MIND Technology Announces Completion of Preferred Stock Conversion

Rhea-AI Summary

MIND Technology has completed the conversion of all its 9% Series A Cumulative Preferred Stock into common stock. The conversion, effective September 4, 2024, resulted in the issuance of approximately 6.6 million new common shares, bringing the total outstanding common shares to about 8 million. This move was approved by preferred stockholders on August 29, 2024, and executed through a Certificate of Amendment filed with the Delaware Secretary of State. Each preferred share was converted into 3.9 common shares.

Rob Capps, President and CEO of MIND, stated that this transaction provides the company with a clean capital structure and improved flexibility to create value for stockholders.

Positive

• Simplified capital structure through conversion of all preferred stock to common stock
• Increased common stock outstanding to approximately 8 million shares, potentially improving liquidity
• Elimination of preferred stock dividend obligations, potentially improving cash flow

Negative

• Dilution of existing common shareholders due to issuance of 6.6 million new common shares

Insights

Financial Analyst

The conversion of MIND Technology's preferred stock to common stock marks a significant shift in the company's capital structure. This move eliminates the 9% dividend obligation associated with the preferred shares, potentially improving cash flow. The conversion ratio of 3.9 common shares for each preferred share has resulted in substantial dilution, with the common share count increasing from about 1.4 million to 8 million. While this dilution may initially concern some investors, it's important to note that the simplified capital structure could make the stock more attractive to a broader range of investors. The elimination of the preferred stock tier also removes a layer of complexity in the company's financials, which may enhance transparency and potentially improve the company's ability to raise capital in the future if needed.

Market Research Analyst

MIND Technology's stock structure simplification comes at a important time for the marine technology industry. The sector is experiencing increased demand due to offshore wind farm development and defense applications. By converting preferred shares, MIND has positioned itself to be more agile in a competitive market. The move could potentially improve the stock's liquidity, making it more appealing to institutional investors who often shy away from complex capital structures. However, the significant dilution might put short-term pressure on the stock price. Investors should watch for any changes in trading volume and institutional ownership in the coming months as indicators of the market's reception to this new capital structure. The company's ability to leverage this cleaner structure for growth initiatives will be critical in determining the long-term impact on shareholder value.

Legal Expert

The completion of MIND Technology's preferred stock conversion demonstrates a well-executed corporate action that required careful navigation of legal and regulatory requirements. The process included a shareholder vote, board approval and proper filing with the Delaware Secretary of State, all of which were completed in compliance with corporate law. This transaction eliminates the preferential rights and liquidation preferences associated with the preferred stock, potentially simplifying future corporate actions and reducing legal complexities in capital raising efforts. However, the company must now be vigilant about maintaining compliance with Nasdaq listing requirements, particularly the minimum bid price, given the significant increase in outstanding shares. Additionally, the company should review its SEC filings and ensure all disclosures are updated to reflect this material change in capital structure to maintain transparency and regulatory compliance.

THE WOODLANDS, Texas, Sept. 5, 2024 /PRNewswire/ -- MIND Technology, Inc. ("MIND" or the "Company") (Nasdaq: MIND; MINDP) announced that it has effected the conversion of all shares of its 9% Series A Cumulative Preferred Stock, $1.00 par value per share (the "Preferred Stock"), into the Company's common stock, $0.01 par value per share.  On August 30, 2024 the Company's Board of Directors elected to proceed with filing the Certificate of Amendment, which provided for the conversion of each share of Preferred Stock into 3.9 shares of common stock, with the Delaware Secretary of State.  The amendment had been approved by the holders of the Preferred Stock at a virtual special meeting on August 29, 2024.  The amendment and the resulting conversion was effective at 4:01 p.m. Eastern Time on September 4, 2024.

Rob Capps, President and CEO of MIND, stated, "We issued approximately 6.6 million shares of common stock in this transaction and now have approximately 8 million shares of common stock outstanding. This transaction provides us with a clean capital structure and good flexibility from which to create value for our stockholders," concluded Capps.

About MIND Technology

MIND Technology, Inc. provides technology to the oceanographic, hydrographic, defense, seismic and security industries. Headquartered in The Woodlands, Texas, MIND has a global presence with key operating locations in the United States, Singapore, Malaysia, and the United Kingdom.  Its Seamap unit designs, manufactures, and sells specialized, high performance, marine exploration and survey equipment. 

Forward-looking Statements

Certain statements and information in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, our objectives for future operations, future orders and anticipated delivery of existing orders, and future payments of dividends are forward-looking statements.  The words "believe," "expect," "anticipate," "plan," "intend," "should," "would," "could" or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature.  These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us.  While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.  All comments concerning our expectations for future revenues and operating results are based on our forecasts of our existing operations and do not include the potential impact of any future acquisitions or dispositions.  Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, without limitation, reductions in our customers' capital budgets, our own capital budget, limitations on the availability of capital or higher costs of capital, volatility in commodity prices for oil and natural gas.

Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof.  We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, unless required by law, whether as a result of new information, future events or otherwise. All forward-looking statements included in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to herein.

Contacts:	Rob Capps, President & CEO
	MIND Technology, Inc.
	281-353-4475
	Ken Dennard / Zach Vaughan
	Dennard Lascar Investor Relations
	713-529-6600
	MIND@dennardlascar.com

 

View original content:https://www.prnewswire.com/news-releases/mind-technology-announces-completion-of-preferred-stock-conversion-302238468.html

SOURCE MIND Technology, Inc.

FAQ

When did MIND Technology (MIND) complete its preferred stock conversion?

MIND Technology completed its preferred stock conversion on September 4, 2024, at 4:01 p.m. Eastern Time.

How many new common shares did MIND Technology (MIND) issue in the conversion?

MIND Technology issued approximately 6.6 million new common shares in the preferred stock conversion.

What was the conversion ratio for MIND Technology's (MIND) preferred stock to common stock?

Each share of MIND Technology's preferred stock was converted into 3.9 shares of common stock.

How many total common shares does MIND Technology (MIND) have outstanding after the conversion?

After the preferred stock conversion, MIND Technology has approximately 8 million shares of common stock outstanding.