Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 02, 2021 | Apr. 15, 2021 | Jun. 27, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | STAFFING 360 SOLUTIONS, INC. | ||
Entity Central Index Key | 0001499717 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 2, 2021 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --01-02 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,040 | ||
Entity Common Stock, Shares Outstanding | 39,166,528 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Current Assets: | ||
Cash | $ 8,256 | $ 1,196 |
Cash in escrow | 2,080 | |
Accounts receivable, net | 24,568 | 26,604 |
Prepaid expenses and other current assets | 1,251 | 842 |
Total Current Assets | 36,155 | 28,642 |
Property and equipment, net | 1,066 | 1,528 |
Goodwill | 27,045 | 31,049 |
Intangible assets, net | 16,017 | 19,511 |
Other assets | 3,168 | 3,223 |
Right of use assets | 3,433 | 4,888 |
Total Assets | 86,884 | 88,841 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 15,030 | 16,577 |
Accrued expenses - related party | 2,306 | 3,884 |
Current debt, related party | 1,139 | 37,780 |
Current portion of debt | 1,260 | 676 |
PPP Loans | 12,468 | |
Accounts receivable financing | 16,986 | 19,374 |
Leases - current liabilities | 1,211 | 1,797 |
Other current liabilities | 6,548 | 3,907 |
Total Current Liabilities | 56,948 | 83,995 |
Long-term debt, related party | 32,182 | |
Long-term debt | 834 | 360 |
PPP Loans, non-current | 6,927 | |
Leases - non-current | 2,226 | 3,183 |
Other long-term liabilities | 3,787 | 1,670 |
Total Liabilities | 102,904 | 89,208 |
Commitments and contingencies | ||
Series E-1 Preferred Stock, 6,500 designated, $0.00001 par value, 1,363 and 729 shares issued and outstanding as of January 2, 2021 and December 28, 2019, respectively | ||
Contingently redeemable Series E Preferred Stock | 2,080 | |
Staffing 360 Solutions, Inc. Equity: | ||
Preferred stock value | ||
Common stock value | 1 | 1 |
Additional paid in capital | 73,844 | 76,214 |
Accumulated other comprehensive income (loss) | 223 | (58) |
Accumulated deficit | (92,179) | (76,537) |
Total Stockholders' Deficit | (18,100) | (367) |
Total Liabilities, Contingently Redeemable Preferred Stock and Stockholders' Deficit | 86,884 | 88,841 |
Series A Preferred Stock [Member] | ||
Staffing 360 Solutions, Inc. Equity: | ||
Preferred stock value | ||
Series E Preferred Stock [Member] | ||
Current Liabilities: | ||
Contingently redeemable Series E Preferred Stock | ||
Staffing 360 Solutions, Inc. Equity: | ||
Preferred stock value | $ 11 | $ 13 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 02, 2021 | Dec. 28, 2019 |
Series E-1 preferred stock, shares designated | 6,500 | 6,500 |
Series E-1 preferred stock, par value | $ 0.00001 | $ 0.00001 |
Series E-1 preferred stock, shares issued | 1,363 | 729 |
Series E-1 preferred stock, shares outstanding | 1,363 | 729 |
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares, issued | 16,818,624 | 8,785,748 |
Common stock, shares, outstanding | 16,818,624 | 8,785,748 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 1,663,008 | 1,663,008 |
Preferred stock, stated value | $ 1 | $ 1 |
Preferred stock, shares issued | 1,663,008 | 1,039,380 |
Preferred stock, shares outstanding | 1,663,008 | 1,039,380 |
Series E Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 13,000 | 13,000 |
Preferred stock, shares issued | 11,080 | 13,000 |
Preferred stock, shares outstanding | 11,080 | 13,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Revenue | $ 204,527 | $ 278,478 |
Cost of revenue | 169,714 | 230,169 |
Gross Profit | 34,813 | 48,309 |
Operating Expenses: | ||
Selling, general and administrative expenses | 37,506 | 44,317 |
Impairment of goodwill | 2,969 | |
Depreciation and amortization | 3,118 | 3,369 |
Total Operating Expenses | 43,593 | 47,686 |
(Loss) Income From Operations | (8,780) | 623 |
Other (Expenses) Income: | ||
Interest expense | (7,195) | (7,628) |
Amortization of debt discount and deferred financing costs | (559) | (857) |
Re-measurement gain on intercompany note | 584 | 383 |
Gain from sale of business | 124 | |
Gain on settlement of deferred consideration | 1,924 | |
Interest expense - restructuring | (41) | |
Other income, net | 125 | 326 |
Total Other Expenses, net | (6,962) | (5,852) |
Loss Before Provision For Income Tax | (15,742) | (5,229) |
Benefit for income taxes | 100 | 335 |
Net Loss | (15,642) | (4,894) |
Deemed dividend | 4,690 | |
Net loss Attributable to Common Stockholders | $ (23,685) | $ (7,382) |
Basic and Diluted Net Loss per Share: | ||
Net Loss | $ (1.74) | $ (0.60) |
Net Loss Attributable to Common Stockholders | $ (2.64) | $ (0.90) |
Weighted Average Shares Outstanding - Basic and Diluted | 8,970,871 | 8,198,519 |
Series A Preferred Stock [Member] | ||
Other (Expenses) Income: | ||
Dividends - related party | $ 125 | $ 200 |
Series E Preferred Stock [Member] | ||
Other (Expenses) Income: | ||
Dividends - related party | 2,472 | 1,560 |
Series E-1 Preferred Stock [Member] | ||
Other (Expenses) Income: | ||
Dividends - related party | $ 756 | $ 728 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Income Statement [Abstract] | ||
Net Loss | $ (15,642) | $ (4,894) |
Other Comprehensive Income (Loss) | ||
Foreign exchange translation gain (loss) | 281 | (2,111) |
Comprehensive Loss Attributable to the Company | $ (15,361) | $ (7,005) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) $ in Thousands | Series E-1 Preferred Stock [Member] | Series A Preferred Stock [Member] | Series E Preferred Stock [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 29, 2018 | $ 13 | $ 73,772 | $ 2,053 | $ (71,643) | $ 4,195 | |||
Beginninng balance, shares at Dec. 29, 2018 | 81 | 1,663,008 | 13,000 | 5,326,068 | ||||
Shares issued to/for Employees, directors and consultants | 832 | 832 | ||||||
Shares issued to/for Employees, directors and consultants, shares | 28,400 | |||||||
Shares issued to/for Sale of common stock, net | $ 1 | 4,360 | $ 4,361 | |||||
Shares issued to/for Sale of common stock, net, shares | 3,331,280 | 3,459,680 | ||||||
Shares issued to/for Share issuance to Jackson | 75 | $ 75 | ||||||
Shares issued to/for Share issuance to Jackson, shares | 100,000 | |||||||
Dividends - Series A Preferred Stock - Related Party | $ (200) | (200) | ||||||
Dividends - Series A Preferred Stock - Related Party, shares | ||||||||
Dividends - Series E Preferred Stock - Related Party | (1,560) | (1,560) | ||||||
Dividends - Series E Preferred Stock - Related Party, shares | ||||||||
Dividends - Series E-1 Preferred Stock - Related Party | (728) | (728) | ||||||
Dividends - Series E-1 Preferred Stock - Related Party, shares | 648 | |||||||
Dividends - Common stockholders | (337) | (337) | ||||||
Foreign currency translation gain (loss) | (2,111) | (2,111) | ||||||
Net loss | (4,894) | (4,894) | ||||||
Ending balance at Dec. 28, 2019 | $ 13 | $ 1 | 76,214 | (58) | (76,537) | (367) | ||
Ending balance, shares at Dec. 28, 2019 | 729 | 1,663,008 | 13,000 | 8,785,748 | ||||
Shares issued to/for Employees, directors and consultants | 581 | 581 | ||||||
Shares issued to/for Employees, directors and consultants, shares | 37,400 | |||||||
Shares issued to/for Related party from Debt Arrangement | 324 | 324 | ||||||
Shares issued to/for Related party from Debt Arrangement, shares | 500,000 | |||||||
Shares issued to/for Series A Preferred Conversion | ||||||||
Shares issued to/for Series A Preferred Conversion, shares | (623,628) | 16,215 | ||||||
Shares issued to/for Sale of common stock, net | 3,894 | $ 3,894 | ||||||
Shares issued to/for Sale of common stock, net, shares | 7,479,261 | 8,032,876 | ||||||
Warrants issued for services | 56 | $ 56 | ||||||
Warrant modification - related party | 126 | 126 | ||||||
Dividends - Series A Preferred Stock - Related Party | (125) | (125) | ||||||
Redemption of Series E Preferred Stock | $ (2) | (1,918) | (1,920) | |||||
Redemption of Series E Preferred Stock, shares | (1,920) | |||||||
Dividends - Series E Preferred Stock - Related Party | (2,472) | (2,472) | ||||||
Dividends - Series E-1 Preferred Stock - Related Party | (756) | (756) | ||||||
Dividends - Series E-1 Preferred Stock - Related Party, shares | 634 | |||||||
Redeemable portion of Series E Preferred Stock - Related Party | (2,080) | (2,080) | ||||||
Beneficial conversion feature for fair value modification - Series E Preferred Stock - Related Party | 4,690 | 4,690 | ||||||
Deemed dividend | (4,690) | (4,690) | ||||||
Foreign currency translation gain (loss) | 281 | 281 | ||||||
Net loss | (15,642) | (15,642) | ||||||
Ending balance at Jan. 02, 2021 | $ 11 | $ 1 | $ 73,844 | $ 223 | $ (92,179) | $ (18,100) | ||
Ending balance, shares at Jan. 02, 2021 | 1,363 | 1,039,380 | 11,080 | 16,818,624 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (15,642) | $ (4,894) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization of intangible assets | 3,275 | 3,369 |
Amortization of debt discount and deferred financing costs | 559 | 857 |
Gain on settlement of deferred consideration | (1,924) | |
Bad debt expense | 933 | |
Goodwill impairment | 2,969 | |
Right of use assets amortization | 1,521 | 1,533 |
Stock based compensation | 637 | 832 |
Gain from sale of business | (124) | |
Re-measurement gain on intercompany note | (584) | (383) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (7,314) | (7,574) |
Prepaid expenses and other current assets | (427) | 367 |
Other assets | (941) | (2,123) |
Accounts payable and accrued expenses | (1,659) | (1,893) |
Accounts payable - Related parties | (1,598) | 1,114 |
Other current liabilities | 2,058 | (94) |
Other long-term liabilities | 1,657 | (85) |
Other, net | 424 | 58 |
NET CASH USED IN OPERATING ACTIVITIES | (14,256) | (10,840) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Collection of UK factoring facility deferred purchase price | 8,654 | 13,970 |
Proceeds from sale of subsidiary | 3,300 | |
Purchase of property and equipment | (257) | (510) |
NET CASH PROVIDED BY INVESTING ACTIVITIES | 11,697 | 13,460 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Third-party financing costs | (795) | (1,154) |
Related-party financing costs | (488) | (188) |
Payments for earn-outs | (6,230) | |
Proceeds from term loans - related party | 2,538 | |
Proceeds from term loans | 1,220 | |
Repayment of term loans | (4,734) | (650) |
Repayments on accounts receivable financing, net | (2,426) | (2,708) |
Dividends - related party | (3,333) | (1,175) |
Redemption of Series E preferred Stock, Related party | (1,920) | |
Proceeds from sale of common stock | 4,634 | 5,515 |
Proceeds from PPP loans | 19,395 | |
Dividends paid on common stock | (337) | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 11,553 | (4,389) |
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | 8,994 | (1,769) |
Foreign currency translation | 146 | (216) |
CASH AND RESTRICTED CASH - Beginning of period | 1,196 | 3,181 |
CASH AND RESTRICTED CASH - End of period | $ 10,336 | $ 1,196 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Jan. 02, 2021 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Staffing 360 Solutions, Inc. (“we,” “us,” “our,” “Staffing 360,” or the “Company”) was incorporated in the State of Nevada on December 22, 2009, as Golden Fork Corporation, which changed its name to Staffing 360 Solutions, Inc., ticker symbol “STAF,” on March 16, 2012. On June 15, 2017, the Company reincorporated in the State of Delaware. We are a rapidly growing public company in the international staffing sector. Our high-growth business model is based on finding and acquiring, suitable, mature, profitable, operating, domestic and international staffing companies. Our targeted consolidation model is focused specifically on the accounting and finance, information technology (“IT”), engineering, administration (“Professional”) and light industrial (“Commercial”) disciplines. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jan. 02, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation These consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. All amounts are in thousands, except share and par values, unless otherwise indicated. The accompanying consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. Change of Year End On February 28, 2017, the board of directors (the “Board”) approved the change of the Company’s fiscal year end from May 31 to a 52-53-week year ending on the Saturday closest to the 31 st Liquidity The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern. The accompanying financial statements have been prepared on a basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements as of the year ended January 2, 2021, the Company has an accumulated deficit of $92,179 and a working capital deficit of $20,793. At January 2, 2021, we had total gross debt of $55,369 and $8,256 of cash on hand. We have historically met our cash needs through a combination of cash flows from operating activities, term loans, promissory notes, convertible notes, private placement offerings and sales of equity. Our cash requirements are generally for operating activities and debt repayments. Subsequent to the year ended January 2, 2021, we have continued to fund our operations and make required capital payments utilizing our available cash and, as of the date of this filing, we have approximately $1,050 in available cash. The financial statements included in this annual report have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity, capital requirements and that our credit facilities with our lenders will remain available to us. Further, our note issued to Jackson Investment Group LLC (“Jackson”) includes certain financial customary covenants and the Company has had instances of non-compliance. Management has historically been able to obtain from Jackson waivers of any non-compliance and management expects to continue to be able to obtain necessary waivers in the event of future non-compliance; however, there can be no assurance that the Company will be able to obtain such waivers, and should Jackson refuse to provide a waiver in the future, the outstanding debt under the agreement could become due immediately, which exceeds our current cash balance. Going Concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern. Historically, the Company has funded such payments either through cash flow from operations or the raising of capital through additional debt or equity. If the Company is unable to obtain additional capital, such payments may not be made on time. The Novel Coronavirus Disease 2019 (“COVID-19”), is impacting worldwide economic activity, and activity in the United States and the United Kingdom where our operations are based. The nature of work of the contractors we support mostly are on the site of our clients. As a result, we are subject to the plans and approaches of our clients to work during this period. This includes whether they support remote working when they have decided to close their facilities. To the extent that our clients have decided to or are required to close their facilities or not permit remote work when they decide to close facilities, we would no longer generate revenue and profit from that client. Developments such as social distancing and shelter-in-place directives have impacted the Company’s ability to deploy its staffing workforce effectively thereby impacting contracts with customers in the Company’s Commercial Staffing and Professional Staffing business streams where we have seen declines in revenues during Fiscal 2020. While expected to be temporary, prolonged workforce disruptions can negatively impact sales in fiscal year 2021 and the Company’s overall liquidity. The Company’s negative working capital and liquidity position combined with the uncertainty generated by the economic reaction to the COVID-19 pandemic raise substantial doubt about the Company’s ability to continue as a going concern. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2021. COVID-19 The full impact of the COVID-19 pandemic continues to evolve as of the date of this annual report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, industry, and workforce. Developments such as social distancing and shelter-in-place directives have impacted the Company’s ability to generate revenues. Given the daily evolution of the COVID-19 pandemic, including new information which may emerge concerning the severity of COVID-19 and the global responses to curb its spread and to treat its impact, the Company is not able to estimate the duration of the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity beyond fiscal year 2020, however the Company continues to take action to reduce the negative effects of the COVID-19 pandemic on its operations through various cost cutting initiatives including reductions to support personnel, temporary salary reductions, and elimination of other non-essential spend. Should the impact from the pandemic go on for an extended period of time, management has developed further plans to partially mitigate the impact of the pandemic. On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. It also appropriated funds for the SBA Paycheck Protection Program (“PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. On May 12, 2020, Monroe Staffing Services, LLC (“Monroe Staffing”), an indirect subsidiary of the Company, entered into a note (the “May 12 Note”) with Newton Federal Bank (the “Bank”), pursuant to the PPP of the CARES Act administered by the U.S. Small Business Administration (“SBA”). The principal amount of the May 12 Note is $10,000. In accordance with the requirements of the CARES Act, the Company and Monroe Staffing (collectively, the “May 12 Note Borrowers”) intends to use the proceeds from the May 12 Note in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on the May 12 Note at the rate of 1.00% per annum. The May 12 Note Borrowers may apply for forgiveness of the amount due under the May 12 Note, in an amount equal to the sum of qualified expenses under the PPP. The May 12 Note Borrowers intend to use the entire proceeds under the May 12 Note for such qualifying expenses. Subject to any forgiveness under the PPP, the May 12 Note matures two years following the date of issuance of the May 12 Note and includes a period for the first six months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of the May 12 Note, the May 12 Note Borrowers are required to make 14 monthly payments of principal and interest. The May 12 Note may be prepaid at any time prior to maturity. The May 12 Note provides for customary events of default, including, among others, those relating to breaches of obligations under the May 12 Note, including a failure to make payments, any bankruptcy or similar proceedings involving the May 12 Note Borrowers, and certain material effects on the May 12 Note Borrowers’ ability to repay the May 12 Note. The May 12 Note Borrowers did not provide any collateral or guarantees for the May 12 Note. On May 20, 2020, Key Resources Inc. (“KRI”), Lighthouse Placement Services, LLC (“LH”) and Staffing 360 Georgia, LLC (“SG”), each a wholly owned direct or indirect subsidiary of the Company, entered into the following notes, each dated May 20, 2020, with the Bank, pursuant to the PPP of the CARES Act administered by the SBA. KRI entered into a note (the “KRI Note”) for the principal amount of approximately $5,443, LH entered into a note (the “LH Note”) for the principal amount of approximately $1,890, and SG entered into a note (the “SG Note,” and, together with the KRI Note and LH Note, the “May 20 Notes”) for the principal amount of approximately $2,063. The combined total of the May 20 Notes is approximately $9,395. In accordance with the requirements of the CARES Act, the Company, KRI, LH and SG (collectively, the “May 20 Note Borrowers”) intends to use the proceeds from the May 20 Notes in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on each of the May 20 Notes at the rate of 1.00% per annum. The May 20 Note Borrowers may apply for forgiveness of the amount due under the May 20 Notes, in an amount equal to the sum of qualified expenses under the PPP. The May 20 Note Borrowers intend to use the entire proceeds under the May 20 Notes for such qualifying expenses. Subject to any forgiveness under the PPP, each of the May 20 Notes mature two years following the date of issuance of the May 20 Notes and include a period for the first six months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of each of the May 20 Notes, the May 20 Note Borrowers are required to make 14 monthly payments of principal and interest. Based upon these payment terms the Company has recognized $6,927 of the PPP loan as a short-term obligation and $12,468 as long term. The May 20 Notes may be prepaid at any time prior to maturity. The May 20 Notes provide for customary events of default, including, among others, those relating to breaches of obligations under the May 20 Notes, including a failure to make payments, any bankruptcy or similar proceedings involving the Borrowers, and certain material effects on the Borrowers’ ability to repay the May 20 Notes. The May 20 Note Borrowers did not provide any collateral or guarantees for the May 20 Notes. The application for these funds required the Company to certify in good faith that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The Company made this good faith assertion based upon the adverse impact the COVID-19 pandemic had on our business and the degree of uncertainty introduced to the capital markets. While the Company has made this assertion in good faith based upon all available guidance, management will continue to assess their continued qualification if and when updated guidance is released by the Treasury Department. All or a portion of the PPP Loan may be forgiven by the SBA upon application by the Company beginning 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, covered mortgage interest and covered utilities during the eight-week period beginning on the date of loan approval. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100, prorated annually. Not more than 40% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100 or less annually are reduced by more than 25%. The ultimate forgiveness of the PPP loan is also predicated upon regulatory authorities concurring with management’s good faith assessment that the current economic uncertainty made the loan request necessary to support ongoing operations. If, despite the Company’s good-faith belief that given the circumstances the Company satisfied all eligibility requirements for the PPP Loan, the Company is later determined to have violated any applicable laws or regulations or it is otherwise determined that the Company was ineligible to receive the PPP Loan, the Company may be required to repay the PPP Loan in its entirety and/or be subject to additional penalties. In the event the PPP Loan, or any portion thereof, is forgiven pursuant to the PPP, the amount forgiven is applied to outstanding principal. Effective March 27, 2020, the Company is deferring Federal Insurance Contributions Act taxes under the CARES Act section 2302. Payment of these tax deferrals of $2,473 and $2,473 are delayed to December 31, 2021 and December 31, 2022, respectively. Acquisitions Clement May Acquisition On June 28, 2018, the Company and Staffing 360 Solutions Limited (formerly known as Longbridge Recruitment 360 Limited), a wholly owned subsidiary of the Company, entered into share purchase agreements (“Share Purchase Agreements”) to acquire all of the share capital of Clement May Limited (“CML”.) Consideration for the acquisition of all the shares was (i) an aggregate cash payment of £1,550 ($2,047), (ii) 15,000 shares of the Company’s common stock, (iii) an earn-out payment of up to £500, the amount to be calculated and paid on or around January 2, 2021 pursuant to the Share Purchase Agreement, and (iv) deferred consideration of £350, to be paid on or around June 28, 2019, depending on the satisfaction of certain conditions set forth in that Share Purchase Agreement. To finance the above acquisition, the Company entered into a term loan with HSBC Bank plc. The Company paid deferred consideration of £350 ($444) on June 26, 2019. The earnout payment of £500 ($656) was fully paid in December 2019. Key Resources Inc. Acquisition On August 27, 2018, the Company and Monroe Staffing Services, LLC (“Monroe Staffing”), an indirect wholly owned subsidiary of the Company, entered into a share purchase agreement with Pamela D. Whitaker (“Seller”), pursuant to which the Seller sold 100% of the common shares of Key Resources Inc. (“KRI”) to Monroe Staffing (the “KRI Transaction”.) The KRI Transaction closed simultaneously with the signing of the share purchase agreement. The purchase price in connection with the KRI Transaction was approximately $12,163, of which (a) approximately $8,109 was paid to the Seller at closing, (b) up to approximately $2,027 is payable as earnout consideration to the Seller on August 27, 2019 and (c) up to $2,027 is payable as earnout consideration to the Seller on August 27, 2020. The payment of the earnout consideration is contingent on KRI’s achievement of certain trailing gross profit amounts. To finance the KRI Transaction, the Company entered into an agreement with Jackson Investment Group, LLC (“Jackson”) on August 27, 2018, pursuant to which the note purchase agreement dated as of September 15, 2017 was amended to add an additional senior debt investment of approximately $8,428. On September 11, 2019, the Company entered into an amended agreement with the seller to delay the payment of the first year earnout of $2,027 until no later than February 27, 2020. For each full calendar month beyond August 27, 2019, that such payment is delayed, the Company shall pay the seller interest in the amount of $10 with the first such payment of interest due on September 30, 2019. In addition, the amended agreement was further amended to change the due date for the second year earnout payment of $2,027 from August 27, 2020, to February 27, 2020. The seller of KRI, Pamela D. Whitaker (“Whitaker”) has filed a lawsuit against the Company asserting claims for breach of contract and declaratory judgment against the Company due under a share purchase agreement and is seeking $4,054 in alleged damages. While the Company had recognized the liability for the earnout consideration of $4,054 due to Whitaker, within current liabilities as of January 2, 2021, in February 2020, the Company filed an action against Whitaker for breach of contract which more than offsets the earnout consideration recognized. The Company paid interest of $30 in Fiscal 2019 and $40 in Fiscal 2020. Divesture of Business On September 24, 2020, the Company and Staffing 360 Georgia, LLC d/b/a first first first first In addition, the Buyer has agreed to assume certain liabilities related to the Assets. The purchase price in connection with the first first The Asset Purchase Agreement contains non-competition and non-solicitation provisions customary for agreements of this type. In addition, under the terms of the Asset Purchase Agreement, the Company has agreed to indemnify the Buyer against certain liabilities, subject to certain conditions and limitations as set forth in the Asset Purchase Agreement. In connection with execution of the Asset Purchase Agreement, the Company and certain of its subsidiaries entered into a Consent Agreement (the “Consent”) with Jackson, a noteholder under the Existing Note Purchase Agreement. Under the terms of the Consent and the Certificate of Designation of the Company’s Series E Convertible Preferred Stock (the “Series E Preferred Stock”), in consideration for Jackson’s consent to the first To induce the Buyer to enter into the Asset Purchase Agreement, the Company also entered into a Transition Services Agreement with the Buyer, pursuant to which each party will provide certain transition services such as payrolling through to year end 2020 to minimize any disruption to the businesses of the Seller and the Buyer arising from the first Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. Significant estimates for Fiscal 2020 and Fiscal 2019 include the valuation of intangible assets, including goodwill, liabilities associated with earn-out obligations, testing long-lived assets for impairment and valuation reserves against deferred tax assets. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Payment terms vary by client and the services offered. The Company has primarily two main forms of revenue – temporary contractor revenue and permanent placement revenue. Temporary contractor revenue is accounted for as a single performance obligation satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance on an hourly basis. The contracts stipulate weekly billing and the Company has elected the “as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as we have the right to payment in an amount that corresponds directly with the value of performance completed to date. Permanent placement revenue is recognized on the date the candidate’s full-time employment with the customer has commenced. The customer is invoiced on the start date, and the contract stipulates payment due under varying terms, typically 30 days. The contract with the customer stipulates a guarantee period whereby the customer may be refunded if the employee is terminated within a short period of time, however this has historically been infrequent, and immaterial upon occurrence. As such, the Company’s performance obligations are satisfied upon commencement of the employment, at which point control has transferred to the customer. Revenue in Fiscal 2020 was comprised of $198,066 of temporary contractor revenue and $6,461 of permanent placement revenue, compared with $266,974 and $11,504 for Fiscal 2019, respectively. Refer to Note 14 for further details on breakdown by segments. Taxes Collected from Customers and Remitted to Governmental Agencies The Company records taxes on customer transactions due to governmental agencies as a receivable and a liability on the consolidated balance sheets. Sales taxes are recorded net on the consolidated statement of operations. Advertising Costs Costs for advertising are expensed when incurred. Advertising expenses for the Company were $1,302 and $1,365 for Fiscal 2020 and 2019, respectively. Legal Contingencies and Expenses From time to time, the Company may become involved in various claims, disputes and legal or regulatory proceedings that arise in the ordinary course of business and relate to contractual and other obligations. The Company assesses its potential contingent and other liabilities by analyzing its claims, disputes and legal and regulatory matters using all available information and developing its views on estimated losses in consultation with its legal and other advisors. The Company determines whether a loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. If the contingency is not probable or cannot be reasonably estimated, disclosure of the contingency shall be made when there is at least a reasonable possibility that a loss may be incurred. Expenses associated with legal contingencies are expensed as incurred. Restructuring Charges The Company records a liability for significant costs associated with exit or disposal activities, including lease termination costs, certain employee severance costs associated with formal restructuring plans, facility closings or other similar activities and related asset impairments, when the liability is incurred. The determination of when the Company accrues for severance and related costs depends on whether the termination benefits are provided under a one-time benefit arrangement or under an ongoing benefit arrangement. Where the Company has either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan, it recognizes severance costs when they are both probable and estimable. Costs associated with restructuring actions that include one-time severance benefits are only recorded once a liability has been incurred, including when management with the proper level of authority has committed to a restructuring plan and the plan has been communicated to employees. These charges are included in operational restructuring and other charges on the consolidated statements of operations. Other charges include knowledge transfer costs directly related to the restructuring initiatives and are expensed as incurred. The Briand Separation Agreement Matthew Briand, the Company’s former employee, board member and officer, resigned from his positions with the Company and subsidiaries. The Company entered into an agreement (the “Briand Separation Agreement”) with Mr. Briand dated December 21, 2017, with an effective date (“Separation Date”) of January 31, 2018, pursuant to which Mr. Briand may provide advisory services, if requested by the Company, through the effective date. The Company paid approximately $190 and $690 in Fiscal 2019 and Fiscal 2018, respectively, to Mr. Briand, in full settlement of his separation agreement. The Faiman Separation Agreement On September 11, 2019, David Faiman, the Company’s Chief Financial Officer, and the Company entered into an agreement whereby Mr. Faiman agreed to transition his position and responsibilities with the Company (“Faiman Separation Agreement”), and Mr. Faiman’s Employment Agreement, dated February 5, 2016, was terminated. Under the terms of the Faiman Separation Agreement, Mr. Faiman will continue as the Company’s Chief Financial Officer, including acting as the Company’s principal financial officer, for a period lasting until the earlier of (i) December 31, 2019 and (ii) either (a) such date that is a reasonable time, as determined by the Company, prior to the commencement of a new position by Mr. Faiman, or (b) upon the Company’s termination of Mr. Faiman’s obligation to provide transition services for Cause. Pursuant to the Faiman Separation Agreement, Mr. Faiman will be entitled to receive, among other things, (i) pay in an amount equal to his base salary through the separation date, payable in equal installments in accordance with the Company’s normal payroll policies, (ii) continuation of Mr. Faiman’s current Company-sponsored employee benefits through the separation date, (iii) accelerated vesting of any outstanding equity awards held by Mr. Faiman and the elimination of any obligations to forfeit such awards upon the termination of Mr. Faiman’s employment (provided that no award shall be extended beyond its original term) and (iv) a positive reference from the management of the Company. Effective January 1, 2020, Mr. Faiman was no longer with the Company. The Company recognized approximately $190 in severance costs related to Mr. Faiman and paid $91 in the fiscal year ended 2020. Cash and Cash Equivalents The Company considers all highly liquid instruments with original maturities of three months or less when acquired, to be cash equivalents. Cash and cash equivalents held at financial institutions may at times exceed federally insured amounts. We believe we mitigate such risk by investing in or through major financial institutions. The Company had no cash equivalents at the end of Fiscal 2020 or Fiscal 2019. Accounts Receivable Accounts receivable are presented net of an allowance for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current creditworthiness and current economic trends. Accounts are written off after all efforts to collect have been exhausted. As of the end of Fiscal 2020 and the end of Fiscal 2019, the Company had an allowance for doubtful accounts of $62 and $210, respectively. Income Taxes The Company utilizes Accounting Standards Codification (“ASC”) Topic 740, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company applies the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes,” which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of the date of this filing, the Company is current on all corporate, federal and state tax returns. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. Foreign Currency Translation Assets and liabilities of subsidiaries operating in foreign countries are translated into U.S. dollars using the exchange rate in effect at the balance sheet date and equity is translated at historical rate. Results of operations are translated using average exchange rates. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are included in a separate component of stockholders’ equity (accumulated other comprehensive income), while gains and losses resulting from foreign currency transactions are included in operations. Deferred Financing Costs Costs incurred in connection with obtaining certain financing are deferred and amortized on an effective interest method basis over the term of the related obligation. In accordance with Accounting Standards Update (“ASU”) 2015-03, “Imputation of Interest – Simplifying the Presentation of Debt Issuance Costs,” debt issuance costs related to a recognized debt liability are presented in the balance sheet as a direct deduction from the debt liability, consistent with th |
Loss Per Common Share
Loss Per Common Share | 12 Months Ended |
Jan. 02, 2021 | |
Basic and Diluted Net Loss per Share: | |
Loss Per Common Share | NOTE 3 – LOSS PER COMMON SHARE The Company utilizes the guidance per ASC 260, “Earnings per Share.” Basic earnings per share are calculated by dividing income/loss available to stockholders by the weighted average number of common stock shares outstanding during each period. Our Series A preferred stockholders receive certain dividends or dividend equivalents that are considered participating securities and our loss per share is computed using the two-class method. Diluted earnings per share are computed using the weighted average number of common stock shares and dilutive common share equivalents outstanding during the period. Dilutive common stock share equivalents consist of common shares issuable upon the conversion of preferred stock, certain equity awards and the exercise of stock options and warrants (calculated using the modified treasury stock method.) Such securities, shown below, presented on a common share equivalent basis and outstanding as of the end of Fiscal 2020 and Fiscal 2019, have been excluded from the per share computations since their inclusion would be anti-dilutive: Fiscal 2020 Fiscal 2019 Warrants 1,576,879 925,935 Long term incentive plan (LTIP) 155,000 365,000 Options 76,500 76,500 Convertible preferred shares 12,443,000 7,785,766 Restricted shares - unvested 77,815 590,440 Total 14,329,194 9,743,641 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jan. 02, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consist of the following: January 2, 2021 December 28, 2019 Computer software $ 471 $ 342 Office equipment 1,115 1,043 Computer equipment 1,160 1,195 Furniture and fixtures 1,123 1,312 Leasehold improvements 713 965 Total property and equipment, gross 4,582 4,857 Accumulated depreciation (3,516 ) (3,329 ) Total property and equipment, net $ 1,066 $ 1,528 Depreciation expense for Fiscal 2020 and Fiscal 2019 was $595 and $643, respectively. |
Other Non-Current Assets
Other Non-Current Assets | 12 Months Ended |
Jan. 02, 2021 | |
Investments, All Other Investments [Abstract] | |
Other Non-Current Assets | NOTE 5 – OTHER NON-CURRENT ASSETS The following provides a breakdown of other non-current assets: January 2, 2021 December 28, 2019 Collateral associated with workers’ compensation insurance $ 3,134 $ 3,204 Other non-current assets 34 19 Total $ 3,168 $ 3,223 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | NOTE 6 – INTANGIBLE ASSETS The following provides a breakdown of intangible assets as of: January 2, 2021 Tradenames Non-Compete Customer Relationships Total Intangible assets, gross $ 9,582 2,500 21,810 33,892 Accumulated amortization (4,283 ) (2,440 ) (11,152 ) (17,875 ) Intangible assets, net $ 5,299 60 10,658 16,017 December 28, 2019 Tradenames Non-Compete Customer Relationships Total Intangible assets, gross $ 9,458 $ 2,488 $ 22,757 $ 34,703 Accumulated amortization (3,558 ) (2,349 ) (9,285 ) (15,192 ) Intangible assets, net $ 5,900 $ 139 $ 13,472 $ 19,511 On September 24, 2020, the Company entered into an Asset Purchase Agreement with first first As of January 2, 2021, estimated annual amortization expense for each of the next five fiscal years is as follows: Fiscal year ended December Amount 2021 $ 2,302 2022 2,254 2023 2,254 2024 2,254 2025 2,184 Thereafter 4,769 Total $ 16,017 Amortization of intangible assets for the period ended Fiscal 2020 and Fiscal 2019 was $2,523 and $2,726, respectively. The weighted average useful life remaining of intangible assets remaining is 7 years. |
Goodwill
Goodwill | 12 Months Ended |
Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 7 – GOODWILL The following table provides a roll forward of goodwill: January 2, 2021 December 28, 2019 Beginning balance, gross $ 31,049 $ 38,139 Accumulated impairment losses (2,969 ) (6,078 ) Beginning balance, net 28,080 32,061 Disposition of business (1,577 ) — Currency translation adjustment 542 (1,012 ) Ending balance, net $ 27,045 $ 31,049 Goodwill by reportable segment is as follows: January 2, 2021 December 28, 2019 Professional Staffing - US $ 6,222 $ 10,527 Commercial Staffing - US 5,860 6,102 Professional Staffing - UK 14,963 14,420 Ending balance, net $ 27,045 $ 31,049 Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. ASC 350, requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. During the first quarter of 2020 the Company identified a triggering event in response the COVID-19 pandemic. In accordance with ASC 350 the Company tested its goodwill for impairment and the Company recognized an impairment with respect to its first During the year ended January 2, 2021 the Company changed its measurement date from the first day of the fiscal fourth quarter to the last day of the fiscal year end. The Company performed its annual goodwill impairment test and no impairment was recognized. To estimate the fair value of the reporting units the Company employed a combination of market approach (valuations using comparable company multiples) and income approach (discounted cash flow analysis) to derive the fair value of the reporting unit when performing its annual impairment testing. Volatility in the Company’s stock price can result in the net book value of our reporting unit approximating, or even temporarily exceeding market capitalization, however, the fair value of our reporting unit is not driven solely by the market price of our stock. As described above, fair value of our reporting unit is derived using a combination of an asset approach, an income approach and a market approach. These valuation techniques consider several other factors beyond our market capitalization, such as the estimated future cash flows of our reporting units, the discount rate used to present value such cash flows and the market multiples of comparable companies. Changes to input assumptions used in the analysis could result in materially different evaluations of goodwill impairment. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Jan. 02, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following provides a breakdown of accounts payable and accrued expenses: January 2, 2021 December 28, 2019 Accounts payable $ 28 $ 1,412 Accrued payroll, taxes and bonuses 12,913 12,700 Severance costs — 190 Other accrued expenses 2,089 2,275 Total $ 15,030 $ 16,577 |
Accounts Receivable Financing
Accounts Receivable Financing | 12 Months Ended |
Jan. 02, 2021 | |
Receivables [Abstract] | |
Accounts Receivable Financing | NOTE 9 – ACCOUNTS RECEIVABLE FINANCING Midcap Funding [X] Trust Prior to September 15, 2017, certain U.S. subsidiaries of the Company were parties to a $25,000 revolving loan facility with MidCap Funding X Trust (“MidCap”), with the option to increase the amount by an additional $25,000, with a maturity of April 8, 2019. The facility provided for borrowing of 85% against eligible receivables and carried an interest rate of LIBOR plus 4.0%, with a LIBOR floor of 1.0% per annum. The Company could prepay all or any portion of the balance at any time subject to a prepayment premium of: (i) 2.0% if prepaid in the first year of the loan; and (ii) 1.0% if prepaid thereafter. This loan is secured by a first priority lien in favor of MidCap on all of the Company’s US based assets except for the CSI assets. The Company entered into customary pledge and guaranty agreements to evidence the security interest in favor of MidCap. On September 15, 2017, the Company amended the facility with Midcap to allow for additional borrowing against unbilled receivables up to 85% with a cap of $1,300 borrowing against such receivables. In addition, the maturity date of the facility was extended to April 8, 2020 and the prepayment premiums reset to: (i) 2% if prepaid in the first or second year post the amendment; and (ii) 1.0% if prepaid thereafter. No other material terms were amended on this date. On August 2, 2019, the Company amended the facility with Midcap to allow for additional borrowing against the unbilled receivables by $1,000 to a cap of $2,300 and extended the maturity of the facility to August 2020. On October 26, 2020, the Company entered into Amendment No. 17 to Credit and Security Agreement with MidCap, whereby, among other things, MidCap agreed to extend the maturity date of our outstanding asset based revolving loan until September 1, 2022. In addition, the Company also agreed to certain amendments to the financial covenants. The facility provides events of default including: (i) failure to make payment of principal or interest on any MidCap loans when required, (ii) failure to perform obligations under the facility and related documents, (iii) not paying its debts as such debts become due and similar insolvency matters, and (iv) material adverse changes to the Company (subject to a 10-day notice and cure period.) Upon an event of default, the Company’s obligations under the credit facility may, or in the event of insolvency or bankruptcy will automatically, be accelerated. Upon the occurrence of any event of default, facility will bear interest at a rate equal to the lesser of: (i) 3.0% above the rate of interest applicable to such obligations immediately prior to the occurrence of the event of default; and (ii) the maximum rate allowable under law. Under the terms of this agreement, the Company is subject to affirmative covenants which are customary for financings of this type, including: (i) maintain good standing and governmental authorizations, (ii) provide certain information and notices to MidCap, (iii) deliver monthly reports and quarterly financial statements to MidCap, (iv) maintain insurance, (v) discharge all taxes, (vi) protect their intellectual property, and (vii) generally protect the collateral granted to MidCap. The Company is also subject to negative covenants customary for financings of this type, including that it may not: (i) enter into a merger or consolidation or certain change of control events, (ii) incur liens on the collateral, (iii) except for certain permitted acquisitions, acquire any significant assets other than in the ordinary course of business, (iv) assume certain additional senior debt, or (v) amend any of their organizational documents. The balance of the Midcap Facility as of January 2, 2021 and December 28, 2019 was $14,842 and $17,298, respectively, and is included in Accounts receivable financing on the Consolidated Balance Sheet. HSBC Invoice Finance (UK) Ltd – New Facility On February 8, 2018, CBS Butler, Staffing 360 Solutions Limited and The JM Group, entered into a new arrangement with HSBC Invoice Finance (UK) Ltd (“HSBC”) which provides for HSBC to purchase the subsidiaries’ accounts receivable up to an aggregate amount of £11,500 ($15,724) across all three subsidiaries. The terms of the arrangement provide for HSBC to fund 90% of the purchased accounts receivable upfront and, a secured borrowing line of 70% of unbilled receivables capped at £1,000 ($1,367) (within the overall aggregate total facility of £11,500 ($15,724).) The arrangement has an initial term of 12 months, with an automatic rolling three-month extension and carries a service charge of 1.80%. On June 28, 2018, CML, the Company’s new subsidiary entered into a new agreement with a minimum term of 12 months for purchase of debt (“APD”) with HSBC, joining CBS Butler, Staffing 360 Solutions Limited and The JM Group (collectively, with CML, the “Borrowers”) as “Connected Clients” as defined in the APD. The new Connected Client APDs carry an aggregate Facility Limit of £20,000 across all Borrowers. The obligations of the Borrowers are secured by a fixed charge and a floating charge on the Borrowers’ respective accounts receivable and are subject to cross-company guarantees among the Borrowers. In addition, the secured borrowing line against unbilled receivables was increased to £1,500 for a period of 90 days. In July 2019, the aggregate Facility Limit was extended to £22,500 across all Borrowers. Under ASU 2016-16, “Statement of Cash Flows (Topic 230, Classification of Certain Cash Receipts and Cash Payments, a consensus of the FASB Emerging Issues Task Force |
Debt
Debt | 12 Months Ended |
Jan. 02, 2021 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 10 – DEBT January 2, 2021 December 28, 2019 Jackson Investment Group - related party $ 33,880 $ 38,278 PPP Loans 19,395 - HSBC Term Loan 2,094 1,035 Total Debt, Gross 55,369 39,313 Less: Debt Discount and Deferred Financing Costs, Net (559 ) (497 ) Total Debt, Net 54,810 38,816 Less: Non-Current Portion (39,943 ) (360 ) Total Current Debt, Net $ 14,867 $ 38,456 Jackson Note – Related Party On September 15, 2017, the Company entered into a $40,000 note agreement with Jackson (the “2017 Jackson Note”.) The proceeds of the sale of the 2017 Jackson Note were used to repay the existing subordinated notes previously issued to Jackson pursuant to the existing note purchase agreement in the aggregate principal amount of $11,165 and to fund a portion of the purchase price consideration of the first On August 27, 2018, Company entered into an amended agreement with Jackson, pursuant to which the note purchase agreement dated as of September 15, 2017 was amended and made a new senior debt investment of approximately $8,428. Terms of the additional investment are the same as the 2017 Jackson Note. From the proceeds of the additional investment, the Company paid a closing fee of $280 and legal fees of $39 and issued 192,000 shares of the Company’s common stock as a closing commitment fee. On August 29, 2019, the Company entered into a Fourth Omnibus Amendment and Reaffirmation Agreement with Jackson, as lender, which, among other things, amends that certain Amended and Restated Note Purchase Agreement, dated as of September 15, 2017, as amended (the “Existing Note Purchase Agreement”.) Pursuant to the Existing Note Purchase Agreement, the Company agreed to issue and sell to Jackson that certain 18% Senior Secured Note due December 31, 2019 in the aggregate principal amount of $2,538 (the “2019 Jackson Note”.) All accrued and unpaid interest on the outstanding principal balance of the 2019 Jackson Note was due and payable monthly on the first day of each month, beginning on October 1, 2019. Pursuant to the terms of the 2019 Jackson Note, if the 2019 Jackson Note was not repaid by December 31, 2019, the Company was required to issue 100,000 shares of its common stock to Jackson on a monthly basis until the 2019 Jackson Note is fully repaid, subject to certain exceptions to comply with Nasdaq listing standards. The Company booked additional expense of $324 related to the issuances of 500,000 shares of common stock to Jackson in 2020. The Company paid the 2019 Jackson Note in full on May 28, 2020. On October 26, 2020, the Company and Jackson entered into the Second Amended and Restated Note Purchase Agreement (the “Amended Note Purchase Agreement”) and the Amended and Restated Senior Secured 12% Promissory Note (the “2020 Jackson Note”), which amended and restated the Existing Note Purchase Agreement. The Amended Note Purchase Agreement refinanced an aggregate of $35.7 million of debt provided by Jackson, extending the maturity to September 30, 2022. In connection with the amendment and restatement, the Company paid Jackson an amendment fee of $488. The Company accounted for the Amended Note Purchase Agreement as a modification of the debt. Accordingly, fees totaling $488 paid to Jackson as well as the modification of 905,508 warrants from a strike price of $1.66 to $1.00 and extension of expiration date of January 26, 2024 to January 26, 2026, resulting in a fair value adjustment of $126, were recorded as additional debt discount which will be amortized over the term of the 2020 Jackson Note using the effective interest method. Under the terms of the Amended Note Purchase Agreement and the 2020 Jackson Note, the Company is required to pay interest on the debt at a per annum rate of 12%. The interest is payable monthly in cash; provided that, the Company may elect to pay up to 50% of monthly interest in-kind (“PIK Interest”) by adding such PIK Interest to the outstanding principal balance of the 2020 Jackson Note. For any month that the Company elects to pay interest in-kind, the Company is required to pay Jackson a fee in shares of our common stock (“PIK Fee Shares”) in an amount equal to $25 divided by the average closing price, as reported by Nasdaq, of such shares of common stock over the 5 trading days prior to the applicable monthly interest payment date. If such average market price is less than $0.50, or is otherwise undeterminable because such shares of common stock are no longer publicly traded or the closing price is no longer reported by Nasdaq, then the average closing price for these purposes shall be deemed to be $0.50, and if such average closing price is greater than $3.50, then the average closing price for these purposes shall be deemed to be $3.50. For the period of November 2020 through and including March 2021, each monthly interest due and payable shall be reduced by $166, and for the period commencing May 2021 through and including September 2021, each monthly interest due and payable shall be increased by $166. Under the terms of the Amended Note Purchase Agreement, the Company is required to make a mandatory prepayment of the principal amount of the 2020 Jackson Note of not less than $3,000 no later January 31, 2021. Payments were made in December 2020 and January 2021 totaling $3,029 in full satisfaction of the mandatory prepayment. The entire outstanding principal balance of the 2020 Jackson Note shall be due and payable on September 30, 2022. The debt continues to be secured by substantially all of the Company’s domestic subsidiaries’ assets pursuant to the Amended and Restated Security Agreement with Jackson, dated September 15, 2017. The Amended Note Purchase Agreement includes certain financial customary covenants, including a leverage ratio covenant. Delivery of financial covenants will commence with the fiscal month ending March 2021. PPP Loans On May 12, 2020, Monroe Staffing, an indirect subsidiary of the Company, entered into the May 12 Note with the Bank, pursuant to the PPP of the CARES Act administered by the SBA. The principal amount of the May 12 Note is $10,000. In accordance with the requirements of the CARES Act, the May 12 Note Borrower intends to use the proceeds from the May 12 Note in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on the May 12 Note at the rate of 1.00% per annum. The May 12 Note Borrowers may apply for forgiveness of the amount due under the May 12 Note, in an amount equal to the sum of qualified expenses under the PPP. The May 12 Note Borrowers intend to use the entire proceeds under the May 12 Note for such qualifying expenses. Subject to any forgiveness under the PPP, the May 12 Note matures two years following the date of issuance of the May 12 Note and includes a period for the first six months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of the May 12 Note, the May 12 Note Borrowers are required to make 14 monthly payments of principal and interest. The May 12 Note may be prepaid at any time prior to maturity. The May 12 Note provides for customary events of default, including, among others, those relating to breaches of obligations under the May 12 Note, including a failure to make payments, any bankruptcy or similar proceedings involving the May 12 Note Borrowers, and certain material effects on the May 12 Note Borrowers’ ability to repay the May 12 Note. The May 12 Note Borrowers did not provide any collateral or guarantees for the May 12 Note. On May 20, 2020, KRI, LH and SG, each a wholly owned direct or indirect subsidiary of the Company, entered into the following notes, each dated May 20, 2020, with the Bank, pursuant to the PPP of the CARES Act administered by the U.S. Small Business Administration. KRI entered into the KRI Note for the principal amount of approximately $5,443, LH entered into the LH Note for the principal amount of approximately $1,890, and SG entered into the SG Note, and, together May 20 Notes for the principal amount of approximately $2,063. The combined total of the May 20 Notes is approximately $9,395. In accordance with the requirements of the CARES Act, the “May 20 Note Borrowers, intends to use the proceeds from the May 20 Notes in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on each of the May 20 Notes at the rate of 1.00% per annum. The May 20 Note Borrowers may apply for forgiveness of the amount due under the May 20 Notes, in an amount equal to the sum of qualified expenses under the PPP. The May 20 Note Borrowers intend to use the entire proceeds under the May 20 Notes for such qualifying expenses. Subject to any forgiveness under the PPP, each of the May 20 Notes mature two years following the date of issuance of the May 20 Notes and include a period for the first six months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of each of the May 20 Notes, the May 20 Note Borrowers are required to make 14 monthly payments of principal and interest. Based upon these payment terms the Company has recognized $6,927 of the PPP loan as a short-term obligation and $12,468 as long term as of January 2, 2021. The May 20 Notes may be prepaid at any time prior to maturity. The May 20 Notes provide for customary events of default, including, among others, those relating to breaches of obligations under the May 20 Notes, including a failure to make payments, any bankruptcy or similar proceedings involving the Borrowers, and certain material effects on the Borrowers’ ability to repay the May 20 Notes. The May 20 Note Borrowers did not provide any collateral or guarantees for the May 20 Notes. The application for these funds required the Company to certify in good faith that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The Company made this good faith assertion based upon the adverse impact the COVID-19 pandemic had on our business and the degree of uncertainty introduced to the capital markets. While the Company has made this assertion in good faith based upon all available guidance, management will continue to assess their continued qualification if and when updated guidance is released by the Treasury Department. All or a portion of the PPP Loan may be forgiven by the SBA upon application by the Company beginning 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, covered mortgage interest and covered utilities during the eight-week period beginning on the date of loan approval. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100, prorated annually. Not more than 40% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100 or less annually are reduced by more than 25%. The ultimate forgiveness of the PPP loan is also predicated upon regulatory authorities concurring with management’s good faith assessment that the current economic uncertainty made the loan request necessary to support ongoing operations. If, despite the Company’s good-faith belief that given the circumstances the Company satisfied all eligibility requirements for the PPP Loan, the Company is later determined to have violated any applicable laws or regulations or it is otherwise determined that the Company was ineligible to receive the PPP Loan, the Company may be required to repay the PPP Loan in its entirety and/or be subject to additional penalties. In the event the PPP Loan, or any portion thereof, is forgiven pursuant to the PPP, the amount forgiven is applied to outstanding principal. As of the date of this filing, the PPP Loans have not been approved for forgiveness. The Monroe Staffing PPP loan forgiveness status was changed from pending to under review. Under review status is the last stage before forgiveness or rejection. Debt Exchange Agreement On November 15, 2018 the Company, entered into a Debt Exchange Agreement (the “Exchange Agreement”) with Jackson, pursuant to which, among other things, Jackson agreed to exchange $13,000 (the “Exchange Amount”) of indebtedness of the Company held by Jackson in exchange for 13,000 shares of a newly created class of preferred stock designated as the Series E Preferred Stock, par value $0.00001 per share, of the Company (the “Series E Preferred Stock”.) The Series E Preferred Stock ranks senior to the Company’s common stock and any other series or classes of preferred stock now or after issued or outstanding with respect to dividend rights and rights on liquidation, winding up and dissolution. Each share of Series E Preferred Stock is initially convertible into 561 shares of common stock of the Company at any time after October 31, 2020 or the occurrence of a Preferred Default (as defined in the Certificate of Designation for the Series E Preferred Stock.) A holder of Series E Preferred Stock is not required to pay any additional consideration in exchange for conversion of such Series E Preferred Stock into the Company’s common stock. Series E Preferred Stock is redeemable by the Company at any time at a price per share equal to the stated value ($1,000 per share) plus all accrued and unpaid dividends thereon. The Series E Preferred Stock carries quarterly dividend rights of (a) cash dividends accruing (i) at an annual rate per share equal to 12% from the date of issuance and (ii) 17% after the occurrence of a Preferred Default, and (b) a dividend payable in shares of Series E-1 Convertible Preferred Stock. The shares of Series E-1 Preferred Stock have all the same terms, preferences and characteristics as the Series E Preferred Stock (including, without limitation, the right to receive cash dividends), except (i) Series E-1 Convertible Preferred Stock are mandatorily redeemable by the Company within thirty (30) days after written demand received from any holder at any time after the earlier of the occurrence of a Preferred Default or November 15, 2020, for a cash payment equal to the Liquidation Value (as defined in the Certificate of Designation for the Series E Preferred Stock) plus any accrued and unpaid dividends thereon, (ii) each share of Series E-1 Preferred Stock is initially convertible into 602 shares of the Company’s common stock, and (iii) Series E-1 Convertible Preferred Stock may be cancelled and extinguished by the Company if all shares of Series E Preferred Stock are redeemed by the Company on or prior to October 31, 2020. On October 26, 2020, in connection with the entry into the Amended Note Purchase Agreement, the Company filed with the Secretary of State of the State of Delaware the second Certificate of Amendment (the “Amendment”) to the Certificate of Designation of the Series E Convertible Preferred Stock (the “Base Series E Preferred Stock”) and Series E-1 Convertible Preferred Stock (the “Series E-1 Preferred Stock,” and collectively with the Base Series E Preferred Stock, the “Series E Preferred Stock”.) Under the amended terms, holders of Series E Preferred Stock are entitled to monthly cash dividends on Series E Preferred Stock at a per annum rate of 12%. At the Company’s option, up to 50% of the cash dividend on the Base Series E Preferred Stock may be paid in kind by adding such 50% portion to the outstanding liquidation value of the Base Series E Preferred Stock (the “PIK Dividend Payment”), commencing on October 26, 2020 and ending on October 25, 2020. If the PIK Dividend Payment is elected, a holder of Series E Preferred Stock is entitled to additional fee to be paid in shares of our common stock an amount equal to $10,000 divided by the average closing price, as reported by Nasdaq of such shares of common stock over the 5 trading days prior to the applicable monthly interest payment date. If such average market price is less than $0.50, or is otherwise undeterminable because such shares are no longer publicly traded or the closing price is no longer reported by Nasdaq, then the average closing price for these purposes shall be deemed to be $0.50, and if such average closing price is greater than $3.50 then the average closing price for these purposes shall be deemed to be $3.50. Dividends on the Series E-1 Preferred Stock may only be paid in cash. If the Company fails to make dividend payments on the Series E Preferred Stock, it will be an event of default under the Amended Note Purchase Agreement. Under the terms of the Amendment, shares of Series E-1 Preferred Stock will be convertible into common stock at a conversion rate equal to the liquidation value of each shares of Series E-1 Preferred Stock divided by $1.00 per share commencing October 31, 2020. Each share of Series E-1 Preferred Stock has a liquidation value of $1,000 per share. The shares of Base Series E Preferred Stock will be also convertible into shares of common stock after October 31, 2022. The conversion rate for the Base Series E Preferred Stock is equal to the liquidation value of each shares of Base Series E Preferred Stock divided by $1.00 per share. Each share of Base Series E Preferred Stock has a liquidation value of $1,000 per share. The amendment resulted in the original conversion price of $1.78 and $1.66 of the Series E and E-1 Preferred Stock, respectively, being reduced to $1.00 for both instruments. The Company accounted for the Amendment as a modification to the Series E and E-1 Preferred Stock. The change in fair value as a result of the modification amounted to $410 and was recognized as a deemed dividend. Further, the Company recognized a beneficial conversion feature (BCF) of $4,280 as a result of the decrease in the conversion price to $1.00 in comparison to the Company’s stock price on the date of the amendment. The BCF was recognized as a deemed dividend. As the Company lacks retained earnings, the deemed dividend was recorded as a reduction in additional paid-in capital resulting in a net impact to additional paid-in capital of $0. Lastly, under the terms of the Consent and the Series E Certificate of Designation, in consideration for Jackson’s consent to the first Jackson Waivers On February 5, 2021, we entered into a Limited Consent and Waiver with Jackson whereby, among other things, Jackson agreed that we may use 75% of the proceeds from the offering to redeem a portion of the 2020 Jackson Note, and 25% of the net proceeds from the offering to redeem a portion of the Base Series E Preferred Stock notwithstanding certain provisions of the certificate of designation for the Base Series E Preferred Stock that would have required the Company to use all the proceeds from the offering to redeem the Base Series E Preferred Stock. In addition, the Company also agreed in the Limited Consent and Waiver to additional limits on its ability to incur other indebtedness, including limits on advances under our revolving loan facility with MidCap Funding [X] Trust. The Company also agreed that to the extent that any of our PPP Loans are forgiven after the offering, Jackson may convert the Base Series E Preferred Stock and Series E-1 Preferred Stock that remains outstanding into a secured note that is substantially similar to the 2020 Jackson Note. On April 8, 2021, the limited waiver was extended to June 17 ,2021. HSBC Loan On April 20, 2020, the terms of the loan with HSBC were amended such that no capital repayments would be required between April 2020 to September 2020, and only interest payments would be made during such time. Since such time, capital repayments have resumed. On May 15, 2020, the Company entered into a 3-year term loan with HSBC in the UK for £1,000. |
Leases
Leases | 12 Months Ended |
Jan. 02, 2021 | |
Leases [Abstract] | |
Leases | NOTE 11 – LEASES On December 30, 2018, the Company adopted ASC 842 using the modified retrospective transition approach allowed under ASU 2018-11 which releases companies from presenting comparative periods and related disclosures under ASC 842 and requires a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has elected to apply the short-term lease exception to all leases of one year or less. In Fiscal 2020 and 2019, as a result of the adoption of ASC 842, we recorded a right of use (“ROU”) lease asset of approximately $3,432 with a corresponding lease liability of approximately $3,437 and ROU of approximately $4,888 with a corresponding lease liability of approximately $4,980, respectively, based on the present value of the minimum rental payments of such leases. The Company’s finance leases are immaterial both individually and in the aggregate. Quantitative information regarding the Company’s leases for Fiscal 2020 is as follows: Lease Cost Classification Fiscal 2020 Operating lease cost SG&A Expenses 1,659 Other information Weighted average remaining lease term (years) 3.91 Weighted average discount rate 6.26 % Future Lease Payments 2021 $ 1,313 2022 735 2023 447 2024 338 2025 326 Thereafter 839 $ 3,998 Less: Imputed Interest 561 $ 3,437 Leases - Current $ 1,211 Leases - Non current $ 2,226 As most of the Company’s leases do not provide an implicit rate, we use the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. This methodology was deemed to yield a measurement of the Right of Use Asset and associated lease liability that was appropriately stated in all material respects. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jan. 02, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 12 – STOCKHOLDERS’ EQUITY The Company issued the following shares of common stock during the Fiscal 2020: Number of Fair Value Fair Value at Issuance Common Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raise 7,479,261 $ 4,634 $ 0.60 $ 0.66 Consultants 15,000 18 1.22 1.22 Conversion of Series A 16,215 - - - Board and committee members 22,400 15 0.56 0.85 Jackson Investment Group 500,000 324 0.36 0.92 8,032,876 $ 4,991 The Company issued the following shares of common stock during the Fiscal 2019: Number of Fair Value Fair Value at Issuance Common Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raise 3,331,280 $ 5,515 $ 1.40 $ 2.00 Consultants 6,000 10 1.56 1.56 Board and committee members 22,400 32 0.83 1.79 Jackson Investment Group 100,000 75 0.75 0.75 3,459,680 $ 5,632 The Company’s authorized common stock consists of 40,000,000 shares having a par value of $0.00001. As of the end of Fiscal 2020 and Fiscal 2019, the Company has issued and outstanding 16,818,624 and 8,785,748 common shares, respectively. In May 2017, the Company entered into an At-The-Market offering (“ATM”) agreement with Joseph Gunnar & Co., LLC to establish an at-the-market equity offering program pursuant to which they are able, with the Company’s authorization, to offer and sell up to $3 million of the Company’s common stock at prevailing market prices from time to time. In Fiscal 2020 and Fiscal 2019, the Company sold 0 and 428,600 shares of common stock under this program for net proceeds value of $0 and $528 (gross $600), respectively. On January 22, 2019 the Company issued and sold 387,500 shares of the Company’s common stock to an institutional purchaser at a purchase price of $2.00 per share, for aggregate gross proceeds of approximately $775, before placement fees and estimated offering expenses. The offering of the Securities was made under the Company’s shelf registration statement on Form S-3 (Registration No. 333-208910) (the “Registration Statement”), including a base prospectus, previously filed with and declared effective by the Securities and Exchange Commission (the “SEC”) on March 22, 2016. The offering of the Securities was made only by means of a prospectus supplement that forms a part of the registration statement. On February 12, 2019, the Company closed its previously announced firm commitment underwritten public offering in which, pursuant to an underwriting agreement between the Company and the underwriter, dated as of February 8, 2019, the Company issued and sold 2,425,000 shares of its common stock, at a public offering price of $1.65 per share. The gross proceeds from the offering were approximately $4,001 (net $3,078), excluding underwriting discounts and commissions and other estimated offering expenses. Pursuant to the underwriting agreement, the Company granted the underwriter an over-allotment option, which is exercisable for up to 45 days following the date of the prospectus for the offering, to purchase up to 363,750 additional shares of common stock. On March 14, 2019, our underwriters exercised a portion of the over-allotment option for 90,180 shares at an exercise price of $1.65 per share. The Company received a total of $138 in net proceeds. On December 23, 2020, the Company entered into an underwriting agreement with H.C. Wainwright & Co., LLC (“Wainwright”.) Pursuant to the agreement, the Company agreed to sell 4,188,405 shares of the Company’s common stock to Wainwright at an offering price to the public of $0.60 per share, less underwriting discounts and commissions. In addition, the Company granted Wainwright a 30-day option to purchase up to an additional 628,260 shares of common stock at the same offering price to the public, less underwriting discounts and commissions. On December 28, 2020, Wainwright exercised its option in full to purchase such additional 628,260 shares of common stock. As a result, the Company issued an aggregate of 4,816,665 shares of common stock under the Underwriting Agreement. On December 30, 2020, the Company entered into a securities purchase agreement with certain institutional and accredited investors. Pursuant to the agreement, the Company agreed to sell, in a registered direct offering, 2,662,596 shares of common stock at an offering price of $0.66 per share. February 2021 Public Offering On February 9, 2021, we announced the pricing of a public offering of an aggregate of 21,855,280 shares of its common stock at a public offering price of $0.90 per share (the “Offering”.) The Offering was made pursuant to the Company’s registration statement on Form S-1 initially filed on January 13, 2021, as subsequently amended and declared effective on February 9, 2021. The Offering was made only by means of a prospectus forming a part of the effective registration statement. The Offering closed on February 12, 2021. In the Offering, the Company issued 20,851,199 shares of common stock and pre-funded warrants to purchase up to 1,004,081 shares of common stock, at an exercise price of $0.0001 per share (the “Pre-funded Warrants”.) The Pre-funded Warrants were sold at $0.8999 per Pre-Funded Warrant. The Pre-funded Warrants were immediately exercisable and could be exercised at any time after their original issuance until such Pre-funded Warrants were exercised in full. The Pre-funded Warrants were exercised immediately upon issuance, and 1,004,081 shares of common stock were issued on February 12, 2021. The net proceeds to the Company from the Offering were approximately $18.1 million, after deducting placement agent fees and estimated offering expenses payable by the Company. While the Company’s Series E Preferred Stock is outstanding, the Company is required to use the proceeds of any sales of equity securities, including the securities offered in the Offering, exclusively to redeem any outstanding shares of the Company’s Series E Preferred Stock, subject to certain limitations. On February 5, 2021, the Company used approximately 75% of the net proceeds from the Offering to redeem a portion of the outstanding Jackson Note and 25% of the net proceeds from the Offering to redeem a portion of the Company’s Series E Preferred Stock. Pursuant to the Limited Consent, upon closing of the Offering, the Company redeemed a portion of the 2020 Jackson Note and redeemed 4,518 shares of the Base Series E Preferred Stock. Following the redemption of the Base Series E Preferred Stock, the Company has 6,172 shares of Base Series E Preferred Stock outstanding with an aggregate stated value of $6,172. Restricted Shares The Company has issued shares to employees and board and committee members under its 2015 Omnibus Incentive Plan and 2016 Omnibus Incentive Plan. Under these plans, the shares are restricted for a period of three years from issuance. As of Fiscal 2020, the Company has a total of 61,600 shares unvested issued to employees and Board and committee members. In accordance with ASC 718, Compensation – Stock Compensation, the Company recognizes stock-based compensation from restricted stock based upon the fair value of the award at issuance over the vesting term on a straight-line basis. The fair value of the award is calculated by multiplying the number of restricted shares by the Company’s stock price on the date of issuance. The impact of forfeitures has historically been immaterial to the financial statements. In Fiscal 2020 and Fiscal 2019, the Company recorded compensation expense associated with these restricted shares of $252 and $539, respectively. The table below is a rollforward of unvested restricted shares issued to employees and board of directors. Restricted Shares Weighted Average Price Per Share Balance at December 29, 2018 572,256 $ 3.47 Granted 22,400 1.48 Vested/adjustments (4,216 ) 5.52 Balance at December 28, 2019 590,440 $ 3.12 Granted 38,615 0.76 Vested/adjustments (567,455 ) 3.16 Balance at January 2, 2021 61,600 $ 1.25 Series A Preferred Stock – Related Party On May 29, 2015, the Company filed a Certificate of Designations, Preferences and Rights of Series A Preferred Stock with the Nevada Secretary of State, whereby the Company designated 1,663,008 shares of preferred stock as Series A Preferred Stock, par value $0.00001 per share. On June 15, 2017, the Company reincorporated in the State of Delaware. The Series A Preferred Stock has a stated value of $1.00 per share and is entitled to a 12% dividend. Shares of the Series A Preferred Stock are convertible into shares of common stock at the holder’s election at any time prior to December 31, 2020 (the “Redemption Date”), at a conversion rate of one and three tenths (1.3) shares of common stock for every 50 shares of Series A Preferred Stock that the Holder elects to convert. Originally the redemption date was December 31, 2018 and this was extended to December 31, 2020 in January 2019. Except as otherwise required by law, the Series A Preferred Stock shall have no voting rights. In the event of a liquidation, dissolution or winding up of the Company, the holders of the Series A Preferred Stock shall be entitled to receive out of the assets of the Company legally available for distribution, prior to and in preference to distributions to the holders of the Company’s common stock, par value $0.00001 per share or classes and series of securities of the Company which by their terms do not rank senior to the Series A Preferred Stock, and either in preference to or pari passu with the holders of any other series of Preferred Stock that may be issued in the future that is expressly made senior or pari passu, as the case may be, an amount equal to the Stated Value of the Series A Preferred Stock less any dividends previously paid out on the Series A Preferred Stock. The holders will be entitled to receive cash dividends at the rate of 12% of the Stated Value per annum, payable monthly in cash, prior to and in preference to any declaration or payment of any dividend on the common stock. So long as any shares of Series A Preferred Stock are outstanding, the Company shall not declare, pay or set apart for payment any dividend on any shares of common stock, unless at the time of such dividend the Company shall have paid all accrued and unpaid dividends on the outstanding shares of Series A Preferred Stock. The Certificate of Designation filed on May 29, 2015, designating the Series A Preferred Stock, was filed in connection with the Company’s issuance of an aggregate of 1,663,008 shares of Series A Preferred Stock to Brendan Flood and Matthew Briand for the conversion of the Gross Profit Appreciation Bonus (as defined in each employment agreement) associated with their employment agreements. The Certificate of Designation was approved and related issuances were ratified by the Company’s Board and compensation committee on May 29, 2015. Up until the Redemption Date, holders may convert their shares into common stock at their election. On the Redemption Date, the Company shall redeem all of the shares of Series A Preferred Stock of each Holder, for cash or for shares of common stock in the Company’s sole discretion. If the Redemption Purchase Price is paid in shares of common stock, the holders shall initially receive one and three tenths (1.3) shares of common stock for each $50.00 of the Redemption Purchase Price. If the Redemption Purchase Price is paid in cash, the redemption price paid to each Holder shall be equal to the Stated Value for each share of Series A Preferred Stock, multiplied by the number of shares of Series A Preferred Stock held by such Holder, less the aggregate amount of dividends paid to such Holder through the Redemption Date. On January 21, 2020, the Company converted the 623,628 Series A Preferred Shares awarded to Mr. Briand into 16,215 shares of common stock. As of Fiscal 2020 and Fiscal 2019, we had issued and outstanding 1,039,380 and 1,663,008 Series A Preferred Stock shares and $125 and $0 accrued dividends, respectively. In Fiscal 2020 and Fiscal 2019, the Company paid dividends of $0 and $200, respectively. Subsequent to Fiscal 2020, on January 8, 2021, the remaining 1,039,380 Series A Preferred Shares were converted into 27,024 shares of our common stock. Series E Preferred Stock The Series E Preferred Stock ranks senior to common stock and any other series or classes of preferred stock now or after issued or outstanding with respect to dividend rights and rights on liquidation, winding up and dissolution. Each share of Series E Preferred Stock was initially convertible into 561.8 shares of our common stock at any time after October 31, 2020 or the occurrence of a Preferred Default. A holder of Series E Preferred Stock is not required to pay any additional consideration in exchange for conversion of such Series E Preferred Stock into our common stock. Series E Preferred Stock is redeemable by the Company at any time at a price per share equal to the stated value ($1,000 per share) plus all accrued and unpaid dividends thereon. While the Series E Preferred Stock is outstanding, the Company is required to use the proceeds of any sales of equity securities, exclusively to redeem any outstanding shares of Series E Preferred Stock, except that the Company is permitted to use up to an aggregate of $3,000 of the gross proceeds from any equity offering completed on or before November 15, 2019 for working capital purposes. On January 22, 2019, the Company completed a registered direct offering of our common stock that generated $775 in gross proceeds that are to be used for working capital purposes. On February 12, 2019, the Company closed its previously announced firm commitment underwritten public offering in which, pursuant to an underwriting agreement between the Company and the underwriter, dated as of February 8, 2019, the Company issued and sold 2,425,000 shares of its common stock, at a public offering price of $1.65 per share. Notwithstanding the terms of the certificate of designations for Series E Preferred Stock, Jackson, the holder our outstanding shares of Series E Preferred Stock, did not require us to use the proceeds from our recent offerings in excess of $3,000 to redeem outstanding shares of the Series E Preferred Stock. Instead, the Company used such excess proceeds to make a terminal payment to the sellers of first In the event of liquidation, dissolution or winding up, the holders of the Series E Preferred Stock are entitled to receive out of the Company assets legally available for distribution, prior to and in preference to distributions to the holders of common stock or classes and series of securities which by their terms do not rank senior to the Series E Preferred Stock, and either in preference to or pari passu with the holders of any other series of preferred stock that may be issued in the future that is expressly made senior or pari passu, as the case may be, an amount equal to the stated value of the Series E Preferred Stock plus any accrued but unpaid dividends. On October 23, 2020, the Company filed the second amendment to the Certificate of Designation of the Series E Preferred Stock and Series E-1 Preferred Stock. Under the amended terms, holders of Series E Preferred Stock are entitled to monthly cash dividends on the Company’s Series E Preferred Stock at a per annum rate of 12%. At the Company’s option, up to 50% of the cash dividend on the Base Series E Preferred Stock may be paid in kind by adding such 50% portion to the outstanding liquidation value of the Base Series E Preferred Stock, commencing on October 26, 2020 and ending on October 25, 2021. If the PIK Dividend Payment is elected, a holder of Series E Preferred Stock is entitled to additional fee to be paid in shares of the Company’s common stock an amount equal to $10 divided by the average closing price, as reported by Nasdaq of such shares of common stock over the 5 trading days prior to the applicable monthly interest payment date. If such average market price is less than $0.50, or is otherwise undeterminable because such shares are no longer publicly traded or the closing price is no longer reported by Nasdaq, then the average closing price for these purposes shall be deemed to be $0.50, and if such average closing price is greater than $3.50 then the average closing price for these purposes shall be deemed to be $3.50. Dividends on the Series E-1 Preferred Stock may only be paid in cash. If the Company fails to make dividend payments on the Series E Preferred Stock, it will be an event of default under the Amended Note Purchase Agreement. Under the terms of the Amendment, shares of Series E-1 Preferred Stock are convertible into the Company common stock at a conversion rate equal to the liquidation value of each shares of Series E-1 Preferred Stock divided by $1.00 per share commencing October 31, 2020. Each share of Series E-1 Preferred Stock has a liquidation value of $1,000 per share. The Company’s shares of Base Series E Preferred Stock are also convertible into shares of our common stock after October 31, 2022. The conversion rate for our Base Series E Preferred Stock is equal to the liquidation value of each shares of Base Series E Preferred Stock divided by $1.00 per share. Each share of Base Series E Preferred Stock has a liquidation value of $1,000 per share. On September 28, 2020, the Company redeemed 1,300 shares of Base Series E Preferred Stock for $1,300, as such there is currently 11,700 shares of Base Series E Preferred Stock outstanding. As of January 2, 2021, 11,080,000 shares and 1,363,000 shares of common stock were issuable upon the potential conversion of Series E Preferred Stock and Series E-1 Preferred Stock, respectively. Due to the contingent nature of the cash redemption feature of the Series E-1 Preferred Stock, the Company classified the shares as mezzanine equity on the consolidated balance sheets. As a result of the February 2021 public offering, whereby the Company issued 21,855,280 shares of its common stock, the Company no longer has sufficient authorized shares to settle the Series E and E-1 Preferred stock upon conversion. The Company will recognize the accounting impact of this transaction during the first quarter of fiscal 2021. Warrants On January 26, 2017, the Company issued the Warrant to Jackson which entitled Jackson to purchase up to 630,000 shares of common stock at an initial exercise price of $6.75 per share (subject to adjustment.) The Warrant is exercisable beginning on July 25, 2017 for a term of four and a half (4.5) years thereafter. The exercise price was subject to anti-dilution protection, including protection in circumstances where common stock is issued pursuant to the terms of certain existing convertible securities, provided that the exercise price shall not be adjusted below a price that is less than the consolidated closing bid price of the common stock. The Warrant had anti-dilution provisions which provided the holder with additional warrants and adjusted strike price in the event of stock repurchases by the Company or additional shares being issued in connection with the Series D Preferred Shares or Lighthouse promissory notes. As such, the Company has historically classified the Warrant as a liability. On July 17, 2020, the Company issued warrants to purchase 90,000 shares to a consultant. The warrants have a 5-year term, an exercise price of $1.00 per share and are valued at $56. In connection with the additional investment from Jackson, the Company entered into Amendment No. 1 to Amended and Restated Warrant Agreement (“Warrant agreement”) with Jackson. The Warrant Amendment amended that certain Amended and Restated Warrant Agreement with Jackson, dated as of April 25, 2018 (the “Warrant”), to reduce the exercise price of the Warrant from $5.00 per share to $3.50 per share. The incremental fair value of repricing the Warrants to $3.50 per share is $135 and was recognized as deferred financing costs to be amortized over the term of the Jackson Note. On October 26, 2020, in connection with the entry into the Amended Note Purchase Agreement, the Company entered into Amendment No. 3 to the Amended and Restated Warrant Agreement, dated April 25, 2018, as amended (the “Warrant”), with Jackson. Pursuant to Amendment No. 3, the exercise price of the Warrant was reduced from $1.66 per share to $1.00 per share and the term of the Warrant was extended to January 26, 2026. The modification of the warrants resulting in a fair value adjustment of $126 were recorded as debt discount which will be amortized over the term of the 2020 Jackson Note using the effective interest method. On December 29, 2020, as partial compensation for Wainwright’s services as underwriter in the December 23, 2020 underwriting agreement, the Company issued to Wainwright’s designees warrants to purchase 361,250 shares of common stock. The warrants have a term of five (5) years from the commencement of sales under the offering, an exercise price of $0.75 per share and are valued at $248. On December 31, 2020, as partial compensation for Wainwright’s services as placement agent in the December 30, 2020 securities purchase agreement, the Company issued to Wainwright’s designees warrants to purchase up to 199,695 shares of common stock. The warrants have a term of five (5) years from the commencement of sales under the offering, an exercise price of $0.82per share and are valued at $127. Transactions involving the Company’s warrant issuances are summarized as follows: Weighted Number of Average Shares Exercise Price Outstanding at December 29, 2018 925,934 $ 1.76 Issued — — Exercised — — Expired or cancelled — — Outstanding at December 28, 2019 925,934 $ 1.76 Issued 650,945 0.81 Exercised — — Expired or cancelled — — Outstanding at January 2, 2021 1,576,879 $ 0.99 The following table summarizes warrants outstanding as of January 2, 2021: Number Weighted Average Weighted Outstanding Contractual Average Exercise Price and Exercisable Life (years) Exercise price $0.75 - $62.50 1,576,879 4.03 $ 0.99 Incentive Plans 2014 Equity Incentive Plan On January 28, 2014, our Board adopted the 2014 Equity Incentive Plan (the “2014 Plan”.) Under the 2014 Plan, we may grant options to employees, directors, senior management of the Company and, under certain circumstances, consultants. The purpose of the 2014 Plan is to retain the services of the group of persons eligible to receive option awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its affiliates. A maximum of 50,000 shares of common stock has been reserved for issuance under this plan. The 2014 Plan expires on January 28, 2024. As of January 2, 2021, the Company had issued 50,000 options and shares of common stock pursuant to the 2015 Plan and therefore there are no remaining shares eligible to be issued under the 2014 Plan. 2015 Omnibus Incentive Plan On September 23, 2015, our Board adopted the 2015 Omnibus Incentive Plan (the “2015 Plan”.) This plan has not been approved by our stockholders. Under the 2015 Plan, we may grant a variety of equity instruments to employees, directors, senior management of the Company and, under certain circumstances, consultants. The purpose of the 2015 Plan is to retain the services of the group of persons eligible to receive option awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its affiliates. The 2015 Plan provides for an aggregate of 90,000 shares of common stock to be available for awards under the 2015 Plan (“Awards”.) The number of shares available for grant pursuant to Awards under the 2015 Plan is referred to as the “Available Shares.” If an Award is forfeited, canceled, or if any Option terminates, expires or lapses without being exercised, the common stock subject to such Award will again be made available for future grant. However, shares that are used to pay the exercise price of an Option or that are withheld to satisfy the Participant’s tax withholding obligation will not be available for re-grant under the 2015 Plan. The Plan will have a term of ten years and no further Awards may be granted under the 2015 Plan after that date. As of January 2, 2021, the Company had issued 90,000 in options and shares of common stock and had 0 unissued securities remaining under this plan. 2016 Omnibus Incentive Plan On October 25, 2016, our Board adopted the 2016 Omnibus Incentive Plan (the “2016 Plan”) to, among other things, attract and retain the best available personnel, to provide additional incentive to employees, directors and consultants and to promote the success of the Company’s business. The 2016 Plan’s terms and conditions are similar to that of the 2015 Plan. On January 26, 2017, our stockholders approved the 2016 Plan, pursuant to which 500,000 shares of the Company’s common stock will be reserved for issuance under stock, restricted stock and stock option awards. On May 30, 2018, our stockholders approved an amendment to the 2016 Plan to increase the total number of shares reserved for issuance under the 2016 Plan to 1,250,000 shares of the Company’s common stock. As of January 2, 2021, we had issued 1,234,276 shares and options to purchase shares of common stock pursuant to the 2016 Plan, leaving 15,724 shares remaining under the 2016 Plan. A summary of option activity during the Fiscal 2020 and Fiscal 2019 of the Company’s 2014 Equity Incentive Plan, 2015 Omnibus Incentive Plan and the 2016 Omnibus Incentive Plan is presented below: Options Weighted Average Exercise Price Outstanding at December 29, 2018 111,400 $ 28.46 Granted — — Exercised — — Expired or cancelled (34,900 ) 29.99 Outstanding at December 28, 2019 76,500 $ 27.76 Granted — — Exercised — — Expired or cancelled — — Outstanding at January 2, 2021 76,500 $ 27.76 During the Fiscal 2020 and Fiscal 2019, the Company recorded total share-based payment expense of $27 and $49, respectively, in connection with all options outstanding. The total compensation cost related to options not yet amortized is $31 at Fiscal 2020. The Company will recognize this charge over approximately 1.5 years. 2016 Long-Term Incentive Plan In May 2016, the Company’s Board approved the 2016 Long-Term Incentive Plan (the “2016 LTIP”.) This plan was approved by our stockholders on January 26, 2017. The material features of the 2016 LTIP are: ● The maximum number of shares of common stock to be issued under the 2016 LTIP is 260,000 shares; ● The award of performance units is permitted; ● The term of the 2016 LTIP expired on December 31, 2018. Board selected 260,000 shares to adequately motivate the participants and drive performance for the period. The estimated fair value of the 2016 LTIP plan based on third party valuation was $136. As of Fiscal 2017, all units had been issued and all compensation expense amortized. For Fiscal 2019 and Fiscal 2018, the Company recorded $0 and $0 in compensation expense, respectively, associated with the 2016 LTIP. All the units under this plan expired on December 31, 2018. 2019 Long-Term Incentive Plan In January 2019, the Company’s Board approved the 2019 Long-Term Incentive Plan (the “2019 LTIP”.) The Board granted 365,000 units to adequately motivate the participants and drive performance for the period. Units vest upon the following: ● 50% upon the employee being in good standing on December 31, 2020; and, ● 50% upon the average share price of the Company’s common stock during the 90-day period leading up to December 31, 2020, based upon the following Vesting Rate table: Average 2019 Price Vesting Rate <$8 per share 0 >$8 per share Pro-rated >=$12 per share Full Vesting The company has recognized expense of $284 related to the 2019 LTIP in Fiscal 2020. 2020 Omnibus Incentive Plan On June 30, 2020, the Board approved the 2020 Omnibus Incentive Plan (the “2020 Plan”) pursuant to which we may grant equity incentive awards to key employees, key contractors, and non-employee directors of the Company. The 2020 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly or in combination, and that may be paid in cash, shares of our common stock, or a combination of cash and common stock. A total of 750,000 shares of common stock are reserved for grant under the 2020 Plan, plus any awards reserved under the Company’s prior equity incentive plans, subject to adjustment in certain circumstances to prevent dilution or enlargement. On September 29, 2020, our stockholders approved the 2020 Plan. As of January 2, 2021, we had issued 31,003 shares and options to purchase shares of common stock pursuant to the 2020 Plan, therefore leaving 718,997 shares remaining under the 2020 Plan. The 2020 Plan will terminate on June 30, 2030. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jan. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13 – COMMITMENTS AND CONTINGENCIES Employment Agreements The Flood Employment Agreement On January 3, 2014, in connection with our acquisition of Initio, we entered into a services agreement (the “Flood Employment Agreement”) with Brendan Flood. Pursuant to the Flood Employment Agreement, Mr. Flood initially served as Executive Chairman of the Board. Mr. Flood was initially paid a salary of £192 per annum, less statutory deductions, plus other benefits including reimbursement for reasonable expenses, paid vacation and insurance coverage for his roles with both the Company and our U.K. subsidiary. Under the Flood Employment Agreement, Mr. Flood’s salary is required to be adjusted (but not decreased) annually in connection with the CPI Adjustment (as defined in the Flood Employment Agreement.) Mr. Flood is also entitled to an annual bonus of up to 50% of his annual base salary based reaching certain financial milestones. Additionally, Mr. Flood was entitled to a gross profit appreciation participation, which entitled the participants to 10% of Initio’s “Excess Gross Profit,” which is defined as the increase in Initio gross profits in excess of 120% of the base year’s gross profit, up to $400. Mr. Flood’s participating level was 62.5%. On May 29, 2015, the Gross Profit Appreciation Bonus associated with this employment agreement was converted into 1,039,380 shares of Series A Preferred Stock. On January 8, 2021, all of his Series A Preferred Stock were converted into 27,024 shares of our common stock. The Flood Employment Agreement had an initial term of five years and automatically renews thereafter unless 12 months’ written notice is provided by either party. It also includes customary non-compete/solicitation language for a period of 12 months after termination of employment, and in the event of a change in control, we may request that Mr. Flood continue employment with the new control entity. In December 2017, upon the reorganization of the Company and departure of Mr. Briand, Mr. Flood’s title was changed to Chairman and he assumed the roles of Chief Executive Officer and President of the Company. On January 1, 2018 the Company increased his salary by the CPI Adjustment. On January 1, 2019 and on January 1, 2020, Mr. Flood was eligible for a CPI salary adjustment and chose to waive this adjustment. All other terms of the Flood Employment Agreement remained unchanged. The Barker Employment Agreement The Company entered into an employment agreement with Alicia Barker that appointed her as our Chief Operating Officer effective July 1, 2018 (the “Barker Employment Agreement”.) Ms. Barker also serves as a member of our Board and receives stock compensation for her service as a member of the Board. Under the terms of the Barker Employment Agreement, Ms. Barker currently receives an annual base salary of $250 and is entitled to receive an annual performance bonus of up to 75% of her base salary based on the achievement of certain performance metrics. Ms. Barker’s base salary is required to be reviewed by the Board on an annual basis and may be increased, but not decreased, in its sole discretion. Ms. Barker is also entitled to reimbursement of certain out-of-pocket expenses incurred in connection with her services to the Company and to participate in the benefit plans generally made available to other executives of the Company. In the event Ms. Barker is terminated without cause or for good reason (as such terms are defined in the Barker Employment Agreement), she is entitled to receive (subject to certain requirements, including signing a general release of claims): (i) any earned but unpaid base salary and vacation time, as well as unreimbursed expenses, through her termination date; (ii) severance pay in an amount equal to 12 months’ base salary; and (iii) any earned but unpaid performance bonus. In the event Ms. Barker is terminated for cause or without good reason, she is only entitled to receive any earned but unpaid base salary and vacation time, as well as unreimbursed expenses, through her termination date. The Barker Employment Agreement also contains customary confidentiality, non-solicitation and non-disparagement clauses. The Anwar Employment Agreement The Company entered into an employment agreement with Khalid Anwar that appointed him as our Senior Vice President, Corporate Finance effective June 29, 2020 (the “Anwar Employment Agreement”.) Under the terms of the Anwar Employment Agreement, Mr. Anwar currently receives an annual base salary of $200 and is entitled to receive an annual performance bonus of up to 50% of his base salary based on the achievement of certain performance metrics. The Anwar Employment Agreement will automatically renew for successive one-year terms after the initial employment term unless terminated by either party upon written notice provided not less than three months before the end of the initial term or renewal term. Mr. Anwar is also entitled to reimbursement of certain out-of-pocket expenses incurred in connection with his services to the Company and to participate in the benefit plans generally made available to other executives of the Company. In the event Mr. Anwar is terminated without cause or for good reason (as such terms are defined in the Anwar Employment Agreement), he is entitled to receive (subject to certain requirements, including signing a general release of claims) (i) any earned but unpaid base salary and vacation time, as well as unreimbursed expenses, through his termination date and (ii) any earned but unpaid performance bonus. In the event Mr. Anwar is terminated for cause or without good reason, he is only entitled to receive any earned but unpaid base salary and vacation time, as well as unreimbursed expenses, through his termination date. Effective December 15, 2020, Mr. Anwar was appointed the Company’s principal financial officer and principal accounting officer. The Anwar Employment Agreement also contains customary confidentiality, non-solicitation and non-disparagement clauses. The Viswakula Employment Agreement The Company entered into an employment agreement with Sharnika Viswakula that appointed her as our Corporate Controller effective November 7, 2016 (the “Viswakula Employment Agreement”.) Under the terms of the Viswakula Employment Agreement, Ms. Viswakula received an annual base salary of $170,000 and was entitled to receive an annual performance bonus of up to 35% of her base salary based on the achievement of certain performance metrics. In addition, Ms. Viswakula received 25,000 restricted shares, vesting 50% on her 1 st nd Earn-out Liabilities While the Company had recognized the liability for the contingent earn-out due the sellers of CBS Butler, in March 2019 the Company filed a warranty claim against the sellers asserting certain misrepresentations for an amount which offsets the contingent earn-out. In April 2019, the sellers of CBS Butler responded denying the Company’s warranty claim and asserting that the earn-out amount is due. On July 5, 2019, the Company entered into a settlement agreement with the selling shareholders of CBS Butler for the full and final satisfaction of claims in exchange for a payment of approximately £2,150 by the Company to the CBS Butler shareholders. The payment was due no later than July 26, 2019. The Company did not make the payment on July 26, 2019, as such the parties agreed to adjust the amount payable to £2,500. The Company paid this in full on August 30, 2019 and recorded a gain of approximately £894 ($1,077) on final settlement. The Company used the proceeds from the term note entered into with Jackson on August 29, 2019 for $2,538, to satisfy this obligation. Pursuant to the acquisition of substantially all of the assets of first Pursuant to the acquisition of Clement May on June 28, 2018, the purchase price includes an earnout payment of up to £500 to be paid on or around December 28, 2019; and deferred consideration of £350, the amount to be calculated and paid pursuant to the terms of the acquisition agreement, on or around June 28, 2019. The Company paid deferred consideration of £350 ($444) on June 26, 2019. The earnout payment of £500 ($656) was paid in December 2019. Pursuant to the acquisition of KRI on August 27, 2018, the purchase price includes earnout consideration payable to the seller of $2,027 each on August 27, 2019 and August 27, 2020. The payment of the earnout consideration was contingent on KRI’s achievement of certain trailing gross profit amounts. On September 11, 2019, the Company entered into an amended agreement with the seller to delay the payment of the first year earnout of $2,027 until no later than February 27, 2020. For each full calendar month beyond August 27, 2019, that such payment is delayed, the Company is required pay the seller interest in the amount of $10 with the first such payment of interest due on September 30, 2019. In addition, the amended agreement was further amended to change the due date for the second year earnout payment of $2,027 from August 27, 2020 to February 27, 2020. The seller of KRI, Pamela D. Whitaker (“Whitaker”) has filed a lawsuit against the Company asserting claims for breach of contract and declaratory judgment against the Company due under a share purchase agreement and is seeking $4,054 in alleged damages. While the Company had recognized the liability for the earnout consideration of $4,054 due to Whitaker, within current liabilities as of January 2, 2021 and December 28, 2019, in February 2020, the Company filed an action against Whitaker for breach of contract which more than offsets the earnout consideration recognized. The Company paid interest of $40 during the period ended September 26, 2020. Refer to legal proceedings below for action filed against Whitaker, the former owner of KRI. Lease Obligations The Company is party to multiple lease agreements for office space. The agreements require monthly rental payments through September 2029. Total minimum obligations are approximately $1,313, $735, $447, $338, $326 and $839 for the twelve months ended fiscal 2021, 2022, 2023, 2024, 2025 and beyond, respectively. For Fiscal 2020 and Fiscal 2019, rent expense amounted to $1,659 and $1,732, respectively. Legal Proceedings Whitaker v. Monroe Staffing Services, LLC & Staffing 360 Solutions, Inc. On December 5, 2019, former owner of Key Resources, Inc. (“KRI”), Pamela D. Whitaker (“Whitaker,” “Plaintiff”), filed a complaint in Guilford County, North Carolina (the “North Carolina Action”) asserting claims for breach of contract and declaratory judgment against Monroe Staffing Services LLC (“Monroe”) and the Company (the “Defendants” arising out of the alleged non-payment of certain earn-out payments and interest purportedly due under a Share Purchase Agreement pursuant to which Whitaker sold all issued and outstanding shares in her staffing agency, KRI to Monroe in August 2018. Whitaker is seeking $4,054 in alleged damages. Defendants removed the action to the Middle District of North Carolina on January 7, 2020, and Plaintiff moved to remand on February 4, 2020. Briefing on the motion to remand concluded on February 24, 2020. Separately, Defendants moved to dismiss the action on January 14, 2020 based on Plaintiff’s failure to state a claim, improper venue, and lack of personal jurisdiction as to defendant Staffing 360 Solutions, Inc. Alternatively, Defendants sought a transfer of the action to the Southern District of New York, based on the plain language of the Share Purchase Agreement’s forum selection clause. Briefing on Defendants’ motion to dismiss concluded on February 18, 2020. On February 28, 2020, Plaintiff moved for leave to file an amended complaint. Defendants filed their opposition to the motion for leave on March 19, 2020. Plaintiff has filed a reply. On June 29, 2020, Magistrate Judge Webster issued a Report and Recommendation on the pending motions, recommending that Defendants’ motion to dismiss be granted with regard to Defendants’ request to transfer the matter to the Southern District of New York, and denied in all other regards without prejudice to Defendants raising those arguments again in the new forum. Magistrate Judge Webster also recommended that Plaintiff’s motion to remand be denied and motion to amend be left to the discretion of the Southern District of New York. Plaintiff filed an objection to the Report and Recommendation on July 9, 2020. Defendants responded on July 23, 2020. On February 19, 2021, the Middle District of North Carolina issued a decision that reversed the Magistrate Judge’s Order, granting Plaintiff’s motion to remand and denying Defendants’ motion to dismiss as moot. Defendants filed a Notice of Appeal to the Fourth Circuit on February 25, 2021. On March 18, 2021 the Fourth Circuit selected the case for mandatory mediation. The mediation is scheduled to take place on April 6, 2021. Separately, on February 26, 2020, the Company and Monroe filed an action against Whitaker in the United States District Court for the Southern District of New York (Case No. 1:20-cv-01716) (the “New York Action”.) The New York Action concerns claims for breach of contract and fraudulent inducement arising from various misrepresentations made by Whitaker to the Company and Monroe in advance of, and included in, the share purchase agreement. The Company and Monroe are seeking damages in an amount to be determined at trial but in no event less than $6 million. On April 28, 2020, Whitaker filed a motion to dismiss the New York Action on both procedural and substantive grounds. On June 11, 2020, Monroe and the Company filed their opposition to Whitaker’s motion to dismiss. On July 9, 2020 Whitaker filed reply papers in further support of the motion. On October 13, 2020, the Court denied Whitaker’s motion to dismiss, in part, and granted the motion, in part. The Court rejected Whitaker’s procedural arguments, but granted the motion on substantive grounds. However, the Court ordered that Monroe and the Company may seek leave to amend the complaint by letter application by December 1, 2020. Monroe and the Company filed a letter of motion for leave to amend and a proposed Amended Complaint on December 1, 2020. On January 5, 2021, Whitaker filed an opposition to the letter motion. On January 25, 2021, Monroe and the Company filed a reply in further support of the letter motion. On March 9, 2021, the Court granted Monroe and the Company’s motion for leave to amend, in part, and denied the motion, in part. The Court rejected Monroe and the Company’s claim for fraudulent inducement, but granted the motion for leave to amend their breach of contract claim. Monroe and the Company filed their amended complaint on March 12, 2021. On April 9, 2021, Whitaker renewed her motion to dismiss on procedural grounds, requesting dismissal of the action or, in the alternative, a stay of the proceeding pending adjudication on the merits of the North Carolina Action. Monroe and the Company’s opposition to the motion to dismiss is due on April 23, 2021 Monroe and the Company intend to pursue their claims vigorously. As of the date of this filing, we are not aware of any other material legal proceedings to which we or any of our subsidiaries is a party or to which any of our property is subject, other than as disclosed above. |
Segment Information
Segment Information | 12 Months Ended |
Jan. 02, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 14 – SEGMENT INFORMATION In December 2017, the Company reorganized its operations into three reportable segments: Commercial – US; Professional – US and Professional - UK. Fiscal 2020 Fiscal 2019 Commercial Staffing - US $ 113,970 $ 127,330 Professional Staffing - US 23,477 37,294 Professional Staffing - UK 67,080 113,854 Total Revenue $ 204,527 $ 278,478 Commercial Staffing - US $ 17,845 $ 20,080 Professional Staffing - US 7,546 14,081 Professional Staffing - UK 9,422 14,148 Total Gross Profit $ 34,813 $ 48,309 Selling, general and administrative expenses $ (37,526 ) $ (44,327 ) Impairment of goodwill (2,969 ) Depreciation and amortization (3,118 ) (3,369 ) Operating income - restructuring 20 10 Interest expense (6,697 ) (7,628 ) Amortization of debt discount and deferred financing costs (596 ) (857 ) Re-measurement gain (loss) on intercompany note 584 (383 ) Gain from sale of business 124 - Gain on settlement of deferred consideration - 1,924 Other income 84 326 Loss Before Provision for Income Tax $ (15,281 ) $ (5,229 ) For Fiscal 2020 and Fiscal 2019, the Company generated revenue in the U.S. and the U.K. as follows: January 2, 2021 December 28, 2019 United States $ 137,447 $ 164,624 United Kingdom 67,080 113,854 Total Revenue $ 204,527 $ 278,478 For the period ended Fiscal 2020 and Fiscal 2019, the Company has assets in the U.S. and the U.K. as follows: January 2, 2021 December 28, 2019 United States $ 73,691 $ 74,671 United Kingdom 13,233 14,170 Total Assets $ 86,924 $ 88,841 Total assets by segment is not presented as it is not reviewed by the Chief Operating Decision Maker in his evaluation of how to allocate capital and resources. For the period ended Fiscal 2020 and Fiscal 2019, the Company has goodwill in the U.S. and the U.K. as follows: January 2, 2021 December 28, 2019 United States $ 12,082 $ 16,630 United Kingdom 14,963 14,419 Total Goodwill $ 27,045 $ 31,049 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jan. 02, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 15 – RELATED PARTY TRANSACTIONS In addition to the Series A Preferred Shares and notes and warrants issued to Jackson, the following are other related party transactions: Board and Committee Members Fiscal 2020 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 75 5,600 $ 4 $ 12 Jeff Grout 75 5,600 4 12 Nick Florio 75 5,600 4 12 Alicia Barker - 5,600 4 6 $ 225 22,400 $ 16 $ 42 Fiscal 2019 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 75 5,600 $ 12 $ 68 Jeff Grout 75 5,600 12 70 Nick Florio 75 5,600 12 69 Alicia Barker - 5,600 8 4 $ 225 22,400 $ 32 $ 94 Appointment of Officers On March 28, 2018, the Company appointed Alicia Barker to fill the Class II director vacancy created by the departure of Mr. Briand earlier in the year, such appointment was effective April 1, 2018. Ms. Barker joined the Company’s board of directors as an independent director and serves on the Board’s Compensation and Human Resources Committee and on the Nominating and Corporate Governance Committee. Effective July 1, 2018, the Company entered into an Employment Agreement with Alicia Barker that appointed her as the Company’s Chief Operating Officer. Ms. Barker will continue as a member of the Company’s board of directors, but effective with her appointment will no longer be a member of any Board committee, nor an independent member of the Board, bringing the number of independent directors to three of five Board members. The Company appointed Khalid Anwar as the Company’s principal financial officer and principal accounting officer, effective as of December 15, 2020. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Jan. 02, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | NOTE 16 – SUPPLEMENTAL CASH FLOW INFORMATION Fiscal 2020 Fiscal 2019 Cash paid for: Interest $ 8,596 $ 7,225 Income taxes 278 324 Non-Cash Investing and Financing Activities: Deferred purchase price of UK factoring facility $ 8,036 $ 13,856 Shares issued in connection with Jackson term loan 324 75 Increase in lease liabilities from obtaining right-of-use assets – ASC 842 adoption 450 5,965 Warrants adjustments in connection with Jackson term loan 126 — Deemed dividend 4,690 — |
Income Taxes
Income Taxes | 12 Months Ended |
Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 17 – INCOME TAXES The components of loss before provision for income taxes for Fiscal 2020 and Fiscal 2019, are as follows: Fiscal 2020 Fiscal 2019 Domestic $ (13,491 ) $ (4,795 ) Foreign (2,251 ) (434 ) Loss before provision for income taxes $ (15,742 ) $ (5,229 ) The provision for income taxes consisted of the following: Fiscal 2020 Fiscal 2019 Current: Federal $ — $ — State 190 119 Foreign — 21 Total current tax expense 190 140 Deferred: Federal (76 ) 49 State 27 186 Foreign (241 ) (710 ) Total deferred tax expense (290 ) (475 ) Total tax benefit $ (100 ) $ (335 ) The difference between the income tax provision on income (loss) and the amount computed at the U.S. federal statutory rate is due to: Fiscal 2020 Fiscal 2019 Benefit at Federal Statutory Rate $ (3,306 ) 21.00 % $ (1,098 ) 21.00 % State taxes, net (1,666 ) 10.59 % (1,741 ) 33.30 % Foreign operations 45 -0.29 % (13 ) 0.25 % Permanent differences 87 0.55 % 349 -6.67 % True-up adjustments (589 ) 3.74 % (325 ) 6.22 % Change in valuation allowance 5,139 -32.64 % 2,399 -45.88 % Other 190 -1.21 % 94 -1.80 % Total Tax Benefit for Income Taxes $ (100 ) 0.64 % $ (335 ) 6.42 % The Company’s effective tax rate differed from the U.S. federal statutory rate primarily due to mix of pre-tax income (loss) results by jurisdictions taxed at different rates than 21%, state taxes net of federal benefit, permanent differences, deferred tax balance adjustments that includes but is not limited to the UK tax rate change from 17% to 19%, and changes in valuation allowance in the U.S. Deferred income taxes are provided for the tax effect of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. Significant components of the Company’s deferred tax assets and (liabilities) are as follows: Fiscal 2020 Fiscal 2019 Deferred tax assets Net operating loss carryforward $ 7,276 $ 5,858 Tax credit, deduction and capital loss carryforward 2,880 2,327 Share-based compensation 749 847 Debt issuance costs 1 333 Accrued expenses and other liabilities 1,741 454 Interest limitation and carryforward 6,194 3,639 Operating lease liabilities 628 731 Total deferred tax assets 19,469 14,189 Less: valuation allowance (17,087 ) (11,948 ) Deferred tax assets, net of valuation allowance 2,382 2,241 Deferred tax liabilities: Deprecation 1,521 1,557 Basis differences in acquired intangibles 1,430 1,433 Operating lease - Right-of-use assets 621 731 Total deferred tax liabilities 3,572 3,721 Deferred tax liability $ (1,190 ) $ (1,480 ) During Fiscal 2020 and Fiscal 2019, the Company has federal net operating losses (“NOLs”) of $16,915 and $14,371. Of the $16,915 in federal NOL carryforwards, $3,369 will begin to expire in 2032 and $2,288 can be carried forward indefinitely, subject to an 80% taxable income limitation in the year of utilization. As of November 15, 2018, the Company had a change in ownership under Section 382 which limits the amount of useable NOLs going forward. As such, the Company reduced the Federal NOL available by $7,220. The Company has not identified subsequent 382 Limitations as of January 2, 2021 or December 28, 2019. As of January 2, 2021 and December 28, 2019, the Company has state operating losses of $62,174 and $47,581 that begin to expire in 2022, and foreign NOLs totaling $2,990 and $1,514 with an indefinite life. As of January 2, 2021 and December 28, 2019, the Company also has capital loss carryforward of $9,467 and $7,531, which, if unused, will begin to expire in 2023 and a general business credit carryforward of $76 and $248. Effective for the year ended December 28, 2018, the Tax Act resulted in a new limitation on interest expense under IRC Section 163(j). New IRC Section 163(j) limits the Company’s annual deduction of interest expense to the sum of business interest income and 30 percent of the adjusted taxable income of the Company. As a result of the CARES Act the limitation has been increased to 50% for tax years 2019 and 2020. The limitation for the year ended January 2, 2021 resulted in disallowed interest of $20,917, which can be carried forward indefinitely. The Company has not recorded deferred taxes or withholding taxes for any undistributed foreign earnings, nor have any taxes been provided for the outside basis difference inherent in these entities as the Company’s assertion is to indefinitely reinvest in foreign operations. It is not practicable to estimate any taxes to be provided on outside basis differences at this time. Based on the amount of foreign undistributed earnings through January 2, 2021, we believe any such tax liability would be insignificant to the financial statements. 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 be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating loss carryforwards can be utilized. We consider the level of historical taxable income, scheduled reversal of temporary differences, tax planning strategies, and projected future taxable income in determining whether a valuation allowance is warranted. During Fiscal 2020, the Company maintained a valuation allowance against its U.S. deferred tax assets. The Company’s valuation allowance increased by $5,139 during Fiscal 2020 primarily attributable to the Section 163(j) interest limitation. During 2020, we maintained our federal and state tax attributes for unrecognized tax benefits related primarily to the treatment of stock compensation and stock options. If recognized, $656 of the unrecognized tax benefits are likely to offset to a corresponding full valuation allowance provided for the reduction of federal NOLs, thereby there is no impact to the effective rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Fiscal 2020 Fiscal 2019 Beginning balance $ 674 $ 670 Additions for tax positions of prior years — 4 Reductions for tax positions of prior years (18 ) — Loss before provision for income taxes $ 656 $ 674 It is reasonably possible that the amount of the unrecognized tax benefits with respect to our unrecognized tax positions will increase or decrease in the next 12 months. These changes may be the result of, among other things, method changes. However, quantification of an estimated range cannot be made at this time. The Company has accrued zero interest and penalties as of January 2, 2021 and December 28, 2019. The Company files its tax returns in the U.S., United Kingdom, Canada and certain state and local tax jurisdictions with various statutes of limitations. The Company has no tax years subject to audit by certain jurisdictions at this time. To the extent utilized in future years’ tax returns, NOLs carryforwards at January 2, 2021 and December 28, 2019 will remain subject to examination until the respective tax year is closed. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jan. 02, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation These consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. All amounts are in thousands, except share and par values, unless otherwise indicated. The accompanying consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. |
Change of Year End | Change of Year End On February 28, 2017, the board of directors (the “Board”) approved the change of the Company’s fiscal year end from May 31 to a 52-53-week year ending on the Saturday closest to the 31 st |
Liquidity | Liquidity The accompanying financial statements do not include any adjustments or classifications that may result from the possible inability of the Company to continue as a going concern. The accompanying financial statements have been prepared on a basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements as of the year ended January 2, 2021, the Company has an accumulated deficit of $92,179 and a working capital deficit of $20,793. At January 2, 2021, we had total gross debt of $55,369 and $8,256 of cash on hand. We have historically met our cash needs through a combination of cash flows from operating activities, term loans, promissory notes, convertible notes, private placement offerings and sales of equity. Our cash requirements are generally for operating activities and debt repayments. Subsequent to the year ended January 2, 2021, we have continued to fund our operations and make required capital payments utilizing our available cash and, as of the date of this filing, we have approximately $1,050 in available cash. The financial statements included in this annual report have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity, capital requirements and that our credit facilities with our lenders will remain available to us. Further, our note issued to Jackson Investment Group LLC (“Jackson”) includes certain financial customary covenants and the Company has had instances of non-compliance. Management has historically been able to obtain from Jackson waivers of any non-compliance and management expects to continue to be able to obtain necessary waivers in the event of future non-compliance; however, there can be no assurance that the Company will be able to obtain such waivers, and should Jackson refuse to provide a waiver in the future, the outstanding debt under the agreement could become due immediately, which exceeds our current cash balance. |
Going Concern | Going Concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern. Historically, the Company has funded such payments either through cash flow from operations or the raising of capital through additional debt or equity. If the Company is unable to obtain additional capital, such payments may not be made on time. The Novel Coronavirus Disease 2019 (“COVID-19”), is impacting worldwide economic activity, and activity in the United States and the United Kingdom where our operations are based. The nature of work of the contractors we support mostly are on the site of our clients. As a result, we are subject to the plans and approaches of our clients to work during this period. This includes whether they support remote working when they have decided to close their facilities. To the extent that our clients have decided to or are required to close their facilities or not permit remote work when they decide to close facilities, we would no longer generate revenue and profit from that client. Developments such as social distancing and shelter-in-place directives have impacted the Company’s ability to deploy its staffing workforce effectively thereby impacting contracts with customers in the Company’s Commercial Staffing and Professional Staffing business streams where we have seen declines in revenues during Fiscal 2020. While expected to be temporary, prolonged workforce disruptions can negatively impact sales in fiscal year 2021 and the Company’s overall liquidity. The Company’s negative working capital and liquidity position combined with the uncertainty generated by the economic reaction to the COVID-19 pandemic raise substantial doubt about the Company’s ability to continue as a going concern. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2021. |
Covid-19 | COVID-19 The full impact of the COVID-19 pandemic continues to evolve as of the date of this annual report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, industry, and workforce. Developments such as social distancing and shelter-in-place directives have impacted the Company’s ability to generate revenues. Given the daily evolution of the COVID-19 pandemic, including new information which may emerge concerning the severity of COVID-19 and the global responses to curb its spread and to treat its impact, the Company is not able to estimate the duration of the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity beyond fiscal year 2020, however the Company continues to take action to reduce the negative effects of the COVID-19 pandemic on its operations through various cost cutting initiatives including reductions to support personnel, temporary salary reductions, and elimination of other non-essential spend. Should the impact from the pandemic go on for an extended period of time, management has developed further plans to partially mitigate the impact of the pandemic. On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. It also appropriated funds for the SBA Paycheck Protection Program (“PPP”) loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. On May 12, 2020, Monroe Staffing Services, LLC (“Monroe Staffing”), an indirect subsidiary of the Company, entered into a note (the “May 12 Note”) with Newton Federal Bank (the “Bank”), pursuant to the PPP of the CARES Act administered by the U.S. Small Business Administration (“SBA”). The principal amount of the May 12 Note is $10,000. In accordance with the requirements of the CARES Act, the Company and Monroe Staffing (collectively, the “May 12 Note Borrowers”) intends to use the proceeds from the May 12 Note in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on the May 12 Note at the rate of 1.00% per annum. The May 12 Note Borrowers may apply for forgiveness of the amount due under the May 12 Note, in an amount equal to the sum of qualified expenses under the PPP. The May 12 Note Borrowers intend to use the entire proceeds under the May 12 Note for such qualifying expenses. Subject to any forgiveness under the PPP, the May 12 Note matures two years following the date of issuance of the May 12 Note and includes a period for the first six months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of the May 12 Note, the May 12 Note Borrowers are required to make 14 monthly payments of principal and interest. The May 12 Note may be prepaid at any time prior to maturity. The May 12 Note provides for customary events of default, including, among others, those relating to breaches of obligations under the May 12 Note, including a failure to make payments, any bankruptcy or similar proceedings involving the May 12 Note Borrowers, and certain material effects on the May 12 Note Borrowers’ ability to repay the May 12 Note. The May 12 Note Borrowers did not provide any collateral or guarantees for the May 12 Note. On May 20, 2020, Key Resources Inc. (“KRI”), Lighthouse Placement Services, LLC (“LH”) and Staffing 360 Georgia, LLC (“SG”), each a wholly owned direct or indirect subsidiary of the Company, entered into the following notes, each dated May 20, 2020, with the Bank, pursuant to the PPP of the CARES Act administered by the SBA. KRI entered into a note (the “KRI Note”) for the principal amount of approximately $5,443, LH entered into a note (the “LH Note”) for the principal amount of approximately $1,890, and SG entered into a note (the “SG Note,” and, together with the KRI Note and LH Note, the “May 20 Notes”) for the principal amount of approximately $2,063. The combined total of the May 20 Notes is approximately $9,395. In accordance with the requirements of the CARES Act, the Company, KRI, LH and SG (collectively, the “May 20 Note Borrowers”) intends to use the proceeds from the May 20 Notes in accordance with the requirements of the PPP to cover certain qualified expenses, including payroll costs, rent and utility costs. Interest accrues on each of the May 20 Notes at the rate of 1.00% per annum. The May 20 Note Borrowers may apply for forgiveness of the amount due under the May 20 Notes, in an amount equal to the sum of qualified expenses under the PPP. The May 20 Note Borrowers intend to use the entire proceeds under the May 20 Notes for such qualifying expenses. Subject to any forgiveness under the PPP, each of the May 20 Notes mature two years following the date of issuance of the May 20 Notes and include a period for the first six months during which time required payments of interest and principal are deferred. Beginning on the eleventh month following the date of each of the May 20 Notes, the May 20 Note Borrowers are required to make 14 monthly payments of principal and interest. Based upon these payment terms the Company has recognized $6,927 of the PPP loan as a short-term obligation and $12,468 as long term. The May 20 Notes may be prepaid at any time prior to maturity. The May 20 Notes provide for customary events of default, including, among others, those relating to breaches of obligations under the May 20 Notes, including a failure to make payments, any bankruptcy or similar proceedings involving the Borrowers, and certain material effects on the Borrowers’ ability to repay the May 20 Notes. The May 20 Note Borrowers did not provide any collateral or guarantees for the May 20 Notes. The application for these funds required the Company to certify in good faith that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The Company made this good faith assertion based upon the adverse impact the COVID-19 pandemic had on our business and the degree of uncertainty introduced to the capital markets. While the Company has made this assertion in good faith based upon all available guidance, management will continue to assess their continued qualification if and when updated guidance is released by the Treasury Department. All or a portion of the PPP Loan may be forgiven by the SBA upon application by the Company beginning 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, covered mortgage interest and covered utilities during the eight-week period beginning on the date of loan approval. For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100, prorated annually. Not more than 40% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100 or less annually are reduced by more than 25%. The ultimate forgiveness of the PPP loan is also predicated upon regulatory authorities concurring with management’s good faith assessment that the current economic uncertainty made the loan request necessary to support ongoing operations. If, despite the Company’s good-faith belief that given the circumstances the Company satisfied all eligibility requirements for the PPP Loan, the Company is later determined to have violated any applicable laws or regulations or it is otherwise determined that the Company was ineligible to receive the PPP Loan, the Company may be required to repay the PPP Loan in its entirety and/or be subject to additional penalties. In the event the PPP Loan, or any portion thereof, is forgiven pursuant to the PPP, the amount forgiven is applied to outstanding principal. Effective March 27, 2020, the Company is deferring Federal Insurance Contributions Act taxes under the CARES Act section 2302. Payment of these tax deferrals of $2,473 and $2,473 are delayed to December 31, 2021 and December 31, 2022, respectively. |
Acquisitions | Acquisitions Clement May Acquisition On June 28, 2018, the Company and Staffing 360 Solutions Limited (formerly known as Longbridge Recruitment 360 Limited), a wholly owned subsidiary of the Company, entered into share purchase agreements (“Share Purchase Agreements”) to acquire all of the share capital of Clement May Limited (“CML”.) Consideration for the acquisition of all the shares was (i) an aggregate cash payment of £1,550 ($2,047), (ii) 15,000 shares of the Company’s common stock, (iii) an earn-out payment of up to £500, the amount to be calculated and paid on or around January 2, 2021 pursuant to the Share Purchase Agreement, and (iv) deferred consideration of £350, to be paid on or around June 28, 2019, depending on the satisfaction of certain conditions set forth in that Share Purchase Agreement. To finance the above acquisition, the Company entered into a term loan with HSBC Bank plc. The Company paid deferred consideration of £350 ($444) on June 26, 2019. The earnout payment of £500 ($656) was fully paid in December 2019. Key Resources Inc. Acquisition On August 27, 2018, the Company and Monroe Staffing Services, LLC (“Monroe Staffing”), an indirect wholly owned subsidiary of the Company, entered into a share purchase agreement with Pamela D. Whitaker (“Seller”), pursuant to which the Seller sold 100% of the common shares of Key Resources Inc. (“KRI”) to Monroe Staffing (the “KRI Transaction”.) The KRI Transaction closed simultaneously with the signing of the share purchase agreement. The purchase price in connection with the KRI Transaction was approximately $12,163, of which (a) approximately $8,109 was paid to the Seller at closing, (b) up to approximately $2,027 is payable as earnout consideration to the Seller on August 27, 2019 and (c) up to $2,027 is payable as earnout consideration to the Seller on August 27, 2020. The payment of the earnout consideration is contingent on KRI’s achievement of certain trailing gross profit amounts. To finance the KRI Transaction, the Company entered into an agreement with Jackson Investment Group, LLC (“Jackson”) on August 27, 2018, pursuant to which the note purchase agreement dated as of September 15, 2017 was amended to add an additional senior debt investment of approximately $8,428. On September 11, 2019, the Company entered into an amended agreement with the seller to delay the payment of the first year earnout of $2,027 until no later than February 27, 2020. For each full calendar month beyond August 27, 2019, that such payment is delayed, the Company shall pay the seller interest in the amount of $10 with the first such payment of interest due on September 30, 2019. In addition, the amended agreement was further amended to change the due date for the second year earnout payment of $2,027 from August 27, 2020, to February 27, 2020. The seller of KRI, Pamela D. Whitaker (“Whitaker”) has filed a lawsuit against the Company asserting claims for breach of contract and declaratory judgment against the Company due under a share purchase agreement and is seeking $4,054 in alleged damages. While the Company had recognized the liability for the earnout consideration of $4,054 due to Whitaker, within current liabilities as of January 2, 2021, in February 2020, the Company filed an action against Whitaker for breach of contract which more than offsets the earnout consideration recognized. The Company paid interest of $30 in Fiscal 2019 and $40 in Fiscal 2020. |
Divesture of Business | Divesture of Business On September 24, 2020, the Company and Staffing 360 Georgia, LLC d/b/a first first first first In addition, the Buyer has agreed to assume certain liabilities related to the Assets. The purchase price in connection with the first first The Asset Purchase Agreement contains non-competition and non-solicitation provisions customary for agreements of this type. In addition, under the terms of the Asset Purchase Agreement, the Company has agreed to indemnify the Buyer against certain liabilities, subject to certain conditions and limitations as set forth in the Asset Purchase Agreement. In connection with execution of the Asset Purchase Agreement, the Company and certain of its subsidiaries entered into a Consent Agreement (the “Consent”) with Jackson, a noteholder under the Existing Note Purchase Agreement. Under the terms of the Consent and the Certificate of Designation of the Company’s Series E Convertible Preferred Stock (the “Series E Preferred Stock”), in consideration for Jackson’s consent to the first To induce the Buyer to enter into the Asset Purchase Agreement, the Company also entered into a Transition Services Agreement with the Buyer, pursuant to which each party will provide certain transition services such as payrolling through to year end 2020 to minimize any disruption to the businesses of the Seller and the Buyer arising from the first |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from its estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected. Significant estimates for Fiscal 2020 and Fiscal 2019 include the valuation of intangible assets, including goodwill, liabilities associated with earn-out obligations, testing long-lived assets for impairment and valuation reserves against deferred tax assets. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. The Company accounts for revenues when both parties to the contract have approved the contract, the rights and obligations of the parties are identified, payment terms are identified, and collectability of consideration is probable. Payment terms vary by client and the services offered. The Company has primarily two main forms of revenue – temporary contractor revenue and permanent placement revenue. Temporary contractor revenue is accounted for as a single performance obligation satisfied over time because the customer simultaneously receives and consumes the benefits of the Company’s performance on an hourly basis. The contracts stipulate weekly billing and the Company has elected the “as invoiced” practical expedient to recognize revenue based on the hours incurred at the contractual rate as we have the right to payment in an amount that corresponds directly with the value of performance completed to date. Permanent placement revenue is recognized on the date the candidate’s full-time employment with the customer has commenced. The customer is invoiced on the start date, and the contract stipulates payment due under varying terms, typically 30 days. The contract with the customer stipulates a guarantee period whereby the customer may be refunded if the employee is terminated within a short period of time, however this has historically been infrequent, and immaterial upon occurrence. As such, the Company’s performance obligations are satisfied upon commencement of the employment, at which point control has transferred to the customer. Revenue in Fiscal 2020 was comprised of $198,066 of temporary contractor revenue and $6,461 of permanent placement revenue, compared with $266,974 and $11,504 for Fiscal 2019, respectively. Refer to Note 14 for further details on breakdown by segments. |
Taxes Collected from Customers and Remitted to Governmental Agencies | Taxes Collected from Customers and Remitted to Governmental Agencies The Company records taxes on customer transactions due to governmental agencies as a receivable and a liability on the consolidated balance sheets. Sales taxes are recorded net on the consolidated statement of operations. |
Advertising Costs | Advertising Costs Costs for advertising are expensed when incurred. Advertising expenses for the Company were $1,302 and $1,365 for Fiscal 2020 and 2019, respectively. |
Legal Contingencies and Expenses | Legal Contingencies and Expenses From time to time, the Company may become involved in various claims, disputes and legal or regulatory proceedings that arise in the ordinary course of business and relate to contractual and other obligations. The Company assesses its potential contingent and other liabilities by analyzing its claims, disputes and legal and regulatory matters using all available information and developing its views on estimated losses in consultation with its legal and other advisors. The Company determines whether a loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. If the contingency is not probable or cannot be reasonably estimated, disclosure of the contingency shall be made when there is at least a reasonable possibility that a loss may be incurred. Expenses associated with legal contingencies are expensed as incurred. |
Restructuring Charges | Restructuring Charges The Company records a liability for significant costs associated with exit or disposal activities, including lease termination costs, certain employee severance costs associated with formal restructuring plans, facility closings or other similar activities and related asset impairments, when the liability is incurred. The determination of when the Company accrues for severance and related costs depends on whether the termination benefits are provided under a one-time benefit arrangement or under an ongoing benefit arrangement. Where the Company has either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan, it recognizes severance costs when they are both probable and estimable. Costs associated with restructuring actions that include one-time severance benefits are only recorded once a liability has been incurred, including when management with the proper level of authority has committed to a restructuring plan and the plan has been communicated to employees. These charges are included in operational restructuring and other charges on the consolidated statements of operations. Other charges include knowledge transfer costs directly related to the restructuring initiatives and are expensed as incurred. The Briand Separation Agreement Matthew Briand, the Company’s former employee, board member and officer, resigned from his positions with the Company and subsidiaries. The Company entered into an agreement (the “Briand Separation Agreement”) with Mr. Briand dated December 21, 2017, with an effective date (“Separation Date”) of January 31, 2018, pursuant to which Mr. Briand may provide advisory services, if requested by the Company, through the effective date. The Company paid approximately $190 and $690 in Fiscal 2019 and Fiscal 2018, respectively, to Mr. Briand, in full settlement of his separation agreement. The Faiman Separation Agreement On September 11, 2019, David Faiman, the Company’s Chief Financial Officer, and the Company entered into an agreement whereby Mr. Faiman agreed to transition his position and responsibilities with the Company (“Faiman Separation Agreement”), and Mr. Faiman’s Employment Agreement, dated February 5, 2016, was terminated. Under the terms of the Faiman Separation Agreement, Mr. Faiman will continue as the Company’s Chief Financial Officer, including acting as the Company’s principal financial officer, for a period lasting until the earlier of (i) December 31, 2019 and (ii) either (a) such date that is a reasonable time, as determined by the Company, prior to the commencement of a new position by Mr. Faiman, or (b) upon the Company’s termination of Mr. Faiman’s obligation to provide transition services for Cause. Pursuant to the Faiman Separation Agreement, Mr. Faiman will be entitled to receive, among other things, (i) pay in an amount equal to his base salary through the separation date, payable in equal installments in accordance with the Company’s normal payroll policies, (ii) continuation of Mr. Faiman’s current Company-sponsored employee benefits through the separation date, (iii) accelerated vesting of any outstanding equity awards held by Mr. Faiman and the elimination of any obligations to forfeit such awards upon the termination of Mr. Faiman’s employment (provided that no award shall be extended beyond its original term) and (iv) a positive reference from the management of the Company. Effective January 1, 2020, Mr. Faiman was no longer with the Company. The Company recognized approximately $190 in severance costs related to Mr. Faiman and paid $91 in the fiscal year ended 2020. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid instruments with original maturities of three months or less when acquired, to be cash equivalents. Cash and cash equivalents held at financial institutions may at times exceed federally insured amounts. We believe we mitigate such risk by investing in or through major financial institutions. The Company had no cash equivalents at the end of Fiscal 2020 or Fiscal 2019. |
Accounts Receivable | Accounts Receivable Accounts receivable are presented net of an allowance for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current creditworthiness and current economic trends. Accounts are written off after all efforts to collect have been exhausted. As of the end of Fiscal 2020 and the end of Fiscal 2019, the Company had an allowance for doubtful accounts of $62 and $210, respectively. |
Income Taxes | Income Taxes The Company utilizes Accounting Standards Codification (“ASC”) Topic 740, “Accounting for Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company applies the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes,” which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of the date of this filing, the Company is current on all corporate, federal and state tax returns. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of subsidiaries operating in foreign countries are translated into U.S. dollars using the exchange rate in effect at the balance sheet date and equity is translated at historical rate. Results of operations are translated using average exchange rates. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are included in a separate component of stockholders’ equity (accumulated other comprehensive income), while gains and losses resulting from foreign currency transactions are included in operations. |
Deferred Financing Costs | Deferred Financing Costs Costs incurred in connection with obtaining certain financing are deferred and amortized on an effective interest method basis over the term of the related obligation. In accordance with Accounting Standards Update (“ASU”) 2015-03, “Imputation of Interest – Simplifying the Presentation of Debt Issuance Costs,” debt issuance costs related to a recognized debt liability are presented in the balance sheet as a direct deduction from the debt liability, consistent with the presentation of a debt discount. |
Business Combinations | Business Combinations In accordance with ASC 805, “Business Combinations,” the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values. The Company utilizes management estimates and, in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities assumed and contingent consideration granted. Such estimates and valuations require us to make significant assumptions, including projections of future events and operating performance. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments In accordance with ASC 820, “Fair Value Measurements and Disclosures,” the Company measures and accounts for certain assets and liabilities at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, and establishes a framework for measuring fair value and standards for disclosure about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. There were no Level 1or 2 assets or liabilities or Level 3 assets in any period. The Company’s Level 3 liabilities were its warrants issued to Jackson and contingent consideration in connection with acquisitions. The Company had accounted for the warrants issued to Jackson as a liability under ASC 815-40 due to certain anti-dilution protection provisions. On April 25, 2018, the Company and Jackson amended the Warrant to remove the anti-dilution clauses. No economic terms were adjusted. These clauses were the basis for recording the warrants as a liability. Therefore, upon execution of this amendment, the Company recorded a mark-to-market gain and reclassed the remaining liability to Additional paid-in capital. The table below represents a rollforward of the Level 3 warrant liability and contingent consideration: Contingent Consideration Balance at December 29, 2018 $ 9,731 CBS Butler earnout payment (3,930 ) CBS Butler gain on settlement of earnout (1,077 ) KRI deferred consideration 408 Clement May earnout (656 ) Change in fair value (537 ) Balance at December 28, 2019 $ 3,939 KRI deferred consideration 115 Balance at January 2, 2021 $ 4,054 Cash is considered to be highly liquid and easily tradable and therefore classified as Level 1 within our fair value hierarchy. ASC 825-10-25, “Fair Value Option” expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is computed on the straight-line method over the estimated useful lives for each category as follows: Computers 3-5 years Computer equipment 3-5 years Network equipment 3-5 years Software 3-5 years Office equipment 3-7 years Furniture and fixtures 3-7 years Leasehold improvements 3-5 years Amortization of leasehold improvements is computed using the straight-line method over the shorter of the life of the lease or the estimated useful life of the assets. Maintenance and repairs are charged to expense as incurred. Major improvements are capitalized. At the time of retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in Other income/(expenses.) |
Long-Lived Assets | Long-Lived Assets In accordance with ASC 360 “Property, Plant, and Equipment,” the Company periodically reviews its long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount. The amount of impairment is measured as the difference between the estimated fair value and the book value of the underlying asset. |
Goodwill | Goodwill Goodwill relates to amounts that arose in connection with various acquisitions and represents the difference between the purchase price and the fair value of the identifiable intangible and tangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but it is subject to periodic review for impairment. Events that would indicate impairment and trigger an interim impairment assessment include, but are not limited to, current economic and market conditions, a decline in the equity value of the business, a significant adverse change in certain agreements that would materially affect reported operating results, business climate or operational performance of the business and an adverse action or assessment by a regulator. In accordance with ASU No. 2011-08, Intangibles-Goodwill and Other (Topic 350) Testing Goodwill for Impairment, or ASU 2011-08, the Company is required to review goodwill by reporting unit for impairment at least annually or more often if there are indicators of impairment present. During the year ended January 2, 2021 the Company changed its annual measurement date from the first day of the fiscal fourth quarter to the last day of the fiscal year end. A reporting unit is either the equivalent of, or one level below, an operating segment. The Company early adopted the provisions in ASU 2017-04, which eliminates the second step of the goodwill impairment test. As a result, the Company’s goodwill impairment tests include only one step, which is a comparison of the carrying value of each reporting unit to its fair value, and any excess carrying value, up to the amount of goodwill allocated to that reporting unit, is impaired. The carrying value of each reporting unit is based on the assignment of the appropriate assets and liabilities to each reporting unit. Assets and liabilities were assigned to each reporting unit if the assets or liabilities are employed in the operations of the reporting unit and the asset and liability is considered in the determination of the reporting unit fair value. |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815, “Derivative and Hedging.” Accounting standards generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.” The Company accounts for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Original issue discounts (“OID”) under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control and could require net cash settlement, then the contract shall be classified as an asset or a liability. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718, “Compensation – Stock Compensation,” which requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50, “Equity-Based Payments to Non-Employees.” |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, which simplifies the guidance on the issuer’s accounting for convertible debt instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, entities will not separately present in equity an embedded conversion feature in such debt and will account for a convertible debt instrument wholly as debt, unless certain other conditions are met. The elimination of these models will reduce reported interest expense and increase reported net income for entities that have issued a convertible instrument that is within the scope of ASU 2020-06. Also, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and treasury stock method will be no longer available. ASU 2020-06 is applicable for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company is still contemplating early adoption and continues to evaluate the impact of the provisions of ASU 2020-06 on its consolidated financial statements. On December 31, 2019, the FASB issued ASC 2019-12 “Income Taxes: Simplifying the Accounting for Income Taxes” (Topic 740.) The amendments in this update simplify the accounting for income taxes by removing the certain exceptions. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the amendments is permitted, including adoption in any interim period for (1) public business entities for periods for which financial statements have not yet been issued and (2) all other entities for periods for which financial statements have not yet been made available for issuance. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company will adopt the guidance when it becomes effective. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”.) This standard requires an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, each reporting entity should estimate an allowance for expected credit losses, which is intended to result in more timely recognition of losses. This model replaces multiple existing impairment models in current U.S. GAAP, which generally requires a loss to be incurred before it is recognized. The new standard applies to trade receivables arising from revenue transactions such as contract assets and accounts receivable. Under ASC 606, revenue is recognized when, among other criteria, it is probable that an entity will collect the consideration it is entitled to when goods or services are transferred to a customer. When trade receivables are recorded, they become subject to the CECL model and estimates of expected credit losses on trade receivables over their contractual life will be required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. This guidance is effective for smaller reporting companies for annual periods beginning after December 15, 2022, including the interim periods in the year. Early adoption is permitted. The Company will adopt the guidance when it becomes effective. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Accounting Policies [Abstract] | |
Summary of Rollforward of Level 3 Warrant Liability and Contingent Consideration | The table below represents a rollforward of the Level 3 warrant liability and contingent consideration: Contingent Consideration Balance at December 29, 2018 $ 9,731 CBS Butler earnout payment (3,930 ) CBS Butler gain on settlement of earnout (1,077 ) KRI deferred consideration 408 Clement May earnout (656 ) Change in fair value (537 ) Balance at December 28, 2019 $ 3,939 KRI deferred consideration 115 Balance at January 2, 2021 $ 4,054 |
Schedule of Estimated Useful Life of Property and Equipment | Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is computed on the straight-line method over the estimated useful lives for each category as follows: Computers 3-5 years Computer equipment 3-5 years Network equipment 3-5 years Software 3-5 years Office equipment 3-7 years Furniture and fixtures 3-7 years Leasehold improvements 3-5 years |
Loss Per Common Share (Tables)
Loss Per Common Share (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Basic and Diluted Net Loss per Share: | |
Schedule of Common Share Equivalent Basis and Outstanding Excluded from Per Share Computations of Antidilutive | Fiscal 2020 Fiscal 2019 Warrants 1,576,879 925,935 Long term incentive plan (LTIP) 155,000 365,000 Options 76,500 76,500 Convertible preferred shares 12,443,000 7,785,766 Restricted shares - unvested 77,815 590,440 Total 14,329,194 9,743,641 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: January 2, 2021 December 28, 2019 Computer software $ 471 $ 342 Office equipment 1,115 1,043 Computer equipment 1,160 1,195 Furniture and fixtures 1,123 1,312 Leasehold improvements 713 965 Total property and equipment, gross 4,582 4,857 Accumulated depreciation (3,516 ) (3,329 ) Total property and equipment, net $ 1,066 $ 1,528 |
Other Non-Current Assets (Table
Other Non-Current Assets (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Investments, All Other Investments [Abstract] | |
Schedule of Other Non-Current Assets | The following provides a breakdown of other non-current assets: January 2, 2021 December 28, 2019 Collateral associated with workers’ compensation insurance $ 3,134 $ 3,204 Other non-current assets 34 19 Total $ 3,168 $ 3,223 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Breakdown of Intangible Assets | The following provides a breakdown of intangible assets as of: January 2, 2021 Tradenames Non-Compete Customer Relationships Total Intangible assets, gross $ 9,582 2,500 21,810 33,892 Accumulated amortization (4,283 ) (2,440 ) (11,152 ) (17,875 ) Intangible assets, net $ 5,299 60 10,658 16,017 December 28, 2019 Tradenames Non-Compete Customer Relationships Total Intangible assets, gross $ 9,458 $ 2,488 $ 22,757 $ 34,703 Accumulated amortization (3,558 ) (2,349 ) (9,285 ) (15,192 ) Intangible assets, net $ 5,900 $ 139 $ 13,472 $ 19,511 |
Schedule of Estimated Annual Amortization Expense for Each of the Next Five Fiscal Years | As of January 2, 2021, estimated annual amortization expense for each of the next five fiscal years is as follows: Fiscal year ended December Amount 2021 $ 2,302 2022 2,254 2023 2,254 2024 2,254 2025 2,184 Thereafter 4,769 Total $ 16,017 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table provides a roll forward of goodwill: January 2, 2021 December 28, 2019 Beginning balance, gross $ 31,049 $ 38,139 Accumulated impairment losses (2,969 ) (6,078 ) Beginning balance, net 28,080 32,061 Disposition of business (1,577 ) — Currency translation adjustment 542 (1,012 ) Ending balance, net $ 27,045 $ 31,049 |
Schedule of Goodwill Reportable by Segment | Goodwill by reportable segment is as follows: January 2, 2021 December 28, 2019 Professional Staffing - US $ 6,222 $ 10,527 Commercial Staffing - US 5,860 6,102 Professional Staffing - UK 14,963 14,420 Ending balance, net $ 27,045 $ 31,049 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | The following provides a breakdown of accounts payable and accrued expenses: January 2, 2021 December 28, 2019 Accounts payable $ 28 $ 1,412 Accrued payroll, taxes and bonuses 12,913 12,700 Severance costs — 190 Other accrued expenses 2,089 2,275 Total $ 15,030 $ 16,577 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | January 2, 2021 December 28, 2019 Jackson Investment Group - related party $ 33,880 $ 38,278 PPP Loans 19,395 - HSBC Term Loan 2,094 1,035 Total Debt, Gross 55,369 39,313 Less: Debt Discount and Deferred Financing Costs, Net (559 ) (497 ) Total Debt, Net 54,810 38,816 Less: Non-Current Portion (39,943 ) (360 ) Total Current Debt, Net $ 14,867 $ 38,456 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Leases [Abstract] | |
Schedule of Quantitative Informations of Opearating Leases | Quantitative information regarding the Company’s leases for Fiscal 2020 is as follows: Lease Cost Classification Fiscal 2020 Operating lease cost SG&A Expenses 1,659 |
Schedule of Operating Lease Liability Maturity | Other information Weighted average remaining lease term (years) 3.91 Weighted average discount rate 6.26 % Future Lease Payments 2021 $ 1,313 2022 735 2023 447 2024 338 2025 326 Thereafter 839 $ 3,998 Less: Imputed Interest 561 $ 3,437 Leases - Current $ 1,211 Leases - Non current $ 2,226 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Equity [Abstract] | |
Schedule of Common Stock Issuance | The Company issued the following shares of common stock during the Fiscal 2020: Number of Fair Value Fair Value at Issuance Common Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raise 7,479,261 $ 4,634 $ 0.60 $ 0.66 Consultants 15,000 18 1.22 1.22 Conversion of Series A 16,215 - - - Board and committee members 22,400 15 0.56 0.85 Jackson Investment Group 500,000 324 0.36 0.92 8,032,876 $ 4,991 The Company issued the following shares of common stock during the Fiscal 2019: Number of Fair Value Fair Value at Issuance Common Shares of Shares (minimum and maximum Shares issued to/for: Issued Issued per share) Equity raise 3,331,280 $ 5,515 $ 1.40 $ 2.00 Consultants 6,000 10 1.56 1.56 Board and committee members 22,400 32 0.83 1.79 Jackson Investment Group 100,000 75 0.75 0.75 3,459,680 $ 5,632 |
Schedule of Unvested Restricted Shares Activity | The table below is a rollforward of unvested restricted shares issued to employees and board of directors. Restricted Shares Weighted Average Price Per Share Balance at December 29, 2018 572,256 $ 3.47 Granted 22,400 1.48 Vested/adjustments (4,216 ) 5.52 Balance at December 28, 2019 590,440 $ 3.12 Granted 38,615 0.76 Vested/adjustments (567,455 ) 3.16 Balance at January 2, 2021 61,600 $ 1.25 |
Schedule of Warrants Activity | Transactions involving the Company’s warrant issuances are summarized as follows: Weighted Number of Average Shares Exercise Price Outstanding at December 29, 2018 925,934 $ 1.76 Issued — — Exercised — — Expired or cancelled — — Outstanding at December 28, 2019 925,934 $ 1.76 Issued 650,945 0.81 Exercised — — Expired or cancelled — — Outstanding at January 2, 2021 1,576,879 $ 0.99 |
Schedule of Stockholders' Equity Note, Warrants or Rights | The following table summarizes warrants outstanding as of January 2, 2021: Number Weighted Average Weighted Outstanding Contractual Average Exercise Price and Exercisable Life (years) Exercise price $0.75 - $62.50 1,576,879 4.03 $ 0.99 |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of option activity during the Fiscal 2020 and Fiscal 2019 of the Company’s 2014 Equity Incentive Plan, 2015 Omnibus Incentive Plan and the 2016 Omnibus Incentive Plan is presented below: Options Weighted Average Exercise Price Outstanding at December 29, 2018 111,400 $ 28.46 Granted — — Exercised — — Expired or cancelled (34,900 ) 29.99 Outstanding at December 28, 2019 76,500 $ 27.76 Granted — — Exercised — — Expired or cancelled — — Outstanding at January 2, 2021 76,500 $ 27.76 |
Summary of Relationship Between Performance and the Vesting Rate | Average 2019 Price Vesting Rate <$8 per share 0 >$8 per share Pro-rated >=$12 per share Full Vesting |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Gross Profit by Segment | In December 2017, the Company reorganized its operations into three reportable segments: Commercial – US; Professional – US and Professional - UK. Fiscal 2020 Fiscal 2019 Commercial Staffing - US $ 113,970 $ 127,330 Professional Staffing - US 23,477 37,294 Professional Staffing - UK 67,080 113,854 Total Revenue $ 204,527 $ 278,478 Commercial Staffing - US $ 17,845 $ 20,080 Professional Staffing - US 7,546 14,081 Professional Staffing - UK 9,422 14,148 Total Gross Profit $ 34,813 $ 48,309 Selling, general and administrative expenses $ (37,526 ) $ (44,327 ) Impairment of goodwill (2,969 ) Depreciation and amortization (3,118 ) (3,369 ) Operating income - restructuring 20 10 Interest expense (6,697 ) (7,628 ) Amortization of debt discount and deferred financing costs (596 ) (857 ) Re-measurement gain (loss) on intercompany note 584 (383 ) Gain from sale of business 124 - Gain on settlement of deferred consideration - 1,924 Other income 84 326 Loss Before Provision for Income Tax $ (15,281 ) $ (5,229 ) For Fiscal 2020 and Fiscal 2019, the Company generated revenue in the U.S. and the U.K. as follows: January 2, 2021 December 28, 2019 United States $ 137,447 $ 164,624 United Kingdom 67,080 113,854 Total Revenue $ 204,527 $ 278,478 For the period ended Fiscal 2020 and Fiscal 2019, the Company has assets in the U.S. and the U.K. as follows: January 2, 2021 December 28, 2019 United States $ 73,691 $ 74,671 United Kingdom 13,233 14,170 Total Assets $ 86,924 $ 88,841 Total assets by segment is not presented as it is not reviewed by the Chief Operating Decision Maker in his evaluation of how to allocate capital and resources. For the period ended Fiscal 2020 and Fiscal 2019, the Company has goodwill in the U.S. and the U.K. as follows: January 2, 2021 December 28, 2019 United States $ 12,082 $ 16,630 United Kingdom 14,963 14,419 Total Goodwill $ 27,045 $ 31,049 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | In addition to the Series A Preferred Shares and notes and warrants issued to Jackson, the following are other related party transactions: Board and Committee Members Fiscal 2020 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 75 5,600 $ 4 $ 12 Jeff Grout 75 5,600 4 12 Nick Florio 75 5,600 4 12 Alicia Barker - 5,600 4 6 $ 225 22,400 $ 16 $ 42 Fiscal 2019 Cash Compensation Shares Issued Value of Shares Issued Compensation Expense Recognized Dimitri Villard $ 75 5,600 $ 12 $ 68 Jeff Grout 75 5,600 12 70 Nick Florio 75 5,600 12 69 Alicia Barker - 5,600 8 4 $ 225 22,400 $ 32 $ 94 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Informations | Fiscal 2020 Fiscal 2019 Cash paid for: Interest $ 8,596 $ 7,225 Income taxes 278 324 Non-Cash Investing and Financing Activities: Deferred purchase price of UK factoring facility $ 8,036 $ 13,856 Shares issued in connection with Jackson term loan 324 75 Increase in lease liabilities from obtaining right-of-use assets – ASC 842 adoption 450 5,965 Warrants adjustments in connection with Jackson term loan 126 — Deemed dividend 4,690 — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jan. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of (Loss) Income Before Provision for Income Taxes | The components of loss before provision for income taxes for Fiscal 2020 and Fiscal 2019, are as follows: Fiscal 2020 Fiscal 2019 Domestic $ (13,491 ) $ (4,795 ) Foreign (2,251 ) (434 ) Loss before provision for income taxes $ (15,742 ) $ (5,229 ) |
Schedule of Components of Provision for Income Taxes | The provision for income taxes consisted of the following: Fiscal 2020 Fiscal 2019 Current: Federal $ — $ — State 190 119 Foreign — 21 Total current tax expense 190 140 Deferred: Federal (76 ) 49 State 27 186 Foreign (241 ) (710 ) Total deferred tax expense (290 ) (475 ) Total tax benefit $ (100 ) $ (335 ) |
Schedule of Effective Income Tax Rate Reconciliation | The difference between the income tax provision on income (loss) and the amount computed at the U.S. federal statutory rate is due to: Fiscal 2020 Fiscal 2019 Benefit at Federal Statutory Rate $ (3,306 ) 21.00 % $ (1,098 ) 21.00 % State taxes, net (1,666 ) 10.59 % (1,741 ) 33.30 % Foreign operations 45 -0.29 % (13 ) 0.25 % Permanent differences 87 0.55 % 349 -6.67 % True-up adjustments (589 ) 3.74 % (325 ) 6.22 % Change in valuation allowance 5,139 -32.64 % 2,399 -45.88 % Other 190 -1.21 % 94 -1.80 % Total Tax Benefit for Income Taxes $ (100 ) 0.64 % $ (335 ) 6.42 % |
Schedule of Deferred Tax Assets (Liabilities) | Our deferred tax assets (liabilities) are as follows: Fiscal 2020 Fiscal 2019 Deferred tax assets Net operating loss carryforward $ 7,276 $ 5,858 Tax credit, deduction and capital loss carryforward 2,880 2,327 Share-based compensation 749 847 Debt issuance costs 1 333 Accrued expenses and other liabilities 1,741 454 Interest limitation and carryforward 6,194 3,639 Operating lease liabilities 628 731 Total deferred tax assets 19,469 14,189 Less: valuation allowance (17,087 ) (11,948 ) Deferred tax assets, net of valuation allowance 2,382 2,241 Deferred tax liabilities: Deprecation 1,521 1,557 Basis differences in acquired intangibles 1,430 1,433 Operating lease - Right-of-use assets 621 731 Total deferred tax liabilities 3,572 3,721 Deferred tax liability $ (1,190 ) $ (1,480 ) |
Schedule of Unrecognized Tax Benefits | Fiscal 2020 Fiscal 2019 Beginning balance $ 674 $ 670 Additions for tax positions of prior years — 4 Reductions for tax positions of prior years (18 ) — Loss before provision for income taxes $ 656 $ 674 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) £ in Thousands, $ in Thousands | Mar. 27, 2020USD ($) | Feb. 26, 2020USD ($) | Sep. 11, 2019USD ($) | Aug. 27, 2019USD ($) | Jun. 28, 2019GBP (£) | Jun. 26, 2019USD ($) | Jun. 26, 2019GBP (£) | Jun. 28, 2018USD ($)shares | Jun. 28, 2018GBP (£)shares | Feb. 29, 2020USD ($) | Jan. 02, 2021USD ($)shares | Dec. 28, 2019USD ($)shares | Dec. 29, 2018USD ($) | Apr. 16, 2021USD ($) | Aug. 27, 2020USD ($) | May 20, 2020USD ($) | May 12, 2020USD ($) | Dec. 28, 2019GBP (£) | Sep. 14, 2017 | Aug. 15, 2017USD ($) |
Accumulated deficit | $ (92,179) | $ (76,537) | ||||||||||||||||||
Working capital deficit | (20,793) | |||||||||||||||||||
Total debt | 55,369 | $ 39,313 | ||||||||||||||||||
Cash on hand | $ 8,256 | |||||||||||||||||||
Debt instrument, face amount | $ 9,395 | |||||||||||||||||||
Percentage of interest accured | 1.00% | 4.00% | ||||||||||||||||||
Number of shares issued | shares | 8,032,876 | 3,459,680 | ||||||||||||||||||
Deferred consideration | ||||||||||||||||||||
Alleged damages | $ 6,000 | |||||||||||||||||||
Proceeds from disposal of business | 3,300 | |||||||||||||||||||
Contingently Redeemable series E Preferred Stock | 2,080 | |||||||||||||||||||
Revenue | 204,527 | 278,478 | ||||||||||||||||||
Advertising expenses | 1,302 | 1,365 | ||||||||||||||||||
Cash equivalents | ||||||||||||||||||||
Allowance for doubtful accounts | 62 | 210 | ||||||||||||||||||
Temporary Contractor Revenue [Member] | ||||||||||||||||||||
Revenue | 198,066 | 266,974 | ||||||||||||||||||
Permanent Placement Revenue [Member] | ||||||||||||||||||||
Revenue | $ 6,461 | 11,504 | ||||||||||||||||||
Series E Preferred Stock [Member] | ||||||||||||||||||||
Number of preferred stock redeemed shares | shares | 1,300 | |||||||||||||||||||
Contingently Redeemable series E Preferred Stock | ||||||||||||||||||||
Separation Agreement [Member] | Matthew Briand [Member] | ||||||||||||||||||||
Severance costs | 190 | $ 690 | ||||||||||||||||||
Separation Agreement [Member] | Mr. Faiman [Member] | ||||||||||||||||||||
Severance costs | 91 | 190 | ||||||||||||||||||
Clement May, Limited [Member] | ||||||||||||||||||||
Aggregate cash payment | $ 2,047 | |||||||||||||||||||
Number of shares issued | shares | 15,000 | 15,000 | ||||||||||||||||||
Earn-out payment | 656 | |||||||||||||||||||
Deferred consideration | $ 444 | |||||||||||||||||||
Clement May, Limited [Member] | Share Purchase Agreement [Member] | ||||||||||||||||||||
Earn-out payment | 656 | |||||||||||||||||||
Key Resources, Inc [Member] | ||||||||||||||||||||
Aggregate cash payment | $ 12,163 | |||||||||||||||||||
Earn-out payment | $ 2,027 | $ 2,027 | ||||||||||||||||||
Deferred consideration | 115 | 408 | ||||||||||||||||||
Percentage of common shares | 100.00% | |||||||||||||||||||
Consideration paid to seller | $ 8,109 | |||||||||||||||||||
Interest amount | 40 | $ 30 | ||||||||||||||||||
Key Resources, Inc [Member] | Whitaker [Member] | ||||||||||||||||||||
Earn-out payment | 4,054 | |||||||||||||||||||
Key Resources, Inc [Member] | Share Purchase Agreement [Member] | ||||||||||||||||||||
Alleged damages | $ 4,054 | |||||||||||||||||||
Key Resources, Inc [Member] | Purchase Agreement [Member] | Jackson Investment Group L L C Term Loan Note Two [Member] | ||||||||||||||||||||
Debt instrument, face amount | $ 8,428 | |||||||||||||||||||
Earn-out payment | $ 2,027 | |||||||||||||||||||
Interest amount | 10 | |||||||||||||||||||
FirstPro Recruitment, LLC [Member] | ||||||||||||||||||||
Proceeds from disposal of business | 3,300 | |||||||||||||||||||
Payment at closing | 1,220 | |||||||||||||||||||
Restricted cash | $ 2,080 | |||||||||||||||||||
Key Resources, Inc [Member] | Paycheck Protection Program Cares Act [Member] | ||||||||||||||||||||
Debt instrument, face amount | $ 5,443 | |||||||||||||||||||
Lighthouse Placement Services, LLC [Member] | ||||||||||||||||||||
Debt instrument, face amount | 1,890 | |||||||||||||||||||
Staffing 360 Georgia, LLC [Member] | ||||||||||||||||||||
Debt instrument, face amount | 2,063 | |||||||||||||||||||
May 12 Note (Member) | Monroe Staffing Services, LLC(Member) | ||||||||||||||||||||
Debt instrument, face amount | $ 10,000 | |||||||||||||||||||
Percentage of interest accured | 1.00% | |||||||||||||||||||
May 12 Note (Member) | Monroe Staffing Services, LLC(Member) | Paycheck Protection Program Cares Act [Member] | ||||||||||||||||||||
Debt instrument, face amount | $ 10,000 | |||||||||||||||||||
Percentage of interest accured | 1.00% | |||||||||||||||||||
Paycheck Protection Program Loan Cares Act [Member] | ||||||||||||||||||||
Short- term debt obligation | 6,927 | |||||||||||||||||||
Long- term debt obligation | $ 12,468 | |||||||||||||||||||
Loan Forgiveness description | All or a portion of the PPP Loan may be forgiven by the SBA upon application by the Company beginning 60 days but not later than 120 days after loan approval and upon documentation of expenditures in accordance with the SBA requirements. Under the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, covered mortgage interest and covered utilities during the eight-week period beginning on the date of loan approval. | |||||||||||||||||||
Compensation of an individual employee prorated annually | $ 100 | |||||||||||||||||||
Maximum percentage of forgiven amount of non payroll cost | 40.00% | |||||||||||||||||||
Paycheck Protection Program Loan Cares Act Deferral One [Member] | ||||||||||||||||||||
Payment o tax deferrals | $ 2,473 | |||||||||||||||||||
Paycheck Protection Program Loan Cares Act Deferral Two [Member] | ||||||||||||||||||||
Payment o tax deferrals | $ 2,473 | |||||||||||||||||||
Paycheck Protection Program Cares Act [Member] | FirstPro Recruitment, LLC [Member] | ||||||||||||||||||||
Separate escrow account | $ 2,080 | |||||||||||||||||||
Subsequent Events [Member] | ||||||||||||||||||||
Cash on hand | $ 1,050 | |||||||||||||||||||
GBP [Member] | Clement May, Limited [Member] | ||||||||||||||||||||
Aggregate cash payment | £ | £ 1,550 | |||||||||||||||||||
Earn-out payment | £ | £ 500 | |||||||||||||||||||
Deferred consideration | £ | £ 350 | |||||||||||||||||||
GBP [Member] | Clement May, Limited [Member] | Share Purchase Agreement [Member] | ||||||||||||||||||||
Earn-out payment | £ | £ 500 | |||||||||||||||||||
Deferred consideration | £ | £ 350 | |||||||||||||||||||
August 27, 2020, to February 27, 2020 [Member] | Key Resources, Inc [Member] | Purchase Agreement [Member] | Jackson Investment Group L L C Term Loan Note Two [Member] | ||||||||||||||||||||
Alleged damages | $ 4,054 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Rollforward of Level 3 Warrant Liability and Contingent Consideration (Details) - USD ($) $ in Thousands | Jun. 26, 2019 | Jan. 02, 2021 | Dec. 28, 2019 |
Beginning balance | $ 3,939 | $ 9,731 | |
Deferred consideration | |||
Change in fair value | (537) | ||
Ending balance | 4,054 | 3,939 | |
CBS Butler Holdings Limited [Member] | |||
Earnout payment | (3,930) | ||
Gain on settlement of earnout | (1,077) | ||
Key Resources, Inc [Member] | |||
Deferred consideration | $ 115 | 408 | |
Clement May, Limited [Member] | |||
Earnout payment | $ (656) | ||
Deferred consideration | $ 444 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Property and Equipment (Details) | 12 Months Ended |
Jan. 02, 2021 | |
Computers [Member] | Minimum [Member] | |
Estimated useful life | 3 years |
Computers [Member] | Maximum [Member] | |
Estimated useful life | 5 years |
Computer Equipment [Member] | Minimum [Member] | |
Estimated useful life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Estimated useful life | 5 years |
Network Equipment [Member] | Minimum [Member] | |
Estimated useful life | 3 years |
Network Equipment [Member] | Maximum [Member] | |
Estimated useful life | 5 years |
Software [Member] | Minimum [Member] | |
Estimated useful life | 3 years |
Software [Member] | Maximum [Member] | |
Estimated useful life | 5 years |
Office Equipment [Member] | Minimum [Member] | |
Estimated useful life | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Estimated useful life | 7 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Estimated useful life | 3 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Estimated useful life | 7 years |
Leasehold Improvements [Member] | Minimum [Member] | |
Estimated useful life | 3 years |
Leasehold Improvements [Member] | Maximum [Member] | |
Estimated useful life | 5 years |
Loss Per Common Share - Schedul
Loss Per Common Share - Schedule of Common Share Equivalent Basis and Outstanding Excluded from per Share Computations of Antidilutive (Details) - shares | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Total | 14,329,194 | 9,743,641 |
Warrants [Member] | ||
Total | 1,576,879 | 925,935 |
2016 Long Term Incentive Plan [Member] | ||
Total | 155,000 | 365,000 |
Options [Member] | ||
Total | 76,500 | 76,500 |
Convertible Peferred Shares [Member] | ||
Total | 12,443,000 | 7,785,766 |
Restricted Shares - Unvested [Member] | ||
Total | 77,815 | 590,440 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 595 | $ 643 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Total property and equipment, gross | $ 4,582 | $ 4,857 |
Accumulated depreciation | (3,516) | (3,329) |
Total property and equipment, net | 1,066 | 1,528 |
Computer Software [Member] | ||
Total property and equipment, gross | 471 | 342 |
Office Equipment [Member] | ||
Total property and equipment, gross | 1,115 | 1,043 |
Computer Equipment [Member] | ||
Total property and equipment, gross | 1,160 | 1,195 |
Furniture and Fixtures [Member] | ||
Total property and equipment, gross | 1,123 | 1,312 |
Leasehold Improvements [Member] | ||
Total property and equipment, gross | $ 713 | $ 965 |
Other Non-Current Assets - Sche
Other Non-Current Assets - Schedule of Other Non-Current Assets (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Investments, All Other Investments [Abstract] | ||
Collateral associated with workers' compensation insurance | $ 3,134 | $ 3,204 |
Other non-current assets | 34 | 19 |
Total | $ 3,168 | $ 3,223 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Sep. 24, 2020 | |
Gross intangibles | $ 33,892 | $ 34,703 | |
Accumulated amortization | 17,875 | 15,192 | |
Amortization of intangible assets | $ 2,523 | $ 2,726 | |
Weighted average useful life of intangible assets | 7 years | ||
firstPRO Recruitment, LLC [Member] | |||
Gross intangibles | $ 2,660 | ||
Accumulated amortization | $ 1,352 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Breakdown of Intangible Assets (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Intangible assets, gross | $ 33,892 | $ 34,703 |
Accumulated amortization | (17,875) | (15,192) |
Intangible assets, net | 16,017 | 19,511 |
Trade Names [Member] | ||
Intangible assets, gross | 9,582 | 9,458 |
Accumulated amortization | (4,283) | (3,558) |
Intangible assets, net | 5,299 | 5,900 |
Non-Compete [Member] | ||
Intangible assets, gross | 2,500 | 2,488 |
Accumulated amortization | (2,440) | (2,349) |
Intangible assets, net | 60 | 139 |
Customer Relationships [Member] | ||
Intangible assets, gross | 21,810 | 22,757 |
Accumulated amortization | (11,152) | (9,285) |
Intangible assets, net | $ 10,658 | $ 13,472 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Estimated Annual Amortization Expense for Each of the Next Five Fiscal Years (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 2,302 | |
2022 | 2,254 | |
2023 | 2,254 | |
2024 | 2,254 | |
2025 | 2,184 | |
Thereafter | 4,769 | |
Intangible assets, net | $ 16,017 | $ 19,511 |
Goodwill (Details Narrative)
Goodwill (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Impairment of goodwill | $ 2,969 | |
FirstPro Reporting Unit [Member] | ||
Impairment of goodwill | $ 2,969 |
Goodwill - Schedule of Goodwill
Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning balance, gross | $ 31,049 | $ 38,139 |
Accumulated impairment losses | (2,969) | |
Beginning balance, net | 31,049 | 320,614 |
Disposition of business | (1,577) | |
Currency translation adjustment | (542) | (1,012) |
Ending balance, net | $ 27,045 | $ 31,049 |
Goodwill - Schedule of Goodwi_2
Goodwill - Schedule of Goodwill Reportable by Segment (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 |
Goodwill | $ 27,045 | $ 31,049 | $ 320,614 |
United States [Member] | |||
Goodwill | 12,082 | 16,630 | |
United Kingdom [Member] | |||
Goodwill | 14,963 | 14,419 | |
Professional Staffing [Member] | United States [Member] | |||
Goodwill | 6,222 | 10,527 | |
Professional Staffing [Member] | United Kingdom [Member] | |||
Goodwill | 14,963 | 14,420 | |
Commercial Staffing [Member] | United States [Member] | |||
Goodwill | $ 5,860 | $ 6,102 |
Accounts Payable And Accrued _3
Accounts Payable And Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 28 | $ 1,412 |
Accrued payroll, taxes and bonuses | 12,913 | 12,700 |
Severance costs | 190 | |
Other accrued expenses | 2,089 | 2,275 |
Total | $ 15,030 | $ 16,577 |
Accounts Receivable Financing (
Accounts Receivable Financing (Details Narrative) £ in Thousands, $ in Thousands | Jun. 28, 2018GBP (£) | Feb. 08, 2018USD ($) | Feb. 08, 2018GBP (£) | Sep. 15, 2017USD ($) | Sep. 14, 2017USD ($) | Jul. 31, 2019GBP (£) | Jan. 02, 2021USD ($) | May 20, 2020 | Dec. 28, 2019USD ($) | Aug. 02, 2019USD ($) | Feb. 08, 2018GBP (£) |
Long-term line of credit | $ 25,000 | $ 14,842 | $ 17,298 | ||||||||
Additional lending facility | $ 25,000 | ||||||||||
Debt instrument interest rate | 4.00% | 1.00% | |||||||||
Midcap Financial Trust [Member] | |||||||||||
Line of credit facility, maturity date | Apr. 8, 2019 | ||||||||||
Line of credit facility, percentage of borrowings against eligible receivables | 85.00% | ||||||||||
Line of credit facility, interest rate description | Interest rate of LIBOR plus 4.0%, with a LIBOR floor of 1.0% per annum. The Company could prepay all or any portion of the balance at any time subject to a prepayment premium of: (i) 2.0% if prepaid in the first year of the loan; and (ii) 1.0% if prepaid thereafter. | ||||||||||
Borrowings unbilled receivable percentage | 85.00% | ||||||||||
Unbilled receivables, incremental borrowing | $ 1,300 | ||||||||||
Debt maturity date, description | Extended to April 8, 2020. | ||||||||||
Line of credit facility, frequency of payment and payment terms | 2% if prepaid in the first or second year post the amendment; and (ii) 1.0% if prepaid thereafter. | ||||||||||
Midcap Financial Trust [Member] | Minimum [Member] | |||||||||||
Unbilled receivables, incremental borrowing | $ 1,000 | ||||||||||
Midcap Financial Trust [Member] | Maximum [Member] | |||||||||||
Unbilled receivables, incremental borrowing | $ 2,300 | ||||||||||
HSBC Invoice Finance (UK) Ltd [Member] | New Facility [Member] | |||||||||||
Line of credit maximum facility | $ 15,724 | ||||||||||
Percentage of cash received equal to eligible receivables | 90.00% | 90.00% | |||||||||
Borrowing fund, description | The terms of the arrangement provide for HSBC to fund 90% of the purchased accounts receivable upfront and, a secured borrowing line of 70% of unbilled receivables | The terms of the arrangement provide for HSBC to fund 90% of the purchased accounts receivable upfront and, a secured borrowing line of 70% of unbilled receivables | |||||||||
Unbilled receivables | $ 1,367 | ||||||||||
Aggregate total facility | $ 15,724 | ||||||||||
Percentage of service charge | 1.80% | 1.80% | |||||||||
HSBC Invoice Finance (UK) Ltd [Member] | GBP [Member] | New Facility [Member] | |||||||||||
Line of credit maximum facility | £ | £ 11,500 | ||||||||||
Unbilled receivables | £ | £ 1,500 | £ 1,000 | |||||||||
Aggregate total facility | £ | £ 20,000 | £ 11,500 | £ 22,500 |
Debt (Details Narrative)
Debt (Details Narrative) $ / shares in Units, £ in Thousands, $ in Thousands | Oct. 31, 2020USD ($)$ / shares | Oct. 26, 2020USD ($)$ / sharesshares | Oct. 23, 2020 | Aug. 29, 2019USD ($)shares | Nov. 15, 2018USD ($)$ / sharesshares | Aug. 27, 2018USD ($)shares | Sep. 15, 2017USD ($) | Jan. 02, 2021USD ($)$ / sharesshares | Dec. 28, 2019USD ($)$ / sharesshares | Jan. 31, 2021USD ($) | Jul. 17, 2020$ / shares | May 20, 2020USD ($) | May 12, 2020USD ($) | Apr. 20, 2020GBP (£) | Apr. 25, 2018USD ($) | Sep. 14, 2017 |
Debt instrument, face amount | $ 9,395 | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | 4.00% | ||||||||||||||
Number of shares issued | shares | 8,032,876 | 3,459,680 | ||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 1 | |||||||||||||||
Preferred Stock, Stated Value Per Share (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||||||||||||
Common stock amount | $ 3,894 | $ 4,361 | ||||||||||||||
Deemed dividend | 4,690 | |||||||||||||||
Additional paid-in capital | $ 73,844 | $ 76,214 | ||||||||||||||
Series E Preferred Stock [Member] | ||||||||||||||||
Preferred Stock, Stated Value Per Share (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | ||||||||||||||
Preferred stock, dividend description | If the PIK Dividend Payment is elected, a holder of Series E Preferred Stock is entitled to additional fee to be paid in shares of the Company's common stock an amount equal to $10 divided by the average closing price, as reported by Nasdaq of such shares of common stock over the 5 trading days prior to the applicable monthly interest payment date. | |||||||||||||||
Series E-1 Preferred Stock [Member] | ||||||||||||||||
Preferred Stock, Stated Value Per Share (in dollars per share) | $ / shares | $ 1 | |||||||||||||||
Conversion price | $ / shares | $ 1 | |||||||||||||||
Beneficial conversion feature | $ 4,280 | |||||||||||||||
Additional paid-in capital | 0 | |||||||||||||||
Contingent redemption feature | $ 2,100 | |||||||||||||||
Lighthouse Placement Services, LLC [Member] | ||||||||||||||||
Debt instrument, face amount | $ 1,890 | |||||||||||||||
Staffing 360 Georgia, LLC [Member] | ||||||||||||||||
Debt instrument, face amount | 2,063 | |||||||||||||||
Minimum [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.75 | |||||||||||||||
Maximum [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | 62.50 | |||||||||||||||
Jackson Investment Group L L C Term Loan Note Two [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.50 | |||||||||||||||
May 12 Note (Member) | Monroe Staffing Services, LLC(Member) | ||||||||||||||||
Debt instrument, face amount | $ 10,000 | |||||||||||||||
Debt instrument, maturity date, description | The May 12 Note matures two years following the date of issuance of the May 12 Note and includes a period for the first six months during which time required payments of interest and principal are deferred. | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||||||||||||
Debt instrument, frequency of periodic payment | monthly | |||||||||||||||
May 20 Note (Member) | ||||||||||||||||
Debt instrument, face amount | $ 9,395 | |||||||||||||||
Debt instrument, maturity date, description | Each of the May 20 Notes mature two years following the date of issuance of the May 20 Notes and include a period for the first six months during which time required payments of interest and principal are deferred | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||||||||||||
Debt instrument, frequency of periodic payment | monthly | |||||||||||||||
Short- term debt obligation | $ 6,927 | |||||||||||||||
Long- term debt obligation | $ 12,468 | |||||||||||||||
Debt instrument, covenant compliance | For purposes of the CARES Act, payroll costs exclude compensation of an individual employee in excess of $100, prorated annually. Not more than 40% of the forgiven amount may be for non-payroll costs. Forgiveness is reduced if full-time headcount declines, or if salaries and wages for employees with salaries of $100 or less annually are reduced by more than 25%. The ultimate forgiveness of the PPP loan is also predicated upon regulatory authorities concurring with management's good faith assessment that the current economic uncertainty made the loan request necessary to support ongoing operations. | |||||||||||||||
May 20 Note (Member) | Key Resources, Inc [Member] | ||||||||||||||||
Debt instrument, face amount | $ 5,443 | |||||||||||||||
May 20 Note (Member) | Lighthouse Placement Services, LLC [Member] | ||||||||||||||||
Debt instrument, face amount | 1,890 | |||||||||||||||
May 20 Note (Member) | Staffing 360 Georgia, LLC [Member] | ||||||||||||||||
Debt instrument, face amount | $ 2,063 | |||||||||||||||
Jackson Investment Group L L C Term Loan Note Three [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 0.50 | |||||||||||||||
HSBC Loan [Member] | GBP [Member] | ||||||||||||||||
Debt instrument, face amount | £ | £ 1,000 | |||||||||||||||
Jackson Investment Group LLC [Member] | ||||||||||||||||
Number of shares issued | shares | 500,000 | 100,000 | ||||||||||||||
Jackson Investment Group LLC [Member] | Senior Secured 12% Promissory Note [Member] | ||||||||||||||||
Debt instrument, payment terms | Expiration date of January 26, 2024 to January 26, 2026 | |||||||||||||||
Jackson Investment Group LLC [Member] | Senior Secured 12% Promissory Note [Member] | Minimum [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 1.66 | |||||||||||||||
Jackson Investment Group LLC [Member] | Senior Secured 12% Promissory Note [Member] | Maximum [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 1 | |||||||||||||||
Jackson Note [Member] | ||||||||||||||||
Warrants outstanding | shares | 905,508 | |||||||||||||||
Amended And Restated Note Purchase Agreement [Member] | Jackson Note [Member] | ||||||||||||||||
Debt instrument, face amount | $ 40,000 | |||||||||||||||
Proceeds from sale of secured notes to repay existing subordinated notes aggregate principal amount | $ 11,165 | |||||||||||||||
Debt instrument, maturity date | Sep. 15, 2020 | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||
Debt instrument, payment terms | The 2017 Jackson Note will accrue interest at 12% per annum, due quarterly on January 1, April 1, July 1 and October 1 in each year, with the first such payment due on January 1, 2018. | |||||||||||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||||||||||
Debt instrument, date of first required payment | Jan. 1, 2018 | |||||||||||||||
Debt instrument, covenant compliance | Interest on any overdue payment of principal or interest due under the 2017 Jackson Note will accrue at a rate per annum that is 5% in excess of the rate of interest otherwise payable thereunder. | |||||||||||||||
Debt instrument, incremental percentage on interest rate | 5.00% | |||||||||||||||
Amended Agreement [Member] | Jackson Note [Member] | ||||||||||||||||
Debt instrument, face amount | $ 8,428 | |||||||||||||||
Payment of closing fee | 280 | |||||||||||||||
Payment of legal fee | $ 39 | |||||||||||||||
Number of shares issued | shares | 192,000 | |||||||||||||||
Fourth Omnibus Amendment and Reaffirmation Agreement [Member] | Jackson Investment Group LLC [Member] | Senior Secured Note [Member] | ||||||||||||||||
Debt instrument, face amount | $ 2,538 | |||||||||||||||
Debt instrument, maturity date | Dec. 31, 2019 | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 18.00% | |||||||||||||||
Debt instrument, interest payment description | All accrued and unpaid interest on the outstanding principal balance of this term note was due and payable monthly on the first day of each month, beginning on October 1, 2019 | |||||||||||||||
Debt instrument, date of first interest payment | Oct. 1, 2019 | |||||||||||||||
Debt instrument, default of payment description | Pursuant to the terms of this term note, if this term note was not repaid by December 31, 2019, the Company was required to issue 100,000 shares of its common stock to Jackson on a monthly basis until this term note is fully repaid, subject to certain exceptions to comply with Nasdaq listing standards. | |||||||||||||||
Number of common shares issuable on monthly basis in event of default | shares | 100,000 | |||||||||||||||
Additional expense related to issuance of common stock | $ 324 | |||||||||||||||
Number of common shares issued in event of default | shares | 500,000 | |||||||||||||||
Amended Note Purchase Agreement [Member] | Series E-1 Preferred Stock [Member] | ||||||||||||||||
Debt instrument, payment terms | The shares of Base Series E Preferred Stock will be also convertible into shares of common stock after October 31, 2022. | On October 26, 2020, in connection with the entry into the Amended Note Purchase Agreement, the Company filed with the Secretary of State of the State of Delaware the second Certificate of Amendment (the "Amendment") to the Certificate of Designation of the Series E Convertible Preferred Stock (the "Base Series E Preferred Stock") and Series E-1 Convertible Preferred Stock (the "Series E-1 Preferred Stock," and collectively with the Base Series E Preferred Stock, the "Series E Preferred Stock".) Under the amended terms, holders of Series E Preferred Stock are entitled to monthly cash dividends on Series E Preferred Stock at a per annum rate of 12%. At the Company's option, up to 50% of the cash dividend on the Base Series E Preferred Stock may be paid in kind by adding such 50% portion to the outstanding liquidation value of the Base Series E Preferred Stock (the "PIK Dividend Payment"), commencing on October 26, 2020 and ending on October 25, 2020. | ||||||||||||||
Preferred Stock, Stated Value Per Share (in dollars per share) | $ / shares | $ 10,000 | |||||||||||||||
Common stock amount | $ 10,000 | |||||||||||||||
Preferred stock, dividend description | If such average market price is less than $0.50, or is otherwise undeterminable because such shares are no longer publicly traded or the closing price is no longer reported by Nasdaq, then the average closing price for these purposes shall be deemed to be $0.50, and if such average closing price is greater than $3.50 then the average closing price for these purposes shall be deemed to be $3.50. Dividends on the Series E-1 Preferred Stock may only be paid in cash. If the Company fails to make dividend payments on the Series E Preferred Stock, it will be an event of default under the Amended Note Purchase Agreement. | |||||||||||||||
Liquidation value | $ / shares | $ 1,000 | |||||||||||||||
Deemed dividend | $ 410 | |||||||||||||||
Amended Note Purchase Agreement [Member] | Minimum [Member] | Series E-1 Preferred Stock [Member] | ||||||||||||||||
Conversion price | $ / shares | $ 1.78 | |||||||||||||||
Amended Note Purchase Agreement [Member] | Maximum [Member] | Series E-1 Preferred Stock [Member] | ||||||||||||||||
Conversion price | $ / shares | $ 1.66 | |||||||||||||||
Amended Note Purchase Agreement [Member] | Jackson Investment Group LLC [Member] | Senior Secured 12% Promissory Note [Member] | ||||||||||||||||
Debt instrument, face amount | $ 35,700 | |||||||||||||||
Debt instrument, maturity date | Sep. 30, 2022 | |||||||||||||||
Debt instrument, payment terms | The Company is required to pay interest on the debt at a per annum rate of 12%. The interest is payable monthly in cash; provided that, the Company may elect to pay up to 50% of monthly interest in-kind ("PIK Interest") by adding such PIK Interest to the outstanding principal balance of the 2020 Jackson Note. For any month that the Company elects to pay interest in-kind, the Company is required to pay Jackson a fee in shares of our common stock ("PIK Fee Shares") in an amount equal to $25 divided by the average closing price, as reported by Nasdaq, of such shares of common stock over the 5 trading days prior to the applicable monthly interest payment date. | |||||||||||||||
Amendment fee | $ 488 | |||||||||||||||
Amended Note Purchase Agreement [Member] | Jackson Investment Group LLC [Member] | Senior Secured 12% Promissory Note [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||||
Amended Note Purchase Agreement [Member] | Jackson Investment Group LLC [Member] | Senior Secured 12% Promissory Note [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 50.00% | |||||||||||||||
Amended and Restated Warrant Agreement [Member] | ||||||||||||||||
Deferred financing costs | $ 126 | $ 135 | ||||||||||||||
Amended and Restated Warrant Agreement [Member] | Jackson Investment Group L L C Term Loan Note Two [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3.50 | |||||||||||||||
Amended and Restated Warrant Agreement [Member] | Jackson Investment Group L L C Term Loan Note Two [Member] | Subsequent Event [Member] | ||||||||||||||||
Debt instrument, face amount | $ 3,000 | |||||||||||||||
Amended and Restated Warrant Agreement [Member] | Jackson Investment Group L L C Term Loan Note Three [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3.50 | |||||||||||||||
Amended and Restated Warrant Agreement [Member] | Debt Exchange Agreement [Member] | Jackson Investment Group L L C Term Loan Note Two [Member] | ||||||||||||||||
Debt instrument, payment terms | For the period of November 2020 through and including March 2021, each monthly interest due and payable shall be reduced by $166, and for the period commencing May 2021 through and including September 2021, each monthly interest due and payable shall be increased by $166. | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3.50 | |||||||||||||||
Prepayment cost | $ 3,029 | |||||||||||||||
Amended and Restated Warrant Agreement [Member] | Debt Exchange Agreement [Member] | Jackson Investment Group L L C Term Loan Note Three [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3.50 | |||||||||||||||
Debt Exchange Agreement [Member] | ||||||||||||||||
Debt instrument, face amount | $ 13,000 | |||||||||||||||
Preferred Stock, Stated Value Per Share (in dollars per share) | $ / shares | $ 0.00001 | |||||||||||||||
Deferred financing costs | $ 13,000 | |||||||||||||||
Debt Exchange Agreement [Member] | Series E Preferred Stock [Member] | ||||||||||||||||
Stock issued to for Convertible of debt, shares | shares | 561 | |||||||||||||||
Preferred Stock, Stated Value Per Share (in dollars per share) | $ / shares | $ 1,000 | |||||||||||||||
Stock conversion description | Each share of Series E-1 Preferred Stock is initially convertible into 602 shares of the Company's common stock |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Total Debt, Gross | $ 55,369 | $ 39,313 |
Less: Debt Discount and Deferred Financing Costs, Net | (559) | (497) |
Total Debt, Net | 54,810 | 38,816 |
Less: Non-Current Portion | (39,943) | (360) |
Total Current Debt, Net | 14,867 | 38,456 |
Jackson Investment Group - Related Party [Member] | ||
Total Debt, Gross | 33,880 | 38,278 |
Paycheck Protection Program Loans [Member] | ||
Total Debt, Gross | 19,395 | |
HSBC Term Loan [Member] | ||
Total Debt, Gross | $ 2,094 | $ 1,035 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Operating lease, right-of-use asset | $ 3,433 | $ 4,888 |
Operating lease, liability | 3,437 | |
Accounting Standards Update 2018-11 [Member] | ||
Operating lease, right-of-use asset | 3,432 | 4,888 |
Operating lease, liability | $ 3,437 | $ 4,980 |
Leases - Schedule of Quantitati
Leases - Schedule of Quantitative Informations of Opearating Leases (Details) $ in Thousands | 12 Months Ended |
Jan. 02, 2021USD ($) | |
Selling General And Administrative Expenses [Member] | |
Operating lease cost | $ 1,659 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Leases [Abstract] | ||
Weighted average remaining lease term (years) | 3 years 10 months 28 days | |
Weighted average discount rate | 6.26% | |
2021 | $ 1,313 | |
2022 | 735 | |
2023 | 447 | |
2024 | 338 | |
2025 | 326 | |
Thereafter | 839 | |
Total | 3,998 | |
Less: Imputed Interest | 561 | |
Operating lease, liability | 3,437 | |
Leases - current liabilities | 1,211 | $ 1,797 |
Leases - non current | $ 2,226 | $ 3,183 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 12, 2021 | Feb. 05, 2021 | Jan. 13, 2021 | Jan. 08, 2021 | Dec. 31, 2020 | Dec. 30, 2020 | Dec. 29, 2020 | Dec. 28, 2020 | Dec. 23, 2020 | Oct. 26, 2020 | Oct. 23, 2020 | Sep. 28, 2020 | Jul. 17, 2020 | Jun. 30, 2020 | Jan. 21, 2020 | Mar. 14, 2019 | Feb. 08, 2019 | Jan. 22, 2019 | Apr. 25, 2018 | Jun. 15, 2017 | May 31, 2016 | Jan. 28, 2014 | Jan. 31, 2019 | May 31, 2017 | Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | Feb. 09, 2021 | Oct. 31, 2020 | May 20, 2020 | May 30, 2018 | Jan. 26, 2017 | May 29, 2015 |
Common stock, shares authorized | 40,000,000 | 40,000,000 | |||||||||||||||||||||||||||||||
Common stock, par or stated value per share | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||||||||||||
Common stock, shares issued | 16,818,624 | 8,785,748 | |||||||||||||||||||||||||||||||
Common stock, shares outstanding | 16,818,624 | 8,785,748 | |||||||||||||||||||||||||||||||
Number of shares issued | 8,032,876 | 3,459,680 | |||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 775 | $ 4,634 | $ 5,515 | ||||||||||||||||||||||||||||||
Shares issued | $ 3,894 | $ 4,361 | |||||||||||||||||||||||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 1 | ||||||||||||||||||||||||||||||||
Unvested shares issued | 38,615 | 22,400 | |||||||||||||||||||||||||||||||
Stock based compensation | $ 637 | $ 832 | |||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||||||||||||||||||||||||||||||
Preferred stock, stated value per share | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||||||||||||
Preferred stock stated value | |||||||||||||||||||||||||||||||||
Accrued dividends | 125 | ||||||||||||||||||||||||||||||||
Dividend paid | $ 3,333 | $ 1,175 | |||||||||||||||||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights | 90,000 | ||||||||||||||||||||||||||||||||
Class of warrant or right exercisable term | 5 years | 4 years 6 months | |||||||||||||||||||||||||||||||
Warrant value | $ 56 | ||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 9,395 | ||||||||||||||||||||||||||||||||
Change in fair value of warrant liability | |||||||||||||||||||||||||||||||||
Options granted during the period | |||||||||||||||||||||||||||||||||
2014 Equity Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 50,000 | ||||||||||||||||||||||||||||||||
Plan expiry date | Jan. 28, 2024 | ||||||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, shares | 50,000 | ||||||||||||||||||||||||||||||||
2015 Omnibus Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 90,000 | ||||||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, expiration period | 10 years | ||||||||||||||||||||||||||||||||
2016 Omnibus Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Stock based compensation | $ 27 | $ 49 | |||||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 15,724 | 1,250,000 | 500,000 | ||||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, shares | 1,234,276 | ||||||||||||||||||||||||||||||||
Options granted during the period | |||||||||||||||||||||||||||||||||
Compensation cost not yet amortized | $ 31 | ||||||||||||||||||||||||||||||||
Compensation cost not yet amortized, period of recognize | 1 year 6 months | ||||||||||||||||||||||||||||||||
2016 Long Term Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Stock based compensation | 0 | $ 0 | |||||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 260,000 | ||||||||||||||||||||||||||||||||
Plan expiry date | Dec. 31, 2018 | ||||||||||||||||||||||||||||||||
Common stock will be authorized but unissued | 260,000 | ||||||||||||||||||||||||||||||||
Estimated fair value of stock based compensation by third party valuation | $ 136 | ||||||||||||||||||||||||||||||||
2019 Long Term Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Options granted during the period | 365,000 | ||||||||||||||||||||||||||||||||
Units vesting upon employees being in good standing, Percentages | 50.00% | ||||||||||||||||||||||||||||||||
Units vesting upon average share price, Percentages | 50.00% | ||||||||||||||||||||||||||||||||
2020 Omnibus Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Stock based compensation | $ 284 | ||||||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 31,003 | 718,997 | |||||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, shares | 750,000 | ||||||||||||||||||||||||||||||||
Restricted Stock [Member] | Two Thousand Fifteen And Two Thousand Sixteen Omnibus Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Share-based compensation restricted period | 3 years | ||||||||||||||||||||||||||||||||
Unvested shares issued | 61,600 | ||||||||||||||||||||||||||||||||
Stock based compensation | $ 252 | $ 539 | |||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Preferred stock, redemption terms | On September 28, 2020, the Company redeemed 1,300 shares of Base Series E Preferred Stock for $1,300, as such there is currently 11,700 shares of Base Series E Preferred Stock outstanding. | ||||||||||||||||||||||||||||||||
Number of shares redeemed | 1,300 | ||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 13,000 | 13,000 | |||||||||||||||||||||||||||||||
Preferred stock, stated value per share | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||||||||||||
Preferred stock, dividend rate, percentage | 12.00% | ||||||||||||||||||||||||||||||||
Preferred stock, shares issued | 11,080 | 13,000 | |||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 11,700 | 11,080 | 13,000 | ||||||||||||||||||||||||||||||
Preferred stock stated value | $ 11 | $ 13 | |||||||||||||||||||||||||||||||
Number of common stock issuable on conversion of preferred stock | 561.8 | ||||||||||||||||||||||||||||||||
Preferred stock, cash dividend, percentage | 50.00% | ||||||||||||||||||||||||||||||||
Convertible preferred stock, term | Each share of Series E Preferred Stock is initially convertible into 561.8 shares of our common stock at any time after October 31, 2020 or the occurrence of a Preferred Default. A holder of Series E Preferred Stock is not required to pay any additional consideration in exchange for conversion of such Series E Preferred Stock into our common stock. | ||||||||||||||||||||||||||||||||
Preferred stock, dividend preference | If the PIK Dividend Payment is elected, a holder of Series E Preferred Stock is entitled to additional fee to be paid in shares of the Company's common stock an amount equal to $10 divided by the average closing price, as reported by Nasdaq of such shares of common stock over the 5 trading days prior to the applicable monthly interest payment date. | ||||||||||||||||||||||||||||||||
Series A Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 1,663,008 | 1,663,008 | |||||||||||||||||||||||||||||||
Preferred stock, stated value per share | $ 0.00001 | $ 0.00001 | |||||||||||||||||||||||||||||||
Preferred stock, shares issued | 1,663,008 | 1,039,380 | 1,663,008 | ||||||||||||||||||||||||||||||
Preferred stock, redemption price per share | $ 50 | ||||||||||||||||||||||||||||||||
Preferred stock convertible into common stock | 623,628 | ||||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 1,663,008 | 1,039,380 | |||||||||||||||||||||||||||||||
Preferred stock stated value | |||||||||||||||||||||||||||||||||
Accrued dividends | 125 | 0 | |||||||||||||||||||||||||||||||
Dividend paid | $ 0 | $ 200 | |||||||||||||||||||||||||||||||
Series A Preferred Stock-Related Party [Member] | |||||||||||||||||||||||||||||||||
Preferred stock, redemption terms | Shares of the Series A Preferred Stock are convertible into shares of common stock at the holder's election at any time prior to December 31, 2020 (the "Redemption Date"), at a conversion rate of one and three tenths (1.3) shares of common stock for every 50 shares of Series A Preferred Stock that the Holder elects to convert. Originally the redemption date was December 31, 2018 and this was extended to December 31, 2020 in January 2019. Except as otherwise required by law, the Series A Preferred Stock shall have no voting rights. | ||||||||||||||||||||||||||||||||
Preferred stock, par value per share | $ 0.00001 | ||||||||||||||||||||||||||||||||
Preferred stock, stated value per share | $ 1 | ||||||||||||||||||||||||||||||||
Preferred stock, dividend rate, percentage | 12.00% | 12.00% | |||||||||||||||||||||||||||||||
Series E-1 Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | |||||||||||||||||||||||||||||||||
Shares issued | |||||||||||||||||||||||||||||||||
Accrued dividends | |||||||||||||||||||||||||||||||||
Preferred stock, liquidation per share | $ 1 | ||||||||||||||||||||||||||||||||
Preferred stock, liquidation value | $ 1,000 | ||||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | |||||||||||||||||||||||||||||||||
Shares issued | |||||||||||||||||||||||||||||||||
Accrued dividends | |||||||||||||||||||||||||||||||||
Number of common stock issuable on conversion of preferred stock | 11,080,000 | ||||||||||||||||||||||||||||||||
Series E-1 Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Preferred stock, stated value per share | $ 1 | ||||||||||||||||||||||||||||||||
Number of common stock issuable on conversion of preferred stock | 1,363,000 | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Preferred stock convertible into common stock | 1,039,380 | ||||||||||||||||||||||||||||||||
Number of common stock issuable on conversion of preferred stock | 27,024 | ||||||||||||||||||||||||||||||||
Underwritten Public Offering [Member] | |||||||||||||||||||||||||||||||||
Sale of common stock, net | $ 3,078 | ||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 4,001 | ||||||||||||||||||||||||||||||||
Over-allotment Option [Member] | |||||||||||||||||||||||||||||||||
Sale of common stock, net | $ 138 | ||||||||||||||||||||||||||||||||
Period for exercise of shares available for purchase to underwriters | 45 days | ||||||||||||||||||||||||||||||||
Public Offering [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 21,855,280 | ||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 18,100 | ||||||||||||||||||||||||||||||||
Stock issued price per share | $ 0.90 | ||||||||||||||||||||||||||||||||
Preferred stock, participation rights | On February 5, 2021, the Company used approximately 75% of the net proceeds from the Offering to redeem a portion of the outstanding Jackson Note and 25% of the net proceeds from the Offering to redeem a portion of the Company's Series E Preferred Stock. | ||||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 6,172 | ||||||||||||||||||||||||||||||||
Preferred stock stated value | $ 6,172 | ||||||||||||||||||||||||||||||||
Public Offering [Member] | Subsequent Event [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Preferred stock, redemption terms | Following the redemption of the Base Series E Preferred Stock, the Company has 6,172 shares of Base Series E Preferred Stock outstanding with an aggregate stated value of $6,172. | ||||||||||||||||||||||||||||||||
Public Offering [Member] | Subsequent Event [Member] | Jackson Note [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Preferred stock, redemption terms | Pursuant to the Limited Consent, upon closing of the Offering, the Company redeemed a portion of the 2020 Jackson Note and redeemed 4,518 shares of the Base Series E Preferred Stock. | ||||||||||||||||||||||||||||||||
Number of shares redeemed | 4,518 | ||||||||||||||||||||||||||||||||
Conversion of Series A [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 16,215 | ||||||||||||||||||||||||||||||||
Preferred stock convertible into common stock | 16,215 | ||||||||||||||||||||||||||||||||
Registered Direct Offering [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 387,500 | ||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 775 | ||||||||||||||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 387,500 | 7,479,261 | 3,331,280 | ||||||||||||||||||||||||||||||
Stock issued price per share | $ 2 | ||||||||||||||||||||||||||||||||
Shares issued | $ 1 | ||||||||||||||||||||||||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 6.75 | ||||||||||||||||||||||||||||||||
Accrued dividends | $ 200 | ||||||||||||||||||||||||||||||||
Common Stock [Member] | Underwritten Public Offering [Member] | |||||||||||||||||||||||||||||||||
Stock issued price per share | $ 1.65 | ||||||||||||||||||||||||||||||||
Shares issued | $ 2,425,000 | ||||||||||||||||||||||||||||||||
Common Stock [Member] | Over-allotment Option [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 90,180 | 363,750 | |||||||||||||||||||||||||||||||
Stock issued price per share | $ 1.65 | ||||||||||||||||||||||||||||||||
Common Stock [Member] | Public Offering [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 20,851,199 | ||||||||||||||||||||||||||||||||
Pre-funded Warrants [Member] | Public Offering [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 1,004,081 | ||||||||||||||||||||||||||||||||
Stock issued price per share | $ 0.8999 | ||||||||||||||||||||||||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.0001 | ||||||||||||||||||||||||||||||||
Designated Shares [Member] | Series A Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 1,663,008 | ||||||||||||||||||||||||||||||||
Preferred stock, par value per share | $ 0.00001 | ||||||||||||||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 62.50 | ||||||||||||||||||||||||||||||||
Maximum [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Gross proceeds from equity offering | $ 3,000 | ||||||||||||||||||||||||||||||||
Preferred stock, average market price | $ 0.50 | ||||||||||||||||||||||||||||||||
Maximum [Member] | Conversion of Series A [Member] | |||||||||||||||||||||||||||||||||
Stock issued price per share | |||||||||||||||||||||||||||||||||
Maximum [Member] | Common Stock [Member] | |||||||||||||||||||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights | 630,000 | ||||||||||||||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||||||||||||||
Class of warrant or right, exercise price of warrants or rights | 0.75 | ||||||||||||||||||||||||||||||||
Minimum [Member] | Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Preferred stock, average market price | $ 3.50 | ||||||||||||||||||||||||||||||||
Minimum [Member] | Conversion of Series A [Member] | |||||||||||||||||||||||||||||||||
Stock issued price per share | |||||||||||||||||||||||||||||||||
At-The-Market Offering Agreement [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 0 | 428,600 | |||||||||||||||||||||||||||||||
Sale of common stock, net | $ 0 | $ 528 | |||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 600 | $ 600 | |||||||||||||||||||||||||||||||
At-The-Market Offering Agreement [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||
Sale of common stock, net | $ 3,000 | ||||||||||||||||||||||||||||||||
Underwriting Agreement [Member] | Wainwright [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 4,816,665 | 4,188,405 | |||||||||||||||||||||||||||||||
Stock issued price per share | $ 0.60 | ||||||||||||||||||||||||||||||||
Additional stock issuable, shares | 628,260 | ||||||||||||||||||||||||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.82 | $ 0.75 | |||||||||||||||||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights | 199,695 | 361,250 | |||||||||||||||||||||||||||||||
Class of warrant or right exercisable term | 5 years | 5 years | |||||||||||||||||||||||||||||||
Warrant value | $ 127 | $ 248 | |||||||||||||||||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||||||||||||||||||
Number of shares issued | 2,662,596 | ||||||||||||||||||||||||||||||||
Stock issued price per share | $ 0.66 | ||||||||||||||||||||||||||||||||
Amended and Restated Warrant Agreement [Member] | |||||||||||||||||||||||||||||||||
Warrants description | Pursuant to Amendment No. 3, the exercise price of the Warrant was reduced from $1.66 per share to $1.00 per share and the term of the Warrant was extended to January 26, 2026. | The Warrant Amendment amended that certain Amended and Restated Warrant Agreement with Jackson, dated as of April 25, 2018 (the "Warrant"), to reduce the exercise price of the Warrant from $5.00 per share to $3.50 per share. The incremental fair value of repricing the Warrants to $3.50 per share is $135 and was recognized as deferred financing costs to be amortized over the term of the Jackson Note. | |||||||||||||||||||||||||||||||
Deferred financing costs | $ 126 | $ 135 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stockholders Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Number of Common Shares Issued | 8,032,876 | 3,459,680 |
Fair Value of Shares Issued | $ 4,991 | $ 5,632 |
Jackson Investment Group LLC [Member] | ||
Number of Common Shares Issued | 500,000 | 100,000 |
Fair Value of Shares Issued | $ 324 | $ 75 |
Consultants [Member] | ||
Number of Common Shares Issued | 15,000 | 6,000 |
Fair Value of Shares Issued | $ 18 | $ 10 |
Board and Committee [Member] | ||
Number of Common Shares Issued | 22,400 | 22,400 |
Fair Value of Shares Issued | $ 15 | $ 32 |
Minimum [Member] | Jackson Investment Group LLC [Member] | ||
Fair Value at Issuance (per Share) | $ 0.36 | $ 0.75 |
Minimum [Member] | Consultants [Member] | ||
Fair Value at Issuance (per Share) | 1.22 | 1.56 |
Minimum [Member] | Board and Committee [Member] | ||
Fair Value at Issuance (per Share) | 0.56 | 0.83 |
Maximum [Member] | Jackson Investment Group LLC [Member] | ||
Fair Value at Issuance (per Share) | 0.92 | 0.75 |
Maximum [Member] | Consultants [Member] | ||
Fair Value at Issuance (per Share) | 1.22 | 1.56 |
Maximum [Member] | Board and Committee [Member] | ||
Fair Value at Issuance (per Share) | $ 0.85 | $ 1.79 |
Equity Raise [Member] | ||
Number of Common Shares Issued | 7,479,261 | 3,331,280 |
Fair Value of Shares Issued | $ 4,634 | $ 5,515 |
Equity Raise [Member] | Minimum [Member] | ||
Fair Value at Issuance (per Share) | $ 0.60 | $ 1.40 |
Equity Raise [Member] | Maximum [Member] | ||
Fair Value at Issuance (per Share) | $ 0.66 | $ 2 |
Conversion of Series A [Member] | ||
Number of Common Shares Issued | 16,215 | |
Fair Value of Shares Issued | ||
Conversion of Series A [Member] | Minimum [Member] | ||
Fair Value at Issuance (per Share) | ||
Conversion of Series A [Member] | Maximum [Member] | ||
Fair Value at Issuance (per Share) |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Unvested Restricted Shares Activity (Details) - $ / shares | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Equity [Abstract] | ||
Restricted Shares, Beginning balance | 590,440 | 572,256 |
Restricted Shares, Granted | 38,615 | 22,400 |
Restricted Shares, Vested/adjustments | (567,455) | (4,216) |
Restricted Shares, Ending balance | 61,600 | 590,440 |
Weighted Average Price Per Share, Beginning balance | $ 3.12 | $ 3.47 |
Weighted Average Price Per Share, Granted | 0.76 | 1.48 |
Weighted Average Price Per Share, Vested/adjustments | 3.16 | 5.52 |
Weighted Average Price Per Share, Ending balance | $ 1.25 | $ 3.12 |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Warrants Activity (Details) - $ / shares | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Equity [Abstract] | ||
Number of Shares, Outstanding Beginning Balance | 925,934 | 925,934 |
Number of Shares, Issued | 650,945 | |
Number of Shares, Exercised | ||
Number of Shares, Expired or Cancelled | ||
Number of Shares, Outstanding Ending Balance | 1,576,879 | 925,934 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ 1.76 | $ 1.76 |
Weighted Average Exercise Price, Issued | 0.81 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Expired or Cancelled | ||
Weighted Average Exercise Price, Outstanding Ending Balance | $ 0.99 | $ 1.76 |
Stockholders' Equity - Schedu_4
Stockholders' Equity - Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - $ / shares | 12 Months Ended | |
Jan. 02, 2021 | Jul. 17, 2020 | |
Exercise Price | $ 1 | |
Class of Warrant or Right, Number Outstanding and Exercisable | 1,576,879 | |
Warrants Outstanding Weighted Average Remaining Contractual Life (years) | 4 years 11 days | |
Weighted Average Exercise Price | $ 0.99 | |
Minimum [Member] | ||
Exercise Price | 0.75 | |
Maximum [Member] | ||
Exercise Price | $ 62.50 |
Stockholders' Equity - Schedu_5
Stockholders' Equity - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Equity [Abstract] | ||
Options Outstanding, Beginning Balance | 76,500 | 111,400 |
Options Granted | ||
Options Exercised | ||
Options Expired or Cancelled | (34,900) | |
Options Outstanding, Ending Balance | 76,500 | 76,500 |
Weighted Average Exercise Price, Beginning Balance | $ 27.76 | $ 28.46 |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Expired or Cancelled | 29.99 | |
Weighted Average Exercise Price, Ending Balance | $ 27.76 | $ 27.76 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Relationship Between Performance and the Vesting Rate (Details) - 2019 Long Term Incentive Plan [Member] - Share-based Payment Arrangement, Tranche One [Member] | 12 Months Ended |
Jan. 02, 2021$ / shares | |
Vesting rate | 0.00% |
Minimum [Member] | |
Average share price | $ 8 |
Vesting rate, Description | Pro-rated |
Maximum [Member] | |
Average share price | $ 8 |
Average share price | $ 12 |
Vesting rate, Description | Full Vesting |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) £ in Thousands, $ in Thousands | Jan. 08, 2021shares | Sep. 26, 2020USD ($) | Jun. 29, 2020USD ($) | Apr. 20, 2020USD ($) | Feb. 26, 2020USD ($) | Sep. 30, 2019USD ($) | Aug. 30, 2019USD ($) | Aug. 30, 2019GBP (£) | Aug. 29, 2019USD ($) | Aug. 27, 2019USD ($) | Jul. 26, 2019GBP (£) | Jul. 05, 2019GBP (£) | Mar. 02, 2019USD ($) | Jul. 02, 2018USD ($) | Jun. 28, 2018USD ($) | Jun. 28, 2018GBP (£) | Nov. 07, 2016USD ($)shares | May 29, 2015shares | Jan. 03, 2014USD ($) | Jan. 03, 2014GBP (£) | Feb. 29, 2020USD ($) | Dec. 28, 2018USD ($) | Jan. 02, 2021USD ($)shares | Dec. 28, 2019USD ($)shares | Dec. 29, 2018USD ($) | Aug. 27, 2020USD ($) | Dec. 28, 2019GBP (£) | Sep. 11, 2019USD ($) | Jun. 26, 2019USD ($) | Jun. 26, 2019GBP (£) | Aug. 27, 2018USD ($) | Sep. 15, 2017USD ($)Installment |
Number of shares, issued | shares | 38,615 | 22,400 | ||||||||||||||||||||||||||||||
Business combination earnout consideration payable | $ 4,054 | $ 3,939 | $ 9,731 | |||||||||||||||||||||||||||||
Alleged damages | $ 6,000 | |||||||||||||||||||||||||||||||
Lease minimum obligation, 2021 | 1,313 | |||||||||||||||||||||||||||||||
Lease minimum obligation, 2022 | 735 | |||||||||||||||||||||||||||||||
Lease minimum obligation, 2023 | 447 | |||||||||||||||||||||||||||||||
Lease minimum obligation, 2024 | 338 | |||||||||||||||||||||||||||||||
Lease minimum obligation, 2025 | 326 | |||||||||||||||||||||||||||||||
Lease minimum obligation, Thereafter | 839 | |||||||||||||||||||||||||||||||
GBS Butler Holdings Limited [Member] | ||||||||||||||||||||||||||||||||
Gain on final settlement of litigation | $ 1,077 | |||||||||||||||||||||||||||||||
GBS Butler Holdings Limited [Member] | Jackson Investment Group LLC [Member] | ||||||||||||||||||||||||||||||||
Proceeds from term loans - related party | $ 2,538 | |||||||||||||||||||||||||||||||
FirstPro, Inc [Member] | ||||||||||||||||||||||||||||||||
Business acquisition cost of acquired entity each quarterly installment payment | $ 75 | |||||||||||||||||||||||||||||||
Business acquisition cost of acquired entity annual equal installment payment | $ 2,675 | |||||||||||||||||||||||||||||||
Business combination number of equal annual installments. | Installment | 3 | |||||||||||||||||||||||||||||||
Business combination deferred consideration paid | $ 300 | $ 892 | ||||||||||||||||||||||||||||||
Business combination remaining liability paid | $ 1,125 | |||||||||||||||||||||||||||||||
Business combination purchase gain recognized | $ 847 | |||||||||||||||||||||||||||||||
Business acquisition quarterly installment payment beginning date | Oct. 1, 2017 | |||||||||||||||||||||||||||||||
Business acquisition annual equal installment payment beginning date | Sep. 15, 2018 | |||||||||||||||||||||||||||||||
Clement May, Limited [Member] | ||||||||||||||||||||||||||||||||
Business combination deferred consideration | $ 444 | |||||||||||||||||||||||||||||||
Business combination earn-out payment | 656 | |||||||||||||||||||||||||||||||
Business combination deferred consideration paid | $ 2,047 | |||||||||||||||||||||||||||||||
Key Resources, Inc [Member] | ||||||||||||||||||||||||||||||||
Business combination earn-out payment | $ 2,027 | $ 2,027 | ||||||||||||||||||||||||||||||
Business combination deferred consideration paid | 12,163 | |||||||||||||||||||||||||||||||
Business combination earnout consideration interest payment | $ 10 | |||||||||||||||||||||||||||||||
GBP [Member] | GBS Butler Holdings Limited [Member] | ||||||||||||||||||||||||||||||||
Accrual final payments | £ | £ 2,500 | £ 2,150 | ||||||||||||||||||||||||||||||
Gain on final settlement of litigation | £ | £ 894 | |||||||||||||||||||||||||||||||
GBP [Member] | Clement May, Limited [Member] | ||||||||||||||||||||||||||||||||
Business combination deferred consideration | £ | £ 350 | |||||||||||||||||||||||||||||||
Business combination earn-out payment | £ | £ 500 | |||||||||||||||||||||||||||||||
Business combination deferred consideration paid | £ | £ 1,550 | |||||||||||||||||||||||||||||||
Ms. Viswakula [Member] | ||||||||||||||||||||||||||||||||
Officer's compensation | $ 200 | $ 190 | ||||||||||||||||||||||||||||||
The Flood Employement Agreement [Member] | Series A Preferred Stock [Member] | ||||||||||||||||||||||||||||||||
Conversion of convertible securities | shares | 1,039,380 | |||||||||||||||||||||||||||||||
The Flood Employement Agreement [Member] | Series A Preferred Stock [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||||||
Conversion of convertible securities | shares | 27,024 | |||||||||||||||||||||||||||||||
The Flood Employement Agreement [Member] | Mr.Brendan Flood [Member] | ||||||||||||||||||||||||||||||||
Deferred compensation arrangement with individual, description | On January 3, 2014, in connection with our acquisition of Initio, we entered into a services agreement (the "Flood Employment Agreement") with Brendan Flood. Pursuant to the Flood Employment Agreement, Mr. Flood initially served as Executive Chairman of the Board. Mr. Flood was initially paid a salary of £192 per annum, less statutory deductions, plus other benefits including reimbursement for reasonable expenses, paid vacation and insurance coverage for his roles with both the Company and our U.K. subsidiary. Under the Flood Employment Agreement, Mr. Flood's salary is required to be adjusted (but not decreased) annually in connection with the CPI Adjustment (as defined in the Flood Employment Agreement.) Mr. Flood is also entitled to an annual bonus of up to 50% of his annual base salary based reaching certain financial milestones. Additionally, Mr. Flood was entitled to a gross profit appreciation participation, which entitled the participants to 10% of Initio's "Excess Gross Profit," which is defined as the increase in Initio gross profits in excess of 120% of the base year's gross profit, up to $400. Mr. Flood's participating level was 62.5%. On May 29, 2015, the Gross Profit Appreciation Bonus associated with this employment agreement was converted into 1,039,380 shares of Series A Preferred Stock. On January 8, 2021, all of his Series A Preferred Stock were converted into 27,024 shares of our common stock. The Flood Employment Agreement had an initial term of five years and automatically renews thereafter unless 12 months' written notice is provided by either party. It also includes customary non-compete/solicitation language for a period of 12 months after termination of employment, and in the event of a change in control, we may request that Mr. Flood continue employment with the new control entity. In December 2017, upon the reorganization of the Company and departure of Mr. Briand, Mr. Flood's title was changed to Chairman and he assumed the roles of Chief Executive Officer and President of the Company. On January 1, 2018 the Company increased his salary by the CPI Adjustment. On January 1, 2019 and on January 1, 2020, Mr. Flood was eligible for a CPI salary adjustment and chose to waive this adjustment. All other terms of the Flood Employment Agreement remained unchanged. | |||||||||||||||||||||||||||||||
Performance based compensation, gross profit threshold | $ 400 | |||||||||||||||||||||||||||||||
Employment agreement, officer, commission percentage of gross profit | 50.00% | 50.00% | ||||||||||||||||||||||||||||||
Percentage Of Gross Profit Appreciation Participation | 10.00% | 10.00% | ||||||||||||||||||||||||||||||
Gross Profits In Excess Percentage | 120.00% | 120.00% | ||||||||||||||||||||||||||||||
Gross profit appreciation participation participating level | 62.50% | 62.50% | ||||||||||||||||||||||||||||||
The Flood Employement Agreement [Member] | Mr.Brendan Flood [Member] | GBP [Member] | ||||||||||||||||||||||||||||||||
Officer's compensation | £ | £ 192 | |||||||||||||||||||||||||||||||
The Barker Employment Agreement [Member] | Alicia Barker [Member] | ||||||||||||||||||||||||||||||||
Officer's compensation | $ 250 | |||||||||||||||||||||||||||||||
Deferred Compensation Arrangement with Individual, Cash Awards Granted, Percentage | 75.00% | |||||||||||||||||||||||||||||||
Entitle to receive severance pay, period | 12 months | |||||||||||||||||||||||||||||||
The Anwar Employment Agreement [Member] | Mr. Anwar [Member] | ||||||||||||||||||||||||||||||||
Officer's compensation | $ 200 | |||||||||||||||||||||||||||||||
Percentage of additional bonus on base salary | 50.00% | |||||||||||||||||||||||||||||||
Deferred Compensation Arrangement with Individual, Cash Awards Granted, Percentage | 50.00% | |||||||||||||||||||||||||||||||
The Viswakula Employment Agreement [Member] | ||||||||||||||||||||||||||||||||
Officer's compensation | $ 170 | |||||||||||||||||||||||||||||||
Percentage of additional bonus on base salary | 35.00% | |||||||||||||||||||||||||||||||
Restricted stock issued | shares | 25,000 | |||||||||||||||||||||||||||||||
Vesting percentage description | Vesting 50% on her 1st anniversary and 50% on her 2nd anniversary. | |||||||||||||||||||||||||||||||
Deferred Compensation Arrangement with Individual, Cash Awards Granted, Percentage | 35.00% | |||||||||||||||||||||||||||||||
Earnout Consideration Postpone Date on February 27, 2020 [Member] | ||||||||||||||||||||||||||||||||
Business combination earnout consideration payable | $ 2,027 | $ 2,027 | $ 2,027 | $ 2,027 | ||||||||||||||||||||||||||||
Business Combination Earnout Consideration Postpone Date [Member] | Key Resources, Inc [Member] | ||||||||||||||||||||||||||||||||
Business combination earnout consideration payable | $ 2,027 | |||||||||||||||||||||||||||||||
Share Purchase Agreement [Member] | Clement May, Limited [Member] | ||||||||||||||||||||||||||||||||
Business combination earn-out payment | $ 656 | |||||||||||||||||||||||||||||||
Share Purchase Agreement [Member] | Key Resources, Inc [Member] | ||||||||||||||||||||||||||||||||
Business combination earnout consideration interest payment | $ 40 | |||||||||||||||||||||||||||||||
Alleged damages | $ 4,054 | |||||||||||||||||||||||||||||||
Share Purchase Agreement [Member] | GBP [Member] | Clement May, Limited [Member] | ||||||||||||||||||||||||||||||||
Business combination earn-out payment | £ | £ 500 | |||||||||||||||||||||||||||||||
Lease Obligations [Member] | ||||||||||||||||||||||||||||||||
Lease minimum obligation, 2021 | 1,313 | |||||||||||||||||||||||||||||||
Lease minimum obligation, 2022 | 735 | |||||||||||||||||||||||||||||||
Lease minimum obligation, 2023 | 447 | |||||||||||||||||||||||||||||||
Lease minimum obligation, 2024 | 338 | |||||||||||||||||||||||||||||||
Lease minimum obligation, 2025 | 326 | |||||||||||||||||||||||||||||||
Lease minimum obligation, Thereafter | 839 | |||||||||||||||||||||||||||||||
Rent expense | 1,659 | $ 1,732 | ||||||||||||||||||||||||||||||
New York Action [Member] | Pamela D. Whitaker [Member] | ||||||||||||||||||||||||||||||||
Alleged damages | $ 4,054 |
Segments Information - Schedule
Segments Information - Schedule of Revenue and Gross Profit by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Total Revenue | $ 204,527 | $ 278,478 | |
Total Gross Profit | 34,813 | 48,309 | |
Selling, general and administrative expenses | (37,506) | (44,317) | |
Impairment of goodwill | 2,969 | ||
Depreciation and amortization | (3,118) | (3,369) | |
Operating income - restructuring | 20 | 10 | |
Interest expense | (7,195) | (7,628) | |
Amortization of debt discount and deferred financing costs | (559) | (857) | |
Re-measurement gain (loss) on intercompany note | 584 | 383 | |
Gain from sale of business | 124 | ||
Gain on settlement of deferred consideration | 1,924 | ||
Other income | 84 | 326 | |
Loss Before Benefit (Provision) For Income Tax | (15,742) | (5,229) | |
Total Assets | 86,884 | 88,841 | |
Total Goodwill | 27,045 | 31,049 | $ 320,614 |
United States [Member] | |||
Total Revenue | 137,447 | 164,624 | |
Total Assets | 13,233 | 74,671 | |
Total Goodwill | 12,082 | 16,630 | |
United States [Member] | Commercial Staffing - US [Member] | |||
Total Revenue | 113,970 | 127,330 | |
Total Gross Profit | 17,845 | 20,080 | |
United States [Member] | Professional Staffing - US [Member] | |||
Total Revenue | 23,477 | 37,294 | |
Total Gross Profit | 7,546 | 14,081 | |
United Kingdom [Member] | |||
Total Revenue | 67,080 | 113,854 | |
Total Assets | 73,691 | 14,170 | |
Total Goodwill | 14,963 | 14,419 | |
United Kingdom [Member] | Professional Staffing - UK [Member] | |||
Total Revenue | 67,080 | 113,854 | |
Total Gross Profit | $ 9,422 | $ 14,148 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Compensation Expense Recognized | $ 637 | $ 832 |
Board and Committee [Member] | ||
Cash Compensation | $ 225 | $ 225 |
Shares Issued | 22,400 | 22,400 |
Value of Shares Issued | $ 16 | $ 32 |
Compensation Expense Recognized | 42 | 94 |
Dimitri Villard Corporate Governance And Nominating Committee Chairman [Member] | Board and Committee [Member] | ||
Cash Compensation | $ 75 | $ 75 |
Shares Issued | 5,600 | 5,600 |
Value of Shares Issued | $ 4 | $ 12 |
Compensation Expense Recognized | 12 | 68 |
Jeff Grout Compensation Committee Chairman [Member] | Board and Committee [Member] | ||
Cash Compensation | $ 75 | $ 75 |
Shares Issued | 5,600 | 5,600 |
Value of Shares Issued | $ 4 | $ 12 |
Compensation Expense Recognized | 12 | 70 |
Nick Florio Audit Committee Chairman [Member] | Board and Committee [Member] | ||
Cash Compensation | $ 75 | $ 75 |
Shares Issued | 5,600 | 5,600 |
Value of Shares Issued | $ 4 | $ 12 |
Compensation Expense Recognized | 12 | 69 |
Alicia Barker [Member] | Board and Committee [Member] | ||
Cash Compensation | ||
Shares Issued | 5,600 | 5,600 |
Value of Shares Issued | $ 4 | $ 8 |
Compensation Expense Recognized | $ 6 | $ 4 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Schedule of Supplemental Cash Flow Informations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest | $ 8,596 | $ 7,225 |
Income taxes | 278 | 324 |
Deferred purchase price of UK factoring facility | 8,036 | 13,856 |
Shares issued in connection with Jackson term loan | 324 | 75 |
Increase in lease liabilities from obtaining right-of-use assets - ASC 842 adoption | 450 | 5,965 |
Warrants adjustments in connection with Jackson term loan | 126 | |
Deemed dividend | $ 4,690 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 02, 2021 | Dec. 28, 2019 | Dec. 29, 2018 | |
Income Taxes [Line Items] | |||
Effective tax rate | 21.00% | 21.00% | |
Percentage of adjusted taxable income of annual deduction of interest expense, limitation | 30.00% | ||
Tax Credit Carryforward, Limitations on Use | As a result of the CARES act the limitation has been increased to 50% for tax years 2019 and 2020. | ||
Disallowed interest, limitation | $ 20,917 | ||
Capital loss carryforward | $ 9,467 | $ 7,531 | |
Capital loss carryforward expiration beginning year | 2023 | ||
Deferred tax assets, tax credit carryforward, general business | $ 76 | 248 | |
Increase in valuation allowance | 5,139 | ||
Unrecognized tax benefits | 656 | 674 | $ 670 |
Federal [Member] | |||
Income Taxes [Line Items] | |||
Net operating losses ("NOLs") | $ 16,915 | 14,371 | |
Operating loss carryforwards, limitations on use | Of the $16,915 in federal NOL carryforwards, $3,369 will begin to expire in 2032 and $2,288 can be carried forward indefinitely, subject to an 80% taxable income limitation in the year of utilization. | ||
Net operating losses expiration beginning year | 2032 | ||
Decrease in net operating losses | $ 7,220 | ||
Federal [Member] | Expire in 2032 [Member] | |||
Income Taxes [Line Items] | |||
Net operating losses ("NOLs") | 3,369 | ||
Federal [Member] | Limitation on Taxable Income [Member] | |||
Income Taxes [Line Items] | |||
Net operating losses ("NOLs") | 2,288 | ||
State [Member] | |||
Income Taxes [Line Items] | |||
Net operating losses ("NOLs") | $ 62,174 | 47,581 | |
Net operating losses expiration beginning year | 2022 | ||
Foreign [Member] | |||
Income Taxes [Line Items] | |||
Net operating losses ("NOLs") | $ 2,990 | $ 1,514 | |
United Kingdom [Member] | |||
Income Taxes [Line Items] | |||
Effective tax rate | 17.00% | 19.00% |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Loss Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | ||
Domestic | $ (13,491) | $ (4,795) |
Foreign | (2,251) | (434) |
Loss before provision for income taxes | $ (15,742) | $ (5,229) |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | ||
Current: Federal | ||
Current: State | 190 | 119 |
Current: Foreign | 21 | |
Total current tax expense | 190 | 140 |
Deferred: Federal | (76) | 49 |
Deferred: State | 27 | 186 |
Deferred: Foreign | (241) | (710) |
Total deferred tax expense | (290) | (475) |
Total tax benefit | $ (100) | $ (335) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | ||
Benefit at Federal Statutory Rate | $ (3,306) | $ (1,098) |
State taxes, net | (1,666) | (1,741) |
Foreign operations | 45 | (13) |
Permanent differences | 87 | 349 |
True-up adjustments | (589) | (325) |
Change in valuation allowance | 5,139 | 2,399 |
Other | 190 | 94 |
Total tax (benefit) expense | $ (100) | $ (335) |
Benefit at Federal Statutory Rate | 21.00% | 21.00% |
State taxes, net | 10.59% | 33.30% |
Foreign operations | (0.29%) | 0.25% |
Permanent differences | 0.55% | (6.67%) |
True-up adjustments | 3.74% | 6.22% |
Change in valuation allowance | (32.64%) | (45.88%) |
Other | (1.21%) | 1.80% |
Total Tax Benefit for Income Taxes | 0.64% | 6.42% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Jan. 02, 2021 | Dec. 28, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 7,276 | $ 5,858 |
Tax credit, deduction and capital loss carryforward | 2,880 | 2,327 |
Share-based compensation | 749 | 847 |
Debt issuance costs | 1 | 333 |
Accrued expenses and other liabilities | 1,741 | 454 |
Interest limitation and carryforward | 6,194 | 3,639 |
Operating lease liabilities | 628 | 731 |
Total deferred tax assets | 19,469 | 14,189 |
Less: valuation allowance | (17,087) | (11,948) |
Deferred tax assets, net of valuation allowance | 2,382 | 2,241 |
Deprecation | 1,521 | 1,557 |
Basis differences in acquired intangibles | 1,430 | 1,433 |
Operating lease - Right-of-use assets | 621 | 731 |
Total deferred tax liabilities | 3,572 | 3,721 |
Deferred tax liability | $ (1,190) | $ (1,480) |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jan. 02, 2021 | Dec. 28, 2019 | |
Income Tax Disclosure [Abstract] | ||
Beginning balance | $ 674 | $ 670 |
Additions for tax positions of prior years | 4 | |
Reductions for tax positions of prior years | (18) | |
Loss before provision for income taxes | $ 656 | $ 674 |