DPAC Technologies, Inc., a provider of machine-to-machine connectivity and device networking solutions, announced recently that it has closed on new equity and debt financing. The value of this financing, which includes the sale of preferred stock, as well as senior subordinated notes and a working capital line of credit, is for approximately $6.0 million, after deducting financing fees.

The company will use the proceeds from this financing to repay its existing senior debt held by National City Bank, repay its existing subordinated debt held by Hill Street Capital, and provide additional working capital. Additionally, the Company entered into a Senior Subordinated Note and Warrant Purchase Agreement with Canal Mezzanine Partners, L.P., providing the Company with approximately $1.1 million in net funding.

The preferred stock issuance is for $2.0 million and consists of 20,000 shares of Series A Preferred shares issued to Development Capital Ventures, L.P. The Preferred shares carry an initial annual dividend rate of 9% and contain conversion rights allowing the preferred shares to be converted into Company’s common stock. The senior debt is a $3.0M working capital line of credit from Fifth Third Bank in Cincinnati, Oh, with a floating interest rate of the bank’s prime rate plus 1.5%. Availability under the line of credit is formula driven based on applicable balances of the Company’s accounts receivable and inventories. The Company will initially have availability to draw up to approximately $2.1 million under the line of credit. The line of credit contains certain financial and other covenants that the Company must comply with.

“I am pleased to announce the closing of this new financing” stated Steve Runkel, President and Chief Executive Office of DPAC. “This financing allows us to repay our existing debt obligations, and more importantly, strengthens our balance sheet. We have made significant steps over the past 12 months in terms of improving our profitability and generating growth from our Device Networking Products. A stronger balance sheet will increase the confidence level of our customers and will position us to be a market leader in the rapidly growing Device Networking and Machine-to-Machine market.”

DPAC Technologies provides embedded wireless networking products for machine-to-machine communication applications. DPAC’s Airborne™ and AirborneDirect™ wireless products are used by major OEMs in the transportation, instrumentation and industrial control, homeland security, medical diagnostics and logistics markets to provide remote data collection and control. DPAC Technologies is based in Hudson, OH.

For more information, please visit www.dpactech.com