Altair Nanotechnologies Inc., a leading provider of advanced materials and products for power and energy systems, today announced the execution of an agreement for a $10 million private placement of its common stock to Al Yousuf LLC, and resolution of their potential claims associated with their 2007 investment. In November 2007, Altair announced the completion of a $40 million private placement with Al Yousuf LLC.
Under the terms of the purchase and settlement agreement, Altair has agreed to issue an aggregate of 8,000,000 shares of common stock to Al Yousuf LLC. 5,882,353 shares are being acquired by Al Yousuf LLC at a purchase price of $1.70 per share and 2,117,647 shares are being provided in exchange for a release of potential breach of contract and other claims related to the 2007 investment. Under the 2007 purchase agreement, Altair made certain representations and warranties related to its inventory, warranty reserve and similar matters that were affected by the write-offs and warranty offers announced in March 2008. All of the shares will be contractually restricted from resale for at least two years, with one-third of the shares being released from this restriction on the second, third and fourth anniversaries respectively. Altair has granted Al Yousuf registration rights related with respect to the shares.
"This investment demonstrates a deepening of our strategic relationship with Al Yousuf and a strong validation of the confidence we both share in Altair's power and energy technologies," said Terry M. Copeland, Altair's chief executive officer. "The proceeds from this funding will be used to support manufacturing growth, working capital and general corporate purposes as we expand the production of our advanced power and energy storage products."
"As Altair's recent outstanding independent testing results confirm, we continue to see the tremendous global growth opportunity for the company's innovative battery technology in both the transportation and stationary power markets," said Eqbal Al Yousuf, President of Al Yousuf LLC. "We are excited about the opportunity to expand our relationship with Altair and look forward to helping the company bring its powerful energy solutions to market."
The share price for the transaction was negotiated based on the 10-day average closing price between September 22, 2008 and October 3, 2008. The discount to market was negotiated as part of Al Yousuf's agreement to the extended resale restriction period.
In addition, Al Yousuf LLC will receive two seats on the company's Board of Directors. The first board member, Eqbal Al Yousuf, President of Al Yousuf LLC, will be added at the close of the transaction and the second will be added at the company's annual shareholders meeting in May 2009. The company plans to ask for shareholder approval to expand the board, Altair reported.