Altair's agreement with Phoenix Motorcars

Altair Nanotechnologies (NASDAQ: ALTI) has disclosed its agreement with Phoenix Motorcars.

"Altair Nanotechnologies Inc. (Nasdaq: ALTI) announced today it received a purchase order for its NanoSafe™ 35 KWh battery pack systems from California-based Phoenix Motorcars for $1,040,000 for battery pack systems scheduled for delivery in February and March 2007. In addition, the company announced it has entered into a multi-year purchase and supply agreement with Phoenix under which Phoenix has projected orders for 2007 between $16 and $42 Million for up to five hundred battery pack systems.
The initial order of battery pack systems, valued at $1,040,000, is scheduled for delivery to Phoenix in February and March 2007, and additional shipments of increasing value are planned throughout the 2007 calendar year. (...)
In consideration for a three-year exclusivity agreement within the U.S., Altairnano received a 16.6 percent ownership in the company. The three-year exclusivity agreement provides Phoenix with limited, exclusive use of Altairnano's NanoSafe battery packs in four-wheel, all-electric vehicles having a gross weight up to 6,000 pounds. Phoenix must meet minimum battery pack purchases, annually, to maintain the limited exclusivity agreement. The minimum commitment to maintain exclusivity for 2007 would provide $16 million in battery pack sales to Altairnano. Altairnano's NanoSafe battery packs manufactured for hybrid electric vehicles (HEVs) and plug-in electric vehicles (PHEVs) are excluded from the exclusivity agreement.
Altairnano's NanoSafe 35 KWh battery pack systems enable Phoenix SUTs (...) providing power for a driving range of 135 miles and driving speeds of up to 100 miles per hour. The NanoSafe battery pack can be recharged in less than 10 minutes at fast-charge stations."

Over this announcement, WR Hambrecht has issued yesterday a favorable analysis stating:

"We believe this order puts Altair on the road to profitability in 2007. We feel it also substantiates our theory that Altair has a winning battery and that it can bring in significant revenue this year. We are raising our 2007 estimates from a loss of ($0.08) on revenue of $18.8 million to a profit of $0.08 on sales of $32.9 million. We reiterate our BUY rating and $5.50 price target based on 2008 estimates.
(...) The long awaited order from Phoenix Motorcars has come through. We had been estimating that the order would be for around $15 million, but had become concerned about Phoenix's funding. It seems Phoenix has secured some funding, and we understand more is coming."

So, now Altair has gained 16,6% of Phoenix Motorcars, an auto maker, gets an amount of at least $16 million and will probably reach profitability in 2007. Even better than this is expected to be the agreement with Alcoa for the hybrid and plug-in vehicles (which are out of the exclusivity with Phoenix Motorcars) - and other partnerships with auto makers.


Disclaimer: I own shares of Altair Nanotechnologies.