Irvine Sensors (IRSN.OB) Closes First Tranche of Financing; Announces Key Management Appointments

QualityStocks would like to highlight Irvine Sensors Corporation (OTCBB: IRSN). Headquartered in Costa Mesa, California, Irvine Sensors 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.

In the company’s news yesterday,

Irvine Sensors Corp. announced the closing of its initial $11.4 million of financing, which includes the 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 percent per annum.

The company said it will work to obtain shareholder authority to increase its capital structure to allow the notes to be converted into common stock, at $0.07 per share. If the company receives shareholder authorization, Irvine Sensors will have the right to force conversion of the notes after two years if its common stock has traded at or above $0.25 per share or more for 30 days.

This tranche of financing is backed by two private equity firms engaged in investments in cyber security, a field in which Irvine Sensors has announced positive third-party test results regarding its EAGLE-10™ high-speed solution. The investors have also committed additional capital to a second tranche of the financing contingent on shareholder approval for the aforementioned increase in capital structure.

In accordance with the financing, Irvine Sensors announced several key executive appointments:

Seth Hamot, the managing member of Roark, Rearden & Hamot, general partner of Costa Brava Partnership III, L.P., the lead investor in the financing, will serve as Irvine Sensors’ new chairman of the board.

Chet White will also serve on the company’s board, as is currently the managing partner of The Griffin Fund, the other institutional investor in the financing.

Irvine Sensors also elected Bill Joll to serve as its new president and CEO. Joll, former president of Velocitude, recently sold to Akamai, and of On2 Technologies, a Google acquisition, will also join Irvine Sensors’ board of directors.

John Carson, a founder of Irvine Sensors, will serve as vice-chairman of the board and chief strategist.

Also joining the board is Marcus Williams, former vice president for Business Development at IT solutions company TechTeam Global Inc.; Jay Scollins, CFO at Roark, Rearden & Hamot Capital Management, LLC.; and Scott Reed, a principal of The Griffin Fund.

Hamot said he will work with Joll and Carson to lead 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,” Hamot stated.

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