Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Feb. 28, 2015 | Apr. 14, 2015 | |
Document Information [Line Items] | ||
Entity Registrant Name | Staffing 360 Solutions, Inc. | |
Entity Central Index Key | 1499717 | |
Current Fiscal Year End Date | -26 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | STAF | |
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 28-Feb-15 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2015 | |
Entity Common Stock, Shares Outstanding | 43,117,408 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Feb. 28, 2015 | 31-May-14 |
Current Assets: | ||
Cash and equivalents | $560,975 | $1,295,733 |
Accounts receivable, net | 17,331,232 | 16,387,565 |
Deferred financing, net | 94,128 | 342,745 |
Prepaid expenses and other current assets | 838,205 | 827,481 |
Total Current Assets | 18,824,540 | 18,853,524 |
Property and equipment, net | 415,131 | 449,257 |
Goodwill | 8,399,786 | 8,318,637 |
Intangible assets, net | 11,178,893 | 13,803,305 |
Other assets | 1,747,929 | 1,523,585 |
Assets from discontinued operations, net | 0 | 47,154 |
Total Assets | 40,566,279 | 42,995,462 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 6,554,318 | 5,369,223 |
Accounts payable and accrued expenses - Related parties | 74,674 | 136,914 |
Accrued payroll and taxes | 3,949,741 | 3,659,891 |
Convertible notes payable, net | 939,829 | 620,172 |
Promissory notes | 1,336,511 | 1,578,291 |
Earn-out liability | 281,554 | 850,216 |
Accounts receivable financing | 12,180,088 | 10,798,713 |
Bonds payable, net | 1,281,126 | 1,499,660 |
Other current liabilities - Due to sellers | 0 | 1,347,215 |
Other current liabilities | 102,811 | 188,048 |
Total Current Liabilities | 26,700,652 | 26,048,343 |
Interest payable | 98,482 | 5,448 |
Earn-out liability | 492,720 | 1,916,212 |
Promissory notes | 1,219,425 | 4,406,049 |
Total Liabilities | 28,511,279 | 32,376,052 |
Stockholders' Equity: | ||
Preferred stock, $0.00001 par value, 20,000,000 shares authorized; 0 shares issued and outstanding as of February 28, 2015 and May 31, 2014, respectively | 0 | 0 |
Common stock, $0.00001 par value, 200,000,000 shares authorized; 42,877,588 and 32,950,537 shares issued and outstanding as of February 28, 2015 and May 31, 2014, respectively | 429 | 329 |
Additional paid in capital | 41,419,935 | 26,411,211 |
Accumulated other comprehensive loss | -26,553 | -37,549 |
Accumulated deficit | -30,035,058 | -16,337,118 |
Total Staffing 360 Solutions, Inc. Stockholders' Equity | 11,358,753 | 10,036,873 |
Non-controlling interest | 696,247 | 582,537 |
Total Equity | 12,055,000 | 10,619,410 |
Total Liabilities and Stockholders' Equity | $40,566,279 | $42,995,462 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Feb. 28, 2015 | 31-May-14 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $0.00 | $0.00 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 42,877,588 | 32,950,537 |
Common Stock, Shares, Outstanding | 42,877,588 | 32,950,537 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Revenue | $30,963,598 | $15,799,695 | $96,640,920 | $16,630,711 |
Cost of Revenue | 25,438,029 | 12,592,706 | 79,609,794 | 13,085,815 |
Gross Profit | 5,525,569 | 3,206,989 | 17,031,126 | 3,544,896 |
Operating Expenses: | ||||
Salaries and wages | 3,710,329 | 1,668,994 | 11,580,640 | 2,097,349 |
Stock based compensation | 182,904 | 280,485 | 584,379 | 363,610 |
Professional fees | 581,479 | 357,897 | 1,965,471 | 1,064,168 |
Consulting fees - Related parties | 68,456 | 100,000 | 358,380 | 370,000 |
General and administrative expenses | 1,283,959 | 1,559,172 | 3,834,524 | 2,016,448 |
Depreciation and amortization | 657,435 | 243,938 | 2,048,934 | 407,789 |
Impairment of intangibles | 0 | 0 | 703,222 | 0 |
Salaries and wages - Restructuring | 0 | 0 | 74,619 | 0 |
Professional fees - Restructuring | -21,838 | 0 | 771,750 | 0 |
Total Operating Expenses | 6,462,724 | 4,210,486 | 21,921,919 | 6,319,364 |
Loss from Operations | -937,155 | -1,003,497 | -4,890,793 | -2,774,468 |
Other Income / (Expenses): | ||||
Other income / (loss) | -15,409 | 0 | 145,284 | 0 |
Interest expense | -346,322 | -178,044 | -1,313,007 | -199,349 |
Amortization of deferred financing | -36,676 | -204,972 | -545,984 | -239,303 |
Amortization of beneficial conversion feature | -41,081 | -73,264 | -2,387,786 | -90,176 |
Amortization of debt discount | -36,031 | -245,089 | -1,062,829 | -358,077 |
Gain on change of fair value of earn-out liability | 840,455 | 0 | 840,455 | 0 |
Gain on conversion of earn-out liability - Restructuring | 485,835 | 0 | 485,835 | 0 |
Interest expense - Restructuring | 0 | 0 | -2,541,853 | 0 |
Gain / (loss) on settlement of debt - Restructuring | -59,284 | 0 | 754,628 | 0 |
Modification expense - Restructuring | -5,215 | 0 | -3,087,662 | 0 |
Loss before Provision for Income Tax | -150,883 | -1,704,866 | -13,603,712 | -3,661,373 |
Income tax benefit / (expense) | -32,359 | 0 | 66,636 | 0 |
Net Loss from Continued Operations | -183,242 | -1,704,866 | -13,537,076 | -3,661,373 |
Net Income / (Loss) from Discontinued Operations | -392 | -58,496 | -47,154 | 46,608 |
Net Loss | -183,634 | -1,763,362 | -13,584,230 | -3,614,765 |
Net income / (loss) attributable to non-controlling interest | -102,845 | 0 | 113,710 | 0 |
Net Loss Attributable to Staffing 360 Solutions, Inc. | -80,789 | -1,763,362 | -13,697,940 | -3,614,765 |
Other Comprehensive Income / (Loss) | ||||
Foreign exchange translation | 44,654 | -17,575 | 56,653 | -17,575 |
Comprehensive Loss | ($138,980) | ($1,780,937) | ($13,527,577) | ($3,632,340) |
Basic and Diluted Income / (Loss) from Continued Operations (in dollars per share) | $0 | ($0.08) | ($0.37) | ($0.23) |
Basic and Diluted Income / (Loss) from Discontinued Operations (in dollars per share) | $0 | $0 | $0 | $0 |
Basic and Diluted Income / (Loss) per Share (in dollars per share) | $0 | ($0.08) | ($0.37) | ($0.23) |
Weighted Average Shares Outstanding - Basic and Diluted (in shares) | 41,034,837 | 21,252,301 | 36,673,143 | 15,805,916 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | ($13,584,230) | ($3,614,765) |
Adjustments to reconcile net loss from operations to net cash used in operating activities: | ||
Net income / (loss) from discontinued operations | -47,154 | 46,608 |
Depreciation | 125,512 | 52,379 |
Write-off of fixed assets | 29,910 | 0 |
Amortization of intangible assets | 1,921,190 | 355,345 |
Amortization of deferred finance costs | 545,984 | 239,303 |
Amortization of debt discount | 1,062,829 | 358,077 |
Amortization of beneficial conversion feature | 2,387,786 | 90,176 |
Change in fair value of goodwill | -81,149 | 0 |
Impairment of intangibles | 703,222 | 0 |
Share-based payment expense | 971,230 | 241,584 |
Warrants issued as interest to note holders | 2,143,300 | 0 |
Modification expense | 3,087,662 | 0 |
Gain on settlement of debt | -754,628 | 0 |
Gain on fair value adjustment of earn-out liability | -840,455 | 0 |
Gain on conversion of earn-out liability | -485,835 | 0 |
Interest paid in common stock | 349,537 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -294,965 | 889,100 |
Prepaid expenses | 43,121 | 109,697 |
Deferred financing | -269,535 | 0 |
Other assets | -224,344 | -99,172 |
Accounts payable and accrued expenses | 1,768,555 | -228,229 |
Accounts payable - Related parties | -62,240 | -166,089 |
Accrued payroll and taxes | 146,128 | -227,460 |
Other current liabilities | -85,237 | 71,722 |
Interest payable - Long term | 93,034 | 0 |
NET CASH USED IN OPERATING ACTIVITIES - CONTINUING OPERATIONS | -1,454,975 | -1,928,332 |
NET CASH PROVIDED BY OPERATING ACTIVITIES - DISCONTINUED OPERATIONS | 10,800 | 136,509 |
NET CASH USED IN OPERATING ACTIVITIES | -1,444,175 | -1,838,431 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition related cash acquired | 0 | 615,075 |
Acquisition - Payments due to seller | -1,347,215 | 0 |
Payment towards earn-out liability | -325,649 | -407,194 |
Purchase of fixed assets | -115,947 | -67,200 |
Cash relinquished in sale of subsidiary | -28,977 | 0 |
Cash paid for purchase of subsidiary | 0 | -8,934,001 |
NET CASH USED IN INVESTING ACTIVITIES | -1,817,788 | -8,793,320 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from convertible notes payable | 404,000 | 1,655,000 |
Repayment of convertible notes payable | -300,000 | -406,253 |
Proceeds from promissory notes payable | 1,705,000 | 340,000 |
Repayment of promissory notes | -2,252,568 | 0 |
Proceeds from accounts receivable financing | 919,881 | 1,408,650 |
Payments to private placement agent | 0 | -1,099,580 |
Proceeds from pipe financing | 0 | 9,359,000 |
Proceeds from sale of bonds | 2,041,500 | 0 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 2,517,813 | 11,256,817 |
NET INCREASE / (DECREASE) IN CASH | -744,150 | 625,066 |
Effect of variation of exchange rate on cash held in foreign currency | 9,392 | 0 |
CASH - Beginning of period | 1,295,733 | 175,043 |
CASH - End of period | 560,975 | 800,109 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest | 143,822 | 3,189 |
Income taxes | 77,378 | 0 |
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Intangible asset | 0 | 3,128,709 |
Goodwill | 0 | 13,361,118 |
Assets acquired from purchase of subsidiary | 0 | 2,209,595 |
Conversion of accounts payable to common stock | 32,870 | 99,710 |
Earn-out liability | 0 | 2,100,000 |
Common stock issued to placement agent | 27,832 | 0 |
Beneficial conversion feature in relation to issuance of debt | 845,499 | 0 |
Debt discount in relation to issuance of debt | 420,992 | 0 |
Conversion of accrued interest to common stock | 203,343 | 4,284 |
Conversion of a convertible note payable | 600,000 | 50,000 |
Conversion of interest related to a convertible note payable | 0 | 4,274 |
Convertible Bonds [Member] | ||
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Conversion of a convertible note payable | 3,528,500 | 0 |
Common Stock [Member] | ||
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares issued | 0 | 3,003,615 |
Convertible Promissory Notes [Member] | ||
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares issued | 123,345 | 387,225 |
Promissory Notes [Member] | ||
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares issued | 0 | 61,026 |
Conversion of a convertible note payable | 2,994,202 | 0 |
Bonds [Member] | ||
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares issued | 360,372 | 0 |
Long-Term Promissory Note [Member] | ||
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares issued | $0 | $3,964,949 |
ORGANIZATION_AND_DESCRIPTION_O
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Feb. 28, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS |
Staffing 360 Solutions, Inc. (“we,” “us,” “our,” “Staffing 360,” or the “Company”) was incorporated in the State of Nevada on December 22, 2009, as Golden Fork Corporation (“Golden Fork”), which changed its name to Staffing 360 Solutions, Inc., trading symbol “STAF”, on March 16, 2012. | |
On July 31, 2012, the Company formed Staffing 360 Alliance, Inc. (“Staffing Alliance”), a wholly owned subsidiary, incorporated in the State of Nevada, which had operations for a short period of time before ceasing operations in February 2014. | |
On April 26, 2013, the Company purchased all of the issued and outstanding common stock (the “TRG Acquisition”) of The Revolution Group, Ltd. (“TRG”), a Massachusetts corporation. The aggregate consideration paid for the TRG Acquisition was approximately $2.5 million, payable in cash, common stock and a percentage of future gross profits. TRG was a wholly owned subsidiary of the Company and operated under the name “Cyber 360, Inc.” until it was sold effective January 1, 2015. (See Note 14 - Acquisitions). | |
On June 28, 2013, the Company filed a Certificate of Amendment to its Articles of Incorporation with the State of Nevada, whereby the authorized number of common stock shares was increased from 75,000,000 to 200,000,000. Additionally, this amendment authorized the Company to issue up to 20,000,000 shares of Preferred Stock. | |
On November 4, 2013, the Company purchased all of the issued and outstanding common stock (the “CSI Acquisition”) of Control Solutions International, Inc. (“CSI”), a Florida corporation, and its wholly owned subsidiary, Canada Control Solutions International, Inc., an Ontario, Canada corporation (“CCSI”), from NewCSI, Inc., a Delaware corporation (“NCSI”), and the shareholders of NCSI. The aggregate consideration paid was approximately $3.5 million, payable in cash, common stock and a percentage of future gross profits. CSI is a wholly owned subsidiary of the Company. (See Note 14 - Acquisitions). | |
On January 3, 2014, the Company purchased all of the issued and outstanding common stock of Initio International Holdings Limited (“Initio”), a company organized under the laws of England and Wales, and its respective subsidiaries, including but not limited to Monroe Staffing Services, LLC, a Delaware limited liability company (“Monroe,” and together with all of Initio’s subsidiaries, the “Subsidiaries”). The aggregate consideration paid was approximately $13.29 million, payable in cash, common stock and promissory notes. Initio and its Subsidiaries are now wholly owned subsidiaries of the Company. Subsequently, Initio was renamed Staffing 360 Solutions Limited (“Staffing UK”). (See Note 14 - Acquisitions). | |
Initio is a United Kingdom domiciled full-service staffing company with established brands in the U.K. and U.S. Initio’s U.K. division, Longbridge, was established in 1989 as an international multi-sector recruitment company with a long successful history of catering to the sales and marketing, technology, legal and IT solutions sectors. Initio’s U.S. division, Monroe, was established in 1969 as a full-service consulting and staffing agency serving companies ranging from Fortune 100 to new start-ups. Monroe has fifteen (15) offices and five (5) on-site locations throughout Connecticut, Massachusetts, Rhode Island, New Hampshire and North Carolina. | |
On February 28, 2014, the Company, through its wholly owned subsidiary, Staffing UK, purchased substantially all of the business assets, including but not limited to contracts, business information, records, debt and goodwill (the “Poolia Acquisition”) of Poolia UK Ltd. (“Poolia UK”). All subsequent business activity is under a Staffing UK subsidiary. The aggregate consideration paid for the Poolia Acquisition was £500,000 (the “Fixed Consideration”), plus an amount equal to the net asset value at the completion date of the acquisition (the “NAV Consideration,” together with the Fixed Consideration, collectively, the “Poolia Purchase Price”). The Fixed Consideration and a sum of £250,000, being an advance payment of the NAV Consideration, was paid at closing. Subsequent to closing, the balance of the NAV Consideration was paid to Poolia UK Ltd. for a total Poolia Purchase Price of $1,626,266. (See Note 14 - Acquisitions) | |
On May 17, 2014, the Company purchased all of the issued and outstanding common stock of PeopleSERVE, Inc., a Massachusetts corporation (“PSI”), and forty-nine percent (49%) of the issued and outstanding common stock of PeopleSERVE PRS, Inc., a Massachusetts corporation (“PRS”, together with PSI, collectively the “Acquired Companies” or “PS”), pursuant to a Stock Purchase Agreement (the “PS Purchase Agreement”) dated May 17, 2014. The aggregate consideration (the “PS Purchase Price”) paid was approximately $8.4 million. (See Note 14 - Acquisitions). | |
At closing, the Company paid: (i) cash of approximately $2.7 million; (ii) 1,127,365 common stock shares based on the market closing price on the date of purchase of $1.93 for a total fair value of approximately $2.2 million; (iii) an unsecured promissory note in the amount of approximately $2.4 million; and (iv) approximately $1.1 million of Net Working Capital. Subsequently, the Company prepared and delivered to seller a certificate that set forth the Company’s determination of the: (i) PS Purchase Price, including the calculation of the Adjusted EBITDA of each Acquired Company for the audited period; and (ii) calculation of the Net Working Capital. Based on this certificate, the Company and seller agreed there was no post-closing PS Purchase Price adjustment required. | |
GOING_CONCERN
GOING CONCERN | 9 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Going Concern [Abstract] | ||||||||||||||
Going Concern Disclosure [Text Block] | NOTE 2 – GOING CONCERN | |||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. As of February 28, 2015, the Company had a working capital deficiency of $7,876,112 and had an accumulated deficit of $30,035,058. For the nine (9) months ended February 28, 2015, the Company had a net loss and net cash used in operations of $13,697,940 and $1,444,175, respectively. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern and the outcome of these uncertainties cannot be predicted. | ||||||||||||||
On April 8, 2015, the Company entered into a new revolving credit facility in the amount of $25 million and a $3 million four (4) year term loan with MidCap Financial. The $25 million revolving credit facility, with the option to accordion up to $50 million, a replacement of the Company’s previous Wells Fargo Bank $15 million revolving credit facility, and is collateralized by the Company’s accounts receivable. Effectively the new MidCap revolving credit facility increased the Company’s cash availability materially through more favorably negotiated account eligibility criterion. Importantly, the larger facility provides the much needed additional borrowing capacity as the Company continues to expand and grow revenue. The Company used the proceeds to reduce its outstanding indebtedness, pay financing fees and costs associated with this capital transaction and provide for current and future working capital. (See Note 15 – Subsequent Events). | ||||||||||||||
Currently, the Company does not have sufficient working capital to fund the continuation or expansion of its ongoing operations and obligations. The Company will need to raise additional capital to fund its operating expenses, pay its obligations, and acquire additional entities. In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources. Management’s plan to continue as a going concern includes raising capital through additional debt and equity financings to fund working capital and additional acquisitions, increasing gross margin by driving organic revenue growth and strategic acquisitions, and reducing operating and overhead costs. The Company anticipates it will require $1.5 million over the next twelve (12) months for working capital purposes. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon management’s ability to successfully secure additional sources of financing and attain profitable operations. Further, management cannot provide any assurance that unforeseen circumstances that may occur at any time within the next twelve (12) months or thereafter will not increase the need to raise additional capital on an immediate basis. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. | ||||||||||||||
If management is unsuccessful in the execution of the aforementioned plan to address issues which create substantial doubt about its ability to continue as a going concern, the Company may be forced to take one of the following actions: | ||||||||||||||
⋅ | Liquidate its assets at distressed prices; and/or | |||||||||||||
⋅ | File for reorganization; and/or | |||||||||||||
⋅ | File for bankruptcy protection. | |||||||||||||
Any of the above scenarios will decrease stockholder value significantly and may result in the value of the Company’s securities becoming worthless. | ||||||||||||||
Restructuring Plan and Implementation: | ||||||||||||||
During the first and second quarters of fiscal 2015, the Company conducted a thorough review and evaluation of its business operations and strategies, a forecast for the staffing industry, and the business environment in general. The Company concluded that it was imperative to take immediate action to reduce short and medium-term debt service obligations, consulting/advisory agreements, employment costs and other corporate commitments that were overburdening the Company’s working capital and ability to fund continuing business operations, raise additional equity capital and/or debt, and execute its business plan. As such, on September 3, 2014, the Company formally established a Restructuring Committee, comprised of a Chairman and four (4) others selected from its Board of Directors to evaluate and formalize a Restructuring Plan. The Restructuring Plan was presented and adopted by the Board of Directors on September 3, 2014. Management planned to pursue each of the initiatives of the Restructuring Plan, some of which were contingent upon third parties’ acceptance of the restructuring terms and may not be fully achieved. | ||||||||||||||
Cost Reduction or Restructuring Goals and Key Initiatives: | ||||||||||||||
Certain targeted initiatives have been and are being achieved through the following actions: | ||||||||||||||
⋅ | Short- and Medium-term debt service: The approved Restructuring Plan authorized management to approach existing debt holders with this proposal. The Company offered equity in the form of common stock and/or warrants in exchange for conversion or deferral of existing notes/obligations. The Company exchanged equity with a fair value in excess of the aggregate amount of debt being extinguished. Upon execution of all necessary agreements, the Company recognized a loss on the transaction. In accordance with ASC 470-40-2, the difference between the reacquisition price of debt and the net carrying amount of the extinguished debt shall be recognized currently in the period of extinguishment as losses or gains. Gains and losses shall not be amortized to future periods. The modification expense was measured at fair value on the date of the agreement and recorded in accordance with ASC 470-40-2; and | |||||||||||||
o | Notes Payable and Other Debt obligations: The Restructuring Plan offered a meaningful incentive to outstanding Notes Payable holders to convert their principal and accrued interest to common stock and/or warrants rather than a cash payment; Note holders converted $2,994,202 of principal and interest to 3,290,446 common stock shares and 3,619,490 warrants exercisable for a term of ten (10) years at $1.25. This action is anticipated to reduce the Company’s future cash outflows by approximately $871,000 in the calendar year of 2015, and by a further $2,265,723 in the calendar year of 2016. | |||||||||||||
o | Modification of Series A Bonds: The Restructuring Plan modified the terms of the Series A Bonds conversion price from $1.50 to $1.00 with the intention of providing a meaningful incentive for the Series A Bond holders to convert their principal and interest to common stock and/or warrants on or before the maturity date of October 15, 2014, rather than redeem for cash; Bondholders converted $3,709,655 of principal and interest to 3,709,687 common stock shares and 1,854,859 warrants exercisable for a term of three (3) years at $2.00. The Company recorded a modification expense of $2,927,959 related to changing the conversion price of these bonds. | |||||||||||||
o | Modification of Series B Bonds: The Restructuring Plan modified the terms of the Series B Bonds conversion price from $1.50 to $1.20 with the intention of providing a meaningful incentive for the Series B Bond holders to convert their principal and interest to common stock by the maturity date of September 15, 2015, rather than redeem for cash. No Bondholders have elected to convert as of February 28, 2015. The Company recorded a modification expense of $154,489 related to changing the conversion price of these bonds; | |||||||||||||
o | Earn-out Liabilities: The Restructuring Plan offered a meaningful incentive to the Earn-out liability holders to convert their contingent future payments to common stock rather than cash payments. In conjunction with the sale of Cyber 360, Inc., effective January 1, 2015, the former shareholders of TRG were offered the opportunity and elected to convert their remaining earn-out liability of $1,134,050 into common stock shares at $1.00 per share. As a result, the Company issued 1,134,050 common stock shares and recorded a gain on conversion of earn-out of $485,835 on February 27, 2015. | |||||||||||||
⋅ | Operational and Corporate commitments: The approved Restructuring Plan authorized management to cancel various on-going consulting and employment agreements and incur certain costs associated with this restructuring. In accordance with ASC 470-25-12, which states, a liability for costs to terminate a contract before the end of its term shall be recognized when the entity terminates the contract in accordance with the contract terms. These amounts were recorded in the operating section of the Statement of Operations on a line item titled Reorganization of Business Expenses and a liability for the amount owed on the balance sheet. | |||||||||||||
o | Consulting Agreements: The Company cancelled various on-going consulting agreements. The measurement date to record the expense was the date upon which the Company decided to cancel the agreement. The Company expensed $73,875 as a result of the cancellation of these agreements. This action is anticipated to reduce the Company’s future cash outflows by approximately $432,000 in the calendar year of 2015. | |||||||||||||
o | Employment: The Company severed employment with some employees. The measurement date to record the expense was the date upon which the Company agreed to separate employment; The Company expensed $691,966 related to the aforementioned severed employment. This action is anticipated to increase the Company’s future cash outflows by approximately $50,000 during the calendar year of 2015, and thereafter to reduce the Company’s future cash outflows by approximately $624,000 annually in perpetuity. | |||||||||||||
o | Restructuring Fees: The Company estimated the cost associated with this restructuring to be approximately $175,000. U.S. GAAP does not allow for a general accrual for restructuring costs. Therefore, any such costs have been and will continue to be expensed as incurred. To date, these fees have totaled $123,334 and are properly classified in Professional fees - Restructuring. | |||||||||||||
Discontinued Operations | ||||||||||||||
On January 27, 2015, the Board of Directors of the Company met without any representation of the officers, former owners or earn-out liability holders and discussed the possibility of discontinuing the Cyber 360 operations. Their independent decision was that they approved and authorized the discontinuance of Cyber 360 operations and to move immediately thereafter towards selling the Cyber 360 operations. Subsequently, the Company presented an arm’s length transaction to some of the former TRG owners. On February 27, 2015, the Company entered into a Stock Purchase Agreement to sell Cyber 360, Inc. to some of the former TRG owners with an effective date of January 1, 2015 for an aggregate purchase price of $1.00 and the settlement of the remaining earn-out obligation under the original purchase agreement. In connection with the sale, all agreements executed in connection with the original acquisition of Cyber 360’s business (previously known as The Revolution Group) in April 2013 (the “Original Sale”) and all obligations thereunder, except as set forth below, were terminated. As a result of the sale, the Company no longer owns Cyber 360, Inc. (FKA: Staffing 360 Group, Inc.), a Nevada corporation, or its subsidiary Cyber 360, Inc. (FKA: TRG), a Massachusetts corporation. | ||||||||||||||
In connection with the sale and in full settlement of the remaining earn-out obligations, the Company issued 1,134,050 shares (the “Earn-Out Shares”) of the Company’s common stock with a fair value of $0.30 per share. These shares are entitled to customary piggy-back registration rights but are subject to a lock-up restriction until the earlier of February 27, 2016 or a sale, liquidation, merger or similar reorganization of the Company resulting in the exchange of all outstanding Company shares for other property. | ||||||||||||||
In accordance with ASC 205-20, the results of the discontinued business have been presented as discontinued operations for the nine (9) and three (3) months ended February 28, 2015. Previously reported results for comparable periods in fiscal year 2014 have also been restated to reflect this reclassification. | ||||||||||||||
The operational results of Cyber 360 are presented in the “Net income from discontinued operations” line item on the Condensed Consolidated Statements of Operations. The assets and liabilities of the discontinued business are presented on the Condensed Consolidated Balance Sheets as assets and/or liabilities from discontinued operations. | ||||||||||||||
Other than consolidated amounts reflecting operating results and balances for both the continuing and discontinued operations, all remaining amounts presented in the accompanying condensed consolidated financial statements and notes reflect the financial results and financial position of the Company's continuing operations. | ||||||||||||||
Revenue, operating income, and net income from discontinued operations were as follows: | ||||||||||||||
Nine Months Ended | Three Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Revenue | $ | 558,521 | $ | 981,269 | $ | 58,039 | $ | 294,952 | ||||||
Operating income | 618,979 | 934,662 | 71,735 | 353,447 | ||||||||||
Net income from discontinued operations | $ | -60,458 | $ | 46,608 | $ | -13,697 | $ | -58,496 | ||||||
The major classes of assets and liabilities from discontinued operations were as follows: | ||||||||||||||
January 1, | May 31, | |||||||||||||
2015 | 2014 | |||||||||||||
(Unaudited) | ||||||||||||||
Cash and equivalents | $ | 44,931 | $ | 28,978 | ||||||||||
Accounts receivable, net | 463,620 | 648,701 | ||||||||||||
Prepaid expenses and other current assets | 26,783 | 53,848 | ||||||||||||
Current assets from discontinued operations | 535,334 | 731,527 | ||||||||||||
Property and equipment, net | 4,471 | 5,349 | ||||||||||||
Non-current assets from discontinued operations | 4,471 | 5,349 | ||||||||||||
Accounts payables and accrued expenses | 92,961 | 84,505 | ||||||||||||
Accrued payroll and taxes | 59,618 | 143,722 | ||||||||||||
Accounts receivable financing | 400,531 | 461,494 | ||||||||||||
Current liabilities from discontinued operations | $ | 553,110 | $ | 689,721 | ||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Accounting Policies [Abstract] | ||||||||
Significant Accounting Policies [Text Block] | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||
Interim Financial Statements | ||||||||
These unaudited condensed consolidated financial statements as of and for the nine (9) and three (3) months ended February 28, 2015 and 2014, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America. | ||||||||
These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the years ended May 31, 2014 and 2013, respectively, which are included in the Company’s May 31, 2014 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on September 15, 2014. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the nine (9) and three (3) months ended February 28, 2015 are not necessarily indicative of results for the entire year ending May 31, 2015. | ||||||||
Year End and Principles of Consolidation | ||||||||
These unaudited condensed consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles (“GAAP”) in the United States, and are expressed in U.S. dollars. The Company’s consolidated fiscal year-end is May 31. Some of the Company’s subsidiaries have varying year-ends. | ||||||||
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. As described below, the Company also consolidates PeopleSERVE PRS, Inc., an entity of which it owns forty-nine percent (49%), since the Company is deemed to be the primary beneficiary of this entity. All inter-company transactions are eliminated. | ||||||||
Variable Interest Entities | ||||||||
Current accounting guidance provides a framework for identifying a Variable Interest Entity (“VIE”) and determining when a company should include the assets, liabilities, non-controlling interests, and results of activities of the VIE in its consolidated financial statements. In general, a VIE is an entity or other legal structure used to conduct activities or hold assets that either: (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, or (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. Generally, a VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE’s assets, liabilities, and non-controlling interest at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest. On May 17, 2014, the Company purchased forty-nine percent (49%) of the issued and outstanding common stock of PeopleSERVE PRS, Inc. Pursuant to ASC 810, PeopleSERVE PRS, Inc. is deemed to be a variable interest entity since the Company is the primary beneficiary. Accordingly, the Company consolidates the results of PeopleSERVE PRS, Inc. | ||||||||
Non-controlling Interests | ||||||||
Non-controlling interests in our subsidiaries are recorded in accordance with the provisions of ASC 810 “Consolidation”, and are reported as a component of equity, separate from the parent company’s equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the non-controlling interests are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings. | ||||||||
Use of Estimates | ||||||||
The preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to valuation, impairment testing, earn-out liabilities, stock-based compensation and deferred income tax assets valuation allowances. Estimates are based on estimates and assumptions on current facts, historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced may differ materially and adversely from estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. Significant estimates for the nine (9) and three (3) months ended February 28, 2015 and 2014, respectively, include the valuation of intangible assets, including goodwill, liabilities associated with earn-out obligations and testing of long-lived assets for impairment. | ||||||||
In recording the initial purchase accounting for previous acquisitions, estimates of the fair value of identifiable intangible assets and goodwill were reflected in the Company’s interim financial statements. Upon retaining the services of an independent valuation consultant, the allocations previously estimated were revised and the results of the independent valuation consultant were retroactively reflected in the Company’s consolidated financial statements for the fiscal year ended May 31, 2014. | ||||||||
Cash and Cash Equivalents | ||||||||
The Company considers all highly liquid instruments with original maturities of three (3) months or less when acquired, to be cash equivalents. The Company had no cash equivalents at February 28, 2015 or 2014. | ||||||||
Accounts Receivable | ||||||||
Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive collection effort. At February 28, 2015 and 2014, the Company had an allowance for doubtful accounts of $416,688 and $503,518, respectively. | ||||||||
Income Taxes | ||||||||
The Company is governed by the Income Tax Law of the United States. The Company utilizes ASC Topic 740, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. | ||||||||
The Company applied the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of the date of this filing, the Company is current on all corporate, federal and state tax returns. | ||||||||
The U.K. and Canadian entities file income tax returns in their respective jurisdictions. | ||||||||
Foreign Currency Translation | ||||||||
Assets and liabilities of subsidiaries operating in foreign countries are translated into U.S. dollars using both the exchange rate in effect at the balance sheet date or historical rate, as applicable. Results of operations are translated using the average exchange rates prevailing throughout the year. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are included in a separate component of stockholders’ equity (accumulated other comprehensive loss), while gains and losses resulting from foreign currency transactions are included in operations. | ||||||||
Amortization of Deferred Financing Costs | ||||||||
Costs incurred in connection with obtaining financing are deferred and amortized on a straight-line basis over the term of the related loan, which is not materially different than the effective interest method. Amortization expense of deferred financing costs for the nine (9) and three (3) months ended February 28, 2015 and 2014 totaled $545,984 and $239,303 and $36,644 and $204,972, respectively. | ||||||||
Business Combinations | ||||||||
In accordance with Accounting Standards Codification 805 - Business Combinations ("ASC 805"), the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values. The Company utilizes management estimates and, in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed and contingent consideration granted. Such estimates and valuations require us to make significant assumptions, including projections of future events and operating performance. | ||||||||
Fair Value of Financial Instruments | ||||||||
In accordance with Accounting Standards Codification 820 - Fair Value Measurements and Disclosures (“ASC 820”), the Company measures and accounts for certain assets and liabilities at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, and establishes a framework for measuring fair value and standards for disclosure about such fair value measurements. | ||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | ||||||||
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities; | |||||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data; | |||||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | |||||||
The Company did not have any Level 2 or Level 3 assets or liabilities as of February 28, 2015 or 2014, with the exception of its Convertible Notes Payable (See Note 5 – Convertible Notes Payable), Promissory notes (See Note 6 – Promissory Notes), Series A Bonds Payable (See Note 7 – Bonds – Series A), Series B Bonds Payable (See Note 8 – Bonds – Series B) and Earn-Out Liability (See Note 12 – Commitments and Contingencies). | ||||||||
Cash is considered to be highly liquid and easily tradable as of February 28, 2015 and 2014 and therefore classified as Level 1 within our fair value hierarchy. | ||||||||
Accounting Standards Codification 825-10-25, “Fair Value Option” (ASC 825-10-25) expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments. | ||||||||
Convertible Instruments | ||||||||
The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with FASB No. 133 “Accounting for Derivative Instruments and Hedging Activities”. | ||||||||
Accounting standards generally provide three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, and (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.” | ||||||||
The Company accounts for convertible instruments (when determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. | ||||||||
ASC 815-40 provides that, among other things, if an event is not within the entity’s control and may require a net cash settlement, then the contract shall be classified as an asset or a liability. | ||||||||
Revenue Recognition | ||||||||
Control Solutions International Inc.: CSI recognizes revenue primarily on a time and materials basis as the services are performed and amounts are earned. The Company considers amounts earned once evidence of an arrangement has been obtained, services are rendered, fees are fixed or determinable, and collectability is reasonably assured. | ||||||||
⋅ | Revenue earned in excess of billings is recorded as unbilled accounts receivable until billed. Billings in excess of revenues earned are recorded as advanced billings until revenue recognition criteria are met. Deposits and prepayments from customers are carried as deferred revenue until the requirements for revenue recognition are met. | |||||||
⋅ | Reimbursements, including those relating to travel, other out-of-pocket expenses and third-party costs, are not included in revenue. They are applied to Cost of Services resulting in Cost of Services reflecting the net amount of expenses not reimbursed by clients. | |||||||
Staffing 360 Solutions (UK) Limited: Staffing UK and its various subsidiaries, follow paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, and (ii) the services have been rendered to the customer, and (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. | ||||||||
PeopleSERVE, Inc. and PeopleSERVE PRS, Inc.: PS recognizes revenue from the sale of staffing services as the services are performed, along with related labor costs and payroll taxes. The Company recognizes revenue for permanent employee placements when contractual contingencies, generally the passage of time, are satisfied. The Company’s revenue recognition policies comply with ASC 605, “Revenue Recognition.” The Company is the primary obligor in its transactions, and has responsibility for fulfillment, including the acceptability of services ordered and purchased by customers. In addition, the Company has all credit risk, retains substantially all risk and rewards of the services rendered, has sole discretion in staffing engagements and sets the billing rates of its consultants. Accordingly, the Company records all transactions at the gross revenue amount billed, consistent with the provisions of ASC 605. Typically, contracts require clients to pay for out-of-pocket expenses, principally travel related expenses. Accordingly, revenue includes amounts billed for these costs and the cost of revenue includes the corresponding actual costs. The Company provides certain customers a five percent (5.0%) discount on certain contracts if paid within thirty (30) days of the invoice date. Accounts receivable result from services provided to clients. The Company carries its accounts receivable at net realizable value. At the closing of the Company’s fiscal period, a portion of receivables may not be invoiced. These unbilled receivables are typically billed within thirty (30) days of the close of the fiscal period. | ||||||||
Stock-Based Compensation | ||||||||
The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50. | ||||||||
Earnings (Loss) per Common Share | ||||||||
The Company utilizes the guidance per FASB Codification ASC 260 - Earnings per Share (“ASC 260”). Basic earnings per share are calculated by dividing income available to stockholders by the weighted average number of common stock shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common stock shares and dilutive common share equivalents outstanding during the period. Dilutive common stock share equivalents consist of common shares issuable upon the conversion of convertible notes and the exercise of stock options and warrants (calculated using the modified treasury stock method). Such securities, shown below, presented on a common share equivalent basis and outstanding as of February 28, 2015 and 2014 have been excluded from the per share computations, since its inclusion would be anti-dilutive: | ||||||||
For the Nine Months Ended | ||||||||
February 28, | ||||||||
2015 | 2014 | |||||||
(Unaudited) | (Unaudited) | |||||||
Convertible bonds - Series A | 470,334 | - | ||||||
Convertible bonds - Series B | 833,794 | - | ||||||
Convertible promissory notes | 696,453 | 1,655,000 | ||||||
Warrants | 12,264,288 | 5,469,230 | ||||||
Options | 2,425,000 | 1,750,000 | ||||||
Total | 16,689,869 | 8,874,230 | ||||||
Property and Equipment | ||||||||
Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows: | ||||||||
Computers | 3-5 years | |||||||
Computer equipment | 3-5 years | |||||||
Network equipment | 3-5 years | |||||||
Software | 3-5 years | |||||||
Office equipment | 3-7 years | |||||||
Furniture and fixtures | 3-7 years | |||||||
Leasehold improvements | 3-5 years | |||||||
Amortization of leasehold improvements is computed using the straight-line method over the shorter of the life of the lease or the estimated useful life of the assets. Maintenance and repairs are charged to expense as incurred. Major improvements are capitalized. At the time of retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in Other income/(loss). | ||||||||
Impairment of Long-Lived Assets | ||||||||
In accordance with ASC 360 - Property, Plant, and Equipment (“ASC 360”), the Company periodically reviews its long-lived assets, including goodwill and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the estimated fair value and the book value of the underlying asset. | ||||||||
Goodwill | ||||||||
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. ASC 350-30-35-4 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment for each reporting unit. As of February 28, 2015 and May 31, 2014, the goodwill balance associated with the Cyber 360, Inc. and Control Solutions, Inc. acquisition was $0 and $2,700,255, respectively. The Company did not record any additional impairment of Goodwill during the nine (9) months ended February 28, 2015. | ||||||||
Intangible Assets | ||||||||
In connection with the CSI Acquisition (See Note 14 - Acquisitions), the Company identified and recognized an intangible asset of $912,000 representing trade name, customer relationships and employment agreements/non-competes. The assets were being amortized on a straight line basis over their estimated life of four (4) years, other than the trade name which was amortized over fifteen (15) years. CSI customer relationships were valued based on the discounted cash flow method applied to projected future cash flows as estimated by Company management. This method resulted in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. The Company recorded amortization expense of $91,099 and $107,654 for the nine (9) months ended February 28, 2015 and the year ended May 31, 2014, respectively. During the quarter ended February 28, 2015, the Company recorded amortization expense of $0. Based upon the impairment analysis performed as of May 31, 2014 and November 30, 2014, the Company impaired the trade name, customer relationships and employment agreements/non-competes in the amount of $10,025 and $703,222, respectively. The intangible asset balance, net of impairment and accumulated amortization, at February 28, 2015 and May 31, 2014 was $0 and $794,321, respectively. | ||||||||
In connection with the acquisition of Staffing UK (See Note 14 - Acquisitions), the Company identified and recognized an intangible asset of $10,311,465 representing trade name, customer relationships and employment agreements/non-competes. The assets are being amortized on a straight line basis over their estimated life of four (4) years, other than the trade name which is amortized over fifteen (15) years. Staffing UK customer relationships were valued based on an estimate of the discounted cash flow method applied to projected future cash flows as estimated by Company management. This method results in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. At February 28, 2015 and May 31, 2014, the intangible asset balance, net of accumulated amortization, was $8,317,262 and $9,599,250, respectively. | ||||||||
In connection with the Poolia Acquisition (See Note 14 - Acquisitions), the Company identified and recognized an intangible asset of $465,321 representing customer relationships and employment agreements/non-competes. The assets are being amortized on a straight line basis over their estimated life of four (4) years. Poolia customer relationships were valued based on an estimate of the discounted cash flow method applied to projected future cash flows as estimated by Company management. This method results in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. At February 28, 2015 and May 31, 2014, the intangible asset balance, net of accumulated amortization, was $348,991 and $436,238, respectively. | ||||||||
In connection with the acquisition of PeopleSERVE, Inc. and PeopleSERVE PRS, Inc. (See Note 14 - Acquisitions), the Company identified and recognized an intangible asset of $2,999,100 representing trade name, customer relationships and employment agreements/non-competes. The assets are being amortized on a straight line basis over their estimated life of four (4) years, other than the trade name which is amortized over fifteen (15) years. PS customer relationships were valued using the discounted replacement cost approach. This method is based on acquisition costs invested to attract each customer and relied on the actual selling costs incurred and allocated to new customer generation over the preceding four (4) years. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. At February 28, 2015 and May 31, 2014, the intangible asset balance, net of accumulated amortization, is $2,512,641 and $2,973,497, respectively. | ||||||||
Reclassifications | ||||||||
Certain reclassifications have been made to conform the prior period data to the current presentations. These reclassifications had no effect on the reported results. | ||||||||
Recent Accounting Pronouncements | ||||||||
In August 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, (“ASU 2014-15”), “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company does not expect that the adoption of this standard will have a material effect on its financial statements. | ||||||||
In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers”. The objective of ASU 2014-19 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016 for public companies. Early adoption is not permitted. The standard permits the use of either a retrospective or modified retrospective (cumulative effect) transition method. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements nor decided upon the method of adoption. | ||||||||
In February 2015, the FASB issued new guidance to improve consolidation guidance for legal entities (Accounting Standards Update (“ASU”) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis), effective for fiscal years beginning after December 15, 2015 and interim periods within those years and early adoption is permitted. The new standard is intended to improve targeted areas of the consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures. The amendments in the ASU affect the consolidation evaluation for reporting organizations. In addition, the amendments in this ASU simplify and improve current GAAP by reducing the number of consolidation models. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. | ||||||||
In June 2014, the FASB issued new guidance on transfers and servicing ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosure), effective prospectively for fiscal years beginning after December 15, 2014 and interim periods within those years. The new guidance requires that repurchase-to-maturity transactions and repurchase financing arrangements be accounted for as secured borrowings and provides for enhanced disclosures, including the nature of collateral pledged and the time to maturity. Certain interim period disclosures for repurchase agreements and securities lending transactions are not required until the second quarter of 2015. The adoption of this new guidance will not have a material impact on the Company’s consolidated financial statements. | ||||||||
The FASB has issued ASU No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Company has not yet determined the effect of the adoption of this standard and it is not expected to have a material impact on the Company’s condensed consolidated financial position and results of operations. | ||||||||
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property, Plant and Equipment Disclosure [Text Block] | NOTE 4 - PROPERTY AND EQUIPMENT | |||||||
Property and equipment consists of the following: | ||||||||
February 28, | May 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Computer software | $ | 107,315 | $ | 113,615 | ||||
Office equipment | 30,391 | 38,098 | ||||||
Computer equipment | 295,168 | 210,561 | ||||||
Furniture and fixtures | 113,277 | 105,637 | ||||||
Website | 32,117 | 32,117 | ||||||
Leasehold improvements | 41,239 | 28,093 | ||||||
Total Cost | 619,508 | 528,121 | ||||||
Accumulated depreciation | -204,376 | -78,864 | ||||||
Total | $ | 415,131 | $ | 449,257 | ||||
Depreciation and amortization expense for the nine (9) and three (3) months ended February 28, 2015 and 2014 was $125,512 and $52,444 and $50,581 and $43,678, respectively. | ||||||||
CONVERTIBLE_NOTES_PAYABLE
CONVERTIBLE NOTES PAYABLE | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Convertible Notes Payable [Abstract] | ||||||||
Convertible Notes Disclosure [Text Block] | NOTE 5 - CONVERTIBLE NOTES PAYABLE | |||||||
During the year ended May 31, 2014, notes issued in fiscal year 2013 in the principal amount of $50,000 and interest of $4,274 were converted into common stock shares of 111,111 and 9,498, respectively. | ||||||||
From April 21, 2014 through May 27, 2014, the Company raised $950,000 from two (2) accredited investors through the issuance of five (5) short-term, twelve percent (12%), convertible promissory notes. The holders of these notes received an aggregate of 190,000 common stock shares. These notes had varying maturity dates. | ||||||||
· | On July 14, 2014, the Company amended and restated one of the five (5) aforementioned promissory notes in the amount of $250,000. The Company repaid $150,000 and the remaining balance of $100,000 was amended and restated with the same basic terms as the original promissory note other than it became due upon demand. This note holder receives 5,000 common stock shares monthly for every $100,000 loaned. The holders may convert, at their sole election, the principal amount and unpaid interest into common stock shares at $1.50 per share. (See Note 15 – Subsequent Events). | |||||||
· | On July 14, 2014, the Company amended and restated one of the five (5) aforementioned promissory notes in the amount of $200,000. The balance of $200,000 was amended and restated with the same basic terms as the original promissory note other than it became due upon demand. The note holder receives 2,500 common stock shares monthly for every $100,000 loaned. The holders may convert, at their sole election, the principal amount and unpaid interest into common stock shares at $1.50 per share. (See Note 15 – Subsequent Events). | |||||||
· | On July 31, 2014, the Company amended and restated one of the five (5) aforementioned promissory notes in the amount of $200,000. The balance of $200,000 was amended and restated with the same basic terms as the original promissory note other than it became due upon demand. The note holder receives 5,000 common stock shares monthly for every $100,000 loaned. The holders may convert, at their sole election, the principal amount and unpaid interest into common stock shares at $1.50 per share. (See Note 15 – Subsequent Events). | |||||||
· | On July 31, 2014, the Company amended and restated one of the five (5) aforementioned promissory notes in the amount of $100,000. The balance of $100,000 was amended and restated with the same basic terms as the original promissory note other than it became due upon demand. The note holder receives 5,000 common stock shares monthly for every $100,000 loaned. The holders may convert, at their sole election, the principal amount and unpaid interest into common stock shares at $1.50 per share. (See Note 15 – Subsequent Events). | |||||||
· | On July 31, 2014, the Company amended and restated one of the five (5) aforementioned promissory notes in the amount of $200,000. The balance of $200,000 was amended and restated with the same basic terms as the original promissory note other than it became due upon demand. The note holder receives 5,000 common stock shares monthly for every $100,000 loaned. The holders may convert, at their sole election, the principal amount and unpaid interest into common stock shares at $1.50 per share. (See Note 15 – Subsequent Events). | |||||||
From May 14, 2014 through May 19, 2014, the Company raised $600,000 from five (5) accredited investors through the issuance of five (5) short-term twelve percent (12%) convertible promissory notes. These notes were payable upon the earlier of the (i) completion of the Company’s Series A Bond offering, (ii) completion of the Company’s senior debt facility, or (iii) July 14, 2014. These note holders received an aggregate of 120,000 common stock shares. These holders were entitled to convert, at their sole election, the principal amount and any unpaid interest into common stock shares at $1.50 per share. On July 14, 2014, all five (5) of these holders converted principal of $600,000 into 400,000 common stock shares and accrued interest of $11,868 into 7,912 common stock shares. | ||||||||
On May 27, 2014, the Company raised $50,000 from an accredited investor through the issuance of a short-term twelve percent (12%) convertible promissory note. This note was payable upon the earlier of the (i) completion of the Company’s Series A Bond offering, (ii) completion of the Company’s senior debt facility, or (iii) July 12, 2014. The note holder received 10,000 common stock shares. The note holder was entitled to convert, at his sole election, the principal amount and any unpaid interest into common stock shares at $1.50 per share. On July 25, 2014, the Company repaid this note, including all unpaid interest. | ||||||||
In connection with the above notes, and pursuant to that certain placement agent agreement dated January 23, 2014 between the Company and a placement agent, the Company paid the placement agent $5,000 and issued 1,000 common stock shares. | ||||||||
On June 22, 2014, the Company raised $100,000 from an accredited investor through the issuance of a short-term twelve percent (12%) convertible promissory note. This note was payable upon the earlier of the (i) completion of the Series A Bond Offering, (ii) completion of the Company’s senior debt facility, or (iii) eight (8) weeks from the original issuance date. The note holder received 20,000 common stock shares. The holder was entitled to convert, at his sole election, the principal amount and any unpaid interest due under the note into common stock shares at $1.50 per share. In August 2014, this note was repaid in full. The Company recorded a debt discount of $28,876 and a beneficial conversion feature of $64,210 for the issuance of the 20,000 common stock shares. | ||||||||
On December 10, 2014, the Company issued a twelve percent (12%) promissory note in the amount of $100,000. On or prior to the maturity date, April 15, 2015, the holder may elect to convert all or part of the principal and accrued interest into common stock shares at $1.00 per share. In addition, for every $1.00 of principal converted, the Company will issue a warrant to purchase one-half of a common stock share at $2.00 per common stock share exercisable for a term of three (3) years. As additional consideration, the Company agreed to issue 10,000 common stock shares upon execution of this agreement. Accordingly, the Company recorded a debt discount of $4,762 for the 10,000 common stock shares issued. The Company recorded amortization expense of $3,023 for the nine (9) and three (3) months ended February 28, 2015. At February 28, 2015, the principal amount outstanding was $100,000. Net of the remaining debt discount of $1,738, the remaining loan balance was $98,262. (See Note 15 – Subsequent Events). | ||||||||
On February 5, 2015, the Company issued an eight percent (8%) promissory note in the amount of $204,000 due in nine (9) months, with the conversion feature commencing 180 days after the loan issuance date. The loan is convertible at a 39% discount of the average share price on the lowest three (3) trading prices during the ten (10) days prior to conversion. In connection with this note, the Company recorded a $177,559 discount related to the beneficial conversion feature of the note to be amortized over the life of the note or until the note was converted or repaid. The Company has recorded amortization expense amounting to $15,125 for the nine (9) and three (3) months ended February 28, 2015. Net of the remaining discount related to the beneficial conversion feature of $162,433, the remaining loan balance was $41,567. (See Note 15 – Subsequent Events). | ||||||||
February 28, | May 31, | |||||||
2015 | 2014 | |||||||
(Unaudited ) | ||||||||
Beginning balance | $ | 1,600,000 | $ | 50,000 | ||||
Proceeds | 404,000 | 1,600,000 | ||||||
Fair value of common stock issued for conversion of convertible notes payable | - | -50,000 | ||||||
Repayment of loans | -300,000 | - | ||||||
Conversion of loans | -600,000 | - | ||||||
Debt discount for restricted stock and beneficial conversion feature for convertible notes payable – net of accumulated amortization of $1,432,304 and $341,241, respectively | -164,171 | -979,828 | ||||||
Net balance | $ | 939,829 | $ | 620,172 | ||||
For the fiscal year ended May 31, 2014, the Company issued 320,000 common stock shares associated with the above notes. The Company recorded a debt discount of $442,035 with associated amortization of $116,289 and a beneficial conversion feature of $879,035 with associated amortization of $224,952 for the issuance of the 320,000 common stock shares. At May 31, 2014, the net outstanding loan balance, net of the remaining debt discount of $979,828, was $620,172. | ||||||||
The Company recorded $475,673 in debt discount and a total beneficial conversion feature of $1,120,803 in relation to the above notes. In addition, the Company recorded amortization totaling $1,432,304. The Company received proceeds of $404,000, repaid principal of $300,000 and converted $600,000 of principal. At February 28, 2015, the net outstanding loan balance, net of the remaining debt discount of $164,171, was $939,829. | ||||||||
For the nine (9) and three (3) months ended February 28, 2015, the Company recorded amortization totaling $1,106,188 and $18,149, respectively. | ||||||||
PROMISSORY_NOTES
PROMISSORY NOTES | 9 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
Debt Disclosure [Abstract] | ||||||||||
Debt Disclosure [Text Block] | NOTE 6 – PROMISSORY NOTES | |||||||||
Promissory notes – short-term consisted of the following: | ||||||||||
February 28, | May 31, | |||||||||
2015 | 2014 | |||||||||
(Unaudited) | ||||||||||
Beginning balance | $ | - | $ | - | ||||||
Proceeds | 1,705,000 | 340,000 | ||||||||
Payments | -1,213,333 | -340,000 | ||||||||
Debt discount (Net of accumulated amortization of $89,706 and $61,026, respectively) | - | - | ||||||||
Promissory notes – Staffing UK – current portion | 55,689 | 789,136 | ||||||||
Promissory notes – PeopleSERVE – current portion | 789,155 | 789,155 | ||||||||
Total Promissory notes – short-term | $ | 1,336,511 | $ | 1,578,291 | ||||||
Promissory notes – long-term consisted of the following: | ||||||||||
February 28, | May 31, | |||||||||
2015 | 2014 | |||||||||
(Unaudited) | ||||||||||
Promissory notes – Staffing UK: | ||||||||||
Beginning balance | $ | 3,616,874 | $ | 3,964,940 | ||||||
Payments | -347,370 | -348,066 | ||||||||
Accelerated interest on deferral of note | 13,367 | - | ||||||||
Conversions | -2,994,202 | - | ||||||||
288,670 | 3,616,874 | |||||||||
Less current portion | -55,689 | -789,136 | ||||||||
232,981 | 2,827,738 | |||||||||
Promissory note – PeopleSERVE | ||||||||||
Beginning balance | 2,367,466 | 2,367,466 | ||||||||
Payment | -591,866 | - | ||||||||
1,775,600 | 2,367,466 | |||||||||
Less current portion | -789,155 | -789,155 | ||||||||
986,445 | 1,578,311 | |||||||||
Total Promissory notes – long-term | $ | 1,219,425 | $ | 4,406,049 | ||||||
Promissory notes - short-term: | ||||||||||
Pursuant to the promissory note agreements dated September 27, 2013, October 18, 2013 and October 28, 2013, the Company issued notes in the amount of $40,000, $200,000 and $100,000, respectively. The promissory notes bear interest at the rate of twelve percent (12%) per annum and were due at the earlier of the completion of the Company’s $1.5 million bridge financing or ninety (90) days from the date of the note. As additional consideration, the note holders received an aggregate of 25,000 common stock shares for each $100,000 invested or a prorated portion thereof. The Company issued 85,000 common stock shares. The Company recorded a debt discount of $61,026 and amortization of $61,026. On November 12, 2013 and November 19, 2013, the Company re-paid $300,000 in principal and $3,189 in interest. On March 21, 2014, the Company repaid $40,000 in principal and $1,933 in interest. These notes have been paid in full. | ||||||||||
In June, 2014, the Company issued a promissory note in the amount of $100,000 to a company of which Robert Mayer, a director and shareholder of the Company, is a Managing Member. The promissory note was non-interest bearing and due upon demand. The Company issued 5,000 common stock shares to the note holder as additional consideration. This note has been paid in full. | ||||||||||
In July 2014, the Company issued three (3) non-interest bearing promissory notes in the aggregate amount of $280,000 to three related parties. The promissory notes were due upon demand. The first note was issued on July 16, 2014 to a company owned by Alfonso J. Cervantes, a former employee, Vice Chairman, President and Secretary of the Company, in the amount of $30,000. The second note was issued on July 17, 2014 to Jeff R. Mitchell, the Company’s CFO, in the amount of $150,000. The Company issued 10,000 common stock shares to Mr. Mitchell as additional consideration. The third note was issued on July 8, 2014 to a company of which Robert Mayer, a director and shareholder of the Company, is a Managing Member, in the amount of $100,000. The Company issued 7,000 common stock shares to the note holder as additional consideration. These notes have been paid in full. | ||||||||||
In August 2014, the Company issued a non-interest bearing promissory note in the amount of $125,000 to a company of which Robert Mayer, a director and shareholder of the Company, is a Managing Member. The promissory note was due upon demand. The Company issued 7,500 common stock shares to the note holder as additional consideration. This note has been paid in full. | ||||||||||
In July and August 2014, the Company issued promissory notes to Sterling National bank totaling $625,000. These notes bear interest at eighteen percent (18%) per annum and were due upon demand. These notes and interest of $7,277 have been paid in full. | ||||||||||
In August 2014, the Company issued a twelve percent (12%) interest bearing promissory note in the amount of $150,000 to Barry Cervantes, a brother of a former employee, Vice Chairman, President and Secretary of the Company, Alfonso J. Cervantes. The promissory note is due upon demand. The Company issued 15,000 common stock shares to Barry Cervantes as additional consideration. This note remains outstanding at February 28, 2015. See Note 15 – Subsequent Events. | ||||||||||
On September 2, 2014, the Company issued a promissory note in the amount of $125,000 to a company of which Robert Mayer, a director and shareholder of the Company, is a Managing Member. The promissory note is due upon demand. The Company issued 7,500 common stock shares to the note holder as additional consideration. This note remains outstanding at February 28, 2015 with accrued interest payable of $25,810. (See Note 15 – Subsequent Events). | ||||||||||
On September 15, 2014, the Company issued a promissory note in the amount of $50,000 to a company of which Robert Mayer, a director and shareholder of the Company, is a Managing Member. The promissory note is due upon demand. The Company issued 2,500 common stock shares to the note holder as additional consideration. This note remains outstanding at February 28, 2015 with accrued interest payable of $9,801. (See Note 15 – Subsequent Events). | ||||||||||
As a result of the 54,500 common stock shares issued as additional consideration above, the Company recorded at the time of issuance a debt discount of $89,706. Since these notes are due on demand, the debt discount was fully amortized at the time of issuance. | ||||||||||
On December 16, 2014, the Company issued a promissory note to Sterling National bank in the amount of $250,000. The note bears interest at eighteen (18%) per annum and originally had a maturity date of March 31, 2015 that has subsequently been modified to have no maturity date. Through February 28, 2015, the Company had repaid $83,333 and $166,667 remains outstanding. (See Note 15 – Subsequent Events). | ||||||||||
As of February 28, 2015, eleven (11) Initio promissory note holders converted an aggregate principal amount of $2,994,202 and interest of $296,243 into: (i) 3,290,446 common stock shares (at the rate of $1.00 per share), and (ii) warrants to purchase 3,619,490 common stock shares at $1.25 per share, exercisable for ten (10) years from the date of conversion (See Note 6 – Promissory Notes). From this conversion, 2,065,379 common stock shares and 2,271,918 warrants were issued on November 30, 2014. The remaining 1,225,066 common stock shares and 1,347,572 warrants were issued on January 2, 2015. In addition, the Company and an Initio promissory note holder agreed to defer the principal amount of $61,827 and accelerate and defer the interest amount of $19,516 for a total principal amount due on March 15, 2019 of $81,344 in exchange for the issuance of 40,672 common stock shares. | ||||||||||
Promissory notes – long-term: | ||||||||||
Staffing 360 Solutions (UK): Pursuant to the purchase of Staffing 360 Solutions (UK), the Company executed and delivered three (3) year promissory notes (the “Initio Promissory Notes”) in the aggregate principal amount of $3,964,949 to the shareholders of Staffing 360 Solutions (UK). The Initio Promissory Notes bear interest at the rate of six percent (6%) per annum and amortize straight line over five (5) years. As of February 28, 2015, the Company has paid $695,437 in principal ($348,067 during the year ended May 31, 2014 and $347,370 during the nine (9) months ended February 28, 2015). On November 30, 2014, eleven (11) noteholders converted an aggregate principal amount of $2,994,202 and interest of $296,243 into (i) 3,290,446 common stock shares, at the rate of $1.00 per share, and (ii) warrants to purchase 3,619,490 common stock shares at $1.25 per share, exercisable for ten (10) years from the date of conversion. From this conversion, 2,065,379 common stock shares and 2,271,918 warrants were issued on November 30, 2014. The remaining, 1,225,066 common stock shares and 1,347,572 warrants, were issued on January 2, 2015. | ||||||||||
The Company and an Initio promissory note holder agreed to defer the principal amount of $61,827 and accelerate and defer the interest amount of $19,516 for a total principal amount due on March 15, 2019 of $81,344 in exchange for the issuance of 40,672 common stock shares. The Company recorded an interest restructuring charge of $13,368 associated with the deferral. | ||||||||||
The remaining principal balance outstanding is $288,671. During the nine (9) and three (3) months ended February 28, 2015, the Company recorded $108,710 and $4,532 of interest expense, respectively and paid accrued interest totaling $91,380 and $2,275, respectively. | ||||||||||
The future payments related to the Initio Promissory Notes are as follows: | ||||||||||
Year | Twelve months | |||||||||
ended | ended | |||||||||
May 31, | Amount | February 28, | Amount | |||||||
2015 | $ | 13,922 | 2016 | $ | 55,689 | |||||
2016 | 55,689 | 2017 | 157,785 | |||||||
2017 | 143,863 | 2018 | - | |||||||
Thereafter | 75,197 | Thereafter | 75,197 | |||||||
Total | $ | 288,671 | Total | $ | 288,671 | |||||
Brendan Flood, a related party and the Company’s Executive Chairman, was a shareholder of Staffing 360 Solutions (UK), and was issued a three (3) year promissory note. Mr. Flood’s portion of the $3,964,949 aggregate principal amount totaled $2,064,880. Mr. Flood was paid $378,561 in principal and $98,290 in interest since inception through November 30, 2014. On November 30, 2014, Mr. Flood converted the remaining promissory note principal, $1,720,733, and interest through maturity of $170,248, into (i) 1,890,981 common stock shares, at the rate of $1.00 per share, and (ii) warrants to purchase 2,080,080 common stock shares at the price of $1.25 per share, exercisable for ten (10) years from the date of conversion. This conversion satisfied his note in full as of November 30, 2014. | ||||||||||
Matt Briand, a related party and the Company’s Chief Executive Officer and President, was a shareholder of Staffing 360 Solutions (UK) and was issued a three (3) year promissory note. Mr. Briand’s portion of the $3,964,949 aggregate principal amount totaled $1,115,144. Mr. Briand was paid $204,443 in principal and $52,987 in interest since inception through November 30, 2014. On November 30, 2014, Mr. Briand converted the remaining Promissory note principal, $929,287, and interest through maturity, $91,943, into (i) 1,021,230 common stock shares, at the rate of $1.00 per share, and (ii) warrants to purchase 1,123,353 common stock shares at the price of $1.25 per share, exercisable for ten (10) years from the date of conversion. The conversion was effective as of November 30, 2014 with the common stock shares and warrants being issued on January 2, 2015. This conversion satisfied his note in full as of January 2, 2015. | ||||||||||
Promissory note - PeopleSERVE: Pursuant to the purchase of PeopleSERVE, Inc. and PeopleSERVE PRS, Inc., the Company executed and delivered to the shareholder, Linda Moraski, a three (3) year promissory note (the “PS Promissory Note”) in the principal amount of $2,367,466. Ms. Moraski continues serving as President and Chief Executive of PeopleSERVE, Inc. and PeopleSERVE PRS, Inc. The PS Promissory Note bears interest at the rate of six percent (6%) per annum and is amortized straight line over five (5) years. As of February 28, 2015, the Company has paid $591,866 in principal. The remaining principal balance is $1,775,600. | ||||||||||
Twelve months | ||||||||||
Year ended | ended | |||||||||
May 31, | Amount | February 28, | Amount | |||||||
2015 | $ | 197,289 | 2016 | $ | 789,155 | |||||
2016 | 789,155 | 2017 | 789,155 | |||||||
2017 | 789,155 | 2018 | 197,289 | |||||||
Total | $ | 1,755,600 | Total | $ | 1,755,600 | |||||
For the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company’s interest expense for long-term notes amounted to $98,482 and $0 and $32,625 and $0, respectively. As of February 28, 2015 and May 31, 2014, accrued and unpaid interest under the long-term notes amounted to $98,482 and $5,448, respectively, and are included in Interest Payable – long-term. | ||||||||||
BONDS_SERIES_A
BONDS - SERIES A (Series A Convertible Bonds [Member]) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Series A Convertible Bonds [Member] | ||||||||
Bonds Disclosure [Text Block] | NOTE 7 – BONDS – SERIES A | |||||||
Bonds – Series A consisted of the following: | ||||||||
February 28, | May 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Beginning Balance | $ | 2,998,500 | $ | - | ||||
Proceeds | 1,060,000 | 2,998,500 | ||||||
Payments | -100,000 | |||||||
Debt discount for restricted stock and beneficial conversion – net of | - | -1,498,840 | ||||||
accumulated amortization of $2,545,445 and $369,334, respectively | ||||||||
Conversions | -3,528,500 | |||||||
Bonds – Series A, net | $ | 430,000 | $ | 1,499,660 | ||||
From April 17, 2014 through May 31, 2014, the Company completed multiple closings of its best efforts private offering (the “Bond Financing”) of twelve percent (12%) Convertible Bonds (the “Convertible Bonds”) with various accredited investors (the “Bond Purchasers”). Pursuant to purchase agreements with each of the Bond Purchasers (the “Bond Agreements”), the Company issued Convertible Bonds in the aggregate of $2,998,500. On or prior to the maturity date, October 15, 2014, of each of the Convertible Bonds, the Bond Purchasers must notify the Company whether the payment for the Convertible Bond was to be in cash or in comparably valued common stock. If no preference notification was delivered by the Bond Purchasers, the Company could make the determination. The Bond Purchasers may elect to convert the Convertible Bonds, including all unpaid coupon payments, at any time prior to the maturity date, into common stock shares, at a conversion price of $1.50 per share. | ||||||||
Each Bond Purchaser received additional equity consideration of 5,000 common stock shares for each $50,000 investment. Accordingly, the Company issued an aggregate of 299,850 common stock shares to the Bond Purchasers and recorded a debt discount of $488,176 and beneficial conversion of $1,379,997. At May 31, 2014, the principal amount outstanding was $2,998,500. Net of the remaining debt discount and beneficial conversion of $369,334, the remaining loan balance was $1,499,660. | ||||||||
From June 1, 2014 through July 29, 2014, the Company issued additional Convertible Bonds in the aggregate of $1,060,000. | ||||||||
Each Bond Purchaser received additional equity consideration of 5,000 common stock shares for each $50,000 investment. Accordingly, the Company issued an aggregate of 106,000 common stock shares to the Bond Purchasers and recorded a debt discount of $174,142 and beneficial conversion of $503,342. For the nine (9) and three (3) months ended February 28, 2015, the Company recorded amortization totaling $2,176,325 and $0, respectively. | ||||||||
On July 29, 2014, the Company completed the Bond Financing. This Bond Financing raised an aggregate of $4,058,500 from seventy (70) accredited investors and issued an aggregate of 405,850 common stock shares. As part of the Series A Bond offering, the placement agent was entitled to: (i) a fee in cash up to an amount equal to ten percent (10%) of the aggregate gross proceeds, (ii) a non-accountable expense allowance of up to two percent (2%) of the aggregate gross proceeds, and (iii) common stock shares equal to ten percent (10%) of the aggregate number of common stock shares issued. The placement agent was paid $487,020 and issued 12,100 common stock shares. | ||||||||
On or about September 10, 2014, the Company offered an early conversion incentive to all outstanding Convertible Bonds to convert principal and interest on or prior to the maturity date of October 15, 2014. The favorable conversion terms offered a discount from the original terms of $1.50 per common stock share with no warrants to conversion at $1.00 per common stock share and one (1) warrant exercisable until October 15, 2017 at $2.00 per common stock share for every $2.00 of principal and interest converted. The modification of conversion price from $2.00 to $1.00 resulted in the Company recording a modification expense of $1,976,775, including outstanding principal and interest. On October 15, 2014, certain Convertible Bondholders elected to convert a portion of the outstanding Convertible Bonds under the favorable conversion terms totaling $3,528,500 in principal and $181,155 in accrued interest into 3,709,687 common stock shares and 1,854,859 warrants exercisable at $2.00 per common stock share. The additional modification associated with the inclusion of warrants resulted in the Company recording a modification expense of $951,184. | ||||||||
On October 15, 2014, the Company agreed with the remaining ten (10) bond holders to extend the Maturity Date of the outstanding Convertible Bonds, $530,000 in principal and $26,765 in accrued interest. Eight (8) of these bond holders totaling $430,000 in principal agreed to extend the maturity to April 15, 2015 in exchange for 45,126 common stock shares, valued at $62,725. The remaining two (2) bond holders totaling $100,000 in principal and $7,430 in accrued interest were repaid in full on December 11, 2014. | ||||||||
At February 28, 2015, net of debt discount and beneficial conversion of $0, the remaining balance is $430,000. | ||||||||
For the nine (9) and three (3) months ended February 28, 2015, interest expense related to the Bond Financing amounted to $203,164 and $0, respectively. As of February 28, 2015 and May 31, 2014, accrued interest under the Bond Financing amounted to $50,941 and $33,980, respectively, and are included in Accounts Payable and Accrued Expenses. | ||||||||
BONDS_SERIES_B
BONDS - SERIES B (Series B Convertible Bonds [Member]) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Series B Convertible Bonds [Member] | ||||||||
Bonds Disclosure [Text Block] | NOTE 8 – BONDS – SERIES B | |||||||
Bonds – Series B consisted of the following: | ||||||||
February 28, | May 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Beginning Balance | $ | - | $ | - | ||||
Proceeds | 981,500 | - | ||||||
Debt discount for restricted stock and beneficial conversion – net of | -130,374 | - | ||||||
accumulated amortization of $93,520 and $0, respectively | ||||||||
Bonds – Series B, net | $ | 851,126 | $ | - | ||||
From October 3, 2014 through November 24, 2014, the Company completed multiple closings of its best efforts private offering of twelve percent (12%) Series B Convertible Bonds (the “Series B Bonds”) with certain accredited investors (the “Bond Purchasers”). Pursuant to purchase agreements with each of the Bond Purchasers (the “Bond Agreements”), the Company issued Convertible Bonds in the aggregate of $981,500 to twenty-one (21) accredited investors. On or prior to the Maturity Date, September 30, 2015, the holder must notify the Company whether the repayment will be made in cash or in common stock shares of the Company. At the maturity date, if the Series B Bond will be repaid in common stock shares, then the Series B Bond shall be repaid in common stock shares as follows: (i) in the event the Company’s common stock shares are trading at $2.67 or higher based on a 10-Day VWAP immediately prior to the Maturity Date, then the repayment conversion price shall be set at $2.00 per share, or (ii) in the event the Company’s common stock shares are trading below $2.67 based on a 10-Day VWAP, then the repayment conversion price shall be set at a twenty-five percent (25%) discount to the 10-Day VWAP calculated immediately prior to the Maturity Date, provided however, that in no event will the repayment conversion price be less than $1.50. The holders may elect to convert the Series B Bonds, including all unpaid coupon payments, at any time prior to the Maturity Date into common stock shares at a conversion price of $2.00 per share. | ||||||||
On November 13, 2014, the Series B Bond agreement was amended as follows: (i) in the event the Company’s common stock shares are trading at $2.67 or higher based on a 10-Day VWAP immediately prior to the Maturity Date, then the repayment price shall be set at $2.00 per share, or (ii) in the event the Company’s common stock shares are trading below $2.67 based on a 10-Day VWAP, then the repayment price shall be set at a twenty-five percent (25%) discount to the 10-Day VWAP calculated immediately prior to the Maturity Date, provided however, that in no event will the repayment conversion price be less than $1.20. The purchasers may elect to convert the Series B Bonds, including all accrued but unpaid coupon payments at any time prior to the Maturity Date into common stock shares at a conversion price of $2.00 per share. As a result of the amendment, the Company recorded a modification expense totaling $154,489. | ||||||||
If an Event of Default, as defined in the Series B Bond, occurs, among other things: (i) the interest rate on the Series B Bond shall automatically increase to eighteen percent (18%); and (ii) with a 30-day written notice to the Company of an Event of Default, the holder may convert a portion of the Series B Bond into common stock up to a principal amount equal to eight percent (8%) of the original principal amount (plus any accrued and unpaid interest outstanding on the debenture) at a conversion price per share equal to seventy-five percent (75%) of the average of the 20 VWAPs of the common stock immediately prior to the applicable default conversion date until the earlier of: (A) the Event of Default is cured to the satisfaction of the holder; or (B) the Series B Bond is repaid in full; or (C) the Series B Bond is converted in full. The holder shall have the right to submit additional default conversion notices until the debenture is no longer outstanding, provided that the holder may not submit more than one such notice per 30-day period. In the event the Company fails to deliver the common stock shares within five (5) days of receiving the default conversion notice, the Company may be subject to additional cash penalty payments to the Series B Bond holders. | ||||||||
On November 24, 2014 the Company completed the fourth and final closing of its Series B Bonds offering. In the fourth closing, the Company issued Series B Bonds for an aggregate of $100,000 to two (2) accredited investors. As a result, the Company issued 10,000 common stock shares as consideration. As of the final closing, the Company issued Series B Bonds for an aggregate of $981,500 and 98,150 common stock shares to a total of twenty (20) accredited investors. On December 8, 2014, the Company terminated its agreement with the investment bank previously engaged in connection with the Series B Bonds. | ||||||||
In addition to the Series B Bonds, each holder received 5,000 common stock shares (the “Equity Consideration”) for each $50,000 principal amount of Series B Bond investment. Accordingly, the Company issued an aggregate of 98,150 common stock shares to the holders. As a result, the Company recorded a debt discount of $123,505 and amortization of $50,522. The Company also recorded a beneficial conversion of $100,389 and amortization of $42,998. At February 28, 2015, the principal amount outstanding is $981,500. Net of the remaining debt discount and beneficial conversion of $130,374, the remaining loan balance is $851,126. | ||||||||
As part of the Series B Bond offering, the placement agent was entitled to: (i) a fee in cash of $88,335, nine percent (9%) of the aggregate gross proceeds raised, plus reimbursement of certain expense, (ii) 5,889 common stock shares equal to six percent (6%) of the Equity Consideration issued, and (iii) a three (3) year warrant, exercisable at $2.00 per share, to purchase 29,445 common stock shares with such exercise price subject to certain adjustments. | ||||||||
For the nine (9) and three (3) months ended February 28, 2015, interest expense associated with the Series B Bonds was $44,246 and $29,042, respectively. In February 2015, the Company paid $25,207 in accrued interest. As of February 28, 2015 and May 31, 2014, accrued interest under the Series B Bond was $19,038 and $0, respectively, and are included in Accounts Payable and Accrued Expenses. | ||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Feb. 28, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 9 - RELATED PARTY TRANSACTIONS |
Consulting Fees – Related Party | |
During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $325,000 and $45,000 and $300,000 and $15,000, respectively in consulting fees to Trilogy Capital Partners, Inc. (“Trilogy”). The Company’s former employee, Vice Chairman, President and Secretary, Alfonso J. Cervantes, is the majority owner of Trilogy. Effective December 31, 2014, Mr. Cervantes voluntarily resigned from his positions with the Company and subsidiaries. The Company entered into an Advisory Agreement with Trilogy, effective as of January 1, 2015, pursuant to which Trilogy may provide advisory services, if requested by the Company, for a period of twelve (12) months. Pursuant to the Advisory Agreement, the Company agreed to, among other things: (a) pay Trilogy $300,000, in equal monthly installments; and (b) issue to Trilogy two hundred fifty thousand (250,000) common stock shares on or before January 30, 2015; and (c) grant to Trilogy twenty-five thousand (25,000) common stock shares, in complete settlement of any past due fees and costs owed to Trilogy. Unless renewed by mutual consent, the Advisory Agreement shall terminate on December 31, 2015. At February 28, 2015, the Company has $250,000 accrued in Accounts Payable and Accrued Expenses – Related Parties account. | |
During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $0 and $90,000 and $0 and $0, respectively, in consulting fees to Robert Lee. This contract was mutually discontinued on December 31, 2013. | |
During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $44,674 and $135,000 and $0 and $45,000, respectively, in consulting fees to Grandview Capital Partners, Inc. (“Grandview”). The Company’s former Chairman and Chief financial Officer, Peter Goldstein, is the majority owner of Grandview. This agreement expired in September 2014. At February 28, 2015, the Company has $74,674 in Accounts Payable and Accrued Expenses – Related Parties account. | |
During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $22,500 and $45,000 and $7,500 and $15,000, respectively, in Board of Director fees to Dimitri Villard. In May 2014, Mr. Villard was named the Chairman of the Corporate Governance and Nominating Committee. During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $15,000 and $0 and $5,000 and $0, respectively to Mr. Villard for his role as Chairman of the Corporate Governance and Nominating Committee. In addition, during fiscal 2015, Mr. Villard has received 45,000 common stock shares valued at $52,393 for his services as a Board of Director and committee member. Additionally, the Company paid Mr. Villard $10,000 in advisory fees from January 1, 2014 through April 30, 2014. At February 28, 2015, the Company has $0 accrued in Accounts Payable and Accrued Expenses – Related Parties. | |
During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $22,500 and $45,000 and $7,500 and $15,000, respectively in Board of Director fees to Robert Mayer. Additionally, the Company paid Mr. Mayer $10,000 in advisory fees from January 1, 2014 through April 30, 2014. In addition, during fiscal 2015, Mr. Mayer has received 37,500 common stock shares valued at $43,662 for his services as a Board of Director and committee member. At February 28, 2015, the Company has $0 accrued in Accounts Payable and Accrued Expenses – Related Parties. | |
During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $22,500 and $2,500 and $7,500 and $2,500, respectively, in Board of Director fees to Jeff Grout. In February 2014, Mr. Grout was named the Chairman of the Compensation Committee. During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $15,000 and $1,667 and $5,000 and $1,667, respectively to Mr. Grout for his role as Chairman of the Compensation Committee. In addition, Mr. Grout received 37,500 common stock shares valued at $43,662 for his services as a Board of Director and committee member. At February 28, 2015, the Company has $0 accrued in Accounts Payable and Accrued Expenses – Related Parties. | |
During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $22,500 and $0 and $7,500 and $0, respectively in Board of Director fees to Nick Florio. In May 2014, Mr. Florio was named the Chairman of the Audit Committee. In September 2014, Mr. Florio was named the Chairman of the Restructuring Committee. During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company incurred $15,000 and $0 and $5,000 and $0, respectively to Mr. Florio for his role as Chairman of the Audit Committee. For his role as Chairman of the Restructuring Committee, Mr. Florio received 50,000 common stock shares valued $63,500. In total, Mr. Florio received 87,500 common stock shares valued at $107,162 for his services as a Board of Director and committee member. At the request of Mr. Florio, all cash payments and common stock issuances have been made in the name of Citrin Cooperman & Company, LLP. At February 28, 2015, the Company has accrued $0 in Accounts Payable and Accrued Expenses – Related Parties. | |
ACCOUNTS_RECEIVABLE_FINANCING
ACCOUNTS RECEIVABLE FINANCING | 9 Months Ended | ||
Feb. 28, 2015 | |||
Accounts Receivable Financing [Abstract] | |||
Accounts Receivable Financing [Text Block] | NOTE 10 – ACCOUNTS RECEIVABLE FINANCING | ||
In May 2013 and November 2013, respectively, Staffing 360 Group, Inc. d/b/a Cyber 360, Inc. and Control Solutions International, Inc., both wholly owned subsidiaries of the Company, entered into financing services agreements by which they assign accounts receivable to fund working capital with Sterling National Bank (“Sterling”). Pursuant to these agreements, Sterling may advance up to ninety percent (90%) of the face value of eligible accounts receivable. The borrowings carry interest at a rate of .025% per day, or nine percent (9%) per annum, from the date of the advance until the date of repayment. There is no ending date to the agreement, only a closing fee of $500 upon termination. Effective February 27, 2015, Cyber 360, Inc. provided 60-day notice of cancellation of their portion of this financing services agreement. | |||
In February 2014, Staffing U.K. entered into an agreement with ABN AMRO Commercial Finance PLC under which it borrows money against open accounts receivable. Under this agreement, the Borrower receives advances of up to ninety percent (90%) on temporary placements and seventy-five percent (75%) on permanent placements of the face value of eligible receivables. This was a consolidation of the agreement already in place since July 2011, to take into account the purchase of business assets of Poolia. The borrowings carry interest at a rate of two and one-half percent (2.50%) above the Sterling Libor rate of three and nine tenths’ percent (3.90%). The Aggregate Limit is 1,250,000 Pounds Sterling, which is cross guaranteed by all of the U.K. subsidiaries and backed by all of the assets of the U.K. entities. At the same time, a term loan agreement was entered into with ABN AMRO Commercial Finance PLC, in order to partially fund the Poolia Acquisition. The amount was 200,000 Pounds Sterling, balance outstanding at February 28, 2015 is 100,000 Pounds Sterling, monthly payments of 8,333 Pounds Sterling, bearing interest at 3.5% over base, which is 0.5% at February 28, 2015, and term of two (2) years. The term loan is secured by personal guarantee from the Executive Chairman. | |||
Effective November 1, 2012, the Company’s subsidiary, Monroe Staffing, a subsidiary of Faro Recruitment America, Inc., which is owned by Staffing U.K., entered into a $14,000,000 line of credit (“Credit and Security Agreement”) with Wells Fargo Bank, NA. The Credit and Security Agreement is subject to accounts receivable limitations and bears interest at one (1) month Libor plus five percent (5.0%) on the greater of $5,000,000 or the actual loan balance outstanding, and expires on October 31, 2015. The Credit and Security Agreement is subject to an annual facility fee, certain covenants and is secured by all of the assets of Monroe Staffing. The covenants are as follows: | |||
· | The Company’s Working Capital Ratio shall at all times be not less than 1:1 measured on a quarterly basis. | ||
· | The Company’s Cash Flow shall at all times be positive, as measured on a quarterly cumulative basis. | ||
· | The Company shall not make any loans, advances or transfers to any subsidiary or affiliate other than transactions in the ordinary course of business. | ||
In March 2014, Monroe Staffing received a one-time waiver relating to the working capital ratio of 1:1 and positive cash flow for the quarterly period ended December 31, 2013. Since such time, Monroe has maintained full quarterly compliance with all Wells Fargo covenants. | |||
Effective July 25, 2014, the Company joined with its subsidiaries, Monroe Staffing Services, LLC, PeopleSERVE, Inc. and PeopleSERVE PRS, Inc., (collectively referred to as “Borrowers”) in an Amended and Restated Credit and Security Agreement and a new Credit and Security Agreement (“Credit Facility”) with Wells Fargo Bank, NA. This Credit Facility increased the line of credit amount from $14,000,000 to $15,000,000 and modified the covenant to permit, with certain limitations, the transfer of funds amongst the Borrowers. All of terms and conditions remain unchanged. The effective rate at February 28, 2015 and May 31, 2014 was 5.15%. At February 28, 2015 and May 31, 2014, $12,180,088 and $10,798,713 respectively, were outstanding as a liability relating to the Accounts Receivable Financing account. (See Note 15 – Subsequent Events). | |||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended | |||||||||||
Feb. 28, 2015 | ||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | NOTE 11 – STOCKHOLDERS’ EQUITY | |||||||||||
Common Stock | ||||||||||||
On May 7, 2013, the Company increased the number of common stock shares from 75,000,000 to 200,000,000 and authorized the creation of 20,000,000 shares of blank check preferred stock, par value $0.00001 per share with such designations, rights and preferences as may be determined from time to time by the Board of Directors. | ||||||||||||
As of February 28, 2015, May 31, 2014 and May 31, 2013, the Company has issued and outstanding 42,877,588, 32,950,537 and 12,288,138 common stock shares, respectively. | ||||||||||||
The issuance of 20,662,399 common stock shares during the year ended May 31, 2014 is summarized below: | ||||||||||||
Number of | Fair Value at | |||||||||||
Common Stock | Fair Value at | Issuance | ||||||||||
Shares | Issuance | (per share) | ||||||||||
Shares issued pursuant to 2013 private placement offering | 627,783 | $ | 565,000 | $ | 0.9 | |||||||
Shares issued pursuant to 2014 private placement offering | 10,000,000 | 10,000,000 | 1 | |||||||||
Shares issued to consultants | 831,055 | 1,025,379 | 0.875 – 2.06 | |||||||||
Shares issued for conversion of accounts payable | 115,408 | 100,982 | 0.875 | |||||||||
Shares issued for conversion of convertible notes payable | 111,111 | 50,000 | 0.45 | |||||||||
Shares issued in connection with convertible notes | 413,750 | 297,047 | 0.72 | |||||||||
Shares issued in connection with accrued interest related to convertible notes | 9,498 | 4,275 | 0.45 | |||||||||
Shares issued in connection with promissory notes | 85,000 | 61,026 | 0.72 | |||||||||
Shares issued to board of directors | 121,250 | 111,612 | 0.45 – 2.04 | |||||||||
Shares issued to audit committee | 2,083 | 4,098 | 1.92 – 1.98 | |||||||||
Shares issued to compensation committee | 4,996 | 9,075 | 0.875 – 2.04 | |||||||||
Shares issued to corporate governance and nominating committee | 4,582 | 8,193 | 0.875 – 2.04 | |||||||||
Shares issued to employees | 90,000 | 113,500 | 0.875 – 1.97 | |||||||||
Shares issued pursuant to acquisitions | 4,560,067 | 5 ,179,429 | 0.875 – 1.93 | |||||||||
Shares issued to private placement agents | 1,338,922 | 786,208 | 0.875 – 2.00 | |||||||||
Shares issued in connection with convertible bonds | 299,850 | 488,177 | 1.63 | |||||||||
Shares issued in connection with bridge loans | 320,000 | 442,034 | 1.38 | |||||||||
Shares issued for conversion of convertible promissory notes | 1,655,000 | 1,655,000 | 1 | |||||||||
Shares issued for conversion of accrued interest related to convertible promissory notes | 72,044 | 72,044 | 1 | |||||||||
The issuance of 9,927,051 common stock shares during the nine (9) months ended February 28, 2015 is summarized below: | ||||||||||||
Number of | Fair Value at | |||||||||||
Common Stock | Fair Value at | Issuance | ||||||||||
Shares | Issuance | (per share) | ||||||||||
Shares issued to consultants | 232,500 | $ | 215,001 | $ | 0.62-1.92 | |||||||
Shares issued for conversion of convertible notes payable | 400,000 | 600,000 | 1.5 | |||||||||
Shares issued in connection with accrued interest on convertible notes | 7,912 | 11,868 | 1.5 | |||||||||
Shares issued in connection with convertible notes | 84,500 | 123,345 | 0.69 | |||||||||
Shares issued in connection with Series A convertible bonds | 106,000 | 174,142 | 0.61 | |||||||||
Shares issued in connection with amendment of Series A convertible bonds | 45,126 | 62,725 | 1.39 | |||||||||
Shares issued in connection with Series B convertible bonds | 98,150 | 123,504 | 1.26 | |||||||||
Shares issued to board and committees members | 207,500 | 246,880 | 0.35-1.95 | |||||||||
Shares issued as interest on debt | 300,672 | 286,809 | 0.30-1.85 | |||||||||
Shares issued to private placement agent | 16,509 | 27,832 | 0.85-1.95 | |||||||||
Shares issued in connection with conversion of accounts payable | 19,000 | 32,870 | 1.73 | |||||||||
Shares issued in connection with conversion of Initio promissory notes | 2,994,202 | 2,245,921 | 0.7501 | |||||||||
Shares issued in connection with conversion of accrued interest and interest expense associated with Initio promissory notes | 296,243 | 222,210 | 0.7501 | |||||||||
Shares issued for conversion of Series A bonds | 3,709,687 | 3,709,655 | 1 | |||||||||
Shares issued for conversion of earn-out liability | 1,134,050 | 340,215 | 0.3 | |||||||||
Shares issued in connection with settlement agreement | 275,000 | 255,750 | 0.93 | |||||||||
Warrants | ||||||||||||
The following table summarizes the changes in warrants outstanding and related prices for the common stock shares issued to shareholders at February 28, 2015: | ||||||||||||
Warrants Outstanding | Warrants Exercisable | |||||||||||
Weighted Average | Weighted | Weighted | ||||||||||
Exercise | Number | Remaining Contractual | Average | Number | Average | |||||||
Price | Outstanding | Life (years) | Exercise price | Exercisable | Exercise Price | |||||||
$1.25 - $2.00 | 12,264,289 | 4.29 | $1.76 | 12,264,289 | $1.76 | |||||||
Transactions involving the Company’s warrant issuance are summarized as follows: | ||||||||||||
Weighted | ||||||||||||
Number of | Average | |||||||||||
Shares | Price Per Share | |||||||||||
Outstanding at May 31, 2013 | 583,338 | $ | 1.8 | |||||||||
Issued | 6,177,427 | $ | 1.82 | |||||||||
Exercised | - | - | ||||||||||
Expired | - | - | ||||||||||
Outstanding at May 31, 2014 | 6,760,765 | $ | 1.97 | |||||||||
Issued | 5,503,524 | $ | 1.51 | |||||||||
Exercised | - | - | ||||||||||
Expired | - | - | ||||||||||
Outstanding at February 28, 2015 | 12,264,289 | $ | 1.76 | |||||||||
Stock Options | ||||||||||||
2014 Equity Plan - On April 30, 2014, the Board of Directors adopted the 2014 Equity Plan (the “Plan”). Under the Plan, the Company may grant options to employees, directors, senior management of the Company and, under certain circumstances, consultants. The purpose of the 2014 Equity Plan is to retain the services of the group of persons eligible to receive option awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its affiliates. Through May 31, 2014, a maximum of 1,500,000 common stock shares had been reserved for issuance under this plan. In July 2014, the Company increased the number of options to be issued to 2,500,000. The Plan expires on April 30, 2024. The Board of Directors will administer the plan unless and until the Board of Directors delegates administration to a committee, consisting of two (2) or more outside directors, as defined in the Treasury Regulations promulgated under Section 162(m) of the Internal Revenue Code of 1986, as amended. On April 30, 2014, the Board of Directors delegated the authority to administer the Plan to the combination of the Company’s Executive Chairman and President. They have the power to determine which persons who are eligible under the Plan will be granted option awards, when and how each option award will be granted, and the provisions and terms of each option award. With the resignation of the Company’s President, this delegated authority to the Executive Chairman and President has reverted back to the Company’s Compensation Committee. | ||||||||||||
On December 8, 2014, the Company modified the exercise price on its unvested 1,380,000 options from an exercise price of $2.00 per share to $1.00 per share. The Company will amortize the modification expense of $104,759 over the remaining vesting term of the stock options. | ||||||||||||
During the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company recorded share-based payment expense of $178,980 and $0 and $66,449 and $0, respectively, in connection with all options outstanding. The amortization of share-based payment was recorded in Salaries and Wages expense during fiscal 2015. | ||||||||||||
Through February 28, 2015, the Company had granted 2,425,000 options to purchase common stock with an exercise price of $2.00 per share. On December 31, 2014, the Company modified the exercise price on its unvested 1,380,000 options from an exercise price of $2.00 per share to $1.00 per share. There are 750,000 options with an exercisable term of five (5) years and all others have an exercisable term of ten (10) years. The vested options were 1,045,000. | ||||||||||||
The fair value of Stock options granted was estimated at the date of grant using the Black-Scholes options pricing model. The Company used the following assumptions for determining the fair value of options granted under the Black-Scholes option pricing model: | ||||||||||||
Exercise price: | $1.00 - $2.00 | |||||||||||
Market price at date of grant: | $0.7501 - $1.99 | |||||||||||
Volatility: | 50.57% - 84.23% | |||||||||||
Expected dividend rate: | 0 | |||||||||||
Expected terms (years): | 10-May | |||||||||||
Risk-free interest rate: | 1.45% - 2.77% | |||||||||||
A summary of the activity during the nine (9) months ended February 28, 2015 of the Company’s 2014 Equity Plan is presented below: | ||||||||||||
Options | Weighted | Aggregate | ||||||||||
Average | Intrinsic | |||||||||||
Exercise Price | Value | |||||||||||
Outstanding at June 1, 2013 | - | $ | - | $ | - | |||||||
Granted | 1,900,000 | 2 | - | |||||||||
Exercised | - | - | - | |||||||||
Expired or cancelled | - | - | - | |||||||||
Outstanding at May 31, 2014 | 1,900,000 | $ | 2 | $ | - | |||||||
Granted | 525,000 | 2 | - | |||||||||
Exercised | - | - | - | |||||||||
Expired or cancelled | - | - | - | |||||||||
Decrease in weighted average exercise price due to modification (1) | - | $ | -0.57 | - | ||||||||
Outstanding at February 28, 2015 | 2,425,000 | $ | 1.43 | $ | - | |||||||
-1 | On December 8, 2014, the Company modified the exercise price on its unvested 1,380,000 options from an exercise price of $2.00 per share to $1.00 per share. | |||||||||||
The total compensation cost related to options not yet amortized is $802,233 at February 28, 2015. The Company will recognize this charge over the next forty-one (41) months. | ||||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Feb. 28, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 12 – COMMITMENTS AND CONTINGENCIES |
Employment Agreements | |
On February 24, 2013, the Company entered into an employment agreement with Darren Minton (the “Minton Employment Agreement”), to serve as a Senior Vice President of the Company. Pursuant to the terms of the Minton Employment Agreement, the Company will pay Mr. Minton $48,000 annually. Mr. Minton is also entitled to receive as additional compensation 20,000 common stock shares. On February 24, 2014, the Company entered into a new employment agreement with Mr. Minton to serve as Executive Vice President of the Company. Pursuant to the terms of the Minton Employment Agreement, the Company agreed to pay Mr. Minton $180,000 annually. Mr. Minton is also entitled to receive as additional one-time grant of 20,000 common stock shares. The employment agreement has a term of eighteen (18) months. In addition, the Company may terminate the Employment Agreement after four (4) months with 30-days’ notice. | |
On November 4, 2013, in connection with the CSI Acquisition, the Company entered into a four (4) year employment agreement with Simon Dealy (the “Dealy Employment Agreement”), to serve as Sr. Vice President of the Company and as Chief Executive Officer of CSI, the Company’s professional services and consulting division. Pursuant to the terms of the Dealy Employment Agreement, the parties agreed that Mr. Dealy will not engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, or any business which the Company contemplates conducting or intends to conduct. Mr. Dealy will receive a salary of $200,000 annually, plus reasonable expenses. Mr. Dealy is also entitled to an annual base commission equal to two percent (2%) of the gross profit of professional services and consulting division. In addition, Mr. Dealy will receive an additional monthly commission, not to exceed one and three quarters’ percent (1.75%), if the CSI gross profit exceeds $2,200,000. The Dealy Employment Agreement will automatically renew for successive one (1) year terms following the completion of the initial four (4) year term of the agreement unless terminated by the Company or Mr. Dealy ninety (90) days prior to the end of such term. | |
On November 4, 2013, in connection with the CSI Acquisition, the Company entered into a four (4) year employment agreement with Margaret Gesualdi (the “Gesualdi Employment Agreement”), to serve as Vice President of the Company and as Mid-Atlantic Region Managing Partner of CSI, the Company’s professional services and consulting division. Pursuant to the Gesualdi Employment Agreement, the parties agreed that Ms. Gesualdi will not engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, or any business which the Company contemplates conducting or intends to conduct. Ms. Gesualdi will receive a salary of $190,000 annually, plus reasonable expenses. Ms. Gesualdi is also entitled to an annual base commission equal to two percent (2%) of the “employee attributable gross profit” of the professional services and consulting division. In addition, Ms. Gesualdi will receive an additional monthly commission, not to exceed one and three quarters’ percent (1.75%), if the employee attributable gross profit exceeds $750,000. The Gesualdi Employment Agreement will automatically renew for successive one (1) year terms following the completion of the initial (4) four year term of the agreement unless terminated by the Company or Ms. Gesualdi ninety (90) days prior to the end of such term. | |
On November 4, 2013, in connection with the CSI Acquisition, the Company entered into a four (4) year employment agreement with Charlie Cooper (the “Cooper Employment Agreement”), to serve as Vice President of the Company and as Chief Operating Officer of CSI, the Company’s professional services and consulting division. Pursuant to the Cooper Employment Agreement, the parties agreed that Mr. Cooper will not engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, or any business which the Company contemplates conducting or intends to conduct. Mr. Cooper will receive a salary of $200,000 annually, plus reasonable expenses. Mr. Cooper is also entitled to an annual base commission equal to two percent (2%) of the gross profit of professional services and consulting division. In addition, Mr. Cooper will receive an additional monthly commission, not to exceed one and three quarters’ percent (1.75%), if the CSI gross profit exceeds $2,200,000. The Cooper Employment Agreement will automatically renew for successive one (1) year terms following the completion of the initial four (4) year term of the agreement unless terminated by the Company or Mr. Cooper ninety (90) days prior to the end of such term. On March 13, 2015, Mr. Cooper’s employment was terminated for cause. | |
On January 3, 2014, in connection with the Initio Acquisition, the Company entered into an employment agreement with Brendan Flood (the “Flood Employment Agreement”). Pursuant to the Flood Employment Agreement, Mr. Flood will serve as Executive Chairman of the Board of Directors, as well as, Chief Executive Officer of Initio. Mr. Flood will be paid a salary of £192,000 (At February 28, 2015, the foreign currency exchange rate of 1.5426 makes this approximately $296,000) per annum, less statutory deductions, plus other benefits including reimbursement for reasonable expenses, paid vacation and insurance coverage for his roles with both Staffing 360 Solutions, Inc. and Staffing UK. Mr. Flood’s salary will be adjusted (but not decreased) annually based upon the Consumer Price Index for All Urban Consumers for the Northeast Region as determined by the United States Department of Labor Bureau of Labor Statistics. Mr. Flood will also be entitled to an annual bonus of up to 50% of his annual base salary based reaching certain financial milestones. Additionally, Mr. Flood is entitled to Gross Profit Appreciation Participation, which entitles the participants to ten (10%) of Initio’s Excess Gross Profit, which is defined as the increase in Initio gross profits in excess of one hundred twenty percent (120%) of the base year’s gross profit, up to $400,000. Mr. Flood’s participating level is sixty-two and one-half percent (62.5%). (See Note 15 – Subsequent Events). The Flood Employment Agreement has a term of five (5) years and will automatically renew thereafter unless twelve (12) months written notice is provided by either party. This employment agreement includes customary non-compete/solicitation language for a period of twelve (12) months after termination of employment. | |
On January 3, 2014, in connection with the Initio Acquisition, the Company entered into an employment agreement with Matt Briand (the “Briand Employment Agreement”). Pursuant to the Briand Employment Agreement, Mr. Briand will serve as Co-Chief Executive Officer of the Company, as well as, Chief Executive Officer of Monroe. Mr. Briand will be paid a salary of $300,000 per annum, plus other benefits including reimbursement for reasonable expenses, paid vacation and insurance coverage for his roles with both Staffing 360 Solutions, Inc. and Monroe Staffing LLC, a division of Staffing 360 Solutions (UK) Limited. Mr. Briand will also be entitled to an annual bonus of up to fifty percent (50%) of his annual base salary based on reaching certain financial milestones. Additionally, Mr. Briand is entitled to Gross Profit Appreciation Participation, which entitles the participants to ten (10%) of Initio’s Excess Gross Profit, which is defined as the increase in Initio gross profits in excess of one hundred twenty percent (120%) of the base year’s gross profit, up to $400,000. Mr. Briand’s participating level is thirty-seven and one-half percent (37.5%). (See Note 15 – Subsequent Events). The Briand Employment Agreement has a term of five (5) years and will automatically renew thereafter unless twelve (12) months written notice is provided by either party. This employment agreement includes customary non-compete/solicitation language for a period of twelve (12) months after termination of employment. On January 27, 2015, Mr. Briand was given the additional title of President. | |
On March 17, 2014, the Company entered into an employment agreement with Jeff R. Mitchell (the “Mitchell Employment Agreement”). Pursuant to the Mitchell Employment Agreement, Mr. Mitchell will serve as Executive Vice President and Chief Financial Officer. Mr. Mitchell will receive an annual base salary $250,000, plus other benefits including reimbursement for reasonable expenses, paid vacation and insurance coverage for his role with Staffing 360 Solutions, Inc. Mr. Mitchell will also be entitled to an annual bonus of up to fifty percent (50%) of his annual base salary based on reaching certain milestones. Mr. Mitchell will also receive a grant of 125,000 common stock shares, issuable as follows: (i) 50,000 common stock shares on June 1, 2014, and (ii) 25,000 common stock shares on each one (1) year anniversary of his employment. In addition, Mr. Mitchell will be entitled to 150,000 stock options to purchase common stock to be issued under the Company’s Stock Option Plan, which such stock options shall vest as follows: (i) 30,000 on June 1, 2014, and (ii) 30,000 on each one (1) year anniversary of his employment. The stock options have an exercise price of $2.00 per share, and are exercisable for a period of ten (10) years from the date of grant. The Mitchell Employment Agreement has a term of three (3) years. This employment agreement includes customary non-compete/solicitation language for a period of twelve (12) months after termination of employment. | |
On May 17, 2014, in connection with the PS Acquisition, the Company entered into an employment agreement with Linda Moraski (the “Moraski PSI Employment Agreement”). Pursuant to the Moraski PSI Employment Agreement, Ms. Moraski will serve as President and Chief Executive Officer of PSI for a term of three (3) years, provided however such term shall automatically renew for one (1) year terms unless notice of non-renewal is provided at least one hundred eighty (180) days prior to such renewal. Ms. Moraski shall receive a base salary of $112,500 per year, which such base salary is subject to increase based on the Consumer Price Index (“CPI”). Further, Ms. Moraski will be entitled to receive an annual commission equal to the sum of (i) three percent (3%) of the Gross Profit of PSI for such fiscal year; plus (ii) two and one-half percent (2.5%) of the amount that Gross Profit of PSI for such fiscal year exceeds the Closing Gross Profit as defined in the Agreement. In addition, Ms. Moraski shall also be entitled to an annual bonus, certain benefits, and eligibility to participate in the Company’s stock incentive plan and certain expense reimbursements. | |
On May 17, 2014, in connection with the PS Acquisition, the Company entered into an employment agreement with Linda Moraski (the “Moraski PRS Employment Agreement”). The terms of the Moraski PRS Employment Agreement are substantially similar to the Moraski PSI Employment Agreement, provided, however, under the Moraski PRS Employment Agreement, Ms. Moraski’s base salary is $37,500, subject to increase based on CPI. Ms. Moraski is not entitled to any commissions or bonuses pursuant to the Moraski PRS Employment Agreement. | |
Earn-out Liability | |
The Earn-out Liability is comprised of contractual contingent liabilities resulting from the Company’s acquisitions. The provisions basically state that the seller of a business may receive additional future compensation based upon the business achieving certain future financial performance levels. The earn-out transactions were accounted for under the purchase method in accordance with ASC 805. | |
Pursuant to the TRG Acquisition (See Note 14 - Acquisitions), the TRG Purchase Price includes cash payments to the TRG Shareholders for performance-based compensation equal to the following percentages of TRG’s gross profit from the date of closing through the end of the sixteenth (16th) quarter following the date of closing, not to exceed $1,500,000: (i) twenty percent (20%) of the amount of TRG’s gross profit up to and including an aggregate of $5,000,000 during the Earn-Out Period; plus (ii) seven percent (7%) of the amount of TRG’s gross profit, if any, in excess of an aggregate of $5,000,000 during the Earn-Out Period. At closing, the Company estimated the performance-based compensation was $1,192,000. During the nine (9) months ended February 28, 2015, the Company paid $111,374 towards the earn-out liability. On February 27, 2015, the Company satisfied this liability in full by issuing 1,134,050 common stock shares as part of the sale of TRG with an effective date of January 1, 2015. | |
Pursuant to the CSI Acquisition (See Note 14 - Acquisitions), the CSI Purchase Price includes cash payment to the NCSI Shareholders for performance-based compensation equal to twenty percent (20%) of CSI’s and CCSI’s consolidated gross profit from the date of closing through the end of the sixteenth (16th) quarter following the date of closing not to exceed a total of $2,100,000. At closing, the Company estimated the performance-based compensation would be $2,100,000, which has subsequently been updated based upon the deteriorating business performance and forecast for CSI. The analysis performed as of February 28, 2015, resulted in the Company reducing the earn-out in the amount of $840,455. The Company has paid $485,271 to date towards the earn-out liability. At February 28, 2015 the balance of the earn-out liability was $774,274. | |
Consulting Agreements | |
On July 19, 2012, the Company entered into a one (1) year consulting agreement for business development, business modeling and support services with River Star Professional Group (“RSPG”) which was amended to a two (2) year agreement effective July 17, 2013. The parties agreed that the consultant will be paid cash $5,000 monthly; plus $2,500 per month in the form of common stock of the Company based upon the closing share value as of the last day of each month, for up to forty (40) man hours of service time with additional hours above forty (40) hours billed at an agreed upon hourly rate plus pre-approved related expenses incurred in performing such services. In November 2013, the Company engaged RSPG to provide compliance support services for an initial $30,000 retainer fee. On January 30, 2014, the Company entered into a termination and settlement agreement with RSPG. As full and final settlement of the agreement, RSPG received a cash payment of $153,750 and 36,388 common stock shares. | |
On February 15, 2013, the Company entered into an advisory agreement (the “Grandview Advisory Agreement”) with Grandview Capital Partners, Inc. (“Grandview”). Pursuant to the Grandview Advisory Agreement, Grandview will provide assistance and advice in seeking out a potential merger or acquisition partners/targets. The Company will pay Grandview $10,000 per month for a period of eighteen (18) months and will increase to $15,000 per month on the completion of the first acquisition of a temporary staffing company by the Company and contemporaneous financing. The Company will further compensate Grandview as its exclusive buy side advisor to locate and facilitate qualified businesses or companies that may desire to provide financing, (debt or equity) or fund the acquisition of certain of the stock or assets of such business transactions. Grandview will receive a fee between one (1%) and ten (10%) percent of the total transaction, depending on the transaction value, as defined in the Grandview Advisory Agreement. The Company’s former Chairman of the Board of Directors, Principal Financial Officer, and Treasurer, Peter Goldstein, is the majority shareholder of Grandview Capital Partners, Inc. Mr. Goldstein resigned from the Board of Directors and all officer positions as of January 3, 2014. This agreement was amended in January 2014 and continued until September 30, 2014 at a rate of $10,000 per month. The balance outstanding is $74,644. | |
On February 15, 2013, the Company entered into an agreement (the “Trilogy Agreement”) with Trilogy Capital Partners, Inc. (“Trilogy”), which commenced in April 2013. Pursuant to the Trilogy Agreement, Trilogy will provide the Company with the development and implementation of an investor awareness program designed to create financial market and investor awareness for the Company. The Company will pay Trilogy $5,000 per month for a period of eighteen (18) months, which expired in October 2014. On November 13, 2014, the Company entered into an Advisory Agreement with Trilogy, effective as of January 1, 2015, pursuant to which Trilogy may provide advisory services if requested by the Company for a period of twelve (12) months. Pursuant to the Advisory Agreement, the Company agreed to, among other things: (a) pay $300,000, in equal monthly installments of $25,000; and (b) grant two hundred fifty thousand (250,000) common stock shares on or before January 30, 2015; and (c) grant an additional 25,000 common stock shares valued at the last trade price at December 31, 2014, in complete settlement of any past due fees and costs owed to Trilogy. Unless renewed by mutual consent, the Advisory Agreement shall terminate on December 31, 2015. | |
On February 14, 2013, the Company entered into a corporate services agreement (the “Pylon Agreement”) with Pylon Management, Inc. (“Pylon”). Pursuant to the Pylon Agreement, Pylon will provide the Company with assistance and advice in identifying potential merger or acquisition targets and integrating such acquired business into the Company for a period of eighteen (18) months. Pursuant to the Pylon Agreement, for any merger and acquisition transaction, Pylon will receive a fee between three (3%) and five (5%) percent of the transaction value. Pylon shall also receive equity compensation in the amount of two percent (2%) of the outstanding common stock shares on the date of the first acquisition, and one percent (1%) of the outstanding common stock shares on the date of the second transaction. All common stock shares issued under the Pylon Agreement shall have “piggyback” registration rights at the Company’s election and shall be included in any registration statement filed by the Company with the Securities and Exchange Commission. Upon the closing of the first transaction, the Company will pay a monthly retainer of $5,000 per month. The Company will also pay Pylon two percent (2%) of the revenue of the Company for administrative services rendered, which may be reduced pursuant to the Pylon Agreement. The Pylon Agreement may be terminated by either party upon ninety (90) days written notice. On April 26, 2013, the Company acquired TRG. As such, Pylon was issued 175,734 common stock shares based on the terms of the agreement. In February 2014, the Company issued Pylon 150,000 common stock shares as full settlement and termination of the Pylon Agreement. On March 1, 2014, the Company entered into a new twelve (12) month advisory agreement with Pylon, agreeing to pay Pylon $5,000 per month as well as performance-based fees. | |
On February 15, 2013, the Company entered into an advisory agreement with Joshua Capital, LLC. Pursuant to this agreement, Joshua Capital, LLC will provide the Company with advisory and consulting services in connection with the Company’s business operations. The Company will pay $10,000 per month for a period of eighteen (18) months and will increase to $15,000 per month on the completion of the first acquisition of a temporary staffing company and contemporaneous financing. The agreement may be terminated by the Company for cause, as defined in the agreement. Robbie Lee, a shareholder of the Company is the majority shareholder of Joshua Capital, LLC. The Company and Joshua Capital terminated the agreement effective December 31, 2013. There are no amounts owed or outstanding. | |
On August 22, 2013, the Company entered into an agreement with Rempel Ventures, LLC. The term of the agreement is twelve (12) months. Rempel Ventures will receive $3,000 and 5,000 common stock shares per month and will provide advisory services. Specifically, they will provide support for business activities related to the Company’s consolidation model in the staffing industry. In addition, Rempel Ventures will provide business and financial advice and services. On January 1, 2014, the Company and Rempel Ventures, LLC amended the agreement increasing the advisory fee to $13,000 per month. In addition, the agreement was transferred from Rempel Ventures, LLC to Alternative Advisory Group LLC. No other terms of the agreement were altered. On April 1, 2014, the Company further modified the Alternative Advisory Group agreement by extending the term of the agreement to April 1, 2015 and discontinued the monthly equity consideration of 5,000 common stock shares which was replaced with a one-time issuance of 200,000 common stock shares. The balance outstanding is $91,000. | |
On December 17, 2014, the Company entered into an exclusive agreement with a New York-based investment bank. The investment bank provides services across a wide variety of potential financings as part of the Company's buy-and-build acquisition strategy, which includes, but is not limited to: convertible debt, secondary offerings and private placements. The Company agreed to pay investment bank varying percentages of capital raised based upon the type and structure of the financing. The initial term of retention was 180 days and could be extended or voided by either party if certain benchmarks were not achieved. The Company paid the investment bank an engagement fee of $10,000 on December 19, 2014. (See Note 15 – Subsequent Events). | |
At February 28, 2015, the Company reviewed two historical consulting contracts under which the consultants were to provide certain services including roadshows, aftermarket support, awareness activity and advising management. The consultants had failed to perform or provide such services. Further, they did not respond to the Company’s requests or attempts to contact them. Therefore, the Company considers the contracts null and void and has reversed the remaining unpaid consulting accrual in the amount of $102,500, all of which had been previously expense in the current fiscal year. | |
Directors Agreements | |
On July 15, 2012, the Company entered into an advisory agreement with Dimitri Villard. From July 1, 2012 to June 30, 2013, Mr. Villard served as a member of the Board of Directors and as an advisor for the Company. The Company agreed to pay Mr. Villard $45,000, consisting of: (i) $22,500 of common stock shares based on the value equal to fifty (50%) of the per share price of the common stock sold in the private placement financing, and (ii) $22,500 of cash to be paid in monthly payments of $1,875. This agreement expired on June 30, 2013, but was continued by the Company on a month to month basis. Effective July 1, 2013, Mr. Villard entered into a new agreement with the Company, to serve as a member of the Board of Directors for $30,000 annually, payable $2,500 per month. Additionally, Mr. Villard was awarded 2,500 common stock shares per month. In addition, effective January 1, 2014, Mr. Villard entered into a separate advisory agreement (the “Villard Advisory Agreement”) for a term of one year for $30,000 per year, payable $2,500 per month, and 30,000 common stock shares, issued at 2,500 common stock shares per month. In April 2014, the Villard Advisory Agreement was terminated. For his services as an advisor in 2014, Mr. Villard was paid $10,000 and was awarded 10,000 common stock shares. In May 2014, Mr. Villard was named the Chairman of the Corporate Governance and Nominating Committee. For his service as Chairman of the Corporate Governance and Nominating Committee, Mr. Villard will receive an annual payment of $20,000, payable $1,667 per month. In addition, Mr. Villard will receive 833 common stock shares per month (10,000 common stock shares annually). In May 2014, Mr. Villard was named as a member of the Audit Committee and the Compensation Committee. For his service as a member of the Audit Committee and Compensation Committee, Mr. Villard will receive 833 common stock shares per month (10,000 common stock shares annually) for each committee. In September 2014, Mr. Villard was appointed to serve on the Restructuring Committee. | |
On July 1, 2013, the Company entered into an agreement with Robert Mayer, to serve as a member of the Board of Directors for an annual payment of $30,000, payable $2,500 per month. In addition, for his service as a member of the Board of Directors, Mr. Mayer will receive 2,500 common stock shares per month. In addition, effective January 1, 2014, Mr. Mayer entered into a separate agreement to serve as an advisor to the Company (the “Mayer Advisory Agreement”) for a term of one (1) year for $30,000 per year, payable $2,500 per month and 30,000 common stock shares, issued at 2,500 common stock shares per month. In April 2014, the Mayer Advisory Agreement was terminated. For his services as an advisor in 2014, Mr. Mayer was paid $10,000 and was awarded 10,000 common stock shares. In May, 2014, Mr. Mayer was named as a member of the Audit Committee and the Compensation Committee. For his service as a member of the Audit Committee and Compensation Committee, Mr. Mayer will receive 833 common stock shares per month (10,000 common stock shares annually) for each committee. | |
In February 2014, the Company entered into an agreement with Jeff Grout to serve as a member of the Board of Directors for an annual payment of $30,000, payable $2,500 per month. In addition, for his service as a member of the Board of Directors, Mr. Grout will receive 2,500 common stock shares per month. In addition, in February, 2014, Mr. Grout was named the Chairman of the Compensation Committee. For his service as Chairman of the Compensation Committee, Mr. Grout will receive an annual payment of $20,000, payable $1,667 per month. Mr. Grout will also receive 833 common stock shares per month (10,000 common stock shares annually). Mr. Grout was also named as a member of the Corporate Governance and Nominating Committee. For his service as a member of the Corporate Governance and Nominating Committee, Mr. Grout will receive 833 common stock shares per month (10,000 common stock shares annually). | |
In May 2014, the Company entered into an agreement with Nick Florio to serve as a member of the Board of Directors for an annual payment of $30,000, payable $2,500 per month. In addition, for his service as a member of the Board of Directors, Mr. Florio will receive 2,500 common stock shares per month. In addition, in May, 2014, Mr. Florio was named the Chairman of the Audit Committee. For his service as Chairman of the Audit Committee, Mr. Florio will receive an annual payment of $20,000, payable $1,667 per month. Mr. Florio will also receive 833 common stock shares per month (10,000 common stock shares annually). Mr. Florio was also named as a member of the Corporate Governance and Nominating Committee. For his service as a member of the Corporate Governance and Nominating Committee, Mr. Florio will receive 833 common stock shares per month (10,000 common stock shares annually). In September 2014, Mr. Florio was named the Chairman of the Restructuring Committee. For his service as Chairman of the Restructuring Committee, Mr. Florio will receive a one-time fee of 50,000 common stock shares. At the request of Mr. Florio, all cash payments and common stock issuances have been made in the name of Citrin Cooperman & Company, LLP. | |
Lease Obligations | |
The Company entered into multiple lease agreements for office space. The agreements require monthly rental payments through March 31, 2017. Total minimum lease obligation approximate $221,564, $635,190 and $205,267 for the years ended May 31, 2015, 2016 and 2017, respectively. For the nine (9) and three (3) months ended February 28, 2015, rent expense amounted to $779,192 and $272,409, respectively. | |
Guarantees | |
Pursuant to the sale of Cyber 360, the Company agreed to continue as a guarantor on the accounts receivable financing facility between Sterling Bank and Cyber 360 until such time that it is paid in full, which is scheduled for April 28, 2015. All customer payments are required to be applied towards the outstanding balance and Cyber 360 is not allowed to make additional advances against this facility. At February 28, 2015, the balance outstanding was $269,539. The balance outstanding on April 13, 2015 is $41,325. | |
Legal Proceedings | |
The Company is party to various legal proceedings, including those noted in this section. Although management at present believes that the ultimate outcome of these proceedings, individually and in the aggregate, are not probable to materially harm our financial position, results of operations, cash flows, or overall trends, legal proceedings are subject to inherent uncertainties, and unfavorable rulings or other events could occur. Unfavorable resolutions could include substantial monetary damages. Were unfavorable outcomes to occur, the possibility exists for a material adverse impact on our business, results of operations, financial position, and overall trends. The Company may also conclude that settling one or more such matters is in the best interests of our stockholders, employees, and customers, and any such settlement could include substantial payments. However, the Company has not reached this conclusion with respect to any particular matter at this time. | |
On May 22, 2014, NewCSI Inc. (“NCSI”), the former owners of Control Solutions International, filed a complaint in the United States District Court for the Western District of Texas, Austin Division, against the Company arising from the terms of the CSI Stock Purchase Agreement dated August 14, 2013. NCSI claims that the Company breached a provision of the CSI Stock Purchase Agreement which required the Company to calculate within 90 days after December 31, 2013 and pay to NCSI fifty percent (50%) of certain “Deferred Tax Assets”. The Company responded denying the material allegations and interposing numerous affirmative defenses. On October 8, 2014, NCSI filed a Motion of Summary Judgment (the “Motion”). On March 30, 2015, a Magistrate Judge of the District Court issued a Report and Recommendation that the District Court deny the Motion. The Recommendation became a final decision on April 13, 2015. | |
On December 31, 2014, NCSI filed an amended complaint in which NCSI seeks up to $154,433 of damages related to the Deferred Tax Assets and an acceleration of earn-out payments provided for in the CSI Stock Purchase Agreement of $1,670,635 at December 31, 2014. The earn-out liability was fully expensed at the time of the acquisition and fully accrued for on the Company’s balance sheet as part of the purchase accounting at the time of the acquisition. The parties have completed fact discovery and are currently in expert discovery. On March 25, 2015, NCSI filed a Motion for Leave to File a Second Amended Complaint (the “Motion to Amend”) to assert a material breach based upon the termination of one of NCSI’s shareholders by the Company. The Company will oppose the Motion to Amend on the grounds that (a) the dispute must be arbitrated under the terms of the individual’s’ employment agreement; and (b) amendment should not be permitted on new grounds as fact discovery has closed in this case. On March 27, 2015, the Company filed a motion to disqualify NCSI’s proposed expert on Deferred Tax Assets. NCSI’s date to oppose is April 9, 2015 and to the best of our knowledge no opposition has been filed. The final pretrial conference in this matter will be held April 24, 2015. The Company believes that it acted in a manner consistent with our contractual rights, and intends to aggressively defend itself against this claim which is believed to be not meritorious. Nevertheless, there can be no assurance that the outcome of this litigation will be favorable to the Company. | |
GEOGRAPHICAL_SEGMENTS
GEOGRAPHICAL SEGMENTS | 9 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Segments, Geographical Areas [Abstract] | ||||||||||||||
Segment Reporting Disclosure [Text Block] | NOTE 13 – GEOGRAPHICAL SEGMENTS | |||||||||||||
For the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company generated revenue in the U.S., Canada and the U.K. as follows: | ||||||||||||||
For the Nine Months Ended | For the Three Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Revenue generated in the U.S. | $ | 90,224,562 | $ | 16,140,575 | $ | 28,934,499 | $ | 15,351,384 | ||||||
Revenue generated in Canada | 103,117 | 70,625 | 32,995 | 28,800 | ||||||||||
Revenue generated in the U.K. | 6,313,241 | 419,511 | 1,996,104 | 419,511 | ||||||||||
Total Revenue | $ | 96,640,920 | $ | 16,630,711 | $ | 30,963,598 | $ | 15,799,695 | ||||||
As of February 28, 2015 and May 31, 2014, the Company has assets in the U.S., Canada and the U.K. as follows: | ||||||||||||||
February 28, | May 31, | |||||||||||||
2015 | 2014 | |||||||||||||
(Unaudited) | ||||||||||||||
Total Assets in the U.S. | $ | 39,271,097 | $ | 39,995,879 | ||||||||||
Total Assets in Canada | 49,307 | 102,351 | ||||||||||||
Total Assets in the U.K. | 1,245,875 | 2,897,232 | ||||||||||||
Total Assets | $ | 40,566,279 | $ | 42,995,462 | ||||||||||
As of February 28, 2015 and May 31, 2014, the Company has liabilities in the U.S., Canada and the U.K. as follows: | ||||||||||||||
February 28, | May 31, | |||||||||||||
2015 | 2014 | |||||||||||||
(Unaudited) | ||||||||||||||
Total Liabilities in the U.S. | $ | 26,788,612 | $ | 29,730,088 | ||||||||||
Total Liabilities in Canada | 8,155 | 6,994 | ||||||||||||
Total Liabilities in the U.K. | 1,714,512 | 2,638,970 | ||||||||||||
Total Liabilities | $ | 28,511,279 | $ | 32,376,052 | ||||||||||
ACQUISITIONS
ACQUISITIONS | 9 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Business Combinations [Abstract] | ||||||||||||||
Business Combination Disclosure [Text Block] | NOTE 14 - ACQUISITIONS | |||||||||||||
On April 26, 2013, the Company purchased all of the issued and outstanding common stock (the “TRG Acquisition”) of The Revolution Group, Ltd. (“TRG”), a Massachusetts corporation. The aggregate consideration paid for the TRG Acquisition was approximately $2.5 million (the “TRG Purchase Price”), paid as follows: (i) cash at closing of $907,287; and (ii) 512,569 common stock shares valued at a price of $0.80 per share totaling $410,055. In addition, the Company agreed to pay the TRG shareholders performance-based compensation in cash an amount equal to the following percentages of TRG’s gross profit through the end of the sixteenth (16th) quarter following the date of closing (the “TRG Earn-Out Period”), not to exceed $1,500,000: (i) twenty percent (20%) of the amount of TRG’s gross profit up to and including an aggregate of $5,000,000 during the Earn-Out Period; plus (ii) seven percent (7%) of the amount of TRG’s gross profit, if any, in excess of an aggregate of $5,000,000 during the Earn-Out Period. At closing, the Company estimated the performance-based compensation would be $1,192,000. | ||||||||||||||
In connection with the TRG Acquisition, the Company identified and recognized intangible assets of $1,054,801 representing trade name, customer relationships and employment agreements/non-competes. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. The assets were being amortized on a straight line basis over their estimated life of four (4) years, other than the trade name which is over fifteen (15) years. This resulted in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. | ||||||||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | ||||||||||||||
ASSETS: | ||||||||||||||
Current assets | $ | 47,881 | ||||||||||||
Intangible assets | 1,054,801 | |||||||||||||
Goodwill | 1,412,646 | |||||||||||||
Total | $ | 2,515,328 | ||||||||||||
LIABILITIES: | ||||||||||||||
Current liabilities | $ | 5,986 | ||||||||||||
Net purchase price | $ | 2,509,342 | ||||||||||||
On January 27, 2015, the Company’s Board of Directors voted unanimously to discontinue TRG and pursue the sale of this business. Effective January 1, 2015, the Company sold the TRG business. Therefore, the activity of this business is recorded as a discontinued operation and all its related assets have been eliminated from the current and comparative period balance sheets and subsequently sold. | ||||||||||||||
On November 4, 2013, the Company purchased all of the issued and outstanding common stock (the “CSI Acquisition”) of Control Solutions International, Inc. (“CSI”), a Florida corporation and its wholly owned subsidiary, Canada Control Solutions International, Inc., an Ontario, Canada corporation (“CCSI”) pursuant to a Stock Purchase Agreement dated August 14, 2013 by and among the Company, NewCSI, Inc., a Delaware corporation (“NCSI”), and the shareholders of NCSI. The aggregate consideration paid for the CSI Acquisition was approximately $3.5 million (“CSI Purchase Price”), payable as follows: (i) cash at closing of $1,311,454; and (ii) 136,000 common stock shares valued at a price of $0.875 per share totaling $119,000. In addition, the Company agreed to pay the NCSI shareholders performance-based compensation in cash an amount equal to twenty percent (20%) of CSI’s and CCSI’s consolidated gross profit through the end of the sixteenth (16th) quarter following the date of closing (the “CSI Earn-Out Period”) not to exceed a total of $2,100,000. At closing, the Company estimated the performance-based compensation would be $2,100,000, which has subsequently been updated based upon the deteriorating business performance and forecast for CSI. The analysis performed as of February 28, 2015, resulted in the Company reducing the earn-out in the amount of $840,455. During the nine (9) months ended February 28, 2015, the Company paid $222,555 of the earn-out. At February 28, 2015 the balance of the earn-out liability was $774,274. This transaction was accounted for under the purchase method in accordance with ASC 805. CSI is a wholly owned subsidiary of the Company. | ||||||||||||||
In connection with the CSI Acquisition, the Company identified and recognized intangible assets of $912,000 representing trade name, customer relationships and employment agreements/non-competes. The assets were being amortized on a straight line basis over their estimated life of four (4) years, other than the trade name which was over fifteen (15) years. This resulted in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. During the nine (9) and three (3) months ended February 28, 2015 and 2014 the Company recognized amortization expense of $91,099 and $208,777 and $0 and $69,425, respectively. The impairment analysis performed as of May 31, 2014 and November 30, 2014, resulted in the Company impairing trade name, customer relationships and employment agreements/non-competes in the amount of $10,025 and $703,222, respectively. The intangible asset balance, net of impairment and accumulated amortization, at November 30, 2014 was $0 and remains $0 at February 28, 2015. | ||||||||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | ||||||||||||||
ASSETS: | ||||||||||||||
Current assets | $ | 1,475,716 | ||||||||||||
Intangible assets | 912,000 | |||||||||||||
Goodwill | 1,287,609 | |||||||||||||
Total | $ | 3,675,325 | ||||||||||||
LIABILITIES: | ||||||||||||||
Current liabilities | $ | 144,871 | ||||||||||||
Net purchase price | $ | 3,530,454 | ||||||||||||
Initio is a U.K. domiciled full-service staffing company with established brands in the United Kingdom and United States. Initio’s U.K. division, Longbridge, was established in 1989 as an international multi-sector recruitment company with a long successful history of catering to the sales and marketing, technology, legal and IT solutions sectors. Initio’s U.S. division, Monroe, was established in 1969 as a full-service consulting and staffing agency serving companies ranging from Fortune 100 to new start-up organizations. Monroe has fifteen (15) offices throughout Connecticut, Massachusetts, Rhode Island, New Hampshire and North Carolina. | ||||||||||||||
On January 3, 2014, the Company purchased all of the issued and outstanding common stock (the “Initio Acquisition”) of Initio International Holdings Limited (“Initio”), a company organized under the laws of England and Wales, and its respective subsidiaries, including but not limited to Monroe Staffing Services, LLC, a Delaware limited liability company (“Monroe,” and together with all of Initio’s subsidiaries, the “Subsidiaries”). The transaction contemplated by a Share Purchase Agreement, dated October 30, 2013, as amended by Amendment No. 1 to the Share Purchase Agreement, dated December 10, 2013 (the “SPA”). The aggregate consideration paid for the Initio Acquisition was approximately $13.29 million, paid as follows: (i) cash at closing of $6,440,000; (ii) 3,296,702 common stock shares valued at a price of $0.875 per share totaling $2,884,614; and (iii) three (3) year promissory notes totaling $3,964,949, each bearing interest at six percent (6%) per annum, amortized straight line over five (5) years. (See Note 6 – Promissory Notes). Upon closing of the Initio Acquisition, certain of the Initio Shareholders were appointed to the Company’s Board of Directors and entered into employment agreements with the Company or one of its subsidiaries. As a result of the Acquisition, Initio and its Subsidiaries became wholly owned subsidiaries of the Company. Initio was renamed Staffing 360 Solutions (UK) Limited (“Staffing UK”). | ||||||||||||||
In connection with the acquisition of Staffing UK, the Company identified and recognized an intangible asset of $10,050,000 representing trade name, customer relationships and employment agreements/non-competes. The assets are being amortized on the straight line basis over their estimated life of four (4) years, other than the trade name which is amortized over fifteen (15) years. This method results in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. During the nine (9) and three (3) months ended February 28, 2015 and 2014 the Company recognized amortization expense of $1,281,988 and $119,478 and $427,329 and $119,478, respectively. The Company will recognize amortization expense of $427,329 in the remaining fiscal year ended 2015, $1,709,317 in the fiscal year ended 2016, $1,709,317 in the fiscal year ended 2017, $1,118,796 in the fiscal year ended 2018, $292,428 each year in the fiscal years 2019 through 2028 and $170,372 in the fiscal year ended 2029. The Intangible Asset balance, net of accumulated amortization, at February 28, 2015 is $8,317,262 | ||||||||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | ||||||||||||||
ASSETS: | ||||||||||||||
Total assets | $ | 15,550,449 | ||||||||||||
Intangible assets | 10,050,000 | |||||||||||||
Goodwill | 2,994,057 | |||||||||||||
Total | $ | 28,594,506 | ||||||||||||
LIABILITIES: | ||||||||||||||
Total liabilities | $ | 15,254,943 | ||||||||||||
Net purchase price | $ | 13,339,563 | ||||||||||||
On February 28, 2014, the Company, through its wholly owned subsidiary, Staffing UK, purchased substantially all of the business and certain assets, including but not limited to contracts, business information, records, book debt and goodwill (the “Poolia Acquisition”) of Poolia UK Ltd. (“Poolia UK”). The Poolia Acquisition was completed pursuant to that certain Asset Purchase Agreement (the “Poolia Purchase Agreement”) by and among Staffing UK, and Poolia UK. Poolia UK operates its professional staffing services from its London office and focuses on providing temporary, contract and permanent qualified professionals to various banking, financial and commercial clients across the United Kingdom. All subsequent business activity from this acquisition is under a Staffing UK subsidiary. The aggregate consideration paid for the Poolia Acquisition was £500,000 (the “Fixed Consideration”), plus an amount equal to the net asset value at the completion date of the acquisition (the “NAV Consideration,” together with the Fixed Consideration, collectively, the “Poolia Purchase Price”). The Fixed Consideration and a sum of £250,000, being an advance payment of the NAV Consideration, was paid in cash at closing. Subsequent to closing, the balance of the NAV Consideration was paid to Poolia UK Ltd. for total consideration of $1,626,266. As of February 28, 2015, the Company has paid the total consideration in full. | ||||||||||||||
In connection with the acquisition of Poolia UK, the Company identified and recognized an intangible asset of $465,321 representing customer relationships and employment agreements/non-competes. The assets are being amortized on the straight line basis over their estimated life of four (4) years. This method results in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes is based on independent professional valuation services’ calculations. During the nine (9) and three (3) months ended February 28, 2015 and 2014 the Company recognized amortization expense of $87,248 and $0 and $29,083 and $0, respectively. The Company will recognize amortization expense of $29,083 in the remaining fiscal year ended 2015, $116,330 in the fiscal year ended 2016, $116,330 in the fiscal year ended 2017 and $87,248 in the fiscal year ended 2018. The Intangible Asset balance, net of accumulated amortization, at February 28, 2015 is $348,991. | ||||||||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | ||||||||||||||
ASSETS: | ||||||||||||||
Current assets | $ | 1,207,897 | ||||||||||||
Intangible assets | 465,321 | |||||||||||||
Goodwill | 584,701 | |||||||||||||
Total | $ | 2,257,919 | ||||||||||||
LIABILITIES: | ||||||||||||||
Current liabilities | $ | 631,653 | ||||||||||||
Net purchase price | $ | 1,626,266 | ||||||||||||
On May 17, 2014, the Company purchased all of the issued and outstanding common stock of PeopleSERVE, Inc., a Massachusetts corporation (“PSI”), and forty-nine percent (49%) of the issued and outstanding common stock of PeopleSERVE PRS, Inc., a Massachusetts corporation (“PRS”, together with PSI, collectively the “Acquired Companies” or “PS”), pursuant to a Stock Purchase Agreement (the “PS Purchase Agreement”) dated May 17, 2014, by and among the Company, the Acquired Companies and Linda Moraski (“PS Seller”), sole owner of all of the issued and outstanding common stock of the Acquired Companies. | ||||||||||||||
The aggregate consideration (the “PS Purchase Price”) paid for the Acquired Companies was approximately $8.4 million. Prior to closing, the Company was provided a certificate setting forth the seller’s good faith estimate of (i) the Purchase Price (the “Estimated Purchase Price”), including the calculation of the Adjusted EBITDA of each Acquired Company for the twelve (12) fiscal months period ending April 26, 2014, and (ii) the Net Working Capital. At closing, the Company paid: (i) cash of approximately $2.7 million; (ii) 1,127,365 common stock shares valued at the market closing price of $1.93 totaling approximately $2.2 million; (iii) an unsecured promissory note of approximately $2.4 million; and (iv) the seller was entitled to all of the Acquired Companies’ Net Working Capital as of the Closing Date, approximately $1.1 million. Further, the PS Purchase Price was subject to a post-closing PS Purchase Price adjustment, based on audited financial statements for each of the Acquired Companies. Subsequently, the Company prepared and delivered to seller a certificate that set forth the Company’s determination of the: (i) PS Purchase Price, including the calculation of the Adjusted EBITDA of each Acquired Company for the audited period; and (ii) calculation of the Net Working Capital. Based on this certificate, the Company and seller agreed there was no post-closing PS Purchase Price adjustment required. | ||||||||||||||
In connection with the forty-nine percent (49%) acquisition of PRS, the Company recorded a non-controlling interest totaling $572,900. The results of operations attributable to the non-controlling interests are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings. For the nine (9) months ended February 28, 2015, the Company recorded net income attributable to non-controlling interest totaling $113,710 and for the three (3) months ended February 28, 2015, the Company recorded net loss attributable to non-controlling interest totaling ($102,845). | ||||||||||||||
In connection with the acquisition of PS, the Company identified and recognized an intangible asset of $2,999,100 representing trade name, customer relationships and employment agreements/non-competes. The assets are being amortized on a straight line basis over their estimated life of four (4) years, other than the trade name which is amortized over fifteen (15) years. This results in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes is based on independent professional valuation services’ calculations. During the nine (9) and three (3) months ended February 28, 2015 and 2014 the Company recognized amortization expense of $460,856 and $0 and $153,619 and $0, respectively. The Company will recognize amortization expense of $153,619 in the remaining fiscal year ended 2015, $614,475 in the fiscal year ended 2016, $614,475 in the fiscal year ended 2017, $590,922 in the fiscal year ended 2018, $49,200 each year in the fiscal years 2019 through 2028 and $47,150 in the fiscal year ended 2029. The Intangible Asset balance, net of accumulated amortization, at February 28, 2015 is $2,512,641. | ||||||||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | ||||||||||||||
ASSETS: | ||||||||||||||
Current assets | $ | 2,878,448 | ||||||||||||
Intangible assets | 2,999,100 | |||||||||||||
Goodwill | 4,789,880 | |||||||||||||
Total | $ | 10,667,428 | ||||||||||||
LIABILITIES: | ||||||||||||||
Current liabilities | $ | 1,707,420 | ||||||||||||
Non-controlling interest | 572,900 | |||||||||||||
Net purchase price | $ | 8,387,108 | ||||||||||||
The following unaudited pro forma consolidated results of operations, expressed in rounded thousands, have been prepared as if the acquisition of CSI, Initio, Poolia UK and PS had occurred as of June 1, 2014 and 2013: | ||||||||||||||
For the Nine Months Ended | For the Three Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Revenue | $ | 96,641,000 | $ | 81,327,000 | $ | 30,964,000 | $ | 26,452,000 | ||||||
Net loss from continuing operations | -13,698,000 | -2,966,000 | -184,000 | -1,406,000 | ||||||||||
Net loss per share from continuing operations | -0.37 | -0.15 | 0 | -0.06 | ||||||||||
Weighted average number of common stock shares – Basic and diluted | 36,673,143 | 19,880,145 | 41,034,837 | 24,579,530 | ||||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Feb. 28, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 15 – SUBSEQUENT EVENTS |
On March 1, 2015, the Company granted 980,000 options to purchase common stock to various employees under the 2014 Equity Plan. The stock options have an exercise price of $1.00 per share, and are exercisable for a period of ten (10) years from the date of grant. | |
On March 24, 2015, the Board of Directors of the Company unanimously approved and authorized the issuance of 1,663,008 Preferred Stock that bears and pays interest monthly at the rate of twelve percent (12%) to two (2) employees, officers and directors for the conversion of their Gross Profit Appreciation Bonus (“GPAB”) associated with their employment agreements. The Company expected the value of the GPAB to be $1,663,009 over the next four (4) years. The Company can redeem the Preferred Stock in 2019 for $864,765. These shares will be issued upon the Compensation Committee’s designation of all of the rights and preferences of the Preferred Stock and the filing of the same with the Nevada Secretary of State. | |
On March 24, 2015, the Board of Directors of the Company unanimously approved an authorized the issuance of 25,000 common stock shares to Mr. Villard, a member of the Board of Directors, for his service on the Restructuring Committee. | |
On April 8, 2015, the Company entered into a new revolving credit facility in the amount of $25 million and a $3 million four (4) year term loan with MidCap Financial. The $25 million revolving credit facility, with the option to accordion up to $50 million, replaces the Company’s $15 million revolving credit facility with Wells Fargo Bank and is collateralized by the Company’s accounts receivable. Associated with this financing, the Company paid MidCap Financial a fee of $140,000, reimbursed transaction expenses of $136,739 and issued 120,000 warrants to purchase common stock shares at an exercise price of $1.25 per share. Additionally, at closing the Company paid the investment bank that facilitated the relationship a fee of $770,000. | |
On April 9, 2015, the Company paid in full five (5) convertible notes totaling $800,000 that were originally issued on July 14, 2014 and July 31, 2014. The payment of principal and interest totaled $888,668. | |
On April 9, 2015, the Company paid in full two (2) related party promissory notes totaling $175,000 and paid interest of $35,611 by issuing 127,320 common stock shares at $0.2797 per share. | |
On April 10, 2015, the Company paid a related party promissory note in the principal amount of $150,000 and accrued interest in the amount of $11,342. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Accounting Policies [Abstract] | ||||||||
Interim Financial Statements Policy [Policy Text Block] | Interim Financial Statements | |||||||
These unaudited condensed consolidated financial statements as of and for the nine (9) and three (3) months ended February 28, 2015 and 2014, respectively, reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the accounting principles generally accepted in the United States of America. | ||||||||
These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the years ended May 31, 2014 and 2013, respectively, which are included in the Company’s May 31, 2014 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on September 15, 2014. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the nine (9) and three (3) months ended February 28, 2015 are not necessarily indicative of results for the entire year ending May 31, 2015. | ||||||||
Consolidation, Policy [Policy Text Block] | Year End and Principles of Consolidation | |||||||
These unaudited condensed consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles (“GAAP”) in the United States, and are expressed in U.S. dollars. The Company’s consolidated fiscal year-end is May 31. Some of the Company’s subsidiaries have varying year-ends. | ||||||||
The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. As described below, the Company also consolidates PeopleSERVE PRS, Inc., an entity of which it owns forty-nine percent (49%), since the Company is deemed to be the primary beneficiary of this entity. All inter-company transactions are eliminated. | ||||||||
Consolidation, Variable Interest Entity, Policy [Policy Text Block] | Variable Interest Entities | |||||||
Current accounting guidance provides a framework for identifying a Variable Interest Entity (“VIE”) and determining when a company should include the assets, liabilities, non-controlling interests, and results of activities of the VIE in its consolidated financial statements. In general, a VIE is an entity or other legal structure used to conduct activities or hold assets that either: (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, or (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. Generally, a VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE’s assets, liabilities, and non-controlling interest at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest. On May 17, 2014, the Company purchased forty-nine percent (49%) of the issued and outstanding common stock of PeopleSERVE PRS, Inc. Pursuant to ASC 810, PeopleSERVE PRS, Inc. is deemed to be a variable interest entity since the Company is the primary beneficiary. Accordingly, the Company consolidates the results of PeopleSERVE PRS, Inc. | ||||||||
Equity Method Investments, Policy [Policy Text Block] | Non-controlling Interests | |||||||
Non-controlling interests in our subsidiaries are recorded in accordance with the provisions of ASC 810 “Consolidation”, and are reported as a component of equity, separate from the parent company’s equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the non-controlling interests are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings. | ||||||||
Use of Estimates, Policy [Policy Text Block] | Use of Estimates | |||||||
The preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to valuation, impairment testing, earn-out liabilities, stock-based compensation and deferred income tax assets valuation allowances. Estimates are based on estimates and assumptions on current facts, historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced may differ materially and adversely from estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. Significant estimates for the nine (9) and three (3) months ended February 28, 2015 and 2014, respectively, include the valuation of intangible assets, including goodwill, liabilities associated with earn-out obligations and testing of long-lived assets for impairment. | ||||||||
In recording the initial purchase accounting for previous acquisitions, estimates of the fair value of identifiable intangible assets and goodwill were reflected in the Company’s interim financial statements. Upon retaining the services of an independent valuation consultant, the allocations previously estimated were revised and the results of the independent valuation consultant were retroactively reflected in the Company’s consolidated financial statements for the fiscal year ended May 31, 2014. | ||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents | |||||||
The Company considers all highly liquid instruments with original maturities of three (3) months or less when acquired, to be cash equivalents. The Company had no cash equivalents at February 28, 2015 or 2014. | ||||||||
Trade and Other Accounts Receivable, Policy [Policy Text Block] | Accounts Receivable | |||||||
Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive collection effort. At February 28, 2015 and 2014, the Company had an allowance for doubtful accounts of $416,688 and $503,518, respectively. | ||||||||
Income Tax, Policy [Policy Text Block] | Income Taxes | |||||||
The Company is governed by the Income Tax Law of the United States. The Company utilizes ASC Topic 740, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. | ||||||||
The Company applied the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of the date of this filing, the Company is current on all corporate, federal and state tax returns. | ||||||||
The U.K. and Canadian entities file income tax returns in their respective jurisdictions. | ||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation | |||||||
Assets and liabilities of subsidiaries operating in foreign countries are translated into U.S. dollars using both the exchange rate in effect at the balance sheet date or historical rate, as applicable. Results of operations are translated using the average exchange rates prevailing throughout the year. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are included in a separate component of stockholders’ equity (accumulated other comprehensive loss), while gains and losses resulting from foreign currency transactions are included in operations. | ||||||||
Depreciation, Depletion, and Amortization [Policy Text Block] | Amortization of Deferred Financing Costs | |||||||
Costs incurred in connection with obtaining financing are deferred and amortized on a straight-line basis over the term of the related loan, which is not materially different than the effective interest method. Amortization expense of deferred financing costs for the nine (9) and three (3) months ended February 28, 2015 and 2014 totaled $545,984 and $239,303 and $36,644 and $204,972, respectively. | ||||||||
Business Combinations Policy [Policy Text Block] | Business Combinations | |||||||
In accordance with Accounting Standards Codification 805 - Business Combinations ("ASC 805"), the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values. The Company utilizes management estimates and, in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed and contingent consideration granted. Such estimates and valuations require us to make significant assumptions, including projections of future events and operating performance. | ||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments | |||||||
In accordance with Accounting Standards Codification 820 - Fair Value Measurements and Disclosures (“ASC 820”), the Company measures and accounts for certain assets and liabilities at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, and establishes a framework for measuring fair value and standards for disclosure about such fair value measurements. | ||||||||
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: | ||||||||
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or liabilities; | |||||||
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market data; | |||||||
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. | |||||||
The Company did not have any Level 2 or Level 3 assets or liabilities as of February 28, 2015 or 2014, with the exception of its Convertible Notes Payable (See Note 5 – Convertible Notes Payable), Promissory notes (See Note 6 – Promissory Notes), Series A Bonds Payable (See Note 7 – Bonds – Series A), Series B Bonds Payable (See Note 8 – Bonds – Series B) and Earn-Out Liability (See Note 12 – Commitments and Contingencies). | ||||||||
Cash is considered to be highly liquid and easily tradable as of February 28, 2015 and 2014 and therefore classified as Level 1 within our fair value hierarchy. | ||||||||
Accounting Standards Codification 825-10-25, “Fair Value Option” (ASC 825-10-25) expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments. | ||||||||
Derivatives, Policy [Policy Text Block] | Convertible Instruments | |||||||
The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with FASB No. 133 “Accounting for Derivative Instruments and Hedging Activities”. | ||||||||
Accounting standards generally provide three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, and (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.” | ||||||||
The Company accounts for convertible instruments (when determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records, when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. | ||||||||
ASC 815-40 provides that, among other things, if an event is not within the entity’s control and may require a net cash settlement, then the contract shall be classified as an asset or a liability. | ||||||||
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition | |||||||
Control Solutions International Inc.: CSI recognizes revenue primarily on a time and materials basis as the services are performed and amounts are earned. The Company considers amounts earned once evidence of an arrangement has been obtained, services are rendered, fees are fixed or determinable, and collectability is reasonably assured. | ||||||||
⋅ | Revenue earned in excess of billings is recorded as unbilled accounts receivable until billed. Billings in excess of revenues earned are recorded as advanced billings until revenue recognition criteria are met. Deposits and prepayments from customers are carried as deferred revenue until the requirements for revenue recognition are met. | |||||||
⋅ | Reimbursements, including those relating to travel, other out-of-pocket expenses and third-party costs, are not included in revenue. They are applied to Cost of Services resulting in Cost of Services reflecting the net amount of expenses not reimbursed by clients. | |||||||
Staffing 360 Solutions (UK) Limited: Staffing UK and its various subsidiaries, follow paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, and (ii) the services have been rendered to the customer, and (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. | ||||||||
PeopleSERVE, Inc. and PeopleSERVE PRS, Inc.: PS recognizes revenue from the sale of staffing services as the services are performed, along with related labor costs and payroll taxes. The Company recognizes revenue for permanent employee placements when contractual contingencies, generally the passage of time, are satisfied. The Company’s revenue recognition policies comply with ASC 605, “Revenue Recognition.” The Company is the primary obligor in its transactions, and has responsibility for fulfillment, including the acceptability of services ordered and purchased by customers. In addition, the Company has all credit risk, retains substantially all risk and rewards of the services rendered, has sole discretion in staffing engagements and sets the billing rates of its consultants. Accordingly, the Company records all transactions at the gross revenue amount billed, consistent with the provisions of ASC 605. Typically, contracts require clients to pay for out-of-pocket expenses, principally travel related expenses. Accordingly, revenue includes amounts billed for these costs and the cost of revenue includes the corresponding actual costs. The Company provides certain customers a five percent (5.0%) discount on certain contracts if paid within thirty (30) days of the invoice date. Accounts receivable result from services provided to clients. The Company carries its accounts receivable at net realizable value. At the closing of the Company’s fiscal period, a portion of receivables may not be invoiced. These unbilled receivables are typically billed within thirty (30) days of the close of the fiscal period. | ||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation | |||||||
The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation issued to employees. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50. | ||||||||
Earnings Per Share, Policy [Policy Text Block] | Earnings (Loss) per Common Share | |||||||
The Company utilizes the guidance per FASB Codification ASC 260 - Earnings per Share (“ASC 260”). Basic earnings per share are calculated by dividing income available to stockholders by the weighted average number of common stock shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common stock shares and dilutive common share equivalents outstanding during the period. Dilutive common stock share equivalents consist of common shares issuable upon the conversion of convertible notes and the exercise of stock options and warrants (calculated using the modified treasury stock method). Such securities, shown below, presented on a common share equivalent basis and outstanding as of February 28, 2015 and 2014 have been excluded from the per share computations, since its inclusion would be anti-dilutive: | ||||||||
For the Nine Months Ended | ||||||||
February 28, | ||||||||
2015 | 2014 | |||||||
(Unaudited) | (Unaudited) | |||||||
Convertible bonds - Series A | 470,334 | - | ||||||
Convertible bonds - Series B | 833,794 | - | ||||||
Convertible promissory notes | 696,453 | 1,655,000 | ||||||
Warrants | 12,264,288 | 5,469,230 | ||||||
Options | 2,425,000 | 1,750,000 | ||||||
Total | 16,689,869 | 8,874,230 | ||||||
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment | |||||||
Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows: | ||||||||
Computers | 3-5 years | |||||||
Computer equipment | 3-5 years | |||||||
Network equipment | 3-5 years | |||||||
Software | 3-5 years | |||||||
Office equipment | 3-7 years | |||||||
Furniture and fixtures | 3-7 years | |||||||
Leasehold improvements | 3-5 years | |||||||
Amortization of leasehold improvements is computed using the straight-line method over the shorter of the life of the lease or the estimated useful life of the assets. Maintenance and repairs are charged to expense as incurred. Major improvements are capitalized. At the time of retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in Other income/(loss). | ||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets | |||||||
In accordance with ASC 360 - Property, Plant, and Equipment (“ASC 360”), the Company periodically reviews its long-lived assets, including goodwill and other intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the estimated fair value and the book value of the underlying asset. | ||||||||
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill | |||||||
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. ASC 350-30-35-4 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment for each reporting unit. As of February 28, 2015 and May 31, 2014, the goodwill balance associated with the Cyber 360, Inc. and Control Solutions, Inc. acquisition was $0 and $2,700,255, respectively. The Company did not record any additional impairment of Goodwill during the nine (9) months ended February 28, 2015. | ||||||||
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Intangible Assets | |||||||
In connection with the CSI Acquisition (See Note 14 - Acquisitions), the Company identified and recognized an intangible asset of $912,000 representing trade name, customer relationships and employment agreements/non-competes. The assets were being amortized on a straight line basis over their estimated life of four (4) years, other than the trade name which was amortized over fifteen (15) years. CSI customer relationships were valued based on the discounted cash flow method applied to projected future cash flows as estimated by Company management. This method resulted in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. The Company recorded amortization expense of $91,099 and $107,654 for the nine (9) months ended February 28, 2015 and the year ended May 31, 2014, respectively. During the quarter ended February 28, 2015, the Company recorded amortization expense of $0. Based upon the impairment analysis performed as of May 31, 2014 and November 30, 2014, the Company impaired the trade name, customer relationships and employment agreements/non-competes in the amount of $10,025 and $703,222, respectively. The intangible asset balance, net of impairment and accumulated amortization, at February 28, 2015 and May 31, 2014 was $0 and $794,321, respectively. | ||||||||
In connection with the acquisition of Staffing UK (See Note 14 - Acquisitions), the Company identified and recognized an intangible asset of $10,311,465 representing trade name, customer relationships and employment agreements/non-competes. The assets are being amortized on a straight line basis over their estimated life of four (4) years, other than the trade name which is amortized over fifteen (15) years. Staffing UK customer relationships were valued based on an estimate of the discounted cash flow method applied to projected future cash flows as estimated by Company management. This method results in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. At February 28, 2015 and May 31, 2014, the intangible asset balance, net of accumulated amortization, was $8,317,262 and $9,599,250, respectively. | ||||||||
In connection with the Poolia Acquisition (See Note 14 - Acquisitions), the Company identified and recognized an intangible asset of $465,321 representing customer relationships and employment agreements/non-competes. The assets are being amortized on a straight line basis over their estimated life of four (4) years. Poolia customer relationships were valued based on an estimate of the discounted cash flow method applied to projected future cash flows as estimated by Company management. This method results in the sum of the future net cash flows discounted to its present day value. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. At February 28, 2015 and May 31, 2014, the intangible asset balance, net of accumulated amortization, was $348,991 and $436,238, respectively. | ||||||||
In connection with the acquisition of PeopleSERVE, Inc. and PeopleSERVE PRS, Inc. (See Note 14 - Acquisitions), the Company identified and recognized an intangible asset of $2,999,100 representing trade name, customer relationships and employment agreements/non-competes. The assets are being amortized on a straight line basis over their estimated life of four (4) years, other than the trade name which is amortized over fifteen (15) years. PS customer relationships were valued using the discounted replacement cost approach. This method is based on acquisition costs invested to attract each customer and relied on the actual selling costs incurred and allocated to new customer generation over the preceding four (4) years. The valuation provided for the trade name, customer relationships and employment agreements/non-competes was based on independent professional valuation services’ calculations. At February 28, 2015 and May 31, 2014, the intangible asset balance, net of accumulated amortization, is $2,512,641 and $2,973,497, respectively. | ||||||||
Reclassification, Policy [Policy Text Block] | Reclassifications | |||||||
Certain reclassifications have been made to conform the prior period data to the current presentations. These reclassifications had no effect on the reported results. | ||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements | |||||||
In August 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, (“ASU 2014-15”), “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company does not expect that the adoption of this standard will have a material effect on its financial statements. | ||||||||
In May 2014, the FASB issued ASU No. 2014-09 (“ASU 2014-09”), “Revenue from Contracts with Customers”. The objective of ASU 2014-19 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016 for public companies. Early adoption is not permitted. The standard permits the use of either a retrospective or modified retrospective (cumulative effect) transition method. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on its financial statements nor decided upon the method of adoption. | ||||||||
In February 2015, the FASB issued new guidance to improve consolidation guidance for legal entities (Accounting Standards Update (“ASU”) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis), effective for fiscal years beginning after December 15, 2015 and interim periods within those years and early adoption is permitted. The new standard is intended to improve targeted areas of the consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures. The amendments in the ASU affect the consolidation evaluation for reporting organizations. In addition, the amendments in this ASU simplify and improve current GAAP by reducing the number of consolidation models. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. | ||||||||
In June 2014, the FASB issued new guidance on transfers and servicing ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosure), effective prospectively for fiscal years beginning after December 15, 2014 and interim periods within those years. The new guidance requires that repurchase-to-maturity transactions and repurchase financing arrangements be accounted for as secured borrowings and provides for enhanced disclosures, including the nature of collateral pledged and the time to maturity. Certain interim period disclosures for repurchase agreements and securities lending transactions are not required until the second quarter of 2015. The adoption of this new guidance will not have a material impact on the Company’s consolidated financial statements. | ||||||||
The FASB has issued ASU No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update further clarifies that compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Company has not yet determined the effect of the adoption of this standard and it is not expected to have a material impact on the Company’s condensed consolidated financial position and results of operations. | ||||||||
GOING_CONCERN_Tables
GOING CONCERN (Tables) | 9 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | Revenue, operating income, and net income from discontinued operations were as follows: | |||||||||||||
Nine Months Ended | Three Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Revenue | $ | 558,521 | $ | 981,269 | $ | 58,039 | $ | 294,952 | ||||||
Operating income | 618,979 | 934,662 | 71,735 | 353,447 | ||||||||||
Net income from discontinued operations | $ | -60,458 | $ | 46,608 | $ | -13,697 | $ | -58,496 | ||||||
The major classes of assets and liabilities from discontinued operations were as follows: | ||||||||||||||
January 1, | May 31, | |||||||||||||
2015 | 2014 | |||||||||||||
(Unaudited) | ||||||||||||||
Cash and equivalents | $ | 44,931 | $ | 28,978 | ||||||||||
Accounts receivable, net | 463,620 | 648,701 | ||||||||||||
Prepaid expenses and other current assets | 26,783 | 53,848 | ||||||||||||
Current assets from discontinued operations | 535,334 | 731,527 | ||||||||||||
Property and equipment, net | 4,471 | 5,349 | ||||||||||||
Non-current assets from discontinued operations | 4,471 | 5,349 | ||||||||||||
Accounts payables and accrued expenses | 92,961 | 84,505 | ||||||||||||
Accrued payroll and taxes | 59,618 | 143,722 | ||||||||||||
Accounts receivable financing | 400,531 | 461,494 | ||||||||||||
Current liabilities from discontinued operations | $ | 553,110 | $ | 689,721 | ||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Accounting Policies [Abstract] | ||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | Such securities, shown below, presented on a common share equivalent basis and outstanding as of February 28, 2015 and 2014 have been excluded from the per share computations, since its inclusion would be anti-dilutive: | |||||||
For the Nine Months Ended | ||||||||
February 28, | ||||||||
2015 | 2014 | |||||||
(Unaudited) | (Unaudited) | |||||||
Convertible bonds - Series A | 470,334 | - | ||||||
Convertible bonds - Series B | 833,794 | - | ||||||
Convertible promissory notes | 696,453 | 1,655,000 | ||||||
Warrants | 12,264,288 | 5,469,230 | ||||||
Options | 2,425,000 | 1,750,000 | ||||||
Total | 16,689,869 | 8,874,230 | ||||||
Property Plant And Equipment Estimated Useful Lives [Table Text Block] | The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows: | |||||||
Computers | 3-5 years | |||||||
Computer equipment | 3-5 years | |||||||
Network equipment | 3-5 years | |||||||
Software | 3-5 years | |||||||
Office equipment | 3-7 years | |||||||
Furniture and fixtures | 3-7 years | |||||||
Leasehold improvements | 3-5 years | |||||||
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property, Plant and Equipment [Table Text Block] | Property and equipment consists of the following: | |||||||
February 28, | May 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Computer software | $ | 107,315 | $ | 113,615 | ||||
Office equipment | 30,391 | 38,098 | ||||||
Computer equipment | 295,168 | 210,561 | ||||||
Furniture and fixtures | 113,277 | 105,637 | ||||||
Website | 32,117 | 32,117 | ||||||
Leasehold improvements | 41,239 | 28,093 | ||||||
Total Cost | 619,508 | 528,121 | ||||||
Accumulated depreciation | -204,376 | -78,864 | ||||||
Total | $ | 415,131 | $ | 449,257 | ||||
CONVERTIBLE_NOTES_PAYABLE_Tabl
CONVERTIBLE NOTES PAYABLE (Tables) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Convertible Notes Payable [Abstract] | ||||||||
Convertible Debt [Table Text Block] | February 28, | May 31, | ||||||
2015 | 2014 | |||||||
(Unaudited ) | ||||||||
Beginning balance | $ | 1,600,000 | $ | 50,000 | ||||
Proceeds | 404,000 | 1,600,000 | ||||||
Fair value of common stock issued for conversion of convertible notes payable | - | -50,000 | ||||||
Repayment of loans | -300,000 | - | ||||||
Conversion of loans | -600,000 | - | ||||||
Debt discount for restricted stock and beneficial conversion feature for convertible notes payable – net of accumulated amortization of $1,432,304 and $341,241, respectively | -164,171 | -979,828 | ||||||
Net balance | $ | 939,829 | $ | 620,172 | ||||
PROMISSORY_NOTES_Tables
PROMISSORY NOTES (Tables) | 9 Months Ended | |||||||||
Feb. 28, 2015 | ||||||||||
Debt Disclosure [Abstract] | ||||||||||
Schedule of Short-term Debt [Table Text Block] | Promissory notes – short-term consisted of the following: | |||||||||
February 28, | May 31, | |||||||||
2015 | 2014 | |||||||||
(Unaudited) | ||||||||||
Beginning balance | $ | - | $ | - | ||||||
Proceeds | 1,705,000 | 340,000 | ||||||||
Payments | -1,213,333 | -340,000 | ||||||||
Debt discount (Net of accumulated amortization of $89,706 and $61,026, respectively) | - | - | ||||||||
Promissory notes – Staffing UK – current portion | 55,689 | 789,136 | ||||||||
Promissory notes – PeopleSERVE – current portion | 789,155 | 789,155 | ||||||||
Total Promissory notes – short-term | $ | 1,336,511 | $ | 1,578,291 | ||||||
Schedule of Long-term Debt Instruments [Table Text Block] | Promissory notes – long-term consisted of the following: | |||||||||
February 28, | May 31, | |||||||||
2015 | 2014 | |||||||||
(Unaudited) | ||||||||||
Promissory notes – Staffing UK: | ||||||||||
Beginning balance | $ | 3,616,874 | $ | 3,964,940 | ||||||
Payments | -347,370 | -348,066 | ||||||||
Accelerated interest on deferral of note | 13,367 | - | ||||||||
Conversions | -2,994,202 | - | ||||||||
288,670 | 3,616,874 | |||||||||
Less current portion | -55,689 | -789,136 | ||||||||
232,981 | 2,827,738 | |||||||||
Promissory note – PeopleSERVE | ||||||||||
Beginning balance | 2,367,466 | 2,367,466 | ||||||||
Payment | -591,866 | - | ||||||||
1,775,600 | 2,367,466 | |||||||||
Less current portion | -789,155 | -789,155 | ||||||||
986,445 | 1,578,311 | |||||||||
Total Promissory notes – long-term | $ | 1,219,425 | $ | 4,406,049 | ||||||
Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block] | The future payments related to the Initio Promissory Notes are as follows: | |||||||||
Year | Twelve months | |||||||||
ended | ended | |||||||||
May 31, | Amount | February 28, | Amount | |||||||
2015 | $ | 13,922 | 2016 | $ | 55,689 | |||||
2016 | 55,689 | 2017 | 157,785 | |||||||
2017 | 143,863 | 2018 | - | |||||||
Thereafter | 75,197 | Thereafter | 75,197 | |||||||
Total | $ | 288,671 | Total | $ | 288,671 | |||||
Schedule of Principal Transactions Revenue [Table Text Block] | Twelve months | |||||||||
Year ended | ended | |||||||||
May 31, | Amount | February 28, | Amount | |||||||
2015 | $ | 197,289 | 2016 | $ | 789,155 | |||||
2016 | 789,155 | 2017 | 789,155 | |||||||
2017 | 789,155 | 2018 | 197,289 | |||||||
Total | $ | 1,755,600 | Total | $ | 1,755,600 | |||||
BONDS_SERIES_A_Tables
BONDS - SERIES A (Tables) (Series A Convertible Bonds [Member]) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Series A Convertible Bonds [Member] | ||||||||
Bonds Payable [Table Text Block] | Bonds – Series A consisted of the following: | |||||||
February 28, | May 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Beginning Balance | $ | 2,998,500 | $ | - | ||||
Proceeds | 1,060,000 | 2,998,500 | ||||||
Payments | -100,000 | |||||||
Debt discount for restricted stock and beneficial conversion – net of | - | -1,498,840 | ||||||
accumulated amortization of $2,545,445 and $369,334, respectively | ||||||||
Conversions | -3,528,500 | |||||||
Bonds – Series A, net | $ | 430,000 | $ | 1,499,660 | ||||
BONDS_SERIES_B_Tables
BONDS - SERIES B (Tables) (Series B Convertible Bonds [Member]) | 9 Months Ended | |||||||
Feb. 28, 2015 | ||||||||
Series B Convertible Bonds [Member] | ||||||||
Bonds Payable [Table Text Block] | Bonds – Series B consisted of the following: | |||||||
February 28, | May 31, | |||||||
2015 | 2014 | |||||||
(Unaudited) | ||||||||
Beginning Balance | $ | - | $ | - | ||||
Proceeds | 981,500 | - | ||||||
Debt discount for restricted stock and beneficial conversion – net of | -130,374 | - | ||||||
accumulated amortization of $93,520 and $0, respectively | ||||||||
Bonds – Series B, net | $ | 851,126 | $ | - | ||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | |||||||||||
Feb. 28, 2015 | ||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||
Schedule of Stockholders Equity [Table Text Block] | The issuance of 20,662,399 common stock shares during the year ended May 31, 2014 is summarized below: | |||||||||||
Number of | Fair Value at | |||||||||||
Common Stock | Fair Value at | Issuance | ||||||||||
Shares | Issuance | (per share) | ||||||||||
Shares issued pursuant to 2013 private placement offering | 627,783 | $ | 565,000 | $ | 0.9 | |||||||
Shares issued pursuant to 2014 private placement offering | 10,000,000 | 10,000,000 | 1 | |||||||||
Shares issued to consultants | 831,055 | 1,025,379 | 0.875 – 2.06 | |||||||||
Shares issued for conversion of accounts payable | 115,408 | 100,982 | 0.875 | |||||||||
Shares issued for conversion of convertible notes payable | 111,111 | 50,000 | 0.45 | |||||||||
Shares issued in connection with convertible notes | 413,750 | 297,047 | 0.72 | |||||||||
Shares issued in connection with accrued interest related to convertible notes | 9,498 | 4,275 | 0.45 | |||||||||
Shares issued in connection with promissory notes | 85,000 | 61,026 | 0.72 | |||||||||
Shares issued to board of directors | 121,250 | 111,612 | 0.45 – 2.04 | |||||||||
Shares issued to audit committee | 2,083 | 4,098 | 1.92 – 1.98 | |||||||||
Shares issued to compensation committee | 4,996 | 9,075 | 0.875 – 2.04 | |||||||||
Shares issued to corporate governance and nominating committee | 4,582 | 8,193 | 0.875 – 2.04 | |||||||||
Shares issued to employees | 90,000 | 113,500 | 0.875 – 1.97 | |||||||||
Shares issued pursuant to acquisitions | 4,560,067 | 5 ,179,429 | 0.875 – 1.93 | |||||||||
Shares issued to private placement agents | 1,338,922 | 786,208 | 0.875 – 2.00 | |||||||||
Shares issued in connection with convertible bonds | 299,850 | 488,177 | 1.63 | |||||||||
Shares issued in connection with bridge loans | 320,000 | 442,034 | 1.38 | |||||||||
Shares issued for conversion of convertible promissory notes | 1,655,000 | 1,655,000 | 1 | |||||||||
Shares issued for conversion of accrued interest related to convertible promissory notes | 72,044 | 72,044 | 1 | |||||||||
The issuance of 9,927,051 common stock shares during the nine (9) months ended February 28, 2015 is summarized below: | ||||||||||||
Number of | Fair Value at | |||||||||||
Common Stock | Fair Value at | Issuance | ||||||||||
Shares | Issuance | (per share) | ||||||||||
Shares issued to consultants | 232,500 | $ | 215,001 | $ | 0.62-1.92 | |||||||
Shares issued for conversion of convertible notes payable | 400,000 | 600,000 | 1.5 | |||||||||
Shares issued in connection with accrued interest on convertible notes | 7,912 | 11,868 | 1.5 | |||||||||
Shares issued in connection with convertible notes | 84,500 | 123,345 | 0.69 | |||||||||
Shares issued in connection with Series A convertible bonds | 106,000 | 174,142 | 0.61 | |||||||||
Shares issued in connection with amendment of Series A convertible bonds | 45,126 | 62,725 | 1.39 | |||||||||
Shares issued in connection with Series B convertible bonds | 98,150 | 123,504 | 1.26 | |||||||||
Shares issued to board and committees members | 207,500 | 246,880 | 0.35-1.95 | |||||||||
Shares issued as interest on debt | 300,672 | 286,809 | 0.30-1.85 | |||||||||
Shares issued to private placement agent | 16,509 | 27,832 | 0.85-1.95 | |||||||||
Shares issued in connection with conversion of accounts payable | 19,000 | 32,870 | 1.73 | |||||||||
Shares issued in connection with conversion of Initio promissory notes | 2,994,202 | 2,245,921 | 0.7501 | |||||||||
Shares issued in connection with conversion of accrued interest and interest expense associated with Initio promissory notes | 296,243 | 222,210 | 0.7501 | |||||||||
Shares issued for conversion of Series A bonds | 3,709,687 | 3,709,655 | 1 | |||||||||
Shares issued for conversion of earn-out liability | 1,134,050 | 340,215 | 0.3 | |||||||||
Shares issued in connection with settlement agreement | 275,000 | 255,750 | 0.93 | |||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | The following table summarizes the changes in warrants outstanding and related prices for the common stock shares issued to shareholders at February 28, 2015: | |||||||||||
Warrants Outstanding | Warrants Exercisable | |||||||||||
Weighted Average | Weighted | Weighted | ||||||||||
Exercise | Number | Remaining Contractual | Average | Number | Average | |||||||
Price | Outstanding | Life (years) | Exercise price | Exercisable | Exercise Price | |||||||
$1.25 - $2.00 | 12,264,289 | 4.29 | $1.76 | 12,264,289 | $1.76 | |||||||
Schedule Of Warrant Activity [Table Text Block] | Transactions involving the Company’s warrant issuance are summarized as follows: | |||||||||||
Weighted | ||||||||||||
Number of | Average | |||||||||||
Shares | Price Per Share | |||||||||||
Outstanding at May 31, 2013 | 583,338 | $ | 1.8 | |||||||||
Issued | 6,177,427 | $ | 1.82 | |||||||||
Exercised | - | - | ||||||||||
Expired | - | - | ||||||||||
Outstanding at May 31, 2014 | 6,760,765 | $ | 1.97 | |||||||||
Issued | 5,503,524 | $ | 1.51 | |||||||||
Exercised | - | - | ||||||||||
Expired | - | - | ||||||||||
Outstanding at February 28, 2015 | 12,264,289 | $ | 1.76 | |||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The Company used the following assumptions for determining the fair value of options granted under the Black-Scholes option pricing model: | |||||||||||
Exercise price: | $1.00 - $2.00 | |||||||||||
Market price at date of grant: | $0.7501 - $1.99 | |||||||||||
Volatility: | 50.57% - 84.23% | |||||||||||
Expected dividend rate: | 0 | |||||||||||
Expected terms (years): | 10-May | |||||||||||
Risk-free interest rate: | 1.45% - 2.77% | |||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the activity during the nine (9) months ended February 28, 2015 of the Company’s 2014 Equity Plan is presented below: | |||||||||||
Options | Weighted | Aggregate | ||||||||||
Average | Intrinsic | |||||||||||
Exercise Price | Value | |||||||||||
Outstanding at June 1, 2013 | - | $ | - | $ | - | |||||||
Granted | 1,900,000 | 2 | - | |||||||||
Exercised | - | - | - | |||||||||
Expired or cancelled | - | - | - | |||||||||
Outstanding at May 31, 2014 | 1,900,000 | $ | 2 | $ | - | |||||||
Granted | 525,000 | 2 | - | |||||||||
Exercised | - | - | - | |||||||||
Expired or cancelled | - | - | - | |||||||||
Decrease in weighted average exercise price due to modification (1) | - | $ | -0.57 | - | ||||||||
Outstanding at February 28, 2015 | 2,425,000 | $ | 1.43 | $ | - | |||||||
-1 | On December 8, 2014, the Company modified the exercise price on its unvested 1,380,000 options from an exercise price of $2.00 per share to $1.00 per share. | |||||||||||
GEOGRAPHICAL_SEGMENTS_Tables
GEOGRAPHICAL SEGMENTS (Tables) | 9 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Segments, Geographical Areas [Abstract] | ||||||||||||||
Schedule of Revenues, Assets, and Liabilities by Geographical Segment [Table Text Block] | For the nine (9) and three (3) months ended February 28, 2015 and 2014, the Company generated revenue in the U.S., Canada and the U.K. as follows: | |||||||||||||
For the Nine Months Ended | For the Three Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Revenue generated in the U.S. | $ | 90,224,562 | $ | 16,140,575 | $ | 28,934,499 | $ | 15,351,384 | ||||||
Revenue generated in Canada | 103,117 | 70,625 | 32,995 | 28,800 | ||||||||||
Revenue generated in the U.K. | 6,313,241 | 419,511 | 1,996,104 | 419,511 | ||||||||||
Total Revenue | $ | 96,640,920 | $ | 16,630,711 | $ | 30,963,598 | $ | 15,799,695 | ||||||
As of February 28, 2015 and May 31, 2014, the Company has assets in the U.S., Canada and the U.K. as follows: | ||||||||||||||
February 28, | May 31, | |||||||||||||
2015 | 2014 | |||||||||||||
(Unaudited) | ||||||||||||||
Total Assets in the U.S. | $ | 39,271,097 | $ | 39,995,879 | ||||||||||
Total Assets in Canada | 49,307 | 102,351 | ||||||||||||
Total Assets in the U.K. | 1,245,875 | 2,897,232 | ||||||||||||
Total Assets | $ | 40,566,279 | $ | 42,995,462 | ||||||||||
As of February 28, 2015 and May 31, 2014, the Company has liabilities in the U.S., Canada and the U.K. as follows: | ||||||||||||||
February 28, | May 31, | |||||||||||||
2015 | 2014 | |||||||||||||
(Unaudited) | ||||||||||||||
Total Liabilities in the U.S. | $ | 26,788,612 | $ | 29,730,088 | ||||||||||
Total Liabilities in Canada | 8,155 | 6,994 | ||||||||||||
Total Liabilities in the U.K. | 1,714,512 | 2,638,970 | ||||||||||||
Total Liabilities | $ | 28,511,279 | $ | 32,376,052 | ||||||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 9 Months Ended | |||||||||||||
Feb. 28, 2015 | ||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed [Table Text Block] | The following unaudited pro forma consolidated results of operations, expressed in rounded thousands, have been prepared as if the acquisition of CSI, Initio, Poolia UK and PS had occurred as of June 1, 2014 and 2013: | |||||||||||||
For the Nine Months Ended | For the Three Months Ended | |||||||||||||
February 28, | February 28, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
Revenue | $ | 96,641,000 | $ | 81,327,000 | $ | 30,964,000 | $ | 26,452,000 | ||||||
Net loss from continuing operations | -13,698,000 | -2,966,000 | -184,000 | -1,406,000 | ||||||||||
Net loss per share from continuing operations | -0.37 | -0.15 | 0 | -0.06 | ||||||||||
Weighted average number of common stock shares – Basic and diluted | 36,673,143 | 19,880,145 | 41,034,837 | 24,579,530 | ||||||||||
TRG [Member] | ||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | |||||||||||||
ASSETS: | ||||||||||||||
Current assets | $ | 47,881 | ||||||||||||
Intangible assets | 1,054,801 | |||||||||||||
Goodwill | 1,412,646 | |||||||||||||
Total | $ | 2,515,328 | ||||||||||||
LIABILITIES: | ||||||||||||||
Current liabilities | $ | 5,986 | ||||||||||||
Net purchase price | $ | 2,509,342 | ||||||||||||
CSI [Member] | ||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | |||||||||||||
ASSETS: | ||||||||||||||
Current assets | $ | 1,475,716 | ||||||||||||
Intangible assets | 912,000 | |||||||||||||
Goodwill | 1,287,609 | |||||||||||||
Total | $ | 3,675,325 | ||||||||||||
LIABILITIES: | ||||||||||||||
Current liabilities | $ | 144,871 | ||||||||||||
Net purchase price | $ | 3,530,454 | ||||||||||||
Staffing 360 UK [Member] | ||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | |||||||||||||
ASSETS: | ||||||||||||||
Total assets | $ | 15,550,449 | ||||||||||||
Intangible assets | 10,050,000 | |||||||||||||
Goodwill | 2,994,057 | |||||||||||||
Total | $ | 28,594,506 | ||||||||||||
LIABILITIES: | ||||||||||||||
Total liabilities | $ | 15,254,943 | ||||||||||||
Net purchase price | $ | 13,339,563 | ||||||||||||
Poolia [Member] | ||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | |||||||||||||
ASSETS: | ||||||||||||||
Current assets | $ | 1,207,897 | ||||||||||||
Intangible assets | 465,321 | |||||||||||||
Goodwill | 584,701 | |||||||||||||
Total | $ | 2,257,919 | ||||||||||||
LIABILITIES: | ||||||||||||||
Current liabilities | $ | 631,653 | ||||||||||||
Net purchase price | $ | 1,626,266 | ||||||||||||
People Serve Inc [Member] | ||||||||||||||
Schedule of Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | |||||||||||||
ASSETS: | ||||||||||||||
Current assets | $ | 2,878,448 | ||||||||||||
Intangible assets | 2,999,100 | |||||||||||||
Goodwill | 4,789,880 | |||||||||||||
Total | $ | 10,667,428 | ||||||||||||
LIABILITIES: | ||||||||||||||
Current liabilities | $ | 1,707,420 | ||||||||||||
Non-controlling interest | 572,900 | |||||||||||||
Net purchase price | $ | 8,387,108 | ||||||||||||
ORGANIZATION_AND_DESCRIPTION_O1
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Textual) | 9 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||||
Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | 7-May-13 | Jun. 28, 2013 | Jun. 28, 2013 | Apr. 26, 2013 | Nov. 04, 2013 | Jan. 03, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | 17-May-14 | 17-May-14 | 31-May-14 | 17-May-14 | |
USD ($) | USD ($) | USD ($) | Maximum [Member] | Minimum [Member] | TRG [Member] | CSI [Member] | Staffing 360 UK [Member] | Poolia [Member] | Poolia [Member] | PS Seller [Member] | PS Seller [Member] | Promissory note - PeopleSERVE [Member] | People Serve Prs Inc [Member] | ||
USD ($) | USD ($) | USD ($) | USD ($) | GBP (£) | PS [Member] | PS [Member] | USD ($) | ||||||||
USD ($) | USD ($) | ||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Business Combination, Consideration Transferred | $2,500,000 | $3,500,000 | $13,290,000 | $1,626,266 | $8,400,000 | ||||||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 75,000,000 | 200,000,000 | 75,000,000 | ||||||||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | 200,000,000 | 20,000,000 | |||||||||||
Other Payments to Acquire Businesses | 250,000 | ||||||||||||||
Payments to Acquire Businesses, Gross | 0 | 8,934,001 | 2,700,000 | ||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 1,127,365 | ||||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | 2,200,000 | 2,200,000 | |||||||||||||
Debt Instrument, Face Amount | 2,994,202 | 2,400,000 | |||||||||||||
Fair Value at Issuance (per share) | $1.93 | $1.93 | |||||||||||||
Due to sellers | 0 | 1,347,215 | 1,100,000 | 1,100,000 | |||||||||||
Business Combination, Consideration Transferred, Other | £ 500,000 | ||||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 49.00% |
GOING_CONCERN_Details
GOING CONCERN (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Revenue | $58,039 | $294,952 | $558,521 | $981,269 |
Operating income | 71,735 | 353,447 | 618,979 | 934,662 |
Net income from discontinued operations | ($392) | ($58,496) | ($47,154) | $46,608 |
GOING_CONCERN_Details_1
GOING CONCERN (Details 1) (USD $) | Jan. 01, 2015 | 31-May-14 |
Cash and equivalents | $44,931 | $28,978 |
Accounts receivable, net | 463,620 | 648,701 |
Prepaid expenses and other current assets | 26,783 | 53,848 |
Current assets from discontinued operations | 535,334 | 731,527 |
Property and equipment, net | 4,471 | 5,349 |
Non-current assets from discontinued operations | 4,471 | 5,349 |
Accounts payables and accrued expenses | 92,961 | 84,505 |
Accrued payroll and taxes | 59,618 | 143,722 |
Accounts receivable financing | 400,531 | 461,494 |
Current liabilities from discontinued operations | $553,110 | $689,721 |
GOING_CONCERN_Details_Textual
GOING CONCERN (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||||
Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 08, 2015 | Feb. 27, 2015 | 31-May-14 | Jan. 01, 2015 | |
Going Concern [Line Items] | ||||||||||||
Net Assets | $7,876,112 | $7,876,112 | ||||||||||
Retained Earnings (Accumulated Deficit) | 30,035,058 | 30,035,058 | 16,337,118 | |||||||||
Net Loss | 80,789 | 1,763,362 | 13,697,940 | 3,614,765 | ||||||||
Net Cash Provided by (Used in) Operating Activities | 1,444,175 | 1,838,431 | ||||||||||
Restructuring Charges | 175,000 | |||||||||||
Debt Instrument, Face Amount | 2,994,202 | 2,994,202 | ||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,290,446 | |||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,619,490 | 3,619,490 | ||||||||||
Warrants Exercisable Terms | 10 years | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.25 | $1.25 | ||||||||||
Gains (Losses) on Extinguishment of Debt | -59,284 | 0 | 754,628 | 0 | ||||||||
Professional Fees | 581,479 | 357,897 | 1,965,471 | 1,064,168 | ||||||||
Debt Instrument, Term | 0 years | |||||||||||
Restructuring Charges [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Professional Fees | 123,334 | |||||||||||
Consulting Agreements [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Restructuring Charges | 73,875 | |||||||||||
Employment Agreement [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Restructuring Charges | 691,966 | |||||||||||
Subsequent Event [Member] | Consulting Agreements [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Increase Decrease In Future Cash Flows | 432,000 | |||||||||||
Subsequent Event [Member] | Employment Agreement [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Increase Decrease In Future Cash Flows | 50,000 | |||||||||||
Annual Additional Amount of Decrease In Future Cash Flows | 624,000 | |||||||||||
Scenario, Forecast [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Effect on Future Cash Flows, Amount | 2,265,723 | 871,000 | ||||||||||
MidCap Financial [Member] | Subsequent Event [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Long-term Line of Credit | 25,000,000 | |||||||||||
Long-term Construction Loan, Current | 3,000,000 | |||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 50,000,000 | |||||||||||
Debt Instrument, Face Amount | 3,000,000 | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.25 | |||||||||||
Debt Issuance Cost | 136,739 | |||||||||||
Debt Instrument, Term | 4 years | |||||||||||
Wells Fargo Bank [Member] | Subsequent Event [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 15,000,000 | |||||||||||
Cyber 360, Inc [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Business Acquisition, Share Price | $1 | |||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | 1,134,050 | |||||||||||
Share Price | $1 | |||||||||||
Cyber 360, Inc [Member] | Subsequent Event [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 1,134,050 | |||||||||||
Gains (Losses) on Extinguishment of Debt | 485,835 | |||||||||||
Cyber 360, Inc [Member] | Earn Out Shares [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Business Acquisition, Share Price | $0.30 | |||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 1,134,050 | |||||||||||
Series A Bonds [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Debt Instrument, Maturity Date | 15-Oct-14 | |||||||||||
Debt Instrument, Face Amount | 3,709,655 | 3,709,655 | ||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,709,687 | |||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,854,859 | 1,854,859 | ||||||||||
Warrants Exercisable Terms | 3 years | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $2 | $2 | ||||||||||
Debt Issuance Cost | 2,927,959 | |||||||||||
Stock or Unit Option Plan Expense | $154,489 | |||||||||||
Series B Bonds [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Debt Instrument, Maturity Date | 15-Sep-15 | |||||||||||
Maximum [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $2 | $2 | ||||||||||
Maximum [Member] | Series A Bonds [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Debt Instrument, Convertible, Conversion Price | $1.50 | $1.50 | ||||||||||
Maximum [Member] | Series B Bonds [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Debt Instrument, Convertible, Conversion Price | $1.50 | $1.50 | ||||||||||
Minimum [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.25 | $1.25 | ||||||||||
Minimum [Member] | Series A Bonds [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Debt Instrument, Convertible, Conversion Price | $1 | $1 | ||||||||||
Minimum [Member] | Series B Bonds [Member] | ||||||||||||
Going Concern [Line Items] | ||||||||||||
Debt Instrument, Convertible, Conversion Price | $1.20 | $1.20 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 16,689,869 | 8,874,230 |
Convertible Bonds - Series A [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 470,334 | 0 |
Convertible Bonds - Series B [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 833,794 | 0 |
Convertible promissory notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 696,453 | 1,655,000 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 12,264,288 | 5,469,230 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 2,425,000 | 1,750,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 9 Months Ended |
Feb. 28, 2015 | |
Computers [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computers [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Computer Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Network Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Network Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Office Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Furniture and fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture and fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Leasehold improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Leasehold improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | |||||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Apr. 26, 2013 | Nov. 30, 2014 | 31-May-14 | Nov. 04, 2013 | Nov. 30, 2014 | 17-May-14 | |
Accounting Policies [Line Items] | |||||||||||
Allowance for doubtful accounts | $416,688 | $503,518 | $416,688 | $503,518 | |||||||
Goodwill impairment | 0 | 2,700,255 | |||||||||
Intangible, net | 11,178,893 | 11,178,893 | 13,803,305 | 13,803,305 | |||||||
Amortization of Deferred Charges | 36,676 | 204,972 | 545,984 | 239,303 | |||||||
Percentage Of Discount Provided To Customer | 5.00% | ||||||||||
PRS [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Ownership interest | 49.00% | 49.00% | 49.00% | ||||||||
TRG [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Intangible assets | 1,054,801 | 1,054,801 | 1,054,801 | ||||||||
Estimated useful life | 4 years | ||||||||||
CSI [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Intangible assets | 912,000 | 912,000 | 912,000 | ||||||||
Estimated useful life | 4 years | 4 years | |||||||||
Impairment of intangible assets | 0 | 91,099 | 107,654 | 703,222 | 10,025 | 703,222 | |||||
Intangible, net | 0 | 0 | 794,321 | 794,321 | |||||||
Staffing 360 UK [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Intangible assets | 10,311,465 | 10,311,465 | |||||||||
Estimated useful life | 4 years | ||||||||||
Intangible, net | 8,317,262 | 8,317,262 | 9,599,250 | 9,599,250 | |||||||
Poolia [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Intangible assets | 465,321 | 465,321 | 465,321 | 465,321 | |||||||
Estimated useful life | 4 years | ||||||||||
Intangible, net | 348,991 | 348,991 | 436,238 | 436,238 | |||||||
PS [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Intangible assets | 2,999,100 | 2,999,100 | 2,999,100 | ||||||||
Estimated useful life | 4 years | ||||||||||
Intangible, net | $2,512,641 | $2,512,641 | $2,973,497 | $2,973,497 | |||||||
Trade Names [Member] | CSI [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 15 years | ||||||||||
Trade Names [Member] | Staffing 360 UK [Member] | |||||||||||
Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 15 years |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Feb. 28, 2015 | 31-May-14 |
Property, Plant and Equipment [Line Items] | ||
Total Cost | $619,508 | $528,121 |
Accumulated depreciation | -204,376 | -78,864 |
Total | 415,131 | 449,257 |
Computer software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Cost | 107,315 | 113,615 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Cost | 30,391 | 38,098 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Cost | 295,168 | 210,561 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Cost | 113,277 | 105,637 |
Website [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Cost | 32,117 | 32,117 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total Cost | $41,239 | $28,093 |
PROPERTY_AND_EQUIPMENT_Details1
PROPERTY AND EQUIPMENT (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation, Depletion and Amortization, Nonproduction | $50,581 | $43,678 | $125,512 | $52,444 |
CONVERTIBLE_NOTES_PAYABLE_Deta
CONVERTIBLE NOTES PAYABLE (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | |
Short-term Debt [Line Items] | |||
Beginning balance | $1,600,000 | $50,000 | $50,000 |
Proceeds | 404,000 | 1,600,000 | |
Fair value of common stock issued for conversion of convertible notes payable | -600,000 | -50,000 | 0 |
Repayment of loans | -300,000 | 0 | |
Debt discount for restricted stock and beneficial conversion feature for convertible notes payable - net of accumulated amortization of $1,432,304 and $341,241, respectively | -164,171 | -979,828 | |
Net balance | 939,829 | 620,172 | |
Notes [Member] | |||
Short-term Debt [Line Items] | |||
Fair value of common stock issued for conversion of convertible notes payable | $0 | ($50,000) |
CONVERTIBLE_NOTES_PAYABLE_Deta1
CONVERTIBLE NOTES PAYABLE (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||
Feb. 05, 2015 | Dec. 10, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Oct. 15, 2014 | Sep. 15, 2014 | Jul. 14, 2014 | Jul. 29, 2014 | Sep. 02, 2014 | Aug. 31, 2014 | Jun. 22, 2014 | Jul. 31, 2014 | Jun. 30, 2014 | |
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | $2,994,202 | $2,994,202 | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | 9.00% | ||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,290,446 | |||||||||||||||
Debt Instrument, Unamortized Discount | 1,738 | |||||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | 177,559 | 845,499 | 0 | |||||||||||||
Amortization of Debt Discount (Premium) | 4,762 | 36,031 | 245,089 | 1,062,829 | 358,077 | |||||||||||
Repayments of Notes Payable | 2,252,568 | 0 | ||||||||||||||
Debt Conversion, Converted Instrument, Amount | 600,000 | 50,000 | 0 | |||||||||||||
Convertible Notes Payable, Current | 939,829 | 939,829 | 620,172 | |||||||||||||
Amortization Of Beneficial Conversion Feature | 41,081 | 73,264 | 2,387,786 | 90,176 | ||||||||||||
Debt Instrument Remaining Discount | 162,433 | |||||||||||||||
Proceeds from Notes Payable | 1,705,000 | 340,000 | ||||||||||||||
Description Of Issue Of Warrants To Purchase Common Stock | In addition, for every $1.00 of principal converted, the Company will issue a warrant to purchase one-half of a common stock share at $2.00 per common stock share exercisable for a term of three (3) years. | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 10,000 | |||||||||||||||
Long-term Debt, Gross | 41,567 | 98,262 | 100,000 | 100,000 | ||||||||||||
Debt Instrument Principal Amount [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Conversion, Original Debt, Amount | 50,000 | |||||||||||||||
Debt Instrument Accrued Interest [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Conversion, Original Debt, Amount | 4,274 | |||||||||||||||
April Notes, May Notes and May 27 and June Notes [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Unamortized Discount | 475,673 | 475,673 | 442,035 | |||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | 1,120,803 | 879,035 | ||||||||||||||
Amortization of Debt Discount (Premium) | 1,432,304 | 116,289 | ||||||||||||||
Repayments of Notes Payable | 300,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Amount | 600,000 | |||||||||||||||
Convertible Notes Payable, Current | 939,829 | 939,829 | 620,172 | |||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 320,000 | |||||||||||||||
Amortization Of Beneficial Conversion Feature | 224,952 | |||||||||||||||
Debt Instrument Remaining Discount | 164,171 | 164,171 | 979,828 | |||||||||||||
Proceeds from Issuance of Common Stock | 404,000 | |||||||||||||||
Series A Convertible Bonds [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 2,998,500 | 3,528,500 | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,709,687 | 400,000 | 405,850 | |||||||||||||
Debt Instrument, Unamortized Discount | 0 | 0 | 488,176 | 174,142 | ||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | -3,528,500 | 1,379,997 | 503,342 | |||||||||||||
Debt Conversion, Converted Instrument, Amount | 4,058,500 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | $1.50 | $2 | ||||||||||||||
Amortization Of Beneficial Conversion Feature | 0 | 2,176,325 | ||||||||||||||
Debt Instrument Remaining Discount | 369,334 | |||||||||||||||
Debt Instrument, Maturity Date | 15-Oct-14 | |||||||||||||||
Series A Convertible Bonds [Member] | Maximum [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $2 | |||||||||||||||
Series A Convertible Bonds [Member] | Minimum [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $1 | |||||||||||||||
April Convertible Promissory Notes [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 950,000 | |||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 190,000 | |||||||||||||||
May 27 Note [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 50,000 | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | $1.50 | |||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 10,000 | |||||||||||||||
May 27 Note [Member] | Corinthian Partners [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Payments of Stock Issuance Costs | 5,000 | |||||||||||||||
Share-based Goods and Nonemployee Services Transaction, Quantity of Securities Issued | 1,000 | |||||||||||||||
May Note [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 600,000 | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 7,912 | |||||||||||||||
Debt Conversion, Converted Instrument, Amount | 600,000 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | 11,868 | |||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 120,000 | |||||||||||||||
Promissory Notes [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 280,000 | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 12.00% | ||||||||||||||
Debt Instrument, Convertible, Conversion Price | $1 | |||||||||||||||
Proceeds from Notes Payable | 204,000 | 100,000 | ||||||||||||||
Debt Instrument, Maturity Date | 15-Apr-15 | |||||||||||||||
Promissory Notes [Member] | Robert Mayer [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 100,000 | 100,000 | 125,000 | 100,000 | ||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 0 | 0 | ||||||||||||||
Promissory Notes [Member] | Subsequent Event [Member] | Robert Mayer [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 7,500 | |||||||||||||||
May 31, 2014 [Member] | Debt Instrument Principal Amount [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 111,111 | |||||||||||||||
May 31, 2014 [Member] | Debt Instrument Accrued Interest [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 9,498 | |||||||||||||||
Notes [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Amortization of Debt Discount (Premium) | 18,149 | 1,106,188 | ||||||||||||||
Debt Conversion, Converted Instrument, Amount | 0 | 50,000 | ||||||||||||||
June Note [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 100,000 | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 20,000 | |||||||||||||||
Debt Instrument, Unamortized Discount | 28,876 | 28,876 | ||||||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | 64,210 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | $1.50 | |||||||||||||||
Twelve Percentage Convertible Promissory Notes One [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 250,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 5,000 | |||||||||||||||
Repayments of Notes Payable | 150,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Amount | 100,000 | |||||||||||||||
Convertible Notes Payable, Current | 100,000 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | 1.5 | |||||||||||||||
Twelve Percentage Convertible Promissory Notes Two [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 200,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 2,500 | |||||||||||||||
Debt Conversion, Converted Instrument, Amount | 100,000 | |||||||||||||||
Convertible Notes Payable, Current | 200,000 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | 1.5 | |||||||||||||||
Twelve Percentage Convertible Promissory Notes Three [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 200,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 5,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Amount | 100,000 | |||||||||||||||
Convertible Notes Payable, Current | 200,000 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | $1.50 | |||||||||||||||
Twelve Percentage Convertible Promissory Notes Four [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 100,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 5,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Amount | 100,000 | |||||||||||||||
Convertible Notes Payable, Current | 100,000 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | $1.50 | |||||||||||||||
Twelve Percentage Convertible Promissory Notes Five [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Debt Instrument, Face Amount | 200,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 5,000 | |||||||||||||||
Debt Conversion, Converted Instrument, Amount | 100,000 | |||||||||||||||
Convertible Notes Payable, Current | 200,000 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | $1.50 | |||||||||||||||
Eight Percent Convertible Promissory Note [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Amortization | 15,125 | 15,125 | ||||||||||||||
Twelve Percent Convertible Promissory Note [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Amortization | $3,023 | $3,023 |
PROMISSORY_NOTES_Details
PROMISSORY NOTES (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Dec. 10, 2014 | |
Short-term Debt [Line Items] | ||||
Beginning balance | $1,578,291 | |||
Proceeds | 1,705,000 | 340,000 | ||
Payments | 2,252,568 | 0 | ||
Debt discount (Net of accumulated amortization of $89,706 and $61,026, respectively) | 1,738 | |||
Total Promissory notes | 1,336,511 | |||
Short Term Promissory Notes [Member] | ||||
Short-term Debt [Line Items] | ||||
Beginning balance | 0 | 0 | 0 | |
Proceeds | 1,705,000 | 340,000 | ||
Payments | -1,213,333 | -340,000 | ||
Debt discount (Net of accumulated amortization of $89,706 and $61,026, respectively) | 0 | 0 | ||
Total Promissory notes | 1,336,511 | 0 | ||
Promissory note - PeopleSERVE [Member] | ||||
Short-term Debt [Line Items] | ||||
Beginning balance | 789,155 | |||
Payments | 591,866 | 0 | ||
Total Promissory notes | 789,155 | 789,155 | ||
Staffing UK [Member] | Short Term Promissory Notes [Member] | ||||
Short-term Debt [Line Items] | ||||
Total Promissory notes | 55,689 | 789,136 | ||
PeopleSERVE [Member] | Short Term Promissory Notes [Member] | ||||
Short-term Debt [Line Items] | ||||
Total Promissory notes | $789,155 | $789,155 |
PROMISSORY_NOTES_Details_1
PROMISSORY NOTES (Details 1) (USD $) | 9 Months Ended | 12 Months Ended | |
Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | |
Debt Instrument [Line Items] | |||
Beginning balance | $2,367,466 | ||
Payment | -2,252,568 | 0 | |
Ending balance | 1,775,600 | ||
Less current portion | -1,336,511 | -1,578,291 | |
Total Promissory Notes - Long-term | 1,219,425 | 4,406,049 | |
Staffing UK [Member] | |||
Debt Instrument [Line Items] | |||
Beginning balance | 3,616,874 | 3,964,940 | 3,964,940 |
Payment | -347,370 | -348,066 | |
Accelerated Interest On Deferral Of Note | 13,367 | 0 | |
Conversions | -2,994,202 | 0 | |
Ending balance | 288,670 | 3,616,874 | |
Less current portion | -55,689 | -789,136 | |
Total Promissory Notes - Long-term | 232,981 | 2,827,738 | |
PeopleSERVE [Member] | |||
Debt Instrument [Line Items] | |||
Beginning balance | 2,367,466 | 2,367,466 | 2,367,466 |
Payment | -591,866 | 0 | |
Ending balance | 2,367,466 | ||
Less current portion | -789,155 | -789,155 | |
Total Promissory Notes - Long-term | $986,445 | $1,578,311 |
PROMISSORY_NOTES_Details_2
PROMISSORY NOTES (Details 2) (USD $) | Feb. 28, 2015 | 31-May-14 |
Promissory notes - Staffing Three Hundred And Sixty Solutions UK [Member] | ||
Debt Instrument [Line Items] | ||
2015 | $13,922 | |
2016 | 55,689 | 55,689 |
2017 | 157,785 | 143,863 |
2018 | 0 | |
Thereafter | 75,197 | 75,197 |
Total | 288,671 | 288,671 |
Promissory note - PeopleSERVE [Member] | ||
Debt Instrument [Line Items] | ||
2015 | 197,289 | |
2016 | 789,155 | 789,155 |
2017 | 789,155 | 789,155 |
2018 | 197,289 | |
Total | $1,755,600 | $1,755,600 |
PROMISSORY_NOTES_Details_Textu
PROMISSORY NOTES (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||||
Dec. 10, 2014 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Jul. 31, 2014 | Nov. 30, 2014 | Feb. 28, 2015 | Jan. 31, 2015 | Mar. 21, 2014 | Nov. 19, 2013 | Dec. 16, 2014 | Aug. 31, 2014 | Sep. 15, 2014 | Sep. 02, 2014 | Aug. 31, 2014 | Oct. 15, 2014 | Jul. 14, 2014 | Jul. 29, 2014 | Feb. 05, 2015 | Jun. 30, 2014 | |
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | $2,994,202 | $2,994,202 | $2,994,202 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | 9.00% | 9.00% | ||||||||||||||||||||
Repayments of Notes Payable | 2,252,568 | 0 | |||||||||||||||||||||
Interest Paid | 143,822 | 3,189 | |||||||||||||||||||||
Interest Expense, Long-term Debt | 0 | 0 | 98,482 | 32,625 | |||||||||||||||||||
Interest Payable, Current | 98,482 | 98,482 | 5,448 | 98,482 | |||||||||||||||||||
Debt Instrument, Term | 0 years | ||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,290,446 | ||||||||||||||||||||||
Long-term Debt, Gross | 98,262 | 100,000 | 100,000 | 100,000 | 41,567 | ||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 10,000 | ||||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | 600,000 | 50,000 | 0 | ||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.25 | $1.25 | $1.25 | ||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 9,927,051 | 20,662,399 | |||||||||||||||||||||
Long-term Debt [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 2,065,379 | ||||||||||||||||||||||
Debt Conversion, Converted Instrument, Warrants or Options Issued | 1,347,572 | 2,271,918 | |||||||||||||||||||||
Long-term Debt, Gross | 288,671 | 288,671 | 288,671 | ||||||||||||||||||||
Interest Expense, Debt | 4,532 | 108,710 | |||||||||||||||||||||
Repayments of Other Debt | 2,275 | 91,380 | |||||||||||||||||||||
Long-term Debt [Member] | Common Stock [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 25,000 | ||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 85,000 | ||||||||||||||||||||||
Long-term Debt [Member] | Noteholder One [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 81,344 | 81,344 | 81,344 | ||||||||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 3,290,446 | ||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 40,672 | ||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | 61,827 | ||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | 19,516 | ||||||||||||||||||||||
Interest and Debt Expense | 13,368 | ||||||||||||||||||||||
Shares Issued, Price Per Share | $1 | $1 | $1 | ||||||||||||||||||||
Warrants To Purchase Of Common Stock | 3,619,490 | ||||||||||||||||||||||
Warrant Exercise Price | $1.25 | ||||||||||||||||||||||
Robert Mayer [Member] | Long-term Debt [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | 100,000 | ||||||||||||||||||||||
Robert Mayer [Member] | Short-term Debt [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 50,000 | 125,000 | |||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 54,500 | ||||||||||||||||||||||
Matt Briand [Member] | Long-term Debt [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | 91,943 | ||||||||||||||||||||||
Warrants To Purchase Of Common Stock | 1,123,353 | ||||||||||||||||||||||
Warrant Exercise Price | $1.25 | ||||||||||||||||||||||
Matt Briand [Member] | Long-term Debt [Member] | Common Stock [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 1,021,230 | ||||||||||||||||||||||
Shares Issued, Price Per Share | $1 | $1 | $1 | ||||||||||||||||||||
Mr.Flood [Member] | Long-term Debt [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 1,720,733 | 1,720,733 | 1,720,733 | ||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | 170,248 | ||||||||||||||||||||||
Warrants To Purchase Of Common Stock | 2,080,080 | ||||||||||||||||||||||
Warrant Exercise Price | $1.25 | ||||||||||||||||||||||
Mr.Flood [Member] | Long-term Debt [Member] | Common Stock [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 1,890,981 | ||||||||||||||||||||||
Shares Issued, Price Per Share | $1 | $1 | $1 | ||||||||||||||||||||
Eleven Initio Promissory Note Holders [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 2,065,379 | ||||||||||||||||||||||
Debt Conversion, Converted Instrument, Warrants or Options Issued | 2,271,918 | ||||||||||||||||||||||
Eleven Initio Promissory Note Holders [Member] | Subsequent Event [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 1,225,066 | ||||||||||||||||||||||
Debt Conversion, Converted Instrument, Warrants or Options Issued | 3,619,490 | 1,347,572 | |||||||||||||||||||||
Debt Conversion Interest Amount | 296,243 | ||||||||||||||||||||||
Debt Conversion, Original Debt, Amount | 2,994,202 | ||||||||||||||||||||||
Share Price | $1 | $1 | $1 | ||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.25 | $1.25 | $1.25 | ||||||||||||||||||||
Debt Instrument, Description | Company and an Initio promissory note holder agreed to defer the principal amount of $61,827 and accelerate and defer the interest amount of $19,516 for a total principal amount due on March 15, 2019 of $81,344 in exchange for the issuance of 40,672 common stock shares | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 10 years | ||||||||||||||||||||||
Eleven Initio Promissory Note Holders [Member] | Subsequent Event [Member] | Common Stock [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,290,446 | ||||||||||||||||||||||
May 31, 2014 [Member] | Long-term Debt [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Repayments of Notes Payable | 40,000 | 300,000 | |||||||||||||||||||||
Interest Paid | 1,933 | 3,189 | |||||||||||||||||||||
June 31, 2014 [Member] | Long-term Debt [Member] | Common Stock [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 5,000 | ||||||||||||||||||||||
July 25, 2014 [Member] | Mr. Mitchell [Member] | Long-term Debt [Member] | Common Stock [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 10,000 | ||||||||||||||||||||||
July 29, 2014 [Member] | Long-term Debt [Member] | Common Stock [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 7,000 | ||||||||||||||||||||||
September 2, 2014 [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Interest Payable, Current | 25,810 | 25,810 | 25,810 | ||||||||||||||||||||
September 15, 2014 [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Interest Payable, Current | 9,801 | 9,801 | 9,801 | ||||||||||||||||||||
Short Term Promissory Notes [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument Debt Discount Accumulated Amortization | 61,026 | 61,026 | 61,026 | ||||||||||||||||||||
Short Term Promissory Notes [Member] | Barry Cervantes [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | 12.00% | |||||||||||||||||||||
Short Term Promissory Notes [Member] | Matt Briand [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument Debt Discount Accumulated Amortization | 89,706 | 89,706 | 89,706 | ||||||||||||||||||||
Short Term Promissory Notes [Member] | September 27, 2013 [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 40,000 | 40,000 | 40,000 | ||||||||||||||||||||
Short Term Promissory Notes [Member] | October 18, 2013 [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Issuance Date | 18-Oct-13 | ||||||||||||||||||||||
Debt Instrument, Face Amount | 200,000 | 200,000 | 200,000 | ||||||||||||||||||||
Short Term Promissory Notes [Member] | October 28, 2013 [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Issuance Date | 28-Oct-13 | ||||||||||||||||||||||
Debt Instrument, Face Amount | 100,000 | 100,000 | 100,000 | ||||||||||||||||||||
Promissory Notes [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 280,000 | ||||||||||||||||||||||
Amount Of Bridge Financing Sought | 1,500,000 | 1,500,000 | 1,500,000 | ||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | 8.00% | |||||||||||||||||||||
Promissory Notes [Member] | Sterling National bank [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Issuance Date | 16-Dec-14 | ||||||||||||||||||||||
Debt Instrument, Face Amount | 250,000 | ||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 18.00% | ||||||||||||||||||||||
Long-term Debt, Gross | 166,667 | 166,667 | 166,667 | ||||||||||||||||||||
Repayments of Debt | 83,333 | ||||||||||||||||||||||
Debt Instrument, Maturity Date, Description | maturity date of March 31, 2015 that has subsequently been modified to have no maturity date. | ||||||||||||||||||||||
Promissory Notes [Member] | Subsequent Event [Member] | Sterling National bank [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 625,000 | 625,000 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 18.00% | 18.00% | |||||||||||||||||||||
Interest Paid | 7,277 | ||||||||||||||||||||||
Promissory Notes [Member] | Robert Mayer [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 100,000 | 100,000 | 100,000 | 125,000 | 125,000 | 100,000 | |||||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 0 | 0 | |||||||||||||||||||||
Promissory Notes [Member] | Robert Mayer [Member] | Subsequent Event [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 7,500 | ||||||||||||||||||||||
Promissory Notes [Member] | Jeff R. Mitchell [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 150,000 | ||||||||||||||||||||||
Promissory Notes [Member] | Trilogy apital PartnersInc [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 30,000 | ||||||||||||||||||||||
Promissory Notes [Member] | Barry Cervantes [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 150,000 | 150,000 | |||||||||||||||||||||
Stock Issued During Period Shares Issued In Connection With Financings | 0 | ||||||||||||||||||||||
Series A Convertible Bonds [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 2,998,500 | 3,528,500 | |||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||||||||||||||||||||||
Long-term Debt | 430,000 | 430,000 | 430,000 | ||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,709,687 | 400,000 | 405,850 | ||||||||||||||||||||
Debt Conversion, Converted Instrument, Warrants or Options Issued | 1,854,859 | ||||||||||||||||||||||
Debt Conversion, Converted Instrument, Amount | 4,058,500 | ||||||||||||||||||||||
Interest Expense, Debt | 0 | 203,164 | |||||||||||||||||||||
Debt Instrument, Description | (i) a fee in cash up to an amount equal to ten percent (10%) of the aggregate gross proceeds, (ii) a non-accountable expense allowance of up to two percent (2%) of the aggregate gross proceeds, and (iii) common stock shares equal to ten percent (10%) of the aggregate number of common stock shares issued. | ||||||||||||||||||||||
Promissory note - PeopleSERVE | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 3,964,949 | 3,964,949 | 3,964,949 | ||||||||||||||||||||
Repayments of Notes Payable | 591,866 | 0 | |||||||||||||||||||||
Long-term Debt | 1,755,600 | 1,755,600 | 1,755,600 | 1,755,600 | |||||||||||||||||||
Debt Instrument, Term | 0 years | ||||||||||||||||||||||
Staffing 360 UK [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 3,964,949 | 3,964,949 | 3,964,949 | ||||||||||||||||||||
Staffing 360 UK [Member] | Promissory Notes [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 3,964,949 | 3,964,949 | 3,964,949 | ||||||||||||||||||||
Repayments of Notes Payable | 695,437 | ||||||||||||||||||||||
Debt Instrument Amortization Period | 0 years | ||||||||||||||||||||||
Long-term Debt | 348,067 | 348,067 | 347,370 | 348,067 | |||||||||||||||||||
Long-term Debt, Current Maturities | 1,775,600 | 1,775,600 | 1,775,600 | ||||||||||||||||||||
Debt Instrument, Term | 0 years | ||||||||||||||||||||||
Staffing 360 UK [Member] | Promissory Notes [Member] | Brendan Flood [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 2,064,880 | 2,064,880 | 2,064,880 | ||||||||||||||||||||
Repayments of Notes Payable | 378,561 | ||||||||||||||||||||||
Interest Paid | 98,290 | ||||||||||||||||||||||
Staffing 360 UK [Member] | Promissory Notes [Member] | Matt Briand [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Face Amount | 1,115,144 | 1,115,144 | 1,115,144 | ||||||||||||||||||||
Repayments of Notes Payable | 204,443 | ||||||||||||||||||||||
Interest Paid | 52,987 | ||||||||||||||||||||||
Long-term Debt | $929,287 | $929,287 | $929,287 |
BONDS_SERIES_A_Details
BONDS - SERIES A (Details) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | ||
Feb. 05, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Jul. 29, 2014 | 31-May-13 | |
Beginning Balance | $1,600,000 | $50,000 | ||||
Proceeds | 2,041,500 | 0 | ||||
Payments | 300,000 | 0 | ||||
Conversions | 177,559 | 845,499 | 0 | |||
Series A Convertible Bonds [Member] | ||||||
Beginning Balance | 2,998,500 | 0 | ||||
Proceeds | 1,060,000 | 2,998,500 | ||||
Payments | -100,000 | |||||
Debt discount for restricted stock and beneficial conversion - net of accumulated amortization of $2,545,445 and $369,334, respectively | 0 | -1,498,840 | ||||
Conversions | -3,528,500 | 1,379,997 | 503,342 | |||
Bonds - Series A, net | $430,000 | $1,499,660 |
BONDS_SERIES_A_Details_Textual
BONDS - SERIES A (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | |||||
Feb. 05, 2015 | Oct. 15, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Sep. 15, 2014 | Jul. 14, 2014 | Jul. 29, 2014 | Dec. 10, 2014 | |
Debt Instrument [Line Items] | |||||||||||
Interest rate | 9.00% | 9.00% | |||||||||
Shares to be received by bond purchasers | 299,850 | 106,000 | |||||||||
Debt discount | $1,738 | ||||||||||
Beneficial conversion feature | 177,559 | 845,499 | 0 | ||||||||
Amortization of beneficial conversion feature | 41,081 | 73,264 | 2,387,786 | 90,176 | |||||||
Remaining debt discount and beneficial conversion feature | 162,433 | ||||||||||
Debt Instrument, Modification Expense | 951,184 | ||||||||||
Debt Conversion, Converted Instrument, Amount | 600,000 | 50,000 | 0 | ||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,290,446 | ||||||||||
Debt Instrument, Face Amount | 2,994,202 | 2,994,202 | |||||||||
Accrued interest | 98,482 | 98,482 | 5,448 | ||||||||
Proceeds from Convertible Debt | 404,000 | 1,655,000 | |||||||||
Proceeds From Sale Of Convertible Bonds | 2,041,500 | 0 | |||||||||
Series A Convertible Bonds [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 12.00% | ||||||||||
Debt instrument, maturity date | 15-Oct-14 | ||||||||||
Conversion price | $2 | $1.50 | |||||||||
Shares to be received by bond purchasers | 5,000 | 5,000 | |||||||||
Investment amount by bond purchasers | 50,000 | 50,000 | |||||||||
Debt discount | 0 | 0 | 488,176 | 174,142 | |||||||
Beneficial conversion feature | -3,528,500 | 1,379,997 | 503,342 | ||||||||
Amortization of beneficial conversion feature | 0 | 2,176,325 | |||||||||
Remaining debt discount and beneficial conversion feature | 369,334 | ||||||||||
Bonds - Series A, net | 430,000 | 430,000 | 1,499,660 | ||||||||
Interest expense - bonds | 0 | 203,164 | |||||||||
Debt Instrument, Modification Expense | 1,976,775 | ||||||||||
Debt Conversion, Converted Instrument, Amount | 4,058,500 | ||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,709,687 | 400,000 | 405,850 | ||||||||
Debt Conversion, Converted Instrument, Warrants or Options Issued | 1,854,859 | ||||||||||
Debt Instrument, Face Amount | 3,528,500 | 2,998,500 | |||||||||
Accrued interest | 181,155 | 50,941 | 50,941 | 33,980 | |||||||
Long-term Debt | 430,000 | 430,000 | |||||||||
Debt Instrument, Description | (i) a fee in cash up to an amount equal to ten percent (10%) of the aggregate gross proceeds, (ii) a non-accountable expense allowance of up to two percent (2%) of the aggregate gross proceeds, and (iii) common stock shares equal to ten percent (10%) of the aggregate number of common stock shares issued. | ||||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | The favorable conversion terms offered a discount from the original terms of $1.50 per common stock share with no warrants to conversion at $1.00 per common stock share and one (1) warrant exercisable until October 15, 2017 at $2.00 per common stock share for every $2.00 of principal and interest converted. | ||||||||||
Proceeds from Convertible Debt | 1,060,000 | ||||||||||
Proceeds From Sale Of Convertible Bonds | 1,060,000 | 2,998,500 | |||||||||
Series A Convertible Bonds [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion price | $2 | ||||||||||
Series A Convertible Bonds [Member] | Minimum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion price | $1 | ||||||||||
Series A Convertible Bonds [Member] | Ten Bond Holders [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Face Amount | 530,000 | ||||||||||
Accrued interest | 26,765 | ||||||||||
Series A Convertible Bonds [Member] | Eight Bond Holders [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, maturity date | 15-Apr-15 | ||||||||||
Debt Conversion, Converted Instrument, Amount | 62,725 | ||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 45,126 | ||||||||||
Debt Instrument, Face Amount | 430,000 | ||||||||||
Repayments of Long-term Debt | 100,000 | ||||||||||
Series A Convertible Bonds [Member] | Two Bond Holders [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Accrued interest | 7,430 | ||||||||||
Series A Convertible Bonds [Member] | Private Placement [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stock Issued During Period, Value, Other | $487,020 | ||||||||||
Stock Issued During Period, Shares, Other | 12,100 |
BONDS_SERIES_B_Details
BONDS - SERIES B (Details) (USD $) | 9 Months Ended | 12 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | 31-May-13 | |
Beginning Balance | $1,600,000 | $50,000 | ||
Proceeds | 2,041,500 | 0 | ||
Series B Convertible Bonds [Member] | ||||
Beginning Balance | 0 | 0 | ||
Proceeds | 981,500 | 0 | ||
Debt discount for restricted stock and beneficial conversion - net of accumulated amortization of $34,557 and $0, respectively | -130,374 | 0 | ||
Bonds - Series B, net | $851,126 | $0 |
BONDS_SERIES_B_Details_Textual
BONDS - SERIES B (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||||
Feb. 05, 2015 | Dec. 10, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Nov. 24, 2014 | Nov. 24, 2014 | 31-May-14 | Jul. 29, 2014 | |
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | 9.00% | ||||||||
Debt Instrument, Face Amount | $2,994,202 | $2,994,202 | ||||||||
Shares Issuable Contingent On Investment | 299,850 | 106,000 | ||||||||
Debt Instrument, Unamortized Discount | 1,738 | |||||||||
Amortization of Debt Discount (Premium) | 4,762 | 36,031 | 245,089 | 1,062,829 | 358,077 | |||||
Debt Instrument, Convertible, Beneficial Conversion Feature | 177,559 | 845,499 | 0 | |||||||
Amortization Of Beneficial Conversion Feature | 41,081 | 73,264 | 2,387,786 | 90,176 | ||||||
Debt Instrument Remaining Discount | 162,433 | |||||||||
Accrued interest | 98,482 | 98,482 | 5,448 | |||||||
Other Restructuring Costs | 5,215 | 0 | 3,087,662 | 0 | ||||||
Proceeds From Sale Of Convertible Bonds | 2,041,500 | 0 | ||||||||
Series B Convertible Bonds [Member] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | 12.00% | ||||||||
Debt Instrument, Face Amount | 981,500 | 981,500 | 981,500 | 981,500 | ||||||
Shares Issuable Contingent On Investment | 5,000 | 5,000 | 10,000 | 10,000 | ||||||
Shares Issuable Investment Threshold | 50,000 | 50,000 | 100,000 | 100,000 | ||||||
Stock Issued During Period Shares Issued In Connection With Financings | 98,150 | 98,150 | ||||||||
Debt Instrument, Unamortized Discount | 123,505 | 123,505 | ||||||||
Amortization of Debt Discount (Premium) | 50,522 | |||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | 100,389 | |||||||||
Amortization Of Beneficial Conversion Feature | 42,998 | |||||||||
Debt Instrument Remaining Discount | 130,374 | 130,374 | ||||||||
Bonds Payable Current | 851,126 | 851,126 | 0 | |||||||
Interest Expense, Debt | 29,042 | 44,246 | ||||||||
Accrued interest | 19,038 | 19,038 | 0 | |||||||
Debt Instrument, Maturity Date | 30-Sep-15 | |||||||||
Debt Instrument, Convertible, Terms of Conversion Feature | (i) in the event the Companys common stock shares are trading at $2.67 or higher based on a 10-Day VWAP immediately prior to the Maturity Date, then the repayment conversion price shall be set at $2.00 per share, or (ii) in the event the Companys common stock shares are trading below $2.67 based on a 10-Day VWAP, then the repayment conversion price shall be set at a twenty-five percent (25%) discount to the 10-Day VWAP calculated immediately prior to the Maturity Date, provided however, that in no event will the repayment conversion price be less than $1.50. | |||||||||
Debt Instrument, Convertible, Conversion Price | $2 | $2 | ||||||||
Other Restructuring Costs | 154,489 | |||||||||
Proceeds From Sale Of Convertible Bonds | $981,500 | $0 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 4 Months Ended | 1 Months Ended | ||||
Dec. 19, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Apr. 30, 2014 | Jan. 31, 2015 | Jan. 31, 2014 | 31-May-14 | |
Related Party Transaction [Line Items] | |||||||||
Payments for Fees | $10,000 | ||||||||
Accounts Payable, Related Parties, Current | 74,674 | 74,674 | 136,914 | ||||||
Trilogy Capital Partners, Inc. [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Consulting Fees Related Parties | 300,000 | 15,000 | 325,000 | 45,000 | |||||
Stock Issued During Period, Shares, Issued for Services | -25,000 | ||||||||
Accounts Payable, Related Parties, Current | 250,000 | 250,000 | |||||||
Consulting Agreement, Cash Compensation Payable | 300,000 | 300,000 | |||||||
Consulting Agreement Common Stock To Be Issued As Compensation Shares | -250,000 | -250,000 | |||||||
Robert Lee [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Consulting Fees Related Parties | 0 | 0 | 0 | 90,000 | |||||
Grandview Capital Partners, Inc. [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Consulting Fees Related Parties | 0 | 45,000 | 44,674 | 135,000 | |||||
Accounts Payable, Related Parties, Current | 74,674 | 74,674 | |||||||
Dimitri Villard [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Consulting Fees Related Parties | 7,500 | 15,000 | 22,500 | 45,000 | |||||
Payments for Fees | 10,000 | ||||||||
Professional and Contract Services Expense | 5,000 | 0 | 15,000 | 0 | |||||
Accounts Payable, Related Parties, Current | 0 | 0 | |||||||
Dimitri Villard [Member] | Common Stock [Member] | Subsequent Event [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stock Issued During Period, Shares, Issued for Services | 45,000 | ||||||||
Stock Issued During Period, Value, Issued for Services | 52,393 | ||||||||
Robert Mayer [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Consulting Fees Related Parties | 7,500 | 15,000 | 22,500 | 45,000 | |||||
Payments for Fees | 10,000 | ||||||||
Accounts Payable, Related Parties, Current | 0 | 0 | |||||||
Robert Mayer [Member] | Common Stock [Member] | Subsequent Event [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stock Issued During Period, Shares, Issued for Services | 37,500 | ||||||||
Stock Issued During Period, Value, Issued for Services | 43,662 | ||||||||
Jeff Grout [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Consulting Fees Related Parties | 7,500 | 2,500 | 22,500 | 2,500 | |||||
Professional and Contract Services Expense | 5,000 | 1,667 | 15,000 | 1,667 | |||||
Accounts Payable, Related Parties, Current | 0 | 0 | |||||||
Jeff Grout [Member] | Common Stock [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stock Issued During Period, Shares, Issued for Services | 37,500 | ||||||||
Stock Issued During Period, Value, Issued for Services | 43,662 | ||||||||
Nick Florio [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Consulting Fees Related Parties | 7,500 | 0 | 22,500 | 0 | |||||
Professional and Contract Services Expense | 5,000 | 0 | 15,000 | 0 | |||||
Accounts Payable, Related Parties, Current | 0 | 0 | |||||||
Nick Florio [Member] | Common Stock [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stock Issued During Period, Shares, Issued for Services | 87,500 | ||||||||
Stock Issued During Period, Value, Issued for Services | 107,162 | ||||||||
Nick Florio [Member] | Restructuring Committee [Member] | Common Stock [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stock Issued During Period, Shares, Issued for Services | 50,000 | ||||||||
Stock Issued During Period, Value, Issued for Services | $63,500 |
ACCOUNTS_RECEIVABLE_FINANCING_
ACCOUNTS RECEIVABLE FINANCING (Details Textual) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | |||||||
Feb. 28, 2014 | Feb. 28, 2015 | 31-May-14 | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Jul. 25, 2014 | Jul. 25, 2014 | |
USD ($) | USD ($) | Staffing 360 UK [Member] | Accounts Receivable Financing [Member] | Accounts Receivable Financing [Member] | Accounts Receivable Financing [Member] | Accounts Receivable Financing [Member] | Accounts Receivable Financing [Member] | Credit and Security Agreement [Member] | Credit and Security Agreement [Member] | Credit and Security Agreement [Member] | Credit and Security Agreement [Member] | ||
USD ($) | Staffing 360 UK [Member] | Staffing 360 UK [Member] | Staffing 360 UK [Member] | Staffing 360 UK [Member] | USD ($) | Minimum [Member] | Maximum [Member] | ||||||
USD ($) | GBP (£) | GBP (£) | Base Rate [Member] | USD ($) | USD ($) | ||||||||
Accounts Receivable Financing [Line Items] | |||||||||||||
Factoring Arrangement Advance Percentage Eligible Receivable | 90.00% | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | 25.00% | |||||||||||
Debt Instrument Closing Fee | $500 | ||||||||||||
Factoring Arrangement Advance Percentage Eligible Receivable Temporary Placements | 90.00% | 90.00% | |||||||||||
Factoring Arrangement Advance Percentage Eligible Receivable Permanent Placements | 75.00% | 75.00% | |||||||||||
Line of Credit Facility, Initiation Date | 1-Nov-12 | ||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,250,000 | 14,000,000 | 14,000,000 | 15,000,000 | |||||||||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | 2.50% | 5.00% | ||||||||||
Debt Instrument, Description of Variable Rate Basis | Libor | Libor | Libor | ||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 3.90% | 3.90% | |||||||||||
Line Of Credit Facility Interest Bearing Borrowing Threshold | 5,000,000 | ||||||||||||
Line of Credit Facility, Expiration Date | 31-Oct-15 | ||||||||||||
Other Short-term Borrowings | 12,180,088 | 10,798,713 | |||||||||||
Line of Credit Facility, Current Borrowing Capacity | 200,000 | 100,000 | |||||||||||
Debt Instrument, Term | 0 years | ||||||||||||
Line of Credit Facility, Interest Rate at Period End | 5.15% | ||||||||||||
Line of Credit Facility, Periodic Payment | £ 8,333 | ||||||||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 3.50% | 0.50% |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Feb. 28, 2015 | 31-May-14 | |
Equity Issuance One [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Private Placements | $565,000 | |
Shares Issued, Price Per Share | $0.90 | |
Equity Issuance Two [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Private Placements | 10,000,000 | |
Shares Issued, Price Per Share | $1 | |
Equity Issuance Three [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period, Value, Issued for Services | 215,001 | 1,025,379 |
Equity Issuance Three [Member] | Minimum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.62 | |
Equity Issuance Three [Member] | Maximum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $1.92 | $2.06 |
Equity Issuance Four [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Conversion Of Liabilities | 100,982 | |
Shares Issued, Price Per Share | $0.88 | |
Equity Issuance Five [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Conversion Of Financings | 600,000 | 50,000 |
Shares Issued, Price Per Share | $1.50 | $0.45 |
Equity Issuance Six [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 297,047 | |
Shares Issued, Price Per Share | $0.72 | |
Equity Issuance Seven [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Conversion Of Liabilities | 11,868 | 4,275 |
Shares Issued, Price Per Share | $1.50 | $0.45 |
Equity Issuance Eight [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 123,345 | 61,026 |
Shares Issued, Price Per Share | $0.69 | $0.72 |
Equity Issuance Nine [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued To Board Of Directors | 111,612 | |
Equity Issuance Nine [Member] | Minimum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.45 | |
Equity Issuance Nine [Member] | Maximum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $2.04 | |
Equity Issuance Ten [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued To Board Of Directors | 4,098 | |
Equity Issuance Ten [Member] | Minimum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $1.92 | |
Equity Issuance Ten [Member] | Maximum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $1.98 | |
Equity Issuance Eleven [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued To Board Of Directors | 246,880 | 9,075 |
Equity Issuance Eleven [Member] | Minimum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.35 | $0.88 |
Equity Issuance Eleven [Member] | Maximum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $1.95 | $2.04 |
Equity Issuance Twelve [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued To Board Of Directors | 8,193 | |
Equity Issuance Twelve [Member] | Minimum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.88 | |
Equity Issuance Twelve [Member] | Maximum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $2.04 | |
Equity Issuance Thirteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued To Employees | 113,500 | |
Equity Issuance Thirteen [Member] | Minimum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.88 | |
Equity Issuance Thirteen [Member] | Maximum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $1.97 | |
Equity Issuance Fourteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period, Value, Acquisitions | 5,179,429 | |
Equity Issuance Fourteen [Member] | Minimum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.88 | |
Equity Issuance Fourteen [Member] | Maximum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $1.93 | |
Equity Issuance Fifteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Private Placements | 786,208 | |
Stock Issued During Period Value Issued To Placement Agents | 27,832 | |
Equity Issuance Fifteen [Member] | Minimum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.85 | $0.88 |
Equity Issuance Fifteen [Member] | Maximum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $1.95 | $2 |
Equity Issuance Sixteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 488,177 | |
Shares Issued, Price Per Share | $1.63 | |
Equity Issuance Seventeen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 442,034 | |
Shares Issued, Price Per Share | $1.38 | |
Equity Issuance Eighteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Conversion Of Financings | 1,655,000 | |
Shares Issued, Price Per Share | $1 | |
Equity Issuance Nineteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Conversion Of Liabilities | 72,044 | |
Shares Issued, Price Per Share | $1 | |
Equity Issuance Twenty [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 174,142 | |
Shares Issued, Price Per Share | $0.61 | |
Equity Issuance Twenty One [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 62,725 | |
Shares Issued, Price Per Share | $1.39 | |
Equity Issuance Twenty Two [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 123,504 | |
Shares Issued, Price Per Share | $1.26 | |
Stock Issued During Period Value As Interest On Debt | 286,809 | |
Equity Issuance Twenty Two [Member] | Minimum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.30 | |
Equity Issuance Twenty Two [Member] | Maximum [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $1.85 | |
Equity Issuance Twenty Three [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 32,870 | |
Shares Issued, Price Per Share | $1.73 | |
Equity Issuance Twenty Four [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 2,245,921 | |
Shares Issued, Price Per Share | $0.75 | |
Equity Issuance Twenty Five [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 222,210 | |
Shares Issued, Price Per Share | $0.75 | |
Equity Issuance Twenty Six [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Value Issued In Connection With Financings | 3,709,655 | |
Shares Issued, Price Per Share | $1 | |
Common Stock [Member] | Equity Issuance One [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Private Placements | 627,783 | |
Common Stock [Member] | Equity Issuance Two [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Private Placements | 10,000,000 | |
Common Stock [Member] | Equity Issuance Three [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period, Shares, Issued for Services | 232,500 | 831,055 |
Common Stock [Member] | Equity Issuance Four [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Conversion Of Liabilities | 115,408 | |
Common Stock [Member] | Equity Issuance Five [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Conversion Of Financings | 400,000 | 111,111 |
Common Stock [Member] | Equity Issuance Six [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 413,750 | |
Common Stock [Member] | Equity Issuance Seven [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Conversion Of Liabilities | 7,912 | 9,498 |
Common Stock [Member] | Equity Issuance Eight [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Conversion Of Financings | 85,000 | |
Stock Issued During Period Shares Issued In Connection With Financings | 84,500 | |
Common Stock [Member] | Equity Issuance Nine [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period, Shares, Issued To Board Of Directors | 121,250 | |
Common Stock [Member] | Equity Issuance Ten [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period, Shares, Issued To Board Of Directors | 2,083 | |
Common Stock [Member] | Equity Issuance Eleven [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period, Shares, Issued To Board Of Directors | 207,500 | 4,996 |
Common Stock [Member] | Equity Issuance Twelve [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period, Shares, Issued To Board Of Directors | 4,582 | |
Common Stock [Member] | Equity Issuance Thirteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued To Employees | 90,000 | |
Common Stock [Member] | Equity Issuance Fourteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period, Shares, Acquisitions | 4,560,067 | |
Common Stock [Member] | Equity Issuance Fifteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Private Placements | 1,338,922 | |
Stock Issued During Period Shares Issued To Placement Agents | 16,509 | |
Common Stock [Member] | Equity Issuance Sixteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 299,850 | |
Common Stock [Member] | Equity Issuance Seventeen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 320,000 | |
Common Stock [Member] | Equity Issuance Eighteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Conversion Of Financings | 1,655,000 | |
Common Stock [Member] | Equity Issuance Nineteen [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Conversion Of Liabilities | 72,044 | |
Common Stock [Member] | Equity Issuance Twenty [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 106,000 | |
Common Stock [Member] | Equity Issuance Twenty One [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 45,126 | |
Common Stock [Member] | Equity Issuance Twenty Two [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 98,150 | |
Stock Issued During Period As Interest On Debt | 300,672 | |
Common Stock [Member] | Equity Issuance Twenty Three [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 19,000 | |
Common Stock [Member] | Equity Issuance Twenty Four [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 2,994,202 | |
Common Stock [Member] | Equity Issuance Twenty Five [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 296,243 | |
Common Stock [Member] | Equity Issuance Twenty Six [Member] | ||
Stockholders Equity [Line Items] | ||
Stock Issued During Period Shares Issued In Connection With Financings | 3,709,687 | |
Common Stock [Member] | Equity Issuance Twenty Seven [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.30 | |
Stock Issued During Period for conversion of earn-out liability | 1,134,050 | |
Stock Issued During Period value conversion of earn-out liability | 340,215 | |
Common Stock [Member] | Equity Issuance Twenty Eight [Member] | ||
Stockholders Equity [Line Items] | ||
Shares Issued, Price Per Share | $0.93 | |
Stock Issued During Period in connection with settlement agreement | 275,000 | |
Stock Issued During Period value in connection with settlement agreement | $255,750 |
STOCKHOLDERS_EQUITY_Details_1
STOCKHOLDERS' EQUITY (Details 1) (USD $) | 9 Months Ended | ||
Feb. 28, 2015 | 31-May-14 | 31-May-13 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise Price | $1.25 | ||
Warrant [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number Outstanding | 12,264,289 | ||
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 4 years 3 months 14 days | ||
Weighted Average Exercise Price | $1.76 | $1.97 | $1.80 |
Number Exercisable | 12,264,289 | ||
Warrants Exercisable Weighted Average Exercise Price | $1.76 | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise Price | $2 | ||
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Exercise Price | $1.25 |
STOCKHOLDERS_EQUITY_Details_2
STOCKHOLDERS' EQUITY (Details 2) (Warrant [Member], USD $) | 9 Months Ended | 12 Months Ended |
Feb. 28, 2015 | 31-May-14 | |
Warrant [Member] | ||
Options | ||
Outstanding | 6,760,765 | 583,338 |
Issued | 5,503,524 | 6,177,427 |
Exercised | 0 | 0 |
Expired | 0 | 0 |
Outstanding | 12,264,289 | 6,760,765 |
Weighted Average Exercise Price | ||
Outstanding | $1.97 | $1.80 |
Issued | $1.51 | $1.82 |
Exercised | $0 | $0 |
Expired | $0 | $0 |
Outstanding | $1.76 | $1.97 |
STOCKHOLDERS_EQUITY_Details_3
STOCKHOLDERS' EQUITY (Details 3) (USD $) | 9 Months Ended |
Feb. 28, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility (minimum): | 50.57% |
Volatility (maximum): | 84.23% |
Expected dividend rate: | 0.00% |
Risk-free interest rate (minimum): | 1.45% |
Risk-free interest rate (maximum): | 2.77% |
Maximum [Member] | Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price: | 2 |
Market price at date of grant: | 1.99 |
Expected terms (years): | 10 years |
Minimum [Member] | Stock Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Exercise price: | 1 |
Market price at date of grant: | 0.7501 |
Expected terms (years): | 5 years |
STOCKHOLDERS_EQUITY_Details_4
STOCKHOLDERS' EQUITY (Details 4) (Employee Stock Option [Member], USD $) | 9 Months Ended | 12 Months Ended | |
Feb. 28, 2015 | 31-May-14 | ||
Employee Stock Option [Member] | |||
Options | |||
Outstanding | 1,900,000 | 0 | |
Granted | 525,000 | 1,900,000 | |
Exercised | 0 | 0 | |
Expired or cancelled | 0 | 0 | |
Outstanding | 2,425,000 | 1,900,000 | |
Weighted Average Exercise Price | |||
Outstanding | $2 | $0 | |
Granted | $2 | $2 | |
Exercised | $0 | $0 | |
Expired or cancelled | $0 | $0 | |
Decrease in weighted average exercise price due to modification (1) | ($0.57) | [1] | |
Outstanding | $1.43 | $2 | |
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value Outstanding | $0 | $0 | |
Aggregate Intrinsic Value Outstanding | $0 | $0 | |
[1] | On December 8, 2014, the Company modified the exercise price on its unvested 1,380,000 options from an exercise price of $2.00 per share to $1.00 per share. |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS' EQUITY (Details Textual) (USD $) | 0 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | ||||||
Dec. 10, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Feb. 28, 2015 | Feb. 28, 2014 | Dec. 08, 2014 | Dec. 31, 2014 | 31-May-13 | 7-May-13 | Jun. 28, 2013 | Jul. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 | 75,000,000 | ||||||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | 200,000,000 | ||||||||
Preferred stock, par value per share | $0.00 | 0.00001 | $0.00 | $0.00 | ||||||||
Common Stock, Shares, Issued | 42,877,588 | 32,950,537 | 42,877,588 | 12,288,138 | ||||||||
Share-based payment expense | $971,230 | $241,584 | ||||||||||
Unrecognized compensation cost recognition period | 41 months | |||||||||||
Stock Issued During Period, Shares, New Issues | 10,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 750,000 | 750,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 1,045,000 | 1,045,000 | ||||||||||
Amortization of Modification Expenses | 104,759 | |||||||||||
Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Common Stock, Shares Authorized | 200,000,000 | |||||||||||
Preferred Stock, Shares Authorized | 20,000,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 10 years | |||||||||||
Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Common Stock, Shares Authorized | 75,000,000 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 5 years | |||||||||||
Common Stock [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Stock Issued During Period, Shares, New Issues | 9,927,051 | 20,662,399 | ||||||||||
Stock Options [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options granted | 525,000 | 1,900,000 | ||||||||||
Options, exercise price | $2 | 2 | ||||||||||
2014 Equity Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options granted | 2,425,000 | |||||||||||
2014 Equity Plan [Member] | Stock Options [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Maximum options authorized for issuance | 1,500,000 | |||||||||||
Share-based payment expense | 178,980 | 0 | 66,449 | 0 | ||||||||
Unrecognized compensation cost | $802,233 | $802,233 | ||||||||||
2014 Equity Plan [Member] | Stock Options [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,500,000 | |||||||||||
2014 Equity Plan [Member] | 2014 Issuance One [Member] | Stock Options [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options granted | 1,380,000 | |||||||||||
2014 Equity Plan [Member] | 2014 Issuance One [Member] | Stock Options [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options, exercise price | 2 | |||||||||||
2014 Equity Plan [Member] | 2014 Issuance One [Member] | Stock Options [Member] | Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options, exercise price | 1 | |||||||||||
2014 Equity Plan [Member] | 2014 Issuance Two [Member] | Stock Options [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options granted | 1,380,000 | |||||||||||
2014 Equity Plan [Member] | 2014 Issuance Two [Member] | Stock Options [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options, exercise price | 2 | |||||||||||
2014 Equity Plan [Member] | 2014 Issuance Two [Member] | Stock Options [Member] | Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Options, exercise price | 1 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Textual) | 1 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 0 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
Dec. 19, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | 31-May-13 | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2015 | Apr. 26, 2013 | Feb. 27, 2015 | Feb. 28, 2015 | Nov. 04, 2013 | Feb. 28, 2015 | Feb. 28, 2015 | Apr. 13, 2015 | Feb. 28, 2015 | Jan. 30, 2014 | Nov. 30, 2013 | Jul. 19, 2012 | Jan. 31, 2014 | Feb. 15, 2013 | Feb. 28, 2015 | Feb. 15, 2013 | Jan. 30, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Apr. 26, 2013 | Feb. 14, 2013 | Feb. 14, 2013 | Feb. 14, 2013 | Feb. 15, 2013 | Apr. 30, 2014 | Jan. 03, 2014 | Aug. 22, 2013 | Jul. 01, 2013 | Feb. 28, 2015 | 31-May-14 | 31-May-14 | Jul. 15, 2012 | Apr. 30, 2014 | Jan. 02, 2014 | 31-May-14 | Jul. 01, 2013 | Apr. 30, 2014 | Jul. 01, 2013 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Sep. 30, 2014 | 31-May-14 | 31-May-14 | 31-May-14 | Feb. 24, 2013 | Feb. 24, 2014 | Nov. 04, 2013 | Nov. 04, 2013 | Jan. 03, 2014 | Jan. 03, 2014 | Jan. 03, 2014 | Mar. 17, 2014 | Mar. 17, 2014 | Mar. 17, 2014 | Mar. 17, 2014 | 17-May-14 | 17-May-14 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | TRG [Member] | TRG [Member] | TRG [Member] | CSI [Member] | CSI [Member] | CSI [Member] | Sterling Bank [Member] | Sterling Bank [Member] | River Star Professional Group [Member] | River Star Professional Group [Member] | River Star Professional Group [Member] | Grandview Capital Partners, Inc. [Member] | Grandview Capital Partners, Inc. [Member] | Trilogy Capital Partners, Inc. [Member] | Trilogy Capital Partners, Inc. [Member] | Trilogy Capital Partners, Inc. [Member] | Trilogy Capital Partners, Inc. [Member] | Pylon Management, Inc. [Member] | Pylon Management, Inc. [Member] | Pylon Management, Inc. [Member] | Pylon Management, Inc. [Member] | Pylon Management, Inc. [Member] | Joshua Capital, LLC. [Member] | Rempel Ventures LLC [Member] | Rempel Ventures LLC [Member] | Rempel Ventures LLC [Member] | Dimitri Villard [Member] | Dimitri Villard [Member] | Dimitri Villard [Member] | Dimitri Villard [Member] | Dimitri Villard [Member] | Dimitri Villard [Member] | Dimitri Villard [Member] | Robert Mayer [Member] | Robert Mayer [Member] | Robert Mayer [Member] | Robert Mayer [Member] | Jeff Grout [Member] | Jeff Grout [Member] | Jeff Grout [Member] | Nick Florio [Member] | Nick Florio [Member] | Nick Florio [Member] | Nick Florio [Member] | Darren Minton [Member] | Darren Minton [Member] | Charlie Cooper [Member] | Margaret Gesualdi [Member] | Matt Briand [Member] | Brendan Flood [Member] | Brendan Flood [Member] | Jeff R. Mitchell [Member] | Jeff R. Mitchell [Member] | Jeff R. Mitchell [Member] | Jeff R. Mitchell [Member] | Linda Moraski [Member] | Linda Moraski [Member] | NewCSI Inc [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | Subsequent Event [Member] | Subsequent Event [Member] | USD ($) | USD ($) | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Subsequent Event [Member] | Subsequent Event [Member] | USD ($) | Completion Of First Acquisition [Member] | Completion Of Second Acquisition [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Subsequent Event [Member] | Corporate Governance And Nominating Committee [Member] | Compensation Committee [Member] | Board Of Directors [Member] | Separate Advisory Agreement [Member] | Separate Advisory Agreement [Member] | Compensation Committee [Member] | Board Of Directors [Member] | Separate Advisory Agreement [Member] | Separate Advisory Agreement [Member] | Corporate Governance And Nominating Committee [Member] | Compensation Committee [Member] | Board Of Directors [Member] | Corporate Governance And Nominating Committee [Member] | Audit Committee [Member] | Board Of Directors [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | GBP (£) | USD ($) | USD ($) | June One Twenty Fourteen [Member] | One Year Anniversary Of Employment [Member] | PSI [Member] | PRS [Member] | USD ($) | ||||||||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||||||||||||||||||||||||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, total contractual obligation payable | $45,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock to be issued to adviser as consulting compensation, value | 22,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, cash compensation payable | 300,000 | 30,000 | 20,000 | 22,500 | 30,000 | 30,000 | 20,000 | 30,000 | 20,000 | 30,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, cash portion fee payable per month | 5,000 | 10,000 | 10,000 | 5,000 | 25,000 | 5,000 | 10,000 | 13,000 | 3,000 | 2,500 | 2,500 | 1,667 | 1,875 | 2,500 | 2,500 | 2,500 | 1,667 | 2,500 | 1,667 | 2,500 | ||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, common stock to be issued as compensation, shares | 30,000 | 10,000 | 10,000 | 30,000 | 10,000 | 30,000 | 10,000 | 10,000 | 50,000 | 10,000 | 10,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, number of shares to be issued each month | 2,500 | 2,500 | 833 | 833 | 833 | 2,500 | 2,500 | 833 | 833 | 2,500 | 833 | 833 | 2,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, advisor fee | 10,000 | 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued to board of directors, shares | 10,000 | 10,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Damage sought, deferred tax asset | 154,433 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum lease obligation, 2015 | 221,564 | 221,564 | 221,564 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum lease obligation, 2016 | 635,190 | 635,190 | 635,190 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum lease obligation, 2017 | 205,267 | 205,267 | 205,267 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rent expense | 272,409 | 779,192 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employment agreement, officer, compensation | 48,000 | 180,000 | 200,000 | 190,000 | 300,000 | 296,000 | 192,000 | 250,000 | 250,000 | 112,500 | 37,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employment agreement, officer, shares transfer percentage | 50.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional share based compensation | 20,000 | 20,000 | 125,000 | 125,000 | 50,000 | 25,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employment agreement, officer, compensation, bonus percentage | 50.00% | 50.00% | 50.00% | 50.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employment agreement, officer, commission percentage of gross profit | 2.00% | 2.00% | 3.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employment agreement, officer, commission, maximum percentage of gross profit per month | 1.75% | 1.75% | 2.50% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance based compensation, gross profit threshold | 5,000,000 | 2,100,000 | 2,200,000 | 750,000 | 400,000 | 400,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options to be granted | -250,000 | 150,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options to vest | 30,000 | 30,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options, exercise price | $2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, value of stock to be issued each month | 5,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, cash compensation payable per month after increase | 15,000 | 5,000 | 15,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of performance fee | 1.00% | 3.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of performance fee, maximum | 10.00% | 5.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, bonus fee | 2.00% | 1.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, initial retainer fee | 30,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting Agreement Percent Of Net Sales | 2.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consulting agreement, cash paid | 153,750 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued to consultant pursuant to agreement, shares | 36,388 | 25,000 | 150,000 | 175,734 | 200,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Percentage of Gross Profit Appreciation Participation | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross Profits in Excess Percentage | 120.00% | 120.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross Profit Appreciation Participation Participating Level | 37.50% | 62.50% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acceleration of Earn Out Payments Amount | 1,670,635 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination Maximum Contingent Consideration | 1,500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Based Compensation Percentage Of Gross Profit Below Threshold | 0.00% | 20.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Based Compensation Percentage Of Gross Profit Above Threshold | 0.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments To Earn Out Agreement | 325,649 | 407,194 | 5,000,000 | 111,374 | 485,271 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination, Contingent Consideration, Liability | 1,192,000 | 2,100,000 | 774,274 | 774,274 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term Debt | 1,600,000 | 50,000 | 41,325 | 269,539 | 74,644 | 91,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnout Liability Assumed | 0 | 2,100,000 | 840,455 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation Arrangement with Individual, Description | On February 24, 2013, the Company entered into an employment agreement with Darren Minton (the “Minton Employment Agreement”), to serve as a Senior Vice President of the Company. Pursuant to the terms of the Minton Employment Agreement, the Company will pay Mr. Minton $48,000 annually. Mr. Minton is also entitled to receive as additional compensation 20,000 common stock shares. On February 24, 2014, the Company entered into a new employment agreement with Mr. Minton to serve as Executive Vice President of the Company. Pursuant to the terms of the Minton Employment Agreement, the Company agreed to pay Mr. Minton $180,000 annually. Mr. Minton is also entitled to receive as additional one-time grant of 20,000 common stock shares. The employment agreement has a term of eighteen (18) months. In addition, the Company may terminate the Employment Agreement after four (4) months with 30-days’ notice. | On November 4, 2013, in connection with the CSI Acquisition, the Company entered into a four (4) year employment agreement with Simon Dealy (the “Dealy Employment Agreement”), to serve as Sr. Vice President of the Company and as Chief Executive Officer of CSI, the Company’s professional services and consulting division. Pursuant to the terms of the Dealy Employment Agreement, the parties agreed that Mr. Dealy will not engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, or any business which the Company contemplates conducting or intends to conduct. Mr. Dealy will receive a salary of $200,000 annually, plus reasonable expenses. Mr. Dealy is also entitled to an annual base commission equal to two percent (2%) of the gross profit of professional services and consulting division. In addition, Mr. Dealy will receive an additional monthly commission, not to exceed one and three quarters’ percent (1.75%), if the CSI gross profit exceeds $2,200,000. The Dealy Employment Agreement will automatically renew for successive one (1) year terms following the completion of the initial four (4) year term of the agreement unless terminated by the Company or Mr. Dealy ninety (90) days prior to the end of such term. | On November 4, 2013, in connection with the CSI Acquisition, the Company entered into a four (4) year employment agreement with Margaret Gesualdi (the “Gesualdi Employment Agreement”), to serve as Vice President of the Company and as Mid-Atlantic Region Managing Partner of CSI, the Company’s professional services and consulting division. Pursuant to the Gesualdi Employment Agreement, the parties agreed that Ms. Gesualdi will not engage or participate in any business that is in competition in any manner whatsoever with the business of the Company, or any business which the Company contemplates conducting or intends to conduct. Ms. Gesualdi will receive a salary of $190,000 annually, plus reasonable expenses. Ms. Gesualdi is also entitled to an annual base commission equal to two percent (2%) of the “employee attributable gross profit” of the professional services and consulting division. In addition, Ms. Gesualdi will receive an additional monthly commission, not to exceed one and three quarters’ percent (1.75%), if the employee attributable gross profit exceeds $750,000. The Gesualdi Employment Agreement will automatically renew for successive one (1) year terms following the completion of the initial (4) four year term of the agreement unless terminated by the Company or Ms. Gesualdi ninety (90) days prior to the end of such term. | On January 3, 2014, in connection with the Initio Acquisition, the Company entered into an employment agreement with Matt Briand (the “Briand Employment Agreement”). Pursuant to the Briand Employment Agreement, Mr. Briand will serve as Co-Chief Executive Officer of the Company, as well as, Chief Executive Officer of Monroe. Mr. Briand will be paid a salary of $300,000 per annum, plus other benefits including reimbursement for reasonable expenses, paid vacation and insurance coverage for his roles with both Staffing 360 Solutions, Inc. and Monroe Staffing LLC, a division of Staffing 360 Solutions (UK) Limited. Mr. Briand will also be entitled to an annual bonus of up to fifty percent (50%) of his annual base salary based on reaching certain financial milestones. Additionally, Mr. Briand is entitled to Gross Profit Appreciation Participation, which entitles the participants to ten (10%) of Initio’s Excess Gross Profit, which is defined as the increase in Initio gross profits in excess of one hundred twenty percent (120%) of the base year’s gross profit, up to $400,000. Mr. Briand’s participating level is thirty-seven and one-half percent (37.5%). (See Note 15 – Subsequent Events). The Briand Employment Agreement has a term of five (5) years and will automatically renew thereafter unless twelve (12) months written notice is provided by either party. This employment agreement includes customary non-compete/solicitation language for a period of twelve (12) months after termination of employment. On January 27, 2015, Mr. Briand was given the additional title of President. | On January 3, 2014, in connection with the Initio Acquisition, the Company entered into an employment agreement with Brendan Flood (the “Flood Employment Agreement”). Pursuant to the Flood Employment Agreement, Mr. Flood will serve as Executive Chairman of the Board of Directors, as well as, Chief Executive Officer of Initio. Mr. Flood will be paid a salary of £192,000 (At February 28, 2015, the foreign currency exchange rate of 1.5426 makes this approximately $296,000) per annum, less statutory deductions, plus other benefits including reimbursement for reasonable expenses, paid vacation and insurance coverage for his roles with both Staffing 360 Solutions, Inc. and Staffing UK. Mr. Flood’s salary will be adjusted (but not decreased) annually based upon the Consumer Price Index for All Urban Consumers for the Northeast Region as determined by the United States Department of Labor Bureau of Labor Statistics. Mr. Flood will also be entitled to an annual bonus of up to 50% of his annual base salary based reaching certain financial milestones. Additionally, Mr. Flood is entitled to Gross Profit Appreciation Participation, which entitles the participants to ten (10%) of Initio’s Excess Gross Profit, which is defined as the increase in Initio gross profits in excess of one hundred twenty percent (120%) of the base year’s gross profit, up to $400,000. Mr. Flood’s participating level is sixty-two and one-half percent (62.5%). (See Note 15 – Subsequent Events). The Flood Employment Agreement has a term of five (5) years and will automatically renew thereafter unless twelve (12) months written notice is provided by either party. This employment agreement includes customary non-compete/solicitation language for a period of twelve (12) months after termination of employment. | On March 17, 2014, the Company entered into an employment agreement with Jeff R. Mitchell (the “Mitchell Employment Agreement”). Pursuant to the Mitchell Employment Agreement, Mr. Mitchell will serve as Executive Vice President and Chief Financial Officer. Mr. Mitchell will receive an annual base salary $250,000, plus other benefits including reimbursement for reasonable expenses, paid vacation and insurance coverage for his role with Staffing 360 Solutions, Inc. Mr. Mitchell will also be entitled to an annual bonus of up to fifty percent (50%) of his annual base salary based on reaching certain milestones. Mr. Mitchell will also receive a grant of 125,000 common stock shares, issuable as follows: (i) 50,000 common stock shares on June 1, 2014, and (ii) 25,000 common stock shares on each one (1) year anniversary of his employment. In addition, Mr. Mitchell will be entitled to 150,000 stock options to purchase common stock to be issued under the Company’s Stock Option Plan, which such stock options shall vest as follows: (i) 30,000 on June 1, 2014, and (ii) 30,000 on each one (1) year anniversary of his employment. The stock options have an exercise price of $2.00 per share, and are exercisable for a period of ten (10) years from the date of grant. The Mitchell Employment Agreement has a term of three (3) years. This employment agreement includes customary non-compete/solicitation language for a period of twelve (12) months after termination of employment. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Exchange Rate, Remeasurement | 1.5426 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 10 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,290,446 | 1,134,050 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payments for Fees | 10,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Decrease, Forgiveness | $102,500 |
GEOGRAPHICAL_SEGMENTS_Details
GEOGRAPHICAL SEGMENTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | $30,963,598 | $15,799,695 | $96,640,920 | $16,630,711 | |
Assets | 40,566,279 | 40,566,279 | 42,995,462 | ||
Liabilities | 28,511,279 | 28,511,279 | 32,376,052 | ||
UNITED STATES | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 28,934,499 | 15,351,384 | 90,224,562 | 16,140,575 | |
Assets | 39,271,097 | 39,271,097 | 39,995,879 | ||
Liabilities | 26,788,612 | 26,788,612 | 29,730,088 | ||
CANADA | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 32,995 | 28,800 | 103,117 | 70,625 | |
Assets | 49,307 | 49,307 | 102,351 | ||
Liabilities | 8,155 | 8,155 | 6,994 | ||
UNITED KINGDOM | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenue | 1,996,104 | 419,511 | 6,313,241 | 419,511 | |
Assets | 1,245,875 | 1,245,875 | 2,897,232 | ||
Liabilities | $1,714,512 | $1,714,512 | $2,638,970 |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | Feb. 28, 2015 | Apr. 26, 2013 | Nov. 04, 2013 | Jan. 03, 2014 | Feb. 28, 2014 | 17-May-14 |
TRG [Member] | ||||||
ASSETS: | ||||||
Current assets | $47,881 | |||||
Intangible assets | 1,054,801 | 1,054,801 | ||||
Goodwill | 1,412,646 | |||||
Total | 2,515,328 | |||||
LIABILITIES: | ||||||
Current liabilities | 5,986 | |||||
Net purchase price | 2,509,342 | |||||
CSI [Member] | ||||||
ASSETS: | ||||||
Current assets | 1,475,716 | |||||
Intangible assets | 912,000 | 912,000 | ||||
Goodwill | 1,287,609 | |||||
Total | 3,675,325 | |||||
LIABILITIES: | ||||||
Current liabilities | 144,871 | |||||
Net purchase price | 3,530,454 | |||||
Staffing 360 UK [Member] | ||||||
ASSETS: | ||||||
Current assets | 15,550,449 | |||||
Intangible assets | 10,050,000 | |||||
Goodwill | 2,994,057 | |||||
Total | 28,594,506 | |||||
LIABILITIES: | ||||||
Current liabilities | 15,254,943 | |||||
Net purchase price | 13,339,563 | |||||
Poolia [Member] | ||||||
ASSETS: | ||||||
Current assets | 1,207,897 | |||||
Intangible assets | 465,321 | 465,321 | ||||
Goodwill | 584,701 | |||||
Total | 2,257,919 | |||||
LIABILITIES: | ||||||
Current liabilities | 631,653 | |||||
Net purchase price | 1,626,266 | |||||
PS [Member] | ||||||
ASSETS: | ||||||
Current assets | 2,878,448 | |||||
Intangible assets | 2,999,100 | 2,999,100 | ||||
Goodwill | 4,789,880 | |||||
Total | 10,667,428 | |||||
LIABILITIES: | ||||||
Current liabilities | 1,707,420 | |||||
Non-controlling interest | 572,900 | |||||
Net purchase price | $8,387,108 |
ACQUISITIONS_Details_1
ACQUISITIONS (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net loss per share from continuing operations | $0 | ($0.08) | ($0.37) | ($0.23) |
Weighted average number of common stock shares - Basic and diluted (in shares) | 41,034,837 | 21,252,301 | 36,673,143 | 15,805,916 |
Pro Forma [Member] | ||||
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net Revenues | $30,964,000 | $26,452,000 | $96,641,000 | $81,327,000 |
Net loss from continuing operations | ($184,000) | ($1,406,000) | ($13,698,000) | ($2,966,000) |
Net loss per share from continuing operations | $0 | ($0.06) | ($0.37) | ($0.15) |
Weighted average number of common stock shares - Basic and diluted (in shares) | 41,034,837 | 24,579,530 | 36,673,143 | 19,880,145 |
ACQUISITIONS_Details_Textual
ACQUISITIONS (Details Textual) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||||||||||||
Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Apr. 26, 2013 | Feb. 28, 2015 | Apr. 26, 2013 | Apr. 26, 2013 | Apr. 26, 2013 | Nov. 30, 2014 | 31-May-14 | Nov. 04, 2013 | Nov. 30, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 31-May-14 | Nov. 04, 2013 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | 17-May-14 | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | 17-May-14 | 17-May-14 | Jan. 03, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Jan. 03, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | TRG [Member] | TRG [Member] | TRG [Member] | TRG [Member] | TRG [Member] | CSI [Member] | CSI [Member] | CSI [Member] | CSI [Member] | CSI [Member] | CSI [Member] | CSI [Member] | CSI [Member] | CSI [Member] | CSI [Member] | Poolia [Member] | Poolia [Member] | Poolia [Member] | Poolia [Member] | Poolia [Member] | Poolia [Member] | PeopleSERVE PRS, Inc. [Member] | PeopleSERVE PRS, Inc. [Member] | PeopleSERVE PRS, Inc. [Member] | PS [Member] | PS [Member] | PS [Member] | PS [Member] | PS [Member] | PS [Member] | Staffing 360 UK [Member] | Staffing 360 UK [Member] | Staffing 360 UK [Member] | Staffing 360 UK [Member] | Staffing 360 UK [Member] | Staffing 360 UK [Member] | ||
USD ($) | USD ($) | Maximum [Member] | Minimum [Member] | Trade name | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Trade name | EUR (€) | USD ($) | USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | PS Seller [Member] | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Promissory notes - Staffing 360 Solutions (UK) [Member] | |||||||
USD ($) | USD ($) | |||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||||||
Business combination, percentage of voting interests transferred | 49.00% | 49.00% | 49.00% | |||||||||||||||||||||||||||||||||||||||
Aggregate consideration price | $2,500,000 | $3,500,000 | $1,626,266 | $8,400,000 | $13,290,000 | |||||||||||||||||||||||||||||||||||||
Fixed consideration | 500,000 | |||||||||||||||||||||||||||||||||||||||||
Additional payment to acquire business | 250,000 | |||||||||||||||||||||||||||||||||||||||||
Cash payment | 0 | 8,934,001 | 907,287 | 1,311,454 | 2,700,000 | 6,440,000 | 5 | |||||||||||||||||||||||||||||||||||
Payment made by issuance of stock | 410,055 | 119,000 | 2,200,000 | 2,884,614 | ||||||||||||||||||||||||||||||||||||||
Shares issued in business acquisition | 512,569 | 136,000 | 1,127,365 | 3,296,702 | ||||||||||||||||||||||||||||||||||||||
Fair Value at Issuance (per share) | $0.80 | $0.88 | $1.93 | $0.88 | ||||||||||||||||||||||||||||||||||||||
Term | 0 years | 3 years | ||||||||||||||||||||||||||||||||||||||||
Issuance of promissory note as part of business combination | 2,994,202 | 2,994,202 | 2,400,000 | 3,964,949 | ||||||||||||||||||||||||||||||||||||||
Interest rate | 9.00% | 9.00% | 6.00% | |||||||||||||||||||||||||||||||||||||||
Due to sellers | 0 | 0 | 1,347,215 | 1,100,000 | ||||||||||||||||||||||||||||||||||||||
Non-controlling interest | 572,900 | |||||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interest | -102,845 | 0 | 113,710 | 0 | 102,845 | 113,710 | ||||||||||||||||||||||||||||||||||||
Business Combination Maximum Contingent Consideration | 1,500,000 | |||||||||||||||||||||||||||||||||||||||||
Performance based compensation, gross profit threshold | 5,000,000 | 2,100,000 | ||||||||||||||||||||||||||||||||||||||||
Performance Based Compensation Percentage Of Gross Profit Above Threshold | 0.00% | 20.00% | 7.00% | |||||||||||||||||||||||||||||||||||||||
Payments To Earn Out Agreement | 325,649 | 407,194 | 5,000,000 | |||||||||||||||||||||||||||||||||||||||
Performance based compensation earn out liability | 1,192,000 | 2,100,000 | 774,274 | 774,274 | ||||||||||||||||||||||||||||||||||||||
Intangible assets | 1,054,801 | 1,054,801 | 912,000 | 912,000 | 912,000 | 465,321 | 465,321 | 465,321 | 465,321 | 2,999,100 | 2,999,100 | 2,999,100 | 10,050,000 | |||||||||||||||||||||||||||||
Estimated useful life | 4 years | 15 years | 4 years | 4 years | 15 years | 4 years | 4 years | 4 years | ||||||||||||||||||||||||||||||||||
Amortization of intangible | 1,921,190 | 355,345 | 0 | 69,425 | 91,099 | 208,777 | 29,083 | 0 | 87,248 | 0 | 153,619 | 0 | 460,856 | 0 | 427,329 | 119,478 | 1,281,988 | 119,478 | ||||||||||||||||||||||||
2015 | 29,083 | 29,083 | 153,619 | 153,619 | 427,329 | 427,329 | ||||||||||||||||||||||||||||||||||||
2016 | 116,330 | 116,330 | 614,475 | 614,475 | 1,709,317 | 1,709,317 | ||||||||||||||||||||||||||||||||||||
2017 | 116,330 | 116,330 | 614,475 | 614,475 | 1,709,317 | 1,709,317 | ||||||||||||||||||||||||||||||||||||
2018 | 87,248 | 87,248 | 590,922 | 590,922 | 1,118,796 | 1,118,796 | ||||||||||||||||||||||||||||||||||||
Each year 2019-2028 | 49,200 | 49,200 | 292,428 | 292,428 | ||||||||||||||||||||||||||||||||||||||
2029 | 47,150 | 47,150 | 170,372 | 170,372 | ||||||||||||||||||||||||||||||||||||||
Impairment of intangible assets | 703,222 | 10,025 | 703,222 | 0 | 91,099 | 107,654 | ||||||||||||||||||||||||||||||||||||
Impairment And Accumulated Amortization Net | 0 | 0 | 0 | 0 | 348,991 | 348,991 | 2,512,641 | 2,512,641 | 8,317,262 | 8,317,262 | ||||||||||||||||||||||||||||||||
Proceeds From Earn Out Agreement | $840,455 |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | |||
Feb. 28, 2014 | Feb. 28, 2015 | Feb. 28, 2014 | Mar. 01, 2015 | Apr. 08, 2015 | Mar. 24, 2015 | Apr. 09, 2015 | Apr. 10, 2015 | |
Subsequent Event [Line Items] | ||||||||
Debt Instrument, Face Amount | $2,994,202 | |||||||
Repayments of Notes Payable | 2,252,568 | 0 | ||||||
Interest Paid | 143,822 | 3,189 | ||||||
Debt Conversion, Converted Instrument, Shares Issued | 3,290,446 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.25 | |||||||
Debt Instrument, Term | 0 years | |||||||
Subsequent Event [Member] | Two Thousand Fourteen Equity Plan [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 980,000 | |||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $1 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 10 years | |||||||
Subsequent Event [Member] | MidCap Financial [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt Instrument, Face Amount | 3,000,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.25 | |||||||
Debt Instrument, Term | 4 years | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | 50,000,000 | |||||||
Debt Instrument, Fee Amount | 140,000 | |||||||
Debt Issuance Cost | 136,739 | |||||||
Debt Instrument, Fee | 770,000 | |||||||
Warrants To Purchase Common Stock | 120,000 | |||||||
Subsequent Event [Member] | MidCap Financial [Member] | Revolving Credit Facility [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt Instrument, Face Amount | 25,000,000 | |||||||
Subsequent Event [Member] | Wells Fargo Bank [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 15,000,000 | |||||||
Debt Instrument, Repurchased Face Amount | 15,000,000 | |||||||
Subsequent Event [Member] | Two Employees Officers And Directors [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Deferred Compensation Arrangement with Individual, Shares Authorized for Issuance | 1,663,008 | |||||||
Preferred Stock, Dividend Rate, Percentage | 12.00% | |||||||
Preferred Stock, Call or Exercise Features | The Company can redeem the Preferred Stock in 2019 for $864,765. | |||||||
Gross Profit Appreciation Bonus Conversion Description | The Company expected the value of the GPAB to be $1,663,009 over the next four (4) years. | |||||||
Subsequent Event [Member] | Common Stock [Member] | Villard [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Deferred Compensation Arrangement with Individual, Shares Authorized for Issuance | 25,000 | |||||||
Subsequent Event [Member] | Five Converitble Notes Payable [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt Instrument, Face Amount | 800,000 | |||||||
Repayments of Notes Payable | 888,668 | |||||||
Subsequent Event [Member] | Two Promissory Notes Payable [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt Conversion, Converted Instrument, Shares Issued | 127,320 | |||||||
Debt Conversion, Original Debt, Amount | 175,000 | |||||||
Share Price | $0.28 | |||||||
Debt Conversion Interest Amount | 35,611 | |||||||
Subsequent Event [Member] | Promissory Note [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Repayments of Notes Payable | 150,000 | |||||||
Interest Paid | $11,342 |