SANTA MONICA, Calif. - JAKKS Pacific, Inc. (NASDAQ: JAKK), a leading toy and consumer products manufacturer, has announced the redemption of all its Series A Senior Preferred Stock for $20 million in cash and 571,295 common shares valued at $15 million. This transaction is part of the company's strategic financial restructuring and reflects its continued efforts to strengthen its financial position.
The redemption of these securities is a significant step in JAKKS Pacific's plan to become a financially robust and self-sustaining entity. According to Stephen Berman, Chairman and CEO, the company has successfully navigated through industry challenges, including those presented by the COVID-19 pandemic, to reach this point. Berman emphasized the company's focus on revitalizing its business operations and enhancing profitability, which enabled the use of its cash flow and improved stock position to complete this transaction.
With the completion of this redemption, JAKKS Pacific eliminates the last debt-related security from its 2019 restructuring. The transaction, which includes a discount of $4.6 million from the contractual liquidation premium, will also remove $1.6 million in preferred dividends from its financial obligations over the next year. As a result, the company will no longer carry the Preferred Stock Derivative Liability, which was $29.947 million as of December 31, and Preferred Stock Accrued Dividends, which totaled $5.992 million as of the same date, on its balance sheet.
The cash portion of the redemption was covered by the company's available funds. Following the transaction, JAKKS Pacific will have 10,798,353 outstanding common shares, indicating a dilution of 5.6%.
Headquartered in Santa Monica, California, JAKKS Pacific is known for its proprietary brands such as AirTitans®, Ami Amis™, and Disguise®, among others. The company also produces a range of products under various licensed properties. JAKKS Pacific remains committed to positively impacting children's lives through its products and charitable contributions.
This press release includes forward-looking statements based on current expectations and projections about future events. Actual results could differ materially from those anticipated due to various factors, including changes in product demand, competitive pressures, and the timing of customer orders.
The information for this article is based on a press release statement from JAKKS Pacific, Inc.
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