Advanced Photonix, Inc. Announces Sale of Two Development Systems and Strategic Relationship with Appleton Papers

ANN ARBOR, Mich.--(BUSINESS WIRE)--Advanced Photonix, Inc.^® (NYSE Amex: API), the leading supplier of terahertz systems to industry, announces today that it has sold two systems under a development agreement with Appleton Papers Inc. Appleton Papers is a specialty coating developer and manufacturer of thermal, carbonless, security and specialty papers. The two systems will be initially deployed on a pilot manufacturing line to provide inspection and quality control of current and newly developed coated products. The goal is to transfer these units to full-scale production equipment once the quality objectives have been demonstrated. The ability of terahertz energy to perform various critical measurements, replacing nuclear gauges, for the paper industry was verified by the U.S. Environmental Protection Agency (http://www.epa.gov/nrmrl/std/etv/pubs/AMS+VStatement_nuc+gauge.pdf) and production testing was performed at Appleton Papers’ plant in Appleton, Wisconsin. The wide frequency content and high precision of the Advanced Photonix terahertz industrial system allows measurement of caliper thickness, density, basis weight and coat weight, and can be used to monitor the quality of the product being produced.

“We are excited to deploy T-Gauge® measurement systems on our pilot coating line to further develop and use the measurement technology in coating applications. We plan to utilize the technology to give us new insights into coating design, application method, and product quality”

“This opens the paper coating market and is a further step in the deployment of our T-Gauge^® system into the industrial market”, said API CEO Richard Kurtz. “We are pleased to be working with Appleton, an established and respected member of the paper industry. This is the first deployment, in the world, of a terahertz system in the paper industry for on-line quality control. With this sale we continue to expand the number of future industrial applications, customers and worldwide markets for our T-Gauge^® systems.”

“We are excited to deploy T-Gauge^® measurement systems on our pilot coating line to further develop and use the measurement technology in coating applications. We plan to utilize the technology to give us new insights into coating design, application method, and product quality,” said Jason Morgan, research services manager for Appleton Papers.

About Appleton Papers Inc

Appleton creates product solutions through its development and use of coating formulations, coating applications and Encapsys ^® microencapsulation technology. The company produces thermal, carbonless and security papers and Encapsys products. Appleton, headquartered in Appleton, Wisconsin, has manufacturing operations in Wisconsin, Ohio and Pennsylvania, employs approximately 1,600 people and has been 100 percent employee-owned since 2001. For more information, visit www.appletonideas.com.

About Advanced Photonix, Inc.

Advanced Photonix, Inc.® (NYSE Amex: API) is a leading supplier with a broad offering of optoelectronic products to a global customer base. We provide optoelectronic solutions, high-speed optical receivers and terahertz instrumentation for telecom, homeland security, military, medical and industrial markets. With our patented technology and state-of-the-art manufacturing we offer industry leading performance, exceptional quality, and high value-added products to our OEM customer base. For more information visit us on the web at www.advancedphotonix.com.

The information contained herein includes forward looking statements that are based on assumptions that management believes to be reasonable but are subject to inherent uncertainties and risks including, but not limited to, unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products; potential problems with the integration of the acquired company and its technology and possible inability to achieve expected synergies; obstacles to successfully combining product offerings and lack of customer acceptance of such offerings; limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company; and a decline in the general demand for optoelectronic products. API-G