Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 04, 2020 | Nov. 02, 2020 | |
Entity Registrant Name | UNIROYAL GLOBAL ENGINEERED PRODUCTS, INC. | |
Document Type | 10-Q | |
Document Period End Date | Oct. 4, 2020 | |
Amendment Flag | false | |
Entity Central Index Key | 0001172706 | |
Current Fiscal Year End Date | --01-03 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-50081 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | NV | |
Ordinary Common Stock [Member] | ||
Entity Common Stock, Shares Outstanding | 3,412,186 | |
Common Class B [Member] | ||
Entity Common Stock, Shares Outstanding | 323,820 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Oct. 04, 2020 | [1] | Dec. 29, 2019 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 767,874 | $ 513,588 | |
Accounts receivable, net | 9,689,695 | 11,662,325 | |
Inventories, net | 17,967,896 | 19,116,542 | |
Other current assets | 1,020,555 | 930,015 | |
Related party receivable | 37,556 | ||
Total Current Assets | 29,483,576 | 32,222,470 | |
PROPERTY AND EQUIPMENT, NET | 18,414,393 | 19,103,319 | |
OPERATING LEASE RIGHT-OF-USE ASSETS | 6,088,870 | 6,607,963 | |
OTHER ASSETS | |||
Intangible assets | 3,227,648 | 3,263,781 | |
Goodwill | 1,079,175 | 1,079,175 | |
Other long-term assets | 3,737,907 | 3,489,313 | |
Total Other Assets | 8,044,730 | 7,832,269 | |
TOTAL ASSETS | 62,031,569 | 65,766,021 | |
CURRENT LIABILITIES | |||
Checks issued in excess of bank balance | 147,960 | 332,141 | |
Lines of credit | 18,452,489 | 20,530,773 | |
Current maturities of long-term debt | 1,092,420 | 1,238,541 | |
Current maturities of finance lease liabilities | 269,528 | 364,872 | |
Accounts payable | 8,338,193 | 9,232,119 | |
Accrued expenses and other liabilities | 7,035,285 | 3,890,367 | |
Related party obligation | 145,214 | 608,517 | |
Current portion of postretirement benefit liability - health and life | 155,803 | 155,803 | |
Total Current Liabilities | 35,636,892 | 36,353,133 | |
LONG-TERM LIABILITIES | |||
Long-term debt, less current portion | 3,651,836 | 2,892,242 | |
Finance lease liabilities, less current portion | 294,955 | 492,613 | |
Operating lease liabilities | 5,713,922 | 6,106,568 | |
Related party lease financing obligation | 2,541,472 | 2,646,970 | |
Long-term debt to related parties | 3,774,613 | 3,190,655 | |
Postretirement benefit liability - health and life, less current portion | 2,575,124 | 2,592,023 | |
Other long-term liabilities | 573,815 | 715,308 | |
Total Long-Term Liabilities | 19,125,737 | 18,636,379 | |
Total Liabilities | 54,762,629 | 54,989,512 | |
STOCKHOLDERS' EQUITY | |||
Preferred units, Series A UEP Holdings, LLC, 200,000 units issued and outstanding ($100 issue price) | 617,571 | 617,571 | |
Preferred units, Series B UEP Holdings, LLC, 150,000 units issued and outstanding ($100 issue price) | 463,179 | 463,179 | |
Preferred stock, Uniroyal Global (Europe) Limited, 50 shares issued and outstanding ($1.51 stated value) | 75 | 75 | |
Common stock, 95,000,000 shares authorized ($.001 par value) 3,736,006 shares issued and outstanding as of October 4, 2020 and December 29, 2019 | 3,736 | 18,680 | |
Additional paid-in capital | 35,290,590 | 35,275,646 | |
Accumulated deficit | (27,696,592) | (24,301,203) | |
Accumulated other comprehensive loss | (1,409,619) | (1,297,439) | |
Total Stockholders' Equity | 7,268,940 | 10,776,509 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 62,031,569 | $ 65,766,021 | |
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 04, 2020 | Dec. 29, 2019 |
Assets [Abstract] | ||
Series A UEP Holdings LLC par value | $ 100 | $ 100 |
Series A UEP Holdings LLC shares issued | 200,000 | 200,000 |
Series A UEP Holdings LLC shares outstanding | 200,000 | 200,000 |
Series B UEP Holdings LLC par value | $ 100 | $ 100 |
Series B UEP Holdings LLC shares issued | 150,000 | 150,000 |
Series B UEP Holdings LLC shares outstanding | 150,000 | 150,000 |
Preferred stock, Uniroyal Global (Europe) Limited shares Par value | $ 1.51 | $ 1.51 |
Preferred stock, Uniroyal Global (Europe) Limited shares issued | 50 | 50 |
Preferred stock, Uniroyal Global (Europe) Limited shares outstanding | 50 | 50 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 95,000,000 | 95,000,000 |
Common Stock, shares issued | 3,736,006 | 3,736,006 |
Common Stock, shares outstanding | 3,736,006 | 3,736,006 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Oct. 04, 2020 | Sep. 29, 2019 | [1] | Oct. 04, 2020 | Sep. 29, 2019 | [1] | |
Revenues [Abstract] | ||||||
NET SALES | $ 15,171,898 | $ 22,033,539 | $ 43,528,393 | $ 71,523,182 | ||
COST OF GOODS SOLD | 13,114,967 | 18,471,639 | 37,931,227 | 59,434,689 | ||
Gross Profit | 2,056,931 | 3,561,900 | 5,597,166 | 12,088,493 | ||
OPERATING EXPENSES: | ||||||
Selling | 778,699 | 1,061,781 | 2,278,279 | 3,348,622 | ||
General and administrative | 1,957,486 | 1,373,118 | 4,834,011 | 4,332,978 | ||
Research and development | 198,182 | 377,989 | 704,239 | 1,302,707 | ||
Other operating expenses | 343,003 | |||||
OPERATING EXPENSES | 2,934,367 | 2,812,888 | 7,816,529 | 9,327,310 | ||
Operating (Loss) Income | (877,436) | 749,012 | (2,219,363) | 2,761,183 | ||
OTHER INCOME (EXPENSE): | ||||||
Interest and other debt related expense | (367,454) | (509,829) | (1,215,771) | (1,547,343) | ||
Funding from Paycheck Protection Program | 33,824 | 2,217,500 | ||||
Other income (expense) | 85,753 | 50,213 | (185,417) | 53,396 | ||
Net Other Income (Expense) | (247,877) | (459,616) | 816,312 | (1,493,947) | ||
(LOSS) INCOME BEFORE TAX PROVISION | (1,125,313) | 289,396 | (1,403,051) | 1,267,236 | ||
TAX (BENEFIT) PROVISION | (111,318) | 12,022 | (404,141) | (6,287) | ||
NET (LOSS) INCOME | (1,013,995) | 277,374 | (998,910) | 1,273,523 | ||
Preferred stock dividend | (808,638) | (777,372) | (2,396,479) | (2,339,862) | ||
NET LOSS ALLOCABLE TO COMMON SHAREHOLDERS | $ (1,822,633) | $ (499,998) | $ (3,395,389) | $ (1,066,339) | ||
LOSS PER COMMON SHARE: | ||||||
Basic | $ (0.49) | $ (0.13) | $ (0.91) | $ (0.29) | ||
Diluted | $ (0.49) | $ (0.13) | $ (0.91) | $ (0.29) | ||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||
Basic | 3,736,006 | 3,736,006 | 3,736,006 | 3,736,988 | ||
Diluted | 3,736,006 | 3,736,006 | 3,736,006 | 3,736,988 | ||
[1] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Oct. 04, 2020 | Sep. 29, 2019 | Oct. 04, 2020 | Sep. 29, 2019 | |||
COMPREHENSIVE LOSS | ||||||
NET (LOSS) INCOME | $ (1,013,995) | $ 277,374 | [1] | $ (998,910) | $ 1,273,523 | [1] |
OTHER COMPREHENSIVE INCOME (LOSS): | ||||||
Minimum benefit liability adjustment | (73,617) | (220,851) | ||||
Foreign currency translation adjustment | 235,736 | (240,059) | (112,180) | (221,612) | ||
OTHER COMPREHENSIVE INCOME (LOSS) | 235,736 | (313,676) | (112,180) | (442,463) | ||
COMPREHENSIVE (LOSS) INCOME | (778,259) | (36,302) | (1,111,090) | 831,060 | ||
Preferred stock dividend | (808,638) | (777,372) | (2,396,479) | (2,339,862) | ||
COMPREHENSIVE LOSS TO COMMON SHAREHOLDERS | $ (1,586,897) | $ (813,674) | $ (3,507,569) | $ (1,508,802) | ||
[1] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | UEPH Series A Units [Member] | UEPH Series B Units [Member] | UGEL Preferred Shares [Member] | Common Stock [Member] | [1] | Additional Paid-In Capital [Member] | [1] | Accmulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total | |
Balance at Dec. 30, 2018 | $ 617,571 | $ 463,179 | $ 75 | $ 18,690 | $ 35,244,770 | $ (22,136,130) | $ (702,645) | $ 13,505,510 | |||
Balance, shares at Dec. 30, 2018 | 200,000 | 150,000 | 50 | 3,738,006 | |||||||
Net income (loss) | 1,273,523 | 1,273,523 | [2] | ||||||||
Other comprehensive income (loss) | (442,463) | (442,463) | |||||||||
Stock-based compensation expense | 44,166 | 44,166 | |||||||||
Treasury shares purchased at cost and retired | $ (10) | (13,290) | (13,300) | ||||||||
Treasury shares purchased at cost and retired, shares | (2,000) | ||||||||||
Preferred stock dividend | (2,339,862) | (2,339,862) | |||||||||
Balance at Sep. 29, 2019 | $ 617,571 | $ 463,179 | $ 75 | $ 18,680 | 35,275,646 | (23,202,469) | (1,145,108) | 12,027,574 | |||
Balance, shares at Sep. 29, 2019 | 200,000 | 150,000 | 50 | 3,738,006 | |||||||
Balance at Jun. 30, 2019 | $ 617,571 | $ 463,179 | $ 75 | $ 18,680 | 35,275,646 | (22,702,471) | (831,432) | 12,841,248 | |||
Balance, shares at Jun. 30, 2019 | 200,000 | 150,000 | 50 | 3,738,006 | |||||||
Net income (loss) | 277,374 | 277,374 | [2] | ||||||||
Other comprehensive income (loss) | (313,676) | (313,676) | |||||||||
Preferred stock dividend | (777,372) | (777,372) | |||||||||
Balance at Sep. 29, 2019 | $ 617,571 | $ 463,179 | $ 75 | $ 18,680 | 35,275,646 | (23,202,469) | (1,145,108) | 12,027,574 | |||
Balance, shares at Sep. 29, 2019 | 200,000 | 150,000 | 50 | 3,738,006 | |||||||
Balance at Dec. 29, 2019 | $ 617,571 | $ 463,179 | $ 75 | $ 18,680 | 35,275,646 | (24,301,203) | (1,297,439) | 10,776,509 | |||
Balance, shares at Dec. 29, 2019 | 200,000 | 150,000 | 50 | 3,736,006 | |||||||
Net income (loss) | (998,910) | (998,910) | |||||||||
Other comprehensive income (loss) | (112,180) | (112,180) | |||||||||
Preferred stock dividend | (2,396,479) | (2,396,479) | |||||||||
Adjustment for reverse stock split | (14,944) | 14,944 | |||||||||
Balance at Oct. 04, 2020 | $ 617,571 | $ 463,179 | $ 75 | $ 3,736 | 35,290,590 | (27,696,592) | (1,409,619) | 7,268,940 | |||
Balance, shares at Oct. 04, 2020 | 200,000 | 150,000 | 50 | 3,736,006 | |||||||
Balance at Jul. 05, 2020 | $ 617,571 | $ 463,179 | $ 75 | $ 3,736 | 35,290,590 | (25,873,959) | (1,645,355) | 8,855,837 | |||
Balance, shares at Jul. 05, 2020 | 200,000 | 150,000 | 50 | 3,736,006 | |||||||
Net income (loss) | (1,013,995) | (1,013,995) | |||||||||
Other comprehensive income (loss) | 235,736 | 235,736 | |||||||||
Preferred stock dividend | (808,638) | (808,638) | |||||||||
Balance at Oct. 04, 2020 | $ 617,571 | $ 463,179 | $ 75 | $ 3,736 | $ 35,290,590 | $ (27,696,592) | $ (1,409,619) | $ 7,268,940 | |||
Balance, shares at Oct. 04, 2020 | 200,000 | 150,000 | 50 | 3,736,006 | |||||||
[1] | The number of shares of common stock reflect the one-for-five reverse stock split that became effective on February 24, 2020. The amounts in common stock and additional paid-in capital were adjusted as of the effective date of the one-for five reverse stock split. See Note 1 for additional information. | ||||||||||
[2] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |||
Oct. 04, 2020 | Sep. 29, 2019 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net (loss) income | $ (998,910) | $ 1,273,523 | [1] | |
Adjustments to reconcile net (loss) income to net cash flows from operating activities: | ||||
Depreciation | 1,757,012 | 1,778,280 | ||
Stock-based compensation expense | 44,166 | |||
Amortization of intangible assets | 11,250 | 12,917 | ||
Loss on disposal of property and equipment | 3,871 | 68,395 | ||
Noncash postretirement benefit - health and life | (220,851) | |||
Funding from Paycheck Protection Program recognized as income | (2,217,500) | [1] | ||
Noncash lease adjustment | 66,591 | (26,258) | ||
Changes in assets and liabilities: | ||||
Accounts receivable | 1,862,403 | (1,187,917) | ||
Inventories | 1,029,195 | (82,294) | ||
Other current assets | (99,857) | 324,711 | ||
Related party receivable | (37,556) | (13,099) | ||
Other long-term assets | (281,231) | 74,135 | ||
Accounts payable | (784,890) | 185,837 | ||
Accrued expenses and other liabilities | 803,544 | 249,784 | ||
Postretirement benefit liability - health and life | (16,899) | (18,208) | ||
Other long-term liabilities | (130,374) | (7,244) | ||
Cash provided by operating activities | 966,649 | 2,455,877 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Capital expenditures | (1,200,045) | (1,584,511) | ||
Proceeds from policy loans, net of payments on life insurance policies | 28,787 | 127,440 | ||
Cash used in Investing Activities | (1,171,258) | (1,457,071) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Net change in checks issued in excess of bank balance | (184,181) | (102,725) | ||
Net advances (payments) on lines of credit | (1,913,809) | 1,893,069 | ||
Payments on long-term debt | (899,690) | (772,381) | ||
Proceeds from issuance of long-term debt - Paycheck Protection Program | 2,217,500 | |||
Proceeds from issuance of long-term debt - automotive lenders | 1,519,861 | |||
Proceeds from issuance of long-term debt - other | 454,088 | |||
Payments on finance lease liabilities | (289,948) | (484,834) | ||
Proceeds from related party obligations | 983,958 | 800,000 | ||
Payments on related party obligations | (968,801) | (628,023) | ||
Payment of preferred stock dividends | (2,332,503) | |||
Purchase and retirement of treasury stock | (13,300) | |||
Cash provided by (used in) financing activities | 464,890 | (1,186,609) | ||
Net Change in Cash and Cash equivalents | 260,281 | (187,803) | ||
Cash and Cash equivalents - beginning of Period | 513,588 | 1,028,841 | ||
Effects of currency translation on cash and cash equivalents | (5,995) | (22,749) | ||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ 767,874 | [2] | $ 818,289 | |
[1] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. | |||
[2] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Oct. 04, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared based upon U.S. Securities and Exchange Commission rules that permit reduced disclosure for interim periods. Therefore, they do not include all information and footnote disclosures necessary for a complete presentation of Uniroyal Global Engineered Products, Inc.’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. Uniroyal Global Engineered Products, Inc. (the “Company,” “Uniroyal Global,” “we,” or “us”) filed audited consolidated financial statements as of and for the fiscal years ended December 29, 2019 and December 30, 2018 which included all information and notes necessary for such complete presentation in conjunction with its 2019 Annual Report on Form 10-K. The results of operations for the interim period ended October 4, 2020 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 29, 2019, which are contained in the Company’s 2019 Annual Report on Form 10-K. The Company owns all of the ownership interests in Uniroyal Engineered Products, LLC (“Uniroyal”) and its holding company UEP Holdings, LLC (“UEPH”), a U.S. manufacturer of textured coatings, and all of the ordinary common stock of Uniroyal Global (Europe) Limited (“UGEL”) formerly known as Engineered Products Acquisition Limited (“EPAL”), the holding company for Uniroyal Global Limited (“UGL”) formerly Wardle Storeys (Earby) Limited (“Wardle Storeys”), a European manufacturer of textured coatings and polymer films. The Company and its subsidiaries use a 52/53-week fiscal year ending on the Sunday nearest to December 31. The current year ending January 3, 2021 is a 53-week year whereas the prior year ended December 29, 2019 was a 52-week year. The Company’s U.K. subsidiaries use the calendar year end of December 31. The activity of the U.K. subsidiaries that occurs on the days that do not coincide with the Company’s year-end is not material. The three months ended October 4, 2020 and September 29, 2019 were both 13-week periods while the nine months ended October 4, 2020 was a 40-week period and the nine months ended September 29, 2019 was a 39-week period. The accompanying unaudited interim consolidated financial statements contain all adjustments (consisting of normal recurring items) which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position as of October 4, 2020 and the results of operations, comprehensive loss and cash flows for the interim periods ended October 4, 2020 and September 29, 2019. The unaudited interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company uses the U.S. dollar as the reporting currency for financial reporting. The financial position and results of operations of the Company’s U.K.-based operations are measured using the British Pound Sterling as the functional currency. See Note 4, Foreign Currency Translation. For purposes of comparability, certain reclassifications have been made to amounts previously reported to conform with the current period presentation. One-for-Five Reverse Stock Split On January 27, 2020, the Company announced a one-for-five reverse stock split (“reverse stock split”) on its common stock that became effective on February 24, 2020. The amounts in common stock and additional paid-in capital were adjusted as of the effective date to reflect the reverse stock split. Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to give effect to the reverse stock split. Coronavirus (COVID-19) Subsequent to year-end 2019, the World Health Organization declared the novel coronavirus (“COVID-19”) outbreak a public health emergency. There have been mandates from international, federal, state and local authorities requiring forced closures of various schools, businesses and other facilities and organizations although there have been some recent easings of these closures. These forced closures have negatively impacted the Company’s business. Primarily due to the negative impact that COVID-19 is having on the global economy, the Company began to experience a decline in sales during the latter part of March 2020. In order to mitigate the effect of the decrease in revenue, the Company is managing its costs, which included initially reducing staff at its manufacturing facilities with production at one-third capacity at the U.S. facility and the entire production staff furloughed at the U.K. facility beginning in late March. During June 2020, the Company had some employees return to work as its U.K. facility started limited production of vinyl products based on orders it was receiving from its customers. The Company brought back additional production workers as incoming orders increased during the third quarter of 2020. Demand for our products continues to improve in the fourth quarter although it is well below normalized levels. Additionally, the Company has applied for loans under programs offered by the governmental agencies in the United States and in the United Kingdom and is exploring options for other supplementary cash flow opportunities to provide further liquidity. For the U.S. operations, during the second quarter of 2020 the Company received $2,217,500 in funds from One Community Bank (formerly Oregon Community Bank) through the Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”) under the Coronavirus Aid, Relief, and Economic Security Act (“the CARES Act”). The loan matures on April 13, 2022 and bears an interest rate of 1.0%. The Company is required to make monthly payments of principal and interest beginning November 13, 2020 based on the amount that is outstanding on October 13, 2020 in order to fully amortize the loan by April 13, 2022. The loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. All or a portion of the loan may be forgiven by the SBA for costs the Company incurs for payroll, rent, utilities and all other allowable expenses during the 24-week period beginning April 13, 2020. The Company used all proceeds from the loan to maintain payroll and make payments for lease, utility and other allowable expenses. Included in the accompanying consolidated statements of operations for the nine months ended October 4, 2020 was $2,217,500 of loan forgiveness that the Company expects to receive from the SBA. Although the Company has not been legally released from this amount of the loan, management concluded that there was reasonable assurance that the Company had substantially met the terms for forgiveness and therefore recognized this amount as income as a component of other income (expense). The Company submitted its application for loan forgiveness to One Community Bank in September 2020. Also for the U.S. operations, during the third quarter of 2020 the Company applied for a $3.2 million loan from Wells Fargo Capital Finance, LLC through the Main Street Lending Program established by the Federal Reserve Board; however, there can be no guarantee that the Company will be successful in obtaining this funding. For the U.K. operations, during the three and nine months ended October 4, 2020 the Company recorded reimbursed costs of approximately $474,000 and $1,560,000, respectively, under the Coronavirus Job Retention Scheme (“CJRS”) set up by the U.K. government to help employers pay the wages of those employees who would otherwise have been laid off during the coronavirus outbreak but under the CJRS were furloughed instead. This program reimbursed the Company for 80% of the compensation expense plus national insurance and certain benefits paid to the furloughed employees, resulting in lower salary expense for the Company. While the employees were on furlough, the compensation paid to them was limited to the amount reimbursed by the CJRS. The Company recorded the reimbursed amounts as reductions to the associated expenses. Additionally for the U.K. operations, during the third quarter of 2020 the Company received a $783,958 loan from its principal shareholder and $1,545,538 in loans from automotive lenders. These funds provided additional working capital to meet various short-term cash needs. While the closures and limitations on movement, domestically and internationally, are expected to be temporary due to the COVID-19 outbreak, the duration of the supply chain disruption and related financial impact cannot be estimated at this time. Should the closures continue for an extended period of time or should the effects of the coronavirus continue to spread, the impact could have a material adverse effect on the Company’s financial position, results of operations and cash flows which may require that the Company obtain additional financing. The payment of dividends for the nine months ended October 4, 2020 and the three months ended December 29, 2019 was deferred to preserve cash and provide additional liquidity. As of October 4, 2020 and December 29, 2019, accrued dividends of $3,154,042 and $788,599, respectively, were included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. Legal Proceedings On October 1, 2020, the Health and Safety Executive (“HSE”), the government agency responsible for the enforcement of health and safety law in the U.K., charged our U.K. subsidiary, Uniroyal Global Limited, with an offense under the Health and Safety at Work etc. Act 1974 arising from an August 2019 incident in which an employee was injured in the course of his employment. The Company fully cooperated with the HSE investigation and, at this time, intends to negotiate a plea based on the legal advice provided to it to date. Based on this legal advice, the Company believes that £150,000 ($195,000) is a reasonable estimate of the fine to be imposed. Accordingly, the Company has recorded a charge of $195,000 in general and administrative expenses in the accompanying Consolidated Statements of Operations for the three and nine months ended October 4, 2020. |
Noncash Transactions and Supple
Noncash Transactions and Supplemental Disclosure of Cash Flow Information | 9 Months Ended |
Oct. 04, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Noncash Transactions and Supplemental Disclosure of Cash Flow Information | 2. Noncash Transactions and Supplemental Disclosure of Cash Flow Information During the nine months ended October 4, 2020, the Company recorded funding from the Paycheck Protection Program of $2,217,500, which is the amount of debt forgiveness that it expects to receive for the loan it made through the Paycheck Protection Program. Although the Company has not been legally released from this amount of the loan, management concluded that there was reasonable assurance that the Company had substantially met the terms for forgiveness, including using all proceeds from the loan for eligible costs (as defined under the Paycheck Protection Program). The Company submitted its application for loan forgiveness in September 2020. During the nine months ended September 29, 2019, the Company entered into several equipment financing obligations with fair values of $379,126, which are accounted for as capital assets. The fair values were added to property and equipment and a corresponding amount to long-term debt or related party lease financing obligation. The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” on December 31, 2018. Under this new standard, the Company was required to record on its balance sheet previously unrecorded operating leases based on the present value of remaining lease payments. Per this new standard, the Company recorded operating lease right-of-use (“ROU”) assets and operating lease liabilities of $6,815,376 on its consolidated balance sheet as of December 31, 2018. During the third quarter of 2020 and 2019, the Company obtained $130,000 and $249,051, respectively, in loans against the cash value of its company owned life insurance policies and are shown net of payments of $101,213 and $121,611, respectively, on the life insurance policies in the consolidated statements of cash flows. These loans have a weighted average interest rate of 3.65% and can be repaid at any time. The following is supplemental disclosure of cash paid for the nine months ended : October 4, 2020 September 29, 2019 Interest $ 1,272,124 $ 1,452,735 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Oct. 04, 2020 | |
Fair Value Of Financial Instruments | |
Fair Value of Financial Instruments | 3. Fair Value of Financial Instruments The Company’s short-term financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and lines of credit. The Company adjusts the carrying value of financial instruments denominated in other currencies such as cash, accounts receivable, accounts payable and lines of credit using the appropriate exchange rates at the balance sheet date. The Company believes that the carrying values of these short-term financial instruments approximate their estimated fair values. The fair value of the Company’s long-term debt is estimated based on current rates for similar instruments with the same remaining maturities. In determining the current interest rates for similar instruments, the Company takes into account its risk of nonperformance. The Company believes that the carrying value of its long-term debt approximates its estimated fair value. The Company uses foreign currency exchange contracts which are recorded at their estimated fair values in the accompanying consolidated balance sheets. The fair values of the currency exchange contracts are based upon observable market transactions of spot and forward rates. For the nine months ended October 4, 2020, there have been no changes in the application of valuation methods applied to similar assets and liabilities. |
Foreign Currency Translation
Foreign Currency Translation | 9 Months Ended |
Oct. 04, 2020 | |
Foreign Currency Translation [Abstract] | |
Foreign Currency Translation | 4. Foreign Currency Translation The financial position and results of operations of the Company’s foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities of operations denominated in foreign currencies are translated into U.S. dollars at exchange rates in effect at the balance sheet date, while the capital accounts are translated at the historical rate for the date they were recognized. Revenues and expenses are translated at the weighted average exchange rates during the reporting period. The resulting translation gains and losses on assets and liabilities are recorded in accumulated other comprehensive loss and are excluded from net income until realized through a sale or liquidation of the investment. Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of the Company’s foreign operations are included in other income (expense) in the accompanying consolidated statements of operations. |
Inventories
Inventories | 9 Months Ended |
Oct. 04, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventories consist of the following: October 4, 2020 December 29, 2019 Raw materials $ 4,847,141 $ 5,430,125 Work-in-process 4,155,246 4,677,987 Finished goods 11,086,340 10,922,947 20,088,727 21,031,059 Less: Allowance for inventory obsolescence (2,120,831 ) (1,914,517 ) Total Inventories, net $ 17,967,896 $ 19,116,542 |
Other Long-term Assets
Other Long-term Assets | 9 Months Ended |
Oct. 04, 2020 | |
Other Assets, Noncurrent [Abstract] | |
Other Long-term Assets | 6. Other Long-term Assets Other long-term assets consist of the following: October 4, 2020 December 29, 2019 Deferred tax asset, net $ 2,970,289 $ 2,694,550 Other 767,618 794,763 Total Other Long-term Assets $ 3,737,907 $ 3,489,313 |
Other Long-term Liabilities
Other Long-term Liabilities | 9 Months Ended |
Oct. 04, 2020 | |
Other Liabilities, Noncurrent [Abstract] | |
Other Long-term Liabilities | 7. Other Long-term Liabilities Other long-term liabilities consist of the following: October 4, 2020 December 29, 2019 Deferred tax liability $ 568,452 $ 709,945 Other 5,363 5,363 Total Other Long-term Liabilities $ 573,815 $ 715,308 |
Lines of Credit
Lines of Credit | 9 Months Ended |
Oct. 04, 2020 | |
Line of Credit Facility [Abstract] | |
Lines of Credit | 8. Lines of Credit The Company’s Uniroyal subsidiary has available a $30,000,000 revolving line of credit financing agreement with Wells Fargo Capital Finance, LLC (“Uniroyal Line of Credit”), which matures on June 15, 2023. Interest is payable monthly at the Eurodollar rate plus 2.25% or Wells Fargo Capital Finance, LLC's prime rate at the Company's election on outstanding balances up to $6,000,000 and prime rate on amounts in excess of $6,000,000. Borrowings on the line of credit are subject to the underlying borrowing base specified in the agreement. The underlying borrowing base is currently determined based upon eligible accounts receivable, inventories and equipment. The line of credit is secured by substantially all of Uniroyal's assets and includes certain financial and restrictive covenants. The Company was in compliance with these covenants as of October 4, 2020. The outstanding balance on the Uniroyal Line of Credit was $10,566,665 and $10,328,913 as of October 4, 2020 and December 29, 2019, respectively. The Company has classified the outstanding balance on this line of credit within current liabilities in the accompanying consolidated balance sheets. Based upon eligible accounts receivable, inventories and equipment at October 4, 2020, the Uniroyal Line of Credit provided additional availability of approximately $368,000 and, combined with its total cash balance of $237,498, Uniroyal had liquidity of approximately $605,000 as of October 4, 2020. The Company’s UGL subsidiary has available a £10,500,000 (approximately $13.6 million) revolving line of credit financing agreement with Lloyds Bank Commercial Finance Limited (“UGL Line of Credit”), which is subject to a six-month notice by either party. The line has several tranches based on currency or underlying security. Interest is payable monthly at the base rate (U.K. LIBOR or Lloyds Bank Base Rate as published) plus 1.95% to 2.45% depending on the tranche. Borrowings on the line of credit are subject to the underlying borrowing base specified in the agreement. The underlying borrowing base is currently determined based upon eligible accounts receivable and inventories. The line of credit is secured by substantially all of the subsidiary's assets and includes certain financial and restrictive covenants. The Company was in compliance with these covenants as of October 4, 2020. The outstanding balance on the UGL Line of Credit was £6,095,747 and £7,787,002 ($7,885,824 and $10,201,860) as of October 4, 2020 and December 29, 2019, respectively. The Company has classified the outstanding balance on this line of credit within current liabilities in the accompanying consolidated balance sheets. Based upon eligible accounts receivable and inventories at October 4, 2020, the UGL Line of Credit provided additional availability of approximately $1.3 million and, combined with its total cash balance of $507,370, UGL had liquidity of approximately $1.8 million as of October 4, 2020. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Oct. 04, 2020 | |
Long-term Debt, by Current and Noncurrent [Abstract] | |
Long-Term Debt | 9. Long-term Debt Long-term debt consists of the following: Interest Rate October 4, 2020 December 29, 2019 Notes Payable Wells Fargo Capital Finance, LLC Prime $ 837,866 $ 1,099,700 Lloyds Bank Commercial Finance Limited 4.23% 48,671 60,971 Lloyds Bank Commercial Finance Limited LIBOR + 3.50% 162,973 217,211 Automotive lenders 0.0% 1,545,538 - 2,595,048 1,377,882 Equipment Financing Obligation Kennet Equipment Leasing Limited 10.90% 52,462 238,514 Regents Capital Corporation 6.20%-7.24% 759,458 994,830 Lloyds Bank Commercial Finance Limited 3.95% 1,337,288 1,519,557 2,149,208 2,752,901 4,744,256 4,130,783 Less: Current portion (1,092,420 ) (1,238,541 ) Long-term Portion $ 3,651,836 $ 2,892,242 During the third quarter of 2020, the Company received $1,545,538 in loans from automotive lenders. The loans are to be repaid in increasing quarterly installments beginning in September 2021 with the final payment in March 2023. No interest is payable on the loans. |
Related Party Obligations
Related Party Obligations | 9 Months Ended |
Oct. 04, 2020 | |
Related Party Obligations | |
Related Party Obligations | 10. Related Party Obligations Long-term debt to related parties consists of the following: Interest Rate October 4, 2020 December 29, 2019 Senior subordinated promissory note 9.25% $ 2,000,000 $ 2,000,000 Senior secured promissory note 10.00% 765,655 765,655 Subordinated secured promissory note 8.00% 225,000 225,000 Subordinated secured promissory note 8.00% - 200,000 Subordinated secured promissory note 0.00% 783,958 - 3,774,613 3,190,655 Less: Current portion - - Long-term Portion $ 3,774,613 $ 3,190,655 The above notes that were outstanding at October 4, 2020 and December 29, 2019 were amended on March 20, 2020 to change the maturity dates to January 15, 2022. No other terms of the notes were changed. The $200,000 note, which was outstanding since January 2019, was repaid in March 2020. During the third quarter of 2020, the Company issued a $783,958 subordinated secured promissory note to its majority shareholder that matures on April 5, 2023. No interest is payable on the note. The Company has a lease financing obligation under which it leases its main U.S. manufacturing facility and certain other property from a related party lessor entity, owned by the Company’s majority shareholder. The lease financing obligation accrues interest at 14.95% and currently requires monthly principal and interest payments of $45,533, which are adjusted annually based on the consumer price index. The lease financing obligation matures on October 31, 2033. The Company has security deposits aggregating $267,500 held by the lessor entity. The lease financing obligation consists of the following: October 4, 2020 December 29, 2019 Related party lease financing obligation $ 2,686,686 $ 2,780,487 Less: Current portion (145,214 ) (133,517 ) Long-term Portion $ 2,541,472 $ 2,646,970 The long-term portion of the lease financing obligation is shown in the accompanying consolidated balance sheets as related party lease financing obligation. The current portion of the lease financing obligation and the remaining balance of related party short-term subordinated secured promissory notes are combined and are shown in current liabilities as related party obligation which consists of the following: October 4, 2020 December 29, 2019 Current portion of related party lease financing obligation $ 145,214 $ 133,517 Related party subordinated secured promissory note - 350,000 Related party subordinated secured promissory note - 125,000 Related Party Obligation $ 145,214 $ 608,517 The related party subordinated secured promissory notes were at a rate of 10%. During the three months ended April 5, 2020, the Company’s majority shareholder advanced $200,000 to the Company, which the Company repaid within the same period. |
Leases
Leases | 9 Months Ended |
Oct. 04, 2020 | |
Capital Leases | |
Leases | 11. Leases The Company has operating leases for equipment and office facilities and finance leases for equipment. These leases expire at various dates from October 2020 through March 2039. Operating leases are included in operating lease right-of-use assets, accrued expenses and other liabilities, and operating lease liabilities in the accompanying consolidated balance sheets. Finance lease right-of-use assets are included in property and equipment, current maturities of finance lease liabilities, and finance lease liabilities, less current portion in the accompanying consolidated balance sheets. The components of lease expense for the three and nine months ended October 4, 2020 and September 29, 2019 are as follows: Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Operating lease expense $ 249,069 $ 285,732 $ 746,045 $ 849,936 Finance lease expense: Amortization of right-of-use assets $ 49,803 $ 56,145 $ 158,658 $ 172,236 Interest on lease liabilities 7,090 12,960 24,441 44,483 Total finance lease expense $ 56,893 $ 69,105 $ 183,099 $ 216,719 Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended October 4, 2020 and September 29, 2019 are as follows: Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Operating cash flows from operating leases $ 249,920 $ 274,760 $ 670,267 $ 708,897 Operating cash flows from finance leases $ 7,090 $ 12,960 $ 24,441 $ 44,483 Financing cash flows from finance leases $ 71,720 $ 156,048 $ 289,948 $ 484,834 Right-of-use assets obtained in exchange for lease obligations for the three and nine months ended October 4, 2020 and September 29, 2019 are as follows: Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Operating leases $ - $ - $ - $ 287,828 Finance leases $ - $ - $ - $ 13,197 Supplemental balance sheet and other information related to operating leases are as follows: October 4, 2020 December 29, 2019 Operating leases: Operating lease right-of-use assets $ 6,088,870 $ 6,607,963 Accrued expenses and other liabilities $ 438,547 $ 497,225 Operating lease liabilities 5,713,922 6,106,568 Total operating lease liabilities $ 6,152,469 $ 6,603,793 Weighted average remaining lease term 15.66 years 15.75 years Weighted average discount rate 7.23% 7.16% Supplemental balance sheet and other information related to finance leases are as follows: October 4, 2020 December 29, 2019 Finance leases: Property and equipment, net $ 2,281,411 $ 2,458,155 Current maturities of finance lease liabilities $ 269,528 $ 364,872 Finance lease liabilities, less current portion 294,955 492,613 Total finance lease liabilities $ 564,483 $ 857,485 Weighted average remaining lease term 2.1 years 2.5 years Weighted average discount rate 4.63% 4.73% Maturities of operating and finance lease liabilities as of October 4, 2020 are as follows: Operating Leases Finance Leases Due in one year or less $ 864,803 $ 289,047 Due after one year through two years 827,359 246,458 Due after two years through three years 716,012 56,096 Due after three years through four years 521,663 1,822 Due after four years through five years 504,331 - Thereafter 7,533,702 - Total lease payments 10,967,870 593,423 Less: Interest (4,815,401 ) (28,940 ) Total $ 6,152,469 $ 564,483 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Oct. 04, 2020 | |
AOCI Attributable to Parent [Abstract] | |
Accumulated Other Comprehensive Loss | 12. Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive loss were as follows: Minimum Foreign Currency Total Balance at December 29, 2019 $ 5,694 $ (1,303,133 ) $ (1,297,439 ) Other comprehensive loss before - (112,180 ) (112,180 ) Balance at October 4, 2020 $ 5,694 $ (1,415,313 ) $ (1,409,619 ) |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Oct. 04, 2020 | |
Stock Options or Stock Based Compensation | |
Stock Based Compensation | 13. Stock Based Compensation On June 25, 2015, the Company’s stockholders approved the adoption of the 2015 Stock Option Plan. This plan provides for the granting of options to purchase the Company’s common stock to employees and directors. The options granted are subject to a vesting schedule as set forth in each individual option agreement. Each option expires on the tenth anniversary of its date of grant unless an earlier termination date is provided in the grant agreement. The maximum aggregate number of shares of common stock that may be optioned and sold under the plan shall be 6% of the shares outstanding on the date of grant. The shares that may be optioned under the plan may be authorized but unissued or may be treasury shares. Compensation expense is recognized on a straight-line basis over a three-year vesting period from date of grant. Stock option activity for the nine months ended October 4, 2020 and September 29, 2019 is as follows: Stock Options Total Weighted Exercis- Weighted Non- Weighted Outstanding at December 30, 2018 (1) 189,300 $ 13.98 166,867 $ 13.46 22,433 $ 17.85 Granted - - - - - - Vested (1) - - 22,433 17.85 (22,433 ) 17.85 Exercised - - - - - - Forfeited or cancelled (1) (7,500 ) 13.85 (7,500 ) 13.85 - - Outstanding at September 29, 2019 (1) 181,800 $ 13.99 181,800 $ 13.99 - $ - Outstanding at December 29, 2019 151,800 $ 14.02 151,800 $ 14.02 - $ - Granted - - - - - - Vested - - - - - - Exercised - - - - - - Forfeited or cancelled - - - - - - Outstanding at October 4, 2020 151,800 $ 14.02 151,800 $ 14.02 - $ - Aggregate Intrinsic Value $ - $ - $ - Aggregate Intrinsic Value $ - $ - $ - (1) The number and weighted average exercise price of options have been restated to reflect a one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. As of October 4, 2020 and September 29, 2019, there was no aggregate intrinsic value of the options outstanding because the options’ weighted average exercise prices of $14.02 and $13.99 per share, respectively, were greater than the average market prices of the common shares. There was no option expense recognized for the three months ended October 4, 2020 and September 29, 2019, and for the nine months ended October 4, 2020. Option expense recognized was $44,166 for the nine months ended September 29, 2019. As of October 4, 2020, there was no unrecognized compensation cost related to the options granted under the 2015 Stock Option Plan. |
Recent Accounting Standards
Recent Accounting Standards | 9 Months Ended |
Oct. 04, 2020 | |
Related Party Obligations Schedule Of Current Portions Details | |
Recent Accounting Standards | 14. Recent Accounting Standards On August 28, 2018, the Financial Accounting Standards Board issued a new standard, ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The new standard modifies the disclosure requirements on fair value measurements in Topic 820, “Fair Value Measurement.” Certain requirements were removed such as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, certain requirements were modified and certain disclosures were added such as the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period. The Company adopted this standard on December 30, 2019. Since this standard only revises disclosure requirements, the adoption of this standard for the year ending January 3, 2021 will not have a significant effect on the Company’s consolidated financial position, results of operations and cash flows. On December 18, 2019, the Financial Accounting Standards Board issued a new standard, ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This new guidance simplifies the accounting for income taxes by removing certain exceptions such as the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income/gain from other items; and the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The new guidance also simplifies the accounting for income taxes under certain circumstances such as requiring that an entity recognize a franchise tax that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of a business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; and requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. This standard will be effective for the Company on January 4, 2021. The Company is currently evaluating the effects this standard will have, if any, on its consolidated financial position, results of operations and cash flows. |
Loss per Common Share
Loss per Common Share | 9 Months Ended |
Oct. 04, 2020 | |
LOSS PER COMMON SHARE: | |
Loss per Common Share | 15. Loss per Common Share The following table sets forth the computation of loss per common share - basic and loss per common share – diluted Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Numerator Net loss allocable to common $ (1,822,633 ) $ (499,998 ) $ (3,395,389 ) $ (1,066,339 ) Denominator Denominator for basic earnings per 3,736,006 3,736,006 3,736,006 3,736,988 Weighted average effect of dilutive - - - - Denominator for dilutive earnings 3,736,006 3,736,006 3,736,006 3,736,988 Basic and Diluted Net Loss Per Net loss allocable to common $ (0.49 ) $ (0.13 ) $ (0.91 ) $ (0.29 ) Effect of dilutive securities - - - - Net loss allocable to common $ (0.49 ) $ (0.13 ) $ (0.91 ) $ (0.29 ) (1) Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect a one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. Due to the net loss allocable to common shareholders for the three and nine months ended October 4, 2020 and the three and nine months ended September 29, 2019, the calculations of basic and diluted loss per share were the same since including options to purchase shares of the Company’s common stock in the calculations of diluted loss per share would have been anti-dilutive. However, if diluted earnings per share had been reported for the three and nine months ended October 4, 2020 and the three and nine months ended September 29, 2019, the calculations would have excluded options to purchase 151,800 and 181,800 shares of common stock, respectively, because the options’ weighted average exercise prices of $14.02 and $13.99 per share, respectively, were greater than the average market prices of the common shares. |
Revenue
Revenue | 9 Months Ended |
Oct. 04, 2020 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue | 16. Revenue The Company recognizes revenue and related accounts receivable when obligations under the terms of a contract with a customer are satisfied, which includes the control of products transferring to the customer. For Uniroyal, this generally occurs when products are shipped and, for UGL, this generally occurs when the customer accepts delivery either at the Company’s U.K. facility or at a mutually agreed upon location. Revenue is measured as the amount of consideration the Company expects to receive in exchange for products transferred to the customer. The following table sets forth revenue disaggregated by the Company’s automotive and industrial sectors Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Revenue by product sector: Automotive $ 9,064,735 $ 14,133,223 $ 24,866,376 $ 46,433,893 Industrial 6,107,163 7,900,316 18,662,017 25,089,289 Total Revenue $ 15,171,898 $ 22,033,539 $ 43,528,393 $ 71,523,182 The following table sets forth revenue disaggregated by the geographic locations of the Company’s customers Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Revenue by customer location: North America $ 7,562,196 $ 11,213,393 $ 23,714,242 $ 35,527,931 Europe 6,529,779 9,362,032 17,139,460 31,968,702 Asia 885,984 1,383,081 2,214,264 3,799,104 Other 193,939 75,033 460,427 227,445 Total Revenue $ 15,171,898 $ 22,033,539 $ 43,528,393 $ 71,523,182 |
Restructuring Expenses
Restructuring Expenses | 9 Months Ended |
Oct. 04, 2020 | |
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodExercisable | |
Restructuring Expenses | 17. Restructuring Expenses In order to increase operating efficiencies and decrease costs, the Company developed a plan to restructure the operations and the management team of its foreign operations facility located in Earby, England. As part of the restructuring, during the quarter ended March 31, 2019, the Company entered into settlement agreements with certain members of that facility’s management team which terminated their continuing service. The Company recorded a charge of $343,003 for the cost of these agreements which is included in other operating expenses in the accompanying consolidated statements of operations for the nine months ended September 29, 2019. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 04, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events The Company has evaluated subsequent events occurring through the date that the financial statements were available to be issued for events requiring recording or disclosure in the October 4, 2020 consolidated financial statements. Subsequent to October 4, 2020, the Company received approximately $384,000 in a loan from its majority shareholder and $1.6 million in loans from automotive lenders with additional availability of approximately $400,000, which will provide more working capital to meet various short-term cash needs. |
Noncash Transactions and Supp_2
Noncash Transactions and Supplemental Disclosure of Cash Flow Information (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Noncash Transactions and Supplemental Disclosure of Cash Flow Information Text Block | The following is supplemental disclosure of cash paid for the nine months ended : October 4, 2020 September 29, 2019 Interest $ 1,272,124 $ 1,452,735 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: October 4, 2020 December 29, 2019 Raw materials $ 4,847,141 $ 5,430,125 Work-in-process 4,155,246 4,677,987 Finished goods 11,086,340 10,922,947 20,088,727 21,031,059 Less: Allowance for inventory obsolescence (2,120,831 ) (1,914,517 ) Total Inventories, net $ 17,967,896 $ 19,116,542 |
Other Long-term Assets (Tables)
Other Long-term Assets (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Other Assets, Noncurrent [Abstract] | |
Schedule of Other Long-term Assets | Other long-term assets consist of the following: October 4, 2020 December 29, 2019 Deferred tax asset, net $ 2,970,289 $ 2,694,550 Other 767,618 794,763 Total Other Long-term Assets $ 3,737,907 $ 3,489,313 |
Other Long-term Liabilities (Ta
Other Long-term Liabilities (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Other Liabilities, Noncurrent [Abstract] | |
Schedule of Other Long-term Liabilities | Other long-term liabilities consist of the following: October 4, 2020 December 29, 2019 Deferred tax liability $ 568,452 $ 709,945 Other 5,363 5,363 Total Other Long-term Liabilities $ 573,815 $ 715,308 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Long-term Debt, by Current and Noncurrent [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consists of the following: Interest Rate October 4, 2020 December 29, 2019 Notes Payable Wells Fargo Capital Finance, LLC Prime $ 837,866 $ 1,099,700 Lloyds Bank Commercial Finance Limited 4.23% 48,671 60,971 Lloyds Bank Commercial Finance Limited LIBOR + 3.50% 162,973 217,211 Automotive lenders 0.0% 1,545,538 - 2,595,048 1,377,882 Equipment Financing Obligation Kennet Equipment Leasing Limited 10.90% 52,462 238,514 Regents Capital Corporation 6.20%-7.24% 759,458 994,830 Lloyds Bank Commercial Finance Limited 3.95% 1,337,288 1,519,557 2,149,208 2,752,901 4,744,256 4,130,783 Less: Current portion (1,092,420 ) (1,238,541 ) Long-term Portion $ 3,651,836 $ 2,892,242 |
Related Party Obligations (Tabl
Related Party Obligations (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Related Party Obligations Tables | |
Schedule of Long-term Debt to Related Parties | Long-term debt to related parties consists of the following: Interest Rate October 4, 2020 December 29, 2019 Senior subordinated promissory note 9.25% $ 2,000,000 $ 2,000,000 Senior secured promissory note 10.00% 765,655 765,655 Subordinated secured promissory note 8.00% 225,000 225,000 Subordinated secured promissory note 8.00% - 200,000 Subordinated secured promissory note 0.00% 783,958 - 3,774,613 3,190,655 Less: Current portion - - Long-term Portion $ 3,774,613 $ 3,190,655 |
Schedule of Related Party Lease Obligation | The lease financing obligation consists of the following: October 4, 2020 December 29, 2019 Related party lease financing obligation $ 2,686,686 $ 2,780,487 Less: Current portion (145,214 ) (133,517 ) Long-term Portion $ 2,541,472 $ 2,646,970 |
Schedule of Related Party Obligations, Current | The current portion of the lease financing obligation and the remaining balance of related party short-term subordinated secured promissory notes are combined and are shown in current liabilities as related party obligation which consists of the following: October 4, 2020 December 29, 2019 Current portion of related party lease financing obligation $ 145,214 $ 133,517 Related party subordinated secured promissory note - 350,000 Related party subordinated secured promissory note - 125,000 Related Party Obligation $ 145,214 $ 608,517 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Leases [Abstract] | |
Schedule of Operating Lease Expense | The components of lease expense for the three and nine months ended October 4, 2020 and September 29, 2019 are as follows: Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Operating lease expense $ 249,069 $ 285,732 $ 746,045 $ 849,936 Finance lease expense: Amortization of right-of-use assets $ 49,803 $ 56,145 $ 158,658 $ 172,236 Interest on lease liabilities 7,090 12,960 24,441 44,483 Total finance lease expense $ 56,893 $ 69,105 $ 183,099 $ 216,719 |
Schedule of Cash Paid for Lease Liabilities | Cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended October 4, 2020 and September 29, 2019 are as follows: Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Operating cash flows from operating leases $ 249,920 $ 274,760 $ 670,267 $ 708,897 Operating cash flows from finance leases $ 7,090 $ 12,960 $ 24,441 $ 44,483 Financing cash flows from finance leases $ 71,720 $ 156,048 $ 289,948 $ 484,834 |
Schedule of Right-of-use assets Obtained in Exchange for Lease Obligations | Right-of-use assets obtained in exchange for lease obligations for the three and nine months ended October 4, 2020 and September 29, 2019 are as follows: Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Operating leases $ - $ - $ - $ 287,828 Finance leases $ - $ - $ - $ 13,197 |
Schedule of Supplemental Information Related to Operating Leases | Supplemental balance sheet and other information related to operating leases are as follows: October 4, 2020 December 29, 2019 Operating leases: Operating lease right-of-use assets $ 6,088,870 $ 6,607,963 Accrued expenses and other liabilities $ 438,547 $ 497,225 Operating lease liabilities 5,713,922 6,106,568 Total operating lease liabilities $ 6,152,469 $ 6,603,793 Weighted average remaining lease term 15.66 years 15.75 years Weighted average discount rate 7.23% 7.16% |
Schedule of Supplemental Information Related to Finance Leases | Supplemental balance sheet and other information related to finance leases are as follows: October 4, 2020 December 29, 2019 Finance leases: Property and equipment, net $ 2,281,411 $ 2,458,155 Current maturities of finance lease liabilities $ 269,528 $ 364,872 Finance lease liabilities, less current portion 294,955 492,613 Total finance lease liabilities $ 564,483 $ 857,485 Weighted average remaining lease term 2.1 years 2.5 years Weighted average discount rate 4.63% 4.73% |
Schedule of Maturities of Lease Liabilities | Maturities of operating and finance lease liabilities as of October 4, 2020 are as follows: Operating Leases Finance Leases Due in one year or less $ 864,803 $ 289,047 Due after one year through two years 827,359 246,458 Due after two years through three years 716,012 56,096 Due after three years through four years 521,663 1,822 Due after four years through five years 504,331 - Thereafter 7,533,702 - Total lease payments 10,967,870 593,423 Less: Interest (4,815,401 ) (28,940 ) Total $ 6,152,469 $ 564,483 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
AOCI Attributable to Parent [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive loss were as follows: Minimum Foreign Currency Total Balance at December 29, 2019 $ 5,694 $ (1,303,133 ) $ (1,297,439 ) Other comprehensive loss before - (112,180 ) (112,180 ) Balance at October 4, 2020 $ 5,694 $ (1,415,313 ) $ (1,409,619 ) |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Schedule of Stock Option Plan: | |
Schedule of Stock Options Activity | Stock option activity for the nine months ended October 4, 2020 and September 29, 2019 is as follows: Stock Options Total Weighted Exercis- Weighted Non- Weighted Outstanding at December 30, 2018 (1) 189,300 $ 13.98 166,867 $ 13.46 22,433 $ 17.85 Granted - - - - - - Vested (1) - - 22,433 17.85 (22,433 ) 17.85 Exercised - - - - - - Forfeited or cancelled (1) (7,500 ) 13.85 (7,500 ) 13.85 - - Outstanding at September 29, 2019 (1) 181,800 $ 13.99 181,800 $ 13.99 - $ - Outstanding at December 29, 2019 151,800 $ 14.02 151,800 $ 14.02 - $ - Granted - - - - - - Vested - - - - - - Exercised - - - - - - Forfeited or cancelled - - - - - - Outstanding at October 4, 2020 151,800 $ 14.02 151,800 $ 14.02 - $ - Aggregate Intrinsic Value $ - $ - $ - Aggregate Intrinsic Value $ - $ - $ - (1) The number and weighted average exercise price of options have been restated to reflect a one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Loss per Common Share (Tables)
Loss per Common Share (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Nonvested | |
Schedule of Loss per Common Share | The following table sets forth the computation of loss per common share - basic and loss per common share – diluted Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Numerator Net loss allocable to common $ (1,822,633 ) $ (499,998 ) $ (3,395,389 ) $ (1,066,339 ) Denominator Denominator for basic earnings per 3,736,006 3,736,006 3,736,006 3,736,988 Weighted average effect of dilutive - - - - Denominator for dilutive earnings 3,736,006 3,736,006 3,736,006 3,736,988 Basic and Diluted Net Loss Per Net loss allocable to common $ (0.49 ) $ (0.13 ) $ (0.91 ) $ (0.29 ) Effect of dilutive securities - - - - Net loss allocable to common $ (0.49 ) $ (0.13 ) $ (0.91 ) $ (0.29 ) (1) Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect a one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Oct. 04, 2020 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Disaggregated Revenue | The following table sets forth revenue disaggregated by the Company’s automotive and industrial sectors Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Revenue by product sector: Automotive $ 9,064,735 $ 14,133,223 $ 24,866,376 $ 46,433,893 Industrial 6,107,163 7,900,316 18,662,017 25,089,289 Total Revenue $ 15,171,898 $ 22,033,539 $ 43,528,393 $ 71,523,182 The following table sets forth revenue disaggregated by the geographic locations of the Company’s customers Three Months Ended Nine Months Ended October 4, September 29, October 4, September 29, Revenue by customer location: North America $ 7,562,196 $ 11,213,393 $ 23,714,242 $ 35,527,931 Europe 6,529,779 9,362,032 17,139,460 31,968,702 Asia 885,984 1,383,081 2,214,264 3,799,104 Other 193,939 75,033 460,427 227,445 Total Revenue $ 15,171,898 $ 22,033,539 $ 43,528,393 $ 71,523,182 |
Basis of Presentation (Details)
Basis of Presentation (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Jan. 27, 2020 | Oct. 04, 2020USD ($) | Jul. 05, 2020USD ($) | Sep. 29, 2019USD ($) | [1] | Oct. 04, 2020USD ($) | Sep. 29, 2019USD ($) | [1] | Oct. 01, 2020USD ($) | Oct. 01, 2020GBP (£) | Dec. 29, 2019USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Reverse stock split | one-for-five | ||||||||||
Accrued dividends | $ 3,154,042 | $ 3,154,042 | $ 788,599 | ||||||||
Gain from debt forgiveness | 33,824 | 2,217,500 | |||||||||
Amount received under Coronavirus Job Retention Scheme as reimbursement for compensation expense | $ 474,000 | 1,560,000 | |||||||||
Percentage of normal wages received by employees under Coronavirus Job Retention Scheme | 80.00% | ||||||||||
Charge against fee imposed under general and administrative expenses | $ 195,000 | $ 195,000 | |||||||||
Health and Safety Executive [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Estimated amount of fine to be imposed under legal advice | $ 195,000 | ||||||||||
Health and Safety Executive [Member] | British Pound Sterling [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Estimated amount of fine to be imposed under legal advice | £ | £ 150,000 | ||||||||||
COVID-19 [Member] | Paycheck Protection Program Loan [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from loan | $ 2,217,500 | ||||||||||
Interest rate | 1.00% | ||||||||||
Date of first periodic payment | Apr. 13, 2022 | ||||||||||
Wells Fargo Capital Finance, LLC [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from issuance of debt | 3,200,000 | ||||||||||
Principal shareholder [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from issuance of debt | 783,958 | ||||||||||
Loans from Automotive Lenders [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from issuance of debt | $ 1,545,538 | ||||||||||
[1] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Noncash Transactions and Supp_3
Noncash Transactions and Supplemental Disclosure of Cash Flow Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Oct. 04, 2020 | Sep. 29, 2019 | Oct. 04, 2020 | Sep. 29, 2019 | Dec. 29, 2019 | Jan. 02, 2019 | |||||
Line of Credit Facility [Line Items] | ||||||||||
Gain from debt forgiveness through paycheck protection program funding | $ 33,824 | [1] | $ 2,217,500 | [1] | ||||||
New equipment leases during the year | 379,126 | |||||||||
Interest | 1,272,124 | $ 1,452,735 | ||||||||
Right-of-use assets | 6,088,870 | [2] | 6,088,870 | [2] | $ 6,607,963 | $ 6,815,376 | ||||
Operating lease liabilities | 6,152,469 | $ 6,152,469 | $ 6,603,793 | $ 6,815,376 | ||||||
Owned life insurance policies [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Proceeds from issuance of debt | 130,000 | 249,051 | ||||||||
Shown net of payments | $ 101,213 | $ 121,611 | ||||||||
Weighted average interest rate | 3.65% | 3.65% | ||||||||
[1] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. | |||||||||
[2] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) | Oct. 04, 2020 | Dec. 29, 2019 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 4,847,141 | $ 5,430,125 | |
Work-in-process | 4,155,246 | 4,677,987 | |
Finished goods | 11,086,340 | 10,922,947 | |
Inventories gross | 20,088,727 | 21,031,059 | |
Less: Allowance for inventory obsolescence | (2,120,831) | (1,914,517) | |
Total Inventories, net | $ 17,967,896 | [1] | $ 19,116,542 |
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Other Long-term Assets (Schedul
Other Long-term Assets (Schedule of Other Long-term Assets) (Details) - USD ($) | Oct. 04, 2020 | Dec. 29, 2019 | |
Other Assets, Noncurrent [Abstract] | |||
Deferred tax asset, net | $ 2,970,289 | $ 2,694,550 | |
Other | 767,618 | 794,763 | |
Total Other Long-term Assets | $ 3,737,907 | [1] | $ 3,489,313 |
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Other Long-term Liabilities (Sc
Other Long-term Liabilities (Schedule of Other Long-term Liabilities) (Details) - USD ($) | Oct. 04, 2020 | Dec. 29, 2019 | |
Other Liabilities, Noncurrent [Abstract] | |||
Deferred tax liability | $ 568,452 | $ 709,945 | |
Other | 5,363 | 5,363 | |
Total Other Long-term Liabilities | $ 573,815 | [1] | $ 715,308 |
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Lines of Credit (Details)
Lines of Credit (Details) | 9 Months Ended | |||
Oct. 04, 2020USD ($) | Oct. 04, 2020GBP (£) | Dec. 29, 2019USD ($) | Dec. 29, 2019GBP (£) | |
Wells Fargo Capital Finance, LLC [Member] | ||||
Line of credit maximum amount | $ 30,000,000 | |||
Line of credit premium over base rate | 2.25% | |||
Line of credit interest rate description | Interest is payable monthly at the Eurodollar rate plus 2.25% or Wells Fargo Capital Finance, LLC’s prime rate at the Company’s election on outstanding balances up to $6,000,000 and prime rate on amounts in excess of $6,000,000. | |||
Line of credit amount outstanding | $ 10,566,665 | $ 10,328,913 | ||
Line of credit amount additional availability | 368,000 | |||
Line of credit with total cash balance | 237,498 | |||
Line of credit liquidity amount | $ 605,000 | |||
Line of credit, maturity date | Jun. 15, 2023 | |||
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | ||||
Line of credit maximum amount | $ 13,600,000 | |||
Line of credit interest rate description | The line has several tranches based on currency or underlying security. Interest is payable monthly at the base rate (U.K. LIBOR or Lloyds Bank Base Rate as published) plus 1.95% to 2.45% depending on the tranche. | |||
Line of credit amount outstanding | $ 7,885,824 | $ 10,201,860 | ||
Line of credit amount additional availability | 1,300,000 | |||
Line of credit with total cash balance | 507,370 | |||
Line of credit liquidity amount | $ 1,800,000 | |||
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | British Pound Sterling [Member] | ||||
Line of credit maximum amount | £ | £ 10,500,000 | |||
Line of credit amount outstanding | £ | £ 6,095,747 | £ 7,787,002 | ||
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | Minimum [Member] | ||||
Line of credit premium over base rate | 1.95% | |||
Lloyds Bank Commercial Finance Limited [Member] | Wardle Storeys [Member] | Maximum [Member] | ||||
Line of credit premium over base rate | 2.45% |
Long-Term Debt (Schedule of Lon
Long-Term Debt (Schedule of Long-term debt) (Details) - USD ($) | Oct. 04, 2020 | Dec. 29, 2019 | |
Debt Instrument [Line Items] | |||
Long-term debt | $ 4,744,256 | $ 4,130,783 | |
Less: Current portion | (1,092,420) | [1] | (1,238,541) |
Long-Term Portion | 3,651,836 | [1] | 2,892,242 |
Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 2,595,048 | 1,377,882 | |
Notes Payable [Member] | Wells Fargo Capital Finance, LLC [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 837,866 | 1,099,700 | |
Notes Payable [Member] | Lloyds Bank Commercial Finance Limited [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 48,671 | 60,971 | |
Notes Payable [Member] | Lloyds Bank Commercial Finance Limited [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 162,973 | 217,211 | |
Notes Payable [Member] | Automotive lenders [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 1,545,538 | ||
Equipment Financing Obligation [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 2,149,208 | 2,752,901 | |
Equipment Financing Obligation [Member] | Lloyds Bank Commercial Finance Limited [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 1,337,288 | 1,519,557 | |
Equipment Financing Obligation [Member] | Kennet Equipment Leasing Limited [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | 52,462 | 238,514 | |
Equipment Financing Obligation [Member] | Regents Capital Corporation [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 759,458 | $ 994,830 | |
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Long-Term Debt (Schedule of L_2
Long-Term Debt (Schedule of Long-term debt Interest Rate) (Details) | 3 Months Ended | 9 Months Ended |
Oct. 04, 2020USD ($) | Oct. 04, 2020 | |
Notes Payable [Member] | Wells Fargo Capital Finance, LLC [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate basis | Prime | |
Notes Payable [Member] | Lloyds Bank Commercial Finance Limited [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 4.23% | 4.23% |
Notes Payable [Member] | Lloyds Bank Commercial Finance Limited [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt, interest rate above basis | 3.50% | |
Long-term debt, interest rate basis | LIBOR | |
Notes Payable [Member] | Automotive lenders [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 0.00% | 0.00% |
Equipment Financing Obligation [Member] | Kennet Equipment Leasing Limited [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 10.90% | 10.90% |
Equipment Financing Obligation [Member] | Regents Capital Corporation [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 6.20% | 6.20% |
Equipment Financing Obligation [Member] | Regents Capital Corporation [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 7.24% | 7.24% |
Equipment Financing Obligation [Member] | Lloyds Bank Commercial Finance Limited [Member] | ||
Debt Instrument [Line Items] | ||
Long term debt, interest rate | 3.95% | 3.95% |
Loans from Automotive Lenders [Member] | ||
Debt Instrument [Line Items] | ||
Proceeds from issuance of debt | $ 1,545,538 |
Related Party Obligations (Narr
Related Party Obligations (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Mar. 20, 2020 | Oct. 04, 2020 | Oct. 04, 2020 | Sep. 29, 2019 | |
Repayments of related party debt | $ 968,801 | $ 628,023 | ||
Company's Majority Owners [Member] | ||||
Repayments of related party debt | $ 200,000 | |||
Long-term debt, interest rate | 14.95% | |||
Long-term debt, periodic payment | $ 45,533 | |||
Long-term debt, security deposit | $ 267,500 | $ 267,500 | ||
Long-term debt, maturity date | Oct. 31, 2033 | |||
Subordinated secured promissory note [Member] | ||||
Repayments of related party debt | $ 200,000 | |||
Long-term debt, interest rate | 10.00% | |||
Senior subordinated promissory note [Member] | ||||
Long-term debt, interest rate | 9.25% | |||
Long-term debt, maturity date | Jan. 15, 2022 | |||
Subordinated secured promissory note [Member] | ||||
Long-term debt, interest rate | 8.00% | |||
Long-term debt, periodic payment | $ 783,958 | |||
Long-term debt, maturity date | Apr. 5, 2023 |
Related Party Obligations (Long
Related Party Obligations (Long-term debt to related parties) (Details) - USD ($) | 9 Months Ended | ||
Oct. 04, 2020 | Dec. 29, 2019 | ||
Total debt to related parties | $ 3,774,613 | $ 3,190,655 | |
Less: Current portion of debt to related parties | |||
Total Long-term Debt to Related Parties | 3,774,613 | [1] | 3,190,655 |
Senior subordinated promissory note [Member] | |||
Total debt to related parties | $ 2,000,000 | 2,000,000 | |
Long-term debt, interest rate | 9.25% | ||
Senior secured promissory note [Member] | |||
Total debt to related parties | $ 765,655 | 765,655 | |
Long-term debt, interest rate | 10.00% | ||
Subordinated secured promissory note [Member] | |||
Total debt to related parties | $ 225,000 | 225,000 | |
Long-term debt, interest rate | 8.00% | ||
Subordinated secured promissory note 2 [Member] | |||
Total debt to related parties | 200,000 | ||
Long-term debt, interest rate | 8.00% | ||
Subordinated secured promissory note 3 [Member] | |||
Total debt to related parties | $ 783,958 | ||
Long-term debt, interest rate | 0.00% | ||
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Related Party Obligations (Leas
Related Party Obligations (Lease Financing Obligation) (Details) - USD ($) | Oct. 04, 2020 | Dec. 29, 2019 | |
Related Party Lease Financing Obligation Details | |||
Related party lease financing obligation | $ 2,686,686 | $ 2,780,487 | |
Less: Current portion | (145,214) | (133,517) | |
Long-Term Portion | $ 2,541,472 | [1] | $ 2,646,970 |
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Related Party Obligations (Curr
Related Party Obligations (Current Related Party Obligations) (Details) - USD ($) | Oct. 04, 2020 | Dec. 29, 2019 | |
Related Party Obligations Current Related Party Obligations Details | |||
Current portion of related party lease financing obligation | $ 145,214 | $ 133,517 | |
Related party subordinated secured promissory note | 350,000 | ||
Related party subordinated secured promissory note | 125,000 | ||
Related Party Obligation | $ 145,214 | [1] | $ 608,517 |
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Leases (Schedule of Operating L
Leases (Schedule of Operating Lease Expense) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2020 | Sep. 29, 2019 | Oct. 04, 2020 | Sep. 29, 2019 | |
Lessee Disclosure [Abstract] | ||||
Operating lease expense | $ 249,069 | $ 285,732 | $ 746,045 | $ 849,936 |
Finance lease expense: | ||||
Amortization of right-of-use assets | 49,803 | 56,145 | 158,658 | 172,236 |
Interest on lease liabilities | 7,090 | 12,960 | 24,441 | 44,483 |
Total finance lease expense | $ 56,893 | $ 69,105 | $ 183,099 | $ 216,719 |
Leases (Schedule of Cash Paid f
Leases (Schedule of Cash Paid for Lease Liabilities) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2020 | Sep. 29, 2019 | Oct. 04, 2020 | Sep. 29, 2019 | |
Lessee Disclosure [Abstract] | ||||
Operating cash flows from operating leases | $ 249,920 | $ 274,760 | $ 670,267 | $ 708,897 |
Operating cash flows from finance leases | 7,090 | 12,960 | 24,441 | 44,483 |
Financing cash flows from finance leases | $ 71,720 | $ 156,048 | $ 289,948 | $ 484,834 |
Leases (Schedule of Right-of-us
Leases (Schedule of Right-of-use assets Obtained in Exchange for Lease Obligations) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 05, 2020 | Sep. 29, 2019 | Oct. 04, 2020 | Sep. 29, 2019 | |
Lessee Disclosure [Abstract] | ||||
Operating leases | $ 287,828 | |||
Finance leases | $ 13,197 |
Leases (Schedule of Supplementa
Leases (Schedule of Supplemental Information Related to Operating Leases) (Details) - USD ($) | Oct. 04, 2020 | Dec. 29, 2019 | Jan. 02, 2019 | |
Operating leases: | ||||
Operating lease right-of-use assets | $ 6,088,870 | [1] | $ 6,607,963 | $ 6,815,376 |
Accrued expenses and other liabilities | 438,547 | 497,225 | ||
Operating lease liabilities | 5,713,922 | [1] | 6,106,568 | |
Total operating lease liabilities | $ 6,152,469 | $ 6,603,793 | $ 6,815,376 | |
Weighted average remaining lease term | 15 years 7 months 28 days | 15 years 9 months | ||
Weighted average discount rate | 7.23% | 7.16% | ||
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Leases (Schedule of Supplemen_2
Leases (Schedule of Supplemental Information Related to Finance Leases) (Details) - USD ($) | Oct. 04, 2020 | Dec. 29, 2019 | |
Finance leases: | |||
Property and equipment, net | $ 2,281,411 | $ 2,458,155 | |
Current maturities of finance lease liabilities | 269,528 | [1] | 364,872 |
Finance lease liabilities, less current portion | 294,955 | 492,613 | |
Total finance lease liabilities | $ 564,483 | $ 857,485 | |
Weighted average remaining lease term | 2 years 1 month 6 days | 2 years 6 months | |
Weighted average discount rate | 4.63% | 4.73% | |
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Leases (Schedule of Maturities
Leases (Schedule of Maturities of Lease Liabilities) (Details) - USD ($) | Oct. 04, 2020 | Dec. 29, 2019 | Jan. 02, 2019 |
Operating leases | |||
Due in one year or less | $ 864,803 | ||
Due after one year through two years | 827,359 | ||
Due after two years through three years | 716,012 | ||
Due after three years through four years | 521,663 | ||
Due after four years through five years | 504,331 | ||
Thereafter | 7,533,702 | ||
Total lease payments | 10,967,870 | ||
Less: Interest | (4,815,401) | ||
Total operating lease liabilities | 6,152,469 | $ 6,603,793 | $ 6,815,376 |
Finance Leases | |||
Due in one year or less | 289,047 | ||
Due after one year through two years | 246,458 | ||
Due after two years through three years | 56,096 | ||
Due after three years through four years | 1,822 | ||
Due after four years through five years | |||
Thereafter | |||
Total lease payments | 593,423 | ||
Less: Interest | (28,940) | ||
Total finance lease liabilities | $ 564,483 | $ 857,485 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) | 9 Months Ended | |
Oct. 04, 2020USD ($) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | $ (1,297,439) | |
Other comprehensive loss before reclassifications | (112,180) | |
Balance | (1,409,619) | [1] |
Minimum Benefit Liability Adjustments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | 5,694 | |
Other comprehensive loss before reclassifications | ||
Balance | 5,694 | |
Foreign Currency Translation Adjustment [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance | (1,303,133) | |
Other comprehensive loss before reclassifications | (112,180) | |
Balance | $ (1,415,313) | |
[1] | The amounts in common stock and additional paid-in capital were adjusted to reflect the one-for-five reverse stock split ("reverse stock split") as of February 24, 2020, the effective date of the reverse stock split. See Note 1 for additional information. |
Stock Based Compensation (Narra
Stock Based Compensation (Narrative) (Details) - USD ($) | 9 Months Ended | |
Oct. 04, 2020 | Sep. 29, 2019 | |
Stock-based compensation expense | $ 44,166 | |
Minimum [Member] | ||
Weighted average option exercise price | $ 14.02 | $ 14.02 |
Maximum [Member] | ||
Weighted average option exercise price | $ 13.99 | $ 13.99 |
Stock Based Compensation (Optio
Stock Based Compensation (Option Activity) (Details) - USD ($) | 9 Months Ended | |||
Oct. 04, 2020 | Sep. 29, 2019 | |||
Total Stock Options | ||||
Outstanding | 151,800 | 189,300 | [1] | |
Granted | [1] | |||
Vested | [1] | |||
Exercised | ||||
Forfeited or cancelled | (7,500) | [1] | ||
Outstanding | 151,800 | 181,800 | [1] | |
Total Weighted Average Exercise Price | ||||
Outstanding | $ 14.02 | $ 13.98 | [1] | |
Granted | [1] | |||
Vested | [1] | |||
Exercised | ||||
Forfeited or cancelled | 13.85 | [1] | ||
Outstanding | $ 14.02 | $ 13.99 | [1] | |
Exercisable | ||||
Outstanding | 151,800 | 166,867 | [1] | |
Granted | [1] | |||
Vested | 22,433 | [1] | ||
Exercised | ||||
Forfeited or cancelled | (7,500) | [1] | ||
Outstanding | 151,800 | 181,800 | [1] | |
Exercisable Weighted Average Exercise Price | ||||
Outstanding | $ 14.02 | $ 13.46 | [1] | |
Granted | [1] | |||
Vested | 17.85 | [1] | ||
Exercised | ||||
Forfeited or cancelled | 13.85 | [1] | ||
Outstanding | $ 14.02 | $ 13.99 | [1] | |
Nonvested | ||||
Outstanding | 22,433 | [1] | ||
Granted | [1] | |||
Vested | (22,433) | [1] | ||
Forfeited or cancelled | [1] | |||
Outstanding | [1] | |||
Nonvested Weighted Average Exercise Price | ||||
Outstanding | $ 17.85 | [1] | ||
Granted | [1] | |||
Vested | 17.85 | [1] | ||
Forfeited or cancelled | [1] | |||
Outstanding | [1] | |||
Aggregate intrinsic value | ||||
Outstanding | ||||
Exercisable | ||||
Nonvested | ||||
[1] | The number and weighted average exercise price of options have been restated to reflect a one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Loss per Common Share (Narrativ
Loss per Common Share (Narrative) (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||||
Oct. 04, 2020 | Sep. 29, 2019 | Oct. 04, 2020 | Sep. 29, 2019 | |||
Weighted average effect of dilutive securities | [1] | [1] | ||||
Option exercise price | ||||||
Stock Option [Member] | ||||||
Weighted average effect of dilutive securities | 151,800 | 181,800 | 151,800 | 181,800 | ||
Stock Option [Member] | Minimum [Member] | ||||||
Option exercise price | $ 14.02 | $ 14.02 | ||||
Stock Option [Member] | Maximum [Member] | ||||||
Option exercise price | $ 13.99 | $ 13.99 | ||||
[1] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Loss per Common Share (Schedule
Loss per Common Share (Schedule of Loss per Common Share) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Oct. 04, 2020 | Sep. 29, 2019 | [1] | Oct. 04, 2020 | Sep. 29, 2019 | [1] | |
Numerator | ||||||
Net loss allocable to common shareholders | $ (1,822,633) | $ (499,998) | $ (3,395,389) | $ (1,066,339) | ||
Denominator | ||||||
Denominator for basic earnings per share - weighted average shares outstanding | 3,736,006 | 3,736,006 | 3,736,006 | 3,736,988 | ||
Weighted average effect of dilutive securities | ||||||
Denominator for dilutive earnings per share - weighted average shares outstanding | 3,736,006 | 3,736,006 | 3,736,006 | 3,736,988 | ||
Basic and Diluted Net Loss Per Share | ||||||
Net loss allocable to common shareholders | $ (0.49) | $ (0.13) | $ (0.91) | $ (0.29) | ||
Effect of dilutive securities | ||||||
Net loss allocable to common shareholders | $ (0.49) | $ (0.13) | $ (0.91) | $ (0.29) | ||
[1] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Revenue (Schedule of Disaggrega
Revenue (Schedule of Disaggregated Revenue) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Oct. 04, 2020 | Sep. 29, 2019 | Oct. 04, 2020 | Sep. 29, 2019 | |||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue | $ 15,171,898 | $ 22,033,539 | [1] | $ 43,528,393 | $ 71,523,182 | [1] |
Automotive Sector [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue | 9,064,735 | 14,133,223 | 24,866,376 | 46,433,893 | ||
Industrial Sector [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue | 6,107,163 | 7,900,316 | 18,662,017 | 25,089,289 | ||
North America [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue | 7,562,196 | 11,213,393 | 23,714,242 | 35,527,931 | ||
Europe [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue | 6,529,779 | 9,362,032 | 17,139,460 | 31,968,702 | ||
Asia [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue | 885,984 | 1,383,081 | 2,214,264 | 3,799,104 | ||
Other [Member] | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total revenue | $ 193,939 | $ 75,033 | $ 460,427 | $ 227,445 | ||
[1] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Restructuring Expenses (Details
Restructuring Expenses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Oct. 04, 2020 | Sep. 29, 2019 | Oct. 04, 2020 | Sep. 29, 2019 | |||
Restructuring Expenses Details Abstract | ||||||
Other operating expenses | [1] | $ 343,003 | [1] | |||
[1] | Share and per share amounts for the three and nine months ended September 29, 2019 have been restated to reflect the one-for-five reverse stock split that became effective on February 24, 2020. See Note 1 for additional information. |
Subsequent Events (Details)
Subsequent Events (Details) | 9 Months Ended |
Oct. 04, 2020USD ($) | |
Loan from majority shareholder [Member] | |
Subsequent Event [Line Items] | |
Proceeds from issuance of debt | $ 384,000 |
Loans from other stakeholders [Member] | |
Subsequent Event [Line Items] | |
Proceeds from issuance of debt | 1,600,000 |
Additional availability [Member] | |
Subsequent Event [Line Items] | |
Proceeds from issuance of debt | $ 400,000 |