SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): March 12, 2020
Micron Solutions, Inc.
(Exact name of registrant as specified in its charter)
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Delaware (State or other jurisdiction of Incorporation or organization) |
1-9731 (Commission File Number) |
72-0925679 (I.R.S. Employer Identification Number) |
25 Sawyer Passway
Fitchburg, MA 01420
(Address of principal executive offices and zip code)
(978) 345-5000
(Registrant's telephone number, including area code)
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:
Title of each class Trading symbol Name of each exchange on which registered
Common Stock, $0.01 par value MICR NYSE American
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. ☐
AFDOCS/21635122.5
Item 1.01 Entry into a Material Definitive Agreement
Micron Solutions, Inc., Micron Products, Inc., the wholly owned subsidiary of Micron Solutions, Inc., and Rockland Trust Company (“Lender”) entered into the Fourth Amendment and Waiver to Credit and Security Agreement (the “Agreement”) as of March 12, 2020. Pursuant to the Agreement, the Lender amended the quarterly debt service coverage ratio measurement requirements for the first three quarters of 2020. In addition, effective as of the date of occurrence, the Lender waived Micron’s non-compliance with the fourth quarter 2019 debt service coverage ratio covenant.
The foregoing description of the Agreement is a summary, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K.
Item 2.02 Results of Operations and Financial Condition.
On March 16, 2020, Micron Solutions, Inc. (the "Company") announced its financial results for the fiscal year ended December 31, 2019. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information contained in this Item 2.02 and the exhibit hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On March 16, 2020, Micron Solutions, Inc. (the "Company") issued a press release announcing its intention to voluntarily delist its Common Stock, par value $0.01 (the “Common Stock”), from the NYSE American LLC (the “Exchange”) and to deregister its Common Stock under Section 12(g) of the Exchange Act and suspend its SEC reporting obligations under Section 15(d) of the Exchange Act.
The Company has notified the Exchange of its intent to voluntarily delist its Common Stock from the Exchange. The Company currently anticipates that it will file with the Securities and Exchange Commission a Form 25 relating to the delisting of its Common Stock on or about March 26, 2020, and anticipates that the delisting of its Common Stock will become effective on or about April 6, 2020.
The Company has been reviewing its ability to regain compliance with Exchange’s stockholder equity requirements as set forth in Section 1003(a)(iii) of the NYSE American Company Guide by December 12, 2020 (the “Cure Period”), and whether to continue the listing of its Common Stock on the Exchange. After much discussion and deliberation, and after taking into account the Company’s net loss for the 2019 fiscal year, the previous four years of fiscal net losses, and the uncertainty of the transactions available to the Company to increase stockholders’ equity, including the sale of assets and capital raising, upon recommendation of a special committee comprised of independent directors, the Board of Directors has determined that it is unlikely to regain compliance with the Exchange’s stockholders’ equity requirements under Section 1003(a)(iii) of the NYSE American Company Guide by the end of the Cure Period.
The Company intends to apply to have its Common Stock quoted on the OTCQB Venture Market on the OTC Markets; however, there can be no assurances that its Common Stock will continue to be traded on such market.
Following the delisting of its Common Stock on the Exchange, the Company plans to file a Form 15 to deregister its Common Stock under Section 12(g) of the Exchange Act and suspend its reporting obligations under Section 15(d) of the Exchange Act, as the Company’s Common Stock is held by less than 300 stockholders of record. The Company is taking this further action in order to reduce legal, accounting and administrative costs associated with being an SEC reporting company and allow management to increase its focus on improving performance by reducing time spent in complying with applicable SEC reporting requirements.
The Company intends to continue to provide periodic financial information, including continuing to engage an independent public accounting firm to perform an annual audit of the Company’s financial statements. Assuming that the Company’s Common Stock is quoted on the OTCQB Venture Market, the Company will provide financial and other business information under the OTC Market’s alternative reporting standards.
The Company intends to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 with the Securities and Exchange Commission on or about March 30, 2020.
Item 7.01 Regulation FD Disclosure
On March 16, 2020, the Company issued a press release announcing its intent to file a Form 25 and to voluntarily delist its Common Stock from the Exchange and to file a Form 15 and to deregister its Common Stock under Section 12(g) of the
AFDOCS/21635122.5
Exchange Act and suspend it SEC reporting obligations. A copy of this release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Item 7.01 and the exhibit hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
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Item 9.01 |
Financial Statements and Exhibits. |
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(d) |
Exhibits. |
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Exhibit No. |
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Description
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10.1 |
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Fourth Amendment and Waiver to Credit and Security Agreement dated as of March 12, 2020 between Micron Solutions, Inc., Micron Products, Inc. and Rockland Trust Company |
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99.1 |
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Press release dated March 16, 2020. |
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AFDOCS/21635122.5
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, on the 16th day of March, 2020.
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MICRON SOLUTIONS, INC. |
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By: |
/s/ William J. Laursen |
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William J. Laursen |
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President and CEO |
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AFDOCS/21635122.5
Fourth AMENDMENT AND WAIVER TO CREDIT AND SECURITY AGREEMENT
This Fourth Amendment and Waiver to Credit and Security Agreement (this “Amendment”) is dated as of March 12, 2020 by and among MICRON PRODUCTS INC., a Massachusetts corporation ("Borrower"), MICRON SOLUTIONS, INC., a Delaware corporation (“Guarantor” and, together with Borrower, each an “Obligor” and collectively, the “Obligors”), and ROCKLAND TRUST COMPANY, a Massachusetts trust company ("Lender").
RECITALS
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A. Borrower and Lender are parties to that certain Credit and Security Agreement dated as of December 29, 2017, as amended by that certain First Amendment and Waiver to Credit and Security Agreement dated as of March 7, 2019, as further amended by that certain Second Amendment and Consent to Credit and Security Agreement dated as of August 6, 2019 and by that certain Third Amendment and Waiver to Credit and Security Agreement dated as of August 19, 2019 (the "Credit Agreement"). |
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B. Obligors have requested that Lender agree to (i) amend certain provisions of the Credit Agreement and (ii) waive certain Events of Default that have occurred as a result of Borrower’s failure to satisfy certain requirements of Section 4.3 and paragraph 1 of Schedule B-3 of the Credit Agreement, namely by virtue of failing to maintain a Debt Service Coverage Ratio of not less than 1.10 to 1.0 for the fiscal quarter ended December 31, 2019 for the trailing 3 month period then ended (the “Specified Event of Default”). |
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C. Lender has agreed to so amend certain provisions of the Credit Agreement and to waive the Specified Event of Default on the terms and conditions set forth below. |
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and each Obligor hereby agree as follows:
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1. Capitalized Terms. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Credit Agreement. |
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2. Waiver of Specified Event of Default; No Other Waiver. Effective as of the date of the occurrence of the Specified Event of Default, Lender hereby waives the Specified Event of Default. Except as expressly set forth herein with respect to the Specified Event of Default, Lender has not waived, is not hereby waiving, and has no intention of waiving, any other Event of Default or any Default. All of the terms and conditions of the Credit Agreement remain in full force and effect and none of such terms and conditions are, or shall be construed as, otherwise amended or modified, except as specifically set forth herein, and nothing in this Amendment shall constitute a waiver by Lender of any Default or Event of Default, or of any right, power or remedy available to Lender under the Credit Agreement or any other Loan Document, whether any such defaults, rights, powers or remedies presently exist or arise in the future, except as specifically set forth herein. |
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3. Amendments to Credit Agreement. |
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a. Paragraph 1 in Schedule B-3 of the Credit Agreement is amended in its entirety as follows: |
“1. DEBT SERVICE COVERAGE RATIO. Borrower shall cause to be maintained a Debt Service Coverage Ratio of not less than 1.1 to 1.0 with respect to the Borrower’s fiscal quarters ending March 31, 2020 and each fiscal quarter thereafter, in each case as calculated for the trailing 12 month period then ended with respect to each such fiscal quarter; provided that the fiscal quarter ending March 31, 2020 shall be calculated for the trailing 3 month period then ended with respect to such fiscal quarter, the fiscal quarter ending June 30, 2020 shall be calculated for the trailing 6 month period then ended with respect to such fiscal quarter and the fiscal quarter ending September 30, 2020 shall be calculated for the trailing 9 month period then ended with respect to such fiscal quarter.”.
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4. Representations and Warranties. Borrower represents and warrants to Lender that (a) all of the representations and warranties made in the Credit Agreement are true and accurate as of the date hereof as if made as of the date hereof (except as the same may relate to an earlier date), and (b) after giving effect to this Amendment, no Default or Event of Default exists. |
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5. Conditions Precedent.The effectiveness of this Amendment is subject to the satisfaction of the following: |
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a. the execution and delivery of this Amendment by all parties hereto; |
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b. receipt by the Lender from the Borrower of a $5,000 amendment fee, together with payment for any fees and expenses reasonably incurred by Lender in connection with this Amendment; and |
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c. receipt by the Lender from the Obligors of such other documents reasonably requested by the Lender, including, without limitation, that certain certificate of good standing of each Obligor, issued by the Secretary of State of the Commonwealth of Massachusetts or the Secretary of State of the State of Delaware, as applicable, in each case issued within thirty (30) days prior to the date hereof. |
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6. Acknowledgements. Each Obligor hereby acknowledges, ratifies, reaffirms, and agrees that the Credit Agreement and the other Loan Documents, as applicable, are enforceable against each Obligor in accordance with their terms and applicable law, and the security interests granted to Lender thereunder in the Collateral are and will remain enforceable perfected first priority security interests which secure the payment and performance by Borrower of the Obligations and Guarantor’s guarantee of Borrower’s payment and performance of the Obligations. |
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7. Release. Each Obligor hereby acknowledges and agrees that it has no defense, counterclaim, offset, cross-complaint, claim or demand of any kind of nature whatsoever that can be asserted to reduce or eliminate all or any part of its liability to repay or guarantee the repayment of the Obligations or to seek affirmative relief or damages of any kind or nature from Lender which are known to it as of the date hereof. Each Obligor hereby voluntarily and knowingly releases and forever discharges Lender and each of its respective predecessors, agents, employees, affiliates, successors and assigns (collectively, the “Released Parties”) from all known claims, demands, actions, causes of action, damages, costs, expenses and liabilities whatsoever, anticipated or unanticipated, suspected or unsuspected, fixed, contingent or conditional, at law or in equity, in any case originating in whole or in part on or before the date this Amendment becomes effective that either Obligor may now or hereafter have against the Released Parties, if any, irrespective of whether any such claims arise out of contract, tort, violation of law or regulations, or otherwise, and that arise from any extension of credit made under the Credit Agreement, the exercise of any rights and remedies under the Credit Agreement or any other Loan Document, and/or the negotiation for and execution of this Amendment, including, without limitation, any contracting for, charging, taking, reserving, collecting or receiving interest in excess of the highest lawful rate applicable. |
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8. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constituting one and the same instrument. |
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9. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the Applicable State. |
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as a sealed instrument as of the first date above written.
BORROWER:
MICRON PRODUCTS INC.
By: ___________________________________
Name: Wayne Coll
Title: Chief Financial Officer
GUARANTOR:
MICRON SOLUTIONS, INC.
By: ___________________________________
Name: Wayne Coll
Title: Chief Financial Officer
LENDER:
ROCKLAND TRUST COMPANY
By: ___________________________________
Name: Thomas Meehan
Title: Relationship Manager
Signature Page to Fourth Amendment and Waiver to Credit and Security Agreement
Micron Solutions, Inc. Announces Intention to Voluntarily Delist and Deregister its Common Stock; Financial Results for Fiscal 2019
March 16, 2020
Page 1 of 2
25 Sawyer Passway ● Fitchburg, Massachusetts 01420
FOR IMMEDIATE RELEASE
Micron Solutions, Inc. Announces
Intention to Voluntarily Delist and Deregister its Common Stock
Financial Results for Fiscal Year End 2019
FITCHBURG, MA, March 16, 2020 – Micron Solutions, Inc. (NYSE American: MICR) (the “Company”), a diversified contract manufacturing organization, through its wholly-owned subsidiary, Micron Products, Inc., producing highly-engineered, innovative components requiring precision machining and injection molding, announced today its Intention to voluntarily delist from the NYSE American (the “Exchange”) and to deregister its Common Stock under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) and suspend its SEC reporting obligations under Section 15(d) of the Exchange Act. The Company is announcing its fourth quarter and year end results for the period ended December 31, 2019.
Delisting and Deregistration:
On March 16, 2020, the Company notified the Exchange of its intent to voluntarily delist its Common Stock from the Exchange. The Company currently anticipates that it will file with the Securities and Exchange Commission a Form 25 relating to the delisting of its Common Stock on or about March 26, 2020, and anticipates that the delisting of its Common Stock will become effective on or about April 6, 2020.
The Company has been reviewing its ability to regain compliance with the Exchange’s stockholder equity requirements as set forth in Section 1003(a)(iii) of the NYSE American Company Guide by December 12, 2020 (the “Cure Period”), and whether to continue the listing of its Common Stock on the Exchange. After much discussion and deliberation, and after taking into account the Company’s net loss for the 2019 fiscal year, the previous four years of fiscal net losses, and the uncertainty of the transactions available to the Company to increase stockholders’ equity, including the sale of assets and capital raising, within the Cure Period, upon recommendation of a special committee comprised of independent directors, the Board of Directors has determined that it is unlikely to regain compliance with the Exchange’s stockholders’ equity requirements under Section 1003(a)(iii) of the NYSE American Company Guide by the end of the Cure Period.
The Company intends to apply to have its Common Stock quoted on the OTCQB Venture Market on the OTC Markets; however, there can be no assurances that its Common Stock will continue to be traded on such market.
Following the delisting of its Common Stock on the Exchange, the Company plans to file a Form 15 to deregister its Common Stock under Section 12(g) of the Exchange Act and suspend its reporting obligations under Section 15(d) of the Exchange Act, as the Company’s Common Stock is held by less than 300 stockholders of record. The Company is taking this further action in order to reduce legal, accounting and administrative costs associated with being an SEC reporting company and allow management to increase its focus on improving performance by reducing time spent in complying with applicable SEC reporting requirements.
The Company intends to continue to provide periodic financial information, including continuing to engage an independent public accounting firm to perform an annual audit of the Company’s financial
-END-
Micron Solutions, Inc. Announces Intention to Voluntarily Delist and Deregister its Common Stock; Financial Results for Fiscal 2019
March 16, 2020
Page 2 of 2
statements. Assuming that the Company’s Common Stock is quoted on the OTCQB Venture Market, the Company will provide financial and other business information under the OTC Market’s alternative reporting standards.
CEO Bill Laursen commented, “We believe that the alternative of listing on the OTCQB would allow us to continue to maintain a trading platform for our shareholders along with the ability to provide quarterly and annual financial reporting, at a reduced cost more appropriate for a company our size. This change will also allow us to better focus our efforts on improving operational performance.”
2019 Financial Results:
The Company intends to report its complete audited financial results when it files its Annual Report on Form 10-K for the fiscal year ended December 31, 2019 with the Securities and Exchange Commission which is expected to be filed on or before March 30, 2020. For fiscal year ended December 31, 2019, the Company expects to report the following financial results:
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Micron Solutions, Inc. |
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Earnings Results |
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(Unaudited) |
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(In Thousands, except per share data) |
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Year Ended December 31, |
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2019 |
2018 |
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Net Sales |
$17,499 | $19,565 | ||
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Cost of Goods Sold |
15,737 | 17,241 | ||
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Gross Profit |
1,762 | 2,324 | ||
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Operating Expenses |
3,477 | 3,081 | ||
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Net Loss from Operations |
(1,715) | (758) | ||
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Interest Expense |
432 | 391 | ||
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Other Income |
(6) | (53) | ||
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Income Tax Provision |
- |
2 | ||
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Net Loss |
$(2,141) | $(1,098) | ||
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Weighted Average Common Shares Outstanding, Basic and Diluted |
2,884 | 2,850 | ||
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Loss Per Share - Basic and Diluted |
$(0.74) | $(0.39) | ||
-END-
Micron Solutions, Inc. Announces Intention to Voluntarily Delist and Deregister its Common Stock; Financial Results for Fiscal 2019
March 16, 2020
Page 3 of 2
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Micron Solutions, Inc. |
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Selected Balance Sheet Data |
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(Unaudited) |
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(In Thousands) |
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Year Ended December 31, |
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2019 |
2018 |
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Accounts Receivable, Net |
$ 2,152 |
$ 2,326 |
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Inventories |
2,469 |
3,685 |
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Total Assets |
$ 8,734 |
$ 12,281 |
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Revolving Line of Credit & Notes Payable |
5,302 |
5,972 |
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Total Liabilities |
$ 6,532 |
$ 8,193 |
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Total Shareholder's Equity |
2,202 |
4,088 |
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Total Liabilities and Shareholder's Equity |
$ 8,734 |
$ 12,281 |
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About Micron Solutions, Inc.
Micron Solutions, Inc., through its wholly-owned subsidiary, Micron Products, Inc., is a diversified contract manufacturing organization that produces highly-engineered, innovative medical device components requiring precision machining and injection molding. The Company also contract manufactures components, devices and equipment for military, law enforcement, industrial and automotive applications. In addition, the Company is a market leader in the production and sale of silver/silver chloride coated and conductive resin sensors used as consumable component parts in the manufacture of integrated disposable electrophysiological sensors. The Company’s strategy for growth is to build a best-in-class contract manufacturer with a specialized focus on plastic injection molding and highly-engineered medical devices and components requiring precision machining.
The Company routinely posts news and other important information on its websites:
http://www.micronsolutionsinc.com and http://www.micronproducts.com
Safe Harbor Statement
Forward-looking statements made herein are based on current expectations of Micron Solutions, Inc. (“our” or the “Company”) that involve a number of risks and uncertainties and should not be considered as guarantees of future performance. The factors that could cause actual results to differ materially include our ability to obtain and retain order volumes from customers who represent significant proportions of net sales; our ability to maintain our pricing model, offset higher costs with price increases and/or decrease our cost of sales; variability of customer delivery requirements; the level of and ability to generate sales of higher margin products and services; our ability to manage our level of debt and provisions in the debt agreements which could make the Company sensitive to the effects of economic downturns and limit our ability to react to changes in the economy or our industry; failure to comply with financial and other covenants in our credit facility; reliance on revenues from exports and impact on
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Micron Solutions, Inc. Announces Intention to Voluntarily Delist and Deregister its Common Stock; Financial Results for Fiscal 2019
March 16, 2020
Page 3 of 2
financial results due to economic uncertainty or downturns in foreign markets; volatility in commodity and energy prices and our ability to offset higher costs with price increases; continued availability of supplies or materials used in manufacturing at competitive prices; variations in the mix of products sold; continued availability of supplies or materials used in manufacturing at competitive prices; and the amount and timing of investments in capital equipment, sales and marketing, engineering and information technology resources. More information about the Company's financial results is included in the Company's most recent Annual Report on Form 10-K and other subsequent filings with the Securities and Exchange Commission.
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For more information, contact: |
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Mr. Wayne Coll |
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Chief Financial Officer |
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978.345.5000 |
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