Summary of GIGA TRONICS INC

Entry into a Material Definitive Agreement, Unregistered Sale of Equity Securiti

Item 1.01 Entry into a Material Definitive Agreement.

On February 19, 2013, Giga-tronics Incorporated (the "Company") entered into a Securities Purchase Agreement pursuant to which it agreed to sell 3,424.65 shares of its proposed newly designated Series C Convertible Voting Perpetual Preferred Stock to Alara Capital AVI II, LLC, a Delaware limited liability company (the "Investor"), an investment vehicle sponsored by Active Value Investors, LLC , for aggregate consideration of $500,000, which is approximately $146.00 per share of Series C Preferred Stock. Each of Active Value Investors, LLC and the Investor has a business address at Parkview Tower, 1150 First Avenue, Suite 600, King of Prussia, PA 19406. The completion of the sale is subject to customary closing conditions.

Each share of Series C Preferred Stock is initially convertible at the option of the holder into 100 shares of the Company's common stock. The conversion ratio is subject to adjustments for stock splits, stock dividends, recapitalizations and similar transactions. If all shares of Series C Preferred Stock were immediately converted, holders of such shares would acquire 342,465 shares of common stock of the Company, or approximately 5.4% of the number of shares of the Company's common stock currently outstanding. Each share of Series C Preferred Stock has a liquidation preference of $146.000321. If the Company pays a dividend on its common stock prior to January 1, 2014 or on or after January 1, 2014, it would be required to pay a dividend on the Series C Preferred Stock equal to 110% or 100%, respectively, of the cash dividend that would be payable on the number of shares of common stock into which each share of Series C Preferred Stock is then convertible. The Series C Preferred Stock generally votes together with the common stock and the Series B Preferred Stock on an as-converted to common stock basis, on each matter submitted to the vote or approval of the holders of common stock, and would vote as a separate class with respect to certain actions that adversely affect the rights of the Series C Preferred Stock and on other matters as required by law.

As previously disclosed, in November 2011, the Company, in exchange for approximately $2.2 million in cash, sold to the Investor 9,997 shares of its Series B Convertible Voting Perpetual Preferred Stock and a warrant to purchase 848,684 shares of the Company's common stock at the price of $3.30 per share (the "Warrant"). The Warrant became exercisable in full following the approval by the Company's shareholders on February 7, 2012. In the Securities Purchase Agreement signed on February 19, 2013, the Company and the Investor agreed to terminate the Investor's right to acquire 342,465 shares of the 848,684 shares underlying the Warrant, subject to the closing of the sale of the Series C shares. As a result, the Warrant as reissued (the "Amended Warrant") would represent the right to acquire 506,219 shares of the Company's common stock at the price of $3.30 per share. The Amended Warrant will expire on August 7, 2014, if and to the extent not exercised earlier.

The Investor currently beneficially owns approximately 26.9% of the Company's common stock. Because the number of shares that the Investor will be entitled to purchase upon exercise of the Amended Warrant will be decreased by the same number of shares of common stock into which the purchase Series C shares are initially convertible, the aggregate number of shares of the Company's common stock beneficially owned by the Investor will not change as a result of this transaction.

In accordance with the terms of the Securities Purchase Agreement, the Company and Investor will enter into an Investor Rights Agreement upon the closing of the sale of the Series C Preferred Stock. In the Investor Rights Agreement, the Company will agree to file certain registration statements for the resale of common stock of the Company that the Investor may acquire upon conversion of the Series C Preferred Stock.

The foregoing discussion is qualified in its entirety by reference to the Securities Purchase Agreement dated as of February 19, 2013 filed as Exhibit 10.1 to this Current Report on Form 8-K, including the exbibits attached thereto and the Certificate of Determination filed as Exhibit 3.1 to this Current Report on Form 8-K.

On February 20, 2013, the Company issued a press release announcing the signing of the Securities Purchase Agreement. A copy of the press release is filed as Exhibit 99.1 with this report.