tssi_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐	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: 001-33627

TSS, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-2027651
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1800 Aviation Drive, Suite 100 Georgetown, Texas		78628
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code

(512)-310-1000

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class		Ticker Symbol		Name of Each Exchange on Which Registered
Common Stock, $.0001 par value		TSSI		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 past 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 each registrant has submitted electronically 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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Number of shares of common stock outstanding as of November 11, 2025: 28,845,037

TSS, INC.

QUARTERLY REPORT ON FORM 10-Q

For the Quarterly Period Ended September 30, 2025

“SAFE HARBOR” STATEMENT		ii

PART I–FINANCIAL INFORMATION		1

Item 1.	Condensed Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30

PART II–OTHER INFORMATION		31

Item 1.	Legal Proceedings	31
Item 1a.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 5.	Other Information	32
Item 6.	Exhibits	33

SIGNATURES		34

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“SAFE HARBOR” STATEMENT

UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

From time to time, we make oral and written statements that may constitute “forward-looking statements” (rather than historical facts) as defined in the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission (the “SEC”) in its rules, regulations and releases, including Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We desire to take advantage of the “safe harbor” provisions in the Private Securities Litigation Reform Act of 1995 for forward looking statements made from time to time, including, but not limited to, the forward- looking statements made in this Quarterly Report on Form 10-Q (the “Quarterly Report”), as well as those made in other filings with the SEC.

Forward looking statements can be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “believe,” “continue,” “forecast,” “foresee” or other similar words. Such forward looking statements are based on management’s current plans and expectations and are subject to risks, uncertainties and changes in plans that could cause actual results to differ materially from those described in the forward-looking statements. Important factors that could cause actual results to differ materially from those anticipated in our forward-looking statements include, but are not limited to, those described under "Risk Factors” set forth in Item 1A of this Form 10-Q and Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

We expressly disclaim any obligation to release publicly any updates or any changes in our expectations or any changes in events, conditions or circumstances on which any forward-looking statement is based.

As used herein, except as otherwise indicated by the context, the terms “TSS”, “Company”, “we”, “our” and “us” are used to refer to TSS, Inc. and its subsidiaries.

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PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

TSS, Inc.

Condensed Consolidated Balance Sheets

(in thousands except par values)

	September 30, 2025 (Unaudited)			December 31, 2024

Current Assets:
Cash and cash equivalents	$	70,696		$	23,222
Contract and other receivables, net		14,785			16,203
Costs and estimated earnings in excess of billings on uncompleted contracts		2,353			851
Inventories, net		11,321			17,673
Prepaid expenses and other current assets		1,176			248
Total current assets		100,331			58,197
Property and equipment, net		39,063			8,591
Lease right-of-use asset		15,835			24,213
Goodwill		780			780
Restricted cash		5,000			-
Other assets		4,403			4,787
Total assets	$	165,412		$	96,568

Current Liabilities:
Accounts payable and accrued expenses	$	48,591		$	53,340
Deferred revenues, current		11,700			2,613
Long-term debt, current		4,906			-
Lease liabilities, current		813			966
Total current liabilities		66,010			56,919
Non-current Liabilities:
Long-term debt, non-current		18,989			8,200
Lease liabilities, non-current		16,640			23,540
Deferred revenues, non-current		363			771
Total non-current liabilities		35,992			32,511
Total liabilities		102,002			89,430

Commitments and Contingencies (Note 1)

Stockholders’ Equity:
Preferred stock, $.0001 par value; 1,000 shares authorized; none issued		-			-
Common stock, $.0001 par value; 49,000 shares authorized; 29,569 and 25,250 issued; 27,588 and 23,107 outstanding at September 30, 2025 and December 31, 2024, respectively		3			3
Additional paid-in capital		132,401			74,200
Treasury stock, at cost; 1,981 and 1,849 shares at September 30, 2025 and December 31, 2024		(11,624	)		(6,730	)
Accumulated deficit		(57,370	)		(60,335	)
Total stockholders’ equity		63,410			7,138
Total liabilities and stockholders’ equity	$	165,412		$	96,568

See accompanying notes to the condensed consolidated financial statements.

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TSS, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per-share amounts)

	Three Months Ended September 30						Nine Months Ended September 30
	2025			2024			2025			2024
Revenues:
Procurement	$	31,101		$	60,484		$	154,280		$	77,022
Facilities management		1,591			1,954			4,371			6,384
System integration		9,191			7,630			26,161			14,713
Total revenues		41,883			70,068			184,812			98,119
Cost of revenues		36,221			62,181			162,125			82,982
Cost of revenues – depreciation		1,027			-			1,645			-
Total cost of revenues		37,248			62,181			163,770			82,982
Gross profit		4,635			7,887			21,042			15,137

Operating expenses:
Selling, general and administrative		5,238			3,885			14,860			8,993
Depreciation and amortization		328			208			764			397
Total operating expenses		5,566			4,093			15,624			9,390
Income (loss) from operations		(931	)		3,794			5,418			5,747

Interest expense		954			1,309			3,281			2,015
Interest (income)		(434	)		(168	)		(992	)		(374	)
Other expense (income)		(4	)		(13	)		(4	)		(13	)
Pre-tax income (loss)		(1,447	)		2,666			3,133			4,119
Income tax expense		50			20			168			56
Net income (loss)	$	(1,497	)	$	2,646		$	2,965		$	4,063

Earnings (loss) per common share - Basic	$	(0.06	)	$	0.12		$	0.12		$	0.18
Earnings (loss) per common share - Diluted	$	(0.06	)	$	0.10		$	0.11		$	0.16

See accompanying notes to the condensed consolidated financial statements.

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TSS, Inc.

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity

(in thousands)

					Additional											Total
	Common Stock				Paid-in		Treasury Stock						Accumulated			Stockholders’
	Shares		Amount		Capital		Shares			Amount			Deficit			Equity
Balance December 31, 2023		23,533	$	2	$	72,103		(1,762	)	$	(2,245	)	$	(66,311	)	$	3,549
Restricted stock vested		376		-		-		-			-			-			-
Treasury shares repurchased		-		-		-		(120	)		(55	)		-			(55	)
Stock-based compensation		-		-		150		-			-			-

SEC Form 10-Q filed by TSS Inc.