ShiftPixy (PIXY) 10-Q 2 Jul 24 2024 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	May 31, 2024	Jun. 30, 2024
Cover [Abstract]
Entity Registrant Name	SHIFTPIXY, INC.
Entity Central Index Key	0001675634
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--08-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Document Period End Date	May 31, 2024
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Entity Ex Transition Period	false
Entity Common Stock Shares Outstanding		6,755,686
Entity File Number	001-37954
Entity Incorporation State Country Code	WY
Entity Tax Identification Number	47-4211438
Entity Address Address Line 1	4101 NW 25th Street
Entity Address City Or Town	Miami
Entity Address State Or Province	FL
Entity Address Postal Zip Code	33142
City Area Code	888
Local Phone Number	798-9100
Security 12b Title	Common Stock, par value $0.0001 per share
Trading Symbol	PIXY
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Current assets
Cash	$ 360	$ 75
Accounts receivable, net	630	590
Unbilled accounts receivable	333	1,784
Prepaid expenses	302	839
Other current assets	481	532
Total current assets	2,106	3,820
Fixed assets, net	1,191	1,622
Right-of-use asset, net	601	866
Deposits and other assets	192	192
Total assets	4,090	6,500
Current liabilities
Accounts payable and other accrued liabilities	24,820	17,911
Payroll tax related liabilities	35,534	29,595
Payroll related liabilities	2,031	2,940
Current liabilities of discontinued operations	0	4,389
Total current liabilities	62,385	54,835
Non-current liabilities
Operating lease liability, non-current	252	2,790
Total liabilities	62,637	57,625
Stockholders' deficit
Convertible preferred stock Class A, 50,000,000 authorized shares; $0.0001 par value: 0 shares issued and outstanding as of May 31, 2024, and August 31, 2023	0	0
Common stock, 750,000,000 authorized shares; $0.0001 par value; and 6,755,686 and 507,383 shares issued and outstanding as of May 31, 2024, and August 31, 2023, respectively	0	0
Additional paid-in capital	182,481	175,226
Accumulated deficit	(241,028)	(226,351)
Total stockholders' deficit	(58,547)	(51,125)
Total liabilities and stockholders' deficit	$ 4,090	$ 6,500

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	May 31, 2024	Aug. 31, 2023
Stockholders' deficit
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, par or stated value per share (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, shares authorized (in shares)	750,000,000	750,000,000
Common stock, par or stated value per share (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares issued (in shares)	6,755,686	507,383
Common stock, shares outstanding (in shares)	6,755,686	507,383

Condensed Unaudited Consolidate

Condensed Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Condensed Unaudited Consolidated Statements of Operations
Revenues (See Note 2)	$ 4,134	$ 3,988	$ 11,721	$ 13,833
Cost of revenues	3,891	3,788	10,806	12,623
Gross profit	243	200	915	1,210
Operating expenses:
Salaries, taxes, and benefits	1,337	2,621	4,001	7,477
Professional fees	780	752	2,059	2,817
Software development	1	50	2	229
Depreciation and amortization	138	148	419	447
General and administrative	1,989	3,074	10,126	6,609
Total operating expenses	4,245	6,645	16,607	17,579
Operating loss	(4,002)	(6,445)	(15,692)	(16,369)
Other (expense) income:
Gain from legal settlement	0	0	2,500	0
Interest expense	(423)	(550)	(1,467)	(1,007)
Other income (expense)	0	0	18	536
Total other income (expense)	(423)	(550)	1,015	(471)
Net loss attributable to ShiftPixy, Inc	(4,425)	(6,995)	(14,677)	(16,840)
Loss from discontinued operations, net of tax	0	(460)	0	(1,267)
Non-controlling interest	0	0	0	(540)
Net Loss	(4,425)	(7,455)	(14,677)	(18,647)
Preferred stock preferential dividend	0	0	(67,444)	(127,145)
Net loss attributable to Shiftpixy's shareholders	$ (4,425)	$ (7,455)	$ (82,121)	$ (145,792)
Continuing operations - basic and diluted	$ (0.69)	$ (16.69)	$ (16.88)	$ (356.13)
Discontinued operations - basic and diluted	0	(1.10)	0	(3.12)
Net loss per common share - basic and diluted	$ (0.69)	$ (17.79)	$ (16.88)	$ (359.25)
Weighted average common shares outstanding - basic and diluted	6,429,780	419,049	4,865,365	405,816

Condensed Unaudited Consolida_2

Condensed Unaudited Consolidated Statements of Stockholders' Deficit - USD ($)	Total	Preferred Stock Issued	Common Stock Issued	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Total Stockholders' Deficit Shoft Pixy, Inc.	Noncontrolling interest
Balance, shares at Aug. 31, 2022		358,333	21,390
Balance, amount at Aug. 31, 2022	$ (31,494,000)	$ 0	$ 0	$ 151,731,000	$ (192,725,000)	$ (40,988,000)	$ 9,494,000
Fair market value increase of preferred stock prior to reverse stock split	127,145,000	0	0	127,145,000	0	127,145,000	0
Preferential dividend of preferred stock	(127,145,000)	0	$ 0	(127,145,000)	0	(127,145,000)	0
Common stock issued on exercised prefunded warrants, shares			5,175
Common stock issued on exercised prefunded warrants, amount	1,000	0	$ 0	1,000	0	1,000	0
Common stock issued for private placement, net of offering costs, shares			17,361
Common stock issued for private placement, net of offering costs, amount	4,387,000	$ 0	$ 0	4,387,000	0	4,387,000	0
Common stock issued on conversion of preferred shares, shares		(358,333)	358,333
Common stock issued on conversion of preferred shares, amount	0	$ 0	$ 0	0	0	0	0
Stock-based compensation expense	735,000	0	0	735,000	0	735,000	0
Warrant modification expense	106,000	0	$ 0	106,000	0	106,000	0
Additional shares issued due to reverse stock split, shares			707
Additional shares issued due to reverse stock split, amount	0	0	$ 0	0	0	0	0
Net proceeds of ATM, net of offering expenses, shares			18,305
Net proceeds of ATM, net of offering expenses, amount	1,973,000	0	$ 0	1,973,000	0	1,973,000	0
Deconsolidation of VIE	540,000	0	0	10,034,000	0	10,034,000	(9,494,000)
Net loss	(18,647,000)	0	0	0	(18,647,000)	(18,647,000)	0
Balance, amount at May. 31, 2023	(42,399,000)	0	$ 0	168,967,000	(211,372,000)	(42,399,000)	0
Balance, shares at May. 31, 2023			421,271
Balance, shares at Feb. 28, 2023			415,689
Balance, amount at Feb. 28, 2023	(35,718,000)	0	$ 0	168,193,000	(203,917,000)
Stock-based compensation expense	235,000	0	0	235,000	0
Net loss	(7,455,000)	0	$ 0	0	(7,455,000)
Proceeds of ATM, net of offering expenses, shares			5,582
Proceeds of ATM, net of offering expenses, amount	539,000	0	$ 0	539,000	0
Balance, amount at May. 31, 2023	(42,399,000)	0	$ 0	168,967,000	(211,372,000)	$ (42,399,000)	$ 0
Balance, shares at May. 31, 2023			421,271
Balance, shares at Aug. 31, 2023			507,383
Balance, amount at Aug. 31, 2023	(51,125,000)	0	$ 0	175,226,000	(226,351,000)
Fair market value increase of preferred stock prior to reverse stock split	67,444,000	0	0	67,444,000	0
Stock-based compensation expense	462,000	0	$ 0	462,000	0
Additional shares issued due to reverse stock split, shares			51,706
Net loss	(14,677,000)	0	$ 0	0	(14,677,000)
Preferential dividend of preferred stock	(67,444,000)	0	0	(67,444,000)	0
Additional shares issued due to reverse stock split, amount	0	0	$ 0	0	0
Common stock issued for cash including the exercise of prefunded warrants, net of offering costs - October 2023 Financing, shares			94,375
Common stock issued for cash including the exercise of prefunded warrants, net of offering costs - October 2023 Financing, amount	2,016,000			2,016,000
Common stock issued for cash including the exercise of prefunded warrants, net of offering costs - March 2024 Financing, shares			1,176,470
Common stock issued for cash including the exercise of prefunded warrants, net of offering costs - March 2024 Financing, amount	4,227,000			4,227,000
Common shares issued pursuant to legal settlement with former related party, shares			181,518
Common shares issued pursuant to legal settlement with former related party, amount	550,000	$ 0	$ 0	550,000	0
Preferred stock Class A issued upon the exercise of preferred stock option, shares		4,744,234
Preferred stock Class A issued upon the exercise of preferred stock option, amount	0	$ 0	$ 0	0	0
Common stock issued on conversion of preferred stocks into common stock, shares		(4,744,234)	4,744,234
Common stock issued on conversion of preferred stocks into common stock, amount	0	$ 0	$ 0	0	0
Balance, amount at May. 31, 2024	(58,547,000)	0	$ 0	182,481,000	(241,028,000)
Balance, shares at May. 31, 2024			6,755,686
Balance, shares at Feb. 29, 2024			5,397,698
Balance, amount at Feb. 29, 2024	(59,011,000)	0	$ 0	177,592,000	(236,603,000)
Stock-based compensation expense	112,000	0	0	112,000	0
Net loss	(4,425,000)	0	$ 0	0	(4,425,000)
Common shares issued pursuant to legal settlement with former related party, shares			181,518
Common shares issued pursuant to legal settlement with former related party, amount	550,000	0	$ 0	550,000	0
Common stock issued for cash including the exercise of prefunded warrants, net of offering costs, shares			1,176,470
Common stock issued for cash including the exercise of prefunded warrants, net of offering costs, amount	4,227,000	0	$ 0	4,227,000	0
Balance, amount at May. 31, 2024	$ (58,547,000)	$ 0	$ 0	$ 182,481,000	$ (241,028,000)
Balance, shares at May. 31, 2024			6,755,686

Condensed Unaudited Consolida_3

Condensed Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	May 31, 2024	May 31, 2023
OPERATING ACTIVITIES
Net loss	$ (14,677)	$ (18,647)
Loss from discontinued operations	0	(1,267)
Non-controlling interest	0	(540)
Net loss from continuing operations	(14,677)	(16,840)
Adjustments to reconcile net loss from continuing operations to net cash used in continuing operating activities:
Depreciation and amortization	419	447
Stock-based compensation	462	735
Warrant modification expense	0	106
Amortization of operating lease	265	85
Fair value of shares for services to be issued to directors	137	169
Allowance for credit losses	380	10
Loss from sale of fixed assets	7	0
Changes in operating assets and liabilities:
Accounts receivable	(420)	(268)
Unbilled accounts receivable	1,451	59
Prepaid expenses and other current assets	537	356
Deposits and other assets	51	(79)
Accounts payable and other accrued liabilities	680	952
Operating lease liability	(285)	(448)
Payroll tax liabilities	5,939	7,844
Payroll related liabilities	(909)	480
Net cash used in continuing operating activities	(5,963)	(6,392)
INVESTING ACTIVITIES
Purchase of fixed assets	0	(343)
Redemption of Trust Account	0	117,574
Investment in private company	0	(100)
Proceeds from the sale of fixed assts	5	0
Net cash provided by investing activities	5	117,131
FINANCING ACTIVITIES
Proceeds from exercised warrant, net of offering costs	0	1
Payment to IHC shareholders	0	(117,574)
Proceeds from registered offering, net of offering costs	4,227	0
Proceeds from At the Market Offering, net of offering costs	0	1,973
Proceeds from private placement, net of offering costs	2,016	4,387
Net cash provided by (used in) financing activities	6,243	(111,213)
Net (decrease) increase in cash	285	(474)
Cash - Beginning of Period	75	618
Cash - End of Period	360	144
Supplemental Disclosure of Cash Flows Information:
Cash paid for interest	15	102
Cash paid for income taxes	0	0
Non-cash Investing and Financing Activities:
Deconsolidation of VIE	0	9,494
Increase in marketable securities in trust account and Class A mandatory redeemable common shares	0	801
Transfer of preferred shares to common shares	0	1
Issuance of common stock as legal settlement with former related party debt	$ 550	$ 0

Nature of Operations

Nature of Operations	9 Months Ended
	May 31, 2024
Nature of Operations
Nature of Operations	Note 1: Nature of Operations ShiftPixy, Inc. (the “Company”) was incorporated on June 3, 2015, in the State of Wyoming. The Company is a specialized human capital service provider that provides solutions for large, contingent, part-time workforce demands, primarily in the light industrial, restaurant and hospitality service trades. The Company’s historic focus has been on the quick service restaurant (“QSR”) industry in Southern California, but the Company has expanded into other geographic areas and industries that employ temporary or part-time labor sources, including light industrial and the healthcare industry. The Company functions as an employment administrative services (“EAS”) provider primarily through its wholly owned subsidiary, ReThink Human Capital Management, Inc. (“HCM”), as well as a staffing provider through another of its wholly owned subsidiaries, ShiftPixy Staffing, Inc. (“Staffing”). These subsidiaries provide a variety of services typically as a co-employer through HCM and a direct employer through Staffing, including the following functions: administrative services, payroll processing, human resources consulting, and workers’ compensation administration and coverage (as permitted and/or required by state law). The Company has built a human resources information systems (“HRIS”) platform to assist in client acquisition that simplifies the onboarding of new clients into the Company’s closed proprietary operating and processing information system (the “ShiftPixy Ecosystem”). In January 2020, the Company sold the assets of Shift Human Capital Management Inc. (“SHCM”), a wholly owned subsidiary of the Company, pursuant to which the Company assigned the majority of the Company’s billable clients at the time of the sale to a third party for cash. The continuing impact of this transaction on the Company’s condensed consolidated financial statements is described in Note 2. Effective October 14, 2023, the Company filed articles of amendment to the Company’s articles of incorporation to effect a one-for-twenty-four (1:24) reverse split of the Company’s issued and outstanding shares of common stock. The reverse split became effective on Nasdaq October 16, 2023. All references to common stock, warrants and options except for the conditional preferred stock option granted in August 2023, to purchase common stock, including per share data and related information contained in the condensed consolidated financial statements have been retroactively adjusted to reflect the effect of the reverse stock split for all periods presented.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	May 31, 2024
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 2: Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These consolidated condensed financial statements are presented in United States dollars. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions to Form 10-Q. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of condensed operations for the three and nine months ending May 31, 2024, are not necessarily indicative of the results that may be expected for the full year ending August 31, 2024. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2023 (“Fiscal 2023”), filed with the SEC on December 14, 2023. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries listed below. All intercompany transactions and balances have been eliminated. The Company’s consolidated subsidiaries are as follows: Name of Consolidated Subsidiaries or Entities State or Other Jurisdiction of Incorporation or Organization Attributable Interest Shiftpixy Corporate Services, Inc. Wyoming 100 % Shiftpixy Staffing, Inc. Wyoming 100 % Shiftpixy Contracting Services, Inc. Wyoming 100 % Shiftpixy Ghost Kitchens, Inc. Wyoming 100 % Shiftpixy Productions, Inc. Wyoming 100 % Shiftpixy Investments, Inc. Wyoming 100 % Shiftpixy Labs, Inc. Wyoming 100 % Industrial Human Capital, Inc (until February 7, 2023) The condensed consolidated financial statements previously included the accounts of Industrial Human Capital, Inc. (“IHC”), which was a special purpose acquisition company (“SPAC”) for which our wholly owned subsidiary, ShiftPixy Investments, Inc., served as the financial sponsor, and which SPAC was deemed to be controlled by the Company as a result of the Company’s 15% equity ownership stake, the overlap of three of our executive officers for a period of time as executive officers of IHC, and significant influence that the Company exercised over the funding and acquisition of new operations for an initial business combination. IHC was consolidated under the variable interest entity model. IHC was dissolved on November 14, 2022, and the Trustee released all the redemption funds from the Trust Account to the IHC shareholders on December 1, 2022, effectively liquidating the Trust. On February 7, 2023, IHC was de-consolidated. On February 7, 2023, three creditors of IHC filed an involuntary petition for liquidation under Chapter 7 against IHC in the US Bankruptcy Court for the Southern District of Florida. See Note 11 for disclosure related to the litigation with IHC. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include: · Continuation as a going concern; management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and liquidation of all liabilities in the normal course of business, · Liability for legal contingencies, · Payroll tax and associated penalties and interest, and · Impairment of long-lived assets. These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties to these estimates or assumptions that are difficult to measure of value. Management regularly reviews the key factors and assumptions to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions. After such a valuation, if deemed appropriate, those estimates are adjusted accordingly. Liquidity, Capital Resources and Going Concern As of May 31, 2024, the Company had cash of approximately $0.4 million and a working capital deficit of $60.3 million. During the nine months ended May 31, 2024, the Company used approximately $6.0 million of cash in operations and incurred $14.7 million of losses, resulting in an accumulated deficit of $241 million. As of May 31, 2024, the Company is delinquent with respect to remitting payroll tax payments to the IRS, States, and local jurisdictions for an aggregate amount of $35.5 million including penalties and interest. The Company does not have sufficient cash to meet its liquidity requirements for the following twelve months from the date of issuance of these unaudited condensed consolidated financial statements. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company has received delinquent notices and notices relating to liens from the IRS claiming it owes approximately $21.1 million for unpaid payroll tax liabilities, including penalties and interest. The balances reported on such notices do not represent the full payroll tax liability of the Company as of May 31, 2024. The Company expects its payroll tax liabilities, penalties and interest to increase in the future. Moreover, the IRS has threatened to take enforced collection against the Company and its subsidiaries. The Company has taken steps to preserve so-called “collection due process rights”: ■ In October of 2023, the IRS issued to ShiftPixy a Letter 1058, Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing Request for a Collection Due Process or Equivalent Hearing ■ On December 12, 2023, the Company received a lien from the IRS. The IRS can levy the Company’s bank accounts. As a result of the appeal filed with the US Tax Court of Appeals, the tax lien is on stay. ■ In January of 2024, ShiftPixy filed Form 12153, Request for a Collection Due Process or Equivalent Hearing ■ The Company had a collection due process hearing with the IRS Independent Office of Appeals in October 2023. In October and November of 2023, the Company requested that the IRS Independent Office of Appeals (“Appeals”), among other things, abate additions to tax and related interest for the failure to make required deposits and the failure to timely pay required tax. ■ In February 2024, the Company received a Notice of Determination from the IRS on our administrative claims wherein the IRS denied, entirely, our appeal for relief. ■ The Company appealed to the US Tax Court of Appeals on March 25, 2024. The IRS can, with limited notice, levy the Company’s bank accounts and subject it to enforced collection if the Company cannot obtain a resolution of the payroll tax issues. There is no assurance that the US Tax Court of Appeals will abate penalties and interest currently assessed against the Company by the IRS. If the Company is not successful in getting the outstanding penalties, and/or interest abated, including working out a payment plan with the IRS, it may cause the Company to file for bankruptcy protection in the near future. The Company has retained tax counsel and has been in near constant communication with the IRS regarding processing its Employee Retention Tax Credits (“ERTCs”). As of September 14, 2023, the IRS has a moratorium on processing new ERTC claims and many of the Company’s clients are seeking refunds. Recently, the Company has filed ERTC claims for its clients and has not received any acceptance from the IRS. Some clients have filed suits against the Company, demanding that the Company takes action to file for additional ERTCs for certain tax periods. The Company has taken aggressive steps to reduce its overhead expenses. The Company has plans and expectations for the next twelve months include raising additional capital which may help fund the Company’s operations and strengthening the Company’s sales force strategy by focusing on staffing services as the key driver towards its success. In addition, the Company is pursuing the acquisitions of large regional staffing companies through debt financing with the end goal of creating a national footprint that could leverage our best-in class technology as a consolidation point and value creator. This technology driven acquisition strategy will equip strategic acquisition targets with proprietary systems and staffing service delivery platform to deliver high revenue growth, margin improvement and lower operating costs. There is no assurance that the Company can obtain financing or obtain appropriate financing on terms that are acceptable to the Company. These condensed consolidated financial statements do not include any adjustments for these uncertainties. There is a likelihood that the Company may file for bankruptcy in the near future if the Company is unable to implement its staffing acquisitions strategy. Revenue and Direct Cost Recognition The Company determines revenue recognition pursuant to Accounting Standards Codification (“ASC 606”) Revenue from contracts with customers, through the following steps: ■ Identification of the contract, or contracts, with a customer. ■ Identification of the performance obligation(s) in the contract. ■ Determination of the transaction price. ■ Allocation of the transaction price to the performance obligation(s) in the contract. ■ Recognition of revenue when, or as the Company satisfies a performance obligation. The Company’s revenues are primarily disaggregated into fees for providing staffing solutions and EAS/HCM services. The Company enters into contracts with its clients for Staffing based on a stated rate and price in the contract. Contracts generally have a term of 12 months, are cancellable at any time by either party with 30 days’ written notice. The performance obligations in the agreements are generally combined into one performance obligation, as they are considered a series of distinct services, and are satisfied over time because the client simultaneously receives and consumes the benefits provided as the Company performs the services. The Company does not have significant financing components or significant payment terms for its clients and consequently has no material credit losses. The Company uses the output method based on a stated rate and price over the payroll processed to recognize revenue, as the value to the client of the goods or services transferred to date appropriately depicts the Company’s performance towards complete satisfaction of the performance obligation. Staffing Solutions The Company records gross billings as revenues for its staffing solutions clients. The Company is primarily responsible for fulfilling the staffing solutions services and has discretion in establishing price. The Company includes payroll costs in revenues with a corresponding increase to cost of revenues for payroll costs associated with these services. As a result, the Company is the principal in this arrangement for revenue recognition purposes. EAS Solutions / HCM Employment administrative service (“EAS”) and Human Capital Management (“HCM”) revenues are primarily derived from the Company’s gross billings, which are based on (i) the payroll cost of the Company’s worksite employees (“WSEs”) and (ii) an administrative fee and (iii) if eligible, WSE can elect certain pass-through benefits. Gross billings are invoiced to each EAS and HCM client, concurrently with each periodic payroll. Revenues are offset by payroll cost component and pass-through costs which are presented on a net basis for revenue recognition. WSEs perform their services at the client's worksite. The Company assumes responsibility for processing and remitting payroll to the WSE and payroll related obligations, it does not assume employment-related responsibilities such as determining the amount of the payroll and related payroll obligations. Revenues that have been recognized but not invoiced are included in unbilled accounts receivable on the Company’s condensed consolidated balance sheets were $0.3 million and $1.8 million, as of May 31, 2024, and August 31, 2023, respectively. Payments received by clients in advance of the due date of an invoice are recorded as liability. As of May 31, 2024, and August 31, 2023. the Company recorded a liability for advance payments of $0 million and $0.2 million, respectively, which is included in accounts payable and other accrued liabilities on the condensed balance sheets. Disaggregation of Revenue The Company’s primary revenue streams include HCM/EAS and staffing services. The Company’s disaggregated revenues for the three and nine months ended May 31, 2024, and 2023, were as follows, in millions: For the Three Months Ended For the Nine Months Ended Revenue: May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 Staffing $ 4.0 $ 3.9 $ 10.8 $ 12.3 EAS/HCM 0.1 0.1 0.9 1.5 $ 4.1 $ 4.0 $ 11.7 $ 13.8 EAS/HCM revenue is presented net, $1.4 million and $12.4 million gross billings less WSE payroll costs of $1.3 million and $11.5 million for the three and nine months ended May 31, 2024, and $8.3 million and $30.7 million, respectively gross billings less WSE payroll costs of $8.2 million and $29.2 million for the three and nine months ended May 31, 2023, respectively. For the three and nine months ended May 31, 2024, and 2023, the following geographical States represented more than 10% of total revenues: For the Three Months Ended For the Nine Months Ended Region: May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 California 28.1 % 31.0 % 26.9 % 44.0 % Washington 0.2 % 15.5 % 10.2 % 12.2 % New York 26.7 % 15.7 % 19.1 % 7.9 % New Mexico - % 16.8 % 16.2 % 15.0 % Florida 10.6 % 2.2 % 5.7 % 2.0 % Incremental Cost of Obtaining a Contract Pursuant to the “practical expedients” provided under Accounting Standards Update “ASC” No 2014-09, the Company expenses sales commissions when incurred because the terms of its contracts are cancellable by either party upon 30-day notice. These costs are recorded in commissions in the Company’s unaudited condensed Consolidated Statements of Operations. Discontinued Operations and Workers’ Compensation On January 3, 2020, the Company entered into an asset purchase agreement with Shiftable HR Acquisition, LLC, a wholly owned subsidiary of Vensure, pursuant to which the Company assigned client contracts which were deemed significant to its revenues, including 100% of the Company’s then existing professional employer organization or PEO business. In connection with this transaction, the Company had a Note Receivable to be paid over four years. Prior to Fiscal Year 2023, the Company determined that it was probable that all contractually required payments would not be collected and recorded a full reserve on the amount of the note receivable. Up until November 15, 2023, the Company was in litigation with Vensure regarding payment of the aforementioned note receivable. On November 15, 2023, the Company won an arbitration for a total amount of $2.5 million, which was reported as a gain from legal settlement in the condensed statement of operations during the nine months ended May 31, 2024. The Company had retained workers’ compensation reserves and workers’ compensation related liabilities, which arose from former WSEs of clients that were transferred to Shiftable HR Acquisition LLC in connection with the Vensure Asset Sale. The workers’ compensation obligations related to the programs in place with Everest and Sunz Insurance Solutions, LLC (“Sunz”). The programs calculated the final policy premium based on the Company’s loss experience during the term of the policy and the stipulated formula set forth in the policy. The Vensure Asset Sale had previously met the criteria of discontinued operations set forth in ASC 205 and as such the retained workers’ compensation asset and liabilities were presented as a discontinued operation. Subsequent to the Vensure Asset sale, the Company entered into litigation with both Everest and Sunz, see Note 11 Contingencies. As of May 31, 2024, the Company has now executed settlement agreements with both programs (Everest and Sunz), under which the Company has continued to make the required installments under the terms of the agreements up to the filing date. The Company recognized approximately $2.3 million of legal settlement expense related to Sunz during the nine months ended May 31, 2024. Segment Reporting The Company operates as one reportable segment under Accounting Standards Codification “ASC” 280, Segment Reporting. The chief operating decision maker (“CODM”) regularly reviews the financial information of the Company at a consolidated level in deciding how to allocate resources and in assessing performance. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents. The Company had no cash equivalent as of May 31, 2024, and August 31, 2023. Concentration of Credit Risk The Company maintains cash with a commercial bank, which is insured by the Federal Deposit Insurance Corporation (“FDIC”). At various times, the Company has deposits in this financial institution in excess of the amount insured by the FDIC. The Company has not experienced any losses related to these balances and believes its credit risk to be minimal. As of May 31, 2024, the Company’s balances exceeded federally insured limits by the FDIC by approximately $0.2 million. As of August 31, 2023, the Company did not have any cash on deposit in excess of the amounts insured by the FDIC. The following represents clients who have ten percent of total accounts receivable as of May 31, 2024, and August 31, 2023, respectively. As of May 31, 2024 August 31, 2023 Client 1 43.9 % 64.5 % Client 2 47.0 % 23.6 % The following represents clients who have ten percent of gross revenues for the Nine months ended May 31, 2024, and 2023: May 31, 2024 May 31, 2023 Client 1 29.7 % 12.6 % Client 2 10.6 % 12.5 % The following represents clients who have ten percent of gross revenues for the three months ended May 31, 2024, and 2023: May 31, 2024 May 31, 2023 Client 1 44.7 % 18.6 % Client 2 20.2 % 13.9 % Fair Value of Financial Instruments The Company adopted the provisions of FASB Accounting Standards Codification (“ASC”) 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements. The Company measures fair value under a framework that utilizes a hierarchy prioritizing the inputs to relevant valuation techniques. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of inputs used in measuring fair value are: ■ Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company as the ability to access. ■ Level 2: Inputs to the valuation methodology include: o Quoted prices for similar assets or liabilities in active markets. o Quoted prices for identical or similar assets or liabilities in inactive markets. o Inputs other than quoted prices that are observable for the asset or liability. o Inputs that are derived principally from or corroborated by observable market data by correlation or other means; and o If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. ■ Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. When the Company changes its valuation inputs for measuring financial assets and liabilities at fair value, either due to changes in current market conditions or other factors, it could be required to transfer those assets or liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. The development and determination of the unobservable inputs for Level 3 fair value measurements and the fair value calculations are the responsibility of the Company’s chief financial officer and are approved by the chief executive officer. There were no transfers out of Level 3 for the three and nine months ended May 31, 2024. As of May 31, 2024, and August 31, 2023, the carrying value of certain financial instruments (cash, accounts receivable, unbilled accounts receivable, and accounts payable and other accrued liabilities) approximated fair value due to the short-term nature of the instruments. Level 1 assets consisted of cash as of May 31, 2024, and August 31, 2023. The Company did not have any Level 2 or 3 assets or liabilities as of May 31,2024, and August 31, 2023. Advertising Costs The Company expenses all advertising as incurred. The Company incurred advertising costs totaling $0.6 million and $1.9 million for the three and nine months ended May 31, 2024, and $0.9 million and $2.0 million for the three and nine months ended May 31, 2023, respectively. Advertising expenses include direct salaries and external costs. Income Taxes The Company accounts for income taxes pursuant to ASC 740, Income Taxes. Under ASC 740, deferred income taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. ASC 740 also provides criteria for the recognition, measurement, presentation, and disclosure of uncertain tax positions. Under ASC 740, the impact of an uncertain tax position on the income tax return may only be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. A full valuation allowance was recorded as of February 29, 2024, and August 31, 2023. As of the date of this filing, the Company has not yet filed its U.S Corporate income tax return on Form 1120 by the due date, which will result in penalties and interest. The Company may be subject to Net Operating Losses (“NOLs”) limitation pursuant to IRS Section 382 upon an ownership change. The Company has not yet performed such study, which examines the availability of credits and NOLs. Stock-Based Compensation The Company has one stock-based compensation plan under which the Company may issue awards, as described in Note 8, Stock Based Compensatio n Compensation-Stock Compensation The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, the Company recognizes expense on an accelerated basis over the employee’s requisite service period, which is generally the vesting period of the equity grant. The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. The expected volatility is based on the historical volatility of the Company’s common stock since the Company’s initial public offering. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. The Company elects to account for forfeitures as they occur. As such, compensation cost previously recognized for an unvested award that is forfeited because of the failure to satisfy a service condition is revised in the period of forfeiture. Fixed Assets, net Fixed assets are recorded at cost, less accumulated depreciation and amortization. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When fixed assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Fixed assets are depreciated over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives of property and equipment are as follows: Equipment: 5 years Furniture & Fixtures: 5 - 7 years Leasehold improvements Shorter of useful life or the remaining lease term, typically 5 years Net Loss Per Share The Company computes basic and diluted earnings (loss) per share amounts pursuant to Section 260-10-45 of FASB ASC. Basic net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the period, excluding the effects of potentially dilutive securities. Diluted net loss per share is computed similar to basic loss per share except that the denominator is increased to include additional common stock equivalents available upon exercise of stock options, warrants, shares of common stock to be issued to directors for services provided. Dilutive common stock equivalents include the dilutive effect of in-the-money stock equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common stock equivalents if their effect would be anti-dilutive. In periods in which a net loss has been incurred, all potentially dilutive common stock shares are considered anti-dilutive and thus are excluded from the calculation. The following potentially dilutive securities were not included in the calculation of diluted net loss per share attributable to common shareholders of the Company because their effect would be antidilutive for the periods presented: For the Three and Nine Months Ended May 31, 2024 May 31, 2023 Options 242 417 Warrants 1,409,120 52,198 Shares of common stock to be issued to the directors for services provided 565,665 2,460 Preferred Option - 1,565 Total potentially dilutive shares 1,975,027 56,640 Reclassification The Company reclassified certain expenses to conform to the current year's presentation, specifically accrued workers’ compensation has been reclassified to accounts payable and other accrued liabilities. The resulting changes from the condensed balance sheets impacted the presentation of such items in the condensed consolidated statements of cash flows for the three and nine months ended May 31, 2024. Recent Accounting Guidance New accounting rules and disclosure requirements can significantly affect our reported results and the comparability of our financial statements. We believe the following new accounting guidance is relevant to the readers of our condensed financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses New Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Account Standard Board “FASB” issued Accounting Standards Update “ASU” 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments. The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker “CODM” and included within each reported measure of segment profit and loss. The amendments also require disclosure of all other segment items by reportable segment and a description of its composition. Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2025. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

Accounts Receivable Unbilled Re

Accounts Receivable Unbilled Receivable and Advanced Payments	9 Months Ended
	May 31, 2024
Accounts Receivable Unbilled Receivable and Advanced Payments
Accounts Receivable, Unbilled Receivable and Advanced Payments	Note 3: Accounts Receivable, Unbilled Receivable and Advanced Payments The Company’s accounts receivable represents outstanding gross billings to clients, net of an allowance for estimated credit losses. The Company in some instances may require its clients to prefund payroll and related liabilities before payroll is processed or due for payment. If a client fails to fund payroll or misses the funding cut-off, at our sole discretion, the Company may pay the payroll and the resulting amounts due to us are recognized as accounts receivable. When client payment is received in advance of the Company’s performance under the contract, such amount is recorded as client deposits in the liability section of the condensed consolidated balance sheet. The Company establishes an allowance for credit losses based on the credit quality of clients, current economic conditions, the age of the accounts receivable balances, historical experience, and other factors that may affect clients’ ability to pay, and charge-off amounts against the allowance when they are deemed uncollectible. The allowance for credit losses was $0.6 million and $0.2 million as of May 31, 2024, and August 31, 2023, respectively. The Company recognizes unbilled revenue when work site employee payroll and payroll tax liabilities in the period in which the WSEs perform work. When clients’ pay periods cross reporting periods, the Company accrues the portion of the unpaid WSE payroll where the Company assumes, under state regulations, the obligation for the payment of wages and the corresponding payroll tax liabilities associated with the work performed prior to period-end. These estimated payroll and payroll tax liabilities are recorded in accrued wages. The associated receivables, including estimated revenues, offset by advance collections from clients and an allowance for credit losses, are recorded as unbilled revenue. As of May 31, 2024, and August 31, 2023, advance collections included in unbilled revenue were $0.3 million and $1.8 million, respectively. Payments received by clients in advance of the due date of an invoice are recorded as liability. As of May 31, 2024, and August 31, 2023, the Company recorded a liability for advance payments of $0 million and $0.2 million, respectively, is included in accounts payable and other accrued liabilities on the condensed balance sheets.

Fixed Assets, net

Fixed Assets, net	9 Months Ended
	May 31, 2024
Fixed Assets, net
Fixed Assets, net	Note 4: Fixed Assets, net Fixed assets consisted of the following, in thousands: May 31, 2024 August 31, 2023 Equipment $ 2,140 $ 2,182 Furniture and fixtures 614 614 Leasehold improvements 604 604 3,358 3,400 Accumulated depreciation and amortization (2,167 ) (1,778 ) Fixed assets, net $ 1,191 $ 1,622 Depreciation and amortization expense was $0.1 million and $0.4 million for the three and nine months ended May 31, 2024, respectively. Depreciation and amortization expense was $0.1 million and $0.4 million for the three and nine months ended May 31, 2023, respectively.

Accounts Payable and Other Accr

Accounts Payable and Other Accrued Liabilities	9 Months Ended
	May 31, 2024
Accounts Payable and Other Accrued Liabilities
Accounts Payable and Other Accrued Liabilities	Note 5: Accounts Payable and Other Accrued Liabilities Accounts payable and other accrued liabilities consisted of the following, in thousands: May 31, 2024 August 31, 2023 Accounts payable (1) $ 8,369 $ 6,527 Contingent lease liability 6,484 3,761 Operating lease liability 407 874 Legal settlement 5,066 1,610 Compensation owed to directors for services 893 756 Workers’ compensation 6 1,219 ERTC owed to clients 1,089 1,089 Due to IHC 600 600 Financed insurance policies 28 335 Business tax 788 150 Other 1,090 990 Total $ 24,820 $ 17,911 (1) Includes the $3.5 million default penalty related to the Sunz litigation settlement as of May 31, 2024.

Payroll Tax And Related Liabili

Payroll Tax And Related Liabilities	9 Months Ended
	May 31, 2024
Payroll Tax And Related Liabilities
Payroll Tax And Related Liabilities	Note 6: Payroll tax and related liabilities Payroll tax related liabilities consisted of the following, in thousands: May 31, 2024 August 31, 2023 Payroll taxes liabilities $ 24,863 $ 22,840 Payroll related liabilities 55 237 Accrued penalties and interest 10,616 6,518 Total $ 35,534 $ 29,595 Payroll tax liabilities and payroll related liabilities are associated with the Company’s WSEs as well as its corporate employees. The Company has recorded approximately $10.6 million and $6.5 million in interest and penalties on approximately $24.9 million and $22.8 million on delinquent outstanding payroll taxes to the IRS, States, and local authorities as of May 31, 2024, and August 23, 2023, respectively. In addition, the Company has received notices from the IRS for unpaid tax liabilities including penalties and interest. The IRS can levy the Company’s bank accounts and is subject to enforcement collections. The Company has requested a collection due process or equivalent hearing, that are subject to enforced collection. The Company has also filed for an abatement of additions to tax and related interest for the failure to make required deposits and the failure to timely pay required tax that are subject to enforced collection. On February 28, 2024, the Company received a Notice of Determination from the IRS on the Company’s administrative claims wherein the IRS denied entirely our appeal for relief. The Company appealed to the US Tax Court on March 25, 2024. In January 2024, the Company was informed by the IRS it was being audited for its August 31, 2022, corporate tax return. If there are any adjustments resulting from the audit, the net operating loss will be adjusted.

Stockholders Deficit

Stockholders Deficit	9 Months Ended
	May 31, 2024
Stockholders Deficit
Stockholders' Deficit	Note 7: Stockholders’ Deficit On October 11, 2023, the Company filed its articles of correction to the Company’s articles of incorporation to effect a one-for-twenty-four reverse stock split (1:24) of the Company’s issued and outstanding shares of common stock. All share and per share related numbers in these condensed consolidated financial statements give effect to the reverse stock split, which was effective on Nasdaq on October 16, 2023. Preferred Stock Class A The shares of Class A preferred stock (“Class A” shares) are not entitled to receive any dividends. Class A shares have a liquidation preference upon dissolution or winding up of the Company in an amount equal to the purchase price, subject to standard anti-dilution features. Each share of Class A is convertible into one share of common stock, at any time, at the option of the holder. For the three and Nine months ended May 31, 2024 Effective on October 14, 2023, the Company filed its articles of amendment to the Company’s articles of incorporation to effect a one for twenty four (1:24) reverse split of the Company’s issued and outstanding shares of Common Stock. The Company effected a reverse split, which became effective on Nasdaq on October 16, 2023. Prior to the shareholders’ vote to approve the reverse stock split, the Company amended its Articles of Incorporation to state that only the common stock is affected if the reverse stock split is effectuated with no intention to affect the Class A Preferred Stock of the Company. The reverse stock split was subsequently approved by the shareholders and effectively the terms and conditions of the Class A preferred stock were “deemed modified” and treated as an extinguishment in accordance with ASC 470-50 and ASC 360-10-S99-2 for the incremental value received (the carrying value is compared to the fair value received after the modification). On October 17, 2023, the Chief Executive Officer exercised such option to acquire preferred stock and contemporaneously converted 4,744,234 shares of Class A into an equivalent number of shares of common stock. As a result of this transaction, the Company recorded a preferential dividend of $67.4 million based upon the incremental value of the stock that was held prior to the reverse stock split and the date of the Class A Preferred Stock conversion to common equity. This transaction had no effect on the Company’s consolidated stockholders’ deficit. There are no shares of Class A issued and outstanding as well as no conditional option to acquire Class A preferred stock as of May 31, 2024. For the three and Nine months ended May 31, 2023 On September 1, 2022, the Chief Executive Officer converted 8,600,000 shares Class A into 8,600,000 shares of the Company’s common stock. All of the 8,600,000 shares of Class A shares were converted into common shares on September 1, 2022, after the Company's reverse stock split had taken effect. Prior to the shareholder vote to approve the reverse stock split, the Company on August 15, 2022, amended its Articles of Incorporation to state that only the common stock is affected if the reverse stock split is effectuated with no intention to affect the preferred stock of the company. Accordingly, no Class A shares are issued and outstanding as of May 31, 2023. Common Stock and Warrants Activity for the nine months ended May 31, 2024 On October 5, 2023, the Company entered into a securities purchase agreement with an institutional investor, pursuant to which the Company issued and sold to the investor in a registered direct offering 56,250 shares of common stock at a price of $26.40 per share, and pre-funded warrants to purchase up to 38,125 shares of common stock at a price of $26.3976 per pre-funded warrant, and (ii) in a concurrent private placement, common stock purchase warrants (“October 2023 warrants”), exercisable for an aggregate of up to 94,375 shares of common stock. The pre-funded warrants had an exercise price of $0.0024 and were immediately exercised. The October 2023 warrants are exercisable for a period of five-year years commencing six months from issuance. On October 16, 2023, the Company entered into an amendment to common stock purchase with the holder of the October 2023 Warrants. Pursuant to the amendment, the exercise price of the October 2023 warrants was increased from $26.40 to $30.504, resulting from a NASDAQ notice of failure to satisfy a continued listing rule. The Company reviewed the accounting for the modification and determined that no adjustment was needed for the three and nine months ended March 31, 2024. The net proceeds of this offering were $2.0 million. On March 19, 2024, the Company priced a “reasonable best effort” offering for the sale of an aggregate of 590,000 shares of common stock at a price of $4.25 per share and pre-funded warrants to purchase up to 586,470 shares of common stock at a price of $4.2499 per pre-funded warrant and 1,176,470 common warrants pursuant to a securities purchase agreement with an institutional investor. The Pre-funded Warrants were immediately exercised, at an exercise price of $0.0001. The Common Warrants are exercisable immediately for a term of five years and have an exercise price of $4.25. The offering closed on March 21, 2024. The net proceeds of the offering were approximately $4.2 million. Concurrently, the Company executed an amendment to common stock warrants previously issued to the investor, pursuant to which the exercise price of an aggregate of 97,850 outstanding warrants the Company issued to the investor in July 2022 and July 2023 was reduced to $4.25 and the term of these warrants was extended to March 21, 2029. In addition, the exercise price of 94,375 outstanding warrants the Company issued to the investor in October 2023 was reduced to $2.41, effective on the date that is six months following the initial date of issuance of the October 2023 Warrants. The incremental change in the fair value following the warrant modification due to the change in the exercise price and term was considered de minimis for the three and nine months ended May 31, 2024. The incremental change in the fair market values was based upon the Black- Scholes option pricing model with the following inputs. The risk-free interest of 4.2 %, expected volatility of 200.7%, dividend yield of 0% and expected term between 4.3 to 6.3 years. Activity for the nine months ended May 31, 2023 On September 20, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a large institutional investor (the “Purchaser”) pursuant to which the Company sold to the Purchaser an aggregate of 17,361 shares of its common stock together with warrants (the “Warrants”) to purchase up to 34,722 shares of common stock (collectively, the “Offering”). Each share of common stock and two accompanying Warrants were sold together at a combined offering price of $288. The Warrants are exercisable for a period of seven years commencing upon issuance at an exercise price of $288, subject to antidilution adjustment. The private placement closed on September 23, 2022. The net proceeds to the Company from the Offering were $4.4 million. In connection with the Purchase Agreement, the Company and the purchaser entered into Amendment No. 1 to Warrants (the “Warrant Amendment”). Pursuant to the Warrant Amendment, the exercise price of (i) 1,051 warrants issued on September 3, 2021, and (ii) 4,124 warrants issued on January 28, 2022, was reduced to $0.24. As a result of the warrant modification due to the change in the exercise price, for the nine months ended May 31, 2023, the Company recorded an expense of $0.1 million. A.G.P./Alliance Global Partners (the “Placement Agent” or "AGP") acted as the exclusive placement agent in connection with the Offering pursuant to the terms of a Placement Agent Agreement, dated September 20, 2022, between the Company and the Placement Agent (the “Placement Agent Agreement”). Pursuant to the Placement Agent Agreement, the Company paid the Placement Agent a fee equal to 7.0% of the aggregate gross proceeds from the Offering. In addition to the cash fee, the Company issued to the Placement Agent warrants to purchase up to 868 shares of common stock (5% of the number of shares sold in the Offering (the “Placement Agent Warrants”). The Placement Agent Warrants are exercisable for a period commencing six months from issuance, will expire four years from the effectiveness of a registration statement for the resale of the underlying shares, and have an initial exercise price of $316.80 per share. On January 31, 2023, the Company filed a S-3 registration statement on Form S-3 for $100 million for the sale of up to $100 million of equity securities over a three-year period. The SEC declared the S-3 effective on February 2, 2023. There is a limitation on the amount of funds that the Company can access under the baby shelf rules which is the value of a company’s public float if less than $75 million, The Company can only raise ⅓ of its float value over the previous 12-month period. On January 31, 2023, the Company entered into an ATM Issuance Sales Agreement which was a part of the registration statement on Form S-3 and prospectus supplement. The at the market offering was for up to $8.2 million in shares of its common stock, could be sold from time to time and at various prices at the Company’s sole control, subject to the conditions and limitations in the sales agreement with AGP. For the three and nine months ended May 31, 2023, the Company received net proceeds of $0.5 million and $2.0 million from the sale of 5,583 and 18,305 shares of the Company’s common stock, respectively. On May 22, 2023, the Company terminated the ATM. During the nine months ended May 31, 2023, the Company issued 5,175 shares of common stock following the exercise of prefunded warrants for net cash consideration of $1,000. Warrants The following table summarizes the changes in the Company’s warrants from August 31, 2023, to May 31, 2024: Number of shares Weighted average remaining life (years) Weighted average exercise price Warrants outstanding, August 31, 2023 138,309 5.6 $ 208.8 Issued 1,270,845 4.9 4.1 Forfeited (34 ) — — Warrants outstanding, May 31, 2024 1,409,120 4.8 $ 19.1 Warrants exercisable, May 31, 2024 1,409,120 4.8 $ 19.1 The following table summarizes the Company’s issued and outstanding warrants outstanding as of May 31, 2024: Warrants Outstanding Weighted Average Life of Outstanding Warrants (In years) Exercise Price March 2024 Common Warrants 1,176,470 4.8 $ 4.25 October 2023 Common Warrants 94,375 4.9 2.41 July 2023 Common Warrants 86,111 4.8 4.25 September 2022 Common Warrants 34,722 5.8 36.0 September 2022 Underwriter Warrants 868 2.8 316.8 July 2022 Common Warrants 14,517 4.8 4.25 September 2021Underwriter Warrants 157 4.9 4,210.8 May 2021Underwriter Warrants 103 1.9 5,820.0 October 2020 Common Warrants 750 1.4 7,920.0 October 2020 Underwriter Warrants 208 1.4 36.0 October 2020 Common Warrants 83 1.4 7,920.0 May 2020 Common Warrants 532 1.0 12,960.0 May 2020 Underwriter Warrants 46 1.0 12,960 March 2020 Common Warrant 178 1.3 24,408.0 Total warrants issued and outstanding 1,409,120 4.8 $ 19.1 Total warrants issued and exercisable 1,409,120 4.8 $ 19.1 In October 2023, the Company issued 94,375 common stock purchase warrants concurrently with the October 2023 private placement. The Private Placement Warrants are exercisable for a period of five-year years commencing six months from issuance. On October 16, 2023, the Company entered into an amendment to common stock purchase with the holder of the Private Placement Warrants. Pursuant to the amendment, the exercise price of the private placement warrants was increased from $26.40 to $30.504. In March 2024, the Company priced a “reasonable best effort” offering for the sale of an aggregate of 590,000 shares of common stock at a price of $4.25 per share and pre-funded warrants to purchase up to 586,470 shares of common stock at a price of $4.2499 per pre-funded warrant and 1,176,470 common warrants pursuant to a securities purchase agreement with an institutional investor. The common warrants are exercisable immediately for a term of five years and have an exercise price of $4.25. Concurrently, the Company executed an amendment to common stock warrants previously issued to the investor, pursuant to which the exercise price of 94,375 outstanding warrants (the October 2023 warrants) the Company issued to the investor in October 2023 was reduced to $2,41, effective on the date that is six months following the initial date of issuance of the October 2023 warrants.

Stock Based Compensation

Stock Based Compensation	9 Months Ended
	May 31, 2024
Stock Based Compensation
Stock Based Compensation	Note 8: Stock Based Compensation Employee Stock Option Plan In March 2017, the Company adopted its 2017 Stock Option/Stock Issuance Plan (the “Plan”). The Plan provides incentives to eligible employees, officers, directors, and consultants in the form of incentive stock options (“ISOs”), non-qualified stock options (“NQSOs”), each of which is exercisable into shares of common stock (collectively, “Options”). On March 6, 2023, the shareholders approved an increase in the number of shares of common stock issuable under the Plan from 1,250 to 31,250. Under the terms of the Plan, options granted prior to July 1, 2020, each option has a term of service vesting provision over a period of time as follows: 25% vest after a 12-month service period following the award, with the balance vesting in equal monthly installments over the succeeding 36 months. Options granted on or after July 1, 2020, typically vest over four years, with 25% of the grant vesting one year from the grant date, and the remainer in equal quarterly installments over the succeeding 12 quarters. All options granted to date have a stated ten-year term. Stock grants are issued at fair value, considered to be the market price on the grant date. The fair value of option awards is estimated on the grant date using the Black-Scholes stock option pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options and future dividends. The Company elected to account for forfeitures under the Plan as they occur. Any compensation cost previously recognized for an unvested award that is forfeited because of a failure to satisfy a service condition is reversed in the period of the forfeiture. As of May 31, 2024, there are 31,050 shares available under the Plan. The Company did not issue any stock options during the three and nine months ended May 31, 2024. The Company recognized approximately $0.1 million and $0.5 million. of stock-based compensation expense that is recorded in general and administrative expenses in the condensed statement of operations, for the three and nine months ended May 31, 2024, respectively. The Company recognized approximately $0.2 million and $0.7 million. of stock-based compensation expense that is recorded in general and administrative expenses in the condensed statement of operations, for the three and nine months ended May 31, 2023, respectively. The following table summarizes the Company’s option activity from August 31, 2023, through May 31, 2024: Options Outstanding and Exercisable Number of Options Weighted Average Remaining Contractual Life Weighted Average Exercise Price (In years) Options Outstanding as of August 31, 2023 417 7.0 $ 19,529 Granted - - - Exercised - - - Forfeited - Cancelled (217 ) - - Options Outstanding as of May 31, 2024 200 5.9 $ 11,210 Options Exercisable as of May 31, 2024 178 6.3 $ 11,560 As of May 31, 2024, the total unrecognized deferred share-based compensation of $0.1 million expected to be recognized over the remaining weighted average vesting periods of 0.3 years. There was no intrinsic value for outstanding stock options as of May 31, 2024. The following table summarizes information about stock options outstanding and vested as of May 31, 2024: Options Outstanding Options Vested Exercise Prices Number of Options Outstanding Number of Options Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ Number of Options Weighted Remaining Contractual Life Weighted Average Exercise Price $ (In years) (In years) $2,520-$5,000 7 6 7.3 3,078 6 7.3 3,078 $5,001- $10,000 38 22 4.8 5,120 22 6.7 7,057 $10,001-$12,960 155 150 6.1 13,098 150 6.1 12,529 200 178 5.9 11,210 178 6.3 11,560

Related Parties

Related Parties	9 Months Ended
	May 31, 2024
Related Parties
Related Parties	Note 9: Related Parties Management and Directors Compensation Scott Absher – Chairman and Chief Executive Officer The Company paid an aggregate amount of $0.2 million and $0.3 million of gross compensation for the three and nine months ended May 31, 2024, and 2023, respectively. Such compensation is reported under salaries, taxes, and benefits in the condensed consolidated statements of operations. Scott Absher does not have any compensation for his position of Chairman of the Board. The Company has accrued unpaid compensation for an aggregate amount of $0.6 million and $0.4 million as of May 31, 2024, and August 31, 2023, respectively. The unpaid compensation is presented under payroll related liabilities as of May 31, 2024, and August 31, 2023 During the fiscal year 2023, the Company granted its Chief Executive Officer a conditional right to receive 4,744,234 Class A shares. Such a grant was also approved by the shareholders. The Chief Executive Officer exercised the option agreement on October 17, 2023, and converted 4,744,234 Class A shares to an equivalent number of shares of common stock. Upon the conversion of the Class A shares to common stock, the Company recorded a preferential dividend on the preferred Class A of $67.4 million. This was based on the incremental value of the stock that was held prior to the reverse split and the date of preferred stock conversion to common stock pursuant to the guidance in ASC 260-10-S99-2. Patrice Launay - Chief Financial Officer On March 7, 2024, the Company signed an offer of employment letter with Patrice Launay, as the Company’s Chief Financial Officer, beginning on March 7, 2024. During the three and nine months ended May 31, 2024, the Company paid an aggregate amount of $ 0.08 million of gross compensation. Other Directors Pursuant to executed agreements, each director is entitled to a monthly cash retainer and $75,000 worth of the Company’s common stock each year. During the three and nine months ended May 31, 2024, the Company incurred $0.07 million and $0.16 million of monthly cash fees, respectively. Accrued monthly cash retainers were $0.3 million and $0.2 million as of May 31, 2024, and August 31, 2023, respectively, and is reported in accounts payable and other accrued liabilities. The Company accrued directors’ fees related to shares of common stock to be issued for services provided to three of the Company’s directors. The Company incurred $0.06 million and $0.13 million of expenses related to the fair value of the shares to be issued to the directors in the three and nine months ended May 31, 2024. The balance owed was $0.9 million and $0.8 million as of May 31, 2024, and August 31, 2023, respectively and is reported in accounts payable and other accrued liabilities. No shares of common stock have been issued as of May 31, 2024, and August 31, 2023, respectively. As of May 31, 2024, and August 31, 2023, there are approximately 565,665 and 1,208 shares of common stock to be issued to directors, respectively. The former Chair of the Audit Committee resigned in July 2023, and was replaced in January 2024. Related Persons to Scott Absher David May, a member of our business development team, is the son-in-law of Mr. Absher. David May’s gross compensation was $0.06 million and $0.13 million for the three and nine months ended May 31, 2024, respectively. David May’s salary was $0.03 million and $0.10 million for the three and nine months ended May 31, 2023, respectively. Phil Eastvold, the Executive Producer of ShiftPixy Productions, Inc., is the son-in-law of Mr. Absher. Mr. Eastvold salary was $0.07 million and $0.17 million for the three and nine months ended May 31, 2024, respectively. Mr. Eastvold salary was $0.06 and $0.17 million for the three and nine months ended May 31, 2023, respectively. Jason Absher, a member of the Company’s business development team, is the nephew of Scott Absher and the son of Mark Absher, a former related party. Mr. Absher’s salary was $0.03 million and $0.09 million for the three and nine months ended May 31, 2024, respectively. Mr. Absher’s salary was $0.03 million and $0.09 million, for the three and nine months ended May 31, 2023, respectively. Connie Absher, (the spouse of Scott Absher), Elizabeth Eastvold, (the daughter of Scott and Connie Absher and spouse of Mr. Eastvold), and Hannah Woods, (the daughter of Scott and Connie Absher), are also employed by the Company. These individuals, as a group, salaries. As a group, these three individuals earned an aggregate gross amount of $0.06 million and $0.14 million in compensation, for the three and nine months ended May 31, 2024, respectively. These individuals, as a group, earned an aggregate gross amount of $0.05 million and $0.14 million in compensation for the three and nine months ended May 31, 2023, respectively. Quelliv, Inc (Scott Absher is the co-founder, acting Chief Financial Officer) Scott Absher, the Company’s Chief Executive Officer, is a founding shareholder and Chief Financial Officer of Quelliv, Inc. (“Quelliv”). Quelliv seeks to provide a non-invasive, alternative approach to wellness using laser biomodulation / Low-level laser therapy, activating the body’s restorative and regenerative processes. The Company functions as a payroll administrative service only (“ASO”) service provider providing payroll and related employment tax processing, human resources, employment compliance, employment related insurance. The Company earns a three percent (3%) administrative fee for processing the payroll on behalf of Quelliv. The Company billed an aggregate amount of approximately $5,900 and $18,300 of administrative fee for the three and nine months ended May 31, 2024, respectively. Such a transaction is considered an arm’s length transaction as the administrative rate is consistent with administrative rates billed by the Company. The Company has a gross receivable balance of approximately $0.6 million and $0.2 million towards Quelliv, Inc. representing payroll processed by the Company but not yet funded by Quelliv. The balance has been fully reserved as of May 31, 2024. The Company recognized $0.14 million and $0.38 million of credit loss expense in the three and nine months ended May 31, 2024.

Commitments

Commitments	9 Months Ended
	May 31, 2024
Commitments
Commitments	Note 10: Commitments Operating Leases Effective August 13, 2020, the Company entered into a non-cancelable seven-year lease for office space located in Miami, Florida, to house its principal executive offices commencing October 2020, and continuing through September 2027. The lease contains escalation clauses relating to increases in real property taxes as well as certain maintenance costs. The monthly rent expense under this lease was approximately $57,000. The Company has not made payments under the lease agreement since June 2022, see Note 11 Contingencies On August 31, 2022, the Company decided to formally abandon the leases for its offices in the Courvoisier Center, including a sublease on the second floor with Verifone. The determination was based on its inability to utilize the premises as they were under extensive construction renovation by the landlord, resulting in a significant negative impact on the Company’s ability to conduct business and the health and well-being of the Company’s employees and guests. The Company formally notified the landlord of its intention to vacate the premises but has not been legally released from the Company's primary obligations under the leases. The Company received a formal complaint from the landlord, and the matter is in litigation. The Company intends to vigorously defend the lawsuit and counterclaim for relocation costs, see Note 11, Contingencies On October 1, 2020, the Company entered into a non-cancelable sixty-four-month lease for industrial space located in Miami, Florida, to house ghost kitchens, production facilities, and certain marketing and technical functions, including those associated with ShiftPixy Labs, Inc. a wholly owned subsidiary of the Company. The lease contained escalation clauses relating to increases in real property taxes as well as certain maintenance costs. The monthly rent expense under this lease is approximately $33,000. The Company relocated its corporate office to this industrial space due to the litigation noted above. On June 21, 2021, the Company entered into a non-cancelable seventy-seven-month lease for premises for office space located in Sunrise, Florida, that the Company anticipates using primarily to house its operations personnel and other elements of its workforce. The Company took possession of the lease on August 1, 2022. The base rent is paid monthly and escalates annually pursuant to a schedule set forth in the lease. The monthly rent expense under this lease is approximately $27,000. During the fourth fiscal quarter of 2023, the Company stopped paying the lease and abandoned this property. The Company recorded an impairment expense of $1.5 million for the remaining value of the right of use asset during the fiscal year 2023. The Company has accrued a contingent liability of $1.6 million as of May 31, 2024, and August 31, 2023, which is included in accounts payable and other accrued liabilities in the condensed consolidated balance sheets. The right-of-use asset has a carrying value of $0 as of May 31, 2024, and August 31, 2023. On May 2, 2022, the Company entered into a non-cancelable sixty-month operating lease, as constituted in an amendment to a prior lease, commencing on July 1, 2022, for office space in Irvine, California, which the Company anticipates using primarily for its IT, operations personnel, and other elements of its workforce. The base rent is paid monthly and escalates annually according to a schedule outlined in the lease. The monthly rent expense under this lease is approximately $24,000. During the fourth quarter of 2023, the Company stopped paying the lease and abandoned this property. The Company is obligated to pay its lease obligation. The Company recorded an impairment expense during the 2023 fiscal year of $1.0 million based upon the remaining value of the right-of use asset. The Company has accrued a contingent liability of $1.1 million as of May 31, 2024, and August 31, 2023, which is included in accounts payable and other accrued liabilities in the condensed consolidated balance sheets. The right-of-use asset has a carrying value of $0 as of May 31, 2024, and August 31, 2023. The components of lease expense are as follows, in thousands: Three Months Ended May 31, 2024 Nine Months Ended May 31, 2024 Operating lease expense $ 46 $ 317 Future minimum lease under non-cancelable operating leases as of May 31, 2024, are as follows, in thousands: Minimum lease commitments 2024 $ 433 2025 257 Thereafter - Total minimum payments 690 Less: present value discount (31 ) Lease liability $ 659 Weighted-average remaining lease term - operating leases (years) 1.5 Weighted-average discount rate 5.54 % Legal Settlement The Company has executed various settlement agreements, which would result in an aggregate payment of approximately $2.2 million in the next twelve months. The Company has made all of the required payments up to the report’s release date.

Contingencies

Contingencies	9 Months Ended
	May 31, 2024
Contingencies
Contingencies	Note 11: Contingencies Certain conditions may exist as of the date the condensed financial statements are issued, which may result in a loss to the Company, but which will be resolved only when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. Legal The Company is currently a party to legal actions other than those described below arising from the normal course of business, none of which are expected to have a material adverse effect on our business, consolidated results of operations, or our consolidated financial condition. Courvoisier Centre Litigation On August 24, 2022, the landlord of our former headquarters offices, Courvoisier Centre, LLC, filed a complaint against the Company in the Eleventh Judicial Circuit Court (Miami-Dade County, Florida) alleging breach of the lease. The Company vacated the offices and ceased payments under the lease in July of 2022, after repeatedly complaining to the landlord regarding the impact of its extensive renovations of the campus and building in which the Company's offices were situated, citing substantial impairments to the Company's ability to conduct business as well as concerns regarding the health and well-being of the Company’s employees and guests, and the landlord’s inability and refusal to provide any adequate relief. On or about October 10, 2022, the Company filed its answer to the complaint and the Company's counterclaim. The Company intends to vigorously defend the lawsuit and seek recovery for its costs of relocation. On June 14, 2024, both parties agreed to a settlement for an aggregated amount of $75,000, payable in three installments of $25,000 starting on July 15, 2024. The settlement agreement has yet to be formally executed by all parties to be legally binding. The Company has accrued approximately $3.8 million, representing the remaining lease liability under the contractual terms of the lease, as of May 31, 2024, and August 31, 2023. Upon execution of this settlement, the Company will recognize a potential gain on settlement of $3.1 million anticipated during our fourth fiscal quarter of 2024. Foundry ASVRF Sawgrass, LLC v. ShiftPixy, Inc. On or around October 16, 2023, the company received a variety of legal proceedings documents as filed in the County Court of the 17th Judicial Circuit in and for Broward County, Florida, as case No. COWE-23-003124, arising out of the Company’s abandonment of a lease of premises at Suite 650, 13450 W. Sunrise Blvd., Sunrise, Florida 33323. Most of the Company’s $0.3 million security deposit has been applied to the cost of unpaid improvements and rent past due for the months of June, July, August and September of 2023 (as well as unreplenished security deposit amounts for prior months). Rent and operating costs per month were approximately $0.1 million. The lease term continues until December 31, 2028. The Landlord has sued for eviction, replenishment of the security deposit and damages for future payments under the lease. Although the plaintiff will claim damages equal to the full value of the lease, the Company has defenses in the nature of the plaintiff’s duty to mitigate damages by securing one or more replacement tenants. The parties are anticipated to engage in mediation wherein the parties are expected to settle plaintiff’s claims. The Company has recorded the value of its lease obligation. Given the early stage of the matter, it is too early to assess the anticipated amount to which the plaintiff will be entitled; however, the plaintiff will likely be entitled to damages approximately equal to the amount of the monthly lease payment due times the number of months it would reasonably take the plaintiff to secure one or more replacement tenants, plus costs associated with the preparation of the premises for such new tenant(s), plus costs associated with the brokerage fee associated with securing the new tenant. The Parties are in active negations to settle this claim. The Company has accrued approximately $1.6 million, representing the remaining lease liability under the contractual terms of the lease, as of May 31, 2024, and August 31, 2023. Olen Commercial Realty Corp. v. ShiftPixy, Inc. In late August of 2023, the Company abandoned its leased premises at 1 Venture, Suite 150, Irvine, CA 92618. The monthly rent is approximately $24,500. The lease term continues until June 30, 2027. The landlord has demanded approximately $1.2 million for the balance of payments due under the lease, including miscellaneous expenses as offset by security deposit funds. While the landlord has not filed suit, it is anticipated that the landlord may file suit within the next few months. In the event the landlord does file suit, the Company will assert rights of offset as a consequence of the landlord’s failure to mitigate its damages. Given the early stage of the matter, it is too early to assess the anticipated amount to which the landlord will be entitled; however, the landlord will likely be entitled to damages approximately equal to the amount of the monthly lease payment due times the number of months it would reasonably take the landlord to secure one or more replacement tenants, plus costs associated with the preparation of the premises for such new tenant(s), plus costs associated with the brokerage fee associated with securing the new tenant. It is anticipated that the parties will negotiate and endeavor to settle the claims. The Company has accrued approximately $1.1 million, representing the remaining lease liability under the contractual terms of the lease, as of May 31, 2024, and August 31, 2023, respectively, which is presented in accounts payable and other accrued liabilities in the condensed consolidated balance sheet. Certified Tire Litigation & Service Center, Inc. On June 29, 2020, the Company was served with a complaint filed by its former client, Certified Tire, in the Superior Court of the State of California, Orange County, naming the Company, two of its officers, and one of its former subsidiaries as defendants. The Complaint asserts multiple causes of action, all of which stem from the former client’s claim that the Company is obligated to reimburse it for sums it paid in settlement of a separate lawsuit brought by one of its employees pursuant to Private Attorney General Act or PAGA. This underlying lawsuit alleged the Company's former client was responsible for multiple violations of the California Labor Code. The Company and the officers named as defendants deny the former client’s allegations, and the Company is defending the lawsuit vigorously based primarily on the Company's belief that the alleged violations that gave rise to the underlying lawsuit were the responsibility of Certified Tire and not the Company. Substantial discovery has taken place and trial is set in November 2024. The Company’s dispositive motion for summary judgment was denied by the court because of its determination that factual disputes exist. Employee Retention Tax Credit (“ERTCs”) Claims The Company has filed various ERTCs claims with the IRS on behalf of its clients, for an aggregate amount of $7.7 million, that have otherwise failed to obtain the related benefits afforded to them pursuant to the filing of Form 7200—the time for the filing of which has expired. To date, the Company has received ERTCs amounting to $2.0 million. In addition, the Company anticipates filing additional ERTCs claims as clients continue to request that the Company complete the submission thereof to the IRS. Because of the Company’s currently existing payroll tax liability, the Company presently receives ERTCs from the IRS in the form of a credit to the Company’s outstanding payroll tax liability. The Company is not presently able to remit the ERTCs to its clients and plans to offer its clients restricted shares of the Company’s common stock in payment of the ERTCs applicable to such clients. If a client rejects the payment of its respective ERTCs in the form of the restricted shares of the Company’s common stock as proposed by the Company, such client may seek to enforce its rights to recover its ERTCs by filing lawsuits against the Company. Apizza, LLC v. Rethink Human Capital Management, Inc. D/B/A “Shiftpixy,” et al., Orange County Superior Court. On March 8, 2024, a complaint was filed in the Superior Court of the State of California, Orange County No. 30-2024-01385218-CU-BT-CJC by its former client Apizza, LLC, against the Company, certain of its subsidiaries and affiliates and current and former officers. In Plaintiff’s complaint, Plaintiff alleges damages “in excess of $2,287,269.15” arising from the Company’s alleged failure to assist Plaintiff in obtaining Employee Retention Tax Credits (“ERTC”). All defendants have been served the complaint except Scott W. Absher. The Company’s carrier was put on notice and responsive pleading denying the allegations, including demurrers for Scott Absher have been filed. At this point, it is too early to assess whether an unfavorable outcome for the Company is probable or remote. Capistrano Catering, Inc. v. ShiftPixy, Inc. – ERTC claim. On June 13, 2022, a Complaint was filed in the Superior Court of the State of California, Orange County, Case No. 30-2022-01264583, by its former client, Capistrano Catering, Inc., asserting claims for specific performance, breach of contract, and breach of the covenant of good faith. Plaintiff’s complaint alleges that we violated our client services agreement by not applying for an employee retention tax credit (“ERTC”) on behalf of Capistrano Catering pursuant to Section 3134 of the Internal Revenue Code and seeks damages of “at least $0.5 million plus prejudgment interest thereon at the legal rate.” The Company initially maintained that it has no legal basis to apply for the ERTC on behalf of Plaintiff, and that the claim is therefore without merit. However, the Company has changed its position, based on its understanding of applicable law and is now actively offering to file for the credit on the client’s behalf. The parties have entered into a stipulation providing for the submission to the IRS by the Company of ERTC claims on behalf of Capistrano Catering and remittance to Capistrano Catering of any credit amounts received from the IRS in response thereto by the Company. The IRS has announced a suspension of accepting further ERTC claims until 2024, so the Company is unable to affect the subject submission until permitted by the IRS. The Company intends to remit to Capistrano Catering the full amount of any credits received from the IRS, although the Company may request a reasonable fee for its processing services. The Company has offered to issue to plaintiff shares of the Company’s stock in payment of the ERTC in the event that the Company receives the credit from the IRS and is unable at such time to forward the payment to plaintiff, provided, however, Capistrano Catering has not indicated whether it will accept the offer of shares, and it may insist on receiving cash in such event. The Court has set a status conference for August 8, 2024, to assess the status of the Company’s filing of ERTC claims on behalf of Capistrano Catering. Robert Angueira, as US Chapter 7 Trustee v. Shiftpixy, Inc, Shiftpixy Investments, On December 14, 2023, the Officers and Directors received notice of an Adversarial proceeding in a bankruptcy case, captioned Robert Angueira, as US Chapter 7 Trustee v. Shiftpixy, Inc, Shiftpixy Investments, Inc et al. The case is related to Industrial Human Capital, “IHC”, a company that was an attempted SPAC in 2022, the Company was unable to finish the listing requirements and $117.6 million was returned to the investors on December 1, 2022. Because some creditors were unpaid after the IHC was closed due to insolvency, some IHC creditors filed an involuntary bankruptcy in the Southern District of Florida. The Company was owed a substantial sum of money related to IHC SPAC’s sponsorship and transferred $600,000 to Shiftpixy from IHC in partial repayment of that money. The Chapter 7 Bankruptcy Trustee asserted a claim against that transfer and the Company is working to make arrangements for payment to the Trustee. In relation to the recent filing by the Chapter 7 Trustee, the Trustee asserts, amongst other things, that some Officers and Directors of ShiftPixy acted inappropriately in transferring those funds back to the investors in IHC and subsequent to the filing of the involuntary bankruptcy. These claims forced the Company to put ShiftPixy’s director and officer carrier on notice and the Company is waiting for their decision on the matter(s). The Chapter 7 Trustee claims to be entitled to the $117 million dollars from the investors, shareholders, officers, and directors and Shiftpixy, Inc, for a bankruptcy estate with claims totaling $1.8 million ($282,000 of which are claims by the Company). The Company recorded $0.6 million in accounts payable and other accrued liabilities as of May 31, 2024, and August 31, 2023. The parties are in active negotiations and have had judicial conference with another follow up meeting scheduled on July 25, 2024. The parties are still in the mediation process. Given the early stage of the litigation, it is too early to assess whether an unfavorable outcome for the Company is either probable or remote. In Re John Stephen Holmes Bankruptcy Litigation On November 8, 2022, the Chapter 7 trustee of the bankruptcy estate of John Stephen Holmes filed an action against the Company, asserting that the cancellation by the Company of Mr. Holmes' 491,250 preferred options on October 22, 2021, violated the automatic stay applicable to Mr. Holmes' Chapter 7 proceedings. After the Company filed a motion to dismiss the trustee's complaint, the trustee endeavored to exercise an option for 520,833 preferred shares that had been issued in the early stages of the Company but was later superseded by a modified option that did not provide for convertibility of the preferred shares to common stock and which modified option was in effect at the time that Mr. Holmes filed for bankruptcy. During the nine months ended May 31, 2024, the Company settled this litigation by issuing 181,518 shares of common stock with a fair value of $550,000 pursuant to an executed settlement agreement. Other Matters Amanda Murphy v. Shiftpixy, Inc., Scott Absher and Connie Absher On April 6, 2024, Amanda Murphy (“Murphy”), the Company’s former Chief Operating Officer and a former Director, filed a complaint of employment discrimination before the State of California Civil Rights Department (“CRD”) under the provisions of the California Fair Employment and Housing Act (“FEHA”), alleging several violations and discriminations. Given the early stage of the proceedings, it is too early to assess whether an unfavorable outcome is either probable or remote. The Company recorded $0.45 million in payroll related liabilities as of May 31, 2024. The Company has put its insurance carrier on notice for this matter. Washington Dept of Rev v. ShiftPixy Staffing, Inc. On or about April 25, 2023, the State of Washington Dept. of Rev. issued a tax warrant against a subsidiary of the Company claiming that (a) its prior communications were unanswered, and (b) asserting that the Company owes $0.9 million in Business & Occupation (“B&O”) Taxes and interest for periods from June 2018 to December 2021. The state essentially claims that such a subsidiary owes B&O Taxes as a consequence of its having conducted staffing services in Washington. The Company has responded, indicating that the subject services provided were actually in the nature of professional employer organization or PEO services (as defined under applicable law) and not staffing services (as defined under applicable law) and that the subsidiary’s tax obligation, if any, pursuant to the state’s own Excise Tax Advisory ETA 3192.2014 would be a small fraction of the amount claimed by the state. The Company further argued that the assessment is improperly made because that entity did not even exist until January of 2021, and it did not start billing a client in the State of Washington until calendar year 2022. The state reviewed documentation submitted by the Company in support of its position and issued a modified tax adjustment, asserting that the sum of $0.3 million is due for the period June 2018 to December 2020. Additionally, the State of Washington assessed another subsidiary of ShiftPixy for approximately $0.6 million with respect to excise tax, which is calculated based on a grossed-up revenue whereas revenue is presented net in the financial statements. The Company filed a request for an administrative hearing on both matters. The Company is exploring its options as to how to appeal this assessment and have discussed the above matter with several State tax attorneys. The Company was informed that the amount due must be paid prior to any appeal. The Company has recorded approximately $0.8 million and $0.2 million in accounts payable and other accrued liabilities in the condensed consolidated balance sheets as of May 31, 2024, and August 31, 2023, respectively. NASDAQ On February 26, 2024, the Company received a letter (the “February 2024 NASDAQ Letter”) from the Staff of the Listing Qualifications Department of Nasdaq, which notifies the Company that it does not comply with Nasdaq’s Listing Rule 5550(b)(2), which requires that the Company maintains a market value of listed securities of $35 million, and that the Company does not otherwise satisfy the requirements of Listing Rule 5550(b)(1) of a stockholders’ equity of at least $2.5 million or Listing Rule 5550(b)(3) of net income from continuing operations of $500,000 in the most recent completed fiscal year or in two of three most recent completed fiscal years. The Nasdaq Letter does not have any immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market, and the Company has 180 calendar days from the date of the Nasdaq Letter to regain compliance. The Company intends to issue additional shares of common stock through private placement and or registered offering. On May 13, 2024, the Company provided a detailed response letter to NASDAQ, pursuant to which the Company requested an extension through August 15, 2024, to seek shareholders’ approval of the offering. The Company has not received any responses from NASDAQ to date. On March 28, 2024, the Company received a letter (the “March 2024 NASDAQ Letter”) from the Staff of the Listing Qualifications Department of Nasdaq, which notifies the Company that it failed to comply with NASDAQ shareholder approval requirements set forth in Listing Rule 5635(d), which requires prior shareholder approval for transactions, other than public offerings, involving the issuance of 20% or more of the pre-transaction shares outstanding at less than the minimum price. The deficiency letter relates to the July 2023 financing. Under Nasdaq Rules, the Company has 45 calendar days to submit a plan to regain compliance and if accepted, Nasdaq can grant an extension of up to 180 calendar days to evidence compliance. On May 13, 2024, the Company provided a response to Nasdaq regarding this deficiency. Internal Revenue Service (“IRS”) Notices The Company responded to a notice from the Internal Revenue Service (“IRS”) claiming underpayment of (i) Federal income taxes withholding, (ii) employee OASDI or Medicare withholding, (iii) Employer OASDI or Medicare taxes for the tax periods ending March 31, 2020, June 30, 2020, December 31, 2020, September 30, 2021, and December 31, 2021, totaling $2,728,832, exclusive of then-accrued but unassessed interest and for employer’s Annual Federal Unemployment Tax (“FUTA”) for an aggregate amount of $108,631 for the tax periods ending December 31, 2020 and December 31, 2021. The Company maintained, as stated in its response to the IRS, that the taxes in question are subject to various deferrals and credits arising under the Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”), including the following: (i) Section 2302, which permits eligible employers to defer payment of OASDI employer taxes; and (ii) Section 2301, which allows eligible employers to apply the Employee Retention Tax Credit, or “ERTC,” to taxes owed. Accordingly, the Company believes that the IRS notice is incorrect, and that the Company has in fact overpaid its federal tax liability for the above tax periods after application of the relevant CARES Act deferrals and credits. At the Company’s request, the IRS has scheduled a Collection Due Process, and the assessment was appealed on November 26, 2023. On February 28, 2024, the Company received a Notice of Letter of Determination from the IRS on its administrative claims wherein the IRS denied, entirely, the Company’s appeal for relief. The case has been appealed to US Tax Court as of March 25, 2024. ShiftPixy Corporate Services, Inc., a wholly owned subsidiary of the Company, filed its Forms 941 for (in addition to other tax periods for which we have been unable to obtain detailed account transcripts from the IRS) the tax periods ending (a) March 31, June 30, September 30, and December 31, 2022, and (b) March 31, June 30, September 30, 2023, and December 31, 2023. However, ShiftPixy Corporate Services, Inc. did not timely remit all tax reported on those tax forms. Accordingly, the IRS assessed additions to tax and interest for the failure to make required deposits and the failure to timely pay required tax (potentially in addition to other fees and expenses of collection). As of October 2, 2023, the date most proximate to the beginning of the reporting cycle for which the Company has detailed information from the IRS, the IRS reported in a Letter 725-B that ShiftPixy Corporate Service employment tax liabilities for the tax periods ending March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, March 31, 2023, and June 30, 2023 were, exclusive of then-accrued but unassessed interest, $3,490,513. As of March 25, 2024, the IRS reported in a Notice that ShiftPixy Corporate Service employment tax liabilities for the tax period ending September 30, 2023, were, exclusive of then-accrued but unassessed interest, $391,736. As of June 10, 2024, the IRS reported in a Notice that ShiftPixy Corporate Service employment tax liabilities for the tax period ending December 31, 2023, were, exclusive of then-accrued but unassessed interest, $136,038. On November 26, 2023, ShiftPixy Corporate Services, Inc. timely filed a Form 12153, Request for a Collection Due Process or Equivalent Hearing, with respect to ShiftPixy Corporate Services’ Liabilities That Are Subject to Enforced Collection. That Form 12153 requested, among other things, an abatement of additions to tax and related interest for the failure to make required deposits and the failure to timely pay required tax that are included within ShiftPixy Corporate Services’ Liabilities That Are Subject to Enforced Collection. On December 12, 2023, the IRS issued to ShiftPixy Corporate Services, Inc. a Letter 3172 (DO), Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320, with respect to ShiftPixy Corporate Services’ liabilities that are subject to enforced collection. On January 11, 2024, ShiftPixy Corporate Services, Inc. timely filed a Form 12153 with respect to ShiftPixy Corporate Services’ liabilities that are subject to enforced collection. That Form 12153 requested, among other things, an abatement of additions to tax and related interest for the failure to make required deposits and the failure to timely pay required tax that are included within ShiftPixy Corporate Services’ Liabilities That Are Subject to Enforced Collection. The Forms 12153 were assigned to Appeals for a collection due process hearing. On June 4, 2024, ShiftPixy Corporate Services, Inc. and Appeals had a collection due process hearing that resulted in the Appeals officer refusing to grant the abatements of the additions to tax or the collection alternatives. Appeals has not yet issued an adverse notice of determination memorializing the Appeals officer’s determinations. By letter dated January 11, 2024, the IRS advised the Company and its Affiliates that its federal income tax return for the tax period ending August 31, 2022, was selected for examination.

Subsequent Events

Subsequent Events	9 Months Ended
	May 31, 2024
Subsequent Events
Subsequent Events	Note 12: Subsequent Events The Company has evaluated events that have occurred after the date of these condensed consolidated financial statements though the date that the condensed consolidated financial statements were issued, and has determined that, there are no such reportable subsequent events that exist through the date the condensed consolidated financial statements were issued in accordance with FASB ASC Topic 855, “Subsequent Events.”

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	May 31, 2024
Summary of Significant Accounting Policies
Basis of Presentation	The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These consolidated condensed financial statements are presented in United States dollars. The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with the instructions to Form 10-Q. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein. The results of condensed operations for the three and nine months ending May 31, 2024, are not necessarily indicative of the results that may be expected for the full year ending August 31, 2024. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2023 (“Fiscal 2023”), filed with the SEC on December 14, 2023.
Principles of Consolidation	The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries listed below. All intercompany transactions and balances have been eliminated. The Company’s consolidated subsidiaries are as follows: Name of Consolidated Subsidiaries or Entities State or Other Jurisdiction of Incorporation or Organization Attributable Interest Shiftpixy Corporate Services, Inc. Wyoming 100 % Shiftpixy Staffing, Inc. Wyoming 100 % Shiftpixy Contracting Services, Inc. Wyoming 100 % Shiftpixy Ghost Kitchens, Inc. Wyoming 100 % Shiftpixy Productions, Inc. Wyoming 100 % Shiftpixy Investments, Inc. Wyoming 100 % Shiftpixy Labs, Inc. Wyoming 100 % Industrial Human Capital, Inc (until February 7, 2023) The condensed consolidated financial statements previously included the accounts of Industrial Human Capital, Inc. (“IHC”), which was a special purpose acquisition company (“SPAC”) for which our wholly owned subsidiary, ShiftPixy Investments, Inc., served as the financial sponsor, and which SPAC was deemed to be controlled by the Company as a result of the Company’s 15% equity ownership stake, the overlap of three of our executive officers for a period of time as executive officers of IHC, and significant influence that the Company exercised over the funding and acquisition of new operations for an initial business combination. IHC was consolidated under the variable interest entity model. IHC was dissolved on November 14, 2022, and the Trustee released all the redemption funds from the Trust Account to the IHC shareholders on December 1, 2022, effectively liquidating the Trust. On February 7, 2023, IHC was de-consolidated. On February 7, 2023, three creditors of IHC filed an involuntary petition for liquidation under Chapter 7 against IHC in the US Bankruptcy Court for the Southern District of Florida. See Note 11 for disclosure related to the litigation with IHC.
Use of Estimates	The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include: · Continuation as a going concern; management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and liquidation of all liabilities in the normal course of business, · Liability for legal contingencies, · Payroll tax and associated penalties and interest, and · Impairment of long-lived assets. These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties to these estimates or assumptions that are difficult to measure of value. Management regularly reviews the key factors and assumptions to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions. After such a valuation, if deemed appropriate, those estimates are adjusted accordingly.
Liquidity, Capital Resources and Going Concern	As of May 31, 2024, the Company had cash of approximately $0.4 million and a working capital deficit of $60.3 million. During the nine months ended May 31, 2024, the Company used approximately $6.0 million of cash in operations and incurred $14.7 million of losses, resulting in an accumulated deficit of $241 million. As of May 31, 2024, the Company is delinquent with respect to remitting payroll tax payments to the IRS, States, and local jurisdictions for an aggregate amount of $35.5 million including penalties and interest. The Company does not have sufficient cash to meet its liquidity requirements for the following twelve months from the date of issuance of these unaudited condensed consolidated financial statements. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company has received delinquent notices and notices relating to liens from the IRS claiming it owes approximately $21.1 million for unpaid payroll tax liabilities, including penalties and interest. The balances reported on such notices do not represent the full payroll tax liability of the Company as of May 31, 2024. The Company expects its payroll tax liabilities, penalties and interest to increase in the future. Moreover, the IRS has threatened to take enforced collection against the Company and its subsidiaries. The Company has taken steps to preserve so-called “collection due process rights”: ■ In October of 2023, the IRS issued to ShiftPixy a Letter 1058, Final Notice, Notice of Intent to Levy and Notice of Your Right to a Hearing Request for a Collection Due Process or Equivalent Hearing ■ On December 12, 2023, the Company received a lien from the IRS. The IRS can levy the Company’s bank accounts. As a result of the appeal filed with the US Tax Court of Appeals, the tax lien is on stay. ■ In January of 2024, ShiftPixy filed Form 12153, Request for a Collection Due Process or Equivalent Hearing ■ The Company had a collection due process hearing with the IRS Independent Office of Appeals in October 2023. In October and November of 2023, the Company requested that the IRS Independent Office of Appeals (“Appeals”), among other things, abate additions to tax and related interest for the failure to make required deposits and the failure to timely pay required tax. ■ In February 2024, the Company received a Notice of Determination from the IRS on our administrative claims wherein the IRS denied, entirely, our appeal for relief. ■ The Company appealed to the US Tax Court of Appeals on March 25, 2024. The IRS can, with limited notice, levy the Company’s bank accounts and subject it to enforced collection if the Company cannot obtain a resolution of the payroll tax issues. There is no assurance that the US Tax Court of Appeals will abate penalties and interest currently assessed against the Company by the IRS. If the Company is not successful in getting the outstanding penalties, and/or interest abated, including working out a payment plan with the IRS, it may cause the Company to file for bankruptcy protection in the near future. The Company has retained tax counsel and has been in near constant communication with the IRS regarding processing its Employee Retention Tax Credits (“ERTCs”). As of September 14, 2023, the IRS has a moratorium on processing new ERTC claims and many of the Company’s clients are seeking refunds. Recently, the Company has filed ERTC claims for its clients and has not received any acceptance from the IRS. Some clients have filed suits against the Company, demanding that the Company takes action to file for additional ERTCs for certain tax periods. The Company has taken aggressive steps to reduce its overhead expenses. The Company has plans and expectations for the next twelve months include raising additional capital which may help fund the Company’s operations and strengthening the Company’s sales force strategy by focusing on staffing services as the key driver towards its success. In addition, the Company is pursuing the acquisitions of large regional staffing companies through debt financing with the end goal of creating a national footprint that could leverage our best-in class technology as a consolidation point and value creator. This technology driven acquisition strategy will equip strategic acquisition targets with proprietary systems and staffing service delivery platform to deliver high revenue growth, margin improvement and lower operating costs. There is no assurance that the Company can obtain financing or obtain appropriate financing on terms that are acceptable to the Company. These condensed consolidated financial statements do not include any adjustments for these uncertainties. There is a likelihood that the Company may file for bankruptcy in the near future if the Company is unable to implement its staffing acquisitions strategy.
Revenue and Direct Cost Recognition	The Company determines revenue recognition pursuant to Accounting Standards Codification (“ASC 606”) Revenue from contracts with customers, through the following steps: ■ Identification of the contract, or contracts, with a customer. ■ Identification of the performance obligation(s) in the contract. ■ Determination of the transaction price. ■ Allocation of the transaction price to the performance obligation(s) in the contract. ■ Recognition of revenue when, or as the Company satisfies a performance obligation. The Company’s revenues are primarily disaggregated into fees for providing staffing solutions and EAS/HCM services. The Company enters into contracts with its clients for Staffing based on a stated rate and price in the contract. Contracts generally have a term of 12 months, are cancellable at any time by either party with 30 days’ written notice. The performance obligations in the agreements are generally combined into one performance obligation, as they are considered a series of distinct services, and are satisfied over time because the client simultaneously receives and consumes the benefits provided as the Company performs the services. The Company does not have significant financing components or significant payment terms for its clients and consequently has no material credit losses. The Company uses the output method based on a stated rate and price over the payroll processed to recognize revenue, as the value to the client of the goods or services transferred to date appropriately depicts the Company’s performance towards complete satisfaction of the performance obligation. Staffing Solutions The Company records gross billings as revenues for its staffing solutions clients. The Company is primarily responsible for fulfilling the staffing solutions services and has discretion in establishing price. The Company includes payroll costs in revenues with a corresponding increase to cost of revenues for payroll costs associated with these services. As a result, the Company is the principal in this arrangement for revenue recognition purposes. EAS Solutions / HCM Employment administrative service (“EAS”) and Human Capital Management (“HCM”) revenues are primarily derived from the Company’s gross billings, which are based on (i) the payroll cost of the Company’s worksite employees (“WSEs”) and (ii) an administrative fee and (iii) if eligible, WSE can elect certain pass-through benefits. Gross billings are invoiced to each EAS and HCM client, concurrently with each periodic payroll. Revenues are offset by payroll cost component and pass-through costs which are presented on a net basis for revenue recognition. WSEs perform their services at the client's worksite. The Company assumes responsibility for processing and remitting payroll to the WSE and payroll related obligations, it does not assume employment-related responsibilities such as determining the amount of the payroll and related payroll obligations. Revenues that have been recognized but not invoiced are included in unbilled accounts receivable on the Company’s condensed consolidated balance sheets were $0.3 million and $1.8 million, as of May 31, 2024, and August 31, 2023, respectively. Payments received by clients in advance of the due date of an invoice are recorded as liability. As of May 31, 2024, and August 31, 2023. the Company recorded a liability for advance payments of $0 million and $0.2 million, respectively, which is included in accounts payable and other accrued liabilities on the condensed balance sheets.
Disaggregation of Revenue	The Company’s primary revenue streams include HCM/EAS and staffing services. The Company’s disaggregated revenues for the three and nine months ended May 31, 2024, and 2023, were as follows, in millions: For the Three Months Ended For the Nine Months Ended Revenue: May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 Staffing $ 4.0 $ 3.9 $ 10.8 $ 12.3 EAS/HCM 0.1 0.1 0.9 1.5 $ 4.1 $ 4.0 $ 11.7 $ 13.8 EAS/HCM revenue is presented net, $1.4 million and $12.4 million gross billings less WSE payroll costs of $1.3 million and $11.5 million for the three and nine months ended May 31, 2024, and $8.3 million and $30.7 million, respectively gross billings less WSE payroll costs of $8.2 million and $29.2 million for the three and nine months ended May 31, 2023, respectively. For the three and nine months ended May 31, 2024, and 2023, the following geographical States represented more than 10% of total revenues: For the Three Months Ended For the Nine Months Ended Region: May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 California 28.1 % 31.0 % 26.9 % 44.0 % Washington 0.2 % 15.5 % 10.2 % 12.2 % New York 26.7 % 15.7 % 19.1 % 7.9 % New Mexico - % 16.8 % 16.2 % 15.0 % Florida 10.6 % 2.2 % 5.7 % 2.0 % Incremental Cost of Obtaining a Contract Pursuant to the “practical expedients” provided under Accounting Standards Update “ASC” No 2014-09, the Company expenses sales commissions when incurred because the terms of its contracts are cancellable by either party upon 30-day notice. These costs are recorded in commissions in the Company’s unaudited condensed Consolidated Statements of Operations.
Discontinued Operations and Workers' Compensation	On January 3, 2020, the Company entered into an asset purchase agreement with Shiftable HR Acquisition, LLC, a wholly owned subsidiary of Vensure, pursuant to which the Company assigned client contracts which were deemed significant to its revenues, including 100% of the Company’s then existing professional employer organization or PEO business. In connection with this transaction, the Company had a Note Receivable to be paid over four years. Prior to Fiscal Year 2023, the Company determined that it was probable that all contractually required payments would not be collected and recorded a full reserve on the amount of the note receivable. Up until November 15, 2023, the Company was in litigation with Vensure regarding payment of the aforementioned note receivable. On November 15, 2023, the Company won an arbitration for a total amount of $2.5 million, which was reported as a gain from legal settlement in the condensed statement of operations during the nine months ended May 31, 2024. The Company had retained workers’ compensation reserves and workers’ compensation related liabilities, which arose from former WSEs of clients that were transferred to Shiftable HR Acquisition LLC in connection with the Vensure Asset Sale. The workers’ compensation obligations related to the programs in place with Everest and Sunz Insurance Solutions, LLC (“Sunz”). The programs calculated the final policy premium based on the Company’s loss experience during the term of the policy and the stipulated formula set forth in the policy. The Vensure Asset Sale had previously met the criteria of discontinued operations set forth in ASC 205 and as such the retained workers’ compensation asset and liabilities were presented as a discontinued operation. Subsequent to the Vensure Asset sale, the Company entered into litigation with both Everest and Sunz, see Note 11 Contingencies. As of May 31, 2024, the Company has now executed settlement agreements with both programs (Everest and Sunz), under which the Company has continued to make the required installments under the terms of the agreements up to the filing date. The Company recognized approximately $2.3 million of legal settlement expense related to Sunz during the nine months ended May 31, 2024.
Segment Reporting	The Company operates as one reportable segment under Accounting Standards Codification “ASC” 280, Segment Reporting. The chief operating decision maker (“CODM”) regularly reviews the financial information of the Company at a consolidated level in deciding how to allocate resources and in assessing performance.
Cash and Cash Equivalents	The Company considers all highly liquid investments with an original maturity of three months or less when purchased as cash equivalents. The Company had no cash equivalent as of May 31, 2024, and August 31, 2023.
Concentration of Credit Risk	The Company maintains cash with a commercial bank, which is insured by the Federal Deposit Insurance Corporation (“FDIC”). At various times, the Company has deposits in this financial institution in excess of the amount insured by the FDIC. The Company has not experienced any losses related to these balances and believes its credit risk to be minimal. As of May 31, 2024, the Company’s balances exceeded federally insured limits by the FDIC by approximately $0.2 million. As of August 31, 2023, the Company did not have any cash on deposit in excess of the amounts insured by the FDIC. The following represents clients who have ten percent of total accounts receivable as of May 31, 2024, and August 31, 2023, respectively. As of May 31, 2024 August 31, 2023 Client 1 43.9 % 64.5 % Client 2 47.0 % 23.6 % The following represents clients who have ten percent of gross revenues for the Nine months ended May 31, 2024, and 2023: May 31, 2024 May 31, 2023 Client 1 29.7 % 12.6 % Client 2 10.6 % 12.5 % The following represents clients who have ten percent of gross revenues for the three months ended May 31, 2024, and 2023: May 31, 2024 May 31, 2023 Client 1 44.7 % 18.6 % Client 2 20.2 % 13.9 %
Fair Value of Financial Instruments	The Company adopted the provisions of FASB Accounting Standards Codification (“ASC”) 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements. The Company measures fair value under a framework that utilizes a hierarchy prioritizing the inputs to relevant valuation techniques. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of inputs used in measuring fair value are: ■ Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company as the ability to access. ■ Level 2: Inputs to the valuation methodology include: o Quoted prices for similar assets or liabilities in active markets. o Quoted prices for identical or similar assets or liabilities in inactive markets. o Inputs other than quoted prices that are observable for the asset or liability. o Inputs that are derived principally from or corroborated by observable market data by correlation or other means; and o If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. ■ Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. When the Company changes its valuation inputs for measuring financial assets and liabilities at fair value, either due to changes in current market conditions or other factors, it could be required to transfer those assets or liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. The development and determination of the unobservable inputs for Level 3 fair value measurements and the fair value calculations are the responsibility of the Company’s chief financial officer and are approved by the chief executive officer. There were no transfers out of Level 3 for the three and nine months ended May 31, 2024. As of May 31, 2024, and August 31, 2023, the carrying value of certain financial instruments (cash, accounts receivable, unbilled accounts receivable, and accounts payable and other accrued liabilities) approximated fair value due to the short-term nature of the instruments. Level 1 assets consisted of cash as of May 31, 2024, and August 31, 2023. The Company did not have any Level 2 or 3 assets or liabilities as of May 31,2024, and August 31, 2023.
Advertising Costs	The Company expenses all advertising as incurred. The Company incurred advertising costs totaling $0.6 million and $1.9 million for the three and nine months ended May 31, 2024, and $0.9 million and $2.0 million for the three and nine months ended May 31, 2023, respectively. Advertising expenses include direct salaries and external costs.
Income Taxes	The Company accounts for income taxes pursuant to ASC 740, Income Taxes. Under ASC 740, deferred income taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period in deferred tax assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. ASC 740 also provides criteria for the recognition, measurement, presentation, and disclosure of uncertain tax positions. Under ASC 740, the impact of an uncertain tax position on the income tax return may only be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. A full valuation allowance was recorded as of February 29, 2024, and August 31, 2023. As of the date of this filing, the Company has not yet filed its U.S Corporate income tax return on Form 1120 by the due date, which will result in penalties and interest. The Company may be subject to Net Operating Losses (“NOLs”) limitation pursuant to IRS Section 382 upon an ownership change. The Company has not yet performed such study, which examines the availability of credits and NOLs.
Stock-Based Compensation	The Company has one stock-based compensation plan under which the Company may issue awards, as described in Note 8, Stock Based Compensatio n Compensation-Stock Compensation The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, the Company recognizes expense on an accelerated basis over the employee’s requisite service period, which is generally the vesting period of the equity grant. The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. The expected volatility is based on the historical volatility of the Company’s common stock since the Company’s initial public offering. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense. The Company elects to account for forfeitures as they occur. As such, compensation cost previously recognized for an unvested award that is forfeited because of the failure to satisfy a service condition is revised in the period of forfeiture.
Fixed Assets, net	Fixed assets are recorded at cost, less accumulated depreciation and amortization. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When fixed assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Fixed assets are depreciated over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives of property and equipment are as follows: Equipment: 5 years Furniture & Fixtures: 5 - 7 years Leasehold improvements Shorter of useful life or the remaining lease term, typically 5 years
Net Loss Per Share	The Company computes basic and diluted earnings (loss) per share amounts pursuant to Section 260-10-45 of FASB ASC. Basic net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted-average number of shares of common stock outstanding during the period, excluding the effects of potentially dilutive securities. Diluted net loss per share is computed similar to basic loss per share except that the denominator is increased to include additional common stock equivalents available upon exercise of stock options, warrants, shares of common stock to be issued to directors for services provided. Dilutive common stock equivalents include the dilutive effect of in-the-money stock equivalents, which are calculated based on the average share price for each period using the treasury stock method, excluding any common stock equivalents if their effect would be anti-dilutive. In periods in which a net loss has been incurred, all potentially dilutive common stock shares are considered anti-dilutive and thus are excluded from the calculation. The following potentially dilutive securities were not included in the calculation of diluted net loss per share attributable to common shareholders of the Company because their effect would be antidilutive for the periods presented: For the Three and Nine Months Ended May 31, 2024 May 31, 2023 Options 242 417 Warrants 1,409,120 52,198 Shares of common stock to be issued to the directors for services provided 565,665 2,460 Preferred Option - 1,565 Total potentially dilutive shares 1,975,027 56,640
Reclassification	The Company reclassified certain expenses to conform to the current year's presentation, specifically accrued workers’ compensation has been reclassified to accounts payable and other accrued liabilities. The resulting changes from the condensed balance sheets impacted the presentation of such items in the condensed consolidated statements of cash flows for the three and nine months ended May 31, 2024.
Recent Accounting Guidance	New accounting rules and disclosure requirements can significantly affect our reported results and the comparability of our financial statements. We believe the following new accounting guidance is relevant to the readers of our condensed financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses
New Accounting Pronouncements Not Yet Adopted	In November 2023, the Financial Account Standard Board “FASB” issued Accounting Standards Update “ASU” 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments. The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker “CODM” and included within each reported measure of segment profit and loss. The amendments also require disclosure of all other segment items by reportable segment and a description of its composition. Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2025. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	May 31, 2024
Summary of Significant Accounting Policies
Schedules of Company's consolidated subsidiaries	Name of Consolidated Subsidiaries or Entities State or Other Jurisdiction of Incorporation or Organization Attributable Interest Shiftpixy Corporate Services, Inc. Wyoming 100 % Shiftpixy Staffing, Inc. Wyoming 100 % Shiftpixy Contracting Services, Inc. Wyoming 100 % Shiftpixy Ghost Kitchens, Inc. Wyoming 100 % Shiftpixy Productions, Inc. Wyoming 100 % Shiftpixy Investments, Inc. Wyoming 100 % Shiftpixy Labs, Inc. Wyoming 100 % Industrial Human Capital, Inc (until February 7, 2023)
Schedules of Disaggregation of Revenue	For the Three Months Ended For the Nine Months Ended Revenue: May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 Staffing $ 4.0 $ 3.9 $ 10.8 $ 12.3 EAS/HCM 0.1 0.1 0.9 1.5 $ 4.1 $ 4.0 $ 11.7 $ 13.8
Revenue from External Customers by Geographic Areas	For the Three Months Ended For the Nine Months Ended Region: May 31, 2024 May 31, 2023 May 31, 2024 May 31, 2023 California 28.1 % 31.0 % 26.9 % 44.0 % Washington 0.2 % 15.5 % 10.2 % 12.2 % New York 26.7 % 15.7 % 19.1 % 7.9 % New Mexico - % 16.8 % 16.2 % 15.0 % Florida 10.6 % 2.2 % 5.7 % 2.0 %
Schedules of Concentration of Risk, by Risk Factor	As of May 31, 2024 August 31, 2023 Client 1 43.9 % 64.5 % Client 2 47.0 % 23.6 % May 31, 2024 May 31, 2023 Client 1 29.7 % 12.6 % Client 2 10.6 % 12.5 % May 31, 2024 May 31, 2023 Client 1 44.7 % 18.6 % Client 2 20.2 % 13.9 %
Schedules of Fixed assets estimated useful lives	Equipment: 5 years Furniture & Fixtures: 5 - 7 years Leasehold improvements Shorter of useful life or the remaining lease term, typically 5 years
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	For the Three and Nine Months Ended May 31, 2024 May 31, 2023 Options 242 417 Warrants 1,409,120 52,198 Shares of common stock to be issued to the directors for services provided 565,665 2,460 Preferred Option - 1,565 Total potentially dilutive shares 1,975,027 56,640

Fixed Assets, net (Tables)

Fixed Assets, net (Tables)	9 Months Ended
	May 31, 2024
Fixed Assets, net
Schedules of fixed assets	May 31, 2024 August 31, 2023 Equipment $ 2,140 $ 2,182 Furniture and fixtures 614 614 Leasehold improvements 604 604 3,358 3,400 Accumulated depreciation and amortization (2,167 ) (1,778 ) Fixed assets, net $ 1,191 $ 1,622

Accounts Payable and Other Ac_2

Accounts Payable and Other Accrued Liabilities (Tables)	9 Months Ended
	May 31, 2024
Accounts Payable and Other Accrued Liabilities
Schedules of accounts payable and other accrued liabilities	May 31, 2024 August 31, 2023 Accounts payable (1) $ 8,369 $ 6,527 Contingent lease liability 6,484 3,761 Operating lease liability 407 874 Legal settlement 5,066 1,610 Compensation owed to directors for services 893 756 Workers’ compensation 6 1,219 ERTC owed to clients 1,089 1,089 Due to IHC 600 600 Financed insurance policies 28 335 Business tax 788 150 Other 1,090 990 Total $ 24,820 $ 17,911

Payroll Tax And Related Liabi_2

Payroll Tax And Related Liabilities (Tables)	9 Months Ended
	May 31, 2024
Payroll Tax And Related Liabilities
Schedules of payroll tax and related liabilities	May 31, 2024 August 31, 2023 Payroll taxes liabilities $ 24,863 $ 22,840 Payroll related liabilities 55 237 Accrued penalties and interest 10,616 6,518 Total $ 35,534 $ 29,595

Stockholders Deficit (Tables)

Stockholders Deficit (Tables)	9 Months Ended
	May 31, 2024
Stockholders Deficit
Schedule of common stock and prefunded warrants	Number of shares Weighted average remaining life (years) Weighted average exercise price Warrants outstanding, August 31, 2023 138,309 5.6 $ 208.8 Issued 1,270,845 4.9 4.1 Forfeited (34 ) — — Warrants outstanding, May 31, 2024 1,409,120 4.8 $ 19.1 Warrants exercisable, May 31, 2024 1,409,120 4.8 $ 19.1
Schedule of warrants outstanding	Warrants Outstanding Weighted Average Life of Outstanding Warrants (In years) Exercise Price March 2024 Common Warrants 1,176,470 4.8 $ 4.25 October 2023 Common Warrants 94,375 4.9 2.41 July 2023 Common Warrants 86,111 4.8 4.25 September 2022 Common Warrants 34,722 5.8 36.0 September 2022 Underwriter Warrants 868 2.8 316.8 July 2022 Common Warrants 14,517 4.8 4.25 September 2021Underwriter Warrants 157 4.9 4,210.8 May 2021Underwriter Warrants 103 1.9 5,820.0 October 2020 Common Warrants 750 1.4 7,920.0 October 2020 Underwriter Warrants 208 1.4 36.0 October 2020 Common Warrants 83 1.4 7,920.0 May 2020 Common Warrants 532 1.0 12,960.0 May 2020 Underwriter Warrants 46 1.0 12,960 March 2020 Common Warrant 178 1.3 24,408.0 Total warrants issued and outstanding 1,409,120 4.8 $ 19.1 Total warrants issued and exercisable 1,409,120 4.8 $ 19.1

Stock Based Compensation (Table

Stock Based Compensation (Tables)	9 Months Ended
	May 31, 2024
Stock Based Compensation
Share-based payment arrangement, option, activity	Options Outstanding and Exercisable Number of Options Weighted Average Remaining Contractual Life Weighted Average Exercise Price (In years) Options Outstanding as of August 31, 2023 417 7.0 $ 19,529 Granted - - - Exercised - - - Forfeited - Cancelled (217 ) - - Options Outstanding as of May 31, 2024 200 5.9 $ 11,210 Options Exercisable as of May 31, 2024 178 6.3 $ 11,560
Summarizes of stock options outstanding	Options Outstanding Options Vested Exercise Prices Number of Options Outstanding Number of Options Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price $ Number of Options Weighted Remaining Contractual Life Weighted Average Exercise Price $ (In years) (In years) $2,520-$5,000 7 6 7.3 3,078 6 7.3 3,078 $5,001- $10,000 38 22 4.8 5,120 22 6.7 7,057 $10,001-$12,960 155 150 6.1 13,098 150 6.1 12,529 200 178 5.9 11,210 178 6.3 11,560

Commitments (Tables)

Commitments (Tables)	9 Months Ended
	May 31, 2024
Commitments
Schedule of Lease, Cost	Three Months Ended May 31, 2024 Nine Months Ended May 31, 2024 Operating lease expense $ 46 $ 317
Schedule of Lessee, Operating Lease, Liability, Maturity	Minimum lease commitments 2024 $ 433 2025 257 Thereafter - Total minimum payments 690 Less: present value discount (31 ) Lease liability $ 659 Weighted-average remaining lease term - operating leases (years) 1.5 Weighted-average discount rate 5.54 %

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details )	9 Months Ended
	May 31, 2024
Shiftpixy Corporate Services, Inc.
Jurisdiction Organization	Wyoming
Attributable Interest	100%
Shiftpixy Staffing, Inc.
Jurisdiction Organization	Wyoming
Attributable Interest	100%
Shiftpixy Contracting Services Inc
Jurisdiction Organization	Wyoming
Attributable Interest	100%
Shiftpixy Productions, Inc.
Jurisdiction Organization	Wyoming
Attributable Interest	100%
Shiftpixy Investments, Inc.
Jurisdiction Organization	Wyoming
Attributable Interest	100%
Shiftpixy Labs, Inc.
Jurisdiction Organization	Wyoming
Attributable Interest	100%
Shiftpixy Ghost Kitchens, Inc.
Jurisdiction Organization	Wyoming
Attributable Interest	100%

Summary of Significant Accoun_5

Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Revenues	$ 4.1	$ 4	$ 11.7	$ 13.8
Staffing [Member]
Revenues	4	3.9	10.8	12.3
HCM / EAS [Member]
Revenues	$ 0.1	$ 0.1	$ 0.9	$ 1.5

Summary of Significant Accoun_6

Summary of Significant Accounting Policies (Details 2) - Revenue from Contract with Customer Benchmark [Member] - Geographic Concentration Risk [Member]	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Florida [Member]
Concentration risk, percentage	10.60%	2.20%	5.70%	2%
California [Member]
Concentration risk, percentage	28.10%	31%	26.90%	44%
Washington [Member]
Concentration risk, percentage	0.20%	15.50%	10.20%	12.20%
New Mexico [Member]
Concentration risk, percentage		16.80%	16.20%	15%
New York [Member]
Concentration risk, percentage	26.70%	15.70%	19.10%	7.90%

Summary of Significant Accoun_7

Summary of Significant Accounting Policies (Details 3) - Accounts Receivable [Member] - Customer Concentration Risk [Member]	9 Months Ended	12 Months Ended
	May 31, 2024	Aug. 31, 2023
Client 1 [Member]
Concentration risk, percentage	43.90%	64.50%
Client 2 [Member]
Concentration risk, percentage	47%	23.60%

Summary of Significant Accoun_8

Summary of Significant Accounting Policies (Details 4) - Gross Revenues [Member] - Customer Concentration Risk [Member]	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Client 1 [Member]
Concentration risk, percentage	44.70%	18.60%	29.70%	12.60%
Client 2 [Member]
Concentration risk, percentage	20.20%	13.90%	10.60%	12.50%

Summary of Significant Accoun_9

Summary of Significant Accounting Policies (Details 5)	9 Months Ended
	May 31, 2024
Leasehold improvements
Estimated useful live	Shorter of useful life or the remaining lease term, typically 5 years
Equipment [Member]
Estimated useful lives	5 years
Furniture & Fixtures [Member] | Minimum[Member]
Estimated useful lives	5 years
Furniture & Fixtures [Member] | Maximum [Member]
Estimated useful lives	7 years

Summary of Significant Accou_10

Summary of Significant Accounting Policies (Details 6) - shares	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Total potentially dilutive shares (in shares)	1,975,027	56,640	1,975,027	56,640
Options [Member]
Total potentially dilutive shares (in shares)	242	417	242	417
Preferred Option [Member]
Total potentially dilutive shares (in shares)		1,565		1,565
Shares to be Issued for Services to Board of Directors [Member]
Total potentially dilutive shares (in shares)	565,665	2,460	565,665	2,460
Warrants [Member]
Total potentially dilutive shares (in shares)	1,409,120	52,198	1,409,120	52,198

Summary of Significant Accou_11

Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023	Aug. 31, 2023	Jan. 03, 2020
Cash	$ 0.4		$ 0.4
Received payroll tax liabilities	35.5		35.5
Unpaid payroll tax liabilities	21.1		21.1
Working capital deficit	(60.3)		(60.3)
Net cash used in operating activities, continuing operations			(6)
Incurred of losses			14.7
Retained earnings (accumulated deficit)	241		241
Unbilled accounts receivable	0.3		0.3		$ 1.8
Advance payments	0		0		$ 0.2
Cash, uninsured amount	0.2		0.2
Advertising expense	0.6	$ 0.9	1.9	$ 2
HCM / EAS [Member]
Worksite employee payroll cost	1.3	8.2	11.5	29.2
Gross billings	$ 1.4	$ 8.3	$ 12.4	$ 30.7
IHC
Variable interest entity, qualitative or quantitative information, non-ownership percentage			15%
Disposal by Sale [Member] | PEO Business [Member]
Sunz litigation			$ 2.3
Percentage of business sold						100%
Addition Information			On November 15, 2023, the Company won an arbitration for a total amount of $2.5 million, which was reported as a gain from legal settlement in the condensed statement of operations during the nine months ended May 31, 2024

Accounts Receivable and Unbille

Accounts Receivable and Unbilled Receivable (Details Narrative) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	May 31, 2024	Aug. 31, 2023
Accounts Receivable and Unbilled Receivable (Details Narrative)
Unbilled revenue	$ 0.3	$ 1.8
Allowance for doubtful accounts	0.6	0.2
Liability	$ 0	$ 0.2

Fixed Assets (Details)

Fixed Assets (Details) - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Fixed assets, Gross	$ 3,358	$ 3,400
Accumulated depreciation & amortization	(2,167)	(1,778)
Fixed assets, net	1,191	1,622
Leasehold improvements
Fixed assets, net	604	604
Equipment [Member]
Fixed assets, net	2,140	2,182
Furniture & fixtures
Fixed assets, net	$ 614	$ 614

Fixed Assets (Details Narrative

Fixed Assets (Details Narrative) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023
Fixed Assets (Details)
Depreciation and amortization expense	$ 0.1	$ 0.1	$ 0.4	$ 0.4

Accounts Payable and Other Ac_3

Accounts Payable and Other Accrued Liabilities (Details) - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Accounts Payable and Other Current Liabilities	$ 24,820	$ 17,911
Contingent lease liability [Member]
Accounts Payable and Other Current Liabilities	6,484	3,761
Operating lease liability [Member]
Accounts Payable and Other Current Liabilities	407	874
Legal settlement [Member]
Accounts Payable and Other Current Liabilities	5,066	1,610
Shares owed to directors for services [Member]
Accounts Payable and Other Current Liabilities	893	756
Workers compensation [Member]
Accounts Payable and Other Current Liabilities	6	1,219
ERTC owed to clients [Member]
Accounts Payable and Other Current Liabilities	1,089	1,089
Other [Member]
Accounts Payable and Other Current Liabilities	1,090	990
Due to IHC [Member]
Accounts Payable and Other Current Liabilities	600	600
Financed insurance policies [Member]
Accounts Payable and Other Current Liabilities	28	335
Business tax [Member]
Accounts Payable and Other Current Liabilities	788	150
Accounts Payable [Member]
Accounts Payable and Other Current Liabilities	$ 8,369	$ 6,527

Accounts Payable and Other Ac_4

Accounts Payable and Other Accrued Liabilities (Details Narrative) $ in Millions	May 31, 2024 USD ($)
Sunz Insurance Solutions, LLC [Member]
Litigation settlement amount	$ 3.5

Payroll Tax And Related Liabi_3

Payroll Tax And Related Liabilities (Details) - USD ($) $ in Thousands	May 31, 2024	Aug. 31, 2023
Payroll Tax And Related Liabilities
Payroll taxes liabilities	$ 24,863	$ 22,840
Payroll related liabilities	55	237
Accrued penalties and interest	10,616	6,518
Total	$ 35,534	$ 29,595

Payroll Tax And Related Liabi_4

Payroll Tax And Related Liabilities (Details Narrative) - USD ($) $ in Millions	May 31, 2024	Aug. 23, 2023
Payroll Tax And Related Liabilities
Accrued Interest And Penalties On Payroll Taxes	$ 10.6	$ 6.5
Delinquent Payroll Taxes	$ 24.9	$ 22.8

Stockholders Deficit (Details)

Stockholders Deficit (Details)	9 Months Ended
	May 31, 2024 $ / shares shares
Number of shares
Number of shares outstanding, beginning balance (in shares)	138,309
Issued (in shares)	1,270,845
Forfeited	(34)
Number of shares outstanding, ending balance (in shares)	1,409,120
Number of shares exercisable (in shares)	1,409,120
Weighted average remaining life (years)
Weighted average Life of Outstanding Warrants in years	5 years 7 months 6 days
Warrants outstanding	4 years 9 months 18 days
Issued	4 years 10 months 24 days
Weighted remaining life (years) exercisable	4 years 9 months 18 days
Weighted average exercise price
Weighted average exercise price Outstanding (in dollars per share), beginning balance | $ / shares	$ 208.8
Issued (in dollars per share) | $ / shares	4.1
Weighted average exercise price Outstanding (in dollars per share), ending balance | $ / shares	19.1
Weighted average exercise price exercisable (in dollars per share) | $ / shares	$ 19.1

Stockholders Deficit (Details 1

Stockholders Deficit (Details 1) - $ / shares	9 Months Ended
	May 31, 2024	Aug. 31, 2023
Class of warrant or right, outstanding (in shares)	1,409,120	138,309
Exercise price of warrants (in dollars per share)	$ 288
Warrants [Member] | October 2023 Warrants [Member]
Class of warrant or right, outstanding (in shares)	94,375
Weighted average Life of Outstanding Warrants in years	4 years 10 months 24 days
Exercise price of warrants (in dollars per share)	$ 2.41
Warrants [Member] | July 2023 Common Warrants [Member]
Class of warrant or right, outstanding (in shares)	86,111
Weighted average Life of Outstanding Warrants in years	4 years 9 months 18 days
Exercise price of warrants (in dollars per share)	$ 4.25
Warrants [Member] | September 2022 Underwriter Warrants [Member]
Class of warrant or right, outstanding (in shares)	868
Weighted average Life of Outstanding Warrants in years	2 years 9 months 18 days
Exercise price of warrants (in dollars per share)	$ 316.8
Warrants [Member] | July 2022 Common Warrants [Member]
Class of warrant or right, outstanding (in shares)	14,517
Weighted average Life of Outstanding Warrants in years	4 years 9 months 18 days
Exercise price of warrants (in dollars per share)	$ 4.25
Warrants [Member] | Sep 2021Underwriter Warrants [Member]
Class of warrant or right, outstanding (in shares)	157
Weighted average Life of Outstanding Warrants in years	4 years 10 months 24 days
Exercise price of warrants (in dollars per share)	$ 4,210.8
Warrants [Member] | May 2021Underwriter Warrants [Member]
Class of warrant or right, outstanding (in shares)	103
Weighted average Life of Outstanding Warrants in years	1 year 10 months 24 days
Exercise price of warrants (in dollars per share)	$ 5,820
Warrants [Member] | October 2020 Common Warrants [Member]
Class of warrant or right, outstanding (in shares)	83
Weighted average Life of Outstanding Warrants in years	1 year 4 months 24 days
Exercise price of warrants (in dollars per share)	$ 7,920
Warrants [Member] | October 2020 Underwriter Warrants [Member]
Class of warrant or right, outstanding (in shares)	208
Weighted average Life of Outstanding Warrants in years	1 year 4 months 24 days
Exercise price of warrants (in dollars per share)	$ 36
Warrants [Member] | May 2020 Common Warrants
Class of warrant or right, outstanding (in shares)	532
Weighted average Life of Outstanding Warrants in years	1 year
Exercise price of warrants (in dollars per share)	$ 12,960
Warrants [Member] | May 2020 Underwriter Warrants [Member]
Class of warrant or right, outstanding (in shares)	46
Weighted average Life of Outstanding Warrants in years	1 year 3 months 18 days
Exercise price of warrants (in dollars per share)	$ 12,960
Warrants [Member] | March 2020 Common Warrant [Member]
Class of warrant or right, outstanding (in shares)	178
Weighted average Life of Outstanding Warrants in years	1 year 4 months 24 days
Exercise price of warrants (in dollars per share)	$ 24,408
Warrants [Member] | March 2024 Common Warrants [Member]
Class of warrant or right, outstanding (in shares)	1,176,470
Weighted average Life of Outstanding Warrants in years	4 years 9 months 18 days
Exercise price of warrants (in dollars per share)	$ 4.25
Warrants [Member] | September 2022 Common Warrants [Member]
Class of warrant or right, outstanding (in shares)	34,722
Weighted average Life of Outstanding Warrants in years	5 years 9 months 18 days
Exercise price of warrants (in dollars per share)	$ 36
Warrants [Member] | Warrants Issued And Outstanding [Member]
Class of warrant or right, outstanding (in shares)	1,409,120
Weighted average Life of Outstanding Warrants in years	4 years 9 months 18 days
Exercise price of warrants (in dollars per share)	$ 19.1
Warrants [Member] | Warrants Issued And Exercisable [Member]
Class of warrant or right, outstanding (in shares)	1,409,120
Weighted average Life of Outstanding Warrants in years	4 years 9 months 18 days
Exercise price of warrants (in dollars per share)	$ 19.1

Stockholders Deficit (Details N

Stockholders Deficit (Details Narrative) - USD ($)			1 Months Ended					3 Months Ended		9 Months Ended		13 Months Ended
	Oct. 05, 2023	Sep. 02, 2022	Mar. 31, 2024	Mar. 19, 2024	Oct. 17, 2023	Jan. 31, 2023	Sep. 20, 2022	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023	Jul. 31, 2023	Aug. 31, 2023	Jan. 28, 2022	Sep. 03, 2021
Market offering						$ 8,200,000
Common stock issued											5,175
Net cash consideration											$ 1,000
Risk-free interest rate used in Black-Scholes model										4.20%
Expected volatility used in Black-Scholes model										200.70%
Expected term used in Black-Scholes model										expected term between 4.3 to 6.3 years
Dividend yield used in Black-Scholes model										0%
Amendment description of common stock										Company executed an amendment to common stock warrants previously issued to the investor, pursuant to which the exercise price of an aggregate of 97,850 outstanding warrants the Company issued to the investor in July 2022 and July 2023 was reduced to $4.25 and the term of these warrants was extended to March 21, 2029. In addition, the exercise price of 94,375 outstanding warrants the Company issued to the investor in October 2023 was reduced to $2.41, effective on the date that is six months following the initial date of issuance of the October 2023 Warrants
Sale of common stock, shares	56,250		590,000
Number of shares offered	94,375
Class of warrant or right, outstanding (in shares)								1,409,120		1,409,120			138,309
Sale of pre-funded warrants	38,125		586,470
Institutional investor number of warrants			1,176,470
Offering price	$ 26.40
Exercise price of warrants (in dollars per share)								$ 288		$ 288
Offering price for pre funded warrants	26.3976		$ 4.2499
Exercise price	$ 0.0024		4.25
Stock options exercised							$ 4,400,000
Net proceeds of ATM, net of offering expenses, shares									5,583		18,305
Net proceeds from sale	$ 2,000,000								$ 500,000		$ 2,000,000
Oprating expenses								$ 4,245,000	$ 6,645,000	$ 16,607,000	17,579,000
Sale of stock, placement fee							7%
Placement Agent Agreement [Member]
Warrants to purchase shares of common stock										868
Initial exercise price										$ 316.80
Securities Purchase Agreement [Member]
Class of warrant or right, outstanding (in shares)								34,722		34,722
Private Placement [Member]
Common stock purchase warrants										94,375
Original exercise price of private placement warrants										$ 26.40
Revised exercise price of private placement warrants										$ 30.504
January2022 Common Warrants [Member]
Class of warrant or right, outstanding (in shares)														4,124	1,051
Decrease of warrants value														$ 0.24
Oprating expenses											$ 100,000
Common Stock Warrants [Member] | Private Placement [Member]
Sale of stock, stock and warrant price per share (in dollars per share)							$ 288
Common Share Units [Member]
Sale of stock, number of shares and warrants issued in transaction (in shares)							17,361
Common Stock Offering Details [Member]
Number of shares offered				590,000
Offering price per share				$ 4.25
Sale of pre-funded warrants				586,470
Number of common warrants purchase				1,176,470
Offering price for pre funded warrants			$ 4.2499
Offering price for pre funded warrants immediately exercised price				$ 0.0001
Common warrants exercise price				$ 4.25
Warrant Amendment [Member]
Amendment description of exercise price										amendment, the exercise price of the October 2023 warrants was increased from $26.40 to $30.504, resulting from a NASDAQ notice of failure to satisfy a continued listing rule
Number of warrants amended												97,850
Number of warrants with exercise price reduction	94,375
Exercise price of warrants (in dollars per share)												$ 4.25
Extended term												extended to March 21, 2029
Scott W Absher [Member] | Chief Executive Officer [Member]
Conversion of stock, shares converted (in shares)					4,744,234
Preferential dividend amount										$ 67,400,000
Scott W Absher [Member] | Chief Executive Officer [Member] | Convertible Preferred Stock [Member]
Conversion of stock, shares converted (in shares)		8,600,000
Scott W Absher [Member] | Chief Executive Officer [Member] | Common Share Units [Member]
Conversion of stock, shares converted (in shares)		8,600,000			4,744,234
Preferential dividend amount					$ 67,400,000
Reverse stock split										one for twenty four (1:24) reverse split

Stock Based Compensation (Detai

Stock Based Compensation (Details)	9 Months Ended
	May 31, 2024 $ / shares shares
Stock Based Compensation
Options vested, beginning balance (in shares)	417
Forfeited (in shares)	(217)
Options vested, ending balance (in shares)	200
Options vested, ending balance (in shares)	178
Options vested, excercisable	178
Weighted remaining contractual life, beginning	7 years
Weighted remaining contractual life, ending	5 years 10 months 24 days
Weighted average exercise price, beginning | $ / shares	$ 19,529
Weighted remaining contractual life, Exercisable	6 years 3 months 18 days
Forfeited (in dollars per share) | $ / shares	$ 0
Weighted average exercise price, ending | $ / shares	11,210
Exercisable | $ / shares	$ 11,560

Stock Based Compensation (Det_2

Stock Based Compensation (Details 1) - $ / shares	9 Months Ended
	May 31, 2024	Feb. 29, 2024	Nov. 30, 2023	Aug. 31, 2023
Number of Options Outstanding, Outstanding (in shares)	200		295
Weighted Average Exercise Price, Outstanding (in dollars per share)	$ 11,210
Weighted Average Remaining Contractual Life, Outstanding	5 years 10 months 24 days
Number of Options Vested (in shares)	178
Weighted Average Remaining Contractual Life	6 years 3 months 18 days
Weighted Average Exercise Price (in dollars per share)	$ 11,560
Number of Options Vested (in shares)	178	242	295	417
Exercise Price Range One [Member]
Number of Options Outstanding, Outstanding (in shares)	7
Weighted Average Exercise Price, Outstanding (in dollars per share)	$ 3,078
Weighted Average Remaining Contractual Life, Outstanding	7 years 3 months 18 days
Weighted Average Remaining Contractual Life	7 years 3 months 18 days
Number of Options Exercisable, Outstanding (in shares)	6
Number of Options Vested (in shares)	6
Weighted Average Exercise Price (in dollars per share)	$ 3,078
Exercise Price Range One [Member] | Minimum[Member]
Exercise Prices (in dollars per share)	2,520
Exercise Price Range One [Member] | Maximum [Member]
Exercise Prices (in dollars per share)	$ 5,000
Exercise Price Range Two [Member]
Number of Options Outstanding, Outstanding (in shares)	38
Weighted Average Exercise Price, Outstanding (in dollars per share)	$ 5,120
Weighted Average Remaining Contractual Life, Outstanding	4 years 9 months 18 days
Weighted Average Remaining Contractual Life	6 years 8 months 12 days
Number of Options Exercisable, Outstanding (in shares)	22
Number of Options Vested (in shares)	22
Weighted Average Exercise Price (in dollars per share)	$ 7,057
Exercise Price Range Two [Member] | Minimum[Member]
Exercise Prices (in dollars per share)	$ 5,001
Exercise Price Range Three [Member]
Number of Options Outstanding, Outstanding (in shares)	155
Weighted Average Exercise Price, Outstanding (in dollars per share)	$ 13,098
Weighted Average Remaining Contractual Life, Outstanding	6 years 1 month 6 days
Weighted Average Remaining Contractual Life	6 years 1 month 6 days
Number of Options Exercisable, Outstanding (in shares)	150
Number of Options Vested (in shares)	150
Weighted Average Exercise Price (in dollars per share)	$ 12,529
Exercise Price Range Three [Member] | Minimum[Member]
Exercise Prices (in dollars per share)	10,001
Exercise Price Range Three [Member] | Maximum [Member]
Exercise Prices (in dollars per share)	12,960
Exercise Price Range Two One [Member] | Maximum [Member]
Exercise Prices (in dollars per share)	$ 10,000

Stock Based Compensation (Det_3

Stock Based Compensation (Details Narrative) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023	Mar. 06, 2023	Mar. 05, 2023
Share-based compensation arrangement by share-based payment award, number of shares authorized (in shares)	31,050		31,050
Stock-based compensation expense	$ 0.1	$ 0.2	$ 0.5	$ 0.7
Related Parties [Member]
Accounts payable and other accrued liabilities			$ 0.1
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition			3 months 18 days
March 6, 2023 [Member]
Share-based compensation arrangement by share-based payment award, number of shares authorized (in shares)					31,250	1,250
Granted Prior to July 1, 2020 [Member] | Share-based payment arrangement, tranche one [Member]
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage			25%
Share-based compensation arrangement by share-based payment award, award vesting period			12 years
Granted Prior to July 1, 2020 [Member] | Share-based payment arrangement, tranche two [Member]
Share-based compensation arrangement by share-based payment award, award vesting period			36 years
Options Granted on or After July 1, 2020 [Member] | Share-based payment arrangement, tranche one [Member]
Share-based compensation arrangement by share-based payment award, award vesting rights, percentage			25%

Related Parties (Details Narrat

Related Parties (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Oct. 17, 2023	May 31, 2024	May 31, 2023	May 31, 2024	May 31, 2023	Aug. 31, 2023
Gross receivable to related party		$ 600,000		$ 600,000		$ 200,000
Recognized allowance for credit losses		140,000		380,000
Salaries, wages, and payroll taxes		1,337,000	$ 2,621,000	4,001,000	$ 7,477,000
Accounts payable and other accrued liabilities		900,000		900,000		800,000
Accrued unpaid compensation for aggregate amount		$ 600,000		$ 600,000		$ 400,000
Shares of common stock issued		6,755,686		6,755,686		507,383
Administration fees expense		$ 5,900		$ 18,300
Scott Absher [Member]
Salaries, wages, and payroll taxes		200,000		300,000
Patrice Launay [Member]
Payments to employees		80,000		80,000
Other Director [Member]
Monthly cash retainer				75,000
Professional fees		70,000		160,000
Accounts payable and other accrued liabilities		300,000		300,000		$ 200,000
Stock-based compensation expense		$ 60,000		$ 130,000
Shares of common stock issued		565,665		565,665		1,208
David May [Member]
Payments to employees		$ 60,000	30,000	$ 130,000	100,000
Phil Eastvold [Member]
Payments to employees		70,000	60,000	170,000	170,000
Jason Absher [Member]
Payments to employees		30,000	30,000	90,000	90,000
Connie Absher, Elizabeth Eastvold, and Hannah Absher [Member]
Payments to employees		$ 60,000	$ 50,000	$ 140,000	$ 140,000
Chief Executive Officer [Member] | Scott W Absher [Member]
Outstanding shares of common stock				4,744,234
Conversion of stock, shares converted (in shares	4,744,234
Preferential dividend amount				$ 67,400,000

Commitments (Details)

Commitments (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	May 31, 2024	May 31, 2024
Commitments
Operating Lease Cost	$ 46	$ 317

Commitments (Details 1)

Commitments (Details 1) $ in Thousands	9 Months Ended
	May 31, 2024 USD ($)
Commitments
2024	$ 433
2025	257
Thereafter	0
Total minimum payments	690
Less: present value discount	(31)
Lease Liability	$ 659
Weighted-average remaining lease term - operating leases (months)	1 year 6 months
Weighted-average discount rate	5.54%

Commitments (Details Narrative)

Commitments (Details Narrative) - USD ($)	9 Months Ended	12 Months Ended
	May 31, 2024	May 31, 2024	Aug. 31, 2023
Contingent liability	$ 3,800,000	$ 3,800,000	$ 3,800,000
ROU asset impairment	3,800,000
Miami Office Space Facility [Member]
Operating lease, monthly expense	57,000
Contingent liability	3,800,000	3,800,000	$ 3,800,000
Impairment expense		3,700,000
ShiftPixy Labs Facility [Member]
Operating lease, monthly expense	33,000
Miami Verifone Facility [Member]
Operating lease, monthly expense	27,000
Contingent liability	1,600,000	1,600,000
Right-of-use asset	0	0
Sunrise Facility [Member]
Impairment expense	1,500,000
Leegal payment		2,200,000
Irvine Facility [Member]
Operating lease, monthly expense	24,000
Contingent liability	1,100,000	1,100,000
Impairment expense	1,000,000
Right-of-use asset	$ 0	$ 0

Contingencies (Details Narrativ

Contingencies (Details Narrative) - USD ($)

1 Months Ended

9 Months Ended

Dec. 14, 2023

Nov. 08, 2022

Jun. 13, 2022

Feb. 26, 2024

Oct. 16, 2023

Apr. 25, 2023

Oct. 22, 2021

May 31, 2024

May 31, 2023

Mar. 25, 2024

Dec. 31, 2023

Aug. 31, 2023

Dec. 31, 2020

Excluding accrued but unassessed interest

$ 3,490,513

$ 391,736

$ 136,038

Settlement agreement amount

75,000

Settlement agreement accrued amount

3,800,000

Potential gain on settlement

3,100,000

Partial repayment to Shiftpixy

0

$ 117,574,000

Employee retention tax credit ("ERTCs") claims amount

35,534,000

$ 29,595,000

Issued shares of restricted stock

5,175

Payroll related liabilities

2,031,000

2,940,000

Operating lease, long term

252,000

2,790,000

Minimum[Member]

Loss contingency, damages sought, value

$ 50,000

John Stephen Holmes [Member] | Preferred Stocks [Member]

Number of shares cancelled (in shares)

491,250

Robert Angueira, as US Chapter 7 Trustee v. Shiftpixy, Inc, Shiftpixy Investments [Member]

Description of insolvency

Officers and Directors received notice of an Adversarial proceeding in a bankruptcy case, captioned Robert Angueira, as US Chapter 7 Trustee v. Shiftpixy, Inc, Shiftpixy Investments, Inc et al. The case is related to Industrial Human Capital, “IHC”, a company that was an attempted SPAC in 2022, the Company was unable to finish the listing requirements and $117.6 million was returned to the investors on December 1, 2022. Because some creditors were unpaid after the IHC was closed due to insolvency, some IHC creditors filed an involuntary bankruptcy in the Southern District of Florida

Partial repayment to Shiftpixy

$ 600,000

Foundry ASVRF Sawgrass, LLC [Member]

Loss contingency, damages sought, value

300,000

Rent and operating costs per month

$ 100,000

Remaining lease liability under the contractual terms of the lease

1,600,000

Olen Commercial Realty Corp. v. ShiftPixy [Member]

Loss contingency, damages sought, value

1,200,000

Monthly rent

24,500

Operating lease, long term

1,100,000

1,100,000

Robert Angueira, as US Chapter 7 Trustee v. Shiftpixy, Inc [Member]

Loss contingency, damages sought, value

1,800,000

Accounts payable and other liabilities

600,000

600,000

Trustee claims to investors

$ 117,000,000

John Stephen Holmes Bankruptcy Litigation [Member]

Loss contingency, damages sought, value

$ 550,000

Loss contingency, damages sought (in shares)

520,833

Issued shares of restricted stock

181,518

Washington Dept of Rev v. ShiftPixy Staffing, Inc. [Member]

Description of issued a tax warrant against the subsidiary company

the State of Washington Dept. of Rev. issued a tax warrant against a subsidiary of the Company claiming that (a) its prior communications were unanswered, and (b) asserting that the Company owes $0.9 million in Business & Occupation (“B&O”) Taxes and interest for periods from June 2018 to December 2021

Accounts payable and other liabilities

$ 800,000

$ 200,000

Excise tax

600,000

Employer OASDI or medicare taxes for the tax periods total

2,728,832

Interest accrued for employer Federal Unemployment Tax

$ 108,631

Nasdaq's listing rule, description

Company maintains a market value of listed securities of $35 million, and that the Company does not otherwise satisfy the requirements of Listing Rule 5550(b)(1) of a stockholders’ equity of at least $2.5 million or Listing Rule 5550(b)(3) of net income from continuing operations of $500,000 in the most recent completed fiscal year or in two of three most recent completed fiscal years. The Nasdaq Letter does not have any immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market, and the Company has 180 calendar days from the date of the Nasdaq Letter to regain compliance

Description of reviewed documentation

The state reviewed documentation submitted by the Company in support of its position and issued a modified tax adjustment, asserting that the sum of $0.3 million is due for the period June 2018 to December 2020

Employee Retention Tax Credit ("ERTCs") Claims [Member]

Employee retention tax credit ("ERTCs") claims amount

2,000,000

Filed claims with the IRS ERTC

7,700,000

Amanda Murphy v. Shiftpixy, Inc., Scott Absher and Connie Absher [Member]

Payroll related liabilities

$ 450,000