M-Tron Industries distributed warrants that can be redeemed for more shares of MPTI. The company reported this distribution was issued as a dividend. MPTI shareholders received  one warrant for each MPTI share owned. The warrants were distributed on 4/25/2025.

Resolution:

According to the SEC filings for this transaction, the tax consequences are the same as for a simple spinoff. It is structured to be a non-taxable event for MPTI shareholders according to the prospectus filed with the SEC. Here is a link to the prospectus filing : https://www.sec.gov/Archives/edgar/data/1902314/000143774925013029/mpti20250307_424b2.htm

The cost basis allocation information is taken from the tax information included in the prospectus filing. According the prospectus, the cost basis of the warrants will be zero.

NOTE 1:

Due to the cost basis information in the prospectus, these instructions will result in zero cost basis for the warrants. A shareholder may elect a non-zero cost basis based on the fair market value of the warrants and MPTI shares. We do not recommend this election as the prospectus states the cost basis of unexercised warrants must be added back to the MPTI shares. This would add unneeded complexity to the transaction.

The Spinoff Entry

Go to Accounting > Securities > Record spinoff of securities in myICLUB.com. If you are unfamiliar with spinoff transactions you can get help at this URL: https://www.myiclub.com/faq/article.aspx?id=54

Here is the information you need to complete the spinoff. 

• Date: 4/25/2025
• Select Parent Security (or Parent Company) : M-Tron Industries (MPTI)
• Remaining Basis Percentage: 100
• Cash received:  See your broker statement for cash-in-lieu received
• Spinoff  Security (or Symbol of New Company) : M-Tron warrants (MPTI WS)
  • Shares received : 1.00 x (# of MPTI shares owned)   (Include fractional shares.)
  • For example, if you owned 100 MPTI shares, you should receive 1.00 x 100 = 100 MPTI warrants.
• Price Per Share : 1.75 (Closing price on 4/30/2025)  

NOTE 2:

While the warrant distribution was done on 4/25/2025, the earliest price we could find was for 4/30/2025.

The prospectus gave the ticker symbol for the warrants as MPTI WS. Not all price sources use this ticker. Also used are MPTIWT and MPTI-WT. The price data source for myICLUB does not include the warrants so will not be included with price downloads. Prices of the warrants for valuation dates will need to be entered by hand.