(Former name, former address and former fiscal year, if changed since last report)

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 preceding 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 the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit and 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 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.

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. ☐

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

As of ~~November~~May 13, ~~2018,~~2019, there were ~~5,015,018~~ 8,239,948 outstanding common stock shares, par value $0.00001 per share, of the issuer.

	September 29,			December 30,			March 30,			December 29,
	2018			2017			2019			2018
	(Unaudited)						(Unaudited)
ASSETS
Current Assets:
Cash	$	2,824		$	3,100		$	2,523		$	3,181
Accounts receivable, net		34,724			33,392			34,286			32,746
Prepaid expenses and other current assets		1,295			1,443			1,410			1,197
Total Current Assets		38,843			37,935			38,219			37,124

Property and equipment, net		1,732			1,618			1,549			1,639
Identifiable intangible assets, net		23,376			17,145
Intangible assets, net								21,938			22,657
Goodwill		32,061			27,169			32,061			32,061
Right of use asset - leases								4,548			—
Other assets		2,873			2,881			2,998			2,956
Total Assets	$	98,885		$	86,748		$	101,313		$	96,437
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued expenses	$	23,700		$	16,709		$	22,199		$	18,283
Current portion of debt, net		675			245
Interest payable - related party								1,462			1,457
Current portion of debt								674			657
Accounts receivable financing		19,680			25,983			17,112			21,979
Lease liabilities, current								1,691			—
Other current liabilities		9,350			6,372			8,502			9,642
Total Current Liabilities		53,405			49,309			51,640			52,018

Term loan - related party, net		46,697			38,749			34,716			34,568
Term loan, net		1,185			—
Warrant Liability		—			1,426
Term loan								823			997
Lease liabilities, non current								2,938			—
Other long-term liabilities		4,685			4,049			3,930			4,659
Total Liabilities		105,972			93,533			94,047			92,242

Commitments and contingencies		—			—			—			—
Series E-1 Preferred Stock, 6,500 designated, $1,000 par value, 244 and 81 shares issued and outstanding as of March 30, 2019 and December 29, 2018, respectively								—			—

Stockholders' Deficit:
Stockholders' Equity:
Staffing 360 Solutions, Inc. Equity:
Preferred stock, $0.00001 par value, 20,000,000 shares authorized;
Series A Preferred Stock - Related Party, 1,663,008 shares designated, $1.00 stated value, 1,663,008 shares issued and outstanding, as of September 29, 2018 and December 30, 2017		—			—
Series B Preferred Stock, 200,000 shares designated, $10.00 stated value, 0 shares issued and outstanding, as of September 29, 2018 and December 30, 2017		—			—
Series C Preferred Stock, 2,000,000 shares designated, $1.00 stated value, 0 shares issued and outstanding, as of September 29, 2018 and December 30, 2017		—			—
Common stock, $0.00001 par value, 40,000,000 and 20,000,000 shares authorized as of September 29, 2018 and December 30, 2017, respectively; 5,003,144 and 3,909,114 shares issued and outstanding, as of September 29, 2018 and December 30, 2017, respectively		—			—
Series A Preferred Stock - Related Party, 1,663,008 shares designated, $1.00 stated value, 1,663,008 shares issued and outstanding, as of March 30, 2019 and December 29, 2018								—			—
Series E Preferred Stock, 13,000 designated, $1,000 par value, 13,000 shares issued and outstanding as of March 30, 2019 and December 29, 2018								13			13
Common stock, $0.00001 par value, 40,000,000 and 20,000,000 shares authorized as of March 30, 2019 and December 29, 2018, respectively; 8,234,348 and 5,326,068 shares issued and outstanding, as of March 30, 2019 and December 29, 2018, respectively								—			—
Additional paid in capital		61,673			57,574			77,232			73,772
Accumulated other comprehensive income		1,477			783			1,435			2,053
Accumulated deficit		(70,237	)		(65,142	)		(71,414	)		(71,643	)
Total Stockholders' Deficit		(7,087	)		(6,785	)
Total Liabilities and Stockholders' Deficit	$	98,885		$	86,748
Total Stockholders' Equity								7,266			4,195
Total Liabilities and Stockholders' Equity							$	101,313		$	96,437

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	Q3 2018			Q3 2017			Q3 2018 YTD			Q3 2017 YTD			Q1 2019			Q1 2018
Revenue	$	71,317		$	50,345		$	186,835		$	133,174		$	73,829		$	55,791

Cost of Revenue, excluding depreciation and amortization stated below		58,821			40,768			150,876			108,347			61,711			44,210

Gross Profit		12,496			9,577			35,959			24,827			12,118			11,581

Operating Expenses:
Selling, general and administrative expenses		11,097			8,800			33,315			22,362			10,491			11,188
Depreciation and amortization		741			790			2,251			2,310			877			798
Total Operating Expenses		11,838			9,590			35,566			24,672			11,368			11,986

Income (Loss) From Operations		658			(13	)		393			155			750			(405	)

Other (Expenses) Income:
Interest expense		(2,279	)		(761	)		(6,185	)		(1,843	)
Amortization of debt discount and deferred financing costs		(156	)		(1,212	)		(393	)		(2,610	)
Loss on extinguishment of debt, net		—			(4,764	)		—			(6,132	)
Change in fair value of warrant liability		—			(688	)		879			(493	)
Gain from sale of business		—			—			238			—
Re-measurement loss on intercompany note		(186	)		—			(332	)		—
Other, net		(14	)		(10	)		227			(31	)
Interest expense and amortization of debt discount and deferred financing costs														(2,007	)		(2,077	)
Gain in fair value of warrant liability														—			538
Re-measurement gain on intercompany note														351			575
Gain on settlement of deferred consideration														847			—
Other income, net														286			250
Total Other Expenses, net		(2,635	)		(7,435	)		(5,566	)		(11,109	)		(523	)		(714	)

Loss Before Provision for Income Tax		(1,977	)		(7,448	)		(5,173	)		(10,954	)
Income (Loss) Before Provision for Income Tax														227			(1,119	)

Benefit from (Provision for) income taxes		(3	)		(206	)		78			(213	)		2			(152	)

Net Loss		(1,980	)		(7,654	)		(5,095	)		(11,167	)
Net Income (Loss)														229			(1,271	)

Dividends - Series A preferred stock - related party		50			50			150			150			50			50
Deemed Dividends - Series D preferred stock		—			—			—			2,009
Dividends - Series E preferred stock - related party														390			—
Dividends - Series E-1 preferred stock - related party														182			—

Net Loss Attributable to Common Stock Holders	$	(2,030	)	$	(7,704	)	$	(5,245	)	$	(13,326	)	$	(393	)	$	(1,321	)

Basic and Diluted Net Loss per Share:
Basic and Diluted Loss per Share:

Net Loss	$	(0.42	)	$	(2.63	)	$	(1.20	)	$	(4.25	)
Net Loss Attributable to Common Stock Holders	$	(0.43	)	$	(2.65	)	$	(1.23	)	$	(5.07	)	$	(0.06	)	$	(0.33	)
Weighted Average Shares Outstanding – Basic and Diluted		4,721,364			2,910,139			4,250,500			2,628,913			6,914,601			3,988,624

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	Q3 2018			Q3 2017			Q3 2018 YTD			Q3 2017 YTD			Q1 2019			Q1 2018
Net Loss	$	(1,980	)	$	(7,654	)	$	(5,095	)	$	(11,167	)
Net Income (Loss)													$	229		$	(1,271	)

Other Comprehensive loss
Foreign exchange translation adjustment		356			110			694			(193	)		(618	)		(916	)
Comprehensive Loss Attributable to the Company	$	(1,624	)	$	(7,544	)	$	(4,401	)	$	(11,360	)	$	(389	)	$	(2,187	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

	Shares		Par Value		Shares		Par Value		Shares		Par Value		Shares		Par Value		Additional paid in capital			Accumulated other comprehensive loss			Accumulated Deficit			Total Equity
	Series E-1				Series A				Series E				Common Stock
Balance December 29, 2018		81	$	—		1,663,008	$	—		13,000	$	13		5,326,068	$	—	$	73,772		$	2,053		$	(71,643	)	$	4,195
Shares issued to/for:
Employees, directors and consultants		—		—		—		—		—		—		5,600		—		199			—			—			199
Sale of common stock, net		—		—		—		—		—		—		2,902,680		—		3,964			—			—			3,964
Dividends - Series A Preferred Stock - Related Party		—		—		—		—		—		—		—		—		(50	)		—			—			(50	)
Dividends - Series E Preferred Stock - Related Party		—		—		—		—		—		—		—		—		(390	)		—			—			(390	)
Dividends - Series E-1 Preferred Stock - Related Party		162		—		—		—		—		—		—		—		(182	)		—			—			(182	)
Dividends - Common Stock holders		—		—		—		—		—		—		—		—		(81	)		—			—			(81	)
Foreign currency translation gain		—		—		—		—		—		—		—		—		—			(618	)		—			(618	)
Net loss		—		—		—		—		—		—		—		—		—			—			229			229
Balance March 30, 2019		243	$	—		1,663,008	$	—		13,000	$	13		8,234,348	$	—	$	77,232		$	1,435		$	(71,414	)	$	7,266

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY

	Shares		Par Value		Shares		Par Value		Additional paid in capital			Accumulated other comprehensive loss			Accumulated Deficit			Total Equity
	Series A				Common Stock
Balance December 30, 2017		1,663,008	$	—		3,909,114	$	—	$	57,574		$	783		$	(65,142	)		(6,785	)
Shares issued to/for:
Employees, directors and consultants		—		—		18,200		—		373			—			—			373
At-Market-Facility, net		—		—		130,545		—		408			—			—			408
Additional shares issues on share split		—		—		426		—		—			—			—			—
Dividends - Series A Preferred Stock - Related Party		—		—		—		—		(50	)		—			—			(50	)
Foreign currency translation gain		—		—		—		—		—			(914	)		—			(914	)
Net loss		—		—		—		—		—			—			(1,271	)		(1,271	)
Balance March 31, 2018		1,663,008	$	—		4,058,285	$	—	$	58,305		$	(131	)	$	(66,413	)	$	(8,239	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	Q3 2018 YTD			Q3 2017 YTD			Q1 2019			Q1 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(5,095	)	$	(11,167	)
Net income (loss)							$	229		$	(1,271	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,251			2,310			877			798
Amortization of debt discount and deferred financing costs		393			2,610			157			122
Loss on extinguishment of debt, net		—			6,132
Gain in fair value of warrants		(879	)		493			—			(538	)
Stock based compensation		951			962			199			373
Re-measurement loss on intercompany note		332			—
Gain from sale of business		(238	)		—
Gain on settlement of deferred consideration								(847	)		—
Re-measurement gain on intercompany note								(351	)		(575	)
Changes in operating assets and liabilities:
Accounts receivable		6,282			(2,907	)		(1,717	)		7,026
Prepaid expenses and other current assets		71			(552	)		(212	)		(47	)
Other assets		165			196			(79	)		(9	)
Accounts payable and accrued expenses		2,789			(129	)		3,547			2,795
Interest payable - related party		(64	)		—			—			(160	)
Other current liabilities		(94	)		(807	)		(118	)		447
Other long-term liabilities		97			285
Other		188			(201	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		7,149			(2,775	)
Other long-term liabilities and other								558			(114	)
NET CASH PROVIDED BY OPERATING ACTIVITIES								2,243			8,847

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of business, net of cash acquired		(9,760	)		(20,817	)
Disposal of business, net of cash		1,403			—
Purchase of property and equipment		(330	)		(169	)		(44	)		(56	)
Collection of UK factoring facility deferred purchase price		7,086			—			3,469			1,269
NET CASH USED IN INVESTING ACTIVITIES		(1,601	)		(20,986	)
NET CASH PROVIDED BY INVESTING ACTIVITIES								3,425			1,213

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of promissory notes		—			(441	)
Proceeds from term loan - related party		8,428			50,165
Repayments of term loan - related party		—			(11,165	)
Proceeds from term loan		2,047			—
Repayments of term loan		(422	)		(3,811	)
Proceeds from convertible notes		—			400
Repayments of convertible notes		—			(6,635	)
Repayment of bonds		—			(50	)
Repayments (proceeds) on accounts receivable financing, net		(16,220	)		5,242
Repayment of term loan								(156	)		(254	)
Repayments on accounts receivable financing, net								(8,606	)		(9,714	)
Dividends paid to related parties		(150	)		(515	)		(245	)		(50	)
Proceeds from At-The-Market Facility		2,286			208
Repayment of Series D Preferred Stock		—			(1,500	)
Dividends paid on common stock								(81	)		—
Proceeds from sale of common stock								4,914			415
Payments made for earn-outs		(1,402	)		(1,094	)		(1,200	)		(90	)
Financing costs - related party		(280	)		—
Third party financing costs		(109	)		(2,311	)		(950	)		(7	)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(5,822	)		28,493
NET CASH USED IN FINANCING ACTIVITIES								(6,324	)		(9,700	)

NET (DECREASE) INCREASE IN CASH		(274	)		4,732			(656	)		360

Effect of exchange rates on cash		(2	)		(2	)		(2	)		(2	)

Cash - Beginning of period		3,100			650			3,181			3,100

Cash - End of period	$	2,824		$	5,380		$	2,523		$	3,458

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Staffing 360 Solutions, Inc. (“we,” “us,” “our,” “Staffing 360,” or the “Company”) was incorporated in the State of Nevada on December 22, 2009, as Golden Fork Corporation, which changed its name to Staffing 360 Solutions, Inc., ticker symbol “STAF,” on March 16, 2012. On June 15, 2017, the Company changed its state of domicile to Delaware.

The Company effected a one-for-ten reverse stock split on September 17, 2015 and a one-for-five reverse stock split on January 3, 2018. All share and per share information in these consolidated financial statements has been retroactively adjusted to reflect these reverse stock splits.

These condensed consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the GAAP.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended December ~~30, 2017, the transition period ended December 31, 2016 and fiscal year ended May 31, 2016, which~~29, 2018 are included in the Company’s December ~~30, 2017~~29, 2018 Form 10-K (“Fiscal 2018”), filed with the United States Securities and Exchange Commission on March ~~29, 2018.~~25, 2019. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the period ended ~~September 29, 2018~~March 30, 2019 are not necessarily indicative of results for the entire year ending December ~~29, 2018.~~28, 2019. This report is for the ~~periods July 1,~~period December 30, 2018 to ~~September 29, 2018~~March 30, 2019 (“~~Q3 2018”~~Q1 2019”)~~, July 2, 2017 to September 30, 2017 (“Q3 2017”),~~ and December 31, 2017 to ~~September 29,~~March 31, 2018 (“~~Q3 2018 YTD”) and January 1, 2017 to September 30, 2017 (“Q3 2017 YTD”~~Q1 2018”).

The accompanying financial statements have been prepared on a basis, which contemplates the ~~Company divested the stock~~realization of ~~PeopleServe Inc.,~~assets and PeopleServe PRS, Inc. for a total consideration of $1,502, net of $567 that was remitted back to the buyer on July 31, 2018 in connection with a net working capital true up. The Company recorded a gain of $238 from sale of the business.

On June 28, 2018, the Company and Staffing 360 Solutions Limited (formerly known as Longbridge Recruitment 360 Limited), a whollyowned subsidiary of the Company, entered into share purchase agreements (“Share Purchase Agreements”) to acquire all of the share capital of Clement May Limited (“CML”). Consideration for the acquisition of all the shares was (i) an aggregate cash payment of £1,550 ($2,047), (ii) 15,000 shares of the Company’s common stock, (iii) an earn-out payment of up to £500, the amount to be calculated pursuant to that Share Purchase Agreement and to be paid on or around December 28, 2018, and (iv) deferred consideration of £350, to be paid on or around June 28, 2019, depending on the satisfaction of ~~certain conditions set forth~~liabilities in ~~that Share Purchase Agreement. To finance~~ the ~~above transaction,~~normal course of business. As shown in the accompanying financial statements as of the quarter ended March 30, 2019, the Company ~~entered into~~has an accumulated deficit of $71,414 and a working capital deficit of $13,421. At March 30, 2019, we had total debt of $37,237 and $2,523 of cash on hand. We have historically met our cash needs through a combination of cash flows from operating activities, term ~~loan~~loans, promissory notes, bonds, convertible notes, private placement offerings and sales of equity. Our cash requirements are generally for operating activities and debt repayments.

The financial statements included in this quarterly report have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity, capital requirements and that our credit facilities with ~~HSBC Bank plc. Refer~~our lenders will remain available to ~~Note 5 for further details.~~us.

~~On August 27, 2018,~~Further, our note issued to Jackson Investment Group LLC includes certain financial customary covenants and the Company has had instances of non-compliance. Management has historically been able to obtain from Jackson Investment Group LLC waivers of any non-compliance and ~~Monroe Staffing Services, LLC (“Monroe Staffing”), an indirect subsidiary~~management expects to continue to be able to obtain necessary waivers in the event of future non-compliance; however, there can be no assurance that the Company ~~entered into~~will be able to obtain such waivers, and should Jackson Investment Group LLC refuse to provide a ~~share purchase~~waiver in the future, the outstanding debt under the agreement could become due immediately.

On December 31, 2017, the Company adopted the new accounting standard ASC 606, Revenue from Contracts with ~~Pamela D. Whitaker (“Seller”), pursuant to which~~Customers for all open contracts and related amendments as of December 31, 2017 using the ~~Seller sold 100% of the common shares of Key Resources Inc. (“KRI”) to Monroe Staffing (the “KRI Transaction”).~~modified retrospective method. The adoption had no

The KRI Transaction closed simultaneously with the signing of the share purchase agreement. The purchase price in connection with the KRI Transaction was approximately $12,163, of which (a) approximately $8,109 was paid to the Seller at closing, (b) up to approximately $2,027 is payable as earnout consideration to the Seller on August 27, 2019 and (c) up to $2,027 is payable as earnout consideration to the Seller on August 27, 2020. The payment of the Earnout Consideration is contingent on KRI’s achievement of certain trailing gross profit amounts.

To finance the above transaction, the Company entered into an agreement with Jackson Investment Group, LLC (“Jackson”) on August 27, 2018, pursuant to which the note purchase agreement dated as of September 15, 2017 was amended to add an additional senior debt investment of approximately $8,428 in the Company in exchange for a senior secured note in the principal amount of approximately $8,428.

On January 1, 2018, the Company adopted the new accounting standard ASC 606, Revenue from Contracts with Customers for all open contracts and related amendments as of January 1, 2018 using the modified retrospective method. The adoption had no impact to the reported results. Results for reporting periods beginning after ~~January 1, 2018 will be~~December 31, 2017 are presented under ASC 606, while the comparative information will not be restated and will continue to be reported under the accounting standards in effect for those periods.

The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation.

The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Payment terms vary by client and the services offered.

The Company has primarily two main forms of revenue – temporary contractor revenue and permanent placement revenue. Temporary contractor revenue is accounted for as a single performance obligation satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance on an hourly basis. The contracts stipulate weekly billing and the Company has elected the “as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as we have the right to payment in an amount that corresponds directly with the value of performance completed to date. Permanent placement revenue is recognized on the date the candidate’s full-time employment with the customer has commenced. The customer is invoiced on the start date, and the contract stipulates payment due under varying terms, typically 30 days. The contract with the customer stipulates a guarantee period whereby the customer may be refunded if the employee is terminated within a short period of time, however this has historically been infrequent, and immaterial upon occurrence. As such, the Company’s performance obligations are satisfied upon commencement of the employment, at which point control has transferred to the customer. Revenue in ~~Q3 2018~~Q1 2019 was comprised of ~~$68,683~~$70,998 of temporary contractor revenue and ~~$2,634~~$2,831 of permanent placement revenue, compared with ~~$48,970~~$52,997 and ~~$1,375~~$2,794 for ~~Q3 2017, respectively. Revenue in Q3~~Q1 2018, ~~YTD was comprised of $178,518 of temporary contractor revenue and $8,317 of permanent placement revenue, compared with $130,220 and $2,954 for Q3 2017 YTD,~~ respectively. Refer to Note 89 for further details on breakdown by segments.

We may make certain reclassifications to prior period amounts to conform with the current year’s presentation. These reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows.

The Company's provision for income taxes is based upon an estimated annual tax rate for the year applied to federal, state and foreign income. On a quarterly basis, the annual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter.

The Company’s effective tax rate may change from period to period based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation, state and local income taxes, and tax audit settlements. The effective income tax rate was ~~(0.31)~~(1.06)%~~, 4.0%, 1.59%~~ and ~~2.3%~~(8.8)% for the period ending Q3Q1 2019 and Q1 2018, ~~Q3 2017, Q3 2018 YTD and Q3 2017 YTD,~~ respectively.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Tax Act") was signed into law making significant changes to the Internal Revenue Code. The changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21%, the transition of U.S. international taxation from a worldwide tax system to a territorial system, allowing for immediate expensing of certain qualified property, modifications to many business deductions and credits, and providing various tax incentives. Shortly after the Tax Act was enacted, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable

~~(All amounts in thousands, except share, per share and stated value per share)~~

detail to complete the accounting for certain income tax effects of the Tax Act. SAB 118 provides that in these cases a registrant should continue to apply Financial Accounting Standards Board ("FASB") Accounting Standards Update No. 2009-06, Income Taxes ("Topic 740") based on the provisions of the tax laws that were in effect immediately prior to the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for registrants to complete the accounting under Topic 740.

The Company remeasured domestic deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally the 21% rate imposed by the Tax Act. The Company recorded an expense of $3.7 million to reduce the net deferred tax assets, along with a corresponding benefit for the reduction of the valuation allowance recorded against these balances in our financial statements for the year ended December 30, 2017.

At September 29, 2018, in accordance with SAB 118, the Company has not completed its accounting for the tax effects of the one-time transition tax imposed by the Tax Act. In order to determine the amount of the liability with respect to the one-time transition tax, the Company must determine, in addition to other factors, the amount of post-1986 Earnings & Profits of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. In order to quantify the liability, we are awaiting further interpretative guidance, continuing to assess available tax methods and elections, and continuing to gather additional information to more precisely compute the amount of the transition tax. Therefore, we have not recorded an estimate of the transition tax in our financial statements.

In addition, the Company is continuing to evaluate whether Global Intangible Low Tax Income taxes (“GILTI”) are recorded as a current period expense when incurred or whether such amounts should be factored into the Company's measurement of its deferred taxes. As a result, the Company has not included an estimate of the tax impacts related to GILTI in the third quarter of 2018. The Company has not elected a method and will only do so after completing their analysis of the GILTI provisions.

~~Staffing 360 Solutions, Inc. has an intercompany note due from~~ ~~Staffing 360 Solutions Limited (formerly known as Longbridge Recruitment 360 Limited), denominated in U.S. dollars.~~ ~~Staffing 360 Solutions Limited’s functional currency is Pound Sterling.~~ The note matures in September 15, 2022, bears interest at a rate of interest equal to the mid-term monthly Applicable Federal Rate (AFR), as published each month by the U.S. Internal Revenue Service pursuant to Section 1274(d) of the Internal Revenue Code, compounded semiannually. Interest is payable in cash quarterly on the first business day of each calendar quarter. ~~Staffing 360 Solutions Limited~~ may prepay all or any portion of the principal amount of this Note at any time, in whole or in part, without premium or penalty. As the note is denominated in U.S. dollars and due to weakening of the Pound Sterling, the Company recorded a non cash foreign currency remeasurement ~~loss~~gain of ~~$186~~$351 and ~~$332~~$575 in Q3Q1 2019 and Q1 2018, ~~and Q3 2018 YTD, respectively.~~respectively, associated with its U.S dollar denominated intercompany note.

Company ~~is currently evaluating~~has elected to apply the ‘package of practical expedients’ which allow us to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. The Company has also elected to apply i) the practical expedient which allows us to not separate lease and non-lease components, and (2) the short-term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the new standard. The adoption of the new standard resulted in the recognition of additional lease liabilities of approximately $4,629, and right-of-use assets of approximately $4,548 million as of March 30, 2019 related to the Company’s operating leases. The new standard did not have a material impact to the Company’s consolidated statement of ~~adopting this guidance.~~operations or consolidated statement of cash flows.

The Company utilizes the guidance per ASC 260, “Earnings per Share.” Basic earnings per share are calculated by dividing income available to stockholders by the weighted average number of common stock shares outstanding during each period. Our Series A preferred stock holders (related parties) receive certain dividends or dividend equivalents that are considered participating securities and our loss per share is computed using the two-class method. For Q3Q1 2019 and Q1 2018, ~~Q3 2017, Q3 2018 YTD and Q3 2017 YTD,~~ pursuant to the two-class method, as a result of the net loss attributable to common stock holders, losses were not allocated to the participating securities.

~~(All amounts in thousands, except share, per share and stated value per share)~~

Diluted earnings per share are computed using the weighted average number of common stock shares and dilutive common share equivalents outstanding during the period. Dilutive common stock equivalents consist of common shares issuable upon the conversion of preferred stock, convertible notes, unvested equity awards and the exercise of stock options and warrants (calculated using the modified treasury stock method). Such securities, shown below, presented on a common share equivalent basis and outstanding as of ~~September 29,~~March 30, 2019 and March 31, 2018 ~~and September 30, 2017~~ have not been ~~excluded from~~included in the diluted earnings per share computations, ~~since~~as their inclusion would be ~~anti-dilutive:~~anti dilutive due to the Company’s net loss as of March 30, 2019 and March 31, 2018:

	September 29,		September 30,		March 30,		March 31,
	2018		2017		2019		2018
Convertible preferred shares		43,239		43,239		7,492,995		43,239
Warrants		925,935		932,234		925,935		925,935
Restricted shares - unvested		595,272		463,052		557,184		475,332
Long term incentive plan (LTIP)		123,515		178,728		375,000		178,728
Options		125,400		122,400		111,400		125,400
Total		1,813,361		1,739,653		9,462,514		1,748,634

On February 8, 2018, CBS Butler, Staffing 360 Solutions Limited and The JM Group, entered into a new arrangement with HSBC Invoice Finance (UK) Ltd (“HSBC”) which provides for HSBC to purchase the subsidiaries’ accounts receivable up to an aggregate amount of £11,500 across all three subsidiaries. The terms of the arrangement provide for HSBC to fund 90% of the purchased accounts receivable upfront and, a secured borrowing line of 70% of unbilled receivables capped at £1,000 (within the overall aggregate total facility of £11,500). The arrangement has an initial term of 12 months, with an automatic rolling three-month extension and carries a service charge of 1.80%.

On June 28, 2018, ~~CML,~~Clement May Limited (“CML”), the Company’s new subsidiary entered into a new agreement with a minimum term of 12 months for purchase of debt (“APD”) with HSBC, joining CBS Butler Holdings Limited (“CBS Butler”), Staffing 360 Solutions Limited and The JM Group (collectively, with CML, the “Borrowers”) as “Connected Clients” as defined in the APD. The new Connected Client APDs carry an aggregate Facility Limit of £20,000 across all Borrowers. The obligations of the Borrowers are secured by a fixed charge and a floating charge on the Borrowers’ respective accounts receivable and are subject to cross-company guarantees among the Borrowers. In addition, the secured borrowing line against unbilled receivables was increased to £1,500 for a period of 90 days.

Under ASU 2016-16, “Statement of Cash Flows (Topic 230, Classification of Certain Cash Receipts and Cash Payments, a consensus of the FASB Emerging Issues Task Force), the upfront portion of the sale of accounts receivable is classified within operating activities, while the deferred purchase price portion (or beneficial interest), once collected, is classified within investing activities.

In conjunction with the HSBC Invoice Finance (UK) Ltd – New Facility, on February 8, 2018, Staffing 360 Solutions Limited and The JM Group terminated ~~this~~its facility with ABN AMRO Commercial Finance and the remaining balance was paid in full.

~~In conjunction with the HSBC Invoice Finance (UK) Ltd – New Facility, on February 8, 2018, CBS Butler terminated this facility and the remaining balance was paid in full.~~

~~(All amounts in thousands, except share, per share and stated value per share)~~

	September 29,			December 30,			March 30,			December 29,
	2018			2017			2019			2018
Jackson Investment Group - related party	$	48,428		$	40,000		$	35,740		$	35,740
HSBC Term Loan		1,860			—			1,497			1,653
ABN AMRO		—			254
Total Debt, Gross		50,288			40,254			37,237			37,393
Less: Debt Discount and Deferred Financing Costs		(1,731	)		(1,260	)		(1,024	)		(1,171	)
Total Debt, Net		48,557			38,994			36,213			36,222
Less: Current Portion, Net		(675	)		(245	)		(674	)		(657	)
Total Long-Term Debt, Net	$	47,882		$	38,749		$	35,539		$	35,565

On June 26, 2018, the Company’s UK subsidiary, Staffing 360 Solutions Limited (formerly known as Staffing 360 Solutions (Holdings) Limited), entered into a term loan agreement (the “Term Loan”) with HSBC Bank plc (“HSBC plc”). The Term Loan was drawn down on June 28, 2018 in an original principal amount of £1,550 ($2,047) to fund the upfront cash consideration of the Clement May acquisition. The Term Loan matures on June 28, 2021, unless otherwise accelerated or terminated earlier. The interest rate on the Term Loan is 2.35% over the base rate of 0.75%, which is subject to periodic adjustment, and is payable in monthly installments of principal and interest. The obligations of Staffing 360 Solutions Limited under the term Loan are secured by fixed and floating charges in favor of HSBC plc on all of Staffing 360 Solutions Limited and its UK subsidiaries’ assets, undertakings, accounts receivable and certain other assets pursuant to the terms of the Term Loan agreement.

On April 11, 2017, the Company entered into a non-interest bearing convertible note for $477, whereby the Company received cash of $400, maturing in October 2017. The Company paid this in full on September 18, 2017.

~~During the period Q3 2017 and Q3 2017 YTD, the Company paid $1,624 and $1,874 in principal of notes payable, respectively. The Company paid this note in full on September 18, 2017.~~

~~During the period Q3 2017 and Q3 2017 YTD, the Company paid $78 and $234 in principal of notes payable, respectively. This note was paid in full in Q3 2017.~~

On September 10, 2016, the Company entered into a non interest bearing convertible note for $477, whereby the Company received cash of $400. This note was due to mature in March 2017. In March 2017, the Company extended the note to September 2017 with a new maturity value of $565. The Company paid this in full on September 18, 2017.

~~8% Convertible Note (July 8, 2015) and 8% Convertible Note (February 8, 2016)~~

On January 3, 2017, the Company entered into an amendment agreement pursuant to which, the parties refinanced an aggregate amount of $2,688 of indebtedness and extended all amortization payments for the two 8% convertible notes dated July 8, 2015 and February 8, 2016 (collectively, the “Amendment”) to October 1, 2018, which was approximately 21 months from the date of the refinancing.

The Amendment had a new face value of $3,126, and an 8% interest rate per annum, with no interest payments due until October 1, 2017, payable quarterly thereafter, and an overall term of 21 months with principal due at maturity. The Amendment was convertible into shares of common stock at a price of $15.00 per share at holder’s election, and the holder agreed to eliminate the 20% pre-payment penalty for an early redemption. In connection with the refinancing, the Company issued the holder 120,000 shares of

~~(All amounts in thousands, except share, per share and stated value per share)~~

common stock, valued at $498. The Amendment resulted in the extinguishment of the old notes of $2,688 and recording of the new debt and debt issue costs. The Company recorded a $870 loss upon extinguishment. On January 26, 2017, the Amendment was paid in full resulting a loss of $498.

On April 5, 2017, the Company amended the note and warrant purchase agreement and entered into a second subordinated secured note for $1,650. Under the terms of this amended agreement, the Company issued to Jackson 59,397 shares of common stock, with an additional 74,184 shares of common stock that were issued after obtaining shareholder approval for issuance of shares to Jackson in excess of the 19.99% limit in June 2017. Also on April 5, 2017, the Company amended the Warrant to allow Jackson to purchase up to an additional 275,508 shares of common stock, modified the initial exercise price of the Warrant to $5.00 per share and modified the conversion price of accrued interest on the note issued to Jackson Investment Group LLC (“Jackson”) includes certain financial customary covenants, including a leverage ratio covenant. As of March 30, 2019, the Company was not in ~~January 2017 to $7.50. The Warrant was also amended to increase~~compliance with all covenants. On May 13, 2019, the ~~amount~~Company received a waiver from Jackson curing the non-compliance as of ~~common stock issuable to Jackson pursuant~~March 30, 2019.

On December 30, 2018, the Company adopted ASC 842 using the modified retrospective transition approach allowed under ASU 2018-11 which releases companies from presenting comparative periods and related disclosures under ASC 842 and requires a cumulative-effect adjustment to the ~~anti-dilution clause contained therein. The second note accrues interest on the principal amount at a rate~~opening balance of ~~6% per annum and has a maturity date of June 8, 2019; however,~~retained earnings in the ~~event the Company satisfied all~~period of its outstanding obligations with Midcap Financial Trust, the maturity date would have been adjusted to July 25, 2018. No interest or principal is payable on the second note until maturity. At any time during the term of the second note, upon notice to Jackson, the Company may also, at its option, redeem all or some of the then outstanding principal amount of the note by paying to Jackson an amount not less than $100 of the outstanding principal (and in multiples of $100), plus any accrued but unpaid interest and liquidated damages and other amounts due under the note. The second note’s principal is not convertible into shares of common stock; however, 50% of the accrued interest on the second note can be converted into shares of common stock, at the sole election of Jackson at maturity or in the event of a prepayment by the Company, at a conversion price equal to $7.50 per share. The proceeds of this transaction were used to redeem the remaining shares and conversion rights of the Series D Preferred Stock.adoption. The Company has ~~accounted for these warrants~~elected to apply the short-term lease exception to all leases of one year or less. Consequently, as a ~~liability under~~result of the adoption of ASC ~~815-40 due to certain anti-dilution protection provisions. The Company has recorded~~842, we recognized a right of use (“ROU”) lease asset of approximately $4,548 with a corresponding lease liability of ~~$1,426 at December 30, 2017. On April 25, 2018,~~approximately $4,629 based on the ~~Company and Jackson amended~~present value of the ~~Warrant to remove the anti-dilution clauses. Refer to Note 6 for further details.~~

minimum rental payments of such leases. The ~~Company paid this note in full on September 18, 2017 and entered into a new note with Jackson (refer to “Jackson Note – Related Party”)~~

~~In August 2017, the Company entered into a promissory note with Jackson for $1,600, with a term of 60 days at interest of 10% per annum~~Company’s finance leases are immaterial both individually and in ~~return for 32,000 shares of common stock. The proceeds of~~ the ~~note were used to fund~~aggregate.

Quantitative information regarding the ~~satisfaction of a judgment entered in the matter of~~ ~~Staffing 360 Solutions, Inc. v. Former Officers of Staffing 360 Solutions, Inc.~~

~~The Company paid this in full on September 18, 2017 and entered into a new note with Jackson (refer to “Jackson Note – Related Party”).~~

On September 1, 2017, the Company entered into a promissory note with Jackson for $515, with a term of 31 days at interest of 12% per annum. The proceeds of the note were used to fund other debt obligations. The Company paid this in full on September 18, 2017 and entered into a new note with Jackson (refer to “Jackson Note – Related Party”).

On September 15, 2017, the Company entered into a $40,000 note agreement with Jackson. The proceeds of the sale of the secured note were used to repay the existing subordinated notes previously issued to Jackson pursuant to the existing note purchase agreement in the aggregate principal amount of $11,165 and to fund a portion of the purchase price consideration of the Firstpro Acquisition and the CBS Butler Acquisition and repay certain other outstanding indebtedness of the Company. The maturity dateCompany’s leases for the ~~amounts due under the Jackson Note~~period ended March 30, 2019 is September 15, 2020. The Jackson Note will accrue interest at 12% per annum, due quarterly on January 1, April 1, July 1 and October 1 in each year, with the first such payment due on January 1, 2018. Interest on any overdue payment of principal or interest due under the Jackson Note will accrue at a rate per annum that is 5% in excess of the rate of interest otherwise payable thereunder.as follows:

~~The Company paid a closing fee of $1,000 in connection with its entry into the A&R Note Purchase Agreement and agreed to issue 450,000 shares~~Note: As most of the Company’s common stock as a closing commitment fee. These shares are subject to registration rights in favor of Jackson which was included in a new resale registration statement which was filed by the Company on November 1, 2017. The Jackson ~~Note resulted in the extinguishment of the old notes of $11,165 and recording of the new debt of $40,000 at fair value.~~ ~~The Company recorded $4,764 loss upon extinguishment of debt, and deferred debt issuance costs of $1,385 to be amortized over the term of the new loan.~~

~~Immediately prior to closing the Jackson Note, Jackson owned 526,697 shares of common stock and 905,508 warrants.~~

~~On August 27, 2018, Company entered into~~leases do not provide an amended agreement with Jackson, pursuant to which the note purchase agreement dated as of September 15, 2017 was amended and made a new senior debt investment of approximately $8,428 in the Company in exchange for a senior secured note in the principal amount of approximately $8,428. Terms of the additional investment are the same as the Jackson Note.

~~From the proceed of the additional investment, the Company paid a closing fee of $280 and legal fees of $39, and issued 192,000 shares of~~implicit rate, we use the Company’s ~~common stock as a closing commitment fee.~~

~~In connection with~~incremental borrowing rate based on the ~~additional investment,~~information available at commencement date in determining the Company entered into Amendment No. 1 to Amended and Restated Warrant Agreement (“Warrant Agreement”) with Jackson. The Warrant Amendment amended that certain Amended and Restated Warrant Agreement with Jackson, dated as of April 25, 2018 (the “Warrant”), to reduce the exercise price of the Warrant from $5.00 per share to $3.50 per share.

~~The incremental fair~~present value of ~~repricing the Warrant to $3.50 per share is $135 and was recognized as deferred financing costs to be amortized over the term of the loan.~~

The Jackson Note includes certain financial customary covenants, including a leverage ratio covenant. As of September 29, 2018, the Company was not in compliance with this covenant. On November 13, 2018, the Company received a waiver from Jackson curing the non-compliance as of September 29, 2018.

The Company issued the following shares of common stock during the ~~nine~~three month period ended ~~September 29,~~March 30, 2019:

The Company issued the following shares of common stock during the three month period ended March 31, 2018:


Shares issued to/for:	Number of common shares issued		Fair Value of shares issued		Fair Value at Issuance (minimum and maximum per share)				Number of Common Shares Issued		Fair Value of Shares Issued		Fair Value at Issuance (minimum and maximum per share)
At-the-Market Facility		726,821	$	2,286	$	1.61	$	4.23		130,545	$	415	$	2.35	$	3.50
Jackson Investment Group		192,000		371		1.93	$	1.93
Employees		125,000		199		1.54		1.61
Consultants		19,383		55		1.40		3.42		14,000		46		3.22		3.42
Acquisition		15,000		21		1.38		1.38
Board and Committee members		15,400		32		1.40		3.25		4,200		15		3.25		3.25
Reverse stock split (rounding up shares)		426		-		-		-		426		-		-		-
		1,094,030	$	2,964						149,171	$	476

Subsequent to ~~September 29, 2018,~~March 30, 2019, the Company ~~sold 5,109 shares of common stock through its at-the-market facility at a value of $10, and~~ granted 5,600 shares of common stock valued ~~$11~~at $9 to the board of ~~directors, and 1,165 shares of common valued at $2 for consulting services.~~ directors.

The Company has issued shares to employees and board and committee members under its 2015 Omnibus Incentive Plan and 2016 Omnibus Incentive Plan. Under these plans, the shares are restricted for a period of three years from issuance. As of ~~September 29, 2018,~~March 30, 2019, the Company has a total of ~~597,272~~557,184 shares unvested issued to employees and Board and committee members. In accordance

~~(All amounts in thousands, except share, per share and stated value per share)~~

with ASC 718, Compensation – Stock Compensation, the Company recognizes stock based compensation from restricted stock based upon the fair value of the award at issuance over the vesting term on a straight-line basis. The fair value of the award is calculated by multiplying the number of restricted shares by the Company’s stock price on the date of issuance. The impact of forfeitures has historically been immaterial to the financial statements. The Company recorded compensation expense associated with these restricted shares of ~~$248, $206, $728~~$145 and ~~$575,~~$245, for the periods ended Q3Q1 2019 and Q1 2018, ~~Q3 2017, Q3 2018 YTD and Q3 2017 YTD,~~ respectively.

The Company recorded share based payment expense of ~~$33, $101, $168~~$24 and ~~$299~~$82 for the periods ended Q3Q1 2019 and Q1 2018, ~~Q3 2017, Q3 2018 YTD and Q3 2017 YTD,~~ respectively.

In the period ended Q3Q1 2019 and Q1 2018, ~~YTD and Q3 2017 YTD,~~ the Company paid ~~$150~~$50 and ~~$515,~~$50, respectively, in dividends to its Series A preferred stock holders. The Company did not have any Series A dividends payable to preferred stock holders at the end of ~~Q3 2018 YTD~~Q1 2019 and ~~Q3 2017 YTD.~~Q1 2018.

The Series DE Preferred Stock ~~contained beneficial~~ranks senior to common stock and any other series or classes of preferred stock now or after issued or outstanding with respect to dividend rights and rights on liquidation, winding up and dissolution. Each share of Series E Preferred Stock is initially convertible into 561.8 shares of our common stock at any time after October 31, 2020 or the occurrence of a Preferred Default. A holder of Series E Preferred Stock is not required to pay any additional consideration in exchange for conversion ~~features;~~of such Series E Preferred Stock into our common stock. Series E Preferred Stock is redeemable by the Company at any time at a ~~portion was quantifiable at the date of issuance~~

(All amounts in ~~the amount of $615, which was recognized immediately due~~thousands, except share, per share and stated value per share)

price per share equal to the ~~immediate convertibility~~stated value ($1,000 per share) plus all accrued and unpaid dividends thereon. While the Series E Preferred Stock is outstanding, the Company is required to use the proceeds of any sales of equity securities, exclusively to redeem any outstanding shares of Series E Preferred Stock, except that the Company is permitted to use up to an aggregate of $3,000 of the gross proceeds from any equity offering completed on or before November 15, 2019 for working capital purposes.

On January 22, 2019, the Company completed a registered direct offering of 387,500 common stock that generated $775 in gross proceeds that were used for working capital purposes. On February 12, 2019, the Company closed its previously announced firm commitment underwritten public offering in which, pursuant to an underwriting agreement between the Company and the underwriter, dated as of February 8, 2019, the Company issued and sold 2,425,000 shares of its common stock, at a public offering price of $1.65 per share. Notwithstanding the terms of the certificate of designations for Series E Preferred Stock, Jackson, the holder our outstanding shares of Series E Preferred Stock, did not require us to use the proceeds from our recent offerings in excess of $3,000 to redeem outstanding shares of the Series DE Preferred Stock. Instead, we used such excess proceeds to make a terminal payment to the sellers of FirstPro in final settlement of all deferred consideration due under our asset purchase agreement with such sellers.

As of March 30, 2019, 7,303,371 shares and 146,386 of common stock were issuable upon the potential conversion of Series E Preferred Stock and that it had no true redemption date. The additional contingent beneficial conversion feature was quantifiable only at the date of each subsequent conversion. Both beneficial conversion features represent additional valueSeries E-1 Preferred Stock, respectively. Due to the ~~holders. As such, they represent a dividend on~~contingent nature of the Series D Preferred Stock and recorded as a Deemed Dividend. These Deemed Dividends are presented on the Statement of Operations for purposes of calculation Earnings Per Share only and have no net impact on Shareholders’ Deficit. Deemed Dividends recorded were $0 and $2,009 for Q3 2018 YTD and Q3 2017 YTD, respectively.

~~On April 5, 2017, the Company entered into an agreement with holders~~cash redemption feature of the Series ~~D Preferred shares to redeem the remaining 62 shares of Series D~~E-1 Preferred Stock, ~~and terminate all future conversion rights,~~the Company classified the shares as mezzanine equity on the consolidated balance sheets.

In the period ended Q1 2019, the Company paid $195 in ~~return for $1,500 in cash and 60,000 shares of common stock.~~dividends to its Series E preferred stock holders.

The Company had accounted for ~~the~~certain warrants issued to Jackson as a liability under ASC 815-40 due to certain anti-dilution protection provisions. The warrants issued to Jackson are considered to be Level 3 liabilities under ASC 820. On April 25, 2018, the Company and Jackson amended the ~~Warrant~~warrant to remove the anti-dilution clauses. No economic terms were adjusted. These clauses were the basis for recording the warrants as a liability. Therefore, upon execution of this amendment, the Company recorded a mark-to-market gain and reclass the remaining liability to Additional paid-in capital. The Company recorded a change in fair value of the warrant liability of ~~$0, $(688), $879 and $(493)~~$538 in Q3Q1 2018 ~~Q3 2017, Q3 2018 YTD and Q3 2017 YTD, respectively,~~ using Black-Scholes valuation model.

In ~~connection with~~January 2019, the ~~additional investment from Jackson,~~Company’s Board approved the ~~Company entered into Amendment No. 1~~2019 Long-Term Incentive Plan (the “2019 LTIP”).

The Board granted 375,000 units to ~~Amended~~adequately motivate the participants and ~~Restated Warrant Agreement (“Warrant agreement”) with Jackson. The Warrant Amendment amended that certain Amended~~drive performance for the period.

The Company recorded share based expense of approximately $30 in Q1 2019 in connection with this. The Company performed a valuation of these units and determined them to be valued at $586 using a combination of Black-Sholes and Monte Carlo valuation models.

(All amounts in thousands, except share, per share ~~to $3.50~~and stated value per ~~share. The incremental fair value of repricing the Warrants to $3.50 per share is $135 and was recognized as deferred financing costs to be amortized over the term of the Jackson Note.~~share)

Pursuant to the acquisition of Control Solutions International, Inc. (“CSI”) on November 4, 2013, the purchase price included monthly cash payments to the former owner and shareholder of CSI for performance-based compensation equal to 20% of CSI’s consolidated gross profit from the date of closing through the end of the sixteenth quarter following the date of closing not to exceed a total of $2,100. During Q2 2018 and Q2 2017, the Company paid $0 and $24, respectively, towards the earn-out liability. During Q3 2018 YTD and Q3 2017 YTD, the Company paid $15 and $68, respectively, towards the earn-out liability. No further payments are due.

~~(All amounts in thousands, except share, per share and stated value per share)~~

Pursuant to the acquisition of The JM Group on November 5, 2015, the purchase price includes a cash payment to the shareholders for performance-based compensation of (a) £850 if the gross profit for the 12 month period ending on the anniversary date of the date of completion (the “Anniversary TTM Gross Profit”) is equal to 90% or more of the gross profit for the twelve months ending October 31, 2015 (the “Completion TTM Gross Profit”); or (b) if the Anniversary TTM Gross Profit is less than 90% of the Completion TTM Gross Profit, a sum equal to £850 multiplied by the Anniversary TTM Gross Profit/Completion TTM Gross Profit. The Company recorded the maximum contingent liability amount of £850 ($1,180). At December 31, 2016, the remaining balance was $1,026 and was recorded in other current liabilities. While unpaid, the balance accrued interest at 10.25% per annum. The balance was paid in full in January 2017.

~~Pursuant to the acquisition of~~ CBS Butler ~~Holdings Limited (“CBS Butler”)~~ on September 15, 2017, the purchase price includes an earn-out payment of up to £4,214 (payable in December 2018, based upon CBS Butler’s operating performance during the period September 1, 2017 through August 31, 2018), and ~~(iv)~~ deferred consideration of £150 less the aggregate amount of ~~each CBS Butler Shareholder’s portion of the~~any net asset shortfall amount, if any, as determined pursuant to the ~~Share Purchase Agreement and~~acquisition agreements for the ~~Option Purchase Agreement.~~acquisition of CBE Butler. In September 2018, the Company paid the deferred consideration of £150 ($195). Subsequent to March 30,2019, the Company paid £505 ($656) towards this earnout.

While the Company has recognized the liability for the contingent earn-out due the sellers of CBS Butler within current liabilities as of December 29, 2018, in March 2019 the Company filed a warranty claim against the sellers asserting certain misrepresentations for an amount which approximates the contingent earn-out. In April 2019, the sellers of CBS Butler responded denying the Company’s warranty claim and asserting that the earn-out amount is due.

Pursuant to the acquisition of FirstPro Inc. (“FirstPro”) on September 15, 2017, the purchase price includes deferred quarterly installments of $75 beginning on October 1, 2017, and $2,675 is payable annually in three equal installments beginning on September 15, 2018. ~~The~~On March 1, 2019, the Company ~~has made $75 and $300~~paid $1,125 in ~~quarterly installments during~~full satisfaction of the ~~period Q3 2018 and Q3 2018 YTD, respectively. The Company made its annual installment~~remaining liability, recognizing a gain of ~~$892 in September 2018.~~ $847.

Pursuant to the acquisition of ~~Clement May~~CML on June 28, 2018, the purchase price includes an earnout payment of up to £500 to be paid on or around December 28, ~~2018;~~2019; and deferred consideration of £350, the amount to be calculated and paid pursuant to the Share Purchase Agreement, ~~to be paid~~ on or around June 28, 2019.

Pursuant to the acquisition of ~~KRI~~Key Resources Inc. (“KRI”) on August 27, 2018, the purchase price includes earnout consideration payable to the seller of $2,027 and $2,027 on August 27, 2019 and August 27, 2020, respectively. The payment of the earnout consideration is contingent on KRI’s achievement of certain trailing gross profit amounts.

On May 22, 2014, NewCSI, Inc. (“NewCSI”), the former owners of Control Solutions International, filed a complaint in the United States District Court for the Western District of Texas, Austin Division, against the Company arising from the terms of the Stock Purchase Agreement dated August 14, 2013 between the Company and NewCSI. NewCSI claims that the Company breached a provision of the Stock Purchase Agreement (“SPA § 2.7”) that required the Company to calculate and pay to NewCSI 50% of certain “Deferred Tax Assets” within 90 days after December 31, 2013, subject to certain criteria. The Complaint sought payment of the amount allegedly owed under SPA § 2.7 and acceleration of earn-out payments provided for in the Stock Purchase Agreement of $1,400, less amounts paid to date, and attorneys’ fees.

On December 31, 2014, NewCSI filed an amended complaint to which NewCSI added an additional count asserting an “Adjustment Event” had occurred requiring an acceleration of earn-out payments provided for in the CSI Stock Purchase Agreement of $2,100, less amounts paid as of December 31, 2014 totaling $429 (balance of $1,671 at December 31, 2014), should the Company or CSI “be unable, or admit in writing its inability, to pay its debts as they mature.” The Company responded denying the material allegations and interposing numerous affirmative defenses, including that the earn-out liability was fully expensed at the time of the acquisition and fully accrued for on the Company’s balance sheet as part of the purchase accounting at the time of the acquisition. A the trial was held May 18-20, 2015. On May 20, 2015, the jury rendered a verdict, finding that the Company had not complied with SPA § 2.7 and owed $154, but that NewCSI had not proven that the Company or CSI had become unable to pay debts as they came due.

On June 3, 2015, NewCSI filed a Motion for Entry of Judgment as Matter of Law seeking entry of a judgment in the amount of $154, plus accelerated earn-out payments in the amount of $1,152, plus statutory interest. NewCSI did not challenge the jury verdict on the ability to pay issue. Also on June 3, 2015, the Company filed a Motion for Entry of Judgment as a Matter of Law seeking entry of judgment against NewCSI on the jury’s finding that the Company had not complied with SPA § 2.7, or, in the alternative, for a reduction of damages to $154 and to hold that NewCSI may not be awarded accelerated earn-out payments as that would result in an illegal penalty.

~~(All amounts in thousands, except share, per share and stated value per share)~~

~~On October 21, 2015, judgment was entered in this action in favor of NewCSI and against the Company in the amount of $1,307, plus pre-judgment interest, post-judgment interest, and costs.~~

On January 26, 2016, the District Court set the bond in respect of the NewCSI litigation at $1,384. The Company has filed a notice of appeal to the United States Court of Appeals for the Fifth Circuit (“Appellate Court”) seeking reversal of the judgment and posted a supersedeas bond to stay the execution of the judgment pending appeal. On April 18, 2016, the Court granted the NewCSI shareholders’ request for payment of attorneys’ fees, but reserved judgment on the amount of fees to award pending the outcome of the Company’s appeal. On November 3, 2016, oral arguments for the appeal were heard and on July 26, 2017, the Appellate Court affirmed the trial Court’s decision but left the legal fee award open for determination by further proceedings in the trial court. On August 29, 2017 the surety company released the supersedeas bond to the New CSI shareholders’ counsel, which was amount was approximately $5 less than the judgment amount with accumulated interest. Payment of this remaining balance has been made by the Company.

On September 29, 2017 NewCSI filed a Supplemental Motion in the United States District Court for the Western District of Texas, Austin Division, seeking $629 in attorneys’ fees. The Company opposed this motion but the magistrate judge issued a report and recommendation on November 17, 2017 recommending an award of fees in the amount of $606. The Company filed an objection with the trial judge to the magistrate’s report and recommendation. On May 30, 2018 the trial judge issued an order adopting the report and recommendation of the magistrate judge and awarding NewCSI the amount of $606 in legal fees, plus interest at the statutory rate of 2.27% per annum. The Company paid $606 in full settlement of this matter in June 2018.

~~Staffing 360 Solutions, Inc. v. Former Officers of Staffing 360 Solutions, Inc.~~

~~On November 13, 2015, in a separate proceeding, Staffing 360 initiated an arbitration before JAMS entitled~~ ~~Staffing 360 Solutions, Inc. v. Former Officers of Staffing 360 Solutions, Inc.~~, against three officers of Staffing 360, each a former Staffing 360 officer and employee. In its demand for arbitration and statement of claim, Staffing 360 alleged that these individuals breached their employment agreements with Staffing 360 and the fiduciary duties each owed to the Company. The three respondents responded with a counterclaim alleging wrongful termination and have moved to dismiss the arbitration, as well as moved for severance in relation to the remainder of their contracts. On July 20, 2016, the arbitrator decided in favor of both of the respondents’ motions. Further on September 21, 2016 the arbitrator rendered the final award, which was set at $1,433. The former officers brought an action in US District Court in New York City under the caption ~~Dealy et al., v. Staffing 360 Solutions, Inc., requesting that the Court convert this arbitration award into a judgment~~. On July 11, 2017, the Court entered an order confirming the arbitrator’s award and granting judgement against the Company. In August 2017, the Company paid $1,582 in full satisfaction of this matter.

~~(All amounts in thousands, except share, per share and stated value per share)~~

	Q3 2018			Q3 2017			Q3 2018 YTD			Q3 2017 YTD			Q1 2019			Q1 2018
Commercial Staffing - US	$	28,496		$	25,635		$	73,441		$	71,354		$	30,085		$	21,396
Professional Staffing - US		11,301			12,259			40,034			36,187			9,581			14,667
Professional Staffing - UK		31,520			12,451			73,360			25,633			34,163			19,728
Total Revenue	$	71,317		$	50,345		$	186,835		$	133,174		$	73,829		$	55,791

Commercial Staffing - US	$	4,463		$	4,642		$	12,278		$	12,947		$	4,632		$	3,898
Professional Staffing - US		4,069			2,411			12,268			6,528			3,714			3,985
Professional Staffing - UK		3,964			2,524			11,413			5,352			3,772			3,698
Total Gross Profit	$	12,496		$	9,577		$	35,959		$	24,827		$	12,118		$	11,581

Selling, general and administrative expenses	$	(11,097	)	$	(8,800	)	$	(33,315	)	$	(22,362	)	$	(10,491	)	$	(11,188	)
Depreciation and amortization		(741	)		(790	)		(2,251	)		(2,310	)		(877	)		(798	)
Interest expense		(2,279	)		(761	)		(6,185	)		(1,843	)
Amortization of debt discount and deferred financing costs		(156	)		(1,212	)		(393	)		(2,610	)
Loss on extinguishment of debt, net		—			(4,764	)		—			(6,132	)
Change in fair value of warrant liability		—			(688	)		879			(493	)
Gain from sale of business		—			—			238			—
Re-measurement loss on intercompany note		(186	)		—			(332	)		—
Other (expense) income, net		(14	)		(10	)		227			(31	)
Loss Before Provision for Income Tax	$	(1,977	)	$	(7,448	)	$	(5,173	)	$	(10,954	)
Interest expense and amortization of debt discount and deferred financing costs														(2,007	)		(2,077	)
Gain in fair value of warrant liability														—			538
Re-measurement gain on intercompany note														351			575
Gain on settlement of deferred consideration														847			—
Other income, net														286			250
Income (Loss) Before Provision for Income Tax													$	227		$	(1,119	)

	Q3 2018								Q1 2019
	Commercial Staffing - US		Professional Staffing - US		Professional Staffing - UK		Total		Commercial Staffing - US		Professional Staffing - US		Professional Staffing - UK		Total
Permanent Revenue	$	13	$	1,714	$	907	$	2,634	$	65	$	1,881	$	885	$	2,831
Temporary Revenue		28,483		9,587		30,613		68,683		30,020		7,700		33,278		70,998
Total	$	28,496	$	11,301	$	31,520	$	71,317	$	30,085	$	9,581	$	34,163	$	73,829

	Q3 2017								Q1 2018
	Commercial Staffing - US		Professional Staffing - US		Professional Staffing - UK		Total		Commercial Staffing - US		Professional Staffing - US		Professional Staffing - UK		Total
Permanent Revenue	$	92	$	291	$	992	$	1,375	$	72	$	1,507	$	1,215	$	2,794
Temporary Revenue		25,543		11,968		11,459		48,970		21,324		13,160		18,513		52,997
Total	$	25,635	$	12,259	$	12,451	$	50,345	$	21,396	$	14,667	$	19,728	$	55,791

	Q3 2018 YTD
	Commercial Staffing - US		Professional Staffing - US		Professional Staffing - UK		Total
Permanent Revenue	$	128	$	4,887	$	3,302	$	8,317
Temporary Revenue		73,313		35,147		70,058		178,518
Total	$	73,441	$	40,034	$	73,360	$	186,835

	Q3 2017 YTD
	Commercial Staffing - US		Professional Staffing - US		Professional Staffing - UK		Total
Permanent Revenue	$	136	$	570	$	2,248	$	2,954
Temporary Revenue		71,218		35,617		23,385		130,220
Total	$	71,354	$	36,187	$	25,633	$	133,174

As of ~~September~~March 30, 2019 and December 29, 2018, ~~and December 30, 2017,~~ the Company has assets in the U.S., the U.K. and Canada as follows:

	September 29,		December 30,		March 30,		December 29,
	2018		2017		2019		2018
United States	$	58,484	$	53,814	$	73,088	$	70,267
United Kingdom		40,306		32,861		28,099		26,047
Canada		95		73		126		123
Total Assets	$	98,885	$	86,748	$	101,313	$	96,437

In accordance with ASC 805, the Company accounts for acquisitions using the purchase method under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values. The Company utilizes management estimates and, in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed and contingent consideration granted. Such estimates and valuations ~~require the Company to make significant assumptions, including projections of future events and operating performance.~~

~~(All amounts in thousands, except share, per share and stated value per share)~~

~~In connection with the acquisition of KRI and Clement May, the Company recorded the following identifiable intangible assets, based on preliminary valuation.~~

~~Goodwill of Clement May is included in the Company’s Professional-UK reportable segment. Goodwill of KRI is included in the Company’s Professional-US reportable segment.~~

~~Identified intangible assets for Clement May are being amortized on a straight-line basis over their weighted average estimated useful life of~~ ~~8.4~~ ~~years. The Company acquired a total~~ ~~of $14,305 in receivables and fair value of these receivables equals the contract value; and recorded contingent consideration associated with Clement May of £850 ($1,122).~~

~~Identified intangible assets of KRI are being amortized on a straight-line basis over their weighted average estimated useful life of~~ ~~10 years. The Company acquired a total~~ ~~of $2,531 in receivables and fair value of these receivables equals the contract value; and recorded contingent consideration associated with KRI of $3,427, net of discounting.~~

~~The following table summarizes the final allocation of the purchase price to the estimated fair values of net assets acquired at the date of the acquisition:~~

The Company recorded a total of $105 and $35 in third party expenses associated with consummating the Clement May and KRI acquisitions, respectively, which are included in Selling, general and administrative expenses, excluding depreciation and amortization stated on the Consolidated Statement of Operations.

The following unaudited pro forma consolidated results of ~~operation~~operations have been prepared, as if the acquisition of ~~FirstPro and CBS Butler had occurred as of June 1, 2016, and acquisition of~~ KRI and ~~Clement May~~CML were acquired on January 1, 2017.

	Q3 2018			Q3 2017			Q3 2018 YTD			Q3 2017 YTD			Q1 2018
Revenues	$	76,749		$	83,118		$	234,001		$	244,485		$	76,801
Net loss from continuing operations		(2,269	)		(7,683	)		(5,392	)		(11,956	)		(915	)

~~(All amounts~~Included in ~~thousands, except share, per share and stated value per share)~~revenues for Q1 2018, is $4.3 million associated with PeopleServe Inc., which was disposed in June 2018.

In addition to the Series AE and Series E-1 Preferred Shares and ~~Notes~~notes issued to Jackson, the following are other related party transactions:

Q3 2018

Q3 2017

Cash Compensation

Shares Issued

Value of Shares Issued

Compensation Expense Recognized

Cash Compensation

Shares Issued

Value of Shares Issued

Compensation Expense Recognized

Dimitri Villard
$
19

1,400

$
2

$
22

$
19

1,400

$
6

$
19

Jeff Grout

19

1,400

2

22

19

1,400

6

19

Nick Florio

19

1,400

2

22

19

1,400

7

19

Alicia Barker

—

1,400

2

—

—

—

—

—

$
57

5,600

$
8

$
66

$
57

4,200

$
19

$
57

Q3 2018 YTD

Q3 2017 YTD

Cash Compensation

Shares Issued

Value of Shares Issued

Compensation Expense Recognized

Cash Compensation

Shares Issued

Value of Shares Issued

Compensation Expense Recognized

Dimitri Villard
$
56

4,200

$
9

$
62

$
50

14,900

$
60

$
53

Jeff Grout

56

4,200

9

62

50

14,900

60

53

Nick Florio

56

4,200

9

62

50

15,100

61

53

Alicia Barker

19

2,800

4

—

—

—

—

—

$
187

15,400

$
31

$
186

$
150

44,900

$
181

$
159

	Q1 2019
	Cash Compensation		Shares Issued		Value of Shares Issued		Compensation Expense Recognized
Dimitri Villard	$	19		1,400	$	3	$	8
Jeff Grout		19		1,400		3		8
Nick Florio		19		1,400		3		8
Alicia Barker		—		1,400		3		—
	$	57		5,600	$	12	$	24

	Q1 2018
	Cash Compensation		Shares Issued		Value of Shares Issued		Compensation Expense Recognized
Dimitri Villard	$	19		1,400	$	5	$	20
Jeff Grout		19		1,400		5		20
Nick Florio		19		1,400		5		20
	$	57		4,200	$	15	$	60

The Company has no balances in accounts payable and accrued expenses – related parties account as of ~~September 29, 2018.~~March 30, 2019.

The Briand Separation Agreement ~~The~~Matthew Briand, the Company’s former employee, board member and officer, resigned from his positions with the Company and subsidiaries. The Company entered into an agreement (the “Briand Separation Agreement”) with Mr. Briand dated December 21, 2017, with an effective date (“Separation Date”) of January 31, 2018, pursuant to which Mr. Briand may provide advisory services, if requested by the Company, through the effective date. The Company paid ~~$16~~$17 in ~~Q3 2018~~Q1 2019 to Mr. Briand as part of this separation agreement. The accrued balance due to Mr. Briand as of ~~September 29, 2018~~March 30, 2019 is ~~$284.~~$184.

On March 28, 2018, the Company appointed Alicia Barker to fill the Class II director vacancy created by the departure of Mr. Briand earlier this year, such appointment was effective April 1, 2018. Ms. Barker joined the company’s board of directors as an independent director and serves on the Board’s Compensation Committee and on the Nominating and Corporate Governance Committee.

Effective July 1, 2018, the Company entered into an Employment Agreement with Alicia Barker that appointed her as the Company’s Chief Operating Officer. Ms. Barker will continue as a member of the Company’s board of directors, but effective with her appointment will no longer be a member of any Board committee, nor an independent member ~~of the Board, bringing the number of independent directors to three of five Board members.~~

~~(All amounts in thousands, except share, per share and stated value per share)~~

Q3 2018 YTD

Q3 2017 YTD

Cash paid for:

Interest

$
4,775

$
1,827

Income taxes

104

140

Non-Cash Investing and Financing Activities:

Deferred purchase price of UK factoring facility

$
8,418

$
—

Shares issued in connection with acquisition of business

21

—

Shares issued in connection with convertible note

—

498

Shares issued in connection with Jackson term loan

371

2,527

Shares issued in connection with Series D payoff

—

208

Shares issued in connection with CBS Butler acquisition

—

430

Warrants issued in connection with Jackson term loan

682

2,303

CSI earnout (payment with Surety bond)

—

1,405

Deemed Dividends

—

2,009

	Q1 2019		Q1 2018
Cash paid for:
Interest	$	2,210	$	1,710
Income taxes		—		22

Non-Cash Investing and Financing Activities:
Deferred purchase price of UK factoring facility	$	3,712	$	1,144

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. This section includes a number of forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current views with respect to future events and financial performance. All statements that address expectations or projections about the future, including, but not limited to, statements about our plans, strategies, adequacy of resources and future financial results (such as revenue, gross profit, operating profit, cash flow), are forward-looking statements. Some of the forward-looking statements can be identified by words like “anticipates,” “believes,” “expects,” “may,” “will,” “can,” “could,” “should,” “intends,” “project,” “predict,” “plans,” “estimates,” “goal,” “target,” “possible,” “potential,” “would,” “seek,” and similar references to future periods. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions that are difficult to predict. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. Important factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to: negative outcome of pending and future claims and litigation; our ability to access the capital markets by pursuing additional debt and equity financing to fund our business plan and expenses on terms acceptable to us or at all; and our ability to comply with our contractual covenants, including in respect of our debt; potential cost overruns and possible rejection of our business model and/or sales methods; weakness in general economic conditions and levels of capital spending by customers in the industries we serve; weakness or volatility in the financial and capital markets, which may result in the postponement or cancellation of our customers' capital projects or the inability of our customers to pay our fees; delays or reductions in U.S. government spending; credit risks associated with our customers; competitive market pressures; the availability and cost of qualified labor; our level of success in attracting, training and retaining qualified management personnel and other staff employees; changes in tax laws and other government regulations, including the impact of health care reform laws and regulations; the possibility of incurring liability for our business activities, including, but not limited to, the activities of our temporary employees; our performance on customer contracts; and government policies, legislation or judicial decisions adverse to our businesses. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We assume no obligation to update such statements, whether as a result of new information, future events or otherwise, except as required by law. We recommend readers to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (“SEC”), particularly our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K.

We are incorporated in the State of Delaware. As a rapidly growing public company in the international staffing sector, our high-growth business model is based on finding and acquiring suitable, mature, profitable, operating, U.S. and U.K. based staffing companies. Our targeted consolidation model is focused specifically on the Professional Sector and Commercial Sector disciplines.

We are a high-growth international staffing company engaged in the acquisition of United States (“U.S.”) and United Kingdom (“U.K.”) based staffing companies. Our services principally consist of providing temporary contractors, and, to a much lesser extent, the recruitment of candidates for permanent placement. As part of our consolidation model, we pursue a broad spectrum of staffing companies supporting primarily accounting and finance, IT, engineering, administration (collectively, the ~~Professional~~“Professional Business Stream”) and commercial (“Commercial ~~Sectors.~~Business Stream”) disciplines. Our typical acquisition model is based on paying consideration in the form of cash, stock, earn-outs and/or promissory notes. In furthering our business model, the Company is regularly in discussions and negotiations with various suitable, mature acquisition targets. ~~Since November 2013, the company has~~To date, we have completed ten ~~acquisitions.~~acquisitions since November 2013.

All share numbers in this section have been adjusted for the one-for-five reverse stock split effective at 5:00 p.m. New York time on January 3, 2018.

On September 15, 2017, Staffing 360 Georgia, LLC (“Staffing Georgia”), a wholly-owned subsidiary of the Company entered into an asset purchase agreement with Firstpro Inc. (“FPI”), Firstpro Georgia, LLC (“FPL”), and certain individuals, pursuant to which the FPI and FPL sold substantially all of their assets to Staffing Georgia (“~~Firstpro Acquisition”)~~. The purchase price in connection with the Staffing Georgia, was $8,000, of which, (a) $4,500 was paid at closing, (b) $825 is payable in quarterly installments of $75 beginning on October 1, 2017, and (c) $2,675 is payable annually in three equal installments beginning on September 15, 2018.

On September 15, 2017, the Company and Staffing 360 Solutions Limited (formerly known as Longbridge Recruitment 360 Limited), a wholly-owned subsidiary of the Company, entered into an agreement (“Share Purchase Agreement”) with the holders of share capital of CBS Butler Holdings Limited (“CBS Butler”) and an agreement (“Option Purchase Agreement”) with the holders of outstanding options of CBS Butler, pursuant to which the holders of the share capital of CBS Butler and holders of outstanding

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~options of CBS Butler sold all of their shares and options of CBS Butler to Staffing 360 Solutions Limited (the “CBS Butler Acquisition”)~~, in exchange for (i) an aggregate cash payment of £13,810, (ii) an aggregate of 100,000 shares of the Company’s common stock, (iii) an earn-out payment of up to £4,214 (payable in October 2018 based upon CBS Butler’s operating performance during the period September 1, 2017 through August 31, 2018), and (iv) deferred consideration of £150 less the aggregate amount of each CBS Butler Shareholder’s portion of the net asset shortfall amount, if any, as determined pursuant to the Share Purchase Agreement and the Option Purchase Agreement.

To finance the above transactions, the Company entered into an agreement with Jackson Investment Group, LLC (“Jackson”) on September 15, 2017. The Company, as borrower, and certain domestic subsidiaries of the Company, as guarantors, entered into an amended and restated note purchase agreement with Jackson, as lender (the “A&R Note Purchase Agreement”), pursuant to which Jackson made a senior debt investment of $40,000 in the Company in exchange for a senior secured note in the principal amount of $40,000 (the “Jackson Note”). The proceeds of the sale of the secured note were used to (i) repay the existing subordinated notes previously issued to Jackson in the aggregate principal amount of $11,165, (ii) to fund the upfront cash portion of the purchase price consideration of the Firstpro Acquisition and the CBS Butler Acquisition, (iii) to repay almost all other outstanding indebtedness of the Company and (iv) general working capital purposes. The maturity date of the Jackson Note is September 15, 2020. The Jackson Note will accrue interest at 12% per annum, due quarterly on January 1, April 1, July 1 and October 1 in each year, with the first such payment due on January 1, 2018. Interest on any overdue payment of principal or interest due under the Jackson Note will accrue at a rate per annum that is 5% in excess of the rate of interest otherwise payable thereunder. The Company may prepay the amounts due on the Jackson Note in whole or in part from time to time, without penalty or premium, subject to the conditions set forth in the A&R Note Purchase Agreement, and such prepayments, depending on the timing of the prepayments, may result in a discount on the principal amount to be prepaid as set forth in the A&R Note Purchase Agreement. The Company paid a closing fee of $1,000 in connection with its entry into the A&R Note Purchase Agreement and agreed to issue 450,000 shares of the Company’s common stock as a closing commitment fee.

On June 6, 2018, the Company divested the stock of PeopleServe Inc., and PeopleServe PRS, Inc. for a total consideration of $1,502, net of $567 that was remitted back to the buyer on July 31, 2018 in connection with a net working capital true up. The Company recorded a gain of $238 from sale of business.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On June 28, 2018, the Company and Staffing 360 Solutions Limited (formerly known as Longbridge Recruitment 360 Limited), a wholly-owned subsidiary of the Company, entered into share purchase agreements (“Share Purchase Agreements”) to acquire all of the share capital of Clement May Limited (“CML”). Consideration for the acquisition of all the shares was (i) an aggregate cash payment of £1,550 ($2,047), (ii) 15,000 shares of the Company’s common stock, (iii) ~~the assignment of certain outstanding debt owed to the CML Majority Holder to the Principal as set forth in that Share Purchase Agreement, (iv)~~ an earn-out payment of up to £500, the amount to be calculated and paid ~~pursuant to that Share Purchase Agreement due~~ on or around December 28, ~~2018,~~2019 pursuant to the Share Purchase Agreement, and ~~(v)~~(iv) deferred consideration of £350, to be paid on or around June 28, 2019, depending on the satisfaction of certain conditions set forth in that Share Purchase Agreement. To finance the above transaction, the Company entered into a term loan with HSBC Bank plc. ~~Refer to Note 9 for further details.~~

On August 27, 2018, the Company and Monroe Staffing Services, LLC (“Monroe Staffing”), an indirect wholly-owned subsidiary of the Company, entered into a share purchase agreement with Pamela D. Whitaker (“Seller”), pursuant to which the Seller sold 100% of the common shares of Key Resources Inc. (“KRI”) to Monroe Staffing (the “KRI Transaction”).

The KRI Transaction closed simultaneously with the signing of the share purchase agreement. The purchase price in connection with the KRI Transaction was approximately $12,163, of which (a) approximately $8,109 was paid to the Seller at closing, (b) up to approximately $2,027 is payable as earnout consideration to the Seller on August 27, 2019 and (c) up to $2,027 is payable as earnout consideration to the Seller on August 27, 2020. The payment of the ~~Earnout Consideration~~earnout consideration is contingent on KRI’s achievement of certain trailing gross profit amounts.

To finance the ~~above transaction,~~KRI Transaction, the Company entered into an agreement with Jackson Investment Group, LLC (“Jackson”) on August 27, 2018, pursuant to which the note purchase agreement dated as of September 15, 2017 was amended to add an additional senior debt investment of approximately ~~$8,428 in the Company in exchange for a senior secured note in the principal amount of approximately~~ $8,428.

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

For three-month periods ended ~~September 29,~~March 30, 2019 and March 31, 2018 ~~and September 30, 2017~~

	Q3 2018			% of Revenue			Q3 2017			% of Revenue			Growth			Q1 2019			% of Revenue			Q1 2018			% of Revenue			Growth
Revenue	$	71,317			100.0	%	$	50,345			100.0	%		41.7	%	$	73,829			100.0	%	$	55,791			100.0	%		32.3	%
Direct cost of revenue		58,821			82.5	%		40,768			81.0	%		44.3	%		61,711			83.6	%		44,210			79.2	%		39.6	%
Gross profit		12,496			17.5	%		9,577			19.0	%		30.5	%		12,118			16.4	%		11,581			20.8	%		4.6	%
Operating expenses		11,838			16.6	%		9,590			19.0	%		23.4	%		11,368			15.4	%		11,986			21.5	%		(5.2	)%
Income (loss) from operations		658			0.9	%		(13	)		(0.0	)%		5161.5	%		750			1.0	%		(405	)		(0.7	)%		(285.2	)%
Other expenses		(2,635	)		(3.7	)%		(7,435	)		(14.8	)%		(64.6	)%		(523	)		(0.7	)%		(714	)		(1.3	)%		(26.8	)%
Provision for income taxes		(3	)		(0.0	)%		(206	)		(0.4	)%		(98.5	)%
Net loss	$	(1,980	)		(2.8	)%	$	(7,654	)		(15.2	)%		(74.1	)%
Benefit from (Provision for) income taxes																	2			0.0	%		(152	)		(0.3	)%		(101.3	)%
Net Income (Loss)																$	229			0.3	%	$	(1,271	)		(2.3	)%		(118.0	)%

For ~~Q3 2018,~~Q1 2019, revenue increased by ~~41.7%~~32.3% to ~~$71,317,~~$73,829, as compared with ~~$50,345,~~$55,791, for ~~Q3 2017.~~Q1 2018. Of that growth, ~~$26,888~~$21,010 was from the acquisitions of ~~CBS Butler, Firstpro,~~ Clement May and KRI coupled with. organic growth of $2,509. This was partially offset by a decline of ~~$4,374~~$4,337 from divesting of PeopleServe ~~an organic decline of $1,481 from the remaining core business,~~ and $611,144 from unfavorable foreign currency translation. ~~Temporary~~Within organic growth, temporary contractor revenue ~~declined $1,290~~grew $2,415 and permanent placement ~~declined $191.~~grew $94.

Revenue in ~~Q3 2018~~Q1 2019 was comprised of ~~$68,683~~$70,998 of temporary contractor revenue and ~~$2,634~~$2,831 of permanent placement revenue, compared with ~~$48,970~~$52,997 and ~~$1,375~~$2,794 for ~~Q3 2017,~~Q1 2018, respectively.

Direct cost of services includes the variable cost of labor and various non-variable costs (e.g., workers’ compensation insurance) relating to employees (temporary and permanent) as well as sub-contractors and consultants. For ~~Q3 2018,~~Q1 2019, direct cost of revenue was ~~$58,821,~~$61,711, an increase of ~~44.3%~~39.6% from ~~$40,768~~$44,210 in ~~Q3 2017,~~Q1 2018, compared with revenue growth of ~~41.7%~~32.3%.

Gross profit for Q3 2018 was $12,496, an increase of 30.5% over $9,577, for Q3 2017, representing gross margin of 17.5% and 19.0% for each period, respectively. Gross profit growth was primarily attributable to the impact of acquisitions. This was partly offset by lower savings from workers’ compensation insurance versus the savings realized in ~~the corresponding period in 2017, the~~ ~~divestiture of the lower margin PeopleServe business, and~~ ~~organic decline on lower permanent placement and contract revenue.~~

Operating expenses for Q3 2018 were $11,838, an increase of 23.4% over $9,590 for Q3 2017. The acquisitions of CBS Butler, Firstpro, Clement May, and KRI drove an increase of 32.3% in operating expense. Excluding the acquisitions, operating expenses decreased by 8.9% driven by lower non-recurring costs, legal, and other costs associated with acquisitions, lower variable costs from lower organic revenue, and savings that are materializing which are attributable to synergies within the subsidiaries, cost savings initiatives, and PeopleServe divesture.

Other expenses for Q3 2018 was $2,635, a decrease of 64.6% from $7,435 in Q3 2017. For Q3 2018 compared with Q3 2017, other expenses primarily reflects higher interest of $1,518 driven mainly by the higher debt and cost of capital resulting from the refinancing in September 2017 and financing of The Clement May and Key Resources acquisitions; a loss on extinguishment of debt in Q3 2017 of $4,764 attributable to the refinancing of convertible notes in January 2017 and Jackson Notes in September 2017, with no corresponding loss in Q3 2018, a loss of $186 from remeasuring the Company’s intercompany note; lower amortization of debt discount and deferred financing costs by $1,056 also attributable to the refinancing; a loss of $688 from fair valuing warrants in Q3 2017, with no corresponding loss in Q3 2018.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Q3 2018 YTD

% of Revenue

Q3 2017 YTD

% of Revenue

Growth

Revenue

$
186,835

100.0
%

$
133,174

100.0
%

40.3
%
Direct cost of revenue

150,876

80.8
%

108,347

81.4
%

39.3
%
Gross profit

35,959

19.2
%

24,827

18.6
%

44.8
%
Operating expenses

35,566

19.0
%

24,672

18.5
%

44.2
%
Income from operations

393

0.2
%

155

0.1
%

153.5
%
Other expenses

(5,566
)

(3.0
)%

(11,109
)

(8.3
)%

(49.9
)%
Benefit from (Provision for) income taxes

78

0.0
%

(213
)

(0.2
)%

(136.6
)%
Net loss

$
(5,095
)

(2.7
)%

$
(11,167
)

(8.4
)%

(54.4
)%

~~Q3 2018 YTD revenue increased by 40.3% to $186,835, as compared with $133,174 for Q3 2017 YTD. Of that growth, $64,905 was from the acquisitions of CBS Butler, Firstpro, Clement May, and KRI~~ ~~and $1,181~~ was from favorable foreign currency translation. This was partially offset by a decline of $6,403 due to PeopleServe and an organic decline of $6,022 from the remaining core business. Organic temporary contractor revenue declined $5,459, partially due to a greater number of weather-related work stoppage days in 2018, and organic permanent placement declined $563.

~~Revenue in Q3 2018 YTD was comprised of $178,518 of temporary contractor revenue and $8,317 of permanent placement revenue, compared with $130,220 and $2,954 for Q3 2017 YTD, respectively.~~

Direct cost of services includes the variable cost of labor and various non-variable costs (e.g., workers’ compensation insurance) relating to employees (temporary and permanent) as well as sub-contractors and consultants. For Q3 2018 YTD, direct cost of revenuefor Q1 2019 was ~~$150,876,~~$12,118, an increase of ~~39.3% from $108,347, in Q3 2017 YTD, compared with revenue growth of 40.3%.~~

~~Gross profit~~4.6% over $11,581 for Q3Q1 2018, ~~YTD was $35,959, an increase of 44.8% over $24,827, for Q3 2017 YTD,~~ representing gross margin of ~~19.2%~~16.4% and ~~18.6%~~20.8% for each period, respectively. Gross profit growth was ~~attributed~~primarily attributable to the impact of acquisitions. This was partly offset by ~~lower savings from workers’ compensation insurance versus~~ the ~~savings realized in the corresponding period in 2017, organic decline on lower permanent placement and contract revenue, and the~~ divestiture of the lower margin PeopleServe ~~business.~~business, workers’ compensation insurance savings realized in Q1 2018 with no corresponding credit in Q1 2019, and mix within the organic revenue growth.

Operating expenses for ~~Q3 2018 YTD was $35,566, an increase~~Q1 2019 were $11,368, a decrease of ~~44.2%~~5.2% over ~~$24,672,~~$11,986 for ~~Q3 2017 YTD. Of that increase, 42.6% can be attributed to acquisition~~Q1 2018. The acquisitions of ~~CBS Butler, Firstpro,~~ Clement May, and ~~KRI. The remaining~~KRI drove an additional increase ~~is primarily stemming from other~~of 9.5% in operating expense. Excluding the acquisitions, operating expenses decreased by 14.7% driven by lower non-recurring costs, legal, and other costs associated with acquisitions, ~~capital raising, and non-cash charges or credits. This was partly offset by~~ lower variable costs ~~from lower organic revenue,~~and savings ~~that are materializing which are~~ attributable to synergies within the subsidiaries, cost savings initiatives, and PeopleServe ~~divesture and higher commissions on the higher gross profit.~~divesture.

Other expenses for ~~Q3 2018 YTD~~Q1 2019 was ~~$5,566,~~$523, a decrease of ~~49.9%~~26.8% from ~~$11,109,~~$714 in Q1 2018. The decrease is driven by the following: $105 lower interest expense recorded in Q1 2019 versus Q1 2018 due to the $13 million debt conversion in Q3 ~~2017 YTD. For Q3 2018 YTD compared with Q3 2017 YTD,~~2018; $847 gain on settlement of firstPRO deferred consideration in Q1 2019; $36 higher other ~~expenses primarily reflects higher interest of $4,342~~income driven mainly by ~~the~~ higher debt and cost of capital resulting from the refinancing in September 2017; lower amortization of debt discount and deferred financing costs by $2,217 also attributable to the refinancing; a loss on extinguishment of debt in Q3 2017 YTD of $6,132 attributable to the refinancing of convertible notes in January 2017, with no corresponding loss in Q3 2018 YTD; a higher gain of $1,372 from fair valuing warrants in; a gain of $238 from the sale of PeopleServe; a loss of $332 from remeasuring the Company’s intercompany note; and, other income of $258 primarily from investment income on the Company’s workers’ compensation collateral. These were partially offset by a gain of $538 from fair valuing warrants in Q1 2018, with no corresponding gain in Q1 2019; $224 of lower gain in Q1 2019 versus Q1 2018 from remeasuring the Company’s intercompany note; $35 of higher amortization of debt discount and deferred financing costs.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

To supplement our consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we also use non-GAAP financial measures and Key Performance Indicators (“KPIs”) in addition to our GAAP results. We believe non-GAAP financial measures and KPIs may provide useful information for evaluating our cash operating performance, ability to service debt, compliance with debt covenants and measurement against competitors. This information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be comparable to similarly entitled measures reported by other companies.

Revenue and Gross Profit by Sector We use this KPI to measure the Company’s mix of Revenue and respective profitability between its two main lines of business due to their differing margins. For clarity, these lines of business are not the Company’s operating segments, as this information is not currently regularly reviewed by the chief operating decision maker to allocate capital and resources. Rather, we use this KPI to benchmark the Company against the industry.

	Q3 2018			Mix	Q3 2017			Mix	Q3 2018 YTD			Mix	Q3 2017 YTD			Mix	Q1 2019			Mix	Q1 2018			Mix
Commercial Staffing - US	$	28,496		40%	$	25,635		51%	$	73,441		39%	$	71,354		54%	$	30,085		41%	$	21,396		38%
Professional Staffing - US		11,301		16%		12,259		24%		40,034		22%		36,187		27%		9,581		13%		14,667		26%
Professional Staffing - UK		31,520		44%		12,451		25%		73,360		39%		25,633		19%		34,163		46%		19,728		36%
Total Revenue	$	71,317			$	50,345			$	186,835			$	133,174			$	73,829			$	55,791

Commercial Staffing - US	$	4,463		36%	$	4,642		48%	$	12,278		34%	$	12,947		52%	$	4,632		38%	$	3,898		34%
Professional Staffing - US		4,069		33%		2,411		26%		12,268		34%		6,528		26%		3,714		31%		3,985		34%
Professional Staffing - UK		3,964		31%		2,524		26%		11,413		32%		5,352		22%		3,772		31%		3,698		32%
Total Gross Profit	$	12,496			$	9,577			$	35,959			$	24,827			$	12,118			$	11,581

Commercial Staffing - US		15.7	%			18.1	%			16.7	%			18.1	%			15.4	%			18.2	%
Professional Staffing - US		36.0	%			19.7	%			30.6	%			18.0	%			38.8	%			27.2	%
Professional Staffing - UK		12.6	%			20.3	%			15.6	%			20.9	%			11.0	%			18.7	%
Total Gross Margin		17.5	%			19.0	%			19.2	%			18.6	%			16.4	%			20.8	%

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Adjusted EBITDA This measure is defined as net loss attributable to common stock before: interest expense, benefit from (provision for) income taxes; income (loss) from discontinued operations, net of tax; other (income) expense, net, in operating income (loss); amortization and impairment of ~~identifiable~~ intangible assets; impairment of goodwill; depreciation; operational restructuring and other charges; other income (expense), net, below operating income (loss); non-cash expenses associated with stock compensation; and charges the Company considers to be non-recurring in nature such as legal expenses associated with litigation, professional fees associated potential and completed acquisitions. We use this measure because we believe it provides a more meaningful understanding of the profit and cash flow generation of the Company.

	Q3 2018			Q3 2017			Q3 2018 YTD			Q3 2017 YTD			Q1 2019			Q1 2018			Trailing Twelve Months Q1 2019			Trailing Twelve Months Q1 2018
Net loss	$	(1,980	)	$	(7,654	)	$	(5,095	)	$	(11,167	)
Net income (loss)													$	229		$	(1,271	)	$	(5,001	)	$	(16,681	)

Interest expense		2,279			761			6,185			1,843
Provision for (benefits from) income taxes		3			206			(78	)		213
Interest expense and amortization of debt discount and deferred financing costs														2,007			2,077			8,896			7,506
(Benefit from) Provision for income taxes														(2	)		152			(132	)		1,079
Depreciation and amortization ~~(1)~~		897			2,002			2,644			4,920			877			798			3,203			3,604
EBITDA	$	1,199		$	(4,685	)	$	3,656		$	(4,191	)	$	3,111		$	1,756		$	6,966		$	(4,492	)

Acquisition, capital raising and other non-recurring expenses ~~(2)~~(1)		797			934			2,642			1,194			211			847			2,488			2,455
Other non-cash charges ~~(3)~~(2)		288			344			951			962			197			373			982			1,409
Gain in fair value of warrant liability														—			(538	)		(341	)		(1,013	)
Re-measurement (gain) loss on intercompany note														(351	)		(575	)		910			(575	)
Gain on settlement of deferred consideration														(847	)		—			(847	)		—
Loss on extinguishment of debt, net		—			4,764			—			6,132			—			—			—			4,764
Change in fair value of warrant liability		—			688			(879	)		493
Restructuring charges														—			—			(57	)		780
Impairment of goodwill														—			—			—			4,790
Gain from sale of business		—			—			(238	)		—			—			—			(238	)		—
Re-measurement loss on intercompany note		186			—			332			—
Other income		14			10			(227	)		31			(286	)		(250	)		(434	)		(142	)
Adjusted EBITDA	$	2,484		$	2,055		$	6,237		$	4,621		$	2,035		$	1,613		$	9,429		$	7,976

Trailing Twelve Months ("TTM") Adjusted EBITDA	$	9,007		$	5,814		$	9,007		$	5,814
Pre-Acquisition Adjusted EBITDA (3)																			$	1,389		$	2,364

Pro Forma TTM Adjusted EBITDA (4)																			$	10,818		$	10,340

Gross Profit TTM	$	47,873		$	32,768		$	47,873		$	32,768								$	48,841		$	40,996

TTM Adjusted EBITDA as percentage of gross profit TTM		18.8	%		17.7	%		18.8	%		17.7	%								19.3	%		19.5	%

Pro Forma TTM Adjusted EBITDA (4)	$	12,330		NA			$	12,330		NA

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Operating Leverage This measure is calculated by dividing the growth in Adjusted EBITDA by the growth in Gross Profit, on a trailing 12-month basis. We use this KPI because we believe it provides a measure of the Company’s efficiency for converting incremental gross profit into Adjusted EBITDA.

	Twelve Months Ended						Three Months Ended
	September 29, 2018			September 30, 2017			March 30, 2019			March 31, 2018
Gross Profit - TTM (Current Period)	$	47,873		$	32,768		$	48,841		$	40,996
Gross Profit - TTM (Prior Period)		32,768			31,490			40,996			31,662
Gross Profit - Growth	$	15,105		$	1,278		$	7,845		$	9,334

Adjusted EBITDA - TTM (Current Period)	$	9,007		$	5,814		$	9,429		$	7,976
Adjusted EBITDA - TTM (Prior Period)		5,814			5,362			7,976			5,390
Adjusted EBITDA - Growth	$	3,193		$	452		$	1,453		$	2,586

Operating Leverage		21.1	%		35.4	%		18.5	%		27.7	%

Leverage Ratio Calculated as Total Long-Term Debt, Net, gross of any Original Issue Discount, divided by Pro Forma Adjusted EBITDA for the trailing 12-months. We use this KPI as an indicator of the Company’s ability to service its debt prospectively.

	September 29, 2018		December 30, 2017		March 30, 2019		December 29, 2018
Total Long-Term Debt, Net	$	47,882	$	38,749	$	35,539	$	35,565
Addback: Total Debt Discount and Deferred Financing Costs		1,731		1,251		1,024		1,171
Total Long-Term Debt	$	49,613	$	40,000	$	36,563	$	36,736

TTM Adjusted EBITDA	$	9,007	$	7,391	$	9,429	$	9,007

Pro Forma TTM Adjusted EBITDA	$	12,330	$	14,767	$	10,818	$	11,384

Pro Forma Leverage Ratio	4.0x		2.7x		3.4x		3.2x

Operating Cash Flow Including Proceeds from Accounts Receivable Financing calculated as net cash (used in) provided by operating activities plus net proceeds from accounts receivable financing. Because much of the Company’s temporary payroll expense is paid weekly and in advance of clients remitting payment for invoices, operating cash flow is often weaker in staffing companies where revenue and accounts receivable are growing. Accounts receivable financing is essentially an advance on client remittances and is primarily used to fund temporary payroll. As such, we believe this measure is helpful to investors as an indicator of the Company’s underlying operating cash flow.

On February 8, 2018, CBS Butler, Staffing 360 Solutions Limited and The JM Group, entered into a new arrangement with HSBC Invoice Finance (UK) Ltd (“HSBC”) which provides for HSBC to purchase the subsidiaries’ accounts receivable up to an aggregate amount of £11,500 across all three subsidiaries. The terms of the arrangement provide for HSBC to fund 90% of the purchased accounts receivable upfront and, a secured borrowing line of 70% of unbilled receivables capped at £1,000 (within the overall aggregate total facility of £11,500). Under ASU 2016-16, “Statement of Cash Flows (Topic 230, Classification of Certain Cash Receipts and Cash Payments, a consensus of the FASB Emerging Issues Task Force, the upfront portion of the sale of accounts receivable is classified within operating activities, while the deferred purchase price portion (or beneficial interest), once collected, is classified within investing activities.

On June 28, 2018, Clement May Limited entered into a new agreement for purchase of debt (“APD”) with HSBC, joining CBS Butler, Staffing 360 Solutions Limited and The JM Group (collectively, with Clement May, the “Borrowers”) as “Connected Clients” as defined in the APD. The new Connected Client APDs carry an aggregate Facility Limit of £20,000 across all Borrowers and the Clement May APD matures on June 28, 2019, unless otherwise accelerated or terminated earlier. The obligations of the Borrowers are secured by a fixed charge and a floating charge on the Borrowers’ respective accounts receivable and are subject to cross-company guarantees among the Borrowers. In addition the secured borrowing line against unbilled receivables was increased to £1,500 for a period of 90 days.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	Q3 2018 YTD			Q3 2017 YTD			Q1 2019			Q1 2018
Net cash provided by operating activities	$	7,149		$	(2,775	)	$	2,243		$	8,847

Collection of UK factoring facility deferred purchase price		7,086			—			3,469			1,269

Repayments on accounts receivable financing		(16,220	)		5,242			(8,606	)		(9,714	)

Net cash (used in) provided by operating activities including proceeds from accounts receivable financing	$	(1,985	)	$	2,467		$	(2,894	)	$	402

The Leverage Ratio and Operating Cash Flow Including Proceeds from Accounts Receivable Financing should be considered together with the information in the “Liquidity and Capital Resources” section, immediately below.

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Historically, we have funded our operations through term loans, promissory notes, bonds, convertible notes, private placement offerings and sales of equity.

Our primary uses of cash have been for professional fees related to our operations and financial reporting requirements and for the payment of compensation, benefits and consulting fees. The following trends may occur as the Company continues to execute on its strategy:

Our liquidity may be negatively impacted by the significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission. We expect all of these applicable rules and regulations could significantly increase our legal and financial compliance costs and increase the use of resources.

As of and for the period ended ~~September 29, 2018,~~March 30, 2019, the Company had a working capital deficiency of ~~$14,562,~~$13,421, an accumulated deficit of ~~$70,237,~~$71,414, and a net ~~loss~~gain of ~~$5,095.~~

~~On September 15, 2017,~~$229. Management believes the Company ~~entered into~~is a going concern meaning it will meet its obligations for the ~~Jackson Note for $40,000. The proceeds~~next 12 months as of the ~~sale~~date these financial statements are issued.

For Q1 2019, net cash provided by operations of $2,243 was primarily attributable changes in operating assets and liabilities totaling $1,979, non-cash adjustments of $35 and net income of $229. Changes in operating assets and liabilities primarily relates to an increase in accounts receivable of $1,717, increase in prepaid expenses and other current assets of $212, increase other assets of $79, decrease in current liabilities of $118; offset by increase in accounts payable and accrued expenses of $3,547 and increase in other long term liabilities and other of $558. Total non-cash adjustments of $35 primarily includes depreciation and amortization of intangible assets of $877, stock based compensation of $199, amortization of debt discounts and deferred financing of $157; offset by foreign currency re-measurement on intercompany loan of $351 and gain from settlement of the secured note were used to (i) repay the existing subordinated notes previously issued to Jackson in the aggregate principal amount of $11,165, (ii) to fund a portion of the upfront cash portion of purchase priceFirstPro deferred consideration of the Firstpro Acquisition and the CBS Butler Acquisition, (iii) repay substantially all other outstanding indebtedness of the Company and (iv) for general working capital purposes. The maturity date for the Jackson Note is September 15, 2020. The Jackson Note will accrue interest at 12% per annum, due quarterly on January 1, April 1, July 1 and October 1 in each year, with the first such payment due on January 1, 2018. Interest on any overdue payment of principal or interest due under the Jackson Note will accrue at a rate per annum that is 5% in excess of the rate of interest otherwise payable thereunder.
$847.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~To finance the CML acquisition, the Company entered into a term loan with HSBC Bank plc. The Term Loan was drawn down on June 28,~~For Q1 2018, ~~in an original principal amount of £1,550 ($2,047). Refer to Note 9 for further details.~~

~~To finance the KRI acquisition, the Company entered into an agreement with Jackson, for the New Jackson Note.~~

~~Management believes the Company is a going concern meaning it will meet its obligations for the next 12 months as of the date these financial statements are issued.~~

~~For Q3 2018 YTD,~~ net cash provided by operations of ~~$7,149~~$8,847 was primarily attributable changes in operating assets and liabilities totaling ~~$9,434,~~$9,938, non-cash adjustments of ~~$2,810, partially~~$180, offset by net loss of ~~$5,095.~~$1,271. Changes in operating assets and liabilities primarily relates ~~to a~~ decrease in accounts receivable of ~~$6,282 (see further discussion below),~~$7,026, increase in accounts payable and accrued expenses of ~~$2,789,~~$2,795, increase in other current liabilities of $447, increase in other long-term liabilities of $50, offset by decrease in ~~other assets~~related party interest payable of ~~$165, decrease~~$160, increase in ~~prepaid expenses~~prepaids and other current assets of ~~$71,~~$47, and other of ~~$188 and increase in other long term liabilities of $97; offset by decrease in interest payable – related party of $64 and decrease in other current liabilities of $94.~~$164. Total non-cash adjustments of ~~$2,810~~$180 primarily includes ~~depreciation and amortization of intangible assets of $2,251, stock based compensation of $951,~~ amortization of debt discounts and deferred financing of ~~$393, foreign currency re-measurement on intercompany loan~~$122, stock based compensation of ~~$332;~~$373, depreciation and amortization of intangible assets of $798; offset by gain on fair value of warrants of ~~$879~~$538 and foreign currency re-measurement gain ~~from sale~~on intercompany loan of ~~business of $238.~~

On February 8, 2018, CBS Butler, Staffing 360 Solutions Limited and The JM Group, entered into a new arrangement with HSBC Invoice Finance (UK) Ltd (“HSBC”) which provides for HSBC to purchase the subsidiaries’ accounts receivable. Under ASU 2016-16, “Statement of Cash Flows (Topic 230, ~~Classification of Certain Cash Receipts and Cash Payments, a consensus of the FASB Emerging Issues Task Force~~, the upfront portion of the sale of accounts receivable is classified within operating activities, while the deferred purchase price portion (or beneficial interest), once collected, is classified within investing activities.

~~For Q3 2017 YTD,~~ net cash used in operations of $2,775 was primarily attributable changes in operating assets and liabilities totaling $4,115 and net loss of $11,167; offset by non-cash adjustments of $12,507. Changes in operating assets and liabilities primarily relates increase in accounts receivable of $2,907, decrease in other current liabilities of $807, an increase in prepaid expenses of $552, decrease in accounts payable and accrued expenses of $129 and other of $201, offset by an increase in other long-term liabilities of $285 and a decrease in other assets of $196. Total non-cash adjustments of $12,507 primarily includes costs related to the extinguishment of debt of $6,132, amortization of debt discounts and beneficial conversion features of $2,610, depreciation and amortization of intangible assets of $2,310, stock based compensation of $962, and change in fair value of warrants of $493. During the period January 1, 2017 to September 30, 2017, the Company used approximately $3,500 of the proceeds from Jackson to pay accounts payable and accrued expenses. In addition, cash used in operations is net of $1,582 for settlement of the ~~Staffing 360 Solutions, Inc. v. Former Officers of Staffing 360 Solutions, Inc.~~ ~~arbitration.~~$575.

For ~~Q3 2018 YTD,~~Q1 2019, net cash flows ~~used in~~provided by investing activities was ~~$1,601, $9,760~~$3,425, $3,469 related to ~~acquisition of Clement May and KRI and purchase of property and equipment of $330; offset by~~ collection of the beneficial interest from HSBC ~~of $7,086 (see discussion above) and disposal of business of $1,403.~~

~~For Q3 2017 YTD,~~ net cash flows used in investing activities was $20,986 which is primarily due to acquisition of CBS Butler for upfront consideration of $16,317, acquisition of Firstpro for upfront consideration of $4,500 and purchasedpartially offset by purchase of property and equipment of ~~$169.~~$44.

For Q1 2018, net cash flows provided by investing activities was $1,213, of which $1,269 is collection of the beneficial interest from HSBC, partially offset by purchase of property and equipment of $56.

For ~~Q3 2018 YTD,~~Q1 2019, net cash flows used in financing activities totaled ~~$5,822,~~$6,324, of which ~~$16,220~~$8,606 relates to repayments on accounts receivable financing, net, ~~(primarily~~payment on FirstPro deferred consideration for $1,200, third party financing costs of $950, dividends paid to related parties of $245, dividends paid to shareholders of $81, and repayment on HSBC loan of $156; offset by proceeds from equity raise of $4,914.

For Q1 2018, net cash flows used in financing activities totaled $9,700, of which $9,714 primarily relates to settlement of the prior U.K. secured borrowing facilities in connection with the new HSBC facility (see discussion above)), ~~payments~~$254 is for the repayment of the ABN AMRO term loan, $90 is for deferred payments associated with the Firstpro ~~and CBS Butler~~ acquisition and CSI earnout, ~~of $1,402, $422 for repayments of term loans, $389 for~~ third party financing costs ~~and $150 dividends to related parties;~~of $7, partially offset by proceeds from ~~term loans of $10,475 and proceeds from~~ the At-market facility of ~~$2,286.~~

For Q3 2017 YTD, net cash flows provided by financing activities totaled $28,493 which is primarily due to proceeds from term loans of $50,165, proceeds from convertible notes of $400, proceeds from the At-The-Market Facility of $208 and proceeds from accounts receivable financing net of $5,242, offset by repayments of term loans of $14,976, repayment of convertible notes of $6,635, third-

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

party financing costs of $2,311, Series D Series D pay off of $1,500, payments made towards earn-out agreements totaling $1,094, dividends paid to related parties of $515, repayment of promissory notes of $441, and repayment of bonds of $50. $415.

In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). ~~This~~The Company adopted this guidance ~~will be~~ effective ~~for public entities for fiscal years beginning after~~ December ~~15, 2018 including the interim periods within those fiscal years. Early application is permitted.~~30, 2018. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: (i) Financing leases, similar to capital leases, which will require the recognition of an asset and liability, measured at the present value of the lease payments and (ii) Operating leases which will require the recognition of an asset and liability measured at the present value of the lease payments. Lessor accounting remains substantially unchanged with the exception that no leases entered into after the effective date will be classified as leveraged leases. For sale leaseback transactions, the sale will only be recognized if the criteria in the new revenue recognition standard are met. The new standard provides a number of optional practical expedients in transition. The Company ~~is currently evaluating~~has elected to apply the ‘package of practical expedients’ which allow us to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. The Company has also elected to apply i) the practical expedient which allows us to not separate lease and non-lease components, and (2) the short-term lease exemption for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements in the new standard. The adoption of the new standard resulted in the recognition of additional lease liabilities of approximately $4,629, and right-of-use assets of approximately $4,548 million as of March 30, 2019 related to the Company’s operating leases. The new standard did not have a material impact to the Company’s consolidated statement of ~~adopting this guidance.~~operations or consolidated statement of cash flows.

As required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” and “internal control over financial reporting” as of the end of the period covered by this Quarterly Report.

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures.

Our principal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of the end of the period covered by this ~~Quarterly~~Annual Report (“Evaluation Date”), pursuant to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, ~~the Company identified a material weakness relating to the accounting for complex debt and equity instruments. As such,~~ our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were ~~not~~ operating effectively.

Management believes that the condensed consolidated financial statements in this quarterly report on Form 10-Q fairly present, in all material respects, the Company’s financial condition as of the Evaluation Date, and results of its operations and cash flows for the Evaluation Date, in conformity with United States Generally Accepted Accounting Principles (“GAAP”).

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that

Based on our evaluation under the framework described above, our management concluded that our internal controls over financial reporting were ~~not~~ effective in accordance with Item 308(a)(3) of Regulation ~~S-K as we had “material weaknesses” (as such term is defined below) in our control environment and financial reporting process relating to the accounting for complex debt and equity instruments.~~S-K.

A “material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

The Company intends to remedy the foregoing material weakness in our control environment and financial reporting process by pursuing third party technical accounting consultation in the matter of transactions that involve complex debt and equity instruments.

A system of controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on our evaluation under the framework described ~~above, aside from the material~~

~~weakness discussed~~ above, our management concluded that our internal controls over financial reporting were effective in accordance with Item 308(a)(3) of Regulation S-K.

This Quarterly Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to the rules of the SEC.

NoThere has been no change in our system of internal control over financial reporting occurred during the period ended ~~September 29, 2018~~March 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~There~~ Except as otherwise set forth below, there have been no material developments to alter the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December ~~30, 2017.~~29, 2018.

Our Amended and Restated Certificate of Incorporation includes a forum selection clause, which could limit our stockholders’ ability

to obtain a favorable judicial forum for disputes with us. Our Amended and Restated Certificate of Incorporation provides that, unless

we consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding

brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director or officer or

other employee to us or our stockholders, (c) any action asserting a claim against us or any director or officer or other employee arising pursuant to any provision of the General Corporation Law of the State of Delaware or our Amended and Restated Certificate of

Incorporation or our By-Laws (as either may be amended from time to time), or (d) any action asserting a claim against us or any director or officer or other employee governed by the internal affairs doctrine shall be a state court located within the State of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware). This exclusive forum provision will apply to state and federal law claims, including claims under the federal securities laws (including actions arising under the Securities Exchange Act of 1934 or the Securities Act of 1933), although our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act of 1933, however, creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act of 1933 or the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under federal securities

laws. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and

consented to the foregoing provisions. This forum selection provision in our Amended and Restated Certificate of Incorporation may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us. It is also possible that, notwithstanding the forum selection clause included in our bylaws, a court could rule that such a provision is inapplicable or unenforceable.

During the period December 31, 2017 through September 29, 2018, we issued 19,383 shares of common stock, with an aggregate value of $55 to Greenridge Global LLC, SP Padda and J Charles Assets in return for investor relations advisory services and construction of leasehold improvements. ~~The shares were issued in reliance upon an exemption pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.~~None.

† In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are furnished and not filed.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PART I FINANCIAL INFORMATION

Item 1	Financial Statements		1
	Condensed Consolidated Balance Sheets as of ~~September 29, 2018~~March 30, 2019 (unaudited) and December ~~30, 2017~~29, 2018		1
	Unaudited Condensed Consolidated Statements of Operations for the ~~three and nine month~~ periods ended ~~September 29,~~March 30, 2019 and March 31, 2018 ~~and for the three and nine month periods ended September 30, 2017~~		2
	Unaudited Condensed Consolidated Statements of Comprehensive Loss for the ~~three and nine month~~ periods ended ~~September 29,~~March 30, 2019 and March 31, 2018 ~~and for the three and nine month periods ended September 30, 2017~~		3
		Unaudited Condensed Consolidated Statements of ~~Cash Flows~~Changes in Stockholders’ Equity for the ~~nine month~~ periods ended ~~September 29,~~March 30, 2019 and March 31, 2018 ~~and September 30, 2017~~	4
		Unaudited Condensed Consolidated Statements of Cash Flows for the periods ended March 30, 2019 and March 31, 2018	6
		Notes to Unaudited Condensed Consolidated Financial Statements	510
Item 2		Management’s Discussion and Analysis of Financial Condition and Results of Operations	2016
Item 3		Quantitative and Qualitative Disclosures About Market Risk	3024
Item 4		Controls and Procedures	3024

		PART II OTHER INFORMATION

Item 1		Legal Proceedings	3226
Item 1A		Risk Factors	3226
Item 2		Unregistered Sales of Equity Securities and Use of Proceeds	3226
Item 3		Defaults Upon Senior Securities	3226
Item 4		Mine Safety Disclosures	3226
Item 5		Other Information	3226
Item 6		Exhibits	3327

Signatures			3428

Lease Cost		Classification	1Q 2019
Operating lease cost		SG&A Expenses		441

Other information
Weighted average remaining lease term (years)		2.8
Weighted average discount rate		6.3	%

Future Lease Payments
2019	$	1,258
2020		1,494
2021		1,215
2022		405
2023		156
Thereafter		586
	$	5,114


Average 2019 Price	Vesting Rate
<$8 per share	0
>$8 per share	Pro-rated
>=$12 per share	Full Vesting

	KRI		Clement May
Goodwill ⁽¹⁾	$	3,346	$	1,545

Intangible assets
Tradenames	$	1,000	$	470
Non-compete		—		273
Customer Relationships		6,400		451
	$	7,400	$	1,194

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐

	KRI			Clement May
Purchase price	$	11,536		$	3,543

Less:
Net assets acquired	$	(790	)	$	(804	)
Intangible assets		(7,400	)		(1,194	)

Goodwill	$	3,346		$	1,545

Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation (previously filed as Exhibit 3.3 to the Company’s Form 8-K, filed with the SEC on June 15, 2017)
3.2		Amendment to Amended and Restated Certificate of Incorporation (previously filed as Exhibit 3.1 to the Company’s Form 8-K, filed with the SEC on January 3, 2018)
3.3		Amended and Restated By-Laws (previously filed as Exhibit 3.1 to the Company’s Form 8-K, filed with the SEC on March 29, 2018)
3.4		Certificate of Amendment to Certificate of Designation of Series E Convertible Preferred Stock, dated February 7, 2019 (previously filed as Exhibit 3.1 to the Company’s current Report on Form 8-K filed with the SEC on February 11, 2019)
10.1		~~Share~~Form of Securities Purchase Agreement, dated ~~August 27, 2018,~~January 22, 2019, by and ~~among Monroe Staffing,~~between the Company and ~~Pamela D. Whitaker (previously~~the Purchaser (Previously filed as Exhibit 10.1 to the Company’s Current Report on Form ~~8-K/A~~8-K filed ~~with the SEC~~ on ~~November 2, 2018)~~January 23, 2019).
10.2		~~Amendment No. 1 to Amended and Restated Warrant~~Placement Agency Agreement dated ~~August 27, 2018,~~January 22, 2019, between the Company and ~~Jackson Investment Group, LLC~~ThinkEquity (Previously filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 23, 2019)
10.3		Waiver Agreement – Series A Preferred Stock (Previously filed as Exhibit 10.99 to Amendment ~~No.10 and Joinder Agreement~~No. 1 to ~~Credit and Security Agreement and Limited Consent, dated August 27, 2018, by and among~~ the ~~Company, certain subsidiaries of the Company and MidCap Funding X Trust~~ Company’s Registration Statement on Form S-1/A filed on January 31, 2019)
10.4		~~First Omnibus~~ Amendment ~~Joinder and Reaffirmation~~ Agreement, dated ~~August~~February 27, ~~2018,~~2019, by and among Staffing 360 Georgia, LLC, Firstpro, Inc., Firstpro Georgia, LLC, April F. Nagel and Philip Nagel (Previously filed as Exhibit 10.1 to the ~~Company, certain subsidiaries of the Company, and Jackson Investment Group, LLC~~Company’s Current Report on Form 8-K filed on March 5, 2019)
10.5		~~12% Senior Secured Note, due September 15, 2020, issued~~Amendment No. 11 to the Credit Agreement dated February 7, 2019 by and among Midcap Funding X Trust, the Company and certain subsidiaries of the Company (Previously filed as Exhibit 10.101 to the Company’s Annual Report on ~~August 27, 2018,staf-ex105_220.htm to Jackson Investment Group, LLC~~Form 10-K filed on March 25, 2019)
10.6		~~First~~Third Omnibus Amendment ~~to Intercreditor~~and Reaffirmation Agreement dated ~~August 27, 2018,~~February 7, 2019, by and among Jackson Investment Group LLC, the Company and certain subsidiaries of the Company ~~and MidCap Funding X Trust.~~
~~10.7~~		~~First Amended and Restated Revolving Loan Note, by and among certain subsidiaries of~~(Previously filed as Exhibit 10.102 to the ~~Company and MidCap Funding X Trust~~Company’s Annual Report on Form 10-K filed on March 25, 2019)
31.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of Sarbanes Oxley Act of 2002
31.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of Sarbanes Oxley Act of 2002
32.1†		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002
32.2†		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Schema
101.CAL		XBRL Taxonomy Calculation Linkbase
101.DEF		XBRL Taxonomy Definition Linkbase
101.LAB		XBRL Taxonomy Label Linkbase
101.PRE		XBRL Taxonomy Presentation Linkbase

Date: ~~November~~ May 13,~~, 2018~~ 2019	STAFFING 360 SOLUTIONS, INC.

	By:	/s/ Brendan Flood
		Brendan Flood
		Chairman and Chief Executive Officer
		(Duly Authorized Officer and Principal Executive Officer)

Date: ~~November~~May 13, ~~2018~~2019	STAFFING 360 SOLUTIONS, INC.

	By:	/s/ David Faiman
		David Faiman
		Chief Financial Officer
		(Duly Authorized Officer, Principal Financial Officer and Principal Accounting Officer)