Attached files
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 (Date of earliest event reported): April 23, 2020
Pharma-Bio Serv, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
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Delaware
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0-50956
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20-0653570
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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6 Road 696, Dorado, Puerto Rico
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00646
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(787) 278-2709
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(Registrant’s
Telephone Number, Including Area Code)
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(Former
Name or Former Address, if Changed Since Last Report)
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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: None
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b2 of the Securities Exchange Act of 1934
(17 CFR §240.12b2).
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
1.01.
Entry
into a Material Definitive Agreement.
The
information under Item 2.03 of this Current Report on Form 8-K is
incorporated herein by reference.
Item
2.03.
Creation
of a Direct Financial Obligation or an Obligation under an Off
Balance Sheet Arrangement of a Registrant.
On
April 23, 2020, Pharma-Bio Serv PR, Inc., Pharma Serv, Inc., and
Pharma-Bio Serv US, Inc. (collectively, the “Borrowers”), each a
wholly-owned subsidiary of Pharma-Bio Serv, Inc. (the
“Company”), entered into loan agreements and related
promissory notes (the “SBA Loan Documents”) to
receive U.S. Small Business Administration Loans (the
“SBA
Loans”) pursuant to the Paycheck Protection Program
(the “PPP”) established under
the Coronavirus Aid, Relief, and Economic Security Act (the
“CARES
Act”), in the aggregate amount of $1,931,700 (the
“Loan
Proceeds”). The Borrowers received the Loan Proceeds
on April 23, 2020. Under the SBA Loan Documents, the SBA Loans have
a fixed interest rate of 1%, repayment begins six months from the
date of disbursement of each SBA Loan, and the SBA Loans mature two
years from the date of first disbursement. There is no prepayment
penalty.
Pursuant to the
terms of the SBA Loan Documents, the Borrowers may apply for
forgiveness of the amount due on the SBA Loans in an amount equal
to the sum of the following costs incurred by the Borrowers during
the eight-week period (or any other period that may be authorized
by the U.S. Small Business Administration) beginning on the date of
first disbursement of the SBA Loans: payroll costs, any payment of
interest on a covered mortgage obligation, payment on a covered
rent obligation, and any covered utility payment. The amount of SBA
Loan forgiveness shall be calculated in accordance with the
requirements of the PPP, including the provisions of Section 1106
of the CARES Act, although no more than 25% of the amount forgiven
can be attributable to non-payroll costs. No assurance is provided
that forgiveness for any portion of the SBA Loans will be
obtained.
The
promissory notes evidencing the SBA Loans contain customary events
of default relating to, among other things, payment defaults,
breach of representations and warranties, or provisions of the
promissory notes. The occurrence of an event of default may result
in the repayment of all amounts outstanding, collection of all
amounts owing from the Borrowers, and/or filing suit and obtaining
judgment against the Borrowers.
The
foregoing description of the SBA Loan Documents is a summary only
and is qualified in its entirely by the reference to the full text
of the loan agreements and promissory notes, which are filed as
Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, and 10.6 to this Current
Report and are incorporated herein by reference.
Item 8.01
Other Events
On
April 29, 2020, the Company's Board voted unanimously to
temporarily suspend the Company's stock repurchase plan. The Board
believes it is prudent to suspend the program due to current
economic uncertainties and will review reinstating the program at a
future date.
Item
9.01.
Financial
Statements and Exhibits.
(d) Exhibits
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Exhibit
No.
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Description
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Loan
Agreement of Pharma-Bio Serv PR, Inc. for Paycheck Protection
Program Loan, dated April 23, 2020.
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Loan
Agreement of Pharma Serv, Inc. for Paycheck Protection Program
Loan, dated April 23, 2020.
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Loan
Agreement of Pharma-Bio Serv US, Inc. for Paycheck Protection
Program Loan, dated April 23, 2020.
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Paycheck
Protection Program Note, dated April 23, 2020, executed by
Pharma-Bio Serv PR, Inc.
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Paycheck
Protection Program Note, dated April 23, 2020, executed by Pharma
Serv, Inc.
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Paycheck
Protection Program Note, dated April 23, 2020, executed by
Pharma-Bio Serv US, Inc.
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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.
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PHARMA-BIO SERV, INC. |
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Date:
April 29, 2020
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By:
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/s/
Pedro
J. Lasanta
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Pedro J.
Lasanta
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Chief Financial
Officer, Vice President Finance and Administration and
Secretary
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