Cover
Cover - shares | 6 Months Ended | |
Jul. 02, 2022 | Aug. 16, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jul. 02, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
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 | 757 3rd Avenue | |
Entity Address, Address Line Two | 27th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10017 | |
City Area Code | (646) | |
Local Phone Number | 507-5710 | |
Title of 12(b) Security | Common stock, par value $0.00001 per share | |
Trading Symbol | STAF | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,433,199 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 02, 2022 | Jan. 01, 2022 |
Current Assets: | ||
Cash | $ 1,780 | $ 4,558 |
Accounts receivable, net | 33,224 | 20,718 |
Prepaid expenses and other current assets | 3,052 | 988 |
Total Current Assets | 38,056 | 26,264 |
Property and equipment, net | 1,089 | 865 |
Goodwill | 28,585 | 23,828 |
Intangible assets, net | 17,652 | 13,649 |
Other assets | 6,500 | 3,506 |
Right of use asset | 9,281 | 5,578 |
Total Assets | 101,163 | 73,690 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 22,097 | 12,532 |
Accrued expenses - related party | 125 | 216 |
Current portion of debt | 9,425 | 9,223 |
Accounts receivable financing | 20,052 | 15,199 |
Leases - current liabilities | 949 | 1,006 |
Earnout liabilities | 8,344 | 4,054 |
Other current liabilities | 3,860 | 2,503 |
Total Current Liabilities | 64,852 | 44,733 |
Long-term debt | 279 | |
Redeemable Series H preferred stock, net | 8,306 | |
Leases - non current | 8,934 | 4,568 |
Other long-term liabilities | 769 | 785 |
Total Liabilities | 82,861 | 50,365 |
Commitments and contingencies | ||
Stockholders’ Equity (Deficit): | ||
Series J Preferred Stock, 40,000 designated, $0.00001 par value, 0 and 0 shares issued and outstanding as of July 2, 2022 and January 1, 2022, respectively | ||
Common stock, $0.00001 par value, 200,000,000 shares authorized; 1,762,158 and 1,758,835 shares issued and outstanding, as of July 2, 2022 and January 1, 2022, respectively | 1 | 1 |
Additional paid in capital | 107,266 | 107,183 |
Accumulated other comprehensive (loss) income | (356) | 162 |
Accumulated deficit | (88,609) | (84,021) |
Total Stockholders’ Equity | 18,302 | 23,325 |
Total Liabilities and Stockholders’ Equity | 101,163 | 73,690 |
Series J Preferred Stock [Member] | ||
Stockholders’ Equity (Deficit): | ||
Series J Preferred Stock, 40,000 designated, $0.00001 par value, 0 and 0 shares issued and outstanding as of July 2, 2022 and January 1, 2022, respectively |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 02, 2022 | Jan. 01, 2022 |
Preferred stock, par or stated value per share | $ 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 | 200,000,000 | 200,000,000 |
Common stock, shares issued | 1,762,158 | 1,758,835 |
Common stock, shares outstanding | 1,762,158 | 1,758,835 |
Series J Preferred Stock [Member] | ||
Preferred stock, par or stated value per share | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 40,000 | 40,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Revenue | $ 59,053,000 | $ 50,530,000 | $ 108,946,000 | $ 99,481,000 |
Cost of Revenue, excluding depreciation and amortization stated below | 48,534,000 | 41,511,000 | 89,914,000 | 82,447,000 |
Gross Profit | 10,519,000 | 9,019,000 | 19,032,000 | 17,034,000 |
Operating Expenses: | ||||
Selling, general and administrative expenses | 10,464,000 | 9,419,000 | 19,373,000 | 17,348,000 |
Depreciation and amortization | 698,000 | 703,000 | 1,353,000 | 1,434,000 |
Total Operating Expenses | 11,162,000 | 10,122,000 | 20,726,000 | 18,782,000 |
Loss From Operations | (643,000) | (1,103,000) | (1,694,000) | (1,748,000) |
Other (Expenses) Income: | ||||
Interest expense and amortization of debt discount and deferred financing costs | (1,137,000) | (1,185,000) | (1,903,000) | (2,426,000) |
Re-measurement (loss) gain on intercompany note | (566,000) | (32,000) | (1,009,000) | 96,000 |
PPP forgiveness gain | 10,105,000 | 10,105,000 | ||
Other income (loss), net | 79,000 | (4,000) | 21,000 | 103,000 |
Total Other (Expenses) Income, net | (1,624,000) | 8,884,000 | (2,891,000) | 7,878,000 |
(Loss) Income Before Benefit from Income Tax | (2,267,000) | 7,781,000 | (4,585,000) | 6,130,000 |
Benefit (Provision) from Income taxes | 3,000 | 67,000 | (3,000) | 30,000 |
Net (Loss) Income | (2,264,000) | 7,848,000 | (4,588,000) | 6,160,000 |
Deemed Dividend | 1,409,000 | 1,798,000 | ||
Earnings allocated to participating securities | 1,261,000 | 236,000 | ||
Net (Loss) Income Attributable to Common Stockholders | $ (2,264,000) | $ 4,855,000 | $ (4,588,000) | $ 3,414,000 |
Net (Loss) Income Attributable to Common Stockholders - Basic | $ (1.29) | $ 7.54 | $ (2.61) | $ 6.05 |
Weighted Average Shares Outstanding – Basic | 1,759,252 | 644,092 | 1,759,298 | 564,404 |
Earnings allocated to participating securities– Diluted (Footnote 3) | $ (2,264) | $ 5,178 | $ (4,588) | $ 4,126 |
Earnings (Loss) per Share Attributed to Common Stockholders - Diluted | $ (1.29) | $ 6.66 | $ (2.61) | $ 5.80 |
Weighted Average Shares Outstanding – Diluted | 1,759,252 | 777,449 | 1,759,298 | 710,877 |
Series E Preferred Stock [Member] | ||||
Other (Expenses) Income: | ||||
Dividends | $ 74,000 | $ 319,000 | ||
Series E-1 Preferred Stock [Member] | ||||
Other (Expenses) Income: | ||||
Dividends | 48,000 | 192,000 | ||
Series G Preferred Stock [Member] | ||||
Other (Expenses) Income: | ||||
Dividends | 123,000 | 123,000 | ||
Series G-1 Preferred Stock [Member] | ||||
Other (Expenses) Income: | ||||
Dividends | 78,000 | 78,000 | ||
Series J Preferred Stock [Member] | ||||
Other (Expenses) Income: | ||||
Dividends |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Income Statement [Abstract] | ||||
Net (Loss) Income | $ (2,264) | $ 7,848 | $ (4,588) | $ 6,160 |
Other Comprehensive (Loss) Income | ||||
Foreign exchange translation adjustment | (318) | 58 | (518) | 50 |
Comprehensive (Loss) Income Attributable to the Company | $ (2,582) | $ 7,906 | $ (5,106) | $ 6,210 |
Consolidated Statements of Chan
Consolidated Statements of Changes In Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] Series E-1 Preferred Stock [Member] | Preferred Stock [Member] Series G-1 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] | Preferred Stock [Member] Series J Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total | Series J Preferred Stock [Member] |
Beginning balance, value at Jan. 02, 2021 | $ 11 | $ 1 | $ 73,844 | $ 223 | $ (92,179) | $ (18,100) | ||||||
Beginning balance, shares at Jan. 02, 2021 | 1,363 | 1,039,380 | 11,080 | 280,338 | ||||||||
Employees, directors and consultants | 335 | 335 | ||||||||||
Employees, directors and consultants, shares | 7,760 | |||||||||||
Series A Preferred Conversion | ||||||||||||
Series A Preferred Conversion, shares | (1,039,380) | 451 | ||||||||||
Sales of common stock, net | 17,847 | $ 17,847 | ||||||||||
Sales of common stock, net shares | 364,255 | 372,466 | ||||||||||
Sales of Series F Preferred Stock, net | 4,140 | $ 4,140 | ||||||||||
Sales of Series F Preferred Stock, net, shares | 4,698 | |||||||||||
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 | (123) | (123) | ||||||||||
Dividends - Series G-1 Preferred Stock - Related Party | (78) | (78) | ||||||||||
Dividends - Series G-1 Preferred Stock - Related Party, shares | 50 | |||||||||||
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 | ||||||||||
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) | |||||||||||
Fair Value Modification - Series E Preferred Stock - Related Party | 389 | 389 | ||||||||||
Series F Preferred Stock - Beneficial Conversion Feature | 1,409 | 1,409 | ||||||||||
Deemed Dividend | (1,798) | (1,798) | ||||||||||
Foreign currency translation gain (loss) | 50 | 50 | ||||||||||
Net income (loss) | 6,160 | 6,160 | ||||||||||
Ending balance, value at Jul. 03, 2021 | $ 1 | 86,465 | 273 | (86,019) | 720 | |||||||
Ending balance, shares at Jul. 03, 2021 | 1,543 | 4,698 | 652,804 | |||||||||
Beginning balance, value at Apr. 03, 2021 | $ 1 | 82,532 | 215 | (93,867) | (11,119) | |||||||
Beginning balance, shares at Apr. 03, 2021 | 1,466 | 652,804 | ||||||||||
Employees, directors and consultants | 116 | 116 | ||||||||||
Sales of Series F Preferred Stock, net | 4,140 | 4,140 | ||||||||||
Sales of Series F Preferred Stock, net, shares | 4,698 | |||||||||||
Dividends - Series E Preferred Stock - Related Party | (74) | (74) | ||||||||||
Dividends - Series E-1 Preferred Stock - Related Party | (48) | (48) | ||||||||||
Dividends - Series E-1 Preferred Stock - Related Party, shares | 27 | |||||||||||
Dividends - Series G Preferred Stock - Related Party | (123) | (123) | ||||||||||
Dividends - Series G-1 Preferred Stock - Related Party | (78) | (78) | ||||||||||
Dividends - Series G-1 Preferred Stock - Related Party, shares | 50 | |||||||||||
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 | ||||||||||
Series F Preferred Stock - Beneficial Conversion Feature | 1,409 | 1,409 | ||||||||||
Deemed Dividend | (1,409) | (1,409) | ||||||||||
Foreign currency translation gain (loss) | 58 | 58 | ||||||||||
Net income (loss) | 7,848 | 7,848 | ||||||||||
Ending balance, value at Jul. 03, 2021 | $ 1 | 86,465 | 273 | (86,019) | 720 | |||||||
Ending balance, shares at Jul. 03, 2021 | 1,543 | 4,698 | 652,804 | |||||||||
Beginning balance, value at Jan. 01, 2022 | $ 1 | 107,183 | 162 | (84,021) | 23,325 | |||||||
Beginning balance, shares at Jan. 01, 2022 | 1,759,158 | |||||||||||
Employees, directors and consultants | 83 | $ 83 | ||||||||||
Employees, directors and consultants, shares | 3,000 | |||||||||||
Sales of common stock, net shares | 3,000 | |||||||||||
Foreign currency translation gain (loss) | (518) | $ (518) | ||||||||||
Net income (loss) | (4,588) | (4,588) | ||||||||||
Series J Preferred Stock dividend issued | ||||||||||||
Series J preferred stock dividend issued, shares | 17,618.3 | |||||||||||
Series J Preferred Stock redemption | ||||||||||||
Series J Preferred Stock redemption, shares | (17,618.3) | |||||||||||
Ending balance, value at Jul. 02, 2022 | $ 1 | 107,266 | (356) | (88,609) | 18,302 | |||||||
Ending balance, shares at Jul. 02, 2022 | 1,762,158 | |||||||||||
Beginning balance, value at Apr. 02, 2022 | $ 1 | 107,225 | (38) | (86,345) | 20,843 | |||||||
Beginning balance, shares at Apr. 02, 2022 | 1,760,158 | |||||||||||
Employees, directors and consultants | 41 | 41 | ||||||||||
Employees, directors and consultants, shares | 2,000 | |||||||||||
Foreign currency translation gain (loss) | (318) | (318) | ||||||||||
Net income (loss) | (2,264) | (2,264) | ||||||||||
Series J Preferred Stock dividend issued | ||||||||||||
Series J preferred stock dividend issued, shares | 17,618.3 | 17,618.3 | ||||||||||
Series J Preferred Stock redemption | ||||||||||||
Series J Preferred Stock redemption, shares | (17,618.3) | |||||||||||
Ending balance, value at Jul. 02, 2022 | $ 1 | $ 107,266 | $ (356) | $ (88,609) | $ 18,302 | |||||||
Ending balance, shares at Jul. 02, 2022 | 1,762,158 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income (Loss) | $ (4,588) | $ 6,160 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Depreciation and amortization | 1,352 | 1,434 |
Amortization of debt discount and deferred financing costs | 282 | 173 |
Bad debt expense | (15) | 239 |
Right of use assets depreciation | 884 | 591 |
Stock based compensation | 83 | 335 |
Forgiveness of PPP loan and related interest | (10,105) | |
Re-measurement (loss) gain on intercompany note | 1,009 | (96) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (7,818) | (2,970) |
Prepaid expenses and other current assets | (1,657) | (42) |
Other assets | (2,770) | (610) |
Accounts payable and accrued expenses | 4,661 | 1,270 |
Interest payable - related party | 536 | |
Other current liabilities | 583 | (15) |
Other long-term liabilities and other | 3,195 | (133) |
NET CASH USED IN OPERATING ACTIVITIES | (4,799) | (3,233) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (313) | (10) |
Acquisition of business, net of cash acquired | 1,395 | |
Collection of UK factoring facility deferred purchase price | 3,705 | 3,382 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 4,787 | 3,372 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Third party financing costs | (2,136) | |
Repayment of term loan - Related party | (17,935) | |
Proceeds from term loan - Related party | 130 | |
Repayment of term loan | (244) | (634) |
Proceeds from term loan | 67 | |
Repayments on accounts receivable financing, net | (2,351) | (5,860) |
Dividends paid | (591) | |
Redemption of Series E preferred stock, related party | (4,908) | |
Proceeds from sale of common stock | 19,670 | |
Payments made on earnouts | (160) | |
Payments made on Redeemable Series H Preferred stock | (14) | |
Proceeds from sale of Series F preferred stock | 4,698 | |
NET CASH USED IN FINANCING ACTIVITIES | (2,702) | (7,566) |
NET DECREASE IN CASH | (2,714) | (7,427) |
Effect of exchange rates on cash | (64) | 19 |
Cash - Beginning of period | 4,558 | 10,336 |
Cash - End of period | $ 1,780 | $ 2,928 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Jul. 02, 2022 | |
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. We are 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. Headway Acquisition On April 18, 2022, we entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Headway Workforce Solutions (“Headway”), and Chapel Hill Partners, LP, as the representatives of all the stockholders (collectively, the “Sellers”) of Headway (the “Sellers’ Representative”), pursuant to which, among other things, we agreed to purchase all of the issued and outstanding securities of Headway in exchange for (i) a cash payment of $ 14 9,000,000 9,000 0.00001 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jul. 02, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation These 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. All amounts are in thousands, except share and par values, unless otherwise indicated. The accompanying 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 GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. Reverse Stock Split The Company effected a one-for-ten reverse stock split 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. The accompanying financial statements have been prepared on a basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements as of the six months ended July 2, 2022, the Company has an accumulated deficit of $ 88,609 26,798 . At July 2, 2022, we had total gross debt (includes Redeemable Series H preferred stock) of $ 18,514 and $ 1,780 of cash on hand. 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 and debt repayments. Subsequent to the six months ended July 2, 2022, we have continued to fund our operations and make required capital payments utilizing our available cash and, as of the date of this filing, we have approximately $ 2,007 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, our note issued to Jackson Investment Group, LLC includes certain financial customary covenants and the Company has had instances of non-compliance. Management has historically been able to obtain from Jackson waivers of any non-compliance and management expects to continue to be able to obtain necessary waivers in the event of future non-compliance; however, there can be no assurance that the Company will be able to obtain such waivers, and should Jackson refuse to provide a waiver in the future, the outstanding debt under the agreement could become due immediately, which exceeds our current cash balance. The entire outstanding principal balance of the 2020 Jackson Note shall be due and payable on September 30, 2022 25,000 Going Concern The accompanying financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. 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 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. COVID-19 The novel Coronavirus disease 2019 (“COVID-19”), is continuing to impact 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 have seen declines in revenues during Fiscal 2021 and 2020. While expected to be temporary, prolonged workforce disruptions can negatively impact sales in fiscal year 2022 and the Company’s overall liquidity. 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 full impact of the COVID-19 outbreak continues to evolve as of the date of this 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. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2022. The Company’s negative working capital and liquidity position combined with the uncertainty generated by the economic reaction to the COVID-19 pandemic contribute to the substantial doubt about the Company’s ability to continue as a going concern. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. Significant estimates for the six months ended July 2, 2022 and July 3, 2021 include the valuation of intangible assets, including goodwill, liabilities associated with testing long-lived assets for impairment, contingent considerations, fair value of financial instruments and valuation reserves against deferred tax assets. 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, 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 Staffing UK 3,104 No impairments to goodwill were recognized during the six months ended July 2, 2022. 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. 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) 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 primarily two main forms of revenue – temporary contractor revenue and permanent placement revenue. Temporary contractor revenue is accounted for as a single performance obligation satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance on an hourly or daily basis. The contracts stipulate weekly or monthly billing, and the Company has elected the “as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as we have the right to payment in an amount that corresponds directly with the value of performance completed to date. Permanent placement revenue is recognized on the date the candidate’s full-time employment with the customer has commenced. The customer is invoiced on the start date, and the contract stipulates payment due under varying terms, typically 30 days. The contract with the customer stipulates a guarantee period whereby the customer may be refunded if the employee is terminated within a short period of time, however this has historically been infrequent, and immaterial upon occurrence. As such, the Company’s performance obligations are satisfied upon commencement of the employment, at which point control has transferred to the customer. Revenue for the six months ended July 2, 2022 was comprised of $ 105,965 2,981 97,106 2,375 Income Taxes The Company’s provision for income taxes is based on the discrete method for the quarter 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 0.14 %, (0.06) %, 0.86 % and 0.49 % for the three and six months ending July 2, 2022 and July 3, 2021, 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. Foreign Currency The Company recorded a non-cash foreign currency remeasurement (loss) gain of $( 566 1,009 32 96 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 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. 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) 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 adopted this ASU in this fiscal year. This standard did not have an impact on our financial statements. 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) |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 6 Months Ended |
Jul. 02, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE | NOTE 3 – EARNINGS (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 was 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, were 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 was 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 was 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 were out-of-the-money were 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 24, 2022, the Company effected a one-for-ten reverse stock split. As required in accordance with GAAP, all share and earnings per share information in this quarterly report, including those 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 July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Three Months Ended Six Months Ended July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Numerator: Net (Loss) Income $ (2,264 ) $ 7,848 $ (4,588 ) $ 6,160 Less: Dividends paid to Series A preferred shareholders — — — — Less: Dividends paid to Series E, E-1, G, G-1, and J preferred shareholders — (323 ) — (712 ) Less: Deemed dividend — (1,409 ) — (1,798 ) Less: Net income allocated to participating equity — (1,261 ) — (236 ) Net (loss) income available to common shareholders for basic earnings per share (2,264 ) 4,855 (4,588 ) 3,414 Effect of dilutive securities: Add: Dividends paid to Series E, E-1, G, G-1, and J preferred shareholders 323 712 Net income available to common and preferred shareholders for diluted earnings per share $ 5,178 $ 4,126 Denominator: Weighted average basic common shares outstanding 1,759,252 644,092 1,759,298 564,404 Weighted average additional common shares outstanding if preferred shares converted to common shares (if dilutive) — 129,839 — 142,953 Total weighted average common shares outstanding if preferred shares converted to common shares 1,759,252 773,931 1,759,298 707,357 Effect of dilutive securities: Restricted shares 3,520 3,520 Weighted average diluted shares outstanding 777,451 710,877 (Loss) Income per common share: Basic $ (1.29 ) $ 7.54 $ (2.61 ) $ 6.05 Diluted $ (1.29 ) $ 6.66 $ (2.61 ) $ 5.80 |
ACCOUNTS RECEIVABLE FINANCING
ACCOUNTS RECEIVABLE FINANCING | 6 Months Ended |
Jul. 02, 2022 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE FINANCING | NOTE 4 – ACCOUNTS RECEIVABLE FINANCING Midcap Funding X 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 was not in compliance with its July 2, 2022 covenants and received a waiver from Midcap. 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 balance of the Midcap facility as of July 2, 2022 and January 1, 2022 was $ 12,392 13,405 White Oak Commercial Finance, LLC As a result of the Headway Acquisition, the Company’s wholly owned Headway subsidiary, has a line of credit with White Oak Commercial Finance, LLC (“White Oak”), that provided working capital and supports general corporate needs of Headway (the “White Oak Agreement”). Under the terms of the White Oak Agreement, the line of credit matures in June 2024. White Oak may terminate the Agreement at any time upon providing 30-days written notice. The Agreement is secured by all the assets of Headway and is personally guaranteed up to $ 1,000 Under the terms of the White Oak Agreement, the maximum borrowing capacity is $ 10,000,000 The borrowing base is defined as the sum of the following: (a) 95% of the eligible ordinary receivables, as defined, and (b) the lessor of (i) $3,000,000 or (ii) 95% of the Company’s outstanding eligible unbilled receivables, as defined, less the sum of the following: (c) 100% of the undrawn amount of all letters of credit outstanding, (d) the special availability reserve, (e) the quarterly tax reserve and (f) the amount all other availability reserves in effect as such time. 5.00 7.00 7.00 0.25 7,568 From time to time, White Oak may cause letters of credit to be opened to be issued for Headway’s benefit. The aggregate face amount of all letters of credit outstanding will become the letter of credit reserve, which reduces the borrowing base under the Agreement. Under the terms of the agreement the letter of credit sub-line may not exceed $ 2,000,000 6.25 0 The White Oak Agreement operates similar to a factoring arrangement whereby Headway’s receivables are bought by White Oak. However, receivables purchased by White Oak are required to be repurchased by Headway in the event the Company’s customer disputes the invoice amount or if the receivable remains unpaid past a certain number of days from the invoice date. Due to the recourse provisions in the arrangement, Headway accounts for transactions under the credit facility as secured borrowings. As of August 2, 2022, the loan agreement with White Oak expired and the Company is in default, As a result, the entire outstanding principal amount together with accrued and unpaid obligations are due. HSBC Invoice Finance (UK) Ltd – New Facility On February 8, 2018, CBSbutler, 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% 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 1.80 On June 28, 2018, 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 CBSbutler, Staffing 360 Solutions Limited and The JM Group (collectively, with CML, the “Borrowers”) as “Connected Clients” as defined in the APD. In 2021, the subsidiaries were reorganized and are now Staffing 360 Solutions Limited and Clement May. 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 3,705 3,382 |
GOODWILL
GOODWILL | 6 Months Ended |
Jul. 02, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 5 – GOODWILL The following table provides a roll forward of goodwill: SCHEDULE OF GOODWILL July 2, 2022 January 1, 2022 Beginning balance, gross $ 23,828 $ 31,591 Acquisition 5,974 — Accumulated disposition — (1,577 ) Accumulated impairment losses — (6,073 ) Currency translation adjustment (1,217 ) (113 ) Ending balance, net $ 28,585 $ 23,828 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 fourth quarter of 2021 the Company identified a triggering event in response 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 Staffing UK 3,104 5,974 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
DEBT | 6 Months Ended |
Jul. 02, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 6 – DEBT SCHEDULE OF DEBT July 2, 2022 January 1, 2022 Jackson Investment Group - related party $ 9,016 $ 8,949 Redeemable Series H Preferred Stock 9,000 — HSBC Term Loan 498 809 Total Debt, Gross 18,514 9,758 Less: Debt Discount and Deferred Financing Costs, Net (783 ) (256 ) Total Debt, Net 17,731 9,502 Less: Non-Current Portion: Long-term debt — (279 ) Redeemable Series H Preferred Stock, net (8,306 ) — Total Current Debt, Net $ 9,425 $ 9,223 Jackson Debt On September 15, 2017, the Company entered into a $ 40,000 11,165 first September 15, 2020 The 2017 Jackson Note will accrue interest at 12 quarterly January 1, 2018 Interest on any overdue payment of principal or interest due under the 2017 Jackson Note will accrue at a rate per annum that is 5 On August 27, 2018, the Company entered into an amended agreement with Jackson, pursuant to which the note purchase agreement dated as of September 15, 2017 was amended and made a new senior debt investment of approximately $ 8,428 280 39 19,200 On August 29, 2019, the Company entered into a Fourth Omnibus Amendment and Reaffirmation Agreement with Jackson, as lender, which, among other things, amends that certain Amended and Restated Note Purchase Agreement, dated as of September 15, 2017, as amended (the “Existing Note Purchase Agreement”.) Pursuant to the Existing Note Purchase Agreement, the Company agreed to issue and sell to Jackson that certain 18 2,538 All accrued and unpaid interest on the outstanding principal balance of the 2019 Jackson Note was due and payable monthly on the first day of each month, beginning on October 1, 2019 Pursuant to the terms of the 2019 Jackson Note, if the 2019 Jackson Note was not repaid by December 31, 2019 10,000 324 50,000 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) On October 26, 2020, the Company, certain of its subsidiaries and Jackson entered into the Amended Note Purchase Agreement and the 2020 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 15,092 99.60 60.00 expiration date of January 26, 2024 to January 26, 2026 126 Under the terms of the Amended Note Purchase Agreement and the 2020 Jackson Note, the Company is required to pay interest on the debt at a per annum rate of 12 50 30.00 30.000 210.00 210.00 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 was 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 2020 Jackson Note of not less than $ 3,000 3,029 On January 4, 2021, the Company used $ 1,558 1,168 33,878 390 390 32,710 10,690 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 2020 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 paid $13,556 of the 2020 Jackson Note 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 3,200 19,154 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 20, 2021, the Company entered into the July 2021 Purchase Agreement. As the Company’s Series G Preferred Stock (as defined below) 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 2020 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 entered into a non-cash financing transaction whereby it 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 3,281 16,730 On October 28, 2021, the Company entered into a securities purchase agreement (the “November 2021 Private Placement”). This placement closed on November 2, 2021 and was announced on November 3, 2021. The net proceeds of the November 2021 Private Placement were approximately $ 9.25 4,500 13,449 The entire outstanding principal balance of the 2020 Jackson Note shall be due and payable on September 30, 2022. The debt represented by the 2020 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 was not in compliance with its July 2, 2022 covenants and received a waiver from Jackson. 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 13,000 0.00001 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 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 10,000 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 11 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. 10,000 If such average market price was less than $35.00 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 $35.00, and if such average closing price were greater than $210.00 then the average closing price for these purposes would be deemed to be $210.00 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 $ 60.00 10,000 The shares of Series E Convertible Preferred Stock were also convertible into shares of common stock after October 31, 2022. 60.00 10,000 106.80 99.60 60.00 The Company accounted for the Amendment as a modification to the Series E Convertible Preferred Stock and Series E-1 Convertible Preferred Stock. The change in fair value as a result of the modification amounted to $ 410 4,280 60.00 0 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 Consent and the Series E Certificate of Designation, in consideration for Jackson’s consent to the first 2,100 2,080 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 2020 Jackson Note. As this provision results in a contingent redemption feature, approximately $ 4,100 389 Jackson Waivers On February 5, 2021, the Company entered into a Limited Consent and Waiver with Jackson whereby, among other things, Jackson agreed that we may use 75% of the proceeds from the offering to redeem a portion of the 2020 Jackson Note, and 25% of the net proceeds from the offering to redeem a portion of the Base Series E Preferred Stock 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 ranked 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 was 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 was not required to pay any additional consideration in exchange for conversion of the Series G Preferred Stock into the Company’s common stock. 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 Series G Preferred Stock carried 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 had 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 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 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 2020 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 July 2, 2022, there were no shares of Series G or Series G-1 Convertible Preferred Stock outstanding. HSBC Loan 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 1,000 11,500 12 months 1.80 Classification of Certain Cash Receipts and Cash Payments, a consensus of the FASB Emerging Issues Task Force), three-year term loan 1,000 498 Redeemable Series H Preferred Stock On May 18, 2022, the Company entered into a stock purchase agreement with Headway. Consideration for the Purchase of 100% 9,000,000 0.00001 1.00 350,000 2.5714 12% The redemption price represents the number of shares of the Preferred Stock (9,000,000), plus all accrued but unpaid dividends, multiplied by the Stated Value ($1). On May 18, 2022, the Company paid $14 towards the Series H Preferred Stock balance. 9,000 In accordance with ASC 480-10-15-3, the agreement includes certain rights and options including: redemption, dividend, voting, and conversion which have characteristics akin to liability and equity. The Series H Preferred Stock is redeemable and has a defined maturity date upon the third anniversary of the original issue date. As such and based on the authoritative guidance, the Series H Preferred Stock meets the definition of a debt instrument. The Company obtained a third-party valuation report to calculate the fair value of Series H Preferred Stock. As of May 18, 2022, the fair value of the Redemption Price was calculated as $ 8,265 735 |
LEASES
LEASES | 6 Months Ended |
Jul. 02, 2022 | |
Leases | |
LEASES | NOTE 7 – LEASES As of July 2, 2022 and January 1, 2022, as a result of the adoption of ASC 842, we recorded a right of use (“ROU”) lease asset of approximately $ 9,281 9,883 5,578 5,574 In September 2021, the Company entered into a new lease agreement for an office lease in New York for a term of 8 2,761 1,635 1,829 10 2,048 10 1,555 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 period ended July 2, 2022 is as follows: SCHEDULE OF LEASE, COST Lease Cost Classification July 2, 2022 Operating lease cost SG&A Expenses 832 Other information Weighted average remaining lease term (years) 6.06 Weighted average discount rate 6.27 % SCHEDULE OF OPERATING LEASE LIABILITY MATURITY Future Lease Payments 2022 $ 690 2023 1,685 2024 1,627 2025 1,575 2026 2,394 Thereafter 4,978 Total $ 12,949 Less: Imputed Interest 3,066 Operating lease, liability $ 9,883 Leases - Current $ 949 Leases - Non current $ 8,934 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. This methodology was deemed to yield a measurement of the Right of Use Asset and associated lease liability that was appropriately stated in all material respects. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Jul. 02, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 8 – STOCKHOLDERS’ EQUITY The Company issued the following shares of common stock during the six months ended July 2, 2022: SCHEDULE OF STOCKHOLDERS EQUITY Number of Common Fair Value Fair Value at Issuance Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Board and committee members 2,000 19 9.70 9.70 Consultant 1,000 7 7.40 7.40 3,000 $ 26 The Company issued the following shares of common stock during the six months ended July 3, 2021: Number of Common Fair Value Fair Value at Issuance Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raises 364,255 $ 19,670 $ 54.00 $ 54.00 Conversion of Series A Preferred Stock 451 — — — Employees 5,084 275 54.00 54.00 Long Term Incentive Plan 2,582 133 51.60 51.60 Board and committee members 94 5 51.60 51.60 372,466 $ 20,083 Reverse Stock Split The Company effected the Reverse Stock Split on June 24, 2022. All share and per share information in this quarterly report have been retroactively adjusted to reflect the Reverse Stock Split. Increase of Authorized Common Stock On December 27, 2021, the Company’s stockholders approved an amendment to the Amended and Restated Certificate of Incorporation of the Company to effect an increase to its number of shares of authorized common stock, par value $ 0.00001 40,000,000 200,000,000 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) Series A Preferred Stock – Related Party As of July 2, 2022 and July 3, 2021, the Company had $ 125 125 Series J Preferred Stock On May 3, 2022, the Company’s Board of Directors (the “Board”) declared a dividend of one one-thousandth of a share of Series J Preferred Stock, par value $ 0.00001 The Company held a special meeting of stockholders on June 23, 2022 (the “Special Meeting”) for the purpose of voting on a Reverse Stock Split Proposal and an Adjournment Proposal. Each share of Series J Preferred Stock entitled the holder thereof to 1,000,000 votes per share and each fraction of a share of Series J Preferred Stock had a ratable number of votes. Thus, each one-thousandth of a share of Series J Preferred Stock entitled the holder thereof to 1,000 votes. All shares of Series J Preferred Stock that were not present in person or by proxy at the Special Meeting as of immediately prior to the opening of the polls at such meeting (the “Initial Redemption Time”) were automatically redeemed by the Company at the Initial Redemption Time before the vote without further action on the part of the Company or the holder of shares of Series J Preferred Stock (the “Initial Redemption”). All shares that were not redeemed pursuant to the Initial Redemption were redeemed automatically upon the approval by the Company’s stockholders of the Reverse Stock Split Proposal at the Special Meeting (the “Subsequent Redemption”). As a result, no shares of Series J Preferred Stock remain outstanding. Under the Certificate of Designations, each holder of Series J Preferred Stock was entitled to consideration in connection with the applicable redemption of $ 0.0001 17,618.3 0.1761 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, 2020 Omnibus Plan and 2021 Omnibus Inventive Plan. Under these plans, the shares are restricted for a period of three years 1,000 22 44 109 318 SCHEDULE OF UNVESTED RESTRICTED SHARES ACTIVITY Weighted Restricted Average Shares Price Per Share Balance at January 2, 2021 1,030 $ 75.00 Granted 19,115 29.20 Vested/adjustments (14,198 ) 29.00 Balance at January 1, 2022 5,947 $ 50.00 Granted 2,000 8.55 Vested/adjustments (259 ) 101.60 Balance at July 2, 2022 7,688 36.64 Warrants Transactions involving the Company’s warrant issuances are summarized as follows: SCHEDULE OF WARRANTS ACTIVITY Weighted Number of Average Shares Exercise Price Outstanding at January 2, 2021 26,285 $ 59.40 Issued 995,452 25.97 Exercised (49,242 ) 0.0001 Expired or cancelled — — Outstanding at January 1, 2022 972,495 $ 26.88 Issued — — Exercised — — Expired or cancelled — — Outstanding at July 2, 2022 972,495 26.88 The following table summarizes warrants outstanding as of July 2, 2022: SCHEDULE OF STOCKHOLDERS' EQUITY NOTE, WARRANTS OR RIGHTS Weighted Average Number Remaining Weighted Outstanding Contractual Average Exercise Price and Exercisable Life (years) Exercise price $ 18.50 3,750 972,495 4.23 $ 26.88 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) Stock Options A summary of option activity during the six months ended July 2, 2022 is presented below: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY Weighted Average Options Exercise Price Outstanding at January 2, 2021 1,302 $ 1,665.60 Granted — — Exercised — — Expired or cancelled — — Outstanding at January 1, 2022 1,302 $ 1,665.60 Granted 50,000 7.80 Exercised — — Expired or cancelled — — Outstanding at July 2, 2022 51,302 $ 50.06 The Company recorded share-based payment expense of $ 16 38 7 13 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jul. 02, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES Headway Earn-out Liability Pursuant to the acquisition of Headway that closed on May 18, 2022, the purchase price includes an earnout payment totaling up to $ 4,450 Adjusted EBITDA of $0 or less than $0= no Contingent Payment Adjusted EBITDA of $500 x 2.5 multiple= $1,250 Contingent Payment Adjusted EBITDA of $1,000 x 2.5 multiple= $2,500 Contingent Payment Adjusted EBITDA of $1,800 x 2.5 multiple= $4,500 Contingent Payment Adjusted EBITDA of $2,000 or more x 2.5 multiple= $5,000 Contingent Payment The Company performed an analysis over the contingent payment and prepared a forecast to determine the likelihood of the Adjusted EBITDA payout. The adjusted EBITDA TTM forecast, as of April 2023, is above the $ 2,000 5,000 160 550 4,290 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) Legal Proceedings Whitaker v. Monroe Staffing Services, LLC & Staffing 360 Solutions, Inc. On December 5, 2019, former owner of Key Resources, Inc. (“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 Staffing Services LLC (“Monroe”) and the Company (collectively, 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 Monroe in August 2018. Whitaker sought $ 4,054 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 thereafter 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. Oral argument was held on March 9, 2022. On July 22, 2022, the Fourth Circuit issued a decision to vacate the District Court’s decision and ordered the North Carolina District Court to transfer the North Carolina Action to the Southern District of New York for adjudication there in accordance with the Share Purchase Agreement’s forum selection clause. 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 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 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. On March 8, 2022, Magistrate Judge Moses stayed the action pending a decision by the Fourth Circuit on the appeal filed by Monroe and the Company. On August 1, 2022, the parties to the New York Action wrote to the Magistrate overseeing the matter to request a conference to address, inter alia, the resumption of discovery in light of the Fourth Circuit’s Order issued on July 22, 2022. On August 3, 2022, Magistrate Judge Moses lifted the stay previously imposed in the matter and ordered the parties to appear at a teleconference held on August 16, 2022. At the teleconference, the parties agreed that the North Carolina Action would be dismissed following its transfer to the Southern District of New York without prejudice to Whitaker’s right to assert the same causes of action, based on substantially similar allegations, as counterclaims in the New York Action and that Whitaker would have until September 30 to do so. The Court Ordered the parties to submit a stipulation to this effect by August 23, 2022. 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. |
ACQUISITION
ACQUISITION | 6 Months Ended |
Jul. 02, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION | NOTE 10 – ACQUISITION In accordance with ASC 805, the Company accounts for acquisitions using the purchase method under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values. The Company utilizes management estimates and, in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed and contingent consideration granted. Such estimates and valuations require the Company to make significant assumptions, including projections of future events and operating performance. On April 18, 2022, the Company entered into a Stock Purchase Agreement with Headway Workforce Solutions, pursuant to which, among other things, the Company agreed to purchase all of the issued and outstanding securities of Headway in exchange for (i) a cash payment of $ 14 9,000,000 The purchase price in connection with the Headway Acquisition was $ 9,000 4,450 to integrate the business of Headway into the Company’s existing temporary professional in the US The total purchase price was allocated to the identifiable assets acquired and liabilities assumed based on our preliminary estimates of their fair values on the acquisition date. The fair values assigned in the preliminary allocation of purchase price included in the table below are based on information that was available as of the date of the acquisition and such amounts are considered preliminary and are based on the information that was available as of the date of the acquisition. We were not able to complete our final purchase price allocation based on the timing of the acquisition and our need to engage third party valuation specialists to assist with the valuation of the contingent consideration as well as requiring additional time to further analyze the initial amounts recorded. The Company is in the process of finalizing its allocation and this may result in potential adjustments to the carrying value of the respective recorded assets and liabilities, establishment of certain additional intangible assets, revisions of useful lives of intangible assets, establishment of potential acquisition contingencies, and the determination of any residual amount that will be allocated to goodwill. As additional information becomes available, the preliminary purchase price allocation may be revised during the remainder of the measurement period, which will not exceed 12 months from the acquisition date. Any such revisions or changes may be material. The following SCHEDULE OF BUSINESS ACQUISITION PURCHASE PRICE FAIR VALUE Current assets $ 10,833 Fixed assets 150 Other non-current assets 3,070 Intangible assets 5,800 Goodwill 5,974 Current liabilities (12,931 ) Other non-current liabilities (167 ) Consideration $ 12,729 In connection with the acquisition of Headway, the Company recorded $ 5,800 The Company recorded a total of $ 449 The following unaudited pro forma consolidated results of operation have been prepared, as if the acquisition of Headway had occurred as of January 3, 2022. SCHEDULE OF UNAUDITED PRO FORMA Six Months Ended Fiscal Year Ended July 2, 2022 January 1, 2022 Revenues $ 144,240 $ 284,191 Net loss from continuing operations (4,846 ) 18,117 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jul. 02, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 11 – SEGMENT INFORMATION The Company generated revenue and gross profit by segment as follows: SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Three Months Ended Six Months Ended July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Commercial Staffing - US $ 28,801 $ 28,518 $ 57,410 $ 58,639 Professional Staffing - US 15,207 3,908 19,536 7,679 Professional Staffing - UK 15,045 18,104 32,000 33,163 Total Revenue $ 59,053 $ 50,530 $ 108,946 $ 99,481 Commercial Staffing - US $ 5,444 $ 5,297 $ 10,163 $ 10,135 Professional Staffing - US 2,367 1,086 3,571 2,039 Professional Staffing - UK 2,708 2,636 5,298 4,860 Total Gross Profit $ 10,519 $ 9,019 $ 19,032 $ 17,034 Selling, general and administrative expenses $ (10,464 ) $ (9,419 ) $ (19,373 ) $ (17,348 ) Depreciation and amortization (698 ) (703 ) (1,353 ) (1,434 ) Interest expense and amortization of debt discount and deferred financing costs (1,137 ) (1,185 ) (1,903 ) (2,426 ) Re-measurement gain (loss) on intercompany note (566 ) (32 ) (1,009 ) 96 PPP forgiveness gain - 10,105 - 10,105 Other (loss) income, net 79 (4 ) 21 103 (Loss) Income Before Provision for Income Tax $ (2,267 ) $ 7,781 $ (4,585 ) $ 6,130 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: Three Months Ended July 2, 2022 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 116 $ 269 $ 1,032 $ 1,417 Temporary Revenue 28,685 14,938 14,013 57,636 Total $ 28,801 $ 15,207 $ 15,045 $ 59,053 Three Months Ended July 3, 2021 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 102 $ 267 $ 972 $ 1,341 Temporary Revenue 28,416 3,641 17,132 49,189 Total $ 28,518 $ 3,908 $ 18,104 $ 50,530 Six Months Ended July 2, 2022 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 229 $ 649 $ 2,103 $ 2,981 Temporary Revenue 57,181 18,887 29,897 105,965 Total $ 57,410 $ 19,536 $ 32,000 $ 108,946 Six Months Ended July 3, 2021 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 143 $ 524 $ 1,708 $ 2,375 Temporary Revenue 58,496 7,155 31,455 97,106 Total $ 58,639 $ 7,679 $ 33,163 $ 99,481 As of July 2, 2022 and January 1, 2022, the Company has assets in the U.S. and the U.K. as follows: July 2, 2022 January 1, 2022 United States $ 76,063 $ 49,652 United Kingdom 25,100 24,038 Total Assets $ 101,163 $ 73,690 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jul. 02, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 – RELATED PARTY TRANSACTIONS In addition to the Series A Preferred Shares, the following are other related party transactions: Board and Committee Members SCHEDULE OF RELATED PARTY TRANSACTIONS Six Months Ended July 2, 2022 Six Months Ended July 3, 2021 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 50 400 $ 4 $ 3 $ 38 234 $ 1 $ 3 Jeff Grout 50 400 4 3 38 234 1 3 Nick Florio 50 400 4 3 38 234 1 3 Vincent Cebula 50 400 4 1 — — — — Alicia Barker — 400 4 3 — 234 1 3 $ 200 2,000 $ 20 $ 13 $ 114 936 $ 4 $ 12 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) |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 6 Months Ended |
Jul. 02, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | NOTE 13 – SUPPLEMENTAL CASH FLOW INFORMATION SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION July 2, 2022 July 3, 2021 Six Months Ended July 2, 2022 July 3, 2021 Cash paid for: Interest $ 1,862 $ 2,323 Income taxes — 278 Non-Cash Investing and Financing Activities: Deferred purchase price of UK factoring facility $ 3,456 $ 3,309 Redeemable Series H preferred stock, net 8,265 — Debt discount 735 Earnout liability 5,000 — Goodwill 5,974 — Intangible assets 5,800 — Dividends accrued to related parties — 712 Deemed dividend — 1,798 Conversion of Series E Preferred Stock – Related Party — 6,172 Conversion of Series E-1 Preferred Stock – Related Party — 1,493 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jul. 02, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS On July 1, 2022, the Company entered into a securities purchase agreement with certain institutional and accredited investors for the issuance and sale of a private placement of 657,858 shares of common stock or pre-funded warrants to purchase shares of common stock, and warrants (the “July 2022 Warrants”) to purchase up to 657,858 shares of common stock, with an exercise price of $ 5.85 per share. The July 2022 Warrants are exercisable immediately upon issuance and have a term of exercise equal to five and one-half years from the date of issuance. The combined purchase price for one share of common stock (or pre-funded warrant) and one associated warrant to purchase one share of common stock was $ 6.10 . In connection with the private placement, each investor entered into a warrant amendment agreement with the Company (collectively, the “Warrant Amendment Agreements”) to amend the exercise prices of certain existing warrants to purchase up to an aggregate of 657,858 shares of common stock of the Company that were previously issued to the investors, with exercise prices ranging from $ 18.50 to $ 38.00 per share and expiration dates ranging from July 22, 2026 to November 1, 2026 . The Warrant Amendment Agreements became effective upon the closing of the private placement and pursuant to the Warrant Amendment Agreements, the amended warrants have a reduced exercise price of $ 5.85 per share and expire five and one-half years following the closing of the private placement. H.C. Wainwright & Co., LLC (“HCW”) acted as the Company’s exclusive placement agent in connection with the private placement, pursuant to that engagement letter, dated as of June 28, 2022, between the Company and HCW. The Company paid HCW (i) a total cash fee equal to 7.5 % of the aggregate gross proceeds of the private placement, (ii) a management fee of 1.0 % of the aggregate gross proceeds of the private placement, or $ 40,129.34 , and (iii) a non-accountable expense allowance of $ 85,000 . In addition, the Company issued to HCW warrants to purchase up to 49,339 shares of common stock at an exercise price equal to $ 7.625 . The warrants are exercisable immediately upon issuance and have a term of exercise equal to five and one-half years from the date of issuance. The Company intends to use the net proceeds received from the private placement for general working capital purposes. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jul. 02, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation These 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. All amounts are in thousands, except share and par values, unless otherwise indicated. The accompanying 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 GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. |
Reverse Stock Split | Reverse Stock Split The Company effected a one-for-ten reverse stock split |
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. The accompanying financial statements have been prepared on a basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements as of the six months ended July 2, 2022, the Company has an accumulated deficit of $ 88,609 26,798 . At July 2, 2022, we had total gross debt (includes Redeemable Series H preferred stock) of $ 18,514 and $ 1,780 of cash on hand. 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 and debt repayments. Subsequent to the six months ended July 2, 2022, we have continued to fund our operations and make required capital payments utilizing our available cash and, as of the date of this filing, we have approximately $ 2,007 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, our note issued to Jackson Investment Group, LLC includes certain financial customary covenants and the Company has had instances of non-compliance. Management has historically been able to obtain from Jackson waivers of any non-compliance and management expects to continue to be able to obtain necessary waivers in the event of future non-compliance; however, there can be no assurance that the Company will be able to obtain such waivers, and should Jackson refuse to provide a waiver in the future, the outstanding debt under the agreement could become due immediately, which exceeds our current cash balance. The entire outstanding principal balance of the 2020 Jackson Note shall be due and payable on September 30, 2022 25,000 |
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. 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 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. |
COVID-19 | COVID-19 The novel Coronavirus disease 2019 (“COVID-19”), is continuing to impact 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 have seen declines in revenues during Fiscal 2021 and 2020. While expected to be temporary, prolonged workforce disruptions can negatively impact sales in fiscal year 2022 and the Company’s overall liquidity. 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 full impact of the COVID-19 outbreak continues to evolve as of the date of this 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. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2022. The Company’s negative working capital and liquidity position combined with the uncertainty generated by the economic reaction to the COVID-19 pandemic contribute to the substantial doubt about the Company’s ability to continue as a going concern. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. Significant estimates for the six months ended July 2, 2022 and July 3, 2021 include the valuation of intangible assets, including goodwill, liabilities associated with testing long-lived assets for impairment, contingent considerations, fair value of financial instruments and valuation reserves against deferred tax assets. |
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, 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 Staffing UK 3,104 No impairments to goodwill were recognized during the six months ended July 2, 2022. 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. 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) |
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 primarily two main forms of revenue – temporary contractor revenue and permanent placement revenue. Temporary contractor revenue is accounted for as a single performance obligation satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance on an hourly or daily basis. The contracts stipulate weekly or monthly billing, and the Company has elected the “as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as we have the right to payment in an amount that corresponds directly with the value of performance completed to date. Permanent placement revenue is recognized on the date the candidate’s full-time employment with the customer has commenced. The customer is invoiced on the start date, and the contract stipulates payment due under varying terms, typically 30 days. The contract with the customer stipulates a guarantee period whereby the customer may be refunded if the employee is terminated within a short period of time, however this has historically been infrequent, and immaterial upon occurrence. As such, the Company’s performance obligations are satisfied upon commencement of the employment, at which point control has transferred to the customer. Revenue for the six months ended July 2, 2022 was comprised of $ 105,965 2,981 97,106 2,375 |
Income Taxes | Income Taxes The Company’s provision for income taxes is based on the discrete method for the quarter 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 0.14 %, (0.06) %, 0.86 % and 0.49 % for the three and six months ending July 2, 2022 and July 3, 2021, 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. |
Foreign Currency | Foreign Currency The Company recorded a non-cash foreign currency remeasurement (loss) gain of $( 566 1,009 32 96 |
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 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. 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) 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 adopted this ASU in this fiscal year. This standard did not have an impact on our financial statements. |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
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 July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Three Months Ended Six Months Ended July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Numerator: Net (Loss) Income $ (2,264 ) $ 7,848 $ (4,588 ) $ 6,160 Less: Dividends paid to Series A preferred shareholders — — — — Less: Dividends paid to Series E, E-1, G, G-1, and J preferred shareholders — (323 ) — (712 ) Less: Deemed dividend — (1,409 ) — (1,798 ) Less: Net income allocated to participating equity — (1,261 ) — (236 ) Net (loss) income available to common shareholders for basic earnings per share (2,264 ) 4,855 (4,588 ) 3,414 Effect of dilutive securities: Add: Dividends paid to Series E, E-1, G, G-1, and J preferred shareholders 323 712 Net income available to common and preferred shareholders for diluted earnings per share $ 5,178 $ 4,126 Denominator: Weighted average basic common shares outstanding 1,759,252 644,092 1,759,298 564,404 Weighted average additional common shares outstanding if preferred shares converted to common shares (if dilutive) — 129,839 — 142,953 Total weighted average common shares outstanding if preferred shares converted to common shares 1,759,252 773,931 1,759,298 707,357 Effect of dilutive securities: Restricted shares 3,520 3,520 Weighted average diluted shares outstanding 777,451 710,877 (Loss) Income per common share: Basic $ (1.29 ) $ 7.54 $ (2.61 ) $ 6.05 Diluted $ (1.29 ) $ 6.66 $ (2.61 ) $ 5.80 |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL | The following table provides a roll forward of goodwill: SCHEDULE OF GOODWILL July 2, 2022 January 1, 2022 Beginning balance, gross $ 23,828 $ 31,591 Acquisition 5,974 — Accumulated disposition — (1,577 ) Accumulated impairment losses — (6,073 ) Currency translation adjustment (1,217 ) (113 ) Ending balance, net $ 28,585 $ 23,828 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT | SCHEDULE OF DEBT July 2, 2022 January 1, 2022 Jackson Investment Group - related party $ 9,016 $ 8,949 Redeemable Series H Preferred Stock 9,000 — HSBC Term Loan 498 809 Total Debt, Gross 18,514 9,758 Less: Debt Discount and Deferred Financing Costs, Net (783 ) (256 ) Total Debt, Net 17,731 9,502 Less: Non-Current Portion: Long-term debt — (279 ) Redeemable Series H Preferred Stock, net (8,306 ) — Total Current Debt, Net $ 9,425 $ 9,223 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Leases | |
SCHEDULE OF LEASE, COST | Quantitative information regarding the Company’s leases for period ended July 2, 2022 is as follows: SCHEDULE OF LEASE, COST Lease Cost Classification July 2, 2022 Operating lease cost SG&A Expenses 832 Other information Weighted average remaining lease term (years) 6.06 Weighted average discount rate 6.27 % |
SCHEDULE OF OPERATING LEASE LIABILITY MATURITY | SCHEDULE OF OPERATING LEASE LIABILITY MATURITY Future Lease Payments 2022 $ 690 2023 1,685 2024 1,627 2025 1,575 2026 2,394 Thereafter 4,978 Total $ 12,949 Less: Imputed Interest 3,066 Operating lease, liability $ 9,883 Leases - Current $ 949 Leases - Non current $ 8,934 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Equity [Abstract] | |
SCHEDULE OF STOCKHOLDERS EQUITY | The Company issued the following shares of common stock during the six months ended July 2, 2022: SCHEDULE OF STOCKHOLDERS EQUITY Number of Common Fair Value Fair Value at Issuance Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Board and committee members 2,000 19 9.70 9.70 Consultant 1,000 7 7.40 7.40 3,000 $ 26 The Company issued the following shares of common stock during the six months ended July 3, 2021: Number of Common Fair Value Fair Value at Issuance Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raises 364,255 $ 19,670 $ 54.00 $ 54.00 Conversion of Series A Preferred Stock 451 — — — Employees 5,084 275 54.00 54.00 Long Term Incentive Plan 2,582 133 51.60 51.60 Board and committee members 94 5 51.60 51.60 372,466 $ 20,083 |
SCHEDULE OF UNVESTED RESTRICTED SHARES ACTIVITY | SCHEDULE OF UNVESTED RESTRICTED SHARES ACTIVITY Weighted Restricted Average Shares Price Per Share Balance at January 2, 2021 1,030 $ 75.00 Granted 19,115 29.20 Vested/adjustments (14,198 ) 29.00 Balance at January 1, 2022 5,947 $ 50.00 Granted 2,000 8.55 Vested/adjustments (259 ) 101.60 Balance at July 2, 2022 7,688 36.64 |
SCHEDULE OF WARRANTS ACTIVITY | Transactions involving the Company’s warrant issuances are summarized as follows: SCHEDULE OF WARRANTS ACTIVITY Weighted Number of Average Shares Exercise Price Outstanding at January 2, 2021 26,285 $ 59.40 Issued 995,452 25.97 Exercised (49,242 ) 0.0001 Expired or cancelled — — Outstanding at January 1, 2022 972,495 $ 26.88 Issued — — Exercised — — Expired or cancelled — — Outstanding at July 2, 2022 972,495 26.88 |
SCHEDULE OF STOCKHOLDERS' EQUITY NOTE, WARRANTS OR RIGHTS | The following table summarizes warrants outstanding as of July 2, 2022: SCHEDULE OF STOCKHOLDERS' EQUITY NOTE, WARRANTS OR RIGHTS Weighted Average Number Remaining Weighted Outstanding Contractual Average Exercise Price and Exercisable Life (years) Exercise price $ 18.50 3,750 972,495 4.23 $ 26.88 |
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY | A summary of option activity during the six months ended July 2, 2022 is presented below: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY Weighted Average Options Exercise Price Outstanding at January 2, 2021 1,302 $ 1,665.60 Granted — — Exercised — — Expired or cancelled — — Outstanding at January 1, 2022 1,302 $ 1,665.60 Granted 50,000 7.80 Exercised — — Expired or cancelled — — Outstanding at July 2, 2022 51,302 $ 50.06 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
SCHEDULE OF BUSINESS ACQUISITION PURCHASE PRICE FAIR VALUE | The following SCHEDULE OF BUSINESS ACQUISITION PURCHASE PRICE FAIR VALUE Current assets $ 10,833 Fixed assets 150 Other non-current assets 3,070 Intangible assets 5,800 Goodwill 5,974 Current liabilities (12,931 ) Other non-current liabilities (167 ) Consideration $ 12,729 |
SCHEDULE OF UNAUDITED PRO FORMA | The following unaudited pro forma consolidated results of operation have been prepared, as if the acquisition of Headway had occurred as of January 3, 2022. SCHEDULE OF UNAUDITED PRO FORMA Six Months Ended Fiscal Year Ended July 2, 2022 January 1, 2022 Revenues $ 144,240 $ 284,191 Net loss from continuing operations (4,846 ) 18,117 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
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 July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Three Months Ended Six Months Ended July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Commercial Staffing - US $ 28,801 $ 28,518 $ 57,410 $ 58,639 Professional Staffing - US 15,207 3,908 19,536 7,679 Professional Staffing - UK 15,045 18,104 32,000 33,163 Total Revenue $ 59,053 $ 50,530 $ 108,946 $ 99,481 Commercial Staffing - US $ 5,444 $ 5,297 $ 10,163 $ 10,135 Professional Staffing - US 2,367 1,086 3,571 2,039 Professional Staffing - UK 2,708 2,636 5,298 4,860 Total Gross Profit $ 10,519 $ 9,019 $ 19,032 $ 17,034 Selling, general and administrative expenses $ (10,464 ) $ (9,419 ) $ (19,373 ) $ (17,348 ) Depreciation and amortization (698 ) (703 ) (1,353 ) (1,434 ) Interest expense and amortization of debt discount and deferred financing costs (1,137 ) (1,185 ) (1,903 ) (2,426 ) Re-measurement gain (loss) on intercompany note (566 ) (32 ) (1,009 ) 96 PPP forgiveness gain - 10,105 - 10,105 Other (loss) income, net 79 (4 ) 21 103 (Loss) Income Before Provision for Income Tax $ (2,267 ) $ 7,781 $ (4,585 ) $ 6,130 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: Three Months Ended July 2, 2022 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 116 $ 269 $ 1,032 $ 1,417 Temporary Revenue 28,685 14,938 14,013 57,636 Total $ 28,801 $ 15,207 $ 15,045 $ 59,053 Three Months Ended July 3, 2021 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 102 $ 267 $ 972 $ 1,341 Temporary Revenue 28,416 3,641 17,132 49,189 Total $ 28,518 $ 3,908 $ 18,104 $ 50,530 Six Months Ended July 2, 2022 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 229 $ 649 $ 2,103 $ 2,981 Temporary Revenue 57,181 18,887 29,897 105,965 Total $ 57,410 $ 19,536 $ 32,000 $ 108,946 Six Months Ended July 3, 2021 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 143 $ 524 $ 1,708 $ 2,375 Temporary Revenue 58,496 7,155 31,455 97,106 Total $ 58,639 $ 7,679 $ 33,163 $ 99,481 As of July 2, 2022 and January 1, 2022, the Company has assets in the U.S. and the U.K. as follows: July 2, 2022 January 1, 2022 United States $ 76,063 $ 49,652 United Kingdom 25,100 24,038 Total Assets $ 101,163 $ 73,690 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF RELATED PARTY TRANSACTIONS | SCHEDULE OF RELATED PARTY TRANSACTIONS Six Months Ended July 2, 2022 Six Months Ended July 3, 2021 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 50 400 $ 4 $ 3 $ 38 234 $ 1 $ 3 Jeff Grout 50 400 4 3 38 234 1 3 Nick Florio 50 400 4 3 38 234 1 3 Vincent Cebula 50 400 4 1 — — — — Alicia Barker — 400 4 3 — 234 1 3 $ 200 2,000 $ 20 $ 13 $ 114 936 $ 4 $ 12 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION | SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION July 2, 2022 July 3, 2021 Six Months Ended July 2, 2022 July 3, 2021 Cash paid for: Interest $ 1,862 $ 2,323 Income taxes — 278 Non-Cash Investing and Financing Activities: Deferred purchase price of UK factoring facility $ 3,456 $ 3,309 Redeemable Series H preferred stock, net 8,265 — Debt discount 735 Earnout liability 5,000 — Goodwill 5,974 — Intangible assets 5,800 — Dividends accrued to related parties — 712 Deemed dividend — 1,798 Conversion of Series E Preferred Stock – Related Party — 6,172 Conversion of Series E-1 Preferred Stock – Related Party — 1,493 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | May 18, 2022 | Apr. 18, 2022 | Jul. 02, 2022 | Jan. 01, 2022 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Preferred stock, par or stated value per share | $ 0.00001 | $ 0.00001 | ||
Stock Purchase Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Cash payment | $ 14 | |||
Convertible preferred stock, shares | 9,000,000 | |||
Stock Purchase Agreement [Member] | Series H Convertible Preferred Stock [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Convertible preferred stock, shares | 9,000,000 | |||
Payments to acquire businesses, gross | $ 9,000 | $ 9,000 | ||
Preferred stock, par or stated value per share | $ 0.00001 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 24, 2022 | Jul. 02, 2022 | Jan. 01, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | Jan. 01, 2022 | Aug. 22, 2022 | |
Debt Instrument [Line Items] | ||||||||
Reverse stock split, description | one-for-ten reverse stock split | |||||||
Accumulated deficit | $ 88,609 | $ 84,021 | $ 88,609 | $ 84,021 | ||||
Working capital deficit | 26,798 | 26,798 | ||||||
Gross debt | 18,514 | 18,514 | ||||||
Cash | 1,780 | 4,558 | 1,780 | 4,558 | $ 2,007 | |||
Goodwill, impairment loss | $ 6,073 | |||||||
Revenue | $ 59,053 | $ 50,530 | $ 108,946 | $ 99,481 | ||||
Effective income tax rate | 0.14% | 0.86% | (0.06%) | 0.49% | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% | |||||||
Other comprehensive income (loss), foreign currency transaction and translation adjustment, net of tax | $ 566 | $ 32 | $ 1,009 | $ 96 | ||||
Temporary Contractor Revenue [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Revenue | 105,965 | 2,375 | ||||||
Permanent Placement Revenue [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Revenue | $ 2,981 | $ 97,106 | ||||||
Staffing UK Reporting Unit [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Goodwill, impairment loss | $ 3,104 | |||||||
2020 Jackson Note [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity date | Sep. 30, 2022 | |||||||
Revolving loan facility | $ 25,000 | $ 25,000 |
SCHEDULE OF EARNINGS PER SHARE,
SCHEDULE OF EARNINGS PER SHARE,BASIC AND DILUTED (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net (Loss) Income | $ (2,264) | $ 7,848 | $ (4,588) | $ 6,160 |
Less: Dividends paid to Series E, E-1, G, G-1, and J preferred shareholders | (323) | (712) | ||
Less: Deemed dividend | (1,409) | (1,798) | ||
Less: Net income allocated to participating equity | 1,261 | 236 | ||
Net (loss) income available to common shareholders for basic earnings per share | $ (2,264) | 4,855 | $ (4,588) | 3,414 |
Add: Dividends paid to Series E, E-1, G, G-1, and J preferred shareholders | 323 | 712 | ||
Net income available to common and preferred shareholders for diluted earnings per share | $ 5,178 | $ 4,126 | ||
Weighted average basic common shares outstanding | 1,759,252 | 644,092 | 1,759,298 | 564,404 |
Weighted average additional common shares outstanding if preferred shares converted to common shares (if dilutive) | 129,839 | 142,953 | ||
Total weighted average common shares outstanding if preferred shares converted to common shares | 1,759,252 | 773,931 | 1,759,298 | 707,357 |
Restricted shares | 3,520 | 3,520 | ||
Weighted average diluted shares outstanding | 777,451 | 710,877 | ||
Basic | $ (1.29) | $ 7.54 | $ (2.61) | $ 6.05 |
Diluted | $ (1.29) | $ 6.66 | $ (2.61) | $ 5.80 |
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 |
ACCOUNTS RECEIVABLE FINANCING (
ACCOUNTS RECEIVABLE FINANCING (Details Narrative) £ in Thousands | 1 Months Ended | 6 Months Ended | ||||||
Dec. 31, 2021 | Jun. 28, 2018 GBP (£) | Feb. 08, 2018 GBP (£) | Sep. 15, 2017 USD ($) | Jul. 31, 2019 GBP (£) | Jul. 02, 2022 USD ($) | Jul. 03, 2021 USD ($) | Jan. 01, 2021 USD ($) | |
Collection of UK factoring facility deferred purchase price | $ 3,705,000 | $ 3,382,000 | ||||||
Midcap Financial Trust [Member] | ||||||||
Letter of credit | $ 25,000,000 | 12,392,000 | $ 13,405,000 | |||||
Line of credit facility additional borrowing capacity | $ 25,000,000 | |||||||
Line of credit facility, maturity date | Apr. 08, 2019 | |||||||
White Oak Commercial Finance LLC [Member] | ||||||||
Letter of credit | 0 | |||||||
Guaranteed amount | 1,000,000 | |||||||
Line of credit facility aggregate amount | $ 10,000,000 | |||||||
Line of credit, description | The borrowing base is defined as the sum of the following: (a) 95% of the eligible ordinary receivables, as defined, and (b) the lessor of (i) $3,000,000 or (ii) 95% of the Company’s outstanding eligible unbilled receivables, as defined, less the sum of the following: (c) 100% of the undrawn amount of all letters of credit outstanding, (d) the special availability reserve, (e) the quarterly tax reserve and (f) the amount all other availability reserves in effect as such time. | |||||||
Line of credit bear interest | 0.25% | |||||||
Line of credit facility borrowing outstanding | $ 7,568 | |||||||
Line of credit | $ 2,000,000 | |||||||
White Oak Commercial Finance LLC [Member] | Interest Rate Floor [Member] | ||||||||
Line of credit bear interest | 7% | 7% | ||||||
White Oak Commercial Finance LLC [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||
Line of credit bear interest | 5% | |||||||
Letter of credit percentage | 6.25% | |||||||
HSBC Invoice Finance (UK) Ltd [Member] | New Facility [Member] | ||||||||
Line of credit facility aggregate amount | £ | £ 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.) | |||||||
Line of credit facility increase decrease for period net | £ | £ 20,000 | £ 11,500 | £ 22,500 | |||||
Line of credit facility, commitment fee percentage | 1.80% | |||||||
Line of credit facility unbilled receivables | £ | £ 1,500 | £ 1,000 |
SCHEDULE OF GOODWILL (Details)
SCHEDULE OF GOODWILL (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jul. 02, 2022 | Jan. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning balance, gross | $ 23,828 | $ 31,591 |
Acquisition | 5,974 | |
Accumulated disposition | (1,577) | |
Accumulated impairment losses | (6,073) | |
Currency translation adjustment | (1,217) | (113) |
Ending balance, net | $ 28,585 | $ 23,828 |
GOODWILL (Details Narrative)
GOODWILL (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jan. 01, 2022 | Jul. 02, 2022 | Jan. 01, 2022 | May 18, 2022 | |
Goodwill [Line Items] | ||||
Goodwill, impairment loss | $ 6,073 | |||
Goodwill | $ 23,828 | $ 28,585 | $ 23,828 | $ 5,974 |
Staffing UK Reporting Unit [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill, impairment loss | $ 3,104 |
SCHEDULE OF DEBT (Details)
SCHEDULE OF DEBT (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | Jan. 01, 2022 |
Short-Term Debt [Line Items] | ||
Total Debt, Gross | $ 18,514 | $ 9,758 |
Less: Debt Discount and Deferred Financing Costs, Net | (783) | (256) |
Total Debt, Net | 17,731 | 9,502 |
Long-term debt | (279) | |
Redeemable Series H Preferred Stock, net | (8,306) | |
Total Current Debt, Net | 9,425 | 9,223 |
Series H Preferred Stock [Member] | ||
Short-Term Debt [Line Items] | ||
Total Debt, Gross | 9,000 | |
Jackson Investment Group Related Party [Member] | ||
Short-Term Debt [Line Items] | ||
Total Debt, Gross | 9,016 | 8,949 |
HSBC Term Loan [Member] | ||
Short-Term Debt [Line Items] | ||
Total Debt, Gross | $ 498 | $ 809 |
DEBT (Details Narrative)
DEBT (Details Narrative) $ / shares in Units, £ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||
May 18, 2022 USD ($) $ / shares shares | Oct. 28, 2021 USD ($) | Aug. 05, 2021 USD ($) | Jul. 20, 2021 USD ($) shares | May 06, 2021 shares | Apr. 21, 2021 USD ($) | Feb. 05, 2021 | Jan. 04, 2021 USD ($) shares | Oct. 31, 2020 USD ($) $ / shares | Oct. 26, 2020 USD ($) $ / shares shares | May 15, 2020 GBP (£) | Aug. 29, 2019 USD ($) shares | Nov. 15, 2018 USD ($) $ / shares shares | Aug. 27, 2018 USD ($) shares | Jun. 28, 2018 GBP (£) | Feb. 08, 2018 GBP (£) | Sep. 15, 2017 USD ($) | May 18, 2022 USD ($) $ / shares shares | Jul. 21, 2021 USD ($) shares | Jul. 31, 2019 GBP (£) | Jul. 02, 2022 USD ($) $ / shares | Apr. 02, 2022 | Jul. 03, 2021 USD ($) | May 28, 2020 USD ($) shares | Jul. 02, 2022 USD ($) $ / shares shares | Jul. 03, 2021 USD ($) shares | Oct. 02, 2021 USD ($) $ / shares | Dec. 28, 2019 | Jul. 01, 2022 $ / shares | Jan. 01, 2022 USD ($) $ / shares | Dec. 27, 2021 $ / shares | Oct. 31, 2021 $ / shares | Jul. 22, 2021 USD ($) | Jan. 31, 2021 USD ($) | Jan. 02, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued during period, shares, new issues | shares | 3,000 | 372,466 | |||||||||||||||||||||||||||||||||
Proceeds from issuance of debt | $ 67,000 | ||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | 17,847,000 | ||||||||||||||||||||||||||||||||||
Preferred stock, par or stated value per share | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||||||||||||||||||||||||
Deemed dividend | $ 1,409,000 | $ 1,798,000 | |||||||||||||||||||||||||||||||||
Long term debt, gross | $ 18,514,000 | $ 18,514,000 | $ 9,758,000 | ||||||||||||||||||||||||||||||||
Common stock par value | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued during period, shares, new issues | shares | 364,255 | ||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | |||||||||||||||||||||||||||||||||||
HSBC Bank [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | £ | £ 1,000 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Description | three-year term loan | ||||||||||||||||||||||||||||||||||
Long term debt, gross | $ 498,000 | $ 498,000 | |||||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Preferred stock, liquidation preference per share | $ / shares | $ 10,000 | ||||||||||||||||||||||||||||||||||
Preferred stock, redemption amount | $ 4,100,000 | $ 2,100,000 | |||||||||||||||||||||||||||||||||
Deemed dividends | $ 389,000 | ||||||||||||||||||||||||||||||||||
Series G-1 Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Conversion of stock, shares issued | shares | 1,561,000 | ||||||||||||||||||||||||||||||||||
Series E-1 Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Preferred stock, par or stated value per share | $ / shares | $ 60 | ||||||||||||||||||||||||||||||||||
Conversion price | $ / shares | $ 60 | $ 60 | |||||||||||||||||||||||||||||||||
Beneficial conversion feature | $ 4,280,000 | ||||||||||||||||||||||||||||||||||
Impact to additional paid-in capital | $ 0 | ||||||||||||||||||||||||||||||||||
Series G Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Preferred stock, redemption amount | $ 2,080,000 | ||||||||||||||||||||||||||||||||||
Conversion of stock, shares issued | shares | 6,172,000 | ||||||||||||||||||||||||||||||||||
Series H Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Preferred stock redemption description | The redemption price represents the number of shares of the Preferred Stock (9,000,000), plus all accrued but unpaid dividends, multiplied by the Stated Value ($1). On May 18, 2022, the Company paid $14 towards the Series H Preferred Stock balance. | ||||||||||||||||||||||||||||||||||
Preferred stock, par or stated value per share | $ / shares | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||||||||||||||
Long term debt, gross | 9,000,000 | 9,000,000 | |||||||||||||||||||||||||||||||||
Debt instrument issuance of aggregate shares | shares | 9,000,000 | 9,000,000 | |||||||||||||||||||||||||||||||||
Common stock par value | $ / shares | $ 1 | $ 1 | |||||||||||||||||||||||||||||||||
Preferred stock conversion price | $ / shares | $ 2.5714 | $ 2.5714 | |||||||||||||||||||||||||||||||||
Cash dividends per annum rate | 12% | ||||||||||||||||||||||||||||||||||
Redemption price | $ 8,265 | $ 8,265 | $ 9,000 | $ 9,000 | |||||||||||||||||||||||||||||||
Fair value financing charge | $ 735 | ||||||||||||||||||||||||||||||||||
Series H Preferred Stock [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument issuance of aggregate shares | shares | 350,000 | 350,000 | |||||||||||||||||||||||||||||||||
Series H Preferred Stock [Member] | Headway [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Ownership percentage | 100% | 100% | |||||||||||||||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 18.50 | $ 18.50 | |||||||||||||||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3,750 | $ 3,750 | |||||||||||||||||||||||||||||||||
Jackson Investment Group L L C Term Loan Note Two [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 30 | ||||||||||||||||||||||||||||||||||
12% Senior Secured Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 7,733,000 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12% | ||||||||||||||||||||||||||||||||||
Proceeds from issuance of private placement | $ 9,250,000 | $ 3,217,000 | $ 6,760,000 | ||||||||||||||||||||||||||||||||
Debt instrument, periodic payment | 13,449,000 | 16,730,000 | 21,700,000 | ||||||||||||||||||||||||||||||||
Proceeds from bank debt | $ 4,500,000 | $ 3,281,000 | $ 5,000,000 | ||||||||||||||||||||||||||||||||
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 | $ 6,172,000 | ||||||||||||||||||||||||||||||||||
12% Senior Secured Note [Member] | Series G-1 Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt conversion, converted instrument, shares issued | shares | 1,561 | ||||||||||||||||||||||||||||||||||
Convertible debt | $ 1,561,000 | ||||||||||||||||||||||||||||||||||
Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, payment terms | 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 | $ 99.60 | ||||||||||||||||||||||||||||||||||
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 | $ 60 | ||||||||||||||||||||||||||||||||||
Jackson Note [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Preferred stock redemption description | 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 2020 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 paid $13,556 of the 2020 Jackson Note and redeemed 4,518 shares of the Series E Convertible Preferred Stock. | ||||||||||||||||||||||||||||||||||
HSBC Invoice Finance (UK) Ltd [Member] | New Facility [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Line of Credit Facility, Increase (Decrease), Net | £ | £ 20,000 | £ 11,500 | £ 22,500 | ||||||||||||||||||||||||||||||||
Unbilled receivables | £ | £ 1,500 | £ 1,000 | |||||||||||||||||||||||||||||||||
Line of Credit Facility, Expiration Period | 12 months | ||||||||||||||||||||||||||||||||||
Line of Credit Facility, Commitment Fee Percentage | 1.80% | ||||||||||||||||||||||||||||||||||
2017 Jackson Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 11,165,000 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 15, 2020 | ||||||||||||||||||||||||||||||||||
Debt instrument, payment terms | The 2017 Jackson Note will accrue interest at 12% per annum, due quarterly on January 1, April 1, July 1 and October 1 in each year, with the first such payment due on January 1, 2018. | ||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12% | ||||||||||||||||||||||||||||||||||
Jackson Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Class of warrant or right, outstanding | shares | 15,092 | ||||||||||||||||||||||||||||||||||
Note Purchase Agreement [Member] | 12% Senior Secured Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||
Debt instrument, interest rate during period | 17% | ||||||||||||||||||||||||||||||||||
Note Purchase Agreement [Member] | 2017 Jackson Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 40,000,000 | ||||||||||||||||||||||||||||||||||
Amended and Restated Note Purchase Agreement [Member] | Jackson Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, frequency of periodic payment | quarterly | ||||||||||||||||||||||||||||||||||
Debt instrument, date of first required payment | Jan. 01, 2018 | ||||||||||||||||||||||||||||||||||
Debt instrument, interest payment description | Interest on any overdue payment of principal or interest due under the 2017 Jackson Note will accrue at a rate per annum that is 5% in excess of the rate of interest otherwise payable thereunder. | ||||||||||||||||||||||||||||||||||
Debt instrument, incremental percentage on interest rate | 500% | ||||||||||||||||||||||||||||||||||
Amended Agreement [Member] | Jackson Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 8,428,000 | ||||||||||||||||||||||||||||||||||
Purchase Agreement Closing Fee | 280,000 | ||||||||||||||||||||||||||||||||||
Purchase Agreement Legal Fee | $ 39,000 | ||||||||||||||||||||||||||||||||||
Stock issued during period, shares, new issues | shares | 19,200 | ||||||||||||||||||||||||||||||||||
Fourth Omnibus Amendment and Reaffirmation Agreement [Member] | Jackson Investment Group, LLC [Member] | FirstPro Reporting Unit [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 2,538,000 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date | Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 18% | ||||||||||||||||||||||||||||||||||
Debt instrument, interest payment description | All accrued and unpaid interest on the outstanding principal balance of the 2019 Jackson Note was due and payable monthly on the first day of each month, beginning on October 1, 2019 | ||||||||||||||||||||||||||||||||||
Debt instrument, date of first interest payment | Oct. 01, 2019 | ||||||||||||||||||||||||||||||||||
Debt instrument, default of payment description | Pursuant to the terms of the 2019 Jackson Note, if the 2019 Jackson Note was not repaid by December 31, 2019, the Company was required to issue 10,000 shares of its common stock to Jackson on a monthly basis until the 2019 Jackson Note is fully repaid, subject to certain exceptions to comply with Nasdaq listing standards. | ||||||||||||||||||||||||||||||||||
Number of common shares issuable on monthly basis in event of default | shares | 10,000 | ||||||||||||||||||||||||||||||||||
Additional expense related to issuance of common stock | $ 324,000 | ||||||||||||||||||||||||||||||||||
Number of common shares issued in event of default | shares | 50,000,000 | ||||||||||||||||||||||||||||||||||
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-1 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 $35.00 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 $35.00, and if such average closing price were greater than $210.00 then the average closing price for these purposes would be deemed to be $210.00 | ||||||||||||||||||||||||||||||||||
Preferred stock, liquidation preference per share | $ / shares | $ 10,000 | ||||||||||||||||||||||||||||||||||
Deemed dividend | $ 410,000 | ||||||||||||||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Minimum [Member] | Series E-1 Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Conversion price | $ / shares | $ 106.80 | ||||||||||||||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Maximum [Member] | Series E-1 Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Conversion price | $ / shares | $ 99.60 | ||||||||||||||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Jackson Investment Group, LLC [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Amendment fee | $ 488,000 | ||||||||||||||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 35,700,000 | ||||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||
Amendment fee | $ 488,000 | ||||||||||||||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12% | ||||||||||||||||||||||||||||||||||
Amended Note Purchase Agreement [Member] | Jackson Investment Group, LLC [Member] | Senior Secured 12% Promissory Note [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 50% | ||||||||||||||||||||||||||||||||||
Amended and Restated Warrant Agreement [Member] | Jackson Investment Group L L C Term Loan Note Two [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 3,000,000 | ||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 210 | ||||||||||||||||||||||||||||||||||
Amended and Restated Warrant Agreement [Member] | Debt Exchange Agreement [Member] | Jackson Investment Group L L C Term Loan Note Two [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
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 was increased by $166. | ||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 30 | ||||||||||||||||||||||||||||||||||
Prepayment cost | $ 3,029,000 | ||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 33,878,000 | ||||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 5.85 | ||||||||||||||||||||||||||||||||||
Proceeds from debt, net of issuance costs | 1,558,000 | ||||||||||||||||||||||||||||||||||
Stock repurchased during period, value | 1,168,000 | ||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Stock repurchased during period, value | $ 390,000 | ||||||||||||||||||||||||||||||||||
Stock repurchased during period, shares | shares | 390 | ||||||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | shares | 10,690 | ||||||||||||||||||||||||||||||||||
Preferred stock par stated value | $ 10,690,000 | ||||||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Jackson Note [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 32,710,000 | ||||||||||||||||||||||||||||||||||
April 2021 Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [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] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Proceeds from issuance of debt | 3,200,000 | ||||||||||||||||||||||||||||||||||
Debt instrument, periodic payment | $ 19,154,000 | ||||||||||||||||||||||||||||||||||
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, shares, new issues | shares | 13,000 | ||||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 13,000,000 | ||||||||||||||||||||||||||||||||||
Preferred stock, par or stated value per share | $ / shares | $ 10,000 | ||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | shares | 561 | ||||||||||||||||||||||||||||||||||
Limited Consent and Waiver [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Agreement description | the Company entered into a Limited Consent and Waiver with Jackson whereby, among other things, Jackson agreed that we may use 75% of the proceeds from the offering to redeem a portion of the 2020 Jackson Note, and 25% of the net proceeds from the offering to redeem a portion of the Base Series E Preferred Stock | ||||||||||||||||||||||||||||||||||
Exchange Agreement [Member] | Jackson Investment Group, LLC [Member] | Series G Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Preferred stock description | The Series G Preferred Stock carried 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 had 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 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 September 30, 2022, for a cash payment equal to the liquidation value plus any accrued and unpaid dividends thereon. | ||||||||||||||||||||||||||||||||||
Exchange Agreement [Member] | Jackson Investment Group, LLC [Member] | Series G Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Preferred stock description | Each share of Series G Preferred Stock was 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 was not required to pay any additional consideration in exchange for conversion of the Series G Preferred Stock into the Company’s common stock. | ||||||||||||||||||||||||||||||||||
Exchange Agreement [Member] | Jackson Investment Group, LLC [Member] | Series E Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued during period, shares, new issues | shares | 6,172 | ||||||||||||||||||||||||||||||||||
Exchange Agreement [Member] | Jackson Investment Group, LLC [Member] | Series E-1 Convertible Preferred Stock [Member] | |||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||
Stock issued during period, shares, new issues | shares | 1,493 |
SCHEDULE OF LEASE, COST (Detail
SCHEDULE OF LEASE, COST (Details) $ in Thousands | 6 Months Ended |
Jul. 02, 2022 USD ($) | |
Weighted average remaining lease term (years) | 6 years 21 days |
Weighted average discount rate | 6.27% |
Selling, General and Administrative Expenses [Member] | |
Operating lease cost | $ 832 |
SCHEDULE OF OPERATING LEASE LIA
SCHEDULE OF OPERATING LEASE LIABILITY MATURITY (Details) - USD ($) $ in Thousands | Jul. 02, 2022 | May 31, 2022 | May 18, 2022 | Apr. 30, 2022 | Jan. 01, 2022 |
Leases | |||||
2022 | $ 690 | ||||
2023 | 1,685 | ||||
2024 | 1,627 | ||||
2025 | 1,575 | ||||
2026 | 2,394 | ||||
Thereafter | 4,978 | ||||
Total | 12,949 | ||||
Less: Imputed Interest | 3,066 | ||||
Operating lease, liability | 9,883 | $ 1,555 | $ 1,829 | $ 2,048 | |
Leases - Current | 949 | $ 1,006 | |||
Leases - Non current | $ 8,934 | $ 4,568 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | Jul. 02, 2022 | May 31, 2022 | May 18, 2022 | Apr. 30, 2022 | Jan. 01, 2022 | Sep. 30, 2021 | Jan. 02, 2021 |
Operating lease, right-of-use asset | $ 9,281 | $ 1,555 | $ 1,635 | $ 2,048 | $ 5,578 | ||
Operating lease liability | 9,883 | $ 1,555 | $ 1,829 | $ 2,048 | |||
Operating lease term | 10 years | 10 years | |||||
New Lease Agreement [Member] | |||||||
Operating lease, right-of-use asset | $ 2,761 | ||||||
Operating lease liability | $ 2,761 | ||||||
Lessee, operating lease, renewal term | 8 years | ||||||
Accounting Standards Update 2018-11 [Member] | |||||||
Operating lease, right-of-use asset | 9,281 | $ 5,578 | |||||
Operating lease liability | $ 9,883 | $ 5,574 |
SCHEDULE OF STOCKHOLDERS EQUITY
SCHEDULE OF STOCKHOLDERS EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 3,000 | 372,466 |
Fair Value of Shares Issued | $ 26 | $ 20,083 |
Long-term Incentive Plan [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 2,582 | |
Fair Value of Shares Issued | $ 133 | |
Equity Raise [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 364,255 | |
Fair Value of Shares Issued | $ 19,670 | |
Conversion of Series A Preferred Stock [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 451 | |
Fair Value of Shares Issued | ||
Minimum [Member] | Long-term Incentive Plan [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 51.60 | |
Minimum [Member] | Equity Raise [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 54 | |
Minimum [Member] | Conversion of Series A Preferred Stock [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | ||
Maximum [Member] | Long-term Incentive Plan [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 51.60 | |
Maximum [Member] | Equity Raise [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | 54 | |
Maximum [Member] | Conversion of Series A Preferred Stock [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | ||
Board and Committee Members [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 2,000 | 94 |
Fair Value of Shares Issued | $ 19 | $ 5 |
Board and Committee Members [Member] | Minimum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 9.70 | $ 51.60 |
Board and Committee Members [Member] | Maximum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 9.70 | $ 51.60 |
Consultant [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 1,000 | |
Fair Value of Shares Issued | $ 7 | |
Consultant [Member] | Minimum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 7.40 | |
Consultant [Member] | Maximum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 7.40 | |
Employees [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 5,084 | |
Fair Value of Shares Issued | $ 275 | |
Employees [Member] | Minimum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 54 | |
Employees [Member] | Maximum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair Value at Issuance (per Share) | $ 54 |
SCHEDULE OF UNVESTED RESTRICTED
SCHEDULE OF UNVESTED RESTRICTED SHARES ACTIVITY (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jul. 02, 2022 | Jan. 01, 2022 | |
Equity [Abstract] | ||
Restricted Shares, Beginning balance | 5,947 | 1,030 |
Weighted Average Price Per Share, Beginning balance | $ 50 | $ 75 |
Restricted Shares, Granted | 2,000 | 19,115 |
Weighted Average Price Per Share, Granted | $ 8.55 | $ 29.20 |
Restricted Shares, Vested/adjustments | (259) | (14,198) |
Weighted Average Price Per Share, Vested/adjustments | $ 101.60 | $ 29 |
Restricted Shares, Ending balance | 7,688 | 5,947 |
Weighted Average Price Per Share, Ending balance | $ 36.64 | $ 50 |
SCHEDULE OF WARRANTS ACTIVITY (
SCHEDULE OF WARRANTS ACTIVITY (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jul. 02, 2022 | Jan. 01, 2022 | |
Equity [Abstract] | ||
Number of Shares, Outstanding Beginning Balance | 972,495 | 26,285 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 26.88 | $ 59.40 |
Number of Shares, Issued | 995,452 | |
Weighted Average Exercise Price, Issued | $ 25.97 | |
Number of Shares, Exercised | (49,242) | |
Weighted Average Exercise Price, Exercised | $ 0.0001 | |
Number of Shares, Expired or Cancelled | ||
Weighted Average Exercise Price, Expired or Cancelled | ||
Number of Shares, Exercised | 49,242 | |
Number of Shares, Outstanding Ending Balance | 972,495 | 972,495 |
Weighted Average Exercise Price, Outstanding Ending Balance | $ 26.88 | $ 26.88 |
SCHEDULE OF STOCKHOLDERS' EQUIT
SCHEDULE OF STOCKHOLDERS' EQUITY NOTE, WARRANTS OR RIGHTS (Details) | 6 Months Ended |
Jul. 02, 2022 $ / shares shares | |
Class of Warrant or Right, Number Outstanding and Exercisable | shares | 972,495 |
Weighted Average Remaining Contractual Life (years) | 4 years 2 months 23 days |
Weighted Average Exercise Price | $ 26.88 |
Minimum [Member] | |
Exercise Price | 18.50 |
Maximum [Member] | |
Exercise Price | $ 3,750 |
SCHEDULE OF SHARE-BASED COMPENS
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS, ACTIVITY (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jul. 02, 2022 | Jan. 01, 2022 | |
Equity [Abstract] | ||
Options Outstanding, Beginning Balance | 1,302 | 1,302 |
Weighted Average Exercise Price, Beginning Balance | $ 1,665.60 | $ 1,665.60 |
Options Granted | 50,000 | |
Weighted Average Exercise Price, Granted | $ 7.80 | |
Options Exercised | ||
Weighted Average Exercise Price, Exercised | ||
Options Expired or Cancelled | ||
Weighted Average Exercise Price, Expired or Cancelled | ||
Options Outstanding, Ending Balance | 51,302 | 1,302 |
Weighted Average Exercise Price, Ending Balance | $ 50.06 | $ 1,665.60 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
May 03, 2022 | Jul. 02, 2022 | Jul. 03, 2021 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | Jan. 01, 2022 | Dec. 27, 2021 | Dec. 26, 2021 | |
Class of Stock [Line Items] | |||||||||
Common stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | 200,000,000 | 40,000,000 | ||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||
Grants in period shares | 2,000 | 19,115 | |||||||
Share based compensation expense | $ 83 | $ 335 | |||||||
Omnibus Incentive Plan [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Share based compensation expense | $ 16 | $ 7 | 38 | 13 | |||||
Restricted Stocks [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Share based compensation expense | $ 22 | $ 44 | $ 109 | 318 | |||||
April 2021 Securities Purchase Agreement [Member] | Second Amended and Restated 12% Senior Secured Note [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Share based payment award vesting period terms | three years | ||||||||
Grants in period shares | 1,000 | ||||||||
Series A Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Dividend payables | $ 125 | $ 125 | |||||||
Series J Preferred Stock [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||
Series preferred stock, shares designated | 0.0001 | 0.0001 | |||||||
Issued shares | 17,618.3 | ||||||||
Redemption share price | $ 0.1761 | $ 0.1761 | |||||||
Series J Preferred Stock [Member] | Stock Purchase Agreement [Member] | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, voting rights | The Company held a special meeting of stockholders on June 23, 2022 (the “Special Meeting”) for the purpose of voting on a Reverse Stock Split Proposal and an Adjournment Proposal. Each share of Series J Preferred Stock entitled the holder thereof to 1,000,000 votes per share and each fraction of a share of Series J Preferred Stock had a ratable number of votes. Thus, each one-thousandth of a share of Series J Preferred Stock entitled the holder thereof to 1,000 votes. All shares of Series J Preferred Stock that were not present in person or by proxy at the Special Meeting as of immediately prior to the opening of the polls at such meeting (the “Initial Redemption Time”) were automatically redeemed by the Company at the Initial Redemption Time before the vote without further action on the part of the Company or the holder of shares of Series J Preferred Stock (the “Initial Redemption”). All shares that were not redeemed pursuant to the Initial Redemption were redeemed automatically upon the approval by the Company’s stockholders of the Reverse Stock Split Proposal at the Special Meeting (the “Subsequent Redemption”). As a result, no shares of Series J Preferred Stock remain outstanding. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | ||||
May 18, 2022 | May 18, 2022 | Feb. 26, 2020 | Apr. 30, 2023 | Jul. 02, 2022 | Jan. 01, 2022 | |
Loss Contingencies [Line Items] | ||||||
Retention bonus | $ 3,860,000 | $ 2,503,000 | ||||
Alleged damages | $ 6,000,000 | |||||
Earnout liabilities | 8,344,000 | $ 4,054,000 | ||||
New York Action [Member] | Pamela D. Whitaker [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Alleged damages | 4,054,000 | |||||
New York Action [Member] | Pamela D. Whitaker [Member] | Headway Workforce Solutions [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Earnout liabilities | 4,054,000 | |||||
Retention Bonus [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Retention bonus | $ 550 | |||||
Headway Workforce Solutions [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Earnout payment | $ 4,450,000,000 | $ 4,450,000,000 | ||||
Business combination consideration transferred | 4,290 | |||||
Payments to acquire businesses gross | $ 160 | |||||
Headway Workforce Solutions [Member] | Forecast [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Threshold amount | $ 2,000 | |||||
Business combination consideration transferred | $ 5,000 | |||||
Headway Workforce Solutions [Member] | Contingent Payment One [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Contingent payment description | Adjusted EBITDA of $0 or less than $0= no Contingent Payment | |||||
Headway Workforce Solutions [Member] | Contingent Payment Two [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Contingent payment description | Adjusted EBITDA of $500 x 2.5 multiple= $1,250 Contingent Payment | |||||
Headway Workforce Solutions [Member] | Contingent Payment Three [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Contingent payment description | Adjusted EBITDA of $1,000 x 2.5 multiple= $2,500 Contingent Payment | |||||
Headway Workforce Solutions [Member] | Contingent Payment Four [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Contingent payment description | Adjusted EBITDA of $1,800 x 2.5 multiple= $4,500 Contingent Payment | |||||
Headway Workforce Solutions [Member] | Contingent Payment Five [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Contingent payment description | Adjusted EBITDA of $2,000 or more x 2.5 multiple= $5,000 Contingent Payment |
SCHEDULE OF BUSINESS ACQUISITIO
SCHEDULE OF BUSINESS ACQUISITION PURCHASE PRICE FAIR VALUE (Details) - Headway Workforce Solutions [Member] $ in Thousands | Jul. 02, 2022 USD ($) |
Business Acquisition [Line Items] | |
Current assets | $ 10,833 |
Fixed assets | 150 |
Other non-current assets | 3,070 |
Intangible assets | 5,800 |
Goodwill | 5,974 |
Current liabilities | (12,931) |
Other non-current liabilities | (167) |
Consideration | $ 12,729 |
SCHEDULE OF UNAUDITED PRO FORMA
SCHEDULE OF UNAUDITED PRO FORMA (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jul. 02, 2022 | Jan. 01, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenues | $ 144,240 | $ 284,191 |
Net loss from continuing operations | $ (4,846) | $ 18,117 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
May 18, 2022 | Apr. 18, 2022 | Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 02, 2022 | Jul. 03, 2021 | |
Business Acquisition [Line Items] | |||||||
Operating expenses | $ 11,162,000 | $ 10,122,000 | $ 20,726,000 | $ 18,782,000 | |||
Headway Workforce Solutions [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Payments to Acquire Businesses, Gross | $ 160 | ||||||
Business combination consideration transferred | 4,290 | ||||||
Intangible assets | $ 5,800,000 | $ 5,800,000 | $ 5,800,000 | ||||
Operating expenses | $ 449,000 | ||||||
Stock Purchase Agreement [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire receivables | $ 14,000 | ||||||
Stock issued during period, shares, conversion of convertible securities | 9,000,000 | ||||||
Stock Purchase Agreement [Member] | Series H Convertible Preferred Stock [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued during period, shares, conversion of convertible securities | 9,000,000 | ||||||
Payments to Acquire Businesses, Gross | $ 9,000,000 | $ 9,000,000 | |||||
Stock Purchase Agreement [Member] | Series H Convertible Preferred Stock [Member] | Headway Workforce Solutions [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Business combination consideration transferred | $ 4,450,000 |
SCHEDULE OF SEGMENT REPORTING I
SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | Jan. 01, 2022 | |
Segment Reporting Information [Line Items] | |||||
Total | $ 59,053 | $ 50,530 | $ 108,946 | $ 99,481 | |
Total Gross Profit | 10,519 | 9,019 | 19,032 | 17,034 | |
Selling, general and administrative expenses | (10,464) | (9,419) | (19,373) | (17,348) | |
Depreciation and amortization | (698) | (703) | (1,353) | (1,434) | |
Interest expense and amortization of debt discount and deferred financing costs | (1,137) | (1,185) | (1,903) | (2,426) | |
Re-measurement gain (loss) on intercompany note | (566) | (32) | (1,009) | 96 | |
PPP forgiveness gain | 10,105 | 10,105 | |||
Other (loss) income, net | 79 | (4) | 21 | 103 | |
(Loss) Income Before Provision for Income Tax | (2,267) | 7,781 | (4,585) | 6,130 | |
Total Assets | 101,163 | 101,163 | $ 73,690 | ||
Permanent Placement Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total | 1,417 | 1,341 | 2,981 | 2,375 | |
Temporary Contractor Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total | 57,636 | 49,189 | 105,965 | 97,106 | |
UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | 76,063 | 76,063 | 49,652 | ||
UNITED KINGDOM | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | 25,100 | 25,100 | $ 24,038 | ||
Commercial Staffing US [Member] | UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Total | 28,801 | 28,518 | 57,410 | 58,639 | |
Total Gross Profit | 5,444 | 5,297 | 10,163 | 10,135 | |
Commercial Staffing US [Member] | UNITED STATES | Permanent Placement Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total | 116 | 102 | 229 | 143 | |
Commercial Staffing US [Member] | UNITED STATES | Temporary Contractor Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total | 28,685 | 28,416 | 57,181 | 58,496 | |
Professional Staffing US [Member] | UNITED STATES | |||||
Segment Reporting Information [Line Items] | |||||
Total | 15,207 | 3,908 | 19,536 | 7,679 | |
Total Gross Profit | 2,367 | 1,086 | 3,571 | 2,039 | |
Professional Staffing US [Member] | UNITED STATES | Permanent Placement Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total | 269 | 267 | 649 | 524 | |
Professional Staffing US [Member] | UNITED STATES | Temporary Contractor Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total | 14,938 | 3,641 | 18,887 | 7,155 | |
Professional Staffing UK [Member] | UNITED KINGDOM | |||||
Segment Reporting Information [Line Items] | |||||
Total | 15,045 | 18,104 | 32,000 | 33,163 | |
Total Gross Profit | 2,708 | 2,636 | 5,298 | 4,860 | |
Professional Staffing UK [Member] | UNITED KINGDOM | Permanent Placement Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total | 1,032 | 972 | 2,103 | 1,708 | |
Professional Staffing UK [Member] | UNITED KINGDOM | Temporary Contractor Revenue [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total | $ 14,013 | $ 17,132 | $ 29,897 | $ 31,455 |
SCHEDULE OF RELATED PARTY TRANS
SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Related Party Transaction [Line Items] | ||
Compensation Expense Recognized | $ 83 | $ 335 |
Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 200 | $ 114 |
Shares Issued | 2,000 | 936 |
Value of Shares Issued | $ 20 | $ 4 |
Compensation Expense Recognized | 13 | 12 |
Dimitri Villard Corporate Governance and Nominating Committee Chairman [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 50 | $ 38 |
Shares Issued | 400 | 234 |
Value of Shares Issued | $ 4 | $ 1 |
Compensation Expense Recognized | 3 | 3 |
Jeff Grout Compensation Committee Chairman [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 50 | $ 38 |
Shares Issued | 400 | 234 |
Value of Shares Issued | $ 4 | $ 1 |
Compensation Expense Recognized | 3 | 3 |
Nick Florio Audit Committee Chairman [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 50 | $ 38 |
Shares Issued | 400 | 234 |
Value of Shares Issued | $ 4 | $ 1 |
Compensation Expense Recognized | 3 | 3 |
Vincent Cebula [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | $ 50 | |
Shares Issued | 400 | |
Value of Shares Issued | $ 4 | |
Compensation Expense Recognized | 1 | |
Alicia Barker [Member] | Board and Committee [Member] | ||
Related Party Transaction [Line Items] | ||
Cash Compensation | ||
Shares Issued | 400 | 234 |
Value of Shares Issued | $ 4 | $ 1 |
Compensation Expense Recognized | $ 3 | $ 3 |
SCHEDULE OF SUPPLEMENTAL CASH F
SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 02, 2022 | Jul. 03, 2021 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest | $ 1,862 | $ 2,323 |
Income taxes | 278 | |
Deferred purchase price of UK factoring facility | 3,456 | 3,309 |
Redeemable Series H preferred stock, net | 8,265 | |
Debt discount | 735 | |
Earnout liability | 5,000 | |
Goodwill | 5,974 | |
Intangible assets | 5,800 | |
Dividends accrued to related parties | 712 | |
Deemed dividend | 1,798 | |
Conversion of Series E Preferred Stock – Related Party | 6,172 | |
Conversion of Series E-1 Preferred Stock – Related Party | $ 1,493 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jul. 01, 2022 | Jul. 01, 2022 | Jun. 28, 2022 | Jul. 02, 2022 |
Minimum [Member] | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 18.50 | |||
Maximum [Member] | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 3,750 | |||
Securities Purchase Agreement [Member] | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 657,858 | 657,858 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.85 | $ 5.85 | ||
Sale of Stock, Price Per Share | $ 6.10 | $ 6.10 | ||
Securities Purchase Agreement [Member] | Accredited Investors [Member] | Private Placement [Member] | ||||
Sale of Stock, Number of Shares Issued in Transaction | 657,858 | |||
Warrant Amendment Agreements [Member] | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 657,858 | 657,858 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.85 | $ 5.85 | ||
Warrant expiration term description | expiration dates ranging from July 22, 2026 to November 1, 2026 | |||
Warrant Amendment Agreements [Member] | Minimum [Member] | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 18.50 | 18.50 | ||
Warrant Amendment Agreements [Member] | Maximum [Member] | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 38 | $ 38 | ||
Engagement Letter [Member] | ||||
Non accountable expense allowance | $ 85,000,000 | |||
Engagement Letter [Member] | HC Wainwright and Company LLC [Member] | ||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 49,339 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 7.625 | |||
Percentage of cash fee on gross proceeds | 7.50% | |||
Engagement Letter [Member] | Private Placement [Member] | ||||
Percentage of management fee on gross proceeds | 1% | |||
Gross proceeds on management fee | $ 40,129.34 |