LAKE FOREST, Calif., Sept. 16, 2013 /PRNewswire/ -- Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) (the "Company"), a global leader in natural gas storage systems, integration and vehicle system technologies, announced today that it has entered into definitive agreements with certain accredited investors for a private placement of 2% senior secured convertible notes in the cumulative principal amount of $11.0 million and warrants (the "Offering"). Mr. Kevin Douglas of Larkspur, California, led the transaction with an investment of $10.0 million. The terms of the offering satisfy the requirements of NASDAQ to be considered an above market value transaction and as such, members of the Company's management team and board of directors also participated in the offering, including W. Brian Olson, the Company's Chief Executive Officer and Bradley Timon, the Company's Chief Financial Officer. The closing of the Offering is expected to occur on or around September 18, 2013. The Company will use approximately $7.3 million of the proceeds to retire bridge debt that matures over the next 45 days. The remainder will be used for general working capital. Craig-Hallum Capital Group LLC acted as the Company's placement agent.
The principal and interest due under the notes is payable on the fifth anniversary of the closing, subject to the investors' put right that may be exercised during the thirty day period following the third anniversary of the closing. Subject to certain beneficial ownership limitations, the notes are convertible at any time into shares of the Company's common stock at a conversion price per share of $2.3824, which represents a 3.6% premium to the previous closing price for a share of the Company's common stock. The notes are secured by a second lien position on substantially all of the assets of the Company's continuing operations.
The investors received warrants to purchase up to 3,411,235 shares of the Company's common stock at an exercise price of $2.30 per share. The warrants cannot be exercised for six months following the closing and expire in March 2019.
Pursuant to the terms of the definitive agreements, Mr. Douglas was given the right to appoint one individual to serve on the Company's board of directors for as long as any of the convertible notes remain outstanding.
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