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A123 Systems makes $25.4M registered direct offering of common stock and warrants

A123 Systems has entered into a definitive agreement with an institutional investor to sell an aggregate of 12,500,000 units at a negotiated price of $2.034 per unit, with each unit consisting of (i) one share of its common stock (“Common Stock”) and (ii) one warrant to purchase one share of Common Stock, in a registered direct offering for gross proceeds of approximately $25.4 million.

The net proceeds to A123 from the sale of the units, after deducting the placement agent’s fees and other estimated offering expenses, are expected to be approximately $23.5 million.

The warrants have an exercise price of $2.71 per share, and the warrants can be exercised beginning on the date that is six months and one day after the initial closing date and will expire 24 months after the date on which they become exercisable. In addition, during a ten trading day period approximately five months following the initial closing date of the transaction and during another ten day trading period approximately six months following the initial closing date of the transaction, A123 has the right, subject to certain conditions, to require the investors to purchase in each such period up to an additional 6,250,000 shares of Common Stock, for an aggregate of up to 12,500,000 additional shares of Common Stock. The sale price for the additional shares will be based on a fixed 10% discount to a VWAP measurement at the time A123 exercises each such right. A123 cannot require the investor to purchase more than $100,000,000 of additional shares.

The offering is expected to close on or about January 25, 2012, subject to the satisfaction of customary closing conditions. Lazard Capital Markets LLC served as the sole placement agent for the offering.

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