Highway Holdings Takes $7.0 Million From David Lazar, Plans Spin-Off

Highway Holdings Limited (Nasdaq: HIHO), a Hong Kong-based parts manufacturer, said it has closed a $7.0 million investment by David Lazar, who became the company’s chief executive. If shareholders approve converting his preferred shares, Lazar would hold about 95% of the company’s common shares on a fully diluted basis.

Current shareholders would keep the manufacturing business through a planned spin-off and receive a $2.0 million cash dividend, the company said in a Nov. 5 press release.

How the $7.0 million investment is structured

Lazar bought two classes of convertible preferred stock in a single closing on Nov. 4: $3.5 million of Series AA shares and $3.5 million of Series AAA shares. Convertible preferred stock can be turned into common stock later, but here that step requires a shareholder vote.

Highway Holdings plans to hold a special meeting and send shareholders a proxy statement first. The company expects the vote to cover the conversion of Lazar’s shares, the election of directors including Lazar and his nominees, an increase in authorized common shares, more shares for the equity incentive plan and a reverse share split.

Spin-off of the manufacturing business

The existing operations will be moved into a newly formed British Virgin Islands subsidiary, called NewCo in the release. Highway Holdings will then distribute all NewCo shares, pro rata, to shareholders of record on a date still to be set. Lazar’s preferred shares, and any common shares converted from them, will not receive NewCo stock.

The company said it will declare a $2.0 million cash dividend promptly after the closing. A special committee of independent directors will oversee the reorganization, the spin-off, the dividend and related compensation payments. Highway Holdings expects to complete the spin-off within 365 days after the closing.

Highway Holdings makes parts and products for equipment manufacturers based mainly in Germany. Its administrative office is in Hong Kong, and it has factories in Germany, in Yangon, Myanmar, and in Shenzhen, China.

What it means for shareholders

If the deal goes through as planned, existing holders would own the legacy manufacturing business directly through NewCo, collect a share of the $2.0 million dividend and keep a small stake in the listed company, which Lazar would control after conversion.

The company listed several risks in its release. The shareholder vote could fail, the dividend or distribution might not be paid, and the change of control could affect its ability to keep its Nasdaq listing.

New management and Lazar’s other roles

At the closing, Lazar and one person he nominated joined the board, and Lazar has the right to recommend up to five more directors for election at the special meeting. Roland W. Kohl, the previous chief executive, and the other executive officers resigned from those roles. Kohl will help with the transition and is expected to keep overseeing the legacy business until the spin-off is done.

Kohl said the board picked the deal after reviewing its strategic options. Lazar said it gives the company new capital while letting current holders keep their stake in the old business.

Lazar has led a series of Nasdaq-listed companies. According to the release, he has been CEO and chairman of Aterian since July 2026 and CEO of Quantum Cyber N.V., formerly Mainz Biomed, since February 2026. Earlier roles include Sow Good from January to May 2026 and Indaptus Therapeutics from December 2025 to April 2026, where he remains on the board.

What to watch next

Highway Holdings will file a Form 6-K with the Securities and Exchange Commission containing the transaction documents. The proxy statement for the special meeting, and the record date for the spin-off, have not yet been announced.

Source: PR Newswire