Teamshares Inc. (NASDAQ: TMS) announced on September 23, 2026, the closing of a definitive agreement to issue and sell 225,000 shares of newly designated Series A Preferred Stock to a group of purchasers. The shares were sold at a purchase price of $990 per share, resulting in an aggregate purchase price of $222.75 million, net of a 1% original issue discount.
The Series A Preferred Stock is perpetual, non-voting, and non-convertible. It carries a liquidation preference of $1,000 per share and accrues cumulative dividends at an annual rate of 16.0% if paid in cash, or 18.0% if paid in kind (PIK). The dividend rate steps down to 14.5% (cash) or 17.5% (PIK) once the Company satisfies specific financial tests regarding EBITDA, leverage, and fixed charge coverage.
The filing indicates that the purchasers are affiliates of a beneficial owner holding more than 10% of the Company’s common stock. The shares were issued pursuant to exemptions from registration under the Securities Act of 1933, relying on Rule 4(a)(2), Rule 506(b), and Regulation S.
The Preferred Stock ranks senior to the Company’s common stock and junior to any indebtedness. The Certificate of Designations, which became effective upon filing with the Secretary of State of Delaware, includes several protective provisions. These include a two-year lock-up period during which the Company cannot redeem the shares without paying a make-whole premium, after which redemption is subject to declining call premiums. Additionally, holders may require mandatory redemption on or after the seventh anniversary of issuance, or immediately upon a change of control.
The Purchase Agreement allows Teamshares to issue up to an additional $75 million in aggregate liquidation preference of Series A Preferred Stock to other investors on the same terms. The Company is restricted from using the proceeds to pay dividends, distributions, or repurchases of junior securities, or to make payments to affiliates outside the ordinary course of business.
According to the accompanying press release, the investment was advised by T. Rowe Price Investment Management, Inc. (TRPIM). The Company stated that the proceeds are intended to fund acquisitions, strengthen its capital position, and provide flexibility to access senior debt financing.
