ALBANY, N.Y.--(BUSINESS WIRE)--Mechanical Technology, Incorporated (MTI or the Company), (OTCQB: MKTY), a company engaged, through its subsidiary MTI Instruments, Inc., in the design, manufacture and sale of precision test and measurement sensors, instruments and systems that provide solutions for linear displacement, vibration measurement and system balancing and tensile measurements in markets that require the exacting measurement and control of products and processes for automated manufacturing, assembly and consistent operation of complex machinery, announces the investment of $2.74 million for future growth initiatives.
Brookstone Partners (www.brookstonepartners.com), a private equity firm in New York City, has, through Brookstone Partners Acquisition XXIV, LLC (Brookstone), acquired 3.75 million newly issued shares of common stock of MTI for $2.74 million. Following this investment, MTI intends to continue to focus on the current growth strategy in the analytical measurement market with sensors, instruments and systems. This new investment has allowed MTI’s balance sheet to improve and provides MTI with additional capital for, among other things, key strategic activities. We believe that, in turn, this will facilitate an accelerated use of the approximate $51.0 million in unused Federal net operating loss carryforwards (NOLs) incurred by MTI during the microfuel cell development period to offset future taxable income.
Concurrent with the investment, the membership of the Board of the Company has changed. In accordance with the terms of the Stock Purchase Agreement between MTI and Brookstone pursuant to which MTI sold the shares of common stock to Brookstone, Dr. Walter L. Robb and Mr. Dennis O’Connor have resigned from the Board, and the Board appointed Mr. Matthew Lipman and Mr. Michael Toporek of Brookstone and Mr. Ted Hirshfield of Steppingstone Group as new members of the Board.
“We are extremely excited about the future of MTI with the addition of new capital and our association with Brookstone,” stated Kevin G. Lynch, CEO of MTI. “Now that we have stabilized the base business, after a difficult year in 2015, the additional capital will enable us to look to expand our growth strategy beyond our current organic growth model. With Brookstone at our side, we expect to generate and execute on new strategic activities including potential acquisitions. This will also strengthen our ability to deliver on our stated goal in achieving shareholder value in conjunction with our recently announced Shareholders’ Rights Plan to protect and ultimately utilize the approximate $51.0 million in NOLs that were generated in the past.”
“On behalf of all shareholders and members of the Board, we want to thank both Dr. Robb and Mr. O’Connor for their dedicated service to the Board and for their guidance and unwavering commitment to MTI for more than 20 years.”
MTI is engaged in the design, manufacture, and sale of test and measurement instruments and systems through its subsidiary MTI Instruments, Inc. MTI Instrument's products use a comprehensive array of technologies to solve complex, real world applications in numerous industries including manufacturing, electronics, semiconductor, solar, commercial and military aviation, automotive and data storage. For more information about the Company, please visit www.mechtech.com.
Statements in this press release that is not historical fact, in particular, “MTI intends to continue to focus on the current growth strategy in the analytical measurement market with sensors, instruments and systems,” that the new investment will, in turn, “facilitate accelerated use of the … Federal net operating losses” and “we expect to generate and execute on new strategic activities including potential acquisitions” constitute forward-looking statements within the meaning of federal securities laws. All forward-looking statements are made as of today, and MTI disclaims any duty to update such statements. It is important to note that the Company’s actual results could differ materially from those projected in forward-looking statements. Factors that could cause the anticipated results not to occur include: the failure of the Company to locate viable strategic activities including potential acquisitions that are beneficial to the Company; that the uncertainty of the global economy may affect demand for our products; variability of customer requirements resulting in cancellations, reductions, or delays; our inability to build and maintain relationships with our customers; and the other risk factors listed from time to time in the Company’s reports filed with the Securities and Exchange Commission, including, but not limited to, our annual report on Form 10-K for the year ended December 31, 2015, and our quarterly reports on Form 10-Q.