Irvine Sensors, a US-based vision systems company that develops satellite sensors for US defense contractors, has raised US$11.4m through a mix of equity and debt financing.
The fundraising was provided by two private equity firms, Costa Brava…
Irvine Sensors, a US-based vision systems company that develops satellite sensors for US defense contractors, has raised US$11.4m through a mix of equity and debt financing.
The fundraising was provided by two private equity firms, Costa Brava Partnership and The Griffin Fund, and was split between the sale of approximately 51.8 million shares of common stock at US$0.07 per share, generating US$3.6m, and the issue of US$7.8m of five-year convertible notes bearing an interest of 12% per annum.
As part of the transaction, Irvine Sensors has agreed to seek stockholder authority to increase its authorized capital structure in order to allow the notes to be converted into common stock, also at US$0.07 per share. The notes could be converted after two years if the company’s stock price has traded at more than US$0.25 for over 30 days.
The two institutional investors have also committed to an additional fundraising, although this is conditioned upon stockholder approval for the increased capital structure and certain other conditions.
Following the transaction, Seth Hamot, general partner of Costa Brava Partnership, has become Irvine Sensors’ new chairman, while Chet White, managing partner of The Griffin Fund, will join the board. Meanwhile, Bill Joll, the former president of technology companies Velocitude and On2 Technologies, is to become the company’s new president and CEO.
Hamot said, “I am looking forward to working with Bill Joll and John Carson as they point Irvine Sensors in a new direction. Having invested our capital to stabilize the firm, we look forward to immediately building upon Irvine Sensors’ long history of successful innovation. Our objective is to turn these cuttingedge technologies into market leading products, and we want to do so quickly. There is much work to be done, but we believe the company is now able to march ahead without distractions.” 2010 proved to be a particularly challenging year for Irvine Sensors. Back in September, the company was forced to delist from Nasdaq, given the company’s inability to meet the stock exchange’s US$1 minimum bid requirement. Irvine Sensors has since moved to the Over-the-Counter Bulletin Board.
In December, the company reported a net loss of US$11.15m for fiscal 2010 compared with net income of US$914,800 in fiscal 2009. However, 2009’s results were skewed somewhat by non-recurring gains linked to patent sales and overall annual revenues actually rose slightly. To that end, the primary job of the new management team is to turn those rising revenues, approximately US$11.72m in fiscal 2010, into a profit.
