Why is M-tron Industries, Inc (“Mtron”) distributing warrants?
On February 27, 2025, Mtron’s Board of Directors declared a dividend of warrants to purchase shares of its common stock to holders of record of Mtron’s common stock as a means of distributing value to its stockholders.
How does it work in practice?
Mtron stockholders will receive, free of charge, one (1) warrant for every share of Mtron common stock owned on the record date of March 10, 2025. Five (5) warrants will enable the warrant holder to purchase, at its sole and exclusion election, one (1) share of Mtron common stock at a price of $47.50 per share, subject to anti-dilution adjustments for certain events. Warrant holders may exercise their warrants for cash, or they may sell their warrants on the open market.
What is a warrant?
A warrant gives the holder the right – but not the obligation – to buy shares of common stock at a specified price for a specific period. Important terms and conditions for Mtron’s warrant distribution will be fully disclosed in a warrant agreement to be filed with the Securities and Exchange Commission (the “SEC”). When available, you should carefully read the warrant agreement and the other documents to be filed with the SEC by Mtron.
Is a warrant the same thing as a share of common stock?
A warrant and a share of common stock are different. A share of common stock represents equity ownership. Generally, a warrant entitles the holder to purchase, at the holder’s sole and exclusive election, at the exercise price, a share or shares of common stock.
What is the record date?
The warrants are expected to be issued to Mtron stockholders of record as of 5:00pm ET, March 10, 2025
What is the issuance date?
The warrants have not yet been issued. We will update this FAQ once that happens and issue a press release accompanied by the necessary SEC filings to provide updated information to stockholders.
What is the ex-dividend date?
Mtron common stock is expected to begin trading ex-dividend the day prior to the March 10, 2025 record date.
What is the trading symbol for the warrants?
The warrants are expected to trade on the NYSE American under the ticker “MPTI WS”, although different financial information websites may use slight variants of this symbol. Once the warrants are listed, the market will determine any market value of the warrants based on supply and demand or other factors. Mtron cannot provide any assurances that an active trading market for the warrants will develop or continue or that there will be liquidity in the trading market for the warrants, or the price at which the warrants will be able to be resold.
What is the CUSIP number for the warrants?
The CUSIP number for the warrants is “55380K125”.
Do the warrants expire?
Yes, the warrants are expected to expire three (3) years from the issuance date. Notwithstanding the foregoing, the warrants will expire on the date that is thirty (30) calendar days following Mtron’s public announcement of the date on which the average volume weighted average price (“VWAP”) for Mtron’s common stock is greater than or equal to $52.00 per share for thirty (30) consecutive trading days (as adjusted for stock splits, stock dividends, combinations, reclassifications and similar events).
Can I sell my warrants?
Yes, it is expected that you can sell the warrants once issued and pocket the proceeds. The warrants are expected to be transferable and listed and tradeable on the NYSE American. To sell your warrants direct registration holders should contact Computershare Investor Services, the warrant agent. Holders in street name should contact their broker, bank or other intermediary.
If I sell my common stock, must I also sell my warrants?
You will choose what to hold and what to sell. The warrants and Mtron’s common stock are separate securities and will trade independent of each other. Once issued, you may sell your warrants and hold your common stock, or vice versa. You must be a holder of Mtron common stock as of the record date (March 10, 2025) to receive a distribution of warrants. Once you receive warrants, you do not need to be a holder of common stock to exercise, purchase or sell the warrants.
What is the process to exercise my warrants?
Once the warrants are issued, direct registration holders should contact Computershare Investor Services, the warrant agent. To exercise, you will be required to complete an exercise notice and provide payment to Computershare Investor Services by money order, certified check, or official bank check in an amount equal to the exercise price multiplied by the number of warrants being exercised. Upon exercise, you will receive the whole number of shares of Mtron common stock to which you are entitled. Holders in street name should contact their broker, bank, or other intermediary for information on how to exercise warrants.
How soon can I exercise the warrants?
The warrants are expected to be “European-style” warrants that would be exercisable only at the earlier of (i) the expiration three (3) years after issuance date in, 1, or (ii) immediately after the average VWAP of Mtron common stock is greater than or equal to $52.00 per share for the prior thirty (30) consecutive trading days. If the early trigger is enacted, the warrants are expected to convert to “American-style” which must be exercised within thirty (30) days of Mtron’s public announcement of the date that the trigger occurred.
What happens after the warrants expire?
After the warrant expected expiration date inMarch 2028 or after the thirty day exercise window if the early trigger is enacted, whichever comes first, the right to exercise the warrant will no longer exist. At this point the warrants will have zero trading value and are expected to be delisted by the NYSE American. Of course, Mtron common stock will continue to trade after that date.
Will the exercise of the warrants result in the issuance of shares of common stock?
Mtron will not issue any shares of common stock at the time when the warrants are issued. However, Mtron will issue shares of common stock to warrant holders who exercise their warrants for cash. Five (5) warrants are exercisable for one (1) share of common stock.
Will you issue fractional warrants or shares in the event the math does not work out to a whole number?
No fractional warrants will be issued. Mtron also will not issue fractional shares of common stock or pay cash in lieu thereof. If a stockholder is entitled to receive a non-whole number of shares of common stock upon exercise of the warrants, Mtron will round down the total number of shares of common stock to the nearest whole number. A whole number is any non-negative number, including zero, that is not a fraction or decimal. Mtron’s calculation shall be determinative.
How much cash will Mtron raise through this warrant distribution and what will it do with the proceeds?
There are too many variables to accurately predict how much cash, if any, Mtron may raise through this distribution of warrants, however assuming that all warrants are exercised, the net proceeds from the exercise of the warrants will be approximately $27.7 million, after deducting estimated expenses related to this distribution. Some key variables are beyond our control, such as the market value of warrants after they list on the NYSE American, how many warrant holders will exercise versus sell in the open market, the timing of cash proceeds from the exercise of warrants, etc.
How will Mtron use the cash proceeds?
We intend to use any proceeds from the exercise of warrants for general corporate purposes.
Who is the warrant agent and how can I contact them?
Computershare Investor Services
Will holders of warrants be entitled to any future cash dividends?
No, holders of unexercised warrants are not entitled to any of the rights of Mtron common stock, which includes the right to vote and to receive dividends. Future cash dividends, if any, will be paid on shares of Mtron common stock outstanding on the record date set for any such dividend.
What type of event would cause an anti-dilution adjustment to warrant?
The initial exercise price for Mtron common stock to be purchased with these warrants is expected to be subject to anti-dilution adjustments for certain events, including, among others:
- Stock dividends;
- Stock splits or combinations;
- Issuance of shares in connection with a consolidation or merger in which Mtron is the continuing corporation
A full description of the anti-dilutive adjustment provisions of the warrants will be included in the warrant agreement.
Are there any substantial tax implications related to the warrants?
The Mtron warrants are expected to be issued as a dividend proportionate to all outstanding shares of Mtron common stock. As such, the warrant dividend would normally be a non-taxable distribution to U.S. taxpayers. The above information is presented here for information purposes only and not intended to constitute tax advice for any individual stockholder or warrant holder. Holders should consult their own tax advisors regarding the United States federal and other tax consequences of the distribution of the warrants.
Where can I get more information regarding the warrant distribution?
Additional information regarding the terms of the warrants when issued, including the warrant agreement, will be filed with the SEC on or around the distribution date and will be available in the Investor Relations section of Mtron’s website at ir.mtronpti.com. You should carefully read the warrant agreement and the other documents once filed with the SEC by Mtron.
THE FOREGOING Q&A DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE WARRANT DISTRIBUTION RELATED AGREEMENTS THAT WILL BE FILED WITH THE SEC.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Q&A contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this Q&A which are not historical facts are forward-looking statements, including statements of expectations of or assumptions about Mtron’s financial and operational performance, revenues, earnings per share, cash flow or use, cost savings and operational efficiencies. The words "anticipate," "assume," "believe," "budget," "estimate," "expect," "forecast," "intend," "plan," "project," "will," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are based on assumptions and analyses made by Mtron in light of its experience and its perception of historical trends, current conditions, expected future developments, and other factors that Mtron believes are appropriate under the circumstances. All forward-looking statements involve a number of known and unknown risks and uncertainties which could affect Mtron’s actual results and performance and could cause its actual results and performance to differ materially from those expressed in any forward-looking statements made by, or on behalf of, Mtron. Additionally, there can be no guarantee that any stockholder of Mtron will exercise the Warrants held by such stockholder when distributed by Mtron, and as a result there can be no guarantee that Mtron will derive the benefits of the transaction described in this Q&A. Further information regarding the important factors that could cause actual results to differ from projected results can be found in Mtron’s reports filed with the SEC, including Mtron's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, its Quarterly Reports on Form 10-Q, and its other filings with the SEC. Forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in the forward-looking statements. The forward-looking statements in this Q&A speak as of the date of this Q&A. The forward-looking statements contained in this Q&A reflect management’s estimates and beliefs as of the date of this Q&A. Mtron does not undertake to update these forward-looking statements.
No Offer or Solicitation
This Q&A shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. A Form 8-A registration statement and prospectus supplement describing the terms of the warrants and the shares of common stock issuable upon exercise thereof will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov. Holders of Mtron common stock should read the prospectus supplement carefully, including the Risk Factors section included and incorporated by reference therein. This Q&A contains a general summary of the warrants. Please read the warrant agreement when it becomes available as it will contain important information about the terms of the warrants.