UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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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 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. |
On December 22, 2021, Kewaunee Scientific Corporation (the “Company”) entered into an Agreement for Purchase and Sale of Real Property with CAI Investments Sub Series 100, LLC, a Nevada limited liability company (the “Buyer”), for the Company’s headquarters and manufacturing facilities located at 2700 West Front Street in Statesville, North Carolina (the “Sale Agreement”). The Sale Agreement is subject to customary due diligence and the Company expects the transaction to close within 60 days of the contract execution date.
Under the terms of the Sale Agreement, the Company will sell the property for $30,275,000 and, at closing, enter into a Lease Agreement with an affiliate of the Buyer (the “Lease Agreement”, and together with the Sale Agreement, the “Sale-Leaseback Agreement”). The Lease Agreement is for an initial term of twenty years, with the Company having a right to renew thereafter for four renewal terms of five years each. Under the terms of the Lease Agreement, the Company’s initial basic rent would be approximately $139,000 per month, which rent will increase by approximately 2% each year of the initial term. The proceeds of this transaction are expected to be used for debt repayment and general corporate purposes.
The Sale Agreement includes customary representations, warranties, covenants and indemnities. The Sale Agreement is subject to a thirty-day examination period, during which the Buyer may terminate for any reason or no reason. Should Buyer terminate the Sale Agreement during the examination period for reasons other than the Company’s default or breach of representations, all but a portion of the earnest money deposit would be refunded to the Buyer.
The foregoing description of the Sale-Leaseback Agreement is qualified in its entirety by reference to the Sale-Leaseback Agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ending January 31, 2022.
Signature
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.
| (Registrant) | ||||||
| Kewaunee Scientific Corporation | ||||||
| Date: December 23, 2021 | /s/ Donald T. Gardner III | |||||
| Donald T. Gardner III Vice President, Finance | ||||||
| Chief Financial Officer | ||||||
Document and Entity Information |
Dec. 22, 2021 |
|---|---|
| Cover [Abstract] | |
| Entity Registrant Name | KEWAUNEE SCIENTIFIC CORP /DE/ |
| Amendment Flag | false |
| Entity Central Index Key | 0000055529 |
| Document Type | 8-K |
| Document Period End Date | Dec. 22, 2021 |
| Entity Incorporation State Country Code | DE |
| Entity File Number | 0-5286 |
| Entity Tax Identification Number | 38-0715562 |
| Entity Address, Address Line One | 2700 West Front Street |
| Entity Address, City or Town | Statesville |
| Entity Address, State or Province | NC |
| Entity Address, Postal Zip Code | 28677 |
| City Area Code | 704 |
| Local Phone Number | 873-7202 |
| Security 12b Title | Common Stock, $2.50 par value |
| Trading Symbol | KEQU |
| Security Exchange Name | NASDAQ |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Entity Emerging Growth Company | false |