Giga-tronics Inc., a provider of test and measurement equipment, announced that it has closed on the previously announced investment from Alara Capital AVI II LLC for $2.2 M.

The company has issued 9,997 shares of a new series of convertible preferred stock at a price of $220 per share to Alara Capital AVI II LLC. The preferred shares are initially convertible into 999,700 shares or approximately 16.6 percent (after giving effect to the conversion) of the company’s common stock, or the equivalent of $2.20 per share of common stock. The convertible preferred stock are entitled to vote together with the common stock on matters submitted to the company’s shareholders on an as-converted basis. Alara Capital AVI II, LCC also receives warrants to purchase up to 848,684 additional shares of common stock in the future, subject to approval of the Giga-tronics shareholders.

As part of the investment, Giga-tronics is expanding its board to seven members. Alara Partner Dr. Joseph Thompson and Dr. Lutz Henckels will join the company’s board of directors effective immediately. They are both experienced executives in the test and measurement industry. The company plans to use the investment proceeds primarily for R&D of new products in its instrument business.

The company has filed the Securities Purchase Agreement and will file the Certificate of Determination, Form of Stock Certificate, Warrant, Investor Rights Agreement and Form of Voting Agreement on a Current Report on Form 8-K to which investors should refer for additional detail on the terms of the preferred stock and the investment.