Advanced Photonix, Inc. Signs VAR Agreement with Seltek Ltd.

Agreement Covers T-Gauge® Industrial Terahertz Gauging System

http://finance.yahoo.com/news/advanced-photonix-inc-signs-var-120600738.html

ANN ARBOR, Mich., Sept. 30, 2014 /PRNewswire/ -- Advanced Photonix, Inc.® (NYSE MKT: API) today announced that it has signed a value-added reseller (VAR) agreement for its T-Gauge®industrial terahertz gauging system with Seltek Ltd. Seltek is a leading manufacturer of measurement and process control systems for continuous web production industries.

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The T-Gauge® measurement system can be used for online or offline measurements for quality assurance and process control of web-based and converting industries. The T-Gauge® Sensor is the world's first terahertz sensor for online process control, quality control, and nondestructive testing. With no ionizing radiation (like x-ray) and no radioactive elements (like nuclear gauges), the T-Gauge® Sensor provides an alternative to legacy technology that requires excessive regulation and control. Terahertz energy will penetrate opaque materials, allowing measurements to be performed on any non-conductive material.

The T‑Gauge® Control Unit (TCU™) is the central component of the T-Gauge® family of products, and it sources the optical and electrical signals necessary to generate and detect terahertz (THz) pulses if the TCU is connected to THz accessories. It also transforms analog data into a digital signal that can be analyzed using the onboard processor.

The TCU is a 19-inch (483 mm) rack, wall, or table mountable intelligent instrument that controls the fiber-coupled THz sensor and includes a high performance waveform processor. The TCU has all the required connections for convenient interfacing to various optical and electronic components. The high-speed delay included in the TCU can be chosen from a number of delay lengths and speed options. When utilized in conjunction with Advanced Photonix T-Gauge® accessories, the TCU enables the user to generate and detect pulsed terahertz energy that can be used to measure physical properties. The TCU has received both UL and CE marks, and can be operated in a wide range of environments. The high signal-to-noise ratio of our THz signal allows the T-Gauge® Sensor to operate at up to a 1kHz measurement rate, which allows tight control of the manufacturing line.

API is developing a VAR partner network to enable T-Gauge® industrial process control solutions for continuous web, discrete manufacturing and anomaly defect inspection applications. The company plans to develop a VAR network which will serve vertical markets where VARs have unique subject matter expertise. VAR partners are trained to sell, install and support API T-Gauge® products. Each VAR will have an in house application development T-Gauge® system to perform feasibility studies and develop new market applications for non-contact measuring of physical properties such as; multiple layer thickness measurements, density, contamination by foreign substances, sub-surface defects within a product and moisture analysis. The technology is very adaptable to different sensor configurations, including robotic controls, to support many different applications. The resulting innovative gauge will help manufacturers to improve quality and reduce costs.

Richard Kurtz, President and CEO commented, "We are always on the lookout for strong VAR partners and have been developing and building a VAR partner network. We are pleased to have established this relationship with Seltek, which has a long history of supporting a world-wide customer base for manufacturing process control. Seltek provides a global presence with world class customer support and market knowledge, which we believe will lead to more rapid market adoption of our terahertz T-Gauge® platform."

Yasar Karadeniz, Managing Director of Seltek Ltd. said, "We are delighted about this new relationship with Advanced Photonix. Their new T-Gauge® sensor technology complements our existing sensor technology and provides a precise, accurate and reliable system that our customers can use to monitor and control their manufacturing process manually or automatically."

Kurtz continued, "VARs are an important part of our distribution channel strategy. VARs provide the end customer the total solution. This solution is based on a Quality Control System or QCS. In web or continuous manufacturing, a typical system is made up of the scanning system that moves our T-Gauge® sensor across the web material to measure physical properties, like layer thickness, overall thickness, density, and sometimes moisture, all at the same time. In a closed loop control system, the VARs software interfaces between the T-Gauge® measurements and the production control system. The position or location of the sensor position relative to the web is used to control the extrusion, calendaring or composite structure of the product manufactured. The process control can be accomplished using automated or manual die, pressure and material feed controls. The VARs also take responsibility for: installation of the scanning equipment and T-Gauge® sensor; Human Machine Interface (HMI) of the control system for operator input; service and support."

"In discrete manufacturing VARs can use robotic, two or multiple axis or fixed locations to inspect product that is an individual item, like blow molded bottles. Here depending on line speed, the size and number of points to be inspected, the VARs can either perform sampling or 100%."

Kurtz concluded, "Our VARs also have a worldwide network of sales and service personnel expanding the number of 'feet on the street' offering our T-Gauge® Sensor to customers."

About Seltek Ltd.

Seltek is engaged in the design, manufacturing, installation and commissioning of process measurement and control systems for continuous web product industries such as metal rolling mills, paper mills, cast film lines, plastics, nonwoven, calendaring, textiles, and converting. For more information visit them at www.seltek.com.

About Advanced Photonix, Inc.

Advanced Photonix, Inc.® (NYSE MKT: API) is a leading supplier of optoelectronic sensors, devices and instruments used by Test and Measurement, Process Control, Medical, Telecommunication and Homeland Security markets. The company has three product lines: Optosolutions focuses on enabling manufacturers to measure physical properties, including temperature, particular counting, color, and fluorescence for Medical, Homeland Security and Process Control applications. The Terahertz sensor product line is targeted to the Process Control, to enable quality control, and Security markets through nondestructive testing. The T-Gauge® sensor can measure subsurface physical properties, like multi-layers thicknesses, density, moisture content, anomaly detection and some chemical features, online and in real time. High-Speed Optical Receiver (HSOR) products are used by the telecommunication market in both telecommunication equipment and in test and measurement equipment utilized in the manufacturing of telecommunication equipment. For more information visit us on the web at www.advancedphotonix.com.

The information contained herein includes forward looking statements that are based on assumptions that management believes to be reasonable but are subject to inherent uncertainties and risks including, but not limited to, unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products; potential problems with the integration of the acquired company and its technology and possible inability to achieve expected synergies; obstacles to successfully combining product offerings and lack of customer acceptance of such offerings; limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company; and a decline in the general demand for optoelectronic products.

CONTACT: ir@advancedphotonix.com

RELATED LINKS: http://www.advancedphotonix.com

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Advanced Photonix 2015, First Quarter- commentary on Terahertz results

Advanced Photonix (API), continues it's trail-blazing in the commercialization of Terahertz, and predicts that 2015 will be a break-out year in sales of THz products and applications. The company has reached profitability for first time in 11 quarters and Rob Risser, COO noted:

"Revenue grew 8% compared to last year's first quarter and we returned to a meaningful positive adjusted EBITDA of $267,000 for the first time in 11 quarters. In addition, we were very close to reporting non-GAAP profit for the quarter, recording a $3,000 loss compared to a loss of $403,000 in the first quarter last year and a loss of $887,000 last quarter."

 http://seekingalpha.com/article/2412385-advanced-photonixs-api-ceo-richard-kurtz-on-q1-2015-results-earnings-call-transcript?uprof=45

While there was a decrease of 41% in API's Terahertz product platform for Q1, 2015 this was due primarily to delays in government contract revenue, for contracts already awarded, and given current and expected Terahertz contract awards, this trend should reverse as the company expect to see substantial growth later in the year.

The decrease was largely attributable to later start up of government contract awards. Although the company recently began a contract with the Navy late in the first quarter, it had anticipated this  would have commenced early in the quarter. API had also anticipated receiving a follow-on Air Force F-35 contract, for the inspection of the Joint Strike Fighter, during the first quarter. However, start up for this 1.5 million dollar award has slipped to a later start date, and is projected to commence late in the second quarter due to administrative delays by the Air Force.

Richard (Rick) Kurtz noted:

"This contract will deliver a fully commercialized version of a prototype handheld measurement sensor that was delivered under an earlier contract. We expect follow-on product sales as a result of this in not only domestic but also international OEMs in the coming years after completion.

We are continuing to see a strong buildup in potential T-Gauge orders in the industrial market. We will be exhibiting at the International Conference on Infrared, Millimeter, and Terahertz Waves or IRMMW-THz Conference in Tucson, Arizona, which runs from September 14 till September 16. This conference is focused on the research market and brings together researchers from around the world, with 90% of the conference and papers focused on Terahertz's research. While we've had long-standing presence in this market, with our new T-Ray product line we are expecting to more than double the number of T-Ray product sales to the research market in the next 12 months."

http://seekingalpha.com/article/2412385-advanced-photonixs-api-ceo-richard-kurtz-on-q1-2015-results-earnings-call-transcript?uprof=45

The company also discussed the increasing role of the Value Added Resellers, (VARS),  in opening new doors for use of the T-Gauge, into the process control market. The company is working with them to do what Kurtz refered to as field trials in various vertical markets, where the VAR is  provided the equipment, who then takes the T-Gauge, to companies they work with across the globe, where they actually demonstrate use of the T-Gauge, on the factory line for a couple of days to collect data necessarily needed to demonstrate the return on the investment (ROI), for increased quality or reduced material usage for the end user. 

Rick also noted that the company will demonstrate use of it's Saf-T Chek, ADS, which is known as the "anomaly detection device" at the IRMMW-THz Conference in September, and hopes to stir up interest in it's use for overseas markets. 

Overall the company confirmed their earlier guidance of 20% revenue growth year over year, to be driven primarily by the exploding HSOR market and a THz market that is finally beginning to realize it's potential in a vast number of market applications. It should be a fun year. 

These of course, are just my opinions and as always do your own due diligence. 

ADVANCED PHOTONIX SALES RISE, CASH FLOW TURNS POSITIVE

https://www.blogger.com/blogger.g?blogID=124073320791841682&pli=1#editor/target=post;postID=1502573173356204743;onPublishedMenu=posts;onClosedMenu=posts;postNum=0;src=link

ANN ARBOR — The optical communication gear and electronics maker Advanced Photonix Inc. (NYSE: API) reported an 8 percent sales jump to $7.7 million in the first fiscal quarter ended June 27 vs. the year-ago revenue figure.

The company also reported a net loss of $925,000 or 3 cents a share, vs. a loss of $268,000 or 1 cent a share in the year-ago period.

(My Note: This is not correct. Api realized a GAAP net loss for the first quarter of fiscal 2015 of approximately $268,000 or $0.01 per share, as compared to a net loss of $925,000 or $0.03 per share in the first quarter of fiscal 2014, and a loss of $1.1 million or $0.04 per share in the fourth quarter of 2014.)

The company said gross profit margin was 38 percent of sales, down from 41 percent of sales a year earlier, due to the completion of development contracts for its Terahertz equipment, deals that have not yet been replaced.

Earnings before interest, taxes, depreciation, amortization and stock-based compensation was $268,000 for the quarter, vs. an adjusted EBITDA loss of $68,000 a year earlier.

The company also released an adjusted loss figure of $3,000 for the quarter. By the same yardstick a year earlier the adjusted loss was $403,000. The adjusted loss was net income excluding investment gains and losses, amortization of intangible assets and patents, non-cash interest expenses and stock-based compensation expenses.

Operating expenses were $3.1 million or 40 percent of sales, down from $3.5 million or 49 percent of sales a year earlier, due primarily to cost reduction measures.

The company had $1.4 million in cash on hand as of June 27, up from $120,000 on March 31, due to the receipt in June of $2.9 million in net proceeds from a firm underwritten placement of 6.2 million shares by B Riley and Co. In addition to the cash on hand, the Company had access to approximately $3.2 million in additional funds available on the Company’s line of credit at quarter end. Net working capital as of June 27 was $4.6 million.

“Our high-speed optical receiver product platform achieved sales of $3.7 million in the quarter as customers demanded a record volume of 100G optical receivers,” said API CEO Richard Kurtz. “Investments made in the past several years in our HSOR product platform are driving profitable growth this fiscal year and investments made in our Terahertz product platform are beginning to show traction in the industrial process control and quality markets. We reiterate our guidance to grow our fiscal year 2015 revenues by more than 20 percent from last year given the ramp we are seeing in our three primary markets: test and measurement, telecommunications, and military-aerospace.”

To listen to the tape of a conference call with analysts and investors discussing these results, visit http://www.advancedphotonix.com.

API T-Gauge® Systems Continue Industrial Market Penetration

http://advancedphotonix.investorroom.com/index.php?s=43&item=222

ANN ARBOR, Mich., July 17, 2014 /PRNewswire/ -- Advanced Photonix^® (NYSE MKT: API) announced that it has received over $400,000 in orders from our value added resellers for multiple T-Gauge^® online terahertz (THz) sensor systems in three different market segments; extruded plastics, carpet, and paper. The company expects these initial design wins will lead to multiple system sales in each market segment over the next several years.  The T-Gauge^®system, manufactured by API, is the only fully hardened THz system that is suitable for online gauging applications.

The primary advantages that the T-Gauge^® sensor offers in these segments compared to alternative sensors is its ability to measure single and/or multiple layers with a single-sided sensor configuration, its ability to measure more than one physical property at the same time with the same sensor, and its inherent safety compared to nuclear and x-ray gauges which produce harmful radiation. These capabilities provide a significant return on investment for continuous, online process control measurements and acceptance is growing for this technology.

The initial extruded plastics application is to measure the individual layer thickness of coated foam food containers. Today companies utilize a combination of nucleonic, x-ray or infrared gauges to measure the total thickness. The T-Gauge^® system is ideal where space is limited and multiple sensors cannot be deployed because one T-Gauge^® sensor can measure individual layer thickness and total thickness simultaneously.

The initial carpet application is targeted at measuring the amount of latex applied to the mesh backing, which is an important factor in carpet quality. The T-Gauge^® is currently the only sensor technology that has been able to make the desired measurement. The difficulty for carpet manufacturers is that the measurement needs to be single-sided, which is easily done with the T-Gauge^® single sided configuration.

The paper market sale to a significant VAR is focused on application development prior to full online deployment. The T-Gauge^® system can measure basis weight, moisture content and non-contact caliper thickness. The incumbent technology, beta gauge, cannot make multiple measurements and requires three to four sensors, where as the T-Gauge^® system only needs one sensor that makes the measurements all at the same spot for greater process correlation. Successful application development could open up a significant paper market for the T-Gauge^®sensors.

"These recent T-Gauge^® purchase orders are evidence of our growing penetration and market leadership in multiple industrial markets based on the strength of our technology and value added reseller channel," said Richard Kurtz, CEO of Advanced Photonix, Inc. "The fact that our gauging solution can satisfy such a broad range of applications and can provide solutions that other sensors cannot, positions us well to grow rapidly as the early adopters of THz sensors lead the way to volume product adoption in each market."

About Advanced Photonix, Inc.

Advanced Photonix, Inc.^® (NYSE MKT: API) is a leading supplier of optoelectronic sensors, devices and instruments used by Test and Measurement, Process Control, Medical, Telecommunication and Homeland Security markets. The company has three product lines: Optosolutions focuses on enabling manufacturers to measure physical properties, including temperature, particular counting, color, and fluorescence for Medical, Homeland Security and Process Control applications. The Terahertz sensor product line is targeted to the Process Control, to enable quality control, and Security markets through nondestructive testing. The T-Gauge^®sensor can measure subsurface physical properties, like multi-layers thicknesses, density, moisture content, anomaly detection and some chemical features, online and in real time. High-Speed Optical Receiver (HSOR) products are used by the telecommunication market in both telecommunication equipment and in test and measurement equipment utilized in the manufacturing of telecommunication equipment. For more information visit us on the web atwww.advancedphotonix.com.

The information contained herein includes forward looking statements that are based on assumptions that management believes to be reasonable but are subject to inherent uncertainties and risks including, but not limited to, unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products; potential problems with the integration of the acquired company and its technology and possible inability to achieve expected synergies; obstacles to successfully combining product offerings and lack of customer acceptance of such offerings; limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company; and a decline in the general demand for optoelectronic products.

Portions of Advanced Photonix's (API) Q4 2014 Conference call-(API remains the only THz company with systems operating on factory floors)

http://seekingalpha.com/article/2293915-advanced-photonixs-api-ceo-richard-kurtz-on-q4-2014-results-earnings-call-transcript?part=single

My Note: As usual I participated in asking questions yesterday relating to Advanced Photonix (API), trailblazing efforts in the commercialization of Terahertz. API remains the only company to have actually placed a THz unit on an operating factory floor, and they have done so in a variety of different industries, and in a number of settings. Rick Kurtz confirmed this on the conference call yesterday. SeekingAlpha, released a summary of the call, and I have included the relevant portions relating to THz. Rick Kurtz, and Rob Risser answered all of my questions, and the reference to Jeff Anderson as the person who answered my questions is incorrect. I have also taken the liberty of clarifying some of my questions which are garbled in the transcript. 

Rob Risser: "Our cost reduced in fact for ruggedized Terahertz product, the T-Ray 5000 was introduced during fiscal 2014 along with underwriter laboratory safety certification.

In addition, we made significant progress toward our T-Ray 5000 CE certification during the year. CE certification is targeted at European market penetration and is required by certain European customers. In addition, we gained significant traction through our value-added reseller channel, which now totals four VARs and distributors located in Asia, Europe and North America.

With these VARs, we have successfully penetrated and had factory acceptance of our T-Ray 5000 and the building products, extruded plastics, pipe and research markets. In addition, we have deployed and are awaiting factory acceptance in the military, paper and pharmaceutical markets. We are successfully penetrating the industrial early adopters and have a business model that will allow a price point that is attractive for a more rapid market acceptance by industrial customers.

During the fourth quarter, our sales and marketing expense is typically high since we exhibited two large tradeshows. Photonics West and the Optical Fiber Conference or OFC, both shows were very successful for us this year and confirmed that we targeted the high growth segments of the markets we participate in."

Richard Kurtz: "Pursuant to our press release of last Friday, we did receive the first of two major Terahertz development contracts discussed during our mid-quarter update. The first was from the Navy, which we proposed to build and test a prototype non-contact, time domain Terahertz non-destructive evaluation scanning system to acquire sub service, beneath summary acoustic hull coatings.

The system will enable the rapid detection of hull defects such as corrosion and gouges beneath submarine hull coating as well as hull coating material and adhesion defects. We remain in discussion on the second SBIR Phase 2 contract for $1.5 million for the F-35 program. We are expecting to receive this award during our second quarter fiscal 2015.

To maintain our leading market position in Terahertz, we have reduced our manufacturing costs for T-Gauge products by more than 25% thus allowing us to lower our price points opening more product sales opportunities.

We are continuing to work on new product developments to further lower the cost of Terahertz solution, thereby allowing us to accelerate market adoption, compete more effectively against older technologies, expand our addressable markets and encourage additions to our value-added reseller channel.

We now are seeing a strong build up and potential T-Gauge orders in both, the industrial and the research market. We are expecting to more than double the number of T-Gauge product sales this coming year."

Here are the questions I asked:

Operator

Our next question comes from Randy [Knudson].

Unidentified Analyst

Good afternoon.

Jeff Anderson - Chief Financial Officer

Afternoon, Randy.

Unidentified Analyst

Well, let me ask you first about you mentioned in Terahertz. You mention pharmaceutical for the first time since about 2008 that I have heard pharmaceutical mentioned with API. Was that intended to be nutraceutical.

Jeff Anderson - Chief Financial Officer

Yes. It should have been nutraceutical more than pharmaceutical. It's an antibiotic.

Unidentified Analyst

Okay, but we are then in at least in some area of the pharmaceutical market and I assume -

Jeff Anderson - Chief Financial Officer

Yes.

Jeff Anderson - Chief Financial Officer

Not at the present time. Again, we have a VAR and Japan that's leading the charge over there for us. They are the ones have been mostly engaged. Our focus obviously has been with the industrial market and the replacement of nuclear gauges because we believe that that's the path to volume today.

Unidentified Analyst

What are you noticing in Terahertz in terms of these areas that we've moved into such as the roofing industry? Are their competitors starting to look at us as well? I mean is it the fact that one party in the industry is purchasing the product leading to other ones.

Jeff Anderson - Chief Financial Officer

Yes. When you first get the first install ones. Then the competitors-type for those building product applications start looking at a lot more seriously more and more opportunities out there within the on the various industrial applications that we have gone after.

Our competitors of course are looking and trying to figure out how to get there, because we do have one of the most advanced Terahertz industrial hardening systems in the world, so we do have a large ahead of our competitors we want to keep that.

That's the reason our focus is on cost reduction to make the ROI even more attractive and we do have multiple customers in the building product side. We have multiple customers now.

Unidentified Analyst

Okay. I don't see anyone else. I see a lot of talk about Terahertz,...  you know, I try to keep up with all the stuff that's going on the net, but I don't see anyone affirmatively indicating they are actually doing commercial (applications). I mean, they may be selling to (labs) or universities, but I don't see anyone else doing what you are doing in the industrial market. Is that fair or are there others?

Jeff Anderson - Chief Financial Officer

That's absolutely correct. Some people do talk about selling to maybe a pharma, but it will be offline. It won't be on the factory floor. It will be in the lab type of thing, so we are the only ones that have deployed Terahertz on the factory floor real time to control the manufacturing process. We don't really control it. That's our VARs doing that within their software package and their scanning systems that they make.

Unidentified Analyst

Yes. I wish there was something you could put out that would affirmatively state that, because you know there's just so much information. As a result, this information that people don't know what the truth of the matter is, so unless you affirmatively tell us that's the situation as you understand, then you know,  nobody knows, so -

 Let me ask you, are you in contact at all with any of the automotive industry. I know you went to the show in Detroit one-time.

Jeff Anderson - Chief Financial Officer

We went to the paint show. We really haven't talked to the OEMs we will call it directly. We are in dialogue with some component manufacturers. We have finished a contract for the F-35 program that is prototype to what we refer to as SPG or single point gauge. We will have hopefully some video next month on it that we can be putting on the website that shows the handheld device with a touch screen on it to measure multiple layers at the same time and there has been some interest in the gas tank manufacturers to manufacture plastic gas tanks that have multiple layers, including a [layer] to ensure they have the proper thickness within corners and on flat surfaces of the blow molded gas tank, so yes we have had some dialogue, but there haven't been the early adopters that we have seen in other applications.

Unidentified Analyst

Let me ask you about the paper industry. You mentioned paper, you still haven't completed a contract sale as I understand in paper and I thought that was done a long time ago.

Jeff Anderson - Chief Financial Officer

We did. We sold our prior version of T-Ray 4000 to Appleton (Appvion),  that was over a year-and-a-half ago. We are still working with them, consulting with them and hopefully we will be able to expand to other people in the paper industry.

Unidentified Analyst

Then the big question is relates to the QPL or the qualified provider list, with TSA. Where are we in terms of that?

We have not gotten any notice whatsoever on that. You are at the mercy of the government and we are not a large enough company to have the lobbyists in place that can really help us to live that, so we really haven't made any progress. From our perspective it's more of a holding pattern today. We are looking at potentially other options to take that to market and that one include maybe you know a strategic relationship out there, but we are in the evaluation phase of that.

_____________________

I would be happy to post news about any other companies actually installing/deploying THz units onto a working factory floor. If your company is making such sales please let me know. Thanks.

Advanced Photonix provides business update and new THz contract announcements

My Note: Here is the transcript regarding the business update given today by Richard Kurtz, CEO, of Advanced Photonix (API). (Thanks to Jmat on the IV message board)
http://secfilings.com/searchresultswide.aspx?link=2&filingid=10044967

(The transcript of the call contains forward-looking statements, which involve known and unknown risks and uncertainties about the Company’s business and the economy and other factors that may cause actual results to differ materially different from  expected achievements and anticipated results, including unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products; problems with the integration of acquired companies and technology and possible inability to achieve expected synergies; and limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company.

Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements contained in this transcript of the conference call. Please see API's  periodic reports and other documents filed with the Securities Exchange Commission for a fuller statement of risk factors applicable to the Company, including it's recently filed Registration Statement on Form S-3, Registration No. 333-195689.)

Richard Kurtz:

I would like to review some of the positive developments in our markets and events that have occurred over the past three months.

Recognizing our need for additional capital, and after reviewing several alternatives, including a strategic sale of assets, a private placement, a convertible debt issuance, a rights offering and various other forms of financing, we raised $2.5 Million through a firm commitment underwriting by B. Riley & Co., LLC. The proceeds in the offering will be used to pay down the outstanding balance under our line of credit with Silicon Valley Bank and certain fees related to our credit agreements with SVB and Partners for Growth, which in turn will help to both ensure the continued availability of that line to meet our working capital needs, and facilitate our ongoing negotiations with our SVB and Partners for Growth.

In particular, over the past several months, we have made several announcements regarding our credit agreements with Silicon Valley Bank and Partners for Growth, the most recent of which occurred on May 2, 2014 when we disclosed in a Form 8-K filing that Silicon Valley Bank had agreed to extend our line of credit through July 31, 2014 and that both Silicon Valley Bank and Partners for Growth had agreed to restructure our financial covenants to, among other things, lower our required liquidity ratio to 1.30:1.00 through May 31, 2014, and to 2.00:1.00 from and after June 30, 2014.  We have exceeded these requirements and yesterday we received a proposal from SVB to extend our line of credit for an additional two year period commencing from the date the final documentation is completed and executed, and to revise our covenants and loan pricing..  PFG has indicated their agreement with the proposed terms, and negotiations with our lenders are ongoing.

On the business side, we believe prospects are improving for fiscal year 2015 with China having announced a major internet expansion and Terahertz contract and system sales beginning to achieve some traction.  As I will detail, two significant terahertz development contracts with the US government that we have been pursuing for over a year are expected to be signed shortly.

Besides the anticipated government terahertz contracts, in March of this year we made an announcement of a significant volume purchase order for our T-Gauge 5000 product by a European customer. By May, that agreement had evolved into a three-year, $1.2 Million minimum commitment. Initial deployment of the product is expected at the end of this calendar year, and if successful, may become a key milestone in gaining market acceptance of this innovative technology.

We also announced in May the release of a new 10G APD product for the Fiber to the Home and Metro markets. We are expecting to have the product in customer hands later this calendar year. We also released a press release in the middle of May announcing a new $700,000 100G order from a current China Telecom customer that was above our previously forecasted demand. As a result of these increases in demand, we have added a second shift and are working to significantly expand our HSOR operations.

● Page 2

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As previously alluded to, we have received notification of an expected award on an approximately $1 million new Small Business Innovation Research (or SBIR) contract for the US Navy for our terahertz product platform. In this Phase II SBIR project we propose to build and test a prototype non-contact time-domain terahertz (TD-THz) non-destructive evaluation (NDE) scanning system to acquire sub-surface images beneath submarine acoustic hull coatings. The system will enable the rapid detection of hull defects such as corrosion and gouges hidden beneath submarine hull coating, as well as hull coating material and adhesion defects.

In addition we have been informally advised that we have been selected to receive a SBIR Phase II grant for $1.5 Million for the F-35 program.  The “selection” term designation means that, a contracting officer has been assigned to finalize a negotiated contract with us (though no assurance can be given that those negotiations will be successfully completed).  

Modern day fighter aircraft require precise alignment of exterior doors and panels in order to meet stringent performance and interchangeability criteria. To meet requirements for rigging doors and panels on the aircraft, two key measurements are required: step height and gap width between the door/panel and the adjacent structure.. The purpose of the Phase II Grant is to transition the prototype hand-held Step/Gap end effector that we developed on an earlier SBIR award to a Commercial Off the Shelf (COTS) product.

In addition, there are also additional purchase orders that we expect to receive in the coming months, indicating that our military business should be returning a more normalized run rate.

In summary, the headwinds of last year have become tailwinds for us as US government, military and China telecom spending have picked up dramatically. As a result we are currently anticipating greater than 20% year over year revenue growth in Fiscal 2015 which should increase our revenues for that year to more than $31 Million, the level at which we expect to have positive EBITDA (as defined in our lending agreements with SVB and PFG).

For all these reasons, and despite the fierce competition and pricing pressures in the telecom space and the many difficulties of introducing a radically new technology like teraherz, we are excited about the coming year’s prospects.

Please join us for our 4th quarter and year-end earnings call to find out more, on June 30, 2014.

Advanced Photonix Announces Continued Market Penetration and Terahertz Success

ANN ARBOR, Mich., July 9, 2013 /PRNewswire/ -- Advanced Photonix^® (NYSE MKT: API), the leading supplier of terahertz systems to industry, announces today that it has sold two new T-Gauge^® sensor systems. The first sale is a spare or backup system for an existing T-Gauge® system used in a critical manufacturing process overseas. The second system will be deployed on an industrial manufacturing line to provide 100% inspection of roofing materials for quality control. This inspection system is expected to be the first in a number of systems deployed to this customer.
(Logo: http://photos.prnewswire.com/prnh/20130304/LA69982LOGO)
The ability of terahertz energy to penetrate non-conducting materials allows inspection of solid and liquid products after packaging. The wide frequency content and high precision of the T-Gauge^® system provides sensitivity to both physical and chemical changes in the product. Measurement of thickness, density, and certain material properties can be used to monitor the quality of the product being produced.
"With the addition of more systems deployed internationally we are continuing to develop a strong global support network for our value-added resellers and customers. This new deployment to a roofing manufacturer expands our applications to a new customer in an existing market. We would like to thank our value-added reseller, Thermo Fisher Scientific, for their hard work in bringing in this new opportunity," said API CEO Richard Kurtz.
About Advanced Photonix, Inc.Advanced Photonix, Inc.^® (NYSE MKT: API) is a leading supplier with a broad offering of optoelectronic products to a global customer base. We provide optoelectronic solutions, high-speed optical receivers and terahertz instrumentation for telecom, homeland security, military, medical and industrial markets. With our patented technology and state-of-the-art manufacturing we offer industry leading performance, exceptional quality, and high value added products to our OEM customer base. For more information visit us on the web at www.advancedphotonix.com.
The information contained herein includes forward looking statements that are based on assumptions that management believes to be reasonable but are subject to inherent uncertainties and risks including, but not limited to, unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products; potential problems with the integration of the acquired company and its technology and possible inability to achieve expected synergies; obstacles to successfully combining product offerings and lack of customer acceptance of such offerings; limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company; and a decline in the general demand for optoelectronic products.
CONTACT: Torrey Hills Capital
Jim Macdonald
(858) 456-7300
jim@sdthc.com
SOURCE Advanced Photonix, Inc.

Advanced Photonix (API) makes sales in Terahertz/NDT of $11.4 million in fiscal 2013

Advanced Photonix while reporting a rather dismal year overall, due primarily to supply chain problems in their high speed optical receivers market, showed remarkable growth for the year in THz sales.

"Industrial sensing and non-destructive test market revenues were $11.4 million in fiscal 2013, an increase of 6% or $631,000 from the fiscal 2012 revenue, up from $10.8 million. Our industrial sensing and non-destructive test revenue in the fourth quarter of the current year increased 47% or $1.2 million from the comparable prior year quarter. These increases are the result of higher terahertz contract and system sales, as well as approximately $298,000 in revenue from 1 month of activity with the net operating assets of Silonex, which was acquired by our Advanced Photonix Canada subsidiary."
Rob Risser stated:
"The terahertz product platform grew due to substantial contract revenue. In addition, our terahertz product platform concentrated on application development to support our developing value-added reseller channel and improving product reliability in order to support the demand in process control market requirements of operating 24/7, 365 days of the year. The good news is that our telecom revenue bottomed in the fourth quarter and is growing again as we enter fiscal 2014 as the supply chain issues are resolved."
" The terahertz product platform spent the year completing several contracts for applying terahertz to the F-35 Joint Strike Fighter jet platform. Developing the industrial process control value-added reseller channel and improving terahertz reliability in our T-Gauge product offering in order to address the industrial process and quality control requirements. This year marks the transition for the terahertz product platform as a research and -- as research and development moderates and contract revenue declines, which should be offset by industrial and laboratory market product sales increases."
Rick Kurtz added: "The world economy is starting to show enough growth to spur manufacturing investment. We introduced our fifth generation terahertz system, T-Gauge 5000 product line, specifically for this market. We're also in the process of attaining both UL and CE certification, and will be the only time-domain terahertz product in the world with such certification."

The only disappointing news was that the TSA approval of the anomaly detection device, Saf-T-Chek,slated for inclusion on the airport qualified providers list,(QPL), remains on hold. Looks like 2014 could be the break-out year for API.

First Public Photos of the new 5th Generation Advanced Photonix T- Gauge®, and Industrial Sensor

My Note: I was able to obtain the following photographs of the Advanced Photonix, (API),  new smaller, lighter, and faster, 5th generation T-Ray 5000, in the  T-Gauge® platform including a photo of the T-Ray industrial sensor head,  recently sold to SkyRay OE, in China, for airport baggage/ security screening. 

The recent press release stated:
"The T-Gauge® terahertz sensor is the second product in the next generation T-Ray 5000 product platform. The first product, the Saf-T-Chek ADS®, is focused on the security market, and is meant for non-imaging detection of anomalies concealed under headgear or clothing. The T-Gauge® sensor, designed for online process control, can be used for imaging, as well as gauging, applications. When coupled with the high-speed line scanner, the T- Gauge® provides imaging capability that exceeds all other pulsed terahertz products."

The photos give viewer a sense of the very light & compact size, of the units.

I received the photos from Rick Kurtz, CEO, at Advanced Photonix, who sent the following note:

Randy, I do not have any professional pictures, we are waiting till we have the new systems installed on the factory floor. It does not show the cable and sensor attached, but I did attach the sensor picture. Please note that we are branding this as a API product for the industrial market.

Hope this is good enough for your website.

Rick Kurtz

Advanced Photonix, Inc.

Thanks Rick!

Advanced Photonix, Inc. Announces Sale of T-Ray 5000 to China

ANN ARBOR, Mich., April 2, 2013 /PRNewswire/ -- Advanced Photonix® (NYSE MKT: API), the leading supplier of terahertz systems to industry, announced today that it has sold a T-Gauge® terahertz sensor to Shanghai Gaojing in Shanghai, China. The system, equipped with a high-speed line scanner, will be integrated into a new security platform being developed as part of a major national program for security instrumentation.

Shanghai Gaojing Radiography Technology Co., a major supplier of baggage inspection systems, has purchased the latest in industrial terahertz systems, the T-Gauge® terahertz sensor from API. Terahertz has shown significant capability in detecting explosives, drugs, and other threats in packages or checked bags. The T-Gauge® sensor was chosen because of its robust performance, its high-speed data acquisition, and its ease of integration. The purchase was made with the assistance of the Terahertz Research Center of Tianjin University. Both Shanghai Gaojing and Tianhin University are participating in a national program that is focused on integrating the terahertz system into a security scanner to detect explosives, drugs and other threats. This national program, with close to 40 participating research groups and $10 million in funding, has been formed to develop a new generation of security instruments that will be based on terahertz technology and be used to detect dangerous items such as drugs or explosives.
There is significant demand for this type of equipment in transportation, national security, pharmaceutical research, and generally to safeguard the public. Tianjin will perform the research portion of the investigation, and Shanghai Gaojing will supply the systems integration. The T-Gauge® was purchased through SkyRay OE, API's distributor in China.
"We are excited to be able to represent API in bringing the latest in terahertz technology to the Chinese market. API is known for supplying the best in terahertz products for industry and research," said Runxuan Wang, of SkyRay OE.
The T-Gauge® terahertz sensor is the second product in the next generation T-Ray 5000 product platform. The first product, the Saf-T-Chek ADS®, is focused on the security market, and is meant for non-imaging detection of anomalies concealed under headgear or clothing. The T-Gauge® sensor, designed for online process control, can be used for imaging, as well as gauging, applications. When coupled with the high-speed line scanner, the T- Gauge® provides imaging capability that exceeds all other pulsed terahertz products.
"This sale represents the first step in what we expect to be a strengthening of our marketing and sales efforts into the Chinese market. We are focused on building our product sales, into the industrial process control market and the homeland security market worldwide," said Richard Kurtz, CEO of API.
About Advanced Photonix, Inc.
Advanced Photonix, Inc.® (NYSE Amex: API) is a leading supplier with a broad offering of optoelectronic products to a global customer base. We provide optoelectronic solutions, high-speed optical receivers and terahertz instrumentation for telecom, homeland security, military, medical and industrial markets. With our patented technology and state-of-the-art manufacturing we offer industry leading performance, exceptional quality, and high value-added products to our OEM customer base. For more information visit us on the web at http://www.advancedphotonix.com/

Advanced Photonix Announces Record Monthly Shipments in December

Advanced Photonix® (NYSE MKT: API), the leading supplier of terahertz systems, announced today that it has built and shipped a record number terahertz systems in December 2012. Of the four systems shipped, two of the systems were part of a three system order previously announced for the Japanese market. The other two systems were part of the Appleton Paper strategic alliance, also announced earlier.

On August 1, 2012, Advanced Photonix® announced the sale of three T-Gauge® systems to the Company's Japanese distributor for deployment on a manufacturing line providing 100% inspection and quality control of packaged products. This is the first industrial deployment of terahertz in Japan. The T-Gauge® systems will inspect individual packages for contaminates or anomalies in a powder. This high-speed application was jointly developed by API and our distributor. The system will scan each individual package in five seconds using both imaging and waveform analysis to determine product quality.

On September 5, 2012, Advanced Photonix® announced a strategic alliance and the sale of two systems to Appleton Paper, a specialty coating developer and manufacturer of thermal, carbonless, security and specialty papers. Appleton will utilize terahertz energy to perform various critical measurements in order to provide inspection and quality control of current and newly developed coated products. The ability of terahertz energy to penetrate non-conducting materials allows for the inspection of solid and liquid products that have already been packaged. The wide frequency content and high precision of the T-Gauge® system provides sensitivity to both physical and chemical changes. Measurement of thickness, density, and certain material properties can be used to monitor the quality of the manufactured product.

“I would like to congratulate the Terahertz manufacturing team for building and shipping a record four systems in a single month," commented Richard Kurtz, Chief Executive Officer of Advanced Photonix. "This milestone achievement is indicative of our team's ability to accommodate growth expectations. As our work on the F-35 program is expected to conclude in the coming quarters, we will continue our transition from contract revenues to product revenues. We will always explore government contract work opportunistically, but believe it will become a smaller portion of our Terahertz revenue as our commercial business increases.”