Silicon Film Suspends Operations

COSTA MESA, Calif., Sept. 15 /PRNewswire/ -- Irvine Sensors Corporation (Nasdaq: IRSN) (Boston Stock Exchange: ISC) announced that Silicon Film Technologies, Inc., an independent and consolidated subsidiary, has suspended operations. The Silicon Film Board has retained special counsel in contemplation of liquidation through bankruptcy proceedings, if immediate financing alternatives are not secured.

Irvine Sensors, a fifty-one percent (51%) owner of Silicon Film, stated that it is also Silicon Film's largest creditor. Robert G. Richards, Irvine Sensors' President and Chief Executive Officer, said "The failure of certification tests in the summer delayed Silicon Film's anticipated revenues, but development expenses continued. They worked hard on the certification issues, and a little over a week ago re-tested in compliance with the FCC's emission standards, but are still falling short with respect to stricter European standards. We believe at least some of those stricter standards must be met for a successful product launch. This has prolonged the schedule uncertainty. We have loaned Silicon Film substantial funds to support their product development because of our belief in the fundamental appeal of the Electronic Film System(TM) concept. However, we have reluctantly concluded that further loans in light of present market circumstances and remaining schedule uncertainty would not be in the best interests of Irvine Sensors' stockholders. We will consider any reasonable workout or alternative financing proposals that might emerge, but we have retained our own special counsel to vigorously pursue our position as their largest secured creditor should the contemplated liquidation ensue."

Note from Steve:   Silicon Film's eFilm was the device that we first reported on about two years ago.   It was a 1.3mpixel digital replacement for the 35mm film canister used in some SLR cameras. Every six months or so they would put out a press release and say they were closer to producing a real product but we never even saw a working prototype of it.