Anticipated net loss for the first quarter includes an estimated $51.6 million warranty expense related to the previously announced field campaign to replace battery modules and packs that may contain defective prismatic cells produced at the Company’s Livonia, Mich. manufacturing facility.

Also included in the anticipated net loss for the first quarter is an estimated $15.2 million increase in inventory reserves related to battery packs, modules and cells manufactured in Livonia, Mich. that may be defective. Net cash used in operating activities is expected to be $46.5 million in the first quarter of 2012. Cash and cash equivalents are anticipated to be $113.1 million at the end of 31 March 2012.

The company will release its first quarter 2012 financial results for the period ended March 31, 2012 before financial markets open on Tuesday, 15 May 2012.

The company anticipates that capacity for prismatic cell production will be constrained for the foreseeable future due to the field campaign, a deliberate manufacturing ramp-up and continued demand for prismatic cell-based products. As a result, the company anticipates that revenue in 2012 will be in the range of $145 million to $175 million, compared to prior expectations of $230 million to $300 million.

As a result of this deliberate ramp and the utilization of a portion of our manufacturing capacity for non-revenue generating production, we are adjusting our full year revenue forecast. We continue to anticipate completing commitments for our field campaign over the next several quarters. As we have not experienced a change in demand from existing customers, we anticipate that most of the revenue corresponding to our reduced guidance will be shifted into 2013.

—David Vieau, CEO of A123 Systems

The company also announced a private offering of $50 million aggregate principal amount of its Senior Unsecured Convertible Notes and Warrants to qualified institutional buyers. The Company intends to use the proceeds from the sale of the Notes for general corporate purposes.