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On September 20, 2010, we reached a definitive agreement to sell additional common shares to Canon, a Hong Kong-based company. This transaction will result in Canon owning 51% of Altair Nanotechnologies, Inc. on a fully-diluted basis (approximately 53.8% of shares outstanding following the transaction). At the same time we signed the Share Subscription Agreement with Canon we also signed a supply and technology licensing agreement with a Canon affiliate, China-based Zhuhai Yintong Energy Company (“YTEâ€). The agreement calls for the Company to supply YTE with nano-lithium titanate powder (“LTOâ€), 11 AHr cells and an ALTI-ESS 1 MW battery system totaling $6.6 million. We shipped these products to YTE during the fourth quarter of 2010. As a result of the SSA Amendment, purchases under this Agreement have been indefinitely suspended. During September 2010 we received a $2.0 million prepayment from YTE for these goods, of which $437,000 was recognized in the fourth quarter, leaving $1.6 million in deferred revenue as of December 31, 2010. Deferred issuance costs related to this stock sale totaled $831,000 for the year ending December 31, 2010 and are included in current assets.
Our Relationship with YTE . In addition, we, Altairnano and Zhuhai Yintong Energy Company Ltd. (“YTEâ€) entered into a Conditional Supply and Technology Licensing Agreement (the “Supply Agreementâ€) on September 20, 2010. Pursuant to the Supply Agreement, YTE has agreed to purchase nano lithium titanate, 11 Ahr battery cells and a 1 megawatt ALTI-ESS system from us for an aggregate purchase price of $6.6 million for delivery over the coming years. A portion of nano lithium titanate and the battery cells and ALTI-ESS have already shipped. Pursuant to the First Amendment to Subscription Agreement (the “SSA Amendmentâ€) dated February 16, 2011 between Altair and Canon, YTE’s obligation to purchase the remainder of the nano lithium titanate has been deferred until the parties reach mutually satisfactory resolution on the technical issues relating to the transfer of technology. The Supply Agreement also includes an agreement to license our nano lithium titanate manufacturing technology at no cost to the owner of a manufacturing facility in China, as long as we own a majority of the owner of such facility. In addition, under the Supply Agreement, we grant to YTE a license to use our battery technology to manufacture batteries during a term commencing on the effective date of the Supply Agreement and continuing as long as YTE purchases at least 60 tons of nano lithium titanate annually. If the share purchase closes, the battery technology license will be exclusive in China (including Taiwan, Hong Kong and Macau) as long as YTE purchases at least 1,000 tons of nano lithium titanate per year after 2010 and is non-exclusive in the remainder of Asia (excluding the Middle East), Australia and New Zealand.
