NOTE 9 – BENEQ RECEIVABLES

In fiscal 2013 the Company sold the assets and liabilities associated with its electroluminescent (“EL”) product line to Beneq Products Oy (“Beneq Products”) for a base sale price of $6.5 million, of which $3.9 million was paid in cash at closing, with the remaining $2.6 million held as two promissory notes (collectively, “Purchase Price Note”). The term of the note is five years with principal payments due annually beginning in November 2014. The note accrues interest at 10% annually, with interest payments due in advance on the first day of each month.

In October 2014, Beneq Products informed the Company that it would not pay, when due on November 30, 2014, the first principal payment of $0.7 million due under the Purchase Price Note. Beneq Products sought to exercise its right under the Purchase Price Note to reschedule, on a single occasion, the due date of a payment to a date not later than 180 days after the November 30, 2014 due date and requested that the Company agree to waive the penalty interest payable under the Purchase Price Note in connection with the exercise of its right to delay payment. Under the terms of the Purchase Price Note, Beneq Products had agreed that, upon its exercise of the right to delay payment, it would pay a penalty equal to 12 months interest on the entire loan balance. The Company agreed to allow Beneq Products to exercise its right to delay repayment of the initial principal payment for up to 180 days in consideration for the payment of penalty interest equal to an additional 2% on the deferred balance in lieu of the penalty amount set forth in the Purchase Price Note.

Under the terms of the sale of assets agreement entered into by the Company in conjunction with the sale of the assets and liabilities associated with the EL product line, the Company transferred to Beneq Products certain non-cancelable component purchase commitments with third party vendors. Subsequent to the closing of the transaction, the Company learned that a vendor would not cooperate in the transfer to Beneq Products of such purchase commitments and demanded performance by Planar. In the third quarter of 2014, the Company entered into an agreement with this vendor (“Vendor Agreement”) related to such purchase commitments. As a part of the Vendor Agreement, the Company agreed to take delivery and ownership of €2.9 million ($3.9 million based on the EUR to USD exchange rate as of the agreement date) of electronic component devices. Delivery of these components and payment to the vendor were both completed in the third quarter of 2014. In the third quarter of 2014, the Company also entered into a settlement agreement (“Settlement Agreement”) with Beneq Products and Beneq Oy, the parent company of Beneq Products (collectively “Beneq”) establishing the terms under which the component inventory will be transferred to and paid for by Beneq (“Component Device Receivable”).

The Purchase Price Note and the Component Device Receivable are included in other current assets and other assets as of March 27, 2015 and September 26, 2014.

Other current assets consist of:


	Mar. 27, 2015		Sep. 26, 2014
Purchase Price Note Receivable from Beneq, current portion	$	1,300	$	650
Component Device Receivable from Beneq, current portion		492		382
Other		3,243		2,877

Total	$	5,035	$	3,909

Other assets consist of:


	Mar. 27, 2015		Sep. 26, 2014
Purchase Price Note Receivable from Beneq, non-current portion	$	1,300	$	1,950
Component Device Receivable from Beneq, non-current portion		1,857		2,741
Other		1,708		2,559

Total	$	4,865	$	7,250

Management has reviewed the total $4.9 million due from Beneq. Given Beneq Oy’s guarantee of the obligations of Beneq Products under the Purchase Price Note, the Company’s security interest in assets of each of Beneq Products and Beneq Oy and information provided by Beneq relating to its efforts to take actions that would enhance its ability to perform the obligations under the Purchase Price Note and the Settlement Agreement, the Company continues to believe the receivables due from Beneq are appropriately valued based on the Company’s best estimate of collectability. Based on this evaluation, the Company has determined that as of March 27, 2015 the total receivables due from Beneq (the Purchase Price Note and the Component Device Receivable) were collectible and appropriately valued on the Company’s balance sheet as of that date. Accordingly, no allowance has been recorded against these receivables.