8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

October 18, 2021	0-7928
Date of Report <br>(Date of earliest event reported)	Commission File Number		(Exact name of registrant as specified in its charter)
---		Delaware	11-2139466
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(State or other jurisdiction of<br><br>incorporation or organization)	(I.R.S. Employer Identification Number)		68 South Service Road, Suite 230<br><br>Melville, New York 11747
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(Address of Principal Executive Offices) (Zip Code)
(631) 962-7000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Name of exchange on which registered
Common Stock, par value 0.10 per share	NASDAQ Stock Market LLC
Series A Junior Participating Cumulative Preferred Stock, par value 0.10 per share

All values are in US Dollars.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 8.01    Other Events

On October 18, 2021, Comtech Telecommunications Corp. (the “Company”) issued a press release announcing that White Hat Capital Partners LP and Magnetar Capital LLC have agreed to purchase $100 million in the aggregate of a new series of convertible preferred stock of the Company. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Forward-Looking Statements

Certain statements contained herein are forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, statements about the contemplated investment and whether and when such investment would be consummated and achievement of its potential benefits, the intended use of proceeds and the expected changes to the Company’s Board of Directors. Risks and uncertainties that could impact these forward-looking statements include: the possibility that the expected synergies and benefits from recent acquisitions will not be fully realized, or will not be realized within the anticipated time periods; the risk that the acquired businesses will not be integrated with the Company successfully; the possibility of disruption from recent acquisitions, making it more difficult to maintain business and operational relationships or retain key personnel; the risk that the Company will be unsuccessful in implementing a tactical shift in its Government Solutions segment away from bidding on large commodity service contracts and toward pursuing contracts for its niche products with higher margins; the nature and timing of receipt of, and the Company's performance on, new or existing orders that can cause significant fluctuations in net sales and operating results; the timing and funding of government contracts; adjustments to gross profits on long-term contracts; risks associated with international sales; rapid technological change; evolving industry standards; new product announcements and enhancements; changing customer demands and or procurement strategies; changes in prevailing economic and political conditions; changes in the price of oil in global markets; changes in foreign currency exchange rates; risks associated with the Company's legal proceedings, customer claims for indemnification, and other similar matters; risks associated with the Company’s obligations under its Credit Facility; risks associated with the Company's large contracts; risks associated with the COVID-19 pandemic and related supply chain disruptions; and other factors described in this and the Company's other filings with the Securities and Exchange Commission. We assume no obligation and do not intend to update these forward-looking statements or to conform these statements to actual results or to changes in our expectations.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Press Release, dated October 18, 2021
104	Cover Page Interactive Data File (embedded within the Inline XBRL Document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, Comtech Telecommunications Corp. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

COMTECH TELECOMMUNICATIONS CORP.

Dated:    October 18, 2021

By:        /s/ Michael A. Bondi    
Name:    Michael A. Bondi Title:    Chief Financial Officer

Document

Exhibit 99.1

COMTECH ANNOUNCES $100 MILLION STRATEGIC GROWTH INVESTMENT

Investment Enhances Comtech’s Financial Flexibility and Accelerates Its Strategic Initiatives in Satellite Ground Station Infrastructure and Next-Generation Public Safety Solutions

MELVILLE, N.Y. -- October 18, 2021 -- Comtech Telecommunications Corp. (NASDAQ: CMTL), a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies, today announced a $100.0 million investment by current shareholder White Hat Capital Partners LP (“White Hat”), an investment firm focused on sustainable value creation in technology companies serving mission-critical applications, and Magnetar Capital (“Magnetar”), a leading alternative investment manager with approximately $13.8 billion of assets under management.

This strategic growth investment significantly enhances Comtech’s financial flexibility and strengthens the Company’s ability to capitalize on its recent large contract awards and growing customer demand for its satellite communications technologies and next-generation 911 public safety solutions. Comtech expects to apply the proceeds of this investment across a range of initiatives to accelerate growth and increase profitability, including, but not limited to:

•Industry-Leading Broadband Satellite Technology: Complete the build out of the Company’s new, state-of-the-art technology centers and advanced manufacturing capabilities in Chandler, Arizona and Basingstoke, United Kingdom. These facilities will better allow Comtech to capture value from the increasing demand for satellite ground station infrastructure and next-generation broadband technology, which Comtech expects will contribute to significant growth over the next several years.

•Next-Generation 911 Business Wins: Participate at greater scale and capitalize on the ongoing 911 upgrade cycle across the United States. During fiscal year 2021, Comtech secured large, multi-year agreements with an initial lifetime value in excess of $200 million from states including Arizona, Iowa, and Pennsylvania. The Company has a robust pipeline of similar opportunities and is positioned to benefit from increased federal funding to modernize the nation’s largely outdated 911 systems.

•Attractive M&A Opportunities: Execute on a disciplined strategy of acquiring and integrating complementary technologies and capabilities, with a focus on creating shareholder value. Over the past several years, Comtech has successfully acquired leading technology companies in both the NG 911 and satellite earth station markets that have been instrumental to bolstering the Company’s market leadership, innovative offerings, and growth outlook.

White Hat and Magnetar’s strategic investment also provides Comtech additional flexibility in terms of optimizing capital allocation and maximizing shareholder value, including the continuation of its annual dividend program as well as opportunistic share repurchases under the Company’s existing common stock repurchase authorization.

In support of the Company’s vision and continued transformation, Comtech, White Hat and Magnetar have jointly agreed to appoint Mark Quinlan to the Company’s Board of Directors in conjunction with the previously announced Chief Executive Officer (“CEO”) succession. Mr. Quinlan is White Hat’s Co-Founder and Managing Partner and has more than 20 years of experience in the technology sector. Upon the appointments of Mr. Quinlan and Michael Porcelain, Comtech’s President and Chief Operating Officer (“COO”) and incoming CEO, to the Comtech Board of Directors, the Board will comprise seven (7) members, five (5) of whom are independent.

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“We are grateful for this significant investment and endorsement of our strategy and team by sophisticated investors with deep technology experience and relationships,” said Comtech’s current Chairman and CEO, Fred Kornberg. “As an existing Comtech shareholder with a long-term investment horizon, White Hat understands our Company and the markets we serve. With White Hat’s track record of successfully advising technology companies at key inflection points, and Magnetar’s breadth of experience in the public markets, we are excited to strengthen our relationship with them as we enter this new phase of growth.”

Mr. Porcelain, President and COO of Comtech and incoming CEO added: “With this investment, we have significantly improved our ability to execute on our previously announced plans that build on customer demand and large sector trends in public safety infrastructure. We are excited by the opportunities we see in both the satellite earth station and public safety markets. White Hat and Magnetar have demonstrated deep understanding of our business, technology, core markets and growth drivers. We believe this partnership is a strong vote of confidence in our vision, our operations, and in our ability to create sustainable long-term value for all of Comtech’s stakeholders.”

“Magnetar and White Hat fully support Comtech’s strategy and the recently announced and well-thought-out leadership transition plan,” said Mr. Quinlan, White Hat Co-Founder. “We applaud the recent actions taken by the Board and management to strengthen corporate governance, increase diversity of views, and enhance shareholder value. We believe Comtech is uniquely positioned to capitalize on accelerating demand for space-based communications solutions and leverage its installed base of public safety customers to drive incremental growth in recurring revenue. We look forward to this next chapter of Comtech’s growth, building on its history of designing and delivering innovative communications solutions to meet the evolving needs of both government and commercial customers around the world.”

Summary of Investment Terms

White Hat and Magnetar will initially purchase $100.0 million of convertible preferred stock, which will be convertible into shares of Comtech common stock at a conversion price of $24.50 per share, subject to potential adjustment to $26.00 per share based on the Company’s fiscal 2022 financial performance. The preferred stock carries a 6.5% dividend, which will be payable in kind or in cash at Comtech’s election. Until March 31, 2023, White Hat and Magnetar will have a one-time right to purchase up to an additional $25.0 million of convertible preferred stock, which will be convertible into shares of Comtech common stock at a conversion price of $32.00 per share. Further details will be included in the Company’s Current Report on Form 8-K to be filed with the Securities and Exchange Commission. That report will describe the investment in additional detail, including exhibits with copies of associated transaction documentation.

Comtech expects the investment to close in October 2021, subject to customary closing conditions.

Goldman Sachs & Co. LLC is serving as exclusive financial advisor to Comtech and Proskauer Rose LLP is serving as Comtech’s legal advisor. Willkie Farr & Gallagher LLP is serving as legal advisor to Magnetar and Schulte Roth & Zabel LLP is serving as legal advisor to White Hat.

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About Comtech

Comtech Telecommunications Corp. is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers around the world. Headquartered in Melville, New York and with a passion for customer success, Comtech designs, produces and markets advanced and secure wireless solutions. For more information, visit www.comtechtel.com.

About White Hat

Founded in 2016, White Hat Capital Partners LP focuses exclusively on concentrated, value-oriented investments in publicly-traded technology companies. White Hat constructively partners with its portfolio companies to improve strategy and capital allocation decisions, implement operational efficiencies and strengthen governance, all with a view toward improving corporate competitiveness and creating shareholder value. For more information, visit www.whitehatcp.com.

About Magnetar

Founded in 2005, Magnetar Capital is a multi-strategy alternative investment manager with approximately $13.8 billion of assets under management as of June 30, 2021. Magnetar seeks to achieve stable risk-adjusted returns by opportunistically employing a wide-range of alternative credit and fixed income, energy and infrastructure, and systematic investing strategies. Magnetar invests across regions and business structures, in both public and private markets, taking advantage of the deep rigor of fundamental and quantitative analysis. The firm is based in Evanston, Illinois, with additional offices in London and Houston. For more information, visit www.magnetar.com.

Forward-Looking Statements

This press release contains statements that are forward-looking in nature and involve certain significant risks and uncertainties, including with respect to the offering of securities, the intended use of proceeds, and the Board and management changes described above. No assurance can be given that the transaction will be completed on the terms described, or at all, or that the proceeds from the offering will be used as indicated. Forward-looking statements are subject to numerous conditions, risks, and uncertainties, many of which are beyond the control of the Company, including those identified in the Company’s filings with the Securities and Exchange Commission. Any forward-looking information in this press release is qualified in its entirety by the risks and uncertainties described in Securities and Exchange Commission filings. The Company undertakes no obligation to release publicly any updates or revisions to any forward-looking statements contained herein except as required by law.

PCMTL

Media Contact:

Kekst CNC

Nicholas.Capuano@kekstcnc.com

(212) 521-4800

Investor Contact:

Comtech Investors Relations

Investors@comtech.com

(631) 962-7005