OCZ Technology Group, Inc. (NASDAQ: OCZ) said it has received notices that Hercules Technology Growth Capital, Inc. has taken exclusive control of the company´s depository accounts at Silicon Valley Bank and Wells Fargo Bank, National Association.
As set forth in the company´s recent SEC filings, Hercules and the company are parties to a loan and security agreement. Since the company is not in compliance with certain of the operating ratios and covenants in the loan agreement, the depository institutions disbursed the cash in the company´s respective accounts to accounts under the control of Hercules.
The company has now received an offer from Toshiba Corp. to acquire substantially all of the company´s assets in a bankruptcy proceeding.
The parties have substantially completed negotiations on an asset purchase agreement and OCZ believes that all the material terms have been agreed to. The company expects to file a petition for bankruptcy shortly after completing final documentation with Toshiba and Hercules, and to conduct the court-supervised auction process to attempt to maximize the value of the company´s assets and operations in an orderly process.
If the company is not able to agree to final documentation with Toshiba, the company expects to file a petition for bankruptcy and liquidate.