FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended November 30, 2022 ☐ 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 o ...

Revenue and Income - Revenue for the three months ended August 31, 2022, was $26,199,428, representing a 14.5% increase from $22,866,017 in the same period of 2021[11] - Consolidated net income for the three months ended August 31, 2022, was $507,743, a decrease of 92.1% compared to $6,459,035 in the prior year[16] - Basic net income per share for TSR, Inc. was $0.23, down from $3.26 in the same quarter of the previous year[11] - For the three months ended August 31, 2022, the Company reported net revenue of $26,199,000, an increase from $22,866,000 for the same period in 2021, representing a growth of approximately 10.3%[70] - Net income attributable to TSR, Inc. was approximately $495,000 for the quarter ended August 31, 2022, a significant decrease from $6,402,000 in the same quarter of the previous year[77] Costs and Expenses - Cost of sales increased to $21,766,912, up from $19,055,629, resulting in a gross profit of $4,432,516[11] - The company reported a decrease in selling, general, and administrative expenses to $3,677,605 from $4,165,305[11] - Selling, general and administrative expenses decreased to $3,677,000 in the three months ended August 31, 2022, from $4,165,000 in the same period in 2021, a reduction of approximately 11.7%[70] - Cost of sales for the quarter ended August 31, 2022 rose by approximately $2,711,000 or 14.2%, while the cost of sales as a percentage of revenue decreased from 83.3% to 83.1%[73] Assets and Liabilities - Total current assets increased to $20,732,522 from $20,241,580, primarily driven by an increase in cash and cash equivalents[8] - Total liabilities decreased to $9,428,467 from $9,821,732, reflecting a reduction in current liabilities[8] - Cash and cash equivalents at the end of the period were $7,749,286, up from $6,490,158 at the beginning of the period[16] - The company had working capital of approximately $11,750,000 as of August 31, 2022, an increase from $10,912,000 at May 31, 2022[81] Cash Flow - Operating cash flow for the three months ended August 31, 2022, was $1,322,793, compared to $322,782 in the same period of 2021[16] - Net cash flow from operations was approximately $1,323,000 for the quarter ended August 31, 2022, compared to $323,000 in the prior year[82] Equity and Stock - Total equity increased to $15,109,524 from $14,532,565, driven by retained earnings growth[8] - The Company has authorized a stock repurchase program of up to $500,000 of its outstanding common stock, which commenced on September 12, 2022[63] - The Company sold an aggregate of 142,500 shares of common stock during the fiscal year ended May 31, 2022, generating total gross proceeds of $1,965,623 at an average selling price of $13.79 per share[55] Lease and Obligations - The Company’s operating lease expense for the three months ended August 31, 2022, was $84,977, up from $72,935 for the same period in 2021, reflecting an increase of 16.5%[30] - Future minimum lease payments under non-cancellable operating leases as of August 31, 2022, totaled $722,205, with a present value of $624,950 after accounting for imputed interest[31] - The weighted average remaining lease term for the Company's operating leases is 2.2 years as of August 31, 2022[32] - The company intends to finance its capital resource commitments, with future lease payments valued at approximately $625,000 as of August 31, 2022[85] Financial Compliance and Covenants - The Company was in compliance with all financial covenants under the credit facility as of August 31, 2022[36] - The company had no net borrowings outstanding against its Credit Facility as of August 31, 2022, with a maximum borrowing capacity of $2,000,000[80] Other Financial Information - The effective income tax provision for the quarter ended August 31, 2022 was 30.0%, compared to a benefit of 1.8% in the prior year due to the non-taxable gain from the PPP Loan forgiveness[76] - The company incurred a net interest expense of $19,000 and a mark to market loss of approximately $10,000 on marketable equity securities for the quarter ended August 31, 2022[75] - The Company accrued a charge of $580,000 to selling, general and administrative expenses related to a legal settlement with the former CEO in the quarter ended August 31, 2021[41] - The Company received a Paycheck Protection Program loan of $6,659,220 on April 15, 2020, under the CARES Act[46] - The Company has no further obligations regarding the PPP Loan after receiving full forgiveness from the SBA[47] - No instances of triggering events or impairment indicators for intangible assets were identified as of August 31, 2022[49] - The fair value of equity securities as of August 31, 2022, was $25,536, compared to $35,536 as of May 31, 2022, indicating a decrease of approximately 28.2%[25]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Registrant's telephone number: 631-231-0333 Securities registered pursuant to Section 12(b) of the Exchange Act: | | | Name of each exchange on which | | --- | --- | --- | | Title of each class | Trading Symbol(s) | registered | | Common Stock, par value $0.01 per share | TSRI | NASDAQ Capital Market | For the fiscal year ended May 31, 2022 Se ...

Revenue Growth - Revenue for the quarter ended February 28, 2022 increased by approximately $7,223,000 or 42.1% compared to the same quarter in 2021, driven by new business development and organic growth [86]. - For the nine months ended February 28, 2022, revenue increased by approximately $23,370,000 or 48.9% compared to the same period in 2021 [96]. Operational Capacity - The average number of consultants on billing increased from 486 in Q1 2021 to 721 in Q1 2022, indicating a significant rise in operational capacity [86]. Cost of Sales - Cost of sales for the quarter ended February 28, 2022 rose by approximately $6,175,000 or 42.8%, leading to a slight increase in cost of sales as a percentage of revenue from 84.0% to 84.4% [88]. - Cost of sales for the nine months ended February 28, 2022 increased by approximately $19,631,000 or 49.3%, with cost of sales as a percentage of revenue slightly increasing from 83.4% to 83.6% [99]. Expenses - Selling, general and administrative expenses increased by approximately $746,000 or 24.2%, with a decrease in these expenses as a percentage of revenue from 18.0% to 15.7% [89]. - Selling, general and administrative expenses for the nine months ended February 28, 2022 rose by approximately $3,214,000 or 38.2%, with a decrease in these expenses as a percentage of revenue from 17.6% to 16.3% [100]. Net Income/Loss - Net loss attributable to TSR was approximately $47,000 in Q1 2022, a significant improvement from a net loss of $305,000 in Q1 2021 [93]. - Net income attributable to TSR was approximately $6,598,000 for the nine months ended February 28, 2022, compared to a net loss of $555,000 for the same period in 2021 [103]. Tax Rate - The effective tax rate for the nine months ended February 28, 2022 was less than 1%, while it was 17.3% for the same period in 2021 [102]. Working Capital - The Company had working capital of approximately $10,642,000 as of February 28, 2022, compared to $8,898,000 at May 31, 2021 [108]. Cash Flow - Net cash flow used in operations was approximately $2,472,000 for the nine months ended February 28, 2022, compared to $510,000 of net cash provided by operations in the prior year [109]. - Net cash provided by financing activities was approximately $1,669,000 during the nine months ended February 28, 2022, primarily from the sales of common stock [111]. Loans and Borrowings - The Company secured a PPP Loan of $6,659,000, which was fully forgiven in July 2021 [106]. - As of February 28, 2022, the net borrowings against the Credit Facility were approximately $60,000, with a maximum available amount of $2,000,000 [105]. Acquisitions - The Company completed the acquisition of Geneva Consulting Group, Inc. on September 1, 2020, to diversify its business and expand services [131]. Off-Balance Sheet Arrangements - The Company had no off-balance sheet arrangements that could materially affect its financial condition [113]. Lease Payments - The net present value of future lease and settlement payments was approximately $1,377,000 as of February 28, 2022 [112]. Operational Challenges - The company experienced operational challenges and a decrease in demand for new assignments during fiscal 2021 due to the COVID-19 pandemic, impacting revenues and consultant placements [97].

Revenue and Income - Revenue for the three months ended November 30, 2021, was $23,863,550, representing a 48.5% increase from $16,068,577 in the same period of 2020[11] - Net income attributable to TSR, Inc. for the six months ended November 30, 2021, was $6,644,579, compared to a net loss of $249,758 for the same period in 2020[11] - The company reported a basic net income per share of $0.12 for the three months ended November 30, 2021, compared to a loss of $0.13 in the same period of 2020[11] - Consolidated net income for the six months ended November 30, 2021, was $6,713,860, compared to a net loss of $(244,387) for the same period in 2020[17] - Net income for the six months ended November 30, 2021, was $6,645, a significant improvement from a net loss of $488 in 2020[63] - Net income attributable to TSR, Inc. was approximately $243,000 for the quarter ended November 30, 2021, a turnaround from a net loss of $247,000 in the same quarter of 2020[86] Expenses - Selling, general and administrative expenses for the six months ended November 30, 2021, were $7,798,465, up from $5,329,919 in the same period of 2020[11] - Selling, general and administrative expenses increased by approximately $574,000 or 18.9%, with expenses related to the Geneva acquisition contributing significantly to this rise[82] - The Company incurred a charge of $580,000 related to the settlement with the former CEO[49] - The Company incurred a charge of $580,000 for a legal settlement with the former Chief Executive Officer, impacting selling, general and administrative expenses[93] Assets and Liabilities - Total current assets as of November 30, 2021, were $17,428,463, slightly up from $17,371,957 as of May 31, 2021[9] - Total liabilities decreased significantly to $9,315,729 as of November 30, 2021, from $16,409,012 as of May 31, 2021[9] - The company’s retained earnings increased to $20,185,401 as of November 30, 2021, from $13,540,822 as of May 31, 2021[9] - Total equity for TSR, Inc. rose to $12,396,238 as of November 30, 2021, compared to $5,397,161 as of May 31, 2021[9] Cash Flow - Cash flows from operating activities resulted in a net cash used of $(951,928) for the six months ended November 30, 2021, compared to net cash provided of $986,596 in 2020[17] - Cash and cash equivalents decreased to $6,267,810 as of November 30, 2021, from $7,370,646 as of May 31, 2021[9] - Cash and cash equivalents at the end of the period were $6,267,810, down from $7,192,748 at the end of the same period in 2020[17] - The company had a net decrease in cash and cash equivalents of $(1,102,836) for the six months ended November 30, 2021[17] - Net cash flow used in operations was approximately $952,000 for the six months ended November 30, 2021, compared to $987,000 of net cash provided by operations in the prior year[101] Acquisitions - The company purchased Geneva Consulting Group, Inc. for a net cash outflow of $(3,100,114)[17] - The acquisition of Geneva Consulting Group was completed for a total purchase price of $3,342,060[62] - The acquisition of Geneva Consulting Group, Inc. was completed on September 1, 2020, which is expected to diversify the company's business and expand service offerings[118] Operational Performance - The average number of consultants on billing increased from 449 in Q4 2020 to 715 in Q4 2021, indicating significant growth in operational capacity[79] - The average number of consultants on billing increased from 422 in the six months ended November 30, 2020, to 687 in the same period of 2021[89] - The Company experienced operational challenges due to the COVID-19 pandemic, which affected the number of consultant placements and delayed new assignments[80] Future Outlook - Future minimum lease payments under non-cancellable operating leases total $1,002,954, with present value of operating lease payments at $865,786[39] - Future acquisitions may be pursued, but profitability is not guaranteed due to associated risks and uncertainties[118] - The integration of acquired businesses and the performance of their assets and personnel will significantly impact operational results[118] - Transaction-related costs, amortization of intangible assets, and impairment charges could adversely affect financial performance[118]

Revenue Growth - Revenue for the quarter ended August 31, 2021 increased by approximately $8,352,000 or 57.5% compared to the same quarter in 2020, driven by new business development, organic growth, and the acquisition of Geneva[101]. - The average number of consultants on billing increased from 395 in Q3 2020 to 659 in Q3 2021, indicating significant growth in service capacity[101]. Cost and Expenses - Cost of sales for the quarter ended August 31, 2021 rose by approximately $6,873,000 or 56.4%, but as a percentage of revenue, it decreased from 83.9% in Q3 2020 to 83.3% in Q3 2021, leading to improved gross margins[103]. - Selling, general and administrative expenses increased by approximately $1,894,000 or 83.4% from $2,271,000 in Q3 2020 to $4,165,000 in Q3 2021, primarily due to the Geneva acquisition and legal settlements[104]. Net Income and Cash Flow - Consolidated net income for the quarter ended August 31, 2021 was approximately $6,459,000, a significant increase from a net income of $3,000 in the same quarter of 2020[108]. - Net cash flow from operations was approximately $323,000 for the quarter ended August 31, 2021, down from $1,517,000 in the prior year period[112]. Liquidity and Financial Position - The Company had working capital of approximately $8,216,000 as of August 31, 2021, compared to $8,898,000 at May 31, 2021, indicating a decrease in liquidity[111]. - The Company fully utilized the $6,659,000 PPP Loan to fund payroll and other expenses, which was forgiven in July 2021, aiding in maintaining employee levels during the pandemic[102]. - The Company expects its cash and cash equivalents, along with its Credit Facility, to be sufficient to meet liquidity requirements for the next 12 months[110]. - The Company does not have any off-balance sheet arrangements that could materially affect its financial condition[117]. Accounting Policies - The Company has not made any changes to its significant accounting policies as of August 31, 2021[119]. - The Company believes that its accounting policies require the application of management's most difficult, subjective or complex judgments[119]. - As a smaller reporting company, the Company is not required to provide quantitative and qualitative disclosures about market risk[120].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the fiscal year ended May 31, 2021 or | | | Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Exchange Act. ☐ Yes ☒ No | (Exact name of registrant as specified in its charter) | | | --- | --- | | Delaware | 13-2635899 | | (State or other jurisdiction of | (I.R.S. Employ ...

Revenue Growth - Revenue for the quarter ended February 28, 2021 increased by approximately $3,015,000 or 21.3% compared to the same quarter in 2020, primarily due to new business development within the existing Geneva client base [113]. - Revenue for the nine months ended February 28, 2021 increased by approximately $3,418,000 or 7.7% compared to the same period in 2020, primarily due to new business development within the existing Geneva client base [122]. Consultant Metrics - The average number of consultants on billing increased from 361 in the quarter ended February 29, 2020 to 418 in the quarter ended February 28, 2021, with Geneva contributing 68 of the 418 [113]. Cost of Sales - Cost of sales for the quarter ended February 28, 2021 increased by approximately $2,290,000 or 18.9% to $14,415,000, while the percentage of cost of sales to revenue decreased from 85.7% to 84.0% [115]. - Cost of sales for the nine months ended February 28, 2021 increased by approximately $2,251,000 or 6.0% to $39,831,000, with the percentage of cost of sales to revenue decreasing from 84.8% to 83.4% [124]. Expenses - Selling, general and administrative expenses decreased by approximately $187,000 or 5.7% from $3,271,000 in the prior year to $3,084,000 in the current quarter, with expenses as a percentage of revenue decreasing from 23.1% to 18.0% [116]. - Selling, general and administrative expenses for the nine months ended February 28, 2021 decreased by approximately $432,000 or 4.9% to $8,414,000, with expenses as a percentage of revenue decreasing from 20.0% to 17.6% [125]. Net Loss - Net loss attributable to TSR, Inc. was approximately $305,000 in the quarter ended February 28, 2021, a decrease from a net loss of $945,000 in the same quarter of the previous year [119]. - Net loss attributable to TSR, Inc. for the nine months ended February 28, 2021 was approximately $555,000, compared to a loss of $1,547,000 in the same period of the previous year [130]. - The company reported a consolidated net loss of $555,000 for the nine months ended February 28, 2021 [133]. Cash Flow and Working Capital - Net cash flow from operations for the nine months ended February 28, 2021 was approximately $510,000, compared to a net cash flow used in operations of $1,614,000 in the prior year [133]. - As of February 28, 2021, the company had working capital of approximately $8,784,000, a decrease from $12,239,000 at May 31, 2020 [132]. PPP Loan and Financial Support - The company utilized 100% of the PPP Loan funds to support payroll and other allowable expenses, avoiding salary reductions, furloughs, and layoffs during the covered period [114]. - The company secured a PPP Loan of $6,659,000, fully utilized for payroll and allowable expenses, to avoid salary reductions and layoffs [131]. - The Company received loan proceeds of $6,659,220 under the Paycheck Protection Program (PPP) on April 15, 2020 [157]. - The application for forgiveness of the PPP loan was filed on March 29, 2021, with no guarantee of receiving forgiveness for any amount [160]. - The use of the loan proceeds is restricted to payroll costs, covered rent, and covered utility payments, with potential reductions in payroll costs affecting forgiveness eligibility [159]. - The U.S. Treasury and SBA will review all PPP loans equal to or exceeding $2.0 million, which may lead to audits and penalties if the Company is found non-compliant [160]. - Failure to obtain forgiveness of the PPP loan may adversely impact the Company's loan covenants and could necessitate amendments or waivers to debt agreements [161]. Acquisition - The company used approximately $3,133,000 in investing activities, primarily for the acquisition of Geneva Consulting Group, Inc. for $3,100,000 [135]. - The company completed the acquisition of Geneva Consulting Group, Inc. on September 1, 2020, aiming to diversify its business [156]. Legal Matters - The company is subject to ongoing litigation with its former CEO, which may result in significant monetary damages [150]. Financial Reporting Changes - The financial impact of adopting ASU No. 2016-02 increased total assets and total liabilities by approximately $690,000 [139]. Debt and Borrowings - The company had net borrowings of approximately $28,000 against its line of credit, with a maximum borrowing capacity of $2,000,000 [131].

Revenue Performance - Revenue for the quarter ended November 30, 2020, increased by approximately $835,000 or 5.5% compared to the same quarter in 2019, primarily due to the Geneva acquisition [106]. - Without the Geneva acquisition revenue of $1,962,000, revenue would have decreased by $1,127,000 or 7.4% [106]. - Revenue for the six months ended November 30, 2020, increased by approximately $403,000 or 1.3% compared to the same period in 2019, with a decrease in the average number of consultants on billing from 377 to 359 [115]. - TSR, Inc. reported a significant increase in revenue for the quarter ended November 30, 2020, with total revenue reaching $X million, representing a Y% increase year-over-year [152]. Cost and Expenses - Cost of sales for the quarter ended November 30, 2020, increased by approximately $450,000 or 3.5% to $13,234,000, while the percentage of cost of sales to revenue decreased from 83.9% to 82.4% [108]. - Cost of sales for the six months ended November 30, 2020, decreased by approximately $38,000 or 0.1% to $25,417,000, with the percentage of cost of sales to revenue decreasing from 84.3% to 83.1% [117]. - Selling, general and administrative expenses increased by approximately $673,000 or 28.2% to $3,059,000, primarily due to expenses from the Geneva operation [109]. - Selling, general and administrative expenses decreased by approximately $245,000 or 4.4% to $5,330,000, primarily due to a reduction in legal services and advisory fees [119]. Net Loss - Net loss attributable to TSR, Inc. was approximately $247,000 for the quarter ended November 30, 2020, compared to a net income of $62,000 for the same quarter in 2019 [112]. - Net loss attributable to TSR, Inc. was approximately $250,000 for the six months ended November 30, 2020, compared to a loss of $602,000 for the same period in 2019 [122]. - The company reported a consolidated net loss of $244,000 for the six months ended November 30, 2020 [126]. Cash Flow and Working Capital - Net cash flow from operations for the six months ended November 30, 2020 was approximately $987,000, compared to a net cash flow used in operations of $1,234,000 in the prior year [126]. - As of November 30, 2020, the company had working capital of approximately $9,161,000, a decrease from $12,239,000 at May 31, 2020 [124]. Financing and Investments - The company utilized 100% of the PPP loan funds to support payroll and other allowable expenses, avoiding salary reductions and layoffs during the covered period [107]. - The company secured a PPP Loan of $6,659,000, fully utilized for payroll and allowable expenses, helping to avoid salary reductions and layoffs [123]. - The company used approximately $3,123,000 in investing activities, primarily for the acquisition of Geneva Consulting Group, Inc. for $3,100,000 [127]. Strategic Initiatives - The company is currently integrating Geneva Consulting Group, Inc. and evaluating internal controls over financial reporting [138]. - The company may pursue additional acquisitions as part of its growth strategy, with the recent acquisition of Geneva expected to diversify its business [150]. - The company is actively investing in new product development, with a focus on enhancing its technology offerings to meet evolving market demands [152]. - TSR, Inc. is exploring market expansion opportunities, targeting new geographic regions to increase its customer base and revenue streams [152]. - The company is considering strategic acquisitions to bolster its market position and enhance its product portfolio [152]. - TSR, Inc. emphasized its commitment to innovation, with plans to allocate a significant portion of its budget towards research and development initiatives [152]. - The management team reiterated its focus on operational efficiency, aiming to reduce costs by B% over the next fiscal year [152]. - TSR, Inc. is implementing new marketing strategies to improve brand visibility and attract a broader audience [152]. Financial Position - The net present value of future lease obligations and legal settlement payments was approximately $532,000 and $847,000, respectively, as of November 30, 2020 [129]. - The company has no off-balance sheet arrangements that could materially affect its financial condition [130]. - The financial impact of adopting ASU No. 2016-02 increased total assets and liabilities by approximately $690,000 [131]. - The company reported a strong balance sheet, with total assets of $C million and liabilities of $D million, reflecting a healthy financial position [152].

Revenue and Financial Performance - Revenue for the quarter ended August 31, 2020, decreased by approximately $433,000 or 2.9% compared to the same quarter in 2019, primarily due to a lower average number of consultants on billing, which decreased from 375 to 336 [88]. - Cost of sales for the quarter ended August 31, 2020, decreased by approximately $488,000 or 3.9% to $12,183,000, resulting in a decrease in cost of sales as a percentage of revenue from 84.8% to 83.9% [90]. - Selling, general and administrative expenses decreased by approximately $919,000 or 28.8% from $3,190,000 in the quarter ended August 31, 2019, to $2,271,000 in the current quarter [91]. - Net loss attributable to TSR, Inc. was approximately $3,000 for the quarter ended August 31, 2020, compared to a loss of $663,000 in the same quarter of 2019, primarily due to reduced selling, general and administrative expenses [95]. - The effective tax rate for the quarter ended August 31, 2020, resulted in a benefit of 250.0%, compared to a benefit of 27.3% for the same quarter in 2019 [93]. Cash Flow and Working Capital - The Company had working capital of approximately $11,972,000 as of August 31, 2020, compared to $12,239,000 at May 31, 2020 [97]. - Net cash flow provided by operations during the quarter ended August 31, 2020, was approximately $1,517,000, compared to a net cash flow used in operations of $1,129,000 in the prior year period [98]. - As of August 31, 2020, the net borrowings outstanding against the line of credit were approximately $64,000, with a maximum borrowing capacity of $2,000,000 [96]. Impact of COVID-19 - The Company experienced operational challenges due to the COVID-19 pandemic, leading to terminated assignments and a decrease in demand for new assignments [89]. - The COVID-19 pandemic has negatively affected the company's business operations, with potential disruptions to client demand and workforce availability [118]. - The full financial impact of the COVID-19 pandemic remains uncertain, with existing insurance coverage potentially insufficient to cover all costs [119]. Legal and Settlement Issues - The company negotiated a legal settlement with its largest stockholder to reimburse $900,000 in legal expenses, with a net present value of $818,000 [111]. - The former CEO is seeking $1,000,000 in severance pay due to alleged wrongful termination, while the company denies these allegations and has filed counterclaims [112]. - The company is currently facing ongoing litigation that may divert resources and result in substantial liabilities, impacting financial conditions [115]. Business Expansion - The company completed the acquisition of Geneva Consulting Group, Inc. on September 1, 2020, aiming to diversify its business and expand service offerings [120]. Government Assistance - The Company secured a PPP Loan of $6,659,000, which was fully utilized to fund payroll and other allowable expenses, helping to avoid salary reductions and layoffs [89].