ALDILA SIGNS NEW $1,300,000 SUBORDINATED SECURED LOAN
Posted on Wed, Oct 24, 2012
Investor/Media Contacts:
Scott M. Bier, Vice President, CFO
Sylvia J. Castle, Investor Relations
Aldila, Inc. (858) 513-1801
FOR IMMEDIATE RELEASE
ALDILA SIGNS NEW $1,300,000 SUBORDINATED SECURED LOAN
Poway, CA, October 23, 2012 – ALDILA, INC. (OTCQX:ALDA) (PINKSHEETS:ALDA) announced today Aldila, Inc. (“Aldila”) and its primary operating subsidiary, Aldila Golf Corporation (“AGC”) entered into a material definitive agreement upon AGC’s signing a Subordinated Secured Note with Milfam I, L.P, aGeorgialimited partnership on October 22, 2012.
The Note will provide liquidity to fund Aldila’s wind-up of its operations inChinaand the related consolidation of its operations to itsVietnamfacility.
The Note bears interest at 10% per annum, payable quarterly, commencing January 1, 2013. At Aldila’s election interest may accrue and be added to principal at a rate of 12% per annum. The interest rate will increase by an additional 2.5% per annum if the principal is not repaid by October 31, 2013, and an additional 2.5% per annum if the principal is not repaid by October 31, 2014. All outstanding principal and unpaid interest is due and payable no later than September 8, 2015. The outstanding principal and unpaid interest may be repaid at any time without penalty.
The Note is guaranteed by Aldila, Inc. The Note and the guaranty are secured by Aldila’s and AGC’s accounts receivable and other rights of payment, general intangibles, inventory, and equipment.
The Note bears an origination fee of 4%, paid in the form of original issue discount.
The Note is subordinated to, and cross-defaulted with, the existing $7,000,000 Line of Credit from Wells Fargo, N.A.
The lender, Milfam I, L.P., is an affiliate of Aldila’s largest shareholder.
This press release may contain forward-looking statements based on our expectations as of the date of this press release. These statements necessarily reflect assumptions that we make in evaluating our expectations as to the future. Forward-looking statements are necessarily subject to risks and uncertainties. Our actual future performance and results could differ from that contained in or suggested by these forward-looking statements as a result of a variety of factors. Our filings with the OTC Disclosure and News Service and the Securities and Exchange Commission (for filings prior to move to OTCQX U.S. Premier) present a detailed discussion of the principal risks and uncertainties related to our future operations, in particular our Annual Report for the year ended December 31, 2011, under “The nature of issuer’s business” in Part C, Item VIII, and “Management’s Discussion and Analysis or Plan of Operation” in Part C, Item XVI and Quarterly Reports and Current Reports, all of which can be obtained on the OTCQX U.S. Premier website, which can be found at www.otcqx.com.
The forward-looking statements in this press release are particularly subject to the risks that:
- consumer discretionary spending will be flat or decline, which could have a material impact on our business;
- our product offerings, including the NV®, VS Proto™, DVS®, VooDoo® and RIP® shaft lines and product offerings outside the golf industry, will not achieve or maintain success with consumers or customers;
- we will not maintain or increase our market share at our principal customers;
- demand for clubs manufactured by our principal customers will decline, thereby affecting their demand for our shafts;
- demand for composite materials by our principal customers will decline or fail to continue to grow;
- the market for graphite shafts will continue to be extremely competitive, affecting selling prices and profitability;
- our international operations will be adversely affected by political instability, currency fluctuations, export/import regulations or other risks typical of multi-national operations, particularly those in less developed countries;
- the Company will not be able to acquire adequate supplies of carbon fiber at reasonable market prices;
- acts of terrorism, natural disasters, or disease pandemics interfere with our manufacturing operations or our ability to ship our finished products.