UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
For the quarterly period ended
For the transition period from __ to __
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Securities registered pursuant to Section 12(b) of the Exchange Act:
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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.
☒
Indicate by check mark whether the registrant has submitted every Interactive
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(or for such shorter period that the registrant was required to submit such files). ☒
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 ☐ |
| 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. ☐
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☐ Yes
As of October 11, 2023, there were
EXPLANATORY NOTE
TSR, Inc. (the “Company,” “we,” “our,” or “us”) is filing this Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) to amend the Company’s Quarterly Report on Form 10-Q for the quarter ended August 31, 2023, filed with the U.S. Securities and Exchange Commission on October 11, 2023 (the “Quarterly Report”).
Background
On August 25, 2023, the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of the Company approved the payment of cash bonuses to the Company’s directors and certain of the Company’s executive officers in the event that a Sale of the Business occurs during the term of such directors’ service on the Board and such executive officers’ employment with the Company, respectively (each, a “Transaction Bonus”).
As a result of an inadvertent error, the Transaction Bonuses were not disclosed in the Quarterly Report. The Company is filing this Amendment No. 1 for the purpose of disclosing the terms of such Transaction Bonuses.
Items Amended in this Amendment No. 1
The following items are amended and restated in their entirety in this Amendment: (i) Part II, Item 5 (“Other Information”); and (ii) Part II, Item 6 (“Exhibits”). Except as described in the preceding sentence, this Amendment No. 1 does not amend, update, or change any other information in the Quarterly Report. Furthermore, this Amendment No. 1 does not change any previously reported financial results.
Item 5. Other Information
On August 25, 2023, the Compensation Committee approved the payment of cash bonuses to certain of the Company’s executive officers in the event that a Sale of the Business occurs during the term of such executive officers’ employment with the Company (each, a “Transaction Bonus”). For such purposes, a “Sale of the Business” means a transfer of the majority of the ownership by sale, acquisition, merger, or other method of the equity or tangible or intangible assets of the Company.
Following the Compensation Committee’s approval of Mr. John Sharkey’s Transaction Bonus, which was approved in the amount of (i) $75,000 for the Sale of the Business; and (ii) an additional $15,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business, the Company entered into an Addendum, effective as of November 3, 2023 (the “Addendum”), to the Amended and Restated Employment Agreement between the Company and John Sharkey, dated as of November 2, 2020, which Addendum was filed on Form 8-K with the SEC on October 27, 2023. Pursuant to the terms of the Addendum, Mr. Sharkey’s Transaction Bonus was increased from $75,000 to $100,000. All other terms of Mr. Sharkey’s Transaction Bonus as approved by the Compensation Committee remain the same.
Upon a Sale of the Business, the Transaction Bonus for each executive officer shall be paid out as follows:
| (a) | Thomas Salerno, Chief Executive Officer, President and Treasurer: (i) $150,000 for the Sale of the Business; and (ii) an additional $25,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (b) | John Sharkey, Senior Vice President, Chief Financial Officer and Secretary: (i) $100,000 for the Sale of the Business; and (ii) an additional $15,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (c) | Mohammad Shah Syed, Managing Director of Sales and Recruiting: (i) $60,000 for the Sale of the Business; and (ii) an additional $10,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
Item 6. Exhibits
| Exhibit | Document | |
| Exhibit 10.1* | Description of Transaction Bonus Arrangements by and between the Company and each of its directors, executive officers and certain key employees, entered into as of August 25, 2023. | |
| 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) |
| * | Filed herewith |
1
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: April 12, 2024 | /s/ Thomas Salerno |
| Thomas Salerno, Chief Executive Officer, President, Treasurer and Principal Executive Officer | |
| Date: April 12, 2024 | /s/ John G. Sharkey |
| John G. Sharkey, Sr. Vice President, Chief Financial Officer, Secretary, Principal Financial Officer and Principal Accounting Officer |
2
Exhibit 10.1
Description of the Transaction Bonus Arrangements
On August 25, 2023, the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of TSR, Inc. (the “Company”) approved the payment of cash bonuses to the directors, executive officers and certain key employees of the Company in the event that a Sale of the Business occurs during the term of such directors’ service on the Board of the Company and such executive officers’ and key employees’ employment with the Company, respectively (each, a “Transaction Bonus”). For such purposes, a “Sale of the Business” means a transfer of the majority of the ownership by sale, acquisition, merger, or other method of the equity or tangible or intangible assets of the Company.
Following the Compensation Committee’s approval of Mr. John Sharkey’s Transaction Bonus, which was approved in the amount of (i) $75,000 for the Sale of the Business; and (ii) an additional $15,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business, the Company entered into an Addendum, effective as of November 3, 2023 (the “Addendum”), to the Amended and Restated Employment Agreement between the Company and John Sharkey, dated as of November 2, 2020, which Addendum was filed on Form 8-K with the SEC on October 27, 2023. Pursuant to the terms of the Addendum, Mr. Sharkey’s Transaction Bonus was increased from $75,000 to $100,000. All other terms of Mr. Sharkey’s Transaction Bonus as approved by the Compensation Committee remain the same.
Upon a Sale of the Business, the Transaction Bonus for each director, executive officer and key employee named below shall be paid out as follows:
| (a) | Thomas Salerno, Chief Executive Officer, President and Treasurer: (i) $150,000 for the Sale of the Business; and (ii) an additional $25,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (b) | John Sharkey, Senior Vice President, Chief Financial Officer and Secretary: (i) $100,000 for the Sale of the Business; and (ii) an additional $15,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (c) | Mohammad Shah Syed, Managing Director of Sales and Recruiting: (i) $60,000 for the Sale of the Business; and (ii) an additional $10,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (d) | Marc Lichtenstein, Managing Director of Operations: (i) $55,000 for the Sale of the Business; and (ii) an additional $9,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (e) | Kurt Ausderan, Director of ADP Business Practice: (i) $30,000 for the Sale of the Business; and (ii) an additional $5,000 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (f) | Bradley Tirpak, Chairman of the Board: (i) $50,000 for the Sale of the Business; and (ii) an additional $7,500 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (g) | Tim Eriksen, Director: (i) $50,000 for the Sale of the Business; and (ii) an additional $7,500 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
| (h) | Rob Fitzgerald, Director: (i) $50,000 for the Sale of the Business; and (ii) an additional $7,500 for each full dollar in share price of the Company’s common stock that exceeds $12 per share at the time of the Sale of the Business. |
Exhibit 31.1
CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas Salerno, Chief Executive Officer, President, Treasurer and Principal Executive Officer certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q/A of TSR, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: April 12, 2024 | |
| /s/ Thomas Salerno | |
| Chief Executive Officer, President, Treasurer and Principal Executive Officer |
Exhibit 31.2
CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a), AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John G. Sharkey, Sr. Vice President, Chief Financial Officer and Principal Accounting Officer, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q/A of TSR, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: April 12, 2024 | |
| /s/ John G. Sharkey | |
| Sr. Vice President, Chief Financial Officer, Secretary, Principal Financial Officer and Principal Accounting Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of TSR, Inc. (the “Company”) on Form 10-Q/A for the quarter ended August 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas Salerno, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
The foregoing certification is incorporated solely for the purposes of complying with the provisions of Section 906 of the Sarbanes-Oxley Act and is not intended to be used for any other purpose.
| /s/ Thomas Salerno | |
| Chief Executive Officer, President, Treasurer and Principal Executive Officer | |
| April 12, 2024 |
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of TSR, Inc. (the “Company”) on Form 10-Q/A for the quarter ended August 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John G. Sharkey, Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
The foregoing certification is incorporated solely for the purposes of complying with the provisions of Section 906 of the Sarbanes-Oxley Act and is not intended to be used for any other purpose.
| /s/ John G. Sharkey | |
| Sr. Vice President, Chief Financial Officer, Secretary, Principal Financial Officer and Principal Accounting Officer | |
| April 12, 2024 |