TSS Closes Subordinated Debt Financing
TSS, Inc., a data center and mission critical facilities and technology services company, announced that it closed a subordinated debt financing in the amount of $945,000.
TSS issued a subordinated promissory note under a loan agreement between TSS and MHV SPV II. The loan agreement contemplates up to $2 million in aggregate borrowings, and MHW SPV II has the exclusive right, with TSS’ consent, to provide up to $1.055 million of additional financing through February 23, 2015, on terms described below. There is no assurance that TSS will obtain this additional financing.
The promissory note is due in five years, and bears interest at a fixed rate of 12% per annum payable on the first day of each month, commencing on March 1, 2015. In connection with this financing, TSS issued a warrant to MHV SPV II, LLC to purchase 472,500 shares of TSS common stock for $0.50 per share, 425,250 shares of common stock for $1.00 per share, and 218,077 shares of common stock for $1.30 per share before February 3, 2020.
“The proceeds of this financing, along with improving operating performance, will provide us with additional capital for future growth,” said Anthony Angelini, president and CEO of TSS. “Although our year-end audit is not complete, we are pleased with our preliminary results in the fourth quarter and the strength of our sales pipeline entering 2015. The structure of the financing announced today strengthens our balance sheet without excessive shareholder dilution, and the strike prices of the warrant indicate the optimism around our ability to increase the value of the company going forward.”