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Note 3 - Related Party Transactions
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]

3.     Related Party Transactions

 

In the normal course of business, the Company enters into various transactions with affiliated companies. Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial or operating decisions.

 

The following tables summarize income and expenses from transactions with related parties for the three and six months ended June 30, 2024 and 2023:

  

Three Months Ended June 30,

  

2024

 

2023

  

Income

 

Expense

 

Income

 

Expense

GAMCO Investors, Inc.

 $45  $—  $—  $— 

The LGL Group, Inc.

  12   27   12   — 

Total

 $57  $27  $12  $— 

 

  

Six Months Ended June 30,

  

2024

 

2023

  

Income

 

Expense

 

Income

 

Expense

GAMCO Investors, Inc.

 $79  $—  $—  $— 

The LGL Group, Inc.

  24   53   24   28 

Total

 $103  $53  $24  $28 

 

The following table summarizes assets and liabilities with related parties as of  June 30, 2024 and December 31, 2023:

  

June 30, 2024

 

December 31, 2023

  

Assets

 

Liabilities

 

Assets

 

Liabilities

GAMCO Investors, Inc.

 $4,844  $—  $2,765  $— 

The LGL Group, Inc.

  74   —   —   — 

Total

 $4,918  $—  $2,765  $— 

 

The material agreements whereby the Company generates revenues and expenses with affiliated entities are discussed below:

 

Investment Activity with GAMCO Investors, Inc.

 

Certain balances are held and invested in U.S. Treasury funds managed or advised by GAMCO Investors, Inc. or one of its subsidiaries (collectively, "GAMCO" or the "Fund Manager"), which is related to the Company through certain of our shareholders. For the three and six months ended June 30, 2024, the Company paid the Fund Manager a fund management fee of approximately 8 basis points annually of the asset balances under management. For the three and six months ended June 30, 2023, the Company did not pay the Fund Manager a fund management fee as no assets were under management. The fund management fees are not paid directly by the Company and are deducted prior to the fund striking its net asset value ("NAV").

 

As of  June 30, 2024 and December 31, 2023, the balance with the Fund Manager was $4,844 and $2,765, respectively, all of which was classified within Cash and cash equivalents on the Condensed Consolidated Balance Sheets.

 

For the three and six months ended June 30, 2024, the Company earned income on its investments with the Fund Manager totaling $45 and $79, respectively, all of which was included in Interest income on the Condensed Consolidated Statements of Operations.

 

For the three and six months ended June 30, 2023, the Company did not earn any income on its investments with the Fund Manager.

 

Transactions with The LGL Group, Inc.

 

Transitional Administrative and Management Services Agreement

On October 7, 2022, the separation of the MtronPTI business from The LGL Group, Inc. ("LGL Group") was completed (the "Separation") and the Company became an independent, publicly traded company trading on the NYSE American under the stock symbol "MPTI." The Separation was completed through LGL Group's distribution (the "Distribution") of 100% of the shares of the Company's common stock to holders of LGL Group's common stock as of the close of business on September 30, 2022, the record date for the Distribution. 

 

MtronPTI and The LGL Group, Inc. ("LGL Group") entered into an Amended and Restated Transitional Administrative and Management Services Agreement ("MtronPTI TSA"), which sets out the terms for services to be provided between the two companies post Separation. The current terms result in a net monthly payment of $4 per month from LGL Group to MtronPTI.

 

For the three months ended June 30, 2024 and 2023, LGL Group paid the Company $12 under the terms of the MtronPTI TSA, which were recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations. For the six months ended June 30, 2024 and 2023, LGL Group paid the Company $24 under the terms of the MtronPTI TSA, which were recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations.

 

 

Tax Indemnity and Sharing Agreement

MtronPTI and LGL Group entered into a Tax Indemnity and Sharing Agreement ("MtronPTI Tax Agreement"), which sets out the terms for which party would be responsible for taxes imposed on LGL Group if the Distribution, together with certain related transactions, were to fail to qualify as a tax-free transaction under Internal Revenue Code ("IRC") Sections 355 and 368(a)(1)(D) if such failure were the result of actions taken after the Distribution by MtronPTI or LGL Group.

 

For the three and six months ended June 30, 2024 and 2023, no taxes related to the Distribution have been recorded in the Condensed Consolidated Financial Statements.

 

Other Transactions

MtronPTI and LGL Group agreed to share the salaries and benefits related to certain employees incurred by LGL Group. For the three and six months ended June 30, 2024, the Company reimbursed LGL Group $27 and $53, respectively, of the salaries and benefits of certain employees, which represents 50% of those costs and were recorded in Engineering, selling and administrative on the Condensed Consolidated Statements of Operations.