Scientific Industries Inc 8-K, filed Apr 21, 2020
Scientific Industries Inc (SCND)
8-K
2020-04-21
For: 2020-04-14
View Original
Added on
April 06, 2026
About this 8-K
Scientific Industries Inc filed this 8-K on April 21, 2020, reporting on events of April 14, 2020.
Items reported
- Item 1.01: Entered into a material agreement
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 14, 2020
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SCIENTIFIC INDUSTRIES, INC.
_________________________________________________
(Exact
name of registrant as specified in its charter)
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Delaware
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000-6658
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04-2217279
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(State
or other Jurisdiction)
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(Commission
File Number)
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(IRS
Employer No.)
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80 Orville Drive
Bohemia, New York 11716
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(Address
of principal executive offices)
(631) 567-4700
__________________________________________________
(Registrant's
telephone number, including area code)
Not Applicable
__________________________________________________
(Former
name or former address, if changed since last report)
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On
April 14, 2020, the Company entered into a loan agreement with its
bank, First National Bank of Pennsylvania pursuant to a note
amounting to $563,700 under the U.S. Small Business Administration
Paycheck Protection Program. The note has a maturity date of April
17, 2022 with an interest rate of 1%. The loan is subject , in all
respects, to the Coronavirus Aid, Relief, and Economic Security
Act, with an initial deferment period of six months and a loan
forgiveness provision whereby the Company may apply for forgiveness
of an amount equal to payroll, rent, and utility payments made
during the eight-week period following the date of the
loan.
ITEM 9.01 Financial Statements and Exhibits
(a) and
(b) not applicable
(c)
Exhibits
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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SCIENTIFIC INDUSTRIES, INC.
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Date: April 21, 2020
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By:
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/s/ Helena R. Santos
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Helena R. Santos,
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President and Chief Executive Officer
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U.S. SMALL BUSINESS ADMINISTRATION
PAYCHECK PROTECTION PROGRAM
NOTE
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SBA
Loan #:
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66687171-01
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SBA
Loan Name:
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Paycheck Protection Program
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Loan
Date:
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4/14/2020
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Loan
Amount:
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$563,700.00
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Interest
Rate:
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1.00%
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Maturity
Date:
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4/17/2022
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Borrower:
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SCIENTIFIC INDUSTRIES INC
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Lender:
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First National Bank of
Pennsylvania
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This
Note represents the Loan (as defined below) made by Lender pursuant
to the Paycheck Protection Program (the “PPP”). Borrower confirms
and agrees that the Loan is subject in all respects to the
Coronavirus Aid, Relief, and Economic Security Act and the
requirements, rules, regulations, procedures and guidance
concerning the PPP as from time to time promulgated by the U.S.
Department of Treasury and/or SBA (collectively, the
“PPP
Regulations”), including, without limitation, all PPP
Regulations applicable to permitted uses of loan proceeds and loan
forgiveness.
1.
PROMISE TO PAY
In
return for the Loan, Borrower promises to pay to the order of
Lender the amount of $563,700.00, interest on the unpaid principal
balance, and all other amounts required by this Note.
2.
DEFINITIONS
“Loan” means the loan
evidenced by this Note.
“Loan
Documents” means the documents related to this Loan
signed by Borrower, including the Borrower Application Form for the
Paycheck Protection Program and the Use of Proceeds Certificate and
Borrower Certificate executed and delivered by Borrower in
connection with this Note.
“SBA” means the Small
Business Administration, an Agency of the United States of
America.
3.
PAYMENT TERMS
Borrower must make
all payments at the place and in the method Lender designates. The
payment terms for this Note are:
Initial Deferment Period: No payments
are due on this Loan for 6 months from the date of first
disbursement of this Loan. Interest will continue to accrue during
the deferment period. After the Initial Deferment Period, to the
extent not prohibited by the PPP
Loan
Forgiveness: Borrower may apply to Lender for forgiveness of
the amount due on this Loan in an amount equal to the sum of the
following costs incurred by Borrower during the 8-week period
beginning on the date of first disbursement of this
Loan:
a. Payroll costs
b. Any payment of interest on a covered mortgage obligation (which
shall not include any prepayment of or payment of principal on a
covered mortgage obligation)
c. Any payment on a covered rent obligation d. Any covered utility
payment
The
amount of Loan forgiveness shall be calculated (and may be reduced)
in accordance with the requirements of the PPP, including the
provisions of Section 1106 of the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act) (P.L. 116-136). Not more than 25%
of the amount forgiven can be attributable to non-payroll costs. If
Borrower has received an EIDL advance, then that amount shall
be subtracted from the loan forgiveness amount.
Maturity: This Note will mature two years from date of first
disbursement of this Loan.
Repayment Terms:
Interest Rate: The interest
rate on this Note is one percent per year. The interest rate is
fixed and will not be changed during the life of the
Loan.
Installment Payments Following
Deferment Period: Borrower must pay monthly principal and
interest payments in 18 equal installments on the outstanding
principal balance on the Loan amortized over the term of the Loan,
unless otherwise forgiven in whole or in part in accordance with
the PPP Regulations, beginning 7 months from the date of this Note
until the maturity date. Payments of principal and interest must be
made on such date as designated by Lender in the months during
which they are due.
Application of Installment
Payments: Lender will apply each installment payment first
to pay interest accrued to the day Lender received the payment,
then to bring principal current, and will apply any remaining
balance to reduce principal.
Payment at Maturity: All
remaining principal and accrued interest is due and payable two
years from the date of first disbursement of this
Loan.
Loan
Prepayment: Notwithstanding any provision in this Note to
the contrary:
Borrower may prepay this Note at any time
without penalty. Borrower may prepay 20 percent or less of
the unpaid principal balance at any time without notice. IfBorrower
prepays more than 20 percent and the Loan has been sold on the
secondary market, Borrower must:
a. Give
Lender written notice;
b. Pay
all accrued interest; and
c. If
the prepayment is received less than 21 days from the date Lender
received the notice, pay an amount equal to 21 days interest from
the date lender received the notice, less any interest accrued
during the 21 days and paid under b. of this
paragraph.
Non-Recourse: Lender and SBA shall have
no recourse against any individual shareholder, member or partner
of Borrower for non-payment of the Loan, except to the extent that
such shareholder, member or partner uses the Loan proceeds for an
unauthorized purpose.
Late Fees: Following the Initial
Deferment Period, to the extent not prohibited by the PPP
Regulations or the loan authorization applicable to the Loan (in
each case as determined by Lender in its sole discretion), if the
Lender has not received the full amount of any monthly payment by
the end of fifteen (15) calendar days after the date it is due,
Borrower agrees to pay a late charge to the Lender. The amount of
the charge will be 4.0% of Borrower’s overdue payment of
principal and interest.
4.
DEFAULT
Borrower is in
default under this Note if Borrower does not make a payment when
due under this Note, or if Borrower:
A.
Fails to do anything required by this Note and other Loan
Documents;
B.
Defaults on any other loan with Lender;
D.
Makes, or anyone acting on its behalf makes, (i) a materially false
or misleading representation to Lender or SBA or (ii) a false or
incorrect statement or certification in any certificate,
attestation or agreement included in any Loan
Documents;
E.
Defaults on any loan or agreement with another creditor, if Lender
believes the default may materially affect Borrower’s ability
to pay this Note;
F.
Fails to pay any taxes when due;
G.
Becomes the subject of a proceeding under any bankruptcy or
insolvency law;
H. Has
a receiver or liquidator appointed for any part of their business
or property; I. Makes an assignment for the benefit of
creditors;
J. Has
any adverse change in financial condition or business operation
that Lender believes may materially affect Borrower’s ability
to pay this Note;
K.
Reorganizes, merges, consolidates, or otherwise changes ownership
or business structure without Lender’s prior written consent;
or
L.
Becomes the subject of a civil or criminal action that Lender
believes may materially affect Borrower’s
ability to pay this Note.
5.
LENDER’S RIGHTS IF THERE IS A DEFAULT
Without
notice or demand and without giving up any of its rights, Lender
may:
A.
Require immediate payment of all amounts owing under this
Note;
B.
Collect all amounts owing from Borrower; or
C.
File suit and obtain judgment.
6.
LENDER’S GENERAL POWERS
Without
notice and without Borrower’s consent, Lender
may:
A.
Incur expenses to collect amounts due under this Note, enforce the
terms of this Note or any other Loan Document. Among other things,
the expenses may include payments for property taxes, prior liens,
insurance, appraisals, environmental remediation costs, and
reasonable attorney’s fees and costs. If Lender incurs such
expenses, it may
demand
immediate repayment from Borrower or add the expenses to the
principal balance; and
B.
Release anyone obligated to pay this Note.
7.
WHEN FEDERAL LAW APPLIES; GOVERNING LAW AND VENUE
When
SBA is the holder, this Note will be interpreted and enforced under
federal law, including SBA regulations. As to this Note, Borrower
may not claim or assert against SBA any local or state law to deny
any obligation, defeat any claim of SBA, or preempt federal
law.
When
the SBA is not the holder, this Note will be interpreted and
enforced under the laws of the Commonwealth of Pennsylvania (the
“Lender’s
State”). All judicial proceedings arising in or under
or related to the Loan, this Note or any of the other Loan
Documents may be brought in any state or federal court located in
the Lender’s State. By execution and delivery of this Note,
Borrower generally and unconditionally: (a) consents to
nonexclusive personal jurisdiction in the Lender’s State; (b)
waives any objection as to jurisdiction or venue in the
Lender’s State; (c) agrees not to assert any defense based on
lack of jurisdiction or venue in the aforesaid courts; and (d)
irrevocably agrees to be bound by any judgment rendered thereby in
connection with the Loan, this Loan or the other Loan
Documents.
8.
SUCCESSORS AND ASSIGNS
Under
this Note, Borrower includes its successors, and Lender includes
its successors and assigns. Lender may at any time assign to one or
more assignees all or a portion of its rights and obligations under
this Note.
9.
GENERAL PROVISIONS
A. All
individuals and entities signing this Note as a Borrower are
jointly and severally liable.
B.
Borrower waives all suretyship defenses.
C.
Borrower must sign all documents necessary at any time to comply
with the Loan Documents.
D.
Lender may exercise any of its rights separately or together, as
many times and in any order it chooses. Lender may delay or forgo
enforcing any of its rights without giving up any of
them.
E.
Borrower may not use an oral statement of Lender or SBA to
contradict or alter the written terms of this Note.
F. If
any part of this Note is unenforceable, all other parts remain in
effect.
G. To
the extent allowed by law, Borrower waives all demands and notices
in connection with this Note, including presentment, demand,
protest, and notice of dishonor. Borrower also waives any defenses
based upon any claim that Lender did not obtain any
guarantee.
H.
Borrower’s execution, delivery and performance of this Note
and all other Loan Documents have been duly authorized by all
necessary corporate action of Borrower. The individual or
individuals executing this Note and all other Loan Documents are
duly authorized to do so.
10.
FURTHER ASSURANCES
The
Loan and this Note are subject in all respects to the PPP
Regulations, including any PPP Regulations promulgated after the
date of this Note. If, after the date of this Note, any further PPP
Regulations are promulgated or if the PPP Regulations mandate a
form of or the terms of the note, loan authorization or other loan
documents for PPP loans, Borrower agrees to execute any further
instruments and documents and to take such further actions as
Lender requests, including exchanging this Note for a new note,
executing an amendment to this Note, or executing any other loan
documents that Lender requests. In the event of any exchange of or
amendment to this Note, the disbursement date applicable to the
Loan (and all related time periods under the PPP Regulations and
the maturity date applicable to this Loan) shall be the same as set
forth in this Note.
11.
BORROWER ’S NAME AND SIGNATURE
By
signing below, each individual or entity executing this Note as
“Borrower” becomes obligated under this Note as
Borrower.
BORROWER:
SCIENTIFIC
INDUSTRIES INC
By:
s Maria H. Santos
MARIA
SANTOS, PRESIDENT
USE OF PROCEEDS
CERTIFICATE
This
Use of Proceeds Certificate is dated as of the date set forth below
and is delivered to First National Bank of Pennsylvania
(“Lender”) in connection
with the loan (the “Loan”) to be made by
Lender to the undersigned borrower (“Borrower”) pursuant to
the Paycheck Protection Program (the “PPP”) and guaranteed by
the Small Business Administration (the “SBA”).
The
undersigned, on his, her or its own behalf or as a duly elected,
qualified and acting officer of Borrower, certifies to Lender that
Borrower will use the Loan proceeds for the purposes specified
below:
$563,700.00
for Payroll Costs
and Payments on Mortgage Interest, Rent, Utilities and Interest on
Other Debt Obligations (at least 75% of this amount shall be used
for Payroll Costs)
IN
WITNESS WHEREOF, the undersigned has executed this Use of Proceeds
Certificate on his, her or its own behalf or as a duly elected,
qualified and acting officer of Borrower, as of the date set forth
below.
BORROWER:
SCIENTIFIC
INDUSTRIES INC
By:
s Maria Santos
MARIA
SANTOS PRESIDENT
BORROWER
CERTIFICATE
This
Borrower Certificate is dated as of the date set forth below and is
delivered to First National Bank of Pennsylvania
(“Lender”) in connection
with the loan (the “Loan”) to be made by
Lender to the undersigned borrower (“Borrower”) pursuant to
the Paycheck Protection Program (the “PPP”) and guaranteed by
the Small Business Administration (the “SBA”).
The
undersigned, on his, her or its own behalf or as a duly elected,
qualified and acting officer of
Borrower, certifies
to Lender as follows:
1.
Borrower acknowledges that if Borrower defaults on the Loan, SBA
may be required to pay Lender under the SBA guarantee, and SBA may
then seek recovery on the Loan (to the extent any balance remains
after loan forgiveness).
2.
Borrower will keep books and records in a manner satisfactory to
Lender, furnish financial statements as requested by Lender, and
allow Lender and SBA to inspect and audit books, records and papers
relating to Borrower’s financial or business
condition.
3.
Borrower will not, without Lender’s consent, change its
ownership structure, make any distribution of company assets that
would adversely affect its financial condition, or transfer
(including pledging) or dispose of any assets, except in the
ordinary course of business.
4. All
of the certifications made by Borrower in the Paycheck Protection
Program Borrower Application Form exclusively prepared and executed
by Borrower, and delivered to Lender, are true and correct in all
respects as of the date of this Borrower Certificate.
5. The
resolutions attached to this Borrower Certificate as Exhibit A are a full, true and
correct copy of the resolutions adopted by the Borrower’s
board of directors or other applicable governing body, and said
resolutions have not been in any way modified, repealed, rescinded,
amended or revoked.
IN
WITNESS WHEREOF, the undersigned has executed this Borrower
Certificate on his, her or its own behalf or as a duly elected,
qualified and acting officer of Borrower, as of the date set forth
below.
BORROWER:
SCIENTIFIC
INDUSTRIES INC
By:
s Maria Santos
MARIA
SANTOS PRESIDENT
Exhibit
A
to
Borrower
Certificate
RESOLVED, that
SCIENTIFIC INDUSTRIES INC (“Borrower”) be, and hereby
is, authorized to borrow from FIRST NATIONAL BANK OF PENNSYLVANIA
(“Lender”) $563,700.00 pursuant to a loan made by
Lender pursuant to the Paycheck Protection Program.
RESOLVED FURTHER,
that any officer of Borrower be, and he or she is hereby
authorized, directed and empowered, in the name of Borrower, to
execute and deliver to Lender all applications, notes, and other
documents and instruments providing for such loan and evidencing
such loan, with interest thereon, and said officers are authorized
from time to time to execute renewals, extensions and/or amendments
of said applications, notes and other documents and instruments,
all in such form as said officers may approve, and the execution
thereof by said authorized officers shall be conclusive evidence of
such approval.
RESOLVED FURTHER,
that any and all acts authorized pursuant to these resolutions and
performed prior to the passage of these resolutions are hereby
ratified and approved, and that Lender may conclusively rely upon a
certified copy of these resolutions as to the officers of Borrower
and continue to conclusively rely on such certified copy of these
resolutions for all past, present and future transactions until
written notice of any change hereto or thereto is given to Lender
by Borrower by certified mail, return receipt
requested.
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