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Note 9 - Subsequent Events
3 Months Ended
Mar. 31, 2020
Notes to Financial Statements  
Subsequent Events [Text Block]
Note
9
 – Subsequent Events
 
In
April,
VTC, L.L.C. (the “Borrower”), a wholly-owned subsidiary of TSS, Inc., applied to Texas Capital Bank, N.A. under the Small Business Administration Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security Act of
2020
(the “CARES Act”) for a loan of
$889,858
(the “Loan”). On
April 17, 2020,
the Loan was approved and the Borrower received the Loan proceeds, which the Borrower intend to use for covered payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act.
 
The Loan, which took the form of a promissory note issued by the Borrower, has a
two
-year term, matures on
April 12, 2022,
and bears interest at a rate of
1%
per annum. Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), will commence on
October 12, 2020.
The Borrower did
not
provide any collateral or guarantees for the Loan, nor did the Borrower pay any fees to obtain the Loan. The promissory note provides for customary events of default, including, among others, failure to make a payment when due, cross-defaults under any loan documents with the lender, certain cross-defaults under agreements with
third
parties, events of bankruptcy or insolvency, certain change of control events, and material adverse changes in the Borrower’s financial condition. If an event of default occurs, the lender will have the right to accelerate indebtedness under the Loan and/or pursue other remedies available to the lender pursuant to the terms of the promissory note.
 
The Borrower
may
apply to the lender for forgiveness of some or all of the Loan, with the amount which
may
be forgiven equal to the sum of eligible payroll costs, mortgage interest, covered rent and covered utilities payments, in each case incurred by the Borrower during the
eight
-week period following the effective date of the promissory note, calculated in accordance with the terms of the CARES Act. Certain reductions in the Borrower's payroll costs during the
eight
-week period
may
reduce the amount of the Loan eligible for forgiveness. There is
no
guarantee, and the lender does
not
make any representation, that the Borrower will receive forgiveness for any fixed amount of any of the Loan proceeds received by the Borrower.