COSTA MESA, Calif., Dec. 27, 2010 /PRNewswire-FirstCall/ -- Irvine Sensors Corporation (OTC Bulletin Board: IRSN) today announced that it has closed an initial $11.4 million tranche of a financing. The tranche consists of a sale of approximately 51.8 million shares of common stock for approximately $3.6 million ($0.07 per share), and approximately $7.8 million of five-year notes bearing simple interest of 12% per annum. Irvine Sensors has agreed to seek stockholder authority to increase its authorized capital structure to allow the notes to be converted into common stock, also at $0.07 per share, and should that authority be granted, Irvine Sensors will have the right to force conversion of the notes after two (2) years if the Company's common stock has traded at or above $0.25 per share or more for 30 days.
The investors in this tranche are two private equity firms with existing interests in the field of cyber security, an area in which Irvine Sensors has announced successful third-party test results of its EAGLE-10™ high-speed solution. The investors have committed additional capital to a second tranche of the financing conditioned on stockholder approval for the increased capital structure and certain other conditions.
In connection with the financing, Seth Hamot, the Managing Member of Roark, Rearden & Hamot, General Partner of Costa Brava Partnership III, L.P., the lead investor in the financing, has become Irvine Sensors' new Chairman of the Board. Also joining the Board is Chet White, managing partner of The Griffin Fund, the other institutional investor in the financing. Bill Joll, former President of Velocitude, recently sold to Akamai, and of On2 Technologies, a Google acquisition, has been elected Irvine Sensors' new President and CEO. John Carson, a founder of Irvine Sensors, has become Vice-Chairman of the Board and Chief Strategist. Also joining the board will be Mr. Marcus Williams, former Vice President for Business Development at IT solutions company TechTeam Global, Inc., Mr. Jay Scollins, Chief Financial Officer at Roark, Rearden & Hamot Capital Management, LLC., Mr. Scott Reed, a principal of The Griffin Fund, and Mr. Joll.
Mr. 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 cutting-edge 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."
Mr. White said, "From our experience, it is very unusual to find an enterprise like Irvine Sensors that has breakout potential in two such large and identifiable markets as thermal imaging and cyber security. Based on our industry contacts, we believe that the ramifications of their technology extend well beyond initial military and government applications."
Mr. Joll said, "I've had extensive experience in leading the growth of technology-based companies, but for me, Irvine Sensors is in a class by itself. They already have two potential 'game changers' and the seeds of others as a result of their pioneering developments over the years."
Mr. Carson said, "This is a momentous occasion for us. We believe we have assembled a world-class team to address our world-class opportunities."
The Company plans to schedule a web cast conference call in mid-January to address the transaction and related appointments further. Both Mr. Hamot and Mr. Joll are expected to be available for that conference call.
Irvine Sensors Corporation (www.irvine-sensors.com), headquartered in Costa Mesa, California, is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products. Irvine Sensors also conducts research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications.