UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 2, 2005
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Advanced Photonix, Inc
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 1-11056 33-0325836
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1240 Avenida Acaso, Camarillo, California 93012
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (805) 987-0146
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT AND
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
Effective Monday, May 2, 2005, Advanced Photonix, Inc ("API") completed its
previously disclosed acquisition of Picotronix, Inc, through the merger of
Picotronix, Inc. (doing business as and referred to herein as "Picometrix"), a
Michigan corporation, with and into Michigan Acquisition Sub, LLC ("Newco"), a
Delaware limited liability company and a wholly-owned subsidiary of API,
pursuant to an Agreement and Plan of Merger (the "Agreement") dated March 8,
2005 by and among API, Newco, Picometrix and Robin Risser and Steven Williamson,
the stockholders of Picometrix. Immediately following the effective time of the
merger, the name of Newco was changed to Picometrix, LLC.
As a result of the transaction, the stockholders of Picometrix received an
aggregate merger consideration consisting of $3,500,000 in cash, four-year API
promissory notes in the aggregate principal amount of $2,900,500 (the "API
Notes") and 2,575,000 shares of API's Class A Common Stock. The API Notes are
payable in four annual installments with the first being a payment of $500,000,
the second being a payment of $550,000, the third being a payment of $900,000
and the fourth being a payment of $950,500. The API Notes bear an interest rate
of prime plus 1.0% and are secured by all of the intellectual property of
Picometrix. API has the option of prepaying the API Notes without penalty.
As previously disclosed, upon the signing of the Agreement, API provided a loan
in the amount of approximately $4,200,000 to Picometrix (the "API Loan"), the
proceeds of which were used to prepay existing long-term indebtedness of
Picometrix to a third party. Immediately following the effective time of the
transaction, the API Loan was contributed to the capital of Newco.
In connection with the closing of the transaction, API entered into a three-year
employment agreement with Robin Risser. Mr. Risser's position with API will be
President and General Manager of the Picometrix business unit with a base salary
of $185,000 per year and a bonus to be determined and approved by the Board of
Directors of API. Upon the signing of the employment agreement, Mr. Risser
received a signing bonus of $30,000. Pursuant to the employment agreement, API
has agreed to cause the Board of Directors of API to appoint Mr. Risser as API's
Chief Financial Officer. In addition, Mr. Risser will be nominated to become a
Director of API at its 2005 annual shareholders meeting.
In connection with the closing of the transaction, API entered into a three-year
employment agreement with Steven Williamson. Mr. Williamson's position with API
and the Picometrix Business Unit will be Chief Technology Officer with a base
salary of $185,000 per year and a bonus to be determined and approved by the
Board of Directors of API. Upon the signing of the employment agreement, Mr.
Williamson received a signing bonus of $30,000.
The terms of the merger are contained in the Agreement, which was filed with the
Securities and Exchange Commission on March 14, 2005 in API's Form 8-K (the
"March 8-K") as Exhibit 10.1. The description of the Agreement is qualified in
its entirety by reference to the copy of the Agreement filed in the March 8-K,
which is incorporated by reference herein.
On May 2, 2005, API and each of its wholly-owned subsidiaries entered into Loan
and Security Agreements (collectively, the "Loan Agreement") with Pacific
Capital Bank, N.A., a national banking association, doing business as Santa
Barbara Bank & Trust ("Pacific Capital"). The Loan Agreement is attached hereto
as Exhibit 10.5. Additional information regarding the Loan Agreement is provided
in Item 2.03 below, which information is incorporated by reference into this
Item 1.01.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION.
On May 2, 2005, API and each of its wholly-owned subsidiaries entered into the
new Loan Agreements with Pacific Capital as lender.
The three year Loan Agreement provides for a $2.7 million term loan. The term
loan provided under the Loan Agreement is secured by substantially all of the
assets of API.(other than the intellectual property of Picometrix). The loan
under the Loan Agreement will bear interest at a rate equal to the Prime Rate,
plus 1.0% provided that the interest rate shall not be below 6.0% nor greater
than 7.75%. The borrowing by API under the Loan Agreement on May 2, 2005 was
$2.7 million, and was used to pay a portion of the merger consideration in
connection with the acquisition by API of Picometrix.
The Loan Agreement contains customary affirmative and negative covenants. The
financial covenants include the maintenance of a specified current ratio
(current assets to current liabilities), debt to effective tangible net worth
ratio and free cash flow. The creation of indebtedness outside the Loan
Agreement, creation of liens, making of certain investments, sale of assets, and
incurrence of debt are all either limited or require prior approval from Pacific
Capital. The Loan Agreement also contains customary events of default such as
nonpayment, bankruptcy, and change in control, which if they occur may cause all
outstanding obligations under the Loan Agreement to be accelerated and become
immediately due and payable.
The description of the Loan Agreement is qualified in its entirety by reference
to the copy of the Loan Agreement filed as Exhibit 10.5 hereof, which is
incorporated by reference herein.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.
On May 2, 2005, API appointed Robin F. Risser, 54, to the position of Chief
Financial Officer of API. Prior to joining API, Mr. Risser has been the Chief
Executive Officer and a member of the board of directors of Picometrix from
1992. Mr. Risser co-founded Picometrix in 1992. Mr. Risser is a member of the
Optical Society of America. Mr. Risser earned an MBA from the University of
Michigan in 1978 and passed the CPA exam in 1975. Mr. Risser was appointed Chief
Financial Officer pursuant to an employment agreement entered into with API in
connection with the closing of the acquisition of Picometrix as further
described in Items 1.01 and 2.01 above. Please refer to Items 1.01 and 2.01
above for a description of Mr. Risser's employment agreement and a description
of the agreements (including the API Note issued to Mr. Risser) Mr. Risser has
entered into with API in connection with API's acquisition of Picometrix.
On May 2, 2005, API appointed Steven Williamson, 51, to the position of Chief
Technology Officer of API. Prior to joining API, Mr. Williamson has been the
President, Chief Technology Officer and a member of the board of directors of
Picometrix from 1992. Mr. Williamson co-founded Picometrix in 1992. Mr.
Williamson earned his B.A. in Physics (Optics) from the University of Rochester,
has 35 publications in the field of ultrafast optics and optoelectronics and
holds 12 patents. Mr. Williamson was appointed Chief Technology Officer pursuant
to an employment agreement entered into with API in connection with the closing
of the acquisition of Picometrix as further described in Items 1.01 and 2.01
above. Please refer to Items 1.01 and 2.01 above for a description of Mr.
Williamson's employment agreement and a description of the agreements (including
the API Note issued to Mr. Williamson) Mr. Williamson has entered into with API
in connection with API's acquisition of Picometrix.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) and (b) Financial Statements of Business Acquired and Pro Forma Financial
Information.
It is impracticable to provide the required financial statements for
the acquired business described in Items 1.01 and 2.01 at this time. The
Registrant will file the required financial statements as they are available,
which is anticipated to be not later than 71 calendar days after the required
filing date of this Form 8-K.
(c) Exhibits:
Exhibit
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Number Exhibit
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10.1 API Note to Robin Risser dated May 2, 2005.
10.2 API Note to Steven Williamson dated May 2, 2005.
10.3 Employment Agreement dated May 2, 2005 between Advanced
Photonix, Inc. and Robin Risser.
10.4 Employment Agreement dated May 2, 2005 between Advanced
Photonix, Inc. and Steven Williamson.
10.5 Loan and Security Agreements dated May 2, 2005 by and
among Advanced Photonix, Inc., its subsidiaries and
Pacific Capital Bank, N.A.
99.1 Press Release of API dated May 2, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADVANCED PHOTONIX, INC.
By: /S/ Richard Kurtz
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Richard Kurtz, Chief Executive Officer
Dated: May 6, 2005
EXHIBIT INDEX
Exhibit
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Number Exhibit
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10.1 API Note to Robin Risser dated May 2, 2005.
10.2 API Note to Steven Williamson dated May 2, 2005.
10.3 Employment Agreement dated May 2, 2005 between Advanced
Photonix, Inc. and Robin Risser.
10.4 Employment Agreement dated May 2, 2005 between Advanced
Photonix, Inc. and Steven Williamson.
10.5 Loan and Security Agreements dated May 2, 2005 by and
among Advanced Photonix, Inc., its subsidiaries and
Pacific Capital Bank, N.A.
99.1 Press Release of API dated May 2, 2005.