Advanced Photonix Enters Into a Debt Conversion Agreement
Improving Cash Flow by $1.3 Million through FY13 and Reducing Interest by $120,000
ANN ARBOR, Mich., May 26 /PRNewswire-FirstCall/ -- Advanced Photonix, Inc. (R) (NYSE Amex: API) announced today that on May 19, 2010, it entered into a debt conversion agreement with the Michigan Economic Development Corporation ("MEDC") and Michigan Strategic Fund ("MSF"). An aggregate of $562,337 of principal and interest owed by Picometrix, LLC, an Advanced Photonix company, is to be converted into 1,041,363 shares of Class A Common Stock of API at a conversion price of $0.54 per share. The balance of the loan, $2.2 million, will be amortized over approximately 4.5 years at an interest rate of 4%, which was reduced from 7%. Total interest saved from this transaction over the life of the loan is expected to be approximately $120,000.
"This announcement reflects our successful negotiations with the MEDC and the MSF to restructure a significant portion of our debt," commented Rob Risser, API's CFO. "This is a milestone that strengthens our balance sheet and will also improve our cash flow by more than $1.3 million over the next 2.5 years. The conversion by MEDC and the MSF for the accrued interest, and the more favorable terms, will provide us with additional flexibility in our operational activities as we see business begin to rebound. We are seeing the start of a rebound as reflected in our recent announcement that we added a second shift to meet demand for high-speed optical receivers in which we hold an industry-leading position."
Mr. Risser continued, "Separately, warrants for the purchase of API Class A common Stock totaling 694,541 shares expired in April 2010. These warrants were related to the 2004 convertible notes from Smithfield Fiduciary LLC and Iroquois Capital LP. The remaining 694,541 warrants associated with these convertible notes will expire in September 2011 if not exercised prior to that date."
About the MEDC
The Michigan Economic Development Corporation (MEDC) is a public corporation created through an interlocal agreement between state and local governments that supplies customized economic development services to help companies and communities find success in a competitive global economy. The MEDC is a liaison with local communities and agencies across the state. It is guided by a board comprised of members who represent a cross section of the state economy, business owners and executives, local economic developers and college presidents. The MEDC brings together supply and demand and matches up resources and services with the needs of Michigan business customers.
About Advanced Photonix, Inc.
Advanced Photonix, Inc. (R) (NYSE Amex: API) is a leading supplier with a broad offering of optoelectronic products to a global customer base. We provide optoelectronic solutions, high-speed optical receivers and terahertz instrumentation for telecom, homeland security, military, medical and industrial markets. With our patented technology and state-of-the-art manufacturing we offer industry leading performance, exceptional quality, and high value added products to our OEM customer base. For more information visit us on the web at www.advancedphotonix.com.
The information contained herein includes forward looking statements that are based on assumptions that management believes to be reasonable but are subject to inherent uncertainties and risks including, but not limited to, unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products; potential problems with the integration of the acquired company and its technology and possible inability to achieve expected synergies; obstacles to successfully combining product offerings and lack of customer acceptance of such offerings; limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company; and a decline in the general demand for optoelectronic products. API-G
CONTACT: |
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Richard Kurtz, Advanced Photonix, Inc. (734) 864-5647 |
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Cameron Donahue, Hayden IR (651) 653-1854; [email protected] |
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SOURCE Advanced Photonix, Inc.
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