ProPhotonix gets another $3m infusion
A $3m financing package would be interest-free for a year, followed by a hefty 12.25% interest rate
A company owned by the wife of Tim Losik, ProPhotonix Ltd.’s new CEO, has agreed to lend the struggling Salem-based company $2 million to help it continue for another year.
According to a press release issued June 21 by the company, Tiger Investment I LLC -- owned and controlled by Patricia A Losik – will advance the funds as part of a $3 million financing package that would be interest-free for a year, followed by a hefty 12.25 percent interest rate to be paid in full by June 2017.
In exchange, Tiger – created May 6 and based in Rye, where Patricia Losik lives -- will get $60,000 and 9.1 percent of the company. Mark Hawtin, a longtime investor in ProPhotonix, will advance the other $1 million for a fee of $15,000 and warrants to purchase 1.9 million common shares of stock at 3 cents a share. That would represent about 2.3 percent of the company.
In addition, half of money Hawtin advances would be used to help pay down the principal of an 8 percent interest bond that Hawtin already holds, and – after being partially written down as part of the deal – now has a balance of about $2 million. The bond comes due June 2015. Hawtin would receive an additional fee of about $41,000 when that bond is paid off.
ProPhotonix – formerly StockerYale -- now concentrates on its LED manufacturing business in Ireland and laser module production and laser diode distribution in England. It has suffered loses for most of the last decade but has always found investors willing to bet on a steady revenue stream.
The company’s former CEO, Mark Blodgett, stepped down from his post in May after a 24-year tenure.