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SAN RAMON, Calif., June 28, 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 by an investment vehicle sponsored by Active Value Investors, LLC ("AVI") that will yield gross proceeds of approximately $858,000 to the Company. The transaction is expected to close in early July.
Under the terms of the agreement, Alara Capital AVI II, LLC, an investment vehicle under AVI ("AVI SPV"), will purchase approximately 5,111 shares of a new Class D convertible voting perpetual preferred stock at a price of $143.00 per share, subject to certain closing conditions. The preferred shares will be initially convertible into 511,186 shares 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. AVI SPV also will purchase a warrant to acquire up to 511,186 additional shares of common stock in the future at an exercise price of $1.43 per share. In addition, an existing warrant to purchase 506,219 shares of common stock held by Alara will be cancelled and AVI SPV will purchase a new warrant to acquire the same number of shares in the future at an exercise price of $1.43 per share. As a result of these transactions, AVI SPV's beneficial ownership of the Company's common stock (on a fully diluted basis) will increase from 26.8% to 36.2%.
John Regazzi, Chief Executive Officer of Giga-tronics, said, "The continued support from Active Value Investors demonstrates their belief in the Company's future and gives me the confidence to continue the aggressive R&D efforts associated with our new product platform."
"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. "To do so, the Company doubled its R&D expenses to aggressively develop a new family of products. At the same time the company absorbed a one-time expense of over half a million dollars to reduce its expense structure by consolidating its Microsource division in Santa Rosa with its Instrument division in San Ramon. We believe that the benefits of these efforts will begin to be realized in the current fiscal year and we are excited to have been a major contributor in transforming Giga-tronics' business."