Micron : Annual Report 2021

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MICRON SOLUTIONS, INC.

State of Incorporation:

Delaware

25 Sawyer Passway Fitchburg, MA 01420

Telephone: (978) 345-5000 Corporate Website:www.micronsolutions.com

SIC Code: 3845

Annual Report

For the fiscal year ended December 31, 2021 (the “Reporting Period“)

The number of shares outstanding of our Common Stock is 3,085,742 as of December 31, 2021.

The number of shares outstanding of our Common Stock was 2,994,007 as of December 31, 2020.

Indicate by check mark whether the company is a shell company (as defined in Rule 405 of the Securities Act of 1933 and Rule 12b-2 of the Exchange Act of 1934):

Yes:No: X

Indicate by check mark whether the company’s shell status has changed since the previous reporting period:

Yes:No: X

Indicate by check mark whether a change in control of the company has occurred over this reporting period:

Yes:No: X

AFDOCS/22151451.3

Disclosure Regarding Forward-Looking Statements

Forward-looking statements made herein are based on current expectations of Micron Solutions, Inc. (“our” or the “Company” or Micron Solutions”) that involve a number of risks and uncertainties and should not be considered as guarantees of future performance. The factors that could cause actual results of operations, financial condition and business operations to differ materially include, but are not limited to, our ability to obtain and retain order volumes from customers who represent significant proportions of net sales; our ability to maintain our pricing model, offset higher costs with product price increases and/or decreases to our cost of sales; variability of customer delivery requirements and the ability to anticipate and respond thereto; the level of and ability to generate sales of higher margin products and services; our ability to manage our level of debt which higher debt levels could make the Company sensitive to the effects of economic downturns and limit our ability to react to changes in the economy or our industry; failure to comply with financial and other covenants in our credit facility; the impact on the Company’s operations and financial results due to economic uncertainty and disruption including, but not limited to, the COVID-19 pandemic; reliance on revenues from exports and impact on financial results due to economic uncertainty or downturns in foreign markets; volatility in commodity and energy prices and our ability to offset higher costs and inflation with price increases; continued availability of labor, supplies, and raw materials and components used in manufacturing at competitive prices; variations in the mix of products sold; maintaining regulatory quality standards applicable to our manufacturing and quality processes; and the amount and timing of investments in capital equipment, sales and marketing, engineering and information technology resources. The COVID-19 pandemic has affected adversely, and is expected to continue to affect adversely, our operations, supply chains, financial condition and results of operations, and we have experienced and expect to continue to experience unpredictable reductions in demand for certain of our services. During the current COVID-19 pandemic, the Company has experienced reduced sales, supply chain disruption, product shipping disruptions, reduced customer demand and reduced availability of workforce. We assume no obligation to update these forward-looking statements contained in this report, whether as a result of new information, future events, or otherwise. The current conflict between Russia and Ukraine is adversely affecting commodity prices. The duration and the level of impact on pricing and on the availability of raw materials is unknown. The Company has neither customers nor suppliers based in either Russia or Ukraine.

PART A – GENERAL COMPANY INFORMATIONItem 1

The Exact Name of the Issuer and its Predecessor

Exact name of the issuer: Micron Solutions, Inc.

Name of predecessor: Arrhythmia Research Technology, Inc. (Until March 24, 2017)

Item 2

The Address of the Issuer’s Principal Executive Offices

25 Sawyer Passway

Fitchburg, MA 01420

Phone: (978) 345-5000

Fax: (978) 342-0168

Website:www.micronsolutions.com

Investor Relations:

Glen Bunnell, CFO

Email:[email protected]

Phone: (978) 345-5000

Item 3

The Jurisdiction and Date of the Issuer’s Incorporation or Organization

The Company was originally incorporated under the name Arrhythmia Research Technology, Inc. under the laws of the State of Louisiana in 1981 and reincorporated under the laws of the State of Delaware on June 12, 1987. The Company changed its name to Micron Solutions, Inc. in March 2017.

PART B – SHARE STRUCTURE

Item 4 The Exact Title and Class of Securities Outstanding Micron Solutions has one class of outstanding stock:

Title: Common Stock, par value $0.01 CUSIP: 59511X

OTCQB Trading Symbol: MICR

Micron Solutions has issued options and warrants to purchase shares of its common stock, of which, 341,500 were still outstanding as of December 31, 2021. No shares of preferred stock are currently outstanding.

Item 5

Par or Stated Value and Description of the Security

The following description of our capital stock and certain provisions of the Certificate of Incorporation, as amended, and the By-Laws is a summary and is qualified in its entirety by reference to the provisions of the Certificate of Incorporation and the By-Laws, copies of which are available upon request:

Common Stock

The Company’s outstanding securities consist solely of shares of common stock, par value $0.01 per share. The Company’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”) authorizes 10,000,000 shares of common stock. The holders of common stock areentitled to one vote per share on all matters submitted to a vote of the stockholders. Holders of common stock do not have cumulative voting rights. Therefore, holders of more than 50% of the shares of common stock are able to elect all of the Company’s directors eligible for election in a given year. The holders of common stock are entitled to dividends if declared by the Company’s board of directors (the “Board of Directors”). There are no redemption or sinking fund provisions applicable to the common stock, and holders of common stock are not entitled to any preemptive rights with respect to additional issuances of common stock by the Company.

Upon liquidation, dissolution or winding up of the Company, the remaining assets legally available for distribution to stockholders, after payment of claims of creditors and payment of liquidation preferences, if any, on outstanding preferred stock, are distributable ratably among the holders of the common stock and any participating preferred stock outstanding at that time.

Preferred Stock

The Certificate of Incorporation also authorizes 2,000,000 shares of preferred stock, par value $0.001 per share. The Company may issue these shares of preferred stock without the approval of the holders of common stock. The Board of Directors has the discretion to issue the preferred stock in such series and with such preferences and rights as it may designate, including, among other things, dividend rights, voting rights, conversion rights and liquidation rights as well as redemption or sinking fund provisions.

The purpose of authorizing the Board of Directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a shareholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of the Company’s outstanding voting stock. Additionally, the issuance of preferred stock may adversely affect the holders of the Company’s common stock by restricting dividends on the Company’s common stock, diluting the voting power of the Company’s common stock or subordinating the liquidation rights of the Company’s common stock. As a result of these or other factors, the issuance of preferred stock could have an adverse impact on the market price of the Company’s common stock.

As of the date of this annual report there are no shares of preferred stock issued and outstanding.

Item 6

The Number of Shares or Total Amount of the Securities Outstanding for Each Class of Securities Authorized

As of December 31, 2021

Class

Number of

Shares Authorized

Number of Shares Outstanding

Freely Tradable Shares (Public Float)

Total Number of Beneficial Stockholders

Total Number of Stockholders of Record

Common Stock

10,000,000

3,085,742

1,746,051

709

174

As of December 31, 2020

Number of

Shares Authorized

Number of Shares Outstanding

Freely Tradable Shares (Public Float)

Total Number of Beneficial Stockholders

Total Number of Stockholders of Record

Common Stock

10,000,000

2,994,007

1,761,782

659

177

Item 7 The Name and Address of the Transfer Agent

Transfer Agent:Continental Stock Transfer & Trust Company 1 State Street, 30th Floor

New York, New York 10004. Telephone: 212-509-4000

Continental Stock Transfer & Trust Company is registered under the Securities Exchange Act 1934, as amended, and is an authorized transfer agent subject to regulation by the SEC.

PART C – BUSINESS INFORMATION

Item 8

The Nature of the Issuer’s Business

Micron Solutions®, Inc., a Delaware corporation (“Micron Solutions”), through its wholly-owned Massachusetts operating subsidiary, Micron Products®, Inc. (“Micron” and together with Micron Solutions, the “Company”), is a diversified contract manufacturing organization (“CMO”) that produces medical devices, military, and consumer components and assemblies requiring precision machining and custom injection molding.

The Company was originally incorporated as Arrhythmia Research Technology, Inc. in the State of Louisiana in 1981 and reincorporated under the laws of the State of Delaware on June 12, 1987. The Company changed its name to Micron Solutions, Inc. in March 2017. The Company’s fiscal year ends on December 31. As of December 31, 2021, the Company had a total of 108 employees, of which 102 were full time employees. Micron Solutions’ common stock trades on the OTCQB Venture Markets tier under the symbol “MICR”. Trading on the OTCQB began on April 6, 2020 after the Company’s voluntary delisting from the NYSE American. The Company has never been in bankruptcy, receivership, or any similar proceeding.

Micron’s primary SIC code is 3845 (Electromedical and Electrotherapeutic Apparatus). Micron has never been a “shell company” as defined under the Securities Act of 1933, as amended.

Item 9

The Nature of Products or Services Offered

Overview

Micron Solutions, operating through its wholly-owned Massachusetts operating subsidiary, Micron

Products, is a diversified contract manufacturing organization (“CMO”) that produces medical devices, military, automotive, and consumer components and assemblies requiring precision machining and custom injection molding.

Micron provides design, engineering, quality and regulatory expertise across the Company’s three product lines, machining, thermoplastic injection molding and sensors, with fulfillment systems using proprietary manufacturing processes to enable the Company’s customers to be competitive. The Company competes globally, with approximately 46% of its revenue derived from exports.

Contract Manufacturing

Machining

The Company is a contract manufacturer of machined components, primarily for original equipment manufacturers (OEMs) in the medical device industry as well as the defense industry. The Company machines components for implants and instruments for medical devices including large joint replacements, wrist plates, rib fixation plates, and screws. Specialized components used in Total Knee Arthroscopy including femoral surface replacements, tibia trays, ultra-high-molecular-weight polyethylene (“UHMWPE”) inserts, trials and instrumentation as well as hip stems and fixation plates used in rib and wrist fractures are fabricated, machined

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