A123 Systems Announces Direct Offering of Common Stock and Warrants; Satisfaction of Conditions for Release of $30 Million of Restricted Cash

July 08, 2012 by Jeff Shepard

A123 Systems announced that it has entered into a definitive agreement with existing institutional investors to sell (i) an aggregate of 7,692,308 shares of its common stock ("Common Stock"), at an offer price of $1.30 per share, subject to certain adjustments based upon the exercise of the warrants described below, and (ii) warrants to purchase additional shares of Common Stock in a registered direct offering for gross proceeds of approximately $10.0 million. The net proceeds to A123 from the sale of the stock and warrants, after deducting the placement agent’s fees and other estimated offering expenses, are expected to be approximately $9.0 million. The number of shares of Common Stock issuable upon exercise of the warrants (which have a nominal exercise price) is based on a fixed 18% discount to the volume-weighted average price, or VWAP, of our common stock on specified trading days during two measurement periods over the next three weeks.

The offering is expected to close on or about July 10, 2012, subject to the satisfaction of customary closing conditions.

The company also announced that it has notified the holders of its 6.00% senior convertible notes of the satisfaction of the conditions for the release of $30 million of restricted cash related to such notes that is subject to an account control agreement.

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