Item 1.01. Entry into a Material Definitive Agreement.
On
March 1, 2021 (the “Effective Date”), Solitron Devices,
Inc. (the “Company”) entered into a Commercial Contract
(the “Agreement”) with 901 Sansbury, LLC (the
“Seller”). Under the terms of the Agreement, the
Company has agreed to buy, and the Seller has agreed to sell (the
“Transaction”), a facility and real estate property
located in West Palm Beach, Florida (the “Property”)
for a purchase price of Four Million Two Hundred Thousand
Dollars ($4,200,000.00) (the “Purchase Price”). The
Company intends to relocate its current manufacturing operations
and corporate headquarters to the Property. The Company expects the
Transaction to close on April 15, 2021, unless extended (the
“Closing”). Notwithstanding anything to the contrary in
the Agreement, the Company has thirty (30) days from the Effective
Date to conduct its due diligence to determine if the property is
suitable, at the Company's sole and absolute discretion. The
Company anticipates obtaining third-party mortgage financing in the
amount of Two Million Nine Hundred and Forty Thousand Dollars
($2,940,000) within forty-five (45) days of the Effective Date. If
the Company is unable to obtain third-party mortgage financing, the
Agreement provides that the Company is to pay the remaining
Purchase Price at closing in cash and in that case extends the
closing to April 30, 2021.
The
Purchase Price includes a deposit to be made by the Company within
three (3) days after the Effective Date of Two Hundred Thousand
Dollars ($200,000.00) to be held in escrow until Closing which
amount shall be refundable to the Company upon certain conditions
set forth in the Agreement, including if the Transaction is not
consummated as a result of the Seller's default or if the Company
elects to terminate the Agreement during the due diligence
period.
The
Closing is subject to certain customary conditions and
provisions.
The
Company’s current manufacturing operations and corporate
headquarters are located in one leased facility in West Palm Beach,
Florida. The lease is for a term ending on December 31, 2021 and
includes an option to renew the lease for an additional five years
beginning on January 1, 2022 under current terms. Assuming the
Company closes the above Transaction within the anticipated
timeline, it expects to begin making the necessary improvements to
the property in order to completely relocate its manufacturing
operations and corporate headquarters later in the calendar
year.
The
foregoing summary of the Agreement and the Transaction contemplated
thereby do not purport to be complete and are qualified in their
entirety by reference to the Agreement, a copy of which is
respectively filed as Exhibit 10.1 hereto and is incorporated
herein by reference.
