Current Report Filing (8-k)
May 04 2020 - 2:43PM
Edgar (US Regulatory)
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 29, 2020
DEEP DOWN,
INC.
(Exact name of registrant as specified
in its charter)
Nevada
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000-30351
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75-2263732
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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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18511 Beaumont Highway, Houston, TX
77049
(Address of principal executive offices)
(Zip Code)
(281) 517-5000
Registrant’s telephone number, including
area code
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
None
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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N/A
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N/A
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N/A
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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 or Rule 12b-2 of the Securities Exchange Act of 1934.
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
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
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On April 29, 2020,
a wholly owned subsidiary of Deep Down, Inc. (the “Company”) entered into an unsecured loan in the aggregate principal
amount of $1.1 million (the “Loan”) with Moody National Bank (the “Lender”) pursuant to the Paycheck
Protection Program (the “PPP”), which is sponsored by the Small Business Administration (the “SBA”). The
PPP is part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), and it provides
loans to qualifying businesses in a maximum amount equal to the lesser of $10.0 million or 2.5 times the average monthly payroll
expenses of the qualifying business. The proceeds of the loan may only be used for payroll costs, rent, utilities, mortgage interests,
and interest on other pre-existing indebtedness (the “permissible purposes”).
The Loan, and interest
accrued thereon, is forgivable, partially or in full, if certain conditions are met. The most significant of the conditions are:
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only amounts expended for permissible purposes during the eight-week period following April 27,
2020 (the “covered period”) are eligible for loan forgiveness;
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of the total amount of expenditures for which forgiveness can be granted, at least 75% must be
for payroll costs, or a proportionate reduction of the maximum loan forgiveness amount will occur; and
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if there are reductions in headcount (or employee compensation is reduced by more than 25%) during
the covered period, a further reduction of the maximum loan forgiveness amount will occur.
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The Loan is evidenced
by a promissory note, dated to be effective as of April 27, 2020 (the “Note”), between Deep Down, Inc.,
a Delaware corporation and wholly owned subsidiary of the Company (the “Borrower”), and the Lender. The Note matures
on April 27, 2022 and bears interest at a fixed rate of 1.00 percent per annum, payable in 18 monthly payments commencing on November
27, 2020. The Loan may be prepaid at any time prior to maturity with no prepayment penalties. In order to obtain full
or partial forgiveness of the Loan, the Borrower must request forgiveness and must provide satisfactory documentation in accordance
with applicable SBA guidelines. The Borrower will be obligated to repay any portion of the principal amount of the Note that is
not forgiven, together with interest accrued and accruing thereon at the rate set forth above, until such unforgiven portion is
paid in full. The Company intends to use the Loan proceeds for only permissible purposes; however, the Company can provide no assurances
that it will be eligible for forgiveness of the Loan, in whole or in part.
The foregoing summary
is only a summary of certain provisions of the Note and is qualified in its entirety by the full text of the Note, a copy of which
is attached as Exhibit 10.1 to this current Report on Form 8-K.
ITEM 2.03
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CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT
OF A REGISTRANT
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The information set
forth above in Item 1.01 is hereby incorporated by reference into this Item 2.03.
ITEM 9.01
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FINANCIAL STATEMENTS AND EXHIBITS.
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(d) Exhibits:
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 thereunto duly authorized.
Date: May 4, 2020
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DEEP DOWN, INC.
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By:
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/s/ Charles K. Njuguna
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Charles K. Njuguna
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President and Chief Executive Officer
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