SCHEDULE: DD Revocable Trust Discloses Xerox Stake

DD Revocable Trust reports beneficial ownership of 11.29% of Xerox Holdings Corporation's common stock, including Series A Preferred Stock, following the passing of Darwin Deason.

Summary

• The DD Revocable Trust, following the passing of Darwin Deason, has filed a Schedule 13D indicating beneficial ownership of 15,283,672 shares of Xerox Holdings Corporation common stock.
• This holding represents approximately 11.29% of the outstanding common stock.
• The reported shares include 8,542,096 shares of common stock and 6,741,576 shares issuable upon conversion of 180,000 shares of Series A Convertible Perpetual Voting Preferred Stock.
• The Trust also holds 7,641,828 warrants to purchase Xerox shares, which are currently 'significantly underwater' and expire on February 11, 2028.
• If these warrants were included, the Trust's beneficial ownership would increase to 22,925,500 shares, or 16.03% of the outstanding stock.
• The Trust acquired these securities through the Last Will and Testament of Darwin Deason, with no funds used for acquisition.
• The Executors of the Trust, Douglas R. Deason, Scott Letier, and Bryan C. Birkland, have acquired shared voting and dispositive power over the shares.
• The Trust holds the shares for investment purposes and for administration and eventual distribution according to the Will.
• The Executors will continuously evaluate Xerox's business and market conditions, and the Trust may acquire or dispose of shares in the future.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this filing as neutral, primarily a procedural update following a shareholder's passing, with no immediate strategic actions or financial performance indicators disclosed.

Positives

• The DD Revocable Trust holds a significant stake (11.29%) in Xerox Holdings Corporation, indicating substantial past investment by Darwin Deason.
• The Trust's holdings include both common stock and convertible preferred stock, offering potential for increased equity ownership.
• The Trust has also received a substantial number of warrants, providing a potential future upside if the share price increases.
• The Executors are actively monitoring the company's performance and market conditions, suggesting a strategic approach to managing the investment.

Negatives

• The filing notes that the 7,641,828 warrants held by the Trust are currently 'significantly underwater', implying their exercise price is well above the current market price.
• The Series A Convertible Perpetual Voting Preferred Stock has a voting structure where it is entitled to one vote for every ten shares it is convertible into, potentially diluting voting power compared to direct common stock ownership.
• The Trust may dispose of some or all of its shares, which could create selling pressure on the stock depending on the timing and volume.

Risks

• The value of the Trust's holdings is subject to the market performance of Xerox Holdings Corporation's stock.
• The warrants held by the Trust may expire worthless if the share price does not rise above the exercise price of $8.00 before February 11, 2028.
• The Trust may decide to sell its shares, potentially impacting the stock price.
• The convertible preferred stock's voting rights are less than proportional to its potential common stock equivalent, which could be a disadvantage in shareholder matters.

Future Outlook

The Trust, through its Executors, will continuously evaluate Xerox's business, financial condition, and market conditions. Depending on these factors, the Trust may acquire additional shares or dispose of some or all of its current holdings. The warrants are expected to expire on February 11, 2028, unless certain conditions are met for an earlier expiration.

Management Comments

• The Executors, in their capacity as fiduciaries of the Trust, will continuously evaluate the Issuer's business, financial condition, and the market for the Shares.
• Depending on market conditions and other factors, the Trust may acquire additional Shares or dispose of some or all of the Shares in the open market, in privately negotiated transactions, or by distribution to the beneficiaries of the Trust.

Industry Context

StockSavvy.ai notes that this Schedule 13D filing by the DD Revocable Trust signifies a significant shift in beneficial ownership reporting for Xerox Holdings Corporation, stemming from the estate of a major shareholder. Such filings often precede strategic actions or provide insights into the intentions of large holders regarding their investment in the company.

Stakeholder Impact

• Shareholders: Potential for increased selling pressure if the Trust decides to dispose of its shares. The voting rights associated with the Series A Preferred Stock may also influence shareholder matters.
• Beneficiaries of the Trust: The ultimate distribution of Xerox shares and any proceeds from their sale will impact the beneficiaries.
• Creditors of the Trust: The value of the Trust's assets, including Xerox shares, is relevant to its creditors.

Next Steps

• The Executors will continue to monitor Xerox's business and market conditions.
• The Trust may acquire additional shares or dispose of existing shares.
• The warrants are subject to expiration on February 11, 2028, or an earlier date under specific conditions.

Key Dates

Keywords

Xerox Holdings Corporation, Schedule 13D, DD Revocable Trust, Darwin Deason, Beneficial Ownership, Common Stock, Series A Convertible Perpetual Voting Preferred Stock, Warrants, Investment Purposes, Executors