Filed pursuant to Rule 424 (b)(2)&(c)
Registration No. 333-70763
Prospectus Supplement
to
Prospectus dated March 17, 1999
ALTAIR INTERNATIONAL INC.
200,000 Common Shares
100,000 Series 2000-A Warrants
This Prospectus Supplement supplements the Prospectus dated March 17, 1999
(the "Prospectus") of Altair International Inc. relating to the offering and
sale of 1,500,000 of our common shares and warrants to purchase up to 500,000 of
our common shares. This Prospectus Supplement relates to the offering and sale
of 200,000 common shares, 100,000 Series 2000-A Warrants, and the 100,000 common
shares subject to the Series 2000-A Warrants. Each Series 2000-A Warrant
entitles the holder thereof to purchase one common share at price equal to the
sum of (a) the average closing bid price during the calendar week preceding the
week in which we accept proceeds for the purchase of the Series 2000-A Warrant,
rounded up to the nearest whole number, plus (b) one dollar. The Series 2000-A
Warrants are exercisable at any time on or before the earlier of (i) the fifth
anniversary of the issuance date, and, (ii) the date thirty days following the
fifth day (whether or not consecutive) the closing price of our common shares on
the Nasdaq National Market equals or exceeds the exercise price by $3.00.
------------------
We are placing the securities being offered pursuant to this Prospectus
Supplement. We intend to use the proceeds from the sale of such common shares
and Series 2000-A Warrants for working capital and toward our final installment
of the purchase price of certain mineral processing technology and assets we
purchased from BHP Minerals International, Inc.
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Per Common
Share/Unit Total
---------- -----
Public Offering Price and
Proceeds to Altair................... $3.17* $634,000*
* We intend to offer the common shares and Series 2000-A Warrants in units of
one common share and one-half Series 2000-A Warrant for a purchase price equal
to the average closing bid price (4:00 p.m. Eastern Standard Time) for our
common shares during the calendar week preceding the week in which we accept
proceeds for the purchase of such securities. The information presented in this
table reflects the sale of 200,000 common shares and 100,000 Series 2000-A
Warrants in units consisting of one common share and one-half Series 2000-A
Warrant at an estimated purchase price per unit of $3.17 (assuming our receipt
and acceptance of proceeds during the calendar week beginning on July 3, 2000).
The actual purchase price is expected to differ, and may differ materially, from
the estimated price.
================================================================================
Our common shares are listed for trading on the Nasdaq National Market
under the symbol "ALTI." On June 30, 2000 the last reported sales price of our
common shares on the Nasdaq National Market was $3.375 per share. As of June 30,
2000, we had 17,114,185 common shares issued and outstanding,
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Consider carefully the risk factors beginning on page S-3 of this Prospectus
Supplement and beginning on page 6 in the Prospectus before investing in our
securities.
================================================================================
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 the Prospectus and this Prospectus Supplement. Any
representation to the contrary is a criminal offense.
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The date of this Prospectus Supplement is July 5, 2000.
<PAGE>
This Prospectus Supplement should be read in conjunction with the Prospectus,
and this Prospectus Supplement is qualified in its entirety by reference to the
Prospectus except to the extent that the information contained herein modifies
or supersedes the information contained in the Prospectus. Capitalized terms
used in this Prospectus Supplement and not otherwise defined herein shall have
the same meaning specified in the Prospectus.
RECENT DEVELOPMENTS
The section of the Prospectus entitled "Prospectus Summary -- Altair
International Inc." is supplemented by the following information about Altair:
Purchase of Titanium Dioxide Processing Technology. On November 15, 1999,
we entered into an Asset Purchase and Sale Agreement with BHP Minerals
International Inc. ("BHP") pursuant to which we purchased all patents and
technology related to a hydrometallurgical process developed by BHP primarily
for the production of titanium dioxide products from titanium bearing ores or
concentrates (the "Processing Technology"), all tangible equipment and other
assets used by BHP to develop and implement the Processing Technology (the
"Processing Assets") and the use for one year (for no fee) of the services of
the BHP personnel presently developing the Processing Technology.
The purchase price for the Processing Technology and Assets is 15,000,000
Australian Dollars ("AUD$") plus certain royalty rights. We have paid
AUD$11,250,000 of the purchase price to date and are required to make a final
installment payment of AUD$3,750,000 (U.S.$2,239,125 as of June 30, 2000) on
August 15, 2000. We believe that the Processing Technology represents a
significant improvement in the processing of mineral ores, particularly titanium
containing ores, and has the potential to materially reduce processing costs for
commodity and specialty products.
Private Placement of Securities. On March 31, 2000, we and a private equity
fund (the "Investor") entered into a Common Stock Purchase Agreement and related
agreements pursuant to which the Investor purchased 1,251,303 of our common
shares for an aggregate purchase price of $6,000,000 (or $4.795 per share);
provided, however, the number of shares received by the Investor in exchange for
its $6,000,000 is subject to adjustment if the lowest average closing price for
any ten days during each of four 30-day repricing periods does not meet a
certain threshold. We also granted the Investor warrants covering 250,261 shares
of our common stock, exercisable at a price of $6.75 per share through March 31,
2003.
In addition, we and the Investor entered into an agreement, subject to
further documentation, establishing a so-called equity line of credit. Pursuant
to the credit agreement, the Investor agrees to purchase up to $10,000,000 in
additional common shares over the course of the eighteen (18) months following
June 5, 2000. The purchase price for such common shares will be 85% of the
average of the five lowest closing bid prices of our common shares during the
ten days preceding our giving notice of our intent to compel a purchase. The
maximum dollar amount of common shares the Investor can be required to purchase
in any single periodic financing is $2,000,000. The Investor's obligations under
the credit agreement are conditioned upon, among other things, (1) a
registration statement with respect to such common shares being effective, (2)
the market price of our common shares exceeding $2 per share, (3) the dollar
trading volume of the common shares equaling 150% of the amount of the
additional financing, and (4) our shareholders having approved the credit
agreement or approved the transaction agreement if, when combined with the
1,251,303 of our common shares already issued to the Investor and any shares
issued pursuant to repricing provisions, the number of shares being issued
pursuant to the credit agreement exceeds 20% of our outstanding issue on March
31, 2000 (approximately 3,172,576 shares).
S-2
<PAGE>
FORWARD-LOOKING STATEMENTS
This Prospectus Supplement 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 below and other
cautionary statements throughout this Prospectus Supplement, the risk factors
and other continuing statements identified in the Prospectus and the risk
factors and other cautionary statements identified in 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 Supplement, the 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.
RISK FACTORS
The section of the Prospectus entitled "Risk Factors" is supplemented by
the following specific information about the Offering to which this Prospectus
Supplement relates:
Before you invest in the common shares, you should be aware that such
investment involves the assumption of various risks, including those described
below. You should consider carefully these risk factors, together with other
risk factors contained in the Prospectus and our other filings with the
Securities and Exchange Commission before you decide to purchase any of our
common shares.
We May Not Be Able to Raise Sufficient Capital to Meet Present and Future
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Obligations.
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In order to complete our purchase of the Processing Technology and the
Processing Assets, we are required to make a final installment payment to BHP of
AUD$3,750,000 on August 15, 2000. If we fail to timely make such payment to BHP,
we will forfeit to BHP, without any right to reimbursement for the amount of the
purchase price paid to date, all right, title and interest in and to the
Processing Technology and Processing Assets. As of June 30, 2000, we do not have
the capital sufficient to make such payment.
The Obligation of the Investor Under Our Equity Line of Credit Is Subject To
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Certain Limitations and Conditions Precedent.
---------------------------------------------
We have entered into an agreement with the Investor pursuant to which the
Investor agrees to purchase up to Ten Million Dollars ($10,000,000) in
additional common shares over the course of the eighteen (18) months following
June 5, 2000. The Investor's obligation to purchase our common shares under such
equity line of credit is subject to certain limitations and conditions,
including the following:
o the maximum dollar amount of common shares the Investor can be required
to purchase in any single periodic financing is $2,000,000, and each
financing must be at least fifteen business days after the previous
financing;
o a registration statement with respect to such common shares must be
effective;
o the market price of our common shares must exceed $2 per share;
o the daily dollar trading volume of the common shares must equal 150% of
the amount of the additional financing; and
S-3
<PAGE>
o our shareholders must have approved the credit agreement if, when
combined with the 1,251,303 of our common shares already issued to the
Investor and any shares issued pursuant to repricing provisions, the
number of shares being issued pursuant to the credit agreement exceeds
20% of our outstanding issue on March 31, 2000 (approximately 3,172,576
shares).
We expect to rely on the equity line of credit to complete our purchase of the
Processing Technology and Processing Assets from BHP on August 15, 2000. If any
of the above limitations or conditions applies and is unsatisfied, we may be
prohibited from selling enough shares to the Investor to raise enough capital to
make our final installment payment to BHP.
We Have Not Yet Confirmed the Viability and Effectiveness of the Processing
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Technology and Processing Assets.
---------------------------------
The Processing Technology and Processing Assets have not been used by us or
anyone else in a commercial setting, and may prove ineffective or unreliable
when subjected to continuous use. We have used the Processing Technology and
Processing Assets to produce sample quantities of TiO2 nanoparticles but have
not completed testing of other product applications. The Processing Technology
and Processing Assets may prove wholly or partially ineffective when applied by
us on a continuous basis in a commercial setting. In addition, the Processing
Assets may break down, be costly to maintain or prove unreliable when operated
on a continuous basis in a commercial setting. If the Processing Technology
proves ineffective or the Processing Assets prove unreliable in a commercial
setting, we may be unable to recoup the investment in the Processing Technology
and Processing Assets.
Nanoparticles Produced Using the Processing Technology May Be, or Be Perceived
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as, Substandard.
----------------
In the short run, we plan to use the Processing Technology and Processing
Assets to produce titanium dioxide ("TiO2") nanoparticles. We have not
previously produced or marketed TiO2 nanoparticles and, to date, have not
obtained any orders for TiO2 nanoparticles. The TiO2 nanoparticles and other
products produced using the Processing Technology and Processing Assets may be
of inferior quality to alternative products or, regardless of actual quality,
may be perceived as lacking adequate quality or reliability. Even if we are able
to efficiently produce TiO2 nanoparticles and other products using the
Processing Technology and Processing Assets, we may not be able to sell such
products in the marketplace.
The Current Market for TRiO2 Nanoparticles Is Limited.
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In the short run, we plan to use the Processing Technology and Processing
Assets to produce TiO2 nanoparticles. The uses for such nanoparticles are
limited--primarily cosmetics and surface coatings--and the market for such
nanoparticles is small, estimated at 3,800 tons per annum. Even if we are able
to effectively produce TiO2 nanoparticles and other products using the
Processing Technology and Processing Assets, we may not be able to profitably
market such products for any of the following reasons:
o there may be insufficient demand for such products;
o despite strong initial demand for such products, the market for such
products may contract or collapse as a result of a decrease in demand
for goods incorporating such mineral products, a worldwide or regional
financial crisis, or other unforeseen event;
S-4
<PAGE>
o the increased supply of such products as a result of the entrance of we
or other suppliers into the market may cause the price to drop,
reducing or eliminating profitability;
o such products may be of inferior quality to alternative products or,
regardless of actual quality, may be perceived as lacking adequate
quality or reliability.
Our Cost of Production May Exceed Estimates.
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We purchased the Processing Technology and Processing Assets based on the
belief that it will be able to produce TiO2 and other products more cheaply than
many competitors. We have not, however, produced any mineral products using the
Processing Technology and Processing Assets on a commercial basis. Our actual
costs of production may exceed those of competitors and, even if its costs of
production are lower, competitors may be able to sell TiO2 and other products at
a lower price than is economical for us.
Pending Patent Applications May Be Denied or Provide Inadequate Protection.
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BHP has filed numerous patent applications with the United States Patent
and Trademark Office (the "PTO") with respect to the Processing Technology and
has transferred the rights to such applications to us. Such applications are
being reviewed by the PTO, and no patents with respect to the Processing
Technology have been granted to date. If the applications for any patents
related to the Processing Technology are denied, the value of the Processing
Technology, and any competitive advantage gained from our ownership of the
Processing Technology, will be substantially diminished. We can provide no
assurance that pending patent applications will be granted.
In addition, persons in jurisdictions outside of the United States in which
no application has been filed, or which do not honor United States patents, may
develop and market infringing technologies. Also, the cost of enforcing patents
outside of North America, as well as other obstacles, may limit our ability to
enforce any patents related to the Processing Technology outside of the United
States.
Use of the Processing Technology May Lead to Substantial Environmental
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Liability.
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Any proposed use of the Processing Technology and Processing Assets will 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 substances discovered at the leased Reno,
Nevada facility or any other property used by us that are Hazardous Substances.
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, although it intends
to employ all reasonably practicable safeguards to prevent any liability under
applicable laws relating to Hazardous Substances, companies engaged in mineral
exploration and processing are inherently subject to substantial risk that
environmental remediation will be required.
USE OF PROCEEDS
The section of the Prospectus entitled "Use of Proceeds" is supplemented by
the following specific information about the Offering to which this Prospectus
Supplement relates:
S-5
<PAGE>
We intend to use the proceeds from our offer and sale of the securities
described in this Prospectus Supplement toward the purchase price of the
Processing Technology and Processing Assets we recently purchased from BHP
Minerals International, Inc. We may also use a portion of such proceeds for
working capital and other general corporate purposes.
PLAN OF DISTRIBUTION
The section of the Prospectus entitled "Plan of Distribution" is
supplemented by the following specific information about the offering to which
this Prospectus Supplement relates:
We are offering and selling the 200,000 common shares, 100,000 Series
2000-A Warrants, and 100,000 common shares issuable upon exercise of the
Warrants subject to this Prospectus Supplement directly to purchasers, and no
underwriter, agent or other person is entitled to receive any commission or
similar compensation in connection with the offer and sale of such securities.
DESCRIPTION OF WARRANTS
The section of the Prospectus entitled "Warrants" is supplemented by the
following specific information about the Series 2000-A Warrants to which this
Prospectus Supplement relates:
The Series 2000-A Warrants to be offered and sold under this Prospectus
Supplement will be issued under a Series 2000-A Warrant Certificate between
Altair and each Series 2000-A Warrant holder. Each Series 2000-A Warrant
entitles the holder thereof to purchase one common share at price equal to the
sum of (a) the average closing (4:00 p.m. Eastern Standard Time) bid price for a
share of our common stock during the calendar week preceding the week during
which we receive and accept proceeds for the purchase of such securities,
rounded up to the nearest whole number, plus (b) one dollar. Such Series 2000-A
Warrants are exercisable at any time on or before the earlier of (i) the fifth
anniversary of the issuance date, and, (ii) the date thirty days following the
fifth day (whether or not consecutive) the closing price of the common shares on
the Nasdaq National Market equals or exceeds the exercise price by $3.00. The
holder of a Series 2000-A Warrant may exercise such Warrant by delivering to us
at our principal office the Series 2000-A 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 2000-A Warrants being
exercised. Each Series 2000-A Warrant is freely assignable, subject to the
restrictions of applicable federal, Canadian, state, and provincial securities
laws. The Series 2000-A 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.
DILUTION
The section of the Prospectus entitled "Dilution" is supplemented by the
following information about the offering to which this Prospectus Supplement
relates:
Our net tangible book value (deficit) at March 31, 2000 was $(204,596) or
approximately $(.01) 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 200,000 common shares and Series 2000-A Warrants to which
this Prospectus Supplement relates are sold at an assumed sale price of $3.17
per unit, and all 100,000 Series 2000-A Warrants are exercised at an assumed
exercise price of $5.00, the net tangible book value of Altair would be $929,404
or approximately $.058 per common share at March 31, 2000, resulting in an
immediate increase in net tangible book value of $1,134,000 or approximately
$.07 per common share to existing shareholders and an immediate dilution of
approximately $3.72 per common share to purchasers.
S-6
<PAGE>
The following table illustrates dilution on a per common share and per
offering basis:
<TABLE>
<CAPTION>
Per Unit/
common share Per Offering
------------ ------------
<S> <C> <C>
Offering Price1..................................................... $3.17 $ 634,000
Exercise of 100,000 Series 2000-A Warrants @ $5.00.................. $5.00 $ 500,000
Net tangible book value (deficit) at March 31, 2000................. $(.01) $ (204,596)
Increase attributable to purchase by new investors 2 ............... $ .07 $1,134,000
Pro forma net tangible book value (deficit) after the offering 2.... $ .058 $ 929,404
Pro forma net tangible book value dilution to new investors 3....... $3.72 $1,116,749
</TABLE>
(1) Reflects the sale of 200,000 common shares and 100,000 Series 2000-A
Warrants in units consisting of one common share and one-half Series 2000-A
Warrant at an estimated purchase price per unit of $3.17. 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 March 31, 2000
was 15,862,882, that the 200,000 common shares and 100,000 Series 2000-A
Warrants to which this Prospectus Supplement relates are sold at a price of
$3.17 per unit and that all of the Series 2000-A Warrants are exercised at an
exercise price of $5.00 for the purchase of 100,000 additional shares. Does not
reflect the possible issuance of up to 2,993,700 common shares upon the exercise
of outstanding stock options or the possible issuance of up to 696,172 common
shares upon the exercise of outstanding warrants.
(3) Dilution represents the difference between the amount paid by investors
(average price of $3.78 per share) and the pro forma net tangible book value
after the offering contemplated by this Prospectus Supplement.
