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SANTA MONICA, Calif. – JAKK, Inc. (NASDAQ: JAKK), a leading manufacturer of toys and consumer products, announces the redemption of all of its Series A preferred stock for $20 million in cash and 571,295 common shares valued at $15 million. . . This transaction is part of the company's strategic financial restructuring and reflects its continued efforts to strengthen its financial position.
The redemption of these securities is an important step in JAKKS Pacific's plan to become a financially robust and self-sustaining company. Chairman and CEO Stephen Berman says the company has successfully navigated industry challenges, including those posed by the COVID-19 pandemic, to get to this point. It is said that he did. Mr. Berman emphasized that the company is focused on revitalizing business operations and improving profitability, which enabled the company to utilize cash flow and improve its equity position to complete this transaction.
Upon completion of this redemption, JAKKS Pacific will exclude the last of its debt-related collateral from the 2019 reorganization. The transaction includes a discount of $4.6 million from the contractual liquidation premium and also waives $1.6 million of preferred dividends from financial obligations for the next year. As a result, the company will no longer record on its balance sheet its preferred stock derivative liability, which totaled $29,947,000 as of December 31, and its preferred stock unpaid dividends, which totaled $5,992,000 as of the same date.
The cash portion of the redemption proceeds was funded by the Company's available funds. Following this transaction, JAKKS Pacific will have 10,798,353 common shares outstanding, representing a dilution rate of 5.6%.
Headquartered in Santa Monica, California, JAKKS Pacific is known for its proprietary brands such as AirTitans®, Ami Amis™ and Disguise®. The company also manufactures various products under various licensed properties. JAKKS Pacific remains committed to positively impacting children's lives through our products and philanthropy.
This press release contains forward-looking statements that are based on current expectations and projections about future events. Actual results may differ materially from expectations due to a variety of factors, including changes in product demand, competitive pressures and the timing of customer orders.
Information in this article is based on a press release from JAKKS Pacific, Inc.
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