SOLITRON DEVICES INC
For the period ended Feb 28, 2025. Filed May 23, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed May 23, 2025
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What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2024-02-29; filed 2024-07-12.
0001654954-24-008904
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2025-02-28; filed 2025-05-23.
0001437749-25-018346
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 84 current paragraphs.
77 unchanged; 3 reworded; 4 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Increased international tariffs and threats of international tariffs may materially and adversely affect our business.
Current report
We rely on several suppliers for the purchase of materials used in the manufacture and production of our goods, including various foreign suppliers in multiple foreign jurisdictions. In fiscal year 2025, approximately 50% of our materials were purchased from foreign suppliers, including 39% from Malaysia and 5% from China. President Trump has proposed steep and additional tariffs on the importation of goods from a number of countries from which we purchase materials, including the raw materials we currently use for the manufacture of our products, including, but not limited to, Malaysia and China. This increase in tariffs imposed could materially and adversely affect our business and our results of operations. While we have alternative suppliers outside Malaysia and China, the Trump administration has imposed or threatened additional tariffs on substantially all foreign jurisdictions, which are potential alternative providers of raw materials to our company. Since the beginning of 2018 during Trump’s first administration, there has been increasing rhetoric, in some cases coupled with legislative or executive action, from several U.S. and foreign leaders regarding the possibility of instituting tariffs on the foreign imports of certain materials and products. During this trend, the U.S. and China imposed tariffs or announced proposed tariffs to be applied in the future to certain of each other’s exports. Beginning in 2019, the first Trump administration imposed tariffs on imports of electronics products of up to 25% and recently an additional 10% tariff to all products. Trump’s second administration has significantly increased its focus on tariffs. In March 2025, additional tariffs have been instituted on Chinese and all other foreign products and materials and we could see potential additional tariffs in the future. Under the current Trump administration, the imposition of additional tariffs fluctuates dramatically and have created uncertainty in global markets. These tariffs apply to a substantial percentage of our respective materials and, as a result, in the future, we may be forced to implement additional price increases to adjust to the higher costs of production and sale of our products, which imposes the risk of reduced demand for such products, thus lowering sales and the resulting revenue. Additionally, future tariffs, or any further costs or restrictions imposed on materials that we import, which lead to an increase in our prices, may result in the loss of customers and harm our business.
Current report
The recently formed Department of Government Efficiency (“DOGE”) and Trump administration policies on reducing federal expenditures could negatively impact our revenues from government-related customers.
Current report
The Trump administration has implemented policies and oversight mechanisms aimed at reducing federal expenditures, streamlining procurement, and increasing operational efficiency. DOGE has reduced the number of federal employees and agencies and continues to do so. As a company that relies on government contracts and makes a large portion of sales in the military and aerospace markets, our business operations and revenue streams may be subject to DOGE and other administrative actions, which may introduce material risks to our financial performance and strategic growth. In addition, DOGE could eliminate an agency or governmental entity with whom we provide products and goods, terminate persons with whom we have business relations, or cancel a contract with us. Any failure to comply with new administrative actions, shifts in federal procurement strategies, or budgetary reductions imposed by the agency could materially and adversely affect our financial results, competitive positioning, and overall business operations.
Removed paragraphs (4)
Previous report
Our acquisition of MEI may subject us to risks and unintended negative consequences.
Previous report
The acquisition of MEI may present challenges to us and our management, including the integration of MEI’s operations and personnel we retained, and other risks including unanticipated liabilities, unanticipated costs, and a diversion of our management’s attention. Any failure to identify or appropriately quantify a liability in our due diligence process could result in the assumption of unanticipated liabilities arising from the prior operations of MEI, some of which may not be adequately reserved and may not be covered by indemnification obligations.
Previous report
While we believe that the acquisition of MEI can benefit our business including due to the comparable and complementary nature of its business with our own, there can be no guarantee that the perceived benefits of the acquisitions will be realized. The success of these acquisitions may be negatively impacted, by, among other things:
Previous report
We cannot assure you that we will successfully integrate or manage MEI’s business in a manner which results in the benefits sought, or avoids unanticipated negative consequences, which may materially adversely impact our business and an investment in us.
Reworded paragraphs (3)
Previous wording
During the fiscal year ended February 29, 2024, four customers accounted for approximately 75% of revenue. During the fiscal year ended February 28, 2023, five customers accounted for approximately 74% of revenue. The loss or financial failure of any significant customer or distributor, any reduction in orders by any of our significant customers or distributors, or the cancellation of a significant order could materially and adversely affect our business. Furthermore, due to continued industry consolidation, the loss of any one customer or significant order may occur with greater frequency and/or have a greater impact than we anticipate. We cannot guarantee that we will be able to retain long-term relationships or secure renewals of short-term relationships with our more substantial customers in the future.
Current wording
During the fiscal year ended February 28, 2025, two customers accounted for approximately 69% of revenue. During the fiscal year ended February 29, 2024, four customers accounted for approximately 75% of revenue. The loss or financial failure of any significant customer or distributor, any reduction in orders by any of our significant customers or distributors, or the cancellation of a significant order could materially and adversely affect our business. Furthermore, due to continued industry consolidation, the loss of any one customer or significant order may occur with greater frequency and/or have a greater impact than we anticipate. We cannot guarantee that we will be able to retain long-term relationships or secure renewals of short-term relationships with our more substantial customers in the future.
Previous wording
Intense competition and a general slowdown in the demand for military-rated semiconductors worldwide have resulted in decreases in the profitability of many of our products. In 2023, the demand and sales for semiconductors worldwide saw a significant decline. We expect that profitability for many of our products will continue to decline in the future, and/or fluctuate in an unpredictable manner. A decline in profitability for our products, if not offset by reductions in the costs of manufacturing these products, increased volumes, increases in the profitability of our other products, or the development and introduction of new products that are more profitable, would result in decreasing our profitability and could have a material adverse effect on our business, financial condition and results of operations.
Current wording
Intense competition and a general slowdown in the demand for military-rated semiconductors worldwide have resulted in decreases in the profitability of many of our products. In general, the demand and sales for semiconductors worldwide is experiencing significant decline. We expect that profitability for many of our products will continue to decline in the future, and/or fluctuate in an unpredictable manner. A decline in profitability for our products, if not offset by reductions in the costs of manufacturing these products, increased volumes, increases in the profitability of our other products, or the development and introduction of new products that are more profitable, would result in decreasing our profitability and could have a material adverse effect on our business, financial condition and results of operations.
Previous wording
We do not have an annual dividend policy in place. We have not declared and paid a cash dividend since June 29, 2015. Our Board of Directors has authorized a repurchase program under which the Company may repurchase up to $1,000,000 of the Company's common stock. The Company did not repurchase any shares of common stock in fiscal 2024 or fiscal 2023. Any determination to pay cash dividends or repurchase shares of the Company’s common stock in the future is contingent on a variety of factors, including our financial condition, results of operations, business requirements, and our Board of Directors' determination that such dividends or stock repurchases are in the best interests of our stockholders and in compliance with all applicable laws and agreements. Accordingly, there is no assurance that we will pay cash dividends or repurchase stock pursuant to our stock repurchase program, or that any declaration of cash dividends or stock repurchases under our stock repurchase program will have a beneficial impact on our stock price.
Current wording
We do not have an annual dividend policy in place. We have not declared and paid a cash dividend since June 29, 2015. Our Board of Directors has authorized a repurchase program under which the Company may repurchase up to $2,000,000 of the Company's common stock. The Company did not repurchase any shares of common stock in fiscal 2025 or fiscal 2024. Any determination to pay cash dividends or repurchase shares of the Company’s common stock in the future is contingent on a variety of factors, including our financial condition, results of operations, business requirements, and our Board of Directors' determination that such dividends or stock repurchases are in the best interests of our stockholders and in compliance with all applicable laws and agreements. Accordingly, there is no assurance that we will pay cash dividends or repurchase stock pursuant to our stock repurchase program, or that any declaration of cash dividends or stock repurchases under our stock repurchase program will have a beneficial impact on our stock price.