Solitron Devices, Inc. (OTCMKTS:SODI) Files An 8-K Entry into a Material Definitive Agreement
Entry into a Material Definitive Agreement.
On July 21, 2020, Solitron Devices, Inc. (the “Company”) executed a promissory note in favor of Bank of America, N.A. (the “Lender”) for an unsecured $807,415 loan under the Paycheck Protection Program (the “PPP Loan”). The Company received the proceeds of the PPP Loan on July 23, 2020.
The Paycheck Protection Program (or “PPP”) was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration.
The interest rate on the PPP Loan is 1.00%, which shall be deferred for the first six months of the term of the loan but interest will continue to accrue during such time. The PPP Loan will mature on July 21, 2025. The PPP Loan is non-recourse and unsecured. The promissory note evidencing the PPP Loan contains customary events of default relating to, among other things, bankruptcy, insolvency, dissolution, payment defaults, breach of representations and warranties, failure to provide the Lender with financial information requested, and the Lender in good faith believes that the prospect of payment by the Company of the PPP Loan is impaired. The PPP Loan may be accelerated upon the occurrence of an event of default. Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. The Company intends to use the loan proceeds for payroll costs, including payments required to continue group health care benefits, and mortgage interest, rent or utility costs and the maintenance of employee and compensation levels. No assurance is provided that the Company will obtain forgiveness of the PPP Loan in whole or in part.
The foregoing descriptions of the Promissory Note do not purport to be complete and are qualified in their entirety by reference to the full text of the Promissory Note attached to this report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.
This Form 8-K contains forward-looking statements that are made to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially. Investors are warned that forward-looking statements involve risks and unknown factors including, but not limited to: our expectations regarding the potential impacts on our operations of the COVID-19 pandemic; our expectations regarding the use of the PPP Loan proceeds; our ability to obtain forgiveness of the PPP Loan in whole or in part; potential impacts on our supply chain and on our customers of the COVID-19 pandemic; overall changes in governmental spending for military and space programs; customer cancellation or rescheduling of orders, problems affecting delivery of vendor-supplied raw materials and components, unanticipated manufacturing problems and availability of direct labor resources.
The Company does not intend to update the forward-looking statements contained herein, except as may be required by law.
Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.
The disclosure in Item 1.01 and Exhibit 10.1 of this report on Form 8-K are incorporated herein by reference.
Financial Statements and Exhibits.
10.1 Promissory Note, dated July 21, 2020, by and between Solitron Devices, Inc. and Bank of America.
SOLITRON DEVICES INC Exhibit
EX-10.1 2 sodi_ex101.htm PROMISSORY NOTE sodi_ex101 Exhibit 10.1 Promissory Note Date Loan Amount Interest Rate July 21,…
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About Solitron Devices, Inc. (OTCMKTS:SODI)
Solitron Devices, Inc. designs, develops, manufactures and markets solid-state semiconductor components and related devices primarily for the military and aerospace markets. The Company manufactures a range of bipolar and metal oxide semiconductor (MOS) power transistors, power and control hybrids, junction and power MOS field effect transistors (Power MOSFETS), field effect transistors and other related products. Other products, such as Joint Army/Navy (JAN) transistors, diodes and Standard Military Drawings (SMD) voltage regulators, are sold as standard or catalog items. Its semiconductor products are classified as active electronic components, which include bipolar transistors and MOS transistors. Its semiconductor products are used as components of military, commercial and aerospace electronic equipment, such as ground and airborne radar systems, power distribution systems, missiles, missile control systems and spacecraft. Its products are also used on the space shuttle.
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