| | | ||||
|
Transaction Valuation*
|
| | |
Amount of Filing**
|
|
|
$39,000,000.00
|
| | |
$3,615.30
|
|
|
Amount Previously Paid:
|
| |
Filing Party:
|
|
|
Form or Registration No.:
|
| |
Date Filed:
|
|
| (a)(1)(A)* | | | Offer to Exchange, dated January 26, 2022 | |
| (a)(1)(B)* | | | Letter of Transmittal | |
| (a)(1)(C)* | | | Notice of Guaranteed Delivery | |
| (a)(1)(D)* | | | Letter to Broker | |
| (a)(1)(E)* | | | Letter to Clients | |
| (a)(1)(F)* | | | Form of Summary Advertisement, dated January 26, 2022 | |
| (a)(5)(A)* | | | Press Release issued by the Company, dated January 26, 2022 | |
| (a)(6)(A)* | | | Exela Webpage | |
| (d)(1)** | | | Form of Exela Notes Indenture (including Form of Exela Notes) | |
| | THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 24, 2022, UNLESS EXTENDED BY THE COMPANY (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED, THE “EXPIRATION DATE”). | | |
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•
Brokerage Firm
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| |
• Contact Information
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|
TD Ameritrade
|
| | Call 1-888-723-8504, option 1 | |
Robinhood | | | https://robinhood.com/us/en/support/articles/how-to-contact-phone-support/ or https://robinhood.com/contact | |
Fidelity | | | https://digital.fidelity.com/ftgw/digital/corporate-actions/ | |
E*Trade | | | Call 1-800-387-2331 | |
Charles Schwab
|
| |
https://client.schwab.com/Accounts/EReorg/eReOrgActiveAccountOffers.aspx
Call 1-800-435-4000
|
|
Sofi Invest | | |
Chat with Invest Support — https://www.sofi.com/chat/v1/web/sofi/?product=invest
Call 1-(855) 525-7634
|
|
eToro | | | https://www.etoro.com/en-us/customer-service/ | |
Name
|
| |
Position
|
|
Board of Directors | | | | |
Par S. Chadha
|
| | Director, Executive Chairman | |
Ronald C. Cogburn
|
| | Director, Chief Executive Officer | |
Martin P. Akins
|
| | Director | |
Marc A. Beilinson
|
| | Director | |
Sharon Chadha
|
| | Director | |
J. Coley Clark
|
| | Director | |
John H. Rexford
|
| | Director | |
James G. Reynolds
|
| | Director | |
William L. Transier
|
| | Director | |
Executive Officers | | | | |
Shrikant Sortur
|
| | Chief Financial Officer | |
Suresh Yannamani
|
| | President | |
Mark D. Fairchild
|
| | President, Exela Smart Office | |
Srini Murali
|
| | President, Americas and APAC | |
Vitalie Robu
|
| | President, EMEA | |
Name and Address
|
| |
Amount and
Nature of Beneficial Ownership |
| |
Current Percent of
Class(1) |
| |
Percent of
Class Post-Offering(2) |
| |||||||||
Various entities affiliated with HGM(3)
|
| | | | 25,264,135 | | | | | | 7.2% | | | | | | 10.1% | | |
8550 West Desert Inn Road, | | | | | |||||||||||||||
Suite 102-452, Las Vegas, NV 89117 | | | | | | | | | | | | | | | | | | | |
Name of Individual
|
| |
Amount and
Nature of Beneficial Ownership |
| |
Current Percent of
Class(1) |
| |
Percent of
Class Post-Offering(2) |
| |||||||||
Par S. Chadha(3)(4)
|
| | | | 25,264,135 | | | | | | 7.2% | | | | | | 10.1% | | |
Ronald C. Cogburn(4)(5)
|
| | | | 154,342 | | | | | | * | | | | | | * | | |
James G. Reynolds(4)(6)(8)
|
| | | | 1,134,120 | | | | | | * | | | | | | * | | |
Martin P. Akins(4)(7)
|
| | | | 227,384 | | | | | | * | | | | | | * | | |
J. Coley Clark(4)
|
| | | | 204,365 | | | | | | * | | | | | | * | | |
John H. Rexford(4)
|
| | | | 212,564 | | | | | | * | | | | | | * | | |
William L. Transier(4)
|
| | | | 163,600 | | | | | | * | | | | | | * | | |
Marc A. Beilinson(4)
|
| | | | 225,000 | | | | | | * | | | | | | * | | |
Suresh Yannamani(4)
|
| | | | 233,756 | | | | | | * | | | | | | * | | |
Shrikant Sortur(4)
|
| | | | 126,714 | | | | | | * | | | | | | * | | |
Sharon Chadha(4)(8)
|
| | | | 25,264,135 | | | | | | 7.2% | | | | | | 10.1% | | |
All directors, named executive officers and other executive officers as a group (14 persons)
|
| | | | 26,297,048 | | | | | | 7.5% | | | | | | 10.5% | | |
| In any liquidation or bankruptcy of the Company, Common Stock would rank below all claims against us by holders of any of our indebtedness, including the New Notes and by holders of Preferred Stock. Holders of our Common Stock would not be entitled to receive any payment or other distribution of assets upon the liquidation or bankruptcy of the Company until after our obligations to creditors, including the holders of the New Notes, with respect to the New Notes, and the liquidation preference of our Preferred Stock have been satisfied in full. | | | Upon a voluntary or involuntary liquidation or bankruptcy of the Company, all holders of the New Notes would be entitled to receive payment in full of principal and interest with respect to the New Notes before any holders of our Preferred Stock or Common Stock receive any payments or distributions with respect to the Preferred Stock or Common Stock. | |
| At every meeting of the stockholders of the Company in connection with the election of directors and all other matters submitted to a vote of stockholders, every holder of shares of Common Stock is entitled to one vote in person or by proxy for each share of Common Stock registered in the name of the holder on the transfer books of the Company. | | | Holders of the New Notes will not have voting rights. | |
| Holders of Common Stock, are entitled to receive dividends if and when declared by our Board of Directors. | | | Holders of New Notes will be entitled to receive interest payments. Interest will accrue at an annual rate equal to 6.00% from and including the Issue Date to, but excluding, the maturity date or earlier acceleration or redemption and will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, beginning on June 30, 2022 and at maturity, to the record holders at the close of business on the immediately preceding March 15, June 15, September 15 and December 15, as applicable (whether or not a business day). | |
| The Common Stock trades on The Nasdaq Capital Market, under the ticker symbol “XELA”. | | | We intend to file an application to list the New Notes on either the NYSE American or Nasdaq under the symbol “XelaA”. | |
| | |
Year Ended December 31
|
| |
Nine Months Ended
September 30, |
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| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||
Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue
|
| | | $ | 1,562,337 | | | | | $ | 1,292,562 | | | | | $ | 978,453 | | | | | $ | 872,294 | | |
Cost of revenue (exclusive of depreciation and amortization)
|
| | | | 1,224,735 | | | | | | 1,023,544 | | | | | | 768,548 | | | | | | 653,398 | | |
Selling, general and administrative expenses (exclusive
of depreciation and amortization) |
| | | | 198,864 | | | | | | 186,104 | | | | | | 140,224 | | | | | | 121,519 | | |
Depreciation and amortization
|
| | | | 100,903 | | | | | | 93,953 | | | | | | 68,127 | | | | | | 58,113 | | |
Impairment of goodwill and other intangible assets
|
| | | | 349,557 | | | | | | — | | | | | | — | | | | | | — | | |
Related party expense
|
| | | | 9,501 | | | | | | 5,381 | | | | | | 4,058 | | | | | | 7,199 | | |
Operating (loss) income
|
| | | | (321,223) | | | | | | (16,420) | | | | | | (2,504) | | | | | | 32,065 | | |
Other expense (income), net: | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense, net
|
| | | | 163,449 | | | | | | 173,878 | | | | | | 129,639 | | | | | | 127,755 | | |
Debt modification and extinguishment costs (gain)
|
| | | | 1,404 | | | | | | 9,589 | | | | | | — | | | | | | (28,070) | | |
Sundry expense (income), net
|
| | | | 969 | | | | | | (153) | | | | | | (251) | | | | | | (438) | | |
Other expense (income), net
|
| | | | 14,429 | | | | | | (34,788) | | | | | | (45,655) | | | | | | 1,169 | | |
Net (loss) income before income taxes
|
| | | | (501,474) | | | | | | (164,946) | | | | | | (86,237) | | | | | | (68,351) | | |
Income tax (expense) benefit
|
| | | | (7,642) | | | | | | (13,584) | | | | | | (3,440) | | | | | | (3,430) | | |
Net (loss)
|
| | | $ | (509,116) | | | | | $ | (178,530) | | | | | $ | (89,677) | | | | | $ | (71,781) | | |
| | | | | |
| | |
Year Ended December 31
|
| |
Nine Months Ended
September 30, |
| ||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||
Other Financial Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
EBITDA(1) | | | | | (237,122) | | | | | | 102,885 | | | | | | 111,529 | | | | | | 117,517 | | |
Adjusted EBITDA(1)
|
| | | | 254,802 | | | | | | 173,545 | | | | | | 136,212 | | | | | | 133,754 | | |
Statement of Cash Flows Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net cash provided by (used in) operating activities
|
| | | | (63,851) | | | | | | (29,781) | | | | | | (66,160) | | | | | | (73,588) | | |
Net cash provided by (used in) investing activities
|
| | | | (25,182) | | | | | | 21,438 | | | | | | 27,745 | | | | | | (3,649) | | |
Net cash provided by (used in) financing activities
|
| | | | 59,139 | | | | | | 63,362 | | | | | | 66,905 | | | | | | 177,995 | | |
Statement of Comprehensive Income Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net (loss)
|
| | | | (509,116) | | | | | | (178,530) | | | | | | (89,677) | | | | | | (71,781) | | |
Foreign currency translation adjustment
|
| | | | (906) | | | | | | (90) | | | | | | 1,285 | | | | | | (1,245) | | |
Unrealized pension actuarial gains (losses), net of tax
|
| | | | 1,242 | | | | | | (9,005) | | | | | | 205 | | | | | | 230 | | |
Total other comprehensive loss, net of tax
|
| | | | (508,780) | | | | | | (187,625) | | | | | | (88,187) | | | | | | (72,796) | | |
Loss per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | (10.55) | | | | | | (3.66) | | | | | | (1.83) | | | | | | (0.82) | | |
Diluted
|
| | | | (10.55) | | | | | | (3.66) | | | | | | (1.83) | | | | | | (0.82) | | |
Book value per share
|
| | | | | | | | | | | | | | | | | | | | | | (5.01) | | |
Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | | 6,198 | | | | | | 68,221 | | | | | | 37,176 | | | | | | 146,175 | | |
Accounts receivable, net of allowance for doubtful accounts
|
| | | | 261,400 | | | | | | 206,868 | | | | | | 214,949 | | | | | | 187,819 | | |
Total assets
|
| | | | 1,258,324 | | | | | | 1,157,779 | | | | | | 1,170,425 | | | | | | 1,180,948 | | |
Long-term debt, net of current maturities
|
| | | | 1,398,385 | | | | | | 1,498,004 | | | | | | 1,491,969 | | | | | | 1,326,579 | | |
Total liabilities
|
| | | | 2,001,365 | | | | | | 2,084,311 | | | | | | 1,997,888 | | | | | | 1,913,783 | | |
Total stockholders’ (deficit) equity
|
| | | | (743,041) | | | | | | (926,532) | | | | | | (827,463) | | | | | | (732,835) | | |
| | |
Year Ended December 31,
|
| |
Nine Months Ended
September 30, |
| ||||||||||||||||||
| | |
2019
|
| |
2020
|
| |
2020
|
| |
2021
|
| ||||||||||||
Net loss
|
| | | $ | (509.1) | | | | | $ | (178.5) | | | | | $ | (89.7) | | | | | $ | (71.8) | | |
Taxes
|
| | | | 7.6 | | | | | | 13.6 | | | | | | 3.4 | | | | | | 3.4 | | |
Interest expense
|
| | | | 163.4 | | | | | | 173.9 | | | | | | 129.6 | | | | | | 127.8 | | |
Depreciation and amortization
|
| | | | 100.9 | | | | | | 94.0 | | | | | | 68.1 | | | | | | 58.1 | | |
EBITDA | | | | | (237.2) | | | | | | 102.9 | | | | | | 111.5 | | | | | | 117.5 | | |
Optimization and restructuring expenses(a)
|
| | | | 73.9 | | | | | | 45.6 | | | | | | 36.1 | | | | | | 15.0 | | |
Transaction and integration costs(b)
|
| | | | 5.7 | | | | | | 16.6 | | | | | | 11.7 | | | | | | 7.9 | | |
Non-cash equity compensation(c)
|
| | | | 7.8 | | | | | | 2.8 | | | | | | 2.5 | | | | | | 1.5 | | |
Other charges, including non-cash(d)
|
| | | | 21.4 | | | | | | 26.2 | | | | | | 15.5 | | | | | | 20.4 | | |
Loss / (gain) on sale of assets(e)
|
| | | | 0.3 | | | | | | 0.1 | | | | | | 0.7 | | | | | | (2.6) | | |
Loss / (gain) on business disposals(f)
|
| | | | — | | | | | | (44.6) | | | | | | (44.6) | | | | | | 1.3 | | |
Debt modification and extinguishment costs(g)
|
| | | | 1.4 | | | | | | 9.6 | | | | | | — | | | | | | (28.1) | | |
Loss / (gain) on derivative instruments(h)
|
| | | | 4.3 | | | | | | 0.4 | | | | | | (0.5) | | | | | | (0.1) | | |
Contract costs(i)
|
| | | | 17.0 | | | | | | 4.3 | | | | | | 3.3 | | | | | | 1.8 | | |
Dissenting shareholders expense (relating to the appraisal action)(j)
|
| | | | 10.4 | | | | | | — | | | | | | — | | | | | | — | | |
Litigation reserve(k)
|
| | | | — | | | | | | 9.6 | | | | | | — | | | | | | (0.9) | | |
Impairment of goodwill and other intangible assets(l)
|
| | | | 349.6 | | | | | | — | | | | | | — | | | | | | — | | |
Adjusted EBITDA
|
| | | $ | 254.8 | | | | | $ | 173.6 | | | | | $ | 136.2 | | | | | $ | 133.8 | | |
| | |
As of September 30, 2021
|
| |||||||||||||||
Balance Sheet
|
| |
Actual
|
| |
Adjustment
|
| |
As Adjusted
|
| |||||||||
Cash and cash equivalents
|
| | | | 146,175 | | | | | | — | | | | | | 146,175 | | |
Accounts receivable, net of allowance for doubtful accounts
|
| | | | 187,819 | | | | | | — | | | | | | 187,819 | | |
Total assets
|
| | | | 1,180,948 | | | | | | — | | | | | | 1,180,948 | | |
Long-term debt, net of current maturities
|
| | | | 1,326,579 | | | | | | 100,000 | | | | | | 1,426,579 | | |
Total liabilities
|
| | | | 1,913,783 | | | | | | 100,000 | | | | | | 2,013,783 | | |
Total stockholders’ (deficit) equity
|
| | | | (832,835) | | | | | | (100,000) | | | | | | (932,835) | | |
| | |
For the nine months ended September 30, 2021
|
| |||||||||||||||
Statement of Comprehensive Income and EPS
|
| |
Actual
|
| |
Adjustment
|
| |
As Adjusted
|
| |||||||||
Net loss
|
| | | | (89,677) | | | | | | (4,500) | | | | | | (94,177)(2) | | |
Other comprehensive income (loss), net of tax | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | 1,285 | | | | | | — | | | | | | 1,285 | | |
Unrealized pension actuarial gains (losses), net of tax
|
| | | | 205 | | | | | | — | | | | | | 205 | | |
Total other comprehensive loss, net of tax
|
| | | | (88,187) | | | | | | (4,500) | | | | | | (92,687) | | |
Loss per share: | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | (0.82) | | | | | | nm(1) | | | | | | nm(1) | | |
Diluted
|
| | | | (0.82) | | | | | | nm(1) | | | | | | nm(1) | | |
| | |
For the twelve months ended December 31, 2020
|
| |||||||||||||||
Statement of Comprehensive Income and EPS
|
| |
Actual
|
| |
Adjustment
|
| |
As Adjusted
|
| |||||||||
Net loss
|
| | | | (178,530) | | | | | | (6,000) | | | | | | (184,530) | | |
Other comprehensive income (loss), net of tax | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustments
|
| | | | (90) | | | | | | — | | | | | | (90) | | |
Unrealized pension actuarial gains (losses), net of tax
|
| | | | (9,005) | | | | | | — | | | | | | (9,005) | | |
Total other comprehensive loss, net of tax
|
| | | | (187,625) | | | | | | (6,000) | | | | | | (193,625) | | |
Loss per share: | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | | (3.66) | | | | | | nm(1) | | | | | | nm(1) | | |
Diluted
|
| | | | (3.66) | | | | | | nm(1) | | | | | | nm(1) | | |
| | |
As of September 30, 2021
|
| |||||||||||||||
Book value per share calculation
|
| |
Actual
|
| |
Adjustment
|
| |
As Adjusted
|
| |||||||||
Shares outstanding at 9/30
|
| | | | 166,196,745 | | | | | | (100,000,000) | | | | | | 66,196,745 | | |
Total stockholders’ (deficit) equity
|
| | | | (832,835,000) | | | | | | (100,000,000) | | | | | | (932,835,000) | | |
Book value per share
|
| | | | (5.01) | | | | | | | | | | | | (14.09) | | |
Period
|
| |
Low
|
| |
High
|
| ||||||
First Quarter 2020
|
| | | $ | 0.26 | | | | | $ | 1.62 | | |
Second Quarter 2020
|
| | | $ | 0.37 | | | | | $ | 2.61 | | |
Third Quarter 2020
|
| | | $ | 0.99 | | | | | $ | 2.27 | | |
Fourth Quarter 2020
|
| | | $ | 1.03 | | | | | $ | 1.94 | | |
First Quarter 2021
|
| | | $ | 1.20 | | | | | $ | 7.79 | | |
Second Quarter 2021
|
| | | $ | 1.24 | | | | | $ | 3.11 | | |
Third Quarter 2021
|
| | | $ | 1.79 | | | | | $ | 5.44 | | |
Fourth Quarter 2021
|
| | | $ | 0.86 | | | | | $ | 2.38 | | |
First Quarter 2022 (through January 25)
|
| | | $ | 0.35 | | | | | $ | 0.90 | | |
| |
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 24, 2022, UNLESS EXTENDED BY THE COMPANY (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED, THE “EXPIRATION DATE”).
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Transaction Code Number:
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Name(s) of Registered Holder(s): |
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Date of Execution of Notice of Guaranteed Delivery: |
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Name of Eligible Institution that Guaranteed Delivery: |
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Name of Tendering Institution: |
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Transaction Code Number:
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(Please Print)
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| Daytime Area Code and Telephone Number: | | |
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| Tax Identification or Social Security Number: | | |
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| Dated: , 2022 | | | | |
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SUBSTITUTE
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| | PART 1 — PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW | | | Social Security Number or Employer Identification Number | |
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Form W-9
Department of the Treasury, Internal Revenue Service |
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| Payer’s Request | | | PART 2 — CERTIFICATION. — Under penalties of perjury, I certify that: | | | | |
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For Taxpayer Identification Number (“TIN”)
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(1)
The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and
(2)
I am not subject to backup withholding because (a) I am exempt from backup withholding or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTION — You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax returns. However, if after being notified by the IRS that you are subject to backup withholding, you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out such item (2). If you are exempt from backup withholding, check the box in Part 4 below.
Part 3
Awaiting TIN ☐
Part 4
Exempt TIN ☐ |
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| For Confirmation of Receipt Only: (212) 509-4000 ext. 536 | | | Continental Stock Transfer & Trust Company | | | Continental Stock Transfer & Trust Company | |
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Exhibit (a)(1)(F)
This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of Common Stock (as defined below). The Offer (as defined below) is made solely by the Offer to Exchange, dated January 26, 2022, and the related Letter of Transmittal and any amendments or supplements thereto. Exela (as defined below) is not aware of any state where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If Exela becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the shares of Common Stock pursuant thereto, Exela will make a good faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good faith effort, Exela cannot comply with the state statute, Exela will not make the Offer to, nor will tenders be accepted from or on behalf of, the holders of shares of Common Stock in that state. Except as set forth above, the Offer is being made to all holders of shares of Common Stock.
EXELA TECHNOLOGIES, INC.
Offer to Exchange up
to 100,000,000 shares of its Common Stock
(in 25 share increments) for up to $100,000,000
aggregate principal amount of its
6.00%
Senior Notes due 2029
Exela Technologies, Inc. (“Exela”) is offering (the “Offer”) to exchange up to 100,000,000 shares of its outstanding common stock, par value $0.0001 per share (the “ Common Stock”), for 6.00% senior unsecured notes of the Company due March 31, 2029 (a “New Note”, and collectively, the “New Notes”), with each 25 shares of Common Stock being exchangeable in the Offer for a New Note having a principal amount equal to $25.00 (equivalent to $1.00 per share), upon the terms and subject to the conditions set forth in this Offer to Exchange (as amended and supplemented from time to time, the “Offer to Exchange”) and the related Offer materials (as amended and supplemented from time to time, the “Offer Documents”). Common Stock may only be tendered in increments of 25 shares.
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 24, 2022, UNLESS EXTENDED BY EXELA (SUCH TIME AND DATE, AS THE SAME MAY BE EXTENDED, THE “EXPIRATION DATE”).
Exela is purchasing shares of Common Stock in 25 share increments and is paying $25.00 principal amount of New Notes for each increment of 25 shares. The maximum number of shares of Common Stock that may be converted into New Notes is 100,000,000. If the number of shares of Common Stock designated by all tendering holders of shares of Common Stock making valid tender exceeds 100,000,000, then the shares of Common Stock will be converted into New Notes subject to prorating as described under “The Offer - Prorating” in the Offer to Exchange.
The New Notes will mature on March 31, 2029 unless earlier redeemed or repurchased, and 100% of the aggregate principal amount, plus accrued and unpaid interest to, but not including, the maturity date, will be paid at maturity. Interest will accrue at an annual rate equal to 6.00% from and including the date of issuance of the New Notes (the “Issue Date”) to, but excluding the maturity date or earlier acceleration or redemption and will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, beginning on June 30, 2022 and at maturity, to the record holders at the close of business on the immediately preceding March 15, June 15, September 15 and December 15, as applicable (whether or not a business day). The New Notes will be redeemable at Exela’s option, in whole or in part, at any time on or after March 31, 2024, at a redemption price of 100% of the outstanding principal amount and on the terms described under “Description of Notes - Optional Redemption” in the Offer to Exchange. The payment of principal, interest and any other amounts due, if any, on the New Notes will be subordinated and junior in right of payment, as set forth in the indenture applicable to the New Notes, to the prior payment in full in cash of all Exela’s secured indebtedness, whether outstanding on the Issue Date or thereafter incurred, assumed or guaranteed. See “Description of New Notes” in the Offer to Exchange.
Exela is making the Offer because Exela believes that the current price for the Common Stock does not reflect the intrinsic value of the Company. See “The Offer – Background, Purpose and Effect of the Exchange Offer” in the Offer to Purchase.
Neither the United States Securities and Exchange Commission nor any state securities commission has approved or disapproved the Offer or the New Notes or determined if the Offer to Exchange is accurate or complete. Any representation to the contrary is a criminal offense.
The Offer commenced on January 26, 2022 (the date the materials relating to the Offer were first sent to the holders of Common Stock) and will end on the Expiration Date. Exela, in its sole discretion, may extend the Expiration Date for any reason. If the Offer is extended, amended or terminated, Exela will promptly make a public announcement by issuing a press release. In the case of an extension, the announcement will be issued no later than 9:00 a.m., New York City Time, on the next business day after the previously scheduled expiration date of the Offer. See “The Offer – Expiration Date; Extensions; Amendments” in the Offer to Exchange. The Offer may be terminated if the conditions to the Offer discussed in the Offer to Exchange are not satisfied or waived or if we so elect. If the Offer is terminated and you previously have tendered shares of Common Stock, such tendered Common Stock will be credited back to an appropriate account promptly following the termination of the Offer without expense to you. See “The Offer” in the Offer to Exchange.
To tender shares in the Exchange Offer, holders of Common Stock who hold their shares through a brokerage firm will need to contact their brokerage firm and follow such broker’s procedures for instructing them to tender such holder’s shares. Record holders of Common Stock must deliver a Letter of Transmittal to Continental Stock Transfer & Trust Company, the exchange agent for the Offer (the “Exchange Agent”), on or prior to the Expiration Date in accordance with the instructions provided in the Letter of Transmittal. See “The Offer – Procedures for tendering shares of Common Stock in the Offer” in the Offer to Exchange. Shareholders who are not U.S. persons will also have to arrange for payment of any applicable withholding tax through their broker.
Upon Exela’s determination that all of the conditions to the Offer were satisfied or waived by Exela on or prior to the Expiration Date, all shares of Common Stock validly tendered and not withdrawn will be accepted (subject to proration as discussed above) and the New Notes will be delivered promptly after expiration of the Offer. Exela’s acceptance of shares of Common Stock tendered pursuant to one of the procedures described in the Offer to Exchange will constitute a binding agreement between the tendering stockholder and Exela upon the terms and subject to the conditions of the Offer. For purposes of the Offer, shares of Common Stock shall be deemed to have been accepted as validly tendered for exchange when, as and if Exela has given written notice thereof to the Exchange Agent. In all cases, delivery of the New Notes will be made only after timely receipt by the applicable broker or nominee or record holder of a properly completed and duly executed Letter of Transmittal and all other required documents. See “The Offer — Conditions to the Completion of the Offer” in the Offer to Exchange.
Shares of Common Stock tendered for exchange may be withdrawn at any time before 12:00 midnight, New York City time, on the Expiration Date. For a withdrawal of tendered shares of Common Stock to be effective, a written notice of withdrawal or revocation must be received by the Exchange Agent no later than 12:00 midnight, New York City time, on the Expiration Date. Any such notice of withdrawal must comply with the requirements set forth under “The Offer – Right of Withdrawal” in the Offer to Exchange.
All questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tendered shares of Common Stock pursuant to any of the procedures described if the Offer to Exchange, and the form and validity (including time of receipt of notices of withdrawal) of all documents will be determined by Exela in its sole discretion (and Exela may delegate the power to make any determination in whole or in part to the Exchange Agent). Any such determination will be final and binding. A stockholder’s tender will not be deemed to have been validly made until all defects or irregularities in its tender have been cured or waived. Neither Exela, the Exchange Agent, the Information Agent (as identified below) nor any other person or entity is under any duty to give notification of any defects or irregularities in any tender or withdrawal of any shares of Common Stock, or will incur any liability for failure to give any such notification. Exela reserves the absolute right to reject any or all tenders of any shares of Common Stock determined by Exela not to be in proper form, or if the acceptance of or exchange of such shares of Common Stock may, in the opinion of Exela’s counsel, be unlawful.
If a stockholder validly tenders any shares of Common Stock and Exela accepts those shares for exchange, such stockholder will lose the rights of a holder of those shares of Common Stock and instead only have rights as a holder of New Notes. For example, the New Notes, unlike shares of Common Stock, do not have the right to share in any capital appreciation, vote on matters properly presented to Exela’s stockholders or have the right to receive dividends, if and when declared by Exela’s Board of Directors. See “Description of Exela’s Common Stock”, “Description of New Notes”, “Comparison of Rights Between the Common Stock and the New Notes” and “Price Range of the Common Stock; Dividends” in the Offer to Exchange.
The information required to be disclosed by paragraph (d)(1) of Rule 13e-4 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Exchange and is incorporated herein by reference.
An exchange of shares of Common Stock for New Notes pursuant to the Offer will be a taxable transaction for U.S. federal income tax purposes. See “Certain Material Income Tax Considerations” in the Offer to Exchange. Stockholders should consult their own financial, tax, legal and other advisors and must make their own decision as to whether to tender their shares of Common Stock for exchange and, if so, the amount of shares of Common Stock to tender.
This Offer to Exchange and the accompanying Letter of Transmittal contain important information which should be read carefully and in its entirety before any decision is made with respect to the Offer. Exela will consult its stockholder list and security position listings for the purpose of disseminating the Offer to holders of shares of Common Stock. Exela will send the Offer to Exchange, the related Letter of Transmittal and other related documents to record holders of shares of Common Stock and to brokers, dealers, banks, trust companies and other nominees whose names appear on the stockholder list or, if applicable, that are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of shares of Common Stock..
All questions and requests for assistance or for copies of the Offer Documents (including the Letter of Transmittal) may be directed to the Information Agent at its telephone number, address and/or email address set forth below. Copies of the Offer Documents will be mailed or otherwise furnished promptly at Exela’s expense. A stockholder may also contact its broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. King
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Banks and Brokers, Call Collect:
(212) 269-5550
All Others, Call Toll-Free:
(888) 644-6071
Email: exela@dfking.com
January 26, 2022
Exhibit (a)(5)(A)
Exela Technologies Announces Share Buyback of up to 100 Million Shares of Common Stock at $1 per Share Through Exchange Offer of New Notes
· | Shareholders can exchange blocks of 25 shares of common stock into a tradable $25 note due 2029 with 6% annual interest rate |
· | Offering price represents an 82% premium to the closing share price of $0.55 on January 25, 2022 |
· | Shares tendered will be retired, reducing share count by approximately 29% |
· | Participating shareholders should instruct their broker to tender their shares well before the expiration time of Midnight EST on February 24, 2022, to give their broker enough time to tender their shares |
IRVING, TX., January 26, 2022 (GLOBE NEWSWIRE) -- Exela Technologies, Inc. (“Exela” or the “Company”) (NASDAQ: XELA), announced today that it has commenced an offer (the “Offer”) to holders of Exela’s outstanding shares of common stock(the “Common Stock”), to exchange up to 100,000,000 shares of Common Stock for up to $100,000,000 aggregate principal amount of its unsecured 6.00% senior notes due 2029 (the “New Notes”). The Offer is being made pursuant the exemption from the registration requirements of the Securities Act of 1933 contained in Section 3(a)(9) for the New Notes. Under that exemption, if Common Stock tendered is freely tradable, the New Notes received in the exchange will be freely tradable. If the Common Stock tendered in the exchange is restricted, the New Notes will be restricted to the same degree. The Offer is being made pursuant to the terms and subject to the conditions set forth in the Offer to Exchange dated January 26, 2022, as may be amended or supplemented in accordance with the terms thereof.
Par Chadha, Exela's Executive Chairman, noted, “After deploying more than $400 million of capital in 2021 to substantially reduce debt and extend maturities, we are now deploying capital to unlock shareholder value for our large and growing shareholder base.”
Holders of Common Stock who validly tender on or prior to 11:59 p.m., New York City time, on February 24, 2022 (unless extended, the “Expiration Date”), will receive for each 25 shares of Common Stock tendered, a New Note having a principal amount equal to $25.00. In the event that a number of shares of Common Stock is tendered in the Offer that would require the Company to issue in excess of $100,000,000 aggregate principal amount of New Notes, then all tenders will be accepted on a pro rata basis such that the aggregate principal amount of the New Notes does not exceed $100,000,000.
Shareholders who hold their shares through a brokerage firm (e.g., Schwab, TD Ameritrade, Fidelity, Robinhood, etc.), should contact their brokerage firm and follow the brokerage firm’s procedures for instructing the broker to tender shares of Common Stock. Because it may take some time for the broker to process instructions, shareholders should contact their broker far enough in advance of the Expiration Date to enable the broker to timely follow the tender instructions.
Consummation of the Offer is subject to the satisfaction or waiver of certain conditions; however, there is no minimum number of shares of Common Stock that must be tendered in the Offer. Exela reserves the right, in its sole discretion, to waive or modify any one or more of the conditions to the Offer.
The New Notes will accrue interest at the rate of 6.00%, and will mature on March 31, 2029.
Exela intends to apply to list the New Notes on either the NYSE American Exchange or Nasdaq under the symbol “XELAA.” If this application is approved, trading in the New Notes is expected to commence within a 30-day period after the approval of listing. Until such time, the New Notes will trade on the OTC.
Documents relating to the Offer will be distributed to holders of shares of Common Stock. Holders of shares of Common Stock may contact D.F. King & Co., Inc., the information agent for the Offer, by calling Banks and Brokers, Call Collect: (212) 269-5550; all others, call toll-free: (888) 644-6071or visit https://to.exelatech.com/ for this purpose.
This press release is for informational purposes only and shall not constitute an offer to sell or exchange nor the solicitation of an offer to buy the New Notes or any other securities. The Offer is not being made to any person in any jurisdiction in which the offer, solicitation or sale is unlawful. Any offers of the New Notes will be made only by means of the Offer to Exchange.
The complete terms and conditions of the Offer are set forth in the Offer to Exchange and related letter of transmittal that is being furnished to holders of Common Stock and also filed with the Securities and Exchange Commission on Schedule TO. Shareholders of Exela are strongly encouraged to read the Schedule TO and related exhibits because they contain important information about the Offer. The Schedule TO and related exhibits will be available without charge at the Securities and Exchange Commission's website at http://www.sec.gov and will be delivered without charge to all shareholders of Exela.
About Exela Technologies
Exela Technologies is a business process automation (BPA) leader, leveraging a global footprint and proprietary technology to provide digital transformation solutions enhancing quality, productivity, and end-user experience. With decades of experience operating mission-critical processes, Exela serves a growing roster of more than 4,000 customers throughout 50 countries, including over 60% of the Fortune® 100. Utilizing foundational technologies spanning information management, workflow automation, and integrated communications, Exela’s software and services include multi-industry, departmental solution suites addressing finance and accounting, human capital management, and legal management, as well as industry-specific solutions for banking, healthcare, insurance, and the public sector. Through cloud-enabled platforms, built on a configurable stack of automation modules, and over 17,500 employees operating in 23 countries, Exela rapidly deploys integrated technology and operations as an end-to-end digital journey partner.
Forward-Looking Statements
Certain statements included in this press release are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "may", "should", "would", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential", "seem", "seek", "continue", "future", "will", "expect", "outlook" or other similar words, phrases or expressions. These forward-looking statements include statements regarding our industry, future events, estimated or anticipated future results and benefits, future opportunities for Exela, and other statements that are not historical facts. These statements are based on the current expectations of Exela management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties, including without limitation those discussed under the heading "Risk Factors" in the Offer to Exchange and Exela's Annual Report and other securities filings. In addition, forward-looking statements provide Exela's expectations, plans or forecasts of future events and views as of the date of this communication. Exela anticipates that subsequent events and developments will cause Exela's assessments to change. These forward-looking statements should not be relied upon as representing Exela's assessments as of any date subsequent to the date of this press release.
Investor and/or Media Contacts:
Vincent Kondaveeti
E: vincent.kondaveeti@exelatech.com
Mary Beth Benjamin
E: IR@exelatech.com
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Exhibit (a)(6)(A)
EXELA TECHNOLOGIES, INC.
Offer to Exchange up to 100,000,000 shares of its Common Stock (in 25 share increments) for
Up to $100,000,000 aggregate principal amount of its 6.00% Senior Notes due 2029
Exela Technologies, Inc. (“we”, “us”, the “Company" or Exela) is offering (the “Offer”) to exchange up to 100,000,000 shares of its outstanding common stock, par value $0.0001 per share (the “Common Stock”), for 6.00% senior unsecured notes of the Company due March 31, 2029 (the “New Notes”), with each 25 shares of Common Stock being exchangeable in the Offer for a New Note having a principal amount equal to $25.00 (equivalent to $1.00 per share), upon the terms and subject to the conditions set forth in the Offer to Exchange and the related Offer materials (as amended and supplemented from time to time, the “Offer Documents”). Common Stock may only be tendered in increments of 25 shares.
The Offer Documents contain important information that should be read carefully before any decision is made with respect to the Offer. The following summary is qualified in its entirety by the more detailed information appearing elsewhere in, or incorporated by reference into, the Offer Documents. A more comprehensive summary is available beginning on page 4 of the Offer to Exchange. Capitalized terms used but not otherwise defined in this summary have the meanings assigned to them elsewhere in the Offer Documents.
· | What is the Exchange Offer? |
· In the Exchange Offer, the Company is offering to repurchase shares of Common Stock in 25 share increments and then retiring those shares. The Company is paying $1.00 principal amount of New Notes for each share, thus for each increment of 25 shares, a shareholder will receive $25.00 of New Notes.
· The consideration for the Offer represents an 82% increase over the last reported sales price of our Common Stock as of January 25, 2022, on the Nasdaq Capital Market of $0.55 per share. |
· You should read the Offer Documents in their entirety and consult your own financial, tax, legal and other advisors and must make your own decision as to whether to tender your shares of Common Stock. |
· | If I hold through a brokerage firm (e.g., Schwab, TD Ameritrade, Fidelity, Robinhood, etc.), how do I participate in the Offer? |
· To tender your shares in the Exchange Offer, you need to contact your brokerage firm and follow their procedures for instructing them to tender your shares. This is typically found in the messaging center or documents center in your online portal. |
· Because it may take some time for the broker to process your instructions, you should contact them far enough in advance of the Expiration Date to enable them to follow your instructions. The Expiration Date is 12:00 midnight, New York City time, on February 24, 2022. |
· Shareholders who are not U.S. persons will also have to arrange for payment of any applicable withholding tax through their broker. |
· If you are having difficulty in instructing your broker, you may contact our Information Agent for assistance at D.F. King & Co., Inc., Call Toll-Free: (888) 644-6071, Email: exela@dfking.com. However, neither the Company, the Information Agent, nor the Exchange Agent can accept your tender directly, only the broker can tender on your behalf. |
· Some helpful links and contact information for popular retail brokerage firms included below. |
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· Brokerage Firm | · Contact Information |
TD Ameritrade | https://robinhood.com/us/en/support/articles/how-to-contact-phone-support/ or https://robinhood.com/contact |
Fidelity | https://digital.fidelity.com/ftgw/digital/corporate-actions/ |
E*Trade | Call 1-800-387-2331 |
Charles Schwab |
https://client.schwab.com/Accounts/EReorg/eReOrgActiveAccountOffers.aspx
Call 1-800-435-4000 |
Sofi Invest |
Chat with Invest Support -
Call 1-(855) 525-7634 |
eToro | https://www.etoro.com/en-us/customer-service/ |
• How many shares of Common Stock are sought to be exchanged in the Offer? Is it a condition to the Offer?
We are offering to exchange up to 100,000,000 shares of our Common Stock, representing approximately 29% of our shares of Common Stock outstanding as of January 25, 2022. There is no minimum share requirement for this Offer.
• Why is the Company making the Offer?
The Company believes that the current price for the Common Stock does not reflect the intrinsic value of the Company. In connection with the announcement of its earnings for the third quarter of 2019, the Company announced a ‘debt reduction and liquidity improvement initiative’, whose goal was the increase of the Company’s liquidity by $125 to $150 million and the reduction of debt by $150 to $200 million in the subsequent two years. The purpose of the initiative was to position the Company for long-term success and increased shareholder value.
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As of December 31, 2021, the Company had:
· Raised $407 million of gross equity capital in 2021;
· Reduced total long-term debt by $454 million in 2021;
· Settled the appraisal action; and
· Announced that it was on-track to exceed the free cash flow improvement of $50 million per annum in 2022
The Company believes that the current price for the Common Stock does not reflect these accomplishments or the intrinsic value of the Company. Thus, the Company believes that this offer will benefit its shareholders as follows:
· those who tender will hold New Notes that have a principal amount value equivalent to $1 per share and pays cash interest at 6% per annum, for seven years, following which the instrument matures and the principal is paid to the instrument holder; the principal amount represents a premium of 82% over the closing price of the Common Stock on January 25, 2022; and
· those who do not exchange may benefit more from future share value accretion and potential dividends as a result of the reduced number of shares outstanding.
• What are the effects of the Offer on the ownership structure of the Company?
The main effect that the Offer could have is that holders of Common Stock who do not exchange their shares will see their percentage ownership of our outstanding Common Stock increase, and those interests will be subordinated to the New Notes in respect of the right to receive payment and rights upon liquidation. In addition, depending on the number of shareholders that elect to tender some or all of their shares of Common Stock in the Offer, there may be fewer shares of Common Stock held by non-affiliated shareholders, and there may therefore be fewer transactions in the shares of Common Stock resulting in lower liquidity than currently.
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• When does the Offer expire?
The Offer will expire at 12:00 midnight, New York City time, on February 24, 2022 (unless the Offer is extended).
• What securities are being sought and what will I receive in the Offer?
Holders of Common Stock are being offered the opportunity to exchange each 25 shares of Common Stock they own for a New Note having a principal amount equal to the $25.00 (equivalent to $1.00 per share) (the “Exchange Ratio”), provided that (1) Common Stock must be tendered in increments of 25 shares, and (2) the aggregate principal amount of the New Notes issued to all tendering stockholders in the Offer will not exceed $100,000,000, upon the terms and subject to the conditions set forth in this Offer to Exchange.
In the event that a number of shares of Common Stock is tendered in the Offer that would require us to issue in excess of $100,000,000 aggregate principal amount of New Notes, then all tenders will be accepted on a pro rata basis (based on increments of 25 shares) such that the aggregate principal amount of the New Notes does not exceed $100,000,000.
• What are the terms of the New Notes?
The New Notes will mature on March 31, 2029 unless earlier redeemed or repurchased, and 100% of the aggregate principal amount, plus accrued and unpaid interest to, but not including, the maturity date, will be paid at maturity. Interest will accrue at an annual rate equal to 6.00% from and including the Issue Date to, but excluding the maturity date or earlier acceleration or redemption and will be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, beginning on June 30, 2022 and at maturity, to the record holders at the close of business on the immediately preceding March 15, June 15, September 15 and December 15, as applicable (whether or not a business day). The New Notes will be redeemable at our option, in whole or in part, at any time on or after March 31, 2024, at a redemption price of 100% of the outstanding principal amount and on the terms described under “Description of Notes - Optional Redemption”.
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The New Notes will be our senior unsecured obligations and will rank equal in right of payment with all of our existing and future senior unsecured and unsubordinated indebtedness. The New Notes will be senior in right of payment with any of our existing and future indebtedness that is expressly subordinated to the New Notes. The New Notes will be effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness. The New Notes will be structurally subordinated to all existing and future indebtedness (including trade payables) of Exela Technologies, Inc.’s subsidiaries (with respect to the assets of such subsidiaries). See “Description of New Notes”.
• Will the New Notes be freely tradable?
In making the Offer, we are relying on the exemption from the registration requirements of the Securities Act of 1933 contained in Section 3(a)(9) of that Act for the New Notes. Under that exemption, if Common Stock tendered is freely tradable, the New Notes received in the exchange will be freely tradable. If the Common Stock tendered in the exchange is restricted, the New Notes will be restricted to the same degree. Our Common Stock (XELA) is listed on the Nasdaq Capital Market. On January 25, one business day before the announcement of the Offer, the closing per share price for the Common Stock as reported by Nasdaq was $0.55.
We intend to file an application to list the New Notes on either the NYSE American Exchange or Nasdaq under the symbol “XelaA.” If this application is approved, trading in the New Notes is expected to commence within a 30-day period after the approval of listing. However, we cannot assure you that the NYSE American Exchange or Nasdaq will list the New Notes or that any trading market will develop for the New Notes. Until such time, the Notes will trade on the OTC. If a trading market does develop, we cannot assure you as to any price at which the New Notes will trade. See “Risk Factors — There may not be an active trading market for the New Notes”, “Description of Exela’s Common Stock” and “Description of New Notes”.
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• Is there a maximum size of the Offer?
Yes. We will accept up to 100,000,000 shares of Common Stock. This represents approximately 29% of our outstanding Common Stock as of January 25, 2022. If more than 100,000,000 shares are tendered, we will only accept 100,000,000 shares of Common Stock, to be allocated among the tendering stockholders on a pro rata basis (based on increments of 25 shares).
• Are there any conditions to the Offer?
Yes. The Offer is conditioned on the closing conditions described under in the Offer Documents. We will not be required, but we reserve the right, to waive any of the conditions of the Offer (to the extent permitted by applicable law) and accept for exchange any shares of Common Stock tendered (or, alternatively, we may elect to terminate the Offer) if any of the conditions of the Offer as described under “The Offer — Conditions to the Completion of the Offer” remain unsatisfied.
• Under what circumstances may the Offer be terminated?
The Offer may be terminated if the conditions to the Offer discussed in this Offer to Exchange are not satisfied or waived or if we so elect. If the Offer is terminated and you previously have tendered shares of Common Stock, such tendered Common Stock will be credited back to an appropriate account promptly following the termination of the Offer without expense to you.
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• How will I be notified if the Offer is extended, amended or terminated?
We, in our sole discretion, may extend the Expiration Date for any reason. If the Offer is extended, amended or terminated, we will promptly make a public announcement by issuing a press release. In the case of an extension, the announcement will be issued no later than 9:00 a.m., New York City Time, on the next business day after the previously scheduled expiration date of the Exchange Offer.
• If I choose to tender my shares of Common Stock for exchange, do I have to tender all of my shares of Common Stock?
No. You may tender all of your shares of Common Stock, a portion of your shares of Common Stock or none of your shares of Common Stock for exchange. See “The Offer — Terms of the Offer”.
• May I withdraw my tender of shares of Common Stock?
Yes. You can withdraw shares of Common Stock previously tendered for exchange at any time before the Expiration Date. The Expiration Date is 12:00 midnight, New York City time, on February 24, 2022, unless extended as described in the Offer Documents. See “The Offer — Right of Withdrawal”.
• What happens if I do not participate in the Offer, or if my shares of Common Stock are not accepted in the Offer because of prorating?
If you currently hold shares of Common Stock and do not tender them or if your shares of Common Stock are not accepted in the Offer because of prorating, your shares of Common Stock will continue to be issued and outstanding. See “The Offer — Terms of the Offer” and “The Offer — Prorating”.
• How will I be taxed on the exchange of my shares of Common Stock?
U.S. Tax Considerations: Receipt of New Notes in redemption of shares of Common Stock will, for U.S. federal income tax purposes, be treated as a taxable transaction for “U.S. Holders” (as defined in the section “Certain Material Income Tax Considerations”). The redemption will be treated as either a sale of the redeemed shares or a dividend paid with respect to your ownership of our stock, with such determination made on a holder by holder basis, taking into account certain facts and circumstances. The U.S. federal income tax consequences of the Offer are complex. You should consult with your own tax advisor regarding the tax consequences of exchanging your shares of Common Stock.
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If the redemption of shares of Common Stock from a Non-U.S. Holder (as defined in the section “Certain Material Income Tax Considerations”) is treated as a dividend for U.S. federal income tax purposes, such dividend will be subject to a 30% U.S. withholding tax (unless the Non-U.S. Holder is eligible to claim a lower rate of tax based on qualification for benefits under a tax treaty with the United States). A Non-U.S. Holder that tenders shares of Common Stock pursuant to the Offer will have their shares accepted for exchange pursuant to the Offer only if such Non-U.S. Person pays us an amount sufficient to satisfy our withholding obligation based on an assumption that the exchange of shares pursuant to the Offer constitutes a dividend for U.S. federal income tax purposes. If you are a Non-U.S. Holder, you should consult with your own tax advisor regarding the U.S. and local jurisdiction tax consequences to you of participating in the Offer.
See “Certain Material Income Tax Considerations”.
• What is the status of the Company's "at-the-market" program?
The Company has suspended all sales under its "at-the-market" program and such sales will remain suspended during the pendency of the Offer.
• Has the Board of Directors adopted a position on the Offer?
Our Board of Directors has approved the making of the Offer. However, the Board of Directors has not made any recommendation as to whether you should tender your shares of Common Stock pursuant to the Offer. You should read the Offer Documents in their entirety and consult your own financial, tax, legal and other advisors and must make your own decision as to whether to tender your shares of Common Stock.
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• What are the interests of our directors, executive officers and affiliates in the Offer?
None of the Company or, to the Company’s knowledge, any of its affiliates, directors or executive officers, is a party to any contract, arrangement, understanding or agreement with any other person relating, directly or indirectly, to the Offer. See “Interests of directors, executive officers and affiliates of the Company in shares of Common Stock”. The Company does not believe that any director or executive officer that owns shares of Common Stock currently intends to tender such shares in the Offer. As a result, it is possible that one or more of our directors or executive officers that own shares of Common Stock may elect to tender some or all of their shares of Common Stock in the Offer. See “Interests of directors, executive officers and affiliates of the Company in shares of Common Stock”.
• Who will pay the fees and expenses associated with the Offer?
We will bear all of our fees and expenses incurred in connection with consummating the Offer. No brokerage commissions are payable by the stockholders to the Information Agent, the Exchange Agent or us. See “The Offer — Fees and Expenses”.
• Who can answer questions concerning the Offer?
Requests for assistance in connection with the tender of your shares of Common Stock pursuant to the Offer may be directed to the Information Agent for the Offer, D.F. King & Co., Inc. at (toll-free) (888) 644-6071 or (collect) (212) 269-5550 or email: exela@dfking.com
For further updates on the Offer, please register your email in the field below.
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