Business Context and Reporting Period
This Form 8-K is filed by XAI Octagon Floating Rate & Alternative Income Term Trust (NYSE: XFLT) for the reporting period of August 4, 2023. The filing reports on an unregistered sale of equity securities under Item 3.02.
Key Financial Metrics and Transaction Details
- Transaction Type: Issuance and sale of 400,000 Additional Shares of 6.00% Series 2029 Convertible Preferred Shares.
- Net Proceeds: Approximately $9.3 million (before expenses).
- Outstanding Equity Post-Transaction:
- Common Shares: 42,874,432
- Convertible Preferred Shares: 800,000
- Financial Metrics: The filing does not provide data on revenue, profit, cash flow, margins, debt, or liquidity for the period.
Material Changes
The Trust completed a subsequent closing under a Purchase Agreement originally entered into on June 28, 2022. This transaction fulfilled the final tranche of up to 800,000 Additional Shares that could be purchased by the Purchasers on or before December 31, 2023. A previous closing of 400,000 Additional Shares occurred on May 11, 2023.
Guidance, Outlook, and Risks
The filing contains no management commentary, forward-looking guidance, or specific risk factors beyond the standard disclosure of the unregistered sale. The transaction was conducted pursuant to Section 4(a)(2) of the Securities Act of 1933.
Investor Verification Checklist
- Verify the total capital raised from the full series of Convertible Preferred Shares (initial 400,000 shares plus two tranches of 400,000 Additional Shares).
- Review the Statement of Preferences (Exhibit 3.1 to the June 29, 2022 Form 8-K) for conversion terms and liquidation preferences.
- Confirm the impact of the $9.3 million proceeds on the Trust's current portfolio deployment strategy.
- Check subsequent filings for any changes in the Trust's leverage or liquidity position following this capital raise.