Giga-tronics Incorporated (Nasdaq:GIGA), a leading provider of
test and measurement equipment, today 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.
About Giga-tronics Incorporated
Giga-tronics designs, manufactures, and markets various test and
measurement equipment used in the development, test, and maintenance of
wireless communications products and systems, flight navigational equipment,
electronic defense systems, and automatic testing systems worldwide. Its
products are primarily used in the design, production, repair, and maintenance
of commercial telecommunications, radar, and electronic warfare equipment.
Additional information may be found at http://www.gigatronics.com
About Alara Capital Partners, LLC
Alara Capital Partners is a private investment firm focused on
acquiring significant ownership stakes in publicly-traded and privately-owned
companies through both open-market purchases and negotiated
transactions. Alara continues to successfully implement its active-value
investment strategy by identifying investments believed to be fundamentally
undervalued, and then partnering with the management team and board to
accelerate value creation initiatives. Additional information may be found
at http://www.alaracap.com
This press release contains forward-looking statements,
including statements concerning Giga‑tronics, its products, business and prospects.
Actual results may differ significantly due to risks and uncertainties, such as
future orders, cancellations or deferrals, disputes over performance, the
ability to collect receivables and general market conditions. For further
discussion, see Giga-tronics' most recent annual report on Form 10-K for the
fiscal year ended March 26, 2011, Part I, under the heading "Certain
Factors Which May Adversely Affect Future Operations or an Investment in
Giga-tronics" and Part II, under the heading "Management's Discussion
and Analysis of Financial Condition and Results of Operations".