Store Manager

		Closing Sales Prices
		High				Low
2019
1st Quarter		$	12.48			$	5.77
2nd Quarter		$	8.01			$	5.00
3d Quarter		$	6.08			$	2.74
4th Quarter		$	6.98			$	1.92
2020
1st Quarter		$	5.35			$	2.39
2nd Quarter		$	8.14			$	3.62
3d Quarter		$	12.38			$	6.51
4th Quarter		$	52.15			$	10.00
2021
1st Quarter (through April 15, 2021)		$	46.00			$	21.50

Item 6.

Item 6.

SELECTED CONSOLIDATED FINANCIAL DATA The following table sets forth selected Statements of Operations and Balance Sheet data for the five fiscal years ended February 3, 2018 and is derived from the Company’s audited Consolidated Financial Statements. The fiscal year ended February 3, 2018 consisted of 53 weeks while all the other fiscal years of the Company presented consisted of 52 weeks. This information should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes and other financial information included herein, including Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. 21     Fiscal Year Ended       February 3,     January 28,     January 30,     January 31,     February 1,   ($ in thousands, except per share data)   2018     2017     2016     2015     2014   STATEMENT OF OPERATIONS DATA:                                         Net sales   $ 437,173     $ 348,672     $ 334,661     $ 358,490     $ 393,659   Other revenue(1)     5,683       4,798       4,843       4,773       4,326     Total revenue     442,856       353,470       339,504       363,263       397,985                                             Cost of sales     299,013       218,811       204,089       222,572       245,755   Gross profit     143,843       134,659       135,415       140,691       152,230   Selling, general and administrative expenses     167,924       139,691       130,845       136,916       141,855   Income from joint venture     (1,787)       —       —       —       —   Gain on sale of asset     —       (1,164)       —       —       —   Asset impairment charges     29,107       —       —       —       —   Income (loss) from operations     (51,401)       (3,868)       4,570       3,775       10,375   Interest expense     332       775       1,860       1,951       2,010   Other  income     (8,881)       (1,081)       (160)       (70)       (80)   Income (loss) before income taxes     (42,852)       (3,562)       2,870       1,894       8,445   Income tax expense (benefit)     (299)       (6,773)       181       116       168   Net income (loss)   $ (42,553)     $ 3,211     $ 2,689     $ 1,778     $ 8,277   Basic earnings (loss) per share   $ (1.19)     $ 0.10     $ 0.09     $ 0.06     $ 0.25                                             Weighted average number of shares outstanding - basic     36,191       32,162       31,167       31,744       32,584   Diluted earnings (loss) per share   $ (1.18)     $ 0.10     $ 0.09     $ 0.06     $ 0.25                                             Weighted average number  of shares – diluted     36,191       32,321       31,323       31,897       32,862                                             Cash dividend paid per share     —       —       —     $ 0.50       —                                       Fiscal Year Ended     February 3,     January 28,     January 30,     January 31,     February 1,       2018     2017     2016     2015     2014                 (in thousands, except store count data) BALANCE SHEET DATA (at the end of the period):                                                               Total  assets   $ 247,906     $ 307,810     $ 271,605     $ 280,009     $ 311,591                                             Current portion of long-term debt and capital lease obligations     —       —       —       938       1,066   Long-term obligations     —       —       —       —       938   Shareholders’ equity   $ 158,214     $ 197,936     $ 175,268     $ 171,740     $ 190,970                                             OPERATING DATA:                                         Store count (open at end of period):                                              Mall stores     237       256       267       270       293        Freestanding stores     23       28       32       40       46        Total stores     260       284       299       310       339                                             Comparable store sales decreases(2)     (9%)     (4%)       (1%)     (1%)     (5%)                                           Total square footage in operation (Year end)     1,439       1,593       1,730       1,799       2,030                                             Total square footage in operation (Average)     1,508       1,669       1,793       1,940       2,134   1. Other revenue is comprised of third-party commission income and management fees related to the fye segment. 2. A store is included in comparable store sales calculations at the beginning of its thirteenth full month of operation. Stores relocated, expanded or downsized are excluded from comparable store sales if the change in square footage is greater than 20% until the thirteenth full month following relocation, expansion or downsizing. Closed stores that were open for at least thirteen months are included in comparable store sales through the month immediately preceding the month of closing. 22 Not required under the requirements of a Smaller Reporting Company. 14 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview Management’s Discussion and Analysis of Financial Condition and Results of Operations provide information that the Company’s management believes necessary to achieve an understanding of its financial condition and results of operations.  To the extent that such analysis contains statements which are not of a historical nature, such statements are forward-looking statements, which involve risks and uncertainties.  These risks include, but are not limited to, changes in the competitive environment for the Company’s merchandise, including the entry or exit of non-traditional retailers of the Company’s merchandise to or from its markets; releases by the musicproducts and video, industries of an increased or decreased number of “hit releases”;services; general economic factors in markets where the Company’s merchandise isproducts and services are sold; and other factors including, but not limited to: cost of goods, consumer disposable income, consumer debt levels and buying patterns, consumer credit availability, interest rates, customer preferences, unemployment, labor costs, inflation, fuel and energy prices, weather patterns, climate change, catastrophic events, competitive pressures and insurance costs discussed in the Company’s filings with the Securities and Exchange Commission. The following discussion and analysis FYE Transaction On February 20, 2020, the Company consummated the sale of substantially all of the assets and certain of the liabilities relating to fye to a subsidiary of Sunrise Records pursuant to an Asset Purchase Agreement dated January 23, 2020, by and among the Company, Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World FL LLC, Trans World New York, LLC, 2428392 Inc., and Sunrise Records. Following the FYE Transaction, Kaspien is the Company’s financial condition andonly operating segment. Impact of COVID-19 To date, as a direct result of COVID-19, most of our employees are working remotely. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations shouldand financial condition, including expenses, reserves and allowances, and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international customers and markets, which are highly uncertain and cannot be readpredicted at this time. Management is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the response to curb its spread, currently we are not able to estimate the effects of the COVID-19 outbreak to our results of operations, financial condition, or liquidity. In response to the rapidly evolving COVID-19 pandemic, we activated our business continuity program, led by our Executive Team in conjunction with “Item 6: Selected Consolidated Financial Data”Human Resources, to help us manage the situation. In mid-March of 2020, we transitioned our corporate office staff to work 100% remotely. This process was aided through the implementation of a flexible work from home policy rolled out to the organization in fiscal 2019, having a companywide communication platform for instant messaging and video conferencing, and cloud-based critical business applications. However, while our business is not dependent on physical office locations nor travel, having a 100% remote workforce does present increased operational risk. Our leadership team believes we have the necessary controls in place to mitigate these impacts and allow the team to continue to operate effectively remotely as long as required by State guidelines. While e-commerce has largely benefited from the closure of brick-and-mortar locations as consumer spending has been pushed online to marketplaces such as Amazon and Walmart, the industry nor our organization has been immune to the impact to our supply chains. For instance, in March 2020, Amazon reduced replenishment in their fulfillment centers to essential items which limited a significant percentage of SKUs carried by Kaspien and a number of Kaspien’ partners shut their warehouses or suffered limited processing capacity due to COVID-19. While Amazon has since lifted restrictions and the Consolidated Financial Statements and related notes included elsewhere inleadership team executed contingency plans to mitigate the adverse impact from these restrictions, this report. During October 2016,highlights the Company acquired allfluid nature of COVID-19 across supply chains. Additionally, since the beginning of the issued and outstanding capital stockpandemic, tens of etailz, Inc., an innovative and leading digital marketplace retail expert. See Note 3 tomillions of Americans have lost their jobs, significantly increasing the Consolidated Financial Statements for additional information. Subsequent to this acquisition, reportable segments consistrisk of fye and etailz. The etailz acquisition represents a significant step forward in the Company’s reinvention. The Company believes the rapid growth of marketplace sales will continue and is clear evidence of the explosive long-term trends underway in retailing. As of February 3, 2018, the Company operated 260 stores totaling approximately 1.4 million square feetnear-term economic contraction in the United States that may affect e-commerce sales. The risk of another wave or increased numbers of positive COVID-19 cases also presents further risk to supply chains. Leadership is actively monitoring the Districtsituation and potential impacts on its financial condition, liquidity, operations and workforce but the full extent of Columbia and the U.S. Virgin Islands. fye Segment The U.S. entertainment retailing industry is a mature industry and continues to experience declines. Physical video and music represent approximately 50% of sales and both categories have been impacted by new distribution channels, including digital distribution and internet fulfillment. As a result, the Company has had negative comparable store sales for the past five years. To mitigate or lessen the impact these changes have had, the Company has focused on the following areas in an effort to improve its business: Evolve the fye Brand Customer Experience. The Company is evolving the fye brand experience by diversifying its merchandise assortment and enhancing its merchandise presentation as it continues its strategy towards becoming the most compelling entertainment and pop culture centric engagement in the marketplace. In addition, the Company offers personalized customer service in its stores guided by a commitment to approach every customer with gratitude, humility and respect. Store Portfolio Evaluation fye Segment The Company’s real estate strategy is to maintain a core group of profitable locations, while evaluating opportunities for new locations in new and existing malls. During fiscal 2017, the Company opened 1 new and remodeled 4 existing fye stores under a new format which expands the merchandise selection and enhances the presentation of the trend and electronics categories while maintaining a strong presence in the media categories. As of February 3, 2018, the Company operated 36 stores under the new format. 23 still highly uncertain. During fiscal 2017 and fiscal 2016, the Company closed 25 and 29 stores, respectively. The Company closes stores when minimum operating thresholds are not achieved or upon lease expiration when either renewal is not available or management determines that renewal is not in the Company’s best interest. The Company has signed short-term lease agreements for desirable locations, which enables us to negotiate rents that are responsive to the then-current sales environment. The Company has 197 stores with leases expiring during fiscal 2018. We will continue to close stores that do not meet our profitability goals, a process which could result in further asset impairments and store closure costs. A continued reduction in the number of stores would lower total sales. The Company believes that there is near-term opportunity for improving the productivity of existing stores. The environment in which our stores operate is intensely competitive and includes internet-based retailers and mass merchants. We believe a specialty retailer that can differentiate itself by offering a distinctive assortment and customer experience, and that can operate efficiently, will be better positioned to maintain its market share. Therefore, we remain dedicated to enhancing our merchandise assortment through introducing additional product lines, improving the operational efficiency of our stores and offering our customers a rewarding shopping experience guided by an approach to engage every customer with gratitude, humility and respect. Expanding Customer Base fye Segment To strengthen customer loyalty, the fye stores offer its customers the option of signing up for a Backstage Pass card which provides an additional 10% discount off of everyday selling prices on nearly all products in addition to other value added benefits members receive through the program in exchange for a membership fee.  Events are also co-sponsors in many stores to provide various segments of customers an opportunity to experience entertainment and shop for unique and exclusive products based on their particular interests.  etailz Segment On October 17, 2016, etailz was acquired to continue to build upon its credibility with fans of entertainment and pop culture. The Company acquired all of the issued and outstanding capital stock of etailz, Inc., an innovative and leading digital marketplace retail expert. etailz uses a data driven approach to digital marketplace retailing utilizing proprietary software and e-commerce insight coupled with a direct customer relationship engagement to identify new distributors and wholesalers, isolate emerging product trends, and optimize price positioning and inventory purchase decisions. The etailz acquisition represents a significant step forward in the Company’s reinvention. The Company believes the rapid growth of marketplace sales will continue and is clear evidence of the explosive long-term trends underway in retailing. fye’s progress onboarding digital and marketing talent, accelerated through the etailz acquisition, will enable the Company to reach a large portion of the market share through a multi-channel approach spanning across retail storefronts, direct websites, and all major online marketplaces. Key Performance Indicators Management monitors a number of key performance indicators to evaluate its performance, including: 15 Net Sales and Comparable Store Net Sales:Revenue: The fye segment measures the rate of comparable store net sales change. A store is included in comparable store net sales calculations at the beginning of its thirteenth full month of operation. Stores relocated, expanded or downsized are excluded from comparable store sales if the change in square footage is greater than 20%until the thirteenth full month following relocation, expansion or downsizing. Closed stores that were open for at least thirteen months are included in comparable store sales through the month immediately preceding the month of closing. The fye segment further analyzes net sales by store format and by product category.The etailz segmentCompany measures total year over year sales growth bygrowth. Net sales performance is measured through several key performance indicators including number of partners and active product category. 24 listings and sales per listing. Cost of Sales and Gross Profit:  Gross profit is calculated based on the cost of product in relation to its retail selling value. Changes in gross profit are impacted primarily by net sales levels, mix of products sold, vendor discounts and allowances, shrinkage, obsolescence and distribution costs.  Distribution expenses include those costs associated with receiving, inspecting & warehousing merchandise, Amazon fulfillment fees, and costs associated with product returns to vendors. Selling, General and Administrative (“SG&A”) Expenses: Included in SG&A expenses are payroll and related costs, occupancy charges, general operating and overhead expenses and depreciation charges (excluding those related to distribution operations, as discussed in Note 5 to the Consolidated Financial Statements in this report).charges.  SG&A expenses also include fixed assets write-offs associated with store closures, if any, and miscellaneous income and expense items, other than interest.  The Company recorded miscellaneous income items for fiscal 2017, 2016, and 2015 in the amount of $0.4 million, $0.4 million, and $3.6 million, respectively.  Included in fiscal 2015 miscellaneous income items was a one-time reimbursement of expenses incurred in prior years, related to a legal settlement of $1.4 million. Balance Sheet and Ratios:  The Company views cash, netmerchandise inventory, investment (merchandise inventory less accounts payable)payable leverage, and working capital (current assets less current liabilities) as key indicators of its financial position.  See Liquidity“Liquidity and Capital ResourcesResources” for further discussion of these items. 25 Gross Merchandise Value (“GMV”): The total value of merchandise sold over a given time period through a customer-to-customer exchange site. It is the measurement of merchandise value sold across all channels and partners within our platform. Fiscal Year Ended February 3, 2018January 30, 2021 (“fiscal 2017”2020”) Compared to Fiscal Year Ended January 28, 2017February 1, 2020 (“fiscal 2016”2019”) The Company’s fiscal year is a 52 or 53-week period ending the Saturday nearest to January 31.  Fiscal 2017, 2016,2020 and 2015fiscal 2019 ended February 3, 2018, January 28, 2017, and January 30, 2016,2021 and February 1, 2020, respectively. Fiscal 2017 had 53 weeksBoth fiscal 2020 and fiscal 2016 and fiscal 20152019 had 52 weeks. The 53rd week Net Revenue. Net revenue increased 18.8% to $158.3 million compared to $133.2 million in fiscal 2017 contributed approximately 1%2019. The primary source of revenue is the Retail as a Service (“RaaS”) model, which represented 99% of net revenue. As part of the Company’s diversification strategic initiative, net revenue from non-Amazon US marketplaces increased to 5.4% of net sales. etailz results for fiscal 2016 includedrevenue from 3.4% of net revenue in the tables below are for thecomparable period starting from the dateprior year. The increase was attributable to Amazon International, Walmart and Other Marketplaces. Subscriptions and Other share of acquisition. Segment Highlights: ($ in thousands)       Fiscal Year Ended February 3, 2018     Fiscal Year Ended January 28, 2017   Total Revenue                     fye       $ 268,397     $ 313,211   etailz         174,459       40,259   Total Company       $ 442,856     $ 353,470                         Gross Profit                     fye       $ 104,254     $ 124,735   etailz         39,589       9,924   Total Company       $ 143,843     $ 134,659                         Loss From Operations                     fye       $ (49,261 )   $ (1,932 ) etailz         (2,140 )     (1,936 ) Total Company       $ (51,401 )   $ (3,868 )                       Reconciliation of etailz Loss from Operations to etailz Adjusted Income from Operations       etailz loss from operations       $ (2,140 )   $ (1,936 )                       Acquisition related transaction expenses         -       2,325   Acquisition related intangible amortization expenses         3,871       1,130   Acquisition related compensation expenses         4,262       1,035   Earnout contingency benefit         (3,280 )     (1,829 ) etailz adjusted income from operations   (1)   $ 2,713     $ 725   (1) In addition to the results of operations determined in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), we reported non-GAAP adjusted operating income for the etailz segment as shown above. The Company believes that etailz adjusted income from operations as per the segment disclosure, when considered together with its GAAP financial results, provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings (losses), net earnings (loss) from continuing operations or cash flows from operating activities, as determined in accordance with GAAP. 26 Total Revenue.net revenue increased to 0.8% of net revenue from 0.4% of net revenue in the comparable period from the prior year.  The increase was attributable an increase in the number of partners and higher gross merchandise value (“GMV”) of partner revenue flowing through the platform Amazon Marketplace. The following table sets forth net revenue by marketplace as a year-over-year comparisonpercentage of the Company’s total revenue:                 2017 vs 2016       2017     2016     $     %   ($ in thousands)                         fye net sales   $ 262,714     $ 308,413     $ (45,699)       (14.8%)   etailz net sales     174,459       40,259       134,200       333.3% Other revenue (1)     5,683       4,798       885       18.4% Total revenue   $ 442,856     $ 353,470     $ 89,386       25.3% 1. Other revenue is comprised of third-party commission income and management fees related to the fye segment. Total revenue increased 25.3% to $442.9 million compared to $353.5 million in fiscal 2016, driven by $174.5 million in revenue from etailz. For fiscal 2016, results for etailz are included in the consolidated results from October 17, 2016 through January 28, 2017. fye Segment The 14.8% net sales decline from the prior year is primarily due to an 8.5% decline in total stores in operation and an 8.7% decline in comparable store net sales. Stores closed in fiscal 2017 and fiscal 2016 recorded sales of $14.9 million and $45.2 million, respectively. Total product units sold for fiscal 2017 decreased 11.1% and the average retail price for units sold decreased 8.1%. Net fye sales by merchandise category for fiscal 2017 and fiscal 2016 were as follows: ($ in thousands)       2017 Net Sales     %  Total     2016 Net Sales     % Total     Total  $  Net Sales Change     Total  % Net Sales Change     Comparable Store % Net Sales Change                                                   Trend/lifestyle       $ 98,019       37.3 %   $ 98,692       32.0 %   $ (673 )     (0.6 %)     3.5%   Video   (1)     81,261       30.9 %     107,637       34.9 %     (26,376 )     (24.5 %)     (15.9%) Music         50,691       19.3 %     67,542       21.9 %     (16,851 )     (24.9 %)     (19.6%)   Electronics         32,743       12.5 %     34,542       11.2 %     (1,799 )     (5.1 %)     1.1%   Total       $ 262,714       100.0 %   $ 308,413       100.0 %   $ (45,699 )     (14.8 %)     (8.7%)   (1) Includes Video Games category, which represented 0.5% of fye fiscal 2017 net sales. Fiscal 2016 datawas adjusted to include this immaterial reclassification. Trend/lifestyle fye stores offer a selection of trend/lifestyle products that primarily relate to theatrical releases, music, and gaming. The trend/lifestyle category increased 3.5% on a comparable store sales basis in fiscal 2017. The trend represented 37.3% of the Company’s total net sales in fiscal 2017 versus 32.0% in fiscal 2016. revenue:     January 30, 2021     February 1, 2020     Change   Amazon US   $ 148,526     $ 128,114     $ 20,412   Amazon International     7,646       4,201       3,445   Walmart & Other Marketplaces     884       362       522   Subtotal Retail     157,056       132,677       24,379   Subscriptions & Other     1,289       539       750   Total   $ 158,345     $ 133,216     $ 25,129   The Company continues to take advantage of opportunities to strengthen its selection and shift product mix to growing categories of entertainment-related merchandise. The Company grew sales in this category by strengthening its assortment of consumables and collectables, as well as by improving the product presentation and value proposition. 27 Video fye stores offer a wide range of new and used DVDs, Blu-rays, and 4Ks in a majority of its stores. Total net sales for the video category declined 15.9% on a comparable store sales basis in fiscal 2017. Video sales were negatively impacted by industry wide declines in physical video due to digital options. According to the Digital Entertainment Group’s year-end report, total video sales in the United States declined 14.0% in 2017. Music fye stores offer a wide range of new and used CDs, music DVDs and vinyl across most music genres, including new releases from current artists as well as an extensive catalog of music from past periods and artists. Total net sales in the music category declined 19.6% on a comparable store sale basis in fiscal 2017. According to SoundScan, total physical album unit sales in the United States declined 17.0% during the period corresponding with the Company’s fiscal 2017. Electronics fye stores offer a selection of complementary portable electronics and accessories to support our entertainment products. The electronics category increased 1.1% on a comparable store sales basis. Electronics represented 12.5% of the Company’s total net sales in fiscal 2017 versus 11.2% in fiscal 2016. etailz Segment etailz recorded sales of $174.5 million for fiscal 2017. etailz generates revenue across a broad array of product lines primarily through the Amazon Marketplace. Categories include:include apparel, baby, beauty, electronics, health & personal care, home/kitchen/grocery, pets, sporting goods, toys & art. Annual platform GMV for fiscal year 2020 was $246 million. Fourth quarter 2020 GMV increased 86% to $73.9 million, compared to $39.7 million in the comparable year-ago period. Subscription GMV increased 886% to $26.9 million (36.3% of total GMV), compared to $2.7 million (6.9%% of total GMV) in the same year-ago period. Gross Profit.   Gross profit as a percentage of revenue was 10.3% in fiscal 2020 as compared to 8.1% in fiscal 2019. The increase in the gross profit rate was primarily due to an increase in merchandise margin to 46.4% in fiscal 2020 as compared to 46.1% in fiscal 2019 and the leveraging of fulfillment fees and commissions and warehousing and freight expenses on the higher sales. The following table sets forth a year-over-year comparison of the Company’s gross profit:         2017 vs 2016                           2017   2016   $   % ($ in thousands)                             fye gross profit   $ 104,254     $ 124,735     $ (20,481 )   -16.4% etailz gross profit   $ 39,589       9,924       29,665     298.9% Total gross profit   $ 143,843     $ 134,659     $ 9,184     6.8% fye gross profit as a % of fye revenue     38.8%       39.8%               etailz gross profit as a % of etailz revenue     22.7%       24.7%               Total gross profit as a % of total revenue     32.5%       38.1%               Gross profit increased 6.8% to $143.83 million compared to $134.7 million in fiscal 2016 as a result of the increased gross profit from etailz attributed to the full year results, partially offset by the decline in overall fye gross profit. fye Segment The decline in gross profit as a percentage of revenue was due to lower sales and higher inventory markdowns to sell off seasonal merchandise. Gross profit as a percentage of sales was 38.8% in fiscal 2017 as compared to 39.8% in fiscal 2016. The decline in gross margin as a percentage of revenue was due to aggressive actions to clear slow moving merchandise. etailz Segment etailz gross profit as a percentage of revenue was 22.7% in fiscal 2017 as compared to 24.7% in fiscal 2016. The decline in etailz gross profit percentage was primarily due to a $2.0 million markdown of inventory from a one-time large purchase. 28           Change   (amounts in thousands)   January 30, 2021     February 1, 2020      $     %                         Merchandise margin   $ 73,448     $ 61,379     $ 12,069       19.7 % % of net revenue     46.4 %     46.1 %     0.3 %                                           Fulfillment fees and  commissions     (49,158 )     (42,530 )     (6,628 )     15.6 % Warehousing and freight     (7,986 )     (7,998 )     12       0.2 % Gross profit   $ 16,304     $ 10,851     $ 5,453       50.3 %                                   % of net revenue     10.3 %     8.1 %                 16 Selling, General and Administrative Expenses. The following table sets forth a year-over-year comparison of the Company’s SG&A expenses:         2017 vs. 2016                             2017   2016   $   %     ($ in thousands)             fye SG&A before depreciation and amortization   $ 114,982     $ 120,201       ($5,219)     -4.3% As a % of total fye revenue     42.8%       38.4%             4.4%                               etailz SG&A before depreciation and amortization     39,446       10,464       28,982     277.0% As a % of total etailz revenue     22.6%       26.0%             -3.4%                               Depreciation and amortization     13,496       9,026       4,470     49.5%                               Total SG&A   $ 167,924     $ 139,691     $ 28,233     20.2%                               As a % of total revenue     37.9%       39.5%               TotalSG           Change   (amounts in thousands)   January 30, 2021     February 1, 2020     $     %                         Kaspien SG&A expenses   $ 16,540     $ 16,491     $ 49       0.3 % Corporate SG&A expenses     5,489       8,591       (3,102 )     (36.1 %) Total SG&A expenses   $ 22,029     $ 25,082     $ (3,053 )     (12.2 %)                                   As a % of total revenue     13.9 %     18.8 %                 SG&A expenses increased $28.2decreased $3.1 million, or 12.2%, primarily due to a 36% reduction in in Corporate SG&A expenses. SG&A expenses for etailz and higher amortization expenses. fye Segment Kaspien increased $49,000. SG&A excluding depreciation and amortization, expenses decreased $5.2 million, or 4.3%, primarily as a resultpercentage of lower expenses duenet revenue decreased to fewer stores13.9% as compared to 18.8% in operation. etailz Segment etailz SG&A, excluding depreciation and amortization, expenses for fiscal 2017 were $39.4 million, or 22.6% of etailz revenue. Depreciation and amortization expense. Consolidated depreciation and amortization expense increased $4.5 million primarily due to amortization of intangibles, and the fye segment’s investments in technology enhancements during previous fiscal years. Income from Joint Venture Income from joint venture was $1.8 million during fiscal 2017. Asset Impairment Charge – fye segment. During fiscal 2017, the Company concluded, based on continued operating losses for the fye segment, that a triggering event had occurred, pursuant to FASB ASC 360,Property, Plant, and Equipment,requiring a test of long-lived assets for impairment at its retail stores. Long-lived assets at locations where impairment was determined to exist were written down to their estimated fair values as of the end of fiscal 2017 resulting2019. The decrease in the recordingrate as a percentage of asset impairment charges of $29.1 million. Estimated fair values for long-lived assets at these locations, including store fixtures, equipment, and leasehold improvements were determined based on a measure of discounted future cash flows over the remaining lease terms at the respective locations. Future cash flows were estimated based on store plans and were discounted at a rate approximating the Company’s cost of capital. Management believes its assumptions were reasonable and consistently applied. 29 The Company did not recognize impairment during fiscal 2016 and fiscal 2015. Losses for store closings in the ordinary course of business represent the write down of the net book value of abandoned fixtures and leasehold improvements. The loss on disposal of fixed assets related to store closings was $0.6 million, $1.1 million and $0.6 million in fiscal 2017, 2016 and 2015, respectively, and is included in selling, general and administrative (“SG&A”) expenses in the Consolidated Statements of Operations and loss on disposal of fixed assets in the Consolidated Statements of Cash Flows. Store closings usually occur at the expiration of the lease, at which time leasehold improvements, which constitute a majority of the abandoned assets, are fully depreciated. Interest Expense.Interest expense in fiscal 2017 was $0.3 million, compared to $0.8 million in fiscal 2016. Other Income.Other income was $8.9 million in fiscal 2017 compared to $1.1 million in fiscal 2016. Other income for fiscal 2017 consisted primarily of a gain on insurance proceeds relatedto the death of the Company’s former Chairman. Other income for fiscal 2016 consisted primarily of a gain on the sale of an investment of $0.8 million. Income Tax Benefit. The following table sets forth a year-over-year comparison of the Company’s income tax benefit:         2017 vs 2016     2017     2016     $     ($ in thousands)         Income tax benefit   $ (299)     $ (6,773)     $ 6,474                             Effective tax rate     0.7%       190.1%           The fiscal 2017 income tax benefit includes the refund of alternative minimum tax credits partially offset by state taxes, adjustments to the reserve for uncertain tax positions, and the accrual of interest. The fiscal 2016 income tax expense includes state taxes, adjustments to the reserve for uncertain tax positions, the accrual of interest and an income tax benefit from the etailz, Inc. acquisition.  See Note 11 in the Consolidated Financial Statements for further detail. Net (Loss) Income. The following table sets forth a year-over-year comparison of the Company’s net (loss) income:     2017   2016   $     ($ in thousands)         Net (loss) income   $ (42,553)     $ 3,211     $ (45,764 )                           Net (loss) income as a percentage of total revenue     (9.6%)       0.9%           Net loss was $42.6 million for fiscal 2017, compared to net income of $3.2 million for fiscal 2016. Included in the results for fiscal 2017 is a non-cash charge of $29.1 million which is the result of recording impairment against certain long-lived assets in the fye segment. The increase in net lossrevenue was primarily due to the decline in fye sales and a lower gross margin rate partially offset by an $8.7 million gain on proceeds from company owned life insurance policies. 30 Fiscal Year Ended January 28, 2017 (“fiscal 2016”) Compared to Fiscal Year Ended January 30, 2016 (“fiscal 2015”) Segment Highlights: etailz results included in the tables below are for the period starting from the date of acquisition. ($ in thousands)   Fiscal Year Ended January 28,   Fiscal Year Ended January 30,     2017   2016 Total Revenue                 fye   $ 313,211     $ 339,504   etailz     40,259       -   Total Company   $ 353,470     $ 339,504                     Gross Profit                 fye   $ 124,735     $ 135,415   etailz     9,924       -   Total Company   $ 134,659     $ 135,415                     Income (Loss) From Operations fye   $ (1,932)     $ 4,570   etailz     (1,936)       -   Total Company   $ (3,868)     $ 4,570   Reconciliation of etailz Loss from Operations to etailz Adjusted Income from Operations etailz loss from operations       $ (1,936 )               Acquisition related transaction expenses         2,325   Acquisition related intangible amortization expenses         1,130                 Acquisition related compensation expenses         1,035   Earnout contingency benefit         (1,829 ) etailz adjusted income from operations(1)       $ 725   1. In addition to the results of operations determined in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), we reported non-GAAP adjusted operating income for the etailz segment as shown above. The Company believes that etailz adjusted income from operations as per the segment disclosure, when considered together with its GAAP financial results, provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges. This measure is not a recognized measure of financial performance under GAAP in the United States, and should not be considered as a substitute for operating earnings (losses), net earnings (loss) from continuing operations or cash flows from operating activities, as determined in accordance with GAAP. 31 Total Revenue.The following table sets forth a year-over-year comparison of the Company’s total revenue:         2016 vs 2015     2016     2015     $     % ($ in thousands)                       fye net sales   $ 308,413     $ 334,661     $ (26,248)     (7.8%) etailz net sales     40,259       -       40,259     n/a Other revenue(1)     4,798       4,843       (45)     (0.9%) Total revenue   $ 353,470     $ 339,504     $ 13,966     4.1% 1. Other revenue is comprised of third-party commission income and management fees related to the fye segment. Total revenue increased 4.1% to $353.5 million compared to $339.5 million in fiscal 2015, driven by $40.3 million in net sales from etailz from the date of acquisition, and partially offset by the decline in fye net sales. fye Segment The 7.8% net sales decline from the prior year is due to a 5% decline in total stores in operation and a 3.6% decline in comparable store net sales. Stores closed in fiscal 2016 and fiscal 2015 recorded sales of $21.6 million and $45.2 million, respectively. Total product units sold for fiscal 2016 decreased 7.5%Corporate SG&A expenses and the average retail price for units sold decreased 1.8%. fye net sales by merchandise category for fiscal 2016 and fiscal 2015 were as follows: ($ in thousands)   2016 Net Sales     % Total     2015 Net Sales     % Total     Total  $ Net Sales Change     Total % Net Sales Change     Comparable Store % Net Sales Change                                                             Video(1)     $107,637       34.9%       $140,223       41.9%     $ (32,856 )     (23.4%)       (15.5%)   Trend/lifestyle     98,692       32.0%       74,295       22.2%       24,397       32.8%       30.9%   Music     67,542       21.9%       84,000       25.1%       (16,458 )     (19.6%)       (15.7%)   Electronics     34,542       11.2%       36,143       10.8%       (1,601 )     (4.4%)       0.8%   Total     $308,413       100.0%       $334,661       100.0%     $ (26,248 )     (7.8%)       (3.6%)   1. Includes Video Games category, which represented 0.8% of fye fiscal 2016 net sales. Fiscal 2015 data was adjusted to include this immaterial reclassification. Video fye stores offer a wide rangeleveraging of new and used DVDs, Blu-rays, and 4Ks in a majority of its stores. Total net sales for the video category declined 15.5% on a comparable store sales basis in fiscal 2016. Video sales were negatively impacted by industry wide declines in physical video due to non-physical options. According to Warner Home Video, total video sales in the United States declined 11% during the period corresponding with the Company’s fiscal 2016. 32 Trend/lifestyle fye stores offer a selection of trend products that primarily relate to theatrical releases, music, and gaming. The trend/lifestyle category increased 30.9% on a comparable store sales basis in fiscal 2016. Trend/lifestyle represented 32.0% of the fye’s total net sales in fiscal 2016 versus 22.2% in fiscal 2015. fye continues to take advantage of opportunities to strengthen its selection and shift product mix to growing categories of entertainment-related merchandise. fye grew sales by strengthening its assortment and improving the product presentation and value proposition. Music fye stores offer a wide range of new and used CDs, music DVDs and vinyl across most music genres, including new releases from current artists as well as an extensive catalog of music from past periods and artists. Total net sales in the music category declined 15.7% on a comparable store sale basis in fiscal 2016. fye has offset declines in CD sales by adding vinyl to its stores. According to SoundScan, total CD unit sales in the United States declined 14.0% during the period corresponding with the Company’s fiscal 2016. Electronics fye stores offer a selection of complementary portable electronics and accessories to support our entertainment products. The electronics category increased 0.8% on a comparable store sales basis. Electronics represented 11.2% of the fye’s net sales in fiscal 2016 versus 10.8% in fiscal 2015. etailz Segment etailz recorded sales of $40.2 million from the date of acquisition. etailz generates revenue across a broad array of product lines primarily through the Amazon Marketplace. Gross Profit. The following table sets forth a year-over-year comparison of the Company’s gross profit:         2016 vs 2015     2016     2015     $     % ($ in thousands)                             fye gross profit   $ 124,735     $ 135,415     $ (10,680 )   -7.9% etailz gross profit     9,924       -       9,924     n/a Total gross profit   $ 134,659     $ 135,415     $ (756 )   -0.6% fye gross profit as a % of fye revenue     39.8%       39.9%               etailz gross profit as a % of etailz revenue     24.7%       -               Total gross profit as a % of total revenue     38.1%       39.9%               Gross profit decreased 0.6% to $134.7 million compared to $135.4 million in fiscal 2015 as incremental gross profit from etailz did not offset lower gross profit from fye. fye Segment The decline in gross profit as a percentage of revenue was due to lower sales and higher inventory markdowns to sell off seasonal merchandise. Gross profit as a percentage of fye revenue was 39.8% in fiscal 2016 as compared to 39.9% in fiscal 2015. etailz Segment etailz reported gross profit of $9.9 million from the date of acquisition. etailz gross profit as a percentage of etailz revenue was 24.7%. Selling, General and Administrative Expenses. The following table sets forth a year-over-year comparison of the Company’s SG&A expenses: 33         2016 vs. 2015     2016     2015     $     %       ($ in thousands)               fye SG&A excluding depreciation and amortization     $120,201       $126,177       ($5,976)       -4.7%   As a % of total fye revenue     38.4%     37.2%               1.2%                                     etailz SG&A excluding depreciation and amortization     10,464       -       10,464       n/a   As a % of total etailz revenue     26.0%       -       n/a       n/a                                     Depreciation and amortization     9,026       4,668       4,358       93.4%                                     Total SG&A     $139,691       $130,845       $8,846       6.8%   Kaspien SG&A expenses increased $8.8 million primarily due to expenses for etailz, acquisition related expenses andon the higher depreciationsales. Depreciation and amortization expenses. fye Segment SG&A, excludingexpense. Consolidated depreciation and amortization expenses, decreased $6.0 million, or 4.7%, due to lower performance-based compensation and lower expenses due to fewer stores in operation. Included in fiscal 2015 miscellaneous income items was a one-time reimbursement of expenses incurred in prior years, related to a legal settlement of $1.4 million. etailz Segment etailz SG&A, excluding depreciation and amortization expenses, was $10.5 million from the date of acquisition, which primarily includes commission fees, payroll costs, and acquisition related expenses. Depreciation and amortization Depreciation and amortization expense increased $4.4 million due to intangible assets amortization resulting from$0.3 million. Asset Impairment Charges. During fiscal 2019, the etailzacquisition, investments in technology enhancements, new and remodeled storesCompany fully impaired its vendor relationships, and the chain wide rolloutCompany recognized an impairment loss of new marketplace fixtures to support the shift in merchandising assortment. Gain on Sale of Asset.The gain on sale of asset of $1.2 million represented the sale of property located in St. Louis, Missouri. The gain represents cash proceeds of $2.8 million less carrying value of $1.6$0.8 million. Interest Expense.Interest expense in fiscal 20162020 was $0.8$1.7 million, compared to $1.9interest income of $0.7 million in fiscal 2015, as the Company’s capital lease obligation ended in fiscal 2015. Other Income.Other income was $1.1 million in fiscal 2016 compared to $160 thousand in fiscal 2015. Other income for fiscal 2016 consisted primarily of a gain on the sale of an investment of $800 thousand. 2019. Income Tax Expense.(Benefit) expense.    The following table sets forth a year-over-year comparison of the Company’s income tax expense: ($ in thousands)           2016 vs. 2015     2016   2015   $ Income tax expense (benefit)   $(6,773)   $181   $(6,954)               Effective tax rate   190.1%   6.30%     (amounts in thousands)               Change       January 30, 2021     February 1, 2020      $                         Income tax (benefit) expense   $ (3,542 )   $ 44     $ (3,586 )                           Effective tax rate     (47.6 %)     0.3 %     (47.9 %) During fiscal 2020, based on the Company’s evaluation of new information that occurred in the current financial reporting period, the Company recorded an income tax benefit of $3.5 million related to the recognition of previously unrecognized income tax benefits pursuant to ASC 740-10-25, Accounting for Income Taxes – Recognition. Prior to the current financial reporting period, the Company had accrued the liabilities for unrecognized income tax benefits, including accrued interest and penalties related to tax positions created by the fye business.  As a result of the FYE Transaction and a reorganization of the Company’s corporate structure, the Company will not utilize the tax attributes attributable to the tax positions and the corporate entities associated with the tax positions have been liquidated. The fiscal 2016 and 20152019 income tax expense includes state taxes adjustments toand the accrual of interest on the reserve for uncertain tax positionspositions. ,Loss From Discontinued Operations.  For fiscal 2019, the accrualCompany recognized a loss from discontinued operations of interest, and an income tax benefit from$44.4 million related to the etailz, Inc. acquisition.  FYE Transaction. See note 11 tpNote 2 to the Consolidated Financial Statements for further detail. 34 more information on the loss from discontinued operations. 17 Net Income.Loss.   The following table sets forth a year-over-year comparison of the Company’s net income: ($ in thousands)           2016 vs. 2015     2016   2015   $               Net income   $3,211 $2,689   $522               Net income as a percentage of total revenue   0.9% 0.8%   loss: (amounts in thousands)               Change       January 30, 2021     February 1, 2020      $                         Net loss   $ (3,892 )   $ (58,744 )   $ 54,852                             Net loss as a percentage of Net revenue     (2.5 %)     (44.1 %)         Net income for fiscal 2016 increased by $522 thousand to $3.2 million, as compared to $2.7loss was $3.9 million for fiscal 2015. 35 2020, compared to $58.7 million for fiscal 2019. Included in the results for fiscal 2019 is a loss from the fye business of $44.4 million.  The decrease in net loss was primarily due to improved loss from operations and the elimination of the loss from fye business. LIQUIDITY AND CAPITAL RESOURCES Liquidity and Cash Flows: The consolidated financial statements for the year ended January 30, 2021 were prepared on the basis of a going concern which contemplates that the Company will be able to realize assets and satisfy liabilities and commitments in the normal course of business. The ability of the Company to meet its liabilities and to continue as a going concern is dependent on improved profitability, the continued implementation of the strategic initiative to reposition the Company as a platform of software and services, the availability of future funding and overcoming the impact of the COVID-19 pandemic. The audited consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Company incurred net losses of $3.9 million and $58.7 million for the fiscal 2020 and fiscal 2019, respectively, and has an accumulated deficit of $112.9 million as of January 30, 2021.  In addition, net cash used in operating activities during fiscal 2020 was $13.6 million. Net cash used in operating activities during fiscal 2019 was $15.8 million. During the third quarter of fiscal 2019, in response to recurring losses from operations, the expectation of continuing operating losses, and uncertainty with respect to any available future funding, the Company pursued several strategic initiatives towards its strategy of shifting its focus solely to the operation of Kaspien, improving profitability and meeting future liquidity needs and capital requirements.  Initiatives completed during the first quarter of fiscal 2020 include: The sale of the For Your Entertainment (fye) business; The establishment of a new secured $25 million revolving credit facility with Encina: The execution of a separate subordinated loan agreement for Kaspien, Inc. (the “Subordinated Loan”); and The receipt by Kaspien, Inc. of loan proceeds pursuant to the Paycheck Protection Plan under the Coronavirus Aid, Relief, and Economic Security Act. There can be no assurance that we will be successful in further implementing our business strategy or that the strategy, including the completed initiatives, will be successful in sustaining acceptable levels of sales growth and profitability.  In addition, the proceeds from the PPP Loan are subject to audit and there is a risk of repayment. The Company’s primary sources of working capitalliquidity are cash provided by operations andits borrowing capacity under its revolving credit facility. The Company’sNew Credit Facility, available cash flows fluctuateand cash equivalents, and to a lesser extent, cash generated from quarteroperations. Our cash requirements relate primarily to quarter dueworking capital needed to various items,operate Kaspien, including seasonalityfunding operating expenses, the purchase of sales and earnings, merchandise inventory purchases and returns, common stock purchases and capital expenditures. Management believes itOur ability to achieve profitability and meet future liquidity needs and capital requirements will have adequate resourcesdepend upon numerous factors, including the timing and amount of our revenue; the timing and amount of our operating expenses; the timing and costs of working capital needs; successful implementation of our strategy and planned activities; and our ability to fundovercome the impact of the COVID-19 pandemic. On March 18, 2021, the Company closed an underwritten offering of 416,600 shares of common stock of the Company, at a price to the public of $32.50 per share. The gross proceeds of the offering were approximately $13.5 million, prior to deducting underwriting discounts and commissions and estimated offering expenses. The Company intends to use the net proceeds from the offering for general corporate purposes, including working capital to implement its cash needs forstrategic plans focused on brand acquisition, investments in technology to enhance its scalable platform and its core retail business. In addition to the foreseeable future, includingaforementioned current sources of existing working capital, the Company is continuing its capital spending, its seasonalefforts to generate additional sales and increase in merchandise inventory and other operating cash requirements and commitments. Management anticipatesmargins. There can be no assurance that any cash requirements due to a shortfall in cash from operationsof the initiatives or strategic alternatives will be funded by the Company’s revolving credit facility, discussed hereafter. Cash flows from investing activities are expected to be comprised primarily of capital expenditures during fiscal 2018. The Company does not expect any material changes in the mix (between equity and debt)implemented, successful or the relative cost of capital resources. consummated. 18 The following table sets forth a three-yeartwo-year summary of key components of cash flow and working capital:   ($ in thousands)   2017   2016   2017 vs. 2016   2015   2016 vs. 2015   Operating Cash Flows   $ (13 )   $ 4,436     $ (4,449 )   $ 7,963     $ (3,527 )   Investing Cash Flows     4,482       (57,333 )     61,815       (20,185 )     (37,148 )   Financing Cash Flows     (5,040 )     (7,337 )     2,297       (2,004 )     (5,333 )                                               Capital Expenditures     (8,407 )     (24,672 )     16,265       (20,700 )     (3,972 )                                               End of Period Balances:                                                                                       Cash, Cash Equivalents, and Restricted Cash     43,506   (1)   44,077       (571 )     104,311       (60,234 )                                               Merchandise Inventory     109,112       126,004       (16,892 )     120,046       5,958                                                 Merchandise Inventory Per Square Foot - fye     59.9       68.8               69.4                                                         Inventory leverage - fye     44.0       40.2       3.8       43.2       (3.0 )   Inventory turns - fye     1.5       1.5               1.6             Working Capital     93,327       98,601       (5,774 )     161,142       (62,541 )                                             (1) Cash and cash equivalents per Consolidated Balance Sheets   $ 31,326     $ 27,974                                                                         Add: Restricted cash     12,180       16,103                             Cash, cash equivalents, and restricted cash   $ 43,506     $ 44,077                           (amounts in thousands)     2020     2019     2020 vs. 2019   Operating Cash Flows     $ (13,391 )   $ (15,827 )   $ 2,436   Investing Cash Flows       10,589       (2,696 )     13,285   Financing Cash Flows       505       13,149       (12,644 )                             Capital Expenditures       (1,190 )     (2,823 )     1,633                               End of Period Balances:                           Cash, Cash Equivalents, and Restricted Cash (1)      6,555       8,852       (2,297 ) Merchandise Inventory       24,515       17,836       6,679   Working Capital       10,762       9,004       1,758   (1)  Cash and cash equivalents per Consolidated Balance Sheets   $ 1,809     $ 2,977       (1,168 )   Add: Restricted cash     4,746       5,875       (1,129 )   Cash, cash equivalents, and restricted cash   $ 6,555     $ 8,852       (2,297 ) During fiscal 2017,2020, cash used in operations was $13 thousand$13.4 million compared to $15.8 million in fiscal 2019.  During 2020, cash used in operations consisted primarily due toof a net loss of $42.6$3.9 million, adding backan increase of $6.7 million in inventory and the payment of $5.5 million in accounts payable partially offset by a decrease in prepaid expenses and accounts receivables.  During 2019, cash used in operations consisted primarily of a net loss of $58.7 million offset by non-cash charges, including the $24.0 million impairment of long-lived assets, a $12.7 inventory net realizable adjustment and $11.5 million in depreciation and amortization and changes in operating assets and liabilities of $14.1 million, loss on fixed assets impairment$6.5 million.  See the Consolidated Statement of $29.1 million, non-cash compensation of $3.1 million, decrease in merchandise inventory of $16.9 million, and a decrease in accounts receivable and other current assets of $3.9 million, less the adjustment to the contingent consideration liability of $3.3 million, the gain on insurance proceeds of $8.7 million, and reductions in accounts payable and deferred revenue of $10.5 million and $1.3 million, respectively. During fiscal 2016, cash flow from operations was $4.4 million primarily due to net income of $3.2 million, plus depreciation and amortization of $9.3 million, less a deferred tax benefit of $7.0 million. Cash Flows for further detail. The Company monitors various statistics to measure its management of inventory, including inventory turnover (annual cost of sales divided by average merchandise inventory balances), inventory investment per square foot (merchandise inventory divided by total store square footage) and inventoryaccounts payable leverage (accounts payable divided by merchandise inventory). 36 Inventory turnover measures the Company’s ability to sell merchandise and how many times it is replaced in a year. This ratio is important in determining the need for markdowns and planning future inventory levels and assessing customer response to our merchandise.  For the fye segment, inventoryInventory turnover in fiscal 20172020 and in fiscal 20162019 was 1.5. For the etailz segment, inventory turnover in fiscal 2017 was 4.5. Inventory investment per square foot measures the productivity of the inventory. It is important in determining if the Company has the appropriate level of inventory to meet customer demands while controlling its investment in inventory. Inventory investment per square foot in the fye segment was $60 per square foot at the end of fiscal 2017 as compared to $69 per square foot at the end of fiscal 2016.4.0 and 3.3, respectively.  Accounts payable leverage measures the percentage of inventory being funded by the Company’s product vendors.  The percentage is important in determining the Company’s ability to fund its business.  Accounts payable leverage on inventory for the fye segmentKaspien was 44.0%36.3% as of January 30, 2021 compared with 29.2% as of February 3, 2018 compared with 40.2% as of January 28, 2017. Accounts payable leverage on inventory for the etailz segment was 16.6% as of February 3, 2018. 1, 2020. Cash provided by investing activities was $4.5$10.6 million in fiscal 2017,2020, compared to cash flows used byin investing activities of $57.3$2.7 million in fiscal 2016.2019.  During fiscal 2017,2020, cash provided by investing activities consisted of Company owned life insurance proceeds of $14.4 million, and $1.1 million in capital distributions received from the joint venture, less $8.4sale of the fye business of $11.8 million, partially offset by capital expenditures of $1.2 million.  During fiscal 2019, cash used in investing activities consisted of $2.8 million in capital expenditures andpartially offset by a $2.6 million investment in$127,000 capital distribution from a joint venture. During fiscal 2016, the primary uses of cash in investing activities were the investment in etailz of $36.6 million and capital expenditures of $24.7 million offset by proceeds from sale of St. Louis property and sale of miscellaneous investments. The Company has historically financed its capital expenditures through borrowings under its revolving credit facility select financing arrangements and cash flow from operations.  The Company anticipates capital spending of approximately $3$1.7 million in fiscal 2018 as the Company has made the majority of its planned capital investments. 2021. Cash used inprovided by financing activities was $5.0$505,000 in fiscal 2020, compared to $13.1 million in fiscal 2017, compared to $7.32019.  In fiscal 2020, cash provided by financing activities consisted of $6.3 million in fiscal 2016.proceeds from short term borrowings, $5.1 million in proceeds from long term borrowings, $2.0 million in proceeds from a PPP loan, partially offset by $13.1 million in payment of short-term borrowings. In fiscal 2017,2019, cash used inprovided by financing activities was primarily comprised of a $5.0 million payment to the etailz shareholders in connection with the amendment to the share purchase agreement. In fiscal 2016, the primary uses of cash in financing activities were the payment of etailz’s outstanding line of credit of $4.7 million and common stock repurchases of $2.6 million. In January 2017, the Company amended and restated its revolving credit facility (“Credit Facility”). The Credit Facility provides for commitments of $50 million subject to increase up to $75 million during the months of October to December of each year, as needed. The availability under the Credit Facility is subject to limitations based on receivables and inventory levels. The principal amount of all outstanding loans under the Credit Facility together with any accrued but unpaid interest, are due and payable in January 2022, unless otherwise paid earlier pursuant to the terms of the Credit Facility. Payments of amounts due under the Credit Facility are secured by the assets of the Company. During fiscal 2017, the Company exercised the right to increase its availability to $60 million subject to the same limitations noted above. The Credit Facility contains customary affirmative and negative covenants, including restrictions on dividends and share repurchases, incurrence of additional indebtedness and acquisitions and covenants around the net number of store closings and restrictions related to the payment of cash dividends and share repurchases, including limiting the amount of dividends to $5.0 million annually and not allowing borrowings under the amended facility for the six months before or six months after the dividend payment. The Credit Facility also includes customary events of default, including, among other things, material adverse effect, bankruptcy, and certain changes of control. As of February 3, 2018, the Company was compliant with all covenants. Interest under the Credit Facility will accrue, at the election of the Company, at a Base Rate or LIBO Rate, plus, in each case, an Applicable Margin, which is determined by reference to the level of availability, with the Applicable Margin for LIBO Rate loans ranging from 1.75% to 2.00% and the Applicable Margin for Prime Rate loans ranging from 0.75% to 1.00%. In addition, a commitment fee of 0.25% is also payable on unused commitments. As of February 3, 2018 and January 28, 2017, the Company did not have any borrowings under the Credit Facility. Peak borrowings under the Credit Facility during fiscal 2017 and fiscal 2016 were $11.7 million and $21.5 million, respectively. 37 short-term borrowings. As of February 3, 2018 and January 28, 2017, the Company had no outstanding letters of credit. The Company had $41 million and $39 million available for borrowing under the Credit Facility as of February 3, 2018 and January 28, 2017, respectively. Off-Balance Sheet Arrangements.The Company has no off-balance sheet arrangements as defined by Item 303 (a) (4) of Regulation S-K. Contractual Obligations and Commitments. The following table summarizes the Company’s contractual obligations as of February 3, 2018, and the effect that such obligations are expected to have on liquidity and cash flows in future periods. Contractual Obligation   2018     2019- 2020     2021- 2022     2023- 2027     Total   $ in thousands                                                               Operating lease and maintenance agreement obligations   $ 25,308     $ 17,832     $ 6,550     $ 965     $ 50,655   Asset retirement obligations(1)     2,014       247       231       11       2,503   Pension  benefits(2)     1,199       2,391       2,333       6,510       12,433   Total   $ 28,521     $ 20,470     $ 9,114     $ 7,486     $ 65,591   (1) Asset retirement obligations are estimated costs associated with the fixed assets and leasehold improvements at the Company’s store locations that arise under the terms of operating leases. (2) In addition to the scheduled pension benefit payments, the Company offers 401(k) Savings Plans to eligible employees (see also Note 10 of the Consolidated Financial Statements in this report). 19 Related Party Transactions. The Company leases its 181,300 square foot distribution center/office facility in Albany, New York from an entity controlled by Directors Jonathan Marcus, Thomas Simpson, and Michael Reickert are the estatechief executive officer of Alimco Re Ltd. (“Alimco”), the managing member of Kick-Start III, LLC and Kick-Start IV, LLC (“Kick-Start”), and a trustee of the Robert J. Higgins its former ChairmanTWMC Trust (the “Trust”), an affiliate of RJHDC, LLC (“RJHDC” and largest shareholder.together with Alimco and Kick-Start, “Related Party Entities”), respectively.  The original distribution center/office facility was occupied in 1985. On December 4, 2015,Related Party Entities are parties to the following agreements with the Company amendedentered into on March 30, 2020: Subordinated Loan and restatedSecurity Agreement, pursuant to which the lease. The lease commenced January 1, 2016,Related Party Entities made a $5.2 million secured term loan ($2.7 million from Alimco, $0.5 million from Kick-Start, and expires$2.0 million from RJHDC) to Kaspien with a scheduled maturity date of May 22, 2023, interest accruing at the rate of twelve percent (12%) per annum and compounded on December 31, 2020. Under the new lease dated December 4, 2015,last day of each calendar quarter by becoming a part of the principal amount, and accounted for as an operating lease,secured by a second priority security interest in substantially all of the assets of the Company paid $1.2 million in both fiscal 2017 and fiscal 2016. Under the lease priorKaspien; Common Stock Purchase Warrants (“Warrants”), pursuant to December 4, 2015,which the Company paid annual rentissued warrants to purchase up to 244,532 shares of $2.1 millionCommon Stock to the Related Party Entities (127,208 shares for Alimco, 23,401 shares for Kick-Start, and 93,923 shares for RJHDC), subject to adjustment in fiscal 2015. Underaccordance with the terms of the lease agreement,Warrants, at an exercise price of $0.01 per share.  As of April 15, 2021, 236,993 warrants were exercised by the Related Party Entities and 7,539 remained outstanding; Contingent Value Rights Agreement (the “CVR Agreement”), pursuant to which the Related Party Entities received contingent value rights (“CVRs”) representing the contractual right to receive cash payments from the Company is responsiblein an amount equal, in the aggregate, to 19.9% of the proceeds (10.35% for property taxesAlimco, 1.90% for Kick-Start, and other operating costs7.64% for RJHDC) received by the Company in respect of certain intercompany indebtedness owing to it by Kaspien and/or its equity interest in Kaspien; and Voting Agreement (the “Voting Agreement”), pursuant to which the Related Party Entities, the Trust, Mr. Simpson and their respective related entities agreed to how their respective shares of the Company’s capital stock held by the parties will be voted with respect to the premises. Sara Neblett,designation, election, removal, and replacement of members of the wifeBoard. Pursuant to the Voting Agreement, Messrs. Marcus and Simpson were appointed as directors of Josh Neblett, the Executive Advisor of etailz, was employed with the Company, and Mr. Reickert, a trustee of the Trust, remained as a director of the Vice President of Partner Care of etailz.  Ms. Neblett received $165,250 in cash compensation during fiscal 2017. 38 Company. Mr. Subin was also granted board observer rights. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires that management apply accounting policies and make estimates and assumptions that affect results of operations and the reported amounts of assets and liabilities in the financial statements.  Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances.  Actual results may differ from these estimates under different assumptions or conditions.  Note 1 of the Notes to the Consolidated Financial Statements in this report includes a summary of the significant accounting policies and methods used by the Company in the preparation of its consolidated financial statements. Management believes that of the Company’s significant accounting policies and estimates, the following involve a higher degree of judgment or complexity: Merchandise Inventory and Return Costs:Costs. Merchandise inventory is stated at the lower of cost or marketnet realizable value under the average cost method. The average cost method attaches a cost to each item and is a blended average of the original purchase price and those of subsequent purchases or other cost adjustments throughout the life cycle of that item. Inventory valuation requires significant judgment and estimates, including obsolescence shrink and any adjustments to market value;net realizable value, if marketnet realizable value is lower than cost.  Inherent in the entertainment products industry is the risk of obsolete inventory.  Typically, newer media releases generate a higher product demand.  Some media vendors offer credits to reduce the cost of products that are selling more slowly, thus allowing for a reduction in the selling price and reducing the possibility for items to become obsolete.  For all merchandise categories, the Company records obsolescence and any adjustments to marketnet realizable value (if lower than cost) based on current and anticipated demand, customer preferences, and market conditions. The provision for inventory shrink is estimated as a percentage of sales for the period from the last date a physical inventory was performed to the end of the fiscal year.  Such estimates are based on historical results and trends and the shrink results from the last physical inventory.  Physical inventories are taken at least annually for all stores and the distribution center throughout the year and inventory records are adjusted accordingly. Shrink expense, including obsolescence was $5.4 million, $5.9 million and $4.7 million, in fiscal 2017, fiscal 2016 and fiscal 2015, respectively.  As a rate to total revenue, this equaled 1.2%, 1.7% and 1.4%, respectively.  Presently, a 0.1% change in the rate of shrink provision would equal approximately $0.2 million in additional charge or benefit to cost of sales, based on fiscal 2017 net sales since the last physical inventories. The Company is generally entitled to return merchandise purchased from major music and video vendors for credit against Long-Lived Assets other purchases from these vendors. Certain vendors reduce the credit with a per unit merchandise return charge which varies depending on the type of merchandise being returned. Certain other vendors charge a handling fee based on units returned. The Company records merchandise return charges in cost of sales. The Company incurred merchandise return charges in fiscal 2017, fiscal 2016 and fiscal 2015 of $0.4 million, $0.6 million and $0.5 million, respectively. Income Taxes: Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. Accounting for income taxes requires management to make estimates and judgments regarding interpretation of various taxing jurisdictions, laws and regulations as well as the ultimate realization of deferred tax assets. These estimates and judgments include the generation of future taxable income, viable tax planning strategies and support of tax filings. In assessing the value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management considers the scheduled reversal of taxable temporary differences, projected future 39 taxable income and tax planning strategies in making this assessment. Based on the available objective evidence, management concluded that a full valuation allowance should be recorded against its net deferred tax assets as of February 3, 2018. In late 2017, new tax legislation was enacted in the United States (Tax Reform Act) which resulted in significant changes to income tax expense.  As a result of the Tax Reform Act, the Company re-measured certain deferred tax assets and liabilities based on the newly enacted federal rate of 21%.  Accordingly, the federal net deferred tax assets were written down to account for the change. Goodwill and Intangible Assets:Our goodwill results from our acquisition of etailz and represents the excess purchase price over the net identifiable assets acquired. All of our goodwill is associated with etailz, a separate reporting unit, and there is no goodwill associated with our other reporting unit, fye. Goodwill is not amortized and we are required to evaluate our goodwill for impairment at least annually or whenever indicators of impairment are present. Our annual test is completed during the fourth fiscal quarter, and interim tests are conducted when circumstances indicate the carrying value of the goodwill or other intangible assets may not be recoverable.  Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is possible that these judgments and estimates could change in future periods. The determination of the fair value of intangible assets and liabilities acquired in a business acquisition, including the Company’s acquisition of etailz in 2016, is subject to many estimates and assumptions. Our identifiable intangible assets that resulted from our acquisition of etailz consist of vendor relationships, technology and tradenames. We review amortizable intangible asset groups for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Long Lived Assets.Goodwill: Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset over its remaining useful life.  If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the assets.  Fair value is generally measured based on discounted estimated future cash flows. Assets to be disposed of would be separately presented in the Consolidated Balance Sheets and reported at the lower of the carrying amount or fair value less disposition costs. ForAs of January 30, 2020, for the purposepurposes of the asset impairment test, the fye segmentCompany has multipleone asset groupings – corporate and individual store level assets. grouping. During fiscal 2017,2019, the Company concluded, based on continued operating losses for the fye segment,Kaspien that a triggering event had occurred, and pursuant to FASB ASC 360,Property, Plant, and Equipmentrequiring a test, an evaluation of long-livedthe Kaspien fixed assets and intangible assets for impairment at its retail stores. Long-livedwas required.  For fiscal 2019, intangible assets at locations where impairment was determinedrelated to existvendor relationships were written down to their estimated fair values as of the end of fiscal 2017fully impaired resulting in the recordingrecognition of asset impairment charges of $29.1$0.8 million. Estimated fair values for long-lived assets at these locations, including store fixtures, equipment, and leasehold improvements were determined based on a measure of discounted future cash flows over the remaining lease terms at the respective locations. Future cash flows were estimated based on store plans and were discounted at a rate approximating the Company’s cost of capital. Management believes its assumptions were reasonable and consistently applied. The Company did not recognize impairment during fiscal 2016 and fiscal 2015. Losses for store closings in the ordinary course of business represent the write down of the net book value of abandoned fixtures and leasehold improvements. The loss on disposal of fixed assets related to store closings was $0.6 million, $1.1 million and $0.6 million in fiscal 2017, 2016 and 2015, respectively, and is included in selling, general and administrative (“SG&A”) expenses in the Consolidated Statements of Operations and loss on disposal of fixed assets in the Consolidated Statements of Cash Flows. Store closings 40 usually occur at the expiration of the lease, at which time leasehold improvements, which constitute a majority of the abandoned assets, are fully depreciated. Recently Issued Accounting Pronouncements. The information set forth above may be found under Notes to Consolidated Statements, Note 2, which is incorporated herein by reference. 4. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company does not hold any financial instruments that expose it to significant market risk and does not engage in hedging activities. To Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required under the extent the Company borrows under its revolving credit facility, the Company is subject to risk resulting from interest rate fluctuations since interest on the Company’s borrowings under its credit facility can be variable. If interest rates on the Company’s revolving credit facility were to increase by 25 basis points, and to the extent borrowings were outstanding, for every $1,000,000 outstanding on the facility, income before income taxes would be reduced by $2,500 per year. Information about the fair valuerequirements of financial instruments is included in Note 1 of Notes to the Consolidated Financial Statements in this report. a Smaller Reporting Company. 20 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The indexExhibits and financial statement schedules to the Company’s Consolidated Financial Statements is included in Item 15, and the Consolidated Financial Statements follow the signature page to this report and are incorporated herein by reference. The quarterly results of operations are included herein in Note 1416 of Notes to the Consolidated Financial Statements in this report. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. Item 9A. CONTROLS AND PROCEDURES Item 9A. CONTROLS AND PROCEDURES Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures:Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Based on this evaluation, our principal executive officer and our principal financial officer concluded that the Company’s disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and as of the end of the period covered by this annual report, our disclosure controls and procedures were effective, in that they provide reasonable assurance that information required to be disclosed by us in the reports we file or submit, under the Exchange Act, is recorded, processed, summarized, as appropriate, to allow timely decisions regarding required disclosure and reported within the time period specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to management including the principal executive officer and principal financial officer. Management’s Report on Internal Control Over Financial Reporting:  Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d – 15(f) under the 41 Exchange Act, as amended). Under the supervision and with the participation of the Company’s management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) inInternal Control-Integrated Framework (2013). Based on our evaluation under the framework inInternal Control-Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of February 3, 2018. January 30, 2021. Changes in Controls and Procedures:The acquisition of etailz, Inc. was significant to the Company and was consummated effective October 17, 2016. Upon consummation of the acquisition, etailz, Inc. became a consolidated subsidiary of the Company. As of February 3, 2018 etailz operations are fully incorporated within the Company, including internal controls over financial reporting. In connection with the foregoing evaluation by the Company’s Chief Executive Officer and Chief Financial Officer, other than as noted above,January 30, 2021, there have been no changes in the Company’s internal controls over financial reporting that occurred during fiscal 20172020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.   We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness. Item 9B.Other Information Item 9B. OTHER INFORMATION No events have occurred which would require disclosure under this Item. Item 9B. PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information required by this item is incorporated by reference from the information to be included in the Proxy Statement for our 20182021 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A with the SEC on or about May 29, 2018,30, 2021, which information is incorporated by reference. Code of Ethics We have adopted the Trans World Entertainment Corporation Code of Ethics that applies to all officers, directors, employees and consultants of the Company. The Code of Ethics is intended to comply with Item 406 of Regulation S-K of the Securities Exchange Act of 1934 and with applicable rules of The NASDAQ Stock Market, Inc. Our Code of Ethics is posted on our Internet website under the “Corporate” page. Our Internet website address is www.twec.com. To the extent required by the rules of the SEC and NASDAQ, we will disclose amendments and waivers relating to our Code of Ethics in the same place on our website. Item 11. EXECUTIVE COMPENSATION Item 11. EXECUTIVE COMPENSATION Information required by this item is incorporated by reference from the information to be included in the Proxy Statement for our 2021 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A with the SEC on or about May 29, 2018,30, 2021, which information is incorporated by reference. 42 21 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS Certain information required by this item is incorporated by reference from the information to be included in the Proxy Statement for our 20182021 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A with the SEC on or about May 29, 2018,30, 2021, which information is incorporated by reference. The following table contains information about the Company’s Common Stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s equity compensation plans as of February 3, 2018: Plan Category Number of Shares to be Issued upon Exercise of Outstanding Options, Warrants and Rights(1) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Outstanding Options, Warrants and Rights) Equity Compensation Plan Approved by Shareholders 2,764,341 $3.06 1,311,164 Equity Compensation Plans and Agreements not Approved  by Shareholders — — — (1) Includes 178,427 deferred shares which may be issued for no consideration. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR   INDEPENDENCE Information required by this item is incorporated by reference from the information to be included in the Proxy Statement for our 20182021 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A with the SEC on or about May 30, 2018,2021, which information is incorporated by reference. Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Information required by this item is incorporated by reference from the information to be included in the Proxy Statement for our 2021 Annual Meeting of Shareholders to be filed pursuant to Regulation 14A with the SEC on or about May 29, 2018,30, 2021, which information is incorporated by reference. 43 PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 15(a) (1) Financial Statements The Consolidated Financial Statements and Notes are listed in the Index to Consolidated Financial Statements on page F-1 of this report. 15(a) (2) Financial Statement Schedules Consolidated Financial Statement Schedules not filed herein have been omitted as they are not applicable or the required information or equivalent information has been included in the Consolidated Financial Statements or the notes thereto. 15(a) (3) Exhibits Exhibits are as set forth in the “Index“ Index to Exhibits” which follows the Notes to the Consolidated Financial Statements and immediately precedes the exhibits filed. Item 16. Form 10-K Summary 44Item 16. Form 10-K Summary None. 22 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.   KASPIEN HOLDINGS INC. Date:   April 30, 2021 TRANS WORLD ENTERTAINMENT CORPORATIONBy:  /s/ Kunal Chopra   Date:   May 4, 2018 By:  /s/ Michael Feurer Michael Feurer Chief Kunal Chopra Principal Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date  /s/ Michael FeurerKunal Chopra Chief Executive Officer and Director May 4, 2018April 30, 2021  (Michael Feurer)(Kunal Chopra) (Principal Executive Officer)Officer         /s/ John AndersonEdwin Sapienza Chief Financial Officer May 4, 2018April 30, 2021 (John Anderson)Edwin Sapienza) (Principal Financial and Chief Accounting Officer)         /s/ Martin HanakaJonathan Marcus      (Martin Hanaka)(Jonathan Marcus) Director May 4, 2018April 30, 2021        /s/Robert Marks  (Robert Marks) Director May 4, 2018 /s/ Michael Nahl  (Michael Nahl) Director May 4, 2018 /s/ Michael Reickert      (Michael Reickert) Director May 4, 2018April 30, 2021       /s/ Michael B.  SolowTom Simpson      (Michael B. Solow)(Tom Simpson) Director May 4, 2018April 30, 2021 45 23 TRANS WORLD ENTERTAINMENT CORPORATION INDEX KASPIEN HOLDINGS INC.  TO CONSOLIDATED FINANCIAL STATEMENTS   Form 10-K Page No.         Reports of Independent Registered Public Accounting Firm F-2 25     Consolidated Financial Statements       Consolidated Balance Sheets as of January 30, 2021 and February 1, 2020 27     Consolidated Balance Sheets at February 3, 2018 and January 28, 2017 F-3 Consolidated Statements of Operations - fiscal years ended February 3, 2018, January 28, 2017, and January 30, 20162021 and February 1, 2020 F-4 28     Consolidated Statements of Comprehensive Loss - fiscal years ended January 30, 2021 and February 1, 2020 29     Consolidated Statements of Comprehensive Income (Loss) - fiscal years ended February 3, 2018, January 28, 2017, and January 30, 2016 F-5 Consolidated Statements of Shareholders’ Equity - fiscal years ended February 3, 2018, January 28, 2017, and January 30, 20162021 and February 1, 2020 F-6 30     Consolidated Statements of Cash Flows - fiscal years ended February 3, 2018, January 28, 2017, and January 30, 20162021 and February 1, 2020 F-7 31     Notes to Consolidated Financial Statements F-8 32 F-1 24  Index Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors and Stockholders of Kaspien Holdings, Inc. (f/k/a Trans World Entertainment Corporation: Corporation) Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheetssheet of Trans World Entertainment CorporationKaspien Holdings, Inc. and subsidiaries (the Company)(“the Company”) as of February 3, 2018January 30, 2021, and January 28, 2017, the related consolidated statements of operations, comprehensive income (loss),loss, shareholders’ equity, and cash flows for each of the fiscal years in the three-year periodyear ended February 3, 2018,January 30, 2021, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 3, 2018 and January 28, 2017,30, 2021, and the results of its operations and its cash flows for each of the fiscal years in the three-year periodyear then ended, February 3, 2018, in conformity with U.S.accounting principles generally accepted accounting principles. in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidatedthe Company’s financial statements based on our audits.audit. We are a public accounting firm registered with thePublic Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our auditsaudit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Valuation of inventory costs and reserves Description of the Critical Audit Matter As discussed in Note 1 to the financial statements, the Company periodically assess and estimates its allowances and reserves for stagnant, unfulfillable, or obsolete inventory based on current and anticipated demand, customer preference, or market conditions. Also discussed in Note 1 to the financial statements, the cost of inventory includes certain costs associated with preparation of inventory for resale, including inbound freight and handling costs. The recognition and evaluation of inventory costs and reserves involves significant complexity and judgment in applying the relevant accounting standards when auditing management’s estimates and conclusions on inventory transactions. How the Critical Audit Matter Was Addressed in the Audit Our principal audit procedures to evaluate management’s calculation of capitalized inventory costs and reserves included, among other procedures, the following: We evaluated the appropriateness and consistency of management’s methods and assumptions used in the identification, recognition, and measurement of the inventory costs and reserves in considering applicable generally accepted accounting standards. We tested the significant inputs, sampled underlying transactions, and analyzed historical trends associated with management’s reserve estimates and recognition of inbound costs. We evaluated whether management had appropriately considered new information that could significantly change the measurement or disclosure of the inventory valuation, and evaluated the disclosures related to the financial statement impacts of the transactions. /s/ Fruci & Associates II, PLLC We have served as the Company’s auditor since 2020. Spokane, Washington April 30, 2021 25  Index Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Kaspien Holdings Inc. Opinion on the Consolidated Financial Statements We have audited, before the effects of the adjustments to retrospectively apply the changes in accounting described in Note 1 – Nature of Operations and Summary of Significant Accounting Policies (Segment Information) and Note 2 – Discontinued Operations, the consolidated balance sheet of Kaspien Holdings Inc. (f/k/a Trans World Entertainment Corporation) and subsidiaries (the Company) as of February 1, 2020, the related consolidated statements of operations, comprehensive loss, shareholders’ equity, and cash flows for the fiscal year ended February 1, 2020, and the related notes (collectively, the consolidated financial statements). The 2020 consolidated financial statements before the effects of the adjustments described in Note 1 – Nature of Operations and Summary of Significant Accounting Policies (Segment Information) and Note 2 – Discontinued Operations are not presented herein. In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the changes in accounting described in Note 1 – Nature of Operations and Summary of Significant Accounting Policies (Segment Information) and Note 2 – Discontinued Operations, present fairly, in all material respects, the financial position of the Company as of February 1, 2020, and the results of its operations and its cash flows for the fiscal year ended February 1, 2020, in conformity with U.S. generally accepted accounting principles. We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the changes in accounting described in Note 1 – Nature of Operations and Summary of Significant Accounting Policies (Segment Information) and Note 2 – Discontinued Operations and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company continues to experience recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, anOur audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our auditsaudit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provideaudit provides a reasonable basis for our opinion. /s/ KPMG LLP We have served as the Company’s auditor since 1994. from 1994 to 2020. Albany, NYNew York May 4, 2018 June 15, 2020 F-2 26  Index TRANS WORLD ENTERTAINMENT CORPORATION KASPIEN HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ($ in thousands, except per share and share amounts)     February 3, 2018   January 28, 2017   ASSETS           CURRENT ASSETS           Cash and cash equivalents   $31,326   $27,974   Restricted cash   1,505   -   Accounts receivable   4,469   7,085   Merchandise inventory   109,112   126,004   Prepaid expenses and other current assets   6,976   8,271   Total current assets   153,388   169,334               Restricted cash   10,675   16,103   Net fixed assets   13,546   45,097   Goodwill   39,191   39,191   Net intangible assets   23,967   27,857   Other assets   7,139   10,228   TOTAL ASSETS   $247,906   $307,810               LIABILITIES           CURRENT LIABILITIES           Accounts payable   $41,780   $52,307   Accrued expenses and other current liabilities   10,846   9,198   Deferred revenue   7,935   9,228   Total current liabilities   60,561   70,733               Other long-term liabilities   29,131   39,141   TOTAL LIABILITIES   89,692   109,874               SHAREHOLDERS’ EQUITY           Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued)   -   -   Common stock ($0.01 par value; 200,000,000 shares authorized; 64,305,171 shares and 64,252,671 shares issued, respectively)   643   643   Additional paid-in capital   341,103   338,075   Treasury stock at cost (28,156,601 and 28,137,283 shares, respectively)   (230,145)   (230,144)   Accumulated other comprehensive loss   (998)   (802)   Retained earnings   47,611   90,164   TOTAL SHAREHOLDERS’ EQUITY   158,214   197,936   TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $247,906   $307,810       January 30, 2021     February 1, 2020   ASSETS             CURRENT ASSETS             Cash and cash equivalents   $ 1,809     $ 2,977   Restricted cash     1,184       950   Accounts receivable     2,718       4,139   Merchandise inventory     24,515       17,836   Prepaid expenses and other current assets     564       2,974   Assets held for discontinued operations     -       51,189   Total current assets     30,790       80,065                     Restricted cash     3,562       4,925   Fixed assets, net     2,268       2,190   Operating lease right-of-use assets     2,742       3,311   Intangible assets, net     732       1,760   Cash surrender value     3,856       3,353   Other assets     1,342       2,202   TOTAL ASSETS   $ 45,292     $ 97,806                     LIABILITIES                 CURRENT LIABILITIES                 Accounts payable   $ 8,894     $ 14,447   Short-term borrowings     6,339       13,149   Accrued expenses and other current liabilities     2,512       3,521   Current portion of operating lease liabilities     596       534   Current portion of PPP loan     1,687       -   Liabilities held for discontinued operations     -       39,410   Total current liabilities     20,028       71,061                     Operating lease liabilities     2,258       2,204   PPP loan     330       -   Long-term debt     5,000       -   Other long-term liabilities     16,187       20,026   TOTAL LIABILITIES     43,803       93,291                     SHAREHOLDERS’ EQUITY                 Preferred stock ($0.01 par value; 5,000,000 shares authorized; none issued)     -       -   Common stock ($0.01 par value; 200,000,000 shares authorized; 3,336,576 shares and 3,225,627 shares issued, respectively)     33       32   Additional paid-in capital     346,495       345,102   Treasury stock at cost (1,410,378 shares and 1,409,316 shares, respectively)     (230,169 )     (230,169 ) Accumulated other comprehensive loss     (2,007 )     (1,479 ) Accumulated deficit     (112,863 )     (108,971 ) TOTAL SHAREHOLDERS’ EQUITY     1,489       4,515   TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 45,292     $ 97,806   See Accompanying Notes to Consolidated Financial Statements. F-3 27  Index TRANS WORLD ENTERTAINMENT CORPORATION KASPIEN HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ($ in thousands, except per share and share amounts)     Fiscal Year Ended       February 3, 2018     January 28, 2017     January 30, 2016                             Net sales   $ 437,173     $ 348,672     $ 334,661   Other revenue     5,683       4,798       4,843   Total revenue     442,856       353,470       339,504                             Cost of sales     299,013       218,811       204,089   Gross profit     143,843       134,659       135,415                             Selling, general and administrative expenses     167,924       139,691       130,845   Income from joint venture     (1,787)       —       —   Gain on sale of asset     —       (1,164)     —   Asset impairment charges     29,107       —       —   Income (loss) from operations     (51,401)       (3,868)       4,570   Interest expense     332       775       1,860   Other  income     (8,881)       (1,081)       (160)   Income (loss) before income taxes     (42,852)       (3,562)       2,870   Income tax expense (benefit)     (299)       (6,773)     181   Net income (loss)   $ (42,553)     $ 3,211     $ 2,689                             Basic and diluted earnings (loss) per share   $ (1.18)     $ 0.10     $ 0.09                             Weighted average number of shares outstanding  - basic     36,191       32,162       31,167                             Weighted average number  of shares – diluted     36,191       32,321       31,323       Fiscal Year Ended       January 30, 2021     February 1, 2020                 Net revenue   $ 158,345     $ 133,216                     Cost of sales     142,041       122,365   Gross profit     16,304       10,851                     Selling, general and administrative expenses     22,029       25,082   Asset impairment charge     -       765   Loss from continuing operations     (5,725 )     (14,996 ) Interest (income) expense     1,709       (647 ) Loss from continuing operations before income tax benefit     (7,434 )     (14,349 ) Income tax (benefit) expense     (3,542 )     44   Loss from continuing operations     (3,892 )     (14,393 ) Loss from fye business, net of tax     -       (44,351 ) Net loss   $ (3,892 )   $ (58,744 )                   Basic and diluted loss per share   $ (2.10 )   $ (32.35 )                   Weighted average number of shares outstanding - basic and diluted     1,849       1,816   See Accompanying Notes to Consolidated Financial Statements. F-4 28  Index TRANS WORLD ENTERTAINMENT CORPORATION KASPIEN HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) LOSS ($ in thousands)     Fiscal Year Ended     February 3, 2018   January 28, 2017   January 30, 2016                           Net income (loss)   $ (42,553 )   $ 3,211     $ 2,689                             Pension actuarial income (loss) adjustment     (196 )     10       1,369   Comprehensive income (loss)   $ (42,749 )   $ 3,221     $ 4,058       Fiscal Year Ended       January 30, 2021     February 1, 2020                 Net loss   $ (3,892 )   $ (58,744 )                   Pension actuarial loss adjustment     (528 )     (744 ) Comprehensive loss   $ (4,420 )   $ (59,488 ) See Accompanying Notes to Consolidated Financial Statements. F-5 29  Index TRANS WORLD ENTERTAINMENT CORPORATION KASPIEN HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY ($dollars and shares in thousands)     Common Shares     Common Stock     Additional Paid-in Capital     Treasury Shares     Treasury Stock At Cost     Accumulated Other Comprehensive Loss     Retained Earnings     Shareholders’ Equity   Balance as of January 31, 2015     58,338     $ 583     $   315,486       (27,094 )   $   (226,412 )   $ (2,181 )   $   84,264     $ 171,740   Net Income     -       -       -       -       -       -       2,689       2,689   Pension actuarial income adjustment     -       -       -       -       -       1,369       -       1,369   Amortization of unearned compensation - stock options     -       -       424       -       -       -       -       424   Exercise of equity grants     8       -       19       -       -       -       -       19   Purchase of treasury stock     -       -       -       (279 )     (1,085 )     -       -       (1,085 ) Vested restricted shares     50       1       (69 )     (38 )     -       -       -       (68 ) Amortization of unearned compensation - restricted stock     -       -       180       -       -       -       -       180   Balance as of January 30, 2016     58,396     $ 584     $ 316,040       (27,411 )   $ (227,497 )   $ (812 )   $ 86,953     $ 175,268   Net Income     -       -       -       -       -       -       3,211       3,211   Pension actuarial income adjustment     -       -       -       -       -       10       -       10   Vesting of performance based awards     -       1       429       -       -       -       -       430   Exercise of equity grants     18       -       39       -               -       -       39   Purchase of treasury stock     -       -       -       (686 )     (2,644 )     -       -       (2,644 ) Issuance of  deferred stock to Directors     -       -       46       -       -       -       -       46   Vested restricted shares     108       1       (143 )     (40 )     (3 )     -       -       (145 ) Common stock issued in the acquisition of etailz     5,731       57       20,358       -       -       -       -       20,415   Stock based compensation     -       -       1,306       -       -       -       -       1,306   Balance as of January 28, 2017     64,253     $ 643     $ 338,075       (28,137 )   $ (230,144 )   $ (802 )   $ 90,164     $ 197,936   Net Loss     -       -       -       -       -       -       (42,553 )     (42,553 ) Pension actuarial loss adjustment     -       -       -       -       -       (196 )     -       (196 ) Vested restricted shares     50       -       (39 )     (20 )     (1 )     -       -       (40 ) Common stock issued in the acquisition of etailz     2       -       -       -       -       -       -       -   Stock based compensation     -       -       3,067       -       -       -       -       3,067   Balance as of February 3, 2018     64,305     $ 643     $ 341,103       (28,157 )   $ (230,145 )   $ (998 )   $ 47,611       158,214       Common Shares     Treasury Shares     Common Stock     Additional Paid-in Capital     Treasury Stock At Cost     Accumulated Other Comprehensive Loss     Retained Earnings (Accumulated Deficit)     Shareholders’ Equity   Balance as of February 3, 2019     3,222       (1,409 )   $ 32     $ 344,826     $ (230,166 )   $ (735 )   $ (50,227 )   $ 63,730   Net Loss     -       -       -       -       -       -       (58,744 )     (58,744 ) Pension actuarial loss adjustment     -       -       -       -       -       (744 )     -       (744 ) Vested restricted shares     4       -       -       3       (3 )     -       -       -   Amortization of unearned compensation/restricted stock amortization     -       -       -       273       -       -       -       273   Balance as of February 1, 2020     3,226       (1,409 )   $ 32     $ 345,102     $ (230,169 )   $ (1,479 )   $ (108,971 )   $ 4,515   Net Loss     -       -       -       -       -       -       (3,892 )     (3,892 ) Pension actuarial loss adjustment     -       -       -       -       -       (528 )     -       (528 ) Issuance of warrants     -       -       -       836       -       -       -       836   Vested restricted shares     4       (1 )     -       (9 )     -       -       -       (9 ) Common stock issued- Director grants     6       -       -       243       -       -       -       243   Exercise of warrants     101       -       1       -       -       -       -       1   Amortization of unearned compensation/restricted stock amortization     -       -       -       323       -       -       -       323   Balance as of January 30, 2021     3,337       (1,410 )   $ 33       346,495     $ (230,169 )   $ (2,007 )   $ (112,863 )   $ 1,489   See Accompanying Notes to Consolidated Financial Statements. F-6 30  Index TRANS WORLD ENTERTAINMENT CORPORATION KASPIEN HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in thousands)     Fiscal Year Ended     February 3, 2018   January 28, 2017   January 30, 2016 OPERATING ACTIVITIES:                         Net income (loss)     ($42,553)       $3,211       $2,689   Adjustments to reconcile net income (loss) to net cash  provided by (used in) operating activities:                         Depreciation of fixed assets     10,272       8,139       5,191   Amortization of intangible assets     3,890       1,143       -   Amortization of lease valuations     (20)       (31)       23   Deferred tax benefit     -       (6,988)       -   Stock based compensation     3,067       1,306       538   Adjustment to contingent consideration     (3,280)       (1,829)       -   Loss on disposal of fixed assets     579       1,089       613   Loss on impairment of fixed assets     29,107       -       -   Gain on sale of property     -       (1,164)       -   Gain on sale of investments     -       (800)       (250)   Change in cash surrender value     (399)       (980)       356   Gain on life insurance asset     (8,733)       -       -   Changes in operating assets and liabilities that provide (use) cash:                         Accounts receivable     2,616       (1,755)       (3)   Merchandise inventory     16,892       8,650       6,331   Prepaid expenses and other current assets     1,295       (342)       4,666   Other long-term assets     (668)       1,217       (2,561)   Accounts payable     (10,527)       (4,469)       (11,639)   Deferred revenue     (1,293)       245       (869)   Accrued expenses and other current liabilities     1,648       (4,792)       1,576   Other long-term liabilities     (1,906)       2,586       1,302   Net cash  provided by (used in) operating activities     (13)       4,436       7,963                             INVESTING ACTIVITIES:                         Acquisition of a business     -       (36,600)       -   Purchases of fixed assets     (8,407)       (24,672)       (20,700)   Proceeds from company owned life insurance     14,363       -       -   Investment in joint venture     (2,575)       -       -   Capital distributions from joint venture     1,101       -       -   Proceeds from sale of assets     -       2,839       1,567   Proceeds from sale of investments     -       1,600       -   Purchases of investments     -       (500)       (1,052)   Net cash provided by (used in) investing activities     4,482       (57,333)       (20,185)                             FINANCING ACTIVITIES:                         Exercise of long term equity awards     -       39       19   Vesting of long term equity awards     (39)       -       -   Payments of capital lease obligations     -       -       (938)   Payments of long term borrowings     (11,657)       (26,192)       -   Proceeds from long term borrowings     11,657       21,463       -   Payments to etailz shareholders     (5,000)       -       -   Purchase of treasury stock     (1)       (2,647)       (1,085)   Net cash  used in financing activities     (5,040)       (7,337)       (2,004)                             Net decrease in cash and cash equivalents     (571)       (60,234)       (14,226)   Cash, cash equivalents, and restricted cash, beginning of year     44,077       104,311       118,537   Cash, cash equivalents, and restricted cash, end of year   $ 43,506     $ 44,077     $ 104,311   Supplemental disclosures and non-cash investing and financing activities:                         Interest paid     $332       $775       $1,861   Issuance of restricted performance based awards / deferred / restricted shares under deferred / restricted stock agreements     120       572       69                             Net assets acquired     -       68,896       -   Less: Contingent consideration not yet paid     -       (10,381)       -   Less: Fair value of shares issued as consideration     -       (20,415)       -   Less: Indemnity liability not yet paid     -       (1,500)       -   Acquisition of a business   $ -     $ 36,600     $ -       Fiscal Year Ended       January 30, 2021     February 1, 2020   OPERATING ACTIVITIES:             Net loss   $ (3,892 )   $ (58,744 ) Adjustments to reconcile net loss to net cash used in operating activities:                 Depreciation of fixed assets     1,111       3,330   Amortization of intangible assets     1,028       1,143   Amortization of right-of-use asset     569       6,990   Stock based compensation     323       276   Write down of investment     -       500   Warrant proceeds amortization to interest     232       -   Interest on long term debt     542       -   Treasury stock received for payment of withholding tax on exercises of RSUs     -       (3 ) Reversal of ASC 740 liability     (3,545 )     -                     Loss on disposal of fixed assets     -       125   Inventory net realizable value adjustment     -       12,701   Loss on impairment of long-lived assets     -       23,983   Change in cash surrender value     (503 )     (329 ) Changes in operating assets and liabilities that provide (use) cash:                 Accounts receivable     1,423       1,182   Merchandise inventory     (6,679 )     14,183   Prepaid expenses and other current assets     2,761       1,931   Other long-term assets     571       (913 ) Accounts payable     (5,458 )     (10,209 ) Accrued expenses and other current liabilities     (1,107 )     (1,888 ) Deferred revenue     -       (274 ) Other long-term liabilities     (767 )     (9,811 ) Net cash used in operating activities     (13,391 )     (15,827 )                   INVESTING ACTIVITIES:                 Purchases of fixed assets     (1,190 )     (2,823 ) Proceeds from sale of fye business     11,779       -   Capital distributions from joint venture     -       127   Net cash provided by (used in) investing activities     10,589       (2,696 )                   FINANCING ACTIVITIES:                 Proceeds from long term borrowings     5,063       -   Proceeds from PPP Loan     2,018       -   Issuance of director deferred shares and RSUs     234       -   Proceeds from short term borrowings     6,339       35,851   Payments of short-term borrowings     (13,149 )     (22,702 ) Net cash provided by financing activities     505       13,149                     Net decrease in cash, cash equivalents, and restricted cash     (2,297 )     (5,374 ) Cash, cash equivalents, and restricted cash, beginning of year     8,852       14,226   Cash, cash equivalents, and restricted cash, end of year   $ 6,555     $ 8,852   Supplemental disclosures and non-cash investing and financing activities:                                   Interest paid   $ 463     $ 838   See Accompanying Notes to Consolidated Financial Statements. F-7 31  Index Index to Notes to Consolidated Financial StatementStatements Note Number and Description Note No. 1. Nature of Operations and Summary of Significant Accounting Policies 2. Recently Issued Accounting Pronouncements 3. Acquisition and Investment 4. Goodwill and Other Intangible Assets 5. Fixed Assets 6. Restricted Cash 7. Credit Facility 8. Leases 9. Shareholders’ Equity 10. Benefit Plans 11. Income Taxes 12. Related Party Transactions 13. Commitments and Contingencies 14. Quarterly Financial Information (Unaudited) F-8 Note No.   Pages No       1. Nature of Operations and Summary of Significant Accounting Policies 33       2. Discontinued Operations 37       3. Sale of fye Business 38       4. Recently Adopted and Issued Accounting Pronouncements 39       5. Other Intangible Assets 40       6. Fixed Assets 41     7. Restricted Cash 41     8. Debt 41     9. Leases 42     10. Shareholders’ Equity 43     11. Benefit Plans 43     12. Income Taxes 46     13. Related Party Transactions 48     14. Commitments and Contingencies 49     15. Basic and Diluted Loss Per Share 49     16. Quarterly Financial Information (Unaudited) 50     17. Subsequent Events 50 32  Index TRANS WORLD ENTERTAINMENT CORPORATION KASPIEN HOLDINGS INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1.  Nature of Operations and Summary of Significant Accounting Policies Nature of Operations: Trans World Entertainment Corporation Kaspien Holdings Inc. and subsidiaries (“the Company”) operates in twoa single reportable segments: fye and etailz. The fye segmentsegment: Kaspien is one of the largest specialty retailers of entertainment products, including trend, video, music, electronics and related products in the United States. The fye segment operates a chain of retail entertainment stores and e-commerce sites,www.fye.comandwww.secondspin.com. As of February 3, 2018, the fye segment operated 260 stores totaling approximately 1.4 million square feet in the United States, the District of Columbia and the U.S. Virgin Islands. The etailz segment is a leading digital marketplace retailer and generates substantially all of its revenue through Amazon Marketplace. The Company’s business is seasonal in nature, with Previously, the peak selling period beingCompany also operated fye, a chain of retail entertainment stores and e-commerce sites, www.fye.com and www.secondspin.com.  On February 20, 2020, the holiday season which fallsCompany consummated the sale of substantially all of the assets and certain of the liabilities relating to fye to a subsidiary of 2428391 Ontario Inc. o/a Sunrise Records (“Sunrise Records”) pursuant to an Asset Purchase Agreement (as amended, the “Asset Purchase Agreement”) dated January 23, 2020, by and among the Company, Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World FL LLC, Trans World New York, LLC, 2428392 Inc., and Sunrise Records. (the “FYE Transaction”). Effects of COVID-19: As reflected in the Company’s fourth fiscal quarter. discussion below, the impact of the COVID-19 pandemic and actions taken in response to it had varying effects on our 2020 results of operations. Higher net sales reflect increased demand, particularly as people are staying at home, including for household staples and other essential and home products, partially offset by fulfillment network capacity and supply chain constraints. Other effects include increased fulfillment costs and cost of sales as a percentage of net sales, primarily due to the impact of lower productivity and costs to maintain safe workplaces. We expect the effects of fulfillment network capacity and supply chain constraints and increased fulfillment costs and cost of sales as a percentage of net sales to continue into all or portions of 2021. However, it is not possible to determine the duration and scope of the pandemic, including any recurrence, the actions taken in response to the pandemic, the scale and rate of economic recovery from the pandemic, any ongoing effects on consumer demand and spending patterns, or other impacts of the pandemic, and whether these or other currently unanticipated consequences of the pandemic are reasonably likely to materially affect our results of operations. Also, as a direct result of COVID-19, most of our employees are working remotely. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including expenses, reserves and allowances, and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international customers and markets, which are highly uncertain and cannot be predicted at this time. Management is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the response to curb its spread, currently we are not able to estimate the effects of the COVID-19 outbreak to our results of operations, financial condition, or liquidity. Liquidity:The Company’s primary sources of working capitalliquidity are cash provided by operations and borrowing capacity under its revolving credit facility. The Company’sfacility, available cash flows fluctuateand cash equivalents, and to a lesser extent, cash generated from quarteroperations.  Our cash requirements relate primarily to quarter dueworking capital needed to various items,operate and grow our business, including seasonality of salesfunding operating expenses and earnings, merchandise inventory purchases and returns, the related terms on the purchasespurchase of inventory and capital expenditures. Management believes itOur ability to achieve profitability and meet future liquidity needs and capital requirements will have adequate resourcesdepend upon numerous factors, including the timing and amount of our revenue; the timing and amount of our operating expenses; the timing and costs of working capital needs; successful implementation of our strategy and planned activities; and our ability to fund its cash needsovercome the impact of the COVID-19 pandemic. There can be no assurance that we will be successful in further implementing our business strategy or that the strategy, including the completed initiatives, will be successful in sustaining acceptable levels of sales growth and profitability. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Company incurred net losses of $3.9 million and $58.8 million for the foreseeable future, including its capital spending, its seasonal increase in merchandise inventoryyears ended January 30, 2021 and other operatingFebruary 1, 2020, respectively, and has an accumulated deficit of $112.9 million as of January 30, 2021. The Company experienced negative cash requirements and commitments. Management anticipates any cash requirements due to a shortfall in cashflows from operations will be funded by the Company’sduring fiscal 2020 and fiscal 2019 and we expect to incur net losses in 2021. As of January 30, 2021, we had cash and cash equivalents of $1.8 million, net working capital of $10.8 million, and outstanding borrowings of $6.3 million on our revolving credit facility, as further discussed hereafter. below. This compares to $3.0 million in cash and cash equivalents and net working capital of $9.0 million and borrowings of $13.1 million on our revolving credit facility as of February 1, 2020. As of June 15, 2020, the issuance date of the Company’s consolidated financial statements for the fiscal year ended February 1, 2020, the Company had concluded there was substantial doubt about its ability to continue as a going concern. The completed initiatives and transactions as described below have alleviated the substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements for the fiscal year ended January 30, 2021 were prepared on the basis of a going concern which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business. The ability of the Company to meet its liabilities and to continue as a going concern is dependent on improved profitability, the strategic initiatives for Kaspien and the availability of future funding. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. 33  Index New Credit Facility On February 20, 2020, Kaspien Inc. entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as administrative agent, under which the lenders party thereto committed to provide up to $25 million in loans under a three-year, secured revolving credit facility (the “ New Credit Facility”).  Concurrent with the FYE Transaction, the Company borrowed $3.3 million under the New Credit Facility in order to satisfy the remaining obligations of the Company under the previous credit facility. The commitments by the lenders under the New Credit Facility are subject to borrowing base and availability restrictions. Up to $5.0 million of the New Credit Facility may be used for the making of swing line loans. As of January 30, 2021, the Company had borrowings of $6.3 million under the New Credit Facility.  Peak borrowings under the New Credit Facility during fiscal 2020 were $12.4 million.  As of January 30, 2021, the Company had no outstanding letters of credit. The Company had $5.0 million available for borrowing under the New Credit Facility as of January 30, 2021. Previously, the Company had an amended and restated its revolving credit facility (“Credit Facility”) with Wells Fargo.  As of February 1, 2020, the Company had borrowings of $13.1 million under the Credit Facility.  Peak borrowings under the Credit Facility during fiscal 2019 were $35.9 million.  As of February 1, 2020, the Company had no outstanding letters of credit. The Company had $12 million available for borrowing under the Credit Facility as of February 1, 2020. On February 20, 2020, in conjunction with the FYE Transaction, the Company fully satisfied its obligations under the Credit Facility through proceeds received from the sale of the fye business and borrowings under the New Credit Facility, as further discussed above, and the Credit Facility is no longer available to the Company. Subordinated Debt Agreement On March 30, 2020, the Company and Kaspien (the “Loan Parties”) entered into Amendment No. 1 to the Loan Agreement (the “Amendment”). Pursuant to the Amendment, among other things, (i) the Company was added as “Parent” under the Amended Loan Agreement, (ii) the Company granted a first priority security interest in substantially all of the assets of the Company, including inventory, accounts receivable, cash and cash equivalents and certain other collateral, and (iii) the Loan Agreement was amended to (a) permit the incurrence of certain subordinated indebtedness under the Subordinated Loan Agreement (as defined below) and (b) limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets. On March 30, 2020, the Loan Parties entered into a Subordinated Loan and Security Agreement (the “Subordinated Loan Agreement”) with the lenders party thereto from time to time (the “Lenders”) and TWEC Loan Collateral Agent, LLC (“Collateral Agent”), as collateral agent for the Lenders, pursuant to which the Lenders made a $5.2 million secured term loan (the “Subordinated Loan”) to Kaspien with a scheduled maturity date of May 22, 2023. As of January 30, 2021, unamortized debt issuance costs of $0.2 million are included in “Long-Term Debt” on the consolidated balance sheet. Directors Jonathan Marcus, Thomas Simpson, and Michael Reickert are the chief executive officer of Alimco Re Ltd. (“Alimco”), the managing member of Kick-Start III, LLC and Kick-Start IV, LLC (“Kick-Start”), and a trustee of the Robert J. Higgins TWMC Trust (the “Trust”), an affiliate of RJHDC, LLC (“RJHDC” and together with Alimco and Kick-Start, “Related Party Entities”), respectively.  The Related Party Entities are parties to the Subordinated Loan Agreement. Paycheck Protection Program On April 17, 2020, Kaspien received loan proceeds of $2.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP Loan, which was in the form of a promissory note (the “Note”), dated April 10, 2020, between Kaspien and First Interstate Bank, as the lender, matures on April 17, 2022, bears interest at a fixed rate of 1% per annum, and is payable in monthly installments of $112,976. While under the terms of the PPP, some or all of the PPP Loan amount may be forgiven if the PPP Loan proceeds are used for qualifying expenses as described in the CARES Act and the Note, such as payroll costs, benefits, rent, and utilities, there is no assurance that the Company will be successful in qualifying for and receiving forgiveness on the PPP Loan amount. On August 20, 2020, the Company submitted an application for forgiveness to the SBA. On October 30, 2020, the Company received a follow up letter requesting additional information related to its forgiveness application. The Company submitted the requested information on November 9, 2020. On January 4, 2021, the Company received another request for additional information. The Company submitted the requested information on January 14, 2021. On April 14, 2021, the Company received another request for additional information. The Company submitted the requested information on April 26, 2021. As of April 30, the Company has not received a decision on its PPP Loan forgiveness request. 34  Index In addition to the aforementioned current sources of existing working capital, the Company may explore certain other strategic alternatives that may become available to the Company, as well continuing our efforts to generate additional sales and increase margins.  If the Company is unable to improve its operations, it may be required to obtain additional funding, and the Company’s financial condition and results of operations may be materially adversely affected. Furthermore, broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance, and may adversely impact our ability to raise additional funds, should we require such additional funds. Basis of Presentation: The consolidated financial statements consist of Kaspien Holdings Inc., its wholly owned subsidiaries, Kaspien NY, LLC  (f/k/a Trans World Entertainment Corporation, its wholly-owned subsidiaries,NY Sub, Inc. (f/k/a Record Town, Inc. (“Record Town”), Record Town’s and its subsidiaries, and etailz,Kaspien, Inc.  All significant intercompany accounts and transactions have been eliminated.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions, including those related to merchandise inventory and return costs;inventory; valuation of long-lived assets,  goodwill and intangible assets, income taxes, accounting, for gift card liability, retirement plan obligation, liability, and other long-term liabilities that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates. Items Affecting Comparability:The Company’s fiscal year is a 52 or 53-week period ending the Saturday nearest to January 31.  Fiscal 2017, 2016,2020 and 2015fiscal 2019 ended February 3, 2018, January 28, 2017, and January 30, 2016,2021 and February 1, 2020, respectively. Fiscal 2017 had 53 weeks andBoth fiscal 2016 and fiscal 2015 had 52 weeks. During the fiscal year 2016, the Company recorded an immaterial adjustment between Other Revenue and Selling, General and Administrative expenses in its fiscal 2016 and fiscal 2015 consolidated financial statements for miscellaneous income, primarily related to commissions earned from third parties. The immaterial adjustment did not impact fiscal 2016 or fiscal 2015 income (loss) from operations, net income, and basic and diluted income per share. years were 52-week periods. Concentration of Business Risks:The fye segmentCompany purchases various inventory from approximately 350 suppliers. In fiscal 2017, 47% of fye purchases were made from tennumerous suppliers including Universal Studio Home Entertainment, AEC - Paramount Video, Buena Vista Home Video, SONY Music, SONY Pictures, Twentieth Century Fox Home Entertainment, Warner/Elektra/Atlantic, Universal Music Group Distribution, Funko LLC, F-9 and Warner Home Video. The etailz segment sold over 34,000 SKU’s from over 2,300 suppliers during fiscal 2017. The Company does not have material long-term purchase contracts; rather, it purchases products from its suppliers on an order-by-order basis.  Historically, the CompanyKaspien has not experienced difficulty in obtaining satisfactory sources of supply and management believes that it will continue to have access to adequate sources of supply. etailz The Company generates substantially all of its revenue through the Amazon Marketplace.  Therefore, the Company depends in large part on its relationship with Amazon for theits continued growth of the etailz segment.growth. In particular, the Company depends on its ability to offer products on the Amazon Marketplace and on its timely delivery of products to customers. Cash and Cash Equivalents: The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Concentration of Credit Risks: The Company maintains centralized cash management Restricted Cash: Cash and investment programs whereby excess cash balances are invested in short-term money market funds. The Company’s investments consist of short-term investment grade securities consistent with its investment guidelines. These guidelines include the provision that sufficient liquidity will be maintained to meet anticipated cash flow needs. The Company maintains these investments, all of which are classified as cash equivalents duethat are restricted as to their short term nature, with Wells Fargo Securities, LLC. The Company limitswithdrawal or use under the amountterms of credit exposure with any one financial institution and believes that no significant concentration of credit risk exists with respect to cash investments. certain contractual agreements are recorded in Restricted Cash on the Company’s consolidated balance sheet. Accounts Receivable:Accounts receivable for the fye segment are primarily comprised of receivables due from commissions due from third parties. For the etailz segment, accountsAccounts receivable are comprised of receivables due from Amazon. There are no provisionsIncluded in the balance is an allowance of $0.1 million for uncollectible amounts from retail sales of merchandise inventory since payment is received at the time of sale. doubtful accounts. Merchandise Inventory and Return Costs: Merchandise inventory is stated at the lower of cost or marketnet realizable value under the average cost method. Inventory valuation requires significant judgment and estimates, including obsolescence, shrink and any adjustments to marketnet realizable value, if market value is lower than cost. The Company records obsolescence and any adjustments to marketnet realizable value (if lower than cost) based on current and anticipated demand, customer preferences and market conditions. As of January 30, 2021, the Company recorded an obsolescence reserve of $0.8 million. The provisioncost of inventory also includes certain costs associated with the preparation of inventory for inventory shrink is estimated as a percentage of store sales for the period from the last date a physical inventory was performed to the end of the fiscal year. Such estimates are based on historical results and trends, and the shrink results from the last physical inventory. Physical inventories are taken at least annually for all stores and theresale, including distribution center throughoutcosts and freight. As of January 30, 2021, the year, and inventory records are adjusted accordingly. The Company is generally entitled to return merchandise purchased from major music vendors for credit against other purchases from these vendors. Certain vendors reduce the credit with a merchandise return charge which varies depending on the typehad recorded capitalized freight of merchandise being returned. Certain other vendors charge a handling fee based on units returned. The Company records all merchandise return charges in cost of sales. $1.3 million. Fixed Assets and Depreciation: Fixed assets are recorded at cost and depreciated or amortized over the estimated useful life of the asset using the straight-line method.  The estimated useful lives are as follows: Leasehold improvements Lesser of estimated useful life of the asset or the lease term Fixtures and equipment 3-77 years Leasehold improvements 7 years Technology 1-5 years F-10 Major improvements and betterments to existing facilities and equipment are capitalized.  Expenditures for maintenance and repairs are expensed as incurred. Impairment of 35  Index Long-Lived Assets:Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset over its remaining useful life.  If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the assets.  Fair value is generally measured based on discounted estimated future cash flows. Assets to be disposed of would be separately presented in the Consolidated Balance Sheets and reported at the lower of the carrying amount or fair value less disposition costs.  For the purposepurposes of the asset impairment test, Kaspien has one asset grouping, which is the fye segment has multiple asset groupings - corporate and individual store level assets. same as the Kaspien reporting unit level. During fiscal 2017,2019, the Company concluded, based on continued operating losses for the fye segment, that a triggering event had occurred, and pursuant to FASB ASC 360,Property, Plant, and Equipment, requiring a testan evaluation of long-livedthe Company’s fixed assets and intangible assets for impairment at its retail stores in the fye segment. Long-livedwas required.  For fiscal 2019, intangible assets at stores, the corporate home office and the Albany distribution center where impairment was determinedrelated to existvendor relationships were written down to their estimated fair values as of the end of fiscal 2017fully impaired resulting in the recordingrecognition of asset impairment charges of $29.1 million. Estimated fair values for long-lived assets at these locations, including store fixtures, equipment, and leasehold improvements were determined based on a measure of discounted future cash flows over the remaining lease terms at the respective locations. Future cash flows were estimated based on an individual store and corporate level plans and were discounted at a rate approximating the Company’s cost of capital. Management believes its assumptions were reasonable and consistently applied. The Company did not recognize any other long-lived asset impairments during fiscal 2016 and fiscal 2015. Losses for store closings in the ordinary course of business represent the write down of the net book value of abandoned fixtures and leasehold improvements. The loss on disposal of fixed assets related to store closings was $0.6$0.8 million $1.1 million and $0.6 million in fiscal 2017, 2016 and 2015, respectively, and is included in selling, general and administrative (“SG&A”) expenses in the Consolidated Statements of Operations and loss on disposal of fixed assets in the Consolidated Statements of Cash Flows. Store closings usually occur at the expiration of the lease, at which time leasehold improvements, which constitute a majority of the abandoned assets, are fully depreciated. Conditional Asset Retirement Obligations:The Company records the fair value of an asset retirement obligation (“ARO”) as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the asset. The Company also records a corresponding asset that is depreciated over the life of the asset. Subsequent to its initial measurement, the ARO is adjusted at the end of each period to reflect the passage of time and changes in the estimated future cash flows underlying the obligation. Commitments and Contingencies:The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated.business.  Although there can be no assurance as to the ultimate disposition of these matters, it is management’s opinion, based upon the information available at this time, that the expected outcome of these matters, individually or in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Company.   During the fourth quarter of fiscal 2019, the Company recognized a charge of $0.4 million related to litigation (see Note 14). Revenue Recognition: The Company’s Retail Sales Retail revenue is primarily from retail salesrelated to the sale of merchandise inventory.goods to customers. Revenue is recognized atwhen control of the point-of-sale. Internetgoods is transferred to the customer, which generally occurs upon shipment to the customer. Additionally, estimated sales returns are calculated based on expected returns. Agency as a service Retail as a service revenue is primarily commission fees for both segments, fye and etailz,services paid on a periodic basis with an additional fee based on percentage of gross merchandise value generated. The commissions earned from these arrangements are recognized as F-11 revenue upon shipment. Shipping and handling fee income fromwhen the fye segment’s internet operations isservices are rendered on a periodic basis with additional fees recognized as net sales.revenue is generated. Software as a service Software as a service revenue primarily includes a subscription fee with an additional fee based on a percentage of gross merchandise value generated. The Company records shipping and handling costs in cost of sales. Loyalty cardsubscription fee earned from these arrangements are recognized when the services are rendered on a periodic basis with additional fees recognized as revenue for the fye segment is amortized over the life of the membership period or upon cancelation of the membership. Net sales are recorded net of estimated amounts for sales returns and other allowances, and net of applicable sales taxes. Total annual membership fees collected in advance and recognized in revenue, net of estimated refunds, were as follows: the unearned revenue as of January 28, 2017, January 30, 2016, and January 31, 2015, was $7.0 million, $6.5 million, and $6.3 million, respectively. The amount of cash received from customers during fiscal 2017, 2016, and 2015, was $16.9 million, $16.8 million, and $15.8 million, respectively. The amount of revenue recognized in earnings was $17.9 million, $16.3 million, and $15.6 million in fiscal 2017, 2016, and 2015, respectively. The unearned revenue as of February 3, 2018 was $6.1 million. generated. Cost of Sales: In addition to the cost of product, the Company includes in cost of sales those costs associated with purchasing, receiving, shipping, online marketplace fulfillment fees and commissions, and inspecting and warehousing product, and depreciation related to distribution operations. Also included are costs associated with the return of product to vendors.product. Cost of sales further includes the cost of inventory shrink losses and obsolescence and the benefit of vendor allowances and discounts. obsolescence. Selling, General and Administrative (“SG&A”) Expenses (SG&A): Included in SG&A expenses are payroll and related costs, store operating costs, occupancy charges, Amazon fees, professional and service fees, general operating and overhead expenses and depreciation charges (excluding those related to distribution operations).and amortization charges.  Selling, general and administrative expenses also include fixed asset write offs associated with store closures, if any, and miscellaneous income and expense items, other than interest. The Company recorded miscellaneous income items Lease Accounting: Operating lease liabilities are recognized at the lease commencement date based on the present value of the fixed lease payments using the Company's incremental borrowing rates for fiscal 2017, 2016,its population of leases. Related operating ROU assets are recognized based on the initial present value of the fixed lease payments, reduced by contributions from landlords, plus any prepaid rent and 2015direct costs from executing the leases. ROU assets are tested for impairment in the amountsame manner as long-lived assets. Lease terms include the non-cancellable portion of $0.4 million, $0.4 million,the underlying leases along with any reasonably certain lease periods associated with available renewal periods, termination options and $3.6 million, respectively. Included in fiscal 2015 miscellaneous income was a one-time reimbursement of expenses incurred in prior years, related to a legal settlement of $1.4 million. Advertising Costspurchase options.  Lease agreements with lease and Vendor Allowances:The fye segment often receives allowances from its vendors to fund in-store displays, print and radio advertising, and other promotional events. Vendor advertising allowances which exceed specific, incremental and identifiable costs incurred in relation to the advertising and promotions offered by the Company to its vendorsnon-lease components are classifiedcombined as a reduction in the purchase pricesingle lease component for all classes of merchandise inventory. Accordingly, advertisingunderlying asset Advertising Costs: Advertising and sales promotion costs are charged to operations, offset by direct vendor reimbursements, as incurred. Total advertising expense, excluding vendor allowances, was $3.1 million, $3.2 million, and $2.9 million in fiscal 2017, 2016, and 2015, respectively. In the aggregate, vendor allowances supporting the fye segment’s advertising and promotion are included as a reduction of SG&A expenses, and reimbursements of such costs were $3.1 million, $3.2 million, and $2.9 million in fiscal 2017, 2016, and 2015, respectively. Advertising costs for the etailz segment primarily consist of Amazon marketing expenses which were $1.2$1.4 million and $0.9 million in fiscal 2017. Lease Accounting: The Company’s calculation of straight-line rent expense includes the impact of escalating rents for the lease period2020 and includes any period during which the Company is not obligated to pay rent while the store is being constructed (“rent holiday”). The Company accounts for step rent provisions, escalation clauses and other lease concessions by recognizing these amounts on a straight line basis over the initial lease term. The Company capitalizes leasehold improvements funded by tenant improvement allowances, depreciating them over the term of the related leases. The tenant improvement allowances are recorded as deferred rent within other long-term liabilities in the Consolidated Balance Sheets and are amortized as a reduction in rent expense over the life of the related leases. F-12 fiscal 2019, respectively. Store Closing Costs: Management periodically considers the closing of underperforming stores. In the event of a store closing, reserves are established at the time a liability is incurred for the present value of any remaining lease obligations, net of estimated sublease income, and other exit costs. Store closings are not considered discontinued operations and as such, closings do not represent a significant change on the Company’s operations and financial results. Gift Cards:The Company offers gift cards for sale. A deferred revenue account, which is included in deferred revenue in the Consolidated Balance Sheets, is established for gift cards issued. The deferred revenue balance related to gift cards was $1.7 million, $2.0 million and $2.3 million at the end of fiscal 2017, 2016 and 2015, respectively. When gift cards are redeemed at the store level, revenue is recorded and the related liability is reduced. Breakage is estimated based on the historical relationship of the redemption of gift cards redeemed to gift cards sold, over a certain period of time. The Company has the ability to reasonably and reliably estimate gift card liability based on historical experience with redemption rates associated with a large volume of homogeneous transactions, from a period of more than ten years. The Company’s estimate is not susceptible to significant external factors and the circumstances around purchases and redemptions have not changed significantly over time. The Company recorded breakage on its gift cards for fiscal 2017, 2016 and 2015 in the amount of $0.4 million, $0.4 million and $0.1 million, respectively. Gift card breakage is recorded as a reduction of SG&A expenses. Goodwill and Intangible Assets:Our goodwill results from our acquisition of etailz and represents the excess purchase price over the net identifiable assets acquired. All of our goodwill is associated with etailz, a separate reporting unit, and there is no goodwill associated with our other reporting unit, fye. Goodwill is not amortized and we are required to evaluate our goodwill for impairment at least annually or whenever indicators of impairment are present. Our annual test is completed during the fourth fiscal quarter, and interim tests are conducted when circumstances indicate the carrying value of the goodwill or other intangible assets may not be recoverable. Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is possible that these judgments and estimates could change in future periods. The determination of the fair value of intangible assets and liabilities acquired in a business acquisition, including the Company’s acquisition of etailz in 2016, is subject to many estimates and assumptions. Our identifiable intangible assets that resulted from our acquisition of etailz consist of vendor relationships, technology and tradenames. We review amortizable intangible asset groups for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Income Taxes:Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  Deferred tax assets are subject to valuation allowances based upon management’s estimates of realizability. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.  It is the Company’s practice to recognize interest and penalties related to income tax matters in income tax expense (benefit) in the Consolidated Statements of Operations. F-13 Comprehensive Loss:Comprehensive loss consists of net loss and a pension actuarial loss adjustment that is recognized in other comprehensive loss (see Note 9). 36  Index Stock-Based Compensation:Stock-based compensation represents the cost related to stock-based awards granted to employees and directors. The Company measures stock-based compensation cost at grant date, based on the estimated fair value of the award, and recognizes the cost as expense on a straight-line basis (net of estimated forfeitures) over the option’s requisite service period.  The Company recognizes compensation expense based on estimated grant date fair value using the Black-Scholes option-pricingBlack‑Scholes option‑pricing model.  Tax benefits, if any, resulting from tax deductions in excess of the compensation cost recognized for those options are to be classified and reported as both an operating cash outflow and financing cash inflow. Comprehensive Income (Loss):Comprehensive income (loss) consists of net income (loss) and a pension actuarial income (loss) adjustment that is recognized in other comprehensive income (loss) (see Note 10). Income (Loss) Loss Per Share: Basic and diluted income (loss)loss per share is calculated by dividing net income (loss)loss by the weighted average common shares outstanding for the period.  Diluted income (loss)During fiscal 2020 and fiscal 2019, the impact of all outstanding stock awards was not considered because the Company reported a net loss and such impact would be anti-dilutive.  Accordingly, basic and diluted loss per share gives effect to all dilutive potential shares outstanding resulting from employeefor fiscal 2020 and fiscal 2019 was the same.  Total anti-dilutive stock options during that period. The dilutive effectawards for each of employee stock options did not have any impact on basic income per share in fiscal 20162020 and 2015, when net income was recorded. The following is a reconciliation of the basic weighted average number of shares outstanding to the diluted weighted average number of shares outstanding:     2017     2016     2015       (in thousands)                             Weighted average common shares outstanding – basic     36,191       32,162       31,167                             Dilutive effect of employee stock options     -       159       156                             Weighted average common shares outstanding–diluted     36,191       32,321       31,323                             Anti-dilutive stock options     2,586       2,175       1,744   fiscal 2019 were approximately were 130,000 and 100,000, respectively. Fair Value of Financial Instruments: Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. In determining fair value, the accounting standards establish a three-level hierarchy for inputs used in measuring fair value, as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Significant observable inputs other than quoted prices in active markets for similar assets and liabilities, such as quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 — Significant unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying value of life insurance policies included in other assets approximates fair value based on estimates received from insurance companies. Segment Information:companies and are classified as Level 2 measurements within the hierarchy as defined by applicable accounting standards. The Company had no Level 3 financial assets or liabilities as of January 30, 2021 or as of February 1, 2020. Segment Information: Change in Reportable Segments As a result of the sale of the fye business on February 20, 2020, further disclosed in Note 2, the Company’s previously reported fye segment is no longer in operation, and the Company now operates as a single reporting segment. The impact of the sale of the fye business on the Company’s operating segments, and reportable segments was reflected in two reportable segments: fye and etailz.the Company’s consolidated financial statements as of February 1, 2020. Prior year segment information was reclassified to conform to the acquisition of etailz in October 2016,reporting structure change. Note 2. Discontinued Operations On February 20, 2020, the Company operated as oneconsummated the sale of substantially all of the assets and certain of the liabilities relating to fye to a subsidiary of Sunrise Records pursuant to an Asset Purchase Agreement dated January 23, 2020, by and among the Company, Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World FL LLC, Trans World New York, LLC, 2428392 Inc., and Sunrise Records. The results for fye were previously reported in the fye segment. Operating earnings (loss) by operatingCertain corporate overhead costs and segment is defined as income (loss) fromcosts previously allocated to fye for segment reporting purposes did not qualify for classification within discontinued operations net interest expense, other income, and income taxes. Resultshave been reallocated to continuing operations. The following table summarizes the major line items for etailzfye that are included in the consolidated resultsincome from discontinued operations, net of tax line item in the Consolidated Statements of Income:     Fifty-two Weeks Ended   (In thousands)   January 30, 2021     February 1, 2020   Net revenue   $ —     $ 192,719   Cost of goods sold     —       127,013   Selling, general and administrative expenses     —       84,667   Impairment of long-lived assets     —       23,218   Interest expense     —       1,531   Other expense     —       364   Loss from discontinued operations before income taxes     —       (44,074 ) Income tax expense     —       277   Loss from discontinued operations, net of tax   $ —     $ (44,351 ) 37  Index The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations for alleach of the periods presented for fiscal 2017. For periods presented for fiscal 2016, results for etailzpresented: (In thousands)   January 30, 2021     February 1, 2020   Cash   $ —     $ —   Accounts receivable, net     —       62   Inventories     —       50,122   Other current assets     —       1,005   Property, plant and equipment, net     —       —   Operating lease right-to-use asset     —       —   Other assets     —       —   Total assets of discontinued operations   $ —     $ 51,189                     Accounts payable   $ —     $ 9,769   Accrued liabilities     —       779   Deferred revenue     —       6,764   Current portion of lease liabilities     —       8,976   Operating lease liabilities     —       11,059   Other liabilities     —       2,063   Total liabilities of discontinued operations   $ —     $ 39,410   The cash flows related to discontinued operations have not been segregated and are included in consolidated results from October 17, 2016 throughthe Consolidated Statements of Cash Flows. The following table summarizes the cash flows for discontinued operations that are included in the Consolidated Statements of Cash Flows:     Fifty-two Weeks Ended   (In thousands)   January 30, 2021     February 1, 2020   Net cash used in operating activities   $ —     $ (12,849 ) Net cash used in investing activities     —       (1,171 )                   Depreciation and amortization     —       2,674   Purchases of fixed assets     —       1,171   Note 3. Sale of fye business On February 20, 2020, the Company consummated the sale of substantially all of the assets and certain of the liabilities relating to fye to a subsidiary of Sunrise Records pursuant to an Asset Purchase Agreement dated January 28, 2017. Significant financial statement captions23, 2020, by reportable segment in U.S. dollarsand among the Company, Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World FL LLC, Trans World New York, LLC, 2428392 Inc., and Sunrise Records. The following table reconciles the assets sold to and liabilities assumed by Sunrise to cash proceeds received: Assets sold       Inventory   $ 50,122   Accounts receivable     62   Other current assets     1,005   fye business assets sold   $ 51,189                       Less liabilities assumed:         Accounts payable     (9,769 ) Deferred revenue     (6,764 ) Accrued expenses and other current liabilities     (779 ) Other long-term liabilities     (2,063 ) Operating lease liabilities     (20,035 ) fye business liabilities assumed   $ 39,410             Net proceeds   $ 11,779   The Company did not recognize a gain/loss upon the sale of the fye business as the assets of fye were impaired to the fair value of the assets as follows: of February 1, 2020. F-14 38  Index ($ in thousands)   Fiscal Year Ended February 3, 2018     Fiscal Year Ended January 28, 2017   Total Revenue                 fye   $ 268,397     $ 313,211   etailz     174,459       40,259   Total Company   $ 442,856     $ 353,470                     Gross Profit                 fye   $ 104,254     $ 124,735   etailz     39,589       9,924   Total Company   $ 143,843     $ 134,659                     Loss From Operations                 fye   $ (49,261)     $ (1,932)   etailz     (2,140)       (1,936)   Total Company   $ (51,401)     $ (3,868)                     Merchandise Inventory                 fye   $ 86,217     $ 109,612   etailz     22,895       16,392   Total Company   $ 109,112     $ 126,004                     Total Assets                 fye   $ 153,050     $ 215,466   etailz     94,856       92,344   Total Company   $ 247,906     $ 307,810                     Other Long Term Liabilities                 fye   $ 27,777     $ 38,792   etailz     1,354       349   Total Company   $ 29,131     $ 39,141                     Capital Expenditures                 fye   $ 7,342     $ 24,418   etailz     1,065       254   Total Company   $ 8,407     $ 24,672   Note 2.4.  Recently Adopted and Issued Accounting Pronouncements In June 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company’s fiscal year beginning February 4, 2018. The Company is continuing to assess the impact on our consolidated financial statements but will result in enhanced footnote disclosure requirements during the first quarter of fiscal 2018 including certain balance sheet activity and unsatisfied performance obligations related to certain promotional programs. The Company has determined that the adoption of this ASU will impact the timing of revenue recognition for gift card breakage. Gift card breakage is currently recognized at the point gift card redemption becomes remote. In accordance with this ASU, the Company will recognize gift card breakage in proportion to the pattern of rights exercised by the customer. Additionally, the Company has assessed and determined that our revenue recognition practices related to our current vendor-direct sales arrangements, for which the Company is the principal and recorded on a gross basis, will remain unchanged upon adoption. Based upon our preliminary assessment of potential impacts to the presentation of our consolidated financial statements primarily related to sales return reserves, F-15 our customer loyalty program, and certain other promotional programs, the Company will use a modified retrospective approach upon adoption of this ASU during the first quarter of fiscal 2018. The Company is continuing to evaluate the impact of the ASU’s expanded disclosure requirements. In February 2016, the FASB issued ASU 2016-02, “Leases”,No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which will replace most existing lease accounting guidance in U.S. GAAP.introduced an expected credit loss model for the impairment of financial assets measured at amortized cost. The core principle of this ASU is thatmodel replaces the probable, incurred loss model for those assets and instead, broadens the information an entity should recognize the rights and obligations resulting from leases asmust consider in developing its expected credit loss estimate for assets and liabilities. The new standard requires qualitative and specific quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities, including significant judgments and changes in judgments. The newmeasured at amortized cost. This standard will be effective for the Company’ssmaller reporting companies for fiscal yearyears beginning February 3, 2019, and requires the modified retrospective method of adoption. The Companyafter December 15, 2022, however early adoption is in the process of determiningpermitted. We are currently evaluating the impact of ASU 2016-02this new standard on itsthe consolidated financial statements. Given the nature of the operating leases for the Company’s home office, distribution center, and stores, the Company expects an increase to the carrying value of its assets and liabilities, however, the Company continues to evaluate the impact of the ASU on its consolidated financial statements. In January 2017,August 2018, the FASB issued ASU 2017-04, “Intangibles - Goodwill2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework— Changes to the Disclosure Requirements for Defined Benefit Plans”, which removes certain disclosures that are no longer cost beneficial and Other (Topic 350): Simplifyingalso includes additional disclosures to improve the Testoverall usefulness of the disclosure requirements to financial statement users. This standard will be effective for Goodwill Impairment,” which simplifies how an entitypublic entities for fiscal years beginning after December 15, 2020, however early adoption is required to test goodwill for impairment by eliminating step two frompermitted. We are currently evaluating the goodwill impairment test whereby a goodwill impairment loss is determined by comparing the implied fair valueimpact of a reporting unit’s goodwill with the carrying amount of that goodwill. Rather, an entity will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company adopted ASU 2017-04 in the fourth quarter of fiscal 2017, which did not have a significant impactthis new standard on the consolidated financial statements. In March 2017,December 2019, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits2019-12, “Simplifying the Accounting for Income Taxes” (Topic 715): Improving740), which simplifies the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” which is intendedaccounting for income taxes by eliminating certain exceptions to improve the presentation of net periodic pension cost and net periodic post-retirement benefit costguidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an entity’sinterim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the enacted changes in tax laws or rates. This standard will be effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, however early adoption is permitted. We are currently evaluating the impact of this new standard on the consolidated financial statementsstatements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 provides, among other things, guidance that modifications of contracts within the scope of Topic 470, Debt, should be accounted for by requiringprospectively adjusting the service cost componenteffective interest rate; modifications of contracts within the scope of Topic 840, Leases, should be disaggregated from other componentsaccounted for as a continuation of net benefit coststhe existing contract; and, presentedchanges in the same line item or itemscritical terms of hedging relationships, caused by reference rate reform, should not result in the de-designation of the instrument, provided certain criteria are met. The Company’s exposure to LIBOR rates includes its credit facility. The amendments are effective as other compensation costs for the employees. Additionally, only the service cost component of net benefit cost is eligible for capitalization when applicable. ASU 2017-07 is effective for the Company’s fiscal year beginning February 3, 2019, and must be applied retrospectively. ASU 2017-07March 12, 2020 through December 31, 2022. Adoption is permitted for early adoption, but only at the beginning of an annual period for which financial statements have not been issued or made available for issuance.any time. The Company is currently evaluating the impact that this ASUupdate will have on its reporting and asset recognition. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting,” which provided clarity as to what changes to the terms or conditions of share-based payment awards require an entity to apply modification accounting in Topic 718. ASU 2017-09 is effective for the Company for interim and annual periods in fiscal year beginning February 3, 2019, with early adoption permitted and is applied prospectively to changes in terms or conditions of awards occurring on or after the adoption date. Condensed Consolidated Financial Statements. F-16 39  Index Note 3. Acquisition and Investment Business Combination - etailz On October 17, 2016, the Company completed the purchase of all of the issued and outstanding shares of etailz. The acquisition of etailz is part of our strategy to diversify our business into the fastest growing segment of retail: the Digital Marketplace. The Company plans to access the relationships, operational expertise, and infrastructure built by etailz to help unlock the full potential of etailz and to accelerate our progress towards being the industry leader for digital marketplace sales and expertise. The Company paid $32.3 million in cash, issued 5.7 million shares of TWMC common stock at closing to the shareholders of etailz as consideration for their shares, and paid $4.3 million in cash advances to settle obligations of the selling shareholders. Based on the fair value of $3.56 per share on the acquisition date, the shares had a value of $20.4 million. An earn-out of up to a maximum of $14.6 million will be payable in fiscal 2018 and fiscal 2019 subject to the achievement by etailz of $6 million in operating income in fiscal 2017 and $7.5 million in fiscal 2018 as outlined in the share purchase agreement. In connection with the acquisition, the Company assumed a liability of the selling shareholders for an etailz employee bonus plan, of which $1.9 million was due and payable at closing and funded as part of the cash advances and the remaining $2.3 million will be earned over a two year service period. The acquisition and related costs were funded primarily from the Company’s cash on hand and short term borrowings under its revolving credit facility. The acquisition was accounted for using the purchase method of accounting. During the Company’s second quarter of fiscal 2017, the share purchase agreement with the selling shareholders of etailz was amended to provide that $11.5 million be released from the earnout escrow account and the $3.1 million remaining in the earnout escrow account may be payable in cash to the selling shareholders in 2019, subject to the achievement by etailz of operating income in excess of $15.5 million during the twenty-four month period ending February 2, 2019. In the event that etailz achieves operating income in excess of $13.5 million, but less than $15.5 million, an earnout of $1.6 million would be payable in 2019. If etailz operating income is below $13.5 million, the $3.1 million escrow would be returned to the Company. The amount released from the earnout escrow was disbursed during the Company’s second quarter of fiscal 2017 as follows: $5.0 million to the Company for future investment to support growth initiatives, $5.0 million to the selling shareholders, and $1.5 million to the Company (to be allocated to increase the maximum amount available under the etailz employee bonus plan from $4.2 million to $5.7 million). During fiscal 2017, the Company recorded a $3.3 million benefit related to its contingent consideration liability. The decrease in the value of the contingent consideration liability resulted from the actual financial results of etailz and the amendment of the earnout agreement as described in the paragraph above. This benefit is recorded in selling, general, and administrative expenses in the Company’s Consolidated Statements of Operations. In the fourth quarter of fiscal 2016, the Company recorded a $1.4 million benefit related to the contingent consideration liability. The decrease in the value of contingent liability resulted from actual fourth quarter financial results of etailz. This benefit is recorded in selling, general, and administrative expenses in the Company’s Consolidated Statements of Operations. F-17 The acquisition date fair value of the consideration for theRecent accounting pronouncements pending adoption not discussed above transaction consisted of the following as of October 17, 2016 (in thousands): Cash consideration   $ 36,600   Fair value of stock consideration     20,415   Fair value of contingent consideration     10,381   Fair value of indemnification consideration held in escrow     1,500   Fair value of purchase consideration   $ 68,896   The following table summarizes the allocation of the aggregate purchase price to the estimated fair value of the net assets acquired:     ($in thousands)       October 17, 2016   Assets (Liablilities) Acquired         Accounts receivable     1,533   Prepaid expenses and other current assets     5,896   Inventory     14,608   Property and equipment, net     663   Other long term-assets     12   Acquired intangible assets:         Trade names     3,200   Technology     6,700   Vendor relationships     19,100   Unfavorable lease valuation     (53 ) Goodwill     39,191   Total assets acquired   $ 90,850   Liabilities Assumed         Accounts payable   $ 4,888   Debt     4,729   Other current liabilities     5,349   Deferred taxes     6,988   Total liabilities assumed   $ 21,954   Net assets acquired   $ 68,896   The amount of goodwill represents the excess of the purchase price over the net identifiable assets acquired and liabilities assumed. Goodwill primarily represents, among other factors, the value of synergiesare either not applicable or are not expected to be realized and for the knowledge and expertise of, and established presence in, the digital marketplace, which do not qualify as separate amortizable intangible assets. Goodwill arising from the acquisition of etailz is not deductible for tax purposes. There were no adjustments from preliminary purchase price accounting to final. Thehave a material impact on our consolidated financial condition, results of operations, of etailz are reported in the Company’s etailz segment and included in the fiscal 2016 consolidated results of operations of the Company from the date of acquisition. The following unaudited pro forma financial information for the fifty-two weeks ended January 28, 2017, presents consolidated information as if the etailz acquisition had occurred on January 31, 2016. Because of different fiscal period ends, and in order to present results for comparable periods, the unaudited pro forma financial information for the fifty-weeks ended January 28, 2017, combines (i) the Company’s historical statement of operations for the fifty-two weeks ended January 28, 2017, and (ii) etailz historical statement of operations for the period from January 1, 2016 through August 31, 2016 and October 1, 2016 through October 16, 2016. The unaudited pro forma financial information is presented after giving effect to certain adjustments for acquisition-related costs, depreciation, amortization of definite lived intangible assets, interest expense on acquisition financing, and F-18 or cash flows. related income tax effects. The unaudited pro forma financial information is based upon currently available information and upon certain assumptions that the Company believes are reasonable under the circumstances. The unaudited pro forma financial information does not purport to present what the Company’s results of operations would actually have been if the aforementioned transaction had in fact occurred on such date or at the beginning of the period indicated, nor does it project the Company’s financial position or results of operations at any future date or for any future period.     Fifty-two Weeks Ended       January 28,       2017   (in thousands) ��       Pro forma total revenue   $ 434,171   Pro forma net loss     (4,986)             Pro forma basic and diluted loss per share   $ (0.14)             Pro forma weighted average number of common shares outstanding – basic and diluted     36,239   Joint Venture On April 11, 2017, the etailz segment of the Company entered into an agreement with another party for the purpose of acquiring and selling certain retail merchandise. etailz holds a 50% economic interest in the arrangement as of February 3, 2018. The initial cash investment was $2.6 million dollars. During the fiscal year ended February 3, 2018, the Company received distributions in the amount of $2.9 million from the joint venture, of which $1.1 million was return of capital and $1.8 million was the Company’s share of joint venture income. The remaining investment of $1.5 million was included in other assets in the Company’s Consolidated Balance Sheet as of February 3, 2018. Note 4. Goodwill and5. Other Intangible Assets Goodwill is not amortized, but is tested for impairment at least annually. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in the etailz acquisition. Determining the fair value of a reporting unit requires the use of significant estimates and assumptions, including revenue growth rates, operating margins, discount rates, and future market conditions, among others. Goodwill and otherOther long-lived assets are reviewed for impairment if circumstances indicate that the carrying amount may not be recoverable. We are continuing During fiscal 2019, the Company fully impaired its vendor relationships and the Company recognized an impairment loss of $0.8 million. The Company continues to amortize certain vendor relationships, technology, and trade names and trademarks that have finite lives. F-19 Identifiable intangible assets as of February 3, 2018January 30, 2021 consisted of the following (in thousands, except weighted-average amortization period):     February 3, 2018       Weighted Average Amortization Period (in months)   Gross Carrying Amount     Accumulated Amortization   Net Carrying Amount                           Vendor Relationships     120     $ 19,100     $ 2,487     $ 16,612   Technology     60       6,700       1,738       4,962   Trade names and trademarks     60       3,200       807       2,393               $ 29,000     $ 5,032     $ 23,967     The changes in net intangibles and goodwill from January 28, 2017 to February 3, 2018 were as follows:                     ($ in thousands)   January 28, 2017     Amortization     February 3, 2018                             Amortized intangible assets:                         Vendor relationships   $ 18,522     $ 1,910     $ 16,612   Technology     6,302       1,340       4,962   Trade names and trademarks     3,033       640       2,393   Net amortized intangible assets   $ 27,857     $ 3,890     $ 23,967                             Unamortized intangible assets:                         Goodwill   $ 39,191       -     $ 39,191   Total unamortized intangible assets   $ 39,191       -     $ 39,191   Estimatedfollowing: (amounts in thousands)   January 30, 2021       Weighted Average Amortization Period (in months)     Gross Carrying Amount     Accumulated Amortization     Impairment     Net Carrying Amount                                   Technology     60       6,700       3,854       2,587       259   Trade names and trademarks     60       3,200       2,727       -       473               $ 9,900     $ 6,581     $ 2,587     $ 732   The changes in net intangibles from February 1, 2020 to January 30, 2021 were as follows: (amounts in thousands)   February 1, 2020     Amortization     January 30, 2021                       Amortized intangible assets:                   Technology     647       388       259   Trade names and trademarks     1,113       640       473   Net amortized intangible assets   $ 1,760     $ 1,028     $ 732   The changes in net intangibles from February 2, 2019 to February 1, 2020 were as follows: (amounts in thousands)   February 2, 2019     Amortization     Impairment     February 1, 2020                             Amortized intangible assets:                         Vendor relationships   $ 880     $ 115     $ 765     $ -   Technology     1,035       388       -       647   Trade names and trademarks     1,753       640       -       1,113   Net amortized intangible assets   $ 3,668     $ 1,143     $ 765     $ 1,760   The remaining amortization expense for eachwill be recognized in fiscal 2021, at which time all of the five succeeding fiscal years and thereafter is as follows ($ in thousands): Fiscal Year   Amortization     2018     3,890   2019     3,890   2020     3,890   2021     3,325   2022     1,910   Thereafter     $7,062   other intangible assets will be fully amortized. F-20 40  Index Note 5.6. Fixed Assets Fixed assets consist of the following:     February 3,     January 28,       2018     2017   ($ in thousands)             Fixtures and equipment     $14,403       $131,216   Leasehold improvements     9,836       43,491   Total fixed assets     24,239       174,707   Allowances for depreciation     (10,693)       (129,610)   Fixed assets, net     $13,546       $45,097       January 30, 2021     February 1, 2020   (amounts in thousands)             Capitalized software   $ 3,721     $ 2,388   Fixtures and equipment     395       538   Leasehold improvements     45       45   Total fixed assets     4,161       2,971   Allowances for depreciation and amortization     (1,893 )     (781 ) Fixed assets, net   $ 2,268     $ 2,190   Depreciation of fixed assets isexpense included in fiscal 2020 and fiscal 2019 SG&A expenses within the Consolidated Statements of Operations as follows:     Fiscal Year       2017     2016     2015   ($ in thousands)                         Cost of sales     $645       $440       $523   Selling, general and administrative expenses     9,627       7,699       4,668   Total     $10,272       $8,139       $5,191   Depreciation expense related to the Company’s distribution center facilitywere $1.1 million and related equipment is included in cost of sales. All other depreciation of fixed assets is included in SG&A expenses. $1.8 million, respectively. Note 6.7. Restricted Cash As of January 30, 2021 and February 3, 2018 and January 28, 2017,1, 2020, the Company had restricted cash of $12.2$4.7 million and $16.1$5.9 million, respectively. In connection with Restricted cash balance at the acquisitionend of etailz and under the termsfiscal 2020 consisted of the share purchase agreement, as amended (see Note 3), the Company designated $1.5a $4.7 million of the restricted cash to be made available to satisfy any indemnification claims within 18 monthsrabbi trust that resulted from the date of acquisition, and $3.2 million of the restricted cash to equal the maximum earn-out amount that could be paid to the selling shareholders of etailz in accordance with the share purchase agreement, as amended. In addition, as a result of the death of itsthe Company’s former Chairman, the Company received $7.5of which $1.2 million which is held in a rabbi trust and has beenwas classified as restricted cash onin current assets and $3.5 million was classified as restricted cash as a long-term asset. Restricted cash balance at the accompanying Consolidated Balance Sheetend of fiscal 2019 consisted of a $5.9 million rabbi trust, that resulted from the death of the Company’s former Chairman, of which $1.0 million was classified as of February 3, 2018. restricted cash in current assets and $4.9 million was classified as restricted cash as a long-term asset. A summary of cash, cash equivalents and restricted cash is as follows (in(amounts in thousands):     February 3,     January 28,       2018     2017   Cash and cash equivalents   $ 31,326     $ 27,974   Restricted cash     12,180       16,103   Total cash, cash equivalents and restricted cash   $ 43,506     $ 44,077   There was     January 30, 2021     February 1, 2020   Cash and cash equivalents   $ 1,809     $ 2,977   Restricted cash     4,746       5,875   Total cash, cash equivalents and restricted cash   $ 6,555     $ 8,852   Note 8.  Debt New Credit Facility On February 20, 2020, Kaspien Inc. entered into a Loan and Security Agreement (the “Loan Agreement”) with Encina Business Credit, LLC (“Encina”), as administrative agent, under which the lenders party thereto committed to provide up to $25 million in loans under a three-year, secured revolving credit facility (the “New Credit Facility”).  Concurrent with the FYE Transaction, the Company borrowed $3.3 million under the New Credit Facility in order to satisfy the remaining obligations of the Company under its previous credit facility. The commitments by the lenders under the New Credit Facility are subject to borrowing base and availability restrictions. Up to $5.0 million of the New Credit Facility may be used for the making of swing line loans. As of January 30, 2021, the Company had borrowings of $6.3 million under the New Credit Facility.  Peak borrowings under the New Credit Facility during fiscal 2020 were $12.4 million.  As of January 30, 2021, the Company had no restricted cashoutstanding letters of credit. The Company had $5.0 million available for borrowing under the New Credit Facility as of January 30, 2016. F-21 2021. Note 7. Credit Facility In January 2017, Previously, the Company entered into a $50 million asset basedhad an amended and restated its revolving credit facility (“Credit Facility”) which amended the previous credit facility. The principal amount of all outstanding loans under the Credit Facility, together with any accrued but unpaid interest, are due and payable in January 2022, unless otherwise paid earlier pursuant to the terms of the Credit Facility. Payments of amounts due under the Credit Facility are secured by the assets of the Company. The Credit Facility contains a provision to increase availability to $75 million during October to December of each year, as needed. The availability under the Credit Facility is subject to limitations based on receivables and inventory levels. During fiscal 2017, the Company exercised the right to increase its availability to $60 million subject to the same limitations noted above. The Credit Facility contains customary affirmative and negative covenants, including restrictions on dividends and share repurchases, incurrence of additional indebtedness and acquisitions and covenants around the net number of store closings and restrictions related to the payment of cash dividends and share repurchases, including limiting the amount of dividends and share repurchases to $5.0 million annually and not allowing borrowings under the amended facility for the six months before or six months after the dividend payment. The Credit Facility also includes customary events of default, including, among other things, material adverse effect, bankruptcy, and certain changes of control.Wells Fargo.  As of February 3, 2018,1, 2020, the Company was compliant with all covenants. Interest under the Credit Facility will accrue, at the electionhad borrowings of the Company, at a Base Rate or LIBO Rate, plus, in each case, an Applicable Margin, which is determined by reference to the level of availability, with the Applicable Margin for LIBO Rate loans ranging from 1.75% to 2.00% and the Applicable Margin for Prime Rate loans ranging from 0.75% to 1.00%. In addition, a commitment fee of 0.25% is also payable on unused commitments. As ofFebruary 3, 2018 and January 28, 2017, the Company did not have any borrowings$13.1 million under the Credit Facility.  Peak borrowings under the Credit Facility during fiscal 2017 and fiscal 20162019 were $11.7 million and $21.5 million, respectively.$35.9 million.  As of February 1, 2020, the Company had no outstanding letters of credit. The Company had $41.0 million and $39.0$12 million available for borrowing under the Credit Facility as ofFebruary 3, 2018 and January 28, 2017, respectively. Note 8. Leases Atof February 3, 2018,1, 2020. 41  Index On February 20, 2020, in conjunction with the FYE Transaction, the Company leased 260 storesfully satisfied its obligations under operating leases, manythe Credit Facility through proceeds received from the sale of the fye business and borrowings under the New Credit Facility, as further discussed above, and the Credit Facility is no longer available to the Company. Subordinated Debt Agreement On March 30, 2020, the Company and Kaspien (the “Loan Parties”) entered into Amendment No. 1 to the Loan Agreement (the “Amendment”). Pursuant to the Amendment, among other things, (i) the Company was added as “Parent” under the Amended Loan Agreement, (ii) the Company granted a first priority security interest in substantially all of the assets of the Company, including inventory, accounts receivable, cash and cash equivalents and certain other collateral, and (iii) the Loan Agreement was amended to (a) permit the incurrence of certain subordinated indebtedness under the Subordinated Loan Agreement (as defined below) and (b) limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets. On March 30, 2020, the Loan Parties entered into a Subordinated Loan and Security Agreement (the “Subordinated Loan Agreement”) with the lenders party thereto from time to time (the “Lenders”) and TWEC Loan Collateral Agent, LLC (“Collateral Agent”), as collateral agent for the Lenders, pursuant to which the Lenders made a $5.2 million secured term loan (the “Subordinated Loan”) to Kaspien with a scheduled maturity date of May 22, 2023. As of January 30, 2021, unamortized debt issuance costs of $0.2 million are included in “Long-term Debt” on the unaudited condensed consolidated balance sheet. Directors Jonathan Marcus, Thomas Simpson, and Michael Reickert are the chief executive officer of Alimco Re Ltd. (“Alimco”), the managing member of Kick-Start III, LLC and Kick-Start IV, LLC (“Kick-Start”), and a trustee of the Robert J. Higgins TWMC Trust (the “Trust”), an affiliate of RJHDC, LLC (“RJHDC” and together with Alimco and Kick-Start, “Related Party Entities”), respectively.  The Related Party Entities are parties to the Subordinated Loan Agreement. On March 30, 2020, in conjunction with the Subordinated Loan Agreement, the Company issued warrants to purchase up to 244,532 shares of Common Stock with an aggregate grant date fair value of $0.8 million recorded as a discount to the Subordinated Loan Agreement, $0.6 million of which contain renewal optionswas unamortized as of January 30, 2021. Paycheck Protection Program On April 17, 2020, Kaspien received loan proceeds of $2.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and escalation clauses,Economic Security Act (“CARES Act”). The PPP Loan, which was in the form of a promissory note (the “Note”), dated April 10, 2020, between Kaspien and First Interstate Bank, as the lender, matures on April 17, 2022, bears interest at a fixed rate of 1% per annum, and is payable in monthly installments of $112,976. While under the terms of the PPP, some or all of the PPP Loan amount may be forgiven if the PPP Loan proceeds are used for periods ranging from one to ten years. Most leases also provide for payment of operatingqualifying expenses as described in the CARES Act and real estate taxes. Some also provide for contingentthe Note, such as payroll costs, benefits, rent, based on percentage of sales over a certain sales volume. In addition, as more fully discussed in Note 12 to Consolidated Financial Statements,and utilities, there is no assurance that the Company will be successful in qualifying for and receiving forgiveness on the PPP Loan amount. On August 20, 2020, the Company submitted an application for forgiveness to the SBA. On October 30, 2020, the Company received a follow up letter requesting additional information related to its forgiveness application. The Company submitted the requested information on November 9, 2020. On January 4, 2021, the Company received another request for additional information. The Company submitted the requested information on January 14, 2021. On April 14, 2021, the Company received another request for additional information. The Company submitted the requested information on April 26, 2021. As of April 30, the Company has not received a decision on its PPP Loan forgiveness request. Note 9.  Leases The Company currently leases its Albany, NY distribution center and administrative offices under an operatingand distribution center. During fiscal 2020 and fiscal 2019, the Company recorded net lease from an entity controlled bycosts of $0.8 million, and did not record any contingent rentals. As of January 30, 2021, the estatematurity of its former Chairman. Rental expense waslease liabilities is as follows ($ in thousands):     Fiscal Year       2017     2016     2015   Minimum rentals     $25,033       $28,531       $30,311   Contingent rentals     —       9       13         $25,033       $28,540       $30,324   follows: F-22     Operating Leases   (amounts in thousands)       2021     726   2022     748   2023     767   2024     652   2025     296   Thereafter     -   Total lease payments     3,189   Less: amounts representing interest     (335 ) Present value of lease liabilities   $ 2,854   42  Index Lease term and discount rate are as follows: As of January 30, 2021 Weighted-average remaining lease term (years) Operating leases 4.3 Weighted-average discount rate Operating leases 5 % Other information:     Fiscal 2020   (amounts in thousands)       Cash paid for amounts included in the measurement of operating lease liabilities         Operating cash flows from operating leases   $ 695   Future minimum rental payments required under allthe remaining leases that have initial or remaining non-cancelable lease terms at February 3, 2018,for the administrative office and distribution center in Spokane, Washington as of January 30, 2021, are as follows ($(amounts in thousands):     Operating Leases       2018   $25,308 2019   9,933 2020   7,899 2021   4,804 2022   1,746 Thereafter   965 Total minimum payments required     $50,655 In addition to the obligations in the table above, a number of the Company’s stores have leases which have rent payments based on the store’s sales volume in lieu of fixed minimum rent payments. During fiscal 2017, fiscal 2016, and fiscal 2015, minimum rent payments based on a store’s sales volume were $0.6 million, $0.8 million and $0.9 million, respectively. (amounts in thousands)   Operating Leases   2021   $ 726   2022     748   2023     767   2024     652   2025     296   Thereafter     -   Total minimum lease payments   $ 3,189   Note 9.10.  Shareholders’ Equity The Company classifies the repurchased shares as treasury stock on the Company’s Consolidated Balance Sheet. There were no treasury stock repurchases during fiscal 2017. 2020 and fiscal 2019. During fiscal 2016,2020, 9,949 shares were issued to Directors and employees. Of the Company repurchased 686,137 shares of common stock at an average price of $3.87 per share.issued, 1,062 were returned to the company to satisfy withholding requirements and retired to treasury shares. During fiscal 2015,2020, 100,988 warrants were exercised for proceeds of $1,010. On August 15, 2019, we completed a 1-for-20 reverse stock split of our outstanding Common Stock. As a result of this stock split, our issued and outstanding Common Stock decreased from 36,291,620 to 1,814,581 shares. Accordingly, all share and per share information contained in this report has been restated to retroactively show the Company repurchased 298,225 shareseffect of commonthis stock at an average price of $3.64 per share. Since the inception of the share repurchase program, the Company has repurchased 2,558,180 shares of common stock at an average price of $3.83 per share. The Company has approximately $12.2 million available for future purchases under its share repurchase program. split. No cash dividends were paid in fiscal 2017,2020 and fiscal 2016, or fiscal 2015. The Company’s Credit Facility contains certain restrictions related to the payment of cash dividends, including limiting the amount of dividends to $5.0 million annually and not allowing borrowings under the amended facility for the six months before or six months after the dividend payment. 2019. Note 10.11. Benefit Plans 401(k) Savings Plan Each segment of the Company offers a 401(k) Savings Plan to eligible employees meeting certain age and service requirements. The fye segment Kaspien offers a 401(k) plan, which permits participants to contribute up to 80% of their salary, including bonuses, up to the maximum allowable by IRS regulations. The Company matches 50% of the first 6% of employee contributions after completing one year of service. Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Participant vesting of the Company’s matching contribution is based on the years of service completed by the participant. Participants are fully vested upon the completion of four years of service. F-23 The etailz segment offers a 401(k) planKaspien Inc. 401(K) Plan, which permits participants to contribute up to the maximum allowable by IRS regulations.  The Company matches 100% of the first 6% of employee contributions after completing one year of service. Participants are immediately vested in their voluntary contributions plus actual earnings thereon.  Participant vesting of the Company’s matching contribution is based on the years of service completed by the participant.  Participants are fully vested upon the completion of three years of service.  All participant forfeitures of non-vested benefits are used to reduce the Company’s contributions or fees in future years. Total expense related to the Company’s matching contributions was approximately $525,000, $592,000$266,000 and $424,000$303,000 in fiscal 2017, 20162020 and 2015,fiscal 2019, respectively. Stock Award Plans As of January 30, 2021, there was approximately $0.4 million of unrecognized compensation cost related to stock option awards expected to be recognized as expense over a weighted average period of 3.5 years.  The FYE Transaction in February 2020 constituted a change of control and vesting on all unvested options was accelerated. As a result, unrecognized compensation expense of $0.2 million was recognized in fiscal 2020. Total compensation expense related to stock awards recognized in fiscal 2020 was $0.3 million. 43  Index The Company has outstanding awards under three employee stock award plans, the 2005 Long Term Incentive and Share Award Plan, the Amended and Restated 2005 Long Term Incentive and Share Award Plan (the “Old Plans”); and the 2005 Long Term Incentive and Share Award Plan (as amended and restated April 5, 2017 (the “New Plan”).  Collectively, these plans are referred to herein as the Stock Award Plans.  Additionally, the Company had a stock award plan for non-employee directors (the “1990 Plan”). The Company no longer issues stock options under the Old Plans or the 1990 Plan. Plans. Equity awards authorized for issuance under the New Plan total 5.0 million.250,000.  As of February 3, 2018,January 30, 2021, of the awards authorized for issuance under the Stock Award Plans, 2.8 millionapproximately 133,356 were granted and are outstanding, 1.4 million45,025 of which were vested and exercisable.  Shares available for future grants of options and other share basedshare-based awards under the New Plan at February 3, 2018as of January 30, 2021 were 4.9 million. Shares available for future grants of options and other share based awards at February 3, 2018 were 1.1 million. Total stock-based compensation expense, related to Company based Stock Award Plans, recognized in the Consolidated Statements of Operations for fiscal 2017, fiscal 2016 and fiscal 2015 was $0.6 million, $0.6 million and $0.5 million, respectively. During fiscal 2017, fiscal 2016 and fiscal 2015, the related total deferred tax benefit was $0. As of February 3, 2018, there was $0.8 million of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over a weighted average period of 2.5 years. Stock awards typically vest ratably over 4 years and expire ten years after the date of grant. In connection with the acquisition of etailz, the Company issued 1,572,552 restricted shares of Company common stock to a key etailz employee, with a grant date fair value of $3.56 per share. These shares vest ratably through January 2019. As of February 3, 2018, the Company recognized $3.1 million of compensation cost related to these restricted shares. As of February 3, 2018, there was approximately $2.5 million of unrecognized compensation cost related to these restricted shares that is expected to be recognized as expense over a weighted average period of 1.0 year. 145,419. The fair values of the options granted have been estimated at the date of grant using the Black - Scholes option pricing model with the following assumptions:     2017   2016   2015 Dividend yield   0%   0%   0% Expected stock price volatility   40.1%-46.4%   38.0%-47.5%   39.7%-50.2% Risk-free interest rate   1.74%-2.39%   1.06%-2.18%   1.32%-1.94% Expected award life ( in years)   5.64-5.71   4.92-6.98   4.92-5.71 Weighted average fair value per share of awards granted during the year   $0.73   $1.19   $1.49 F-24     2020     2019   Dividend yield     0 %     0 % Expected stock price volatility     88.0-105.5 %     63.7-70.1 % Risk-free interest rate     0.28%-0.56 %     1.35%-1.62 % Expected award life ( in years)     4.93-7.12       5.64-6.98   Weighted average fair value per share of awards granted during the year   $ 5.81     $ 4.46   The following table summarizes information about stock awards outstandingoption activity under the Company’s Stock Award Plans asPlans:     Employee and Director Stock Award Plans                                       Number of Shares Subject To Option     Stock Award Exercise Price Range Per Share     Weighted Average Exercise Price     Other Share Awards (1)     Weighted Average Grant Fair Value/ Exercise Price                                   Balance February 2, 2019     138,921     $ 19.60-$97.40     $ 55.00       13,571     $ 33.60   Granted     5,750     $ 3.51-$5.40       3.76       -       -   Cancelled/Forfeited     (15,475 )   $ 34.60-$95.40       57.68       -       -   Exercised     -       -       -       (3,626 )     5.66   Balance February 1, 2020     129,196     $ 3.51-$97.40     $ 52.11       9,945     $ 36.75   Granted     98,898     $ 3.68 -$10.75       7.36       -       -   Cancelled/Forfeited     (94,738 )   $ 7.12 -$97.40       51.84       -       -   Exercised     -       -       -       (9,945 )     (36.75 ) Balance January 30, 2021     133,356     $ 3.51-$97.40     $ 20.41       -     $ -    (1) Other Share Awards include deferred shares granted to executives and directors. As of February 3, 2018:     Outstanding   Exercisable             Weighted           Weighted             Average   Average   Aggregate       Average   Aggregate Exercise       Remaining   Exercise   Intrinsic       Exercise   Intrinsic   Price Range   Shares   Life   Price   Value   Shares   Price   Value   $0.00-$2.66   932,000   6.9   1.94   $—   352,000   $2.86   $—   2.67-3.50   721,000   7.2   3.35   —   480,000   6.72   —   3.51-4.87   932,914   7.6   3.95   —   479,164   3.29   —   Total   2,585,914   7.2   $3.06   $—   1,311,164   $3.29   $— TheJanuary 30, 2021, the aggregate intrinsic value in the preceding table represents the total pretax intrinsic valueof all outstanding and vested awards based on the Company’s closing common stock price of $1.60$38.56 as of February 3, 2018,January 30, 2021 was $3.3 million and $0.4 million, respectively.  The aggregate intrinsic value represents the value which would have been received by the award holders had all award holders under the Stock Award Plans exercised their awards as of that date. The following table summarizes stock option activity under the Stock Award Plans:     Employee and Director Stock Award Plans     Number of Shares Subject To Option   Stock Award Exercise Price Range Per Share   Weighted Average Exercise Price   Other Share Awards (1)   Weighted Average Grant Date Value                       Balance January 31, 2015   2,471,850   $1.73-$14.32   $6.81   237,400   $3.75 Granted   380,000   3.40-3.88   3.72   23,774   3.59 Exercised/vested   (8,000)   1.73-2.53   2.33   (50,000)   0.00 Forfeited   (18,500)   1.73-4.87   3.62   —   0.00 Canceled   (713,525)   1.73-14.32   13.28   —   0.10 Balance January 30, 2016   2,111,825   $1.73-$6.41   $4.04   211,174   $3.79 Granted   1,009,664   2.80-3.90   3.66   68,097   3.84                       Exercised/vested   (18,000)   1.73-2.53   2.09   (108,344)   3.68                       Forfeited   (38,250)   2.53-4.87   3.82   —   0.00 Canceled   (605,675)   2.53-6.41   5.23   —   0.00 Balance January 28, 2017   2,459,564   $1.73-$5.50   $3.58   170,927   $3.63 Granted   680,000   1.60-1.85   1.84   65,000   1.85 Exercised/vested   —   —   —   (52,500)   3.50 Forfeited   (389,500)   1.85-4.87   3.23   (5,000)   3.53 Canceled   (164,150)   3.79-5.50   5.43   -   0.00 Balance February 3, 2018   2,585,914   $1.60-$4.87   $3.06   178,427   $3.26 (1) Other Share Awards include deferred shares granted to executives and Directors. During fiscal 2017 and 2016, the Company did not issue any deferred shares to non-employee directors. During fiscal 2015,2019, the Company recognized approximately $9,000$40,000 in expenses for deferred shares issued to non-employee directors. F-25   There were no exercises of non-restricted stock options during fiscal 2020 and fiscal 2019. ($ in thousands)   Stock Option Exercises     2017   2016   2015 Cash received for exercise price   —   $39   $19 Intrinsic value   —   $25   $12 Defined Benefit Plans The Company maintains a non-qualified Supplemental Executive Retirement Plan (“SERP”) for certain Executive Officers of the Company.  The SERP, which is unfunded, provides eligible executives defined pension benefits that supplement benefits under other retirement arrangements.  The annual benefit amount is based on salary and bonus at the time of retirement and number of years of service. Prior to June 1, 2003, the Company had provided the Board of Directors with a noncontributory, unfunded retirement plan (“Director Retirement Plan”) that paid retired directors an annual retirement benefit. The final payments due under the director retirement plan were made in fiscal 2020. 44  Index For fiscal 2017, 2016,2020 and 2015,2019, net periodic benefit cost recognized under both plans totaled approximately $0.6 million, $0.8$0.3 million and $1.0$0.6 million, respectively.  The accrued pension liability for both plans was approximately $18.3$17.4 million and $18.7$17.5 million atas of January 30, 2021 and February 3, 2018 and January 28, 2017,1, 2020, respectively, and is recorded within other long termlong-term liabilities on the Consolidated Balance Sheets.   The accumulated benefit obligation for both plans was $18.4$17.4 million and $19.0$17.7 million foras of the fiscal years ended January 30, 2021 and February 3, 2018 and January 28, 2017,1, 2020, respectively. The following is a summary of the Company’s defined benefit pension plans as of each fiscal year-end : year-end: Obligation and funded status: ($ in thousands)   February 3, 2018     January 28, 2017   Change in Projected Benefit Obligation:                 Benefit obligation at beginning of year   $ 18,700     $ 19,026   Service cost     63       61   Interest cost     555       549   Actuarial loss     177       196   Benefits paid     (1,161 )     (1,132 ) Benefit obligation at end of year   $ 18,334     $ 18,700                     Fair value of plan assets at end of year   $ -     $ -                                       Funded status   $ (18,334 )   $ (18,700 ) Unrecognized prior service cost     -       17   Unrecognized net actuarial gain     (102 )     (315 ) Accrued benefit cost   $ (18,436 )   $ (18,998 ) F-26 Funded Status: (amounts in thousands)   January 30, 2021     February 1, 2020   Change in Projected Benefit Obligation:             Benefit obligation at beginning of year   $ 17,673     $ 17,476   Service cost     -       55   Interest cost     355       568   Actuarial loss     535       773   Benefits paid     (1,192 )     (1,199 ) Benefit obligation at end of year   $ 17,371     $ 17,673                     Fair value of plan assets at end of year   $ -     $ -                     Funded status   $ (17,371 )   $ (17,673 ) Unrecognized net actuarial loss     1,077       529   Accrued benefit cost   $ (16,294 )   $ (17,144 ) Amounts recognized in the Consolidated Balance Sheets consist of:     February 3, 2018     January 28, 2017   ($ in thousands)             Current liability   $ (1,199 )   $ (1,161 ) Long term liability     (17,135 )     (17,539 ) Add: Accumulated other comprehensive income     (102 )     (298 ) Net amount recognized   $ (18,436 )   $ (18,998 )     January 30, 2021     February 1, 2020   (amounts in thousands)             Current liability   $ (1,184 )   $ (1,199 ) Long term liability     (16,722 )     (17,247 ) Accumulated other comprehensive loss     535       773   Net amount recognized   $ (17,371 )   $ (17,673 ) Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Loss: Net Periodic Benefit Cost:   Fiscal Year       2017     2016     2015   Service cost   $ 63     $ 61     $ 66   Interest cost     555       549       583   Amortization of prior service cost     17       220       342   Amortization of actuarial net gain     (36 )     (14 )     (34 ) Net periodic benefit cost   $ 599     $ 816     $ 957   Net Periodic Benefit Cost:     Fiscal Year       2020     2019   Service cost   $ -     $ 55   Interest cost     355       568   Amortization of actuarial net gain     -       (20 ) Net periodic benefit cost   $ 355     $ 603   Other Changes in Benefit Obligations Recognized in Other Comprehensive (Income) Loss:     2017     2016   Net prior service cost recognized as a component of  net periodic benefit cost   $ (17)     $ (220) Net actuarial gain recognized as a component of net periodic benefit cost     36       14   Net actuarial losses arising during the period     177       196         196       (10)   Income tax effect     -       -   Total recognized in other comprehensive (income) loss   $ 196     $ (10)   Total recognized in net periodic benefit cost and other comprehensive loss   $ 795     $ 806       2020     2019   Net prior service cost recognized as a component of  net periodic benefit cost   $ -     $ -   Net actuarial loss arising during the period     528       744         528       744   Income tax effect     -       -   Total recognized in other comprehensive loss   $ 528     $ 744   Total recognized in net periodic benefit cost and other comprehensive loss   $ 883     $ 1,341   45  Index The pre-tax components of accumulated other comprehensive loss, which have not yet been recognized as components of net periodic benefit cost as of February 3, 2018, January 28, 2017, and January 30, 20162021 and February 1, 2020 and the tax effect are summarized below. ($ in thousands)   February 3,   January 28,   January 30,     2018   2017   2016 Net unrecognized actuarial gain   ($102)   ($315)   ($525) Net unrecognized prior service cost          -   17   237 Accumulated other comprehensive income   ($102)   ($298)   ($288) Tax expense   1,100   1,100   1,100 Accumulated other comprehensive loss   $998   $802   $812 F-27     Fiscal Year         2017   2016     Weighted-average assumptions used to determine benefit obligation:             Discount rate   3.42%   3.58%     Salary increase rate   3.00%   3.00%     Measurement date   Jan 31, 2018   Jan 28, 2017                       Fiscal Year     2017   2016   2015 Weighted-average assumptions used to determine net periodic benefit cost:             Discount rate   3.16%   3.63%   3.00% Salary increase rate   3.00%   3.00%   3.00% (amounts in thousands)   January 30,     February 1,       2021     2020   Net unrecognized actuarial loss   $ 528     $ 744   Other actuarial adjustments     379       (365 ) Accumulated other comprehensive loss   $ 907     $ 379   Tax expense     1,100       1,100   Accumulated other comprehensive loss   $ 2,007     $ 1,479       Fiscal Year       2020     2019   Weighted-average assumptions used to determine benefit obligation:             Discount rate     1.94 %     2.31 % Salary increase rate     0.00 %     0.00 % Measurement date   Jan 31, 2021     Jan 31, 2020       Fiscal Year       2020     2019   Weighted-average assumptions used to determine net periodic benefit cost:             Discount rate     1.94 %     2.31 % Salary increase rate     N/A       N/A   The discount rate is based on the rates implicit in high-quality fixed-income investments currently available as of the measurement date.  The Citigroup Pension Discount Curve (CPDC) rates are intended to represent the spot rates implied by the high qualityhigh-quality corporate bond market in the U.S.  The projected benefit payments attributed to the projected benefit obligation have been discounted using the CPDC mid-year rates and the discount rate is the single constant rate that produces the same total present value. The following benefit payments which reflect expected future service, as appropriate,over the next ten years are expected to be paid: Year   Pension Benefits   ($ in thousands) 2018     1,199   2019     1,199   2020     1,192   2021     1,184   2022     1,149   2023 – 2027     6,510   Accumulated Other Comprehensive Loss ($ in thousands) Pension Benefit January 28, 2017 ($802 ) Other comprehensive loss before reclassifications (196 ) February 3, 2018 ($998 ) F-28 Year   Pension Benefits   (amounts in thousands)         2021     1,184   2022     1,149   2023     1,149   2024     1,149   2025     1,269   2026 – 2030     6,511   Note 11.12.  Income Taxes Income tax benefitexpense consists of the following:     Fiscal Year     2017   2016   2015   ($ in thousands)     Federal - current   $ (500)     $ -     $ -   State - current     201       215       181   Deferred     -       (6,988 )     -   Income tax expense (benefit)   $ (299)     $ (6,773 )   $ 181       Fiscal Year       2020     2019(1)   (amounts in thousands)       Federal - current   $ (3,542 )   $ -   State - current     -       44   Deferred     -       -   Income tax (benefit) expense   $ (3,542 )   $ 44   (1) Amount adjusted to reflect impact of discontinued operations. 46  Index A reconciliation of the Company’s effective income tax rate with the federal statutory rate is as follows:     Fiscal Year     2017   2016   2015 Federal statutory rate     33.7%       35.0%       35.0% State income taxes     (0.5%)       (6.0%)       4.1% Change in valuation allowance     36.1%       (57.2%)       (39.0%)   Cash surrender value - insurance / benefit program     7.0%       4.0%       5.3% Contingent consideration     2.6%       19.1%       —% Change in US Federal Statutory Tax Rate     (79.4%)       —%       —% Deferred tax benefit - acquisition     —%       196.1%       —% Other     1.2%       (0.9%)       0.9% Effective tax rate     0.7%       190.1%       6.3%   Fiscal Year      2020     2019(1)   Federal statutory rate     21.0 %     21.0 % State income taxes, net of federal tax effect     0.0 %     0.3 % Change in Valuation Allowance     (27.7 %)     (21.0 %) Cash surrender value - insurance / benefit program     6.8 %     0.1 % Uncertain tax position     47.6 %     --- % Other     (0.19 %)     (0.1 %) Effective tax rate     (47.6 %)     0.3 % (1) Amount adjusted to reflect impact of discontinued operations. The Other category is comprised of various items, including the impacts of non-deductible meals, dues,entertainment, penalties and parking benefits and the refundable portion of the federal currentalternative minimum tax benefit on refundable AMT taxcarryover credit. Significant components of the Company’s deferred tax assets and liabilities are as follows:     February 3, 2018   January 28, 2017 ($ in thousands)     DEFERRED TAX ASSET                 Accrued Expenses   $ 260     $ 400   Inventory     -       347   Retirement and compensation related accruals     6,724       9,063   Fixed assets     7,561       1,718   Federal and state net operating loss and credit carry forwards     64,807       83,221   Real estate leases, included deferred rent     2,446       4,141   Losses on investment     827       1,268   Others     577       901   Gross deferred tax assets before valuation allowance     83,202       101,059   Less: valuation allowance     (76,810 )     (89,443 ) Total deferred tax assets   $ 6,392     $ 11,616                     DEFERRED TAX LIABILITIES                 Intangibles   $ (6,193 )   $ (11,616 ) Inventory     (199 )     -   Total deferred tax liabilities   $ (6,392 )   $ (11,616 )                   NET DEFERRED TAX ASSET   $ -     $ -   F-29     January 30, 2021     February 1, 2020   (amounts in thousands)       DEFERRED TAX ASSETS             Accrued Expenses   $ 71     $ 1,783   Inventory     215       32   Retirement and compensation related accruals     3,981       5,888   Fixed assets     218       6,470   Federal and state net operating loss and credit carry forwards     90,206       83,562   Real estate leases, included deferred rent     -       5,712   Losses on investment     853       896   Others     107       549   Gross deferred tax assets before valuation allowance     95,651       104,892   Less: valuation allowance     (95,022 )     (104,556 ) Total deferred tax assets   $ 629     $ 336                     DEFERRED TAX LIABILITIES                 Intangibles   $ (629 )   $ (336 ) Inventory     -       -   Total deferred tax liabilities   $ (629 )   $ (336 )                   NET DEFERRED TAX ASSET   $ -     $ -   The Company, at the end of fiscal 2020, has a net operating loss carryforward of $208.3$346.7 million for federal income tax purposes andwhich will expire at various times throughout 2040 with a portion being available indefinitely.  The Company has approximately $273.4$219.5 million of net operating loss carryforward for state income tax purposes as of the end of fiscal 20172020 that expire at various times through 20372040 and are subject to certain limitations and statutory expiration periods.  The reduction in state net operating loss carryforward is due to the FYE Transaction, as the Company will not utilize those losses. The state net operating loss carryforwards are subject to various business apportionment factors and multiple jurisdictional requirements when utilized.   The Company has federal tax credit carryforwards of $0.5 million which will expire in various amounts through 2026.  The Company has state tax credit carryforwards of $1.1 million, of which $0.2 million will expire in 2027 with the remainder available indefinitely. million. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.  Management considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment.   Based on the available objective evidence, management concluded that a full valuation allowance should be recorded against its deferred tax assets.  As of February 3, 2018,January 30, 2021, the valuation allowance decreased to $76.8$95.0 million from $89.4$104.6 million at January 28, 2017. The decrease in the Company’s deferred tax assets was caused primarily by enactmentas of the Tax Cuts and Jobs Act which was enacted on December 22, 2017 and changes in certain deductible temporary differences to offset income before income taxes earned in fiscal 2017.February 1, 2020.   Management will continue to assess the valuation allowance against the gross deferred assets. 47  Index A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the respective years is provided below.  Amounts presented excluded interest and penalties, where applicable, on unrecognized tax benefits:     Fiscal Year     2017   2016   2015 ($ in thousands)     Unrecognized tax benefits at beginning of year   $ 1,930     $ 1,930     $ 1,930   Increases in tax positions from prior years     -       -       -   Decreases in tax positions from prior years     -       -       -   Increases in tax positions for current years     -       -       -   Settlements     -       -       -   Lapse of applicable statute of limitations     -       -       -   Unrecognized tax benefits at end of year   $ 1,930     $ 1,930     $ 1,930       Fiscal Year       2020     2019   (amounts in thousands)       Unrecognized tax benefits at beginning of year   $ 1,930     $ 1,930   Increases in tax positions from prior years     -       -   Decreases in tax positions from prior years     (1,517 )     -   Increases in tax positions for current years     -       -   Settlements     -       -   Lapse of applicable statute of limitations     -       -   Unrecognized tax benefits at end of year   $ 413     $ 1,930   As of February 3, 2018,January 30, 2021, the Company had $1.9 million of gross unrecognized tax benefits, $1.5 million of which would affect the Company’s tax rate if recognized.  While it is reasonably possible that the amount of unrecognized tax benefits will increase or decrease within the next twelve months, the Company does not expect the change to have a significant impact on its results of operations or financial position.  The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions.  The Company has substantially concluded all federal income tax matters and all material state and local income tax matters through fiscal 2013. The Company’s practice is to recognize interest and penalties associated with its unrecognized tax benefits as a component of income tax expense in the Company’s Consolidated Statements of Operations.  During fiscal 2017,2020, the Company accrued a provision for interest expense of $0.2 million.  As of February 3, 2018,January 30, 2021, the liability for uncertain tax positions reflected in the Company’s Consolidated Balance Sheets was $3.1$3.5 million, including accrued interest and penalties of $2.3$2.7 million. On December 22, 2017, the The Tax Cuts and Jobs Act (the “Act”) was enacted. The Act makes broad and complex change to the U.S. tax code including a significant reduction to the U.S. federal corporate tax rate from F-30 35 percent to 21 percent effective January 1, 2018. Accordingly, the federal deferred tax assets were written down to account for the change. The write down is reflected in both the valuation allowance and the deferred tax assets which total $34.0 million. This change is also presented in the effective tax rate schedule as a reduction to the current year losses by 79.3%. The valuation allowance rate impact includes an offsetting reduction for the tax rate which results in no change to the provision for income taxes. The Act also repeals the Corporation Alternative Minimum Tax (“AMT”) for tax years beginning after December 31, 2017.  Any AMT carryover credits will bebecame refundable starting in the 2018 tax year, and any remaining credit will be fully refundable in 2021, as such, the Company recorded a current benefit in its' financial statements. 2021. Note 12.13.  Related Party Transactions The Prior to the consummation of the FYE Transaction, the Company leasesleased its 181,300 square foot distribution center/office facility in Albany, New York from an entity controlled by the estate of Robert J. Higgins, its former Chairman and largest shareholder. The original distribution center/office facility was occupiedLoss from fye business in 1985.the Statement of Operations. On December 4, 2015,February 20, 2020, as part of the FYE Transaction, the Company amendedassigned the rights and restatedobligations of the lease.lease to the acquiror. Directors Jonathan Marcus, Thomas Simpson, and Michael Reickert are the chief executive officer of Alimco Re Ltd. (“Alimco”), the managing member of Kick-Start III, LLC and Kick-Start IV, LLC (“Kick-Start”), and a trustee of the Robert J. Higgins TWMC Trust (the “Trust”), an affiliate of RJHDC, LLC (“RJHDC” and together with Alimco and Kick-Start, “Related Party Entities”), respectively.  The lease commenced January 1, 2016, and expires on December 31, 2020. UnderRelated Party Entities are parties to the new lease dated December 4, 2015, and accounted for as an operating lease,following agreements with the Company paid $1.2entered into on March 30, 2020: Subordinated Loan and Security Agreement, pursuant to which the Related Party Entities made a $5.2 million secured term loan ($2.7 million from Alimco, $0.5 million from Kick-Start, and $2.0 million from RJHDC) to Kaspien with a scheduled maturity date of May 22, 2023, interest accruing at the rate of twelve percent (12%) per annum and compounded on the last day of each calendar quarter by becoming a part of the principal amount, and secured by a second priority security interest in both fiscal 2017 and fiscal 2016. Undersubstantially all of the lease prior to December 4, 2015,assets of the Company paid annual rentand Kaspien; Common Stock Purchase Warrants (“Warrants”), pursuant to which the Company issued warrants to purchase up to 244,532 shares of $2.1 millionCommon Stock to the Related Party Entities (127,208 shares for Alimco, 23,401 shares for Kick-Start, and 93,923 shares for RJHDC), subject to adjustment in fiscal 2015. Underaccordance with the terms of the lease agreement,Warrants, at an exercise price of $0.01 per share.  As of April 15, 2021, 236,993 of the Warrants had been exercised by the Related Party Entities and 7,539 warrants remained outstanding; Contingent Value Rights Agreement (the “CVR Agreement”), pursuant to which the Related Party Entities received contingent value rights (“CVRs”) representing the contractual right to receive cash payments from the Company is responsiblein an amount equal, in the aggregate, to 19.9% of the proceeds (10.35% for property taxesAlimco, 1.90% for Kick-Start, and other operating costs7.64% for RJHDC) received by the Company in respect of certain intercompany indebtedness owing to it by Kaspien and/or its equity interest in Kaspien; and Voting Agreement (the “Voting Agreement”), pursuant to which the Related Party Entities, the Trust, Mr. Simpson and their respective related entities agreed to how their respective shares of the Company’s capital stock held by the parties will be voted with respect to the premises. Sara Neblett,designation, election, removal, and replacement of members of the wifeBoard of Josh Neblett,Directors of the Executive Advisor of etailz, was employed with the Company as the Vice President of Partner Care of etailz. Ms. Neblett received $165,250 in cash compensation during fiscal 2017. Company. 48  Index Note 13.14. Commitments and Contingencies Legal Proceedings The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated.  Although there can be no assurance as to the ultimate disposition of these matters, it is management’s opinion, based upon the information available at this time, that the expected outcome of these matters, individually and in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Company. Store Manager Loyalty Memberships and Magazine Subscriptions Class Actions Two former Store Managers filed actions alleging claims of entitlement to unpaid compensation for overtime. In one action, the plaintiff seeks to represent a class of allegedly similarly situated employees who performed the same position (Store Manager and Senior Assistant Manager) while the other plaintiff seeks to represent a class of allegedly similarly situated employees who performed the same position (Store Manager). Specifically, Carol SpackAction On November 14, 2018, three consumers filed a punitive class action complaint against Trans World Entertainment Corporation (Trans World)the Company and Synapse Group, Inc. in the United States District Court for the District of Massachusetts, Boston Division (Case No.1:18-cv-12377-DPW) concerning enrollment in the Company’s Backstage Pass VIP loyalty program and associated magazine subscriptions.  The complaint alleged, among other things, that the Company’s “negative option marketing” misled consumers into enrolling for membership and subscriptions without obtaining the consumers’ consent.  The complaint sought to represent a nationwide class of “all persons in the United States” who were enrolled in and/or charged for Backstage Pass VIP memberships and/or magazine subscriptions, and to obtain statutory and actual damages on their behalf. On April 11, 2019, the plaintiffs voluntarily dismissed their lawsuit.  On May 8, 2019, two of the plaintiffs from the dismissed lawsuit filed a similar putative class action in Massachusetts state court (Civ. Act. No. 197CV00331, Mass. Super. Ct. Hampden Cty.), based on the same allegations, but this time seeking to represent only a class of “FYE customers in Massachusetts” who were charged for VIP Backstage Pass Memberships and/or magazine subscriptions.  The Company removed that lawsuit back to federal court on June 12, 2019, and then filed a motion to dismiss and/or strike the plaintiff’s class action allegations on June 28, 2019.  On February 2, 2021 the court granted the Company’s motion, struck the class action allegations, and dismissed the individual plaintiffs’ claims for lack of jurisdiction.  Plaintiffs appealed the court’s decision on February 24, 2021.   The parties participated in a mandatory court-annexed mediation session on April 8, 2021.  The parties have agreed on terms to resolve the matter fully and finally, and the appeal will be dismissed without material impact on the financial results of the Company. Store Manager Class Actions There are two pending class actions.  The first, Spack v. Trans World Entertainment Corp. was originally filed in the District of New Jersey, on April 20, 2017 (Case No.: 3:17-cv-02687-BRM-LHG) alleging(the “Spack Action”).  The Spack Action alleges that she is entitled to unpaid compensation for overtime under the federal Fair Labor Standards Act (FLSA). She brings a nationwide collective action under the FLSA on behalf of allCompany misclassified Store Managers and(“SMs”) as exempt nationwide.  It also alleges that the Company improperly calculated overtime for Senior Assistant Managers. SheManagers (“SAMs”) nationwide, and that both SMs and SAMs worked “off-the-clock.”  It also brings class action claims underalleges violations of New Jersey and Pennsylvania law on behalf of all persons who worked as Store Managers in New Jersey or Senior Assistant Managers in Pennsylvania. On May 19, 2017, NatashaState Law with respect to calculating overtime for SAMs.  The second, Roper filed a complaint againstv. Trans World Entertainment Corp., was filed in the U.S. District Court for the Northern District of New York, (Case No.: 1:17-cv-0553-TJM-CFH) in which sheMay 2017 (the “Roper Action”).  The Roper Action also alleges that she is F-31 entitled to unpaid compensation for overtime under the FLSA. Ms. Roper bringsasserts a nationwide collective action under the FLSAmisclassification claim on behalf of all similarly situated Store Managers. SMs.  Both actions were consolidated into the Northern District of New York, with the Spack Action being the lead case. The Company has reached a settlement with the plaintiffs for both store manager class actions, which has received preliminary approval from the court.  The Company reserved $0.4 million for the settlement as of February 1, 2020.  Notices of the settlement have been issued to class members, and the settlement claims process is currently ongoing.  A final settlement approval hearing has been set by the court for April 14, 2021. Note 14.15. Basic and Diluted Loss Per Share Basic loss per share is calculated by dividing net loss by the weighted average common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock (net of any assumed repurchases) that then shared in the earnings of the Company, if any.  It is computed by dividing net loss by the sum of the weighted average shares outstanding and additional Common Shares that would have been outstanding if the dilutive potential common shares had been issued for the Company’s Common Stock awards from the Company’s Stock Award Plans. 49  Index The following represents basic and diluted loss per share for continuing operations, loss from discontinued operations and net loss for the respective periods:     Fifty-two Weeks Ended   (in thousands, except per share amounts)   January 30, 2021     February 1, 2020           Loss from continuing operations   $ (3,892 )   $ (14,393 )                   Basic and diluted loss per common share from continuing operations   $ (2.10 )   $ (7.93 )                   Loss from discontinued operations   $ -     $ (44,351 ) Basic and diluted loss per common share from discontinued operations   $ -     $ (24.42 )                   Net loss   $ (3,892 )   $ (58,744 )                                     Basic and diluted loss per common share   $ (2.10 )   $ (32.35 )                   Weighted average number of common shares outstanding – basic and diluted     1,849       1,816   Note 16.  Quarterly Financial Information (Unaudited)         Fiscal 2017 Quarter Ended     Fiscal   February 3,   October 28,   July 29,   April 29,     2017   2018(2)   2017   2017   2017(1)     ($ in thousands, except for per share amounts) Total Revenue   $442,856     $145,409       $93,001       $102,479       $101,967   Gross profit     143,843     40,787       31,581       35,170       36,305   Net income (loss)   ($42,553)   ($32,450)   ($8,071)   ($5,565)   $3,533   Basic and diluted income (loss) per share   ($1.18)   ($0.90)   ($0.22)   ($0.15)   $0.10                 Fiscal 2016 Quarter Ended     Fiscal   January 28,   October 29,   July 30,   April 30,     2016   2017   2016   2016   2016     ($ in thousands, except for per share amounts) Total Revenue   $353,470   $147,109   $66,282   $64,349   $75,730 Gross profit   134,659   50,258   26,872   26,701   30,828 Net income (loss)   $3,211   $8,322   ($483)   ($4,655)   $27 Basic and diluted income (loss) per share   $0.10   $0.23   ($0.02)   ($0.15)   $0.00           Fiscal 2020 Quarter Ended       Fiscal 2020     January 30, 2021     October 31, 2020(2)     August 1, 2020     May 2, 2020           Total Revenue   $ 158,345     $ 45,547     $ 38,913     $ 42,296     $ 31,589   Gross profit     16,304       4,678       3,891       4,423       3,312   Income (loss) from continuing operations     (3,892 )     (139 )     2,552     (899 )     (5,406 ) Net income (loss)   $ (3,892 )   $ (139 )   $ 2,552     $ (899 )   $ (5,406 ) Diluted income (loss) per share (3)   $ (2.10 )   $ (0.03 )   $ 1.39     $ (0.49 )   $ (2.97 )           Fiscal 2019 Quarter Ended       Fiscal 2019     February 1, 2020(1)     November 2, 2019     August 3, 2019     May 4, 2019           Total Revenue   $ 133,216     $ 35,208     $ 28,616     $ 34,260     $ 35,132   Gross profit     10,851       2,267       2,720       3,087       2,777   Loss from continuing operations     (14,393 )     (3,195 )     (3,094 )     (3,758 )     (4,346 ) Net loss   $ (58,744 )   $ (19,659 )   $ (23,155 )   $ (8,128 )   $ (7,802 ) Basic and diluted loss per share(3)   $ (32.35 )   $ (10.81 )   $ (12.73 )   $ (4.48 )   $ (4.20 ) 1. Includes $0.8 million impairment of fixed assets and intangibles. 2. Includes an income tax benefit of $3.5 million related to the reversal of liabilities accrued pursuant to ASC 740-10, Accounting for Uncertain Tax Positions 3. Per share amounts reflect the 1-for- 20 stock split during fiscal 2019. Note 17.  Subsequent Events On March 18, 2021 the Company completed the closing of an underwritten offering of 416,600 shares of common stock of the Company, at a price to the public of $32.50 per share. The gross proceeds of the offering were approximately $13.5 million, prior to deducting underwriting discounts and commissions and estimated offering expenses. The Company intends to use the net proceeds from this offering for general corporate purposes, including working capital to implement its strategic plans focused on brand acquisition, investments in technology to enhance its scalable platform and its core retail business. 50  Index Index to Exhibits Document Number and Description Exhibit No. 1.1 Underwriting Agreement, dated March 16, 2021, by and between Kaspien Holdings Inc. and Aegis Capital Corp. - incorporated herein by reference to Exhibit 1.1 to the Company’s Form 8-K filed on March 16, 2021. Commission File No. 0-14818.     2.1 1. Includes $8.7 million gain from insurance proceeds. 2. Includes $29.1 million impairment of fixed assets. F-32 Index to Exhibits Document Number and Description Exhibit No. 2.1 ShareAsset Purchase Agreement by and among Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World Entertainment Corporation, etailz,FL LLC, Trans World New York, LLC, Kaspien Holdings Inc., each equityholder ofetailz,2428392 Inc., and Thomas C. Simpson, as sellers’ representative,2428391 Ontario Inc, o/a Sunrise Records, dated as of October 17, 2016January 23, 2020 – incorporated herein by reference to Exhibit 2.1 to the Company’s Form 8-K filed on October 18, 2016.January 23, 2020. Commission File No. 0-14818.     2.2 Registration RightsAmendment No. 1 to Asset Purchase Agreement by and among Record Town, Inc., Record Town USA LLC, Record Town Utah LLC, Trans World Entertainment CorporationFL LLC, Trans World New York, LLC, Kaspien Holdings Inc., 2428392 Inc., and each holder of Consideration Shares,2428391 Ontario Inc, o/a Sunrise Records, dated as of October 17, 2016February 20, 2020 – incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 18, 2016.February 20, 2020. Commission File No. 0-14818. 2.3 Amendment No. 1 to Share Purchase Agreement by and among Trans World Entertainment Corporation, etailz Inc. and Thomas C. Simpson, as sellers’ representative, dated as of May 3, 2017 – incorporated herein by reference to Exhibit 1.1 to the Company’s Form 8-K filed on May 4, 2017. Commission File No. 0-14818.     3.1 Restated Certificate of Incorporation —– incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year ended January 29, 1994.  Commission File No. 0-14818.     3.2 Certificate of Amendment to the Certificate of Incorporation — incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 29, 1994. Commission File No. 0-14818.     3.3 Certificate of Amendment to the Certificate of Incorporation —– incorporated herein by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the year ended January 31, 1998.  Commission File No. 0-14818.     3.4 Amended By-Laws —– incorporated herein by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K for the year ended January 29, 2000.  Commission File No. 0-14818.     3.5 Form of Certificate of Amendment to the Certificate of Incorporation—Incorporation – incorporated herein by reference to Exhibit 3.5 to the Company’s Registration Statement on Form S-4, No. 333-75231.     3.6 Form of Certificate of Amendment to the Certificate of Incorporation—Incorporation – incorporated herein by reference to Exhibit 3.6 to the Company’s Registration Statement on Form S-4, No. 333-75231.     3.7 Certificate of Amendment to the Certificate of Incorporation—Incorporation – incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed August 15, 2000.  Commission File No. 0-14818.     3.8 Certificate of Amendment to the Certificate of Incorporation -– incorporated herein by reference to Exhibit 2 to the Company’s Current Report on Form 8-A filed August 15, 2000. Commission File No. 0-14818.     3.9 Certificate of Amendment to the Certificate of Incorporation – incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed July 16, 2019.  Commission File  No. 0-14818. 3.10 Amendment No. 1 to By-Laws – incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed March 31, 2020. Commission File No. 0-14818.   4.8 3.11 Second Amended and restated Credit Agreement between Certificate of Amendment of Certificate of Incorporation of Trans World Entertainment Corporation, and Wells Fargo; National Association dated January 17, 2017–September 3, 2020 – incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K filed on September 3, 2020. Commission File No. 0-14818. 3.12 Amendment No. 2 to Bylaws of Kaspien Holdings Inc., dated September 3, 2020 – incorporated herein by reference to Exhibit 3.2 to the Company’s Form 8-K filed on September 3, 2020. Commission File No. 0-14818. 4.1 Specimen of Kaspien Holdings Inc. Stock Certificate – incorporated herein by reference to Exhibit 4.1 to the Company’s CurrentAnnual Report on Form 8-K filed January 19, 2017. Commission File No. 0-14818. E-1 10.1 Amended and Restated Lease, dated December 4, 2015, between Robert J. Higgins, as Landlord, and Record Town, Inc. and Trans World Entertainment Corporation, as Tenant — incorporated herein by reference to Exhibit 10.3 Company’s Quarterly Report on Form 10-Q10-K for the fiscal quarteryear ended October 31, 1998.February 1, 2020.  Commission File No. 0-14818.     *4.2 Description of Kaspien Holdings Inc. Capital Stock.   10.5 4.3 Trans World Music Corporation 1990 Stock Option Plan for Non-Employee Directors,Loan and Security Agreement by and among Kaspien Inc. and Encina Business Credit, LLC, dated as amended and restated —of February 20, 2020 – incorporated herein by reference to Annex AExhibit 10.1 to Trans World’s Definitive Proxy Statement onthe Company’s Form 14A8-K filed as of May 19, 2000.February 20, 2020.  Commission File No. 0-14818. 51  Index 4.4 Amendment No. 1 to Loan and Security Agreement by and among Kaspien Inc. and Encina Business Credit, LLC, dated as of March 30, 2020 – incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed March 31, 2020.  Commission File No. 0-14818.     4.5 Amendment No. 2 to Loan and Security Agreement by and among Kaspien Inc. and Encina Business Credit, LLC, dated as of March 30, 2020 – incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed April 8, 2021.  Commission File No. 0-14818.   10.6 4.6 Subordinated Loan and Security Agreement dated as of March 30, 2020 – incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed March 31, 2020.  Commission File No. 0-14818.   4.7 Contingent Value Rights Agreement, dated as of March 30, 2020 – incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K filed March 31, 2020.  Commission File No. 0-14818. 4.8 Common Stock Purchase Warrants, dated as of March 30, 2020 – incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K filed March 31, 2020.  Commission File No. 0-14818. 4.9 Voting Agreement, dated as of March 30, 2020 – incorporated herein by reference to Exhibit 4.2 to the Company’s Form 8-K filed March 31, 2020.  Commission File No. 0-14818. 4.10 Promissory Note by and between Kaspien Inc. Inc. and First Interstate Bank, dated as of April 10, 2020 – incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed April 23, 2020.  Commission File No. 0-14818. 10.1 Form of Indemnification Agreement dated May 1, 1995 between the Company and its officers and directors—directors – incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 29, 1995.  Commission File No. 0-14818.     10.7 10.2 Trans World Entertainment CorporationKaspien Holdings Inc. Supplemental Executive Retirement Plan, as amended —– incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on July 16, 2012.  Commission File No. 0-14818.     10.8 10.3 Trans World Entertainment CorporationKaspien Holdings Inc. 2005 Long Term Incentive and Share Award Plan—incorporatedPlan –incorporated herein by reference to Appendix A to Trans  World Entertainment Corporation’sKaspien Holdings Inc.’s Definitive Proxy Statement on Form 14A filed as of May 11, 2005.  Commission File No. 0-14818. 10.4 10.9 Trans World Entertainment CorporationKaspien Holdings Inc. Bonus Plan —– incorporated herein by reference to Appendix A to Trans World Entertainment Corporation’sKaspien Holdings Inc.’s Definitive Proxy Statement on Form 14A filed as of May 30, 2014.  Commission File No. 0-14818.     10.10 10.5 Trans World Entertainment CorporationKaspien Holdings Inc. Amended and Restated 2005 Long Term Incentive and Share Award Plan—Plan – incorporated herein by reference to Appendix A to Trans  World Entertainment Corporation’sKaspien Holdings Inc.’s Definitive Proxy Statement on Form 14A filed as of May 30, 2014.  Commission File No. 0-14818.     10.11 10.6 EmploymentSeverance, Retention and Restrictive Covenant Agreement dated as of August 27, 2014 between the Company and Michael Feurer,—Edwin J. Sapienza, dated February 26, 2019 – incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on March 4, 2019. Commission File No. 0-14818. 10.7 Offer Letter by and between Kaspien Holdings Inc. and Kunal Chopra, dated July 5, 2019 – incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K10-Q filed on September 3, 2014.17, 2019. Commission File No. 0-14818     10.12 10.8 Amendment to Offer Letter by and between Trans World Entertainment CorporationKaspien Holdings Inc. and Josh Neblett,Kunal Chopra, dated OctoberJuly 17, 2016— incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K filed on October 18, 2016. Commission File No. 0-148182019.     *21 Significant Subsidiaries of the Registrant.     *23 Consent of KPMG LLP.Fruci & Associates II, PLLC.     *23.1 Consent of KPMG LLC   *31.1 Certification of Chief Executive Officer dated May 4, 2018,April 30, 2021, relating to the Registrant’s Annual Report on Form 10-K for the year ended February 3, 2018,January 30, 2021, pursuant to Rule 13a-14(a) or Rule 15a-14(a).     *31.2 Certification of Chief Financial Officer dated May 4, 2018,April 30, 2021, relating to the Registrant’s Annual Report on Form 10-K for the year ended February 3, 2018,January 30, 2021,  pursuant to Rule 13a-14(a) or Rule 15a-14(a). E-2 52  Index *32 Certification of Chief Executive Officer and Chief Financial Officer of Registrant, dated May 4, 2018,April 30, 2021, pursuant to 18 U.S.C. Section   1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 relating to the Registrant’s Annual Report on Form 10-K for the year ended February 3, 2018.January 30, 2021. *101.INS XBRL Instance Document     *101.SCH XBRL Taxonomy Extension Schema     *101.CAL XBRL Taxonomy Extension Calculation Linkbase     *101.DEF XBRL Taxonomy Extension Definition Linkbase     *101.LAB XBRL Taxonomy Extension Label Linkbase     *101.PRE XBRL Taxonomy Extension Presentation Linkbase * Filed herewith E-3 53