Daily News: March 7, 2014

SVB, Partners for Growth III Extend Advanced Photonix Credit Line


Advanced Photonix announced that it reached an agreement with Silicon Valley Bank (SVB) and Partners for Growth III to waive past covenant violations under the company’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 May 31, 2014.

The company plans to continue discussions with SVB to extend the line of credit beyond May 31, 2014 based on future business conditions.

The amendments provide for:

1. An extension of the SVB line of credit from March 31, 2014 to May 31, 2014

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 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

4. 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

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 $5,000 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 May 31, 2014 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

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.”

Advanced Photonix supplies a broad offering of optoelectronic products to a global customer base.