UNITED STATES
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: April 23, 2020
Micropac Industries, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-5109 | 75-225149 | |||
| (State or jurisdiction of | (Commission File Number) | (IRS employer | |||
| incorporation) | Identification No.) | ||||
| 905 East Walnut Street, Garland, Texas | 75040 | |
| Address of principal executive offices | Zip Code |
Registrant’s telephone number, including area code:(972) 272-3571
| N/A |
| (Former name or former address, if changed since last report) |
| Item 1.01 | Entry into a Material Definitive Agreement. |
On April 17, 2020, Micropac Industries, Inc. (the “Company”) obtained an unsecured $1,924,400 loan under the Paycheck Protection Program (the “PPP Loan”). The Paycheck Protection Program (or “PPP”) was established under the recently congressionally-approved Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration. The PPP Loan to the Company is being made through Frost Bank, the Company’s existing lender (the “Lender”).
The term of the PPP Loan is two years. 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. The promissory note evidencing the PPP Loan contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties, or provisions of the promissory note. 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.
| 1 |
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 Form 8-K as Exhibit 10.1 and incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of the Registrant. |
The disclosure in Item 1.01 and Exhibit 10.1 of this report are incorporated herein by reference.
Forward-Looking Statements
This Form 8-K contains forward-looking statements that are made pursuant 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 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.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| 10.1 | Promissory Note, dated April 17, 2020, by and between Micropac Industries, Inc. and Frost Bank. |
SIGNATURES
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.
| Dated 4/23/2020 | MICROPAC INDUSTRIES, INC. | ||
| (Registrant) | |||
| /s/ Mark King | |||
| (Signature) | |||
| Mark King | |||
| Chief Executive Officer |
