Form 8-K - Current report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

January 22, 2024		0-7928
Date of Report		Commission File Number
(Date of earliest event reported)

(Exact name of registrant as specified in its charter)

Delaware		11-2139466
(State or other jurisdiction of		(I.R.S. Employer Identification Number)
incorporation or organization)

	68 South Service Road, Suite 230
	Melville, New York 11747
	(Address of Principal Executive Offices) (Zip Code)

	(631) 962-7000
	(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of exchange

on which registered

Common Stock, par value $0.10 per share

CMTL

Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

COMTECH TELECOMMUNICATIONS CORP /DE/

Item 8.01

Other Events.

On January 22, 2024, Comtech Telecommunications Corp. (“Comtech” or the “Company”) issued a press release announcing that funds affiliated with White Hat Capital Partners LP and funds affiliated with Magnetar have agreed to purchase $45 million in the aggregate of a new series of convertible preferred stock of the Company, the Series B Convertible Preferred Stock, par value $0.10 per share, titled the “Series B Convertible Preferred Stock” (“Series B Convertible Preferred Stock”). In connection with the investment, the Company exchanged all outstanding shares of the Company’s Series A-1 Convertible Preferred Stock, par value $0.10 per share, titled the “Series A-1 Convertible Preferred Stock” for Series B Convertible Preferred Stock. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. White Hat Capital Partners LP is affiliated with Mark Quinlan, a member of the Company’s Board of Directors.

Forward-Looking Statements

Certain statements contained herein are forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the Company’s results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, statements about the investment described herein and achievement of its potential benefits and the intended use of proceeds. Risks and uncertainties that could impact these forward-looking statements include: the Company’s ability to access capital and liquidity so that it is able to continue as a going concern; the possibility that the expected synergies and benefits from acquisitions will not be fully realized, or will not be realized within the anticipated time periods; the risk that the acquired businesses will not be integrated successfully; the possibility of disruption from acquisitions or dispositions, making it more difficult to maintain business and operational relationships or retain key personnel; the risk that the Company will be unsuccessful in implementing its “One Comtech” transformation and integration of individual businesses into two segments; the risk that the Company will be unsuccessful in implementing a tactical shift in its Satellite and Space Communications segment away from bidding on large commodity service contracts and toward pursuing contracts for its niche products and solutions with higher margins; the nature and timing of the Company’s receipt of, and the Company’s performance on, new or existing orders that can cause significant fluctuations in net sales and operating results; the timing and funding of government contracts; adjustments to gross profits on long-term contracts; risks associated with international sales; rapid technological change; evolving industry standards; new product announcements and enhancements; changing customer demands and or procurement strategies; changes in prevailing economic and political conditions, including as a result of Russia’s military incursion into Ukraine and the Israel-Hamas war; changes in the price of oil in global markets; changes in prevailing interest rates and foreign currency exchange rates; risks associated with the Company’s legal proceedings, customer claims for indemnification, and other similar matters; risks associated with the Company’s obligations under its credit facility and the Company’s ability to refinance its credit facility; risks associated with the Company’s large contracts; risks associated with supply chain disruptions; and other factors described in this and the Company’s other filings with the Securities and Exchange Commission. The Company assumes no obligation and does not intend to update these forward-looking statements or to conform these statements to actual results or to changes in our expectations.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits

Exhibit No.		Description
99.1		Press Release, dated January 22, 2024, announcing investment by funds affiliated with White Hat Capital Partners LP and funds affiliated with Magnetar in Series B Convertible Preferred Stock of Comtech Telecommunications Corp.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: January 22, 2024

COMTECH TELECOMMUNICATIONS CORP.


By:	/s/ Michael A. Bondi
	Name:	Michael A. Bondi
	Title:	Chief Financial Officer

EXHIBIT 99.1

Comtech Announces $45 Million Strategic Investment and Exchange of Convertible Preferred Stock

Investment Enhances Comtech’s Financial Flexibility and Supports Its Strategic Initiatives in Satellite Ground Station Infrastructure and Next-Generation Terrestrial and Wireless Solutions

MELVILLE, N.Y. -- (BUSINESS WIRE) -- January 22, 2024 -- Comtech Telecommunications Corp. (NASDAQ: CMTL) (“Comtech” or the “Company”), a leading global technology company providing terrestrial and wireless network solutions, next-generation 911 emergency services, satellite and space communications technologies, and cloud native capabilities, today announced a $45.0 million investment by current shareholders White Hat Capital Partners LP (“White Hat”), an investment firm focused on sustainable value creation in technology companies serving mission-critical applications, and funds affiliated with Magnetar, a leading alternative investment manager with over $14 billion of assets under management. In connection with the investment, the Company exchanged all outstanding shares of Comtech’s existing convertible preferred stock for a new series of convertible preferred stock.

This strategic investment enhances Comtech’s financial flexibility and strengthens the Company’s ability to capitalize on its recent large contract awards and growing customer demand for its satellite communications technologies and next-generation terrestrial and wireless solutions. Comtech expects to apply the proceeds of this investment across a range of initiatives which not only support near-term working capital needs and general corporate purposes, including the repayment of certain outstanding indebtedness, but also its growth prospects. The issuance of the new series of convertible preferred stock demonstrates the continued commitment of White Hat and Magnetar, and is an important step towards the completion of the Company’s previously announced process to refinance its existing Credit Facility and further increase its financial and operational strength.

Mark Quinlan, who currently serves as an appointee of White Hat and Magnetar on the Company’s Board of Directors, will retain his position on the Board. Mr. Quinlan is White Hat’s Co-Founder and Managing Partner and has more than 20 years of experience in the technology sector. He has provided valuable insight and experience to the Board of Directors since January 2022.

“We are grateful for this investment and endorsement of our strategy and team by two of our existing long-term shareholders,” said Comtech’s Chairman and CEO, Ken Peterman. “Magnetar and White Hat understand our Company, our end markets, and the potential of our One Comtech vision. With White Hat’s investment experience within the technology sector and Magnetar’s breadth of investment experience in both private and public markets and across asset classes and capital structures, we value their continued support and are excited to strengthen our relationship with them at this key inflection point for the Company.”

“Under CEO Ken Peterman’s leadership, the entire Comtech team has made incredible progress on its One Comtech transformation,” said Mr. Quinlan. “We recognize Comtech’s potential and believe this investment further supports the Company’s commitment to developing and delivering mission-critical solutions for its customers.”

Summary of Investment Terms

White Hat and Magnetar purchased $45.0 million of a new series of convertible preferred stock and exchanged all outstanding shares of Comtech’s existing convertible preferred stock for shares of the new series of convertible preferred stock. The preferred stock will be convertible into shares of Comtech common stock at a conversion price of $7.99 per share; carries a 9.00% dividend, payable in kind, or a 7.75% dividend, payable in cash, at Comtech’s election; and contains an optional redemption date of October 31, 2028. Further details will be included in the Company’s Current Report on Form 8-K to be filed with the Securities and Exchange Commission. That report will describe the investment in additional detail, including exhibits with copies of associated transaction documentation.

Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to Comtech and Sidley Austin LLP is serving as legal advisor to the Special Committee of the Board of Directors of Comtech. Willkie Farr & Gallagher LLP is serving as legal advisor to Magnetar and Schulte Roth + Zabel LLP is serving as legal advisor to White Hat.

About Comtech

Comtech Telecommunications Corp. is a leading global technology company providing terrestrial and wireless network solutions, next-generation 9-1-1 emergency services, satellite and space communications technologies, and cloud native capabilities to commercial and government customers around the world. Comtech’s unique culture of innovation and employee empowerment unleashes a relentless passion for customer success. With multiple facilities located in technology corridors throughout the United States and around the world, Comtech leverages its global presence, technology leadership, and decades of experience to create the world’s most innovative communications solutions. For more information, please visit www.comtech.com.

Forward-Looking Statements

This press release contains statements that are forward-looking in nature and involve certain significant risks and uncertainties, including with respect to the offering of securities, the intended use of proceeds and our current expectations, initiatives, strategies or future plans. No assurance can be given that the transaction will be completed, or that the proceeds from the offering will be used as indicated. Forward-looking statements are subject to numerous conditions, risks, and uncertainties, many of which are beyond the control of the Company, including those identified in the Company’s filings with the Securities and Exchange Commission. Forward-looking statements are also based on assumptions that may not be realized and involve risks and uncertainties that could cause actual results or other events to differ materially from the expectations and beliefs contained herein. Any forward-looking information in this press release is qualified in its entirety by the risks and uncertainties described in Securities and Exchange Commission filings. The Company undertakes no obligation to release publicly any updates or revisions to any forward-looking statements contained herein except as required by law.

PCMTL

###

Contacts

Investor Relations
Maria Ceriello
Investors@comtech.com

Cover	Jan. 22, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 22, 2024
Entity File Number	0-7928
Entity Registrant Name	COMTECH TELECOMMUNICATIONS CORP /DE/
Entity Central Index Key	0000023197
Entity Tax Identification Number	11-2139466
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	68 South Service Road
Entity Address, Address Line Two	Suite 230
Entity Address, City or Town	Melville
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11747
City Area Code	631
Local Phone Number	962-7000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.10 per share
Trading Symbol	CMTL
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false