UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
On July 26, 2022, Exela Technologies BPA, LLC, a subsidiary of the registrant, entered into an employment agreement with Suresh Yannamani. The agreement memorializes the existing terms of Mr. Yannamani's compensation, namely an annual base salary of $422,500, subject to annual review, and eligibility to participate in the Exela Technologies, Inc. Executive Bonus Plan with a bonus target of 100% of the base salary with a maximum stretch level performance target of 250% of base salary. In addition, the agreement provides for severance in an amount equal to the sum of two times the then current salary and the bonus target, in the case of termination for reasons other than cause or without good reason. The Agreement also memorializes Mr. Yannamni's appointment as chief executive officer of the subsidiary. In connection with his entry into the agreement, Mr. Yannamani ceased being President of the registrant. The agreement expires on its one-year anniversary and automatically renews for successive one-year periods unless terminated by either party.
The foregoing description of the employment agreement does not purport to be a complete description of all of the terms, provisions, covenants and agreements contained in the agreement, and is subject to and qualified in its entirety by reference to the full text of the agreement, a copy of which will be filed as an exhibit to the Company’s next Quarterly Report on Form 10-Q, and will be incorporated herein in its entirety by reference.
Item 5.03 Amendment to Articles of Incorporation or Bylaws
Reverse Stock Split
On July 25, 2022, Exela Technologies, Inc. (“Exela” or the “Company”) announced that it filed a Certificate of Amendment of the Company’s Second Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Amendment”), with the Secretary of State of Delaware, to effect a 1-for-20 reverse stock split (the “Reverse Split”) of the Company’s issued and outstanding shares of common stock, par value $0.0001 per share (the “Common Stock”), at 5:00 p.m. Eastern Time on that date. Beginning with the opening of trading on July 26, 2022, the Company’s Common Stock will trade on The Nasdaq Capital Market on a split-adjusted basis under a new CUSIP number 30162V706 and will continue to trade under the symbol “XELA.”
As a result of the Reverse Split, every twenty (20) shares of the Company’s Common Stock issued and outstanding will be converted into one (1) share of Common Stock. No fractional shares will be issued in connection with the Reverse Split. Stockholders who would otherwise be entitled to a fractional share of Common Stock will instead receive cash in lieu of fractional shares based on the closing sales price of the Company’s Common Stock as quoted on The Nasdaq Capital Market on July 25, 2022.
The Reverse Split will not reduce the number of authorized shares of the Common Stock or preferred stock (the “Preferred Stock”), or change the par values of the Company’s Common Stock or Preferred Stock. The Reverse Split will affect all stockholders uniformly and will not affect any stockholder's ownership percentage of the Company's shares of Common Stock (except to the extent that the Reverse Split would result in some of the stockholders receiving cash in lieu of fractional shares). All outstanding options, warrants, restricted stock units and similar securities entitling their holders to receive or purchase shares of the Company’s Common Stock (including the conversion rate of the Preferred Stock) will be adjusted as a result of the Reverse Split, as required by the terms of each security.
The foregoing description of the Certificate of Amendment is a summary of the material terms thereof, does not purport to be complete and is qualified in its entirety by reference to the full text of the Certificate of Amendment, which is filed with this report as Exhibit 3.1 and is incorporated herein by reference.
As a result of the Reverse Split, the number of issued and outstanding shares of Common Stock will be approximately 64.8 million shares.
On July 25, 2022, the Company issued a press release announcing the Reverse Split. A copy of the press release is filed herewith as Exhibit 99.1 hereto.
Special Voting Stock Elimination
On July 25, 2022, the Company filed a Certificate of Elimination (the “Certificate of Elimination”) with the Secretary of State of the State of Delaware retiring all previously redeemed shares of the Special Voting Preferred Stock. Effective upon the filing of the Certificate of Elimination, all references to the Special Voting Preferred Stock in the Second Amended and Restated Certificate of Incorporation of the Company shall be eliminated and the shares of Special Voting Preferred Stock so retired shall resume the status of authorized and unissued shares of preferred stock of the Company, without designation as to series.
Preferred Stock Increase
On July 25, 2022, the Company increased the authorized number of shares of each of Series B Cumulative Perpetual Preferred Stock and Tandem Preferred Stock of the Corporation, from 5,000,000 shares to 8,600,000.
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Item 9.01 Financial Statements and Exhibits
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SIGNATURE
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 hereunto duly authorized.
Dated: July 26, 2022
| EXELA TECHNOLOGIES, INC. | ||
| By: | /s/ Erik Mengwall | |
| Name: Erik Mengwall | ||
| Title: Secretary | ||