UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of earliest event reported: April 1, 2020

TSR, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware   00-8656   13-2635899

(State or Other Jurisdiction

of Incorporation)

  (Commission File Number)  

(I.R.S. Employer

Identification No.)

 

400 Oser Avenue, Suite 150, Hauppauge, NY 11788

(Address of Principal Executive Offices) (Zip Code)

(631) 231-0333

(Registrant’s telephone number, including area code)

 

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 Stock, par value $0.01 per share   TSRI   NASDAQ Capital Market
Preferred Share Purchase Rights1   --   --

1Registered pursuant to Section 12(b) of the Act pursuant to a Form 8-A filed by the registrant on March 15, 2019. Until the Distribution Date (as defined in the registrant’s Rights Agreement dated August 29, 2019), the Preferred Share Purchase rights will be transferred only with the share of the registrant’s Common Stock to with the Preferred Share Purchase Rights are attached.

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 April 1, 2020, the Company entered into a binding term sheet (“Term Sheet”) with Zeff Capital, L.P. (“Zeff”) pursuant to which they agreed to pay Zeff an amount of $900,000 over a period of three years in cash or cash and stock in settlement of expenses incurred by Zeff during its solicitations in 2018 and 2019 in connection with the annual meetings of the Company, the costs incurred in connection with the litigation initiated by and against the Company as well as negotiation, execution and enforcement of the Settlement and Release Agreement, dated as of August 30, 2019, by and between the Company, Zeff and certain other parties. The parties intend to enter into definitive documents for the settlement. However, the binding Term Sheet shall remain in full force and effect until such time as the definitive documents are executed by the parties or until the Term Sheet is terminated by mutual consent of the parties.

The foregoing descriptions of the terms and conditions of the Term Sheet do not purport to be complete and are qualified in their entirety by the full text of the Term Sheet, which is attached to this Current Report as Exhibit 10.1 and incorporated into this Current Report by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibit Number   Description
     
10.1   Term Sheet, dated as of April 1, 2020, by and between Zeff Capital, L.P. and TSR, Inc.

 

 

 

 

SIGNATURES

 

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.

 

  TSR, Inc.
     
     
  By:   /s/ John G. Sharkey
      John G. Sharkey
      Senior Vice President and
Chief Financial Officer

 

 

Dated: April 6, 2020

 

 

Exhibit 10.1

TERM SHEET - DRAFT

 

WHEREAS Zeff Capital, L.P. (together with its affiliates, “Zeff”) seeks reimbursement of the costs incurred by it and on its behalf as part of its solicitations in 2018 and 2019 in connection with the annual meetings of stockholders of TSR, Inc. (“TSR”). The costs incurred by Zeff in connection with the litigation initiated by and against TSR, as well as the negotiation, execution and enforcement of the Settlement and Release Agreement, dated as of August 30, 2019, by and between TSR, Zeff and certain other parties and the Share Repurchase Agreement, dated as of August 30, 2019, by and between TSR, Zeff and certain other parties, are inextricably linked with, and form a part of, the costs incurred by or on behalf of Zeff in connection with its solicitations.

WHEREAS Zeff has incurred costs in the amount of approximately $1,132,778 related to the matters.

WHEREAS TSR Inc. seeks to close out the matter regarding the proxy solicitation, recognizes the value for all its shareholders in replacing the former Board of Directors, and believes it is appropriate and in shareholders’ interest to reimburse the costs Zeff incurred.

WHEREAS both parties have agreed to a settlement of $900,000 structured to be paid as follows:

Payment One of $300,000 due by June 30, 2021;

Payment Two of $300,000 due by June 30, 2022;

Payment Three of $300,000 due by June 30, 2022, which shall be payable at the Board’s option of cash or common stock of TSR based on the volume weighted average price for the preceding 30 days at the time of the Board’s decision or June 30,2022, at the latest.

Interest: There shall be no interest due on the settlement.

Cash Flow Sweep: If any of the Payments would be in excess 30% of trailing twelve month EBITDA, TSR Inc. shall have the option to defer the amount of payment in excess of trailing twelve month EBITDA by one year.

Payments Shall Not Cause a Breach of Covenants: If any of the Payments would cause any default or covenant breach with senior secured lenders including Access Capital, TSR Inc. shall have the options to defer the Payment until the Payment would not cause such a breach.

 

 

 

  ZEFF CAPITAL, L.P.  
       
  By: Zeff Holding Company, LLC, as  
  general partner  
       
  By: /s/ Daniel Zeff  
    Daniel Zeff (Manager)  
       
  Date: 4/1/20   
       
  TSR Inc.  
       
  By: /s/ Brad Tirpak  
    Brad Tirpak (Chairman of the Board)  
       
  Date: April 1, 2020