Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Jan. 08, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-30 | |
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 $0.00001 per share | |
Trading Symbol | STAF | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,812,100 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash | $ 681 | $ 1,992 |
Accounts receivable, net | 25,222 | 23,628 |
Prepaid expenses and other current assets | 1,774 | 1,762 |
Total Current Assets | 27,677 | 27,382 |
Property and equipment, net | 1,296 | 1,230 |
Goodwill | 19,891 | 19,891 |
Intangible assets, net | 15,404 | 17,385 |
Other assets | 8,018 | 6,701 |
Right of use asset | 8,269 | 9,070 |
Total Assets | 80,555 | 81,659 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 19,146 | 16,526 |
Accrued expenses - related party | 227 | 218 |
Current portion of debt | 249 | |
Accounts receivable financing | 15,937 | 18,268 |
Leases - current liabilities | 1,297 | 1,188 |
Earnout liabilities | 7,489 | 8,344 |
Other current liabilities | 2,610 | 2,639 |
Total Current Liabilities | 46,706 | 47,432 |
Long-term debt | 9,740 | 8,661 |
Redeemable Series H preferred stock, net | 7,520 | 8,393 |
Leases - non current | 7,807 | 8,640 |
Other long-term liabilities | 248 | 180 |
Total Liabilities | 72,021 | 73,306 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Common stock, $0.00001 par value, 200,000,000 shares authorized; 4,811,020 and 2,629,199 shares issued and outstanding, as of September 30, 2023 and December 31, 2022, respectively | 1 | 1 |
Additional paid in capital | 120,896 | 111,586 |
Accumulated other comprehensive loss | (1,359) | (2,219) |
Accumulated deficit | (111,004) | (101,015) |
Total Stockholders’ Equity | 8,534 | 8,353 |
Total Liabilities and Stockholders’ Equity | 80,555 | 81,659 |
Series J Preferred Stock [Member] | ||
Stockholders’ Equity: | ||
Preferred stock value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 4,811,020 | 2,629,199 |
Common stock, shares outstanding | 4,811,020 | 2,629,199 |
Series J Preferred Stock [Member] | ||
Preferred stock, par value | $ 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 ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 63,467 | $ 66,120 | $ 188,650 | $ 175,066 |
Cost of Revenue, excluding depreciation and amortization stated below | 54,095 | 53,795 | 160,929 | 143,709 |
Gross Profit | 9,372 | 12,325 | 27,721 | 31,357 |
Operating Expenses: | ||||
Selling, general and administrative expenses | 10,837 | 11,043 | 30,720 | 30,416 |
Depreciation and amortization | 882 | 787 | 2,308 | 2,140 |
Total Operating Expenses | 11,719 | 11,829 | 33,028 | 32,556 |
Loss From Operations | (2,347) | 496 | (5,307) | (1,199) |
Other Expenses: | ||||
Interest expense | (1,530) | (891) | (4,229) | (2,512) |
Amortization of debt discount and deferred financing costs | (120) | (236) | (322) | (518) |
Re-measurement loss on intercompany note | 1,009 | |||
Other gain/(loss), net | (237) | 717 | (63) | 738 |
Total Other Expenses, net | (1,887) | 599 | (4,615) | (2,292) |
Income (Loss) Before Benefit from Income Tax | (4,234) | 1,094 | (9,922) | (3,491) |
Provision from Income taxes | (21) | (62) | (67) | (65) |
Net Income (Loss) | $ (4,255) | $ 1,032 | $ (9,989) | $ (3,556) |
Net Loss - Basic | $ (0.98) | $ 0.43 | $ (2.63) | $ (1.80) |
Net Loss - Diluted | $ (0.98) | $ 0.43 | $ (2.63) | $ (1.80) |
Weighted Average Shares Outstanding - Basic | 4,349,587 | 2,401,961 | 3,800,371 | 1,980,398 |
Weighted Average Shares Outstanding - Diluted | 4,349,587 | 2,401,961 | 3,800,371 | 1,980,398 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Income Statement [Abstract] | ||||
Net Income (Loss) | $ (4,255) | $ 1,032 | $ (9,989) | $ (3,556) |
Other Comprehensive Income (Loss) | ||||
Foreign exchange translation adjustment | 721 | (2,729) | 860 | (3,247) |
Comprehensive Loss Attributable to the Company | $ (3,534) | $ (1,697) | $ (9,129) | $ (6,803) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Balance at Jan. 01, 2022 | $ 1 | $ 107,183 | $ 162 | $ (84,021) | $ 23,324 |
Balance, shares at Jan. 01, 2022 | 1,772,341 | ||||
Employees, directors and consultants | 326 | 326 | |||
Sale of common stock and warrants | 3,460 | 3,460 | |||
Sale of common stock and warrants, shares | 657,858 | ||||
Foreign currency translation gain | (3,247) | (3,247) | |||
Net income | (3,556) | (3,556) | |||
Employees, directors and consultants, shares | 3,000 | ||||
Balance at Oct. 01, 2022 | $ 1 | 110,968 | (3,085) | (87,577) | 20,307 |
Balance, shares at Oct. 01, 2022 | 2,433,199 | ||||
Balance at Jan. 01, 2022 | $ 1 | 107,183 | 162 | (84,021) | $ 23,324 |
Balance, shares at Jan. 01, 2022 | 1,772,341 | ||||
Warrants Exercised, shares | |||||
Balance at Dec. 31, 2022 | $ 1 | 111,586 | (2,219) | (101,015) | $ 8,353 |
Balance, shares at Dec. 31, 2022 | 2,629,199 | ||||
Balance at Jul. 02, 2022 | $ 1 | 107,266 | (356) | (88,609) | 18,302 |
Balance, shares at Jul. 02, 2022 | 1,775,341 | ||||
Employees, directors and consultants | 242 | 242 | |||
Sale of common stock and warrants | 3,460 | $ 3,460 | |||
Sale of common stock and warrants, shares | 657,858 | 660,858 | |||
Foreign currency translation gain | (2,729) | $ (2,729) | |||
Net income | 1,032 | 1,032 | |||
Balance at Oct. 01, 2022 | $ 1 | 110,968 | (3,085) | (87,577) | 20,307 |
Balance, shares at Oct. 01, 2022 | 2,433,199 | ||||
Balance at Dec. 31, 2022 | $ 1 | 111,586 | (2,219) | (101,015) | 8,353 |
Balance, shares at Dec. 31, 2022 | 2,629,199 | ||||
Employees, directors and consultants | 1,167 | 1,167 | |||
Sale of common stock and warrants | 4,113 | 4,113 | |||
Sale of common stock and warrants, shares | 1,884,516 | ||||
Foreign currency translation gain | 860 | 860 | |||
Net income | (9,989) | (9,989) | |||
Employees, directors and consultants, shares | 337,305 | ||||
Warrants Exercised | 2,002 | $ 2,002 | |||
Warrants Exercised, shares | 550,000 | ||||
Shares issued in connection with debt - related party | 128 | $ 128 | |||
Warrants Exercised, shares | 200,000 | ||||
Modification of Series H | 1,900 | 1,900 | |||
Warrants modification | 1,636 | 1,636 | |||
Equity issuance cost | (1,636) | (1,636) | |||
Balance at Sep. 30, 2023 | $ 1 | 120,896 | (1,359) | (111,004) | 8,534 |
Balance, shares at Sep. 30, 2023 | 5,601,020 | ||||
Balance at Jul. 01, 2023 | $ 1 | 116,639 | (2,080) | (106,749) | 7,811 |
Balance, shares at Jul. 01, 2023 | 4,811,020 | ||||
Employees, directors and consultants | 227 | $ 227 | |||
Sale of common stock and warrants, shares | 2,771,821 | ||||
Foreign currency translation gain | 721 | $ 721 | |||
Net income | (4,255) | (4,255) | |||
Employees, directors and consultants, shares | 40,000 | ||||
Warrants Exercised | 2,002 | 2,002 | |||
Warrants Exercised, shares | 550,000 | ||||
Shares issued in connection with debt - related party | 128 | 128 | |||
Warrants Exercised, shares | 200,000 | ||||
Modification of Series H | 1,900 | 1,900 | |||
Warrants modification | 1,636 | 1,636 | |||
Equity issuance cost | (1,636) | (1,636) | |||
Balance at Sep. 30, 2023 | $ 1 | $ 120,896 | $ (1,359) | $ (111,004) | $ 8,534 |
Balance, shares at Sep. 30, 2023 | 5,601,020 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (9,989) | $ (3,556) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,308 | 2,140 |
Amortization of debt discount and deferred financing costs | 322 | 518 |
Bad debt expense | 21 | (302) |
Right of use assets depreciation | 973 | 1,066 |
Stock based compensation | 1,167 | 325 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,611) | (6,114) |
Prepaid expenses and other current assets | (12) | (1,854) |
Other assets | (2,167) | (944) |
Accounts payable and accrued expenses | 2,462 | (1,083) |
Accounts payable, related party | 0 | 125 |
Other current liabilities | 79 | 357 |
Other long-term liabilities and other | 721 | 1,041 |
NET CASH USED IN OPERATING ACTIVITIES | (10,726) | (8,281) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (328) | (719) |
Acquisition of business, net of cash acquired | 1,395 | |
Collection of UK factoring facility deferred purchase price | 5,046 | 5,282 |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 4,718 | 5,958 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Third party financing costs | (653) | (554) |
Proceeds from term loan - Related party | 2,000 | 67 |
Repayment of term loan | (1,156) | (379) |
Repayments on accounts receivable financing, net | (2,239) | (3,345) |
Warrant Inducement, net | 2,292 | (160) |
Proceeds from sale of common stock | 4,433 | 4,013 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 4,677 | (358) |
NET DECREASE IN CASH | (1,331) | (2,681) |
Effect of exchange rates on cash | 19 | (123) |
Cash - Beginning of period | 1,992 | 4,558 |
Cash - End of period | $ 681 | $ 1,754 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2023 | |
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 high-growth international staffing company engaged in the acquisition of U.S. and U.K. based staffing companies. As part of our consolidation model, we pursue a broad spectrum of staffing companies supporting primarily the Professional and Commercial Business Streams. The model is based on finding and acquiring suitable, mature, profitable, operating, domestic and international staffing companies focused specifically on the accounting and finance, information technology (“IT”), engineering, administration (“Professional”) and light industrial (“Commercial”) disciplines. Our typical acquisition model is based on paying consideration in the form of cash, stock, earn-outs and/or promissory notes. In furthering our business model, we are regularly in discussions and negotiations with various suitable, mature acquisition targets. To date, we have completed 11 acquisitions since November 2013. The Company focuses on five strategic verticals that represent sub-segments of the staffing industry. These five strategic pillars, accounting & finance, information technology, engineering, administration, and commercial are the basis for the Company’s sales and revenue generation and its growth acquisition targets. The Headway Acquisition in May 2022 added 33 60,700 184,100 60,000 Typical contribution for EOR projects is 80-85% of the gross profit earned, compared to 40-50% for traditional staffing which negates the impact of lower gross margins STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) The Company has developed a centralized, sales and recruitment hub in both the U.S. and U.K. markets. The addition of Headway, with its single office in Raleigh, North Carolina, and nationwide coverage for operations, supports and accelerates the Company’s objective of driving efficiencies through the use of technology, deemphasizing bricks and mortar, supporting more efficient and cost-effective service delivery for all Brands. The Company has a management team with significant operational and M&A experience. The combination of this management experience and the increased opportunity for expansion of its core Brands with EOR services and nationwide expansion, provide for the opportunity of significant organic growth, while plans to continue its business model, finding and acquiring suitable, mature, profitable, operating, U.S. and U.K. based staffing companies continues. We effected a one-for-ten |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. All amounts are in thousands, except share, per share and par values, unless otherwise indicated. The accompanying condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. Liquidity The accompanying condensed consolidated 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 nine months ended September 30, 2023, the Company has an accumulated deficit of $ 111,004 and a working capital deficit of $ 19,884 . At September 30, 2023, we had total gross debt of $ 19,116 . 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. The financial statements included in this Quarterly Report on Form 10-Q have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity, capital requirements and that our credit facilities with our lenders will remain available to us. Further, the notes issued to Jackson Investment Group LLC (“Jackson”) 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. As of the date of the filing of this Quarterly Report on Form 10-Q, the entire outstanding principal balance of the Jackson Notes, which was $ 10,116 October 14, 2024 32,500 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) Going Concern The accompanying condensed consolidated 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 In May 2023, the World Health Organization determined that COVID-19 no longer fit the definition of a public health emergency and the U.S. government announced its plan to let the declaration of a public health emergency associated with COVID-19 expire on May 11, 2023. COVID-19 is expected to remain a serious endemic threat for an indefinite future period and may continue to adversely affect the global economy, and we are unable to predict the full extent of potential delays or impacts on our business, our clinical studies, our research programs, the recoverability of our assets, and our manufacturing. The effects of the COVID-19 endemic may continue to disrupt or delay our business operations, including but not limited to with respect to efforts relating to potential business development transactions and our ability to deploy staffing workforce effectively during social distancing and shelter-in-place directives and it could continue to disrupt the marketplace which could have an adverse effect on our operations. As such, it is uncertain as to the full magnitude that COVID-19 and its ongoing effects 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. The Company is not able to estimate the effects of the COVID-19 endemic on its results of operations, financial condition, or liquidity for fiscal year 2023. The Company’s negative working capital and liquidity position combined with the uncertainty generated by the economic reaction to COVID-19 and its ongoing effects contribute to the substantial doubt about the Company’s ability to continue as a going concern. Use of Estimates The preparation of condensed 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 nine months ended September 30, 2023 and October 1, 2022 include the valuation of intangible assets, including goodwill, liabilities associated with testing long-lived assets for impairment and valuation reserves against deferred tax assets. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) 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 December 31, 2022, the Company changed its annual measurement date from the last day of the fiscal year end to the first day of the fiscal fourth quarter. 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 10,000 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. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) 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 three and nine months ended September 30, 2023 was comprised of $ 62,661 185,887 806 2,763 64,734 170,699 1,386 4,367 Income Taxes The Company utilizes Accounting Standards Codification (“ASC”) Topic 740, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company applies the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes,” which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of the date of this filing, the Company is current on all corporate, federal and state tax returns. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. The effective income tax rate was (0.53) (0.67) 5.43 (1.872) 21 Foreign Currency The Company recorded a non-cash foreign currency remeasurement loss of $ 0 (566) 0 (32) Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values 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 placed were estimated using a Black Scholes model. Refer to Note 10 – Stockholders Equity for further details. Recent Accounting Pronouncements On June 16, 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost basis. This ASU replaces the probable, incurred loss model for those assets. On November 15, 2019, the FASB delayed the effective date of FASB ASC Topic 326 for certain small public companies and other private companies. As amended, the effective date of ASC Topic 326 was delayed until fiscal years beginning after December 15, 2022, for SEC filers that are smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities. The Company adopted this ASU on January 1, 2023. The adoption of this standard did not have a material impact on the consolidated financial statements. |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER COMMON SHARE | NOTE 3 – EARNINGS (LOSS) PER COMMON SHARE The Company utilizes the guidance per ASC 260, “Earnings per Share”. Basic earnings per share are calculated by dividing income/loss available to stockholders by the weighted average number of common stock shares outstanding during each period. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) Diluted earnings per share are computed using the weighted average number of common stock shares and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents consist of shares of common stock issuable upon the conversion of preferred stock, convertible notes, unvested equity awards and the exercise of stock options and warrants (calculated using the modified treasury stock method). Such securities, shown below, presented on a common stock equivalent basis and outstanding as of September 30, 2023 and October 1, 2022 have not been included in the diluted earnings per share computations, as their inclusion would be anti-dilutive due to the Company’s net loss as of September 30, 2023 and October 1, 2022: SCHEDULE OF COMMON SHARE EQUIVALENT BASIS AND OUTSTANDING EXCLUDED FROM PER SHARE COMPUTATIONS OF ANTI-DILUTIVE September 30, 2023 October 1, 2022 Warrants 6,697,801 972,495 Restricted shares – unvested 228,304 6,784 Options 51,302 51,302 Total 6,977,407 1,030,581 |
ACCOUNTS RECEIVABLE FINANCING
ACCOUNTS RECEIVABLE FINANCING | 9 Months Ended |
Sep. 30, 2023 | |
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 party to a $ 25,000 25,000 April 8, 2019 On October 26, 2020, the Company entered into Amendment No. 17 to that certain Credit and Security Agreement, dated April 8, 2017, by and among, the Company, as the parent, Monroe Staffing Services, LLC, a Delaware limited liability company, Faro Recruitment America, Inc., a New York corporation, Lighthouse Placement Services, Inc., a Massachusetts corporation, Staffing 360 Georgia, LLC, a Georgia limited liability company, and Key Resources, Inc., a North Carolina corporation, as borrowers (the “Credit Facility Borrowers”), MidCap Funding IV Trust as successor by assignment to MidCap (as agent for lenders), and other financial institutions or other entities from time to time parties thereto as lenders (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit and Security Agreement”) pursuant to which, among other things, the parties 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. On October 27, 2022, the Company and the Credit Facility Borrowers entered into Amendment No. 27 and Joinder Agreement to the Credit and Security Agreement (“Amendment No. 27”) with MidCap Funding IV Trust as successor by assignment to MidCap and the lenders party thereto. Amendment No. 27, among other things, (i) increases the revolving loan commitment amount from $ 25,000 32,500 extends the commitment expiry date from October 27, 2022 to September 6, 2024 10,000 5,000 42,500 In addition, Amendment No. 27 increases the applicable margin from 4.0% to 4.25%, with respect to the Loan (other than Letter of Credit Liabilities (as defined in the Credit and Security Agreement)), and from 3.5% to 3.75% with respect to the Letter of Credit Liabilities. Amendment No. 27 also replaces the interest rate benchmark from LIBOR to SOFR and provides that the Loan shall bear interest at the sum of a term-based SOFR rate (plus a SOFR adjustment of 0.11448%) plus the Applicable Margin, subject to certain provisions for the replacement of SOFR with an alternate benchmark in connection with SOFR no longer being provided by its administrator. Notwithstanding the foregoing, the SOFR interest rate shall not be at any time less than 1.00%. The facility provides events of default including: (i) failure to make payment of principal or interest on any 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 in the financial condition of business prospectus of any Borrower (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. At the election of agent or required lenders (or automatically in case of bankruptcy or insolvency events of default), upon the occurrence of any event of default and for so long as it continues, 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. On August 30, 2023, the Company and the Credit Facility Borrowers entered into Amendment No. 28 to Credit and Security Agreement with MidCap and the lenders party thereto (the “Lenders”). Amendment No. 28, among other things: (i) increases the applicable margin (a) from 4.25% to 4.50% with respect to revolving loans and other obligations (other than letter of credit liabilities) and (b) from 3.75% to 4.50% with respect to letter of credit liabilities, (ii) revises the definition of borrowing base to include the amount of any reserves and/or adjustments provided for in the Credit and Security Agreement, including, but not limited to, the Additional Reserve Amount (as defined in the in Amendment No. 28), (iii) requires that the Company complies with a fixed charge coverage ratio of at least 1:00 to 1:00, and (iv) waives the existing event of default that occurred under the Credit and Security Agreement due to the Credit Parties’ failure to maintain the Minimum Liquidity amount (as defined in the Credit and Security Agreement) for the fiscal month ending June 30, 2023 (each as defined in the Credit and Security Agreement). In addition, pursuant Amendment No. 28, no later than five (5) business days following the receipt of any cash proceeds from any equity issuance or other cash contribution from the Company’s equity holders, the Company shall prepay the revolving loans by an amount equal to (i) the sum of $ 1,300 50 In connection with Amendment No. 28, the Company shall pay to MidCap (i) a modification fee of $ 68 32 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) The balance of the MidCap facility as of September 30, 2023 and December 31, 2022 was $ 17,516 18,176 HSBC Invoice Finance (UK) Ltd On February 8, 2018, CBS Butler Holdings Limited (“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 11,500 12 1.80 1,000 0 On June 28, 2018, the Company’s subsidiary, Clement May Limited (“CML”) entered into a new agreement with a minimum term of 12 months for purchase of debt (“APD”) with HSBC, joining CBS Butler, Staffing 360 Solutions Limited and The JM Group (collectively, with CML, the “Borrowers”) as “Connected Clients” as defined in the APD. 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 4,946 4,683 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 5 – INTANGIBLE ASSETS The following provides a breakdown of intangible assets as of: SCHEDULE OF BREAKDOWN OF INTANGIBLE ASSETS Tradenames Non-Compete Customer Relationship Total September 30, 2023 Tradenames Non-Compete Customer Relationship Total Intangible assets, gross $ 10,779 $ 2,469 $ 26,229 $ 39,478 Accumulated amortization (6,235 ) (2,469 ) (15,370 ) (24,074 ) Intangible assets, net $ 4,544 $ - $ 10,859 $ 15,404 Tradenames Non-Compete Customer Relationship Total December 31, 2022 Tradenames Non-Compete Customer Relationship Total Intangible assets, gross $ 10,759 $ 2,467 $ 26,170 $ 39,397 Accumulated amortization (5,609 ) (2,467 ) (13,936 ) (22,012 ) Intangible assets, net $ 5,151 $ - $ 12,234 $ 17,385 On April 18, 2022, the Company entered into a Stock Purchase Agreement (the “Headway Purchase Agreement”) with Headway Workforce Solutions (“Headway”), 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 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) As of September 30, 2023, estimated annual amortization expense for each of the next five fiscal years is as follows: SCHEDULE OF ESTIMATED ANNUAL AMORTIZATION EXPENSE FOR EACH OF THE NEXT FIVE FISCAL YEARS Fiscal quarter ended September Amount 2023 $ 660 2024 2,640 2025 2,571 2026 2,428 2027 2,428 Thereafter 4,677 Total $ 15,404 Amortization of intangible assets for the three and nine months ended September 30, 2023 and October 1, 2022 was $ 659 2,037 582 1,166 7.8 |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 6 – GOODWILL The following table provides a roll forward of goodwill: SCHEDULE OF GOODWILL September 30, 2023 December 31, 2022 Beginning balance, gross $ 37,541 $ 31,478 Acquisition - 7,808 Accumulated disposition (1,577 ) (1,577 ) Accumulated impairment losses (16,073 ) (16,073 ) Currency translation adjustment - (1,745 ) Ending balance, net $ 19,891 $ 19,891 Goodwill by reportable segment is as follows: SCHEDULE OF GOODWILL REPORTABLE BY SEGMENT September 30, 2023 December 31, 2022 Professional Staffing - US $ 14,031 $ 14,031 Commercial Staffing - US 5,860 5,860 Professional Staffing - UK - - Ending balance, net $ 19,891 $ 19,891 Goodwill $ 19,891 $ 19,891 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. ASC 280-10-50-11 states that operating segments often exhibit similar long-term financial performance if they have similar economic characteristics. In fiscal 2022, 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 10,000 10,000 7,808 During the year ended December 31, 2022, the Company changed its measurement date from the last day of the fiscal year end to the first day of the fiscal fourth quarter. The Company performed its annual goodwill impairment test and no impairment was recognized other than the charge recognized by the Staffing UK reporting unit. To estimate the fair value of the reporting units the Company employed a combination of market approach (valuations using comparable company multiples) and income approach (discounted cash flow analysis) to derive the fair value of the reporting unit when performing its annual impairment testing. Volatility in the Company’s stock price can result in the net book value of our reporting unit approximating, or even temporarily exceeding market capitalization, however, the fair value of our reporting unit is not driven solely by the market price of our stock. As described above, fair value of our reporting unit is derived using a combination of an asset approach, an income approach and a market approach. These valuation techniques consider several other factors beyond our market capitalization, such as the estimated future cash flows of our reporting units, the discount rate used to present value such cash flows and the market multiples of comparable companies. Changes to input assumptions used in the analysis could result in materially different evaluations of goodwill impairment. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) |
ACQUISITION
ACQUISITION | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION | NOTE 7 – 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 the Headway Purchase Agreement with Headway, 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 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) The following table summarizes the allocation of the purchase price of the fair value of the assets acquired and liabilities assumed at the date of the acquisition: SCHEDULE OF BUSINESS ACQUISITION PURCHASE PRICE FAIR VALUE Current assets $ 10,833 Fixed assets 150 Other non-current assets 4,914 Intangible assets 6,800 Goodwill 6,809 Current liabilities (14,965 ) Other non-current liabilities (1,812 ) Consideration $ 12,729 In connection with the acquisition of Headway, the Company recorded $ 6,800 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 8 – DEBT SCHEDULE OF DEBT September 30, 2023 December 31, 2022 Jackson Investment Group - related party $ 10,116 $ 9,016 Redeemable Series H Preferred Stock 9,000 9,000 HSBC Term Loan - 249 Total Debt, Gross 19,116 18,265 Less: Debt Discount and Deferred Financing Costs, Net (1,769 ) (962 ) Total Debt, Net 17,347 17,304 Less: Non-Current Portion - Related Party (9,740 ) (8,661 ) Less: Non-Current Portion (7,607 ) (8,393 ) Total Current Debt, Net $ - $ 249 Jackson Notes The entire outstanding principal balance of the Second Amended and Restated Note Purchase Agreement between the Company, Jackson and the guarantor parties thereto was due and payable on September 30, 2022. On October 27, 2022, the Company entered into the Third Amended and Restated Note and Warrant Purchase Agreement (the “Third A&R Agreement”) with Jackson, which amended and restated the Second Amended Note Purchase Agreement, dated October 26, 2020, as amended, and issued to Jackson the Third Amended and Restated Senior Secured 12 9,000 October 28, 2022 to October 14, 2024 On June 30, 2023, the Company and Jackson entered into an amendment (“Amendment No. 1”) to the 2022 Jackson Note to amend the interest payment dates of September 30, 2023, August 1, 2023, and September 1, 2023 to October 1, 2023, November 1, 2023 and December 1, 2023, respectively. On August 30, 2023, the Company and the guarantor parties thereto (together with the Company, the “Obligors”) entered into that certain First Omnibus Amendment and Reaffirmation Agreement to the Note Documents (the “First Omnibus Amendment Agreement”) with Jackson, which First Omnibus Amendment Agreement, among other things: (i) amends the Third A&R Agreement, (ii) provided for the issuance of a new 12% Senior Secured Promissory Note due October 14, 2024 (the “2023 Jackson Note” and together with the 2022 Jackson Note, the “Jackson Notes”) to Jackson, and (iii) joins certain subsidiaries of the Company to (a) that certain Amended and Restated Pledge Agreement, dated as of September 15, 2017 (as amended by the First Omnibus Amendment Agreement, the “Pledge Agreement”) and (b) that certain Amended and Restated Security Agreement, dated as of September 15, 2017 (as amended by the Amendment Agreement, the “Security Agreement”), as either subsidiary guarantors or pledgors (as applicable) and amends certain terms and conditions of each of the Pledge Agreement and the Security Agreement Pursuant to the First Omnibus Amendment Agreement, interest on the 2022 Jackson Note, evidencing the obligations of the Obligors under the Third A&R Agreement and executed by the Company in favor of Jackson, shall be paid in cash and continue to accrue at a rate per annum equal to 12% until the principal amount of the 2022 Jackson Note has been paid in full. In the event that Company has not repaid in cash at least 50% of the outstanding principal balance of the 2022 Jackson Note as of the date of the First Omnibus Amendment Agreement or on or before October 27, 2023, then interest on the outstanding principal balance of the 2022 Jackson Note will accrue at 16% per annum until the 2022 Jackson Note is repaid in full STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) In addition, pursuant to the terms of the Third A&R Agreement, as amended by the First Omnibus Amendment Agreement, until all principal interest and fees due pursuant to the Third A&R Agreement and the Jackson Notes are paid in full by the Company and are no longer outstanding, Jackson shall have a first call over 50 HSBC Loan On February 8, 2018, CBS Butler, Staffing 360 Solutions Limited and The JM Group, entered into a new arrangement with HSBC which provides for HSBC to purchase the subsidiaries’ accounts receivable up to an aggregate amount of £ 11,500 1,000 11,500 12 1.80 , three-year term 1,000 0 Redeemable Series H Preferred Stock On May 18, 2022, the Company entered into the Headway Purchase Agreement with Headway. Consideration for the purchase of 100 9,000,000 0.00001 1.00 350,000 25.714 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 On July 31, 2023, the Company, Chapel Hill Partners, L.P. (“Chapel Hill”) and Jean-Pierre Sakey (“Sakey”) entered into an agreement in connection with the Headway Purchase Agreement. Pursuant to the agreement, if on or prior to September 30, 2023, the Company pays an aggregate of $ 11,340,000 9,000,000 525,000 Pursuant to the agreement, if on or prior to September 30, 2023, the Company does not redeem the Series H Preferred Stock and remit the Contingent Payment (as defined in the Headway Purchase Agreement), then the Company shall make the Contingent Payment in the amount of $ 5,000,000 1,000,000 134,000 100,000 0.0000001 Pursuant to the Letter Agreement, the Company shall also have no obligation to pay the Preferred Dividend (as defined in the Series H COD) on June 30, 2023, September 30, 2023 and December 31, 2023. Sixth Amendment to Intercreditor Agreement with Jackson and MidCap On August 30, 2023, in connection with the First Omnibus Amendment Agreement, the 2023 Jackson Note and Amendment No. 28, the Company, Jackson, the Lenders and MidCap entered into the Sixth Amendment to Intercreditor Agreement (the “Sixth Amendment”), which amended the Intercreditor Agreement, dated as of September 15, 2017 (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time, the “Intercreditor Agreement”), by and between the Company, Jackson and MidCap. The Sixth Amendment, among other things, provides for (i) consent by the Lenders to the Amendment Agreement and (ii) consent by Jackson to Amendment No. 28. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
LEASES | NOTE 9 – LEASES As of September 30, 2023 and December 31, 2022, we recorded a right of use (“ROU”) lease asset of approximately $ 8,717 9,561 9,281 9,883 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) On May 18, 2022, the Company acquired Headway and assumed an office lease in North Carolina for a remaining term of six years and eight months. This resulted in increases to right of use assets of $ 1,715 1,731 10 years 2,048 10 years 1,555 Quantitative information regarding the Company’s leases for period ended September 30, 2023 is as follows: SCHEDULE OF LEASE, COST AND OPERATING LEASE LIABILITY MATURITY Lease Cost Classification September 30, 2023 Operating lease cost SG&A Expenses 1,301 Other information Weighted average remaining lease term (years) - Weighted average discount rate 0.00 % Future Lease Payments 2023 $ 485 2024 1,843 2025 1,688 2026 1,594 2027 1,607 Thereafter 4,188 Lessee operating lease liability payments due $ 11,404 Less: Imputed Interest 2,300 Operating lease, liability $ 9,104 Leases - Current $ 1,297 Leases - Non current $ 7,807 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 ROU lease asset and associated lease liability that was appropriately stated in all material respects. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 10 – STOCKHOLDERS’ EQUITY The Company issued the following shares of common stock during the quarter ended September 30, 2023: SCHEDULE OF STOCKHOLDERS EQUITY Number of Fair Value Fair Value at Issuance Common Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raise 1,884,516 $ 4,999 $ 2.65 $ 2.65 Employees 177,305 531 $ 2.82 $ 2.82 Board and committee members 160,000 243 $ 1.05 $ 3.13 Warrants exercised per inducement letter 550,000 2,002 $ 0.83 $ 0.83 2,771,821 $ 7,774 The Company issued the following shares of common stock during the quarter ended October 1, 2022: Number of Fair Value Fair Value at Issuance Common Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raise 657,858 4,013 $ 6.10 $ 6.10 Board and committee members 2,000 $ 17 $ 7.40 $ 9.65 Consultant 1,000 7 $ 7.40 $ 7.40 660,858 $ 4,037 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) Reverse Stock Split On June 24, 2022, the Company effected the Reverse Stock Split. All share and per share information in this Quarterly Report on Form 10-Q, including the condensed consolidated financial statements and the notes thereto, has, where applicable, been retroactively adjusted to reflect the Reverse Stock Split. February 2023 Public Offering On February 7, 2023, the Company entered into a securities purchase agreement (“February 2023 Purchase Agreement”) with an institutional, accredited investor (the “Investor”) for the issuance and sale, in a best efforts public offering (the “February 2023 Offering”), of (i) 315,000 0.00001 1,569,516 2.6532 2.6522 Subject to certain limitations described in the February 2023 Pre-Funded Warrants, the February 2023 Pre-Funded Warrants are immediately exercisable and may be exercised at a nominal consideration of $0.001 per share any time until all of the February 2023 Pre-Funded Warrants are exercised in full. A holder will not have the right to exercise any portion of the February 2023 Warrants or the February 2023 Pre-Funded Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% or 9.99%, respectively (or at the election of the holder of such warrants, 9.99%) of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the February 2023 Warrants or the February 2023 Pre-Funded Warrants, respectively. However, upon notice from the holder to the Company, the holder may increase the beneficial ownership limitation pursuant to the February 2023 Warrants, which may not exceed 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the February 2023 Warrants, provided that any increase in the beneficial ownership limitation will not take effect until 61 days following notice to the Company In connection with the February 2023 Offering, the Investor entered into a warrant amendment agreement (the “February 2023 Warrant Amendment Agreement”) with the Company to amend the exercise price of certain existing warrants to purchase up to an aggregate of 876,654 5.85 January 7, 2028 2.47 The Company utilized the net proceeds from the February 2023 Offering for general working capital purposes. H.C. Wainwright & Co., LLC (“Wainwright”) acted as the Company’s exclusive placement agent in connection with the February 2023 Offering, pursuant to that certain engagement letter, dated as of January 4, 2023, as amended (the “Wainwright Engagement Letter”), between the Company and Wainwright. Pursuant to the Wainwright Engagement Letter, the Company paid Wainwright (i) a cash fee equal to 7.5 1.0 141,339 3.3165 The Units, the Pre-Funded Units, the shares of common stock included as part of the Units and Pre-Funded Units, the February 2023 Pre-Funded Warrants, the February 2023 Warrants, the shares of common stock issuable upon the exercise of the February 2023 Pre-Funded Warrants and the February 2023 Warrants, the February 2023 Placement Agent Warrants and the shares of common stock issuable upon the exercise thereof were offered by the Company pursuant to a Registration Statement on Form S-1, as amended (File No. 333-269308), initially filed on January 20, 2023 with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and declared effective on February 7, 2023. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) Series A Preferred Stock – Related Party As of September 30, 2023 and October 1, 2022, the Company had $ 0 125 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 from issuance. As of September 2023, the Company has issued a total of 337,305 941 41 SCHEDULE OF UNVESTED RESTRICTED SHARES ACTIVITY Weighted Average Restricted Shares Price Per Share Balance at January 1, 2022 5,976 $ 75.00 Granted 63,000 29.20 Vested/adjustments (384 ) 29.00 Balance at December 31, 2022 68,592 50.00 Granted 337,305 2.50 Vested/adjustments (177,593 ) 2.85 Balance at September 30, 2023 228,304 $ 3.72 Warrants In connection with the private placement consummated in July 2022 (the “July 2022 Private Placement”), on July 7, 2022, the Company entered into warrant amendment agreements (the “Warrant Amendment Agreements”) with each of the nine existing participating investors, which amended warrants to purchase up to 657,858 18.50 38.00 5.85 January 7, 2028 837 In connection with the Third A&R Agreement, the Company (i) issued to Jackson five year warrants to purchase up to an aggregate of 24,332 3.06 October 27, 2027 15,093 60.00 3.06 29 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) In connection with the February 2023 Offering, the Company entered into the February 2023 Purchase Agreement with the Investor for the issuance and sale, in a best efforts public offering, of (i) 315,000 1,569,516 2.6532 2.6522 876,654 5.85 January 7, 2028 2.47 176 On September 1, 2023, the Company entered into an inducement offer letter agreement (the “Inducement Letter”) with a certain holder (the “Holder”) of certain of its existing warrants to purchase up to an aggregate of 2,761,170 Pursuant to the Inducement Letter, the Holder agreed to exercise for cash its Existing Warrants to purchase an aggregate of 2,761,170 0.83 5,522,340 The closing of the transactions contemplated pursuant to the Inducement Letter occurred on September 6, 2023 (the “Closing Date”). The Company received aggregate gross proceeds of approximately $ 2,300 50 50 The Company engaged Wainwright to act as its exclusive placement agent in connection with the transactions summarized above and paid Wainwright a cash fee equal to 7.5 a management fee equal to 1.0% of the gross proceeds from the exercise of the Existing Warrants, pursuant to the Wainwright Engagement Letter. Pursuant to the Engagement Letter, the Company agreed to reimburse Wainwright for its expenses in connection with the exercise of the Existing Warrants and the issuance of the September 2023 Warrants of up to $ 50 25 16 207,088 1.0375 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 1, 2022 972,495 26.88 Issued 1,404,478 5.83 Exercised — — Expired or cancelled (673,285 ) 26.84 Outstanding at December 31, 2022 1,703,688 10.21 Issued 8,631,937 2.06 Exercised (2,761,170 ) 0.83 Expired or cancelled (876,654 ) (1.41 ) Outstanding at September 30, 2023 6,697,801 3.48 The following table summarizes warrants outstanding as of September 30, 2023: SCHEDULE OF WARRANTS OUTSTANDING Weighted Average Number Remaining Weighted Outstanding Contractual Average Exercise Price and Exercisable Life (years) Exercise price $ 2.47 3,750.00 6,697,801 4.86 3.48 Stock Options A summary of option activity during the nine months ended September 30, 2023 is presented below: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS ACTIVITY Weighted Average Options Exercise Price Outstanding at January 1, 2022 1,302 1,665.60 Granted 50,000 7.80 Exercised — — Expired or cancelled — — Outstanding at December 31, 2022 51,302 50.06 Granted — — Exercised — — Expired or cancelled — — Outstanding at July 1, 2023 51,302 50.06 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) The Company recorded share-based payment expense of $ 227 1 7 16 Limited Duration Stockholder Rights Agreement On September 27, 2023, the board of directors (the “Board”) of the Company declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock and .3889 Rights for each outstanding share of Series H Preferred Stock (collectively with the common stock, the “Voting Stock”). The dividend is was paid on October 21, 2023 to the stockholders of record at the close of business on October 21, 2023 (the “Record Date”). Each Right initially entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $ 0.00001 2.75 Until the close of business on the earlier of (i) 10 business days following the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) by the Company or an Acquiring Person (as defined below) that an Acquiring Person has become such, or such other date, as determined by the Board, on which a Person has become an Acquiring Person, or (ii) 10 business days (or such later date as may be determined by action of the Board prior to such time as any person or group of affiliated or associated persons becomes an Acquiring Person) after the date of the commencement of, or the first public announcement of an intention to commence, a tender or exchange offer the consummation of which would result in any person or group of affiliated or associated persons becoming an Acquiring Person (the earlier of such dates being called the “Distribution Date”), (x) the Rights will be evidenced by the certificates representing the Voting Stock registered in the names of the holders thereof (or by book entry shares in respect of such Voting Stock) and not by separate Right Certificates (as defined below), and (y) the Rights will be transferable only in connection with the transfer of Voting Stock. Until the Distribution Date (or earlier expiration of the Rights), (i) new Voting Stock certificates issued after the Record Date upon transfer or new issuances of Voting Stock will contain a legend incorporating the terms of the Rights Agreement by reference, and (ii) the surrender for transfer of any certificates representing Voting Stock (or book entry shares of Voting Stock) outstanding as of the Record Date will also constitute the transfer of the Rights associated with the shares of Voting Stock represented thereby. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the Voting Stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. Except as otherwise provided in the Rights Agreement, the Rights are not exercisable until the Distribution Date. The Rights will expire on the earliest of (i) October 2, 2026 or such later date as may be established by the Board prior to the expiration of the Rights, (ii) the time at which the Rights are redeemed pursuant to the terms of the Rights Agreement, (iii) the closing of any merger or other acquisition transaction involving the Company pursuant to an agreement of the type described in the Rights Agreement at which time the Rights are terminated, or (iv) the time at which such Rights are exchanged pursuant to the terms of the Rights Agreement. The Purchase Price payable, and the number of shares of Preferred Stock or other securities or property issuable, upon exercise of the Rights is subject to adjustment from time to time, among others, (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for or purchase Preferred Stock at a price, or securities convertible into Preferred Stock with a conversion price, less than the then-current market price of the Preferred Stock, or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in Preferred Stock) or of subscription rights or warrants (other than those referred to above). The number of outstanding Rights is subject to adjustment in the event of a stock dividend on any class or series of Voting Stock payable in shares of a class or series of Voting Stock or subdivisions, consolidations or combinations of any class or series of Voting Stock occurring, in any such case, prior to the Distribution Date. Shares of Preferred Stock purchasable upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled, when, as and if declared, to a minimum preferential quarterly dividend payment of the greater of (a) $10.00 and (b) the sum of (1) 1,000 (subject to adjustments for stock dividends, stock splits, or stock combinations) times the aggregate per share amount of all cash dividends, plus (2) 1,000 (subject to adjustments for stock dividends, stock splits, or stock combinations) times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of common stock, or a subdivision of the outstanding shares of common stock (by reclassification or otherwise), in each case declared on the common stock. In the event of liquidation, dissolution or winding up of the Company, the holders of the Preferred Stock will be entitled to a minimum preferential payment of the greater of (a) $10.00 per share (plus any accrued but unpaid dividends and distributions), and (b) an amount equal to 1,000 times (subject to adjustments for stock dividends, stock splits, or stock combinations) made per share amount of all cash and other property to be distributed in respect of common stock. Each share of Preferred Stock will be initially entitled to 1,000 votes (subject to adjustment for stock dividends, stock splits, or stock combinations). In addition to voting together with the holders of common stock for the election of other directors of the Company, the holders of Preferred Stock, voting separately as a class to the exclusion of the holders of common stock, shall be entitled at the meeting of stockholders (and at each subsequent annual meeting of stockholders), unless all dividends in arrears on the Preferred Stock have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the Company. Holders of Preferred Stock shall otherwise have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of common stock as set forth herein) for taking any corporate action, other than as required by law. In the event of any merger, consolidation, combination or other transaction in which outstanding shares of common stock are converted or exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of common stock is changed or exchanged. In the event that any person or group of affiliated or associated persons becomes an Acquiring Person (the first occurrence of such event, a “Flip-In Event”), each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which will thereupon become void), will thereafter have the right to receive upon exercise of a Right that number of shares of common stock equal to the number of shares of common stock obtained by dividing the Purchase Price (subject to adjustments) by 50% of the current per share market price of the common stock on the date of the Flip-In Event. Except in certain situations, a person or group of affiliated or associated persons becomes an “Acquiring Person” upon acquiring beneficial ownership of 10% (20% in the case of a Passive Investor (as defined in the Rights Agreement)) or more in voting power of the shares of Voting Stock then outstanding, subject to certain exclusions. Under the Rights Agreement, a “Passive Investor” is generally a person who or which has reported or is required to report beneficial ownership of shares of Voting Stock on Schedule 13G under the Exchange Act. Certain synthetic interests in securities created by derivative positions are treated under the Rights Agreement as beneficial ownership of the number of shares of Voting Stock equivalent to the economic exposure created by the derivative security, to the extent actual shares of Voting Stock are directly or indirectly beneficially owned by a counterparty to such derivative security. In the event that, after a Flip-In Event, the Company is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold, proper provisions will be made so that each holder of a Right (other than Rights beneficially owned by an Acquiring Person which will have become void) will thereafter have the right to receive upon the exercise of a Right that number of shares of common stock equal to the result obtained by dividing the Purchase Price (subject to adjustments) by 50% of the current per share market price of the common stock of such person(s) (or its parent) with whom the Company has engaged in the foregoing transaction. At any time after a Flip-In Event and prior to the acquisition by an Acquiring Person of 50% or more in voting power of the shares of Voting Stock then outstanding, the Board may, at its option, exchange the Rights (other than Rights owned by such Acquiring Person which will have become void), in whole or in part, for shares of common stock, at an exchange ratio of one share of common stock per Right. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) With certain exceptions, no adjustment in the Purchase Price will be required unless such adjustment would require an increase or decrease of at least 1% in such Purchase Price. No fractional shares of Preferred Stock or common stock will be issued (other than fractions of Preferred Stock which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), and in lieu thereof an adjustment in cash will be made based on the current market price of the Preferred Stock or the common stock. At any time prior to a Flip-In Event, the Board may redeem all but not less than the then outstanding Rights at a price of $ 0.01 For so long as the Rights are then redeemable, the Company may, in its sole discretion, except with respect to the Redemption Price, supplement or amend any provision in the Rights Agreement without the approval of any holders of the Rights. After the Rights are no longer redeemable, the Company may, except with respect to the Redemption Price, supplement or amend the Rights Agreement without the approval of any holders of Rights, provided that no such supplement or amendment may adversely affect the interests of holders of the Rights, cause the Rights Agreement to become amendable contrary to the provisions of the Rights Agreement, or cause the Rights to again to become redeemable. Until a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES Earn-out Liabilities Pursuant to the acquisition of Key Resources Inc. (“KRI”) on August 27, 2018, the purchase price includes earnout consideration payable to the seller of $ 2,027 2,027 10 2,027 4,054 4,054 40 Pursuant to the Headway Acquisition 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 July 2023, is above the $ 2,000 5,000 160 550 4,290 Legal Proceedings Whitaker v. Monroe Staffing Services, LLC & Staffing 360 Solutions, Inc. On December 5, 2019, former owner of KRI, Pamela D. Whitaker (“Whitaker” or “Plaintiff”), filed a complaint in Guilford County, North Carolina (the “North Carolina Action”) asserting claims for breach of contract and declaratory judgment against Monroe 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 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) Defendants removed the action to the Middle District of North Carolina on January 7, 2020, and Plaintiff moved to remand on February 4, 2020. Briefing on the motion to remand concluded on February 24, 2020. Separately, Defendants moved to dismiss the action on January 14, 2020, based on Plaintiff’s failure to state a claim, improper venue, and lack of personal jurisdiction as to defendant Staffing 360 Solutions, Inc. Alternatively, Defendants sought a transfer of the action to the Southern District of New York, based on the plain language of the Share Purchase Agreement’s forum selection clause. Briefing on Defendants’ motion to dismiss concluded on February 18, 2020. On February 28, 2020, Plaintiff moved for leave to file an amended complaint. Defendants filed their opposition to the motion for leave on March 19, 2020. Plaintiff has filed a reply. On June 29, 2020, Magistrate Judge Webster issued a Report and Recommendation on the pending motions, recommending that Defendants’ motion to dismiss be granted with regard to Defendants’ request to transfer the matter to the Southern District of New York, and denied in all other regards without prejudice to Defendants raising those arguments again in the new forum. Magistrate Judge Webster also recommended that Plaintiff’s motion to remand be denied and motion to amend be left to the discretion of the Southern District of New York. Plaintiff filed an objection to the Report and Recommendation on July 9, 2020. Defendants responded on July 23, 2020. On February 19, 2021, the District Court issued a decision that reversed the Magistrate Judge’s Order. The District Court granted Plaintiff’s motion to remand and denied Defendants’ motion to dismiss as moot. Defendants filed a Notice of Appeal to the Fourth Circuit on February 25, 2021, and filed their opening brief on April 21, 2021. Plaintiff filed her response brief on May 21, 2021, and Defendants replied on June 11, 2021. Oral argument was held on March 9, 2022. As of the date of this filing, a decision is pending. Separately, on February 26, 2020, the Company and Monroe filed an action against Whitaker in the United States District Court for the Southern District of New York (Case No. 1:20-cv-01716) (the “New York Action”.) The New York Action concerns claims for breach of contract and fraudulent inducement arising from various misrepresentations made by Whitaker to the Company and Monroe in advance of, and included in, the share purchase agreement. The Company and Monroe are seeking damages in an amount to be determined at trial but in no event less than $ 6,000 On October 13, 2020, the Court denied Whitaker’s motion to dismiss, in part, and granted the motion, in part. The Court rejected Whitaker’s procedural arguments but granted the motion on substantive grounds. However, the Court ordered that Monroe and the Company may seek leave to amend the complaint by letter application by December 1, 2020. Monroe and the Company filed a letter of motion for leave to amend and a proposed Amended Complaint on December 1, 2020. On January 5, 2021, Whitaker filed an opposition to the letter motion. On January 25, 2021, Monroe and the Company filed a reply in further support of the letter motion. On March 9, 2021, the Court granted Monroe and the Company’s motion for leave to amend, in part, and denied the motion, in part. The Court rejected Monroe and the Company’s claim for fraudulent inducement but granted the motion for leave to amend their breach of contract claim. Monroe and the Company filed their amended complaint on March 12, 2021. On April 9, 2021, Whitaker renewed her motion to dismiss on procedural grounds, requesting dismissal of the action or, in the alternative, a stay of the proceeding pending adjudication on the merits of the North Carolina Action. On May 14, 2021, Monroe and the Company filed an opposition to the motion to dismiss. On June 21, 2021, Whitaker filed a reply in further support of the motion. The Court referred the case to Magistrate Judge Moses, who held oral argument on the motion on November 9, 2021. 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 Barbara 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 in the North Carolina Action. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) In light of the Fourth Circuit’s issuance of its July 22, 2022, decision and order transferring the North Carolina Action to the Southern District of New York, 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, 2022, to do so. The Court ordered the parties to submit a stipulation to this effect by August 23, 2022. Per the Court’s Order, on August 22, 2022, the parties filed a stipulation and proposed order whereby the parties agreed that Whitaker would voluntarily dismiss the North Carolina Action, and would reassert the causes of action set forth in the Proposed Amended Complaint filed in the North Carolina Action as counterclaims in the New York Action; and set forth deadlines for the filing of Whitaker’s answer and counterclaims Plaintiffs’ response to such counterclaims. The Court so-ordered that stipulation on August 23, 2022. On September 30, 2022, Whitaker filed an answer and counterclaims, including (1) a cause of action for breach of contract, which was substantially similar to Whitaker’s breach of contract in the North Carolina Action (the “Breach of Contract Counterclaim”), and (2) a cause of action under New York and North Carolina consumer protection statutes, asserting that that Plaintiffs exhibited a pattern and practice in the purchase of businesses similar to KRI by which they allegedly, “endeavor[ ] to acquire the purchased company at a discount of the agreed-upon purchase price by making an initial down payment, then reneging on payment of deferred compensation or earnouts and fabricating a pretextual reason for nonpayment at the time the deferred compensation or earnouts become due” (the Consumer Protection Counterclaim”). For the Consumer Protection Counterclaim, Defendant seeks to recover the full amount of the Earnout Payments ($ 4,054 On November 11, 2022, Plaintiffs moved to dismiss the Consumer Protection Counterclaim. Briefing on Plaintiffs’ motion was completed on December 22, 2022. On June 9, 2023, Plaintiff’s motion to dismiss the Consumer Protection Counterclaim was granted. On August 9, 2023, the Court issued a third revised case management order which set forth relevant deadlines, including the close of fact discovery on September 22, 2023, and the close of all discovery (including expert discovery) on December 8, 2023. 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 12 – SEGMENT INFORMATION The Company generated revenue and gross profit by segment as follows: STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Three Months Ended Nine Months Ended September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Commercial Staffing - US $ 23,714 $ 25,940 $ 71,106 $ 83,350 Professional Staffing - US 25,824 25,756 $ 74,671 45,292 Professional Staffing - UK 13,929 14,424 $ 42,873 46,424 Total Revenue $ 63,467 $ 66,120 $ 188,650 $ 175,066 Commercial Staffing - US $ 5,186 $ 5,034 $ 13,294 $ 15,197 Professional Staffing - US 2,454 4,715 8,882 8,286 Professional Staffing - UK 1,732 2,576 5,545 7,874 Total Gross Profit $ 9,372 $ 12,325 $ 27,721 $ 31,357 Selling, general and administrative expenses $ (10,837 ) $ (11,043 ) $ (30,720 ) $ (30,416 ) Depreciation and amortization (1,001 ) (787 ) (2,630 ) (2,140 ) Interest expense and amortization of debt discount and deferred financing costs (1,530 ) (1,127 ) (4,229 ) (3,030 ) Re-measurement loss on intercompany note - 1,009 - - Other loss income, net (237 ) 717 (63 ) 738 Loss Before Provision for Income Tax $ (4,235 ) $ 1,094 $ (9,922 ) $ (3,491 ) The following table disaggregates revenues by segments: SCHEDULE OF DISAGGREGATES REVENUES BY SEGMENTS Quarter Ended September 30, 2023 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 24 $ 162 $ 620 $ 806 Temporary Revenue $ 23,690 $ 25,662 $ 13,309 $ 62,661 Total Revenue $ 23,714 $ 25,824 $ 13,929 $ 63,467 Quarter Ended October 1, 2022 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 128 $ 245 $ 1,013 $ 1,386 Temporary Revenue 25,812 25,511 13,411 64,734 Total Revenue $ 25,940 $ 25,756 $ 14,424 $ 66,120 Nine Months Ended September 30, 2023 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 194 $ 719 $ 1,850 $ 2,763 Temporary Revenue 70,912 73,952 41,023 185,887 Total $ 71,106 $ 74,671 $ 42,873 $ 188,650 Nine Months Ended October 1, 2022 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 357 $ 894 $ 3,116 $ 4,367 Temporary Revenue 82,993 44,398 43,308 170,699 Total $ 83,350 $ 45,292 $ 46,424 $ 175,066 As of April 1, 2023 and December 31, 2022, the Company has assets in the U.S. and the U.K. as follows: SCHEDULE OF ASSETS BY GEOGRAPHIC AREAS Total Assets September 30, 2023 December 31, 2022 United States $ 69,073 $ 70,970 United Kingdom 11,482 10,689 Total Assets $ 80,555 $ 81,659 Goodwill September 30, 2023 December 31, 2022 United States $ 19,891 $ 19,891 United Kingdom - - Total Goodwill $ 19,891 $ 19,891 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS In addition to the shares of Series A Preferred Stock and notes and warrants issued to Jackson, the following are other related party transactions: Board and Committee Members SCHEDULE OF RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2023 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 75 30,000 $ 48 $ 123 Jeff Grout 50 20,000 40 90 Nick Florio 50 20,000 40 115 Vincent Cebula 58 30,000 48 106 Alicia Barker - 30,000 50 50 Brendan Flood - 30,000 50 50 $ 233 160,000 $ 276 $ 278 Nine Months Ended October 1, 2022 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 75 400 $ 4 $ 79 Jeff Grout 75 400 4 79 Nick Florio 75 400 4 79 Vincent Cebula 75 400 4 79 Alicia Barker - 400 4 4 $ 300 2,000 $ 20 $ 320 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | NOTE 14 – SUPPLEMENTAL CASH FLOW INFORMATION SCHEDULE OF CASH FLOW, SUPPLEMENTAL DISCLOSURES September 30, 2023 October 1, 2022 Nine Months Ended September 30, 2023 October 1, 2022 Cash paid for: Interest $ 3,805 $ 2,849 Income taxes — 150 Non-Cash Investing and Financing Activities: Deferred purchase price of UK factoring facility 4,946 3,456 Modification of Series H 1,900 — Redeemable Series H preferred stock, net — 8,265 Debt discount — 735 Earnout liability — 4,450 Goodwill — 5,974 Intangible assets — 5,800 Warrant modification — 837 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS Restricted Shares On November 14, 2023, the Board approved an amendment to the 2021 Plan, subject to stockholder approval, to increase the number of shares of common stock available for issuance pursuant to awards under the 2021 by an additional 1,560,000 2,060,000 Increase in Common Stock Our Board has approved, subject to stockholder approval, an amendment to our Charter to increase the number of authorized shares of common stock, par value $ 0.00001 200,000,000 250,000,000 Annex C Common Stock Increase Amendment We currently have a total of 220,000,000 200,000,000 20,000,000 0.00001 200,000,000 250,000,000 220,000,000 270,000,000 Professional Staffing – UK On January 6,2024 Staffing 360 Solutions Limited, a UK Subsidiary, filed a Notice of Intent with the High Court of Justice in the UK, stating the company’s intention to appoint administrators in an attempt to save the business from liquidation. The moratorium period is ten business days initially while the company reviews its options. Nasdaq Compliance Minimum Bid Price Requirement On July 17, 2023, the Company received a letter from the Listing Qualifications Staff (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock for the 30 consecutive business day period between June 1, 2023, through July 14, 2023, the Company did not meet the minimum bid price of $ 1.00 In order to regain compliance with Nasdaq’s minimum bid price requirement, the Company’s common stock must maintain a minimum closing bid price of $ 1.00 The letter has no immediate impact on the listing of the Company’s common stock, which will continue to be listed and traded on Nasdaq, subject to the Company’s compliance with the other listing requirements of Nasdaq. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) Quarterly Reports on Form 10-Q On July 5, 2023, the Company received a notice from the Staff notifying the Company that it has been granted an exception to enable the Company to regain compliance with the Rule pursuant to the following terms: on or before October 16, 2023, the Company must file the Form 10-Q for the period ended April 1, 2023, as required by the Rule. In the event the Company does not satisfy the terms of the exception, the Staff will provide written notification that the Company’s common stock will be delisted. On August 23, 2023, the Company received a notice from the Staff notifying the Company that as it has not yet filed its Quarterly Report on Form 10-Q for the period ended September 30, 2023, the Company no longer complies with the Rule for continued listing on Nasdaq. Pursuant to the July 5, 2023 notice described above, the Staff had granted the Company an exception until October 16, 2023 to file its delinquent Form 10-Q for the period ended April 1, 2023 (the “Initial Delinquent Filing”). As a result, any additional Staff exception to allow the Company to regain compliance with all delinquent filings, will be limited to a maximum of 180 calendar days from the due date of the Initial Delinquent Filing, or October 16, 2023. On October 16, 2023, the Company filed the Q1 Form 10-Q and on October 18, 2023, the Staff notified the Company that it had regained compliance with the Listing Rule with respect to the Q1 Form 10-Q. On November 6, 2023, the Company received a notice from the Staff notifying the Company that it was not in compliance with Nasdaq’s continued listing requirements under the Rule as a result of its failure to file the Form 10-Q for the period ended September 30, 2023 in a timely manner (the “Staff Determination”). Unless the Company requests an appeal of the Staff Determination pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series, trading of the Company’s common stock will be suspended from Nasdaq at the opening of business on October 27, 2023, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company’s securities from listing and registration on Nasdaq. The Company filed for an appeal regarding the removal of the Company’s securities from listing and registration on Nasdaq. This appeal is set for January 11, 2024. The Staff Determination has no immediate effect and will not immediately result in the suspension of trading or delisting of the Company’s shares of common stock. The aforementioned notices have no immediate effect on the listing of the Company’s common stock. There can be no assurance that the Company will regain compliance with the Nasdaq’s rules or maintain compliance with any of the other Nasdaq continued listing requirements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. All amounts are in thousands, except share, per share and par values, unless otherwise indicated. The accompanying condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. |
Liquidity | Liquidity The accompanying condensed consolidated 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 nine months ended September 30, 2023, the Company has an accumulated deficit of $ 111,004 and a working capital deficit of $ 19,884 . At September 30, 2023, we had total gross debt of $ 19,116 . 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. The financial statements included in this Quarterly Report on Form 10-Q have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity, capital requirements and that our credit facilities with our lenders will remain available to us. Further, the notes issued to Jackson Investment Group LLC (“Jackson”) 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. As of the date of the filing of this Quarterly Report on Form 10-Q, the entire outstanding principal balance of the Jackson Notes, which was $ 10,116 October 14, 2024 32,500 STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) |
Going Concern | Going Concern The accompanying condensed consolidated 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 In May 2023, the World Health Organization determined that COVID-19 no longer fit the definition of a public health emergency and the U.S. government announced its plan to let the declaration of a public health emergency associated with COVID-19 expire on May 11, 2023. COVID-19 is expected to remain a serious endemic threat for an indefinite future period and may continue to adversely affect the global economy, and we are unable to predict the full extent of potential delays or impacts on our business, our clinical studies, our research programs, the recoverability of our assets, and our manufacturing. The effects of the COVID-19 endemic may continue to disrupt or delay our business operations, including but not limited to with respect to efforts relating to potential business development transactions and our ability to deploy staffing workforce effectively during social distancing and shelter-in-place directives and it could continue to disrupt the marketplace which could have an adverse effect on our operations. As such, it is uncertain as to the full magnitude that COVID-19 and its ongoing effects 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. The Company is not able to estimate the effects of the COVID-19 endemic on its results of operations, financial condition, or liquidity for fiscal year 2023. The Company’s negative working capital and liquidity position combined with the uncertainty generated by the economic reaction to COVID-19 and its ongoing effects 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 condensed 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 nine months ended September 30, 2023 and October 1, 2022 include the valuation of intangible assets, including goodwill, liabilities associated with testing long-lived assets for impairment and valuation reserves against deferred tax assets. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) |
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 December 31, 2022, the Company changed its annual measurement date from the last day of the fiscal year end to the first day of the fiscal fourth quarter. 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 10,000 |
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. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) 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 three and nine months ended September 30, 2023 was comprised of $ 62,661 185,887 806 2,763 64,734 170,699 1,386 4,367 |
Income Taxes | Income Taxes The Company utilizes Accounting Standards Codification (“ASC”) Topic 740, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company applies the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes,” which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of the date of this filing, the Company is current on all corporate, federal and state tax returns. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. The effective income tax rate was (0.53) (0.67) 5.43 (1.872) 21 |
Foreign Currency | Foreign Currency The Company recorded a non-cash foreign currency remeasurement loss of $ 0 (566) 0 (32) |
Warrants | Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values 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 placed were estimated using a Black Scholes model. Refer to Note 10 – Stockholders Equity for further details. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On June 16, 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost basis. This ASU replaces the probable, incurred loss model for those assets. On November 15, 2019, the FASB delayed the effective date of FASB ASC Topic 326 for certain small public companies and other private companies. As amended, the effective date of ASC Topic 326 was delayed until fiscal years beginning after December 15, 2022, for SEC filers that are smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities. The Company adopted this ASU on January 1, 2023. The adoption of this standard did not have a material impact on the consolidated financial statements. |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF COMMON SHARE EQUIVALENT BASIS AND OUTSTANDING EXCLUDED FROM PER SHARE COMPUTATIONS OF ANTI-DILUTIVE | SCHEDULE OF COMMON SHARE EQUIVALENT BASIS AND OUTSTANDING EXCLUDED FROM PER SHARE COMPUTATIONS OF ANTI-DILUTIVE September 30, 2023 October 1, 2022 Warrants 6,697,801 972,495 Restricted shares – unvested 228,304 6,784 Options 51,302 51,302 Total 6,977,407 1,030,581 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF BREAKDOWN OF INTANGIBLE ASSETS | The following provides a breakdown of intangible assets as of: SCHEDULE OF BREAKDOWN OF INTANGIBLE ASSETS Tradenames Non-Compete Customer Relationship Total September 30, 2023 Tradenames Non-Compete Customer Relationship Total Intangible assets, gross $ 10,779 $ 2,469 $ 26,229 $ 39,478 Accumulated amortization (6,235 ) (2,469 ) (15,370 ) (24,074 ) Intangible assets, net $ 4,544 $ - $ 10,859 $ 15,404 Tradenames Non-Compete Customer Relationship Total December 31, 2022 Tradenames Non-Compete Customer Relationship Total Intangible assets, gross $ 10,759 $ 2,467 $ 26,170 $ 39,397 Accumulated amortization (5,609 ) (2,467 ) (13,936 ) (22,012 ) Intangible assets, net $ 5,151 $ - $ 12,234 $ 17,385 |
SCHEDULE OF ESTIMATED ANNUAL AMORTIZATION EXPENSE FOR EACH OF THE NEXT FIVE FISCAL YEARS | As of September 30, 2023, estimated annual amortization expense for each of the next five fiscal years is as follows: SCHEDULE OF ESTIMATED ANNUAL AMORTIZATION EXPENSE FOR EACH OF THE NEXT FIVE FISCAL YEARS Fiscal quarter ended September Amount 2023 $ 660 2024 2,640 2025 2,571 2026 2,428 2027 2,428 Thereafter 4,677 Total $ 15,404 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF GOODWILL | The following table provides a roll forward of goodwill: SCHEDULE OF GOODWILL September 30, 2023 December 31, 2022 Beginning balance, gross $ 37,541 $ 31,478 Acquisition - 7,808 Accumulated disposition (1,577 ) (1,577 ) Accumulated impairment losses (16,073 ) (16,073 ) Currency translation adjustment - (1,745 ) Ending balance, net $ 19,891 $ 19,891 |
SCHEDULE OF GOODWILL REPORTABLE BY SEGMENT | Goodwill by reportable segment is as follows: SCHEDULE OF GOODWILL REPORTABLE BY SEGMENT September 30, 2023 December 31, 2022 Professional Staffing - US $ 14,031 $ 14,031 Commercial Staffing - US 5,860 5,860 Professional Staffing - UK - - Ending balance, net $ 19,891 $ 19,891 Goodwill $ 19,891 $ 19,891 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
SCHEDULE OF BUSINESS ACQUISITION PURCHASE PRICE FAIR VALUE | The following table summarizes the allocation of the purchase price of the fair value of the assets acquired and liabilities assumed at the date of the acquisition: SCHEDULE OF BUSINESS ACQUISITION PURCHASE PRICE FAIR VALUE Current assets $ 10,833 Fixed assets 150 Other non-current assets 4,914 Intangible assets 6,800 Goodwill 6,809 Current liabilities (14,965 ) Other non-current liabilities (1,812 ) Consideration $ 12,729 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF DEBT | SCHEDULE OF DEBT September 30, 2023 December 31, 2022 Jackson Investment Group - related party $ 10,116 $ 9,016 Redeemable Series H Preferred Stock 9,000 9,000 HSBC Term Loan - 249 Total Debt, Gross 19,116 18,265 Less: Debt Discount and Deferred Financing Costs, Net (1,769 ) (962 ) Total Debt, Net 17,347 17,304 Less: Non-Current Portion - Related Party (9,740 ) (8,661 ) Less: Non-Current Portion (7,607 ) (8,393 ) Total Current Debt, Net $ - $ 249 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
SCHEDULE OF LEASE, COST AND OPERATING LEASE LIABILITY MATURITY | Quantitative information regarding the Company’s leases for period ended September 30, 2023 is as follows: SCHEDULE OF LEASE, COST AND OPERATING LEASE LIABILITY MATURITY Lease Cost Classification September 30, 2023 Operating lease cost SG&A Expenses 1,301 Other information Weighted average remaining lease term (years) - Weighted average discount rate 0.00 % Future Lease Payments 2023 $ 485 2024 1,843 2025 1,688 2026 1,594 2027 1,607 Thereafter 4,188 Lessee operating lease liability payments due $ 11,404 Less: Imputed Interest 2,300 Operating lease, liability $ 9,104 Leases - Current $ 1,297 Leases - Non current $ 7,807 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
SCHEDULE OF STOCKHOLDERS EQUITY | The Company issued the following shares of common stock during the quarter ended September 30, 2023: SCHEDULE OF STOCKHOLDERS EQUITY Number of Fair Value Fair Value at Issuance Common Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raise 1,884,516 $ 4,999 $ 2.65 $ 2.65 Employees 177,305 531 $ 2.82 $ 2.82 Board and committee members 160,000 243 $ 1.05 $ 3.13 Warrants exercised per inducement letter 550,000 2,002 $ 0.83 $ 0.83 2,771,821 $ 7,774 The Company issued the following shares of common stock during the quarter ended October 1, 2022: Number of Fair Value Fair Value at Issuance Common Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raise 657,858 4,013 $ 6.10 $ 6.10 Board and committee members 2,000 $ 17 $ 7.40 $ 9.65 Consultant 1,000 7 $ 7.40 $ 7.40 660,858 $ 4,037 |
SCHEDULE OF UNVESTED RESTRICTED SHARES ACTIVITY | SCHEDULE OF UNVESTED RESTRICTED SHARES ACTIVITY Weighted Average Restricted Shares Price Per Share Balance at January 1, 2022 5,976 $ 75.00 Granted 63,000 29.20 Vested/adjustments (384 ) 29.00 Balance at December 31, 2022 68,592 50.00 Granted 337,305 2.50 Vested/adjustments (177,593 ) 2.85 Balance at September 30, 2023 228,304 $ 3.72 |
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 1, 2022 972,495 26.88 Issued 1,404,478 5.83 Exercised — — Expired or cancelled (673,285 ) 26.84 Outstanding at December 31, 2022 1,703,688 10.21 Issued 8,631,937 2.06 Exercised (2,761,170 ) 0.83 Expired or cancelled (876,654 ) (1.41 ) Outstanding at September 30, 2023 6,697,801 3.48 |
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS ACTIVITY | A summary of option activity during the nine months ended September 30, 2023 is presented below: SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS ACTIVITY Weighted Average Options Exercise Price Outstanding at January 1, 2022 1,302 1,665.60 Granted 50,000 7.80 Exercised — — Expired or cancelled — — Outstanding at December 31, 2022 51,302 50.06 Granted — — Exercised — — Expired or cancelled — — Outstanding at July 1, 2023 51,302 50.06 |
Warrant [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
SCHEDULE OF WARRANTS OUTSTANDING | The following table summarizes warrants outstanding as of September 30, 2023: SCHEDULE OF WARRANTS OUTSTANDING Weighted Average Number Remaining Weighted Outstanding Contractual Average Exercise Price and Exercisable Life (years) Exercise price $ 2.47 3,750.00 6,697,801 4.86 3.48 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT | The Company generated revenue and gross profit by segment as follows: STAFFING 360 SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (All amounts in thousands, except share, per share, par values and stated value per share) (UNAUDITED) SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Three Months Ended Nine Months Ended September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022 Commercial Staffing - US $ 23,714 $ 25,940 $ 71,106 $ 83,350 Professional Staffing - US 25,824 25,756 $ 74,671 45,292 Professional Staffing - UK 13,929 14,424 $ 42,873 46,424 Total Revenue $ 63,467 $ 66,120 $ 188,650 $ 175,066 Commercial Staffing - US $ 5,186 $ 5,034 $ 13,294 $ 15,197 Professional Staffing - US 2,454 4,715 8,882 8,286 Professional Staffing - UK 1,732 2,576 5,545 7,874 Total Gross Profit $ 9,372 $ 12,325 $ 27,721 $ 31,357 Selling, general and administrative expenses $ (10,837 ) $ (11,043 ) $ (30,720 ) $ (30,416 ) Depreciation and amortization (1,001 ) (787 ) (2,630 ) (2,140 ) Interest expense and amortization of debt discount and deferred financing costs (1,530 ) (1,127 ) (4,229 ) (3,030 ) Re-measurement loss on intercompany note - 1,009 - - Other loss income, net (237 ) 717 (63 ) 738 Loss Before Provision for Income Tax $ (4,235 ) $ 1,094 $ (9,922 ) $ (3,491 ) |
SCHEDULE OF DISAGGREGATES REVENUES BY SEGMENTS | The following table disaggregates revenues by segments: SCHEDULE OF DISAGGREGATES REVENUES BY SEGMENTS Quarter Ended September 30, 2023 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 24 $ 162 $ 620 $ 806 Temporary Revenue $ 23,690 $ 25,662 $ 13,309 $ 62,661 Total Revenue $ 23,714 $ 25,824 $ 13,929 $ 63,467 Quarter Ended October 1, 2022 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 128 $ 245 $ 1,013 $ 1,386 Temporary Revenue 25,812 25,511 13,411 64,734 Total Revenue $ 25,940 $ 25,756 $ 14,424 $ 66,120 Nine Months Ended September 30, 2023 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 194 $ 719 $ 1,850 $ 2,763 Temporary Revenue 70,912 73,952 41,023 185,887 Total $ 71,106 $ 74,671 $ 42,873 $ 188,650 Nine Months Ended October 1, 2022 Commercial Staffing - US Professional Staffing - US Professional Staffing - UK Total Permanent Revenue $ 357 $ 894 $ 3,116 $ 4,367 Temporary Revenue 82,993 44,398 43,308 170,699 Total $ 83,350 $ 45,292 $ 46,424 $ 175,066 |
SCHEDULE OF ASSETS BY GEOGRAPHIC AREAS | As of April 1, 2023 and December 31, 2022, the Company has assets in the U.S. and the U.K. as follows: SCHEDULE OF ASSETS BY GEOGRAPHIC AREAS Total Assets September 30, 2023 December 31, 2022 United States $ 69,073 $ 70,970 United Kingdom 11,482 10,689 Total Assets $ 80,555 $ 81,659 Goodwill September 30, 2023 December 31, 2022 United States $ 19,891 $ 19,891 United Kingdom - - Total Goodwill $ 19,891 $ 19,891 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF RELATED PARTY TRANSACTIONS | SCHEDULE OF RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2023 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 75 30,000 $ 48 $ 123 Jeff Grout 50 20,000 40 90 Nick Florio 50 20,000 40 115 Vincent Cebula 58 30,000 48 106 Alicia Barker - 30,000 50 50 Brendan Flood - 30,000 50 50 $ 233 160,000 $ 276 $ 278 Nine Months Ended October 1, 2022 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 75 400 $ 4 $ 79 Jeff Grout 75 400 4 79 Nick Florio 75 400 4 79 Vincent Cebula 75 400 4 79 Alicia Barker - 400 4 4 $ 300 2,000 $ 20 $ 320 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
SCHEDULE OF CASH FLOW, SUPPLEMENTAL DISCLOSURES | SCHEDULE OF CASH FLOW, SUPPLEMENTAL DISCLOSURES September 30, 2023 October 1, 2022 Nine Months Ended September 30, 2023 October 1, 2022 Cash paid for: Interest $ 3,805 $ 2,849 Income taxes — 150 Non-Cash Investing and Financing Activities: Deferred purchase price of UK factoring facility 4,946 3,456 Modification of Series H 1,900 — Redeemable Series H preferred stock, net — 8,265 Debt discount — 735 Earnout liability — 4,450 Goodwill — 5,974 Intangible assets — 5,800 Warrant modification — 837 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) | Jun. 24, 2022 | May 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Business acqusition | $ 60,000 | |
Business contribution description | Typical contribution for EOR projects is 80-85% of the gross profit earned, compared to 40-50% for traditional staffing which negates the impact of lower gross margins | |
Stock split | one-for-ten | |
Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Business acqusition | $ 60,700 | |
Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Business acqusition | $ 184,100 | |
Headway Workforce Solutions [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Business acqusition percent | 33% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Short-Term Debt [Line Items] | |||||
Retained Earnings (Accumulated Deficit) | $ 111,004,000 | $ 101,015,000 | $ 111,004,000 | ||
Working capital deficit | 19,884,000 | 19,884,000 | |||
Long-Term Debt, Gross | 19,116,000 | 18,265,000 | 19,116,000 | ||
Revenue | $ 63,467,000 | $ 66,120,000 | $ 188,650,000 | $ 175,066,000 | |
Effective income tax rate | (0.53%) | 5.43% | (0.67%) | (1.872%) | |
Effective income tax rate federal | 21% | ||||
Other comprehensive income (loss), foreign currency transaction and translation adjustment, net of tax | $ 0 | $ 0 | $ (566,000) | $ (32,000) | |
Temporary Contractor Revenue [Member] | |||||
Short-Term Debt [Line Items] | |||||
Revenue | 62,661,000 | 64,734,000 | 185,887,000 | 170,699,000 | |
Permanent Placement Revenue [Member] | |||||
Short-Term Debt [Line Items] | |||||
Revenue | 806,000 | $ 1,386,000 | 2,763,000 | $ 4,367,000 | |
Staffing UK Reporting Unit [Member] | |||||
Short-Term Debt [Line Items] | |||||
Goodwill impairment loss | $ 10,000,000 | 10,000,000 | |||
Jackson Note [Member] | |||||
Short-Term Debt [Line Items] | |||||
Principal amount | 10,116 | $ 10,116 | |||
Debt instrument, maturity date | Oct. 14, 2024 | ||||
Jackson Note [Member] | Midcap Funding X Trust [Member] | |||||
Short-Term Debt [Line Items] | |||||
Long-term line of credit | $ 32,500 | $ 32,500 |
SCHEDULE OF COMMON SHARE EQUIVA
SCHEDULE OF COMMON SHARE EQUIVALENT BASIS AND OUTSTANDING EXCLUDED FROM PER SHARE COMPUTATIONS OF ANTI-DILUTIVE (Details) - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 6,977,407 | 1,030,581 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 6,697,801 | 972,495 |
Restricted Shares Unvested [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 228,304 | 6,784 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 51,302 | 51,302 |
ACCOUNTS RECEIVABLE FINANCING (
ACCOUNTS RECEIVABLE FINANCING (Details Narrative) £ in Thousands, $ in Thousands | 1 Months Ended | 9 Months Ended | ||||||||||
Aug. 30, 2023 USD ($) | Oct. 27, 2022 USD ($) | May 15, 2020 | Jun. 28, 2018 GBP (£) | Feb. 08, 2018 GBP (£) | Sep. 15, 2017 USD ($) | Jul. 31, 2019 GBP (£) | Sep. 30, 2023 USD ($) | Oct. 01, 2022 USD ($) | Sep. 30, 2023 GBP (£) | Dec. 31, 2022 USD ($) | Oct. 26, 2022 USD ($) | |
Financing Receivable, Modified [Line Items] | ||||||||||||
Loan description | Pursuant to the First Omnibus Amendment Agreement, interest on the 2022 Jackson Note, evidencing the obligations of the Obligors under the Third A&R Agreement and executed by the Company in favor of Jackson, shall be paid in cash and continue to accrue at a rate per annum equal to 12% until the principal amount of the 2022 Jackson Note has been paid in full. In the event that Company has not repaid in cash at least 50% of the outstanding principal balance of the 2022 Jackson Note as of the date of the First Omnibus Amendment Agreement or on or before October 27, 2023, then interest on the outstanding principal balance of the 2022 Jackson Note will accrue at 16% per annum until the 2022 Jackson Note is repaid in full | |||||||||||
Modification fee | $ 68 | |||||||||||
Overdue interest amount | 32 | |||||||||||
Collection of UK factoring facility deferred purchase price | $ 4,946 | $ 4,683 | ||||||||||
Revolving Credit Facility [Member] | ||||||||||||
Financing Receivable, Modified [Line Items] | ||||||||||||
Long-term line of credit | $ 1,300 | |||||||||||
Revolving credit facility percentage | 50% | |||||||||||
Credit and Security Agreement [Member] | ||||||||||||
Financing Receivable, Modified [Line Items] | ||||||||||||
Loan description | the Company and the Credit Facility Borrowers entered into Amendment No. 28 to Credit and Security Agreement with MidCap and the lenders party thereto (the “Lenders”). Amendment No. 28, among other things: (i) increases the applicable margin (a) from 4.25% to 4.50% with respect to revolving loans and other obligations (other than letter of credit liabilities) and (b) from 3.75% to 4.50% with respect to letter of credit liabilities, (ii) revises the definition of borrowing base to include the amount of any reserves and/or adjustments provided for in the Credit and Security Agreement, including, but not limited to, the Additional Reserve Amount (as defined in the in Amendment No. 28), (iii) requires that the Company complies with a fixed charge coverage ratio of at least 1:00 to 1:00, and (iv) waives the existing event of default that occurred under the Credit and Security Agreement due to the Credit Parties’ failure to maintain the Minimum Liquidity amount (as defined in the Credit and Security Agreement) for the fiscal month ending June 30, 2023 (each as defined in the Credit and Security Agreement). | |||||||||||
Midcap Financial Trust [Member] | ||||||||||||
Financing Receivable, Modified [Line Items] | ||||||||||||
Long-term line of credit | $ 25,000 | $ 17,516 | $ 18,176 | |||||||||
Line of credit facility additional borrowing capacity | $ 25,000 | |||||||||||
Line of credit facility, maturity date | Apr. 08, 2019 | |||||||||||
MidCap Funding IV Trust [Member] | Credit and Security Agreement [Member] | ||||||||||||
Financing Receivable, Modified [Line Items] | ||||||||||||
Loans payable | $ 32,500 | $ 25,000 | ||||||||||
Debt instrument maturity date | extends the commitment expiry date from October 27, 2022 to September 6, 2024 | |||||||||||
Loan description | Amendment No. 27 increases the applicable margin from 4.0% to 4.25%, with respect to the Loan (other than Letter of Credit Liabilities (as defined in the Credit and Security Agreement)), and from 3.5% to 3.75% with respect to the Letter of Credit Liabilities. Amendment No. 27 also replaces the interest rate benchmark from LIBOR to SOFR and provides that the Loan shall bear interest at the sum of a term-based SOFR rate (plus a SOFR adjustment of 0.11448%) plus the Applicable Margin, subject to certain provisions for the replacement of SOFR with an alternate benchmark in connection with SOFR no longer being provided by its administrator. Notwithstanding the foregoing, the SOFR interest rate shall not be at any time less than 1.00%. | |||||||||||
MidCap Funding IV Trust [Member] | Credit and Security Agreement [Member] | Tranches [Member] | ||||||||||||
Financing Receivable, Modified [Line Items] | ||||||||||||
Loan commitment amount | $ 42,500 | |||||||||||
MidCap Funding IV Trust [Member] | Credit and Security Agreement [Member] | Tranches [Member] | Maximum [Member] | ||||||||||||
Financing Receivable, Modified [Line Items] | ||||||||||||
Loans payable | 10,000 | |||||||||||
MidCap Funding IV Trust [Member] | Credit and Security Agreement [Member] | Tranches [Member] | Minimum [Member] | ||||||||||||
Financing Receivable, Modified [Line Items] | ||||||||||||
Loans payable | $ 5,000 | |||||||||||
HSBC Invoice Finance (UK) Ltd [Member] | New Facility [Member] | ||||||||||||
Financing Receivable, Modified [Line Items] | ||||||||||||
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.) The arrangement has an initial term of 12 months, with an automatic rolling three-month extension and carries a service charge of 1.80% | |||||||||||
Line of credit facility | 1,000 | 1,000 | ||||||||||
Line of credit facility term | 12 months | |||||||||||
Line of credit facility interest rate | 1.80% | |||||||||||
Line of credit facility | £ | £ 0 | |||||||||||
Line of credit facility increase decrease for period net | £ | £ 20,000 | £ 11,500 | £ 22,500 | |||||||||
Line of credit facility unbilled receivables | £ | £ 1,500 | £ 1,000 |
SCHEDULE OF BREAKDOWN OF INTANG
SCHEDULE OF BREAKDOWN OF INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 39,478 | $ 39,397 |
Accumulated amortization | (24,074) | (22,012) |
Intangible assets, net | 15,404 | 17,385 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 10,779 | 10,759 |
Accumulated amortization | (6,235) | (5,609) |
Intangible assets, net | 4,544 | 5,151 |
Non Compete [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 2,469 | 2,467 |
Accumulated amortization | (2,469) | (2,467) |
Intangible assets, net | ||
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 26,229 | 26,170 |
Accumulated amortization | (15,370) | (13,936) |
Intangible assets, net | $ 10,859 | $ 12,234 |
SCHEDULE OF ESTIMATED ANNUAL AM
SCHEDULE OF ESTIMATED ANNUAL AMORTIZATION EXPENSE FOR EACH OF THE NEXT FIVE FISCAL YEARS (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 660 | |
2024 | 2,640 | |
2025 | 2,571 | |
2026 | 2,428 | |
2027 | 2,428 | |
Thereafter | 4,677 | |
Intangible assets, net | $ 15,404 | $ 17,385 |
SCHEDULE OF GOODWILL (Details)
SCHEDULE OF GOODWILL (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning balance, gross | $ 37,541 | $ 31,478 |
Acquisition | 7,808 | |
Accumulated disposition | (1,577) | (1,577) |
Accumulated impairment losses | (16,073) | (16,073) |
Currency translation adjustment | (1,745) | |
Ending balance, net | $ 19,891 | $ 19,891 |
SCHEDULE OF GOODWILL REPORTABLE
SCHEDULE OF GOODWILL REPORTABLE BY SEGMENT (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill | $ 19,891 | $ 19,891 |
Professional Staffing [Member] | UNITED STATES | ||
Goodwill | 14,031 | 14,031 |
Professional Staffing [Member] | UNITED KINGDOM | ||
Goodwill | ||
Commercial Staffing [Member] | UNITED STATES | ||
Goodwill | $ 5,860 | $ 5,860 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Apr. 18, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Amortization of intangible assets | $ 659 | $ 582 | $ 2,037 | $ 1,166 | |
Intangible asset, useful life | 7 years 9 months 18 days | 7 years 9 months 18 days | |||
Stock Purchase Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payments to acquire receivables | $ 14 | ||||
Stock Purchase Agreement [Member] | Series H Convertible Preferred Stock [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Stock issued during period, shares, conversion of convertible securities | 9,000,000 |
GOODWILL (Details Narrative)
GOODWILL (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
May 18, 2022 | Dec. 31, 2022 | Sep. 30, 2023 | |
Goodwill [Line Items] | |||
Estimated value of goodwill | $ 7,808 | ||
Staffing UK Reporting Unit [Member] | |||
Goodwill [Line Items] | |||
Goodwill impairment loss | $ 10,000 | $ 10,000 |
SCHEDULE OF BUSINESS ACQUISITIO
SCHEDULE OF BUSINESS ACQUISITION PURCHASE PRICE FAIR VALUE (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Apr. 18, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 19,891 | $ 19,891 | |
Headway Workforce Solutions [Member] | |||
Business Acquisition [Line Items] | |||
Current assets | $ 10,833 | ||
Fixed assets | 150 | ||
Other non-current assets | 4,914 | ||
Intangible assets | 6,800 | ||
Goodwill | 6,809 | ||
Current liabilities | (14,965) | ||
Other non-current liabilities | (1,812) | ||
Consideration | $ 12,729 |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | ||
Apr. 18, 2022 | Jul. 31, 2023 | May 18, 2022 | |
Headway Workforce Solutions [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 9,000 | $ 5,000 | |
Contingent payment | 4,450 | $ 4,450 | |
Intangible assets | 6,800 | ||
Stock Purchase Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Payments to acquire receivables | $ 14 | ||
Stock Purchase Agreement [Member] | Series H Convertible Preferred Stock [Member] | |||
Business Acquisition [Line Items] | |||
Conversion of convertible securities, shares | 9,000,000 |
SCHEDULE OF DEBT (Details)
SCHEDULE OF DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Short-Term Debt [Line Items] | |||
Total Debt, Gross | $ 19,116 | $ 18,265 | |
Less: Debt Discount and Deferred Financing Costs, Net | (1,769) | (962) | |
Total Debt, Net | 17,347 | 17,304 | |
Less: Non-Current Portion - Related Party | (9,740) | (8,661) | |
Less: Non-Current Portion | (7,607) | (8,393) | |
Total Current Debt, Net | 249 | $ 249 | |
Jackson Investment Group Related Party [Member] | |||
Short-Term Debt [Line Items] | |||
Total Debt, Gross | 10,116 | 9,016 | |
Redeemable Series H Preferred Stock [Member] | |||
Short-Term Debt [Line Items] | |||
Total Debt, Gross | 9,000 | 9,000 | |
HSBC Term Loan [Member] | |||
Short-Term Debt [Line Items] | |||
Total Debt, Gross | $ 249 |
DEBT (Details Narrative)
DEBT (Details Narrative) $ / shares in Units, £ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Aug. 30, 2023 | Oct. 27, 2022 USD ($) | May 18, 2022 USD ($) $ / shares shares | May 15, 2020 GBP (£) | Jun. 28, 2018 GBP (£) | Feb. 08, 2018 GBP (£) | Jul. 31, 2019 GBP (£) | Sep. 30, 2023 USD ($) $ / shares shares | Oct. 01, 2022 shares | Sep. 30, 2023 USD ($) $ / shares shares | Oct. 01, 2022 shares | Sep. 30, 2023 GBP (£) shares | Dec. 31, 2022 USD ($) $ / shares | |
Debt Instrument [Line Items] | |||||||||||||
Expiration term | Pursuant to the First Omnibus Amendment Agreement, interest on the 2022 Jackson Note, evidencing the obligations of the Obligors under the Third A&R Agreement and executed by the Company in favor of Jackson, shall be paid in cash and continue to accrue at a rate per annum equal to 12% until the principal amount of the 2022 Jackson Note has been paid in full. In the event that Company has not repaid in cash at least 50% of the outstanding principal balance of the 2022 Jackson Note as of the date of the First Omnibus Amendment Agreement or on or before October 27, 2023, then interest on the outstanding principal balance of the 2022 Jackson Note will accrue at 16% per annum until the 2022 Jackson Note is repaid in full | ||||||||||||
Carrying amount | $ 19,116,000 | $ 19,116,000 | $ 18,265,000 | ||||||||||
Number of shares issued | shares | 2,771,821 | 660,858 | |||||||||||
Preferred stock stated value | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||
Common Stock [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of shares issued | shares | 657,858 | 1,884,516 | 657,858 | ||||||||||
Series H Preferred Stock [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Number of shares issued | shares | 9,000,000 | ||||||||||||
Preferred stock stated value | $ / shares | $ 0.00001 | ||||||||||||
Debt instrument conversion price | $ / shares | 1 | ||||||||||||
Preferred stock conversion price | $ / shares | $ 25.714 | ||||||||||||
Cash dividends per annum rate | 12% | ||||||||||||
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 | ||||||||||||
Debt instrument redemption amount | $ 8,265,000 | $ 9,000,000 | $ 9,000,000 | ||||||||||
Fair value of deferred financing | $ 735,000 | ||||||||||||
Number of additional shares redeem | shares | 100,000 | 100,000 | 100,000 | ||||||||||
Redemption price per share | $ / shares | $ 0.00 | $ 0.00 | |||||||||||
Series H Preferred Stock [Member] | Common Stock [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument issuance of aggregate shares | shares | 350,000 | ||||||||||||
Series H Preferred Stock [Member] | Headway [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Ownership percentage | 100% | ||||||||||||
HSBC Bank [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument description | three-year term | ||||||||||||
Face amount | £ | £ 1,000 | ||||||||||||
Carrying amount | $ 0 | $ 0 | |||||||||||
HSBC Invoice Finance (UK) Ltd [Member] | New Facility [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Remaining balance | £ | £ 0 | ||||||||||||
Line of credit facility increase decrease for period | £ | £ 20,000 | £ 11,500 | £ 22,500 | ||||||||||
Unbilled receivables | £ | £ 1,500 | £ 1,000 | |||||||||||
Expiration period | 12 months | ||||||||||||
Service charge percentage | 1.80% | ||||||||||||
Third Amended and Restated Note Purchase Agreement [Member] | Jackson Note [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Percentage of first call over of net proceeds from increase of common stock | 50% | ||||||||||||
Purchase Agreement Amended [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Contingent payment amount as per agreement | 5,000,000 | 5,000,000 | |||||||||||
Contingent payment installment amount | 1,000,000 | 1,000,000 | |||||||||||
Installment amount to be paid to third parties to satisfy existing incentives and fees | 134,000 | 134,000 | |||||||||||
Purchase Agreement Amended [Member] | Series H Preferred Stock [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate agreed amount for redemption of preferred stock | $ 11,340,000 | $ 11,340,000 | |||||||||||
Number of shares issued and outstanding | shares | 9,000,000 | 9,000,000 | 9,000,000 | ||||||||||
Payment to third parties to satisfy existing incentives and fees due | $ 525,000 | $ 525,000 | |||||||||||
Senior Secured 12 % Promissory Note [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Restated senior secured promissory note percentage | 12% | ||||||||||||
Remaining balance | $ 9,000,000 | ||||||||||||
Expiration term | amends the Third A&R Agreement, (ii) provided for the issuance of a new 12% Senior Secured Promissory Note due October 14, 2024 (the “2023 Jackson Note” and together with the 2022 Jackson Note, the “Jackson Notes”) to Jackson, and (iii) joins certain subsidiaries of the Company to (a) that certain Amended and Restated Pledge Agreement, dated as of September 15, 2017 (as amended by the First Omnibus Amendment Agreement, the “Pledge Agreement”) and (b) that certain Amended and Restated Security Agreement, dated as of September 15, 2017 (as amended by the Amendment Agreement, the “Security Agreement”), as either subsidiary guarantors or pledgors (as applicable) and amends certain terms and conditions of each of the Pledge Agreement and the Security Agreement | October 28, 2022 to October 14, 2024 |
SCHEDULE OF LEASE, COST AND OPE
SCHEDULE OF LEASE, COST AND OPERATING LEASE LIABILITY MATURITY (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Leases | ||
Operating lease cost | $ 1,301 | |
Weighted average remaining lease term (years) | ||
Weighted average discount rate | 0% | |
2023 | $ 485 | |
2024 | 1,843 | |
2025 | 1,688 | |
2026 | 1,594 | |
2027 | 1,607 | |
Thereafter | 4,188 | |
Lessee operating lease liability payments due | 11,404 | |
Less: Imputed Interest | 2,300 | |
Operating lease, liability | 9,104 | |
Leases - Current | 1,297 | $ 1,188 |
Leases - Non current | $ 7,807 | $ 8,640 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | ||||
May 18, 2022 | May 31, 2022 | Apr. 30, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Operating lease right of use asset | $ 8,269 | $ 9,070 | |||
Operating lease liability | 9,104 | ||||
Increase in operating lease, right-of-use asset | $ 1,715 | ||||
Increase in operating lease liabilities | $ 1,731 | $ 1,555 | $ 2,048 | ||
New Lease Agreement [Member] | London England [Member] | |||||
Lessee, operating lease, renewal term | 10 years | ||||
New Lease Agreement [Member] | Redhill England [Member] | |||||
Lessee, operating lease, renewal term | 10 years | ||||
Accounting Standards Update 2018-11 [Member] | |||||
Operating lease right of use asset | 8,717 | 9,281 | |||
Operating lease liability | $ 9,561 | $ 9,883 |
SCHEDULE OF STOCKHOLDERS EQUITY
SCHEDULE OF STOCKHOLDERS EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 2,771,821 | 660,858 |
Fair Value of Shares Issued | $ 7,774 | $ 4,037 |
Employees [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 177,305 | |
Fair Value of Shares Issued | $ 531 | |
Board and Committee Members [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 160,000 | 2,000 |
Fair Value of Shares Issued | $ 243 | $ 17 |
Consultant [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 1,000 | |
Fair Value of Shares Issued | $ 7 | |
Minimum [Member] | Employees [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | $ 2.82 | |
Minimum [Member] | Board and Committee Members [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | 1.05 | $ 7.40 |
Minimum [Member] | Consultant [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | 7.40 | |
Maximum [Member] | Employees [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | 2.82 | |
Maximum [Member] | Board and Committee Members [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | $ 3.13 | 9.65 |
Maximum [Member] | Consultant [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | $ 7.40 | |
Equity Raise [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 1,884,516 | 657,858 |
Fair Value of Shares Issued | $ 4,999 | $ 4,013 |
Equity Raise [Member] | Minimum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | $ 2.65 | $ 6.10 |
Equity Raise [Member] | Maximum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | $ 2.65 | $ 6.10 |
Warrants Exercised Per Inducement Letter [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of Common Shares Issued | 550,000 | |
Fair Value of Shares Issued | $ 2,002 | |
Warrants Exercised Per Inducement Letter [Member] | Minimum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | $ 0.83 | |
Warrants Exercised Per Inducement Letter [Member] | Maximum [Member] | ||
Subsidiary, Sale of Stock [Line Items] | ||
Fair value at issuance (per Share) | $ 0.83 |
SCHEDULE OF UNVESTED RESTRICTED
SCHEDULE OF UNVESTED RESTRICTED SHARES ACTIVITY (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Restricted shares, beginning balance | 68,592 | 5,976 |
Weighted average price per share, beginning balance | $ 50 | $ 75 |
Restricted shares, granted | 337,305 | 63,000 |
Weighted average price per share, granted | $ 2.50 | $ 29.20 |
Restricted shares, vested/adjustments | (177,593) | (384) |
Weighted average price per share, vested/adjustments | $ 2.85 | $ 29 |
Restricted shares, ending balance | 228,304 | 68,592 |
Weighted average price per share, ending balance | $ 3.72 | $ 50 |
SCHEDULE OF WARRANTS ACTIVITY (
SCHEDULE OF WARRANTS ACTIVITY (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Number of shares, outstanding ending balance | 1,703,688 | 972,495 |
Weighted average exercise price, outstanding beginning balance | $ 10.21 | $ 26.88 |
Number of shares, issued | 8,631,937 | 1,404,478 |
Weighted average exercise price, issued | $ 2.06 | $ 5.83 |
Number of shares, exercised | (2,761,170) | |
Weighted average exercise price, exercised | $ 0.83 | |
Number of shares, expired or cancelled | (876,654) | (673,285) |
Weighted average exercise price, expired or cancelled | $ (1.41) | $ 26.84 |
Number of shares, outstanding ending balance | 6,697,801 | 1,703,688 |
Weighted average exercise price, outstanding ending balance | $ 3.48 | $ 10.21 |
SCHEDULE OF WARRANTS OUTSTANDIN
SCHEDULE OF WARRANTS OUTSTANDING (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2023 | Sep. 01, 2023 | |
Exercise price | $ 1.0375 | $ 0.83 |
Number of warrants outstanding and exercisable | 6,697,801 | |
Weighted average remaining contractual life (years) | 4 years 10 months 9 days | |
Weighted average exercise price | $ 3.48 | |
Minimum [Member] | ||
Exercise price | 2.47 | |
Maximum [Member] | ||
Exercise price | $ 3,750 |
SCHEDULE OF SHARE-BASED COMPENS
SCHEDULE OF SHARE-BASED COMPENSATION, STOCK OPTIONS ACTIVITY (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Equity [Abstract] | ||
Options outstanding, beginning balance | 51,302 | 1,302 |
Weighted average exercise price, beginning balance | $ 50.06 | $ 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 | 51,302 |
Weighted average exercise price, ending balance | $ 50.06 | $ 50.06 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Sep. 27, 2023 | Sep. 06, 2023 | Sep. 01, 2023 | Feb. 07, 2023 | Jan. 04, 2023 | Jul. 07, 2022 | Sep. 30, 2023 | Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Dec. 31, 2022 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Common stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||
Exercise price | $ 0.83 | $ 1.0375 | $ 1.0375 | $ 1.0375 | ||||||||
Sharebased payment expense | $ 227 | $ 1 | $ 7 | $ 16 | ||||||||
Sale of common stock and warrants, shares | 2,771,821 | 660,858 | ||||||||||
Warrants to purchase | 2,761,170 | |||||||||||
Proceeds from exercise warrants | $ 2,300 | |||||||||||
Issuance of warrants | $ 50,000 | $ 50,000 | $ 50,000 | |||||||||
Non accountable expenses | 25 | |||||||||||
Clearing costs | $ 16 | |||||||||||
Purchase of common stock | 207,088 | |||||||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||
Share price | $ 0.01 | |||||||||||
Dividend description | (a) $10.00 and (b) the sum of (1) 1,000 (subject to adjustments for stock dividends, stock splits, or stock combinations) times the aggregate per share amount of all cash dividends, plus (2) 1,000 (subject to adjustments for stock dividends, stock splits, or stock combinations) times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of common stock, or a subdivision of the outstanding shares of common stock (by reclassification or otherwise), in each case declared on the common stock. In the event of liquidation, dissolution or winding up of the Company, the holders of the Preferred Stock will be entitled to a minimum preferential payment of the greater of (a) $10.00 per share (plus any accrued but unpaid dividends and distributions), and (b) an amount equal to 1,000 times (subject to adjustments for stock dividends, stock splits, or stock combinations) made per share amount of all cash and other property to be distributed in respect of common stock. Each share of Preferred Stock will be initially entitled to 1,000 votes (subject to adjustment for stock dividends, stock splits, or stock combinations). In addition to voting together with the holders of common stock for the election of other directors of the Company, the holders of Preferred Stock, voting separately as a class to the exclusion of the holders of common stock, shall be entitled at the meeting of stockholders (and at each subsequent annual meeting of stockholders), unless all dividends in arrears on the Preferred Stock have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the Company. Holders of Preferred Stock shall otherwise have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of common stock as set forth herein) for taking any corporate action, other than as required by law. | |||||||||||
Voting rights description | At any time after a Flip-In Event and prior to the acquisition by an Acquiring Person of 50% or more in voting power of the shares of Voting Stock then outstanding, the Board may, at its option, exchange the Rights (other than Rights owned by such Acquiring Person which will have become void), in whole or in part, for shares of common stock, at an exchange ratio of one share of common stock per Right. | |||||||||||
Restricted Stock [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Shares issued | 337,305 | 337,305 | 337,305 | |||||||||
Sharebased payment expense | $ 941 | 41 | ||||||||||
Series A Preferred Stock [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Dividends payable | $ 0 | $ 0 | $ 125 | $ 0 | $ 125 | |||||||
Series A Junior Participating Preferred Stock [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Preferred stock, par value | $ 0.00001 | |||||||||||
Share price | $ 2.75 | |||||||||||
Minimum [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Exercise price | $ 2.47 | $ 2.47 | $ 2.47 | |||||||||
Maximum [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Exercise price | $ 3,750 | $ 3,750 | $ 3,750 | |||||||||
Common Stock [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Sale of common stock and warrants, shares | 657,858 | 1,884,516 | 657,858 | |||||||||
Warrant [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Cash fee percentage | 7.50% | |||||||||||
Sale of common stock and warrants, shares | 5,522,340 | |||||||||||
Exercise of warrants percentage | 50% | |||||||||||
Management fee description | a management fee equal to 1.0% of the gross proceeds from the exercise of the Existing Warrants, pursuant to the Wainwright Engagement Letter. | |||||||||||
Securities Purchase Agreement [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Shares repurchased from investor | 15,093 | 15,093 | 15,093 | |||||||||
Exercise price | $ 3.06 | $ 3.06 | $ 3.06 | |||||||||
Sale of common stock and warrants, shares | 24,332 | |||||||||||
Expiration date | Oct. 27, 2027 | |||||||||||
Securities Purchase Agreement [Member] | Minimum [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Exercise price | 60 | 60 | $ 60 | |||||||||
Securities Purchase Agreement [Member] | Maximum [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Exercise price | $ 3.06 | $ 3.06 | $ 3.06 | |||||||||
Warrant Amendment Agreement [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Shares repurchased from investor | 657,858 | |||||||||||
Exercise price | $ 5.85 | |||||||||||
Warrants expiration | Jan. 07, 2028 | |||||||||||
Shares fair value | $ 837 | |||||||||||
Warrant Amendment Agreement [Member] | Minimum [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Exercise price | $ 18.50 | |||||||||||
Warrant Amendment Agreement [Member] | Maximum [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Exercise price | $ 38 | |||||||||||
Amended Note Purchase Agreement [Member] | Jackson Investment Group, LLC [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Fair value adjustment of warrants | $ 29 | |||||||||||
February 2023 IPO [Member] | H.C. Wainwright & Co., LLC [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Shares repurchased from investor | 141,339 | |||||||||||
Exercise price | $ 3.3165 | |||||||||||
Cash fee percentage | 750% | |||||||||||
Management fee percentage | 100% | |||||||||||
February 2023 IPO [Member] | Securities Purchase Agreement [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Shares repurchased from investor | 315,000 | |||||||||||
Common stock, par value | $ 0.00001 | |||||||||||
Public offering price | 2.6532 | |||||||||||
Shares issued price per share | $ 2.6522 | |||||||||||
Pre-funded description | Subject to certain limitations described in the February 2023 Pre-Funded Warrants, the February 2023 Pre-Funded Warrants are immediately exercisable and may be exercised at a nominal consideration of $0.001 per share any time until all of the February 2023 Pre-Funded Warrants are exercised in full. A holder will not have the right to exercise any portion of the February 2023 Warrants or the February 2023 Pre-Funded Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% or 9.99%, respectively (or at the election of the holder of such warrants, 9.99%) of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the February 2023 Warrants or the February 2023 Pre-Funded Warrants, respectively. However, upon notice from the holder to the Company, the holder may increase the beneficial ownership limitation pursuant to the February 2023 Warrants, which may not exceed 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the February 2023 Warrants, provided that any increase in the beneficial ownership limitation will not take effect until 61 days following notice to the Company | |||||||||||
Sale of common stock and warrants, shares | 315,000 | |||||||||||
February 2023 IPO [Member] | Securities Purchase Agreement [Member] | Prefunded Warrant [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Shares repurchased from investor | 1,569,516 | |||||||||||
February 2023 IPO [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Shares repurchased from investor | 1,569,516 | |||||||||||
Exercise price | $ 2.6532 | |||||||||||
Price per unit | $ 2.6522 | |||||||||||
February 2023 IPO [Member] | Warrant Amendment Agreement [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Shares repurchased from investor | 876,654 | |||||||||||
Exercise price | $ 5.85 | |||||||||||
Warrants expiration | Jan. 07, 2028 | |||||||||||
Shares fair value | $ 176 | |||||||||||
February 2023 IPO [Member] | Warrant Amendment Agreement [Member] | Minimum [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Exercise price | $ 2.47 | |||||||||||
February 2023 Purchase Agreement [Member] | Warrant Amendment Agreement [Member] | ||||||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||||||
Warrants expiration | Jan. 07, 2028 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||||||||
Sep. 30, 2022 | May 18, 2022 | Apr. 18, 2022 | Sep. 26, 2020 | Feb. 26, 2020 | Dec. 05, 2019 | Sep. 30, 2019 | Jul. 31, 2023 | Feb. 29, 2020 | Sep. 30, 2023 | Dec. 31, 2022 | Aug. 27, 2020 | Sep. 11, 2019 | Aug. 27, 2019 | |
Loss Contingencies [Line Items] | ||||||||||||||
Loss contingency damages sought value | $ 6,000,000 | |||||||||||||
Earnout payments | $ 4,054 | |||||||||||||
Retention bonus | $ 2,610,000 | $ 2,639,000 | ||||||||||||
Retention Bonus [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Retention bonus | 550,000 | |||||||||||||
Key Resources Inc [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Business combination earnout consideration interest payment | $ 10,000 | |||||||||||||
Headway Workforce Solutions [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payment totaling | $ 4,450,000 | $ 4,450,000 | ||||||||||||
Threshold amount | $ 2,000,000 | |||||||||||||
Business combination consideration transferred | $ 9,000,000 | $ 5,000,000 | ||||||||||||
Payments to acquire business | $ 160,000 | |||||||||||||
Business combination consideration transferred | $ 4,290,000 | |||||||||||||
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 | |||||||||||||
Business Combination Earnout Consideration Prepone Date [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payment totaling | $ 2,027,000 | $ 2,027,000 | $ 2,027,000 | |||||||||||
Share Purchase Agreement [Member] | Key Resources Inc [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Business combination earnout consideration interest payment | $ 40,000 | |||||||||||||
Loss contingency damages sought value | $ 4,054,000 | |||||||||||||
Earnout payments | $ 4,054,000 | |||||||||||||
New York Action [Member] | Pamela D. Whitaker [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Loss contingency damages sought value | $ 4,054,000 |
SCHEDULE OF SEGMENT REPORTING I
SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total Revenue | $ 63,467 | $ 66,120 | $ 188,650 | $ 175,066 |
Total Gross Profit | 9,372 | 12,325 | 27,721 | 31,357 |
Selling, general and administrative expenses | (10,837) | (11,043) | (30,720) | (30,416) |
Re-measurement loss on intercompany note | 1,009 | |||
Income (Loss) Before Benefit from Income Tax | (4,234) | 1,094 | (9,922) | (3,491) |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 63,467 | 66,120 | 188,650 | 175,066 |
Total Gross Profit | 9,372 | 12,325 | 27,721 | 31,357 |
Selling, general and administrative expenses | (10,837) | (11,043) | (30,720) | (30,416) |
Depreciation and amortization | (1,001) | (787) | (2,630) | (2,140) |
Interest expense and amortization of debt discount and deferred financing costs | (1,530) | (1,127) | (4,229) | (3,030) |
Re-measurement loss on intercompany note | 1,009 | |||
Other loss income, net | (237) | 717 | (63) | 738 |
Income (Loss) Before Benefit from Income Tax | (4,235) | 1,094 | (9,922) | (3,491) |
Operating Segments [Member] | Commercial Staffing US [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 23,714 | 25,940 | 71,106 | 83,350 |
Operating Segments [Member] | Commercial Staffing US [Member] | UNITED STATES | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 23,714 | 25,940 | 71,106 | 83,350 |
Total Gross Profit | 5,186 | 5,034 | 13,294 | 15,197 |
Operating Segments [Member] | Professional Staffing US [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 25,824 | 25,756 | 74,671 | 45,292 |
Operating Segments [Member] | Professional Staffing US [Member] | UNITED STATES | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 25,824 | 25,756 | 74,671 | 45,292 |
Total Gross Profit | 2,454 | 4,715 | 8,882 | 8,286 |
Operating Segments [Member] | Professional Staffing UK [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 13,929 | 14,424 | 42,873 | 46,424 |
Operating Segments [Member] | Professional Staffing UK [Member] | UNITED KINGDOM | ||||
Segment Reporting Information [Line Items] | ||||
Total Revenue | 13,929 | 14,424 | 42,873 | 46,424 |
Total Gross Profit | $ 1,732 | $ 2,576 | $ 5,545 | $ 7,874 |
SCHEDULE OF DISAGGREGATES REVEN
SCHEDULE OF DISAGGREGATES REVENUES BY SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total | $ 63,467 | $ 66,120 | $ 188,650 | $ 175,066 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 63,467 | 66,120 | 188,650 | 175,066 |
Permanent Placement Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 806 | 1,386 | 2,763 | 4,367 |
Temporary Contractor Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 62,661 | 64,734 | 185,887 | 170,699 |
Commercial Staffing US [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 23,714 | 25,940 | 71,106 | 83,350 |
Commercial Staffing US [Member] | Permanent Placement Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 24 | 128 | 194 | 357 |
Commercial Staffing US [Member] | Temporary Contractor Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 23,690 | 25,812 | 70,912 | 82,993 |
Professional Staffing US [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 25,824 | 25,756 | 74,671 | 45,292 |
Professional Staffing US [Member] | Permanent Placement Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 162 | 245 | 719 | 894 |
Professional Staffing US [Member] | Temporary Contractor Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 25,662 | 25,511 | 73,952 | 44,398 |
Professional Staffing UK [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 13,929 | 14,424 | 42,873 | 46,424 |
Professional Staffing UK [Member] | Permanent Placement Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | 620 | 1,013 | 1,850 | 3,116 |
Professional Staffing UK [Member] | Temporary Contractor Revenue [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total | $ 13,309 | $ 13,411 | $ 41,023 | $ 43,308 |
SCHEDULE OF ASSETS BY GEOGRAPHI
SCHEDULE OF ASSETS BY GEOGRAPHIC AREAS (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Total Assets | $ 80,555 | $ 81,659 |
Total Goodwill | 19,891 | 19,891 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 80,555 | 81,659 |
Total Goodwill | 19,891 | 19,891 |
Operating Segments [Member] | UNITED STATES | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 69,073 | 70,970 |
Total Goodwill | 19,891 | 19,891 |
Operating Segments [Member] | Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Assets | 11,482 | 10,689 |
Total Goodwill |
SCHEDULE OF RELATED PARTY TRANS
SCHEDULE OF RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | |
Related Party Transaction [Line Items] | ||||
Compensation Expense Recognized | $ 227,000 | $ 1,000 | $ 7,000 | $ 16,000 |
Board and Committee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash Compensation | $ 233,000 | $ 300,000 | ||
Shares Issued | 160,000 | 2,000 | ||
Value of Shares Issued | $ 276,000 | $ 20,000 | ||
Compensation Expense Recognized | 278,000 | 320,000 | ||
Dimitri Villard [Member] | Board and Committee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash Compensation | $ 75,000 | $ 75,000 | ||
Shares Issued | 30,000 | 400 | ||
Value of Shares Issued | $ 48,000 | $ 4,000 | ||
Compensation Expense Recognized | 123,000 | 79,000 | ||
Jeff Grout [Member] | Board and Committee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash Compensation | $ 50,000 | $ 75,000 | ||
Shares Issued | 20,000 | 400 | ||
Value of Shares Issued | $ 40,000 | $ 4,000 | ||
Compensation Expense Recognized | 90,000 | 79,000 | ||
Nick Florio [Member] | Board and Committee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash Compensation | $ 50,000 | $ 75,000 | ||
Shares Issued | 20,000 | 400 | ||
Value of Shares Issued | $ 40,000 | $ 4,000 | ||
Compensation Expense Recognized | 115,000 | 79,000 | ||
Vincent Cebula [Member] | Board and Committee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash Compensation | $ 58,000 | $ 75,000 | ||
Shares Issued | 30,000 | 400 | ||
Value of Shares Issued | $ 48,000 | $ 4,000 | ||
Compensation Expense Recognized | 106,000 | 79,000 | ||
Alicia Barker [Member] | Board and Committee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash Compensation | ||||
Shares Issued | 30,000 | 400 | ||
Value of Shares Issued | $ 50,000 | $ 4,000 | ||
Compensation Expense Recognized | 50,000 | $ 4,000 | ||
Brendan Flood [Member] | Board and Committee [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cash Compensation | ||||
Shares Issued | 30,000 | |||
Value of Shares Issued | $ 50,000 | |||
Compensation Expense Recognized | $ 50,000 |
SCHEDULE OF CASH FLOW, SUPPLEME
SCHEDULE OF CASH FLOW, SUPPLEMENTAL DISCLOSURES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest | $ 3,805 | $ 2,849 |
Income taxes | 150 | |
Deferred purchase price of UK factoring facility | 4,946 | 3,456 |
Modification of Series H | 1,900 | |
Redeemable Series H preferred stock, net | 8,265 | |
Debt discount | 735 | |
Earnout liability | 4,450 | |
Goodwill | 5,974 | |
Intangible assets | 5,800 | |
Warrant modification | $ 837 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - $ / shares | Nov. 14, 2023 | Jul. 17, 2023 | Dec. 27, 2023 | Dec. 26, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Subsequent Event [Line Items] | ||||||
Common stock par value | $ 0.00001 | $ 0.00001 | ||||
Common stock shares authorized | 200,000,000 | 200,000,000 | ||||
Preferred stock shares authorized | 20,000,000 | 20,000,000 | ||||
preferred stock par value | $ 0.00001 | $ 0.00001 | ||||
Description for compliance as per listing qualifications department | based upon the closing bid price of the Company’s common stock for the 30 consecutive business day period between June 1, 2023, through July 14, 2023, the Company did not meet the minimum bid price of $1.00 per share required for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2). The letter also indicated that the Company will be provided with a compliance period of 180 calendar days, or until January 15, 2024 (the “Compliance Period”), in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A). | |||||
Minimum bid price per share | $ 1 | |||||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock par value | $ 0.00001 | |||||
Common stock shares authorized | 250,000,000 | 200,000,000 | ||||
Capital stock shares authorized | 270,000,000 | 220,000,000 | ||||
Preferred stock shares authorized | 20,000,000 | |||||
preferred stock par value | $ 0.00001 | |||||
Subsequent Event [Member] | Restricted Stock [Member] | Two Thousand Twenty One Plan [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Additioanl shares of common stock | 1,560,000 | |||||
Total number of shares common stock | 2,060,000 |