8-K 1 form8-k.htm






Washington, D.C. 20549







April 13, 2020

Date of Report (Date of earliest event reported)



(Exact name of registrant as specified in its charter)


Delaware   1-13906   47-0587703
(State or other jurisdiction of   (Commission   (IRS Employer
incorporation or organization)   File No.)   Identification Number)


4201 Congress Street, Suite 175    
Charlotte, North Carolina   28209
(Address of principal executive offices)   (Zip Code)


(704) 994-8279

(Registrant’s telephone number including area code)


Not Applicable

(Former name or former address, if changed since last report)


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:


Title of Each Class   Trading Symbol(s)   Name of Each Exchange on Which Registered
Common Shares, $.01 par value   BTN   NYSE American


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.


Paycheck Protection Program Loan


On April 14, 2020, Ballantyne Strong, Inc. (the “Company”) entered into a promissory note (the “Note”) evidencing an unsecured loan in the amount of $3,173,900 made to the Company under the Paycheck Protection Program (the “Loan”). The Paycheck Protection Program (or “PPP”) was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business Administration (“SBA”). The Loan to the Company is being made through University Bank (the “Lender”).


The Loan has a two-year term and bears interest at a rate of 1.0% per annum. Monthly principal and interest payments are deferred for six months. Beginning seven months from the disbursement date of the Loan, the Company is required to make monthly payments of principal and interest to the Lender. Loan may be prepaid at any time prior to maturity with no prepayment penalties. The Note matures on April 14, 2022. The Note contains customary events of default relating to, among other things, payment defaults, making materially false and misleading representations to the SBA or Lender, or breaching the terms of the Loan documents. The occurrence of an event of default may result in the repayment of all amounts outstanding, collection of all amounts owing from the Company, or filing suit and obtaining judgment against the Company.


Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loan granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs and any payments of mortgage interest, rent, and utilities. However, no assurance is provided that the Company will obtain forgiveness for any portion of the Loan.


The foregoing description of the Note is a summary only and is qualified in its entirely by the reference to the full text of the Note, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.


Additional Borrowing Under MDI Credit Facility


To further strengthen liquidity, the Company’s Canadian subsidiary, Strong MDI/Screen Systems, Inc. (“Strong/MDI”), has drawn down approximately $2.9 million CAD on its revolving line of credit. Amounts outstanding under Strong/MDI’s credit facility are payable upon demand and bear interest at a 2.45% variable rate.


Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.


The information set forth in Item 1.01 above is incorporated herein by reference.


Item 5.02. Departure or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


Management Changes


On April 13, 2020, D. Kyle Cerminara, resigned from his position of Chief Executive Officer of the Company, effective immediately. Mr. Cerminara will continue to lead the Company’s Board of Directors in the role of Non-Executive Chairman.


On April 13, 2020, the Board of Directors of the Company appointed Mark D. Roberson as Chief Executive Officer of the Company and Todd R. Major as Chief Financial Officer of the Company, with both appointments effective immediately.





Mr. Roberson, age 55, joined the Company in November 2018 as its Chief Financial Officer. Mr. Roberson brings an extensive background in executive leadership, operations, corporate finance, SEC reporting, treasury, and mergers and acquisitions. He previously served as Chief Operations Officer of Chanticleer Holdings, Inc., a Nasdaq-listed restaurant operating company, from May 2015 to November 2018, and as Chief Executive Officer of PokerTek, Inc., a then Nasdaq-listed gaming technology company, from February 2010 to October 2014 (having served as Acting Chief Executive Officer from May 2009 until February 2010). He also served as Chief Financial Officer and Treasurer of PokerTek, Inc. from October 2007 until October 2014. Mr. Roberson previously held positions of increasing responsibility at Curtiss-Wright, Inc., a NYSE-listed aerospace and defense contractor, Krispy Kreme Doughnut Corporation, a then NYSE-listed fast-casual restaurant franchisor and operator, and LifeStyle Furnishings International, a $2 billion private equity backed furniture manufacturer. Mr. Roberson is a Certified Public Accountant who started his career with Ernst & Young and PricewaterhouseCoopers. He earned an MBA from Wake Forest University, a B.S. in Accounting from UNC-Greensboro and a B.S. in Economics from Southern Methodist University. He has served on the Board of Directors of CynergisTek, Inc. (NYSE American: CTEK), a cybersecurity and information management consulting firm, since May 2016, where he chairs the Audit Committee and is a member of the Compensation Committee, which be previously chaired.


Mr. Major, age 47, joined the Company in April 2019 as its Senior Vice President, Finance. Mr. Major previously served as Senior Director, Financial and SEC Reporting of Bojangles, Inc., a then Nasdaq-listed restaurant operating company and franchisor, from March 2015 to April 2019, as Director, Financial Reporting of Premier, Inc. (Nasdaq: PINC), a healthcare performance improvement company, from September 2014 to February 2015, and as Senior Director, Financial Reporting of Horizon Lines, Inc, a then NYSE-traded transportation and logistics company from November 2006 to September 2014. From June 2003 to November 2006, Mr. Major previously held positions of increasing responsibility at Nabi Biopharmaceuticals, Inc., a then Nasdaq-listed biopharmaceutical company engaged in the development and commercialization of proprietary products. Mr. Major is a Certified Public Accountant and earned an MBA from Queens University of Charlotte and a B.A. in Accounting from Flagler College.


To the Company’s knowledge, there are no arrangements or understandings between either of Mr. Roberson or Mr. Major and any other person pursuant to which they were selected for their positions. In addition, there are no family relationships between Mr. Roberson or Mr. Major and any directors or executive officers of the Company, and no transactions are required to be reported under Item 404(a) of Regulation S-K between Mr. Roberson or Mr. Major and the Company.


Mr. Roberson and Mr. Major did not enter into any compensation arrangements in connection with the roles to which they were appointed to above. The Compensation Committee of the Company’s Board of Directors will review and consider changes to the compensation of Mr. Roberson and Mr. Major in connection with their service in the new roles with the Company.


Item 8.01. Other Events.


In response to the rapid spread of the novel COVID-19 virus, the Company has temporarily curtailed its service and distribution activities in the United States and temporarily closed its screen manufacturing facility in Canada. Accordingly, the Company is taking a number of actions to preserve liquidity during this period and to remain in a strong competitive position when the current crisis subsides.


The Company has implemented targeted furloughs and other actions to significantly reduce operating expenses and manage working capital. Further, as described above, the Company has received funds in the amount of $3,173,900 under the PPP Loan, and the Company’s Canadian subsidiary, Strong MDI/Screen Systems, Inc. (“Strong/MDI”), has drawn down approximately $2.9 million CAD on its revolving line of credit.





Forward Looking Statements


Except for the historical information, this Current Report on Form 8-K and the exhibit to this Current Report on Form 8-K include forward-looking statements, including the impact of COVID-19 pandemic on the business and financial condition of the Company, its customers and suppliers and the effectiveness of the actions taken to mitigate the effects of the COVID-19 pandemic. Forward-looking statements involve a number of risks and uncertainties, including but not limited to those discussed in the “Risk Factors” section contained in Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2019 and the following risks and uncertainties: the Company’s ability to expand its revenue streams, potential interruptions of supplier relationships or higher prices charged by suppliers, the Company’s ability to successfully compete and introduce enhancements and new features that achieve market acceptance and that keep pace with technological developments, the Company’s ability to successfully execute its capital allocation strategy, the Company’s ability to maintain its brand and reputation and retain or replace its significant customers, the impact of a challenging global economic environment or a downturn in the markets (such as the current economic disruption and market volatility generated by the ongoing COVID-19 pandemic), economic and political risks of selling products in foreign countries (including tariffs), risks of non-compliance with U.S. and foreign laws and regulations, potential sales tax collections and claims for uncollected amounts, cybersecurity risks and risks of damage and interruptions of information technology systems, the Company’s ability to retain key members of management and successfully integrate new executives, the Company’s ability to complete acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or other transactions on acceptable terms or at all, the Company’s ability to utilize or assert its intellectual property rights, the impact of natural disasters and other catastrophic events (such as the ongoing COVID-19 pandemic), the adequacy of insurance and the impact of having a controlling stockholder. Given the risks and uncertainties, readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results which may not occur as anticipated. Many of the risks listed above have, and may be further be, exacerbated by the COVID-19 pandemic and the worsening economic environment. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein, as well as others not now anticipated. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except where required by law, the Company assumes no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.


Item 9.01. Financial Statements and Exhibits.


(d) Exhibits.


No.   Description
10.1   Paycheck Protection Program Note, entered into by Ballantyne Strong, Inc., as Borrower, for the benefit of University Bank, as Lender, as of April 14, 2020.
99.1   April 15, 2020 Press Release.







Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: April 16, 2020 By: /s/ Todd R. Major
    Todd R. Major
     Chief Financial Officer