UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 27, 2002 (November
25, 2002)
Altair Nanotechnologies Inc.
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(Exact name of registrant as specified in its charter)
Province of
Ontario,
Canada 1-12497 None
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(State or other (Commission File No.) (IRS Employer
jurisdiction Identification No.)
of incorporation)
1725 Sheridan Avenue, Suite 140
Cody, Wyoming 82414
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(Address of principal executive offices, including zip code)
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Registrant's telephone number, including area code: (307) 587-8245
Altair International Inc.
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(Former Name, if Changed Since Last Report)
Item 5. Other Events
Altair Nanotechnologies Inc. (the "Company") is filing this Current Report
on Form 8-K (this "Report") in order to (a) report its partial prepayment and
amendment of its $2,000,000 Secured Term Note dated December 28, 2001 (the
"Note") and related transactions, and (b) in order to satisfy certain
requirements related to its listing on the Nasdaq SmallCap Market, provide a
proforma balance sheet as of October 31, 2002 showing shareholders' equity in
excess of $5 million.
Note Prepayment and Amendment
-----------------------------
On November 25, 2002, the Company, together with its consolidated
subsidiaries, and Doral 18, LLC (the "Investor") entered into a Note Amendment
Agreement dated November 21, 2002 (the "Amendment Agreement"), pursuant to
which, among other things, (1) the principal amount of the Note was reduced from
$2,000,000 to $1,400,000 in exchange for the Company's issuance of 1,500,000
common shares, and (2) the Note was amended to extend the maturity date from
March 31, 2003 to March 31, 2004. In order to effect these amendments to the
Note, and others described below, the parties entered into an Amended and
Restated Secured Term Note dated November 21, 2002 (the "Amended Note"), which
supersedes the prior Note.
The Amended Note is in the principal amount of $1,400,000and is due and
payable on March 31, 2004. Interest on the Amended Note accrued at the rate 11%
per annum is payable monthly in arrears in cash. Under the Amended Note, a right
to convert $280,000 of principal (a "Conversion Right") accrues on each of March
1, 2003, June 1, 2003, September 1, 2003, December 1, 2003 and March 1, 2004. If
the amount that would be subject to a Conversion Right is prepaid prior to the
date of accrual, such Conversion Right does not accrue. Once a Conversion Right
has accrued, the principal amount subject to such Conversion Right cannot be
prepaid unless all principal amounts not subject to a Conversion Right have been
prepaid in full. Each Conversion Right gives the holder the right to the convert
the subject principal amount into common shares of the Company at a conversion
price equal to the less of, (a) $1.00, and (b) 70% of the average of the closing
price of the common shares of the Company for the five (5) trading days ending
on the trading day immediately preceding the date with respect to which such
Conversion Right accrued.
In addition, pursuant to the Note Amendment Agreement, the Company issued
to the Investor a warrant to purchase 750,000 common shares at the exercise
price of $1.00 per share at any time on or before November 21, 2007.
The Company also entered into a registration rights agreement pursuant to
which it agreed to register the re-sale of all common shares issued under the
Amended Note and related warrant If such re-sale registration statement is not
effective by March 16, 2003, the Company incurs certain penalties as stated in
the Registration Rights Agreement. The failure to cause such registration
statement to be effective within 180 days of December 16, 2002 is an event of
default under the Amended Note.
Pro Forma Balance Sheet; Nasdaq Listing
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As disclosed in prior reports, because the market price of the Company's
common shares is less than $1.00 per share, the Company was, in order to avoid
delisting, invited to move from the Nasdaq National Market to the Nasdaq
SmallCap Market in September 2002. The Company's listing on the Nasdaq SmallCap
Market is probationary as long as the market price of the Company's common
shares remain below $1.00 per share. This probationary period expires on or
about December 4, 2002, subject to a 180-day extension if, by that date, the
Company satisfies all of the initial listing requirements of the Nasdaq SmallCap
Market other than the minimum bid price requirement.
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One of the initial listing requirements of the Nasdaq SmallCap Market is
that shareholders' equity (i.e. the amount by which a company's assets exceed
its liabilities) exceed $5 million. The balance sheet of the Company included in
the Company's Quarterly Report on Form 10-Q with respect to the quarter ended
September 30, 2002 indicated that the Company's shareholders' equity as of
September 30, 2002 was $4,206,495. In order to increase its shareholders' equity
prior to the December 4, 2002 deadline, secure working capital and extend the
Note due date, the Company entered into the Amendment Agreement described under
"Note Prepayment and Amendment" above and the private placement transaction
described in Note 1(2) to the pro forma balance sheet set forth on the following
page. As a result of consummating such transactions, the Company's pro-forma
shareholders' equity as of October 31, 2002 exceeds $5 million. The Company
believes that it satisfies the other initial listing requirements (except the
minimum bid price requirement) for the Nasdaq SmallCap Market and that, as a
result, the Company will qualify for an additional 180-day probationary period
during which to attempt to cause the market price of its common shares to rise
above $1.00 per share. A pro-forma balance sheet of the Company as of October
31, 2002 is set forth on the following page.
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ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEET
(Expressed in United States Dollars)
(Unaudited)
Proforma
Adjustments October 31, 2002
October 31, 2002 (Note 1) as Adjusted
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ASSETS
Current Assets
Cash and cash equivalents $ 205,804 $ 625,000 $ 830,804
Other current assets 84,717 -- 84,717
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Total current assets 290,521 625,000 915,521
Property and Equipment, net 7,374,574 -- 7,374,574
Patents and Related Expenditures, net 1,160,530 -- 1,160,530
Other Assets 202,104 (59,907) 142,197
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Total Assets $ 9,027,729 $ 565,093 $ 9,592,822
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 657,585 $ -- $ 657,585
Note payable - current portion 1,820,690 (1,820,690) --
Loans payable - related parties -- -- --
Capital lease obligations - current portion -- -- --
Deferred revenue -- -- --
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Total current liabilities 2,478,275 (1,820,690) 657,585
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Note Payable, Long-Term Portion 2,472,300 1,160,783 3,633,083
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Commitments and Contingencies
Stockholders' Equity
Common stock, no par value, unlimited
shares authorized; 26,679,128 shares
issued and outstanding at October 31, 2002 41,772,769 1,225,000 42,997,769
Deficit accumulated during the development stage (37,695,615) -- (37,695,615)
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Total Shareholders' Equity 4,077,154 1,225,000 5,302,154
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Total Liabilities and Shareholders' Equity $ 9,027,729 $ 565,093 $ 9,592,822
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Note 1. Proforma Adjustments
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We entered into certain transactions subsequent to October 31, 2002
which had a significant effect on shareholders' equity. These transactions are
reflected on the accompanying balance sheet as proforma adjustments to the
October 31, 2002 account balances. Following are descriptions of the
transactions:
(1) On November 25, 2002, we entered into a Note Amendment Agreement and
an Amended and Restated Secured Term Note with Doral 18, LLC ("Doral")
which amended a note payable in the amount of $2,000,000 that we
entered into with Doral in 2001 (the "Note"). Under the terms of the
Note Amendment Agreement, we issued to Doral 1,500,000 common shares
in return for a reduction in the Note balance of $600,000. In
addition, we issued to Doral 750,000 warrants to purchase common
shares in exchange for amendments to the Note which extend the
maturity date (as defined in the Note) to March 31, 2004 and which
eliminate certain restrictive and other covenants. The proforma
adjustments for these transactions reflect the reduction in the Note
balance, the extension of the due date and the issuance of common
shares and warrants.
(2) On November 26, 2002, we closed the offer and sale to six accredited
investors of 1,562,500 common shares, together with 585,938 warrants
to purchase common shares, for an aggregate purchase price of
$625,000. The warrants are exercisable at $1.00 per share and expire
five years from the date of issue or, after one year from date of
issue or anytime after the shares are registered, the 180th day
following the date the closing price of the common shares equals or
exceeds $3.00 for 10 days, whether or not consecutive.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit No. Exhibit Incorporated by Reference/ Filed Herewith
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4.1 Amended and Restated Secured Term Note Filed herewith.
dated November 21, 2002
4.2 Warrant to Purchase Common Stock (Note Filed herewith.
Amendment Agreement
10.1 Note Amendment Agreement dated November 21, Filed herewith.
2002
10.2 Registration Rights Agreement Filed herewith.
99.1 Certification of Chief Executive Officer Filed herewith
99.2 Certification of Chief Financial Officer Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned thereunto duly authorized.
Altair Nanotechnologies Inc.
November 27, 2002 By: /s/ William P. Long
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Date Dr. William P. Long
Chief Executive Officer
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