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SAN RAMON, Calif., Feb. 20, 2013 (GLOBE NEWSWIRE) -- Giga-tronics Incorporated (Nasdaq:GIGA), a leading provider of test and measurement equipment, today announced the signing of a securities purchase agreement that will yield gross proceeds of $500,000 to the Company.
Under the terms of the agreement, Alara Capital AVI II, LLC ("AVI SPV"), an investment vehicle under Active Value Investors, LLC ("AVI"), will purchase approximately 3,425 shares of a new Class C convertible preferred stock at a price of $146.00 per share, subject to certain closing conditions that are expected to be satisfied within two weeks. The preferred shares will be initially convertible into 342,465 shares or 5.37% (after giving effect to the issuance) of the Company's common stock. The convertible preferred stock will be entitled to vote together with the common stock on matters submitted to the Company's shareholders on an as-converted basis.
The parties have agreed that the number of shares purchasable upon exercise of the existing warrant held by AVI SPC will be reduced by 342,465 shares,which is equal to the number of shares that AVI SPV would receive upon full conversion of the new series of preferred stock, maintaining the number of shares of common stock beneficially owned by AVI SPV as originally approved by the Company's shareholders.
John Regazzi, Chief Executive Officer of Giga-tronics, said, "This second strategic investment by AVI helps support our new investment strategy without further shareholder dilution and demonstrates AVI's continued confidence in the Company's future."
"About two years ago, Giga-tronics embarked on a road to refocus on growth and profits," said Dr. Lutz Henckels, Director of the Company and an operating partner of AVI and managing member of AVI SPV. "To do so, the Company needed to double its R&D expenses to aggressively develop a new family of products and to reduce its expense structure by consolidating its Microsource division in Santa Rosa with its Instrument division in San Ramon. These efforts will start to pay off in the upcoming fiscal year and we are excited to have been a major contributor in reinvigorating Giga-tronics' business."