As filed with the Securities and Exchange Commission on March 19, 2003
Registration No. 333-102592
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 TO FORM S-2
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REGISTRATION STATEMENT Under the Securities Act of 1933
Altair Nanotechnologies Inc.
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(Exact name of registrant as specified in its charter)
Canada None
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
William P. Long Copies to:
Chief Executive Officer
Altair Nanotechnologies Inc. Bryan T. Allen, Esq.
1725 Sheridan Avenue, Suite 140 Brian G. Lloyd, Esq.
Cody, Wyoming 82414 STOEL RIVES LLP
(307) 587-8245 201 South Main Street, Suite 1100
(Address, including zip code, and telephone number, Salt Lake City, Utah 84111
including area code, of registrant's principal office; Phone: (801) 328-3131
name, address, including zip code, and telephone number, Fax: (801) 578-6999
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement as
determined by market conditions.
If any of the securities being registered on this form are to be offered on
a delayed or continuing basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the SEC, acting pursuant to said Section 8(a), may
determine.
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The registration statement of which this prospectus is a part is being qualified
under the securities laws of selected states. This prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of these securities, in any state in which such offer, sale or
solicitation would be unlawful prior to or absent qualification under the
securities laws of such state.
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ALTAIR NANOTECHNOLOGIES, INC.
2,250,000 Common Shares
750,000 Warrants
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This prospectus relates to the offering and sale of 1,500,000 common
shares, no par value, of Altair Nanotechnologies Inc., together with 750,000
Series 2003A Warrants and the 750,000 common shares issuable upon the exercise
of such warrants. Each Series 2003A Warrant entitles the holder thereof to
purchase one common share of Altair at any time prior to the fifth anniversary
of the issue date at the price equal to the greater of (i) $1.00 per share, and
(ii) 125% of the average of the closing price of our common shares, as reported
on the Nasdaq SmallCap Market, during the calendar week preceding the calendar
week in which we receive and accept subscription proceeds for the particular
investment. In addition, pursuant to Rule 416 of the Securities Act of 1933, as
amended, this prospectus, and the registration statement of which it is a part,
covers a presently indeterminate number of shares of common stock issuable upon
the occurrence of a stock split, stock dividend, or other similar transaction.
We are offering the common shares, together with the Series 2003A
Warrants, pursuant to this prospectus on a "best-efforts," "no-minimum" basis
through specified officers and employees. We do not intend to engage any
underwriters, placement agents, or finders in connection with this offering. The
common shares and Series 2003A Warrants are being offered in units consisting of
one common share and one-half Series 2003A Warrant for a purchase price per unit
equal to 90% of the closing price of the common shares, as reported on the
Nasdaq SmallCap Market, on the trading day preceding the day on which the
particular investor tenders the purchase price and required subscription
materials.
In the United States, our common shares are listed for trading under
the symbol ALTI on the Nasdaq SmallCap Market. On March 14, 2003, the closing
sale price of our common shares, as reported by the Nasdaq SmallCap Market, was
$0.38 per share.
Unless otherwise expressly indicated, all monetary amounts set forth in
this prospectus are expressed in United States Dollars. As of March 1, 2003, we
had 30,494,615 common shares issued and outstanding.
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Consider carefully the risk factors beginning on page 4 in this prospectus
before investing in the offered securities being sold with this prospectus.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed on the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
Dated March 17, 2003
Table of Contents
Page
SUMMARY.....................................................................2
RISK FACTORS................................................................4
FORWARD-LOOKING STATEMENTS.................................................13
USE OF PROCEEDS............................................................14
DILUTION...................................................................15
PLAN OF DISTRIBUTION.......................................................16
DESCRIPTION OF OFFERED SECURITIES..........................................18
LEGAL MATTERS..............................................................19
EXPERTS....................................................................19
INFORMATION ABOUT OUR COMPANY..............................................20
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................20
WHERE YOU CAN FIND MORE INFORMATION........................................20
SUBSCRIPTION PROCEDURES....................................................21
Exhibits...................................................................21
3
SUMMARY
This summary highlights some of the information in this prospectus.
Because it is a summary, it does not contain all of the information you need to
make an investment decision. To understand this offering fully, you should read
this entire prospectus.
Altair Nanotechnologies Inc.
We are a development-stage Canadian company whose primary business is
developing and commercializing ceramic oxide nanoparticle products. In the
second quarter of 2002, we initiated research and development efforts directed
toward the utilization of nanomaterials in the pharmaceuticals industry. In July
2002, we announced the development of a new active pharmaceutical ingredient for
the treatment of hyperphosphatemia (elevated serum phosphate levels) in patients
undergoing kidney dialysis, as well as a new drug delivery system using
inorganic ceramic nanoparticles. In August 2002, we filed a patent application
covering these developments. We are currently seeking business relationships
with pharmaceutical companies that can conduct additional testing and
development, seek necessary FDA approvals and take the other steps necessary to
bring the new pharmaceutical ingredient and drug delivery system to market.
In addition to pharmaceuticals, we are developing nanomaterials with
potential applications in alternative energy--primarily fuel cells and
batteries--as well as thermal spray coatings, catalysts, cosmetics and paints.
We have also developed prototypes of the Altair Centrifugal Jig and
have conducted a feasibility study on a mining property that we lease in
Tennessee. However, we are not further developing the jig or the Tennessee
mineral property at this time.
Our principal office is located at 1725 Sheridan Avenue, Suite 140,
Cody, Wyoming 82414 U.S.A., and our telephone number is (307) 587-8245.
The Offering
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Offered securities 1,500,000 common shares and 750,000 Series 2003A
Warrants (including the common shares issuable upon
exercise of such warrants) in units of one common share
and one-half Series 2003A Warrant.
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Offering price For each unit, consisting of one common share and
one-half Series 2003A Warrant, an amount equal to 90% of
the closing price of the common shares, as reported on
the Nasdaq SmallCap Market, on the trading day preceding
the day on which the particular investor tenders the pur-
chase price and required subscription materials.
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Subscription agreement; limitations on transfer Purchasers will be required to sign a subscription
agreement in the form attached to this prospectus as
Exhibit II pursuant to which they will agree not to
knowingly sell or otherwise transfer the common shares
or the 2003A Warrants offered pursuant to this
prospectus in Canada for a period of six months after
the date of issuance.
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Common shares outstanding before this offering 30,494,615(1)
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Common shares outstanding after this offering, if all 32,628,091(1)
offered securities are sold and the Series 2003A Warrants
are exercised
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Use of proceeds We are offering the offered securities on a
"best-efforts," "no-minimum" basis. We intend to use the
cash proceeds from the sale of the offered securities
for working capital to be used for general corporate
purposes. If management determines that capital from
other sources is sufficient to fund our ongoing
operations, we may use up to $280,000 of the net cash
proceeds to prepay indebtedness arising under our
$1,400,000 Second Amended and Restated Secured Term
Note. In addition, in order to conserve working capital,
we may issue the offered securities in non-cash
transactions in exchange for the cancellation of
indebtedness and accounts payable and in exchange for
services, including services rendered in connection with
capital-raising activities.
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Risk factors Investing in the offered securities involves substantial
risks. You should read the risk factors beginning on
page 4 in this prospectus before making an investment
decision.
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(1) As of March 1, 2003. Excludes 4,061,700 common shares authorized for
issuance upon exercise of outstanding options that have been granted pursuant to
our stock option plans, 9,170,171 common shares subject to outstanding warrants
to purchase common shares and an indeterminable number of common shares subject
to our $1,400,000 Second Amended and Restated Secured Term Note.
3
RISK FACTORS
Before you invest in the offered securities described in this prospectus,
you should be aware that such investment involves the assumption of various
risks. You should consider carefully the risk factors described below together
with all of the other information included in this prospectus before you decide
to purchase the offered securities.
We have not generated any substantial operating revenues and may not ever
generate substantial revenues.
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To date, we have not generated substantial revenues from operations. As
of December 31, 2002, we have generated $268,041 of revenues from our titanium
processing technology and $28,270 from use of the jig in consulting contracts.
We have not completed exploration of the Tennessee mineral property. We can
provide no assurance that we will ever generate revenues from the Tennessee
mineral property or that we will generate substantial revenues from the titanium
processing technology and the jig.
We may continue to experience significant losses from operations.
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We have experienced a loss from operations in every fiscal year since
our inception. Our losses from operations in 2001 were $6,021,532 and our losses
from operations in 2002 were $7,856,711. Although we have made projections of
possible one-time profitability during 2003, such projections are based solely
on an expectation that we will enter into a license agreement with respect to
our new RenaZorb(TM) product and that such license agreement will include, among
other things, a one-time up-front multi-million dollar payment. We may not enter
into any such license agreement, or such license agreement may not involve any
significant up-front payments. Even if we do receive a significant up-front
payment during 2003 and achieve one-time profitability, we will thereafter
experience a net operating loss until, and if, the titanium processing
technology, the jig and/or the Tennessee mineral property begin generating
significant, sustained revenues. Even if any or all such products or projects
begin generating significant, sustained revenues, the revenues may not exceed
our costs of production and operating expenses.
We may not be able to raise sufficient capital to meet future obligations.
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As of December 31, 2002, we had $244,681 in cash, and a
working capital deficit of $204,365. Although we have raised additional capital
since December 31, 2002, we do not expect that this capital, when combined with
projected revenues from nanoparticle sales, will be sufficient to fund our
ongoing operations. Accordingly, we will need to raise significant amounts of
additional capital in the future in order to sustain our ongoing operations and
continue the testing and additional development work necessary to place the
titanium processing technology into continuous operation. In addition, we will
need additional capital for exploration of the Tennessee mineral property. If we
determine to construct and operate a mine on the Tennessee mineral property, we
will need to obtain a significant amount of additional capital to complete
construction of the mine and commence operations.
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We may not be able obtain the amount of additional capital needed or
may be forced to pay an extremely high price for capital. Factors affecting the
availability and price of capital may include the following:
o market factors affecting the availability and cost of capital
generally;
o our financial results;
o the amount of our capital needs;
o the market's perception of mining, technology and/or minerals
stocks;
o the economics of projects being pursued;
o industry perception of our ability to recover minerals with the jig
or titanium processing technology or from the Tennessee mineral
property; and
o the price, volatility and trading volume of our common shares.
If we are unable to obtain sufficient capital or are forced to pay a
high price for capital, we may be unable to meet future obligations or
adequately exploit existing or future opportunities, and may be forced to
discontinue operations.
We have a substantial number of warrants, options and other convertible
securities outstanding and may issue a significant number of additional shares
upon exercise or conversion thereof.
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As of December 31, 2002, there were outstanding warrants to purchase up
to 9,170,171 common shares at a weighted average exercise price of $1.92 per
share and options to purchase up to 4,061,700 common shares at a weighted
average exercise price of $3.83 per share. The existence of such warrants and
options may hinder future equity offerings, and the exercise of such warrants
and options may further dilute the interests of all shareholders. Future resale
of the common shares issuable on the exercise of such warrants and options may
have an adverse effect on the prevailing market price of the common shares.
In addition, we have issued a Second Amended and Restated Secured Term
Note. Under the Second Amended and Restated Secured Term Note, a conversion
right with respect to $280,000 of principal 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 that 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 convert the subject
principal amount into common shares at a conversion price equal to the lesser of
(a) $1.00 per share and (b) 70% of the average of the closing price of our
common shares for the five trading days ending on the trading day immediately
preceding the date on which that conversion right accrued.
In order to illustrate the relationship between the market price of our
common shares and the issuance of common shares upon the exercise of conversion
rights that may accrue under the Second Amended and Restated Secured Term Note,
the following table sets forth how many additional common shares would be issued
upon the exercise of such conversion rights if such conversion rights accrue and
the average of the closing price of our common stock for the five trading days
ending on the day before each conversion right accrues is (a) $1.43 or greater,
(b) $0.50 per share, (c) $0.25 per share, and (d) $0.10 per share. Such prices
5
are selected for illustration purposes only and do not reflect our actual
estimate of the average of the closing price of our common shares for any
particular period.
$1.43 or $0.50 $0.25 $0.10
Greater
Shares Issuable(1) 1,400,000 4,000,000 8,000,000 20,000,000
Percentage of Outstanding(2)
Common Shares 4.4% 11.7% 20.9% 39.8%
(1) Assumes that shareholder approval is obtained for the transaction
in which we issued the Second Amended and Restated Secured Term Note
and all related transactions, that no principal is prepaid, that all
conversion rights accrue and are exercised at the same time and that no
default occurs and that no penalties or premiums are required to be
paid.
(2) Represents percentage of outstanding common shares following
exchange assuming the 30,244,348 common shares outstanding on December
31, 2002 are outstanding on the date of conversion.
The potential accrual of such conversion rights may hinder future equity
offerings, and the exercise of any conversion rights that accrue may further
dilute the interests of all shareholders. The sale in the open market of common
shares issuable upon the exercise of conversion rights may place downward
pressure on the market price of our common shares. Speculative traders may
anticipate the exercise of conversion rights and, in anticipation of a decline
in the market price of our common shares, engage in short sales of our common
shares. Such short sales could further negatively affect the market price of our
common shares.
Our competitors may be able to raise money and exploit opportunities more
rapidly, easily and thoroughly than we can.
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We have limited financial and other resources and, because of our early
stage of development, have limited access to capital. We compete or may compete
against entities that are much larger than we are, have more extensive resources
than we do and have an established reputation and operating history. Because of
their size, resources, reputation, history and other factors, certain of our
competitors may have better access to capital and other significant resources
than we do and, as a result, may be able to exploit acquisition and development
opportunities more rapidly, easily or thoroughly than we can.
We have pledged substantial assets to secure the Second Amended and Restated
Secured Term Note.
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We have pledged all of the intellectual property, fixed assets and
common stock of Altair Nanomaterials, Inc., our second-tier wholly-owned
subsidiary, to secure repayment of a Second Amended and Restated Secured Term
Note with a face value of $1,400,000 and a due date of March 31, 2004. Altair
Nanomaterials, Inc. owns and operates the titanium processing technology we
acquired from BHP Minerals International Inc. in 1999. The Second Amended and
Restated Secured Term Note is also secured by a pledge of the common stock and
leasehold assets of Mineral Recovery Systems, Inc., which owns and operates our
leasehold interests in the Camden, Tennessee area. If we default on the Second
Amended and Restated Secured Term Note, severe remedies will be available to the
holder of the Second Amended and Restated Secured Term Note, including immediate
seizure and disposition of all pledged assets.
6
We have issued a $3,000,000 note to secure the purchase of the land and the
building where our titanium processing assets are located.
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In August 2002, we entered into a purchase and sale agreement with BHP
Minerals International Inc. to purchase the land, building and fixtures in Reno,
Nevada where our titanium processing assets are located. In connection with this
transaction, BHP also agreed to terminate our obligation to pay royalties
associated with the sale or use of the titanium processing technology. In
return, we issued to BHP a note in the amount of $3,000,000, at an interest rate
of 7%, secured by the property we acquired. The first payment of $600,000 of
principal plus accrued interest is due February 8, 2006. Additional payments of
$600,000 plus accrued interest are due annually on February 8, 2007 through
2010. If we fail to make the required payments on the note, BHP has the right to
foreclose and take the property. If this should occur, we would be required to
relocate our titanium processing assets and offices, causing a significant
disruption in our business.
Operations using the titanium processing technology, the jig or the Tennessee
mineral property may lead to substantial environmental liability.
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Virtually any proposed use of the titanium processing technology, the
jig or the Tennessee mineral property would be subject to federal, state and
local environmental laws. Under such laws, we may be jointly and severally
liable with prior property owners for the treatment, cleanup, remediation and/or
removal of any hazardous substances discovered at any property we use. In
addition, courts or government agencies may impose liability for, among other
things, the improper release, discharge, storage, use, disposal or
transportation of hazardous substances. We might use hazardous substances and,
if we do, we will be subject to substantial risks that environmental remediation
will be required.
Certain of our experts and directors reside in Canada and may be able to avoid
civil liability.
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We are a Canadian corporation, and a majority of our directors and our
Canadian legal counsel are residents of Canada. As a result, investors may be
unable to effect service of process upon such persons within the United States
and may be unable to enforce court judgments against such persons predicated
upon civil liability provisions of the United States securities laws. It is
uncertain whether Canadian courts would (i) enforce judgments of United States
courts obtained against us or such directors, officers or experts predicated
upon the civil liability provisions of United States securities laws or (ii)
impose liability in original actions against Altair or its directors, officers
or experts predicated upon United States securities laws.
We are dependent on key personnel.
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Our continued success will depend to a significant extent on the
services of Dr. William P. Long, our Chief Executive Officer, Dr. Rudi Moerck,
our President, and Mr. C. Patrick Costin, our Vice President and President of
Fine Gold Recovery Systems, Inc. and Mineral Recovery Systems, Inc. our
wholly-owned subsidiary. The loss or unavailability of Dr. Long, Dr. Moerck or
Mr. Costin could have a material adverse effect on us. We do not carry key man
insurance on the lives of Dr. Long, Dr. Moerck or Mr. Costin.
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We may issue substantial amounts of additional shares without stockholder
approval.
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Our articles of incorporation authorize the issuance of an unlimited
number of common shares. All such shares may be issued without any action or
approval by our stockholders. In addition, we have two stock option plans which
have potential for diluting the ownership interests of our stockholders. The
issuance of any additional common shares would further dilute the percentage
ownership of Altair held by existing stockholders.
The market price of our common shares is extremely volatile.
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Our common shares are listed on the Nasdaq SmallCap Market. Trading in
our common shares has been characterized by a high degree of volatility. Trading
in our common shares may continue to be characterized by extreme volatility for
numerous reasons, including the following:
o Uncertainty regarding the viability of the titanium processing
technology, the jig or the Tennessee mineral property;
o Dominance of trading in our common shares by a small number of
firms;
o Positive or negative announcements by us or our competitors;
o Uncertainty regarding our ability to maintain our listing on the
Nasdaq SmallCap Market and/or continue as a going concern;
o Industry trends, general economic conditions in the United States
or elsewhere, or the general markets for equity securities,
minerals, or commodities; and
o Speculation by short sellers of our common shares or other persons
who stand to profit from a rapid increase or decrease in the price
of our common shares.
We may be delisted from the Nasdaq SmallCap Market.
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Our listing on the Nasdaq SmallCap Market is conditioned upon our
compliance with the NASD's continued listing requirements for such market by
June 2003, including the $1.00 per share minimum bid requirement. If the market
price for our common shares has not increased to $1.00 per share for at least 10
consecutive days by June 2003, we expect to be delisted from the Nasdaq SmallCap
Market. The Staff of Nasdaq has indicated that it may submit to the SEC a
proposed rule or policy change which, if approved by the SEC, could lead to an
additional 180 day extension beyond June 2003 in order to meet the $1.00 per
share minimum bid requirement for certain companies. Even if such change were to
be approved, we would not likely be eligible for such additional 180 extension
unless our we had a minimum stockholders' equity balance of $5,000,000 in June
2003. We presently do not have a stockholders' equity balance of $5,000,000 and,
absent a significant infusion of capital, do not expect to have such a balance
in June 2003. Delisting from the Nasdaq SmallCap Market may have a significant
negative impact on the trading price, volume and marketability of our common
shares.
8
We have never declared a cash dividend and do not intend to declare a cash
dividend in the foreseeable future.
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We have never declared or paid cash dividends on our common shares. We
currently intend to retain any future earnings, if any, for use in our business
and, therefore, do not anticipate paying dividends on our common shares in the
foreseeable future.
If you purchase shares in this offering, you will face immediate and substantial
dilution.
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This offering involves immediate substantial dilution to prospective
investors. The book value per common share immediately following this offering
will be substantially less than the price per common shares.
Because we are not required to sell a minimum number of securities in this
offering, there is a greater risk that you could lose your investment.
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This offering is not subject to a requirement for the sale of a minimum
number of shares. We cannot assure you that we will be able to sell all or any
portion of the offered shares and Series 2003A Warrants or that proceeds from
sales actually made will be sufficient to fund operations. Because the number of
offered securities that we will actually sell in this offering is unknown, the
risks to initial purchasers of the offered securities are substantially
increased.
We may be unable to exploit the potential pharmaceutical application of our
titanium processing technology.
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We do not have the technical or financial resources to complete
development of, and take to market, any pharmaceutical application of our
titanium processing technology. In order for us to get any significant,
long-term benefit from any potential pharmaceutical application of our
technologies, the following must occur:
o we must enter into an evaluation license or similar agreement with
an existing pharmaceutical company under which such company would
pay a fee for the right to evaluate a pharmaceutical use of our
technology for a specific period of time and for an option to
purchase or receive a license for such use of our technology;
o tests conducted by such pharmaceutical company would have to
indicate that the pharmaceutical use of our technology is safe,
technically viable and financially viable;
o such pharmaceutical company would have to apply for and obtain FDA
approval of the pharmaceutical use of our technology, or any
related products, which would involve extensive additional testing;
and
o such pharmaceutical company would have to successfully market the
product incorporating our technology.
Although we may receive some significant one-time payments in various stages of
the testing and evaluation of the pharmaceutical application of our technology,
9
we are not expecting to receive significant ongoing revenue unless and until an
end product incorporating the technology goes to market.
We may not be able to license our technology for titanium dioxide pigment
production.
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Because of our relatively small size and limited resources, we do not
plan to use our titanium processing technology for large-scale production of
titanium dioxide pigments; we have, however, entered into discussions with
various minerals and materials companies about licensing our technology to such
entities for large-scale production of titanium dioxide pigments. We have not
entered into any long-term licensing agreements with respect to the use of our
titanium processing technology for large-scale production of titanium dioxide
pigments and can provide no assurance that we will be able to enter into any
such an agreement. Even if we enter into such agreement, we would not receive
significant revenues from such license until feasibility testing is complete
and, if the results of feasibility testing were negative, would not receive
significant revenues at any time.
We may not be able to sell nanoparticles produced using the titanium processing
technology.
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We plan to use the titanium processing technology to produce titanium
dioxide nanoparticles. Titanium dioxide nanoparticles and other products we
intend to initially produce with the titanium processing technology generally
must be customized for a specific application working in cooperation with the
end user. We are still testing and customizing our titanium dioxide nanoparticle
products for various applications and have no long-term agreements with end
users to purchase any of our titanium dioxide nanoparticle products. We may be
unable to recoup our investment in the titanium processing technology and
titanium processing equipment for various reasons, including the following:
o we may be unable to customize our titanium dioxide nanoparticle
products to meet the distinct needs of potential customers;
o potential customers may purchase from competitors because of
perceived or actual quality or compatibility differences;
o our marketing and branding efforts may be insufficient to attract a
sufficient number of customers; and
o because of our limited funding, we may be unable to continue our
development efforts until a strong market for nanoparticles
develops.
In addition, the uses for such nanoparticles are limited, and the
market for such nanoparticles is small. In light of the small size of the
market, the addition of a single manufacturer may cause the price to drop to a
point at which we cannot produce the nanoparticles at a profit.
Our costs of production may be too high to permit profitability.
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We have not produced any mineral products using our titanium processing
technology and equipment on a commercial basis. Our actual costs of production
may exceed those of competitors and, even if our costs of production are lower,
10
competitors may be able to sell titanium dioxide and other products at a lower
price than is economical for Altair.
In addition, even if our initial costs are as anticipated, the titanium
processing equipment may break down, prove unreliable or prove inefficient in a
commercial setting. If so, related costs, delays and related problems may cause
production of titanium dioxide nanoparticles and related products to be
unprofitable.
We have not completed testing and development of the jig and are presently
focusing our resources on other projects.
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We have not completed testing of, or developed a production model of,
any series of the jig. We do not expect to complete testing and development of
the jig during the coming year and have determined to focus most of our limited
resources on the titanium processing technology. We may never develop a
production model of the jig.
Even if we complete development of the jig, the jig may prove unmarketable and
may not perform as anticipated in a commercial operation.
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The designed capacity of the Series 12 jig is too small for coal
washing, heavy minerals extraction, and most other intended applications of the
jig, except use in small placer gold mines or similar operations. Even if the
Series 12 jig is completed and performs to design specifications in subsequent
tests or at a commercial facility, we believe that, because of its small
capacity, the potential market for the Series 12 jig is limited.
If we complete development of and begin marketing a production model of
the Series 30 jig, it may not prove attractive to potential end users, may be
rendered obsolete by competing technologies or may not recover end product at a
commercially viable rate. Even if technology included in the jig initially
proves attractive to potential end users, performance problems and maintenance
issues may limit the market for the jig.
The jig faces competition from other jig-like products and from alternative
technologies.
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Various jig-like products and alternative mineral processing
technologies perform many functions similar or identical to those for which the
jig is designed. Results from further tests or actual operations may reveal that
these alternative products and technologies are better adapted to any or all of
the uses for which the jig is intended. Moreover, regardless of test results,
consumers may view any or all of such alternative products and technologies as
technically superior to, or more cost effective than, the jig.
Certain patents for the jig have expired, and those that have not expired may be
difficult to enforce.
--------------------------------------------------------------------------------
All of the initial patents issued on the jig have expired, and we are
unable to prevent competitors from copying the technology once protected by such
patents. Additional patents related to the process through which water is pulsed
through the cylindrical screen on the jig expire beginning in 2010, and patents
11
for an efficiency-enhancing aspect of the cylindrical screen expire during 2018.
The cost of enforcing patents is often significant, especially outside of North
America. Accordingly, we may be unable to enforce even our patents that have not
yet expired.
We have suspended examining the feasibility of mining the Tennessee mineral
property and may not have working capital sufficient to again continue testing
efforts.
--------------------------------------------------------------------------------
Due to a shortage of working capital, we have suspended feasibility
testing of the Tennessee mineral property. We do not expect to obtain an amount
of working capital sufficient to again start feasibility testing of the
Tennessee mineral property in the foreseeable future.
Even if we again commence feasibility testing on the Tennessee mineral
property, we are unable to provide any assurance that mining of the Tennessee
mineral property is feasible or to identify all processes that we would need to
complete before we could commence a mining operation on the Tennessee mineral
property. To the extent early feasibility testing yields positive results, we
expect feasibility testing to involve, among other things, the following:
o operating a pilot mining facility to determine mineral recovery
efficiencies and the quality of end products;
o additional drilling and sampling in order to more accurately
determine the quantity, quality and continuity of minerals on the
Tennessee mineral property;
o examining production costs and the market for products produced at
the pilot facility;
o designing any proposed mining facility;
o identifying and applying for the permits necessary for any proposed
full-scale mining facility; and
o attempting to secure financing for any proposed full-scale mining
facility.
Our test production at the pilot plant, economic analysis and additional
exploration activities may indicate any of the following:
o that the Tennessee mineral property does not contain heavy minerals
of a sufficient quantity, quality or continuity to permit any
mining;
o that production costs exceed anticipated revenues;
o that end products do not meet market requirements or customer
expectations;
o that there is an insufficient market for products minable from the
Tennessee mineral property; or
o that mining the Tennessee mineral property is otherwise not
economically or technically feasible.
Even if we conclude that mining is economically and technically
feasible on the Tennessee mineral property, we may be unable to obtain the
capital, resources and permits necessary to mine the Tennessee mineral property.
Market factors, such as a decline in the price of, or demand for, minerals
recoverable at the Tennessee mineral property, may adversely affect the
development of mining operations on such property. In addition, as we move
through the testing process, we may identify additional items that need to be
researched and resolved before any proposed mining operation could commence.
12
We cannot forecast the life of any potential mining operation located on the
Tennessee mineral property.
--------------------------------------------------------------------------------
We have not explored and tested the Tennessee mineral property enough
to establish the existence of a commercially minable deposit (i.e. a reserve) on
such property. Until such time as a reserve is established (of which there can
be no assurance), we cannot provide an estimate as to how long the Tennessee
mineral property could sustain any proposed mining operation.
We may be unable to obtain necessary environmental permits and may expend
significant resources in order to comply with environmental laws.
--------------------------------------------------------------------------------
In order to begin construction and commercial mining on the Tennessee
mineral property, we must obtain additional federal, state and local permits. We
will also be required to conform our operations to the requirements of numerous
federal, state and local environmental laws. Because we have not yet commenced
design of a commercial mining facility on the Tennessee mineral property, we are
not in a position to definitively ascertain which federal, state and local
mining and environmental laws or regulations would apply to a mine on the
Tennessee mineral property. Nevertheless, we anticipate having to comply with
and/or obtain permits under the Clean Air Act, Clean Water Act and Resource
Conservation and Recovery Act, in addition to numerous state laws and
regulations before commencing construction or operation of a mine on the
Tennessee mineral property. We can provide no assurance that we will be able to
comply with such laws and regulations or obtain any such permits. In addition,
obtaining such permits and complying with such environmental laws and
regulations may be cost prohibitive.
The market for commodities produced using the jig or at the Tennessee mineral
property may significantly decline.
--------------------------------------------------------------------------------
If the jig is successfully developed and manufactured on a commercial
basis, we intend to use the jig, or lease the jig for use, to separate and
recover valuable, heavy mineral particles. Active international markets exist
for gold, titanium, zircon and many other minerals potentially recoverable with
the jig. Prices of such minerals fluctuate widely and are beyond our control. A
significant decline in the price of minerals capable of being extracted by the
jig could have significant negative effect on the value of the jig. Similarly, a
significant decline in the price of minerals expected to be produced on the
Tennessee mineral property could have a significant negative effect on the
viability of a mine or processing facility on such property.
FORWARD-LOOKING STATEMENTS
This prospectus contains various forward-looking statements. Such
statements can be identified by the use of the forward-looking words
"anticipate," "estimate," "project," "likely," "believe," "intend," "expect," or
similar words. These statements discuss future expectations, contain projections
regarding future developments, operations, or financial conditions, or state
other forward-looking information. When considering such forward-looking
statements, you should keep in mind the risk factors noted in the previous
section and other cautionary statements throughout this prospectus and our
periodic filings with the SEC that are incorporated herein by reference. You
should also keep in mind that all forward-looking statements are based on
13
management's existing beliefs about present and future events outside of
management's control and on assumptions that may prove to be incorrect. If one
or more risks identified in this prospectus or any applicable filings
materializes, or any other underlying assumptions prove incorrect, our actual
results may vary materially from those anticipated, estimated, projected, or
intended.
Among the key factors that may have a direct bearing on our operating
results are risks and uncertainties described under "Risk Factors," including
those attributable to the absence of significant operating revenues or profits,
uncertainties regarding the development and commercialization of the titanium
processing technology and the jig, development risks associated with the
Tennessee mineral property and uncertainties regarding our ability to obtain
capital sufficient to continue our operations and pursue our proposed business
strategy.
USE OF PROCEEDS
We will receive all of the proceeds from the offer and sale of the
offered securities. We intend to use the net cash proceeds, following the
payment of any legal costs and other offering expenses, to provide working
capital to be used for general corporate purposes. If management determines that
capital from other sources is sufficient to fund our ongoing operations, we may
use up to $280,000 of the net cash proceeds to prepay indebtedness arising under
our $1,400,000 Second Amended and Restated Secured Term Note. The interest rate
of this note is 11% per year. Under such note, a conversion right with respect
to $280,000 of principal 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. In order to avoid the dilution associated with
the accrual of such a conversion right, management may determine to use up to
$280,000 of the net cash proceeds in order to prevent the accrual of a
conversion right on June 1, 2003 or September 1, 2003.
In addition, in order to conserve working capital, we may issue some or
all of the offered securities in non-cash transactions in exchange for the
cancellation of indebtedness and accounts payable and in exchange for services,
including services rendered in connection with capital raising activities.
There is no requirement that we sell a minimum number of shares in this
offering. Therefore, we may receive no proceeds from this offering, or
insufficient proceeds for our planned use of proceeds set forth above.
14
DILUTION
Our net tangible book value (deficit) at December 31, 2002 was
$3,258,613 or approximately $0.11 per common share. Net tangible book value of a
company is the value of all of its tangible assets, less the value of all
liabilities. Net tangible book value per common share is the net tangible book
value of the company divided by the number of common shares issued and
outstanding.
If all of the 1,500,000 common shares and 750,000 Series 2003A Warrants
to which this prospectus relates are sold at an assumed sale price of $0.40 per
share, and all Series 2003A Warrants are exercised at an assumed exercise price
of $1.00 per share, our net tangible book value would be $4,608,613 or $0.14 per
common share at December 31, 2002, resulting in an immediate increase in net
tangible book value of $1,350,000 or approximately $0.03 per common share to
existing shareholders and an immediate dilution of approximately $0.46 per
common share to purchasers.
The following table illustrates dilution on a per common share and per
offering basis:
Per Unit Per Offering
-------- ------------
Offering price (1)......................................................... $0.40 $600,000
Net tangible book value (deficit) at December 31, 2002..................... $0.11 $3,258,613
Increase attributable to purchase by new investors(2)...................... $0.03 $1,350,000
Pro forma net tangible book value (deficit) after the offering (2)......... $0.14 $4,608,613
Pro forma net tangible book value dilution to new investors (3)............ $0.46 $1,030,887
(1) Reflects the sale of 1,500,000 common shares and 750,000 Series 2003A
Warrants at an estimated purchase price per units of one common share
and one-half Series 2003A Warrant of $0.40. The actual purchase price
will vary, and may differ materially, from the estimated price.
(2) Assumes that the number of common shares outstanding as of December 31,
2002 was 30,244,348 and that the 1,500,000 common shares and 750,000
Series 2003A Warrants to which this prospectus relates are sold at a
price of $0.40 per share and that all Series 2003A Warrants are
exercised for the purchase of an additional 750,000 common shares at an
exercise price of $1.00 per share. Does not reflect the possible
issuance of up to 4,061,700 common shares upon the exercise of
outstanding stock options or the possible issuance of up to 9,170,177
common shares upon the exercise of outstanding warrants.
(3) Dilution represents the difference between the amount paid by investors
(average price of $0.60 per share) and the pro forma net tangible book
value after the offering contemplated by this prospectus.
15
PLAN OF DISTRIBUTION
We are offering and selling the 1,500,000 common shares and
750,000 Series 2003A Warrants to which this prospectus relates directly to
purchasers. We have not retained any underwriter, broker or dealer to facilitate
the offer or sale of the offered securities, and we will pay no underwriting
commissions or discounts in connection with the offer or sale of the offered
securities. The offered securities will be offered directly to prospective
investors by our President, Rudi E. Moerck, and by the President of our
wholly-owned subsidiary Altair Nanomaterials, Inc, Kenneth E. Lyon. In addition,
some of our other officers and employees may prepare and deliver written
communications regarding the offered securities and respond to inquiries
initiated by potential purchasers. No commissions, discounts, or other
compensation of any kind will be paid to our officers or employees that
participate in the offering.
None of Mr. Moerck, Mr. Lyon nor our other officers and employees
is a registered broker-dealer or an associated person of a registered
broker-dealer. In order to be able to offer and sale the offered securities
without being associated with a registered broker dealer, Messrs. Moerck and
Lyon are relying upon the safe harbor set forth in Rule 3a4-1 promulgated under
the Securities Exchange Act of 1934, as amended, which provides that associated
persons of an issuer of securities that meet certain requirements will not be
deemed to be a broker solely by reasons of their participation in the sale of
the securities of the issuer. In general, to qualify for the safe harbor set
forth in Rule 3a4-1, an associated person of the issuer must satisfy each of the
following requirements:
(1) The associated person is not subject to statutory disqualification at
the time of his participation in the offering. In general, a person is
subject to statutory disqualification if the person has been expelled
or suspended from a self regulatory organization (such as the National
Association of Securities Dealers), has had a securities-related
registration revoked or is barred to trading in certain securities or
in certain markets.
(2) The associated person is not compensated in connection with his
participation in the offering by the payment of commission or other
remuneration based directly or indirectly on transactions in
securities.
(3) The associated person is not at the time of his participation an
associated person of a broker or dealer.
(4) The associated person meets the conditions of any of (i), (ii) or (iii)
below:
(i) The associated person restricts his participation to transactions
involving offers and sale of securities under specified
circumstances (none of which are expected to apply to this
offering).
(ii) The associated person meets all of the following conditions:
16
(A) The associated person primarily performs, or is intended
primarily to perform at the end of the offering, substantial duties for
or on behalf of the issuer otherwise than in connection with
transactions in securities;
(B) The associated person was not a broker or dealer, or an
associated person of a broker or dealer, within the preceding 12
months; and
(C) The associated person does not participate in selling an
offering of securities for any issuer more than once every 12 months
other than in reliance on the preceding or following subsections.
(iii) The associated person restricts his participation to any one or
more of the following activities:
(A) Preparing any written communication or delivering such
communication through the mails or other means that does not involve
oral solicitation by the associated person of a potential purchaser;
Provided, however, that the content of such communication is approved
by a partner, officer or director of the issuer;
(B) Responding to inquiries of a potential purchaser in a
communication initiated by the potential purchaser; Provided, however,
That the content of such responses are limited to information contained
in a registration statement filed under the Securities Act of 1933 or
other offering document; or
(C) Performing ministerial and clerical work involved in
effecting any transaction.
With respect to the requirements of Rule 3a4-1, consistent with the
requirements of Sections (1), (2) and (3), none of Mr. Moerck, Mr. Lyon nor any
of our officers or employees is subject to any statutory disqualification,
will be compensated in connection with his participation in the offering or is
an associated person of a broker or dealer.
Messrs. Moerck and Lyon are the only persons authorized to engaged in
oral solicitation or other activities not permitted by Section 4(iii) above in
connection with the offering. Mr. Moerck, as the President of Altair
Nanotechnologies, Inc. among other things, is responsible for marketing products
and certain aspects of product development. Mr. Lyon is President of Altair
Nanomaterials Inc., the second-tier subsidiary of Altair that owns its
nanoparticle production technology and assets, and is responsible for the
day-to-day operations of such subsidiary. Accordingly, consistent with Section
4(ii)(A), each primarily performs substantial duties on behalf of Altair
otherwise than in connection with securities transactions. In addition,
consistent with Section 4(ii)(B) and (C), neither Mr. Moerck nor Mr. Lyon has
been an associated person of a broker or dealer within the preceding 12 months,
or has participated in selling an offering of securities for any issuer during
the preceding 12 months.
17
As stated above, in addition to the activities of Messrs. Lyon and
Moerck, other officers and employees of Altair and its wholly-owned subsidiaries
may participate in the offering on a limited basis as permitted by Section
(4)(iii). Their activities would be limited to (a) preparing written
communications or delivering such communications through the mails or other
means that does not involve oral solicitation; (b) responding to inquiries of a
potential purchaser in a communication initiated by the potential purchaser (and
limiting the content of such response to information contained in the
registration statement of which this prospectus is part; and (c) performing
ministerial and clerical work involved in effecting any related transactions.
DESCRIPTION OF OFFERED SECURITIES
Our Common Shares
-----------------
Our articles of continuance authorize the issuance of an unlimited
number of common shares, which do not have par value. As of December 31, 2002,
there were 30,244,348 common shares issued and outstanding, held by
approximately 500 registered holders. Holders of common shares are entitled to
one vote per share on all matters to be voted on by shareholders. There is no
cumulative voting with respect to the election of directors. The holders of
common shares are entitled to receive dividends, if any, as may be declared from
time to time by our board of directors in its discretion from funds legally
available therefor. Upon our liquidation, dissolution or winding up, the holders
of common shares are entitled to receive ratably any assets available for
distribution to shareholders. The common shares have no preemptive or other
subscription rights, and there are no conversion rights or redemption or sinking
fund provisions with respect to such shares. All of the outstanding common
shares are fully paid and nonassessable.
As of December 31, 2002, we had issued and outstanding options to
acquire 4,061,700 common shares issued pursuant to its options plans and had
issued and outstanding warrants to purchase 9,170,171 common shares issued in
various series.
Neither our articles nor our bylaws contain any provision that would
delay, defer or prevent a change in control. We have, however, adopted an
Amended and Restated Shareholder Rights Plan Agreement dated October 15, 1999,
which allows our shareholders to acquire additional common shares at a price
that would create a strong disincentive to a tender offer or similar change of
control transaction, if a person acquires, or announces an intent to acquire,
15% or more of the outstanding common shares, and if certain other conditions
are met. A copy of this agreement is attached as Exhibit 10.1 to our Current
Report on Form 8-K filed with the SEC on November 18, 1999. A copy of this
agreement is also available upon written request to us. You should review the
entire agreement before making any investment decision.
Series 2003A Warrants
---------------------
Each Series 2003A Warrant entitles the holder thereof to purchase one
common share at any time prior to the fifth anniversary of the issue date at the
price equal to the greater of (i) $1.00 per share, and (ii) 125% of the average
of the closing price of the common shares, as reported on our principal trading
18
market, during the calendar week preceding the calendar week in which we receive
and accept subscription proceeds for the particular investment. The holder of a
Series 2003A Warrant may exercise such Warrant by delivering to the Company at
its principal office the Series 2003A Warrant certificate, the Subscription Form
attached thereto, and cash or certified check in an amount equal to the exercise
price multiplied by the number of Series 2003A Warrants being exercised. The
Series 2003A Warrants may only be exercised in increments equal to the lesser of
(a) 25,000 common shares and (b) the number of shares subject to the Series
2003A Warrant. Each Series 2003A Warrant is freely assignable, subject to the
restrictions of applicable federal, Canadian, state, and provincial securities
laws. The Series 2003A Warrants provide for the adjustment of the number of
common shares subject thereto and the exercise price in the event of a stock
split, stock dividend, merger, consolidation, or similar event.
Canadian Transfer Restrictions
------------------------------
Neither the common shares nor the 2003A Warrants offered pursuant to
this prospectus may be knowingly resold or otherwise transferred in Canada for a
period of six months after the date of issuance. Investors will be required to
sign a subscription agreement pursuant to which they will agree to comply with
this restriction.
A form of the Series 2003A Warrant Certificate is attached to this
prospectus as Exhibit I. A form of the subscription agreement investors will be
required to sign is attached hereto as Exhibit II.
LEGAL MATTERS
The validity of the shares being offered hereby is being passed upon
for us by Goodman and Carr LLP, Ontario, Canada.
EXPERTS
The consolidated financial statements incorporated in this prospectus
by reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report (which report expresses an unqualified
opinion and includes an explanatory paragraph referring to the uncertainty that
the Company will be able to continue as a going concern), which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
19
INFORMATION ABOUT OUR COMPANY
This prospectus is accompanied by a copy of our Annual Report on Form
10-K for the year ended December 31, 2002. If delivered after May 15, 2003, this
prospectus is also accompanied by our most recent Quarterly Report on Form 10-Q
filed with the SEC. These documents contain information about us as of their
respective dates. We recommend that you carefully review these documents as part
of your review of this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the information we file
with them. This means that we can disclose information to you by referring you
to those documents. The documents that have been incorporated by reference are
an important part of this prospectus, and you should review that information in
order to understand the nature of any investment by you in our common shares.
Information contained in this prospectus automatically updates and supersedes
previously filed information. We are incorporating by reference our Annual
Report on Form 10-K for the year ended December 31, 2002, filed with the SEC on
March 17, 2003.
We will provide, without charge, to each person to whom this prospectus
is delivered, upon written or oral request of any such person, a copy of the
foregoing document (other than exhibits to such document which are not
specifically incorporated by reference in such document). Please direct written
requests for such copies to the Company c/o Mineral Recovery Systems at 204
Edison Way, Reno, Nevada 89502, U.S.A., Attention: Ed Dickinson, Chief Financial
Officer. Telephone requests may be directed to the office of the Director of
Finance at (800) 897-8245.
You should only rely upon the information included in or incorporated
by reference into this prospectus or in any prospectus supplement that is
delivered to you. We have not authorized anyone to provide you with additional
or different information. You should not assume that the information included in
or incorporated by reference into this prospectus or any prospectus supplement
is accurate as of any date later than the date on the front of the prospectus or
prospectus supplement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and
other information with the SEC. You may read and copy any reports, statements,
or other information that we file at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the Public Reference Room. The SEC
also maintains an Internet site (http://www.sec.gov) that contains reports,
proxy statements, and other information regarding issuers, including us, that
file electronically with the SEC.
Our common shares are quoted on the Nasdaq SmallCap Market. You can
inspect and copy reports, proxy statements and other information concerning us
at the Public Reference Room of the National Association of Securities Dealers,
1735 K Street, N.W., Washington, D.C. 20006.
20
This prospectus is a part of the registration statement that we filed
on Form S-2 with the SEC. The registration statement contains more information
about us and our common shares than this prospectus, including exhibits and
schedules. You should refer to the registration statement for additional
information about us and the securities being offered in this prospectus.
Statements that we make in this prospectus relating to any documents filed as an
exhibit to the registration statement or any document incorporated by reference
into the registration statement may not be complete, and you should review the
referenced document itself for a complete understanding of its terms.
SUBSCRIPTION PROCEDURES
Purchasers of common shares and Series 2003A Warrants in this offering
will be required to sign a subscription agreement in the form attached to this
prospectus as Exhibit II. By signing the subscription agreement, purchasers
will, among other things:
o Agree not to knowingly sell or otherwise transfer the common
shares or Series 2003A Warrants in Canada for a period of six
months after the issue date;
o Indicate and make a representation as to the location of their
principal business address or residence, whichever is applicable,
in order to assure compliance with state securities laws; and
o Confirm the number of common shares and Series 2003A Warrants
being purchased and the purchase price applicable to the purchase.
Payment of the purchase price is due at the time of subscription and may be paid
by check or wire transfer. We may accept or reject any subscription in our sole
and absolute discretion. We will promptly return the purchase price for any
subscription that we do not accept.
Exhibits
The following documents related to our offering of common shares and
Series 2003A Warrants are attached to this prospectus:
o Exhibit I - Form of Series 2003A Warrant
o Exhibit II - Form of Subscription Agreement
21
Exhibit I
Form of Series 2003A Warrant
[see attached]
THESE SECURITIES, AND ANY SECURITIES ISSUABLE UPON THE EXERCISE HEREOF, HAVE NOT
BEEN QUALIFIED UNDER CANADIAN OR PROVINCIAL SECURITIES LAWS AND MAY NOT BE
RESOLD OR OTHERWISE TRANSFERRED IN CANADA FOR A PERIOD OF SIX MONTHS AFTER THE
ISSUE DATE OF THE WARRANT.
ALTAIR NANOTECHNOLOGIES INC.
COMMON SHARE PURCHASE WARRANT
_______ Series 2003A Warrants Warrant Certificate No. 2003A-___
Void after 5:00 p.m., Mountain Standard Time
on _________________, 2007
ALTAIR NANOTECHNOLOGIES INC.
(Incorporated under the laws of Canada)
This Series 2003A Warrant Certificate ("Warrant Certificate") is to certify
that, for value received, ________________or registered assigns (the "Holder")
shall have the right to purchase from Altair Nanotechnologies Inc. (hereinafter
called the "Corporation") one fully paid and non-assessable Common Share of the
Corporation (a "Common Share") for each Series 2003A Warrant (individually, a
"Warrant") represented by this Warrant Certificate during the time period
commencing on the date this Warrant is executed by the Company and continuing
until 5:00 p.m. (Mountain Standard time) on _______________ [five-years from
issue date] (the "Expiry Time"). As specified in the Corporation's Registration
Statement on Form S-2, File No. 333-102592, covering the issuance of the
Warrants, the exercise price for the purchase of each such Common Share is the
greater of (i) $1.00 per share, and (ii) 125% of the average of the closing
price of the Common Shares, as reported on the Nasdaq SmallCap Market, during
the calendar week preceding the calendar week in which the Corporation received
and accepted subscription proceeds for the Warrants. During such week, 125% of
the average of the closing price of the Common Shares, as reported on the Nasdaq
SmallCap Market, was $_____. Accordingly, the exercise price for the purchase of
each such Common Share shall be U.S. $_____ per share (the "Exercise Price").
The number of Common Shares to be received upon the exercise of each Warrant and
the Exercise Price may be adjusted from time to time as hereinafter set forth.
The Warrants shall be subject to the following terms and conditions:
1. For the purposes of this Warrant, the term "Common Shares" means common
shares without nominal or par value in the capital of the Corporation
as constituted on the date hereof; provided that in the event of a
change, subdivision, redivision, reduction, combination or
consolidation thereof or any other adjustment under clause 10 hereof,
or successive such changes, subdivisions, redivisions, reductions,
combinations, consolidations or other adjustments, then subject to the
adjustments, if any, having been made in accordance with the provisions
of this Warrant Certificate, "Common Shares" shall thereafter mean the
shares, other securities or other property resulting from such change,
subdivision, redivision, reduction, combination or consolidation or
other adjustment.
2. This Warrant Certificate shall be signed by an officer of the
Corporation holding office at the time of signing, or any successor or
replacement person and notwithstanding any change in any of the persons
Ex. I-1
holding said offices between the time of actual signing and the
delivery of the Warrant Certificate and notwithstanding that such
officer signing may not have held office at the date of the delivery of
the Warrant Certificate, the Warrant Certificate so signed shall be
valid and binding upon the Corporation.
3. All rights under any of the Warrants in respect of which the right of
subscription and purchase therein provided for shall not theretofore
have been exercised shall wholly cease and determine and such Warrants
shall be wholly void and of no valid or binding effect after the Expiry
Time.
4. The right to purchase Common Shares pursuant to the Warrants may only
be exercised by the Holder at or before the Expiry Time by:
(a) duly completing and executing a Subscription Form in the form
attached hereto, in the manner therein indicated; and
(b) surrendering this Warrant Certificate and the duly completed
and executed Subscription Form to the Corporation at the
address specified in clause 22 below together with payment of
the purchase price for the Common Shares subscribed for in the
form of cash or a certified cheque payable to the Corporation
in an amount equal to the then applicable Exercise Price
multiplied by the number of Common Shares subscribed for.
5. Upon receipt of the Subscription Form, this Warrant Certificate, and
payment as aforesaid, the Corporation shall cause to be issued to the
Holder the number of Common Shares to be issued and the Holder shall
become a shareholder of the Corporation in respect of such Common
Shares, effective as of the date of receipt by the Corporation of such
Subscription Form, Warrant Certificate, and payment and shall be
entitled to delivery of a certificate or certificates evidencing such
shares. The Corporation shall cause such certificate or certificates to
be mailed to the Holder at the address or addresses specified in such
Subscription Form within ten (10) business days of such receipt and
payment as herein provided or, if so instructed by the Holder, held for
pick-up by the Holder at the principal office of the registrar and
transfer agent of the Common Shares, Equity Transfer Services Inc. (the
"Transfer Agent").
6. No fractional shares or stock representing fractional shares shall be
issued upon the exercise of any Warrant. In lieu of any fractional
shares which would otherwise be issuable, the Corporation shall either
pay cash equal to the product of such fraction multiplied by the fair
market value of one share of Common Stock on the date of exercise, as
determined in good faith by the Corporation's Board of Directors, or
issue the next largest whole number of Common Shares at the
Corporation's option.
7. Neither the Warrants nor any Common Shares issuable upon exercise of
the Warrants may be offered or sold into Canada for a period of six
months after the issue date of the Warrants. If the Warrants are
exercised prior to the expiration of such six-month period, the
certificates evidencing the Common Shares issuable upon their exercise
shall bear the legend set forth below:
THESE SECURITIES HAVE NOT BEEN QUALIFIED UNDER CANADIAN OR
PROVINCIAL SECURITIES LAWS AND MAY NOT BE RESOLD OR OTHERWISE
TRANSFERRED IN CANADA PRIOR TO [THE DATE SIX MONTH FROM THE
ISSUE DATE OF THE WARRANTS].
Ex. I-2
8. The holding of a Warrant shall not constitute the Holder a shareholder
of the Corporation nor entitle him to any right or interest in respect
thereof except as herein expressly provided.
9. The Corporation covenants and agrees that until the Expiry Time, while
any of the Warrants shall be outstanding, it shall reserve and there
shall remain unissued out of its authorized capital a sufficient number
of Common Shares to satisfy the right of purchase herein provided, as
such right of purchase may be adjusted pursuant to clauses 10 and 11
hereof. All Common Shares which shall be issued upon the exercise of
the right to purchase herein provided for, upon payment therefor of the
amount at which such Common Shares may at the time be purchased
pursuant to the provisions hereof, shall be issued as fully paid and
non-assessable shares and the holders thereof shall not be liable to
the Corporation or its creditors in respect thereof.
10. (a) If and whenever at any time after the date hereof and prior to
the Expiry Time the Corporation shall (i) subdivide, redivide
or change its then outstanding Common Shares into a greater
number of Common Shares, (ii) reduce, combine or consolidate
its then outstanding Common Shares into a lesser number of
Common Shares or (iii) issue Common Shares (or securities
exchangeable for or convertible into Common Shares) to the
holders of all or substantially all of its then outstanding
Common Shares by way of a stock dividend or other distribution
(any of such events herein called a "Common Share
Reorganization"), then the Exercise Price shall be adjusted
effective immediately after the effective date of any such
event in (i) or (ii) above or the record date at which the
holders of Common Shares are determined for the purpose of any
such dividend or distribution in (iii) above, as the case may
be, by multiplying the Exercise Price in effect on such
effective date or record date, as the case may be, by a
fraction, the numerator of which shall be the number of Common
Shares outstanding on such effective date or record date, as
the case may be, before giving effect to such Common Share
Reorganization and the denominator of which shall be the
number of Common Shares outstanding immediately after giving
effect to such Common Share Reorganization including, in the
case where securities exchangeable for or convertible into
Common Shares are distributed, the number of Common Shares
that would be outstanding if such securities were exchanged
for or converted into Common Shares.
(b) If and whenever at any time after the date hereof and prior to
the Expiry Time, the Corporation shall distribute any class of
shares or rights, options or warrants or other securities
(other than those referred to in clause 10(a) above),
evidences of indebtedness or property (excluding cash
dividends paid in the ordinary course) to holders of all or
substantially all of its then outstanding Common Shares, the
number of Common Shares to be issued by the Corporation under
this Warrant shall, at the time of exercise of the right of
subscription and purchase under this Warrant Certificate, be
appropriately adjusted and the Holder shall receive, in lieu
of the number of the Common Shares in respect of which the
right to purchase is then being exercised, the aggregate
number of Common Shares or other securities or property that
the Holder would have been entitled to receive as a result of
such event, if, on the record date thereof, the Holder had
been the registered holder of the number of Common Shares to
which the Holder was theretofore entitled upon the exercise of
the rights of the Holder hereunder.
(c) If and whenever at any time after the date hereof and prior to
the Expiry Time there is a capital reorganization of the
Corporation or a reclassification or other change in the
Common Shares (other than a Common Share Reorganization) or a
consolidation or merger or amalgamation of the Corporation
with or into any other corporation or other entity (other than
a consolidation, merger or amalgamation which does not result
in any reclassification of the outstanding Common Shares or a
Ex. I-3
change of the Common Shares into other securities), or a
transfer of all or substantially all of the Corporation's
assets to another corporation or other entity in which the
holders of Common Shares are entitled to receive shares, other
securities or other property (any of such events being called
a "Capital Reorganization"), the Holder, where he has not
exercised the right of subscription and purchase under this
Warrant Certificate prior to the effective date of such
Capital Reorganization, shall be entitled to receive and shall
accept, upon the exercise of such right, on such date or any
time thereafter, for the same aggregate consideration in lieu
of the number of Common shares to which he was theretofore
entitled to subscribe for and purchase, the aggregate number
of shares or other securities or property which the Holder
would have been entitled to receive as a result of such
Capital Reorganization if, on the effective date thereof, he
had been the registered holder of the number of Common Shares
to which he was theretofore entitled to subscribe for and
purchase.
(d) If and whenever at any time after the date hereof and prior to
the Expiry Time, any of the events set out in clause 10(a),
(b) or (c) shall occur and the occurrence of such event
results in an adjustment of the Exercise Price pursuant to the
provisions of this clause 10, then the number of Common Shares
purchaseable pursuant to this Warrant shall be adjusted
contemporaneously with the adjustment of the Exercise Price by
multiplying the number of Common Shares then otherwise
purchaseable on the exercise thereof by a fraction, the
numerator of which shall be the Exercise Price in effect
immediately prior to the adjustment and the denominator of
which shall be the Exercise Price resulting from such
adjustment.
(e) If the Corporation takes any action affecting its Common
Shares to which the foregoing provisions of this clause 10, in
the opinion of the board of directors of the Corporation,
acting in good faith, are not strictly applicable, or if
strictly applicable would not fairly adjust the rights of the
Holder against dilution in accordance with the intent and
purposes hereof, or would otherwise materially affect the
rights of the Holder hereunder, then the Corporation may
execute and deliver to the Holder an amendment hereto
providing for an adjustment in the application of such
provisions so as to adjust such rights as aforesaid in such
manner as the board of directors of the Corporation may
determine to be equitable in the circumstances, acting in good
faith. The failure of the taking of action by the board of
directors of the Corporation to so provide for any adjustment
on or prior to the effective date of any action or occurrence
giving rise to such state of facts will be conclusive evidence
that the board of directors has determined that it is
equitable to make no adjustment in the circumstances.
11. The following rules and procedures shall be applicable to the
adjustments made pursuant to clause 10:
(a) any Common Shares owned or held by or for the account of the
Corporation shall be deemed not be to outstanding except that,
for the purposes of clause 10, any Common Shares owned by a
pension plan or profit sharing plan for employees of the
Corporation or any of its subsidiaries shall not be considered
to be owned or held by or for the account of the Corporation;
(b) no adjustment in the Exercise Price shall be required unless a
change of at least 1% of the prevailing Exercise Price would
result, provided, however, that any adjustment which, except
for the provisions of this clause 11(b), would otherwise have
been required to be made, shall be carried forward and taken
into account in any subsequent adjustment;
Ex. I-4
(c) the adjustments provided for in clause 10 are cumulative and
shall apply to successive subdivisions, consolidations,
dividends, distributions and other events resulting in any
adjustment under the provisions of such clause;
(d) in the absence of a resolution of the board of directors of
the Corporation fixing a record date for any dividend or
distribution referred to in clause 10(a)(iii) above, the
Corporation shall be deemed to have fixed as the record date
therefor the date on which such dividend or distribution is
effected;
(e) if the Corporation sets a record date to take any action and
thereafter and before the taking of such action abandons its
plan to take such action, then no adjustment to the Exercise
Price will be required by reason of the setting of such record
date;
(f) forthwith after any adjustment to the Exercise Price or the
number of Common Shares purchaseable pursuant to the Warrants,
the Corporation shall provide to the Holder a certificate of
an officer of the Corporation certifying as to the amount of
such adjustment and, in reasonable detail, describing the
event requiring and the manner of computing or determining
such adjustment; and
(g) any question that at any time or from time to time arises with
respect to the amount of any adjustment to the Exercise Price
or other adjustment pursuant to clause 10 shall be
conclusively determined by a firm of independent chartered
accountants (who may be the Corporation's auditors) selected
by the board of directors of the Corporation and shall be
binding upon the Corporation and the Holder.
12. With 30 days after the effective date or record date, as applicable, of
any event referred to in clause 10, the Corporation shall notify the
Holder of the particulars of such event and the estimated amount of any
adjustment required as a result thereof.
13. On the happening of each and every such event set out in clause 10, the
applicable provisions of this Warrant, including the Exercise Price,
shall, ipso facto, be deemed to be amended accordingly and the
Corporation shall take all necessary action so as to comply with such
provisions as so amended.
14. The Corporation shall not be required to deliver certificates for
Common Shares while the share transfer books of the Corporation are
properly closed, having regard to the provisions of clauses 10 and 11
hereof, prior to any meeting of shareholders or for the payment of
dividends or for any other purpose and in the event of the surrender of
any Warrant in accordance with the provisions hereof and the making of
any subscription and payment for the Common Shares called for thereby
during any such period delivery of certificates for Common Shares may
be postponed for not more than five (5) days after the date of the
re-opening of said share transfer books. Provided, however, that any
such postponement of delivery of certificates shall be without
prejudice to the right of the Holder so surrendering the same and
making payment during such period to receive after the share transfer
books shall have been re-opened such certificates for the Common Shares
called for, as the same may be adjusted pursuant to clauses 10 and 11
hereof as a result of the completion of the event in respect of which
the transfer books were closed.
15. Subject as hereinafter provided, all or any of the rights conferred
upon the Holder by the terms hereof may be enforced by the Holder by
appropriate legal proceedings. No recourse under or upon any
obligation, covenant or agreement contained herein shall be had against
any shareholder or officer of the Corporation either directly or
through the Corporation, it being expressly agreed and declared that
Ex. I-5
the obligations under the Warrants are solely corporate obligations and
that no personal liability whatever shall attach to or be incurred by
the shareholders or officers of the Corporation or any of them in
respect thereof, any and all rights and claims against every such
shareholder, officer or director being hereby expressly waived as a
condition of and as a consideration for the issue of the Warrants.
16. (a) The Warrants and the Common Shares issuable upon exercise
thereof may not be assigned or transferred in Canada for a
period of six months after the issue date of the Warrant. Any
purported transfer or assignment made other than in accordance
with this Section 16 shall be null and void and of no force
and effect.
(b) Any assignment permitted hereunder shall be made by surrender
of this Warrant Certificate to the Corporation at its
principal office with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax. In such
event, the Corporation shall, without charge, execute and
deliver a new Warrant Certificate in the name of the assignee
named in such Assignment Form, and the Warrants represented by
this Warrant Certificate shall promptly be cancelled. This
Warrant Certificate may be divided or combined with other
Warrants which carry the same rights upon presentation thereof
at the principal office of the Corporation together with a
written notice signed by the Holder thereof, specifying the
names and denominations in which new Warrants are to be
issued. The terms "Warrant" and "Warrants" as used herein
include any Warrants in substitution for or replacement of
this Warrant, or into which the Warrant represented by this
Warrant Certificate may be divided or exchanged.
17. The Holder may subscribe for and purchase any lesser number of Common
Shares than the number of shares expressed in this Warrant Certificate
subject to a minimum purchaser per exercise equal to the lesser of (a)
25,000 Common Shares, or (b) the total number of Common Shares subject
to the Warrant Certificate. In the case of any subscription for a
lesser number of Common Shares than expressed in this or any successor
Warrant Certificate or a transfer of any of the Warrants pursuant to
clause 16, the Holder shall be entitled to receive at no cost to the
Holder a new Warrant Certificate in respect of the balance of Warrants
not then exercised or transferred. Any new Warrant Certificate(s) shall
be mailed to the Holder or assignee by the Corporation or, at its
direction, the Transfer Agent, within five (5) business days of receipt
by the Corporation of all materials required by clauses 5 or 16, as
applicable.
18. Each Holder of this Warrant, the Warrant Shares or any other security
issued or issuable upon exercise of this Warrant shall indemnify and
hold harmless the Corporation, its directors and officers, and each
person, if any, who controls the Corporation, against any losses,
claims, damages or liabilities, joint or several, to which the
Corporation or any such director, officer or any such person may become
subject under any applicable law, insofar as such losses, claims,
damages or liabilities, or actions in respect thereof, arise out of or
are based upon the disposition by such Holder of the Warrants or the
Common Shares issuable upon the exercise of the Warrants in violation
of the terms of this Warrant Certificate.
19. If any Warrant Certificate becomes stolen, lost, mutilated or
destroyed, the Corporation shall, on such terms as it may in its
discretion acting reasonably impose, issue and sign a new Warrant
Certificate of like denomination, tenor and date as the Warrant
Certificate so stolen, lost, mutilated or destroyed for delivery to the
Holder.
Ex. I-6
20. The Corporation and the Transfer Agent may deem and treat the
registered holder of any Warrant Certificate as the absolute owner of
the Warrants represented thereby for all purposes, and the Corporation
and neither the Corporation nor the Transfer Agent shall be affected by
any notice or knowledge to the contrary except where the Corporation or
the Transfer Agent is required to take notice by statute or by order of
a court of competent jurisdiction. A Holder shall be entitled to the
rights evidenced by such Warrant Certificate free from all equities or
rights of set-off or counterclaim between the Corporation and the
original or any intermediate holder thereof and all persons may act
accordingly and the receipt by any such Holder of the Common Shares
purchaseable pursuant to such Warrant shall be a good discharge to the
Corporation and the Transfer Agent for the same and neither the
Corporation nor the Transfer Agent shall be bound to inquire into the
title of any such Holder except where the Corporation or the Transfer
Agent is required to take notice by statute or by order of a court of
competent jurisdiction.
21. Provisions of this Warrant Certificate may be amended and the
observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the
written consent of the Company and the Holder of this Warrant
Certificate.
22. All notices to be sent hereunder shall be deemed to be validly given to
the Holders of the Warrants on the date of receipt if personally
delivered, sent by telecopier or overnight courier, charges prepaid, or
five days after deposit in the United States mail, by registered or
certified mail, postage prepaid, addressed to such holders at their
post office addresses appearing in the register of Warrant holders
caused to be maintained by the Corporation. All notices to be sent
hereunder shall be deemed to be validly given to the Corporation on the
date of receipt if personally delivered, sent by telecopier or
overnight courier, charges prepaid, or five days after deposit in the
United States mail, by registered or certified mail, postage prepaid,
addressed to the Corporation at 1725 Sheridan Avenue, Suite 140, Cody,
Wyoming 82414 or such other address as the Corporation shall have
designated by written notice to such registered owner.
23. This Warrant shall be governed by the laws of the State of Nevada and
the federal laws of the United States applicable therein (without
reference to the conflict of laws provisions thereof).
IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate
to be signed by its duly authorized officer.
DATED as of the ___ day of ______, 2003.
ALTAIR NANOTECHNOLOGIES INC.
By: ________________________________________
Its: _______________________________________
Ex. I-7
SUBSCRIPTION FORM
(Series 2003A Warrant)
TO BE COMPLETED IF WARRANTS ARE TO BE EXERCISED:
The undersigned hereby subscribes for ________________ common shares of Altair
Nanotechnologies Inc. according to the terms and conditions set forth in the
annexed warrant certificate (or such number of other securities or property to
which such warrant entitles the undersigned to acquire under the terms and
conditions set forth in the annexed warrant certificate). The subscriber
acknowledges and agrees that any legend required by applicable law may be placed
on any certificates representing common shares delivered to the undersigned.
Address for Delivery of Shares: ____________________________________
____________________________________
____________________________________
____________________________________
Attention: _________________________
Tendered (U.S. $_____ per share) Exercise Price $______________________
Dated at ________________, this _______ day of_______________, _______.
Witness: ) ____________________________________
) Holder's Name )
)
) ____________________________________
) Authorized Signature )
)
) ____________________________________
) Title (if applicable)
Signature guaranteed:
Ex. I-8
ASSIGNMENT FORM
(Series 2003A Warrant)
TO BE COMPLETED IF WARRANTS ARE TO BE ASSIGNED:
TO: ALTAIR NANOTECHNOLOGIES INC.
1725 Sheridan Avenue
Suite 140
Cody, Wyoming 82414
By signing below, the undersigned represents, warrants and certifies to
Altair Nanotechnologies Inc. as follows:
(a) the undersigned is the record and beneficial owner of the
Warrant(s) represented by the Warrant Certificate attached hereto; and
(b) if the Warrant(s) are to be transferred in Canada, a period of six
months has elapsed since the issue date of the Warrant(s).
By signing below, the undersigned hereby transfers, assigns and conveys all
right, title and interest in and to _________ of the Warrants represented by
this Warrant Certificate to _____________________________
____________________________ residing at ______________________________________
________________________________________ for good and valuable consideration.
You are hereby instructed to take the necessary steps to effect this transfer.
Dated at ___________________, this ______ day of _____________, _____.
Witness: ) ____________________________________
) Holder's Name )
)
) ____________________________________
) Authorized Signature )
)
) ____________________________________
) Title (if applicable)
Signature guaranteed:
Ex. I-9
Exhibit II
Form of Subscription Agreement
[see attached]
ALTAIR NANOTECHNOLOGIES INC.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this "Agreement") is entered into by and
between Altair Nanotechnologies Inc., a Canadian corporation (the "Corporation")
and the undersigned Subscriber, effective as of the date this Agreement is
accepted by the Corporation, with respect to certain Units (as defined below) of
the Corporation described in the Prospectus dated March 17, 2003, as amended or
supplement to date (the "Prospectus"), relating to the offering of the Units by
the Corporation, which Prospectus is a part of the Corporation's Registration
Statement on Form S-2, File No. 333-102592.
In consideration of the mutual covenants set forth herein, and other
good and valuable consideration, the undersigned and the Corporation hereby
agree and acknowledge as follows:
1. Purchase of Units. Each "Unit" consists of one common share, no par
value, of the Corporation (collectively, "Shares") and one-half Series 2003A
Warrant of the Corporation (collectively, "Warrants"). The purchase price per
Unit is equal to 90% of the closing price of the Shares, as reported on the
Nasdaq SmallCap Market, on the trading day preceding the day on which the
particular investor tenders the purchase price and required subscription
materials. The undersigned hereby subscribes for and agrees to purchase the
number of Units specified on the signature page of this Agreement in accordance
with the terms hereof.
2. Canadian Transfer Restrictions. Neither the Shares nor the Warrants
purchased pursuant to this Agreement, nor the Shares issuable upon the exercise
of the Warrants (the "Warrant Shares"), may be knowingly offered or sold into
Canada for a period of six months after the issue date of the Units.
3. Signature Page; Review of Prospectus. The information set forth on
the signature page of this Agreement, including the information as to the
undersigned's residence, is complete and accurate. The undersigned has received
and reviewed a copy of the Prospectus.
4. Acceptance by the Corporation. This Agreement may be accepted or
rejected by the Corporation in its sole and absolute discretion, and the
undersigned shall have no right or interest in any Units unless and until this
Agreement is accepted by the Corporation.
5. Governing Law; Counterparts. This Agreement will be governed by the
laws of the State of Nevada and the federal laws of the United States applicable
therein (without reference to the conflict of laws provisions thereof). This
Agreement may be signed in counterparts, all of which taken together shall be
one and the same Agreement. A facsimile copy of this Agreement or any
counterpart thereto is valid as an original
6. Tender of Signature Page and Subscription Proceeds. Payment of the
purchase price for any Units subscribed for is due at the time of subscription
(and will be promptly returned to the subscriber if the subscription is not
accepted). The purchase price shall be paid by check addressed to the Company
and sent, together with an executed copy of this Agreement, to 204 Edison Way,
Reno, Nevada 89502, U.S.A., Attention: Edward Dickinson, Chief Financial
Officer. The purchase price may also be paid by wire transfer. Please contact
Edward Dickinson at (775) 858-3750 for wire transfer instructions or with other
subscription and payment questions.
[intentionally left blank; signature page follows]
Ex. II-1
IN WITNESS WHEREOF, the undersigned has executed this Altair
Nanotechnologies Inc. Subscription Agreement as of the _____ day of
_____________, 2003.
A. __________________________________ __________________________________
(Signature of Subscriber) (Signature of Joint Subscriber
if applicable)
__________________________________ __________________________________
(Name of Subscriber) (Name of Joint Subscriber,
(Please Print or Type) if applicable)
B. Number of Units subscribed for: _____________________________________________
C. Calculation of Purchase Price.
(i) Closing price of the Shares, as reported on the
Nasdaq SmallCap Market, on the trading day preceding
the daday the subscriber executes and delivers this
Agreement together with the Aggregate Purchase Price:
____________________________________
(ii) 90% of the amount indicated in C(i):
____________________________
(iii) Aggregate Purchase Price (number of Units multiplied
by amount in C(ii)):
_____________________________________________________
(Feel free to contact Edward Dickinson, Chief Financial Officer, at
(775) 858-3750, with any questions regarding calculation of the
purchase price.)
D. Subscriber's Residence Address or, if Subscriber is not a natural
person, principal business address (please indicate street
address--post office address is not legally sufficient):
__________________________________________
__________________________________________
__________________________________________
E. Complete mailing address for delivery of certificates, notices and
other shareholder communications (if different from residence/business
address):
__________________________________________
__________________________________________
__________________________________________
F. Name in which Shares and Warrants are to be registered:
__________________________________________
(Please Print)
ACCEPTED AS OF ______________________, 2003
ALTAIR NANOTECHNOLOGIES Inc.
By: ________________________________________________
Its: _______________________________________________
Ex. II-2
======================================================= ===================================================
We have not authorized any dealer, salesperson or
other person to give any information or represent
anything not contained in this prospectus. This
prospectus does not offer to sell or buy any 2,250,000 Common Shares
securities in any jurisdiction where it is unlawful. 750,000 Warrants
The information in this prospectus is current as of
March 17, 2003.
ALTAIR NANOTECHNOLOGIES INC.
-----------------------
2,250,000 COMMON SHARES
750,000 WARRANTS
---------------
Prospectus
---------------
March 17, 2003
====================================================== ====================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
----------------------------------------------------
The following table sets forth the various expenses of the offering,
sale and distribution of the offered securities being registered pursuant to
this registration statement (the "Registration Statement"). All of the expenses
listed below will be borne by the Company. All of the amounts shown are
estimates except the SEC registration fees.
Item Amount
---- ------
SEC Commission registration fees $94
NASD registration fees $15,000
Accounting fees and expenses $5,000
Legal fees and expenses $20,000
Blue Sky fees and expenses $3,000
Printing Expenses $1,000
Miscellaneous Expenses $5,906
Total: $50,000
Item 15. Indemnification of Directors and Officers
--------------------------------------------------
Our Bylaws
----------
The Registrant's Bylaws provide that, to the maximum extent permitted
by law, the Registrant shall indemnify a director or officer of the Registrant,
a former director or officer of the Registrant, or another individual who acts
or acted at the Registrant's request as a director or officer, or an individual
acting in a similar capacity, of another entity, against all costs, charges and
expenses, including any amount paid to settle an action or satisfy a judgment,
reasonably incurred by the individual in respect of any civil, criminal,
administrative, investigative or other proceeding in which the individual is
involved because of that association with the Registrant or other entity.
The Canada Business Corporations Act
------------------------------------
Section 124 of the Canada Business Corporations Act provides as follows
with respect to the indemnification of directors and officers:
(1) A corporation may indemnify a director or officer of the
corporation, a former director or officer of the corporation or another
individual who acts or acted at the corporation's request as a director or
officer, or an individual acting in a similar capacity, of another entity,
against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, reasonably incurred by the individual in respect
of any civil, criminal, administrative, investigative or other proceeding in
which the individual is involved because of that association with the
corporation or other entity.
(2) A corporation may advance moneys to a director, officer or other
individual for the costs, charges and expenses of a proceeding referred to in
subsection (1). The individual shall repay the moneys if the individual does not
fulfill the conditions of subsection (3).
II-1
(3) A corporation may not indemnify an individual under subsection (1)
unless the individual
(a) acted honestly and in good faith with a view to the best
interests of the corporation, or, as the case may be, to the best
interests of the other entity for which the individual acted as
director or officer or in a similar capacity at the corporation's
request; and
(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, the individual had
reasonable grounds for believing that the individual's conduct was
lawful.
(4) A corporation may with the approval of a court, indemnify an
individual referred to in subsection (1), or advance moneys under subsection
(2), in respect of an action by or on behalf of the corporation or other entity
to procure a judgment in its favor, to which the individual is made a party
because of the individual's association with the corporation or other entity as
described in subsection (1) against all costs, charges and expenses reasonably
incurred by the individual in connection with such action, if the individual
fulfills the conditions set out in subsection (3).
(5) Despite subsection (1), an individual referred to in that
subsection is entitled to indemnity from the corporation in respect of all
costs, charges and expenses reasonably incurred by the individual in connection
with the defense of any civil, criminal, administrative, investigative or other
proceeding to which the individual is subject because of the individual's
association with the corporation or other entity as described in subsection (1),
if the individual seeking indemnity
(a) was not judged by the court or other competent authority
to have committed any fault or omitted to do anything that the
individual ought to have done; and
(b) fulfills the conditions set out in subsection (3).
(6) A corporation may purchase and maintain insurance for the benefit
of an individual referred to in subsection (1) against any liability incurred by
the individual
(a) in the individual's capacity as a director or officer of
the corporation; or
(b) in the individual's capacity as a director or officer, or
similar capacity, of another entity, if the individual acts or acted in
that capacity at the corporation's request.
(7) A corporation, an individual or an entity referred to in subsection
(1) may apply to a court for an order approving an indemnity under this section
and the court may so order and make any further order that it sees fit.
(8) An applicant under subsection (7) shall give the Director notice of
the application and the Director is entitled to appear and be heard in person or
by counsel.
(9) On an application under subsection (7) the court may order notice
to be given to any interested person and the person is entitled to appear and be
heard in person or by counsel.
Employment Agreements With Certain Officers
-------------------------------------------
Pursuant to an employment agreement with William P. Long, the Chief
Executive Officer and a director of the Registrant, the Registrant has agreed to
assume all liability for and to indemnify, protect, save, and hold Dr. Long
harmless from and against any and all losses, costs, expenses, attorneys' fees,
claims, demands, liability, suits, and actions of every kind and character which
may be imposed upon or incurred by Dr. Long on account of, arising directly or
indirectly from, or in any way connected with or related to Dr. Long's
activities as an officer and member of the board of directors of the Registrant,
except as arise as a result of fraud, felonious conduct, gross negligence or
II-2
acts of moral turpitude on the part of Dr. Long. In addition, Mineral Recovery
Systems, Inc. ("MRS"), a wholly-owned subsidiary of the Registrant, has agreed
to assume all liability for and to indemnify, protect, save, and hold harmless
Patrick Costin (Vice President of the Registrant and President of MRS) from and
against any and all losses, costs, expenses, attorneys' fees, claims, demands,
liabilities, suits and actions of every kind and character which may be imposed
on or incurred by Mr. Costin on account of, arising directly or indirectly from,
or in any way connected with Mr. Costin's activities as manager, officer, or
director of MRS or the Registrant.
Other Indemnification Information
---------------------------------
Indemnification may be granted pursuant to any other agreement, bylaw,
or vote of shareholders or directors. In addition to the foregoing, the
Registrant maintains insurance through a commercial carrier against certain
liabilities which may be incurred by its directors and officers. The foregoing
description is necessarily general and does not describe all details regarding
the indemnification of officers, directors or controlling persons of the
Registrant.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been informed that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The rights of indemnification described above are not exclusive of any
other rights of indemnification to which the persons indemnified may be entitled
under any bylaw, agreement, vote of stockholders or directors or otherwise.
Item 16. Exhibits.
------------------
The following exhibits required by Item 601 of Regulations S-K
promulgated under the Securities Act have been included herewith or have been
filed previously with the SEC as indicated below.
Exhibit No. Description Incorporated by Reference/
Filed Herewith (and Sequential Page #)
---------------- ---------------------------------------- -------------------------------------------------------
4.1 Form of Common Stock Certificate Incorporated by reference to Registration Statement on
Form 10-SB filed with the Commission on November 25,
1996, File No. 1-12497.
4.2 Amended and Restated Shareholder Incorporated by reference to the Company's Current
Rights Plan dated October 15, 1999, Report on Form 8-K filed with the Commission on
between the Company and Equity November 19, 1999, File No. 1-12497.
Transfer Services, Inc.
4.3 Form of Series 2003A Warrant Included herein beginning on page Ex. I-1
5 Opinion of Goodman and Carr LLP as to Incorporated by reference to Amendment No. 1 to the
legality of securities offered Company's Registration Statement on Form S-2 filed
with the Commission on February 7, 2003, File No.
333-102592.
II-3
10.1 Employment Agreement between Altair Incorporated by reference to the Company's Annual
International Inc. and William P. Long Report on Form 10-K filed with the Commission on
dated January 1, 1998 March 31, 1998, as amended by Amendment No. 1 to
Annual Report on Form 10-K/A filed on May 15, 1998.
10.2 Employment Agreement between Fine Gold Incorporated by reference to Registration Statement
Recovery Systems Inc. and C. Patrick on Form 10-SB filed with the Commission on November
Costin dated August 15, 1994 25, 1996.
10.3 Altair International Inc. Stock Option Incorporated by reference to the Company's
Plan adopted by shareholders on May Registration Statement on Form S-8 filed with the
10, 1996 Commission on July 11, 1997.
10.4 1998 Altair International Inc. Stock Incorporated by reference to the Company's Definitive
Option Plan adopted by Shareholders on Proxy Statement on Form 14A filed with the Commission
June 11, 1998 on May 12, 1998.
10.5 Form of Mineral Lease Incorporated by reference to the Company's Annual
Report on Form 10-K filed with the Commission on March
31, 1998, as amended by Amendment No. 1 to Annual
Report on Form 10-K/A filed on May 15, 1998.
10.6 Purchase and Sale Agreement dated Incorporated by reference to Amendment No. 1 to the
August 8, 2002 between the Company and Company's Registration Statement on Form S-2 filed
BHP Minerals International Inc. (re with the Commission on February 7, 2003, File No.
Edison Way property) 333-102592.
10.7 Note Amendment Agreement dated Incorporated by reference to the Company's Current
November 21, 2002 Report on Form 8-K filed with the Commission on
November 27, 2002.
10.8 Installment Note dated August 8, 2002 Incorporated by reference to Amendment No. 1 to the
(re Edison Way property) Company's Registration Statement on Form S-2 filed
with the Commission on February 7, 2003, File No.
333-102592.
10.9 Stock Pledge Agreement dated December Incorporated by reference to the Company's Current
15, 2000 (Mineral Recovery Systems Report on Form 8-K filed with the Commission on
common stock). December 26, 2000.
10.10 Stock Pledge Agreement dated December Incorporated by reference to the Company's Current
15, 2000 (Altair Technologies common Report on Form 8-K filed with the Commission on
stock). December 26, 2000.
10.11 First Amendment to Stock Pledge Incorporated by reference to the Company's Current
Agreement Report on Form 8-K filed with the SEC on January 4,
2002.
II-4
10.12 Second Amended and Restated Secured Incorporated by reference to the Company's Amendment
Term Note dated November 21, 2002 No. 1 to Current Report on Form 8-K filed with the
Commission on December 4, 2002, File No. 1-12497.
10.13 Trust Deed dated August 8, 2002 (re Incorporated by reference to Amendment No. 1 to the
Edison Way property) Company's Registration Statement on Form S-2 filed
with the Commission on February 7, 2003, File No.
333-102592.
10.14 Form of Subscription Agreement Included herein beginning on page Ex. II-1
10.15 2002 Employee Wage Stock Purchase Plan Incorporated by reference to the Company's
Registration Statement on Form S-8, File No.
333-99099, filed with the Commission on September 3,
2002.
23.1 Consent of Deloitte & Touche LLP Filed herewith.
23.2 Consent of Goodman and Carr LLP Included in Exhibit No. 5 above.
24 Powers of Attorney Incorporated by reference to the Company's
Registration Statement on Form S-2 filed with the
Commission on January 17, 2003, File No. 333-102592.
-----------------------
Item 17. Undertakings.
----------------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration Statement;
notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-5
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company,
the Company has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-2 and has duly caused this Amendment
No. 2 to Registration Statement on Form S-2 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cody, State of Wyoming,
on March 17, 2003.
ALTAIR NANOTECHNOLOGIES INC.
By /s/ William P. Long
---------------------------------
William P. Long
Chief Executive Officer
ADDITIONAL SIGNATURES
Signature Title Date
--------- ----- ----
/s/ William P. Long Chief Executive Officer and Director March 17, 2003
------------------------------------ (Principal Executive Officer and authorized
William P. Long representative of the Company in the United States)
/s/ Edward H. Dickinson Chief Financial Officer and Director March 17, 2003
------------------------------------ (Principal Financial Officer and Principal
Edward H. Dickinson Accounting Officer)
/s/ James I. Golla* Director March 17, 2003
------------------------------------
James I. Golla
/s/ George E. Hartman* Director March 17, 2003
------------------------------------
George E. Hartman
/s/ Robert Sheldon* Director March 17, 2003
------------------------------------
Robert Sheldon
* By /s/ William P. Long
------------------------------
William P. Long, Attorney-in-Fact
II-7
EXHIBIT INDEX
The following exhibits required by Item 601 of Regulations S-K
promulgated under the Securities Act have been included herewith or have been
filed previously with the SEC as indicated below.
Exhibit No. Description Incorporated by Reference/
Filed Herewith (and Sequential Page #)
---------------- ---------------------------------------- -------------------------------------------------------
4.1 Form of Common Stock Certificate Incorporated by reference to Registration Statement on
Form 10-SB filed with the Commission on November 25,
1996, File No. 1-12497.
4.2 Amended and Restated Shareholder Incorporated by reference to the Company's Current
Rights Plan dated October 15, 1999, Report on Form 8-K filed with the Commission on
between the Company and Equity November 19, 1999, File No. 1-12497.
Transfer Services, Inc.
4.3 Form of Series 2003A Warrant Included herein beginning on page Ex. I-1
5 Opinion of Goodman and Carr LLP as to Incorporated by reference to Amendment No. 1 to the
legality of securities offered Company's Registration Statement on Form S-2 filed
with the Commission on February 7, 2003, File
No. 333-102592
10.1 Employment Agreement between Altair Incorporated by reference to the Company's Annual
International Inc. and William P. Long Report on Form 10-K filed with the Commission on
dated January 1, 1998 March 31, 1998, as amended by Amendment No. 1 to
Annual Report on Form 10-K/A filed on May 15, 1998.
10.2 Employment Agreement between Fine Gold Incorporated by reference to Registration Statement
Recovery Systems Inc. and C. Patrick on Form 10-SB filed with the Commission on November
Costin dated August 15, 1994 25, 1996.
10.3 Altair International Inc. Stock Option Incorporated by reference to the Company's
Plan adopted by shareholders on May Registration Statement on Form S-8 filed with the
10, 1996 Commission on July 11, 1997.
10.4 1998 Altair International Inc. Stock Incorporated by reference to the Company's Definitive
Option Plan adopted by Shareholders on Proxy Statement on Form 14A filed with the Commission
June 11, 1998 on May 12, 1998.
10.5 Form of Mineral Lease Incorporated by reference to the Company's Annual
Report on Form 10-K filed with the Commission on March
31, 1998, as amended by Amendment No. 1 to Annual
Report on Form 10-K/A filed on May 15, 1998.
II-8
10.6 Purchase and Sale Agreement dated Incorporated by reference to Amendment No. 1 to the
August 8, 2002 between the Company and Company's Registration Statement on Form S-2 filed
BHP Minerals International Inc. (re with the Commission on February 7, 2003, File No.
Edison Way property) 333-102592.
10.7 Note Amendment Agreement dated Incorporated by reference to the Company's Current
November 21, 2002 Report on Form 8-K filed with the Commission on
November 27, 2002.
10.8 Installment Note dated August 8, 2002 Incorporated by reference to Amendment No. 1 to the
(re Edison Way property) Company's Registration Statement on Form S-2 filed
with the Commission on February 7, 2003, File No.
333-102592.
10.9 Stock Pledge Agreement dated December Incorporated by reference to the Company's Current
15, 2000 (Mineral Recovery Systems Report on Form 8-K filed with the Commission on
common stock). December 26, 2000.
10.10 Stock Pledge Agreement dated December Incorporated by reference to the Company's Current
15, 2000 (Altair Technologies common Report on Form 8-K filed with the Commission on
stock). December 26, 2000.
10.11 First Amendment to Stock Pledge Incorporated by reference to the Company's Current
Agreement Report on Form 8-K filed with the SEC on January 4,
2002.
10.12 Second Amended and Restated Secured Incorporated by reference to the Company's Amendment
Term Note dated November 21, 2002 No. 1 to Current Report on Form 8-K filed with the
Commission on December 4, 2002, File No. 1-12497.
10.13 Trust Deed dated August 8, 2002 (re Incorporated by reference to Amendment No. 1 to the
Edison Way property) Company's Registration Statement on Form S-2 filed
with the Commission on February 7, 2003, File No.
333-102592.
10.14 Form of Subscription Agreement Included herein beginning on page Ex. II-1
10.15 2002 Employee Wage Stock Purchase Plan Incorporated by reference to the Company's
Registration Statement on Form S-8, File No.
333-99099, filed with the Commission on September 3,
2002.
23.1 Consent of Deloitte & Touche LLP Filed herewith.
23.2 Consent of Goodman and Carr LLP Included in Exhibit No. 5 above.
24 Powers of Attorney Incorporated by reference to the Company's
Registration Statement on Form S-2 filed with the
Commission on January 17, 2003, File No. 333-102592.
-----------------------
II-9