8-K

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):   December 29, 2020

Solitron Devices, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	001-04978	22-1684144
(State<br>or Other Jurisdiction of Incorporation)	(Commission<br>File Number)	(IRS Employer<br>Identification No.)
3301<br>Electronics Way, West Palm Beach, Florida	33407
---	---
(Address<br>of Principal Executive Offices)	(Zip<br>Code)

(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))

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. □

Item 2.02

On December 29, 2020, Solitron Devices, Inc. (“Solitron” or the “Company”) issued a press release announcing preliminary revenue and bookings for the third quarter of fiscal year 2021, preliminary financials for the first and second quarters of fiscal 2021, and updated expectations for fiscal 2021. A copy of the press release is furnished hereto as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit<br>No.	Description
99.1	Press<br>Release issued by Solitron Devices, Inc.

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.

	SOLITRON<br>DEVICES, INC.
December 29,<br>2020	By:	/s/ <br>Tim<br>Eriksen
		Tim<br>Eriksen
		Chief<br>Executive Officer and<br><br><br>Interim<br>Chief Financial Officer

sodi_ex991

Exhibit 99.1

SOLITRON DEVICES, INC. FINANCIAL/CORPORATE UPDATE

WEST PALM BEACH, FL – Solitron Devices, Inc. (OTCBB: SODI) (“Solitron” or the “Company”) is providing the following financial/corporate update.

FISCAL 2021 THIRD QUARTER HIGHLIGHTS

➢

Net sales of approximately $2.3 million in the fiscal 2021 third quarter (three month period ending November 30, 2020) versus $2.3 million in the prior year period

➢

Net bookings of $1.3 million in the fiscal 2021 third quarter versus $3.5 million in prior year period

➢

Cash and securities of approximately $3.7 million and debt of $0.8 million under our PPP loan at the end of the fiscal 2021 third quarter versus cash and securities of $2.9 million and debt of $0.8 million at the end of the fiscal 2021 second quarter.

➢

Accounts Receivable was $1.1 million at the end of the fiscal 2021 third quarter as compared to $1.8 million at the end of the fiscal 2021 second quarter and $1.4 million at the end of fiscal 2020.

In a year of unusual challenges, our team has done a remarkable job. We are on track to come close to, meet or exceed the updated fiscal year 2021 expectations from our September press release of $10.5 million in net sales, $11.5 million of bookings, and a meaningful improvement in net income.

For the first nine months of fiscal 2021 net sales were $7.9 million versus $7.2 million in the first nine months of fiscal 2020. Our current estimate for fiscal 2021 fourth quarter net sales is $2.4 to $2.7 million. This would result in net sales for fiscal 2021 of between $10.3 million and $10.6 million. If achieved, it would be the first time the company has exceeded $10 million in fiscal year revenues since the company went through a reorganization more than 25 years ago. As a reminder, when current management took over in 2016 trailing twelve months sales were approximately $7.5 million.

Due to COVID-19 we have experienced significant delays in bookings. In the first nine months of fiscal 2021 bookings were just $4.4 million versus $9.1 million for the first nine months of fiscal 2020. So far in the month of December we have received bookings in excess of $6.6 million and expect to receive approximately another $1.0 to $1.5 million of additional bookings before the end of the fiscal year in February 2021. As a reminder, timing is always uncertain with regard to the receipt of government/defense related contracts.

In July, based on the then current economic uncertainty due to the resurgence of the coronavirus in the country, and South Florida in particular, and the impact of the COVID-19 on our bookings, the Company applied for and was approved for a PPP loan in the amount of $0.8 million. We will be eligible to apply for forgiveness in January.

Below are preliminary unaudited financials for the first two quarters of fiscal 2021

SOLITRON DEVICES, INC.

BALANCE SHEETS

AS OF AUGUST 31, 2020, MAY 31, 2020 AND FEBRUARY 29, 2020

(In thousands except for share and per share amounts)

	May 31,<br><br><br>2020	Feb. 29,<br><br><br>2020
	(unaudited)	(unaudited)
ASSETS
CURRENT<br>ASSETS
Cash<br>and cash equivalents	1,549	1,332
Securities	211	164
Accounts<br>receivable	1,300	1,379
Inventories,<br>net	3,290	2,870
Prepaid<br>expenses and other current assets	179	118
TOTAL<br>CURRENT ASSETS	6,529	5,863
Property,<br>Plant and Equipment, Net	369	405
Operating<br>Lease - Right-of-Use Asset	630	723
Other<br>Assets	45	45
TOTAL<br>ASSETS	7,573	7,036
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT<br>LIABILITIES
Accounts<br>payable	314	269
Customer<br>deposits	24	53
Notes<br>Payable (PPP Loan)	-	-
Operating<br>Lease Liability	417	417
Accrued<br>expenses and other current liabilities	690	438
TOTAL<br>CURRENT LIABILITIES	1,445	1,177
Operating<br>Lease Liability	276	377
TOTAL<br>LIABILITIES	1,721	1,554
STOCKHOLDERS’<br>EQUITY
Preferred<br>stock, .01 par value, authorized 500,000 shares, none<br>issued	-	-
Common<br>stock, .01 par value, authorized 10,000,000 shares,
2,060,456<br>shares outstanding, net of 510,807 treasury shares
at<br>August 31, 2020; 2,062,949 shares outstanding, net of
508,314<br>treasury shares at May 31, 2020 and February 29, 2020	21	21
Additional<br>paid-in capital	1,834	1,834
Retained<br>Earnings	5,478	5,109
Less<br>treasury stock	( 1,481)	( 1,481)
TOTAL<br>STOCKHOLDERS’ EQUITY	5,852	5,483
TOTAL<br>LIABILITIES AND STOCKHOLDERS’ EQUITY	7,573	7,037

All values are in US Dollars.

SOLITRON DEVICES, INC.

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED AUGUST 31, 2020, MAY 31, 2020, AUGUST 31, 2019 AND MAY 31, 2019

(Unaudited, in thousands except for share and per share amounts)

	Fiscal second<br><br><br>quarter ended	Fiscal first<br><br><br>quarter ended	Fiscal second<br><br><br>quarter ended	Fiscal first<br><br><br>quarter ended
	8/31/2020	5/31/2020	8/31/2019	5/31/2019
Net<br>Sales	3,103	2,498	2,420	2,557
Cost<br>of Sales	1,978	1,642	1,958	2,366
Gross<br>Profit	1,125	856	462	191
Selling,<br>General and Administrative Expenses	526	486	672	444
Operating<br>Income (Loss)	599	370	( 210)	( 253)
Other<br>income (loss)
Interest<br>Income	-	-	1	-
Dividend<br>Income	1	6	( 7)	1
Realized<br>gain (loss) on investments	11	15	3	( 16)
Unrealized<br>gain (loss) on investments	24	( 22)	-	19
Total<br>other income (loss)	36	( 1)	( 3)	4
Net<br>Income (Loss)	635	369	( 213)	( 249)
Net<br>Income (Loss) Per Share-Basic and diluted	$0.31	$0.18	$(0.11)	$(0.13)
Weighted<br>average shares outstanding	2,060,457	2,062,949	2,013,959	1,901,959

SOLITRON DEVICES, INC.

STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED AUGUST 31, 2020 AND AUGUST 31, 2019

(Unaudited, in thousands)

	2020	2019
Net income<br>(loss)	$1,004	$(462)
Adjustments to<br>reconcile net income (loss)
to net cash used in<br>operating activities:
Depreciation<br>and amortization	119	108
Amortization<br>of ROU Asset	187	185
Net<br>realized and unrealized losses (gains) on investments	( 28)	1
Stock<br>based compensation	-	282
Changes<br>in Operating Assets and Liabilities:
Accounts<br>receivable	( 403)	152
Inventories	( 298)	909
Payments<br>on Operating Lease Liabilities	( 204)	( 185)
Prepaid<br>expenses and other current assets	( 131)	( 35)
Other<br>assets	-	-
Accounts<br>payable	56	( 411)
Customer<br>deposits	( 24)	33
Accrued expenses,<br>other current and non current liabilities	447	( 103)
Net<br>cash provided by (used in) operating activities	725	474
Investing<br>activities
Proceeds<br>from sale of securities	272	45
Purchases<br>of Securities	( 272)	( 32)
Purchases<br>of property and equipment	( 40)	( 68)
Net<br>cash provided by (used in) investing activities	( 40)	( 55)
Financing<br>activities
Proceeds<br>from SBA Paycheck Protection Program loan	807	-
Purchase<br>of treasury stock	( 6)	-
Net<br>cash provided by financing activities	802	-
Net increase<br>(decrease) in cash and cash equivalents	1,487	419
Cash and cash<br>equivalents - beginning of the year	1,332	394
Cash and cash<br>equivalents - end of period	$2,819	$813

The preliminary, unaudited financial information disclosed in this press release for the fiscal 2020 and 2021 first, second and third quarters are based on management's review of operations for those periods and the information available to the Company as of the date of this press release. An independent registered public accounting firm has not reviewed or performed any procedures with respect to the preliminary, unaudited financial information presented for the fiscal quarters and fiscal years ended November 30, 2020, August 31, 2020, May 31, 2020, February 29, 2020, November 30, 2019, August 31,2019, May 31, 2019, February 28, 2019, or February 28, 2018, nor completed the audit for the fiscal year ended February 28, 2017.

About Solitron Devices, Inc.

Solitron Devices, Inc., a Delaware corporation, designs, develops, manufactures and markets solid state semiconductor components and related devices primarily for the military and aerospace markets. The Company manufactures a large variety of bipolar and metal oxide semiconductor (“MOS”) power transistors, power and control hybrids, junction and power MOS field effect transistors (“Power MOSFETS”), and other related products. Most of the Company's products are custom made pursuant to contracts with customers whose end products are sold to the United States government. Other products, such as Joint Army/Navy (“JAN”) transistors, diodes and Standard Military Drawings voltage regulators, are sold as standard or catalog items. The Company was incorporated under the laws of the State of New York in March 1959 and reincorporated under the laws of the State of Delaware in August 1987.

Forward-Looking Statements

This press release contains forward-looking statements regarding future events and the future performance of Solitron Devices, Inc. that involve risks and uncertainties that could materially affect actual results, including statements regarding the Company’s unaudited fiscal 2020 and 2021 first, second and third quarter results and the Company’s expectations regarding bookings, net sales, and net income in fiscal 2021. Factors that could cause actual results to vary from current expectations and forward-looking statements contained in this press release include, but are not limited to: (1) the successful completion of the two-year audit the Company is currently undergoing; (2) actual bookings, net sales and net income for fiscal year 2021; (3) the global impact of the pandemic outbreak of coronavirus (COVID-19) and its impact on our operations and the operations of our suppliers and clients, staffing levels and labor costs, the timing and size of orders from our clients, our delivery schedules and our liquidity and cash position (4) our ability to properly account for inventory in the future; (5) our ability to protect the Company’s net operating losses and tax benefits; (6) volatility and changes in our stock price, corporate or other market conditions; (7) the loss of, or reduction of business from, substantial clients; (8) our dependence on government contracts, which are subject to termination, price renegotiations and regulatory compliance; (9) changes in government policy or economic conditions; (10) increased competition; (11) the uncertainty of current economic conditions, domestically and globally; and (12) other factors contained in the Company’s Securities and Exchange Commission filings, including its most recent Form 10-K, 10-Q and 8-K reports.

Tim Eriksen

Chief Executive Officer

(561) 848-4311

Corporate@solitrondevices.com