UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report
(Date of earliest event
reported):
April
16,
2021
Solitron Devices, Inc.
(Exact
Name of Registrant as Specified in its Charter)
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Delaware
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001-04978
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22-1684144
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(State or other
jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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3301
Electronics Way, West Palm Beach, Florida
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33407
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(Address of
principal executive offices)
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(Zip
Code)
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(561) 848-4311
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
☐
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name of
each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§ 230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§ 240.12b-2 of this
chapter).
Emerging
growth company □
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. □
Section 1 – Registrant's Business and Operations
Item
1.01.
Entry
into a Material Definitive Agreement.
The
information set forth in Item 2.03 is hereby incorporated by
reference into this Item 1.01.
Section 2 – Financial Information
Item
2.01
Completion
of Acquisition or Disposition of Assets.
On
April 16, 2021, Solitron Devices, Inc. (the "Company") closed on
the acquisition of a facility and real estate located in West Palm
Beach, Florida for a purchase price of $4,200,000.00 pursuant to
the Commercial Contract entered into on March 1, 2021 and
previously disclosed on Form 8-K filed with the Securities and
Exchange Commission on March 4, 2021. In connection with the
acquisition, the Company obtained mortgage financing from Bank of
America, N.A. in the amount of $2,940,000 to fund that portion of
the total purchase price.
The
Company expects to begin making the necessary improvements to the
property acquired in order to completely relocate its manufacturing
operations and corporate headquarters later in the calendar
year.
Item
2.03
Creation
of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
In
order to fund $2,940,000 of the total purchase price for the
property acquired as described in Item 2.01 above, the Company
entered into the following principal loan documents on April 16,
2021 with Bank of America, N.A.: (i) Master Credit Agreement; (ii)
Note; (iii) Mortgage, Assignment of Rents, Security Agreement and
Fixture Filing; and (iv) Financial Covenant Agreement. Pursuant to
the terms of the Note, the loan for $2,940,000 accrues interest at
a fixed rate of 3.80% per year and matures on April 15, 2031.
Beginning on May 15, 2021, the Company will pay monthly
installments of $17,593.06 consisting of principal and interest.
The payment and performance of the loan for $2,940,000 is secured
by a security interest in the property acquired pursuant to the
Mortgage, Assignment of Rents, Security Agreement and Fixture
Filing. The Master Credit Agreement contains certain
representations and warranties, undertakings and events of default
customary for these types of agreements. Additionally, under the
terms of the Financial Covenant Agreement, the Company has agreed
to maintain a fixed charge coverage ratio of at least 1.15:1.0,
calculated at the end of each fiscal year, using the results of the
twelve-month period ending with that reporting period, and has
agreed to maintain on a consolidated basis a minimum of
unrestricted, unencumbered liquid assets of no less than
$1,000,000.
The
foregoing summaries of the Master Credit Agreement, Note, Mortgage,
Assignment of Rents, Security Agreement and Fixture Filing, and
Financial Covenant Agreement are qualified in their entirety by
reference to the agreements, copies of which are filed with this
report as Exhibits 10.1-10.4 and are incorporated herein by
reference.
Section 9 – Financial Statements and Exhibits
Item
9.01.
Financial
Statements and Exhibits.
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Exhibit No.
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Description
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Master
Credit Agreement, dated as of April 15, 2021, between Solitron
Devices, Inc. and Bank of America, N.A.
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Note,
dated as of April 15, 2021, between Solitron Devices, Inc. and Bank
of America, N.A.
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Mortgage,
Assignment of Rents, Security Agreement and Fixture Filing, dated
as of April 15, 2021, by Solitron Devices, Inc. to Bank of America,
N.A.
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Financial
Covenant Agreement, dated as of April 15, 2021, between Solitron
Devices, Inc. and Bank of America, N.A.
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SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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SOLITRON
DEVICES, INC.
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Date:
April 21, 2021
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By:
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/s/ Tim Eriksen
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Tim
Eriksen
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Chief Executive
Officer and Interim Chief
Financial Officer
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