The LGL Group, Inc. (NYSE American: LGL) announced that it has
completed its previously announced spin-off of M-tron Industries,
Inc. (NYSE American: MPTI) on October 7, 2022, as previously
announced.
- Mtron common stock trades on the NYSE American under the symbol
“MPTI.”
- The pro-forma shares outstanding for MPTI post the spin-off are
2.67 million.
- The pro-forma shares outstanding for LGL post spin-off are 5.33
million.
- The LGL warrants outstanding remain unchanged however the
exercise terms will be adjusted for the Mtron Spinoff.
- No Mtron warrants were issued in conjunction with the
distribution of Mtron
Separation Details:
Shareholders of LGL received one-half share of M-tron
Industries, Inc. (“Mtron”) for each share of LGL held, as
previously announced and amended. The separation was achieved
through the distribution of 100 percent of the shares of Mtron to
holders of LGL common stock at 12:01 am on October 7, 2022, with
LGL stockholders receiving one-half share of Mtron common stock for
every share of LGL common stock held at the close of business on
the record date of September 30, 2022. LGL stockholders entitled to
receive the distribution received a book-entry account statement or
a credit to their brokerage account reflecting their ownership of
Mtron common stock. Fractional shares of Mtron common stock were
not distributed. Any fractional shares of Mtron common stock
otherwise issuable to an LGL stockholder were sold in the open
market on such stockholder’s behalf, and each such stockholder will
receive a cash payment for the fractional share based on its pro
rata portion of the net cash proceeds from all sales of fractional
shares. Under a thousand shares were sold in accordance with this
provision. Following the distribution, LGL retains no ownership
interest in Mtron.
Effect of Spin-off on LGL’s Outstanding Warrants:
The LGL warrants exercise price was originally set at $12.50,
and the warrant accelerated exercise trigger price of $17.50 will
be adjusted for the Mtron Spinoff as outlined below in “Warrant
Adjustments”.
Warrant Details
LGL Group has approximately 5.25 million “European Style”
warrants outstanding, exercisable at a 5 for 1 ratio into LGL
shares only at the earlier of (i) the expiration of the warrant
term, which is November 16, 2025, or (ii) subject to a date
acceleration if triggered only after the average volume weighted
average price (“VWAP”) of LGL common stock for 30 consecutive
trading days is greater than or equal to an acceleration trigger
price.
The warrants are publicly listed on the NYSE American under the
symbol LGL.WS.
LGL’s warrant agreement is found here:
https://www.sec.gov/Archives/edgar/data/61004/000119380520001361/ex44tos1a103725036_11022020.htm
Warrant Adjustments: Exercise Price Adjustment and Target
Trigger Price for Potential Acceleration of Exercise Date
The distribution of Mtron shares is a qualifying dilutive event
that requires an adjustment under Section 10 (c) of the warrant
agreement, with the exercise price to be adjusted following the
distribution of Mtron shares to LGL shareholders.
The exercise price, originally set at $12.50, will be adjusted
in accordance with the foregoing formula.
Using the calculation provided within the warrant agreement, the
LGL warrants will be adjusted as follows:
EP1 = EP0 x MP0 / (FMV0 + MP0)
Where,
EP1 = the Exercise Price in effect
immediately after the record date
EP0 = the Exercise Price in effect at the
Close of Business on the record date ($12.50)
MP0 = the average VWAP per share of LGL from
October 4th through October 17th
FMV0 = the average VWAP per share of MPTI
from October 4th through October 17th. (FMV0 will be adjusted to
include the effect of the distribution ratio of one-half share of
MPTI for one share of LGL).
The VWAP will be derived from the when issued
trading for the period from October 4, 2022 through October 6, 2022
and regular way trading from October 7, 2022 through October 17,
2022.
The target price for acceleration of the exercise date,
originally set at $17.50, will be similarly adjusted in accordance
with the foregoing formula used for adjusting the exercise
price.
An 8-K is expected to be issued on or about October 19, 2022
with details of the warrant exercise price adjustment and related
target price for acceleration of the exercise date.
Effect of Spin-off on Investor’s Cost Basis for LGL and Mtron
Shares:
The Company anticipates completing IRS Form 8937 “Report of
Organizational Actions Affecting Basis of Securities”, relating to
the reallocation of investor’s cost basis as a result of this
shareholder distribution of stock in Mtron, within 45 days of the
distribution. The completed and signed Form 8937 will be posted
prominently on LGL’s corporate website on or before November 21,
2022, and will be accessible to the public on this website or the
primary website of any successor organization for 10 years.
Operations after the Spin-Off:
The spin-off of Mtron will enable shareholders to evaluate the
performance and future potential of each entity more clearly on a
standalone basis, while allowing each to pursue its own distinct
business strategy and capital allocation policy. LGL continues to
own and develop its frequency reference and time standard
synchronization solutions business through its Precise Time and
Frequency LLC (“PTF”) subsidiary and retains $40.4 million of cash
and marketable securities as of the quarter ending June 30, 2022,
excluding the $1.0 million of cash spun off with Mtron.
Information for investors can be found on the company's
website.
https://www.lglgroup.com/sites/default/files/2022-09/LGL%20-%20September%208%202022%20-%20Spin%20Update%20R4.pdf
About M-tron Industries, Inc.
M-tron Industries, Inc. (“Mtron”) was originally founded in 1965
as Mechtronics, Industries, Inc. Shortly thereafter, the name was
formally changed to M-tron Industries, Inc. The primary business of
Mtron during the early years was building crystals for the CB radio
market. When technology changed in the late 1970s, so did Mtron. A
change in marketing approach and continued development of products
provided new life for the company. Mtron became known as a supplier
of high quality, high reliability crystal, oscillator, and to some
degree, VCXO (Voltage Controlled Crystal Oscillator) and TCXO
(Temperature Compensated Crystal Oscillator) products which would
be used in applications such as telecommunication infrastructure
used to make phone systems and later on, the internet function. In
1976, M-tron Industries, Inc. was acquired. In 2002, Mtron acquired
the assets of Champion Technologies, Inc. of Franklin Park,
Illinois. Champion was a spin-off of Motorola during the mid-1980s.
This acquisition helped Mtron recover more quickly from the telecom
market collapse of 2001 and 2002 by expanding product offering, as
well as customer base.
In 1965, at nearly the same time that Mtron was established,
another company was organized, known as Piezo Technology, Inc.
(“PTI”). PTI was organized for the purpose of designing and
building crystal filters used in all types of equipment where
certain types of noise need to be filtered out of a circuit. PTI
grew over the years in both business and products to include LC
(Lumped Element) filters, TCXO and OCXO (Oven Controlled Crystal
Oscillator) products. Primary markets for PTI were Military,
Avionics and Instrumentation. In 1995 PTI opened a manufacturing
location in India and in 2004 M-tron Industries, Inc. acquired
Piezo Technology, Inc.
The combined operations of Mtron and PTI are referred to as
“Mtron”, and are headquartered in Orlando, Florida. Mtron currently
has a global footprint and serves most major markets that require
precision timing and filter products. The Company’s target market
segments include high-end telecommunications, and military,
instrumentation, space and avionics (referred to as “MISA”). Mtron
has operations in Orlando, Florida, Yankton, South Dakota and
Noida, India. In addition, Mtron has a sales office in Hong
Kong.
About The LGL Group, Inc.
In 1917, Lynch Glass Machinery Company, the predecessor of LGL,
was formed, and emerged in the late twenties as a successful
manufacturer of glass-forming machinery. The company was then
renamed Lynch Corporation, and was incorporated in 1928, under the
laws of the State of Indiana. In 1946, Lynch was listed on the “New
York Curb Exchange,” the predecessor to the NYSE American. LGL
Group’s long history of owning and operating various businesses in
the precision engineering, manufacturing and communication services
and media sectors. LGL is focused on growth through expanding new
and existing operations across diverse industries.
LGL’s principal subsidiary, Precise Time and Frequency (“PTF”),
is focused on the design and manufacture of high-performance
Frequency and Time Reference Standards that form the basis for
timing and synchronization in various applications.
For more information on LGL and its products and services,
contact Ivan Arteaga at The LGL Group, Inc., 2525 Shader Rd.,
Orlando, Florida 32804, (407) 298-2000, or visit
www.lglgroup.com.
Caution Concerning Forward Looking Statements
This press release may contain forward-looking statements made
in reliance upon the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements include all statements that do not relate solely to
historical or current facts and can be identified by the use of
words such as “may,” “will,” “expect,” “project,” “estimate,”
“anticipate,” “plan,” “believe,” “potential,” “should,” “continue”
or the negative versions of those words or other comparable words.
These forward-looking statements are not guarantees of future
actions or performance. These forward-looking statements are based
on information currently available to us and our current plans or
expectations and are subject to a number of uncertainties and risks
that could significantly affect current plans, anticipated actions
and LGL’s and Mtron’s future financial condition and results.
Certain of these risks and uncertainties are described in greater
detail in our filings with the Securities and Exchange Commission.
We are under no obligation to (and expressly disclaim any such
obligation to) update or alter our forward-looking statements,
whether as a result of new information, future events or
otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20221012005726/en/
Ivan Arteaga The LGL Group, Inc. iarteaga@lglgroup.com (407)
298-2000
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