Amendment to Recommendation Statement - Form SC 14D9/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14D-9

(Rule 14d-101)

SOLICITATION/RECOMMENDATION STATEMENT

UNDER SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 2)

TSR, INC.

(Name of Subject Company)

TSR, INC.

(Name of Person Filing Statement)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

872885207

(CUSIP Number of Class of Securities)

Thomas Salerno

Chief Executive Officer

400 Oser Avenue, Suite 150

Hauppauge, NY 11788

(631) 231-0333

(Name, address and telephone number of person authorized to receive notices and communications
on behalf of the person(s) filing statement)

With copies to:

Lawrence R. Bard, Esq.

Scott D. Museles, Esq.

Shulman Rogers, P.A.

12505 Park Potomac Ave, Suite 600

Potomac, MD 20854

(301) 230-5200

☐	Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

This Amendment No. 2 (this "Amendment") amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 filed by TSR, Inc., a Delaware corporation ("TSR" or the "Company"), with the U.S. Securities and Exchange Commission (the "SEC") on May 30, 2024, as amended by that certain Amendment No. 1 thereto filed with the SEC on June 14, 2024 (as amended, the "Filed Schedule 14D-9").

The Filed Schedule 14D-9 relates to the tender offer by Vienna Acquisition Corporation ("Purchaser"), a Delaware corporation and wholly owned subsidiary of Vienna Parent Corporation, an Indiana corporation ("Parent"), to purchase all of the issued and outstanding shares of Common Stock, par value $0.01 per share, of the Company, at a purchase price of $13.40 per Share (the "Offer Price"), net to the stockholder in cash, without interest, and less any applicable tax withholding, on the terms and subject to the conditions set forth in the Offer to Purchase, dated as of May 30, 2024 (as may be amended or supplemented from time to time, the "Offer to Purchase") and the related Letter of Transmittal (as may be amended or supplemented from time to time, the "Letter of Transmittal"), and pursuant to the Agreement and Plan of Merger, dated as of May 15, 2024, by and among Parent, Purchaser and TSR (as may be amended from time to time, the "Merger Agreement").

This Amendment is being filed to reflect certain updates to the Filed Schedule 14D-9 as set forth below. Underlined text shows text being added to a referenced disclosure in the Filed Schedule 14D-9 and a line through text shows text being deleted from a referenced disclosure in the Filed Schedule 14D-9. Except as otherwise set forth below, the information in the Filed Schedule 14D-9 remains unchanged and is incorporated herein by reference as relevant to the items in this Amendment. All page references in the information below are to pages in the Filed Schedule 14D-9, and all capitalized terms used below, unless otherwise defined, shall have the meanings set forth in the Filed Schedule 14D-9.

Item 3. Past Contacts, Transactions, Negotiations and Agreements

The following paragraph shall be added to the beginning of the section under the subheading "Employment Agreements Effective at Closing: New Salerno Employment Agreement and New Syed Employment Agreement" on page 12 of the Filed Schedule 14D-9:

●

"On March 29, 2024, Ice Miller delivered a form of employment agreement proposed to be entered by certain employees of TSR to be effective at closing. The TSR employees who would enter into those agreements (Messrs. Salerno and Syed) were not identified until April 29, 2024. During the period from March 29, 2024, through May 15, 2024, separate counsel to these employees negotiated the terms of such agreements with Ice Miller and, in late April and early May, representatives of the Purchaser discussed the financial and other terms of the employment agreements with Messrs. Salerno and Syed."

Item 4. The Solicitation or Recommendation

The paragraph beginning with "On September 11, 2023," under the subheading "Background of the Merger Agreement" on page 14 of the Filed Schedule 14D-9 is revised to read as follows:

●

"On September 11, 2023, the TSR Board, along with Mr. Salerno, Mr. Sharkey, representatives of Shulman Rogers and representatives of Focus, held a meeting via conference call during which Focus updated management and the Board on their efforts, which included completing the CIM. Focus relayed that, as of the date of the meeting, they had reached out to over one hundred and fifty potential buyers of TSR, executed ten Non-Disclosure Agreements with potential buyers and had approximately ten more Non-Disclosure Agreements in process. The Non-Disclosure Agreements included a customary standstill that terminated in accordance with its terms upon the public announcement of a transaction."

The section under the subheading "Discounted Cash Flow Analysis" on page 23 of the Filed Schedule 14D-9 is revised to read as follows:

●

"Chessiecap performed a discounted cash flow analysis of the Company. A discounted cash flow analysis is a methodology used to derive a valuation of a company by calculating the present value of the future cash flows of the Company. "Present value" refers to the current value of the future cash flows and is calculated by discounting the future cash flows by a discount rate derived from economic assumptions, estimates of risk, the opportunity cost of capital, expected returns and other factors. Chessiecap calculated the discounted cash flow of the Company based on a Company forecast of revenue and profitability, the profitability being adjusted upward by Chessiecap to estimate the value of the Company as if it did not have certain current one-time expenses and certain expenses related to being a publicly reporting entity. The Company forecast provided to Chessiecap was limited to one quarter plus one full fiscal year forward.

For this prospective discounted cash flow analysis, Chessiecap estimated the enterprise value of the Company to be $17,329,616 and the net equity value (enterprise value plus estimated cash less debt) to be $23,029,756. The enterprise value consists of the present value of interim cash flows plus the terminal value of $14,654,577 derived using the future after-tax free cash flowsflow of the Company for fiscal year 2025 of $2,803,556 and appliedapplying a perpetuity growth rate of 3.15%, consistent with the historical U.S. long-term GDP growth rate and a discount rate of 19.02%, as derived for a firm of the Company's size, characteristics, and prospects. The discounted cash flow analysis indicated an implied value of $10.29 per share. We compared this value with the Offer Price of $13.40 per share."

The section under the subheading "Guideline Public Companies Analysis" on page 24 of the Filed Schedule 14D-9 is revised to replace the list after the first paragraph with the following chart:

Guideline Public Company Analysis

All figures in thousands, except per share and multiples

														Trailing
								Market						Twelve Mos.
		Shares			Share			Value			Enterprise			EBITDA			EV / LTM
Company		Outstanding			Price			of Equity			Value (EV)			(TTM)			EBITDA
Adecco Group AG			336,850			$	19.10			$	6,433,835			$	9,627,835			$	913,000			10.55	x
Hays plc (in GBp)			1,580,000			GBP	0.98			GBP	1,554,720			GBP	1,682,620			GBP	180,800			9.31	x
Kelly Services, Inc.			35,310			$	24.58			$	867,920			$	793,420			$	99,200			8.00	x
Kforce Inc.			19,690			$	68.39			$	1,346,599			$	1,403,940			$	90,260			15.55	x
ManpowerGroup Inc.			48,380			$	75.39			$	3,647,368			$	4,496,068			$	534,900			8.41	x
Randstad N.V.			178,090			$	55.90			$	9,955,231			$	10,874,231			$	975,000			11.15	x
Robert Half Inc.			105,210			$	75.59			$	7,952,824			$	7,462,984			$	518,840			14.38	x
																			Median			10.55	x

The section under the subheading "Comparable Transaction Analysis" on page 24 of the Filed Schedule 14D-9 is revised to add the following to the end of the subsection:

Sale Date		Target Name		Acquirer Name		Net Sales			EBITDA			Sale Date		Transaction Price			Transaction Price/ EBITDA
12/08/2023		Undisclosed		Undisclosed		$	11,745,692			$	2,093,548			12/08/2023		$	9,000,000			4.3	x
05/18/2022		Headway Workforce Solutions, Inc.		Staffing 360 Solutions, Inc.		$	83,422,006			$	(1,722,283	)		05/18/2022		$	8,279,000			NA
11/04/2021		Undisclosed		Undisclosed		$	5,235,384			$	1,357,398			11/04/2021		$	6,000,000			4.4	x
03/02/2021		Snelling Staffing, LLC		HireQuest, Inc.		$	123,138,000			$	3,970,000			03/02/2021		$	17,300,000			4.4	x
01/31/2021		Undisclosed		Undisclosed		$	13,652,468			$	1,847,088			01/31/2021		$	6,000,000			3.3	x
05/09/2019		Undisclosed		Undisclosed		$	21,323,000			$	1,730,052			05/09/2019		$	10,500,000			6.1	x
01/01/2018		Undisclosed		Undisclosed		$	5,236,389			$	533,782			01/01/2018		$	5,000,000			9.4	x
04/03/2017		SNI Holdco Inc.		GEE Group Inc.		$	113,459,880			$	11,887,111			04/03/2017		$	66,300,000			5.6	x
01/01/2016		Paladin Consulting, Inc		General Employment Enterprises, Inc.		$	22,598,839			$	491,356			01/01/2016		$	1,750,000			3.6	x
09/30/2015		Vision Technology Services, Inc. & Subs.		BG Staffing, Inc		$	33,227,466			$	3,826,195			09/30/2015		$	9,722,072			2.5	x
06/04/2015		Staffgroup Ltd		Cordant Group Plc		$	81,111,254			$	5,101,443			06/04/2015		$	35,027,300			6.9	x
09/26/2013		Undisclosed		Undisclosed		$	7,498,805			$	280,749			09/26/2013		$	2,800,000			10.0	x
04/05/2021		Softworld, Inc.		Kelly Services, Inc.		$	110,528,426			$	11,836,709			04/05/2021		$	220,400,000			18.6	x
09/09/2020		Undisclosed		Undisclosed		$	23,640,000			$	1,728,000			09/09/2020		$	10,200,000			5.9	x
03/13/2017		Undisclosed		Undisclosed		$	30,402,214			$	1,415,656			03/13/2017		$	3,150,000			2.2	x
09/06/2016		Undisclosed		Undisclosed		$	13,320,000			$	600,000			09/06/2016		$	3,750,000			6.3	x
01/12/2016		Undisclosed		Undisclosed		$	11,100,755			$	800,395			01/12/2016		$	5,000,000			6.3	x
08/04/2015		Agile Resources, Inc		General Employment Enterprises, Inc.		$	7,711,321			$	639,227			08/04/2015		$	3,507,382			5.5	x
06/15/2015		Hudson Information Technology (US) Business of Hudson Global, Inc.		Mastech Holdings, Inc.		$	36,186,000			$	1,108,000			06/15/2015		$	16,987,000			15.3	x
12/31/2013		Undisclosed		Undisclosed		$	6,246,280			$	668,144			12/31/2013		$	2,200,000			3.3	x
																	Median			5.58	x

Following the final paragraph, beginning with "Premiums Paid Analysis," under the subheading "Other Factors" on page 24 of the Filed Schedule 14D-9, the following chart is added:

●	"The chart below sets forth the transactions analyzed:

Target Name		Target Business Description		Transaction Control Premium			Date Effective		Deal Value (MM)
Computer Task Group, Inc.		Provides IT based staffing services			23.8	%		12/13/2023		$	168.99
Volt Information Sciences, Inc.		Provides staffing services			39.8	%		04/25/2022		$	132.60
DPA Group NV		Provides recruitment services			9.4	%		08/16/2021		$	79.00
CPL Resources Plc		Provides recruitment & H/R services			35.5	%		01/21/2021		$	366.16
Harvey Nash Group Plc		Provides recruitment & IT services			10.2	%		12/28/2018		$	95.37
CDI Corp.		Provides outsourcing & staffing services			29.1	%		09/13/2017		$	155.04
InterQuest Group Ltd.		Provides information technology staffing			4.9	%		08/08/2017		$	12.23
USG People NV		Provides employment, ed & training services			25.2	%		07/22/2016		$	1,549.82
Proffice AB		Provides human resources solutions			24.2	%		02/19/2016		$	196.71
Chandler MacLeod Group Ltd.		Provides H/R & recruitment services			49.1	%		03/31/2015		$	236.82
Kelly Group Ltd.		Provides H/R & outsourcing solutions			9.9	%		11/30/2014		$	16.73
		Median			24.2	%

Item 5. Persons/Assets Retained, Employed, Compensated or Used

Item 5 on page 28 of the Filed Schedule 14D-9 is revised to read as follows:

●

"Pursuant to Focus's engagement letter with TSR, TSR retained Focus as its investment bank in connection with the Offer and the Merger. In connection with Focus's services to the TSR Board, TSR has agreed to pay Focus an aggregate fee of approximately $880,000, of which $850,000 is contingent upon Closing. Additional information related to Focus's retention as TSR's financial advisor is set forth under the sections entitled "Item 4. The Solicitation or Recommendation-Background of the Merger Agreement; Reasons for the Recommendation-Background of the Merger Agreement" and are hereby incorporated herein by reference. Focus provided no other services to TSR prior to the engagement disclosed in this Schedule 14D-9.

Pursuant to Chessiecap's engagement letter with TSR, TSR retained Chessiecap as its financial advisor in connection with the Offer and the Merger and to render Chessiecap's opinion to the TSR Board. Chessiecap's opinion does not constitute a recommendation to any stockholder of TSR as to whether or not such holder should tender Shares in connection with the Offer or otherwise act with respect to the Transactions or any other matter. In connection with Chessiecap's services as the financial advisor to the TSR Board, TSR has agreed to pay Chessiecap an aggregate fee of approximately $66,000. Additional information related to Chessiecap's retention as TSR's financial advisor is set forth under the sections entitled "Item 4. The Solicitation or Recommendation-Background of the Merger Agreement; Reasons for the Recommendation-Background of the Merger Agreement" and "-Opinion of TSR's Financial Advisor" and are hereby incorporated herein by reference. Chessiecap provided no other services to TSR prior to the engagement disclosed in this Schedule 14D-9.

Neither TSR nor any person acting on its behalf has or currently intends to employ, retain or compensate any person to make solicitations or recommendations to the stockholders of TSR on its behalf with respect to the Transactions or related matters, except that such solicitations or recommendations may be made by directors, officers or employees of TSR, for which services no additional compensation will be paid."

Item 8. Additional Information - Legal Proceedings

The section of the Filed Schedule 14D-9 under the subheading "Legal Proceedings" on page 32 is revised to read as follows:

●	"Lawsuits arising out of or relating to the Offer, the Merger or the other Transactions may be filed in the future.

As of June 21, 2024, TSR has received demand letters from two purported stockholders of TSR regarding the Schedule 14D-9 (the "Demand Letters"). The Demand Letters generally allege that the Schedule 14D-9 omits material information and request that TSR disseminate corrective disclosures.

TSR believes that the disclosures set forth in the Schedule 14D-9 comply fully with applicable laws and denies the allegations in the matters described above. However, in order to moot certain of the disclosure claims and avoid the costs, risks and uncertainties inherent in litigation, and provide additional information to its stockholders, TSR determined to voluntarily provide certain additional disclosures in the Amendment to Schedule 14D-9, dated June 21, 2024. Nothing in these supplemental disclosures should be regarded as an indication that TSR or TSR's affiliates, management, directors or other representatives, or any recipient of this information, considered or now considers the information contained in the supplemental disclosures to be material; rather, TSR believes that the Schedule 14D-9 disclosed all necessary information and denies that any additional disclosures are or were required under any federal or state law.

TSR cannot predict the outcome of each Demand Letter, nor can TSR predict the amount of time and expense that will be required to resolve each Demand Letter. TSR believes that the Demand Letters are without merit and that the disclosures set forth in the Schedule 14D-9 comply fully with all applicable law. It is possible that additional similar demands could be made in connection with the Transaction or that lawsuits may be filed against TSR, TSR's Board, Parent and/or Purchaser. If any additional demands are made or complaints are filed, absent new or significantly different allegations, TSR will not necessarily disclose such additional filings."

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	TSR, INC.
Dated: June 21, 2024	By:	/s/ Thomas Salerno
		Name:	Thomas Salerno
		Title:	Chief Executive Officer

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