WILMINGTON, MA -- (Marketwire) -- 02/28/13 -- Implant Sciences Corporation (OTCQB: IMSC), a high technology supplier of systems and sensors for homeland security markets, today announced that it has renegotiated its credit agreements with its senior secured investor, DMRJ Group LLC.
On February 28, 2013, Implant Sciences concluded an agreement with DMRJ to extend the maturity of all remaining Implant Sciences' indebtedness by one year, to March 31, 2014. In addition, DMRJ has converted $12 million of currently outstanding indebtedness under the Company's $23 million line of credit into a senior secured convertible promissory note that is convertible into a new Series I Convertible Preferred Stock. The Series I Convertible Preferred Stock is convertible into Implant Sciences' common stock at a price of $1.18 per share. This conversion is in addition to the September 2012 amendment under which DMRJ converted $12 million of indebtedness under the line of credit into a Series H Convertible Preferred Stock, which is itself convertible into common stock at $1.09 per share.
In addition, DMRJ's rights, under certain circumstances, to require the Company to repurchase any shares of Series H Preferred Stock that may be issued, have been eliminated. Finally, the March 2009 senior convertible note, plus accrued and unpaid interest, may, at DMRJ's option, be converted by DMRJ into a new Series J Convertible Preferred Stock. The amendments affecting the March 2009 note do not affect the rate at which the March 2009 note is ultimately convertible into common stock.
DMRJ Managing Director David Levy commented, "The shipment of the India Ministry of Defence order and the approval of the QS-B220 by the Transportation Security Administration are significant steps in establishing Implant Sciences as a leader in the trace detection industry. We are very pleased at the progress they have made, and are proud to support them in the fight against terrorism."
"DMRJ has been a true partner in our efforts to establish Implant Sciences as a market leader in the homeland security and defense market," Implant Sciences' President and CEO, Glenn D. Bolduc, added. "The confidence DMRJ has in Implant Sciences is explicit with this one year extension and conversion of a portion of the line of credit into a convertible note. The agreements substantially improve the Company's ability to build upon our recent successes."
Detailed information on additional terms of the extension can be found in the Company's Report on Form 8-K, which will be filed with the Securities and Exchange Commission by March 1, 2013. No other terms of the credit facility were changed.
About Implant Sciences
Implant Sciences is the leader in next generation Explosives Trace Detection (ETD) technology. In January 2013, the Company became only the third ETD manufacturer, and the sole American-owned company, to receive product approval from the US Transportation Security Administration. Implant Sciences develops, manufactures and sells sophisticated sensors and systems for Security, Safety, and Defense (SS&D) markets. The Company has developed proprietary technologies used in its commercial explosives and narcotics trace detection systems, which ship to a growing number of locations domestically and internationally. Implant Sciences' QS-H150 portable explosives trace detector has received Qualified Anti-Terrorism Technology Designation and, in addition to receiving TSA approval for air cargo screening, the Company's QS-B220 has also received a Developmental Testing & Evaluation (DT&E) Designation by the U.S. Department of Homeland Security under the Support Anti-terrorism by Fostering Effective Technology Act of 2002 (the SAFETY Act). For further details on the Company and its products, please visit the Company's website at www.implantsciences.com.
Safe Harbor Statement
This press release may contain certain "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to risks and uncertainties that could cause the Company's actual results to differ materially from the forward-looking statements. Such risks and uncertainties include, but are not limited to, the risks that our explosives detection products and technologies (including any new products we may develop) may not be accepted by the Transportation Security Administration or by other U.S. or foreign government and law enforcement agencies or commercial consumers of security products; economic, political and other risks associated with international sales and operations could adversely affect our sales; our business is subject to intense competition and rapid technological change; the risk that we will be required to repay all of our indebtedness to our secured lender, DMRJ Group, by March 31, 2014; that if we are unable to satisfy our obligations to DMRJ and to raise additional capital to fund operations, DMRJ may seize our assets and our business may fail; the risk that we continue to incur substantial operating losses and may never be profitable; the risk that liability claims related to our products or our handling of hazardous materials could damage our reputation and have a material adverse effect on our financial results; the risks that our markets are subject to technological change and that our success depends on our ability to develop and introduce new products; the risk that we may not be able to retain our management and key employees or to identify, hire and retain additional personnel as needed; the risks that we may not be able to enforce our patent and other intellectual property rights or operate without infringing on the proprietary rights of others; and other risks and uncertainties described in our filings with the Securities and Exchange Commission, including its most recent Forms 10-K, 10-Q and 8-K. Such statements are based on management's current expectations and assumptions which could differ materially from the forward-looking statements.