IT staffing firm TSR Inc. (NASDAQ: TSRI) reported revenue fell 4.3% in its fiscal third quarter ended Feb. 29, prior to the full impact of Covid-19. The Hauppauge, New York-based company also reported that it agreed to pay shareholder Zeff Capital $900,000 over three years to reimburse it for costs incurred in lawsuits against the company. It’s also facing a current lawsuit by the company’s former CEO and treasurer.

Third-quarter revenue fell because of fewer consultants on billing and a lower average bill rate caused by of a shift in business mix with fewer placements for high-end skills, according to the company.

However, the effects of the current pandemic is an open question. TSR reported it cannot estimate the full impact of the Covid-19 at this time.

“Currently, in excess of 95% of our IT consultants and 75% of our administrative workers on billing with customers have been able to transition to working from home,” said Thomas Salerno, who formally became CEO and treasurer last month. “However, there can be no assurance that the customers will continue this arrangement.”

A majority of the company’s customers and workforce are located in New York and New Jersey — areas that have been hit hard by Covid-19.

The company has gone through several recent changes, including a new board and a lawsuit from the former CEO.

“During the quarter, five members of the board resigned in accordance with the settlement agreement entered into in August 2019,” Chairman Bradley Tirpak said. “The new board, consisting on Tim Eriksen, Robert Fitzgerald and myself, have been working diligently to improve the company.”

TSR also agreed on April 1 to pay $900,000 in three installments to Zeff Capital to reimburse legal costs incurred during a proxy contest that led to the change in the makeup of the board. Of that amount, $600,000 will be in cash and $300,000 will be in either cash or stock. Zeff incurred costs of $1.13 million but agreed to a $900,000 reimbursement, according to a filing with the US Securities and Exchange Commission.

Zeff Capital, QAR Industries Inc. and Fintech Consulting own 48.6% of common stock in TSR, according to a regulatory filing.

Last month, TSR’s former CEO and treasurer, Christopher Hughes, filed a lawsuit against the company saying it terminated him without cause to avoid paying severance under his employment agreement.

Share price and market cap

Shares in TSR were up 1.06% to $2.86 as of 10:32 a.m. Eastern time; the company had a market cap of $5.6 million, according to FT.com.