Preferred Shareholders Facing a Dilemma with MIND Technology’s Exchange Proposal – What You Need to Know Before Voting

Houston, Texas – MIND Technology, Inc., a micro-cap provider of technology and solutions for various industries, is facing challenges with its cash generation and outstanding preferred stock. The company, formerly known as Mitcham Industries, reported disappointing financial results for the first quarter of fiscal year 2025. Despite experiencing declining revenues and backlog, the company’s demand for products has been on the rise in recent quarters, leading to improved profitability in fiscal year 2024.

However, MIND Technology’s ongoing struggle with cash flow has forced the company to defer dividend payments on its 9.00% Series A Cumulative Preferred Stock. To address this issue, the company has proposed converting the preferred shares into new common shares at a ratio of 1:3.9. While this conversion could potentially benefit preferred shareholders, the proposal requires approval from 2/3 of the outstanding preferred stock, posing a significant obstacle.

Preferred shareholders are now faced with a critical decision – either approve the conversion proposal and potentially benefit from a calculated value of approximately $17 per share, or risk facing dire consequences such as a severe drop in share price or the issuance of convertible debt. The approval of the proposal could also result in intense selling pressure on the company’s common shares.

With the virtual special meeting of preferred shareholders scheduled to reconvene on June 27, the company is urging shareholders to vote promptly. While the proposal presents an arbitrage opportunity for preferred shareholders, the risks involved in the decision-making process are substantial. The outcome of the vote will not only impact the company’s capital structure but also influence the future prospects of common and preferred shareholders alike.

Given the complex nature of the situation, preferred shareholders must carefully weigh the potential outcomes and implications of their decisions. Ultimately, the approval or rejection of the proposed conversion will have profound effects on the financial landscape of MIND Technology and its stakeholders.