Raser Technology sells $19 million in stock and investment rights

Alexander Richter 4 Feb 2010

Raser Technologies sells $5 million of convertible preferred stock plus an additional $14 million in certain investment rights to Fletcher International, Ltd.

In a release by the company, “Raser Technologies, Inc. (NYSE: RZ), announces the sale of $5 million of convertible preferred stock plus an additional $14 million in certain investment rights, in a transaction that closed on February 3, 2010. The shares are being sold to Fletcher International, Ltd. (“Fletcher”), an affiliate of Fletcher Asset Management, Inc., an SEC Registered Investment Advisor and strategic partner of Raser. The financing is part of a broader strategic relationship between Raser and Fletcher. Capstone Investments acted as underwriter for this transaction.

Moez Kaba, an executive from Fletcher Asset Management, said, “We look forward to supporting Raser’s management in identifying and developing collaborations with partners and other opportunities in the geothermal and plug-in-hybrid vehicle industries.”

The preferred shares of Raser’s stock were purchased for an aggregate price of $5.0 million. As a holder of Raser preferred stock, Fletcher is entitled to quarterly dividends, payable in cash or shares of common stock, at an annual rate of LIBOR + 8% but no greater than 14%. The preferred shares can be converted to common stock at a price of $5 per share and can be redeemed at a price of no less than $1.22 per share of common stock, subject to adjustment under certain circumstances, after the earlier of six months after the closing date or the date on which the Company’s common stock trades above $2.00 per share. The $1.22 per share redemption price floor represents a 37% premium to the closing price of the Company’s stock on February 3, 2010.

“Since becoming one of our largest investors in 2008, Fletcher has consistently supported our efforts, bringing substantial additional capital and valuable strategic support,” said Nick Goodman, Chief Executive Officer, Raser Technologies. “We’re very happy with this expansion of our relationship.”

Moreover, Fletcher may make additional investments of up to $14 million in preferred stock. The additional investment right expires: as to $7 million, between 6 and 12 months after closing and as to the remaining $7 million, between 12 and 36 months after closing, depending on certain conditions. The terms of any additional preferred shares will be identical to the terms of the initial transaction.

Raser intends to use the net proceeds from the transaction to further its geothermal development program and for general corporate purposes.”

Source: Company release via Business Wire