Cover
Cover - shares | 9 Months Ended | |
Oct. 02, 2021 | Nov. 16, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Oct. 2, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --01-02 | |
Entity File Number | 001-37575 | |
Entity Registrant Name | STAFFING 360 SOLUTIONS, INC. | |
Entity Central Index Key | 0001499717 | |
Entity Tax Identification Number | 68-0680859 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 641 Lexington Avenue | |
Entity Address, Address Line Two | Suite 2701 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10022 | |
City Area Code | (646) | |
Local Phone Number | 507-5710 | |
Title of 12(b) Security | Common stock | |
Trading Symbol | STAF | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 17,249,150 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 02, 2021 | Jan. 02, 2021 |
Current Assets: | ||
Cash | $ 2,231 | $ 8,256 |
Cash in escrow | 2,080 | |
Accounts receivable, net | 24,230 | 24,568 |
Prepaid expenses and other current assets | 1,535 | 1,251 |
Total Current Assets | 27,996 | 36,155 |
Property and equipment, net | 827 | 1,066 |
Goodwill | 26,943 | 27,045 |
Intangible assets, net | 14,183 | 16,017 |
Other assets | 3,246 | 3,168 |
Right of use asset | 5,889 | 3,433 |
Total Assets | 79,084 | 86,884 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 13,235 | 15,030 |
Accrued expenses - related party | 125 | 2,306 |
Current debt, related party | 13,214 | 1,139 |
Current portion of debt | 710 | 1,260 |
PPP Loans | 12,468 | |
Accounts receivable financing | 13,308 | 16,986 |
Leases - current liabilities | 1,129 | 1,211 |
Other current liabilities | 6,526 | 6,548 |
Total Current Liabilities | 48,247 | 56,948 |
Long-term debt, related party | 32,182 | |
Long-term debt | 433 | 834 |
PPP Loans, non-current | 6,927 | |
Leases - non current | 4,701 | 2,226 |
Other long-term liabilities | 3,836 | 3,787 |
Total Liabilities | 57,217 | 102,904 |
Commitments and contingencies | ||
Contingently redeemable Series E Preferred Stock | 2,080 | |
Staffing 360 Solutions, Inc. Equity: | ||
Common stock, $0.00001 par value, 40,000,000 shares authorized; 12,777,378 and 2,803,381 shares issued and outstanding, as of October 2, 2021 and January 2, 2021, respectively | 1 | 1 |
Additional paid in capital | 98,832 | 73,855 |
Accumulated other comprehensive income | 340 | 223 |
Accumulated deficit | (77,306) | (92,179) |
Total Stockholders’ Equity (Deficit) | 21,867 | (18,100) |
Total Liabilities and Stockholders’ Equity (Deficit) | 79,084 | 86,884 |
Series E Preferred Stock [Member] | ||
Current Liabilities: | ||
Contingently redeemable Series E Preferred Stock | 2,080 | |
Series E One Preferred Stock [Member] | ||
Current Liabilities: | ||
Contingently redeemable Series E Preferred Stock | ||
Series A Preferred Stock [Member] | ||
Staffing 360 Solutions, Inc. Equity: | ||
Preferred stock, value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 02, 2021 | Jan. 02, 2021 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Common Stock, Shares Authorized | 40,000,000 | 40,000,000 |
Common Stock, Shares, Issued | 12,777,378 | 2,803,381 |
Common Stock, Shares, Outstanding | 12,777,378 | 2,803,381 |
Series E Preferred Stock [Member] | ||
Temporary Equity, Shares Authorized | 13,000 | 13,000 |
Temporary Equity, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Temporary Equity, Shares Issued | 0 | 2,080 |
Temporary Equity, Shares Outstanding | 0 | 2,080 |
Series E One Preferred Stock [Member] | ||
Temporary Equity, Shares Authorized | 6,500 | 6,500 |
Temporary Equity, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Temporary Equity, Shares Issued | 0 | 1,363 |
Temporary Equity, Shares Outstanding | 0 | 1,363 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Issued | 0 | 1,039,380 |
Preferred Stock, Shares Outstanding | 0 | 1,039,380 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Revenue | $ 47,501 | $ 48,640 | $ 146,982 | $ 150,693 |
Cost of Revenue, excluding depreciation and amortization stated below | 37,877 | 40,317 | 120,324 | 124,168 |
Gross Profit | 9,624 | 8,323 | 26,658 | 26,525 |
Operating Expenses: | ||||
Selling, general and administrative expenses | 8,463 | 9,391 | 25,811 | 28,609 |
Impairment of goodwill | 2,969 | |||
Depreciation and amortization | 688 | 768 | 2,122 | 2,312 |
Total Operating Expenses | 9,151 | 10,159 | 27,933 | 33,890 |
Income (Loss) From Operations | 473 | (1,836) | (1,275) | (7,365) |
Other Income (Expenses): | ||||
Interest expense and amortization of debt discount and deferred financing costs | (1,006) | (1,746) | (3,432) | (6,277) |
Re-measurement (loss) gain on intercompany note | (315) | 442 | (219) | (348) |
Gain on business sale | 220 | 220 | ||
PPP forgiveness gain | 9,504 | 19,609 | ||
Other income, net | 188 | 161 | 292 | 122 |
Total Other Income (Expenses), net | 8,371 | (923) | 16,250 | (6,283) |
Income (Loss) Before (Provision for) Benefit from Income Tax | 8,844 | (2,759) | 14,975 | (13,648) |
(Provision for) Benefit from income taxes | (131) | 118 | (102) | 247 |
Net Income (Loss) | 8,713 | (2,641) | 14,873 | (13,401) |
Deemed Dividend | 1,798 | |||
Earnings allocated to participating securities | (1,077) | (1,763) | ||
Earnings (Loss) per Share attributable to Common Stockholders - Basic | $ 7,553 | $ (3,433) | $ 10,517 | $ (16,180) |
Net Income (Loss) Attributable to Common Stockholders - Basic | $ 0.70 | $ (2.34) | $ 1.43 | $ (11.10) |
Weighted Average Shares Outstanding – Basic | 10,790,503,000 | 1,462,947,000 | 7,377,285,000 | 1,461,197,000 |
Earnings allocated to participating securities– Diluted (Footnote 3) | 7,636 | 11,312 | ||
Earnings (Loss) per Share Attributed to Common Stockholders - Diluted | $ 0.69 | $ (2.34) | $ 1.34 | $ (11.10) |
Weighted Average Shares Outstanding – Diluted | 11,079,104 | 1,462,947 | 8,449,293 | 1,461,197 |
Series A Preferred Stock [Member] | ||||
Other Income (Expenses): | ||||
Dividends | $ 31 | $ 93 | ||
Series E Preferred Stock [Member] | ||||
Other Income (Expenses): | ||||
Dividends | 553 | 319 | 2,111 | |
Series E One Preferred Stock [Member] | ||||
Other Income (Expenses): | ||||
Dividends | 208 | 192 | 575 | |
Series G Preferred Stock [Member] | ||||
Other Income (Expenses): | ||||
Dividends | 43 | 166 | ||
Series G One Preferred Stock [Member] | ||||
Other Income (Expenses): | ||||
Dividends | $ 40 | $ 118 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Income Statement [Abstract] | ||||
Net Income (Loss) | $ 8,713 | $ (2,641) | $ 14,873 | $ (13,401) |
Other Comprehensive Income (Loss) | ||||
Foreign exchange translation adjustment | 67 | (169) | 117 | 344 |
Comprehensive Income (Loss) Attributable to the Company | $ 8,780 | $ (2,810) | $ 14,990 | $ (13,057) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' (Deficit) Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member]Series E One Preferred Stock [Member] | Preferred Stock [Member]Series G One Preferred Stock [Member] | Preferred Stock [Member]Series A Preferred Stock [Member] | Preferred Stock [Member]Series E Preferred Stock [Member] | Preferred Stock [Member]Series F Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 28, 2019 | $ 13 | $ 1 | $ 76,214 | $ (58) | $ (76,537) | $ (367) | |||||
Balance, shares at Dec. 28, 2019 | 729 | 1,663,008 | 13,000 | 1,464,291 | |||||||
Net Income loss | (13,401) | ||||||||||
Balance at Jun. 27, 2020 | $ 13 | $ 1 | 74,890 | 455 | (87,297) | (11,938) | |||||
Balance, shares at Jun. 27, 2020 | 1,053 | 1,039,380 | 13,000 | 1,553,761 | |||||||
Balance at Dec. 28, 2019 | $ 13 | $ 1 | 76,214 | (58) | (76,537) | (367) | |||||
Balance, shares at Dec. 28, 2019 | 729 | 1,663,008 | 13,000 | 1,464,291 | |||||||
Employees, directors and consultants | 479 | 479 | |||||||||
Employees, directors and consultants, shares | 5,300 | ||||||||||
Share issuance to Jackson | 324 | 324 | |||||||||
Share issuance to Jackson, shares | 83,334 | ||||||||||
Warrants issued to consultants | 55 | 55 | |||||||||
Dividends - Series A Preferred Stock - Related Party | (93) | (93) | |||||||||
Conversion of Series A to common shares | |||||||||||
Conversion of Series A to common shares, shares | (623,628) | 2,703 | |||||||||
Balance, shares | 91,337 | ||||||||||
Dividends - Series E Preferred Stock - Related Party | (2,111) | $ (2,111) | |||||||||
Dividends - Series E-1 Preferred Stock - Related Party | (575) | (575) | |||||||||
Dividends - Series E-1 Preferred Stock - Related Party, shares | 490 | ||||||||||
Foreign currency translation loss | 344 | 344 | |||||||||
Net Income loss | (13,401) | (13,401) | |||||||||
Balance at Sep. 26, 2020 | $ 13 | $ 1 | 74,293 | 286 | (89,938) | (15,345) | |||||
Balance, shares at Sep. 26, 2020 | 1,219 | 1,039,380 | 13,000 | 1,555,628 | |||||||
Balance at Jun. 27, 2020 | $ 13 | $ 1 | 74,890 | 455 | (87,297) | (11,938) | |||||
Balance, shares at Jun. 27, 2020 | 1,053 | 1,039,380 | 13,000 | 1,553,761 | |||||||
Employees, directors and consultants | 140 | 140 | |||||||||
Employees, directors and consultants, shares | 1,867 | ||||||||||
Share issuance to Jackson | |||||||||||
Warrants issued to consultants | 55 | 55 | |||||||||
Dividends - Series A Preferred Stock - Related Party | (31) | (31) | |||||||||
Dividends - Series E Preferred Stock - Related Party | (553) | (553) | |||||||||
Dividends - Series E-1 Preferred Stock - Related Party | (208) | (208) | |||||||||
Dividends - Series E-1 Preferred Stock - Related Party, shares | 166 | ||||||||||
Foreign currency translation loss | (169) | (169) | |||||||||
Net Income loss | (2,641) | (2,641) | |||||||||
Balance at Sep. 26, 2020 | $ 13 | $ 1 | 74,293 | 286 | (89,938) | (15,345) | |||||
Balance, shares at Sep. 26, 2020 | 1,219 | 1,039,380 | 13,000 | 1,555,628 | |||||||
Balance at Jan. 02, 2021 | $ 11 | $ 1 | 73,844 | 223 | (92,179) | (18,100) | |||||
Balance, shares at Jan. 02, 2021 | 1,363 | 1,039,380 | 11,080 | 2,803,381 | |||||||
Net Income loss | 14,873 | ||||||||||
Balance at Jul. 03, 2021 | $ 1 | 86,465 | 273 | (86,019) | 720 | ||||||
Balance, shares at Jul. 03, 2021 | 1,543 | 4,698 | 6,528,038 | ||||||||
Balance at Jan. 02, 2021 | $ 11 | $ 1 | 73,844 | 223 | (92,179) | (18,100) | |||||
Balance, shares at Jan. 02, 2021 | 1,363 | 1,039,380 | 11,080 | 2,803,381 | |||||||
Employees, directors and consultants | 350 | 350 | |||||||||
Employees, directors and consultants, shares | 79,273 | ||||||||||
Series A Preferred Conversion | |||||||||||
Series A Preferred Conversion, shares | (1,039,380) | 4,504 | |||||||||
Sales of common stock and warrants, net | 30,315 | $ 30,315 | |||||||||
Balance, shares | 8,585,319 | 9,973,997 | |||||||||
Sales of Series F Preferred Stock, net | 4,107 | $ 4,107 | |||||||||
Sales of Series F Preferred Stock, net, shares | 4,698 | ||||||||||
Conversion of Series F Preferred Stock | |||||||||||
Balance, shares | (4,698) | 1,304,901 | |||||||||
Redemption of Series E Preferred Stock - Related Party | $ (5) | (4,903) | (4,908) | ||||||||
Redemption of Series E Preferred Stock - Related Party, shares | (4,908) | ||||||||||
Dividends - Series E Preferred Stock - Related Party | (319) | (319) | |||||||||
Dividends - Series E-1 Preferred Stock - Related Party | (192) | (192) | |||||||||
Dividends - Series E-1 Preferred Stock - Related Party, shares | 130 | ||||||||||
Dividends - Series G Preferred Stock - Related Party | (166) | (166) | |||||||||
Dividends - Series G-1 Preferred Stock - Related Party | (118) | (118) | |||||||||
Balance, shares | 68 | ||||||||||
Conversion of Series E Preferred Stock - Related Party to Series G preferred Stock - Related Party | |||||||||||
Conversion of Series E Preferred Stock - Related Party to Series G preferred Stock - Related Party, shares | (1,493) | 1,493 | |||||||||
Conversion of Series G preferred Stock - Related Party to Long Term Debt – Related Party | |||||||||||
Conversion of Series G preferred Stock - Related Party to Long Term Debt - Related Party, shares | (1,561) | ||||||||||
Redeemable portion of Series E Preferred Stock - Related Party | $ (6) | (4,086) | (4,092) | ||||||||
Redeemable portion of Series E Preferred Stock - Related Party, shares | (6,172) | ||||||||||
Series F Preferred Stock – Beneficial Conversion Feature | 1,409 | 1,409 | |||||||||
Fair Value Modification - Series E Preferred Stock - Related Party | 389 | 389 | |||||||||
Deemed Dividend | (1,798) | (1,798) | |||||||||
Foreign currency translation loss | 117 | 117 | |||||||||
Net Income loss | 14,873 | 14,873 | |||||||||
Balance at Oct. 02, 2021 | $ 1 | 98,832 | 340 | (77,306) | 21,867 | ||||||
Balance, shares at Oct. 02, 2021 | 0 | 12,777,378 | |||||||||
Balance at Jul. 03, 2021 | $ 1 | 86,465 | 273 | (86,019) | 720 | ||||||
Balance, shares at Jul. 03, 2021 | 1,543 | 4,698 | 6,528,038 | ||||||||
Employees, directors and consultants | 15 | 15 | |||||||||
Employees, directors and consultants, shares | 1,667 | ||||||||||
Conversion of Series G-1 Preferred Stock – Related Party to Long term debt – Related Party | |||||||||||
Sales of common stock and warrants, net | 12,468 | 12,468 | |||||||||
Balance, shares | 4,942,772 | ||||||||||
Conversion of Series F Preferred Stock | (33) | (33) | |||||||||
Balance, shares | (4,698) | 1,304,901 | |||||||||
Dividends - Series G Preferred Stock - Related Party | (43) | (43) | |||||||||
Dividends - Series G-1 Preferred Stock - Related Party | (40) | (40) | |||||||||
Balance, shares | 18 | ||||||||||
Foreign currency translation loss | 67 | 67 | |||||||||
Net Income loss | 8,713 | 8,713 | |||||||||
Balance at Oct. 02, 2021 | $ 1 | $ 98,832 | $ 340 | $ (77,306) | $ 21,867 | ||||||
Balance, shares at Oct. 02, 2021 | 0 | 12,777,378 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unadited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Oct. 02, 2021 | Sep. 26, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net Income (Loss) | $ 8,713 | $ (2,641) | $ 14,873 | $ (13,401) | $ 14,873 | $ (13,401) | |
Adjustments to reconcile net income (loss) income to net cash used in operating activities: | |||||||
Depreciation and amortization | 2,122 | 2,312 | |||||
Amortization of debt discount and deferred financing costs | 365 | 521 | |||||
Bad debt expense | 260 | 879 | |||||
Impairment of goodwill | 2,969 | $ 2,969 | |||||
Right of use assets amortization | 852 | 1,112 | |||||
Stock based compensation | 350 | 534 | |||||
Forgiveness of PPP loan and related interest | (19,609) | ||||||
Gain from sale of business | (220) | ||||||
Re-measurement (loss) gain on intercompany note | 315 | (442) | 219 | 348 | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (5,343) | (4,805) | |||||
Prepaid expenses and other current assets | (289) | (446) | |||||
Other assets | (438) | (722) | |||||
Accounts payable and accrued expenses | (2,356) | (1,860) | |||||
Interest payable - related party | (326) | (871) | |||||
Other current liabilities | (105) | 192 | |||||
Other long-term liabilities and other | (349) | 2,540 | |||||
NET CASH USED IN OPERATING ACTIVITIES | (9,774) | (10,918) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of property and equipment | (100) | (226) | |||||
Proceeds from disposal of business | 3,300 | ||||||
Collection of UK factoring facility deferred purchase price | 5,349 | 6,830 | |||||
NET CASH PROVIDED BY INVESTING ACTIVITIES | 5,249 | 9,904 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from related party note | 130 | ||||||
Third party financing costs | (3,769) | ||||||
Repayment of term loan | (29,244) | (165) | |||||
Proceeds from term loan | 1,220 | ||||||
Repayment of term loan - related party | (2,538) | ||||||
Proceeds from PPP loans | 19,395 | ||||||
Repayments on accounts receivable financing, net | (3,659) | (4,999) | |||||
Dividends paid to related parties | (591) | (2,480) | |||||
Redemption of Series E preferred stock, related party | (4,908) | ||||||
Proceeds from sale of common stock | 33,769 | ||||||
Proceeds from sale of Series F preferred stock | 4,698 | ||||||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (3,574) | 10,433 | |||||
NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH | (8,099) | 9,419 | |||||
Effect of exchange rates on cash | (6) | 55 | |||||
Cash and Restricted Cash - Beginning of period | $ 10,336 | $ 1,196 | 10,336 | 1,196 | 1,196 | ||
Cash and Restricted Cash - End of period | $ 2,231 | $ 10,670 | $ 2,231 | $ 10,670 | $ 10,336 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 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, which changed its name to Staffing 360 Solutions, Inc., ticker symbol “STAF,” on March 16, 2012. On June 15, 2017, the Company reincorporated in the State of Delaware. As a rapidly growing public company in the international staffing sector, our high-growth business model is based on finding and acquiring, suitable, mature, profitable, operating, domestic and international staffing companies. Our targeted consolidation model is focused specifically on the accounting and finance, information technology (“IT”), engineering, administration (“Professional”) and light industrial (“Commercial”) disciplines. The Company effected a one-for-six reverse |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended January 2, 2021 which are included in the Company’s January 2, 2021 Form 10-K (“Fiscal 2020”), filed with the United States Securities and Exchange Commission on April 16, 2021. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the period ended October 2, 2021 are not necessarily indicative of results for the entire year end. This report is for the period January 3, 2021 to October 2, 2021 (“Q3 2021 YTD”) and December 29, 2019 to September 26, 2020 (“Q3 2020 YTD”). The Company uses a 4-4-5 calendar month which only has 364 days and as such an extra week would need to be added every few years. In October of 2020, the Company’s board of directors (the “Board”) approved the addition of such an extra week to last year’s fiscal year end resulting in the last year ended on January 2, 2021. Liquidity The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern. As shown in the accompanying financial statements as of the quarter ended October 2, 2021, the Company has an accumulated deficit of $ 77,306 and a working capital deficit of $ 20,251 . At October 2, 2021, we had total net debt of $ 14,357 and total cash of $ 2,231 . We have historically met our cash needs through a combination of cash flows from operating activities, term loans, promissory notes, convertible notes, private placement offerings and sales of equity. Our cash requirements are generally for operating activities along with debt and equity repayments. The financial statements included in this quarterly report have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity, capital requirements and that our credit facilities with our lenders will remain available to us. Further, the Second Amended and Restated 12% September 30, 2022 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) On February 12, 2021, the Company closed an offering (the “February 2021 Offering”) of 3,475,200 167,347 5.40 167,347 The net proceeds to the Company from the February 2021 Offering were approximately $ 18,100 1,596 227 Prior to the exchange of the Company’s Series E Preferred Stock (as defined herein) for newly issued Series G Preferred Stock (as defined herein), consummated on May 6, 2021, the Company was required to use the proceeds of any sales of equity securities, including the securities offered in the February 2021 Offering, exclusively to redeem any outstanding shares of the Company’s Series E Preferred Stock, subject to certain limitations. On February 5, 2021, the Company received a Limited Consent and Waiver from Jackson (the “Limited Consent”), the sole holder of the Company’s outstanding shares of Series E Convertible Preferred Stock, to use approximately (i) 75% of the net proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which had an outstanding principal amount of $ 32,710 Pursuant to the Limited Consent, upon closing of the February 2021 Offering, the Company redeemed a portion of the Jackson Note with an outstanding principal amount of $ 13,556 4,518 19,154 6,172 6,172 On April 21, 2021, the Company entered into a securities purchase agreement (the “April 2021 Purchase Agreement”) with certain institutional and accredited investors for the issuance and sale of an aggregate of 4,698 1,000 1,304,901 3.60 five years At issuance the Series F Preferred Stock was convertible into an aggregate of approximately 1,304,901 shares of common stock at a conversion price of $ 3.60 per share, subject to certain ownership limitations, upon the Company amending its certificate of incorporation to effect a reverse split within a range of 2-into-1 to up to 20-into-1 to be determined by the Board. On June 30, 2021, the Company effectuated the Reverse Stock Split. All shares of Series F Preferred Stock have been converted into shares of common stock. The net proceeds to the Company from the April 2021 Private Placement were approximately $ 4,200 , after deducting placement agent fees and estimated offering expenses payable by the Company. The Company used approximately $ 3,200 of the net proceeds to redeem a portion of the Jackson Note, which had an outstanding principal amount of $ 19,154 immediately prior to such redemption. In addition, the Company used $ 1,000 of the net proceeds for working capital purposes. On July 20, 2021, the Company entered into a securities purchase agreement (the “July 2021 Purchase Agreement”) with certain institutional investors. Pursuant to the July 2021 Purchase Agreement, the Company agreed to sell in a registered direct offering, 2,199,132 0.00001 3.45 1,099,566 3.80 five years The net proceeds to the Company from the July 2021 Offerings were approximately $ 6,760 , after deducting placement agent fees and estimated offering expenses payable by the Company. The Company used $ 5,000 of the net proceeds to redeem a portion of the Jackson Note, which had an outstanding principal amount of approximately $ 21,700 immediately prior to such redemption. In addition, the Company used approximately $ 1,700 of the net proceeds for working capital purposes. On August 5, 2021, the Company entered into a securities purchase agreement (the “First August 2021 Purchase Agreement”) with certain institutional investors. Pursuant to the First August 2021 Purchase Agreement, the Company agreed to sell in a registered direct offering, 1,383,162 shares of the Company’s common stock, to the purchasers at an offering price of $ 2.6425 per share and associated warrant (the “First August 2021 Registered Direct Offering”). Pursuant to the First August 2021 Purchase Agreement, in a concurrent private placement (together with the First August 2021 Registered Direct Offering, the “First August 2021 Offerings”), the Company also sold to the purchasers unregistered warrants to purchase up to an aggregate of 691,581 shares of common stock, representing 50% of the shares of common stock that were issued and sold in the First August 2021 Registered Direct Offering (the “First August 2021 Warrants”). The First August 2021 Warrants are exercisable at an exercise price of $ 2.58 per share, were exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance. On August 22, 2021, the Company entered into a securities purchase agreement (the “Second August 2021 Purchase Agreement”) with certain institutional investors. Pursuant to the Second August 2021 Purchase Agreement, the Company agreed to sell in a registered direct offering, 1,360,478 shares of the Company’s common stock, to the purchasers at an offering price of $ 2.10 per share and associated warrant (the “Second August 2021 Registered Direct Offering”). Pursuant to the Second August 2021 Purchase Agreement, in a concurrent private placement (together with the Second August 2021 Registered Direct Offering, the “Second August 2021 Offerings”, and the Second August 2021 Offerings together with the First August 2021 Offerings, the “August 2021 Offerings”), the Company also sold to the purchasers unregistered warrants to purchase up to an aggregate of 680,239 shares of common stock, representing 50% of the shares of common stock that were issued and sold in the Second August 2021 Registered Direct Offering (the “Second August 2021 Warrants”). The Second August 2021 Warrants are exercisable at an exercise price of $ 2.04 per share, were exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance. The net proceeds to the Company from the August 2021 Offerings were approximately $ 5,683 , after deducting placement agent fees and estimated offering expenses payable by the Company. The Company used a portion of the net proceeds from the First August 2021 Offerings together with other cash on hand to redeem $ 3,281 16,730 Going concern The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company’s debt obligations and certain unsecured payments associated with historical acquisitions are due in the next 12 months, and the Company’s debt obligations with Jackson and MidCap may become due on demand due to certain covenant violations discussed above, which are in excess of cash on hand. Historically, the Company has funded such payments either through cash flow from operations or the raising of capital through additional debt or equity. If the Company is unable to obtain additional capital, such payments may not be made on time. The Novel Coronavirus Disease 2019 (“COVID-19”), is impacting worldwide economic activity, and activity in the United States and the United Kingdom where our operations are based. The nature of work of the contractors we support mostly are on the site of our clients. As a result, we are subject to the plans and approaches of our clients to work during this period. This includes whether they support remote working when they have decided to close their facilities. To the extent that our clients have decided to or are required to close their facilities or not permit remote work when they decide to close facilities, we would no longer generate revenue and profit from that client. Developments such as social distancing and shelter-in-place directives have impacted the Company’s ability to deploy its staffing workforce effectively thereby impacting contracts with customers in the Company’s Commercial Staffing and Professional Staffing business streams where we had declines in revenues during Fiscal 2020. The economic downturn has resulted in a strong recovery in permanent placement business (or direct hire) over temporary contracting. As the anticipated return to work following the end of the stimulus check program has been slower than expected, the Company has concentrated on meeting this direct hire need, principally in the Professional Staffing Business Streams. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) The Company’s negative working capital and liquidity position combined with the uncertainty generated by the economic reaction to the COVID-19 pandemic raise substantial doubt about the Company’s ability to continue as a going concern. Divesture of Business On September 24, 2020, the Company and Staffing 360 Georgia, LLC d/b/a first first first first In addition, the Buyer agreed to assume certain liabilities related to the Assets. The purchase price in connection with the first 3,300 1,220 2,080 first 2,080 The Asset Purchase Agreement contains non-competition and non-solicitation provisions customary for agreements of this type. In addition, under the terms of the Asset Purchase Agreement, the Company has agreed to indemnify the Buyer against certain liabilities, subject to certain conditions and limitations as set forth in the Asset Purchase Agreement. In connection with execution of the Asset Purchase Agreement, the Company and certain of its subsidiaries entered into a Consent Agreement (the “Consent”) with Jackson, a noteholder under our Amended and Restated Note Purchase Agreement, dated September 15, 2017 (the “Existing Note Purchase Agreement”). Under the terms of the Consent and the Certificate of Designation of the Company’s Series E Convertible Preferred Stock (the “Series E Preferred Stock”), in consideration for Jackson’s consent to the first 1,300 shares of Series E Convertible Preferred Stock for $ 1,300 and on July 22, 2021, after conversion of the Series G Preferred Stock to the New Note (as defined herein), the Company redeemed $ 2,080 of the Jackson Note with the Escrow Funds. To induce the Buyer to enter into the Asset Purchase Agreement, the Company also entered into a Transition Services Agreement with the Buyer, pursuant to which each party agreed to provide certain transition services such as payrolling through to year end 2020 to minimize any disruption to the businesses of the Seller and the Buyer arising from the first COVID-19 The full impact of the COVID-19 pandemic continues to evolve as of the date of this quarterly report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, industry, and workforce. Developments such as social distancing and shelter-in-place directives have impacted the Company’s ability to generate revenues. Given the daily evolution of the COVID-19 pandemic, including new information which may emerge concerning the severity of COVID-19 and the global responses to curb its spread and to treat its impact, the Company is not able to estimate the duration of the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity beyond fiscal year 2021, however the Company continues to take action to reduce the negative effects of the COVID-19 pandemic on its operations through various cost cutting initiatives including reductions to support personnel, temporary salary reductions, and elimination of other non-essential spend. Should the impact from the pandemic go on for an extended period of time, management has developed further plans to partially mitigate the impact of the pandemic. On March 27, 2020, the U.S. President signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. It also appropriated funds for the SBA Paycheck Protection Program (“PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. On May 12, 2020, Monroe Staffing Services, LLC (“Monroe”), an indirect subsidiary of the Company, entered into a note (the “May 12 Note”) with Newton Federal Bank (the “Bank”), pursuant to the PPP of the CARES Act administered by the SBA. The principal amount of the May 12 Note is $ 10,000 In accordance with the requirements of the CARES Act, the Company and Monroe (collectively, the “May 12 Note Borrowers”) used the proceeds from the May 12 Note in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on the May 12 Note at the rate of 1.00% STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) Prior to forgiveness under the PPP, the May 12 Note was to mature two years following the date of issuance of the May 12 Note and included a period for the first ten months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of the May 12 Note, the May 12 Note Borrowers would be required to make 14 monthly payments of principal and interest. The May 12 Note may be prepaid at any time prior to maturity. The May 12 Note provides for customary events of default, including, among others, those relating to breaches of obligations under the May 12 Note, including a failure to make payments, any bankruptcy or similar proceedings involving the May 12 Note Borrowers, and certain material effects on the May 12 Note Borrowers’ ability to repay the May 12 Note. The May 12 Note Borrowers did not provide any collateral or guarantees for the May 12 Note. On May 25, 2021, the Company was notified by its lender, Affinity Bank, that the May 12 Note, in the amount of $ 10,000 of principal and $ 105 in interest, was forgiven in its entirety by the SBA, which was recorded as Other Income as a PPP forgiveness gain. On May 20, 2020, Key Resources Inc. (“KRI”), Lighthouse Placement Services, LLC (“LH”) and Staffing 360 Georgia, LLC (“SG”), each a wholly owned direct or indirect subsidiary of the Company, entered into the following notes, each dated May 20, 2020, with the Bank, pursuant to the PPP of the CARES Act administered by the SBA. KRI entered into a note (the “KRI Note”) for the principal amount of approximately $ 5,443 1,890 2,063 9,395 In accordance with the requirements of the CARES Act, the Company, KRI, LH and SG (collectively, the “May 20 Note Borrowers”) used the proceeds from the May 20 Notes in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on each of the May 20 Notes at the rate of 1.00 Prior to any forgiveness under the PPP, each of the May 20 Notes was to mature two years following the date of issuance of the May 20 Notes and included a period for the first ten months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of each of the May 20 Notes, the May 20 Note Borrowers are required to make 14 monthly payments of principal and interest. The May 20 Notes may be prepaid at any time prior to maturity. The May 20 Notes provide for customary events of default, including, among others, those relating to breaches of obligations under the May 20 Notes, including a failure to make payments, any bankruptcy or similar proceedings involving the Borrowers, and certain material effects on the Borrowers’ ability to repay the May 20 Notes. The May 20 Note Borrowers did not provide any collateral or guarantees for the May 20 Notes. The application for these funds required the Company to certify in good faith that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The Company made this good faith assertion based upon the adverse impact the COVID-19 pandemic had on our business and the degree of uncertainty introduced to the capital markets. While the Company has made this assertion in good faith based upon all available guidance, management will continue to assess their continued qualification if and when updated guidance is released by the Treasury Department. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) On July 14, 2021, the Company was notified by its lender, Affinity Bank, that the May 20 Notes for the Company’s subsidiaries KRI, LH and SG, in the amounts of $ 5,443 , $ 1,890 and $ 2,063 , respectively, in principal and $ 63 , $ 22 and $ 24 , respectively, in interest, were forgiven in their entirety by the SBA, which was recorded as Other Income as a PPP forgiveness gain. Effective March 27, 2020, the Company is deferring Federal Insurance Contributions Act taxes under the CARES Act section 2302. Payment of these tax deferrals of $ 2,473 2,473 Goodwill Goodwill relates to amounts that arose in connection with various acquisitions and represents the difference between the purchase price and the fair value of the identifiable intangible and tangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but it is subject to periodic review for impairment. Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, a decline in the equity value of the business, a significant adverse change in certain agreements that would materially affect reported operating results, business climate or operational performance of the business and an adverse action or assessment by a regulator. In accordance with ASU No. 2011-08, Intangibles-Goodwill and Other (Topic 350) Testing Goodwill for Impairment, or ASU 2011-08, the Company is required to review goodwill by reporting unit for impairment at least annually or more often if there are indicators of impairment present. During the year ended January 2, 2021 the Company changed its annual measurement date from the first day of the fiscal fourth quarter to the last day of the fiscal year end. A reporting unit is either the equivalent of, or one level below, an operating segment. The Company early adopted the provisions in ASU 2017-04, which eliminates the second step of the goodwill impairment test. As a result, the Company’s goodwill impairment tests include only one step, which is a comparison of the carrying value of each reporting unit to its fair value, and any excess carrying value, up to the amount of goodwill allocated to that reporting unit, is impaired. The carrying value of each reporting unit is based on the assignment of the appropriate assets and liabilities to each reporting unit. Assets and liabilities were assigned to each reporting unit if the assets or liabilities are employed in the operations of the reporting unit and the asset and liability is considered in the determination of the reporting unit fair value. The Company recognized an impairment with respect to its first STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) No impairments to goodwill were recognized during the period ended October 2, 2021. In assessing potential impairment to goodwill, management has made assumptions regarding partial recovery from the COVID-19 pandemic. If the assumptions utilized by management are not achieved and declines to operations are greater than anticipated, while failing to achieve growth in future periods as a result of the prolonged impact of COVID-19 pandemic, an impairment to goodwill could be recorded and such amount could be material to the financial statements. A reduction in the projected long-term operating performance of the reporting units, market declines, changes in discount rates or other conditions could result in a material impairment in the future. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Payment terms vary by client and the services offered. The Company has two main forms of revenue – temporary contractor revenue and permanent placement revenue. Temporary contractor revenue is accounted for as a single performance obligation satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance on an hourly basis. The contracts stipulate weekly billing and the Company has elected the “as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as we have the right to payment in an amount that corresponds directly with the value of performance completed to date. Permanent placement revenue is recognized on the date the candidate’s full-time employment with the customer has commenced. The customer is invoiced on the start date, and the contract stipulates payment due under varying terms, typically 30 days. The contract with the customer stipulates a guarantee period whereby the customer may be refunded if the employee is terminated within a short period of time, however this has historically been infrequent, and immaterial upon occurrence. As such, the Company’s performance obligations are satisfied upon commencement of the employment, at which point control has transferred to the customer. Revenues in Q3 2021 was comprised of $ 46,168 1,333 47,177 1,463 143,274 of temporary contractor revenue and $ 3,708 of permanent placement revenue, compared with $ 145,150 and $ 5,543 in Q3 2020 YTD, respectively. Refer to Note 10 for further details on breakdown by segments. Reclassifications We may make certain reclassifications to prior period amounts to conform with the current year’s presentation. These reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows. Income Taxes The Company’s provision for income taxes is based upon an estimated annual tax rate for the year applied to federal, state and foreign income. On a quarterly basis, the annual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared with those forecasted at the beginning of the fiscal year and each interim period thereafter. The effective income tax rate was 1.48% , ( 4.28% ), 0.67% and ( 1.81% ) for the period ending Q3 2021, Q3 2020, Q3 2021 YTD and Q3 2020 YTD, respectively. The Company’s effective tax rate differs from the U.S. federal statutory rate of 21% , primarily due to changes in valuation allowances in the U.S., which eliminates the effective tax rate on current year losses, offset by current state taxes and changes to goodwill naked credit. The Company may have experienced an IRC Section 382 limitation during 2021, for which it is in process of conducting an analysis to determine the tax consequences of such a limitation. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) Foreign Currency The Company recorded a non-cash foreign currency remeasurement (loss) gain of $ (315) 422 (219) 348) Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants the Company has privately placed were estimated using a Black Scholes model. Refer to Note 8 for further details. Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and treasury stock method will be no longer available. ASU 2020-06 is applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company will adopt this standard for the fiscal year ending January 1, 2022. On December 31, 2019, the FASB issued ASC 2019-12 “Income Taxes: Simplifying the Accounting for Income Taxes” (Topic 740). The amendments in this update simplify the accounting for income taxes by removing certain exceptions. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for (1) public business entities for periods for which financial statements have not yet been issued and (2) all other entities for periods for which financial statements have not yet been made available for issuance. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). This standard requires an impairment model, known as the current exp |
INCOME (LOSS) PER COMMON SHARE
INCOME (LOSS) PER COMMON SHARE | 9 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
INCOME (LOSS) PER COMMON SHARE | NOTE 3 – INCOME (LOSS) PER COMMON SHARE The Company computes earnings per share in accordance with ASC Topic 260, Earnings per Share Basic earnings per common share is computed by dividing income or loss available to common stockholders by the weighted average number of shares of basic common stock outstanding. The Company’s Series F convertible preferred stock, which is convertible into shares of the Company’s common stock at any time and from time to time from and after the issue date, and the Company’s Series F warrants, are classified as participating securities in accordance with ASC 260. Net income allocated to the holders of Series F convertible preferred stock and Series F warrants is calculated based on the shareholders’ proportionate share of weighted average shares of common stock outstanding on an if-converted basis. For purposes of determining diluted earnings per common share, basic earnings per common share is further adjusted to include the effect of potential dilutive common shares outstanding, including unvested restricted stock using the more dilutive of either the two-class method or the treasury stock method, and Series G and G-1 Preferred Stock using the if-converted method. Stock options and warrants that are out-of-the-money are not included in the denominator for the calculation diluted EPS. Under the two-class method of calculating diluted earnings per share, net income is reallocated to common stock, the Series F Preferred stock, the Series F warrants, and all dilutive securities based on the contractual participating rights of the security to share in the current earnings as if all of the earnings for the period had been distributed. In the computation of diluted earnings per share, the if-converted method for the Series F Preferred Stock resulted in a more dilutive earnings per share than the two-class method. As such, the if-converted method was utilized for the calculation of diluted EPS. On June 30, 2021, the Company effected a one-for-six reverse stock split The following table sets forth the components used in the computation of basic and diluted income per share: SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED Q3 2021 Q3 2020 Q3 2021 YTD Q3 2020 YTD Numerator: Net Income (Loss) $ 8,713 $ (2,641 ) $ 14,873 $ (13,401 ) Less: Dividends paid to Series A preferred shareholders — (31 ) — (93 ) Less: Dividends paid to Series E, E-1, G, G-1 preferred shareholders (83 ) (761 ) (795 ) (2,686 ) Less: Deemed dividend — — (1,798 ) — Less: Net income allocated to participating equity (1,077) — (1,763) — Net income (loss) available to common shareholders for basic earnings per share 7,553 (3,433 ) 10,517 (16,180 ) Effect of dilutive securities: Add: Dividends paid to Series E, E-1, G, G-1 preferred shareholders 83 795 Net income (loss) available to commons and preferred shareholders for diluted earnings per share $ 7,636 $ 11,312 Denominator: Weighted average basic common shares outstanding 10,790,503 1,462,947 7,377,285 1,461,197 Weighted average additional common shares outstanding if preferred shares converted to common shares (if dilutive) 254,342 — 1,037,749 — Total weighted average common shares outstanding if preferred shares converted to common shares 11,044,845 1,462,947 8,415,034 1,461,197 Effect of dilutive securities: — — Restricted shares 34,259 34,259 Weighted average diluted shares outstanding 11,079,104 8,449,293 Income per common share: Basic $ 0.70 $ (2.34 ) $ 1.43 $ (11.10 ) Diluted $ 0.69 $ 1.34 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) |
ACCOUNTS RECEIVABLE BASED FINAN
ACCOUNTS RECEIVABLE BASED FINANCING FACILITIES | 9 Months Ended |
Oct. 02, 2021 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE BASED FINANCING FACILITIES | NOTE 4 – ACCOUNTS RECEIVABLE BASED FINANCING FACILITIES HSBC Invoice Finance (UK) Ltd – New Facility On February 8, 2018, CBS Butler Holdings Limited (“CBS Butler”), Staffing 360 Solutions Limited and The JM Group, entered into a new arrangement with HSBC Invoice Finance (UK) Ltd (“HSBC”) which provides for HSBC to purchase the subsidiaries’ accounts receivable up to an aggregate amount of £ 11,500 The terms of the arrangement provide for HSBC to fund 90% 1,000 11,500 1.80% On June 28, 2018, Clement May Limited (“CML”), the Company’s new subsidiary, entered into a new agreement with a minimum term of 12 months for purchase of debt (“APD”) with HSBC, joining CBS Butler, Staffing 360 Solutions Limited and The JM Group (collectively, with CML, the “Borrowers”) as “Connected Clients” as defined in the APD. The new Connected Client APDs carry an aggregate facility limit of £ 20,000 1,500 22,500 Under ASU 2016-16, “Statement of Cash Flows” (Topic 230, Classification of Certain Cash Receipts and Cash Payments, a consensus of the FASB Emerging Issues Task Force MidCap Funding Trust Prior to September 15, 2017, certain U.S. subsidiaries of the Company were parties to a $ 25,000 25,000 April 8, 2019 On October 26, 2020, the Company entered into Amendment No. 17 to Credit and Security Agreement with MidCap, whereby, among other things, MidCap agreed to extend the maturity date of our outstanding asset based revolving loan until September 1, 2022. In addition, the Company also agreed to certain amendments to the financial covenants. The facility provides events of default including: (i) failure to make payment of principal or interest on any MidCap loans when required, (ii) failure to perform obligations under the facility and related documents, (iii) not paying its debts as such debts become due and similar insolvency matters, and (iv) material adverse changes to the Company (subject to a 10-day notice and cure period.) Upon an event of default, the Company’s obligations under the credit facility may, or in the event of insolvency or bankruptcy will automatically, be accelerated. Upon the occurrence of any event of default, the facility will bear interest at a rate equal to the lesser of: (i) 3.0% above the rate of interest applicable to such obligations immediately prior to the occurrence of the event of default; and (ii) the maximum rate allowable under law. Under the terms of this agreement, the Company is subject to affirmative covenants which are customary for financings of this type, including covenants to: (i) maintain good standing and governmental authorizations, (ii) provide certain information and notices to MidCap, (iii) deliver monthly reports and quarterly financial statements to MidCap, (iv) maintain insurance, (v) discharge all taxes, (vi) protect its intellectual property, and (vii) generally protect the collateral granted to MidCap. The Company is also subject to negative covenants customary for financings of this type, including that it may not: (i) enter into a merger or consolidation or certain change of control events, (ii) incur liens on the collateral, (iii) except for certain permitted acquisitions, acquire any significant assets other than in the ordinary course of business, (iv) assume certain additional senior debt, or (v) amend any of its organizational documents. The Company is not in compliance with its October 2, 2021 covenants and received a waiver from Midcap. The balance of the MidCap Facility as of October 2, 2021 and January 2, 2021 was $ 11,528 14,842 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) |
GOODWILL
GOODWILL | 9 Months Ended |
Oct. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 5 – GOODWILL The following table provides a roll forward of goodwill: SCHEDULE OF GOODWILL October 2, 2021 January 2, 2021 Beginning balance, net $ 27,045 $ 31,049 Accumulated impairment losses - (2,969 ) Disposition of business - (1,577 ) Currency translation (102 ) 542 Ending balance, net $ 26,943 $ 27,045 Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. ASC 350, 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. During the first quarter of 2020 the Company identified a triggering event in response to the COVID-19 pandemic. In accordance with ASC 350 the Company tested its goodwill for impairment and the Company recognized an impairment with respect to its first 2,969 During the year ended January 2, 2021 the Company changed its measurement date from the first day of the fiscal fourth quarter to the last day of the fiscal year. No impairments to goodwill were recognized during the period ended October 2, 2021. |
DEBT
DEBT | 9 Months Ended |
Oct. 02, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 6 – DEBT SCHEDULE OF DEBT October 2, 2021 January 3, 2021 Jackson Investment Group - related party $ 13,449 $ 33,880 PPP Loans - 19,395 HSBC Term Loan 1,143 2,094 Total Debt, Gross 14,592 55,369 Less: Debt Discount and Deferred Financing Costs (235 ) (559 ) Total Debt, Net 14,357 54,810 Less: Non Current Portion (433 ) (39,943 ) Total Current Debt, Net $ 13,924 $ 14,867 Jackson Debt On October 26, 2020, the Company, certain of its subsidiaries and Jackson entered into the Amended Note Purchase Agreement and the Jackson Note, which amended and restated the Existing Note Purchase Agreement. The Amended Note Purchase Agreement refinanced an aggregate of approximately $ 35,700 September 30, 2022 488 488 150,918 9.96 6.00 warrant expiration date of January 26, 2024 to January 26, 2026 126 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) Under the terms of the Amended Note Purchase Agreement and the Jackson Note, the Company is required to pay interest on the debt at a per annum rate of 12% 50% 3.00 3.00 21.00 For the period of November 2020 through and including March 2021, each monthly interest amount due and payable was reduced by $166, and for the period commencing April 2021 through and including September 2021, each monthly interest amount due and payable shall be increased by $166. Under the terms of the Amended Note Purchase Agreement, the Company was required to make a mandatory prepayment of the principal amount of the Jackson Note of not less than $3,000 no later than January 31, 2021. Payments were made in December 2020 and January 2021 totaling $ 3,029 On January 4, 2021, the Company used $ 1,558 in net proceeds from a securities purchase agreement dated December 30, 2020 and redeemed $ 1,168 of the Jackson Note with an outstanding principal amount of $ 33,878 and redeemed 390 shares of the Series E Convertible Preferred Stock with an aggregate value of $ 390 . Following the redemption of the portion of the Jackson Note and Series E Convertible Preferred Stock, the Jackson Note balance was $ 32,710 and the Company had 10,690 shares of Series E Convertible Preferred Stock outstanding with an aggregate stated value of $ 10,690 . On February 5, 2021, the Company received the Limited Consent from Jackson, the sole holder of the Company’s outstanding shares of Series E Convertible Preferred Stock, to use approximately (i) 75% of the net proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which had an outstanding principal amount of $32,710 as of February 9, 2021, and (ii) 25% of the net proceeds from the February 2021 Offering to redeem a portion of the Company’s Series E Convertible Preferred Stock. Pursuant to the Limited Consent, upon closing of the February 2021 Offering, the Company redeemed a portion of the Jackson Note with an outstanding principal amount of $13,556 and redeemed 4,518 shares of the Series E Convertible Preferred Stock. On April 21, 2021, the Company entered into the April 2021 Purchase Agreement. The net proceeds to the Company were approximately $ 4,200 , after deducting placement agent fees and estimate offering expenses payable by the Company. The Company used $ 3,200 of the net proceeds to redeem a portion of the Jackson Note, which had an outstanding principal amount of $ 19,154 immediately prior to such redemption. On July 20, 2021, the Company entered into the July 2021 Purchase Agreement. As the Company’s Series G Preferred Stock was outstanding, it was required to use the proceeds of any sales of equity securities, including the common stock offered in the July 2021 Offerings, exclusively to redeem any outstanding shares of Series G Preferred Stock, subject to certain limitations. The Company received a waiver from Jackson, the sole holder of the outstanding shares of its Series G Preferred Stock, to pay accrued and unpaid interest and prepay a portion of the outstanding principal balance of the Jackson Note and paid accrued and unpaid dividends on the Series G-1 Convertible Preferred Stock upon conversion of such preferred stock into the New Note (as defined below). The net proceeds to the Company from the July 2021 Offerings were approximately $ 6,760 5,000 21,700 On July 21, 2021, the Company exchanged its outstanding 6,172 1,561 12% 7,733 6,172 1,561 Under the terms of the New Note, the Company is required to pay interest on the New Note at a per annum rate of 12% 17% September 30, 2022 On August 5, 2021, the Company entered into the First August 2021 Purchase Agreement. The net proceeds to the Company from the First August 2021 Offerings were approximately $ 3,217 , after deducting placement agent fees and offering expenses payable by the Company. The Company used a portion of the net proceeds from the First August 2021 Offerings together with other cash on hand to redeem $ 3,281 of the Jackson Note, which had an outstanding principal amount of approximately $ 16,730 immediately prior to such redemption. The entire outstanding principal balance of the Jackson Note shall be due and payable on September 30, 2022. The debt represented by the Jackson Note continues to be secured by substantially all of the Company’s domestic subsidiaries’ assets pursuant to the Amended and Restated Security Agreement with Jackson, dated September 15, 2017. The Amended Note Purchase Agreement includes certain customary financial covenants, including a leverage ratio covenant and a minimum adjusted EBITDA covenant. Delivery of financial covenants commenced with the fiscal month ending March 2021. The Company is not in compliance with its October 2, 2021 covenants and received a waiver from Jackson. PPP Loans On May 12, 2020, Monroe, an indirect subsidiary of the Company, entered into the May 12 Note with the Bank, pursuant to the PPP of the CARES Act administered by the SBA. The principal amount of the May 12 Note was $ 10,000 In accordance with the requirements of the CARES Act, the May 12 Note Borrowers used the proceeds from the May 12 Note in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on the May 12 Note at the rate of 1.00 % per annum. The May 12 Note Borrowers applied for forgiveness of the amount due under the May 12 Note, in an amount equal to the sum of qualified expenses under the PPP. The May 12 Note Borrowers used the entire proceeds under the May 12 Note for such qualifying expenses. The May 12 Note matures two years following the date of issuance of the May 12 Note and included a period for the first ten months during which time required payments of interest and principal are deferred 14 monthly On May 25, 2021, the Company was notified by its lender, Affinity Bank, that the May 12 Note, in the amount of $ 10,000 of principal and $ 105 in interest, was forgiven in its entirety by the SBA. The Company recorded the forgiveness of $ 10,000 105 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) On May 20, 2020, each of KRI, LH and SG, each a wholly owned direct or indirect subsidiary of the Company, entered into the borrowing agreements with the Bank pursuant to the PPP, each evidenced by a note dated May 20, 2020 (as previously defined, the KRI Note, the LH Note and the SG Note, respectively. The combined aggregate principal amount of the indebtedness represented by the May 20 Notes was $ 9,395 . In accordance with the requirements of the CARES Act, the May 20 Note Borrowers used the proceeds from the May 20 Notes in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on each of the May 20 Notes at the rate of 1.00 Each of the May 20 Notes matures two years following the date of issuance of the May 20 Notes and included a period for the first ten months during which time required payments of interest and principal were deferred . Beginning in the eleventh month following the date of each of the May 20 Notes, the May 20 Note Borrowers are required to make 14 monthly payments of principal and interest. The May 20 Notes may be prepaid at any time prior to maturity. The May 20 Notes provide for customary events of default, including, among others, those relating to breaches of obligations under the May 20 Notes, including a failure to make payments, any bankruptcy or similar proceedings involving the May 20 Note Borrowers, and certain material effects on the May 20 Note Borrowers’ ability to repay the May 20 Notes. The May 20 Note Borrowers did not provide any collateral or guarantees for the May 20 Notes. On July 14, 2021, the Company was notified by its lender, Affinity Bank, that the May 20 Notes for the Company’s subsidiaries KRI, LH and SG, in the amounts of $ 5,443 , $ 1,890 and $ 2,063 , respectively, in principal and $ 63 , $ 22 and $ 24 , respectively, in interest, were forgiven in their entirety by the SBA. The application for these funds required the Company to certify in good faith that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The Company made this good faith assertion based upon the adverse impact the COVID-19 pandemic had on our business and the degree of uncertainty introduced to the capital markets. While the Company has made this assertion in good faith based upon all available guidance, management will continue to assess their continued qualification if and when updated guidance is released by the Treasury Department. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) Debt Exchange Agreement On November 15, 2018 the Company, entered into a Debt Exchange Agreement with Jackson, pursuant to which, among other things, Jackson agreed to exchange $ 13,000 (the “Exchange Amount”) of indebtedness of the Company held by Jackson in exchange for 13,000 shares of Series E Preferred Stock, par value $ 0.00001 per share. The Series E Preferred Stock ranked senior to the Company’s common stock and any other series or classes of preferred stock issued or outstanding with respect to dividend rights and rights on liquidation, winding up and dissolution. Each share of Series E Preferred Stock was initially convertible into 561 shares of common stock of the Company at any time after October 31, 2020 or the occurrence of a Preferred Default (as defined in the Certificate of Designation for the Series E Preferred Stock (the “Series E Certificate of Designation”)). A holder of Series E Preferred Stock was not required to pay any additional consideration in exchange for conversion of such Series E Preferred Stock into the Company’s common stock. Series E Preferred Stock was redeemable by the Company at any time at a price per share equal to the stated value ($ 1,000 per share) plus all accrued and unpaid dividends thereon. The Series E Preferred Stock carried quarterly dividend rights of (a) cash dividends accruing (i) at an annual rate per share equal to 12% from the date of issuance and (ii) 17% after the occurrence of a Preferred Default, and (b) a dividend payable in shares of Series E-1 Convertible Preferred Stock (the “Series E-1 Convertible Preferred Stock” and, collectively with the Series E Convertible Preferred Stock, the “Series E Preferred Stock”). The shares of Series E-1 Convertible Preferred Stock had all the same terms, preferences and characteristics as the Series E Preferred Stock (including, without limitation, the right to receive cash dividends), except (i) Series E-1 Convertible Preferred Stock were mandatorily redeemable by the Company within thirty (30) days after written demand received from any holder at any time after the earlier of the occurrence of a Preferred Default or November 15, 2020, for a cash payment equal to the Liquidation Value (as defined in the Series E Certificate of Designation) plus any accrued and unpaid dividends thereon, (ii) each share of Series E-1 Convertible Preferred Stock was initially convertible into 101 shares of the Company’s common stock , and (iii) Series E-1 Convertible Preferred Stock could be cancelled and extinguished by the Company if all shares of Series E Convertible Preferred Stock are redeemed by the Company on or prior to October 31, 2020. On October 26, 2020, in connection with the entry into the Amended Note Purchase Agreement, the Company filed with the Secretary of State of the State of Delaware the second Certificate of Amendment (the “Amendment”) to the Series E Certificate of Designation. Under the amended terms, holders of Series E Preferred Stock were entitled to monthly cash dividends on Series E Preferred Stock at a per annum rate of 12%. At the Company’s option, up to 50% of the cash dividend on the Series E Convertible Preferred Stock could be paid in kind by adding such 50% portion to the outstanding liquidation value of the Series E Convertible Preferred Stock (the “PIK Dividend Payment”), commencing on October 26, 2020 and ending on October 25, 2020 . If the PIK Dividend Payment was elected, a holder of Series E Preferred Stock was entitled to additional fee to be paid in shares of our common stock an amount equal to $ 10,000 divided by the average closing price, as reported by Nasdaq of such shares of common stock over the 5 trading days prior to the applicable monthly interest payment date. If such average market price was less than $3.50, or was otherwise undeterminable because such shares were no longer publicly traded or the closing price was no longer reported by Nasdaq, then the average closing price for these purposes was to be deemed to be $ 3.50, and if such average closing price were greater than $ 21.00 then the average closing price for these purposes would be deemed to be $ 21.00 . Dividends on the Series E-1 Convertible Preferred Stock could only be paid in cash. If the Company failed to make dividend payments on the Series E Convertible Preferred Stock, it would be an event of default under the Amended Note Purchase Agreement. Under the terms of the Amendment, shares of Series E-1 Convertible Preferred Stock were convertible into common stock at a conversion rate equal to the liquidation value of each share of Series E-1 Convertible Preferred Stock divided by $ 6.00 per share commencing October 31, 2020. Each share of Series E-1 Convertible Preferred Stock had a liquidation value of $ 1,000 per share. The shares of Series E Convertible Preferred Stock were also convertible into shares of common stock after October 31, 2022 . The conversion rate for the Series E Convertible Preferred Stock was equal to the liquidation value of each share of Series E Convertible Preferred Stock divided by $6.00 per share. Each share of Series E Convertible Preferred Stock had a liquidation value of $ 1,000 per share. The Amendment resulted in the original conversion price of $ 10.68 and $ 9.96 of the Series E Convertible Preferred Stock and E-1 Convertible Preferred Stock, respectively, being reduced to $6.00 for both instruments. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) The Company accounted for the Amendment as a modification to the Series E and E-1 Preferred Stock. The change in fair value as a result of the modification amounted to $ 410 4,280 6.00 0 Under the terms of the Consent and the Series E Certificate of Designation, in consideration for Jackson’s consent to the first 2,100 of the Series E Preferred Stock was reclassified to mezzanine equity during the year ended January 2, 2021. On July 22, 2021, after conversion of the Series G Preferred Stock to the New Note, the Company redeemed $ 2,080 of the Jackson Note using the Escrow Funds. Lastly, under the terms of the Limited Consent and Waiver with Jackson dated February 5, 2021, it was agreed that to the extent that any of the PPP Loans are forgiven after the February 2021 Offering, Jackson may convert the Series E Convertible Preferred Stock and Series E-1 Convertible Preferred Stock that remains outstanding into a secured note that is substantially similar to the Jackson Note. As this provision results in a contingent redemption feature, approximately $ 4,100 389 Series G Preferred Stock – Related Party On May 6, 2021, the Company, entered into an Exchange Agreement with Jackson (the “Exchange Agreement”), pursuant to which, among other things, Jackson agreed to exchange 6,172 1,493 The Series G Preferred Stock ranks senior to each of the Company’s common stock, Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible Preferred Stock, and any other classes and series of stock of the Company now or hereafter authorized, issued or outstanding, which by their terms expressly provide that they are junior to the Series G Preferred Stock or which do not specify their rank (which includes the Series F Convertible Preferred Stock). Each share of Series G Preferred Stock is initially convertible into 1,000 shares of common stock at any time from and after, (i) with respect to the Series G Preferred Stock, the earlier of October 31, 2022 or the occurrence of a default and, (ii) with respect to the Series G-l Convertible Preferred Stock, October 31, 2020. A holder of Series G Preferred Stock is not required to pay any additional consideration in exchange for conversion of the Series G Preferred Stock into the Company’s common stock The Series G Preferred Stock carries monthly dividend rights of (a) cash dividends accruing (i) at an annual rate per share equal to 12% from the date of issuance (plus any accrued dividends with respect to the Series E Preferred Stock unpaid as of the date of the Exchange) and (ii) 17% after the occurrence of a default, and (b) a dividend payable in shares of Series G-1 Convertible Preferred Stock. The shares of Series G-1 Convertible Preferred Stock have all the same terms, preferences and characteristics as the Series G Preferred Stock (including, without limitation, the right to receive cash dividends), except Series G-1 Convertible Preferred Stock are mandatorily redeemable by the Company within thirty (30) days after written demand received from any holder at any time after the earlier of the occurrence of a Preferred Default or September 30, 2022, for a cash payment equal to the liquidation value plus any accrued and unpaid dividends thereon On July 20, 2021, the Company entered into the July 2021 Purchase Agreement. As the Company’s Series G Preferred Stock was outstanding, it was required to use the proceeds of any sales of equity securities, including the common stock offered in the July 2021 Registered Direct Offering, exclusively to redeem any outstanding shares of Series G Preferred Stock, subject to certain limitations. The Company received a waiver from Jackson, the sole holder of the outstanding shares of its Series G Preferred Stock, to pay accrued and unpaid interest and prepay a portion of the outstanding principal balance of the Jackson Note, and paid accrued and unpaid dividends on the Series G-1 Convertible Preferred Stock upon conversion of such preferred stock into the New Note. While under the terms of the Certificate of Designation governing the Series G Preferred Stock and Series G-1 Preferred Stock, 6,172,000 1,561,000 As of October 2, 2021, there were no shares of Series G or Series G-1 Convertible Preferred Stock outstanding. HSBC Loan On April 20, 2020, the terms of the loan with HSBC were amended such that no capital repayments would be required between April 2020 to September 2020, and only interest payments would be made during such time. Since such time, capital repayments have resumed. On May 15, 2020, the Company entered into a three-year term loan 1,000 |
LEASES
LEASES | 9 Months Ended |
Oct. 02, 2021 | |
Leases | |
LEASES | NOTE 7 – LEASES As of October 2, 2021 and January 2, 2021, as a result of the adoption of ASC 842, the Company recorded a right of use (“ROU”) lease asset of approximately $ 5,889 with a corresponding lease liability of approximately $ 5,830 and ROU of approximately $ 3,432 with a corresponding lease liability of approximately $ 3,437 , respectively, based on the present value of the minimum rental payments of such leases. The Company’s finance leases are immaterial both individually and in the aggregate. In September 2021, the Company entered into a new lease agreement for an office lease in New York for a term of 8 2,735 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) Quantitative information regarding the Company’s leases for the period ended October 2, 2021 is as follows: SCHEDULE OF LEASE, COST Lease Cost Classification Q3 2021 YTD Operating lease cost SG&A Expenses 1,051 SCHEDULE OF OPERATING LEASE LIABILITY MATURITY Other information October 2, 2021 Weighted average remaining lease term (years) 4.0 Weighted average discount rate 6.7 % Future Lease Payments 2021 $ 361 2022 1,010 2023 1,134 2024 935 2025 839 Thereafter 2,966 Total $ 7,245 Less: Imputed Interest 1,415 Operating lease, liability 5,830 Leases - Current 1,129 Leases - Non Current 4,701 As most of the Company’s leases do not provide an implicit rate, we use the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. |
EQUITY
EQUITY | 9 Months Ended |
Oct. 02, 2021 | |
Equity [Abstract] | |
EQUITY | NOTE 8 – EQUITY Common Stock The Company issued the following shares of common stock during the nine-month period ended October 2, 2021: SCHEDULE OF STOCKHOLDERS EQUITY Shares issued to/for: Number of Common Shares Issued Fair Value of Fair Value at Issuance Equity Raise 8,585,319 $ 30,315 $ 2.10 $ 5.40 Preferred Series F Conversion 1,304,901 4,107 3.15 3.15 Consultants 1,667 3 1.84 1.84 Preferred Series A Conversion 4,504 - - - Employees 50,835 275 5.40 5.40 Board and Committee members 936 5 5.16 5.16 Long-term incentive plan 25,835 133 5.16 5.16 9,973,997 $ 34,838 The Company issued the following shares of common stock during the nine-month period ended September 26, 2020: Shares issued to/for: Number of Common Shares Issued Fair Value of Fair Value at Issuance Jackson Investment Group 83,334 $ 324 $ 2.16 $ 5.52 Preferred Series A Conversion 2,703 - - - Consultants 2,500 18 7.32 7.32 Board and Committee members 2,800 11 3.36 5.10 91,337 $ 353 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) Reverse Stock Split The Company effected a one-for-six reverse stock split on June 30, 2021 (the “Reverse Stock Split”). All share and per share information in these consolidated financial statements has been retroactively adjusted to reflect the Reverse Stock Split February 2021 Public Offering On February 9, 2021, the Company announced the pricing of a public offering of an aggregate of 3,642,547 5.40 The February 2021 Offering closed on February 12, 2021. In the February 2021 Offering, the Company issued 3,475,200 shares of common stock and pre-funded warrants to purchase up to 167,347 shares of common stock, at an exercise price of $ 0.0001 per share. The Pre-funded Warrants were sold at $ 5.40 per Pre-funded Warrant. The Pre-funded Warrants were immediately exercisable and could be exercised at any time after their original issuance until such Pre-funded Warrants were exercised in full. The Pre-funded Warrants were exercised immediately upon issuance, and 167,347 shares of common stock were issued on February 12, 2021. The net proceeds to the Company from the February 2021 Offering were approximately $ 18,100 , after deducting placement agent fees and estimated offering expenses payable by the Company. Prior to the exchange of the Company’s Series E Preferred Stock for Series G Preferred Stock, consummated on May 6, 2021, the Company was required to use the proceeds of any sales of equity securities, including the securities offered in the February 2021 Offering, exclusively to redeem any outstanding shares of the Company’s Series E Preferred Stock, subject to certain limitations. Pursuant to the Limited Consent, the Company was permitted to use approximately (i) 75% of the net proceeds from the February 2021 Offering to redeem a portion of the outstanding Jackson Note and to use (ii) 25% of the net proceeds from the February 2021 Offering to redeem a portion of the Company’s Series E Preferred Stock, and upon closing of the February 2021 Offering, the Company redeemed a portion of the Jackson Note and redeemed 4,518 shares of the Series E Convertible Preferred Stock . Following the redemption of the Series E Convertible Preferred Stock, the Company has 6,172 shares of Series E Convertible Preferred Stock outstanding with an aggregate stated value of $6,172 . Prior to the February 2021 Offering, the Company entered the Limited Consent with Jackson, whereby, among other things, Jackson agreed that we may use 75% of the proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which at the time had an outstanding principal amount of $32,710, and 25% of the net proceeds from the Offering to redeem a portion of our Series E Convertible Preferred Stock, notwithstanding certain provisions of the Series E Certificate of Designation that would have required us to use all the proceeds from the Offering to redeem the Series E Convertible Preferred Stock. In addition, the Company also agreed in the Limited Consent to additional limits on our ability to incur other indebtedness, including limits on advances under our revolving loan facility with MidCap. The Company also agreed that to the extent that any of our PPP Loans are forgiven after the Offering, Jackson may convert the Series E Convertible Preferred Stock and Series E-1 Convertible Preferred Stock that remains outstanding into a secured note that is substantially similar to the Jackson Note. On April 8, 2021, the Limited Consent was extended to June 17, 2021. On February 5, 2021, the Company also entered into a Limited Waiver and Agreement with Jackson (the “Limited Waiver”), whereby Jackson agreed that it would not convert any shares of the Series E Convertible Preferred Stock or Series E-1 Convertible Preferred Stock into shares of our common stock or exercise any warrants to purchase shares to the extent that doing so would cause the number of our authorized shares of common stock to be less than the number of shares being offered in the Offering. Jackson also waived any event of default under the Series E Certificate of Designation and the Jackson Note that would have resulted from the Company having an insufficient number of authorized shares of common stock to honor conversions of the Series E Convertible Preferred Stock and the exercise of Jackson’s warrants. On April 8, 2021, the Limited Waiver was extended to June 17, 2021, and on May 6, 2021 the Limited Waiver was extended to June 30, 2021. The limited waiver was not extended further because the Company effected a Reverse Stock Split on June 30, 2021. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) April 2021 Private Placement On April 21, 2021, the Company entered into the April 2021 Purchase Agreement with certain institutional and accredited investors for the issuance and sale of an aggregate of 4,698 shares of Series F Preferred Stock at a price of $ 1,000 per share and warrants to purchase up to an aggregate of 1,304,901 shares of common stock, at an exercise price of $ 3.60 per share. The April 2021 Warrants are exercisable six months following the closing of the April 2021 Private Placement and will expire five years following the date the April 2021 Warrants first became exercisable. The Series F Preferred Stock is convertible into an aggregate of approximately 1,304,901 shares of Common Stock at a conversion price of $ 3.60 per share, subject to certain ownership limitations, upon the Company amending its certificate of incorporation to effect a reverse split within a range of 1-into-2 to up to 1-into-20 to be determined by the Company’s Board. On June 30, 2021, the Company effectuated the Reverse Stock Split. The net proceeds to the Company from the April 2021 Private Placement were approximately $ 4,200 , after deducting placement agent fees and estimated offering expenses payable by the Company. The Company used $ 3,200 of the net proceeds to redeem a portion of the Jackson Note, which had an outstanding principal amount of $ 19,154 as of April 21, 2021. In addition, the Company used $ 1,000 of the net proceeds for working capital purposes. This transaction has been accounted for in Q2 2021 YTD. As the Series F Preferred Stock was issued concurrently with the April 2021 Warrants, the Company evaluated the existence of a BCF using the effective conversion price for the Preferred Stock based on the proceeds allocated to that instrument. Accordingly, the Company recognized a BCF of $ 1,409 Subject to certain beneficial ownership limitations, the Series F Preferred Stock shall vote on an “as converted” basis on all matters submitted to the holders of Common Stock for approval; provided, however, that solely for purposes of determining the number of votes that the Series F Preferred Stock is entitled to, the “Conversion Price” of the Series F Preferred Stock shall be deemed $ 4.35 Series G Preferred Stock – Related Party On May 6, 2021, the Company, entered into the Exchange Agreement with Jackson, pursuant to which, among other things, Jackson agreed to exchange 6,172 shares of the Company’s Series E Convertible Preferred Stock, and 1,493 shares of the Series E-1 Preferred Stock for an equivalent number of shares of the Company’s newly issued Series G Convertible Preferred Stock and Series G-1 Convertible Preferred Stock. The Series G Convertible Preferred Stock is subject to the same terms stated in the Limited Waiver, as described above in “February 2021 Offering” in this Note 8. The Series G Preferred Stock ranks senior to each of the Company’s common stock, Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible Preferred Stock, and any other classes and series of stock of the Company now or hereafter authorized, issued or outstanding, which by their terms expressly provide that they are junior to the Series G Preferred Stock or which do not specify their rank (which includes the Series F Convertible Preferred Stock). Each share of Series G Preferred Stock is initially convertible into 1,000 shares of common stock at any time from and after, (i) with respect to the Series G Preferred Stock, the earlier of October 31, 2022 or the occurrence of a default and, (ii) with respect to the Series G-l Convertible Preferred Stock, October 31, 2020. A holder of Series G Preferred Stock is not required to pay any additional consideration in exchange for conversion of the Series G Preferred Stock into the Company’s common stock The Series G Preferred Stock carries monthly dividend rights of (a) cash dividends accruing (i) at an annual rate per share equal to 12% from the date of issuance (plus any accrued dividends with respect to the Series E Preferred Stock unpaid as of the date of the Exchange) and (ii) 17% after the occurrence of a default, and (b) a dividend payable in shares of Series G-1 Convertible Preferred Stock. The shares of Series G-1 Convertible Preferred Stock have all the same terms, preferences and characteristics as the Series G Preferred Stock (including, without limitation, the right to receive cash dividends), except Series G-1 Convertible Preferred Stock are mandatorily redeemable by the Company within thirty (30) days after written demand received from any holder at any time after the earlier of the occurrence of a Preferred Default or September 30, 2022, for a cash payment equal to the liquidation value plus any accrued and unpaid dividends thereon The Series G Preferred Stock shall vote on an “as converted” basis on all matters submitted to the holders of common stock for approval. While under the terms of the Certificate of Designation governing the Series G Preferred Stock and Series G-1 Preferred Stock, as of July 20, 2021 6,172,000 1,561,000 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) July 2021 Registered Direct Offering and Concurrent Private Placement July 2021 Offerings On July 20, 2021, the company entered into the July 2021 Purchase Agreement with certain institutional investors. Pursuant to the July 2021 Purchase Agreement, the Company sold in the July 2021 Registered Direct Offering, 2,199,132 shares of the Company’s common stock to the investors at an offering price of $ 3.45 per share and associated warrant. In the concurrent July 2021 Private Placement, the Company sold to the same investors unregistered warrants (the “July 2021 Warrants”) to purchase up to an aggregate of 1,099,566 shares of common stock, representing 50% of the shares of common stock sold in the July 2021 Registered Direct Offering. The July 2021 Warrants are exercisable at an exercise price of $ 3.80 per share, were exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance. The net proceeds from the July 2021 Offerings were approximately $ 6,760 , after deducting placement agent fees and other estimated offering expenses payable by the Company. While the Company’s Series G Preferred Stock was outstanding, it was required to use the proceeds of any sales of equity securities, including the common stock offered in the July 2021 Registered Direct Offering, exclusively to redeem any outstanding shares of Series G Preferred Stock, subject to certain limitations. The Company received a waiver from Jackson, the sole holder of the outstanding shares of its Series G Preferred Stock, to pay accrued and unpaid interest and prepay a portion of the outstanding principal balance of the Jackson Note, which at the time had an outstanding principal amount of $ 16,077 , and to pay accrued and unpaid dividends on the Series G-1 Convertible Preferred Stock upon conversion of such preferred stock into the New Note. Pursuant to the engagement letter entered into on December 21, 2020 (as amended, the “Engagement Letter”) with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which Wainwright agreed to serve as the exclusive placement agent for the Company, on a reasonable best-efforts basis, in connection with the July 2021 Offerings, the Company paid Wainwright an aggregate cash fee equal to 7.5% 1.0% 85 13 164,935 7.5% 5 4.3125 125% Jackson Consent In connection with the July 2021 Offerings, on July 22, 2021 the Company entered into a limited consent with Jackson whereby, among other things, Jackson agreed that the Company could effect the July 2021 Offerings and use $ 5,000 of the net proceeds thereof to pay accrued and unpaid interest and prepay a portion of the outstanding principal balance of the Jackson Note, notwithstanding certain provisions of the certificate of designation for the Series G Preferred Stock (the “Series G Certificate of Designation”) that would have required the Company to use all the proceeds from the July 2021 Offerings to redeem the Series G Preferred Stock. Conversion of Series G Convertible Preferred Stock into Senior Debt On July 21, 2021, the Company exchanged its 6,172 shares of Series G Convertible Preferred Stock and 1,561 shares of Series G-1 Convertible Preferred Stock for senior indebtedness by entering into the New Note, in aggregate principal amount of $ 7,733 (the “New Note”), which amount represented all of the outstanding Series G Preferred Stock totaling $ 6,172 and Series G-1 Convertible Preferred Stock totaling $ 1,561 held by Jackson as of July 21, 2021, under the Note Purchase Agreement. The New Note was deemed issued pursuant to the Amended Note Purchase Agreement. Under the terms of the New Note, the Company is required to pay interest on the New Note at a per annum rate of 12%, in cash only, accruing from and after the date of the New Note and until the entire principal balance of the New Note shall have been repaid in full, and on and at all times during which the “Default Rate” (as defined in the Amended Note Purchase Agreement) applies, to the extent permitted by law, at a per annum rate of 17 %. The entire outstanding principal balance of the New Note is due and payable in full on September 30, 2022. Upon an Event of Default (as defined in the Amended Note Purchase Agreement), the principal of the New Note and all accrued and unpaid interest thereon may be accelerated and declared or otherwise become due and payable in accordance with the terms of the Amended Note Purchase Agreement. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) First August 2021 Registered Direct Offering and Concurrent Private Placement On August 5, 2021, the Company entered into the First August 2021 Purchase Agreement with certain institutional investors. Pursuant to the First August 2021 Purchase Agreement, the Company agreed to sell, in a registered direct offering, 1,383,162 shares of the Company’s common stock to the purchasers at an offering price of $ 2.6425 per share and associated warrant. Pursuant to the First August 2021 Purchase Agreement, in a concurrent private placement, the Company also sold to the purchasers unregistered warrants to purchase up to an aggregate of 691,581 shares of common stock, representing 50 % of the shares of common stock that were issued and sold in the First August 2021 Registered Direct Offering. The First August 2021 Warrants are exercisable at an exercise price of $ 2.58 per share, were exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance. Pursuant to the Engagement Letter, Wainwright agreed to serve as the exclusive placement agent for the Company, on a reasonable best-efforts basis, in connection with the First August 2021 Offerings. The Company paid Wainwright an aggregate cash fee equal to 7.5% of the gross proceeds of the First August 2021 Offerings and a management fee equal to 1.0% of the gross proceeds of the First August 2021 Offerings, and additionally reimbursed Wainwright for a non-accountable expense allowance of $ 50 and $ 13 for clearing expenses. Additionally, the Company issued to Wainwright or its designees as compensation warrants to purchase up to 103,737 shares of common stock, equal to 7.5% of the aggregate number of shares of common stock placed in the First August 2021 Registered Direct Offering (the “First August 2021 Wainwright Warrants”). The First August 2021 Wainwright Warrants have a term of five ( 5 ) years from the commencement of sales under the First August 2021 Registered Direct Offering and an exercise price of $ 3.3031 per share of common stock (equal to 125% of the offering price per share of common stock issued and sold in the First August 2021 Registered Direct Offering). The First August 2021 Offerings closed on August 9, 2021. The net proceeds to the Company from the First August 2021 Offerings were approximately $ 3,217 , after deducting placement agent fees and estimated offering expenses payable by the Company. The Company used a portion of the net proceeds from the First August 2021 Offerings together with other cash on hand to redeem $ 3,281 16,730 Second August 2021 Registered Direct Offering and Concurrent Private Placement On August 22, 2021, the Company entered into the Second August 2021 Purchase Agreement with certain institutional investors. Pursuant to the Second August 2021 Purchase Agreement, the Company agreed to sell, in a registered direct offering, 1,360,478 2.10 680,239 50% 2.04 Pursuant to the Engagement Letter, Wainwright agreed to serve as the exclusive placement agent for the Company, on a reasonable best-efforts basis, in connection with the Second August 2021 Offerings. The Company paid Wainwright an aggregate cash fee equal to 7.5% 1.0% 50 13 102,036 7.5% 5 2.625 125% The net proceeds to the Company from the Second August 2021 Offerings were approximately $ 2,466 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) Restricted Shares The Company has issued shares of restricted stock to employees and members of the Board under its 2015 Omnibus Incentive Plan, 2016 Omnibus Incentive Plan and 2020 Omnibus Inventive Plan. Under these plans, the shares are restricted for a period of three years 34,259 5 61 323 227 Stock Options The Company recorded share-based payment expense of $ 6 , $ 7 , $ 19 and $ 20 for the periods ended Q3 2021, Q3 2020, Q3 2021 YTD and Q3 2020 YTD, respectively. Convertible Preferred Shares Series A Preferred Stock – Related Party On May 29, 2015, the Company filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock with the Nevada Secretary of State, whereby the Company designated 1,663,008 0.00001 1.00 12 Shares of the Series A Preferred Stock are convertible into shares of common stock at the holder’s election at any time prior to December 31, 2020, at a conversion rate of one and three tenths (1.3) shares of common stock for every 50 shares of Series A Preferred Stock that the holder elects to convert In the periods ended Q3 2021 YTD and Q3 2020 YTD, the Company paid $ 0 and $ 0 , respectively, in dividends to its Series A Preferred Stockholders. On January 21, 2020, the Company converted the shares of Series A Preferred Stock awarded to Mr. Briand into 2,703 shares of common stock. On January 8, 2021, the Company converted the shares awarded to Mr. Flood into 4,504 shares of common stock. The Company has $ 125 and $ 62 of dividends payable to Series A Preferred Stockholders at the end of Q3 2021 YTD and Q3 2020 YTD, respectively. Series E Preferred Stock - Related Party The Series E Preferred Stock ranks senior to common stock and any other series or classes of preferred stock now or after issued or outstanding with respect to dividend rights and rights on liquidation, winding up and dissolution. Each share of Series E Preferred Stock was initially convertible into 561.8 shares of our common stock at any time after October 31, 2020 or the occurrence of a Preferred Default . A holder of Series E Preferred Stock is not required to pay any additional consideration in exchange for conversion of such Series E Preferred Stock into our common stock. Series E Preferred Stock is redeemable by the Company at any time at a price per share equal to the stated value ($ 1,000 per share) plus all accrued and unpaid dividends thereon. On May 6, 2021, the Company, entered into the Exchange Agreement with Jackson, pursuant to which, among other things, Jackson agreed to exchange 6,172 1,493 0 0 2019 Long-Term Incentive Plan In January 2019, the Company’s Board approved the 2019 Long-Term Incentive Plan (the “2019 LTIP”). The Board granted 60,834 Units vest upon the following: ● 50% ● 50% SUMMARY OF RELATIONSHIP BETWEEN PERFORMANCE AND THE VESTING RATE Average 2019 Price Vesting Rate <$ 48 0 >$ 48 Pro-rated >=$ 72 Full Vesting On January 8, 2021, the Company issued 25,834 0 71 4 213 2020 Omnibus Incentive Plan On June 30, 2020, the Board approved the 2020 Omnibus Incentive Plan (the “2020 Plan”) pursuant to which we may grant equity incentive awards to key employees, key contractors, and non-employee directors of the Company. The 2020 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly or in combination, and that may be paid in cash, shares of our common stock, or a combination of cash and common stock. A total of 125,000 shares of common stock are reserved for grant under the 2020 Plan, plus any awards reserved under the Company’s prior equity incentive plans, subject to adjustment in certain circumstances to prevent dilution or enlargement. On September 29, 2020, our stockholders approved the 2020 Plan. As of October 2, 2021, we had issued 8,719 116,281 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Oct. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES Legal Proceedings Whitaker v. Monroe Staffing Services, LLC & Staffing 360 Solutions, Inc. On December 5, 2019, former owner of KRI, Pamela D. Whitaker (“Whitaker” or “Plaintiff”), filed a complaint in Guilford County, North Carolina (the “North Carolina Action”) asserting claims for breach of contract and declaratory judgment against Monroe and the Company (the “Defendants”) arising out of the alleged non-payment of certain earn-out payments and interest purportedly due under a Share Purchase Agreement pursuant to which Whitaker sold all issued and outstanding shares in her staffing agency, KRI to Staffing 360’s subsidiary, Monroe Staffing Services in August 2018. Whitaker is seeking $ 4,054 Defendants removed the action to the Middle District of North Carolina on January 7, 2020, and Plaintiff moved to remand on February 4, 2020. Briefing on the motion to remand concluded on February 24, 2020. Separately, Defendants moved to dismiss the action on January 14, 2020 based on Plaintiff’s failure to state a claim, improper venue, and lack of personal jurisdiction as to defendant Staffing 360 Solutions, Inc. Alternatively, Defendants sought a transfer of the action to the Southern District of New York, based on the plain language of the Share Purchase Agreement’s forum selection clause. Briefing on Defendants’ motion to dismiss concluded on February 18, 2020. On February 28, 2020, Plaintiff moved for leave to file an amended complaint. Defendants filed their opposition to the motion for leave on March 19, 2020. Plaintiff has filed a reply. On June 29, 2020, Magistrate Judge Webster issued a Report and Recommendation on the pending motions, recommending that Defendants’ motion to dismiss be granted with regard to Defendants’ request to transfer the matter to the Southern District of New York, and denied in all other regards without prejudice to Defendants raising those arguments again in the new forum. Magistrate Judge Webster also recommended that Plaintiff’s motion to remand be denied and motion to amend be left to the discretion of the Southern District of New York. Plaintiff filed an objection to the Report and Recommendation on July 9, 2020. Defendants responded on July 23, 2020. On February 19, 2021, the District Court issued a decision that reversed the Magistrate Judge’s Order. The District Court granted Plaintiff’s motion to remand and denied Defendants’ motion to dismiss as moot. Defendants filed a Notice of Appeal to the Fourth Circuit on February 25, 2021 and filed their opening brief on April 21, 2021. Plaintiff filed her response brief on May 21, 2021, and Defendants replied on June 11, 2021. As of the date of this filing, the appeal remains pending. Separately, on February 26, 2020, the Company and Monroe filed an action against Whitaker in the United States District Court for the Southern District of New York (Case No. 1:20-cv-01716) (the “New York Action”). The New York Action concerns claims for breach of contract and fraudulent inducement arising from various misrepresentations made by Whitaker to the Company and Monroe in advance of, and included in, the share purchase agreement. The Company and Monroe are seeking damages in an amount to be determined at trial but in no event less than $ 6,000 On October 13, 2020, the Court denied Whitaker’s motion to dismiss, in part, and granted the motion, in part. The Court rejected Whitaker’s procedural arguments, but granted the motion on substantive grounds. However, the Court ordered that Monroe and the Company may seek leave to amend the complaint by letter application by December 1, 2020. Monroe and the Company filed a letter of motion for leave to amend and a proposed Amended Complaint on December 1, 2020. On January 5, 2021, Whitaker filed an opposition to the letter motion. On January 25, 2021, Monroe and the Company filed a reply in further support of the letter motion. On March 9, 2021, the Court granted Monroe and the Company’s motion for leave to amend, in part, and denied the motion, in part. The Court rejected Monroe and the Company’s claim for fraudulent inducement, but granted the motion for leave to amend their breach of contract claim. Monroe and the Company filed their amended complaint on March 12, 2021. On April 9, 2021, Whitaker renewed her motion to dismiss on procedural grounds, requesting dismissal of the action or, in the alternative, a stay of the proceeding pending adjudication on the merits of the North Carolina Action. On May 14, 2021, Monroe and the Company filed an opposition to the motion to dismiss. On June 21, 2021, Whitaker filed a reply in further support of the motion. The Court referred the case to Magistrate Judge Moses, who held oral argument on the motion on November 9, 2021. Whitaker’s renewed motion to dismiss remains pending. Monroe and the Company intend to pursue their claims vigorously. As of the date of this filing, we are not aware of any other material legal proceedings to which we or any of our subsidiaries is a party or to which any of our property is subject, other than as disclosed above. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) |
SEGMENTS
SEGMENTS | 9 Months Ended |
Oct. 02, 2021 | |
Segment Reporting [Abstract] | |
SEGMENTS | NOTE 10 – SEGMENTS The Company generated revenue and gross profit by segment as follows: SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT Q3 2021 Q3 2020 Q3 2021 YTD Q3 2020 YTD Commercial Staffing - US $ 29,601 $ 28,708 $ 88,240 $ 79,992 Professional Staffing - US 4,536 5,188 12,215 19,778 Professional Staffing - UK 13,364 14,744 46,527 50,923 Total Revenue $ 47,501 $ 48,640 $ 146,982 $ 150,693 Commercial Staffing - US $ 5,195 $ 4,642 $ 15,422 $ 12,552 Professional Staffing - US 1,200 1,664 3,146 6,598 Professional Staffing - UK 3,229 2,017 8,090 7,375 Total Gross Profit $ 9,624 $ 8,323 $ 26,658 $ 26,525 Selling, general and administrative expenses $ (8,463 ) $ (9,391 ) $ (25,811 ) $ (28,609 ) Depreciation and amortization (688 ) (768 ) (2,122 ) (2,312 ) Impairment of goodwill — — - (2,969 ) Interest expense and amortization of debt discount and deferred financing costs (1,006 ) (1,746 ) (3,432 ) (6,277 ) Re-measurement (loss) gain on intercompany note (315 ) 442 (219 ) (348 ) Gain on business sale — 220 — 220 PPP forgiveness gain 9,504 — 19,609 — Other income, net 188 161 292 122 Income (Loss) Before (Provision for) Benefit From Income Tax $ 8,844 $ (2,759 ) $ 14,975 $ (13,648 ) STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) The following table disaggregates revenues by segments: Q3 2021 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 147 $ 328 $ 858 $ 1,333 Temporary Revenue 29,454 4,208 12,506 46,168 Total $ 29,601 $ 4,536 $ 13,364 $ 47,501 Q3 2020 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 171 $ 600 $ 692 $ 1,463 Temporary Revenue 28,537 4,588 14,052 47,177 Total $ 28,708 $ 5,188 $ 14,744 $ 48,640 Q3 2021 YTD Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 290 $ 851 $ 2,567 $ 3,708 Temporary Revenue 87,950 11,364 43,960 143,274 Total $ 88,240 $ 12,215 $ 46,527 $ 146,982 Q3 2020 YTD Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 281 $ 2,676 $ 2,586 $ 5,543 Temporary Revenue 79,711 17,102 48,337 145,150 Total $ 79,992 $ 19,778 $ 50,923 $ 150,693 As of October 2, 2021 and January 2, 2021, the Company has assets in the U.S. and the U.K. as follows: October 2, 2021 January 2, 2021 2021 United States $ 71,438 $ 74,371 United Kingdom 7,646 12,514 Total Assets $ 79,084 $ 86,884 |
OTHER RELATED PARTY TRANSACTION
OTHER RELATED PARTY TRANSACTIONS | 9 Months Ended |
Oct. 02, 2021 | |
Related Party Transactions [Abstract] | |
OTHER RELATED PARTY TRANSACTIONS | NOTE 11 – OTHER RELATED PARTY TRANSACTIONS In addition to the shares of Series G Preferred Stock and Series G-1 Convertible Preferred Stock and notes issued to Jackson, the following are other related party transactions: Board and Committee Members On July 29, 2021, the Board of the Company appointed Vincent Cebula to the Board as a Class I director, to fill a vacancy as a result of the increase in the size of the Board from five to six persons. The Company had the following activity with its Board and Committee Members: STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) SCHEDULE OF RELATED PARTY TRANSACTIONS Q3 2021 YTD Q3 2020 YTD Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 63 234 $ 1 $ 2 $ 56 700 $ 3 $ 10 Jeff Grout 63 234 1 2 56 700 3 10 Nick Florio 63 234 1 2 56 700 3 10 Alicia Barker - 234 1 2 - 700 3 4 Vincent Cebula 17 - - - - - - - $ 206 $ 936 $ 4 $ 8 $ 168 $ 2,800 $ 12 $ 34 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Oct. 02, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION SCHEDULE OF CASH FLOW, SUPPLEMENTAL DISCLOSURES Q3 2021 YTD Q3 2020 YTD Cash paid for: Interest $ 3,507 $ 6,417 Income taxes 396 — Non-Cash Investing and Financing Activities: Deferred purchase price of UK factoring facility $ 5,234 $ 6,017 Shares issued to Jackson Investment Group — 324 Dividends accrued to related parties 795 596 Deemed Dividend 1,798 — Acquisition of Right of Use Assets 2,735 — Conversion of Series E Preferred Stock – Related Party 6,172 — Conversion of Series E-1 Preferred Stock – Related Party 1,493 — Conversion of Series G Preferred Stock – Related Party to debt 6,172 — Conversion of Series G-1 Preferred Stock – Related Party to debt 1,561 — STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Oct. 02, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS November 2021 Concurrent Private Placement On October 28, 2021, the Company entered into a securities purchase agreement with certain institutional and accredited investors for the issuance and sale of 4,683,547 0.00001 4,683,547 1.85 1.975 Pursuant to the Engagement Letter, Wainwright agreed to serve as the exclusive placement agent for the Company, on a reasonable best-efforts basis, in connection with the November 2021 Private Placement. The Company paid Wainwright a total cash fee equal to 7.5% 1.0% 35 351,266 2.4688 This placement closed on November 2, 2021 and was announced on November 3, 2021. We used $ 4,500 13,449 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the fiscal year ended January 2, 2021 which are included in the Company’s January 2, 2021 Form 10-K (“Fiscal 2020”), filed with the United States Securities and Exchange Commission on April 16, 2021. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the period ended October 2, 2021 are not necessarily indicative of results for the entire year end. This report is for the period January 3, 2021 to October 2, 2021 (“Q3 2021 YTD”) and December 29, 2019 to September 26, 2020 (“Q3 2020 YTD”). The Company uses a 4-4-5 calendar month which only has 364 days and as such an extra week would need to be added every few years. In October of 2020, the Company’s board of directors (the “Board”) approved the addition of such an extra week to last year’s fiscal year end resulting in the last year ended on January 2, 2021. |
Liquidity | Liquidity The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern. As shown in the accompanying financial statements as of the quarter ended October 2, 2021, the Company has an accumulated deficit of $ 77,306 and a working capital deficit of $ 20,251 . At October 2, 2021, we had total net debt of $ 14,357 and total cash of $ 2,231 . We have historically met our cash needs through a combination of cash flows from operating activities, term loans, promissory notes, convertible notes, private placement offerings and sales of equity. Our cash requirements are generally for operating activities along with debt and equity repayments. The financial statements included in this quarterly report have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity, capital requirements and that our credit facilities with our lenders will remain available to us. Further, the Second Amended and Restated 12% September 30, 2022 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) On February 12, 2021, the Company closed an offering (the “February 2021 Offering”) of 3,475,200 167,347 5.40 167,347 The net proceeds to the Company from the February 2021 Offering were approximately $ 18,100 1,596 227 Prior to the exchange of the Company’s Series E Preferred Stock (as defined herein) for newly issued Series G Preferred Stock (as defined herein), consummated on May 6, 2021, the Company was required to use the proceeds of any sales of equity securities, including the securities offered in the February 2021 Offering, exclusively to redeem any outstanding shares of the Company’s Series E Preferred Stock, subject to certain limitations. On February 5, 2021, the Company received a Limited Consent and Waiver from Jackson (the “Limited Consent”), the sole holder of the Company’s outstanding shares of Series E Convertible Preferred Stock, to use approximately (i) 75% of the net proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which had an outstanding principal amount of $ 32,710 Pursuant to the Limited Consent, upon closing of the February 2021 Offering, the Company redeemed a portion of the Jackson Note with an outstanding principal amount of $ 13,556 4,518 19,154 6,172 6,172 On April 21, 2021, the Company entered into a securities purchase agreement (the “April 2021 Purchase Agreement”) with certain institutional and accredited investors for the issuance and sale of an aggregate of 4,698 1,000 1,304,901 3.60 five years At issuance the Series F Preferred Stock was convertible into an aggregate of approximately 1,304,901 shares of common stock at a conversion price of $ 3.60 per share, subject to certain ownership limitations, upon the Company amending its certificate of incorporation to effect a reverse split within a range of 2-into-1 to up to 20-into-1 to be determined by the Board. On June 30, 2021, the Company effectuated the Reverse Stock Split. All shares of Series F Preferred Stock have been converted into shares of common stock. The net proceeds to the Company from the April 2021 Private Placement were approximately $ 4,200 , after deducting placement agent fees and estimated offering expenses payable by the Company. The Company used approximately $ 3,200 of the net proceeds to redeem a portion of the Jackson Note, which had an outstanding principal amount of $ 19,154 immediately prior to such redemption. In addition, the Company used $ 1,000 of the net proceeds for working capital purposes. On July 20, 2021, the Company entered into a securities purchase agreement (the “July 2021 Purchase Agreement”) with certain institutional investors. Pursuant to the July 2021 Purchase Agreement, the Company agreed to sell in a registered direct offering, 2,199,132 0.00001 3.45 1,099,566 3.80 five years The net proceeds to the Company from the July 2021 Offerings were approximately $ 6,760 , after deducting placement agent fees and estimated offering expenses payable by the Company. The Company used $ 5,000 of the net proceeds to redeem a portion of the Jackson Note, which had an outstanding principal amount of approximately $ 21,700 immediately prior to such redemption. In addition, the Company used approximately $ 1,700 of the net proceeds for working capital purposes. On August 5, 2021, the Company entered into a securities purchase agreement (the “First August 2021 Purchase Agreement”) with certain institutional investors. Pursuant to the First August 2021 Purchase Agreement, the Company agreed to sell in a registered direct offering, 1,383,162 shares of the Company’s common stock, to the purchasers at an offering price of $ 2.6425 per share and associated warrant (the “First August 2021 Registered Direct Offering”). Pursuant to the First August 2021 Purchase Agreement, in a concurrent private placement (together with the First August 2021 Registered Direct Offering, the “First August 2021 Offerings”), the Company also sold to the purchasers unregistered warrants to purchase up to an aggregate of 691,581 shares of common stock, representing 50% of the shares of common stock that were issued and sold in the First August 2021 Registered Direct Offering (the “First August 2021 Warrants”). The First August 2021 Warrants are exercisable at an exercise price of $ 2.58 per share, were exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance. On August 22, 2021, the Company entered into a securities purchase agreement (the “Second August 2021 Purchase Agreement”) with certain institutional investors. Pursuant to the Second August 2021 Purchase Agreement, the Company agreed to sell in a registered direct offering, 1,360,478 shares of the Company’s common stock, to the purchasers at an offering price of $ 2.10 per share and associated warrant (the “Second August 2021 Registered Direct Offering”). Pursuant to the Second August 2021 Purchase Agreement, in a concurrent private placement (together with the Second August 2021 Registered Direct Offering, the “Second August 2021 Offerings”, and the Second August 2021 Offerings together with the First August 2021 Offerings, the “August 2021 Offerings”), the Company also sold to the purchasers unregistered warrants to purchase up to an aggregate of 680,239 shares of common stock, representing 50% of the shares of common stock that were issued and sold in the Second August 2021 Registered Direct Offering (the “Second August 2021 Warrants”). The Second August 2021 Warrants are exercisable at an exercise price of $ 2.04 per share, were exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance. The net proceeds to the Company from the August 2021 Offerings were approximately $ 5,683 , after deducting placement agent fees and estimated offering expenses payable by the Company. The Company used a portion of the net proceeds from the First August 2021 Offerings together with other cash on hand to redeem $ 3,281 16,730 |
Going concern | Going concern The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company’s debt obligations and certain unsecured payments associated with historical acquisitions are due in the next 12 months, and the Company’s debt obligations with Jackson and MidCap may become due on demand due to certain covenant violations discussed above, which are in excess of cash on hand. Historically, the Company has funded such payments either through cash flow from operations or the raising of capital through additional debt or equity. If the Company is unable to obtain additional capital, such payments may not be made on time. The Novel Coronavirus Disease 2019 (“COVID-19”), is impacting worldwide economic activity, and activity in the United States and the United Kingdom where our operations are based. The nature of work of the contractors we support mostly are on the site of our clients. As a result, we are subject to the plans and approaches of our clients to work during this period. This includes whether they support remote working when they have decided to close their facilities. To the extent that our clients have decided to or are required to close their facilities or not permit remote work when they decide to close facilities, we would no longer generate revenue and profit from that client. Developments such as social distancing and shelter-in-place directives have impacted the Company’s ability to deploy its staffing workforce effectively thereby impacting contracts with customers in the Company’s Commercial Staffing and Professional Staffing business streams where we had declines in revenues during Fiscal 2020. The economic downturn has resulted in a strong recovery in permanent placement business (or direct hire) over temporary contracting. As the anticipated return to work following the end of the stimulus check program has been slower than expected, the Company has concentrated on meeting this direct hire need, principally in the Professional Staffing Business Streams. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) The Company’s negative working capital and liquidity position combined with the uncertainty generated by the economic reaction to the COVID-19 pandemic raise substantial doubt about the Company’s ability to continue as a going concern. |
Divesture of Business | Divesture of Business On September 24, 2020, the Company and Staffing 360 Georgia, LLC d/b/a first first first first In addition, the Buyer agreed to assume certain liabilities related to the Assets. The purchase price in connection with the first 3,300 1,220 2,080 first 2,080 The Asset Purchase Agreement contains non-competition and non-solicitation provisions customary for agreements of this type. In addition, under the terms of the Asset Purchase Agreement, the Company has agreed to indemnify the Buyer against certain liabilities, subject to certain conditions and limitations as set forth in the Asset Purchase Agreement. In connection with execution of the Asset Purchase Agreement, the Company and certain of its subsidiaries entered into a Consent Agreement (the “Consent”) with Jackson, a noteholder under our Amended and Restated Note Purchase Agreement, dated September 15, 2017 (the “Existing Note Purchase Agreement”). Under the terms of the Consent and the Certificate of Designation of the Company’s Series E Convertible Preferred Stock (the “Series E Preferred Stock”), in consideration for Jackson’s consent to the first 1,300 shares of Series E Convertible Preferred Stock for $ 1,300 and on July 22, 2021, after conversion of the Series G Preferred Stock to the New Note (as defined herein), the Company redeemed $ 2,080 of the Jackson Note with the Escrow Funds. To induce the Buyer to enter into the Asset Purchase Agreement, the Company also entered into a Transition Services Agreement with the Buyer, pursuant to which each party agreed to provide certain transition services such as payrolling through to year end 2020 to minimize any disruption to the businesses of the Seller and the Buyer arising from the first |
COVID-19 | COVID-19 The full impact of the COVID-19 pandemic continues to evolve as of the date of this quarterly report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, industry, and workforce. Developments such as social distancing and shelter-in-place directives have impacted the Company’s ability to generate revenues. Given the daily evolution of the COVID-19 pandemic, including new information which may emerge concerning the severity of COVID-19 and the global responses to curb its spread and to treat its impact, the Company is not able to estimate the duration of the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity beyond fiscal year 2021, however the Company continues to take action to reduce the negative effects of the COVID-19 pandemic on its operations through various cost cutting initiatives including reductions to support personnel, temporary salary reductions, and elimination of other non-essential spend. Should the impact from the pandemic go on for an extended period of time, management has developed further plans to partially mitigate the impact of the pandemic. On March 27, 2020, the U.S. President signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. It also appropriated funds for the SBA Paycheck Protection Program (“PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. On May 12, 2020, Monroe Staffing Services, LLC (“Monroe”), an indirect subsidiary of the Company, entered into a note (the “May 12 Note”) with Newton Federal Bank (the “Bank”), pursuant to the PPP of the CARES Act administered by the SBA. The principal amount of the May 12 Note is $ 10,000 In accordance with the requirements of the CARES Act, the Company and Monroe (collectively, the “May 12 Note Borrowers”) used the proceeds from the May 12 Note in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on the May 12 Note at the rate of 1.00% STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) Prior to forgiveness under the PPP, the May 12 Note was to mature two years following the date of issuance of the May 12 Note and included a period for the first ten months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of the May 12 Note, the May 12 Note Borrowers would be required to make 14 monthly payments of principal and interest. The May 12 Note may be prepaid at any time prior to maturity. The May 12 Note provides for customary events of default, including, among others, those relating to breaches of obligations under the May 12 Note, including a failure to make payments, any bankruptcy or similar proceedings involving the May 12 Note Borrowers, and certain material effects on the May 12 Note Borrowers’ ability to repay the May 12 Note. The May 12 Note Borrowers did not provide any collateral or guarantees for the May 12 Note. On May 25, 2021, the Company was notified by its lender, Affinity Bank, that the May 12 Note, in the amount of $ 10,000 of principal and $ 105 in interest, was forgiven in its entirety by the SBA, which was recorded as Other Income as a PPP forgiveness gain. On May 20, 2020, Key Resources Inc. (“KRI”), Lighthouse Placement Services, LLC (“LH”) and Staffing 360 Georgia, LLC (“SG”), each a wholly owned direct or indirect subsidiary of the Company, entered into the following notes, each dated May 20, 2020, with the Bank, pursuant to the PPP of the CARES Act administered by the SBA. KRI entered into a note (the “KRI Note”) for the principal amount of approximately $ 5,443 1,890 2,063 9,395 In accordance with the requirements of the CARES Act, the Company, KRI, LH and SG (collectively, the “May 20 Note Borrowers”) used the proceeds from the May 20 Notes in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on each of the May 20 Notes at the rate of 1.00 Prior to any forgiveness under the PPP, each of the May 20 Notes was to mature two years following the date of issuance of the May 20 Notes and included a period for the first ten months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of each of the May 20 Notes, the May 20 Note Borrowers are required to make 14 monthly payments of principal and interest. The May 20 Notes may be prepaid at any time prior to maturity. The May 20 Notes provide for customary events of default, including, among others, those relating to breaches of obligations under the May 20 Notes, including a failure to make payments, any bankruptcy or similar proceedings involving the Borrowers, and certain material effects on the Borrowers’ ability to repay the May 20 Notes. The May 20 Note Borrowers did not provide any collateral or guarantees for the May 20 Notes. The application for these funds required the Company to certify in good faith that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The Company made this good faith assertion based upon the adverse impact the COVID-19 pandemic had on our business and the degree of uncertainty introduced to the capital markets. While the Company has made this assertion in good faith based upon all available guidance, management will continue to assess their continued qualification if and when updated guidance is released by the Treasury Department. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) On July 14, 2021, the Company was notified by its lender, Affinity Bank, that the May 20 Notes for the Company’s subsidiaries KRI, LH and SG, in the amounts of $ 5,443 , $ 1,890 and $ 2,063 , respectively, in principal and $ 63 , $ 22 and $ 24 , respectively, in interest, were forgiven in their entirety by the SBA, which was recorded as Other Income as a PPP forgiveness gain. Effective March 27, 2020, the Company is deferring Federal Insurance Contributions Act taxes under the CARES Act section 2302. Payment of these tax deferrals of $ 2,473 2,473 |
Goodwill | Goodwill Goodwill relates to amounts that arose in connection with various acquisitions and represents the difference between the purchase price and the fair value of the identifiable intangible and tangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but it is subject to periodic review for impairment. Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, a decline in the equity value of the business, a significant adverse change in certain agreements that would materially affect reported operating results, business climate or operational performance of the business and an adverse action or assessment by a regulator. In accordance with ASU No. 2011-08, Intangibles-Goodwill and Other (Topic 350) Testing Goodwill for Impairment, or ASU 2011-08, the Company is required to review goodwill by reporting unit for impairment at least annually or more often if there are indicators of impairment present. During the year ended January 2, 2021 the Company changed its annual measurement date from the first day of the fiscal fourth quarter to the last day of the fiscal year end. A reporting unit is either the equivalent of, or one level below, an operating segment. The Company early adopted the provisions in ASU 2017-04, which eliminates the second step of the goodwill impairment test. As a result, the Company’s goodwill impairment tests include only one step, which is a comparison of the carrying value of each reporting unit to its fair value, and any excess carrying value, up to the amount of goodwill allocated to that reporting unit, is impaired. The carrying value of each reporting unit is based on the assignment of the appropriate assets and liabilities to each reporting unit. Assets and liabilities were assigned to each reporting unit if the assets or liabilities are employed in the operations of the reporting unit and the asset and liability is considered in the determination of the reporting unit fair value. The Company recognized an impairment with respect to its first STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) No impairments to goodwill were recognized during the period ended October 2, 2021. In assessing potential impairment to goodwill, management has made assumptions regarding partial recovery from the COVID-19 pandemic. If the assumptions utilized by management are not achieved and declines to operations are greater than anticipated, while failing to achieve growth in future periods as a result of the prolonged impact of COVID-19 pandemic, an impairment to goodwill could be recorded and such amount could be material to the financial statements. A reduction in the projected long-term operating performance of the reporting units, market declines, changes in discount rates or other conditions could result in a material impairment in the future. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Payment terms vary by client and the services offered. The Company has two main forms of revenue – temporary contractor revenue and permanent placement revenue. Temporary contractor revenue is accounted for as a single performance obligation satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance on an hourly basis. The contracts stipulate weekly billing and the Company has elected the “as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as we have the right to payment in an amount that corresponds directly with the value of performance completed to date. Permanent placement revenue is recognized on the date the candidate’s full-time employment with the customer has commenced. The customer is invoiced on the start date, and the contract stipulates payment due under varying terms, typically 30 days. The contract with the customer stipulates a guarantee period whereby the customer may be refunded if the employee is terminated within a short period of time, however this has historically been infrequent, and immaterial upon occurrence. As such, the Company’s performance obligations are satisfied upon commencement of the employment, at which point control has transferred to the customer. Revenues in Q3 2021 was comprised of $ 46,168 1,333 47,177 1,463 143,274 of temporary contractor revenue and $ 3,708 of permanent placement revenue, compared with $ 145,150 and $ 5,543 in Q3 2020 YTD, respectively. Refer to Note 10 for further details on breakdown by segments. |
Reclassifications | Reclassifications We may make certain reclassifications to prior period amounts to conform with the current year’s presentation. These reclassifications did not have a material effect on our condensed consolidated statement of financial position, results of operations or cash flows. |
Income Taxes | Income Taxes The Company’s provision for income taxes is based upon an estimated annual tax rate for the year applied to federal, state and foreign income. On a quarterly basis, the annual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared with those forecasted at the beginning of the fiscal year and each interim period thereafter. The effective income tax rate was 1.48% , ( 4.28% ), 0.67% and ( 1.81% ) for the period ending Q3 2021, Q3 2020, Q3 2021 YTD and Q3 2020 YTD, respectively. The Company’s effective tax rate differs from the U.S. federal statutory rate of 21% , primarily due to changes in valuation allowances in the U.S., which eliminates the effective tax rate on current year losses, offset by current state taxes and changes to goodwill naked credit. The Company may have experienced an IRC Section 382 limitation during 2021, for which it is in process of conducting an analysis to determine the tax consequences of such a limitation. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) |
Foreign Currency | Foreign Currency The Company recorded a non-cash foreign currency remeasurement (loss) gain of $ (315) 422 (219) 348) |
Warrants | Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants the Company has privately placed were estimated using a Black Scholes model. Refer to Note 8 for further details. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and treasury stock method will be no longer available. ASU 2020-06 is applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company will adopt this standard for the fiscal year ending January 1, 2022. On December 31, 2019, the FASB issued ASC 2019-12 “Income Taxes: Simplifying the Accounting for Income Taxes” (Topic 740). The amendments in this update simplify the accounting for income taxes by removing certain exceptions. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for (1) public business entities for periods for which financial statements have not yet been issued and (2) all other entities for periods for which financial statements have not yet been made available for issuance. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). This standard requires an impairment model, known as the current expected credit loss model (the “CECL model”), that is based on expected losses rather than incurred losses. Under the new guidance, each reporting entity should estimate an allowance for expected credit losses, which is intended to result in more timely recognition of losses. This model replaces multiple existing impairment models in current U.S. GAAP, which generally requires a loss to be incurred before it is recognized. The new standard applies to trade receivables arising from revenue transactions such as contract assets and accounts receivable. Under ASC 606, revenue is recognized when, among other criteria, it is probable that an entity will collect the consideration it is entitled to when goods or services are transferred to a customer. When trade receivables are recorded, they become subject to the CECL model and estimates of expected credit losses on trade receivables over their contractual life will be required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. This guidance is effective for smaller reporting companies for annual periods beginning after December 15, 2022, including the interim periods in the year. Early adoption is permitted. The Company will adopt the guidance when it becomes effective. |
INCOME (LOSS) PER COMMON SHARE
INCOME (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED | The following table sets forth the components used in the computation of basic and diluted income per share: SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED Q3 2021 Q3 2020 Q3 2021 YTD Q3 2020 YTD Numerator: Net Income (Loss) $ 8,713 $ (2,641 ) $ 14,873 $ (13,401 ) Less: Dividends paid to Series A preferred shareholders — (31 ) — (93 ) Less: Dividends paid to Series E, E-1, G, G-1 preferred shareholders (83 ) (761 ) (795 ) (2,686 ) Less: Deemed dividend — — (1,798 ) — Less: Net income allocated to participating equity (1,077) — (1,763) — Net income (loss) available to common shareholders for basic earnings per share 7,553 (3,433 ) 10,517 (16,180 ) Effect of dilutive securities: Add: Dividends paid to Series E, E-1, G, G-1 preferred shareholders 83 795 Net income (loss) available to commons and preferred shareholders for diluted earnings per share $ 7,636 $ 11,312 Denominator: Weighted average basic common shares outstanding 10,790,503 1,462,947 7,377,285 1,461,197 Weighted average additional common shares outstanding if preferred shares converted to common shares (if dilutive) 254,342 — 1,037,749 — Total weighted average common shares outstanding if preferred shares converted to common shares 11,044,845 1,462,947 8,415,034 1,461,197 Effect of dilutive securities: — — Restricted shares 34,259 34,259 Weighted average diluted shares outstanding 11,079,104 8,449,293 Income per common share: Basic $ 0.70 $ (2.34 ) $ 1.43 $ (11.10 ) Diluted $ 0.69 $ 1.34 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL | The following table provides a roll forward of goodwill: SCHEDULE OF GOODWILL October 2, 2021 January 2, 2021 Beginning balance, net $ 27,045 $ 31,049 Accumulated impairment losses - (2,969 ) Disposition of business - (1,577 ) Currency translation (102 ) 542 Ending balance, net $ 26,943 $ 27,045 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT | SCHEDULE OF DEBT October 2, 2021 January 3, 2021 Jackson Investment Group - related party $ 13,449 $ 33,880 PPP Loans - 19,395 HSBC Term Loan 1,143 2,094 Total Debt, Gross 14,592 55,369 Less: Debt Discount and Deferred Financing Costs (235 ) (559 ) Total Debt, Net 14,357 54,810 Less: Non Current Portion (433 ) (39,943 ) Total Current Debt, Net $ 13,924 $ 14,867 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Leases | |
SCHEDULE OF LEASE, COST | Quantitative information regarding the Company’s leases for the period ended October 2, 2021 is as follows: SCHEDULE OF LEASE, COST Lease Cost Classification Q3 2021 YTD Operating lease cost SG&A Expenses 1,051 |
SCHEDULE OF OPERATING LEASE LIABILITY MATURITY | SCHEDULE OF OPERATING LEASE LIABILITY MATURITY Other information October 2, 2021 Weighted average remaining lease term (years) 4.0 Weighted average discount rate 6.7 % Future Lease Payments 2021 $ 361 2022 1,010 2023 1,134 2024 935 2025 839 Thereafter 2,966 Total $ 7,245 Less: Imputed Interest 1,415 Operating lease, liability 5,830 Leases - Current 1,129 Leases - Non Current 4,701 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Equity [Abstract] | |
SCHEDULE OF STOCKHOLDERS EQUITY | The Company issued the following shares of common stock during the nine-month period ended October 2, 2021: SCHEDULE OF STOCKHOLDERS EQUITY Shares issued to/for: Number of Common Shares Issued Fair Value of Fair Value at Issuance Equity Raise 8,585,319 $ 30,315 $ 2.10 $ 5.40 Preferred Series F Conversion 1,304,901 4,107 3.15 3.15 Consultants 1,667 3 1.84 1.84 Preferred Series A Conversion 4,504 - - - Employees 50,835 275 5.40 5.40 Board and Committee members 936 5 5.16 5.16 Long-term incentive plan 25,835 133 5.16 5.16 9,973,997 $ 34,838 The Company issued the following shares of common stock during the nine-month period ended September 26, 2020: Shares issued to/for: Number of Common Shares Issued Fair Value of Fair Value at Issuance Jackson Investment Group 83,334 $ 324 $ 2.16 $ 5.52 Preferred Series A Conversion 2,703 - - - Consultants 2,500 18 7.32 7.32 Board and Committee members 2,800 11 3.36 5.10 91,337 $ 353 |
SUMMARY OF RELATIONSHIP BETWEEN PERFORMANCE AND THE VESTING RATE | SUMMARY OF RELATIONSHIP BETWEEN PERFORMANCE AND THE VESTING RATE Average 2019 Price Vesting Rate <$ 48 0 >$ 48 Pro-rated >=$ 72 Full Vesting On January 8, 2021, the Company issued 25,834 0 71 4 213 2020 Omnibus Incentive Plan On June 30, 2020, the Board approved the 2020 Omnibus Incentive Plan (the “2020 Plan”) pursuant to which we may grant equity incentive awards to key employees, key contractors, and non-employee directors of the Company. The 2020 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly or in combination, and that may be paid in cash, shares of our common stock, or a combination of cash and common stock. A total of 125,000 shares of common stock are reserved for grant under the 2020 Plan, plus any awards reserved under the Company’s prior equity incentive plans, subject to adjustment in certain circumstances to prevent dilution or enlargement. On September 29, 2020, our stockholders approved the 2020 Plan. As of October 2, 2021, we had issued 8,719 116,281 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT | The Company generated revenue and gross profit by segment as follows: SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT Q3 2021 Q3 2020 Q3 2021 YTD Q3 2020 YTD Commercial Staffing - US $ 29,601 $ 28,708 $ 88,240 $ 79,992 Professional Staffing - US 4,536 5,188 12,215 19,778 Professional Staffing - UK 13,364 14,744 46,527 50,923 Total Revenue $ 47,501 $ 48,640 $ 146,982 $ 150,693 Commercial Staffing - US $ 5,195 $ 4,642 $ 15,422 $ 12,552 Professional Staffing - US 1,200 1,664 3,146 6,598 Professional Staffing - UK 3,229 2,017 8,090 7,375 Total Gross Profit $ 9,624 $ 8,323 $ 26,658 $ 26,525 Selling, general and administrative expenses $ (8,463 ) $ (9,391 ) $ (25,811 ) $ (28,609 ) Depreciation and amortization (688 ) (768 ) (2,122 ) (2,312 ) Impairment of goodwill — — - (2,969 ) Interest expense and amortization of debt discount and deferred financing costs (1,006 ) (1,746 ) (3,432 ) (6,277 ) Re-measurement (loss) gain on intercompany note (315 ) 442 (219 ) (348 ) Gain on business sale — 220 — 220 PPP forgiveness gain 9,504 — 19,609 — Other income, net 188 161 292 122 Income (Loss) Before (Provision for) Benefit From Income Tax $ 8,844 $ (2,759 ) $ 14,975 $ (13,648 ) STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share and stated value per share) (UNAUDITED) The following table disaggregates revenues by segments: Q3 2021 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 147 $ 328 $ 858 $ 1,333 Temporary Revenue 29,454 4,208 12,506 46,168 Total $ 29,601 $ 4,536 $ 13,364 $ 47,501 Q3 2020 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 171 $ 600 $ 692 $ 1,463 Temporary Revenue 28,537 4,588 14,052 47,177 Total $ 28,708 $ 5,188 $ 14,744 $ 48,640 Q3 2021 YTD Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 290 $ 851 $ 2,567 $ 3,708 Temporary Revenue 87,950 11,364 43,960 143,274 Total $ 88,240 $ 12,215 $ 46,527 $ 146,982 Q3 2020 YTD Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 281 $ 2,676 $ 2,586 $ 5,543 Temporary Revenue 79,711 17,102 48,337 145,150 Total $ 79,992 $ 19,778 $ 50,923 $ 150,693 As of October 2, 2021 and January 2, 2021, the Company has assets in the U.S. and the U.K. as follows: October 2, 2021 January 2, 2021 2021 United States $ 71,438 $ 74,371 United Kingdom 7,646 12,514 Total Assets $ 79,084 $ 86,884 |
OTHER RELATED PARTY TRANSACTI_2
OTHER RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF RELATED PARTY TRANSACTIONS | SCHEDULE OF RELATED PARTY TRANSACTIONS Q3 2021 YTD Q3 2020 YTD Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 63 234 $ 1 $ 2 $ 56 700 $ 3 $ 10 Jeff Grout 63 234 1 2 56 700 3 10 Nick Florio 63 234 1 2 56 700 3 10 Alicia Barker - 234 1 2 - 700 3 4 Vincent Cebula 17 - - - - - - - $ 206 $ 936 $ 4 $ 8 $ 168 $ 2,800 $ 12 $ 34 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
SCHEDULE OF CASH FLOW, SUPPLEMENTAL DISCLOSURES | SCHEDULE OF CASH FLOW, SUPPLEMENTAL DISCLOSURES Q3 2021 YTD Q3 2020 YTD Cash paid for: Interest $ 3,507 $ 6,417 Income taxes 396 — Non-Cash Investing and Financing Activities: Deferred purchase price of UK factoring facility $ 5,234 $ 6,017 Shares issued to Jackson Investment Group — 324 Dividends accrued to related parties 795 596 Deemed Dividend 1,798 — Acquisition of Right of Use Assets 2,735 — Conversion of Series E Preferred Stock – Related Party 6,172 — Conversion of Series E-1 Preferred Stock – Related Party 1,493 — Conversion of Series G Preferred Stock – Related Party to debt 6,172 — Conversion of Series G-1 Preferred Stock – Related Party to debt 1,561 — |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Oct. 02, 2021 | |
Accounting Policies [Abstract] | ||
Stockholders' Equity, Reverse Stock Split | one-for-six reverse stock split | one-for-six reverse |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Aug. 22, 2021 | Aug. 05, 2021 | Jul. 22, 2021 | Jul. 20, 2021 | Jul. 14, 2021 | May 25, 2021 | Apr. 21, 2021 | Feb. 12, 2021 | Feb. 09, 2021 | Feb. 05, 2021 | Sep. 28, 2020 | Sep. 24, 2020 | Mar. 27, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Sep. 26, 2020 | Jun. 30, 2021 | Jun. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jul. 21, 2021 | Jan. 02, 2021 | May 20, 2020 | May 12, 2020 |
Retained Earnings (Accumulated Deficit) | $ 77,306,000 | $ 77,306,000 | $ 92,179,000 | |||||||||||||||||||||
Working capital deficit | 20,251,000 | 20,251,000 | ||||||||||||||||||||||
Debt, Current | 14,357,000 | 14,357,000 | ||||||||||||||||||||||
Cash | $ 2,231,000 | $ 2,231,000 | $ 8,256,000 | |||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 9,973,997 | 91,337 | ||||||||||||||||||||||
Proceeds from Issuance of Common Stock | $ 33,769,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | $ 10,000,000 | |||||||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | one-for-six reverse stock split | one-for-six reverse | ||||||||||||||||||||||
Proceeds from Issuance of Debt | 1,220,000 | |||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 47,501,000 | $ 48,640,000 | $ 146,982,000 | 150,693,000 | ||||||||||||||||||||
Effective Income Tax Rate Reconciliation, Percent | 1.48% | 4.28% | 1.81% | 0.67% | ||||||||||||||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |||||||||||||||||||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | $ (315,000) | 422,000 | $ (219,000) | 348,000 | ||||||||||||||||||||
Second Amended and Restated 12% Senior Secured Note [Member] | ||||||||||||||||||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | $ 2,080,000 | |||||||||||||||||||||||
Temporary Contractor Revenue [Member] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 46,168,000 | 47,177,000 | 143,274,000 | 145,150,000 | ||||||||||||||||||||
Permanent Placement Revenue [Member] | ||||||||||||||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 1,333,000 | $ 1,463,000 | $ 3,708,000 | $ 5,543,000 | ||||||||||||||||||||
Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Stock Redeemed or Called During Period, Shares | 1,300 | |||||||||||||||||||||||
Stock Redeemed or Called During Period, Value | $ 1,300 | |||||||||||||||||||||||
Series E Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 13,556,000 | |||||||||||||||||||||||
Stock Redeemed or Called During Period, Shares | 4,518 | |||||||||||||||||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | ||||||||||||||||||||||
Jackson Note [Member] | Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Preferred Stock, Redemption Terms | the Company received the Limited Consent from Jackson, the sole holder of the Company’s outstanding shares of Series E Convertible Preferred Stock, to use approximately (i) 75% of the net proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which had an outstanding principal amount of $32,710 as of February 9, 2021, and (ii) 25% of the net proceeds from the February 2021 Offering to redeem a portion of the Company’s Series E Convertible Preferred Stock. Pursuant to the Limited Consent, upon closing of the February 2021 Offering, the Company redeemed a portion of the Jackson Note with an outstanding principal amount of $13,556 and redeemed 4,518 shares of the Series E Convertible Preferred Stock. | |||||||||||||||||||||||
First PRO Recruitment, LLC [Member] | ||||||||||||||||||||||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | $ 3,300,000 | |||||||||||||||||||||||
Business Combination, Consideration Transferred | 1,220,000 | |||||||||||||||||||||||
Key Resources, Inc [Member] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 5,443,000 | |||||||||||||||||||||||
Lighthouse Placement Services, LLC [Member] | ||||||||||||||||||||||||
Debt instrument, face amount | 1,890,000 | |||||||||||||||||||||||
Staffing 360 Georgia, LLC [Member] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 2,063,000 | |||||||||||||||||||||||
Public Offering [Member] | ||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 3,642,547 | |||||||||||||||||||||||
Proceeds from Issuance of Common Stock | $ 18,100,000 | $ 18,100,000 | ||||||||||||||||||||||
[custom:PlacementAgentFeesAndEstimatedOfferingExpenses] | 1,596,000 | |||||||||||||||||||||||
Professional Fees | $ 227,000 | |||||||||||||||||||||||
Preferred Stock, Participation Rights | On February 5, 2021, the Company received a Limited Consent and Waiver from Jackson (the “Limited Consent”), the sole holder of the Company’s outstanding shares of Series E Convertible Preferred Stock, to use approximately (i) 75% of the net proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which had an outstanding principal amount of $32,710 as of February 9, 2021, and (ii) 25% of the net proceeds from the February 2021 Offering to redeem a portion of the Company’s Series E Preferred Stock. | |||||||||||||||||||||||
Shares Issued, Price Per Share | $ 5.40 | |||||||||||||||||||||||
Public Offering [Member] | Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Preferred Stock, Redemption Terms | Following the redemption of the Series E Convertible Preferred Stock, the Company has 6,172 shares of Series E Convertible Preferred Stock outstanding with an aggregate stated value of $6,172 | |||||||||||||||||||||||
Public Offering [Member] | Series E Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Preferred Stock, Shares Outstanding | 6,172 | |||||||||||||||||||||||
Preferred Stock, Value, Issued | $ 6,172,000 | |||||||||||||||||||||||
Public Offering [Member] | Jackson Note [Member] | Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Preferred Stock, Participation Rights | Prior to the February 2021 Offering, the Company entered the Limited Consent with Jackson, whereby, among other things, Jackson agreed that we may use 75% of the proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which at the time had an outstanding principal amount of $32,710, and 25% of the net proceeds from the Offering to redeem a portion of our Series E Convertible Preferred Stock, notwithstanding certain provisions of the Series E Certificate of Designation that would have required us to use all the proceeds from the Offering to redeem the Series E Convertible Preferred Stock. | |||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | $ 32,710,000 | |||||||||||||||||||||||
Preferred Stock, Redemption Terms | shares of the Series E Convertible Preferred Stock | |||||||||||||||||||||||
Februrary 2021 Offering [Member] | Jackson Note [Member] | Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Preferred Stock, Redemption Terms | Pursuant to the Limited Consent, upon closing of the February 2021 Offering, the Company redeemed a portion of the Jackson Note with an outstanding principal amount of $13,556 and redeemed 4,518 shares of the Series E Convertible Preferred Stock (the “Series E Convertible Preferred Stock”). | |||||||||||||||||||||||
August Two Thousand And Twenty One Registered Direct Offering [Member] | Investors [Member] | ||||||||||||||||||||||||
Share Price | $ 2.10 | $ 2.6425 | ||||||||||||||||||||||
August Two Thousand And Twenty One Warrants [Member] | ||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 680,239 | 691,581 | ||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | ||||||||||||||||||||||
August Two Thousand And Twenty One Offerings [Member] | ||||||||||||||||||||||||
Proceeds from Issuance Initial Public Offering | $ 5,683,000 | |||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 4,942,772 | 8,585,319 | ||||||||||||||||||||||
Common Stock [Member] | Public Offering [Member] | ||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 3,475,200 | |||||||||||||||||||||||
Pre-funded Warrants [Member] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | |||||||||||||||||||||||
Pre-funded Warrants [Member] | Public Offering [Member] | ||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 167,347 | |||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 167,347 | |||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.0001 | |||||||||||||||||||||||
Shares Issued, Price Per Share | $ 5.40 | |||||||||||||||||||||||
August Two Thousand And Twenty One Warrants [Member] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.04 | $ 2.58 | ||||||||||||||||||||||
Jackson Note [Member] | Public Offering [Member] | Series E Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 19,154,000 | |||||||||||||||||||||||
12% Senior Secured Note [Member] | ||||||||||||||||||||||||
Percentage of interest accrued | 12.00% | |||||||||||||||||||||||
Debt instrument, face amount | $ 7,733 | |||||||||||||||||||||||
Proceeds from Issuance of Private Placement | $ 3,217,000 | $ 6,760,000 | ||||||||||||||||||||||
Debt Instrument, Periodic Payment | 16,730,000 | 21,700,000 | ||||||||||||||||||||||
Proceeds from Bank Debt | $ 3,281,000 | 5,000,000 | ||||||||||||||||||||||
Paycheck Protection Program Loan Cares Act [Member] | First PRO Recruitment, LLC [Member] | ||||||||||||||||||||||||
Separate Account, Liability | 2,080,000 | |||||||||||||||||||||||
Restricted cash | $ 2,080,000 | |||||||||||||||||||||||
May 12 Note [Member] | Monroe Staffing Services, LLC [Member] | ||||||||||||||||||||||||
Percentage of interest accrued | 1.00% | |||||||||||||||||||||||
Debt instrument, face amount | $ 10,000,000 | |||||||||||||||||||||||
May 12 Note [Member] | Affinity Bank [Member] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 10,000,000 | |||||||||||||||||||||||
Interest Expense, Debt | $ 105,000 | |||||||||||||||||||||||
May Twenty Note [Member] | ||||||||||||||||||||||||
Percentage of interest accrued | 1.00% | |||||||||||||||||||||||
Debt instrument, face amount | $ 9,395,000 | |||||||||||||||||||||||
Paycheck Protection Program Loan Cares Act Deferral One [Member] | ||||||||||||||||||||||||
Payment of tax deferrals | $ 2,473,000 | |||||||||||||||||||||||
Paycheck Protection Program Loan Cares Act Deferral Two [Member] | ||||||||||||||||||||||||
Payment of tax deferrals | $ 2,473,000 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | Senior Notes [Member] | ||||||||||||||||||||||||
Percentage of interest accrued | 12.00% | |||||||||||||||||||||||
Debt Conversion, Original Debt, Due Date of Debt | Sep. 30, 2022 | |||||||||||||||||||||||
April Two Thousand Twenty One Purchase Agreement [Member] | ||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 4,698 | |||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,304,901 | |||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.60 | |||||||||||||||||||||||
Shares Issued, Price Per Share | $ 1,000 | |||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 5 years | |||||||||||||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 1,304,901 | |||||||||||||||||||||||
Preferred Stock, Convertible, Conversion Price | $ 3.60 | |||||||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | effect a reverse split within a range of 2-into-1 to up to 20-into-1 | |||||||||||||||||||||||
Proceeds from Issuance of Private Placement | $ 4,200,000 | |||||||||||||||||||||||
Proceeds from Issuance of Debt | 3,200,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment | 19,154,000 | |||||||||||||||||||||||
Proceeds from working capital | 1,000,000 | |||||||||||||||||||||||
July 2021 Securities Purchase Agreement [Member] | Second Amended and Restated 12% Senior Secured Note [Member] | ||||||||||||||||||||||||
Proceeds from Issuance of Private Placement | 6,760,000 | |||||||||||||||||||||||
Proceeds from Issuance of Debt | 5,000,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment | 21,700,000 | |||||||||||||||||||||||
Proceeds from working capital | $ 1,700,000 | |||||||||||||||||||||||
July 2021 Securities Purchase Agreement [Member] | Certain Institutional and Accredited Investors [Member] | ||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,099,566 | |||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.80 | |||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 5 years | |||||||||||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 2,199,132 | |||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.00001 | |||||||||||||||||||||||
April 2021 Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Proceeds from Issuance of Private Placement | 4,200,000 | |||||||||||||||||||||||
April 2021 Securities Purchase Agreement [Member] | Second Amended and Restated 12% Senior Secured Note [Member] | ||||||||||||||||||||||||
Proceeds from Issuance of Debt | 3,200,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment | 19,154,000 | |||||||||||||||||||||||
Proceeds from working capital | $ 1,000,000 | |||||||||||||||||||||||
April 2021 Securities Purchase Agreement [Member] | Certain Institutional and Accredited Investors [Member] | ||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,304,901 | |||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.60 | |||||||||||||||||||||||
Sale of Stock, Price Per Share | $ 3.45 | |||||||||||||||||||||||
August Two Thousand And Twenty One Purchase Agreement [Member] | Investors [Member] | ||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 1,360,478 | 1,383,162 | ||||||||||||||||||||||
Key Resources, Inc [Member] | May 12 Note [Member] | Affinity Bank [Member] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 5,443,000 | |||||||||||||||||||||||
Interest Expense, Debt | 63,000 | |||||||||||||||||||||||
Lighthouse Placement Services, LLC [Member] | May 12 Note [Member] | Affinity Bank [Member] | ||||||||||||||||||||||||
Debt instrument, face amount | 1,890,000 | |||||||||||||||||||||||
Interest Expense, Debt | 22,000 | |||||||||||||||||||||||
Staffing 360 Georgia LLC [Member] | May 12 Note [Member] | Affinity Bank [Member] | ||||||||||||||||||||||||
Debt instrument, face amount | 2,063,000 | |||||||||||||||||||||||
Interest Expense, Debt | $ 24,000 |
SCHEDULE OF EARNINGS PER SHARE,
SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Oct. 02, 2021 | Jul. 03, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||
Net Income (Loss) | $ 8,713 | $ 8,713 | $ (2,641) | $ (2,641) | $ 14,873 | $ (13,401) | $ 14,873 | $ (13,401) |
Less: Dividends paid to Series E, E-1, G, G-1 preferred shareholders | (83) | (761) | (795) | (2,686) | ||||
Less: Deemed dividend | (1,798) | $ (1,798) | ||||||
Less: Net income allocated to participating equity | 1,077 | 1,763 | ||||||
Net income (loss) available to common shareholders for basic earnings per share | 7,553 | $ (3,433) | 10,517 | $ (16,180) | ||||
Add: Dividends paid to Series E, E-1, G, G-1 preferred shareholders | 83 | 795 | ||||||
Net income (loss) available to commons and preferred shareholders for diluted earnings per share | $ 7,636 | $ 11,312 | ||||||
Weighted average basic common shares outstanding | 10,790,503 | 10,790,503 | 1,462,947 | 1,462,947 | 7,377,285 | 1,461,197 | 7,377,285 | 1,461,197 |
Weighted average additional common shares outstanding if preferred shares converted to common shares (if dilutive) | 254,342 | 1,037,749 | ||||||
Total weighted average common shares outstanding if preferred shares converted to common shares | 11,044,845 | 1,462,947 | 8,415,034 | 1,461,197 | ||||
Restricted shares | 34,259 | 34,259 | ||||||
Weighted average diluted shares outstanding | 11,079,104 | 8,449,293 | ||||||
Basic | $ 0.70 | $ 0.70 | $ (2.34) | $ (2.34) | $ 1.43 | $ (11.10) | $ 1.43 | $ (11.10) |
Diluted | $ 0.69 | $ 0.69 | $ (2.34) | $ 1.34 | $ 1.34 | $ (11.10) | ||
Series A Preferred Stock [Member] | ||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||||||
Less: Dividends paid to Series A preferred shareholders | $ (31) | $ (31) | $ (93) | $ (93) |
INCOME (LOSS) PER COMMON SHAR_2
INCOME (LOSS) PER COMMON SHARE (Details Narrative) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Oct. 02, 2021 | |
Earnings Per Share [Abstract] | ||
Reverse stock split, description | one-for-six reverse stock split | one-for-six reverse |
ACCOUNTS RECEIVABLE BASED FIN_2
ACCOUNTS RECEIVABLE BASED FINANCING FACILITIES (Details Narrative) £ in Thousands, $ in Thousands | Jun. 28, 2018GBP (£) | Feb. 08, 2018GBP (£) | Sep. 15, 2017USD ($) | Jul. 31, 2019GBP (£) | Oct. 02, 2021USD ($) | Jan. 02, 2021USD ($) |
HSBC Invoice Finance (UK) Ltd [Member] | New Facility [Member] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | £ 11,500 | |||||
Borrowing fund, description | The terms of the arrangement provide for HSBC to fund 90% of the purchased accounts receivable upfront and, a secured borrowing line of 70% of unbilled receivables capped at £1,000 (within the overall aggregate total facility of £11,500.) | |||||
Percentage of cash received equal to eligible receivables | 90.00% | |||||
Unbilled receivables | £ 1,500 | |||||
Line of Credit Facility, Increase (Decrease), Net | £ 20,000 | £ 11,500 | £ 22,500 | |||
Line of Credit Facility, Commitment Fee Percentage | 1.80% | |||||
HSBC Invoice Finance (UK) Ltd [Member] | New Facility [Member] | GBP [Member] | ||||||
Unbilled receivables | £ 1,000 | |||||
Midcap Financial Trust [Member] | ||||||
Long-term Line of Credit | $ | $ 25,000 | $ 11,528 | $ 14,842 | |||
Additional lending facility | $ | $ 25,000 | |||||
Line of Credit Facility, Expiration Date | Apr. 8, 2019 |
SCHEDULE OF GOODWILL (Details)
SCHEDULE OF GOODWILL (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Beginning balance, net | $ 27,045 | $ 31,049 | $ 31,049 | ||
Accumulated impairment losses | $ (2,969) | (2,969) | |||
Disposition of business | (1,577) | ||||
Currency translation | (102) | 542 | |||
Ending balance, net | $ 26,943 | $ 26,943 | $ 27,045 |
GOODWILL (Details Narrative)
GOODWILL (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 | |
Goodwill [Line Items] | |||||
Impairment of goodwill | $ 2,969 | $ 2,969 | |||
FirstPro Reporting Unit [Member] | |||||
Goodwill [Line Items] | |||||
Impairment of goodwill | $ 2,969 |
SCHEDULE OF DEBT (Details)
SCHEDULE OF DEBT (Details) - USD ($) $ in Thousands | Oct. 02, 2021 | Jan. 02, 2021 |
Short-term Debt [Line Items] | ||
Total Debt, Gross | $ 14,592 | $ 55,369 |
Less: Debt Discount and Deferred Financing Costs | (235) | (559) |
Total Debt, Net | 14,357 | 54,810 |
Less: Non Current Portion | (433) | (39,943) |
Total Current Debt, Net | 13,924 | 14,867 |
Jackson Investment Group Related Party [Member] | ||
Short-term Debt [Line Items] | ||
Total Debt, Gross | 13,449 | 33,880 |
Paycheck Protection Program Loans [Member] | ||
Short-term Debt [Line Items] | ||
Total Debt, Gross | 19,395 | |
H S B C Term Loan [Member] | ||
Short-term Debt [Line Items] | ||
Total Debt, Gross | $ 1,143 | $ 2,094 |
DEBT (Details Narrative)
DEBT (Details Narrative) $ / shares in Units, £ in Thousands | Aug. 05, 2021USD ($) | Jul. 20, 2021USD ($)shares | Jul. 14, 2021USD ($) | May 25, 2021USD ($) | May 06, 2021shares | Apr. 21, 2021USD ($) | Feb. 05, 2021USD ($) | Jan. 04, 2021USD ($)shares | Oct. 31, 2020USD ($)$ / shares | Oct. 26, 2020USD ($)$ / sharesshares | May 15, 2020GBP (£) | Nov. 15, 2018USD ($)$ / sharesshares | Jul. 21, 2021USD ($)shares | Oct. 02, 2021USD ($)$ / shares | Jul. 03, 2021USD ($) | Jun. 27, 2020USD ($) | Jul. 03, 2021USD ($) | Jun. 27, 2020USD ($) | Oct. 02, 2021USD ($)$ / sharesshares | Sep. 26, 2020USD ($)shares | Jul. 22, 2021USD ($) | Jan. 02, 2021USD ($)$ / shares | May 20, 2020USD ($) | May 12, 2020USD ($) |
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Proceeds from Issuance of Debt | $ 1,220,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | 10,000,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | 105,000 | |||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 12,468,000 | $ 30,315,000 | ||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 9,973,997 | 91,337 | ||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||
Deemed dividend | $ 1,798,000 | $ 1,798,000 | ||||||||||||||||||||||
Deemed dividends | 389,000 | |||||||||||||||||||||||
H S B C Bank [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | £ | £ 1,000 | |||||||||||||||||||||||
Debt instrument term | three-year term loan | |||||||||||||||||||||||
Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ / shares | $ 1,000 | |||||||||||||||||||||||
Preferred Stock, Redemption Amount | $ 4,100,000 | $ 4,100,000 | $ 2,100,000 | |||||||||||||||||||||
Series G One Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 1,561,000 | |||||||||||||||||||||||
Conversion of Stock, Shares Issued | shares | 1,561,000 | |||||||||||||||||||||||
Series E One Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 6 | |||||||||||||||||||||||
Conversion price | $ / shares | $ 6 | $ 6 | ||||||||||||||||||||||
Beneficial conversion feature | $ 4,280,000 | |||||||||||||||||||||||
Impact to additional paid-in capital | $ 0 | $ 0 | ||||||||||||||||||||||
Series G Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | 6,172,000 | |||||||||||||||||||||||
Preferred Stock, Redemption Amount | $ 2,080,000 | |||||||||||||||||||||||
Conversion of Stock, Shares Issued | shares | 6,172,000 | |||||||||||||||||||||||
Series E Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 13,556,000 | |||||||||||||||||||||||
Jackson Note [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Class of Warrant or Right, Outstanding | shares | 150,918 | |||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Dividends, Common Stock, Stock | $ 10,000,000 | |||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Series E One Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, payment terms | The shares of Series E Convertible Preferred Stock were also convertible into shares of common stock after October 31, 2022 | On October 26, 2020, in connection with the entry into the Amended Note Purchase Agreement, the Company filed with the Secretary of State of the State of Delaware the second Certificate of Amendment (the “Amendment”) to the Series E Certificate of Designation. Under the amended terms, holders of Series E Preferred Stock were entitled to monthly cash dividends on Series E Preferred Stock at a per annum rate of 12%. At the Company’s option, up to 50% of the cash dividend on the Series E Convertible Preferred Stock could be paid in kind by adding such 50% portion to the outstanding liquidation value of the Series E Convertible Preferred Stock (the “PIK Dividend Payment”), commencing on October 26, 2020 and ending on October 25, 2020 | ||||||||||||||||||||||
Preferred Stock, Dividend Preference or Restrictions | If such average market price was less than $3.50, or was otherwise undeterminable because such shares were no longer publicly traded or the closing price was no longer reported by Nasdaq, then the average closing price for these purposes was to be deemed to be $ | |||||||||||||||||||||||
Preferred Stock, Liquidation Preference Per Share | $ / shares | $ 1,000 | |||||||||||||||||||||||
Deemed dividend | $ 410,000 | |||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Minimum [Member] | Series E One Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Conversion price | $ / shares | $ 10.68 | |||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Maximum [Member] | Series E One Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Conversion price | $ / shares | $ 9.96 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Proceeds from Debt, Net of Issuance Costs | $ 1,558,000 | |||||||||||||||||||||||
Stock Repurchased During Period, Value | 1,168,000 | |||||||||||||||||||||||
Debt Instrumen Principal Amount | 33,878,000 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Instrumen Principal Amount | $ 390,000 | |||||||||||||||||||||||
Stock Repurchased During Period, Shares | shares | 390 | |||||||||||||||||||||||
Preferred Stock Outstanding | shares | 10,690 | |||||||||||||||||||||||
Preferred Stock Par Stated Value | $ 10,690,000 | |||||||||||||||||||||||
April 2021 Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Proceeds from Issuance of Private Placement | $ 4,200,000 | |||||||||||||||||||||||
Debt Exchange Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.00001 | |||||||||||||||||||||||
Debt Exchange Agreement [Member] | Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 13,000,000 | |||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 13,000 | |||||||||||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 1,000 | |||||||||||||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | shares | 561 | |||||||||||||||||||||||
Conversion of Stock, Description | each share of Series E-1 Convertible Preferred Stock was initially convertible into 101 shares of the Company’s common stock | |||||||||||||||||||||||
Jackson Investment Group LLC Term Loan Note Two [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3 | $ 3 | ||||||||||||||||||||||
Jackson Investment Group LLC Term Loan Note Two [Member] | Amended and Restated Warrant Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | 21 | 21 | ||||||||||||||||||||||
Jackson Investment Group LLC Term Loan Note Two [Member] | Amended and Restated Warrant Agreement [Member] | Debt Exchange Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | 3 | $ 3 | ||||||||||||||||||||||
Debt instrument, payment terms | For the period of November 2020 through and including March 2021, each monthly interest amount due and payable was reduced by $166, and for the period commencing April 2021 through and including September 2021, each monthly interest amount due and payable shall be increased by $166. | |||||||||||||||||||||||
Prepayment Fees on Advances, Net | $ 3,029,000 | |||||||||||||||||||||||
Jackson Note [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Instrumen Principal Amount | $ 32,710,000 | |||||||||||||||||||||||
Second Amended and Restated 12% Senior Secured Note [Member] | April 2021 Securities Purchase Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Proceeds from Issuance of Debt | 3,200,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment | $ 19,154,000 | |||||||||||||||||||||||
12% Senior Secured Note [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 7,733 | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||||||||||
Proceeds from Issuance of Private Placement | $ 3,217,000 | $ 6,760,000 | ||||||||||||||||||||||
Debt Instrument, Periodic Payment | 16,730,000 | 21,700,000 | ||||||||||||||||||||||
Proceeds from Bank Debt | $ 3,281,000 | $ 5,000,000 | ||||||||||||||||||||||
Debt Instrument, Interest Rate During Period | 12.00% | |||||||||||||||||||||||
12% Senior Secured Note [Member] | Series G Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 6,172 | |||||||||||||||||||||||
Convertible Debt | $ 6,172 | |||||||||||||||||||||||
12% Senior Secured Note [Member] | Series G One Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 1,561 | |||||||||||||||||||||||
Convertible Debt | $ 1,561 | |||||||||||||||||||||||
12% Senior Secured Note [Member] | Note Purchase Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 30, 2022 | |||||||||||||||||||||||
Debt Instrument, Interest Rate During Period | 17.00% | |||||||||||||||||||||||
May 12 Note [Member] | Affinity Bank [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | $ 10,000,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | $ 105,000 | |||||||||||||||||||||||
May 12 Note [Member] | Monroe Staffing Services, LLC [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 10,000,000 | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||||||||||||||||||||
Debt instrument, maturity date, description | The May 12 Note matures two years following the date of issuance of the May 12 Note and included a period for the first ten months during which time required payments of interest and principal are deferred | |||||||||||||||||||||||
Debt instrument, frequency of periodic payment | 14 monthly | |||||||||||||||||||||||
May Twenty Note [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 9,395,000 | |||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||||||||||||||||||||
Debt instrument, maturity date, description | Each of the May 20 Notes matures two years following the date of issuance of the May 20 Notes and included a period for the first ten months during which time required payments of interest and principal were deferred | |||||||||||||||||||||||
Debt instrument, frequency of periodic payment | 14 monthly | |||||||||||||||||||||||
Jackson Investment Group L L C Term Loan Note Three [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | 3.50 | $ 3.50 | ||||||||||||||||||||||
Jackson Investment Group L L C Term Loan Note Three [Member] | Amended and Restated Warrant Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | 21 | 21 | ||||||||||||||||||||||
Jackson Investment Group L L C Term Loan Note Three [Member] | Amended and Restated Warrant Agreement [Member] | Debt Exchange Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 21 | $ 21 | ||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 83,334 | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Amended Note Purchase Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Amendment fee | $ 488,000 | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Exchange Agreement [Member] | Series G Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Preferred stock description | The Series G Preferred Stock carries monthly dividend rights of (a) cash dividends accruing (i) at an annual rate per share equal to 12% from the date of issuance (plus any accrued dividends with respect to the Series E Preferred Stock unpaid as of the date of the Exchange) and (ii) 17% after the occurrence of a default, and (b) a dividend payable in shares of Series G-1 Convertible Preferred Stock. The shares of Series G-1 Convertible Preferred Stock have all the same terms, preferences and characteristics as the Series G Preferred Stock (including, without limitation, the right to receive cash dividends), except Series G-1 Convertible Preferred Stock are mandatorily redeemable by the Company within thirty (30) days after written demand received from any holder at any time after the earlier of the occurrence of a Preferred Default or September 30, 2022, for a cash payment equal to the liquidation value plus any accrued and unpaid dividends thereon | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Exchange Agreement [Member] | Series G Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Preferred stock description | Each share of Series G Preferred Stock is initially convertible into 1,000 shares of common stock at any time from and after, (i) with respect to the Series G Preferred Stock, the earlier of October 31, 2022 or the occurrence of a default and, (ii) with respect to the Series G-l Convertible Preferred Stock, October 31, 2020. A holder of Series G Preferred Stock is not required to pay any additional consideration in exchange for conversion of the Series G Preferred Stock into the Company’s common stock | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Exchange Agreement [Member] | Series E Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 6,172 | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Exchange Agreement [Member] | Series E-1 Convertible Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 1,493 | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, payment terms | warrant expiration date of January 26, 2024 to January 26, 2026 | |||||||||||||||||||||||
Fair value adjustment of debt discount | $ 126,000 | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | Minimum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 9.96 | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | Maximum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 6 | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | Amended Note Purchase Agreement [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 35,700,000 | |||||||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 30, 2022 | |||||||||||||||||||||||
Amendment fee | $ 488,000 | |||||||||||||||||||||||
Debt instrument, payment terms | the Company is required to pay interest on the debt at a per annum rate of 12%. The interest is payable monthly in cash; provided that, the Company may elect to pay up to 50% of monthly interest in-kind (“PIK Interest”) by adding such PIK Interest to the outstanding principal balance of the Jackson Note. For any month that the Company elects to pay interest in-kind, the Company is required to pay Jackson a fee in shares of our common stock (“PIK Fee Shares”) in an amount equal to $25 divided by the average closing price, as reported by The Nasdaq Capital Market (“Nasdaq”), of such shares of common stock over the 5 trading days prior to the applicable monthly interest payment date. | |||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | Amended Note Purchase Agreement [Member] | Minimum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | 12.00% | ||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | Amended Note Purchase Agreement [Member] | Maximum [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 50.00% | 50.00% | ||||||||||||||||||||||
Jackson Note [Member] | Series E Preferred Stock [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Preferred Stock, Redemption Terms | the Company received the Limited Consent from Jackson, the sole holder of the Company’s outstanding shares of Series E Convertible Preferred Stock, to use approximately (i) 75% of the net proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which had an outstanding principal amount of $32,710 as of February 9, 2021, and (ii) 25% of the net proceeds from the February 2021 Offering to redeem a portion of the Company’s Series E Convertible Preferred Stock. Pursuant to the Limited Consent, upon closing of the February 2021 Offering, the Company redeemed a portion of the Jackson Note with an outstanding principal amount of $13,556 and redeemed 4,518 shares of the Series E Convertible Preferred Stock. | |||||||||||||||||||||||
Key Resources, Inc [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 5,443,000 | |||||||||||||||||||||||
Key Resources, Inc [Member] | May Twenty Note [Member] | Affinity Bank [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | $ 5,443,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | 63,000 | |||||||||||||||||||||||
Lighthouse Placement Services, LLC [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt instrument, face amount | $ 1,890,000 | |||||||||||||||||||||||
Lighthouse Placement Services, LLC [Member] | May Twenty Note [Member] | Affinity Bank [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | 1,890,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | 22,000 | |||||||||||||||||||||||
Staffing Three Hundred And Sixty Georgia L L C [Member] | May Twenty Note [Member] | Affinity Bank [Member] | ||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||
Debt Instrument, Periodic Payment, Principal | 2,063,000 | |||||||||||||||||||||||
Debt Instrument, Periodic Payment, Interest | $ 24,000 |
SCHEDULE OF LEASE, COST (Detail
SCHEDULE OF LEASE, COST (Details) $ in Thousands | 9 Months Ended |
Oct. 02, 2021USD ($) | |
Selling, General and Administrative Expenses [Member] | |
Operating lease cost | $ 1,051 |
SCHEDULE OF OPERATING LEASE LIA
SCHEDULE OF OPERATING LEASE LIABILITY MATURITY (Details) - USD ($) $ in Thousands | Oct. 02, 2021 | Jan. 02, 2021 |
Leases | ||
Operating Lease, Weighted Average Remaining Lease Term | 4 years | |
Weighted average discount rate | 6.70% | |
2021 | $ 361 | |
2022 | 1,010 | |
2023 | 1,134 | |
2024 | 935 | |
2025 | 839 | |
Thereafter | 2,966 | |
Total | 7,245 | |
Less: Imputed Interest | 1,415 | |
Operating lease, liability | 5,830 | |
Leases - Current | 1,129 | $ 1,211 |
Leases - Non Current | $ 4,701 | $ 2,226 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | Oct. 02, 2021 | Sep. 30, 2021 | Jan. 02, 2021 |
Operating Lease, Right-of-Use Asset | $ 5,889 | $ 3,433 | |
Operating Lease, Liability | 5,830 | ||
New Lease Agreement [Member] | |||
Operating Lease, Right-of-Use Asset | $ 2,735 | ||
Lessee, Operating Lease, Renewal Term | 8 years | ||
Accounting Standards Update 2018-11 [Member] | |||
Operating Lease, Right-of-Use Asset | 5,889 | 3,432 | |
Operating Lease, Liability | $ 5,830 | $ 3,437 |
SCHEDULE OF STOCKHOLDERS EQUITY
SCHEDULE OF STOCKHOLDERS EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 9,973,997 | 91,337 |
Fair Value of Shares Issued | $ 34,838 | $ 353 |
Jackson Investment Group, LLC [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 83,334 | |
Fair Value of Shares Issued | $ 324 | |
Long-term Incentive Plan [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 25,835 | |
Fair Value of Shares Issued | $ 133 | |
Consultants [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 1,667 | 2,500 |
Fair Value of Shares Issued | $ 3 | $ 18 |
Employees [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 50,835 | |
Fair Value of Shares Issued | $ 275 | |
Board and Committee Members [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 936 | 2,800 |
Fair Value of Shares Issued | $ 5 | $ 11 |
Minimum [Member] | Jackson Investment Group, LLC [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 2.16 | |
Minimum [Member] | Long-term Incentive Plan [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 5.16 | |
Minimum [Member] | Consultants [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 1.84 | 7.32 |
Minimum [Member] | Employees [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 5.40 | |
Minimum [Member] | Board and Committee Members [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 5.16 | 3.36 |
Maximum [Member] | Jackson Investment Group, LLC [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 5.52 | |
Maximum [Member] | Long-term Incentive Plan [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 5.16 | |
Maximum [Member] | Consultants [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 1.84 | 7.32 |
Maximum [Member] | Employees [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 5.40 | |
Maximum [Member] | Board and Committee Members [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 5.16 | $ 5.10 |
Equity Raise [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 8,585,319 | |
Fair Value of Shares Issued | $ 30,315 | |
Equity Raise [Member] | Minimum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 2.10 | |
Equity Raise [Member] | Maximum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 5.40 | |
Preferred Series F Conversion [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 1,304,901 | |
Fair Value of Shares Issued | $ 4,107 | |
Preferred Series F Conversion [Member] | Minimum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 3.15 | |
Preferred Series F Conversion [Member] | Maximum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 3.15 | |
Preferred Series A Conversion [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 4,504 | 2,703 |
Fair Value of Shares Issued | ||
Preferred Series A Conversion [Member] | Minimum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | ||
Preferred Series A Conversion [Member] | Maximum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) |
SUMMARY OF RELATIONSHIP BETWEEN
SUMMARY OF RELATIONSHIP BETWEEN PERFORMANCE AND THE VESTING RATE (Details) - 2019 Long Term Incentive Plan [Member] Pure in Thousands, $ / shares in Thousands | 9 Months Ended |
Oct. 02, 2021$ / shares | |
Share-based Payment Arrangement, Tranche One [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Price | $ 48 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.00% |
Share-based Payment Arrangement, Tranche Two [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Price | $ 48 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | Pro-rated |
Share-based Payment Arrangement, Tranche Three [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share Price | $ 72 |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | Full Vesting |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | Aug. 22, 2021 | Aug. 09, 2021 | Aug. 05, 2021 | Jul. 22, 2021 | Jul. 21, 2021 | Jul. 20, 2021 | May 06, 2021 | Apr. 21, 2021 | Feb. 12, 2021 | Feb. 09, 2021 | Feb. 05, 2021 | Jan. 08, 2021 | Jan. 04, 2021 | Dec. 21, 2020 | Aug. 05, 2020 | Jan. 21, 2020 | Jun. 15, 2017 | Jan. 31, 2019 | Oct. 02, 2021 | Jul. 03, 2021 | Jun. 27, 2020 | Jun. 26, 2020 | Jul. 03, 2021 | Jun. 30, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Jun. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 | May 29, 2015 |
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 9,973,997 | 91,337 | |||||||||||||||||||||||||||||
Proceeds from Issuance of Common Stock | $ 33,769,000 | ||||||||||||||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | one-for-six reverse stock split | one-for-six reverse | |||||||||||||||||||||||||||||
Proceeds from Issuance of Debt | 1,220,000 | ||||||||||||||||||||||||||||||
Deemed dividend | $ 1,798,000 | 1,798,000 | |||||||||||||||||||||||||||||
Long-term Debt, Gross | $ 14,592,000 | 14,592,000 | $ 55,369,000 | ||||||||||||||||||||||||||||
Proceeds used to pay accrued and unpaid interest and outstanding principal balance of outstanding note | $ 5,000,000,000 | ||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expense | $ 350,000 | 534,000 | |||||||||||||||||||||||||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||||||||||||||||||||
Preferred stock, stated value per share | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||||||||||||||||||||
Share-based Payment Arrangement, Noncash Expense | $ 0 | $ 71,000 | 213,000 | $ 4,000 | |||||||||||||||||||||||||||
2019 Long Term Incentive Plan [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 25,834 | ||||||||||||||||||||||||||||||
Options granted during the period | 60,834 | ||||||||||||||||||||||||||||||
Units Vesting Upon Employees Being In Good Standing Percentages | 50.00% | ||||||||||||||||||||||||||||||
Units Vesting Upon Average Share Price Percentages | 50.00% | ||||||||||||||||||||||||||||||
Two Thousand Twenty Omnibus Incentive Plan [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 8,719 | 8,719 | |||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | 116,281 | ||||||||||||||||||||||||||||||
12% Senior Secured Note [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Proceeds from Issuance of Private Placement | $ 3,217,000 | $ 6,760,000 | |||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment | 16,730,000 | 21,700,000 | |||||||||||||||||||||||||||||
Long-term Debt, Gross | $ 7,733,000 | 16,077,000 | |||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 7,733 | ||||||||||||||||||||||||||||||
Default interest rate | 17.00% | ||||||||||||||||||||||||||||||
Proceeds from Bank Debt | $ 3,281,000 | $ 5,000,000 | |||||||||||||||||||||||||||||
Restricted Stocks [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Expense | $ 5,000 | $ 61,000 | $ 227,000 | $ 323,000 | |||||||||||||||||||||||||||
Share-based Payment Arrangement, Option [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Stock or Unit Option Plan Expense | $ 6,000 | $ 7,000 | $ 19,000 | $ 20,000 | |||||||||||||||||||||||||||
April 2021 Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Proceeds from Issuance of Private Placement | $ 4,200,000 | ||||||||||||||||||||||||||||||
April 2021 Securities Purchase Agreement [Member] | Second Amended and Restated 12% Senior Secured Note [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Proceeds from Issuance of Debt | 3,200,000 | ||||||||||||||||||||||||||||||
Debt Instrument, Periodic Payment | 19,154,000 | ||||||||||||||||||||||||||||||
Proceeds from working capital | $ 1,000,000 | ||||||||||||||||||||||||||||||
Share-based compensation restricted period, description | three years | ||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 34,259 | ||||||||||||||||||||||||||||||
April 2021 Securities Purchase Agreement [Member] | Certain Institutional and Accredited Investors [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.60 | ||||||||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,304,901 | ||||||||||||||||||||||||||||||
Sale of Stock, Price Per Share | $ 3.45 | ||||||||||||||||||||||||||||||
August Two Thousand Twenty One Offerings [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Proceeds from Issuance Initial Public Offering | $ 2,466,000 | $ 3,217,000 | |||||||||||||||||||||||||||||
[custom:NonAccountableExpenseAllowance] | 50,000 | ||||||||||||||||||||||||||||||
[custom:ClearingExpenses] | $ 13,000 | ||||||||||||||||||||||||||||||
[custom:AggregateCashFeePercentage] | 7.50% | ||||||||||||||||||||||||||||||
Management fee percentage | 1.00% | ||||||||||||||||||||||||||||||
Sale of Stock, Percentage of Ownership after Transaction | 7.50% | ||||||||||||||||||||||||||||||
August Two Thousand Twenty One Offerings [Member] | Institutional Investors [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 680,239 | ||||||||||||||||||||||||||||||
Sale of Stock, Percentage of Ownership after Transaction | 50.00% | ||||||||||||||||||||||||||||||
August Two Thousand Twenty One Purchase Agreement [Member] | Institutional Investors [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 1,360,478 | ||||||||||||||||||||||||||||||
Stock issued price per share | $ 2.10 | ||||||||||||||||||||||||||||||
August Two Thousand Twenty One Warrants [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | 2.625 | ||||||||||||||||||||||||||||||
August Two Thousand Twenty One Warrants [Member] | Institutional Investors [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.04 | ||||||||||||||||||||||||||||||
August Two Thousand Twenty One Wainwright Warrants [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 102,036 | ||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
[custom:NumberOfCommonStockIssuableOnConversionOfPreferredStock-0] | 561.8 | 561.8 | |||||||||||||||||||||||||||||
[custom:ConvertiblePreferredStockTerm] | Each share of Series E Preferred Stock was initially convertible into | ||||||||||||||||||||||||||||||
Preferred Stock, Redemption Price Per Share | $ 1,000 | $ 1,000 | |||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Stock Repurchased During Period, Shares | 390 | ||||||||||||||||||||||||||||||
Series F Convertible Preferred Stock [Member] | April 2021 Securities Purchase Agreement [Member] | Certain Institutional and Accredited Investors [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Sale of Stock, Price Per Share | $ 1,000 | ||||||||||||||||||||||||||||||
Series F Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Stock issued price per share | $ 4.35 | ||||||||||||||||||||||||||||||
Series F Preferred Stock [Member] | April 2021 Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 1,304,901 | ||||||||||||||||||||||||||||||
Preferred Stock, Convertible, Conversion Price | $ 3.60 | ||||||||||||||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | effect a reverse split within a range of 1-into-2 to up to 1-into-20 | ||||||||||||||||||||||||||||||
Series F Preferred Stock [Member] | April 2021 Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Deemed dividend | $ 1,409,000 | ||||||||||||||||||||||||||||||
Series E Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 13,556,000 | ||||||||||||||||||||||||||||||
[custom:NumberOfCommonStockIssuableOnConversionOfPreferredStock-0] | 6,172 | ||||||||||||||||||||||||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | |||||||||||||||||||||||||||||
Series E-1 Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
[custom:NumberOfCommonStockIssuableOnConversionOfPreferredStock-0] | 1,493 | ||||||||||||||||||||||||||||||
Series G Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Conversion of Stock, Shares Issued | 6,172,000 | ||||||||||||||||||||||||||||||
Conversion of Stock, Shares Converted | 6,172 | ||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 6,172,000 | ||||||||||||||||||||||||||||||
Series G One Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Conversion of Stock, Shares Issued | 1,561,000 | ||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | $ 1,561,000 | ||||||||||||||||||||||||||||||
Series G1 Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Conversion of Stock, Shares Converted | 1,561 | ||||||||||||||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred stock, stated value per share | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||||||||||||||||||||
Dividends, Preferred Stock, Stock | 0 | $ 0 | |||||||||||||||||||||||||||||
[custom:NumberOfCommonStockIssuableOnConversionOfPreferredStock-0] | 4,504 | ||||||||||||||||||||||||||||||
Dividends, Preferred Stock | $ 62,000 | $ 125,000 | |||||||||||||||||||||||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | 1,039,380 | ||||||||||||||||||||||||||||
Series A Preferred Stock Related Party [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred stock, redemption terms | Shares of the Series A Preferred Stock are convertible into shares of common stock at the holder’s election at any time prior to December 31, 2020, at a conversion rate of one and three tenths (1.3) shares of common stock for every 50 shares of Series A Preferred Stock that the holder elects to convert | ||||||||||||||||||||||||||||||
Preferred stock, stated value per share | $ 1 | ||||||||||||||||||||||||||||||
Preferred stock, dividend rate, percentage | 12.00% | ||||||||||||||||||||||||||||||
Series E 1 Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | |||||||||||||||||||||||||||||
Jackson Note [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred stock, redemption terms | the Company received the Limited Consent from Jackson, the sole holder of the Company’s outstanding shares of Series E Convertible Preferred Stock, to use approximately (i) 75% of the net proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which had an outstanding principal amount of $32,710 as of February 9, 2021, and (ii) 25% of the net proceeds from the February 2021 Offering to redeem a portion of the Company’s Series E Convertible Preferred Stock. Pursuant to the Limited Consent, upon closing of the February 2021 Offering, the Company redeemed a portion of the Jackson Note with an outstanding principal amount of $13,556 and redeemed 4,518 shares of the Series E Convertible Preferred Stock. | ||||||||||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 83,334 | ||||||||||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Series E Convertible Preferred Stock [Member] | Exchange Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 6,172 | ||||||||||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Series E-1 Convertible Preferred Stock [Member] | Exchange Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 1,493 | ||||||||||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Series G Preferred Stock [Member] | Exchange Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred stock description | Each share of Series G Preferred Stock is initially convertible into 1,000 shares of common stock at any time from and after, (i) with respect to the Series G Preferred Stock, the earlier of October 31, 2022 or the occurrence of a default and, (ii) with respect to the Series G-l Convertible Preferred Stock, October 31, 2020. A holder of Series G Preferred Stock is not required to pay any additional consideration in exchange for conversion of the Series G Preferred Stock into the Company’s common stock | ||||||||||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Series G Convertible Preferred Stock [Member] | Exchange Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred stock description | The Series G Preferred Stock carries monthly dividend rights of (a) cash dividends accruing (i) at an annual rate per share equal to 12% from the date of issuance (plus any accrued dividends with respect to the Series E Preferred Stock unpaid as of the date of the Exchange) and (ii) 17% after the occurrence of a default, and (b) a dividend payable in shares of Series G-1 Convertible Preferred Stock. The shares of Series G-1 Convertible Preferred Stock have all the same terms, preferences and characteristics as the Series G Preferred Stock (including, without limitation, the right to receive cash dividends), except Series G-1 Convertible Preferred Stock are mandatorily redeemable by the Company within thirty (30) days after written demand received from any holder at any time after the earlier of the occurrence of a Preferred Default or September 30, 2022, for a cash payment equal to the liquidation value plus any accrued and unpaid dividends thereon | ||||||||||||||||||||||||||||||
H C Wainwright And Company L L C [Member] | Engagement Letter [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.3031 | $ 4.3125 | |||||||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 103,737 | 164,935 | |||||||||||||||||||||||||||||
Percentage of common stock exercisable | 7.50% | 7.50% | |||||||||||||||||||||||||||||
[custom:PercentageOfCashFeeOnGrossProceeds-0] | 7.50% | ||||||||||||||||||||||||||||||
[custom:PercentageOfManagementFeeOnGrossProceeds-0] | 1.00% | ||||||||||||||||||||||||||||||
[custom:NonAccountableExpenseAllowance] | $ 50,000 | $ 85,000 | |||||||||||||||||||||||||||||
[custom:ClearingExpenses] | $ 13,000 | $ 13,000 | |||||||||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 5 years | 5 years | 5 years | ||||||||||||||||||||||||||||
[custom:PercentageOfExercisePriceOfWarrantOnOfferingPricePerShare-0] | 125.00% | 125.00% | 125.00% | ||||||||||||||||||||||||||||
[custom:AggregateCashFeePercentage] | 7.50% | ||||||||||||||||||||||||||||||
Management fee percentage | 1.00% | ||||||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 4,942,772 | 8,585,319 | |||||||||||||||||||||||||||||
Pre-funded Warrants [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.40 | ||||||||||||||||||||||||||||||
Series F Convertible Preferred Stock [Member] | April 2021 Securities Purchase Agreement [Member] | Certain Institutional and Accredited Investors [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Sale of Stock, Number of Shares Issued in Transaction | 4,698 | ||||||||||||||||||||||||||||||
Designated Shares [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 1,663,008 | ||||||||||||||||||||||||||||||
Preferred stock, par value per share | 0.001% | ||||||||||||||||||||||||||||||
Public Offering [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 3,642,547 | ||||||||||||||||||||||||||||||
Stock issued price per share | $ 5.40 | ||||||||||||||||||||||||||||||
Proceeds from Issuance of Common Stock | $ 18,100,000 | $ 18,100,000 | |||||||||||||||||||||||||||||
Preferred Stock, Participation Rights | On February 5, 2021, the Company received a Limited Consent and Waiver from Jackson (the “Limited Consent”), the sole holder of the Company’s outstanding shares of Series E Convertible Preferred Stock, to use approximately (i) 75% of the net proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which had an outstanding principal amount of $32,710 as of February 9, 2021, and (ii) 25% of the net proceeds from the February 2021 Offering to redeem a portion of the Company’s Series E Preferred Stock. | ||||||||||||||||||||||||||||||
Public Offering [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred stock, redemption terms | Following the redemption of the Series E Convertible Preferred Stock, the Company has 6,172 shares of Series E Convertible Preferred Stock outstanding with an aggregate stated value of $6,172 | ||||||||||||||||||||||||||||||
Public Offering [Member] | Series E Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred Stock, Shares Outstanding | 6,172 | ||||||||||||||||||||||||||||||
Public Offering [Member] | Jackson Note [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Stock Repurchased During Period, Shares | 4,518 | ||||||||||||||||||||||||||||||
Preferred stock, redemption terms | shares of the Series E Convertible Preferred Stock | ||||||||||||||||||||||||||||||
Preferred Stock, Participation Rights | Prior to the February 2021 Offering, the Company entered the Limited Consent with Jackson, whereby, among other things, Jackson agreed that we may use 75% of the proceeds from the February 2021 Offering to redeem a portion of the Jackson Note, which at the time had an outstanding principal amount of $32,710, and 25% of the net proceeds from the Offering to redeem a portion of our Series E Convertible Preferred Stock, notwithstanding certain provisions of the Series E Certificate of Designation that would have required us to use all the proceeds from the Offering to redeem the Series E Convertible Preferred Stock. | ||||||||||||||||||||||||||||||
Public Offering [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 3,475,200 | ||||||||||||||||||||||||||||||
Public Offering [Member] | Pre-funded Warrants [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 167,347 | ||||||||||||||||||||||||||||||
Stock issued price per share | $ 5.40 | ||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.0001 | ||||||||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 167,347 | ||||||||||||||||||||||||||||||
Registered Direct Offering [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Proceeds from Issuance Initial Public Offering | $ 6,760 | ||||||||||||||||||||||||||||||
Registered Direct Offering [Member] | Institutional Investors [Member] | Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 2,199,132 | ||||||||||||||||||||||||||||||
Stock issued price per share | $ 3.45 | ||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3.80 | ||||||||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,099,566 | ||||||||||||||||||||||||||||||
Percentage of common stock exercisable | 50.00% | ||||||||||||||||||||||||||||||
Registered Direct Offering [Member] | Institutional Investors [Member] | First August 2021 Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Balance, shares | 1,383,162 | ||||||||||||||||||||||||||||||
Stock issued price per share | $ 2.6425 | ||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.58 | ||||||||||||||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 691,581 | ||||||||||||||||||||||||||||||
Percentage of common stock exercisable | 50.00% | ||||||||||||||||||||||||||||||
Conversion Of Series A [Member] | |||||||||||||||||||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||||||||||||||||||
Conversion of Stock, Shares Converted | 2,703 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | Feb. 26, 2020 | Oct. 02, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Alleged damages | $ 6,000 | |
New York Action [Member] | Pamela D. Whitaker [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Alleged damages | $ 4,054 |
SCHEDULE OF SEGMENT REPORTING I
SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 | |
Segment Reporting Information [Line Items] | |||||
Total Revenue | $ 47,501 | $ 48,640 | $ 146,982 | $ 150,693 | |
Total Gross Profit | 9,624 | 8,323 | 26,658 | 26,525 | |
Selling, general and administrative expenses | (8,463) | (9,391) | (25,811) | (28,609) | |
Depreciation and amortization | (688) | (768) | (2,122) | (2,312) | |
Impairment of goodwill | (2,969) | $ (2,969) | |||
Interest expense and amortization of debt discount and deferred financing costs | (1,006) | (1,746) | (3,432) | (6,277) | |
Re-measurement (loss) gain on intercompany note | (315) | 442 | (219) | (348) | |
Gain on business sale | 220 | 220 | |||
PPP forgiveness gain | 9,504 | 19,609 | |||
Other income, net | 188 | 161 | 292 | 122 | |
Income (Loss) Before (Provision for) Benefit From Income Tax | 8,844 | (2,759) | 14,975 | (13,648) | |
Total Assets | 79,084 | 79,084 | 86,884 | ||
Permanent Placement Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 1,333 | 1,463 | 3,708 | 5,543 | |
Temporary Contractor Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 46,168 | 47,177 | 143,274 | 145,150 | |
UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | 71,438 | 71,438 | 74,371 | ||
UNITED KINGDOM | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | 7,646 | 7,646 | $ 12,514 | ||
Commercial Staffing U S [Member] | UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 29,601 | 28,708 | 88,240 | 79,992 | |
Total Gross Profit | 5,195 | 4,642 | 15,422 | 12,552 | |
Commercial Staffing U S [Member] | UNITED STATES | Permanent Placement Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 147 | 171 | 290 | 281 | |
Commercial Staffing U S [Member] | UNITED STATES | Temporary Contractor Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 29,454 | 28,537 | 87,950 | 79,711 | |
Professional Staffing US [Member] | UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 4,536 | 5,188 | 12,215 | 19,778 | |
Total Gross Profit | 1,200 | 1,664 | 3,146 | 6,598 | |
Professional Staffing US [Member] | UNITED STATES | Permanent Placement Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 328 | 600 | 851 | 2,676 | |
Professional Staffing US [Member] | UNITED STATES | Temporary Contractor Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 4,208 | 4,588 | 11,364 | 17,102 | |
Professional Staffing U K [Member] | UNITED KINGDOM | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 13,364 | 14,744 | 46,527 | 50,923 | |
Total Gross Profit | 3,229 | 2,017 | 8,090 | 7,375 | |
Professional Staffing U K [Member] | UNITED KINGDOM | Permanent Placement Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | 858 | 692 | 2,567 | 2,586 | |
Professional Staffing U K [Member] | UNITED KINGDOM | Temporary Contractor Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Revenue | $ 12,506 | $ 14,052 | $ 43,960 | $ 48,337 |
SCHEDULE OF RELATED PARTY TRANS
SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
Related Party Transaction [Line Items] | ||
Compensation Expense Recognized | $ 350 | $ 534 |
Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 206 | $ 168 |
Shares Issued | 936 | 2,800,000 |
Value of Shares Issued | $ 4 | $ 12 |
Compensation Expense Recognized | 8 | 34 |
Dimitri Villard Corporate Governance And Nominating Committee Chairman [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 63 | $ 56 |
Shares Issued | 234 | 700,000 |
Value of Shares Issued | $ 1 | $ 3 |
Compensation Expense Recognized | 2 | 10 |
Jeff Grout Compensation Committee Chairman [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 63 | $ 56 |
Shares Issued | 234 | 700,000 |
Value of Shares Issued | $ 1 | $ 3 |
Compensation Expense Recognized | 2 | 10 |
Nick Florio Audit Committee Chairman [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 63 | $ 56 |
Shares Issued | 234 | 700,000 |
Value of Shares Issued | $ 1 | $ 3 |
Compensation Expense Recognized | 2 | 10 |
Alicia Barker [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | ||
Shares Issued | 234 | 700,000 |
Value of Shares Issued | $ 1 | $ 3 |
Compensation Expense Recognized | 2 | 4 |
Vincent Cebula [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 17 | |
Shares Issued | ||
Value of Shares Issued | ||
Compensation Expense Recognized |
SCHEDULE OF CASH FLOW, SUPPLEME
SCHEDULE OF CASH FLOW, SUPPLEMENTAL DISCLOSURES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Jul. 03, 2021 | Jun. 27, 2020 | Jul. 03, 2021 | Jun. 27, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Supplemental Cash Flow Elements [Abstract] | ||||||
Interest | $ 3,507 | $ 6,417 | ||||
Income taxes | 396 | |||||
Deferred purchase price of UK factoring facility | 5,234 | 6,017 | ||||
Shares issued to Jackson Investment Group | 324 | |||||
Dividends accrued to related parties | 795 | 596 | ||||
Deemed Dividend | $ 1,798 | 1,798 | ||||
Acquisition of Right of Use Assets | 2,735 | |||||
Conversion of Series E Preferred Stock – Related Party | 6,172 | |||||
Conversion of Series E-1 Preferred Stock – Related Party | 1,493 | |||||
Conversion of Series G Preferred Stock – Related Party to debt | 6,172 | |||||
Conversion of Series G-1 Preferred Stock – Related Party to debt | $ 1,561 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Oct. 31, 2021 | Oct. 28, 2021 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 |
Subsequent Event [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 9,973,997 | 91,337 | |||
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | |||
Subsequent Event [Member] | Jackson Note [Member] | |||||
Subsequent Event [Line Items] | |||||
Redeem of debt | $ 4,500 | ||||
Debt Instrument, Face Amount | $ 13,449 | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||||
Subsequent Event [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 4,683,547 | ||||
Common Stock, Par or Stated Value Per Share | $ 0.00001 | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Private Placement [Member] | |||||
Subsequent Event [Line Items] | |||||
Cash fee percentage | 7.50% | ||||
Management fee percentage | 1.00% | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Warrant [Member] | |||||
Subsequent Event [Line Items] | |||||
Warrants to purchase | 4,683,547 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.85 | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Warrant [Member] | Private Placement [Member] | |||||
Subsequent Event [Line Items] | |||||
Warrants to purchase | 351,266 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.4688 | ||||
Non-accountable expense | $ 35 | ||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Prefunded Warrant [Member] | |||||
Subsequent Event [Line Items] | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.975 |