News

SatCon Announces $12 Million Financing Transaction

July 23, 2006 by Jeff Shepard

SatCon Technology Corp.® announced that it has entered into a definitive agreement for a $12 million private placement with institutional investors. First Albany Capital served as the placement agent for the transaction.

"We greatly appreciate the tremendous vote of confidence in SatCon that this financing represents from our new institutional investors," stated David Eisenhaure, Chairman and CEO. "The capital infusion fulfills part of SatCon's overall financing strategy and supports our plans for growth in our core businesses of developing and manufacturing alternative energy products, components for hybrid electric vehicles and advanced micro-electronics. Achieving this financing milestone will allow us to accelerate the expansion of our alternative energy stationary power business under the management of Clemens van Zeyl."

The Senior Secured Convertible Notes to be issued in the financing will bear interest at the higher of 7.0% per annum or the six-month LIBOR plus 3.5% and will be convertible into SATC common stock at a conversion price of $1.65 per share, which represents a premium of approximately 6% over the average closing price of the company's common stock for the last 5 trading days. Subject to certain conditions, the company may elect to make payments of interest or principal in cash or stock. If interest is paid in stock, the price per share will be at a 10% discount to the 5-day volume-weighted average price of the company's common stock prior to the payment date. If principal is paid in stock, the price per share will be the lesser of the conversion price or a 10% discount to the 5-day volume-weighted average price of the company's common stock prior to the payment date.

As part of this transaction, the company will also issue warrants to purchase 3,636,368 shares of common stock that are fully exercisable at $1.815 per share six months from now and will expire in July 2013. Under certain circumstances, the company can force the exercise of these warrants, depending on the performance of the company's common stock.