Filed pursuant to
Rule 424 (b)(3)
Registration Nos.
333-54092,
333-45511 &
333-36462
ALTAIR INTERNATIONAL INC.
12,060,842 Common Shares
------------------
This prospectus relates to the offering and sale of 12,060,842 common
shares of Altair International Inc., without par value. All of the offered
shares are to be sold by persons who are existing security holders and
identified in the section of this prospectus entitled "Selling Shareholders." Of
the shares offered hereby, 650,000 are currently owned by the selling
shareholders and 1,383,672 are issuable upon the exercise of outstanding
warrants to purchase common shares of Altair. The remaining 10,027,170 offered
shares are being registered pursuant to a contractual obligation with one of the
selling shareholders and represent an estimated number of common shares that
Altair may be required to issue to such selling shareholder pursuant to a 10%
Asset-Backed Exchangeable Term Note. The number of shares actually issued upon
the exchange of the Exchangeable Term Note may be greater or fewer than
10,027,170 shares. 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 cover a presently indeterminate number of common shares issuable upon the
occurrence of a stock split, stock dividend, or other similar transaction.
We will not receive any of the proceeds from the sale of the shares
offered hereunder. In the United States, our common shares are listed for
trading under the symbol ALTI on the Nasdaq National Market. On November 8,
2001, the closing sale price of a common share, as reported by the Nasdaq
National Market, was $1.52 per share. Unless otherwise expressly indicated, all
monetary amounts set forth in this prospectus are expressed in United States
Dollars.
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.
================================================================================
Consider carefully the risk factors beginning on page 2 in this prospectus
before investing in the offered share being sold with this prospectus.
================================================================================
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 November 9, 2001
TABLE OF CONTENTS
RISK FACTORS................................................................2
FORWARD-LOOKING STATEMENTS.................................................10
OUR COMPANY'S COMMON STOCK.................................................10
USE OF PROCEEDS............................................................12
DILUTION...................................................................12
SELLING SHAREHOLDERS.......................................................13
PLAN OF DISTRIBUTION.......................................................22
DESCRIPTION OF OFFERED SECURITIES..........................................24
LEGAL MATTERS..............................................................24
EXPERTS....................................................................24
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................24
WHERE YOU CAN FIND MORE INFORMATION........................................25
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, and may never generate, significant operating revenues.
------------------------------------------------------------------------------
To date, we have not generated any significant revenues from
operations. We have not completed development of the jig or the titanium
processing technology and have not completed exploration of the Tennessee
mineral property. We can provide no assurance that we will ever generate
significant revenues from the jig or the Tennessee mineral property or that we
will generate significant revenues from the titanium processing technology.
We may continue to experience significant losses from operations.
-----------------------------------------------------------------
We have experienced a loss from operations in every fiscal year since
our inception. Our losses from operations in 1999 were $3,729,534 and our losses
from operations in 2000 were $6,647,367. We will continue to experience a net
operating loss until, and if, the titanium processing technology, the jig and/or
the Tennessee mineral property begin generating significant revenues. Even if
any or all such products or projects begin generating significant revenues, the
revenues may not exceed our costs of production and operating expenses. We may
not ever realize a profit from operations.
We may not be able to raise sufficient capital to meet future obligations.
------------------------------------------------------------------------- -
As of September 30, 2001, we had $17,728 in unrestricted cash and
$2,504,715 in restricted cash that is securing a letter of credit and is
scheduled to be released as the outstanding principal balance is reduced.
through In the absence of significant revenue, this amount of capital will
likely prove insufficient to complete the testing and additional development
work necessary to place the titanium processing technology into continuous
operation. In addition, we will likely need additional capital for testing and
development of the jig or 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.
We may not be able to 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;
2
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.
Our competitors may be able to raise money and exploit opportunities more
--------------------------------------------------------------------------------
rapidly, easily and thoroughly than we can.
-------------------------------------------
We have limited financial and other resources and, because of our
earlier 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.
The common shares issued upon exchange of the Exchangeable Term Note may dilute
--------------------------------------------------------------------------------
existing shareholders.
----------------------
We do not presently have the capital to redeem the monthly payments
required by the 10% Asset-Backed Exchangeable Term Note dated December 15, 2000
(the "Exchangeable Term Note"). If we do not redeem such monthly payments, the
holder of the Exchangeable Term Note has the right to exchange the monthly
payment amounts into common shares at an exchange price equal to the lesser of
$3.00 and the average of the lowest three daily trading prices of the common
shares during the 15 trading days ending on the day before an exchange right is
exercised. Because the exchange price is tied to the market price of our common
shares, the number of shares issuable upon exercise of exchange rights increases
significantly as the market price of our common shares falls below $3.00 and
would approach infinity if the market price of our common shares approached
zero. For example, if the market price of our common shares were to drop to $.50
and remain at that level throughout the term of the Exchangeable Term Note, the
holder would receive approximately 15,458,332 common shares (or approximately
44.5% of the common shares that would be outstanding after the issuance) upon
exercise of all exchange rights accruing under the Exchangeable Term Note.
The exercise of exchange rights under the Exchangeable Term Note may place
--------------------------------------------------------------------------------
downward pressure on the market price of our common shares and encourage short
--------------------------------------------------------------------------------
selling.
--------
The exchange of the monthly payment amount under the Exchangeable Term
Note and subsequent sale of the common shares issuable upon such exchange may
place downward pressure on the market price of our common shares. Speculative
traders may anticipate the exercise of exchange rights under the Exchangeable
Term Note 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.
3
We have pledged substantial assets to secure the Exchangeable Term Note.
------------------------------------------------------------------------
We have pledged all of the intellectual property and common stock of
Altair Technologies, Inc., our second-tier wholly-owned subsidiary, to secure
repayment of the Exchangeable Term Note. Altair Technologies, Inc. owns and
operates the titanium processing technology we acquired from BHP Minerals in
1999. The Exchangeable Term Note is also secured by a pledge of the common stock
of Mineral Recovery Systems, Inc., which owns and operates our leasehold
interests in the Camden, Tennessee area. If we default on the Exchangeable Term
Note, severe remedies will be available to the holder of the Exchangeable Term
Note, including immediate seizure and disposition of all pledged assets.
Operations using the titanium processing technology, the jig or the Tennessee
--------------------------------------------------------------------------------
mineral property may lead to substantial environmental liability.
-----------------------------------------------------------------
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.
----------------
We are an Ontario 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.
----------------------------------
Our continued success will depend to a significant extent on the
services of Dr. William P. Long, our President and Chief Executive Officer, and
Mr. C. Patrick Costin, our Vice President and President of Fine Gold and MRS.
The loss or unavailability of Dr. Long or Mr. Costin could have a material
adverse effect on us. We do not carry key man insurance on the lives of Dr. Long
or Mr. Costin.
4
We may issue substantial amounts of additional shares without stockholder
--------------------------------------------------------------------------------
approval.
---------
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 of 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. Additional common shares
could be issued at a lower price per share than the price you are being offered.
The market price of our common shares is extremely volatile.
------------------------------------------------------------
Our common shares have been listed on the Nasdaq National Market since
January 26, 1998. 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 Continued dominance of trading in our common shares by a small
number of firms;
o Positive or negative announcements by us or our competitors;
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
(such as the holders of the Exchangeable Term Note) who stand to
profit from a rapid increase or decrease in the price of our
common shares.
Future sales of currently restricted securities or common shares subject to
--------------------------------------------------------------------------------
outstanding options may affect the market price of our common shares.
---------------------------------------------------------------------
In general, Rule 144 of the Securities Act provides that outstanding
restricted common shares of Altair may be sold subject to certain conditions
beginning one year after issuance and, unless held by an affiliate of Altair,
may be sold without limitation beginning two years after issuance. Future sales
of currently restricted securities may have a negative effect on the market
price of our common shares.
In addition, shares issued upon exercise of options granted pursuant to
our employee stock option plans are presently registered under the Securities
Act. Subject to certain restrictions on resale by affiliates, such shares may be
sold without restriction. The sale of any substantial number of common shares
may have a depressive effect on the market price of our common shares.
We have never declared, and are currently prohibited from declaring, a dividend.
--------------------------------------------------------------------------------
We have never declared or paid 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
5
foreseeable future. In addition, under the terms of the Exchangeable Term Note,
we are prohibited from declaring or paying any dividends until the Exchangeable
Term Note is paid in full.
We may not be able to sell nanoparticles produced using the titanium processing
--------------------------------------------------------------------------------
technology.
-----------
In the short run, we plan to use the titanium processing technology to
produce titanium dioxide ("TiO2") nanoparticles. TiO2 nanoparticles are TiO2
crystals that are approximately one-tenth the size of conventional pigmentary
TiO2 particles. Because of their small size, photocatalytic and ultraviolet
shielding capabilities and other unique characteristics, TiO2 nanoparticles sell
at a much higher price than conventional TiO2 particles and are used in products
such as specialty surface coatings, UV protectant cosmetics and battery
components.
TiO2 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 TiO2 nanoparticle products for various applications
and have no long-term agreements with end users to purchase any of TiO2
nanoparticle products. If we are unable to customize our TiO2 nanoparticle
products to the satisfaction of customers or otherwise unable to obtain any
long-term commitments from end-users of our TiO2 nanoparticle products, we may
be unable to recoup our investment in the titanium processing technology and
titanium processing equipment.
In addition, the uses for such nanoparticles are limited, and the
market for such nanoparticles is small, currently estimated at 3,800 tons per
annum. In light of the small size of the market, we may not be able to
profitably market any proposed nanoparticle products for any of the following
reasons:
o there may be insufficient demand for such products;
o despite strong initial demand for any such products, the market
for such products may contract as a result of a decrease in demand
for goods incorporating such products or other event;
o the increased supply of such products as a result of our entrance
into the market may cause the price to drop, reducing or
eliminating profitability; and
o competing entities may begin producing, or increase their
production of nanoparticles, causing the price to drop or
displacing potential sales.
6
Our costs of production may be so high as to prevent us from becoming
--------------------------------------------------------------------------------
profitable.
-----------
We have not produced any mineral products using the 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,
competitors may be able to sell TiO2 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 TiO2 nanoparticles and related products to be unprofitable.
Our costs of production may exceed estimates.
---------------------------------------------
We have not produced any mineral products using the 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,
competitors may be able to sell TiO2 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 TiO2 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.
-----------------------------------\------
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 and the Tennessee mineral
property. 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.
---------------------------------------------------------
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.
7
The jig faces competition from other jig-like products and from alternative
--------------------------------------------------------------------------------
technologies.
-------------
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
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 not completed examining the feasibility of mining the Tennessee mineral
--------------------------------------------------------------------------------
property.
---------
We are currently in the process of conducting feasibility testing of
the Tennessee mineral property. Because we are at an early stage of testing, 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.
8
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.
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.
9
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
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 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.
OUR COMPANY'S COMMON STOCK
Price Range of Common Stock
Beginning on January 26, 1998, our common shares began trading on the
Nasdaq National Market under the symbol "ALTIF" (changed to "ALTI" on May 23,
2000) The following table sets forth, for the periods indicated, the high and
low sales prices for our common shares, as reported on the Nasdaq National
Market.
Fiscal Year Ended December 31, 1998 Low High
---------------- ----------------
1st Quarter (beginning January 26,
1998) $8.125 $15.625
2nd Quarter 7.000 9.625
3rd Quarter 3.000 10.250
4th Quarter 5.875 8.625
Fiscal Year Ended December 31, 1999 Low High
---------------- ----------------
1st Quarter $6.063 $9.875
2nd Quarter 4.125 6.875
3rd Quarter 3.875 5.000
4th Quarter 3.453 5.063
10
Fiscal Year Ended December 31, 2000 Low High
---------------- ----------------
1st Quarter $3.625 $9.469
2nd Quarter $2.750 $5.625
3rd Quarter $2.000 $4.469
4th Quarter $0.719 $3.500
Fiscal Year Ended December 31, 2001 Low High
---------------- ----------------
1st Quarter $1.313 $3.438
2nd Quarter $2.00 $2.910
3rd Quarter $1.240 $2.740
The last sale price of the common shares, as reported on the Nasdaq National
Market, on November 8, 2001 was $1.52 per share.
Outstanding Shares and Number of Shareholders
As of November 1, 2001, the number of common shares outstanding was
20,814,809, held by approximately 500 holders of record. In addition, as of the
same date, we had reserved 5,366,700 common shares for issuance upon exercise of
options that have been, or may be, granted under our employee stock option plans
and 1,883,672 common shares 3,600,340 for issuance upon the exercise of
outstanding warrants. In addition, we have issued the Exchangeable Term Note,
pursuant to which a presently indeterminable number of additional common shares
may be issued.
Of our outstanding common shares, 1,750,001 were "restricted
securities," as defined in Rule 144 as of September 30, 2001. The resale of
550,000 of such restricted securities has been registered under the registration
statement of which this prospectus is part. The 1,200,001 "restricted
securities" that have not been registered under the registration statement of
which this prospectus is a part were issued between August 4, 2000 and July 23,
2001.
Dividends
We have never declared or paid dividends on our common shares.
Moreover, we currently intend to retain any future earnings for use in our
business and, therefore, do not anticipate paying any dividends on our common
shares in the foreseeable future.
Transfer Agent and Registrar
The Transfer Agent and Registrar for our common shares is Equity
Transfer Services, Inc., Suite 420, 120 Adelaide Street West, Toronto, Ontario,
M5H 4C3.
11
Canadian Taxation Considerations
Dividends paid on common shares owned by non-residents of Canada are
subject to Canadian withholding tax. The rate of withholding tax on dividends
under the Income Tax Act (Canada) (the "Act") is 25%. However, Article X of the
reciprocal tax treaty between Canada and the United States of America (the
"Treaty") generally limits the rate of withholding tax on dividends paid to
United States residents to 15%. The Treaty further generally limits the rate of
withholding tax to 5% if the beneficial owner of the dividends is a U.S.
corporation which owns at least 10% of the voting shares of the company.
If the beneficial owner of the dividend carries on business in Canada
through a permanent establishment in Canada, or performs in Canada independent
personal services from a fixed base in Canada, and the shares of stock with
respect to which the dividends are paid are effectively connected with such
permanent establishment or fixed base, the dividends are taxable in Canada as
business profits at rates which may exceed the 5% or 15% rates applicable to
dividends that are not so connected with a Canadian permanent establishment or
fixed base. Under the provisions of the Treaty, Canada is permitted to apply its
domestic law rules for differentiating dividends from interest and other
disbursements.
A capital gain realized on the disposition of our common shares by a
person resident in the United States (a "Non-resident") will be subject to tax
under the Act if the shares held by the Non-resident are "taxable Canadian
property." In general, our common shares will be taxable Canadian property if
the particular Non-resident used (or in the case of a Non-resident insurer, used
or held) the common shares in carrying on business in Canada or, where at any
time during the five-year period immediately preceding the realization of the
gain, not less than 25% of the issued and outstanding shares of any class or
series of shares of the Company were owned by the particular Non-resident, by
persons with whom the particular Non-resident did not deal at arms' length, or
by any combination thereof. If the common shares constitute taxable Canadian
property, relief nevertheless may be available under the Treaty. Under the
Treaty, gains from the alienation of common shares owned by a Non-resident who
has never been resident in Canada generally will be exempt from Canadian capital
gains tax if the shares do not relate to a permanent establishment or fixed base
which the Non-resident has or had in Canada, and if not more than 50% of the
value of the shares was derived from real property (which includes rights to
explore for or to exploit mineral deposits) situated in Canada.
USE OF PROCEEDS
All proceeds from any sale of offered shares, less commissions and
other customary fees and expenses, will be paid directly to the selling
shareholders selling the offered shares. We will not receive any proceeds from
the sale of any of the offered shares.
DILUTION
Our unaudited net tangible book value at September 30, 2001 was
$3,716,444, or approximately $.18 per each of the 20,578,909 common shares then
12
outstanding and approximately $.11 per share had all of the 12,060,842 offered
shares been issued and outstanding on that date. Accordingly, new investors who
purchase shares may suffer an immediate dilution of the difference between the
purchase price per share and approximately $.11 per share.
As of September 30, 2001, there were outstanding warrants and options
to purchase up to 7,267,040 common shares at a weighted average exercise price
of $4.2642 per share. The existence of such warrants and options may hinder
future equity offerings by us, and the exercise of such warrants and options may
have an adverse effect on the prevailing market price of the common shares.
Furthermore, the holders of warrants and options may exercise them at a time
when we would otherwise be able to obtain additional equity capital on terms
more favorable to us.
SELLING SHAREHOLDERS
All of the offered shares are to be sold by persons who are existing
security holders of Altair. The selling shareholders acquired their shares,
warrants and Exchangeable Term Note in private placements of (i) the
Exchangeable Term Note and 350,000 warrants that we completed on December 15,
2000 (ii) 50,000 shares and 50,000 warrants that we completed on August 22,
2000, (iii) 500,000 shares and 500,000 warrants that we completed on August 4,
2000, (iv) 325,339 warrants that we completed on March 31, 2000, (v) 83,333
warrants that we completed on March 3, 2000, (vi) 75,000 warrants that we
completed on February 15, 2000, and (vii) 100,000 shares that we completed on
December 29, 1997.
Of the common shares offered hereby, 650,000 are currently owned by the
selling shareholders and 1,383,672 are issuable upon exercise of outstanding
warrants. The remaining 10,027,170 offered shares relate to the Exchangeable
Term Note, which is exchangeable into our common shares.
For purposes of this prospectus, we have assumed that the number of
shares issuable upon exercise of each of the warrants is the number stated on
the face thereof. The number of shares issuable upon exercise of the warrants,
and available for resale hereunder, is subject to adjustment and could
materially differ from the estimated amount depending on the occurrence of a
stock split, stock dividend, or similar transaction resulting in an adjustment
in the number of shares subject to the warrants.
For purposes of this prospectus, we have also assumed that 10,027,170
shares would be issued upon exercise of exchange rights under the Exchangeable
Term Note, which is the 150% of the number of shares that will be issued if we
do not prepay or redeem any amounts due under the Exchangeable Term Note, the
holder of the Exchangeable Term Note exercises all exchange rights immediately
upon accrual and the exchange rate remains at $1.15623, as it was on the date we
filed the initial registration statement of which this prospectus is a part.
Nonetheless, the number of shares issuable upon exchange of accrued monthly
payments under the Exchangeable Term Note, and available for resale hereunder,
is subject to adjustment and could materially differ from the estimated amount
depending variations in the market price of our common shares, any partial or
complete redemption of the Exchangeable Term Note or the occurrence of a stock
split, stock dividend, or similar transaction resulting in an adjustment in the
number of shares issuable upon exchange of accrued monthly payments under the
Exchangeable Term Note.
13
Beneficial Ownership of Selling Shareholders
The table that begins on the top of the next page sets forth, as of the
date of this prospectus:
o the name of each selling shareholder,
o certain beneficial ownership information with respect to the
selling shareholders,
o the number of shares that may be sold from time to time by each
selling shareholder pursuant to this prospectus, and
o the amount (and, if one percent or more, the percentage) of common
shares to be owned by each selling shareholder if all offered
shares are sold.
Beneficial ownership is determined in accordance with SEC rules and generally
includes voting or investment power with respect to securities. Common shares
that are issuable upon the exercise of outstanding options, warrants or other
purchase rights, to the extent exercisable within 60 days of the date of this
prospectus, are treated as outstanding for purposes of computing each selling
shareholder's percentage ownership of outstanding common shares.
Shares Beneficially Owned
Beneficial Ownership upon Completion of the
Prior to Offering Offering(1)
--------------------------------- -----------------------------
Number of
Number of Shares Being Number of
Beneficial Owner Shares Percent(2) Offered Shares Percent
------------------------------ ---------------- ------------- -------------- ------------ ------------
Doral 18, LLC 1,429,550(3) 4.9%(4) 10,377,170 300,000 1.3%
David White**
John Fern**
Louis Schnur 2,956,189(5) 9.9%(6) 750,000 2,206,189 9.9%
MBRT Trust(7) 412,500(8) 2.0% 350,000 62,500 *
Shayne Davis**
Gibson Family Limited 233,334(9) 1.1% 100,000 133,334 *
Partnership
Tom Gibson**
Anderson LLC 250,261(10) 1.2% 250,261 0 --
David Sims**
Toyota on Western, Inc. 83,333(11) * 83,333 0 --
Louis Schnur**
De Jong & Associates, Inc. 75,000(12) * 75,000 0 --
Ron de Jong**
Ladenburg Thalmann & Co., 75,078(13) * 75,078 0 --
Inc.
All Selling Shareholders as 5,515,245(3)(14) 22.6% 12,060,842 1,676,633 7.5%
a Group
---------------------
14
* Represents less than one percent of the outstanding common shares.
** Such individual has authority to make voting and investment decisions
with respect to the securities of Altair held by the entity listed
above such individual's name. Where two or more individuals are listed,
each has such authority acting without the other.
(1) Assuming the sale by each selling shareholder of all of the shares
offered hereunder by such selling shareholder. There can be no
assurance that any of the shares offered hereby will be sold.
(2) The percentages set forth above have been computed assuming the number
of common shares outstanding equals the sum of (a) 20,814,809, which is
the number of common shares actually outstanding on November 1, 2001,
and (b) common shares subject to exercisable warrants and exchange
rights with respect to which such percentage is calculated.
(3) Includes 650,000 common shares issuable by us upon the exercise of
warrants held by Doral 18, LLC and 779,000 shares that would have been
issued if all accrued exchange rights would have been exercised on
November 1, 2001. Does not include shares issuable upon exercise of the
exchange rights that may accrue in the future under the Exchangeable
Term Note held by Doral. As further discussed in "--Private Placement
of Shares, Warrants and Notes--Doral 18, LLC" below, if we elect not to
redeem the monthly payment amount we owe under the Exchangeable Term
Note, on each due date, the holder of the Exchangeable Term Note
automatically will receive the right to exchange (immediately or at any
later date during the term) the monthly payment amount into common
shares at the applicable exchange price. The exchange price for any
date is the lesser of (a) a fixed exchange price of $3.00, subject to
adjustment, and (b) the average of the lowest three daily trading
prices of the common shares during the 15 trading days ending on the
day before an exchange right is exercised. For an illustration of how
many common shares would be issuable under the Exchangeable Term Note
if the market price of our common shares were to remain at various
price levels during the term of the Exchangeable Term Note, see
"--Private Placement of Shares, Warrants and Notes - Doral 18, LLC"
below. As required by a registration rights agreement with Doral, we
have registered 10,027,170 common shares on behalf of Doral with
respect to the Exchangeable Term Note, representing 150% of the number
of shares that would be issuable to Doral were all exchange rights to
vest and be exercised on the date the initial draft registration
statement of which this prospectus is a part was filed.
(4) Under the terms of theThe Exchangeable Term Note and Warrants held by
Doral, Doral is prohibited from exercising any accruedDoral contain
provisions which provide that Doral may not exercise exchange rights or
warrants if, after such exercise, it would beneficially ownif such
exercise would result in Doral owning more than 4.999% of the
outstanding common shares. But for the effect of such provision, Doral
would beneficially own 6.4% of the outstanding common shares.
(5) Includes 1,639,133 common shar es issuable by us upon the exercise of
warrants held by Mr. Schnur and 83,333 common shares issuable upon the
exercise of warrants owned by Toyota On Western, Inc., an affiliate of
Mr. Schnur.
(6) Under the terms of the Warrants held by Mr. Schnur and Toyota On
Western, Inc., neither may exercise any Warrants if, after such
exercise, he/it would beneficially own more than 9.999% of the
outstanding common shares. But for the effect of such provision, Mr.
Schnur would beneficially own 13.2% of the outstanding common shares.
15
(7) The MBRT Trust is an irrevocable trust established by William P. Long,
President of the Company, and is administered by an independent trustee
for the benefit of the children of Mr. Long. Mr. Long disclaims any
beneficial interest in the common shares owned by the MBRT Trust.
(8) Includes 125,000 common shares issuable by us upon the exercise of
warrants held by such entity.
(9) Includes 50,000 common shares issuable by us upon the exercise of
warrants held by such entity.
(10) Includes 250,261 common shares issuable by us upon the exercise of
warrants held by such entity.
(11) Includes 83,333 common shares issuable by us upon the exercise of
warrants held by such entity. Said shares are also listed as being
beneficially owned by Mr. Schnur who is an affiliate of such entity.
(12) Includes 75,000 common shares issuable by us upon the exercise of
warrants held by such entity.
(13) Includes 75,078 common shares issuable by us upon the exercise of
warrants held by such entity.
(14) Includes 2,950,805 common shares issuable by us upon the exercise of
warrants held by the selling shareholders.
Doral 18, LLC is a Cayman Islands limited liability company and private
investment fund that is owned by all of its investors and managed by JE Matthew
LLC. JE Matthew LLC, of which David White and John Fern are managers, has voting
and investment control over the shares listed above as beneficially owned by
Doral 18, LLC.
MBRT Trust is a Cayman Islands private trust established for the
benefit of the children of William P. Long, President of Altair, and is managed
by its trustee, United European Bank. On behalf of United European Bank, Shayne
Davis has voting and investment control over the shares listed above as
beneficially owned by MBRT Trust.
Gibson Family Limited Partnership is a family-owned limited partnership
that is owned by all of its investors and managed by Tom Gibson, general
partner. Tom Gibson has voting and investment control over the shares listed
above as beneficially owned by Gibson Family Limited Partnership.
Anderson LLC is a Cayman Islands limited liability company that is
managed by Navigator Management Ltd. David Sims, Director of Navigator
Management Ltd., has voting and investment control over the shares listed above
as beneficially owned by Anderson LLC.
Toyota on Western, Inc. is an Illinois corporation owned by Louis
Schnur and Judy Schnur. Louis Schnur, President of Toyota on Western, Inc., has
voting and investment control over the shares listed above as beneficially owned
by Toyota on Western, Inc.
De Jong & Associates, Inc. is a California corporation and operating
business that is owned and controlled by Ron de Jong, who has voting and
investment control over the shares listed above as beneficially owned by de Jong
& Associates, Inc.
Ladenburg Thalmann & Co., Inc. is a corporation engaged in the full
service investment banking and brokerage business. The board of directors of
Ladenburg Thalmann & Co., Inc. has voting and investment control over the shares
listed above as beneficially owned by Ladenburg Thalmann Co., Inc.
16
We believe that the selling shareholders who are individuals have sole
voting and investment power with respect to all shares shown as beneficially
owned by them. We believe that voting and investment power with respect to
shares shown as beneficially owned by selling shareholders who are entities
resides with the individuals identified in the preceding seven paragraphs. There
can be no assurance that any of the shares offered hereby will be sold.
Private Placement of Shares, Warrants and Notes
Doral 18, LLC
-------------
On December 15, 2000, pursuant to a securities purchase agreement, we
sold Doral 18, LLC a warrant to purchase 350,000 common shares and a $7,000,000
10% Asset-Backed Exchangeable Term Note.
The warrant has an exercise price of $3.00, and is exercisable at any
time on or before the earlier of (a) December 15, 2005, and (b) the date 60 days
after we provide notice to the holder that the market price of the common shares
has been equal to or greater than $12.00 for five consecutive days. The exercise
price is subject to reduction pursuant to a formula set forth in the warrant at
any time we sell common shares or grant a security or right exercisable for or
convertible into common shares at a purchase price which is less than the
current exercise price (with exceptions for existing stock options and other
specified transactions). The warrant also includes standard anti-dilution
provisions pursuant to which the exercise price and number of common shares
issuable thereunder are adjusted proportionately in the event of a stock split,
stock dividend, recapitalization or similar transaction.
The Exchangeable Term Note is in the principal amount of $7,000,000 and
bears interest at a rate of 10% per annum. Under the Exchangeable Term Note, we
are required to make monthly payments on or before the 15th day of each calendar
month in the principal amount of $291,667 plus accrued interest. The
Exchangeable Term Note is due and payable in full on December 15, 2003.
We may redeem the monthly payment amounts at any time throughout the
term of the Exchangeable Term Note. In addition, we may prepay the Exchangeable
Term Note in $250,000 increments at any time at a price equal to 115% of the sum
of outstanding principal and accrued interest. If we elect not to redeem the
monthly payment amount, on each due date, the holder of the Exchangeable Term
Note automatically will receive the right to exchange (immediately or at any
later date during the term) the monthly payment amount into common shares at the
applicable exchange price. The exchange price for any date is the lesser of (a)
a fixed exchange price of $3.00, subject to adjustment, and (b) the average of
the lowest three daily trading prices of the common shares during the 15 trading
days ending on the day before an exchange right is exercised.
The fixed exchange price is subject to reduction pursuant to a formula
set forth in the Exchangeable Term Note at any time we sell common shares or
issue a security or grant a right exercisable for or convertible into common
shares at a purchase price which is less than the current fixed exchange price
(with exceptions for existing stock options and other specified transactions).
The Exchangeable Term Note also includes standard anti-dilution provisions
pursuant to which the exercise price and number of common shares issuable
thereunder are adjusted proportionately in the event of a stock split, stock
dividend, recapitalization or similar transaction.
17
Upon the occurrence of a default or specified major corporate event,
the holder of the Exchangeable Term Note has the right to exchange the entire
principal balance of the Exchangeable Term Note for common shares. Upon the
occurrence of other specified events, we are required to redeem the monthly
payment amount in cash at 120% of face value.
The Exchangeable Term Note is secured by a pledge of the equipment,
intellectual property and common stock of Altair Technologies, Inc., a
second-tier wholly-owned subsidiary of Altair International Inc. Altair
Technologies, Inc. owns and operates the titanium processing technology we
acquired in 1999. The Exchangeable Term Note is also secured by a pledge of the
common stock of Mineral Recovery Systems, Inc., which owns and operates our
leasehold interests in the Camden, Tennessee area.
Pursuant to a registration rights agreement dated as of December 15,
2000, we are obligated to file a registration statement registering the shares
issuable to Doral in connection with the Exchangeable Term Note and the warrant.
In order to illustrate the relationship between the market price of our
common shares and the number of common shares issuable upon exchange of the
monthly payment amounts on the Exchangeable Term Note, the following table sets
forth how many additional common shares would be issued upon exchange of the
entire exchangeable amount of the Exchangeable Term Note if the average of the
lowest three daily trading prices during the 15 trading days ending on the day
before an exchange rate is exercised were (a) $3.00 or greater, (b) $2.50 per
share, (c) $2.00 per share, (d) $1.00 per share, and (e) $.50 per share. Such
prices are selected for illustration purposes only and do not reflect our actual
estimate of the average of the lowest three daily trading prices during any 15
trading day period.
Assumed Average of Lowest Three Trading Prices Throughout the Term
------------------------------------------------------------------
$3.00 or
Greater $2.50 $2.00 $1.00 $.50
Shares Issuable(1) 2,576,388 3,091,666 3,864,583 7,729,166 15,458,332
Percentage of Outstanding(2)
Common Shares 11.8% 13.8% 16.7% 28.7% 44.5%
(1) Assumes that shareholder approval is obtained for the issuance the
transaction in which we issued the Exchangeable Term Note, that no
principal or interest is redeemed with cash or prepaid, that all
exchange rights are exercised on the date of accrual, 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 19,244,318 common shares, the number outstanding
on June 29, 2001, are outstanding on the date of exercise.
18
Louis Schnur
------------
Louis Schnur acquired 375,000 common shares and 375,000 warrants in a
private placement pursuant to the terms of a stock purchase agreement dated as
of August 4, 2000. The 375,000 warrants include warrants to purchase 187,500
common shares at an exercise price of $5 at any time prior to the earlier of (i)
July 9, 2006, and (ii) the date thirty days following the fifth day (whether or
not consecutive) the closing price of the common shares equals or exceeds $7.00
and warrants to purchase 187,500 common shares at an exercise price of $4 at any
time prior to the earlier of (i) July 9, 2006, and (ii) the date thirty days
following the fifth day (whether or not consecutive) the closing price of the
common shares equals or exceeds $6.00. Notwithstanding the foregoing, pursuant
to a Repricing Amendment to Common Share Purchase Warrants dated as of October
18, 2001, the warrants have been amended to reduce the exercise price to $1 per
share for a period that commenced on or about November 9, 2001 and that will
continue until December 15, 2001, after which the exercise price will again
increase to $4.
The warrants include standard anti-dilution provisions pursuant to
which the exercise price and number of shares issuable thereunder is adjusted
proportionately in the event of a stock split, stock dividend, recapitalization
or similar transaction. The warrants also contain a provision which provides
that the holder may not exercise the warrant if such exercise would result in
the holder, together with any affiliate thereof, beneficially owning in excess
of 9.999% of our then issued and outstanding common shares.
The shares that may be offered pursuant to this prospectus include the
375,000 common shares issued to Mr. Schnur and the common shares issuable upon
the exercise of the warrants. Pursuant to a registration rights agreement dated
as of August 4, 2000 and entered into in conjunction with the Schnur purchase
agreement, we are obligated to file a registration statement registering the
common shares, and shares issuable upon the exercise of warrants, acquired by
Mr. Schnur on August 4, 2000.
MBRT Trust
----------
MBRT Trust, an irrevocable trust for the benefit of the children of
William P. Long, President of the Company, acquired 125,000 common shares and
125,000 warrants in a private placement pursuant to the terms of a stock
purchase agreement dated as of August 4, 2000. The 125,000 warrants include
warrants to purchase 62,500 common shares at an exercise price of $5 at any time
prior to the earlier of (i) the fifth anniversary of the date the registration
statement of which this prospectus is a part is first effective, and (ii) the
date thirty days following the fifth day (whether or not consecutive) the
closing price of the common shares equals or exceeds $7.00 and warrants to
purchase 62,500 common shares at an exercise price of $4 at any time prior to
the earlier of (i) the fifth anniversary of the date the registration statement
of which this prospectus is a part is first effective, and (ii) the date thirty
days following the fifth day (whether or not consecutive) the closing price of
the common shares equals or exceeds $6.00. The warrants include standard
anti-dilution provisions pursuant to which the exercise price and number of
shares issuable thereunder is adjusted proportionately in the event of a stock
split, stock dividend, recapitalization or similar transaction. The shares that
may be offered pursuant to this prospectus include the 125,000 shares issued to
19
MBRT Trust and the 125,000 shares issuable upon the exercise of the warrants. In
addition, the shares that may be offered pursuant to this prospectus include
100,000 shares acquired by MBRT Trust in a private placement completed on
December 29, 1997 and previously registered on registration statement no.
333-45511.
Pursuant to a registration rights agreement dated as of August 4, 2000
and entered into in conjunction with the MBRT purchase agreement, we are
obligated to file a registration statement registering the common shares, and
shares issuable upon the exercise of warrants, acquired by the MBRT Trust on
August 4, 2000.
Gibson Family Limited Partnership
---------------------------------
Gibson Family Limited Partnership acquired 50,000 shares and 50,000
warrants in a private placement pursuant to the terms of a stock purchase
agreement dated as of August 22, 2000. The 50,000 warrants include warrants to
purchase 25,000 common shares at an exercise price of $5 at any time prior to
the earlier of (i) the fifth anniversary of the date the registration statement
of which this prospectus is a part is first effective, and (ii) the date thirty
days following the fifth day (whether or not consecutive) the closing price of
the common shares equals or exceeds $7.00 and warrants to purchase 25,000 common
shares at an exercise price of $4 at any time prior to the earlier of (i) the
fifth anniversary of the date the registration statement of which this
prospectus is a part is first effective, and (ii) the date thirty days following
the fifth day (whether or not consecutive) the closing price of the common
shares equals or exceeds $6.00. The warrants include standard anti-dilution
provisions pursuant to which the exercise price and number of shares issuable
thereunder is adjusted proportionately in the event of a stock split, stock
dividend, recapitalization or similar transaction. The shares that may be
offered pursuant to this prospectus include the 50,000 common shares issued to
the Gibson Family Limited Partnership and the common shares issuable upon the
exercise of the warrants.
Pursuant to a registration rights agreement dated as of August 22, 2000
and entered into in conjunction with the Gibson Family purchase agreement, we
are obligated to file a registration statement registering the common shares,
and shares issuable upon the exercise of warrants, acquired by the Gibson Family
Limited Partnership on August 22, 2000.
De Jong and Associates
----------------------
De Jong & Associates, Inc. acquired 75,000 warrants in a private
placement pursuant to the terms of a consulting agreement dated as of February
15, 2000 in consideration of consulting services provided to us by de Jong. The
warrants have an exercise price of $4.00 per share and are exercisable at any
time on or before February 15, 2003. The warrants include standard anti-dilution
provisions pursuant to which the exercise price and number of shares issuable
thereunder is adjusted proportionately in the event of a stock split, stock
dividend, recapitalization or similar transaction. The shares that may be
offered pursuant to this prospectus include the shares issuable upon the
exercise of such warrants. The common shares issuable upon exercise of the
warrants were previously registered on registration statement no. 333-36462.
20
Toyota on Western, Inc.
-----------------------
Toyota on Western, Inc. acquired 83,333 warrants in a private placement
pursuant to the terms of a stock purchase agreement dated as of March 3, 2000.
Pursuant to the Toyota purchase agreement, among other things, we granted
warrants to purchase 83,333 shares at the exercise price of $8.00 per share on
or before the earlier of (i) March 3, 2004 and (ii) the date thirty days
following the fifth day (whether or not consecutive) the closing price of a
common share on the Nasdaq National Market equals or exceeds $10.00.
Notwithstanding the foregoing, pursuant to a Repricing Amendment to Common Share
Purchase Warrants dated as of October 18, 2001, the warrants have been amended
to reduce the exercise price to $1 per share for a period that commenced on or
about November 9, 2001 and that will continue until December 15, 2001, after
which the exercise price will again increase to $8.
The warrants include standard anti-dilution provisions pursuant to
which the exercise price and number of shares issuable thereunder is adjusted
proportionately in the event of a stock split, stock dividend, recapitalization
or similar transaction. The warrants also contain a provision which provides
that the holder may not exercise the warrant if such exercise would result in
the holder, together with any affiliate thereof, beneficially owning in excess
of 9.999% of our then issued and outstanding common shares.
The shares that may be offered pursuant to this prospectus include the
common shares issuable upon the exercise of the warrants. The common shares
issuable upon exercise of the warrants were previously registered on
registration statement no. 333-36462.
Ladenburg Thalmann & Co., Inc.
------------------------------
On March 31, 2000, the Company granted Ladenburg Thalmann & Co., Inc.
75,078 Series N Warrants in return for serving as placement agent in connection
with a private placement of common shares as of March 31, 2000. The warrants
permit Ladenburg to purchase up to 75,078 shares at an exercise price of $6.75
(or pursuant to a cashless exercise provision) at any time on or before the
earlier of (i) March 31, 2003 and (ii) the date thirty days following the fifth
day (whether or not consecutive) the closing price of a common share on the
Nasdaq National Market equals or exceeds $9.00. The cashless exercise provision
permits the holder, in lieu of paying the exercise price, to tender the warrant
certificate and receive a number of common shares equal in market value (defined
to be the previous 10 days average closing bid price) to the difference between
the aggregate market value of the common shares issuable upon exercise of the
warrant, and the aggregate cash exercise price of the common shares issuable
upon exercise of the warrant.
The warrants include standard anti-dilution provisions pursuant to
which the exercise price and number of shares issuable thereunder is adjusted
proportionately in the event of a stock split, stock dividend, recapitalization
or similar transaction. The shares that may be offered pursuant to this
prospectus include the common shares issuable upon the exercise of the warrant.
The common shares issuable upon exercise of the warrants were previously
registered by the Company on registration statement no. 333-36462.
21
Anderson LLC
------------
Anderson LLC acquired 250,261 warrants in a private placement pursuant
to the terms of a common stock purchase agreement dated as of March 31, 2000.
Pursuant to the Anderson purchase agreement, we granted Anderson warrants to
purchase 250,261 shares at an exercise of $6.75 per share (or pursuant to a
cashless exercise provision) at any time on or before March 31, 2003. The
cashless exercise provision permits the holder, in lieu of paying the exercise
price, to tender the warrant certificate and receive a number of common shares
equal in market value (defined to be the previous 10 days average closing bid
price) to the difference between the aggregate market value of the common shares
issuable upon exercise of the warrant, and the aggregate cash exercise price of
the common shares issuable upon exercise of the warrant.
The warrants include standard anti-dilution provisions pursuant to
which the exercise price and number of shares issuable thereunder is adjusted
proportionately in the event of a stock split, stock dividend, recapitalization
or similar transaction. The shares that may be offered pursuant to this
prospectus include the common shares issuable upon the exercise of the warrants.
The common shares issuable upon exercise of the warrants were previously
registered on registration statement no. 333-36462.
PLAN OF DISTRIBUTION
The Shares. The shares offered by this prospectus may be sold from time
to time by the selling shareholders, who consist of the persons named as
"selling shareholders" above and those persons' pledgees, donees, transferees or
other successors in interest. The selling shareholders may sell the offered
shares on the Nasdaq National Market, or otherwise, at market prices or at
negotiated prices. They may sell shares by one or a combination of the
following:
o a block trade in which a broker or dealer so engaged will attempt
to sell the offered shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction;
o purchases by a broker or dealer as principal and resale by the
broker or dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which a broker
solicits purchasers;
o an exchange distribution in accordance with the rules of such
exchange;
o privately negotiated transactions;
o if such a sale qualifies, in accordance with Rule 144 promulgated
under the Securities Act rather than pursuant to this prospectus;
or
o any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares by means of short sales.
Short sales involve the sale by a selling shareholder, usually with a future
delivery date, of common shares that the seller does not own. Covered short
sales are sales made in an amount not greater than the number of shares subject
to the short seller's warrant, exchange right or other right to acquire common
22
shares. A selling shareholder may close out any covered short position by either
exercising its warrants or exchange rights to acquire common shares or
purchasing shares in the open market. In determining the source of shares to
close out the covered short position, a selling shareholder will likely
consider, among other things, the price of common shares available for purchase
in the open market as compared to the price at which it may purchase common
shares pursuant to its warrants or exchange rights.
Naked short sales are any sales in excess of the number of shares
subject to the short seller's warrant, exchange right or other right to acquire
common shares. A selling shareholder must close out any naked position by
purchasing shares. A naked short position is more likely to be created if a
selling shareholder is concerned that there may be downward pressure on the
price of the common shares in the open market.
The existence of a significant number of short sales generally causes
the price of the common shares to decline, in part because it indicates that a
number of market participants are taking a position that will profitable only if
the price of the common shares declines. Purchases to cover short sales may,
however, increase the demand for the common shares and have the effect of
raising or maintaining the price of the common shares.
In making sales, brokers or dealers engaged by the selling shareholders
may arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from such selling shareholders in amounts to be
negotiated prior to the sale. Such selling shareholders and any broker-dealers
that participate in the distribution may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, and any proceeds or
commissions received by them, and any profits on the resale of shares sold by
broker-dealers, may be deemed to be underwriting discounts and commissions. If a
selling shareholder notifies us that a material arrangement has been entered
into with a broker-dealer for the sale of shares through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a
broker or dealer, we will file a prospectus supplement, if required pursuant to
the Securities Act of 1933, setting forth:
o the name of each of the participating broker-dealers,
o the number of shares involved,
o the price at which the offered shares were sold,
o the commissions paid or discounts or concessions allowed to the
broker-dealers, where applicable;
o a statement to the effect that the broker-dealers did not conduct
any investigation to verify the information set out or
incorporated by reference in this prospectus, and
o any other facts material to the transaction.
General. We are paying the expenses incurred in connection with
preparing and filing this prospectus and the registration statement to which it
relates, other than selling commissions. In addition, in the event a selling
shareholder effects a short sale of common shares, this prospectus may be
delivered in connection with such short sale and the shares offered by this
prospectus may be used to cover such short sale. To the extent, if any, that a
selling shareholder may be considered an "underwriter" within the meaning of the
Securities Act, the sale of the shares by it shall be covered by this
prospectus.
23
We have not retained any underwriter, broker or dealer to facilitate
the offer or sale of the offered shares offered hereby. We will pay no
underwriting commissions or discounts in connection therewith, and we will not
receive any proceeds from the sale of the offered shares.
In order to comply with the securities laws of certain states, if
applicable, the offered securities will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the offered shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available.
DESCRIPTION OF OFFERED SECURITIES
For a description of the common shares offered hereunder, please refer
to the description of the common shares provided in the Registration Statement
on Form 10-SB we filed with the SEC on November 25, 1996.
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 financial statements and schedules included in our Annual Report on
Form 10-K for the year ended December 31, 2000, as amended, and incorporated by
reference in this prospectus have been audited by Deloitte & Touche LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said firm
as experts in accounting and auditing in giving said reports.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
As permitted by SEC rules, this prospectus does not contain all of the
information that prospective investors can find in the Registration Statement or
the exhibits to the Registration Statement. The SEC permits us to incorporate by
reference into this prospectus information filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus,
except as superseded or modified by information contained directly in this
prospectus or in a subsequently filed document that also is (or is deemed to be)
incorporated herein by reference.
This prospectus incorporates by reference the documents set forth below
that we (File No. 1-12497) have previously filed with the SEC pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
documents contain important information about the Company and its financial
condition.
24
(a) Our Annual Report on Form 10-K for the year ended December 31,
2000, filed with the SEC on April 2, 2001, as amended by
Amendment No. 1 on Form 10-K/A filed with the SEC on April 17,
2001, Amendment No.2 on Form 10-K/A filed with the SEC on May
2, 2001, Amendment No. 3 on Form 10-K/A filed with the SEC on
May 9, 2001, and Amendment No. 4 on Form 10-K/A filed with the
SEC on June 8, 2001
(b) Our Current Report on Form 8-K filed with the SEC on March 23,
2001, as amended by an Amendment No. 1 on Form 8-K/A filed
with the SEC on March 28, 2001.
(c) Our Current Report on Form 8-K/A filed with the SEC on
December 26, 2000, as amended by an Amendment No. 1 on Form
8-K/A filed with the SEC on April 18, 2001.
(d) Our Quarterly Report on Form 10-Q for the quarter ended March
31, 2001 filed with the SEC on May 14, 2001.
(e) Our Quarterly Report on Form 10-Q for the quarter ended June
30, 2001 filed with the SEC on August 14, 2001.
(f) Our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2001 filed with the SEC on November 9, 2001.
(g) The description of the common shares contained in our
Registration Statement on Form 10-SB filed with the SEC on
November 25, 1996, including any amendment or report filed
under the Exchange Act for the purpose of updating such
description.
We hereby incorporate by reference all reports and other documents
filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this prospectus and prior to the termination of this offering.
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 the Company files 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 makes available to the
public reports, proxy statements, and other information regarding issuers, such
as the Company, that file electronically with the SEC.
In addition, we will provide, without charge, to each person to whom
this prospectus is delivered, upon written or oral request of any such person, a
25
copy of any or all of the foregoing documents (other than exhibits to such
documents which are not specifically incorporated by reference in such
documents). Please direct written requests for such copies to the Company c/o
Mineral Recovery Systems at 230 South Rock Boulevard, Suite 21, 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.
Our common shares are quoted on the Nasdaq National Market. Reports,
proxy statements and other information concerning the Company can be inspected
and copied at the Public Reference Room of the National Association of
Securities Dealers, 1735 K Street, N.W., Washington, D.C. 20006.
26
====================================================== ====================================================
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 12,060,842 Common Shares
securities in any jurisdiction where it is unlawful.
The information in this prospectus is current as of
November 9, 2001.
-----------------------
ALTAIR INTERNATIONAL INC.
12,060,842 COMMON SHARES
---------------
Prospectus
---------------
November 9, 2001
====================================================== ====================================================