Tandon Family Cash to Bolster Golden Systems

Golden Systems Inc. in Simi Valley has closed the first of two transactions to provide a capital infusion of $2.25 million from the Tandon family, the company’s president and certain key employees.

The money will be used for working capital purposes as the company implements a plan for new products and new business strategy.

At the transaction’s closing, 850,000 shares of common stock and a promissory note in the principal amount of $1.87 million were issued to the Tandon family. In exchange, the Tandon family, which founded Golden Systems, provided $1.31 million in cash and canceled promissory notes and interest of approximately $687,000 for cash advanced to the company since January.

The Tandon family also has agreed to obtain an arrangement with the company’s bank lenders in India that would defer for one year all payments on the company’s debt, which totaled approximately $8.1 million on Jan. 31.

A final closing will occur upon shareholder approval, at which time the $1.87 million note will be repaid with the issuance of 12.48 million shares of common stock, and the company’s president and certain key employees will receive 1.66 million shares of common stock in exchange for $250,000 in cash.

Issuance of the additional shares will result in the Tandon family increasing its ownership interest from 38.5% to 77.3%, while certain company employees will acquire 8.6% of the company.

Golden Systems designs power-switching supplies for original manufacturers of electronic equipment. The company’s manufacturing operations are in India and Sri Lanka, and the engineering staff is in Scotland and India.