StockerYale completes private placement of $5.5 million convertible note

JUNE 15--StockerYale Inc. (Salem, NH; www.stockeryale.com) has completed the placement of a $5.5 million convertible note with current institutional investors led by Laurus Master Fund Ltd.

JUNE 15--StockerYale Inc. (Salem, NH; www.stockeryale.com), an independent provider of advanced illumination and optical products, has completed the placement of a $5.5 million convertible note with current institutional investors led by Laurus Master Fund Ltd. The note is convertible into StockerYale common shares at $ 2.15 per share. The note carries an interest rate of 1% above prime, is subject to a minimum of 5.0%, and is payable in either cash or stock. The company can elect to prepay the three-year note in cash. In addition, the institutional investors were also issued 440,000 warrants to purchase common stock at $3.12 per share over seven years.

The company used the proceeds to retire its $3.4 million credit facility with Merrill Lynch Business Financial Services and to provide additional working capital. The company has implemented a plan to strengthen its balance sheet through the issuance of convertible notes. The company placed a $2.5 million convertible note in September 2003 and a $4.0 million convertible note in February 2004 with Laurus Master Funds. As of June 10, 2004, the $2.5 million note has been fully converted to common stock and more than 30% of the $4.0 million note has been converted to common stock.

StockerYale Inc. designs and manufactures structured light lasers, light-emitting diodes, fiberoptic and fluorescent illumination technologies, as well as specialty optical fiber, phase masks, and diffractive optics for use in a wide range of markets and industries including machine vision, telecommunications, aerospace, defense and security, utilities, industrial inspection, and medical.

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