26 May 2010


Advanced Photonix restructures debt to boost cash flow by $1.3m through fiscal 2013 and cut interest by $120,000

Advanced Photonix Inc (API) of Ann Arbor, MI, USA, which designs and makes silicon, InP- and GaAs-based photodetectors, subsystems, and terahertz instrumentation, says that on 19 May it entered into a debt conversion agreement with the Michigan Economic Development Corp (MEDC) and Michigan Strategic Fund (MSF).

A total of $562,337 of principal and interest owed by subsidiary Picometrix LLC 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 ($2.2m) will be amortized over about 4.5 years at an interest rate of 4% (reduced from 7%). Total interest saved over the life of the loan is expected to be about $120,000.

The deal will strengthen API’s balance sheet and improve cash flow by more than $1.3m over the next 2.5 years, says chief financial officer Rob Risser. “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,” he adds. “We are seeing the start of a rebound, as reflected in our recent announcement [on 14 April] that we added a second shift to meet demand for high-speed optical receivers.”

Separately, April saw the expiry of warrants for the purchase of API Class A common Stock totaling 694,541 shares (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.

See related item:

Advanced Photonix amends Michigan facility lease, saving $1.6m

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