Business Context and Reporting Period
This Form 8-K was filed by XAI Octagon Floating Rate & Alternative Income Trust (NYSE: XFLT) on April 4, 2024. The report details an unregistered sale of equity securities under Item 3.02.
Key Financial Metrics
- Transaction Type: Issuance and sale of 6.95% Series 2029 Convertible Preferred Shares.
- Shares Issued: 400,000 shares on April 4, 2024.
- Price per Share: $23.25.
- Net Proceeds: Approximately $9.3 million (before expenses).
- Total Outstanding: 1,200,000 Convertible Preferred Shares immediately following this issuance.
Material Changes
The Trust completed a tranche of a previously disclosed purchase agreement entered into on November 6, 2023. This agreement authorized the sale of up to 1,200,000 shares. The April 4, 2024 issuance represents the full completion of the authorized amount under this specific agreement, bringing the total outstanding Convertible Preferred Shares to 1,200,000.
Guidance, Outlook, and Risks
The filing does not provide forward-looking guidance, management commentary on future performance, or specific risk factors beyond the standard disclosure of the unregistered sale. The transaction was executed pursuant to Section 4(a)(2) of the Securities Act of 1933. The filing references a prior Form 8-K (November 7, 2023) for the full Statement of Preferences and Purchase Agreement details.
Investor Verification Checklist
- Verify the total capital raised under the November 2023 Purchase Agreement against the $9.3 million reported here.
- Review the Statement of Preferences (Exhibit 3.1 from the November 7, 2023 filing) to understand the conversion terms and liquidation preference of the Series 2029 shares.
- Confirm the impact of the $9.3 million proceeds on the Trust's current liquidity and leverage ratios in subsequent financial reports.
- Check for any remaining capacity under the Purchase Agreement, as the filing states the total authorized amount (1,200,000 shares) is now fully issued.