<SEC-DOCUMENT>0000356037-18-000028.txt : 20180803
<SEC-HEADER>0000356037-18-000028.hdr.sgml : 20180803
<ACCEPTANCE-DATETIME>20180803100035
ACCESSION NUMBER:		0000356037-18-000028
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20180731
ITEM INFORMATION:		Completion of Acquisition or Disposition of Assets
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20180803
DATE AS OF CHANGE:		20180803

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CSP INC /MA/
		CENTRAL INDEX KEY:			0000356037
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				042441294
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1219

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-10843
		FILM NUMBER:		18990591

	BUSINESS ADDRESS:	
		STREET 1:		175 CABOT STREET
		STREET 2:		SUITE 210
		CITY:			LOWELL
		STATE:			MA
		ZIP:			01854
		BUSINESS PHONE:		9789545038

	MAIL ADDRESS:	
		STREET 1:		175 CABOT STREET
		STREET 2:		SUITE 210
		CITY:			LOWELL
		STATE:			MA
		ZIP:			01854
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a8-kitem201dispositionofas.htm
<DESCRIPTION>8-K
<TEXT>
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<div><a name="sCFBDBBD7AC4D4F0AF070FCA6264C50D9"></a></div><div style="line-height:120%;text-align:center;-sec-extract:summary;font-size:14pt;"><font style="font-family:inherit;font-size:14pt;font-weight:bold;">UNITED STATES</font></div><div style="line-height:120%;text-align:center;font-size:14pt;"><font style="font-family:inherit;font-size:14pt;font-weight:bold;">SECURITIES AND EXCHANGE COMMISSION</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Washington, DC 20549</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">FORM 8-K</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Current Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Date of Report (Date of earliest event reported): July 31, 2018</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">CSP Inc.</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(Exact name of the registrant as specified in its charter)</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">Massachusetts</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(State or other jurisdiction of incorporation)</font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:97.19626168224299%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:50%;"></td><td style="width:50%;"></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">000-10843</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">04-2441294</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">(Commission File Number)</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">(IRS Employer Identification No.)</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:97.19626168224299%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:50%;"></td><td style="width:50%;"></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">175 Cabot Street - Suite 210, Lowell, Massachusetts</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">01854</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">(Address of principal executive offices)</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">(Zip Code)</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">(978) 954-5038</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">(Registrant&#8217;s telephone number, including area code)</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">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:</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Wingdings;font-size:10pt;">o</font><font style="font-family:inherit;font-size:10pt;">&#32;&#32;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Wingdings;font-size:10pt;">o</font><font style="font-family:inherit;font-size:10pt;">&#32;&#32;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Wingdings;font-size:10pt;">o</font><font style="font-family:inherit;font-size:10pt;">&#32;&#32;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#32;&#32;&#32;&#32;(17 CFR 240.14d-2(b))</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Wingdings;font-size:10pt;">o</font><font style="font-family:inherit;font-size:10pt;">&#32;&#32;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#32;&#32;&#32;&#32;(17 CFR 240.13e-4(c))</font></div><div style="line-height:120%;text-align:left;padding-left:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#231f20;">Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (&#167;230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (&#167;240.12b-2 of this chapter).</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;text-indent:432px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#32;&#32;&#32;&#32;&#32;&#32;&#32;&#32;Emerging growth company </font><font style="font-family:Wingdings;font-size:10pt;">o</font><font style="font-family:inherit;font-size:10pt;">&#32;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;color:#231f20;">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. &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;         &#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;          </font><font style="font-family:Wingdings;font-size:10pt;">o</font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;"><br></font></div><div><br></div><hr style="page-break-after:always"><div><br></div><div style="line-height:174%;padding-bottom:13px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Item 2.01.&#160; </font><font style="font-family:inherit;font-size:10pt;color:#211d1e;font-weight:bold;">Completion of Acquisition or Disposition of Assets</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">.</font><font style="font-family:inherit;font-size:10pt;">&#32;&#32;</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On July 31, 2018, CSP Inc., a Massachusetts corporation (the &#8220;</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Company</font><font style="font-family:inherit;font-size:10pt;">&#8221; or &#8220;</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">CSP</font><font style="font-family:inherit;font-size:10pt;">&#8221;), announced the completion of the Company&#8217;s sale of all of the stock of Modcomp GmbH, a limited liability company incorporated under the laws of Germany (&#8220;</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Modcomp Germany</font><font style="font-family:inherit;font-size:10pt;">&#8221;), to Reply AG, a German stock corporation (&#8220;</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Reply AG</font><font style="font-family:inherit;font-size:10pt;">&#8221;), an affiliate of Reply SpA, a worldwide group of companies (the &#8220;</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Reply Group</font><font style="font-family:inherit;font-size:10pt;">&#8221;), pursuant to the terms of a Share Purchase and Assignment Agreement dated June 27, 2018 (the &#8220;</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Share Purchase Agreement</font><font style="font-family:inherit;font-size:10pt;">&#8221;) by and among CSPI LTD, an indirect wholly owned subsidiary of the Company (&#8220;</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">CSPI</font><font style="font-family:inherit;font-size:10pt;">&#8221;), and Reply AG.  Modcomp Germany through itself and its wholly owned subsidiaries provided managed security services to customers primarily in Germany.  Reference is made to the Share Purchase Agreement, which is </font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Exhibit 2.1</font><font style="font-family:inherit;font-size:10pt;">&#32;to this Current Report on Form 8-K.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Upon the closing of the Share Purchase Agreement, Reply AG paid to CSPI total cash at closing of approximately EUR12,343,000, which consists of the original purchase price of EUR10,000,000 plus an adjustment at closing for Net Cash (as defined in the Share Purchase Agreement) of approximately EUR2,343,000.  The Net Cash number is subject to certain post-closing adjustments as set forth in the Share Purchase Agreement.  CSPI and Reply AG have entered into a customary escrow agreement for a three (3) year period with an aggregate holdback from the total cash consideration of EUR400,000, covering indemnity claims for certain employee matters.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Share Purchase Agreement contains customary representations and warranties of CSPI and Reply AG as set forth therein.  In addition, pursuant to and subject to the terms and conditions in the Share Purchase Agreement, CSPI has agreed to indemnify Reply AG for certain pre-closing taxes.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Pursuant to the Share Purchase Agreement, CSPI has agreed that for a period of three (3) years following July 31, 2018, the closing date, CSPI shall not directly or indirectly, except with respect to CSPI&#8217;s continued business in the United Kingdom, (i) engage in performing services in Germany competing with Modcomp Germany&#8217;s managed security services business as conducted as of July 31, 2018 (the &#8220;</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Business</font><font style="font-family:inherit;font-size:10pt;">&#8221;); (ii) have any controlling ownership or equity interest in any business, entity or enterprise that engages in the Business in Germany as conducted as of July 31, 2018, subject to limited exceptions; or (iii) solicit the employment of any person who as of July 31, 2018 and still at the time of solicitation is an employee of any of the acquired companies, except with the prior written authorization of Reply AG.  The foregoing restricted covenants do not prohibit CSPI&#8217;s sale of tangible personal products in Germany, whether related or unrelated to managed security services.  </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Reply AG and the Reply Group had no material relationship with the Company or any of its affiliates, or any director or officer of the Company or any associate of any such director of officer of the Company, other than in respect of the transaction described above.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On July 31, 2018, the Company issued a press release announcing the completion of the sale of its Germany operations to Reply AG.  A copy of the press release is attached hereto as </font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Exhibit 99.1</font><font style="font-family:inherit;font-size:10pt;">&#32;and is incorporated by reference herein.</font></div><div style="line-height:174%;padding-bottom:13px;padding-top:12px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:174%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Item 9.01&#160;&#160;&#160;Financial Statements and Exhibits.</font></div><div style="line-height:174%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:174%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">(d)</font><font style="font-family:inherit;font-size:10pt;">&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Exhibits</font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:174%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">2.1</font></div></td><td style="vertical-align:top;"><div style="line-height:174%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Share Purchase and Assignment Agreement dated June 27, 2018, by and between CSPI LTD, as Seller, and Reply AG, as Purchaser, and Modcomp, Inc, as Guarantor.*</font></div></td></tr></table><div style="line-height:174%;text-align:left;padding-left:96px;text-indent:48px;font-size:10pt;"><a style="text-decoration:underline;color:#0000FF;-sec-extract:exhibit;" href="a8-kex991pressrelease.htm"><font style="font-family:inherit;font-size:10pt;">99.1</font></a><font style="font-family:inherit;font-size:10pt;">CSP Inc. press release dated July 31, 2018.</font></div><div style="line-height:174%;text-align:left;padding-left:96px;text-indent:-48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:174%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">*Incorporated by reference to Exhibit 2.1 of CSP&#8217;s Current Report on Form 8-K filed on June 27, 2018.</font></div><div><br></div><hr style="page-break-after:always"><div><br></div><div style="line-height:174%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">SIGNATURE</font></div><div style="line-height:174%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:174%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:174%;text-align:left;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">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.</font></div><div style="line-height:174%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:174%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">CSP INC.</font></div><div style="line-height:174%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:174%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Date:  August 3, 2018</font></div><div style="line-height:174%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:174%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">By:</font><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">/s/ Gary W. Levine</font><font style="font-family:inherit;font-size:10pt;">&#160;&#160;&#160;&#160;</font></div><div style="line-height:174%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Gary W. Levine</font></div><div style="line-height:174%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Chief Financial Officer</font></div><div style="line-height:174%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div>	</body>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a8-kex991pressrelease.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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<div><a name="s5D88947404E37DE2E512FCA625A39E33"></a></div><div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Exhibit 99.1</font></div></div><div><br></div><div style="line-height:120%;text-align:center;-sec-extract:summary;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;color:#3d3833;font-weight:bold;">CSPi Closes on Sale of Germany Operations</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;color:#3d3833;font-style:italic;font-weight:bold;">Company to Focus Increased Time and Resources on </font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;color:#3d3833;font-style:italic;font-weight:bold;">Higher-Margin Managed Services Opportunities</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">LOWELL, Mass., July 31, 2018 -- </font><font style="font-family:Arial;font-size:10pt;color:#0000ff;text-decoration:underline;">CSPi</font><font style="font-family:Arial;font-size:10pt;">&#32;(NASDAQ:CSPI), a provider of IT managed services, security solutions and packet capture products, today announced that it has closed on the sale of its Germany operations (CSPi GmbH, Technology Solutions) to European IT service provider and media conglomerate Reply (MTA, STAR: REY) for &#8364;10.0 million in cash (approximately $11.7 million at current exchange rates). In addition, CSPi has received from Reply &#8364;2.3 million (approximately $2.8 million) in cash from the CSPi GmbH&#8217;s balance sheet at the time of the closing. Reply has acquired all of the outstanding stock of CSPi GmbH, along with all of its assets and liabilities, including its pension obligation. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">CSPi will continue to operate its United Kingdom location to serve certain multinational clients.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;font-weight:bold;">About CSP Inc.</font><font style="font-family:Arial;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">CSPi (NASDAQ:CSPI) maintains two distinct and dynamic divisions - the High Performance Products, including the Cybersecurity Center of Excellence, and Technology Solutions - with a shared vision for technology excellence.&#160; CSPi&#8217;s cybersecurity solutions protect an organization&#8217;s critical assets to minimize or remove the impact of the inevitable data breach. Our </font><font style="font-family:Arial;font-size:10pt;color:#0000ff;text-decoration:underline;">ARIA Software Defined Security platform</font><font style="font-family:Arial;font-size:10pt;">&#32;solves the complexities associated with securing DevOps environments, while our </font><font style="font-family:Arial;font-size:10pt;color:#0000ff;text-decoration:underline;">Myricom nVoy Series</font><font style="font-family:Arial;font-size:10pt;">&#32;appliances provide automated breach identification and notification, enabled by the 10G dropless packet capture inherent in our </font><font style="font-family:Arial;font-size:10pt;color:#0000ff;text-decoration:underline;">Myricom&#174; ARC intelligent adapters</font><font style="font-family:Arial;font-size:10pt;">. </font><font style="font-family:Arial;font-size:10pt;color:#0000ff;text-decoration:underline;">CSPi&#8217;s Technology Solutions</font><font style="font-family:Arial;font-size:10pt;">&#32;division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and security services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of </font><font style="font-family:Arial;font-size:10pt;color:#0000ff;text-decoration:underline;">Managed IT Services</font><font style="font-family:Arial;font-size:10pt;">&#32;providing 24 x 7 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless &amp; Mobility. For more information, please visit&#160;</font><font style="font-family:Arial;font-size:10pt;color:#004eb0;text-decoration:underline;">www.cspi.com</font><font style="font-family:Arial;font-size:10pt;">. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Myricom and ARIA are trademarks of CSP Inc. All other brand names, product names or trademarks belong to their respective owners.</font></div><div style="line-height:120%;padding-bottom:15px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;padding-bottom:15px;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">The Company wishes to take advantage of the &#8220;Safe Harbor&#8221; provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the Act. Such forward-looking statements may include, but are not limited to, the expected closing and timing of the transaction.&#160; The Company cautions that numerous factors could cause actual results to differ materially from forward-looking statements made by the Company. Such risks that could affect, prevent, or delay the closing and timing of the transaction&#160; and such other risk factors affecting the Company include the ability to satisfy the closing conditions, receipt of regulatory approval, general economic conditions, market factors, competitive factors, and pricing pressures, and others described in the Company's filings with the&#160;SEC. Please refer to the section on forward-looking statements included in the Company's filings with the&#160;Securities and Exchange Commission.</font></div><div style="line-height:120%;padding-bottom:15px;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Contact:</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Gary Levine</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Chief Financial Officer</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">CSPi</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Tel: 978.954.5040</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:Arial;font-size:10pt;">Fax: 978.455.3251</font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div><br></div>	</body>
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