Filed pursuant to Rule 424(b)(2)&(c)
Registration No. 333-70763
Prospectus Supplement
to
Prospectus dated March 17, 1999
ALTAIR INTERNATIONAL INC.
112,500 Common Shares
37,500 Warrants
------------------
This Prospectus Supplement supplements the Prospectus dated March 17, 1999
(the "Prospectus") of Altair International Inc. ("we," the "Company" or
"Altair") relating to the offering and sale of 1,500,000 common shares of the
Company (the "Shares") and warrants to purchase up to 500,000 of the Shares (the
"Warrants"). This Prospectus Supplement relates to the offer and sale of up to
75,000 Shares, 37,500 Series L Warrants, each of which entitles the holder
thereof to purchase one Share at the price of $6.00 on or before the earlier of
(i) the third anniversary of the issue date of such Warrant, 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 U.S.
$8.00 (the "Series L Warrants"), and the 37,500 Shares subject to the Series L
Warrants. See "Description of Warrants."
------------------
The securities being offered pursuant to this Prospectus Supplement are
being placed by the Company. See "Plan of Distribution." Altair intends to use
the proceeds from the sale of the securities described in this Prospectus
Supplement for working capital and toward its second installment of the purchase
price of certain mineral processing technology and assets Altair purchased from
BHP Minerals International, Inc. See "Use of Proceeds" and "Recent
Developments."
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Per Share/Unit(1) Total(1)
Purchase Price................... $4.00 $300,000
Proceeds to the Company.......... $4.00 $300,000
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(1) The information presented in this table reflects the sale of 75,000 Shares
and 37,500 Series L Warrants in units consisting of one Share and one-half
Series L Warrant at a purchase price per unit of $4.00.
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The common shares of the Company (the "Common Shares") are
listed for trading on the Nasdaq National Market under the symbol "ALTIF." On
January 20, 2000, the last reported sales price of Common Shares on the Nasdaq
National Market was $4.125 per share. As of January 20, 2000 there were
15,474,915 Common Shares issued and outstanding (excluding Common Shares subject
to outstanding options and warrants to purchase Common Shares).
- --------------------------------------------------------------------------------
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 the
securities being sold with this Prospectus Supplement.
- --------------------------------------------------------------------------------
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 January 21, 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:
As of November 15, 1999, Altair entered into an Asset Purchase and Sale
Agreement (the "Asset Purchase Agreement") with BHP Minerals International Inc.
("BHP") pursuant to which Altair 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
"Technology"), all tangible equipment and other assets used by BHP to develop
and implement the Technology (the "Assets") and the use for one year (for no
fee) of the services of the BHP personnel presently developing the Technology.
The purchase price for the Technology and Assets is 15,000,000 Australian
Dollars ("AUD$") and was arrived at after extensive arms-length negotiation
between Altair and BHP. The noon buying rate in New York City for an Australian
Dollar on January 11, 2000, as reported by the Federal Reserve Bank of New York
for customs purposes, was $.6575 United States Dollars. Altair has agreed to pay
the purchase price in four equal installments of AUD$3,750,000, the first of
which was made at closing, and the remaining three of which are due and payable
on February 15, 2000 (changed to May 15, 2000 pursuant to a letter agreement),
May 15, 2000, and August 15, 2000. Altair funded its first installment of the
purchase price using existing cash. Altair intends to fund future installments
primarily through the offer and sale of Common Shares, warrants to purchase
Common Shares, and various other debt or equity securities. Altair may also use
revenues, if any, generated from the sale of mineral products produced using the
Technology and Assets to fund part of the May 15, 2000 and August 15, 2000
installments. If Altair fails to pay any of the remaining three installments of
the purchase price, the Asset Purchase Agreement provides that Altair will
forfeit to BHP, without a right to reimbursement of any amount of the purchase
price paid to date, all right, title and interest in the Technology and Assets.
The Asset Purchase Agreement also requires Altair to pay to BHP, until the
earlier of the fifteenth anniversary of November 15, 1999 or the date Altair has
paid an aggregate royalty of AUD$105,000,000, a quarterly royalty equal to:
o 1.5% of the international market price of all uncoated titanium
dioxide pigment produced and sold as a result of the use of the
Technology by Altair or a transferee at Altair's mineral properties in
Tennessee;
o 1.5% of the international market price of all uncoated titanium
dioxide pigment produced and sold as a result of the use of the
Technology by BHP or any affiliate of BHP at a specified heavy mineral
sand operation located in Auckland, New Zealand;
o 3% of the international market price of all uncoated titanium dioxide
pigment produced and sold as a result of the use of the Technology by
Altair or a transferee of Altair at any location other than Altair's
Tennessee Mineral Property or the Auckland, New Zealand heavy mineral
sand operation identified above; and
o 3% of the sales proceeds (F.O.B. Altair's facility, reduced by the
amount of product returns) received by Altair or a transferee of
Altair from the sale of any products other than titanium dioxide
pigment produced through Altair's use of the Technology.
S-2
<PAGE>
Altair believes that the 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.
Altair anticipates commencing limited production of titanium dioxide
nanoparticles using the Technology and Assets during the first quarter of 2000.
Titanium dioxide nanoparticles are used in specialty paint, cosmetics, and other
high technology applications due to their unique photo-catalytic activity.
Although the market for such nanoparticles is limited and the general titanium
dioxide pigment market represents a much better opportunity for long-term growth
and revenues, titanium dioxide nanoparticles sell at a higher price per ton and
at a higher margin than other titanium dioxide products. Altair believes its
production and sale of such nanoparticles, if the Technology can be
commercialized, may generate as early as the first quarter of Year 2000.
In addition, in connection with the Asset Purchase Agreement, Altair and
BHP entered into a Lease dated November 15, 1999, pursuant to which Altair will
lease approximately 20,000 square feet of laboratory and testing space at BHP's
testing facility in Reno, Nevada for a monthly rent of $15,000. The initial term
of the Lease expires on December 31, 2000, subject to automatic renewal for
six-month periods at inflation-adjusted rent until terminated by the Company.
The Lease grants Altair a right of first refusal in the event BHP intends to
sell the property subject to the Lease and includes an agreement to negotiate in
good faith with respect to Altair's possible purchase of such property.
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 in this section 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 Altair's 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,
Altair's actual results may vary materially from those anticipated, estimated,
projected, or intended.
Among the key factors that may have a direct bearing on Altair's operating
results are risks and uncertainties described under "Risk Factors," including
those attributable to uncertainties regarding our ability to raise all capital
necessary to fund the purchase of the Assets and Technology and uncertainties
regarding the effectiveness of the Technology or quality of the Assets.
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. What follows is a summary of certain risks related to Altair's purchase
and proposed development and commercialization of the Technology and Assets. You
should consider carefully these risk factors, together with the Risk Factors
dealing with other aspects of Altair's business and contained in the Prospectus
and Altair's other filings with the Securities and Exchange Commission before
you decide to purchase any Common Shares.
S-3
<PAGE>
We May Not Have Sufficient Capital To Pay All Installments Of The Purchase Price
And May Forfeit the Technology and Assets.
We may not be able to obtain the capital necessary to make the
AUD$3,750,000 payments due on each of February 15, 2000 (changed to May 15,
2000, pursuant to letter agreement), May 15, 2000 and August 15, 2000 with
respect to our purchase of the Assets and Technology from BHP. If we fail to
timely make such payments 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 Technology and related Assets. Altair does not
presently have sufficient capital to pay the second, third or fourth
installments to the purchase price of the Technology and Assets from BHP and has
not secured the additional capital needed to fund such installments. Although
Altair intends to raise such additional capital through the sale of titanium
dioxide produced using the Technology and Assets and/or through the placement of
Common Shares, warrants, and other debt or equity securities, the capital
generated from such activities may be insufficient to pay all installments to
the purchase price. Factors affecting the availability and price of capital may
include, without limitation, the following:
o Market factors affecting the availability and cost of capital
generally;
o The market's perception of our ability to use and further develop the
Technology and the Assets;
o The initial performance of the Technology and the Assets and the
quality and variety of products produced;
o The market's perception of mining, technology, and/or minerals stocks;
o The price of, and demand for, titanium dioxide nanoparticles and any
other products produced, or proposed to be produced, with the
Technology and Assets;
o Market perception of the abilities of our management team;
o Our progress in developing our other projects, including the Altair
Centrifugal Jig and the Tennessee Mineral Property.
The Technology May Prove Ineffective Or the Assets May Prove Unreliable.
The Technology and Assets have not been used by Altair, or by anyone in
a commercial setting, and may prove ineffective or unreliable when subjected to
continuous use. We have reviewed test results produced by BHP suggesting that
the Technology and Assets can effectively extract titanium dioxide from
titanium-containing ores. Nevertheless, Altair has not independently tested the
Technology and Assets, and neither Altair nor BHP has attempted to use the
Technology or Assets on a continuous basis in a commercial setting. The
Technology may prove wholly or partially ineffective when applied by Altair. In
addition, the Assets may break down, be costly to maintain or prove unreliable
when operated on a continuous basis in a commercial setting. Our plans for
funding the purchase of the Technology and Assets depend upon our being able to
quickly and effectively commercialize the Technology. If the Technology proves
ineffective or the Assets prove unreliable in a commercial setting, we may be
unable to fund our purchase of the Technology and Assets or may otherwise be
unable to recoup our investment in the Technology and Assets.
The Market May Not Accept End Products Produced Using the Technology.
In the short run, we plan to use the Technology and Assets to produce
titanium dioxide nanoparticles from ilmenite-containing feed stocks. We have not
previously produced or marketed titanium dioxide nanoparticles and, to date,
have not obtained or sought to obtain any orders for titanium dioxide
nanoparticles. The titanium dioxide nanoparticles and other products produced
using the Technology and 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 titanium
dioxide nanoparticles and other products using the Technology and Assets, we may
not be able to sell such products in the marketplace.
S-4
<PAGE>
The Market for Titanium Dioxide and Other Products May Be Too Small or May
Contract or Collapse.
In the short run, we plan to use the Technology and Assets to produce
titanium dioxide nanoparticles from ilmenite-containing feed stocks. The uses
for such nanoparticles are limited -- primarily cosmetics and surface coatings
- -- and the market for such nanoparticles is small, estimated at 5,000 tons per
annum. Even if we are able to effectively produce titanium dioxide nanoparticles
and other products using the Technology and 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;
o the increased supply of such mineral products as a result of the
entrance of Altair 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 Costs of Production May Exceed Expectations or Our Competitors May Charge
Lower Prices for the Same Products.
We are purchasing the Technology and Assets based on our belief that,
with our use of the Technology and the Assets, we will be able to produce
titanium dioxide and other products more cheaply than many competitors. We have
not, however, produced any mineral products using the Technology and Assets on
either a test or a commercial basis. Our actual costs of production may exceed
those of our competitors and, even if our costs of production are lower, our
competitors may be able to sell titanium dioxide and other products on at a
lower price than is economical for Altair.
We May Be Unable to Obtain or Renew All Permits Necessary to Operate the Assets.
In order to begin commercial production using the Technology and the
Assets at the facility we are leasing in Reno, Nevada, we may be required to
obtain certain state and local permits. BHP has assigned to us all of the
permits it held with respect to its use of the Assets; however, our governmental
compliance due diligence is incomplete, and we have been unable to confirm
whether any additional permits will be required in order to use the Technology
and the Assets or whether we will be able to obtain any such permits. In
addition, many such permits must be renewed on a periodic basis or amended in
connection with our planned expansion of operations at the leased Reno, Nevada
facility. We can provide no assurance that we will be able to obtain all new
permits, or extensions, amendments or renewals of existing permits, necessary to
use the Assets and Technology for commercial production. Even if we can obtain
all such permits, we may incur substantial costs or need to make substantial
modifications in order to obtain such permits.
Our Applications For Patents Related To The Technology May Be Denied Or May
Otherwise Be Unenforceable.
BHP has filed numerous patent applications with the United States
Patent and Trademark Office ("PTO") with respect to the Technology and has
transferred the rights to such applications to Altair. Such applications are
being reviewed by the PTO, and no patents with the respect to the Technology
have been granted to date. If the applications for any patents related to the
Technology are denied, the value of the Technology, and any competitive
advantage gained from Altair's ownership of the Technology, may be substantially
diminished. We can provide no assurance that pending patent applications will be
granted.
S-5
<PAGE>
In addition, we have not filed patent applications in any jurisdictions
outside of the United States. Persons in countries in which no application has
been filed, or which do not honor United States patents, may develop and market
infringing technologies. In addition, 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 Technology outside of the United States.
We May Incur Liability Under Applicable Environmental Laws.
Any proposed use of the Technology and 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 Altair, which are deemed by the federal
and/or state government to be toxic or hazardous ("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 we intend
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:
Altair intends to use the proceeds from its offer and sale of the
securities described in this Prospectus Supplement toward the purchase price of
the Technology and Assets. Altair 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:
The 75,000 Shares, 37,500 Series L Warrants, and 37,500 Shares issuable
upon exercise of the Warrants subject to this Prospectus Supplement are being
offered and sold by the Company 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 L Warrants to which this
Prospectus Supplement relates:
The Series L Warrants to be offered and sold under this Prospectus
Supplement will be issued under a Series L Warrant Certificate between the
Company and each Series L Warrant holder. Each Series L Warrant entitles the
holder thereof to purchase one Share at the exercise price of $6.00 on or before
5:00 p.m. (Mountain Standard Time) on or before the earlier of (i) the third
anniversary of the issue date of such Series L Warrant, 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 U.S. $8.00.
The holder of a Series L Warrant may exercise such Warrant by delivering to the
Company at its principal office the Series L 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 L Warrants being
exercised. Each Series L Warrant is freely assignable, subject to the
restrictions of applicable federal, Canadian, state, and provincial securities
laws. The Series L Warrants provide for the adjustment of the number of Shares
subject thereto and the exercise price in the event of a stock split, stock
dividend, merger, consolidation, or similar event.
S-6
<PAGE>
DILUTION
The section of the Prospectus entitled "Dilution" is supplemented by
the following information about the offering to which this Prospectus Supplement
relates:
The net tangible book value of the Company at September 30, 1999 was
$5,409,786 or approximately $.35 per Common Share. Net tangible book value of
the Company is the value of all 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 Common Shares and Series L Warrants to which this
Prospectus Supplement relates are sold, and all Series L Warrants are exercised,
the net tangible book value of the Company would be $5,934,786 or approximately
$.38 per Common Share at September 30, 1999, resulting in an immediate increase
in net tangible book value of $525,000 or approximately $.03 per Common Share to
existing shareholders and an immediate dilution of approximately $4.29 per Share
to purchasers. The following table illustrates dilution on a per Share and per
offering basis:
<TABLE>
<CAPTION>
Per Unit/
Share
Per Offering
<S> <C> <C>
Offering price1 $4.00 $300,000
Exercise of 37,500 Series L Warrants @ $6.00 per share............. $6.00 $225,000
Net tangible book value (deficit) at September 30, 1999............ $ .35 $5,409.786
Increase attributable to purchase by new investors(2).............. $ .03 $525,000
Pro forma net tangible book value (deficit) after the offering(2).. $ .38 $5,934,786
pro forma net tangible book value dilution to new investors(3)..... $4.29 $482,625
</TABLE>
(1) Reflects the sale of 75,000 Common Shares and 37,500 Series L Warrants
in units consisting of one Common Share and one-half Series L Warrant
at a purchase price per unit of $4.00.
(2) Assumes that the number of Common Shares outstanding as of September
30, 1999 was 15,474,915 and that the 75,000 Shares and 37,500 Series L
Warrants to which this Prospectus Supplement relates are sold and that
all of the Series L Warrants are exercised for the purchase of 37,500
additional shares. Does not reflect the possible issuance of up to
3,060,000 Common Shares upon the exercise of outstanding stock options
or the possible issuance of up to 150,000 Common Shares upon the
exercise of outstanding warrants.
(3) Dilution represents the difference between the amount paid by investors
(average price of $4.67 per share) and the pro forma net tangible book
value after the offering contemplated by this Prospectus Supplement.
S-7
<PAGE>
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We have not authorized any
dealer, salesperson or other person to
give any information or represent 1,500,000 Common Shares
anything not contained in this 500,000 Warrants
Prospectus. This Prospectus Supplement
does not offer to sell or buy any
securities in any jurisdiction where
it is unlawful. The information in
this Prospectus Supplement is current
as of Janaury 21, 2000.
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SUMMARY
TABLE OF CONTENTS
(For a more detailed Table of ALTAIR INTERNATIONAL INC.
Contents, see page 2 of the
Prospectus) COMMON SHARES
WARRANTS
Prospectus Supplement
Page
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Recent Developments................S-2
Forward Looking Statements.........S-3
Risk Factors.......................S-3 ---------------
Use of Proceeds....................S-6
Plan of Distribution...............S-6 Prospectus Supplement
Warrants...........................S-6
Dilution...........................S-7 ---------------
Prospectus
Page
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Table of Contents....................2 January 21, 2000
About this Prospectus................4
Prospectus Summary...................4
Forward-Looking Statements & Risk
Factors..............................6
Price Range of Common Shares........19
Use of Proceeds.....................20
Dilution............................21
Plan of Distribution................21
Description of Warrants.............22
Legal Matters.......................23
Experts.............................23
Incorporation of Certain Documents
by Reference........................23
Where You Can Find More
Information.........................24
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S-8
