Algae International Group (ALGA) said it hopes to reduce financial vulnerability by signing a US $5 million strategic financing partnership with US-based AGS Capital Group.

John Potter, president of ALGA, said the reserve equity financing they entered into with AGS will provide ALGA with more control on how and when it raises equity. This means it can reduce "any potential dilution or disruption to our capital structure."

ALGA also has the discretion to sell common shares at 10% discount when the prices are attractive, he added in a statement.

The US $5 million equity financing will be used to further develop its algae cultivation and development program in California. The company is trying to sell renewable energy using algae as one of the main sources.

Allen Silberstein, Chief Investment Officer of AGS, said they are looking forward to partnering with ALGA by providing them with the capital to pursue their algae project.