Exela Technologies Reports Exchange of Series A Preferred Stock for Common Stock

On November 19 and 21, 2024, Exela Technologies, Inc. (NASDAQ:XELA) finalized an agreement with certain holders of the outstanding Series A Perpetual Convertible Preferred Stock. The exchange involved 1,525,666 shares of Series A Preferred Stock for 21,385,694 shares of the Company’s common stock at an exchange price of $1.18 per share of Common Stock. This transaction was conducted under a preferred stock exchange agreement, which also included customary representations, warranties, and covenants of the Company and the Holders.

Considering that some holders of the Series A Preferred Stock have affiliations with specific directors and executive officers of Exela Technologies, the Company’s Board of Directors established a special committee of independent directors to assess and approve the Exchange. The evaluation included engaging an independent financial advisor to provide a precise valuation of the Series A Preferred Stock. Following the completion of this exchange, the outstanding shares of Series A Preferred Stock decreased from 2,778,111 to 1,252,445, while the number of Common Stock outstanding surged from 6,365,363 to 27,751,057 shares.

The shares of Common Stock issued as part of the Exchange were exclusively disbursed to former holders of the Series A Preferred Stock. This issuance was eligible for exemption from registration under Section 3(a)(9) of the Securities Act of 1933 and/or Section 4(a)(2) of the Securities Act, as it was structured as an exchange between the Company and a limited number of existing security holders, without any remunerations paid for soliciting such an exchange.

Moving forward, Exela Technologies has disclosed the official Form of Exchange Agreement, a detailed document outlining the terms of the exchange. In addition, the company has submitted the requisite documents, including the interactive data file, to adhere to Securities and Exchange Commission regulations.

This development reflects a strategic move for Exela Technologies, streamlining its preferred and common stock holdings while navigating the evolving dynamics of its shareholder base and optimizing its capital structure.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Exela Technologies’s 8K filing here.

Exela Technologies Company Profile

Exela Technologies, Inc (Exela), formerly Quinpario Acquisition Corp. 2, is engaged in providing information and transaction processing solutions. The Company’s segments include Information and Transaction Processing Solutions (ITPS), Healthcare Solutions (HS) and Legal & Loss Prevention Services (LLPS).