7 March 2014

Advanced Photonix extends line of credit with lenders

Advanced Photonix Inc of Ann Arbor, MI, USA (which designs and makes APD, PIN, and FILTRODE photodetectors, HSOR high-speed optical receivers, and T-Ray terahertz instrumentation) has reached agreements with both Silicon Valley Bank (SVB) and Partners for Growth III L.P. (PFG) to waive past covenant violations under the firm’s respective loan and security agreements with SVB and PFG and (subject to certain terms and conditions) provide for an extension of the line of credit under the SVB loan agreement through 31 May. Advanced Photonix plans to continue discussions with SVB to extend the line of credit beyond 31 May, based on the firm’s future business conditions.

The amendments provide for:

1. An extension of the SVB line of credit from 31 March to 31 May.
2. SVB’s and PFG’s waiver of the current covenant defaults under the loan agreements.
3. A reset of the loan agreements’ trailing three-month adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) covenant to a negative $1.2m for February, a negative $800,000 for March, a negative $600,000 for April and a positive $1 for May.
4. A reset of the loan agreements’ existing liquidity ratio to 1.30 as of 28 February, and 2.25 each month thereafter through 31 May.
5. 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.
6. 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.
7. A revision to the EBITDA definition to add back fees associated with the negotiation of the amendments.
8. A $10,000 fee payable to each of SVB and PFG for the modifications and waiver of the current covenant defaults and an additional $5000 payable to SVB for the extension of the SVB line of credit.
9. Additional fees payable to SVB and PFG of up to $50,000 and $75,000, respectively, due upon the earlier of 31 May and the date that all outstanding indebtedness becomes due under the loan agreements.
10. All other terms and conditions of the loan agreements would remain the same.

“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,” says president & CEO Richard Kurtz. “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.”

See related items:

Advanced Photonix’s growth pauses while silicon photodiode production shut down

Tags: Advanced Photonix

Visit: www.advancedphotonix.com