Silonex Net Asset Purchase

6 Months Ended

Sep. 27, 2013

Silonex Net Asset Purchase

Note 8. Silonex Net Asset Purchase

On March 1, 2013, the Company, through its Advanced Photonix Canada, Inc. subsidiary (APC), acquired substantially all the operating assets and assumed certain liabilities of Silonex, Inc.’s business for $900,000 in cash, which was primarily funded with the PFG proceeds.  Silonex designed, manufactured and marketed optoelectronic devices and sensor solutions to various vertical markets, including Industrial Controls, Banking, Vending, Medical and Telecommunications.  The products, customers and business operations are complimentary to, and have minimal overlap with, the Company’s Optosolutions product line, and broaden the Company’s supply channel due to Silonex’s existing relationships with Chinese manufacturers.  The results of operations of APC have been included in the consolidated financial statements since the date of the acquisition.  The functional currency of APC is the US dollar.

Silonex was part of a privately owned company, and prepared financial statements with multiple charge out of costs, intercompany sales and royalty arrangements that do not reflect the actual operation of the business as acquired.  Therefore the Company has considered it impractical to reconstruct a full Statement of Operations on a proforma basis for prior comparable periods.  Given certain assumptions on China sales which were done on a royalty basis, the Company has been able to estimate the total sales for the comparable three and six months of fiscal 2013 at approximately $930,000 and $1.8 million, respectively.  APC sales included in the Company’s results for the three month and six months of fiscal 2014 were $944,000 and $2.0 million, respectively.  APC net income included in the Company’s results for the three and six months of fiscal 2014 were 29,000 and 64,000, respectively.