American Superconductor Corporation (Nasdaq:AMSC), a global
solutions provider serving wind and power grid industry leaders,
today announced that it has entered into an amendment (the
"Amendment") to its existing senior term loan with Hercules
Technology Growth Capital, Inc. and an At Market Issuance ("ATM")
Sales Agreement with MLV & Co. LLC.
The terms of the Amendment with Hercules provide, among other
things, AMSC with a total borrowing capacity of $15 million,
representing $10 million of incremental borrowing capacity based on
the outstanding balance of the existing term loan. Upon execution
of the Amendment, Hercules advanced this $10 million (the "New Term
Loan") to AMSC. The New Term Loan bears interest of 11%, which is
the same rate as the existing term loan. The company is obligated
to make interest only payments for up to the first six months after
the date of a new advance (nine months should the company achieve
certain revenue targets), after which it is obligated to begin
re-paying the New Term Loan in equal monthly installments through
November 1, 2016.
In conjunction with entering into the Amendment, the company
issued warrants to purchase up to 256,410 shares of common stock to
Hercules at an exercise price of $1.95 per share. In addition, the
company amended the terms of its existing warrant with Hercules,
originally issued on June 5, 2012, to lower the exercise price to
$1.95.
For more information about the New Term Loan, please refer to
AMSC's filing on Form 8-K today.
Under the terms of the ATM Sales Agreement, AMSC may, at its
discretion, from time to time, sell through MLV, as sales agent,
such number of shares of common stock of the company ("Shares") as
would result in aggregate gross proceeds to the company of up to
$30 million. MLV, at AMSC's discretion and instruction, will
use its commercially reasonable efforts to sell the Shares at
market prices from time to time, including sales made directly on
The NASDAQ Global Select Market.
Sales in the ATM offering, if any, would be made pursuant to the
prospectus supplement dated November 15, 2013, which supplements
the prospectus dated September 25, 2013, included in the shelf
registration statement that AMSC filed with the Securities and
Exchange Commission ("SEC") on September 13, 2013.
For more information about AMSC and the ATM offering, you are
encouraged to read the prospectus for the ATM offering, as
supplemented by the prospectus supplement, and other documents
incorporated by reference into such prospectus. You may obtain
these documents on the SEC's website at www.sec.gov.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy, nor may there be any sale of
AMSC's common stock in any state or jurisdiction in which such an
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities law of any state or
jurisdiction.
This press release contains forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Any statements in this release
about future expectations, plans, prospects or sales under the ATM
offering and other statements containing the words "believes,"
"anticipates," "plans," "expects," "will" and similar expressions,
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements represent management's current
expectations and are inherently uncertain.
There are a number of important factors that could materially
impact the value of our common stock or cause actual results to
differ materially from those indicated by such forward-looking
statements. Such factors include: We have experienced recurring
operating losses and recurring negative cash flows from operations
which raise substantial doubt about our ability to continue as a
going concern. This substantial doubt has resulted in a qualified
opinion from our auditors with an explanatory paragraph regarding
our ability to continue as a going concern. We believe this opinion
may have an adverse effect on our customer and supplier
relationships; our success in addressing the wind energy market is
dependent on the manufacturers that license our designs; we may not
realize all of the sales expected from our backlog of orders and
contracts; our business and operations would be adversely impacted
in the event of a failure or security breach of our information
technology infrastructure; our success is dependent upon attracting
and retaining qualified personnel and our inability to do so could
significantly damage our business and prospects; we rely upon
third-party suppliers for the components and subassemblies of many
of our Wind and Grid products, making us vulnerable to supply
shortages and price fluctuations, which could harm our business;
many of our revenue opportunities are dependent upon subcontractors
and other business collaborators; if we fail to implement our
business strategy successfully, our financial performance could be
harmed; problems with product quality or product performance may
cause us to incur warranty expenses and may damage our market
reputation and prevent us from achieving increased sales and market
share; new regulations related to conflict-free minerals may force
us to incur significant additional expenses; our contracts with the
U.S. government are subject to audit, modification or termination
by the U.S. government and include certain other provisions in
favor of the government; the continued funding of such contracts
remains subject to annual congressional appropriation which, if not
approved, could reduce our revenue and lower or eliminate our
profit; we may acquire additional complementary businesses or
technologies, which may require us to incur substantial costs for
which we may never realize the anticipated benefits; many of our
customers outside of the United States are, either directly or
indirectly, related to governmental entities, and we could be
adversely affected by violations of the United States Foreign
Corrupt Practices Act and similar worldwide anti-bribery laws
outside the United States; we have limited experience in marketing
and selling our superconductor products and system-level solutions,
and our failure to effectively market and sell our products and
solutions could lower our revenue and cash flow; we have
experienced recurring losses from operations and negative operating
cash flow; these factors raise substantial doubt regarding our
ability to continue as a going concern; we have a history of
operating losses, and we may incur additional losses in the future;
our operating results may fluctuate significantly from quarter to
quarter and may fall below expectations in any particular fiscal
quarter; we may require additional funding in the future and may be
unable to raise capital when needed; our debt obligations include
certain covenants and other events of default;. Should we not
comply with the covenants or incur an event of default, we may be
required to repay our debt obligations in cash, which could have an
adverse effect on our liquidity; if we fail to maintain proper and
effective internal controls over financial reporting, our ability
to produce accurate and timely financial statements could be
impaired and may lead investors and other users to lose confidence
in our financial data; we may be required to issue performance
bonds or provide letters of credit, which restricts our ability to
access any cash used as collateral for the bonds or letters of
credit; changes in exchange rates could adversely affect our
results from operations; growth of the wind energy market depends
largely on the availability and size of government subsidies and
economic incentives; we depend on sales to customers in China, and
global conditions could negatively affect our operating results or
limit our ability to expand our operations outside of China;
changes in China's political, social, regulatory and economic
environment may affect our financial performance; our products face
intense competition, which could limit our ability to acquire or
retain customers; our international operations are subject to risks
that we do not face in the United States, which could have an
adverse effect on our operating results; adverse changes in
domestic and global economic conditions could adversely affect our
operating results; we may be unable to adequately prevent
disclosure of trade secrets and other proprietary information; our
patents may not provide meaningful protection for our technology,
which could result in us losing some or all of our market position;
the commercial uses of superconductor products are limited today,
and a widespread commercial market for our products may not
develop; there are a number of technological challenges that must
be successfully addressed before our superconductor products can
gain widespread commercial acceptance, and our inability to address
such technological challenges could adversely affect our ability to
acquire customers for our products; we have not manufactured our
Amperium wire in commercial quantities, and a failure to
manufacture our Amperium wire in commercial quantities at
acceptable cost and quality levels would substantially limit our
future revenue and profit potential; third parties have or may
acquire patents that cover the materials, processes and
technologies we use or may use in the future to manufacture our
Amperium products, and our success depends on our ability to
license such patents or other proprietary rights; our technology
and products could infringe intellectual property rights of others,
which may require costly litigation and, if we are not successful,
could cause us to pay substantial damages and disrupt our business;
we have filed a demand for arbitration and other lawsuits against
our former largest customer, Sinovel, regarding amounts we contend
are overdue. We cannot be certain as to the outcome of these
proceedings; we have been named as a party to purported stockholder
class actions and stockholder derivative complaints, and we may be
named in additional litigation, all of which will require
significant management time and attention, result in significant
legal expenses and may result in an unfavorable outcome, which
could have a material adverse effect on our business, operating
results and financial condition; our 7% convertible note contains
warrants and provisions that could limit our ability to repay the
note in shares of common stock and should the note be repaid in
stock, shareholders could experience significant dilution; our
common stock has experienced, and may continue to experience,
significant market price and volume fluctuations, which may prevent
our stockholders from selling our common stock at a profit and
could lead to costly litigation against us that could divert our
management's attention;. These and the important factors discussed
under the caption "Risk Factors" in Part 1. Item 1A of our Form
10-K for the fiscal year ended March 31, 2013, and our other
reports filed with the SEC, among others, could cause actual
results to differ materially from those indicated by
forward-looking statements made herein and presented elsewhere by
management from time to time. Any such forward-looking statements
represent management's estimates as of the date of this press
release. While we may elect to update such forward-looking
statements at some point in the future, we disclaim any obligation
to do so, even if subsequent events cause our views to change.
These forward-looking statements should not be relied upon as
representing our views as of any date subsequent to the date of
this press release.
CONTACT: AMSC Contact:
Kerry Farrell
Phone: 978-842-3247
Email: kerry.farrell@amsc.com
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