Advanced Photonix, Inc. Announces an Agreement Extending Line of Credit with Lenders
ANN ARBOR, Mich., March 6, 2014 /PRNewswire/ -- Advanced Photonix, Inc.® (NYSE MKT: API) (the "Company", "API", "we", "us" or "our") today announced that it has reached an agreement with each of Silicon Valley Bank ("SVB") and Partners for Growth III, L.P. ("PFG" and together with SVB, the "Lenders" and each a "Lender") to waive past covenant violations under the Company's respective loan and security agreements with SVB (the "SVB Loan Agreement") and PFG (the "PFG Loan Agreement" and together with the SVB Loan Agreement, the "Loan Agreements") and, subject to certain terms and conditions, provide for an extension of the line of credit under the SVB Loan Agreement through May 31, 2014 (the foregoing changes, the "Amendments"). The Company plans to continue discussions with SVB to extend the line of credit beyond May 31, 2014 based on the Company's future business conditions.
The Amendments provide for:
- An extension of the SVB line of credit from March 31, 2014 to May 31, 2014.
- SVB's and PFG's waiver of the current covenant defaults under the Loan Agreements.
- A reset of the Loan Agreements' trailing three month adjusted EBITDA covenant to a negative $1.2 million for the month ended February 28, 2014, a negative $800,000 for the month ended March 31, 2014, a negative $600,000 for the month ended April 30, 2014 and a positive $1 for the month ended May 31, 2014.
- A reset of the Loan Agreements' existing liquidity ratio to 1.30 as of February 28, 2014, and 2.25 each month thereafter through May 31, 2014.
- The current interest rates under the SVB Loan Agreement to remain at the Prime Rate published in the Wall Street Journal (currently 3.25%) plus 4.0% for the line of credit and 4.5% on the existing term loan.
- Certain changes to the SVB Loan Agreement to eliminate the Company's ability to engage in stock repurchases and to impose a uniform 30-day deadline to deliver monthly financial statements to SVB for all months, including those coinciding with the end of a fiscal quarter.
- A revision to the EBITDA definition to add back fees associated with the negotiation of the Amendments.
- A $10,000 fee payable to each of SVB and PFG for the modifications and waiver of the current covenant defaults and an additional $5,000 payable to SVB for the extension of the SVB line of credit.
- Additional fees payable to SVB and PFG of up to $50,000 and $75,000, respectively, due upon the earlier of May 31, 2014 and the date that all outstanding indebtedness becomes due under the Loan Agreements.
- All other terms and conditions of the Loan Agreements would remain the same.
Richard Kurtz, President and CEO commented, "We are pleased to have come to agreement with both Silicon Valley Bank and Partners for Growth, both of which have a rich history of working with growing high technology businesses like API. We would like to thank Silicon Valley bank and Partners for Growth, both for their deep understanding of the high technology market and for their commitment to API in particular."
About Advanced Photonix, Inc.
Advanced Photonix, Inc.® (NYSE MKT: 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
Richard Kurtz, Advanced Photonix, Inc. (734)-864-5688
SOURCE Advanced Photonix, Inc.