Massachusetts Green Bubble Alert: A123 Waltham, MA
Updated October 24, 2012
Cash-fueled climb led to fall of A123 Systems
Waltham batter maker found no niche (clip)
In the fall of 2009, Governor Deval Patrick joined chief executive David Vieau on a tour of what was perhaps Massachusetts’ hottest company: A123 Systems Inc.
The Waltham battery maker had just raised $380 million in an initial public offering as investors shrugged off the recession and drove the stock 50 percent above the company’s initial pricing. Nearly $400 million in government grants, loans, and tax incentives were already rolling into the company on the promise of a technology that could help transform the nation’s flailing auto industry into a leader in electric cars.
“Guys were tripping over themselves to get in here,” recalled Howard Anderson, an early A123 investor. “I remember hearing the number two guy at GM say, ‘I’ve seen the future and this is it.’”
But that flood of money would sow the seeds of A123’s fall, enticing it to ramp up commercial production too quickly — far faster than the market for electric vehicles would grow. As the economy struggled, gas prices moderated, and a national energy policy failed to gain traction, A123 burned through cash to finance stubbornly high production costs for a market that never really materialized.
Maker of Batteries Files for Bankruptcy
October 16, 2012 (clip)
DETROIT — The troubled battery maker A123 Systems filed for bankruptcy on Tuesday, dealing a blow to the Obama administration’s program to jump-start a domestic battery industry and spur development of electric vehicles.
Updated August 16, 2012
August 08, 2012 (clip)
'A123 Deal With Wanxiang Raises Security Concerns, Lawmaker Says'
“It appears the Department of Energy and the Obama administration have failed to secure sensitive taxpayer funded intellectual property from being transferred to a foreign adversary, which raises serious national security issues,”Stearns said in an e-mailed statement."
A123 Falls After Qualcomm Chief Jacobs Steps Down from Board
Andrew Herndon on July 27, 2012 (clip)
A123 Systems Inc. (AONE), a U.S. maker of lithium-ion batteries for electric cars and grid storage, fell to a record low after a director resigned.
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Green Bubble ALERT: A123 Systems of Waltham, MA
"Once-highflying A123 Systems (AONE)" of Waltham, MA.,", is the subject of March 23, 2912 Boston Globe and the focus of this issue of the Massachusetts Green Bubble Alert (GBA). GBA is continuously updated to bring to you the latest news about companies in which you and I hold 60% investment through state and federal tax credits, grants, stimulus and loan guarantees.
FOR IMMEDIATE RELEASE (except)
email@example.comPRLog (Press Release) - Jun 01, 2012 -
A deadline is coming up on June 1, 2012 in the lawsuit filed for investors in NASDAQ:AONE shares over alleged securities laws violations in connection with certain financial statements made by A123 Systems, Inc.
According to the complaint filed in the U.S. District Court for the District of Massachusetts the plaintiff alleges on behalf of purchasers of A123 Systems, Inc. (NASDAQ:AONE) securities between February 28, 2011 and March 23, 2012, that A123 Systems, Inc. and certain of its top officials violated the Securities Exchange Act of 1934 by issuing allegedly false and/or misleading statements, or by allegedly failing to disclose material information regarding manufacturing flaws in its Livonia, Michigan facility.
National Legal and Policy Center
After Layoffs, Execs Get Big Raises at Taxpayer-Funded A123
Submitted by Paul Chesser on Wed, 02/15/2012 - 21:05 Excerpts only: Full article can be found, here:
"Massachusetts-based A123 Systems -- which received $279.1 million in stimulus money from the Department of Energy, and up to $135 million in incentives from the State of Michigan -- boosted the base salaries of two vice presidents and its chief financial officer on February 8."
"Chief Financial Officer David Prystash was bumped 27 percent to $380,000; VP of Energy Solutions Robert Johnson’s base salary increased 51 percent from his 2010 level to $400,000; and VP of Automotive Systems Jason Forcier saw his pay rise 32 percent from 2010, to $350,000."
"A previous SEC filing explained that A123 CFO Prystash was just hired in May at a base salary of $300,000 plus a $50,000 signing bonus,"
"Prystash’s predecessor Michael Rubino was listed with a base salary of $275,000 in 2010, but his total compensation with bonuses and stock options reached over $674,000."
"Other SEC records show A123 VPs Johnson and Forcier each had a base salary of $265,000 in 2010, but received more than $744,000 and $739,000 in total compensation, respectively, with bonuses and stock options included. Johnson’s total remuneration in 2008 and 2009 was nearly $1.2 million and $800,000 respectively, while Forcier’s was more than $1.3 million in 2009, the year he was hired."
UPDATE: April 12, 2012:
Wall Street Journal
By Aabha Rathee
April 12, 2012
A lithium-ion battery manufactured by A123 Systems (NYSE:AONE)
was behind the injury-causing explosion at a General Motors (NYSE:GM) battery lab,
according to reports. The battery leaked chemical gases into the lab, GM’s
Warren Technical Center in Michigan, which caused an explosion. The battery,
which was being tested, remained intact. One lab worker was admitted to
hospital with chemical burns, though the injuries are not thought to be life
Last month, A123 Systems said it would spend $55 million on replacing batteries with potentially defective cells in another case. However, shareholders have already reacted, filing a
class-action lawsuit against the company last week.
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Boston Globe March 27, 2012 'A draining setback', about A123 Systems, is followed by A123 Systems company history revealed by headlines, press release excepts and public documents review. This evidence calls into question the wisdom of federal and state tax credits and loan guarantees, backed by the public purse, that don't translate to jobs or economic benefits.
US House of Representatives Budget Committee Chairman Paul Ryan ‘Empty Promise of Green Jobs’ Report states that Governor Deval Patrick's appointed Advisor on green energy policy, Paul Gaynor CEO and President, First Wind Holdings, received a $117 million loan guarantee in March of 2010. First Wind withdrew its initial public offering in October of 2010, due to a lack of investor demand. And, that according to the Boston Globe, investors shied away from the company because, “First Wind owes more than $500 million, loses money on a steady basis, and reports a negative cash flow.”
IMPORTANT UPDATE: MARCH 29, 2012 DETROIT FREE PRESS:
Shares of electric vehicle battery supplier A123 Systems continued falling to new lows Wednesday as one New York law firm began seeking investors who might want to sue management and the board over alleged violations of securities law.
On Monday, the Waltham, Mass.-based firm with plants in Livonia and Romulus announced that it would replace faulty batteries shipped to five customers, including Fisker Automotive. [cut] continue reading....
March 27, 2012
‘A draining setback’.
Summary of article with editor's context added:
A123 ‘A draining setback in Boston Globe Business section March 27, 2012 has announced that the Waltham, MA company’s battery defect “latest”, will cost the company $55 million A123 stock, “fell another 21 cents yesterday”. A123 states they have lost millions of dollars in orders. The company ended 2011 with a net loss of $258 million. This follows A123’s layoffs of a few hundred employees in Michigan that had provided $100 million in incentives to A123.
A123 Systems http://seekingalpha.com/symbol/aone/stocktalks
Massachusetts Executive Secretary of Energy and Environment Ian Bowles said the grant to A123 will create between 100 and 300 engineering and science jobs in the state.
A123 gets $249m in stimulus funding
maker plans to build Mich. Factory
A123 previously received $100 million in economic incentives from the Michigan Economic Development Corporation to
build a factory in Livonia, Mich., and that will be the first facility built with the federal money, the company said.
Revolving Credit Facilities— The Company entered into a line of credit (“LOC”)
for up to $8.0 million, based on a portion of eligible receivables, with a
financial institution. The line of credit accrues interest at the financial
institution’s prime (4.0% at December 31, 2010 and June 30,
2011). The outstanding balance at December 31, 2010 and
June 30, 2011 was $8.0 million. The LOC, as amended, has a maturity date
of September 19, 2011. The Company is required to comply with the
same covenants and terms required under the term loan mentioned above.
Mass Clean Energy Loan— The Company
has a forgivable loan from the Massachusetts Clean Energy Technology Center for
$5.0 million. If the Company complies with certain capital expenditure
conditions, $2.5 million of the loan will be forgiven and if the Company
complies with certain employment conditions an additional $2.5 million
will be forgiven. As of December 31, 2010 and June 30, 2011,
$2.5 million is recorded as an offset to property, plant and equipment in
the condensed consolidated balance sheets as the Company is reasonably assured
that the Company will comply with the conditions for the forgiveness related to
the capital expenditure condition. As of December 31, 2010 and
June 30, 2011, the remaining $2.5 million is recorded as long-term
debt as the Company is not reasonably assured that it will comply with the
employment conditions. The loan has a fixed interest rate of 6.0%, and all
funds not forgiven borrowed under the agreement and accrued interest is due
upon maturity in October 2017 if the Company has not complied with the
Wall Street Journal Sept 24, 2009
But for investors who remember the dot-com boom, there is one
potentially troubling part of A123’s pricey public offering: The company’s
proven track record of spending more than it makes. In the first half of 2009,
A123 had sales of $43 million and a net loss of $41 million. That followed last
year’s net loss of $80.4 million on sales of $68.5 million.
Once-highflying A123 Systems (AONE) recently became the latest battery microcap to irk investors by announcing a
dilutive follow-on stock offering designed to bolster its dwindling cash supply. And short sellers managed to trash the stock of another prominent player, Advanced Battery Technologies, (ABAT) by accusing it of fraudulent accounting. (China-based Advanced denies the so-far-unproven assertions.)
"-- the industry is in a wild
scramble. It’s reminiscent of the Gold Rush that was spawned by the arrival of
the personal computer three decades ago, or the dot-com hype-fest of the late
Dec. 29 (Bloomberg) -- Fisker
Automotive Inc., which is beginning to sell plug-in electric sports cars, said it is recalling 239 Karma cars in the
U.S. because of a battery defect supplier A123 Systems Inc. announced last week.
Consumer Reports' $100K Fisker Karma dies on arrival
Excerpts of the
Fisker Karma, a plug-in hybrid that's supposed to go up to 33 miles on battery power only,
Last month, Fisker ran dry of federal loan money and had to
stop work at a former GM plant in Delaware it promised to revive. It laid off 26 people from the
skeleton crew working there, and also began earlier-than-planned layoffs of
several dozen engineers at its headquarters in California.
The Department of Energy had halted loan cash to Fisker last May because the company failed to
meet production and sales commitments it made to obtain the $529 million DOE
We buy about 80 cars a year and this is the first time in memory that we have had a car that is undriveable before it has
finished our check-in process.