UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended May 31, 2004
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________ to _________
Commission file number 001-04978
Solitron Devices, Inc.
----------------------
(Exact name of small business issuer as specified in its charter)
Delaware 22-1684144
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
3301 Electronics Way, West Palm Beach, Florida 33407
----------------------------------------------------
(Address of principal executive offices)
(561) 848-4311
--------------
(Issuer's telephone number, including area code)
N/A
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [_]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of July 6, 2004: 2,076,351
Transitional Small Business Disclosure Format (check one):
Yes [_] No [X]
1
SOLITRON DEVICES, INC.
INDEX
PART 1 - FINANCIAL INFORMATION
------------------------------
Page No.
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Item 1. Financial Statements (unaudited):
Consolidated Balance Sheets 3
May 31, 2004 and February 29, 2004
Consolidated Statement of Operations 4
Three Months Ended May 31, 2004 and 2003
Consolidated Statements of Cash flows 5
Three Months Ended May 31, 2004 and 2003
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial Condition and 8-11
Results of Operations
Item 3. Controls and Procedures 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
2
SOLITRON DEVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
May 31, 2004 February 29, 2004
------------ -----------------
(Unaudited) (Audited)
(in thousands, except for share
amounts)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,958 $ 1,883
Accounts receivable 897 988
Inventories 2,440 2,416
Prepaid expenses and other current assets 166 164
------------ -----------------
TOTAL CURRENT ASSETS 5,461 5,451
PROPERTY, PLANT AND EQUIPMENT, net 596 562
OTHER ASSETS 52 52
------------ -----------------
TOTAL ASSETS $ 6,109 $ 6,065
============ =================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of accrued environmental expenses $ 986 $ 966
Accounts payable - Post petition 448 409
Accounts payable-Pre-petition, current portion 840 851
Accrued expenses and other liabilities 1,200 1,189
------------ -----------------
TOTAL CURRENT LIABILITIES 3,474 3,415
LONG TERM LIABILITIES, net of current portion 13 33
------------ -----------------
TOTAL LIABILITIES 3,487 3,448
------------ -----------------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, authorized 500,000
shares, none issued -0- -0-
Common stock, $.01 par value, authorized 10,000,000
shares, 2,076,351 shares issued and outstanding 21 21
Additional paid-in capital 2,620 2,620
Accumulated deficit (19) (24)
------------ -----------------
TOTAL STOCKHOLDERS' EQUITY 2,622 2,617
------------ -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,109 $ 6,065
============ =================
The accompanying notes are an integral part of the financial statements
3
SOLITRON DEVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MAY 31,
2004 2003
---- ----
(Unaudited) (Unaudited)
(in thousands, except for
share amounts and per
share amounts)
Net sales $ 1,934 $ 2,000
Cost of sales 1,604 1,555
----------- -----------
Gross profit 330 445
Selling, general and administrative expenses 318 248
----------- -----------
Operating income 12 197
----------- -----------
Other (expense) income
Other (expense) income (5) 21
Interest expense (2) (5)
----------- -----------
Net other (expense) income (7) 16
----------- -----------
Net income $ 5 $ 213
=========== ===========
INCOME PER SHARE OF COMMON STOCK:
Basic $ 0.002 $ 0.10
----------- -----------
Diluted $ 0.002 $ 0.10
----------- -----------
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 2,076,351 2,070,821
=========== ===========
Diluted 2,076,351 2,070,821
=========== ===========
The accompanying notes are an integral part of the financial statements
4
SOLITRON DEVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MAY 31,
(In thousands)
2004 2003
---- ----
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 5 $ 213
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 42 15
Changes in operating assets and liabilities:
(Increase) Decrease in:
Accounts receivable 92 114
Inventories (25) (29)
Prepaid expenses and other current assets (2) 21
Increase (Decrease) in:
Accounts payable 38 (174)
Accounts payable - Pre-petition (11) 0
Accrued expenses and other liabilities 11 15
Accrued environmental expenses 19 30
Other long term liabilities (19) (30)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 150 175
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (75) (59)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (75) (59)
----------- -----------
NET INCREASE IN CASH 75 116
CASH AT BEGINNING OF PERIOD 1,883 1,448
----------- -----------
CASH AT END OF PERIOD $ 1,958 $ 1,564
=========== ===========
The accompanying notes are an integral part of the financial statements
5
SOLITRON DEVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General:
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments), which are, in the opinion of management, necessary for a fair
statement of the results for the interim period.
The accompanying unaudited interim consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission for reporting on Form 10-QSB. Pursuant to such rules and regulations,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted.
The information contained in this Form 10-QSB should be read in conjunction with
the Notes to Consolidated Financial Statements appearing in the Company's Annual
Report on Form 10-KSB for the year ended February 29, 2004.
The results of operations for the three-month period ended May 31, 2004 are not
necessarily indicative of the results to be expected for the year ending
February 28, 2005.
2. ENVIRONMENTAL REGULATION:
While the Company believes that it has the environmental permits necessary to
conduct its business and that its operations conform to present environmental
regulations, increased public attention has been focused on the environmental
impact of semiconductor operations. The Company, in the conduct of its
manufacturing operations, has handled and does handle materials that are
considered hazardous, toxic or volatile under federal, state, and local laws
and, therefore, is subject to regulations related to their use, storage,
discharge, and disposal. No assurance can be made that the risk of accidental
release of such materials can be completely eliminated. In the event of a
violation of environmental laws, the Company could be held liable for damages
and the costs of remediation and, along with the rest of the semiconductor
industry, is subject to variable interpretations and governmental priorities
concerning environmental laws and regulations. Environmental statutes have been
interpreted to provide for joint and several liability and strict liability
regardless of actual fault. There can be no assurance that the Company and its
subsidiaries will not be required to incur costs to comply with, or that the
operations, business, or financial condition of the Company will not be
materially adversely affected by, current or future environmental laws or
regulations.
The information contained in this Form 10-QSB should be read in conjunction with
the "Business - Environmental Liabilities" section appearing in the Company's
Annual Report on Form 10-KSB for the year ended February 29, 2004.
3. INVENTORIES:
As of May 31, 2004 net inventories consist of the following:
Raw Materials $1,472,000
Work-In-Process 1,243,000
Finished Goods 291,000
----------
Gross Inventories 3,006,000
Reserve (566,000)
----------
Net Inventories $2,440,000
==========
6
SOLITRON DEVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. INVENTORIES (continued):
The raw materials inventory balance reflects purchases and material usage during
the period. Cycle counts are performed in the raw materials stockrooms weekly
and monthly cycle count adjustments are recorded. Work-in-process inventory is
counted and adjusted semiannually. The finished goods inventory balance reflects
shipments from and transfers to the finished goods stockroom during the period.
The inventory reserve balance is adjusted semiannually for work-in-process and
annually for finished goods and raw materials in conjunction with physical
inventory counts.
4. RELATED PARTY TRANSACTIONS (STOCK OPTION AWARDS):
On May 17, 2004, the Board of Directors granted stock options to certain key
employees. The options, which will vest on May 16, 2005, were for a total of
47,500 shares and the exercise price was fixed at $1.05 per share (the closing
price on the Over-The-Counter Bulletin Board at the time of the grant). On the
same date, the Board of Directors awarded Mr. Saraf 175,636 shares, which are
fully vested, to replace options that expired during fiscal year 2004. The
exercise price was fixed at $1.05 per share (the closing price on the
Over-The-Counter Bulletin Board at the time of the grant). The Company did not
recognize any expense associated with this award.
5. SUBSEQUENT EVENT:
The Company's former controller filed a "Whistleblower" claim with the U.S.
Department of Labor, Occupational Safety & Health Administration (OSHA) pursuant
to Section 806 of the Sarbanes-Oxley Act of 2002, codified at 185 U.S.C. Section
1514A, which is also known as the "Corporate and Criminal Fraud Accountability
Act of 2002". The matter is being handled as an administrative proceeding before
OSHA.
Following an investigation of this matter by a duly authorized investigator,
OSHA issued its Findings and Preliminary Order (the "Findings") on June 30,
2004. In the Findings, OSHA found that it was not reasonable to believe that the
Company violated 185 U.S.C. 1514A of the Sarbanes-Oxley Act. Additionally, OSHA
determined that since none of the alleged adverse actions were linked to a
reprisal for voicing concerns protected under the Sarbanes-Oxley Act, the case
is to be dismissed. The Company's former controller has 30 days from the receipt
of the Findings to file objections and request a hearing on the record, or the
Findings will become final and not subject to court review.
6. RECENT ACCOUNTING PRONOUNCEMENTS:
Management does not believe that any recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying consolidated financial statements. Also, Management believes that
accounting standards adopted during fiscal year 2004 are not applicable to the
Company.
7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Overview:
Solitron Devices, Inc., a Delaware corporation (the "Company" or "Solitron"),
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
power transistors, power and control hybrids, junction and MOS field effect
transistors 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
transistors, diodes and Standard Military Drawings voltage regulators, are sold
as standard or catalog items.
The following discussion and analysis of factors which have affected the
Company's financial position and operating results during the periods included
in the accompanying condensed consolidated financial statements should be read
in conjunction with the Consolidated Financial Statements and the related Notes
to Consolidated Financial Statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations included in the Company's Annual
Report on Form 10-KSB for the year ended February 29, 2004 and the Condensed
Consolidated Financial Statements and the related Notes to Condensed
Consolidated Financial Statements included in Item 1 of this Quarterly Report on
Form 10-QSB.
Critical Accounting Policies:
Our financial statements and accompanying notes are prepared in accordance with
generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue, and expenses. These
estimates and assumptions are affected by management's application of accounting
policies. Our critical accounting policies include inventories, valuation of
plant, equipment and intangible assets, revenue recognition and accounting for
income taxes. A discussion of all of these critical accounting policies can be
found in the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" section of our Annual Report on Form 10-KSB for the
fiscal year ended February 29, 2004.
Trends and Uncertainties:
During the three months ended May 31, 2004, the company's book-to-bill ratio was
approximately .91, reflecting a decrease in the volume of orders booked. The
Company does not believe that the change in the book-to-bill ratio indicates a
specific trend in the demand for the Company's products. Generally, the intake
of orders over the last eighteen months has varied greatly as a result of the
fluctuations in the general economy and of variations in defense spending on
programs the Company supports, which is expected to continue over the next
twelve months. The Company continues to identify means intended to reduce its
variable manufacturing costs to offset the potential impact of low volume of
orders to be shipped should a slow down in the intake of orders reoccur.
However, should order intake fall significantly below the level experienced in
the last twelve months, the Company might be required to implement further cost
cutting or other downsizing measures to continue its business operations.
8
Results of Operations-Three Months Ended May 31, 2004 Compared to Three Months
Ended May 31, 2003:
Net sales for the three months ended May 31, 2004 decreased approximately 3% to
$1,934,000 as compared to $2,000,000 for the three months ended May 31, 2003.
This increase was primarily attributable to a lower level of scheduled orders
that were shipped in accordance with customer requirements.
Cost of sales for the three months ended May 31, 2004 increased to $1,604,000
from $1,555,000 for the comparable period in 2003. Expressed as a percentage of
sales, cost of sales increased to approximately 83% from approximately 78% for
the same period in 2003. This change was due primarily to increases in material
costs (30% vs. 27%) and indirect labor costs (10% vs. 8%) expressed as a
percentage of sales.
Gross profit for the three months ended May 31, 2004 decreased to $330,000 from
$445,000 for the three months ended May 31, 2003. Accordingly, gross margins on
the Company's sales decreased to approximately 17% for the three months ended
May 31, 2004 in comparison to approximately 22% for the three months ended May
31, 2003. This change was due partly to a lower level of shipments and partly to
increases in material and indirect labor costs as shown in the preceding
paragraph.
For the three months ended May 31, 2004, the Company shipped 96,988 units as
compared with 154,722 units shipped during the same period of the prior year. It
should be noted that since the Company manufactures a wide variety of products
with an average sale price ranging from less than one dollar to several hundred
dollars, such periodic variations in the Company's volume of units shipped might
not be a reliable indicator of the Company's performance.
The Company's backlog of open orders decreased approximately 3% for the three
months ended May 31, 2004 as compared to an increase of approximately 5% for the
three months ended May 31, 2003. Changes in the backlog reflect changes in the
intake of orders.
The Company has experienced an increase in the level of bookings of
approximately 37% for the quarter ended May 31, 2004 as compared to the same
period for the previous year principally as a result of a higher demand for its
products in this period.
Selling, general, and administrative expenses increased to $318,000 for the
three months ended May 31, 2004 from $248,000 for the comparable period in 2003.
During the three months ended May 31, 2004, selling, general, and administrative
expenses as a percentage of sales increased to approximately 16% as compared
with approximately 12% for the three months ended May 31, 2003. This increase is
due in part to an approximately $47,000 increase in legal fees, $35,000 of which
is a result of our dispute with our landlord and $12,000 as a result of the
ongoing formal investigation by the SEC. The increase is also due in part to an
approximately $17,000 increase in accounting fees, $7,000 of which is a result
of the ongoing formal investigation by the SEC and $10,000 resulting from an
increase in our fiscal year 2004 audit fee.
The Company recorded an Operating Income of $12,000 for the three months ended
May 31, 2004 compared to $197,000 for the three months ended May 31, 2003. This
decrease is due primarily to a $66,000 decrease in sales, a $64,000 increase in
cost of sales and a $70,000 increase in selling, general and administrative
expenses.
The Company recorded net other expense of $5,000 for the three months ended May
31, 2004 versus $16,000 for the three months ended May 31, 2003. The decrease
was due primarily to recognition of $10,000 of other expense relating to
accounts receivable adjustments.
Net income for the three months ended May 31, 2004 was approximately equal to
$5,000 as compared to $213,000 for the same period in 2003. This decrease in net
income is mainly due to a $66,000 decrease in sales, a $64,000 increase in cost
of sales, and a $70,000 increase in selling, general and administrative
expenses.
9
Liquidity and Capital Resources:
The Company's sole source of liquidity is cash generated by ongoing operations.
The Company's liquidity is expected to be adversely affected in the short term
due to the anticipated lower level of revenue in the next six to nine months.
The Company's liquidity is not expected to improve until the Company's revenues
increase to a level above its breakeven point.
Furthermore, the Company's liquidity continues to be adversely affected by
significant non-recurring expenses associated with the Company's 1993 bankruptcy
petition obligations and the Company's inability to obtain additional working
capital through the sale of debt or equity securities. For a more complete
discussion of the Company's bankruptcy obligations, see "Business - Bankruptcy
Proceedings" in the Company's Form 10-KSB filed for the period ended February
29, 2004.
The Company is required to make quarterly payments to holders of unsecured
claims until they receive 35 percent (35%) of their pre-petition claims. As of
May 31, 2004, the Company has paid approximately $462,000 to its unsecured
creditors. The Company`s remaining obligation is approximately $1,863,000 to
holders of allowed unsecured claims in quarterly installments.
The Company reported a net income of $5,000 and operating income of $12,000 for
the three months ended May 31, 2004. The Company has significant obligations
arising from settlements related to its bankruptcy proceeding which require it
to make substantial cash payments, which cannot be supported by the Company's
current level of operations.
At May 31, 2004, February 29, 2004 and May 31, 2003 respectively, the Company
had cash of $1,958,000, $1,883,000 and $1,564,000. A reduction in accounts
receivable contributed $92,000 to the last three months' positive cash flow
generated by ongoing operations.
At May 31, 2004, the Company had working capital of $1,987,000 as compared with
a working capital at May 31, 2003 of $2,332,000. At February 29, 2004, the
Company had a working capital of 2,036,000. The approximately $49,000 decrease
for the three months ended May 31, 2004 was due mainly to a decrease in accounts
receivable.
Off-Balance Sheet Arrangements:
We are not involved in any off-balance sheet arrangements.
FORWARD-LOOKING STATEMENTS
Information in this Form 10-QSB, including any information incorporated by
reference herein, includes "forward looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Act of 1934, as amended, and is subject to the safe-harbor created by
such sections. The Company's actual results may differ significantly from the
results discussed in such forward-looking statements.
Statements regarding:
o sources and availability of liquidity;
o the Company's expectations regarding its liquidity;
o the Company's beliefs regarding the change in book-to-bill ratio;
o the Company's expectations regarding fluctuations in the general economy
and variations in defense spending;
o the Company's ability to generate sufficient cash flow from operations to
sustain operations;
o the Company's ability to implement effectively cost-cutting or downsizing
measures;
o the Company's compliance with environmental laws, orders and
investigations and the future cost of such compliance;
o implementation of the Plan of Reorganization and the Company's ability to
make payments required under the Plan of Reorganization or otherwise to
generate sufficient cash from operations or otherwise;
o the Company's belief regarding the effect of recently issued, but not yet
effective, accounting standards; and
10
o other statements contained in this report that address activities, events
of developments that the Company expects, believes or anticipates will or
may occur in the future, and similar statements are forward-looking
statements.
These statements are based upon assumptions and analyses made by the Company in
light of current conditions, future developments and other factors the Company
believes are appropriate in the circumstances, or information obtained from
third parties and are subject to a number of assumptions, risks and
uncertainties. Readers are cautioned that forward-looking statements are not
guarantees of future performance and that actual results might differ materially
from those suggested or projected in the forward-looking statements. Factors
that may cause actual future events to differ significantly from those predicted
or assumed include, but are not limited to:
o the loss of certification or qualification of the Company's products or
the inability of the Company to capitalize on such certifications and/or
qualifications;
o unexpected rapid technological change;
o a misinterpretation of the Company's capital needs and sources and
availability of liquidity;
o a change in government regulations which hinders the Company's ability to
perform government contracts;
o a shift in or misinterpretation of industry trends;
o unforeseen factors which impair or delay the development of any or all of
its products;
o inability to sustain or grow bookings and sales;
o inability to capitalize on competitive strengths or a misinterpretation of
those strengths;
o the emergence of improved, patented technology by competitors;
o a misinterpretation of the nature of the competition, the Company's
competitive strengths or its reputation in the industry;
o inability to respond quickly to customers' needs and to deliver products
in a timely manner resulting from unforeseen circumstances;
o inability to generate sufficient cash to sustain operations;
o failure of price or volume recovery;
o failure to successfully implement cost-cutting or downsizing measures,
strategic plans or the insufficiency of such measures and plans;
o changes in military or defense appropriations;
o inability to make or renegotiate payments under the Plan of
Reorganization;
o inability to be released from environmental liabilities;
o an increase in the expected cost of environmental compliance based on
factors unknown at this time;
o changes in law or industry regulation;
o inability to sell certain properties or to obtain expected prices for such
properties;
o unexpected growth or stagnation of the business; and
o the results of the SEC investigation.
Changes to the forward-looking statements are based on the actual
forward-looking statements in this Form 10-QSB and the actual risks affecting
those particular forward-looking statements.
ITEM 3. CONTROLS AND PROCEDURES
Based on the evaluation of the Company's disclosure controls and procedures as
of May 31, 2004, Shevach Saraf, Chairman, President, Chief Executive Officer,
Treasurer and Chief Financial Officer of the Company, has concluded that the
Company's disclosure controls and procedures are effective in ensuring that
information required to be disclosed by the Company in the reports that it files
or submits under the Securities and Exchange Act of 1934, as amended, is
recorded, processed, summarized and reported within the time period specified by
the Securities and Exchange Commission's rules and forms.
There were no significant changes in the Company's internal control over
financial reporting that has materially affected or is reasonably likely to
materially affect the Company's internal control over financial reporting.
11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
The Company's former controller filed a "Whistleblower" claim with the U.S.
Department of Labor, Occupational Safety & Health Administration (OSHA) pursuant
to Section 806 of the Sarbanes-Oxley Act of 2002, codified at 185 U.S.C. Section
1514A, which is also known as the "Corporate and Criminal Fraud Accountability
Act of 2002". The matter is being handled as an administrative proceeding before
OSHA.
Following an investigation of this matter by a duly authorized investigator,
OSHA issued its Findings and Preliminary Order (the "Findings") on June 30,
2004. In the Findings, OSHA found that it was not reasonable to believe that the
Company violated 185 U.S.C. 1514A of the Sarbanes-Oxley Act. Additionally, OSHA
determined that since none of the alleged adverse actions were linked to a
reprisal for voicing concerns protected under the Sarbanes-Oxley Act, the case
is to be dismissed. The Company's former controller has 30 days from the receipt
of the Findings to file objections and request a hearing on the record, or the
Findings will become final and not subject to court review.
The Southeast Regional Office of the Securities and Exchange Commission is
conducting a formal investigation concerning the Company. To date, the SEC
investigation has focused on the propriety of the Company's past accounting. The
Company has produced documents to the SEC, and the SEC has taken and continues
to take sworn testimony of several individuals. As of this date, the SEC has not
requested a "Wells" submission from the Company, and has not indicated an
intention to file any civil or administrative complaint against the Company. An
unfavorable outcome of the SEC investigation may have a material adverse effect
on the Company's financial condition or results of operations. At this time, we
are unable to conclude that the likelihood of an adverse outcome is probable or
remote. We therefore are unable to express an opinion as to the likelihood of an
unfavorable outcome. We also are unable to express an opinion as to an amount or
range of potential loss.
ITEM 2. CHANGES IN SECURITIES:
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
See "Management's Discussion and Analysis - Liquidity and Capital Resources" in
this Form 10-QSB and "Business - Bankruptcy Proceedings" in the Company's Form
10-KSB for the period ended February 29, 2004, for a discussion of the status of
payments pursuant to the Company's 1993 bankruptcy reorganization.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None
ITEM 5. OTHER INFORMATION:
None
12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
a) Exhibits
31 Certification of Chief Executive Officer and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Chief Executive Officer and Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
b) Reports
None
13
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SOLITRON DEVICES, INC.
Date: July 13, 2004 /s/ Shevach Saraf
-----------------------------
By: Shevach Saraf
Title: Chairman, President,
Chief Executive Officer and
Chief Financial Officer
14
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
31 Certification of Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32 Certification of Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
15