TSS (TSSI) risk factors, FY2024 10-K

Other

1. 01We derive a significant portion of our revenues from one customer
2. 02A material breach of our multi-year rack integration agreement, or our choice to terminate the agreement for any reason other than the other party’s material breach of the agreement, could significantly reduce certain minimum payments from our primary OEM partner
3. 03Future power demands of AI-enabled computer racks is unknown and our ability to continue to earn revenues from AI rack integration services is highly dependent on our access to an acceptable amount of electrical power and related computer cooling capabilities
4. 04Our revenues and profitability could be materially and negatively affected by U.S. imposed tariffs
5. 05Supply chain challenges have negatively affect our integration business by slowing the supply of parts needed to perform integration services, requiring us to hold greater quantities of inventory for longer periods and/or delaying completion of services for our customers
6. 06We may be unable to hire and retain sufficiently qualified personnel, and the loss of any of our key executive officers may adversely affect our business
7. 07Changes in labor market conditions are causing increases in our labor costs, and if we are unable to adequately recover these costs from our customers, our business will be negatively impacted
8. 08We have a history of operating losses, and we may experience net losses in the future
9. 09We are attempting to diversify our customer base but there is no guarantee that we will be successful in doing so
10. 10The level of our procurement business may fluctuate significantly on a quarterly basis, requiring additional working capital to grow
11. 11As the age of modular data centers increases and customers look to shut or replace such units, our recurring maintenance revenues could be negatively impacted, and this could adversely affect our operating results
12. 12We operate in a highly competitive industry, which could reduce our growth opportunities, revenue and operating results
13. 13Most of our contracts may be canceled on short notice, so our revenue and potential profits are not guaranteed
14. 14We submit change orders to our customers for work we perform beyond the scope of some of our contracts. If our customers do not approve these change orders, the results of operations could be adversely impacted
15. 15We may not accurately estimate the costs associated with services provided under fixed-price contracts, which could impair our financial performance
16. 16We warranty customer equipment against failure in some of our fixed price contracts, and a major equipment failure could have a material impact on our financial performance
17. 17We may choose, or be required, to pay our subcontractors even if our customers do not pay or delay paying us for the related services
18. 18The industries we serve have experienced and may continue to experience rapid technological, structural and competitive changes that could reduce the need for our services and adversely affect our revenues
19. 19If we are unable to engage appropriate subcontractors or if our subcontractors fail to perform their contractual obligations, our performance as a prime contractor and ability to obtain future business could be materially and adversely impacted
20. 20Security breaches and attacks on our computer systems could lead to significant costs and disruptions that could harm our business, financial results and reputation
21. 21Because we do not currently intend to pay dividends on our common stock, stockholders will benefit from an investment in our common stock only if it appreciates in value
22. 22Our insiders beneficially own a significant portion of our outstanding common stock. Future sales of common stock by these insiders may adversely affect the market price of our common stock