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| Delaware(State or other jurisdiction ofIncorporation or organization) |   | 13-2635899(I.R.S. Employer Identification No.) |
|-----------------------------------------------------------------------|--------|------------------------------------------------|

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| Large Accelerated Filer o                                                       | Accelerated Filer o         |
|---------------------------------------------------------------------------------|-----------------------------|
| Non-Accelerated filer o(Do not check if a smaller reporting company)  | Smaller Reporting Company x |

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| Part I.  Financial Information:                                                                                  |   | PageNumber |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------|
|                                                                                                                  |   |       |
| Item 1.    Financial Statements:                                                                       |   |       |
|                                                                                                                  |   |       |
| Condensed Consolidated Balance Sheets –                                                                         |   |       |
| August 31, 2010 and May 31, 2010                                                                                      |   | 3          |
|                                                                                                                  |   |       |
| Condensed Consolidated Statements of Income –                                                                   |   |       |
| For the three months ended August 31, 2010 and 2009                                                                   |   | 4          |
|                                                                                                                  |   |       |
| Condensed Consolidated Statements of Equity –                                                                   |   |       |
| For the three months ended August 31, 2010 and 2009                                                                   |   | 5          |
|                                                                                                                  |   |       |
| Condensed Consolidated Statements of Cash Flows –                                                               |   |       |
| For the three months ended August 31, 2010 and 2009                                                                   |   | 6          |
|                                                                                                                  |   |       |
| Notes to Condensed Consolidated Financial Statements                                                                  |   | 7          |
|                                                                                                                  |   |       |
| Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations |   | 11         |
|                                                                                                                  |   |       |
| Item 4.    Controls and Procedures                                                                     |   | 15         |
|                                                                                                                  |   |       |
|                                                                                                                  |   |       |
|                                                                                                                  |   |       |
| Part II.  Other Information                                                                                      |   | 16         |
|                                                                                                                  |   |       |
| Item 2(c).  Unregistered Sales of Equity Securities and Use of Proceeds                                     |   | 16         |
|                                                                                                                  |   |       |
| Item 6.  Exhibits                                                                                                |   | 16         |
|                                                                                                                  |   |       |
| Signatures                                                                                                            |   | 16         |

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|    ASSETS                                                                                                                                                                                                                                    |   | August 31,2010 |       |   | May 31,2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|--------|------------------|--------|
|                                                                                                                                                                                                                                                        |   | (Unaudited)    |       |   | (Note 1)         |   |
| Current Assets:                                                                                                                                                                                                                                             |   |           |       |   |             |   |
|        Cash and cash equivalents                                                                                                                                                                                         |   | $              | 4,075,964  |   |             | $      | 5,669,972 |   |
|        Certificates of deposit and marketable securities                                                                                                                                                                 |   |           | 4,611,374  |   |             |   | 3,015,389 |   |
|        Accounts receivable, net of allowance for doubtful accounts of $202,000 and $202,000                                                                                                                              |   |           | 6,937,800  |   |             |   | 6,507,741 |   |
|        Other receivables                                                                                                                                                                                                 |   |           | 5,242      |   |             |   | 3,957 |   |
|        Prepaid expenses                                                                                                                                                                                                  |   |           | 64,605     |   |             |   | 94,604 |   |
|        Prepaid and recoverable income taxes                                                                                                                                                                              |   |           | 90,140     |   |             |   | 115,721 |   |
|        Deferred income taxes                                                                                                                                                                                             |   |           | 90,000     |   |             |   | 90,000 |   |
|               Total Current Assets                                                                                                                                                    |   |           | 15,875,125 |   |             |   | 15,497,384 |   |
|                                                                                                                                                                                                                                                        |   |           |       |   |             |   |   |   |
| Equipment and leasehold improvements, net of accumulated depreciation                                                                                                                                                                                       |   |           |       |   |             |   |   |   |
|        and amortization of $429,329 and $427,804                                                                                                                                                                         |   |           | 10,427     |   |             |   | 9,558 |   |
| Other assets                                                                                                                                                                                                                                                |   |           | 49,653     |   |             |   | 49,653 |   |
| Deferred income taxes                                                                                                                                                                                                                                       |   |           | 54,000     |   |             |   | 55,000 |   |
| Total Assets                                                                                                                                                                                                                                                |   | $              | 15,989,205 |   |             | $      | 15,611,595 |   |
|                                                                                                                                                                                                                                                        |   |           |       |   |             |   |   |   |
|                                                                                                                                                                                                                                                        |   |           |       |   |             |   |   |   |
| LIABILITIES AND EQUITY                                                                                                                                                                                                                                      |   |           |       |   |             |   |   |   |
|                                                                                                                                                                                                                                                        |   |           |       |   |             |   |   |   |
| Current Liabilities:                                                                                                                                                                                                                                        |   |           |       |   |             |   |   |   |
|        Accounts and other payables                                                                                                                                                                                       |   | $              | 321,783    |   |             | $      | 259,448 |   |
|        Accrued expenses and other current liabilities                                                                                                                                                                    |   |           | 1,596,787  |   |             |   | 1,291,160 |   |
|        Advances from customers                                                                                                                                                                                           |   |           | 1,489,690  |   |             |   | 1,491,490 |   |
|               Total Current Liabilities                                                                                                                                               |   |           | 3,408,260  |   |             |   | 3,042,098 |   |
| Equity:                                                                                                                                                                                                                                                     |   |           |       |   |             |   |   |   |
|        Preferred stock, $1 par value, authorized 1,000,000 shares; none issued                                                                                                                                           |   |           | —    |   |             |   | — |   |
|        Common stock, $.01 par value, authorized 25,000,000 shares; issued 6,228,326 shares,               4,038,188 and 4,049,588 outstanding |   |           | 62,283     |   |             |   | 62,283 |   |
|        Additional paid-in capital                                                                                                                                                                                        |   |           | 5,071,727  |   |             |   | 5,071,727 |   |
|        Retained earnings                                                                                                                                                                                                 |   |           | 20,682,752 |   |             |   | 20,661,190 |   |
|                                                                                                                                                                                                                                                        |   |           | 25,816,762 |   |             |   | 25,795,200 |   |
|        Less: Treasury stock, 2,190,138 and 2,178,738 shares, at cost                                                                                                                                                     |   |           | 13,279,249 |   |             |   | 13,253,523 |   |
|               Total TSR, Inc. Equity                                                                                                                                                  |   |           | 12,537,513 |   |             |   | 12,541,677 |   |
| Noncontrolling Interest                                                                                                                                                                                                                                     |   |           | 43,432     |   |             |   | 27,820 |   |
| Total Equity                                                                                                                                                                                                                                                |   |           | 12,580,945 |   |             |   | 12,569,497 |   |
| Total Liabilities and Equity                                                                                                                                                                                                                                |   | $              | 15,989,205 |   |             | $      | 15,611,595 |   |

----

|                                                                           |   | Three Months EndedAugust 31, |                      |
|--------------------------------------------------------------------------------|--------|------------------------------|---------------------------|
|                                                                           |   | 2010                         |                      |   | 2009 |   |
|                                                                           |   |                         |                      |   |   |   |   |   |
| Revenue, net                                                                   |   | $                            | 9,363,893                 |   |   | $ | 9,092,302 |   |
|                                                                           |   |                         |                      |   |   |   |   |   |
| Cost of sales                                                                  |   |                         | 7,656,490                 |   |   |   | 7,446,501 |   |
| Selling, general and administrative expenses                                   |   |                         | 1,636,505                 |   |   |   | 1,526,042 |   |
|                                                                           |   |                         | 9,292,995                 |   |   |   | 8,972,543 |   |
| Income from operations                                                    |   |                         | 70,898                    |   |   |   | 119,759 |   |
|                                                                           |   |                         |                      |   |   |   |   |   |
| Other income (expense):                                                        |   |                         |                      |   |   |   |   |   |
|     Interest and dividend income                           |   |                         | 5,780                     |   |   |   | 18,296 |   |
|     Unrealized gain (loss) on marketable securities, net.. |   |                         | (3,004                    | ) |   |   | 3,680 |   |
|                                                                           |   |                         |                      |   |   |   |   |   |
| Income before income taxes                                                     |   |                         | 73,674                    |   |   |   | 141,735 |   |
| Provision for income taxes                                                     |   |                         | 33,000                    |   |   |   | 59,000 |   |
| Consolidated net income                                                        |   |                         | 40,674                    |   |   |   | 82,735 |   |
| Less: Net income attributable to noncontrolling interest                       |   |                         |    (19,112 | )     |   |   |    (19,357 | )     |
| Net income attributable to TSR, Inc.                                      |   | $                            | 21,562                    |   |   | $ | 63,378 |   |
|                                                                           |   |                         |                      |   |   |   |   |   |
| Basic and diluted net income per TSR, Inc. common share                        |   | $                            | 0.01                      |   |   | $ | 0.02 |   |
|                                                                           |   |                         |                      |   |   |   |   |   |
| Weighted average number of basic and diluted common shares outstanding         |   |                         |  4,042,279           |   |   |   |  4,050,488 |   |

----

|                                                    |   | Shares ofcommonstock |          |   |  Commonstock |   |          | Additionalpaid-incapital |   |   |  Retainedearnings |   |   |  Treasurystock |          |   | Non-controllingInterest |   |          |  Totalequity    |   |
|---------------------------------------------------------|--------|----------------------|---------------|--------|-------------------|--------|---------------|--------------------------|--------|--------|------------------------|--------|--------|---------------------|---------------|--------|-------------------------|--------|---------------|----------------------|--------|
| Balance at May 31, 2009                                 |   |                 | 6,228,326     |   |              | $      | 62,283        |                     |   | $      | 5,071,727              |   |   | $                   | 20,517,707    |   |                    | $      | (13,251,231   | )                    |   | $ | 17,636 |   |   | $ | 12,418,122 |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Net income attributable to noncontrolling interest |   |                 | —       |   |              |   |  — |                     |   |   |  —          |   |   |                |  — |   |                    |   |  — |                 |   |   |  19,357 |   |   |   |  19,357 |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Distribution to noncontrolling interest                 |   |                 |  — |   |              |   |  — |                     |   |   |  —          |   |   |                |  — |   |                    |   |  — |                 |   |   | (6,000 | ) |   |   | (6,000 | ) |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Net income attributable to TSR, Inc.                    |   |                 |  — |   |              |   |  — |                     |   |   |  —          |   |   |                |  63,378  |   |                    |   |  — |                 |   |   |  — |   |   |   |  63,378 |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Balance at Aug. 31, 2009                                |   |                 | 6,228,326     |   |              | $      | 62,283        |                     |   | $      | 5,071,727              |   |   | $                   | 20,581,085    |   |                    | $      | (13,251,231   | )     |   | $ | 30,993 |   |   | $ | 12,494,857 |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Balance at May 31, 2010                                 |   |                 | 6,228,326     |   |              | $      | 62,283        |                     |   | $      | 5,071,727              |   |   | $                   | 20,661,190    |   |                    | $      | (13,253,523   | )                    |   | $ | 27,820 |   |   | $ | 12,569,497 |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Net income attributable to noncontrolling interest      |   |                 |  — |   |              |   |  — |                     |   |   |  —          |   |   |                |  — |   |                    |   |  — |                 |   |   |  19,112 |   |   |   |  19,112 |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Distribution to noncontrolling interest                 |   |                 |  — |   |              |   |  — |                     |   |   |  —          |   |   |                |  — |   |                    |   |  — |                 |   |   | (3,500 | ) |   |   | (3,500 | ) |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Purchases of treasury stock                             |   |                 | —       |   |              |   |  — |                     |   |   |  —          |   |   |                |  — |   |                    |   | (25,726       | )                    |   |   |  — |   |   |   | (25,726 | ) |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Net income attributable to TSR, Inc.                    |   |                 |  — |   |              |   |  — |                     |   |   |  —          |   |   |                |  21,562  |   |                    |   |  — |                 |   |   |  — |   |   |   |  21,562 |   |
|                                                    |   |                 |          |   |              |   |          |                     |   |   |                   |   |   |                |          |   |                    |   |          |                 |   |   |   |   |   |   |   |   |
| Balance at Aug. 31, 2010                                |   |                 | 6,228,326     |   |              | $      | 62,283        |                     |   | $      | 5,071,727              |   |   | $                   | 20,682,752    |   |                    | $      | (13,279,249   | )     |   | $ | 43,432 |   |   | $ | 12,580,945 |   |

----

|                                                                                                                                                               |   | Three Months EndedAugust 31, |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                                                                                                               |   | 2010                         |       |   | 2009 |   |
| Cash flows from operating activities:                                                                                                                              |   |                         |       |   |   |   |   |   |
|        Consolidated net income                                                                                                  |   | $                            | 40,674     |   |   | $ | 82,735 |   |
|                                                                                                                                                               |   |                         |       |   |   |   |   |   |
|      Adjustments to reconcile net income to net cash provided by (used in) operating activities:                                          |   |                         |       |   |   |   |   |   |
|               Depreciation and amortization                                                  |   |                         | 1,525      |   |   |   | 4,544 |   |
|               Unrealized (gain) loss on marketable securities, net                           |   |                         | 3,004      |   |   |   | (3,680 | ) |
|               Deferred income taxes                                                          |   |                         | 1,000      |   |   |   | 1,000 |   |
|                                                                                                                                                               |   |                         |       |   |   |   |   |   |
|       Changes in operating assets and liabilities:                                                                                   |   |                         |       |   |   |   |   |   |
|               Accounts receivable                                                            |   |                         | (430,059   | ) |   |   | (404,207 | ) |
|               Other receivables                                                              |   |                         | (1,285     | ) |   |   | (4,813 | ) |
|               Prepaid expenses                                                               |   |                         | 29,999     |   |   |   | (8,095 | ) |
|               Prepaid and recoverable income taxes                                           |   |                         | 25,581     |   |   |   | 24,018 |   |
|               Accounts and other payables and accrued expenses and other current liabilities |   |                         | 367,962    |   |   |   | 115,483 |   |
|               Advances from customers                                                        |   |                         | (1,800     | )     |   |   | (15,000 | )      |
| Net cash provided by (used in) operating activities                                                                                                                |   |                         | 36,601     |   |   |   | (208,015 | )      |
|                                                                                                                                                               |   |                         |       |   |   |   |   |   |
| Cash flows from investing activities:                                                                                                                              |   |                         |       |   |   |   |   |   |
|        Proceeds from maturities of marketable securities                                                                        |   |                         | 500,000    |   |   |   | 250,000 |   |
|        Purchases of marketable securities                                                                                       |   |                         | (2,098,989 | ) |   |   | (250,000 | ) |
|        Purchases of equipment and leasehold improvements                                                                        |   |                         | (2,394     | )     |   |   | (2,284 | )      |
| Net cash used in investing activities                                                                                                                              |   |                         | (1,601,383 | )     |   |   | (2,284 | )      |
|                                                                                                                                                               |   |                         |       |   |   |   |   |   |
| Cash flows from financing activities:                                                                                                                              |   |                         |       |   |   |   |   |   |
|        Purchases of treasury stock                                                                                              |   |                         | (25,726    | )     |   |   | — |   |
|        Distribution to noncontrolling interest                                                                                       |   |                         | (3,500     | ) |   |   | (6,000 | ) |
| Net cash used in financing activities                                                                                                                              |   |                         | (29,226    | )     |   |   | (6,000 | )      |
|                                                                                                                                                               |   |                         |       |   |   |   |   |   |
| Net decrease in cash and cash equivalents                                                                                                                          |   |                         | (1,594,008 | ) |   |   | (216,299 | ) |
| Cash and cash equivalents at beginning of period                                                                                                                   |   |                         | 5,669,972  |   |   |   | 4,075,213 |   |
| Cash and cash equivalents at end of period                                                                                                                         |   | $                            | 4,075,964  |   |   | $ | 3,858,914 |   |
|                                                                                                                                                               |   |                         |       |   |   |   |   |   |
| Supplemental disclosures of cash flow data:                                                                                                                        |   |                         |       |   |   |   |   |   |
|        Income taxes paid                                                                                                        |   | $                            | 6,000      |   |   | $ | 35,000 |   |
|                                                                                                                                                               |   |                         |       |   |   |   |   |   |

----

| 1.   | Basis of Presentation |
|----------------|-----------------------|

| 2.   | Net Income Per Common Share |
|----------------|-----------------------------|

| 3.   | Cash and Cash Equivalents |
|----------------|---------------------------|

|                    |   | August 31,2010 |      |   | May 31,2010 |   |
|-------------------------|--------|----------------|-----------|--------|-------------|--------|
|                    |   |           |      |   |        |   |
| Cash in banks           |   | $              | 1,998,254 |   |        | $      | 2,171,031 |   |
| Money market funds      |   |           | 1,827,710 |   |        |   | 2,499,327 |   |
| US Treasury securities  |   |           | —   |   |        |   | 999,614 |   |
| Certificates of deposit |   |           | 250,000   |   |        |   | — |   |
|                    |   | $              | 4,075,964 |   |        | $      | 5,669,972 |   |

| 4.   | Revenue Recognition |
|----------------|---------------------|

----

| 5.   | Marketable Securities |
|----------------|-----------------------|

|   | August 31, 2010    |   | Level 1 |      |   | Level 2 |   |      | Level 3 |   |   | Total   |   |
|--------|-------------------------|--------|---------|-----------|--------|---------|--------|-----------|---------|--------|--------|---------|--------|
|   | US Treasury Securities  |   | $       | 2,497,242 |   |    | $      | —   |    |   | $      | — |   |   | $ | 2,497,242 |   |
|   | Certificates of Deposit |   |    | —   |   |    |   | 2,100,000 |    |   |   | — |   |   |   | 2,100,000 |   |
|   | Equity Securities       |   |    | 14,132    |   |    |   | —   |    |   |   | — |   |   |   | 14,132 |   |
|   |                    |   | $       | 2,511,374 |   |    | $      | 2,100,000 |    |   | $      | — |   |   | $ | 4,611,374 |   |

|   | May 31, 2010       |   | Level 1 |      |   | Level 2 |   |      | Level 3 |   |   | Total   |   |
|--------|-------------------------|--------|---------|-----------|--------|---------|--------|-----------|---------|--------|--------|---------|--------|
|   | US Treasury Securities  |   | $       | 1,498,253 |   |    | $      | —   |    |   | $      | — |   |   | $ | 1,498,253 |   |
|   | Certificates of Deposit |   |    | —   |   |    |   | 1,500,000 |    |   |   | — |   |   |   | 1,500,000 |   |
|   | Equity Securities       |   |    | 17,136    |   |    |   | —   |    |   |   | — |   |   |   | 17,136 |   |
|   |                    |   | $       | 1,515,389 |   |    | $      | 1,500,000 |    |   | $      | — |   |   | $ | 3,015,389 |   |
|   |                    |   |    |      |   |    |   |      |    |   |   |    |   |   |   |   |   |

----

|  August 31, 2010 Current |   |   AmortizedCost |      |   | GrossUnrealizedHoldingGains |   |    | GrossUnrealizedHoldingLosses |   |   |   RecordedValue |   |
|------------------------------------|--------|---------------------------|-----------|--------|-----------------------------|--------|---------|------------------------------|--------|--------|---------------------------|--------|
|                               |   |                      |      |   |                        |   |    |                         |   |   |                      |   |
| US Treasury Securities             |   | $                         | 2,497,242 |   |                        | $      | — |                         |   | $      | —                   |   |   | $ | 2,497,242 |   |
| Certificates of Deposit            |   |                      | 2,100,000 |   |                        |   | — |                         |   |   | —                   |   |   |   | 2,100,000 |   |
| Equity Securities                  |   |                      | 16,866    |   |                        |   | — |                         |   |   | 2,734                     |   |   |   | 14,132 |   |
|                               |   | $                         | 4,614,108 |   |                        | $      | — |                         |   | $      | 2,734                     |   |   | $ | 4,611,374 |   |

|  May 31, 2010 Current |   |   AmortizedCost |      |   | GrossUnrealizedHoldingGains |   |    | GrossUnrealizedHoldingLosses |   |   |   RecordedValue |   |
|---------------------------------|--------|---------------------------|-----------|--------|-----------------------------|--------|---------|------------------------------|--------|--------|---------------------------|--------|
|                            |   |                      |      |   |                        |   |    |                         |   |   |                      |   |
| US Treasury Securities          |   | $                         | 1,498,253 |   |                        | $      | — |                         |   | $      | —                   |   |   | $ | 1,498,253 |   |
| Certificates of Deposit         |   |                      | 1,500,000 |   |                        |   | — |                         |   |   | —                   |   |   |   | 1,500,000 |   |
| Equity Securities               |   |                      | 16,866    |   |                        |   | 270     |                         |   |   | —                   |   |   |   | 17,136 |   |
|                            |   | $                         | 3,015,119 |   |                        | $      | 270     |                         |   | $      | —                   |   |   | $ | 3,015,389 |   |

| 6.  | Fair Value of Financial Instruments |
|----------|-------------------------------------|

| 7.   | Stockholders’ Equity |
|----------------|----------------------------|

| 8.   | Other Matters |
|----------------|---------------|

----

| 9. | Recent Accounting Pronouncements |
|----|----------------------------------|

|   | In April 2009, the FASB issued an accounting standard to require that disclosures concerning the fair value of financial instruments be presented in interim as well as in annual financial statements. This accounting standard was subsequently codified into ASC Topic 825, “Financial Instruments.” In addition, the FASB issued an accounting standard to provide additional guidance for determining the fair value of a financial asset or financial liability when the volume and level of activity for such asset or liability have decreased significantly and to also provide guidance for determining whether a transaction is an orderly one. This accounting standard was subsequently codified into ASC Topic 820, “Fair Value Measurements and Disclosures.” The FASB also issued an accounting standard which revised and expanded the guidance concerning the recognition and measurement of other-than-temporary impairments of debt securities classified as available-for-sale or held-to-maturity. In addition, it required enhanced disclosures concerning such impairment for both debt and equity securities. This accounting standard was subsequently codified into ASC Topic 320, “Investments – Debt and Equity Securities.” The requirements of these three accounting standards are effective for interim reporting periods ending after June 15, 2009. Early adoption is permitted for interim periods ending after March 15, 2009, but only if the election is made to adopt all these accounting standards. Disclosures for earlier periods presented for comparative purposes at initial adoption are not required. In periods after initial adoption, comparative disclosures are required only for periods ending after initial adoption. The Company has adopted the accounting standards for the first quarter of fiscal 2010. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On April 1, 2009, new guidance was adopted which establishes general standards of accounting for and disclosure of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This guidance was subsequently amended on February 24, 2010 to no longer require disclosure of the date through which an entity has evaluated subsequent events. This accounting standard was subsequently codified into ASC Topic 855, “Subsequent Events.” The effect of the adoption was not material. |
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|   | In June 2009, the FASB issued an accounting standard which established the Codification to become the single source of authoritative accounting principles generally accepted in the United States of America (“GAAP”) recognized by the FASB to be applied by nongovernmental entities, with the exception of guidance issued by the SEC and its staff. All guidance contained in the Codification carries an equal level of authority. The Codification is not intended to change GAAP, but rather is expected to simplify accounting research by reorganizing current GAAP into approximately 90 accounting topics and providing all the authoritative literature related to a topic in one place. The Company adopted this accounting standard in preparing the condensed consolidated financial statements for the quarter ended November 30, 2009 and all subsequent public filings will reference the Codification as the sole source of authoritative literature.  The adoption of this accounting standard, which was subsequently codified into ASC Topic 105, “Generally Accepted Accounting Principles,” had no impact on retained earnings and will have no impact on the Company’s consolidated financial statements. |
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|                                         |   | (Dollar amounts in thousands)Three Months Ended |   |
|----------------------------------------------|--------|-------------------------------------------------|--------|
|                                         |   | August 31,2010                                  |   |   | August 31,2009 |   |
|                                         |   |   Amount                              |   |   | % ofRevenue |   |   |   Amount |   |   | % ofRevenue |   |
| Revenue, net                                 |   | $                                               | 9,364  |   |   |   | 100.0% |   |   | $ | 9,092 |   |   |   | 100.0% |   |
| Cost of sales                                |   |                                            | 7,657  |   |   |   | 81.8% |   |   |   | 7,446 |   |   |   | 81.9% |   |
| Gross profit                                 |   |                                            | 1,707  |   |   |   | 18.2% |   |   |   | 1,646 |   |   |   | 18.1% |   |
|                                         |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative expenses |   |                                            | 1,636  |   |   |   | 17.4% |   |   |   | 1,526 |   |   |   | 16.8% |   |
| Income from operations                       |   |                                            | 71     |   |   |   | 0.8% |   |   |   | 120 |   |   |   | 1.3% |   |
|                                         |   |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income, net                            |   |                                            | 3      |   |   |   | 0.0% |   |   |   | 22 |   |   |   | 0.2% |   |
| Income before income taxes                   |   |                                            | 74     |   |   |   | 0.8% |   |   |   | 142 |   |   |   | 1.5% |   |
| Provision for income taxes                   |   |                                            | 33     |   |   |   | 0.4% |   |   |   | 59 |   |   |   | 0.6% |   |
| Net income                                   |   | $                                               | 41     |   |   |   | 0.4% |   |   | $ | 83 |   |   |   | 0.9% |   |

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|                    |   | Payments Due By Period |      |
|-------------------------|--------|------------------------|-----------|
| Contractual Obligations |   |  Total            |      |   | Less than1 Year |   |   |  1-3 Years |   |   |  3-5 Years |   |   | More than5 Years |   |
| Operating Leases        |   | $                      | 1,101,000 |   |   | $ | 357,000 |   |   | $ | 577,000 |   |   | $ | 143,000 |   |   | $ | 24,000 |   |
| Employment Agreements   |   |                   | 1,469,000 |   |   |   | 713,000 |   |   |   | 450,000 |   |   |   | 306,000 |   |   |   | — |   |
| Totals                  |   | $                      | 2,570,000 |   |   | $ | 1,070,000 |   |   | $ | 1,027,000 |   |   | $ | 449,000 |   |   | $ | 24,000 |   |

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| Period                                                             |   |   | Total Number ofShares (or Units)Purchased |   |   |   | Average PricePaid per Share(or Unit)  |   |   |   | Total Number of Shares(or Units) Purchased asPart of PubliclyAnnounced Plans or Programs (1) |   |   |   | Maximum Number (orApproximate DollarValue) of Shares (orUnits) that May Yet BePurchase Under the Plans or Programs |   |
|-------------------------------------------------------------------------|--------|--------|-------------------------------------------|--------|--------|--------|--------------------------------------------|--------|--------|--------|---------------------------------------------------------------------------------------------------|--------|--------|--------|--------------------------------------------------------------------------------------------------------------------|--------|
|       June, 2010                          |   |   | 11,400                                    |   |   | $      | 2.26                                       |   |   |   | 11,400                                                                                            |   |   |   | 226,699                                                                                                            |   |
|       July, 2010                          |   |   | 0                                         |   |   |   | n/a                                        |   |   |   | 0                                                                                                 |   |   |   | 226,699                                                                                                            |   |
|       Aug, 2010                           |   |   | 0                                         |   |   |   | n/a                                        |   |   |   | 0                                                                                                 |   |   |   | 226,699                                                                                                            |   |
|            Total |   |   | 11,400                                    |   |   | $      | 2.26                                       |   |   |   | 11,400                                                                                            |   |   |   | 226,699                                                                                                            |   |

| (1)   | The repurchase plan was authorized by the Board of Directors and publicly announced on December 17, 2007and re-authorized by the Board in January 2010. At the date of re-approval, 226,699 shares were available for repurchase under the plan. The plan does not have an expiration date. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                         | TSR Inc.     |                                |
|----------------------------------------------------------------------------------------------|--------------|-------------------------------------|
|                                                                                         | (Registrant) |                                |
|                                                                                         |         |                                |
|                                                                                         |         |                                |   |
| Date:           October 8, 2010  | By:          | /s/ J.F. Hughes                |   |
|                                                                                         |         | J.F. Hughes, Chairman and President |   |

|                                                                                         |   |                                                                |
|----------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|
|                                                                                         |   |                                                                |
|                                                                                         |   |                                                                |
| Date:           October 8, 2010  | By:    | /s/ John G. Sharkey                                            |   |
|                                                                                         |   | John G. Sharkey, Vice President Finance and Chief Financial Officer |   |
|                                                                                         |   |                                                                |   |
|                                                                                         |   |                                                                |   |

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