8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

May 17, 2021

Date of Report (Date of earliest event reported)

TSS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-33627	20-2027651
(State or other jurisdiction of<br><br> <br>incorporation)	(Commission File Number)	(I.R.S. Employer<br><br> <br>Identification No.)
110 E. Old Settlers Road
Round Rock, Texas		78664
(Address of principal executive offices)		(Zip Code)
(512) 310-1000
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(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of this Act: None.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of  the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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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Item 2.02.	Results of Operations and Financial Condition.

On Monday, May 17, 2021, TSS, Inc. (the “Company”), issued a press release reporting certain financial results of the Company for the three months ended March 31, 2021. A copy of the press release is being furnished herewith as Exhibit 99.1.

The Company’s press release contains non-GAAP financial measures. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Disclosure regarding definitions of these measures used by the Company and why the Company’s management believes the measures provide useful information to investors is also included in the press release.

The Company will conduct a conference call to discuss its financial results on Monday, May 17, 2021, at 4:30 p.m. Eastern Time.

The information in this Report, including Exhibit 99.1 attached hereto, is furnished pursuant to Item 2.02 of this Current Report on Form 8-K. Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Statements contained in this report contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements may address matters such as our expected future business and financial performance, and often contain words such as “guidance,” “prospects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could adversely or positively affect the Company’s future results include: the Company may not have sufficient resources to fund its business and may need to issue debt or equity to obtain additional funding; the Company’s reliance on a significant portion of its revenues from a limited number of customers; risks relating to operating in a highly competitive industry; risks relating to the failure to maintain effective internal control over financial reporting; risks relating to rapid technological, structural, and competitive changes affecting the industries the Company serves; risks involved in properly managing complex projects; risks relating to the possible cancellation of customer contracts on short notice; risks relating to the Company’s ability to continue to implement its strategy, including having sufficient financial resources to carry out that strategy; risks relating to the Company’s ability to meet all of the terms and conditions of its debt obligations; uncertainty related to current economic conditions, including the impact of the COVID-19 pandemic, and the related impact on demand for the Company’s services; and other risks and uncertainties disclosed in the Company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2020. These uncertainties may cause the Company’s actual future results to be materially different than those expressed in the Company’s forward-looking statements. The Company does not undertake to update its forward-looking statements.

Item 9.01.	Financial Statements and Exhibits.
99.1	Press Release, dated May 17, 2021
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S I G N A T U R E S

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 hereunto duly authorized.

TSS, INC.
By:	/s/ John Penver
	John Penver
	Chief Financial Officer

Date: May 17, 2021

ex_250782.htm

Exhibit 99.1

TSS, INC. REPORTS FIRST QUARTER 2021 RESULTS

ROUND ROCK, TX – May 17, 2021 – **TSS, Inc. (**Other OTC: TSSI), **** a data center facilities and technology services company, reported results for its first quarter ended March 31, 2021.

First Quarter Highlights:

●	First quarter 2021 revenue of $5.2 million compared with $10.6 million in the first quarter of 2020. Reseller revenues were $2.2 million in the first quarter of 2021 compared with $6.8 million in the first quarter of 2020.
●	Gross margin of 25% in the first quarter of 2021 compared with 15% in the first quarter of 2020.
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●	Operating loss of $607,000 in the first quarter of 2021 compared to operating loss of $277,000 in the first quarter of 2020.
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●	Net loss of $699,000 or $0.04 per share in the first quarter of 2021 compared to net loss of $368,000 or $0.02 per share in the first quarter of 2020.
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●	Adjusted EBITDA loss of $334,000 in the first quarter of 2021 compared with Adjusted EBITDA loss of $49,000 in the first quarter of 2020.
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“We continue to see fluctuations in our revenue and profitability quarter to quarter. These fluctuations are primarily due to the timing of delivery of new projects We anticipate these quarterly fluctuations to continue throughout the year.” said Anthony Angelini, President and Chief Executive Officer of TSS. “We are seeing a significant number of large opportunities within all of our business units. Our expectation is the delivery of these opportunities will result in significant positive results in the second half of the year and into next year.”

Quarterly Conference Call Details

The Company has scheduled a conference call to discuss the first quarter 2021 financial results for Monday, May 17, 2021 at 4:30 PM Eastern. To participate on the conference call, please dial 877-691-2551 toll free from the U.S., or 630-691-2747 for international callers. The conference code is 50165343#. Investors may also access a live audio web cast of this conference call under the “events” tab on the investor relations section of the Company's website at www.tssiusa.com.

An audio replay of the conference call will be available approximately one hour after the conclusion of the call and will be made available until June 17, 2021. The audio replay can be accessed at the following url: https://onlinexperiences.com/Launch/QReg/ShowUUID=303414BB-CB0A-4B6B-B9B4-0AD19D7A9ADF&LangLocaleID=1033. The passcode to access the digital playback is 50165343. Additionally, a replay of the webcast will be available on the Company’s website approximately two hours after the conclusion of the call and will remain available for 30 calendar days.

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About Non-GAAP Financial Measures

Adjusted EBITDA is a supplemental financial measure not defined under Generally Accepted Accounting Principles (GAAP). We define Adjusted EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization, impairment loss on goodwill and other intangibles, stock-based compensation, and provision for bad debts. We present Adjusted EBITDA because we believe this supplemental measure of operating performance is helpful in comparing our operating results across reporting periods on a consistent basis by excluding non-cash items that may, or could, have a disproportionate positive or negative impact on our results of operations in any particular period. We also use Adjusted EBITDA as a factor in evaluating the performance of certain management personnel when determining incentive compensation.

Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA, while providing useful information, should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP. Consistent with Regulation G under the U.S. federal securities laws, Adjusted EBITDA has been reconciled to the nearest GAAP measure, and this reconciliation is located under the heading “Adjusted EBITDA Reconciliation” following the Consolidated Statements of Operations included in this press release.

About TSS, Inc.

TSS is a trusted single source provider of mission-critical planning, design, system integration, deployment, maintenance and evolution of data centers facilities and information infrastructure. TSS specializes in customizable end to end solutions powered by industry experts and innovative services that include technology consulting, engineering, design, construction, operations, facilities management, technology system installation and integration, as well as maintenance for traditional and modular data centers. For more information, visit www.tssiusa.com or call 888-321-4877.

Forward Looking Statements

This press release may contain “forward-looking statements” -- that is, statements related to future -- not past -- events, plans, and prospects. In this context, forward-looking statements may address matters such as our expected future business and financial performance, and often contain words such as “guidance,” “prospects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “should,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could adversely or positively affect the Company's future results include: we may not have sufficient resources to fund our business and may need to issue debt or equity to obtain additional funding; our reliance on a significant portion of our revenues from a limited number of customers; risks relating to operating in a highly competitive industry; risks relating to the failure to maintain effective internal control over financial reporting; risks relating to rapid technological, structural, and competitive changes affecting the industries we serve; risks involved in properly managing complex projects; risks relating to the possible cancellation of customer contracts on short notice; risks relating our ability to continue to implement our strategy, including having sufficient financial resources to carry out that strategy; risks relating to our ability to meet all of the terms and conditions of our debt obligations; uncertainty related to current economic conditions including the impact of the COVID-19 pandemic and the related impact on demand for our services; and other risks and uncertainties disclosed in our filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2020. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

Company Contact:

TSS, Inc.

John Penver, CFO

Phone: (512) 310-1000

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TSS, Inc.

Consolidated Balance Sheets

(In thousands except par values)

			December 31,
			2020
Assets
Current Assets
Cash and cash equivalents	8,903		$	19,012
Contract and other receivables, net	640			915
Costs and estimated earnings in excess of billings on uncompleted contracts	528			806
Inventories, net	290			197
Prepaid expenses and other current assets	231			58
Total current assets	10,592			20,988
Property and equipment, net	549			662
Lease right-of-use asset	712			876
Goodwill	780			780
Intangible assets, net	194			217
Other assets	316			285
Total assets	13,143		$	23,808
Liabilities and Stockholders’ Equity
Current Liabilities
Current portion of lease liabilities	763		$	748
Accounts payable and accrued expenses	2,860			13,374
Deferred revenues	4,607			3,962
Total current liabilities	8,230			18,084
Long-term borrowings	2,282			2,234
Non-current portion of Lease liabilities, less current portion	17			208
Non-current portion of deferred revenues	74			99
Total liabilities	10,603			20,625
Stockholders’ Equity
Preferred stock- .0001 par value; 1,000 shares authorized at March 31, 2021 and December 31, 2020; none issued	-			-
Common stock- .0001 par value, 49,000 shares authorized at March 31, 2021 and December 31, 2020: 19,404 and 19,055 shares issued at March 31, 2021 and December 31, 2020, respectively	2			2
Additional paid-in capital	70,214			70,070
Treasury stock 1,198 and 1,097 shares at cost at March 31, 2021 and December 31, 2020, respectively	(1,962	)		(1,874	)
Accumulated deficit	(65,714	)		(65,015	)
Total stockholders' equity	2,540			3,183
Total liabilities and stockholders’ equity	13,143		$	23,808

All values are in US Dollars.

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TSS, Inc.

Condensed Consolidated Statements of Operations

(In thousands except per-share values, unaudited)

	Three Months Ended March 31,
	2021			2020
Results of Operations:
Revenue	$	5,170		$	10,597
Cost of revenue, excluding depreciation and amortization		3,865			8,996
Gross profit		1,305			1,601
Operating expenses:
Selling, general and administrative		1,775			1,759
Depreciation and amortization		137			119
Total operating costs		1,912			1,878
Operating income (loss)		(607	)		(277	)
Interest income (expense), net		(85	)		(82	)
Loss before income taxes		(692	)		(359	)
Income tax expense		7			9
Net loss	$	(699	)	$	(368	)
Basic and diluted loss per share:
Basic & diluted net loss per share	$	(0.04	)	$	(0.02	)

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TSS, Inc.

Adjusted EBITDA Reconciliation

(In thousands, unaudited)

	Three Months Ended March 31,
	2021			2020
Net loss	$	(699	)	$	(368	)
Interest expense, net		85			82
Depreciation and amortization		137			119
Income tax expense		7			9
EBITDA	$	(470	)	$	(158	)
Stock based compensation		136			109
Provision for bad debts		-			-
Adjusted EBITDA	$	(334	)	$	(49	)