Replies to post #56403 on Savvy Trades and Investments

[larrybaz]

TSSI - 8-K issued after hours. Balance sheet should continue to strengthen with this sale. Effect on operations???

"On December 28, 2018, Innovative Power Systems, Inc. (“IPSI”), a wholly owned subsidiary of TSS, Inc. (“TSS”, together with IPSI, the “Company”), entered in an asset purchase agreement (the “Purchase Agreement”) to sell certain identified assets used in IPSI’s Virginia-based, installation services of mission critical data center power and cooling and related services business, together with certain identified liabilities, to Innovative Power, LLC (the “Buyer”) for total cash consideration of $2.5 million, subject to certain post-closing adjustments relating to working capital and certain customer contracts of the business (the “Transaction”). The Company intends to use the proceeds from the Transaction for general working capital purposes.

The managing member of the Buyer is Peter H. Woodward, Chairman of the Board of Directors of TSS. Mr. Woodward is also the General Partner of MHW Partners, LP and the managing member of MHW SPVII, LLC (collectively “MHW”), entities that hold $1.595 million of promissory notes payable by TSS. The purchase price was determined through arms-length negotiations between TSS and Mr. Woodward. The Transaction was unanimously approved by the Board of Directors of TSS other than Mr. Woodward.

The Transaction closed on December 28, 2018. The Purchase Agreement contains representations, warranties, covenants and indemnification provisions customary for a transaction of this type. Many of the representations made by IPSI are subject to and qualified by materiality or similar concepts. Both the Buyer and IPSI have agreed to indemnify the other party for certain losses arising from breaches of the Purchase Agreement and for certain other liabilities, subject to specified limitations. TSS is a party to the Purchase Agreement for purposes of sharing IPSI’s indemnification obligations thereunder. In connection with the Transaction, both parties will provide transition services with respect to the business that the Buyer is acquiring.

The foregoing summary of the Purchase Agreement and the Transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement filed as Exhibit 2.1 to this Form 8-K and is incorporated herein by reference.

The representations, warranties and covenants set forth in the Purchase Agreement have been made only for the purposes of the Purchase Agreement and solely for the benefit of the parties thereto. In addition, such representations, warranties and covenants (i) are subject to materiality qualifications contained in the Purchase Agreement that may differ from what may be viewed as material by investors, (ii) are made only as of the dates specified in the Purchase Agreement and (iii) have been included in the Purchase Agreement for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as fact. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding its terms and not to provide investors with any other factual information regarding the parties or their respective businesses. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties or any of their respective affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures."