Business Context and Reporting Period
This Form 8-K is filed by XAI Octagon Floating Rate & Alternative Income Trust (NYSE: XFLT) on September 23, 2024, reporting an event that occurred on September 20, 2024. The Trust is a Delaware corporation focused on floating rate and alternative income investments.
Key Financial Metrics and Transaction Details
- Transaction Type: Unregistered sale of equity securities (Item 3.02).
- Security Issued: 400,000 shares of 6.95% Series II 2029 Convertible Preferred Shares.
- Issue Price: $23.25 per share.
- Liquidation Preference: $25.00 per share.
- Net Proceeds: Approximately $9.3 million (before expenses).
- Outstanding Balance: 1,200,000 Series II 2029 Convertible Preferred Shares outstanding immediately following this issuance.
Material Changes
The filing reports the execution of a tranche under a purchase agreement entered into on June 10, 2024, with Eagle Point Credit Management LLC. This issuance increases the total outstanding Series II 2029 Convertible Preferred Shares from 800,000 to 1,200,000. The filing does not provide comparative financial data (revenue, profit, cash flow, or debt levels) for the period.
Guidance, Outlook, and Risks
The Trust has an agreement to issue up to 1,800,000 Series II 2029 Convertible Preferred Shares in one or more transactions on or before December 10, 2025. This specific issuance was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933. The filing does not contain specific management commentary on future outlook, risks, or contingencies beyond the terms of the purchase agreement.
Investor Verification Checklist
- Verify the total number of Series II 2029 Convertible Preferred Shares outstanding (1,200,000) against the Trust's latest 10-Q or 10-K.
- Review the full text of the Statement of Preferences (Exhibit 3.1 to the June 14, 2024 Form 8-K) for conversion terms and dividend details.
- Confirm the remaining capacity under the purchase agreement (up to 1,800,000 total shares).
- Check for any subsequent filings regarding the use of the $9.3 million in net proceeds.