A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, announced a private offering of $50 million aggregate principal amount of its Senior Unsecured Convertible Notes and Warrants to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Act"). The Company intends to use the proceeds from the sale of the Notes for general corporate purposes.
The Notes will bear interest at a rate of 6.00% per year, subject to certain adjustments, and mature in July, 2013. The Notes will be convertible, at the holder's option, into shares of the Company's common stock initially at a fixed conversion price, subject to certain adjustments. The Company will be required to redeem 1/28th of the principal amount of Notes, subject to certain adjustments, semi-monthly. Interest and amortization payments may be settled in common stock of the Company, subject to certain conditions. Holders of the Notes will also have certain number of optional voluntary conversion rights.
Holders of the Notes will have the right to require the Company to redeem up to $25 million aggregate principal amount of the Notes if the Company does not obtain stockholder approval to issue an additional number of shares of the Company's common stock in connection with conversion of the Notes and interest and amortization payments settled in common stock of the Company by June 30, 2012.
In conjunction with the Convertible Offering, the Company shall issue warrants equal to 30% of the number of shares of Common Stock the Investor would receive if the Notes were converted in full at the initial Conversion Price. The Warrants expire in May 2017.
The offering is expected to close on or about May 18, 2012, subject to the satisfaction of customary closing conditions.
This press release shall not constitute an offer to sell nor a solicitation of an offer to buy any of these securities, nor shall there be any offer, solicitation or sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.