Giga-tronics announces $2.2 million strategic investment from Alara Capital Partners
Giga-tronics Incorporated has announced the signing of a securities purchase agreement to receive a $2.2 million equity investment sponsored by Alara Capital Partners, LLC. Under the terms of the strategic investment, Alara Capital AVI II, LLC will purchase 9,997 shares of a new series of convertible preferred stock at a price of $220 per share, subject to certain conditions to closing.
The parties anticipate the closing will occur within two weeks. The preferred shares will be
initially convertible into 999,700 shares or approximately 16.6% (after giving effect to the conversion) 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. Upon
closing, Alara will also receive warrants to purchase up to 848,684 additional shares of common stock in
the future, subject to approval of the Giga-tronics shareholders.
John Regazzi, Chief Executive Officer of Giga-tronics said, “We could not have found a better strategic
investor than Alara Capital. They have a deep knowledge of our industry sector and their investment is a strong endorsement of our overall business.”
“Giga-tronics has a long and well-respected reputation in the test and measurement industry,” said Dr.
Joseph Thompson, a Partner with Alara Capital. “We are excited about Giga-tronics prospects and look
forward to helping accelerate their ability to bring the next-generation of industry leading products to
market.” Dr. Henckels, the former CEO of LeCroy Corporation (NASDAQ: LCRY) and Synthesis Research, continued, “Giga-tronics has all the elements to be a major player in the microwave synthesizer
business and I look forward to serving on the board.”
As part of the investment, Giga-tronics has agreed to expand its board to seven members. Dr. Joseph
Thompson and Dr. Lutz Henckels will join the Company’s board of directors following the closing of the
investment.
Darren C. Wallis, a Partner with Alara Capital stated, “The success of our active-value investing practice is predicated upon finding promising companies like Giga-tronics and providing the necessary resources for building long-term shareholder value.”
The Company will file the securities purchase agreement, terms of the preferred stock, and related
agreements on a Current Report on Form 8-K to which investors should refer for additional detail on the
terms of the preferred stock and the investment.
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