TSR INC - Quarter Report: 2023 August (Form 10-Q)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended August 31,
☐ Transition report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from __ to __
Commission File Number: 001-38838
| TSR, Inc. |
| (Exact name of registrant as specified in its charter) |
| Delaware | 13-2635899 | |
| (State or other jurisdiction of | (I.R.S. Employer | |
| Incorporation or organization) | Identification No.) |
| 400 Oser Avenue, Suite 150, Hauppauge, NY 11788 |
| (Address of principal executive offices) |
| 631-231-0333 |
| (Registrant’s telephone number) |
Securities registered pursuant to Section 12(b) of the Exchange 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 |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | |
| Non-Accelerated Filer ☒ | Smaller Reporting Company ☒ | |
| 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of October 11, 2023, there were 2,143,712 shares of common stock, par value $0.01 per share, issued and outstanding.
TSR, INC. AND SUBSIDIARIES
INDEX
i
Part I. Financial Information
Item 1. Financial Statements
TSR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
August 31, 2023 and May 31, 2023
| August 31, | May 31, | |||||||
| 2023 | 2023 | |||||||
| ASSETS | (Unaudited) | (see Note 1) | ||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 7,694,031 | $ | 7,382,320 | ||||
| Certificates of deposit and marketable securities | 773,112 | 515,152 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $181,000 | 12,002,515 | 12,081,335 | ||||||
| Other receivables | 63,652 | 79,618 | ||||||
| Prepaid expenses | 278,248 | 248,534 | ||||||
| Total Current Assets | 20,811,558 | 20,306,959 | ||||||
| Equipment and leasehold improvements, net of accumulated depreciation and amortization of $288,852 and $270,606, respectively | 51,353 | 69,599 | ||||||
| Other assets | 48,772 | 48,772 | ||||||
| Right-of-use assets | 413,904 | 459,171 | ||||||
| Intangible assets, net | 1,292,000 | 1,333,500 | ||||||
| Goodwill | 785,883 | 785,883 | ||||||
| Deferred income taxes | 322,000 | 344,000 | ||||||
| Total Assets | $ | 23,725,470 | $ | 23,347,884 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and other payables | $ | 2,508,810 | $ | 1,663,990 | ||||
| Accrued expenses and other current liabilities | 2,476,722 | 3,663,326 | ||||||
| Advances from customers | 1,254,981 | 1,266,993 | ||||||
| Income taxes payable | 192,260 | 11,260 | ||||||
| Operating lease liabilities - current | 128,475 | 150,167 | ||||||
| Total Current Liabilities | 6,561,248 | 6,755,736 | ||||||
| Operating lease liabilities, net of current portion | 317,143 | 342,260 | ||||||
| Total Liabilities | 6,878,391 | 7,097,996 | ||||||
| Commitments and contingencies | ||||||||
| Equity: | ||||||||
| TSR, Inc.: | ||||||||
| Preferred stock, $1 par value, authorized 500,000 shares; issued | ||||||||
| Common stock, $.01 par value, authorized 12,500,000 shares; issued 3,322,527 shares, 2,143,712 outstanding, respectively | 33,226 | 33,226 | ||||||
| Additional paid-in capital | 7,702,269 | 7,676,742 | ||||||
| Retained earnings | 22,758,895 | 22,212,107 | ||||||
| 30,494,390 | 29,922,075 | |||||||
| Less: Treasury stock, 1,178,815 shares, at cost | 13,726,895 | 13,726,895 | ||||||
| Total TSR, Inc. Equity | 16,767,495 | 16,195,180 | ||||||
| Noncontrolling interest | 79,584 | 54,708 | ||||||
| Total Equity | 16,847,079 | 16,249,888 | ||||||
| Total Liabilities and Equity | $ | 23,725,470 | $ | 23,347,884 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 1
TSR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended August 31, 2023 and August 31, 2022
(UNAUDITED)
| Three Months Ended | ||||||||
| August 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenue, net | $ | 22,513,290 | $ | 26,199,428 | ||||
| Cost of sales | 18,486,579 | 21,766,912 | ||||||
| Selling, general and administrative expenses | 3,251,761 | 3,677,605 | ||||||
| 21,738,340 | 25,444,517 | |||||||
| Income from operations | 774,950 | 754,911 | ||||||
| Other income (expense): | ||||||||
| Interest expense, net | (3,246 | ) | (19,168 | ) | ||||
| Unrealized gain (loss) on marketable securities, net | 2,960 | (10,000 | ) | |||||
| Income before income taxes | 774,664 | 725,743 | ||||||
| Provision for income taxes | 203,000 | 218,000 | ||||||
| Consolidated net income | 571,664 | 507,743 | ||||||
| Less: Net income attributable to noncontrolling interest | 24,876 | 12,997 | ||||||
| Net income attributable to TSR, Inc. | $ | 546,788 | $ | 494,746 | ||||
| Basic net income per TSR, Inc. common share | $ | 0.26 | $ | 0.23 | ||||
| Diluted net income per TSR, Inc. common share | $ | 0.24 | $ | 0.22 | ||||
| Basic weighted average number of common shares outstanding | 2,143,712 | 2,146,448 | ||||||
| Diluted weighted average number of common shares outstanding | 2,247,300 | 2,236,674 | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 2
TSR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
For the Three Months Ended August 31, 2023 and August 31, 2022
(UNAUDITED)
| Shares of common stock | Common stock | Additional paid-in capital | Retained earnings | Treasury stock | TSR, Inc. equity | Non- controlling interest | Total equity | |||||||||||||||||||||||||
| Balance at May 31, 2022 | 3,298,549 | $ | 32,986 | $ | 7,473,866 | $ | 20,470,042 | $ | (13,514,003 | ) | $ | 14,462,891 | $ | 69,674 | $ | 14,532,565 | ||||||||||||||||
| Net income attributable to noncontrolling interest | - | 12,997 | 12,997 | |||||||||||||||||||||||||||||
| Non-cash stock compensation | - | 69,216 | 69,216 | 69,216 | ||||||||||||||||||||||||||||
| Net income attributable to TSR, Inc. | - | 494,746 | 494,746 | 494,746 | ||||||||||||||||||||||||||||
| Balance at August 31, 2022 | 3,298,549 | $ | 32,986 | $ | 7,543,082 | $ | 20,964,788 | $ | (13,514,003 | ) | $ | 15,026,853 | $ | 82,671 | $ | 15,109,524 | ||||||||||||||||
| Shares of common stock | Common stock | Additional paid-in capital | Retained earnings | Treasury stock | TSR, Inc. equity | Non- controlling interest | Total equity | |||||||||||||||||||||||||
| Balance at May 31, 2023 | 3,322,527 | $ | 33,226 | $ | 7,676,742 | $ | 22,212,107 | $ | (13,726,895 | ) | $ | 16,195,180 | $ | 54,708 | $ | 16,249,888 | ||||||||||||||||
| Net income attributable to noncontrolling interest | - | 24,876 | 24,876 | |||||||||||||||||||||||||||||
| Non-cash stock compensation | - | 25,527 | 25,527 | 25,527 | ||||||||||||||||||||||||||||
| Net income attributable to TSR, Inc. | - | 546,788 | 546,788 | 546,788 | ||||||||||||||||||||||||||||
| Balance at August 31, 2023 | 3,322,527 | $ | 33,226 | $ | 7,702,269 | $ | 22,758,895 | $ | (13,726,895 | ) | $ | 16,767,495 | $ | 79,584 | $ | 16,847,079 | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 3
TSR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Three Months Ended August 31, 2023 and August 31, 2022
(UNAUDITED)
| Three Months Ended August 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Consolidated net income | $ | 571,664 | $ | 507,743 | ||||
| Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 59,746 | 62,260 | ||||||
| Unrealized (gain) loss on marketable securities, net | (2,960 | ) | 10,000 | |||||
| Deferred income taxes | 22,000 | 185,000 | ||||||
| Non-cash lease recovery | (1,542 | ) | (20,647 | ) | ||||
| Non-cash stock-based compensation expense | 25,527 | 69,216 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 78,820 | 745,986 | ||||||
| Other receivables | 15,966 | (22,040 | ) | |||||
| Prepaid expenses | (29,714 | ) | 7,515 | |||||
| Prepaid and recoverable income taxes | 26,725 | |||||||
| Accounts payable, other payables, accrued expenses and other current liabilities | (341,784 | ) | 300,464 | |||||
| Advances from customers | (12,012 | ) | 48,137 | |||||
| Income taxes payable | 181,000 | |||||||
| Legal settlement payable | - | (597,566 | ) | |||||
| Net cash provided by operating activities | 566,711 | 1,322,793 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of certificates of deposit | (500,000 | ) | ||||||
| Maturities of certificates of deposit | 245,000 | |||||||
| Purchases of equipment and leasehold improvements | (1,783 | ) | ||||||
| Net cash used in investing activities | (255,000 | ) | (1,783 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net repayments on credit facility | (61,882 | ) | ||||||
| Net cash used in financing activities | (61,882 | ) | ||||||
| Net increase in cash and cash equivalents | 311,711 | 1,259,128 | ||||||
| Cash and cash equivalents at beginning of period | 7,382,320 | 6,490,158 | ||||||
| Cash and cash equivalents at end of period | $ | 7,694,031 | $ | 7,749,286 | ||||
| Supplemental disclosures of cash flow data: | ||||||||
| Income taxes paid | $ | $ | 6,000 | |||||
| Interest paid | $ | 26,000 | $ | 17,000 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 4
TSR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2023
(Unaudited)
| 1. | Basis of Presentation |
The accompanying condensed consolidated interim financial statements include the accounts of TSR, Inc. and its subsidiaries. Unless otherwise stated or the context otherwise requires, the terms “we,” “us,” “our,” “TSR’” and the “Company” refer to TSR, Inc. and its subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of May 31, 2023, which has been derived from audited financial statements, and the unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America applying to interim financial information and with the instructions to Form 10-Q of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required by accounting principles generally accepted in the United States of America and normally included in the Company’s annual financial statements have been condensed or omitted. These condensed consolidated interim financial statements as of and for the three months ended August 31, 2023, are unaudited; however, in the opinion of management, such statements include all adjustments (consisting of normal recurring adjustments) necessary to present fairly the consolidated financial position, results of operations and cash flows of the Company for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results that might be expected for future interim periods or for the full year ending May 31, 2024. These condensed consolidated interim financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended May 31, 2023.
Recent Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires financial assets to be presented at the net amount to be collected, with an allowance for credit losses to be deducted from the amortized cost basis of the financial asset such that the net carrying value of the asset is presented as the amount expected to be collected. Under ASU 2016-13, the entity’s statement of operations is required to reflect the measurement of credit losses for newly recognized financial assets, as well as expected increases or decreases in expected credit losses that have taken place during the period. For public business entities, ASU 2016-013 is effective for fiscal years beginning after December 15, 2022. The Company adopted ASU No. 2016-13 on June 1, 2023 and the adoption of this update did not have a significant impact on the Company’s condensed consolidated financial statements
| 2. | Net Income Per Common Share |
Basic net income per common share is computed by dividing net income available to common stockholders of TSR by the weighted average number of common shares outstanding during the reporting period, excluding the effects of any potentially dilutive securities. During the quarter ended February 28, 2021, the Company granted time and performance vesting restricted stock awards under its 2020 Equity Incentive Plan (see Note 13 for further information). Diluted earnings per share gives effect to all potentially dilutive common shares outstanding during the reporting period. The common stock equivalents associated with these restricted stock awards of 103,588 and 90,226 have been included for dilutive shares outstanding for the three months ended August 31, 2023 and 2022, respectively.
Page 5
TSR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2023
(Unaudited)
| 3. | Cash and Cash Equivalents |
The Company considers short-term highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents were comprised of the following as of August 31, 2023 and May 31, 2023:
| August 31, 2023 | May 31, 2023 | |||||||
| Cash in banks | $ | 3,056,484 | $ | 7,010,568 | ||||
| Certificates of deposit | 1,500,000 | |||||||
| Money market funds | 3,137,547 | 371,752 | ||||||
| $ | 7,694,031 | $ | 7,382,320 | |||||
| 4. | Fair Value of Financial Instruments |
Accounting Standards Codification (“ASC”) Topic 825, Financial Instruments, requires disclosure of the fair value of certain financial instruments. For cash and cash equivalents, accounts receivable, accounts and other payables, accrued liabilities and advances from customers, the amounts presented in the condensed consolidated financial statements approximate fair value because of the short-term maturities of these instruments.
| 5. | Certificates of Deposit and Marketable Securities |
The Company has characterized its investments in certificates of deposit and marketable securities, based on the priority of the inputs used to value the investments, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). If the inputs used to measure the investments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
Investments recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs to valuation techniques as follows:
| ● | Level 1 - These are investments where values are based on unadjusted quoted prices for identical assets in an active market the Company has the ability to access. |
| ● | Level 2 - These are investments where values are based on quoted market prices that are not active or model derived valuations in which all significant inputs are observable in active markets. |
| ● | Level 3 - These are investments where values are derived from techniques in which one or more significant inputs are unobservable. |
Page 6
TSR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2023
(Unaudited)
The following are the major categories of assets measured at fair value on a recurring basis as of August 31, 2023, and May 31, 2023 using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2) and significant unobservable inputs (Level 3):
| August 31, 2023 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Certificates of Deposit | $ | 745,000 | $ | $ | $ | 745,000 | ||||||||||
| Equity Securities | 28,112 | 28,112 | ||||||||||||||
| $ | 773,112 | $ | $ | $ | 773,112 | |||||||||||
| May 31, 2023 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Certificates of Deposit | $ | 490,000 | $ | $ | $ | 490,000 | ||||||||||
| Equity Securities | 25,152 | 25,152 | ||||||||||||||
| $ | 515,152 | $ | $ | $ | 515,152 |
Based upon the Company’s intent and ability to hold its certificates of deposit to maturity (which range up to 12 months at purchase), such securities have been classified as held-to-maturity and are carried at amortized cost, which approximates market value. The Company’s equity securities are classified as trading securities, which are carried at fair value, as determined by quoted market prices, which is a Level 1 input, as established by the fair value hierarchy. The related unrealized gains and losses are included in earnings. The Company’s certificates of deposit and marketable securities at August 31, 2023 and May 31, 2023, are summarized as follows:
| August 31, 2023 | Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Recorded Value | ||||||||||||
| Equity Securities | $ | 16,866 | $ | 11,246 | $ | $ | 28,112 | |||||||||
| Certificates of Deposit | 745,000 | 745,000 | ||||||||||||||
| $ | 761,866 | $ | 11,246 | $ | $ | 773,112 | ||||||||||
| May 31, 2023 | Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Recorded Value | ||||||||||||
| Equity Securities | $ | 16,866 | $ | 8,286 | $ | $ | 25,152 | |||||||||
| Certificates of Deposit | 490,000 | 490,000 | ||||||||||||||
| $ | 506,866 | $ | 8,286 | $ | $ | 515,152 | ||||||||||
The Company’s investments in marketable securities consist primarily of investments in equity securities. Market values were determined for each individual security in the investment portfolio. When evaluating the investments for other-than-temporary impairment, the Company reviews factors such as length of time and extent to which fair value has been below cost basis, the financial condition of the issuer, and the Company’s ability and intent to hold the investment for a period of time, which may be sufficient for anticipated recovery in market values.
Page 7
TSR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2023
(Unaudited)
| 6. | Other Matters |
From time to time, the Company is party to various lawsuits, some involving material amounts. Management is not aware of any lawsuits that would have a material adverse impact on the consolidated financial position of the Company except for the litigation disclosed elsewhere in this report, including in Notes 9 and 11 to the condensed consolidated financial statements.
| 7. | Leases |
The Company leases the space for its offices in Hauppauge, New York and Edison, New Jersey. Under ASC 842, at contract inception we determine whether the contract is or contains a lease and whether the lease should be classified as an operating or finance lease. Operating leases are in right-of-use assets and operating lease liabilities are in our condensed consolidated balance sheets.
The Company’s leases for its offices are classified as operating leases.
The lease agreements for Hauppauge and New Jersey expire on December 31, 2026, and May 31, 2027, respectively, and do not include any renewal options.
In addition to the monthly base amounts in the lease agreements, the Company is required to pay real estate taxes and operating expenses during the lease terms.
For the three months ended August 31, 2023 and 2022, the Company’s operating lease expense for these leases was $66,922 and $84,977, respectively. These expenses were all included in selling, general and administrative expenses.
As there are no explicit rates provided in our leases, the Company’s incremental borrowing rate was used based on the information available as of the commencement date in determining the present value of the future lease payments. Future minimum lease payments under non-cancellable operating leases as of August 31, 2023, are as follows:
| Twelve Months Ending August 31, | ||||
| 2024 | $ | 154,841 | ||
| 2025 | 124,614 | |||
| 2026 | 127,729 | |||
| 2027 | 97,582 | |||
| Total undiscounted operating lease payments | 504,766 | |||
| Less imputed interest | 59,148 | |||
| Present value of operating lease payments | $ | 445,618 | ||
The following table sets forth the right-of-use assets and operating lease liabilities as of August 31, 2023:
| Assets | ||||
| Right-of-use assets, net | $ | 413,904 | ||
| Liabilities | ||||
| Current operating lease liabilities | $ | 128,475 | ||
| Long-term operating lease liabilities | 317,143 | |||
| Total operating lease liabilities | $ | 445,618 | ||
The weighted average remaining lease term for the Company’s operating leases is 3.4 years. The weighted average incremental borrowing rate was 7%.
Page 8
TSR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2023
(Unaudited)
| 8. | Credit Facility |
On November 27, 2019, TSR closed on a revolving credit facility (the “Credit Facility”) pursuant to a Loan and Security Agreement with Access Capital, Inc. (the “Lender”) which provides funding to TSR and its direct and indirect subsidiaries, TSR Consulting Services, Inc., Logixtech Solutions, LLC and Eurologix, S.A.R.L., each of which, together with TSR, is a borrower under the Credit Facility. Each of the borrowers has provided a security interest to the Lender in all of their respective assets to secure amounts borrowed under the Credit Facility.
TSR expects to utilize the Credit Facility for working capital and general corporate purposes. The maximum amount that may be advanced under the Credit Facility at any time shall not exceed $2,000,000.
Advances under the Credit Facility accrue interest at a rate per annum equal to (x) the “base rate” or “prime rate” announced by Citibank, N.A. from time to time, which shall be increased or decreased, as the case may be, in an amount equal to each increase or decrease in such “base rate” or “prime rate,” plus (y) 1.75%. The prime rate as of August 31, 2023 was 8.50%, indicating an interest rate of 10.25% on the Credit Facility. The initial term of the Credit Facility is five years, which shall automatically renew for successive five-year periods unless either TSR or the Lender gives written notice to the other of termination at least 60 days prior to the expiration date of the then-current term.
TSR is obliged to satisfy certain financial covenants and minimum borrowing requirements under the Credit Facility, and to pay certain fees, including prepayment fees, and provide certain financial information to the Lender. The Company was in compliance with all covenants at August 31, 2023.
As of August 31, 2023, the net payments exceeded borrowings outstanding against the Credit Facility resulting in a receivable from the Lender of $49,597 which is included in “Other receivables” on the condensed consolidated balance sheet. The amount the Company has borrowed fluctuates and, at times, it has utilized the maximum amount of $2,000,000 available under the facility to fund its payroll and other obligations.
| 9. | Legal Settlement with Investor |
On April 1, 2020, the Company entered into a binding term sheet (“Term Sheet”) with Zeff Capital, L.P. (“Zeff”) pursuant to which it agreed, among other things, 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 . In exchange for certain releases, the Term Sheet called for a cash payment of $300,000 on June 30, 2021, a second cash payment of $300,000 on June 30, 2022 and a third payment of $300,000 also on June 30, 2022, which could be paid in cash or common stock at the Company’s option. There was no interest due on these payments. The Company accrued $818,000, the estimated present value of these payments using an effective interest rate of 5%, in the quarter ended February 29, 2020, as the events relating to the expense occurred prior to such date. The $300,000 payment due on June 30, 2021, was paid when due. The two cash payments of $300,000 each were made by June 30, 2022 in full satisfaction of the settlement.
| 10. | Intangible Assets |
The Company amortizes its intangible assets over their estimated useful lives and will review these assets for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If intangible assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair market value.
Page 9
TSR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2023
(Unaudited)
Intangible assets are as follows:
| May 31, 2023 | Amortization | August 31, 2023 | ||||||||||
| Database (estimated life 5 years) | $ | 103,500 | $ | 11,500 | $ | 92,000 | ||||||
| Trademark (estimated life 3 years) | 5,000 | 5,000 | ||||||||||
| Customer relationships (estimated life 15 years) | 1,225,000 | 25,000 | 1,200,000 | |||||||||
| Total | $ | 1,333,500 | $ | 41,500 | $ | 1,292,000 | ||||||
No instances of triggering events or impairment indicators were identified at August 31, 2023.
| 11. | Related Party Transactions |
On January 5, 2021, the members of the Board of Directors of TSR other than Robert Fitzgerald approved providing a waiver to QAR Industries, Inc. for its contemplated acquisition of shares owned by Fintech Consulting LLC under the Company’s prior Amended and Restated Rights Agreement so that a distribution date would not occur as a result of the acquisition. QAR Industries, Inc. and Fintech Consulting LLC were both principal stockholders of the Company, each owning more than 5% of the Company’s outstanding common stock prior to the consummation of the acquisition. Robert Fitzgerald is the President and majority shareholder of QAR Industries, Inc. The other directors of the Company are not affiliated with QAR Industries, Inc.
On February 3, 2021, the acquisition was completed and QAR Industries, Inc. purchased 348,414 shares of TSR common stock from Fintech Consulting LLC at a price of $7.25 per share. At the same time, Bradley M. Tirpak, Chairman of TSR, purchased 27,586 shares of TSR common stock from Fintech Consulting LLC at a price of $7.25 per share.
On December 1, 2021, Fintech Consulting LLC filed a complaint against the Company in the United States District Court for the District of New Jersey, related to the foregoing transaction. The named Defendants in the complaint were the Company, QAR Industries, Inc., Robert E. Fitzgerald, a director and a shareholder of QAR Industries, Inc., and Bradley Tirpak. The complaint purported to assert claims against the Defendants under state law and Section 10(b) of the Exchange Act in connection with a Share Purchase Agreement, dated January 31, 2021, by and between the Plaintiff, as the seller of shares of TSR's common stock, and QAR Industries, Inc. and Mr. Tirpak, as the purchasers of such shares (the “SPA”). The plaintiff sought (i) judgment declaring the transactions represented by the SPA null and void and for the return of the shares; (ii) judgment cancelling the SPA and returning the shares in exchange for return of the purchase price; (iii) judgment unwinding the transaction; (iv) compensatory damages; (v) punitive damages; (vi) pre-judgment interest; (vii) costs of the lawsuit including attorneys’ fees; and (viii) such other relief as the Court may find appropriate. Fintech filed its first amended complaint on March 2, 2022 which Defendants moved to dismiss on April 19, 2022. On December 7, 2022, the court granted Defendants’ motion and dismissed the New Jersey Action on jurisdictional grounds.
Following the dismissal of the original lawsuit, the Plaintiff filed another complaint relating to the SPA against the Defendants on January 12, 2023, in the Court of Chancery of the State of Delaware (the “Delaware Chancery Action”), asserting claims and seeking relief substantially similar to that which was asserted and sought in the preceding lawsuit. The Delaware Chancery Action was dismissed without prejudice by the court on January 23, 2023.
On January 22, 2023, Fintech Consulting LLC filed a complaint against the Company in the United States District Court for the District of Delaware (the “Delaware Federal Action’). The Delaware Federal Action, in sum and substance, asserted claims and sought relief substantially similar to that contained in both the New Jersey Action and the Delaware Chancery Action.
Page 10
TSR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2023
(Unaudited)
Although the Company believed the Delaware Federal Action described above to be without merit, to avoid the time and expense of litigation, the Company negotiated with Fintech to settle this matter pursuant to a settlement agreement and release dated April 24, 2023. An amount of $75,000 was paid in the fourth quarter of fiscal year 2023 to settle this matter. Upon the payment of the settlement amount (i) the plaintiffs forever released and discharged the defendants from any and all claims or liability of any nature whatsoever; (ii) the defendants forever released and discharged the plaintiffs from any and all claims or liability of any nature whatsoever that relate to the Delaware Federal Action or the SPA; and (iii) the plaintiffs filed a Stipulation of Dismissal with Prejudice on April 27, 2023.
The Company has provided placement services for an entity in which a Board of Director of the Company is the former CEO. Revenues for such services in the quarters ended August 31, 2023, and 2022 were approximately $17,000 and $36,000, respectively. There were no amounts outstanding as accounts receivable from this entity as of August 31, 2023, or August 31, 2022.
| 12. | Common Stock |
Our certificate of incorporation, as amended, authorizes the issuance of up to 12,500,000 shares of common stock, $0.01 par value per share.
On October 8, 2021, the Company filed an automatic shelf registration statement on Form S-3 (File No. 333-260152) (the “2021 TSRI Shelf”) which contains (i) a base prospectus, which covers the offering, issuance and sale by the Company of up to $5,000,000 in the aggregate of shares of common stock from time to time in one or more offerings; and (ii) a sales agreement prospectus, which covers the offering, issuance and sale by the Company of up to $4,167,000 in the aggregate of shares of common stock that may be issued and sold from time to time under an at-the-market sales agreement (the “2021 ATM”) by and between the Company and A.G.P./Alliance Global Partners, as sales agent (the “2021 Agent”). The $4,167,000 of common stock that may be offered, issued and sold under the sales agreement prospectus is included in the $5,000,000 of shares of common stock that may be offered, issued and sold by the Company under the base prospectus. Upon termination of the sales agreement, any portion of the $4,167,000 included in the sales agreement prospectus that is not sold pursuant to the sales agreement will be available for sale in other offerings pursuant to the base prospectus and if no shares are sold under the agreement, the full $4,167,000 of securities may be sold in other offerings pursuant to the base prospectus. Under the 2021 ATM, we pay the 2021 Agent a commission rate equal to 3.0% of the gross sales price per share of all shares sold through the 2021 Agent under the sales agreement.
During the fiscal year ended May 31, 2022, we sold an aggregate of 142,500 shares of common stock pursuant to the 2021 ATM for total gross proceeds of $1,965,623 at an average selling price of $13.79 per share, resulting in net proceeds of $1,783,798 after deducting $181,825 in commissions and other transactions costs. There were no shares sold during the quarters ending August 31, 2023, or 2022.
The 2021 TSRI Shelf is currently our only active shelf-registration statement. We may offer TSR common stock registered under the 2021 TSRI Shelf from time to time in response to market conditions or other circumstances if we believe such a plan of financing is in the best interests of our stockholders. We believe that the 2021 TSRI Shelf provides us with the flexibility to raise additional capital to finance our operations as needed. However, there is no assurance we will be successful in doing so.
| 13. | Stock-based Compensation Expense |
On January 28, 2021, the Company granted 108,333 shares in time vesting restricted stock awards and 69,167 shares in time and performance vesting restricted stock awards to officers, directors and key employees under the TSR, Inc. 2020 Equity Incentive Plan (the “Plan”). The time vesting shares vest in tranches at the one, two and three-year anniversaries of the grants (“service condition”). These shares had a grant date fair value of $826,000 based on the closing price of TSR common stock on the day prior to the grants. The associated compensation expense is recognized on a straight-line basis over the time between grant date and the date the shares vest (the “service period”). The time and performance vesting shares also vest in tranches at or after the two- and three-year anniversaries of the grants.
Page 11
TSR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2023
(Unaudited)
The performance condition is defined in the grant agreements and relates to the market price of the Company’s common stock over a stated period of time (“market condition”). These shares had a grant date value of $262,000 based on the closing price of TSR common shares on the day prior to the grants discounted by an estimated forfeiture rate of 40-60%. The Company took into account the historical volatility of its common stock to assess the probability of satisfying the market condition. The associated compensation expense is recognized on a straight-line basis between the time the achievement of the performance criteria is deemed probable and the time the shares may vest. During the quarters ended August 31, 2023, and 2022, $25,527 and $69,216, respectively, have been recorded as stock-based compensation expense and included in selling, general and administrative expenses. As of August 31, 2023, there is approximately $43,000 of unearned compensation expense that will be expensed through February 2024; 142,666 stock awards expected to vest; 82,499 awards vested to date, of which 16,635 were forfeited to pay taxes applicable to the stock awards.
| 14. | Stock Repurchase Program |
On September 12, 2022, the Board of Directors authorized a stock repurchase program of up to $500,000 of the Company’s outstanding common stock, par value $0.01 per share. The stock repurchase program commenced two business days after the filing of the related Form 8-K and is authorized for twelve (12) months following the commencement date.
The shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with federal securities laws. The actual timing, number and value of shares repurchased under the program will be determined by the Board of Directors at its discretion and will depend on a number of factors, including the market price of Company’s stock, general market and economic conditions, and applicable legal and contractual requirements. The Company has no obligation or commitment to repurchase all or any portion of the shares covered by this authorization.
During the fiscal year ended May 31, 2023, 26,714 shares of the Company’s common stock were repurchased at an aggregate cost of $212,892. No shares were repurchased in the quarters ended August 31, 2023, or 2022.
Page 12
TSR, INC. AND SUBSIDIARIES
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the notes to such financial statements.
Forward-Looking Statements
Certain statements contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations, including statements concerning the Company’s plans, future prospects and future cash flow requirements are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projections in the forward-looking statements due to known and unknown risks and uncertainties, including but not limited to the following: the statements concerning the success of the Company’s plan for growth, both internally and through the previously announced pursuit of suitable acquisition candidates; the successful integration of announced and completed acquisitions and any anticipated benefits therefrom; the impact of adverse economic conditions on client spending which has a negative impact on the Company’s business; risks relating to the competitive nature of the markets for contract computer programming services; the extent to which market conditions for the Company’s contract computer programming services will continue to adversely affect the Company’s business; the concentration of the Company’s business with certain customers; uncertainty as to the Company’s ability to maintain its relations with existing customers and expand its business; the impact of changes in the industry, such as the use of vendor management companies in connection with the consultant procurement process; the increase in customers moving IT operations offshore; the Company’s ability to adapt to changing market conditions; the risks, uncertainties and expense of the legal proceedings to which the Company is a party; and other risks and uncertainties set forth in the Company’s filings with the Securities and Exchange Commission. The Company is under no obligation to publicly update or revise forward-looking statements.
Results of Operations
The following table sets forth, for the periods indicated, certain financial information derived from the Company’s condensed consolidated statements of operations. There can be no assurance that trends in operating results will continue in the future.
Three months ended August 31, 2023, compared with three months ended August 31, 2022:
| (Dollar amounts in thousands) Three Months Ended | ||||||||||||||||
| August 31, 2023 | August 31, 2022 | |||||||||||||||
| Amount | % of Revenue | Amount | % of Revenue | |||||||||||||
| Revenue, net | $ | 22,513 | 100.0 | % | $ | 26,199 | 100.0 | % | ||||||||
| Cost of sales | 18,486 | 82.1 | % | 21,767 | 83.1 | % | ||||||||||
| Gross profit | 4,027 | 17.9 | % | 4,432 | 16.9 | % | ||||||||||
| Selling, general and administrative expenses | 3,252 | 14.5 | % | 3,677 | 14.0 | % | ||||||||||
| Income from operations | 775 | 3.4 | % | 755 | 2.9 | % | ||||||||||
| Other expense, net | - | 0.0 | % | (29 | ) | (0.1 | )% | |||||||||
| Income before income taxes | 775 | 3.4 | % | 726 | 2.8 | % | ||||||||||
| Provision for income taxes | 203 | 0.9 | % | 218 | 0.8 | % | ||||||||||
| Consolidated net income | 572 | 2.5 | % | 508 | 2.0 | % | ||||||||||
| Less: Net income attributable to noncontrolling interest | 25 | 0.1 | % | 13 | 0.1 | % | ||||||||||
| Net income attributable to TSR, Inc. | $ | 547 | 2.4 | % | $ | 495 | 1.9 | % | ||||||||
Page 13
TSR, INC. AND SUBSIDIARIES
Revenue
Revenue consists primarily of revenue from computer programming consulting services. Revenue for the quarter ended August 31, 2023, decreased approximately $3,686,000 or 14.1% from the quarter ended August 31, 2022, primarily due to a decrease in clerical and administrative contractors placed with customers. The average number of consultants on billing with customers decreased from 680 for the quarter ended August 31, 2022 to 519 for the quarter ended August 31, 2023. There were 464 and 438 IT contractors at August 31, 2022 and 2023, respectively, while there were 216 and 81 clerical and administrative contractors at August 31, 2022 and 2023, respectively. Customers using our clerical and administrative contractors decreased their spending by terminating assignments early and hiring our contractors directly at a greater rate than usual.
Cost of Sales
Cost of sales for the quarter ended August 31, 2023, decreased approximately $3,281,000 or 15.1% to $18,486,000 from $21,767,000 in the prior year period. The decrease in cost of sales resulted primarily from a decrease in consultants placed with customers. Cost of sales as a percentage of revenue decreased from 83.1% in the quarter ended August 31, 2022, to 82.1% in the quarter ended August 31, 2023. Cost of sales decreased at a higher rate than revenue when comparing the quarter ended August 31, 2023, to the prior year period, causing an increase in gross margins. The change in the business mix towards having a higher percentage of IT contractors yielded the increase in gross margin percentage.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of expenses relating to account executives, technical recruiters, facilities costs, management, and corporate overhead. These expenses decreased approximately $425,000 or 11.6% from $3,677,000 in the quarter ended August 31, 2022, to $3,252,000 in the quarter ended August 31, 2023. The decrease in these expenses primarily resulted from a decrease of $205,000 from a reduction of both onshore and offshore recruiting in line with the decrease in new placement opportunities with customers, reduced legal fees of $73,000 and reduced costs associated with the upgrading of internal systems of $63,000. Additionally, the Company incurred non-cash compensation expenses of $26,000 in the quarter ended August 31, 2023, and $69,000 in the quarter ended August 31, 2022, related to the Plan. Selling, general and administrative expenses, as a percentage of revenue increased from 14.0% in the quarter ended August 31, 2022, to 14.5% in the quarter ended August 31, 2023.
Other Expense
Other expense for the quarter ended August 31, 2023, resulted primarily from net interest expense of $3,000 being offset by a mark to market gain of approximately $3,000 on the Company’s marketable equity securities. Other expense for the quarter ended August 31, 2022, resulted primarily from net interest expense of $19,000 and a mark to market loss of approximately $10,000 on the Company’s marketable equity securities.
Income Tax Provision
The income tax provision included in the Company’s results of operations for the quarters ended August 31, 2023, and 2022, reflect the Company’s estimated effective tax rate for the fiscal years ending May 31, 2024, and 2023, respectively. These rates resulted in a provision of 26.2% for the quarter ended August 31, 2023 and a provision of 30.0% for the quarter ended August 31, 2022.
Net Income Attributable to TSR, Inc.
Net income attributable to TSR, Inc. was approximately $547,000 in the quarter ended August 31, 2023, compared to $495,000 in the quarter ended August 31, 2022. The increase in net income over the prior year quarter was primarily attributable to the reduction of selling, general and administrative expenses, and an increase in gross margin percentage.
Page 14
TSR, INC. AND SUBSIDIARIES
Impact of inflation and Changing Prices
For the quarter ended August 31, 2023, and 2022, inflation and changing prices did not have a material effect on the Company’s revenue or income from operations.
Liquidity and Capital Resources
The Company’s cash was sufficient to enable it to meet its liquidity requirements during the quarter ended August 31, 2023. The Company expects that its cash and cash equivalents and the Company’s Credit Facility pursuant to a Loan and Security Agreement with Access Capital, Inc. (the “Lender”) will be sufficient to provide the Company with adequate resources to meet its liquidity requirements for the 12-month period following the issuance of these condensed consolidated financial statements. Utilizing its accounts receivable as collateral, the Company has secured this Credit Facility to increase its liquidity as necessary. As of August 31, 2023, the Company had no net borrowings outstanding against this Credit Facility. The amount the Company has borrowed fluctuates and, at times, it has utilized the maximum amount of $2,000,000 available under this facility to fund its payroll and other obligations. The Company was in compliance with all covenants under the Credit Facility as of August 31, 2023, and through the date of this filing.
At August 31, 2023, the Company had working capital (total current assets in excess of total current liabilities) of approximately $14,250,000, including cash and cash equivalents and marketable securities of $8,467,000 as compared to working capital of $13,551,000, including cash and cash equivalents and marketable securities of $7,897,000 at May 31, 2023.
Net cash flow of approximately $567,000 was provided by operations during the quarter ended August 31, 2023, as compared to $1,323,000 of net cash provided by operations in the prior year period. The cash provided by operations for the quarter ended August 31, 2023, primarily resulted from consolidated net income of $572,000, a decrease in accounts receivable of $79,000 and an increase in income taxes payable of $181,000 offset by a decrease in accounts payable and accrued expenses of $342,000. The cash provided by operations for the quarter ended August 31, 2022, primarily resulted from consolidated net income of $508,000, a decrease in accounts receivable of $746,000 and an increase in accounts payable and accrued expenses of $300,000 offset by a decrease in legal settlement payable of $598,000.
Net cash used in investing activities of approximately $255,000 for the quarter ended August 31, 2023, primarily resulted from purchases of certificates of deposits exceeding maturities. Net cash used in investing activities of $2,000 for the quarter ended August 31, 2022, primarily resulted from purchases of fixed assets.
There was no cash provided by or used in financing activities during the quarter ended August 31, 2023. Net cash used in financing activities during the quarter ended August 31, 2022, of $62,000 primarily resulted from net repayments under the Company’s Credit Facility.
The Company’s capital resource commitments at August 31, 2023, consisted of lease obligations on its branch and corporate facilities. The net present value of its future lease payments was approximately $446,000 as of August 31, 2023. The Company intends to finance these commitments primarily from the Company’s available cash and Credit Facility.
Page 15
TSR, INC. AND SUBSIDIARIES
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Critical Accounting Estimates
The Securities Act regulations define “critical accounting estimates” as those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant. These estimates require the application of management’s most difficult subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. These critical accounting estimates were discussed in the Company’s May 31, 2023 Annual Report on Form 10-K in Item 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations under the caption- Critical Accounting Estimates.
The Company’s significant accounting policies are described in Note 1 to the Company’s consolidated financial statements, contained in its May 31, 2023, Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. The Company believes that those accounting policies require the application of management’s most difficult, subjective or complex judgments and are thus considered critical accounting estimates under the Securities Act.
There have been no changes in the Company’s significant accounting policies or critical accounting estimates as of August 31, 2023.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
As a smaller reporting company, we are not required to provide the information called for by this Item.
Item 4. Controls and Procedures
Disclosure Controls and Procedures. The Company conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal accounting officer, of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934). Based on this evaluation, the principal executive officer and principal accounting officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective.
Internal Control Over Financial Reporting. There was no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Page 16
TSR, INC. AND SUBSIDIARIES
Part II. Other Information
Item 1. Legal Proceedings.
None
Item 1A. Risk Factors
We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2023, as filed with the Securities and Exchange Commission. We are not aware of any material updates to the risk factors described in our previously filed Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Page 17
TSR, INC. AND SUBSIDIARIES
Item 6. Exhibits
| Exhibit | Document | |
| Exhibit 31.1 | Rule 13a-14(a)/15d-14(a) Certification by Thomas Salerno as principal executive officer | |
| Exhibit 31.2 | Rule 13a-14(a)/15d-14(a) Certification by John G. Sharkey as principal financial officer | |
| Exhibit 32.1 | Section 1350 Certification by Thomas Salerno as principal executive officer | |
| Exhibit 32.2 | Section 1350 Certification by John G. Sharkey as principal financial officer | |
| Exhibit 101 | Interactive Data File containing the following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2023, formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) the Notes to the Condensed Consolidated Financial Statements. | |
| Exhibit 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Page 18
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 thereto duly authorized.
| TSR, Inc. | |
| (Registrant) | |
| Date: October 11, 2023 | /s/ Thomas Salerno |
| Thomas Salerno, Chief Executive Officer, President, Treasurer and Principal Executive Officer | |
| Date: October 11, 2023 | /s/ John G. Sharkey |
| John G. Sharkey, Sr. Vice President, Chief Financial Officer, Secretary, Principal Financial Officer and Principal Accounting Officer |
Page 19