Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Jun. 13, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Staffing 360 Solutions, Inc. | |
Entity Central Index Key | 1,499,717 | |
Current Fiscal Year End Date | --12-30 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | STAF | |
Document Type | 10-Q/A | |
Amendment Flag | true | |
Amendment Description | We are filing this Amendment No. 1 to our Quarterly Report on Form 10-Q for the period ended September 30, 2017, as filed with the Securities and Exchange Commission on November 14, 2017, to correct errors related to the recognition of compensation expense associated with shares granted to employees and directors, the recognition of the beneficial conversion features associated with our Series D Preferred Shares, classification of warrants issued to Jackson and the recognition of closing fees paid to Jackson in connection with the financing on September 15, 2017. | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 | |
Entity Common Stock, Shares Outstanding | 4,255,572 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 5,380 | $ 650 |
Accounts receivable, net | 33,797 | 22,274 |
Prepaid expenses and other current assets | 1,174 | 613 |
Total Current Assets | 40,351 | 23,537 |
Property and equipment, net | 1,241 | 919 |
Identifiable intangible assets, net | 16,199 | 9,149 |
Goodwill | 33,362 | 15,779 |
Other assets | 2,972 | 4,573 |
Total Assets | 94,125 | 53,957 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 22,052 | 18,110 |
Current portion of debt, net | 367 | 3,639 |
Accounts receivable financing | 23,076 | 15,605 |
Dividends payable - related party | 366 | |
Other current liabilities | 1,247 | 1,274 |
Total Current Liabilities | 46,742 | 38,994 |
Term loan - related party, net | 38,630 | |
Warrant Liability | 2,303 | |
Long-term debt, net | 38,630 | 3,997 |
Other long-term liabilities | 6,615 | 2,688 |
Total Liabilities | 94,290 | 45,679 |
Series D Preferred Stock, 5,000 shares designated, $0.00001 par value, $10,000 stated value, 0 and 93 shares issued and outstanding, as of September 30, 2017 and December 31, 2016, respectively | 884 | |
Staffing 360 Solutions, Inc. (Deficit) Equity: | ||
Preferred stock value | ||
Common stock, $0.00001 par value, 40,000,000 and 20,000,000 shares authorized as of September 30, 2017 and December 31, 2016, respectively; 3,837,764 and 1,827,959 shares issued and outstanding, as of September 30, 2017 and December 31, 2016, respectively | 0 | 0 |
Additional paid in capital | 56,991 | 53,190 |
Accumulated other comprehensive income | 662 | 855 |
Accumulated deficit | (57,818) | (46,651) |
Total Stockholders' (Deficit) Equity | (165) | 7,394 |
Total Liabilities, Mezzanine Equity and Stockholders' (Deficit) Equity | 94,125 | 53,957 |
Series A Preferred Stock - Related Party [Member] | ||
Staffing 360 Solutions, Inc. (Deficit) Equity: | ||
Preferred stock value | 0 | 0 |
Series B Preferred Stock [Member] | ||
Staffing 360 Solutions, Inc. (Deficit) Equity: | ||
Preferred stock value | 0 | 0 |
Series C Preferred Stock [Member] | ||
Staffing 360 Solutions, Inc. (Deficit) Equity: | ||
Preferred stock value | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Series D Preferred Stock, Shares Designated | 5,000 | 5,000 |
Series D Preferred Stock, Par Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 |
Series D Preferred Stock, Stated Value Per Share (in dollars per share) | $ 10,000 | $ 10,000 |
Series D Preferred Stock, Shares Issued | 0 | 93 |
Series D Preferred Stock, Shares Outstanding | 0 | 93 |
Preferred Stock, Par Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common Stock, Shares Authorized | 40,000,000 | 20,000,000 |
Common Stock, Shares, Issued | 3,837,764 | 1,827,959 |
Common Stock, Shares, Outstanding | 3,837,764 | 1,827,959 |
Series A Preferred Stock - Related Party [Member] | ||
Preferred Stock, Par Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, Shares Designated | 1,663,008 | 1,663,008 |
Preferred Stock, Shares Issued | 1,663,008 | 1,663,008 |
Preferred Stock, Shares Outstanding | 1,663,008 | 1,663,008 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Par Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 10 | $ 10 |
Preferred Stock, Shares Designated | 200,000 | 200,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Series C Preferred Stock [Member] | ||
Preferred Stock, Par Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, Shares Designated | 2,000,000 | 2,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 50,345 | $ 45,950 | $ 133,174 | $ 135,423 |
Cost of Revenue, Excluding Depreciation and Amortization Stated Below | 40,768 | 37,545 | 108,347 | 111,802 |
Gross Profit | 9,577 | 8,405 | 24,827 | 23,621 |
Operating Expenses: | ||||
Selling, general and administrative expenses, excluding depreciation and amortization stated below | 8,800 | 7,917 | 22,362 | 24,194 |
Depreciation and amortization | 790 | 727 | 2,310 | 2,059 |
Total Operating Expenses | 9,590 | 8,644 | 24,672 | 26,253 |
(Loss) Income From Operations | (13) | (239) | 155 | (2,632) |
Other Expenses: | ||||
Interest expense | (761) | (615) | (1,843) | (2,007) |
Amortization of beneficial conversion feature | 0 | (183) | 0 | (550) |
Amortization of debt discount and deferred financing costs | (1,212) | (401) | (2,610) | (1,310) |
Loss on extinguishment of debt, net | (4,764) | 0 | (6,132) | 0 |
Change in fair value of warrant liability | (688) | 0 | (493) | 0 |
Gain on settlement of warrants | 0 | 0 | 0 | 485 |
Other expense | (10) | (35) | (31) | (38) |
Total Other Expenses | (7,435) | (1,234) | (11,109) | (3,420) |
Loss Before Provision for Income Tax | (7,448) | (1,473) | (10,954) | (6,052) |
(Provision for) benefit from income taxes | (206) | 375 | (213) | (260) |
Net Loss | (7,654) | (1,098) | (11,167) | (6,312) |
Net income attributable to non-controlling interest | 0 | 0 | 0 | 37 |
Net Loss Before Preferred Share Dividends | (7,654) | (1,098) | (11,167) | (6,349) |
Dividends - Series A preferred stock - related party | 50 | 50 | 150 | 150 |
Deemed Dividends - Series D preferred stock | 0 | 927 | 2,009 | 1,660 |
Net Loss Attributable to Common Stock Holders | $ (7,704) | $ (2,075) | $ (13,326) | $ (8,159) |
Basic and Diluted Net Loss per Share: | ||||
Net Loss | $ (2.63) | $ (0.77) | $ (4.25) | $ (5.27) |
Net Loss Attributable to Common Stock Holders | $ (2.65) | $ (1.45) | $ (5.07) | $ (6.81) |
Weighted Average Shares Outstanding – Basic and Diluted | 2,910,139 | 1,426,938 | 2,628,913 | 1,197,680 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net Loss | $ (7,654) | $ (1,098) | $ (11,167) | $ (6,312) |
Other Comprehensive Income (loss) | ||||
Foreign exchange translation adjustment | 110 | 169 | (193) | 484 |
Comprehensive Loss | (7,544) | (929) | (11,360) | (5,828) |
Comprehensive income attributable to non-controlling interest | 37 | |||
Comprehensive Loss attributable to common stock holders | $ (7,544) | $ (929) | $ (11,360) | $ (5,865) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Oct. 01, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (11,167) | $ (6,312) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation | 250 | 132 |
Amortization of identifiable intangible assets | 2,060 | 1,927 |
Amortization of debt discount and deferred financing costs | 2,610 | 1,860 |
Loss on extinguishment of debt, net | 6,132 | 0 |
Change in fair value of warrants | 493 | 0 |
Gain on settlement of warrants | 0 | (485) |
Stock based compensation | 962 | 773 |
Interest paid in stock | 0 | 109 |
Other | 0 | 41 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,907) | (1,099) |
Prepaid expenses and other current assets | (552) | 156 |
Other assets | 196 | (828) |
Accounts payable and accrued expenses | (129) | 4,460 |
Other current liabilities | (807) | (632) |
Other long-term liabilities | 285 | 357 |
Other | (201) | 328 |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (2,775) | 787 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Posting of surety bond | 0 | (1,405) |
Acquisition of businesses, net of cash acquired | (20,817) | (101) |
Purchase of property and equipment | (169) | (245) |
NET CASH USED IN FROM INVESTING ACTIVITIES | (20,986) | (1,751) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from convertible notes | 400 | 578 |
Repayment of convertible notes | (6,635) | (1,589) |
Proceeds from promissory notes | 0 | 700 |
Repayment of promissory notes | (441) | (1,506) |
Proceeds from term loan - related party | 50,165 | 0 |
Repayments of term loan - related party | (11,165) | 0 |
Proceeds from term loan | 0 | 783 |
Repayments of term loan | (3,811) | (629) |
Repayment of bonds | (50) | (949) |
Proceeds from (repayments on) accounts receivable financing, net | 5,242 | (1,575) |
Proceeds from overadvance of accounts receivable financing | 0 | 1,050 |
Proceeds from private placement | 0 | 3,347 |
Proceeds from Series D Preferred Stock | 0 | 2,000 |
Repayment of Series D Preferred Stock | (1,500) | 0 |
Dividends paid to related parties | (515) | 0 |
Proceeds from At-The-Market Facility | 208 | 0 |
Payments made for earn-outs | (1,094) | (104) |
Third party financing costs | (2,311) | (777) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 28,493 | 1,329 |
NET INCREASE IN CASH | 4,732 | 365 |
Effect of exchange rates on cash | (2) | 0 |
Cash - Beginning of period | 650 | 991 |
Cash - End of period | $ 5,380 | $ 1,356 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [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 changed its state of domicile to Delaware. The Company effected a one-for-ten reverse stock split on September 17, 2015 and a one-for-five reverse stock split on January 3, 2018. All share and per share information in these condensed consolidated financial statements has been retroactively adjusted to reflect these reverse stock splits. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the GAAP. This filing includes unaudited condensed consolidated financial statements for the period January 1, 2017 to September 30, 2017 that have been restated, please refer to Note 3 for further details. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the transition period ended December 31, 2016 and for the years ended May 31, 2016 and 2015, which are included in the Company’s December 31, 2016 Form 10-KT, as amended, filed with the United States Securities and Exchange Commission on April 12, 2017. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the period ended September 30, 2017 are not necessarily indicative of results for the entire year ending December 30, 2017. The accompanying condensed consolidated financial statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12 months as of the date these financial statements are issued. On September 15, 2017, the Company completed financing of a $40,000 term loan with Jackson Investment Group, LLC, which among other outcomes, significantly alters the Company’s debt service obligations prospectively. The Company believes it can meet its obligations in the next 12 months from the date these financial statements are issued. Acquisitions On September 15, 2017, Staffing 360 Georgia, LLC (“Staffing Georgia”), a wholly-owned subsidiary of the Company entered into an asset purchase agreement with Firstpro Inc. (“FPI”), Firstpro Georgia, LLC (“FPL”), and certain individuals, pursuant to which the FPI and FPL sold substantially all of their assets to Staffing Georgia (“ Firstpro Acquisition”) On September 15, 2017, the Company and Longbridge Recruitment 360 Limited (“Longbridge”), a wholly-owned subsidiary of the Company, entered into an agreement (“Share Purchase Agreement”) with the holders of share capital of CBS Butler Holdings Limited (“CBS Butler”) and an agreement (“Option Purchase Agreement”) with the holders of outstanding options of CBS Butler, pursuant to which the holders of the share capital of CBS Butler and holders of outstanding options of CBS Butler sold all of their shares and options of CBS Butler to Longbridge (the “ CBS Butler Acquisition”) (payable in December 2018, based upon CBS Butler’s operating performance during the period September 1, 2017 through August 31, 2018), To finance the above transactions, the Company entered into an agreement with Jackson Investment Group, LLC (“Jackson”) on September 15, 2017. The Company, as borrower, and certain domestic subsidiaries of the Company, as guarantors, entered into an amended and restated note purchase agreement with Jackson, as lender (the “A&R Note Purchase Agreement”), pursuant to which Jackson made a senior debt investment of $40,000 in the Company in exchange for a senior secured note in the principal amount of $40,000 (the “Jackson Note”). The proceeds of the sale of the secured note were used to (i) repay the existing subordinated notes previously issued to Jackson in the aggregate principal amount of $11,165, (ii) to fund the upfront cash portion of the purchase price consideration of the Firstpro Acquisition and the CBS Butler Acquisition, (iii) to repay substantially all other outstanding indebtedness of the Company and (iv) general working capital purposes. The maturity date for the Jackson Note is September 15, 2020. The 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. Interest on any overdue payment of principal or interest due under the Jackson Note will accrue at a rate per annum that is 5% in excess of the rate of interest otherwise payable thereunder. The Company may prepay the amounts due on the Jackson Note in whole or in part from time to time, without penalty or premium, subject to the conditions set forth in the A&R Note Purchase Agreement, and such prepayments, depending on the timing of the prepayments, may result in a discount on the principal amount to be prepaid as set forth in the A&R Note Purchase Agreement. The Company paid a closing fee of $1,000 in connection with its entry into the A&R Note Purchase Agreement and agreed to issue 450,000 shares of the Company’s common stock as a closing commitment fee. These shares are subject to registration rights in favor of Jackson and were included in a new resale registration statement filed by the Company. In accordance with ASC 470 “Debt”, the Jackson Note resulted in the extinguishment of the old notes of $11,165 and recording of the new debt of $40,000 at fair value. The Company recorded $4,764 loss upon extinguishment of debt, and deferred debt issuance costs of $1,385 to be amortized over the term of the new loan. Change of Year End On February 28, 2017, the Board of Directors of the Company (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 31st of December. In a 52 week fiscal year, each of the Company’s quarterly periods will comprise 13 weeks. In a 53 week fiscal year, one quarter will consist of 14 weeks. On April 12, 2017, the Company filed a transition report on Form 10-KT, as amended, covering the transition period June 1, 2016 through December 31, 2016. Annual reports on Form 10-K covering 52-53 week years will be filed thereafter. This filing includes comparative unaudited condensed consolidated financial statements for the period January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016. Reclassifications Certain reclassifications have been made to conform the prior period data to the current presentations. In accordance with 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. These The Company has reclassified the Midcap Additional Term Loan from Long-term debt to Other long-term liabilities, as this represents the long term portion of funds received from the accounts receivable financing facility. These reclassifications had no impact on reported results of operations. The Company paid the Midcap Additional Term Loan in full on September 18, 2017. Income Taxes The Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The Company’s effective tax rate may change from period to period based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation, state and local income taxes and tax audit settlements. The effective income tax rate for the period July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016 was 4% and (37.6)%, respectively. The effective income tax rate for the period January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016, was 2.3% and 4.3%, respectively. Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment”. The amendments in this update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. The guidance is effective for annual periods fiscal years beginning after December 15, 2019. The Company early adopted this guidance during impairment testing performed on October 1, 2017. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”. The amendments in this update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments”. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 is effective for the Company beginning in the first quarter of fiscal 2019. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. The Company is currently evaluating the impact of adopting this guidance. In March 2016, the FASB issued ASU 2016-09, “Stock Compensation”, regarding the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is to be applied for annual periods beginning after December 15, 2016 and interim periods within those annual periods, and early adoption is permitted. The guidance requires companies to apply the requirements retrospectively, modified retrospectively, or prospectively depending on the amendment(s) applied. The adoption of this standard had no material financial impact. In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). This guidance will be effective for public entities for fiscal years beginning after December 15, 2018 including the interim periods within those fiscal years. Early application is permitted. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: (i) Financing leases, similar to capital leases, which will require the recognition of an asset and liability, measured at the present value of the lease payments and (ii) Operating leases which will require the recognition of an asset and liability measured at the present value of the lease payments. Lessor accounting remains substantially unchanged with the exception that no leases entered into after the effective date will be classified as leveraged leases. For sale leaseback transactions, the sale will only be recognized if the criteria in the new revenue recognition standard are met. The Company is currently evaluating the impact of adopting this guidance. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, which amends the guidance relating to the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this guidance. In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement–Period Adjustments”. Changes to the accounting for measurement-period adjustments relate to business combinations. Currently, an acquiring entity is required to retrospectively adjust the balance sheet amounts of the acquiree recognized at the acquisition date with a corresponding adjustment to goodwill as a result of changes made to the balance sheet amounts of the acquiree. The measurement period is the period after the acquisition date during which the acquirer may adjust the balance sheet amounts recognized for a business combination (generally up to one year from the date of acquisition). The changes eliminate the requirement to make such retrospective adjustments, and, instead require the acquiring entity to record these adjustments in the reporting period they are determined. The new standard is effective for both public and private companies for annual reporting periods beginning after December 15, 2015. The Adoption of this guidance had no material impact on the Company’s financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”. ASU 2014-09 supersedes the revenue recognition requirements of FASB ASC Topic 605, “Revenue Recognition” and most industry-specific guidance throughout the ASC, resulting in the creation of FASB ASC Topic 606, “Revenue from Contracts with Customers”. ASU 2014-09 requires entities to recognize revenue in a way that depicts 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 in exchange for those goods or services. This ASU provides alternative methods of adoption. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers, Deferral of the Effective Date”. ASU 2015-14 defers the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers, Principal versus Agent Considerations” (Reporting Revenue Gross versus Net) clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing”, clarifying the implementation guidance on identifying performance obligations and licensing. The amendments in this ASU clarify the two following aspects (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The effective date and transition requirements for ASU 2016-08 and ASU 2016-10 are the same as the effective date and transition requirements for ASU 2014-09. The Company is currently assessing the potential impact of adopting ASU 2014-09, ASU 2016-08 and ASU 2016-10 on its financial statements and related disclosures. As per ASC 606, Company has two streams of revenue, permanent placement revenue and temporary contractor revenues. Permanent placement revenue is not recognized performance obligations under the agreement is met and the candidate has started employment. Temporary contractor revenue is hourly based, and revenue is recognized as earned. |
CORRECTION OF ERRORS IN PREVIOU
CORRECTION OF ERRORS IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Prior Period Adjustment [Abstract] | |
CORRECTION OF ERRORS IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS | NOTE 3 – CORRECTION OF ERRORS IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS We identified errors in our previously issued financial statements for the interim and annual periods prior to December 30, 2017 related to the recognition of compensation expense associated with shares granted to employees and directors, and the recognition of the beneficial conversion features associated with our Series D Preferred Shares. We assessed the materiality of these errors in accordance with the U.S. Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”), using both the rollover method and the iron curtain method, as defined in SAB 108, and concluded the errors, including other adjustments discussed below, were immaterial to prior years but, if corrected in the current year, would have been material to the current year. Under SAB 108, such prior‑year misstatements which, if corrected in the current year would be material to the current year, must be corrected by adjusting the prior‑year financial statements. Correcting prior year financial statements for such immaterial misstatements does not require previously filed reports to be amended. In addition to the errors noted above, we also noted errors relating to the classification of warrants issued to Jackson and the recognition of closing fees paid to Jackson in connection with the financing on September 15, 2017, that impact the interim periods in Fiscal 2017. On March 29, 2018 the Company filed an Item 4.02(a) Form 8-K disclosing the existence of a material misstatement within the financial statements included in the Company’s Form 10-Q filed for the third quarter ended September 30, 2017. The impact of these errors disclosed in the tables below, have been reflected in this Form 10-Q/A for the period ended September 30, 2017. The effects of the corrections of the errors on our consolidated balance sheets, statements of operations and statements of cash flows for the periods included in this Form 10-Q/A are presented in the tables below: As of September 30, 2017 (unaudited) As of December 31, 2016 Previously As Previously As Reported Adjustments Restated Reported Adjustments Restated Current Assets $ 40,351 $ - $ 40,351 $ 23,537 $ - $ 23,537 Long-Term Assets 53,774 - 53,774 30,420 - 30,420 Total Assets 94,125 - 94,125 53,957 - 53,957 Current Liabilities 46,841 $ (99 ) 46,742 38,628 366 38,994 Long-Term Liabilities 43,189 4,359 47,548 7,051 (366 ) 6,685 Total Liabilities 90,030 4,260 94,290 45,679 - 45,679 Mezzanine Equity - - - 612 272 884 Common Stock - - - - - - Preferred Stock - - - - - - Additional Paid-In Capital 60,784 (3,793 ) 56,991 54,658 (1,468 ) 53,190 Accumulated Other Comprehensive Loss 662 - 662 855 - 855 Accumulated Deficit (57,351 ) (467 ) (57,818 ) (47,847 ) 1,196 (46,651 ) Total Equity (Deficit) 4,095 (4,260 ) (165 ) 7,666 (272 ) 7,394 Total Liabilities and Equity (Deficit) $ 94,125 $ - $ 94,125 $ 53,957 $ - $ 53,957 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Previously As Previously As Reported Adjustments Restated Reported Adjustments Restated Revenue $ 50,345 $ - $ 50,345 $ 133,174 $ - $ 133,174 Gross Profit 9,577 - 9,577 24,827 - 24,827 SG&A 9,140 (340 ) 8,800 23,105 (743 ) 22,362 Depreciation and amortization 790 - 790 2,310 - 2,310 Other - - - - - - Total Operating Expenses 9,930 (340 ) 9,590 25,415 (743 ) 24,672 Income (Loss) From Operations (353 ) 340 (13 ) (588 ) 743 155 Other Expenses (4,803 ) (2,632 ) (7,435 ) (8,553 ) (2,556 ) (11,109 ) Loss Before Provision for Income Taxes (5,156 ) (2,292 ) (7,448 ) (9,141 ) (1,813 ) (10,954 ) Provision for Income Taxes (206 ) - (206 ) (213 ) - (213 ) Net Loss (5,362 ) (2,292 ) (7,654 ) (9,354 ) (1,813 ) (11,167 ) Series A Dividend 50 - 50 150 - 150 Series D Deemed Dividend - - - - 2,009 2,009 Net Loss Attributable to Common Stock Holders $ (5,412 ) $ (2,292 ) $ (7,704 ) $ (9,504 ) $ (3,822 ) $ (13,326 ) Basic and Diluted Net Loss per Share: Net Loss $ (1.67 ) $ (0.96 ) $ (2.63 ) $ (3.26 ) $ (0.99 ) $ (4.25 ) Net Loss Attributable to Common Stock Holders $ (1.69 ) $ (0.96 ) $ (2.65 ) $ (3.31 ) $ (1.76 ) $ (5.07 ) Weighted Average Shares Outstanding - Basic and Diluted 3,206,063 (295,924 ) 2,910,139 2,868,089 (239,176 ) 2,628,913 Three Months Ended October 1, 2016 Nine Months Ended October 1, 2016 Previously As Previously As Reported Adjustments Restated Reported Adjustments Restated Revenue $ 45,950 $ - $ 45,950 $ 135,423 $ - $ 135,423 Gross Profit 8,405 - 8,405 23,621 - 23,621 SG&A 7,795 122 7,917 24,102 92 24,194 Depreciation 727 - 727 2,059 - 2,059 Total Operating Expenses 8,522 122 8,644 26,161 92 26,253 Loss From Operations (117 ) (122 ) (239 ) (2,540 ) (92 ) (2,632 ) Other Expenses (1,234 ) - (1,234 ) (3,420 ) - (3,420 ) Loss Before Provision for Income Taxes (1,351 ) (122 ) (1,473 ) (5,960 ) (92 ) (6,052 ) Benefit from (Provision for) Income Taxes 375 - 375 (260 ) - (260 ) Net Loss (976 ) (122 ) (1,098 ) (6,220 ) (92 ) (6,312 ) Non-Controlling Interest - - - (37 ) - (37 ) Net Loss Before Preferred Share Dividends (976 ) (122 ) (1,098 ) (6,257 ) (92 ) (6,349 ) Series A Dividend 50 - 50 150 - 150 Series D Deemed Dividend - 927 927 - 1,660 1,660 Net Loss Attributable to Common Stock Holders $ (1,026 ) $ (1,049 ) $ (2,075 ) $ (6,407 ) $ (1,752 ) $ (8,159 ) Basic and Diluted Net Loss per Share: Net Loss $ (0.64 ) $ (0.13 ) $ (0.77 ) $ (2.17 ) $ (3.10 ) $ (5.27 ) Net Loss Attributable to Common Stock Holders $ (0.67 ) $ (0.78 ) $ (1.45 ) $ (2.23 ) $ (4.58 ) $ (6.81 ) Weighted Average Shares Outstanding - Basic and Diluted 1,529,481 (102,543 ) 1,426,938 2,868,089 (1,670,409 ) 1,197,680 Nine Months Ended September 30, 2017 Nine Months Ended October 1, 2016 Previously As Previously As Reported Adjustments Restated Reported Adjustments Restated Net Loss $ (9,354 ) $ (1,813 ) $ (11,167 ) $ (6,220 ) $ (92 ) $ (6,312 ) Adjustments to reconcile net loss to net cash Provided by (used in) operating activities: Non-cash addbacks 10,529 1,978 12,507 4,265 92 4,357 Changes in operating assets and liabilities (3,962 ) (153 ) (4,115 ) 2,742 - 2,742 Net cash (used in) provided by operating activities (2,787 ) 12 (2,775 ) 787 - 787 Net cash used in investing activities (22,080 ) 1,094 (20,986 ) (1,855 ) 104 (1,751 ) Net cash provided by financing activities 29,599 (1,106 ) 28,493 1,433 (104 ) 1,329 Net increase in cash 4,732 - 4,732 365 - 365 Foreign currency translation (2 ) - (2 ) - - - Cash - beginning of period 650 - 650 991 - 991 Cash - end of period $ 5,380 $ - $ 5,380 $ 1,356 $ - $ 1,356 |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Loss Per Common Share | NOTE 4 – LOSS PER COMMON SHARE The Company utilizes the guidance per ASC 260, “Earnings per Share”. Basic earnings per share are calculated by dividing income available to stockholders by the weighted average number of common stock shares outstanding during each period. Our Series A preferred stock holders (related parties) receive certain dividends or dividend equivalents that are considered participating securities and our earnings (loss) per share is computed using the two-class method. For the period ended September 30, 2017 and October 1, 2016, pursuant to the two-class method, as a result of the net loss, losses were not allocated to the participating securities. 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, convertible notes 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 September 30, 2017 and October 1, 2016 have been excluded from the per share computations, since their inclusion would be anti-dilutive: September 30, October 1, 2017 2016 Convertible bonds - Series B — 1,155 Convertible promissory notes — 428,215 Convertible preferred shares 43,239 118,438 Warrants 932,234 16,753 Restricted shares - unvested 463,052 77,322 Long term incentive plan (LTIP) 178,728 178,728 Options 122,400 62,760 Total 1,739,653 883,371 As of October 1, 2016, convertible preferred shares include the Company’s Series D Preferred Stock which contained both a fixed and variable conversion feature that fluctuated with the Company’s stock price. In addition, other restrictions prevented the holders from converting all of the Series D Preferred Stock at the same time. As a result, the Company could not estimate the exact amount of shares of common stock the Series D Preferred Stock could be converted into at any time. As a result, only the fixed portion of the conversion features were included in the amounts above. The Series D Preferred Stock contained beneficial conversion features; a portion was quantifiable at the date of issuance in the amount of $615, which was recognized immediately due to the immediate convertibility of the Series D Preferred Stock and that it had no true redemption date. The additional beneficial conversion feature was quantifiable only at the date of each subsequent conversion. Both beneficial conversion features represent additional value to the holders not known at the date of issuance. As such, they represent a dividend on the Series D Preferred Stock and recorded as a Deemed Dividend. These Deemed Dividends are presented on the Statement of Operations for purposes of calculating Earnings Per Share only and have no net impact on Shareholders’ Deficit. In April 2017, the Company entered into an agreement with Holders of the Series D Preferred shares to redeem the remaining 62 shares of Series D Preferred Stock and terminate all future conversion rights, in return for $1,500 in cash and 60,000 shares of common stock. Deemed Dividends recorded were $0 and $2,009 for the three and nine months ended September 30, 2017, respectively, and $927 and $1,660 for the three and nine months ended October 1, 2016, respectively. |
ACCOUNTS RECEIVABLE BASED FINAN
ACCOUNTS RECEIVABLE BASED FINANCING FACILITIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounts Receivable Based Financing Activities [Abstract] | |
Accounts Receivable Based Financing Facilities | NOTE 5 – ACCOUNTS RECEIVABLE BASED FINANCING FACILITIES On September 15, 2017, the Company entered into an amendment with Midcap Financial Trust, pertaining to its accounts receivable based lending facility. The amendment maintains a total facility of $25,000, with an accordion for an additional $25,000, and interest of LIBOR plus 400 basis points with a LIBOR floor of 100 basis points. The amendment also provides for incremental borrowing against the Company’s unbilled receivables up to 85%, with a borrowing cap of $1,300, of such eligible receivables. In conjunction with closing of the Jackson Note, the Midcap Additional Term Loan was repaid in full. In conjunction with the closing of the Jackson Note, the Company’s accounts receivable based lending facility with Sterling National Bank was closed. HSBC Invoice Finance (UK) Ltd CBS Butler had a revolving accounts receivable financing arrangement with HSBC Invoice Finance (UK) Ltd “HSBC”. The facility, whose maximum capacity was £8,500, had an original expiration of January 2011, and provided for termination by either party with 90 days’ notice. Under the arrangement, CBS Butler could borrow against eligible short-term trade receivables in exchange for cash and a subordinated interest. The Company would receive cash equal to approximately 90% (varies slightly by geographical location of the receivable) of the value of the eligible receivables. HSBC Invoice Finance (UK) Ltd – New Facility On February 8, 2018, CBS Butler, Longbridge and The JM Group, entered into a new arrangement with HSBC which provides for HSBC to purchase the subsidiaries’ accounts receivable up to an aggregate amount of £11,500 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 (within the overall aggregate total facility of £11,500). The arrangement has an initial term of 12 months, with an automatic rolling three-month extension and carries a service charge of 1.80%. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 6 – DEBT September 30, 2017 December 31, 2016 Bonds: Bonds - Series B $ — $ 50 Convertible Notes: Non-interest Bearing Convertible Note (January 6, 2016) — 359 Non-interest Bearing Convertible Note (September 10, 2016) — 477 8% Convertible Note (July 8, 2015) — 1,960 8% Convertible Note (February 8, 2016) — 728 Lighthouse- Seller Note #1 — 1,874 Lighthouse - Seller Note #2 — 234 Promissory Notes: Staffing (UK) - Seller Note — 112 PeopleServe - Seller Note — 329 Term Loans: Jackson Investment Group - related party 40,000 — Midcap Financial Trust — 2,025 ABN AMRO 377 694 Sterling National Bank — 168 Total Debt 40,377 9,010 Less Debt Discount and Deferred Financing Costs (1,380 ) (1,374 ) Total Debt, Net 38,997 7,636 Less: Current Portion, Net (367 ) (3,639 ) Total Long-Term Debt, Net $ 38,630 $ 3,997 Series B Bonds In April 2017, these bonds were paid in full. During the period ended October 1, 2016, the Company paid $689 in principal. Non-interest Bearing Convertible Note (January 6, 2016) This note was paid in full in January 2017. Non-interest Bearing Convertible Note (September 10, 2016) On September 10, 2016, the Company entered into a non interest bearing convertible note for $477, whereby the Company received cash of $400. This note was due to mature in March 2017. In March 2017, the Company extended the note to September 2017 with a new maturity value of $565. The Company paid this in full on September 18, 2017. Non-interest Bearing Convertible Note (April 11, 2017) On April 11, 2017, the Company entered into a non-interest bearing convertible note for $477, whereby the Company received cash of $400, maturing in October 2017. The Company paid this in full on September 18, 2017. 8% Convertible Note (July 8, 2015) and 8% Convertible Note (February 8, 2016) On January 3, 2017, the Company entered into an amendment agreement pursuant to which, the parties refinanced an aggregate amount of $2,688 of indebtedness and extended all amortization payments for the two 8% convertible notes dated July 8, 2015 and February 8, 2016 (collectively, the “Amendment”) to October 1, 2018, which was approximately 21 months from the date of the refinancing. The Amendment had a new face value of $3,126, and an 8% interest rate per annum, with no interest payments due until October 1, 2017, payable quarterly thereafter, and an overall term of 21 months with principal due at maturity. The Amendment was convertible into shares of common stock at a price of $15.00 per share at holder’s election, and the holder agreed to eliminate the 20% pre-payment penalty for an early redemption. In connection with the refinancing, the Company issued the holder 120,000 shares of common stock, valued at $498. The Amendment resulted in the extinguishment of the old notes of $2,688 and recording of the new debt and debt issue costs. The Company recorded a $870 loss upon extinguishment. On January 26, 2017, the Amendment was paid in full resulting a loss of $498. During the period ended October 1, 2016, the Company paid $980 in principal on the 8% Convertible Note (July 8, 2015) note. Lighthouse Seller Note #1 During the period July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016, the Company paid $1,624 and $125 in principal, respectively. During the period January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016, the Company paid $1,874 and $375 in principal, respectively. The Company paid this in full on September 18, 2017. Lighthouse Seller Note #2 During the period July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016, the Company paid $78 and $78 in principal, respectively. During the period January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016, the Company paid $234 and $234, respectively. Staffing (UK) – Sellers Note The Company paid this note in full in January 2017. PeopleSERVE – Sellers Note During the period from July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016, the Company paid $0 and $197 in principal, respectively. During the period from January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016, the Company paid $329 and $592 in principal, respectively. Jackson Investment Group Term Loan Note #1 On January 26, 2017, the Company entered into a note and warrant purchase agreement with Jackson for $7,400. Under the terms of this agreement, the Company issued to Jackson 330,000 shares of common stock and a warrant to purchase up to 630,000 shares of common stock at an initial exercise price of $6.75 per share (the “Warrant”). The note accrues interest on the principal amount at a rate of 6% per annum and has a maturity date of July 25, 2018. No interest or principal is payable until maturity. At any time during the term of the note, upon notice to Jackson, the Company may also, at its option, redeem all or some of the then outstanding principal amount of the note by paying to Jackson an amount not less than $100 of the outstanding principal (and in multiples of $100), plus any accrued but unpaid interest and liquidated damages and other amounts due under the note. The note’s principal is not convertible into shares of common stock; however 50% of the accrued interest on the note may be converted into shares of common stock, at the sole election of Jackson at maturity or upon prepayment by the Company, at a conversion price equal to $10.00 per share. On March 14, 2017, the Company and Jackson amended the warrant to include a blocker preventing Jackson from owning more than 19.99% of the Company’s shares outstanding as of January 26, 2017, until such ownership is approved by the shareholders consistent with Nasdaq Rule 5635(b). On June 15, 2017, our stockholders approved the issuance of shares of the Company’s common stock under the warrant to Jackson that may result in Jackson owning in excess of 19.99% of the Company’s outstanding shares. The warrant is exercisable beginning on July 25, 2017 for a term of four and a half (4.5) years thereafter. The exercise price is 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 Company has accounted for these warrants as a liability under ASC 815-40 due to certain anti-dilution protection provisions. The Company paid this note in full on September 18, 2017 and entered in a new note with Jackson (refer to “Jackson Note – Related Party”). Jackson Investment Group Term Loan Note #2 On April 5, 2017, the Company amended the note and warrant purchase agreement with Jackson and entered into a second subordinated secured note with Jackson for $1,650. Under the terms of this amended agreement, the Company issued to Jackson 59,397 shares of common stock, with an additional 74,184 shares of common stock that was issued after obtaining shareholder approval for issuance of shares to Jackson in excess of the 19.99% limit in June 2017. Also on April 5, 2017, the Company amended the Warrant to allow Jackson to purchase up to an additional 275,508 shares of common stock (subject to the same shareholder approval for issuance of shares to Jackson in excess of the 19.99% limit), modified the initial exercise price of the Warrant to $5.00 per share and modified the conversion price of accrued interest on the note issued to Jackson in January 2017 to $7.50. The Warrant was also amended to increase the amount of common stock issuable to Jackson pursuant to the anti-dilution clause contained therein. The second note accrues interest on the principal amount at a rate of 6% per annum and has a maturity date of June 8, 2019; however, in the event the Company satisfies all of its outstanding obligations with Midcap Financial Trust, the maturity date will be adjusted to July 25, 2018. No interest or principal is payable on the second note until maturity. At any time during the term of the second note, upon notice to Jackson, the Company may also, at its option, redeem all or some of the then outstanding principal amount of the note by paying to Jackson an amount not less than $100 of the outstanding principal (and in multiples of $100), plus any accrued but unpaid interest and liquidated damages and other amounts due under the note. The second note’s principal is not convertible into shares of common stock; however, 50% of the accrued interest on the second note can be converted into shares of common stock, at the sole election of Jackson at maturity or in the event of a prepayment by the Company, at a conversion price equal to $7.50 per share. The proceeds of this transaction were used to redeem the remaining shares and conversion rights of the Series D Preferred Stock. The Company has accounted for these warrants as a liability under ASC 815-40 due to certain anti-dilution protection provisions. The Company has recorded a liability of $2,303 at September 30, 2017. The Company paid this note in full on September 18, 2017 and entered into a new note with Jackson (refer to “Jackson Note – Related Party”) Jackson Investment Group Term Loan Note #3 In August 2017, the Company entered into a promissory note with Jackson for $1,600, with a term of 60 days at interest of 10% per annum and in return for 32,000 shares of common stock. The proceeds of the note were used to fund the satisfaction of a judgment entered in the matter of Staffing 360 Solutions, Inc. v. Former Officers of Staffing 360 Solutions, Inc. The Company paid this in full on September 18, 2017 and entered into a new note with Jackson (refer to “Jackson Note – Related Party”). Jackson Investment Group Term Loan Note #4 On September 1, 2017, the Company entered into a promissory note with Jackson for $515, with a term of 31 days at interest of 12% per annum. The proceeds of the note were used to fund other debt obligations. The Company paid this in full on September 18, 2017 and entered into a new note with Jackson (refer to “Jackson Note – Related Party”). Jackson Note – Related Party On September 15, 2017, the Company entered into a $40,000 note agreement with Jackson. The proceeds of the sale of the secured note will 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 Firstpro Acquisition and the CBS Butler Acquisition and repay certain other outstanding indebtedness of the Company. The maturity date for the amounts due under the Jackson Note is September 15, 2020. The 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. Interest on any overdue payment of principal or interest due under the Jackson Note will accrue at a rate per annum that is 5% in excess of the rate of interest otherwise payable thereunder. The Company paid a closing fee of $1,000 in connection with its entry into the A&R Note Purchase Agreement and agreed to issue 450,000 shares of the Company’s common stock as a closing commitment fee. These shares are subject to registration rights in favor of Jackson which was included in a new resale registration statement which was filed by the Company on November 1, 2017. The Jackson Note resulted in the extinguishment of the old notes of $11,165 and recording of the new debt of $40,000 at fair value. The Company recorded $4,764 loss upon extinguishment of debt, and deferred debt issuance costs of $1,385 to be amortized over the term of the new loan. Immediately prior to closing the Jackson Note, Jackson owned 526,697 shares of common stock and 905,508 warrants. The Jackson Note includes customary covenants including a leverage ration covenant. The threshold for this covenant assumed that the UK borrowing facilities would be treated as a sale of receivables. However, the refinancing of the UK facilities was not completed until February 2018. As such, Jackson permitted the Company to calculate the leverage ratio as of September 30, 2017, on a pro forma basis as if the UK facilities were indeed treated consistent with the covenant threshold, which kept the Company in compliance with such covenant. Midcap Financial Trust – Term Loan During the period July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016, the Company paid $1,425 and $113 in principal, respectively. During ABN AMRO Term Loan During the period July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016, the Company paid $119 and $131 in principal, respectively. On March 29, 2017, Longbridge Recruitment 360 Limited and The JM Group each received a reservation of rights letter from ABN AMRO bank with respect to technical noncompliance with certain financial covenants contained in their financing documents with the bank. There was no financial impact of receiving this letter. During the period from January 3, 2016 to October 1, 2016, the Company borrowed an additional 219. Since payments on this term loan are denominated in GBP, the Company is subject to foreign exchange changes. Sterling National Bank Promissory Note During the period ended July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016, the Company paid $70 and $44 in principal, respectively. During the period January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016, the Company paid $168 and $126 in principal, respectively. The Company paid this note in full on September 18, 2017 with the funding received from the Jackson Note. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Equity | NOTE 7 – EQUITY Common Stock The Company issued 2,009,805 shares of common stock during the period ended September 30, 2017 as summarized below: Shares issued to/for: Number of common shares issued Fair Value of shares issued Fair Value at Issuance (per share) Conversion of Series D Preferred Stock 394,600 $ 972 $ 2.80 $ 3.80 Jackson Investment Group 945,581 2,527 2.75 3.70 Employees 338,240 408 2.75 4.70 Extension of convertible notes 120,000 498 4.15 4.15 CBS Butler Acquisition 100,000 430 4.30 4.30 Board and Committee members 44,900 166 3.10 4.70 At-the-Market Facility 61,984 208 3.15 3.50 Consultants 4,500 20 3.50 4.70 2,009,805 $ 5,229 As of December 31, 2016, the Company’s authorized common stock consists of 20,000,000 shares having par value of $0.00001. Effective January 26, 2017, after obtaining shareholder approval, the Company amended its Articles of Incorporation to increase the number of authorized shares of common stock from 20,000,000 shares to 40,000,000 shares. The Company had issued and outstanding 3,837,764 and 1,827,959 shares of common stock as of September 30, 2017 and December 31, 2016, respectively. In May 2017, using its effective shelf registration on Form S-3 (No. 333-208910), 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. Subsequent to period end and through to June 2018, the Company had sold 300,501 shares of common stock under this program at a value of $874. 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 vest after three years from issuance. As of September 30, 2017, the Company has a total of 463,053 Convertible Preferred Shares Series A Preferred Stock – Related Party In the quarter ended September 30, 2017, the Company paid $515 in dividends to its Series A preferred stock holders. Series D Preferred Stock On June 24, 2016, the Company entered into a Securities Purchase Agreement with certain purchasers pursuant to which the Company sold to the purchasers 211 shares of the Company’s Series D Preferred Stock at a face value of $10 (whole dollars) per share of Series D Preferred, and Original Issue Discount of 5% and a conversion price into common stock of $2.50 per share, for aggregate proceeds of approximately $2,000 before placement fees and estimated offering expenses. The offering of the Series D Preferred Stock was made under the Company’s Shelf Registration. Due to the contingent nature of the cash redemption feature of the Series D Preferred Stock, the Company has classified the shares as mezzanine equity on the consolidated balance sheets. During the period ended October 1, 2016, holders of this series converted 118 shares of Series D Preferred Stock to 268,192 shares of common stock. During the period ended September 30, 2017, holders converted an additional 31 shares of Series D Preferred Stock to 334,600 shares of common stock. The Series D Preferred Stock contained beneficial conversion features; a portion was quantifiable at the date of issuance in the amount of $615, which was recognized immediately due to the immediate convertibility of the Series D Preferred Stock and that it had no true redemption date. The additional contingent beneficial conversion feature was quantifiable only at the date of each subsequent conversion. Both beneficial conversion features represent additional value to the holders. As such, they represent a dividend on the Series D Preferred Stock and recorded as a Deemed Dividend. These Deemed Dividends are presented on the Statement of Operations for purposes of calculation Earnings Per Share only and have no net impact on Shareholders’ Deficit. Deemed Dividends recorded were $0 and $2,009 for the three and nine months ended September 30, 2017, respectively, and $927 and $1,660 for the three and nine months ended October 1, 2016, respectively. On April 5, 2017, the Company entered into an agreement with holders of the Series D Preferred shares to redeem the remaining 62 shares of Series D Preferred Stock and terminate all future conversion rights, in return for $1,500 in cash and 60,000 shares of common stock. 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 is 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 classified the Warrant as a liability. On April 5, 2017, the Company amended the Warrant and entered into a second subordinated secured note with Jackson for $1,650. Under the terms of the amended Warrant, Jackson may purchase up to an additional 275,508 shares of common stock On September 15, 2017, the Company issued 20,000 three-year cashless warrants with an exercise price of $5.00 valued at $28. Transactions involving the Company’s warrant issuances are summarized as follows: Number of shares Weighted Average Price Per Share Outstanding at December 31, 2016 6,726 $ 97.62 Issued 925,508 5.00 Exercised — — Expired or cancelled — — Outstanding at September 30, 2017 932,234 $ 5.67 Stock Options 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. 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 and stock option awards. During the period ended September 30, 2017 the Company issued to employees and consultants, 387,640 shares and 62,700 options, with an exercise price of $6.75 per share to purchase shares of common stock, and therefore has 49,660 remaining under this plan. The fair value of stock options granted was estimated at the date of grant using the Black-Scholes option pricing model. The Company used the following assumptions for determining the fair value of options granted under the Black-Scholes option pricing model: Exercise price $ 6.75 Market price at date of grant $ 3.10 Volatility 99.38 % Expected dividend rate — Expected term (years) 5 Risk-free interest rate 1.93 % During the three months ended September 30, 2017 and October 1, 2016, the Company recorded stock compensation expense of $96 and $90, respectively, in connection with all options outstanding. During the nine months ended September 30, 2017 and October 1, 2016, the Company recorded stock compensation expense of $283 and $270, respectively, in connection with all options outstanding. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 8 – COMMITMENTS AND CONTINGENCIES Earn-out Liabilities and Stock Value Guarantees Pursuant to the acquisition of Control Solutions International, Inc. (“CSI”), the purchase price includes monthly cash payments to the former owners and shareholders of CSI for performance-based compensation equal to 20% of CSI’s consolidated gross profit from the date of closing through the end of the sixteenth quarter following the date of closing not to exceed a total of $2,100. During the period ended September 30, 2017 and October 1, 2016, the Company paid $68 and $104, respectively, towards the earn-out liability. This accrual is related to the matter of NewCSI, Inc. vs. Staffing 360 Solutions, Inc. Pursuant to the acquisition of The JM Group, the purchase price includes a cash payment to the shareholders for performance-based compensation of (a) £850 if the gross profit for the 12 month period ending on the anniversary date of the date of completion (the “Anniversary TTM Gross Profit”) is equal to 90% or more of the gross profit for the twelve months ending October 31, 2015 (the “Completion TTM Gross Profit”); or (b) if the Anniversary TTM Gross Profit is less than 90% of the Completion TTM Gross Profit, a sum equal to £850 multiplied by the Anniversary TTM Gross Profit/Completion TTM Gross Profit. The Company recorded the maximum contingent liability amount of £850 ($1,180). At December 31, 2016, the remaining balance was $1,026 and was recorded in other current liabilities. While unpaid, the balance accrued interest at 10.25% per annum. The balance was paid in full in January 2017. Legal Proceedings NewCSI, Inc. vs. Staffing 360 Solutions, Inc. On May 22, 2014, NewCSI, Inc. (“NewCSI”), the former owners of Control Solutions International, filed a complaint in the United States District Court for the Western District of Texas, Austin Division, against the Company arising from the terms of the Stock Purchase Agreement dated August 14, 2013 between the Company and NewCSI. NewCSI claims that the Company breached a provision of the Stock Purchase Agreement (“SPA § 2.7”) that required the Company to calculate and pay to NewCSI 50% of certain “Deferred Tax Assets” within 90 days after December 31, 2013, subject to certain criteria. The Complaint sought payment of the amount allegedly owed under SPA § 2.7 and acceleration of earn-out payments provided for in the Stock Purchase Agreement of $1,400, less amounts paid to date, and attorneys’ fees. The Company responded denying the material allegations and interposing numerous affirmative defenses. On October 8, 2014, NewCSI filed a Motion of Summary Judgment (the “Motion”). On March 30, 2015, a Magistrate Judge of the District Court issued a Report and Recommendation that the District Court deny the Motion. The Recommendation became a final decision on April 13, 2015. On December 31, 2014, NewCSI filed an amended complaint to which NewCSI added an additional count asserting an “Adjustment Event” had occurred requiring an acceleration of earn-out payments provided for in the CSI Stock Purchase Agreement of $2,100, less amounts paid as of December 31, 2014 totaling $429 (balance of $1,671 at December 31, 2014), should the Company or CSI “be unable, or admit in writing its inability, to pay its debts as they mature.” The Company responded denying the material allegations and interposing numerous affirmative defenses, including that the earn-out liability was fully expensed at the time of the acquisition and fully accrued for on the Company’s balance sheet as part of the purchase accounting at the time of the acquisition. The final pretrial conference in this matter was held April 22, 2015. A jury was selected on May 14, 2015, and the trial was held May 18-20, 2015. On May 20, 2015, the jury rendered a verdict, finding that the Company had not complied with SPA § 2.7 and owed $154, but that NewCSI had not proven that the Company or CSI had become unable to pay debts as they came due. The Court had held that it was not a question for the jury to decide if damages for breach of SPA § 2.7 should include accelerated earn-out payments. On June 3, 2015, NewCSI filed a Motion for Entry of Judgment as Matter of Law seeking entry of a judgment in the amount of $154, plus accelerated earn-out payments in the amount of $1,152, plus statutory interest. NewCSI did not challenge the jury verdict on the ability to pay issue. Also on June 3, 2015, the Company filed a Motion for Entry of Judgment as a Matter of Law seeking entry of judgment against NewCSI on the jury’s finding that the Company had not complied with SPA § 2.7, or, in the alternative, for a reduction of damages to $154 and to hold that NewCSI may not be awarded accelerated earn-out payments as that would result in an illegal penalty. On October 21, 2015, judgment was entered in this action in favor of NewCSI and against the Company in the amount of $1,307, plus pre-judgment interest, post-judgment interest, and costs. On January 26, 2016, the District Court set the bond in respect of the NewCSI litigation at $1,384. The Company has filed a notice of appeal to the United States Court of Appeals for the Fifth Circuit (“Appellate Court”) seeking reversal of the judgment and posted a supersedeas bond to stay the execution of the judgment pending appeal. On April 18, 2016, the Court granted the NewCSI shareholders’ request for payment of attorneys’ fees, but reserved judgment on the amount of fees to award pending the outcome of the Company’s appeal. As of January 2016, the NewCSI shareholders have claimed they have incurred $552 in attorney’s fees, which could increase during the pendency of the appeal. On November 3, 2016, oral arguments for the appeal were heard and on July 26, 2017, the Appellate Court affirmed the trial Court’s decision. On August 29, 2017 the surety company released the supersedeas bond to the New CSI shareholders’ counsel, which was approximately $5 less than the judgment amount with accumulated interest. Payment of this remaining balance has been made subsequent to period end. The amount of the legal fee award was left for final determination by the trail court. On September 29, 2017 NewCSI filed a Supplemental Motion in the United States District Court for the Western District of Texas, Austin Division, seeking $629 in attorneys’ fees. The Company opposed this motion but the magistrate judge issued a report and recommendation on November 17, 2017 recommending an award of fees in the amount of $606. The Company has filed an objection with the trial judge to the magistrate’s report and recommendation and awaits a ruling. The Company has fully reserved the amount of the magistrate’s report and recommendation. On May 30, 2018 the trial judge issued an order adopting the report and recommendation of the magistrate judge and awarding NewCSI the amount of $606 in legal fees, plus interest at the statutory rate. The Company intends to pay $607 in full settlement of this matter in June 2018. Staffing 360 Solutions, Inc. v. Former Officers of Staffing 360 Solutions, Inc. On November 13, 2015, in a separate proceeding, Staffing 360 initiated an arbitration before JAMS entitled Staffing 360 Solutions, Inc. v. Former Officers of Staffing 360 Solutions, Inc. On July 20, 2016, the arbitrator decided in favor of both of the respondents’ motions. Further on September 21, 2016 the arbitrator rendered the final award, which was set at $1,433. The former officers brought an action in US District Court in New York City under the caption Dealy et al., v. Staffing 360 Solutions, Inc. . |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2017 | |
Segments Geographical Areas [Abstract] | |
Segment Reporting Disclosure | NOTE 9 – SEGMENTS The Company’s operating segments, which are consistent with its reportable segments, are organized by geography in accordance with its internal management and reporting structure. For the period ended September 30, 2017 and October 1, 2016, the Company generated revenue and gross profit by segment as follows: July 2, 2017 to September 30, 2017 July 3, 2016 to October 1, 2016 January 1, 2017 to September 30, 2017 January 3, 2016 to October 1, 2016 United States $ 37,830 $ 38,845 $ 107,441 $ 112,557 United Kingdom 12,452 7,074 25,634 22,790 Canada 63 31 99 76 Total Revenue $ 50,345 $ 45,950 $ 133,174 $ 135,423 United States $ 7,033 $ 6,815 $ 19,441 $ 18,842 United Kingdom 2,523 1,581 5,352 4,744 Canada 21 9 34 35 Total Gross Profit $ 9,577 $ 8,405 $ 24,827 $ 23,621 Selling, general and administrative expenses, excluding depreciation and amortization stated below $ (8,800 ) $ (7,917 ) $ (22,362 ) $ (24,194 ) Depreciation and amortization (790 ) (727 ) (2,310 ) (2,059 ) Interest expense (761 ) (615 ) (1,843 ) (2,007 ) Amortization of beneficial conversion feature — (183 ) — (550 ) Amortization of debt discount and deferred financing costs (1,212 ) (401 ) (2,610 ) (1,310 ) Loss on extinguishment of debt, net (4,764 ) — (6,132 ) — Change in fair value of warrants (688 ) — (493 ) — Gain on settlement of warrants — — — 485 Other expense (10 ) (35 ) (31 ) (38 ) Loss Before Provision for Income Tax $ (7,448 ) $ (1,473 ) $ (10,954 ) $ (6,052 ) As of September 30, 2017, and December 31, 2016, the Company has assets in the U.S., the U.K. and Canada as follows: September 30, December 31, 2017 2016 United States $ 60,795 $ 44,990 United Kingdom 33,261 8,936 Canada 69 31 Total Assets $ 94,125 $ 53,957 |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | NOTE 10 - ACQUISITIONS Based upon a preliminary valuation, the Company recorded the following identifiable intangible assets in connection with the acquisition of FirstPro and CBS Butler: CBS Butler FirstPro Goodwill (1) $ 13,754 $ 3,829 Intangible assets Tradenames $ 1,123 $ 35 Non-compete 150 193 Customer Relationships 4,473 3,136 $ 5,746 $ 3,364 (1) Goodwill amounts are shown net of adjustments of $811 and $702 for CBS Butler and FirstPro, respectively, for discounting of deferred payment and earnouts and other purchases accounting adjustments. In connection with the acquisition of CBS Butler and FirstPro, the Company performed a preliminary valuation of identifible intangible assets of $5,746 and $3,364, respectively, representing trade names, customer relationships, and non-compete agreements. These assets are being amortized on a straight line basis over their weighted average estimated useful life of 10 years. The Company acquired a total of $8,527 in receivables and fair value of these receivables equals the contract value. The Company finalized its’ purchase price allocation during the fourth quarter of 2017. The following unaudited pro forma consolidated results of operation have been prepared, as if the acquisition of FirstPro and CBS Butler had occurred as of January 1, 2016: July 2, 2017 to September 30, 2017 July 3, 2016 to October 1, 2016 January 1, 2017 to September 30, 2017 January 3, 2016 to October 1, 2016 Revenues $ 63,854 $ 66,944 $ 184,995 $ 201,611 Net loss from continuing operations (7,837 ) (1,311 ) (11,674 ) (8,468 ) The Company recorded $6,768 in revenues that came from the acquisitions completed during the quarter. |
OTHER RELATED PARTY TRANSACTION
OTHER RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Other Related Party Transactions | NOTE 11 – OTHER RELATED PARTY TRANSACTIONS Consulting Fees – Related Party Board and Committee Members During the period from July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016, the Company incurred $19 and $13, respectively, in board of director fees to Dimitri Villard. During the period from January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016, the Company incurred $50 and $38, respectively, in board of director fees to Dimitri Villard. During the period from January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016, Mr. Villard also received 1,700 and 1,200 shares of common stock valued at $6 and $15, respectively for his services as a board and committee member. During the period ended September 30, 2017, Mr. Villard received 13,200 shares valued at $54 as a bonus. These shares vest over a three year period and as such the Company has recognized expense of $56 and $42 during the period ended September 30, 2017 and period ended October 1, 2016, respectively. 0 During the period from July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016, the Company incurred $ 19 1,700 and 1,200 shares of These shares vest over a three year period and as such the Company has recognized expense of $56 and $42 during the period ended September 30, 2017 and period ended October 1, 2016, respectively. During the period from July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016, the Company incurred $19 and $13, respectively, 1,900 These shares vest over a three year period and as such the Company has recognized expense of $54 and $41 during the period ended September 30, 2017 and period ended October 1, 2016, respectively. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION January 1, 2017 to September 30, 2017 January 3, 2016 to October 1, 2016 Cash paid for: Interest $ 1,827 $ 1,559 Income taxes 140 132 Non Cash Investing and Financing Activities: Shares issued in connection with convertible note $ 498 $ — Shares issued in connection with Jackson term loan 2,527 — Warrants issued in connection with Jackson term loan 2,303 — Shares issued in connection with Series D payoff 208 — Shares issued in connection with CBS Butler acquisition 430 — Deemed Dividends 2,009 1,660 Dividends - Series A preferred stock - related party — 150 Conversion of a convertible note payable — (1,066 ) Shares issued in connection with convertible notes — 315 Shares issued in connection with promissory notes — 65 CSI earnout (payment with surety bond) 1,405 — |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 – SUBSEQUENT EVENTS Where applicable, all material subsequent events have been disclosed in their respective Notes to these financial statements except as follows: The Company performed its annual goodwill impairment testing as of October 1, 2017 and recognized an impairment with respect to its PeopleServe reporting unit of $4,790, fully impairing the goodwill of this reporting unit. The impairment resulted from a continued decline in that reporting unit’s revenue which has lower margin than other reporting units. To determine the impairment, 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. Under ASU 2017-04, which the Company early adopted, the impairment amount represents the excess of the carrying value over the fair value of the reporting unit. In June 2018, the Company divested its PeopleServe business for an estimated net proceeds of $1,700. The final net proceeds are subject to a net working capital true up. |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation These condensed consolidated financial statements and related notes are presented in accordance with generally accepted accounting principles in the United States (“GAAP”), expressed in U.S. dollars. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with the GAAP. This filing includes unaudited condensed consolidated financial statements for the period January 1, 2017 to September 30, 2017 that have been restated, please refer to Note 3 for further details. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the transition period ended December 31, 2016 and for the years ended May 31, 2016 and 2015, which are included in the Company’s December 31, 2016 Form 10-KT, as amended, filed with the United States Securities and Exchange Commission on April 12, 2017. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited consolidated financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the period ended September 30, 2017 are not necessarily indicative of results for the entire year ending December 30, 2017. The accompanying condensed consolidated financial statements have been prepared on a going concern basis which implies the Company will continue to meet its obligations for the next 12 months as of the date these financial statements are issued. On September 15, 2017, the Company completed financing of a $40,000 term loan with Jackson Investment Group, LLC, which among other outcomes, significantly alters the Company’s debt service obligations prospectively. The Company believes it can meet its obligations in the next 12 months from the date these financial statements are issued. |
Acquisitions | Acquisitions On September 15, 2017, Staffing 360 Georgia, LLC (“Staffing Georgia”), a wholly-owned subsidiary of the Company entered into an asset purchase agreement with Firstpro Inc. (“FPI”), Firstpro Georgia, LLC (“FPL”), and certain individuals, pursuant to which the FPI and FPL sold substantially all of their assets to Staffing Georgia (“ Firstpro Acquisition”) On September 15, 2017, the Company and Longbridge Recruitment 360 Limited (“Longbridge”), a wholly-owned subsidiary of the Company, entered into an agreement (“Share Purchase Agreement”) with the holders of share capital of CBS Butler Holdings Limited (“CBS Butler”) and an agreement (“Option Purchase Agreement”) with the holders of outstanding options of CBS Butler, pursuant to which the holders of the share capital of CBS Butler and holders of outstanding options of CBS Butler sold all of their shares and options of CBS Butler to Longbridge (the “ CBS Butler Acquisition”) (payable in December 2018, based upon CBS Butler’s operating performance during the period September 1, 2017 through August 31, 2018), To finance the above transactions, the Company entered into an agreement with Jackson Investment Group, LLC (“Jackson”) on September 15, 2017. The Company, as borrower, and certain domestic subsidiaries of the Company, as guarantors, entered into an amended and restated note purchase agreement with Jackson, as lender (the “A&R Note Purchase Agreement”), pursuant to which Jackson made a senior debt investment of $40,000 in the Company in exchange for a senior secured note in the principal amount of $40,000 (the “Jackson Note”). The proceeds of the sale of the secured note were used to (i) repay the existing subordinated notes previously issued to Jackson in the aggregate principal amount of $11,165, (ii) to fund the upfront cash portion of the purchase price consideration of the Firstpro Acquisition and the CBS Butler Acquisition, (iii) to repay substantially all other outstanding indebtedness of the Company and (iv) general working capital purposes. The maturity date for the Jackson Note is September 15, 2020. The 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. Interest on any overdue payment of principal or interest due under the Jackson Note will accrue at a rate per annum that is 5% in excess of the rate of interest otherwise payable thereunder. The Company may prepay the amounts due on the Jackson Note in whole or in part from time to time, without penalty or premium, subject to the conditions set forth in the A&R Note Purchase Agreement, and such prepayments, depending on the timing of the prepayments, may result in a discount on the principal amount to be prepaid as set forth in the A&R Note Purchase Agreement. The Company paid a closing fee of $1,000 in connection with its entry into the A&R Note Purchase Agreement and agreed to issue 450,000 shares of the Company’s common stock as a closing commitment fee. These shares are subject to registration rights in favor of Jackson and were included in a new resale registration statement filed by the Company. In accordance with ASC 470 “Debt”, the Jackson Note resulted in the extinguishment of the old notes of $11,165 and recording of the new debt of $40,000 at fair value. The Company recorded $4,764 loss upon extinguishment of debt, and deferred debt issuance costs of $1,385 to be amortized over the term of the new loan. |
Change of Year End | Change of Year End On February 28, 2017, the Board of Directors of the Company (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 31st of December. In a 52 week fiscal year, each of the Company’s quarterly periods will comprise 13 weeks. In a 53 week fiscal year, one quarter will consist of 14 weeks. On April 12, 2017, the Company filed a transition report on Form 10-KT, as amended, covering the transition period June 1, 2016 through December 31, 2016. Annual reports on Form 10-K covering 52-53 week years will be filed thereafter. This filing includes comparative unaudited condensed consolidated financial statements for the period January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016. |
Reclassifications | Reclassifications Certain reclassifications have been made to conform the prior period data to the current presentations. In accordance with 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. These The Company has reclassified the Midcap Additional Term Loan from Long-term debt to Other long-term liabilities, as this represents the long term portion of funds received from the accounts receivable financing facility. These reclassifications had no impact on reported results of operations. The Company paid the Midcap Additional Term Loan in full on September 18, 2017. |
Income Taxes | Income Taxes The Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions in which the Company operates, to determine its quarterly provision for income taxes. Certain significant or unusual items are separately recognized in the quarter in which they occur and can be a source of variability in the effective tax rates from quarter to quarter. The Company’s effective tax rate may change from period to period based on recurring and non-recurring factors including the geographical mix of earnings, enacted tax legislation, state and local income taxes and tax audit settlements. The effective income tax rate for the period July 2, 2017 to September 30, 2017 and July 3, 2016 to October 1, 2016 was 4% and (37.6)%, respectively. The effective income tax rate for the period January 1, 2017 to September 30, 2017 and January 3, 2016 to October 1, 2016, was 2.3% and 4.3%, respectively. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment”. The amendments in this update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. The guidance is effective for annual periods fiscal years beginning after December 15, 2019. The Company early adopted this guidance during impairment testing performed on October 1, 2017. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”. The amendments in this update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact of adopting this guidance. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments”. The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. ASU 2016-15 is effective for the Company beginning in the first quarter of fiscal 2019. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. The Company is currently evaluating the impact of adopting this guidance. In March 2016, the FASB issued ASU 2016-09, “Stock Compensation”, regarding the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is to be applied for annual periods beginning after December 15, 2016 and interim periods within those annual periods, and early adoption is permitted. The guidance requires companies to apply the requirements retrospectively, modified retrospectively, or prospectively depending on the amendment(s) applied. The adoption of this standard had no material financial impact. In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842). This guidance will be effective for public entities for fiscal years beginning after December 15, 2018 including the interim periods within those fiscal years. Early application is permitted. Under the new provisions, all lessees will report a right-of-use asset and a liability for the obligation to make payments for all leases with the exception of those leases with a term of 12 months or less. All other leases will fall into one of two categories: (i) Financing leases, similar to capital leases, which will require the recognition of an asset and liability, measured at the present value of the lease payments and (ii) Operating leases which will require the recognition of an asset and liability measured at the present value of the lease payments. Lessor accounting remains substantially unchanged with the exception that no leases entered into after the effective date will be classified as leveraged leases. For sale leaseback transactions, the sale will only be recognized if the criteria in the new revenue recognition standard are met. The Company is currently evaluating the impact of adopting this guidance. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, which amends the guidance relating to the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this guidance. In September 2015, the FASB issued ASU 2015-16, “Simplifying the Accounting for Measurement–Period Adjustments”. Changes to the accounting for measurement-period adjustments relate to business combinations. Currently, an acquiring entity is required to retrospectively adjust the balance sheet amounts of the acquiree recognized at the acquisition date with a corresponding adjustment to goodwill as a result of changes made to the balance sheet amounts of the acquiree. The measurement period is the period after the acquisition date during which the acquirer may adjust the balance sheet amounts recognized for a business combination (generally up to one year from the date of acquisition). The changes eliminate the requirement to make such retrospective adjustments, and, instead require the acquiring entity to record these adjustments in the reporting period they are determined. The new standard is effective for both public and private companies for annual reporting periods beginning after December 15, 2015. The Adoption of this guidance had no material impact on the Company’s financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”. ASU 2014-09 supersedes the revenue recognition requirements of FASB ASC Topic 605, “Revenue Recognition” and most industry-specific guidance throughout the ASC, resulting in the creation of FASB ASC Topic 606, “Revenue from Contracts with Customers”. ASU 2014-09 requires entities to recognize revenue in a way that depicts 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 in exchange for those goods or services. This ASU provides alternative methods of adoption. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers, Deferral of the Effective Date”. ASU 2015-14 defers the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers, Principal versus Agent Considerations” (Reporting Revenue Gross versus Net) clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing”, clarifying the implementation guidance on identifying performance obligations and licensing. The amendments in this ASU clarify the two following aspects (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The effective date and transition requirements for ASU 2016-08 and ASU 2016-10 are the same as the effective date and transition requirements for ASU 2014-09. The Company is currently assessing the potential impact of adopting ASU 2014-09, ASU 2016-08 and ASU 2016-10 on its financial statements and related disclosures. As per ASC 606, Company has two streams of revenue, permanent placement revenue and temporary contractor revenues. Permanent placement revenue is not recognized performance obligations under the agreement is met and the candidate has started employment. Temporary contractor revenue is hourly based, and revenue is recognized as earned. |
CORRECTION OF ERRORS IN PREVI21
CORRECTION OF ERRORS IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Prior Period Adjustment [Abstract] | |
Schedule of Effect of Corrections of Consolidated Balance Sheets, Statement of Operations and Cash Flows | The effects of the corrections of the errors on our consolidated balance sheets, statements of operations and statements of cash flows for the periods included in this Form 10-Q/A are presented in the tables below: As of September 30, 2017 (unaudited) As of December 31, 2016 Previously As Previously As Reported Adjustments Restated Reported Adjustments Restated Current Assets $ 40,351 $ - $ 40,351 $ 23,537 $ - $ 23,537 Long-Term Assets 53,774 - 53,774 30,420 - 30,420 Total Assets 94,125 - 94,125 53,957 - 53,957 Current Liabilities 46,841 $ (99 ) 46,742 38,628 366 38,994 Long-Term Liabilities 43,189 4,359 47,548 7,051 (366 ) 6,685 Total Liabilities 90,030 4,260 94,290 45,679 - 45,679 Mezzanine Equity - - - 612 272 884 Common Stock - - - - - - Preferred Stock - - - - - - Additional Paid-In Capital 60,784 (3,793 ) 56,991 54,658 (1,468 ) 53,190 Accumulated Other Comprehensive Loss 662 - 662 855 - 855 Accumulated Deficit (57,351 ) (467 ) (57,818 ) (47,847 ) 1,196 (46,651 ) Total Equity (Deficit) 4,095 (4,260 ) (165 ) 7,666 (272 ) 7,394 Total Liabilities and Equity (Deficit) $ 94,125 $ - $ 94,125 $ 53,957 $ - $ 53,957 Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Previously As Previously As Reported Adjustments Restated Reported Adjustments Restated Revenue $ 50,345 $ - $ 50,345 $ 133,174 $ - $ 133,174 Gross Profit 9,577 - 9,577 24,827 - 24,827 SG&A 9,140 (340 ) 8,800 23,105 (743 ) 22,362 Depreciation and amortization 790 - 790 2,310 - 2,310 Other - - - - - - Total Operating Expenses 9,930 (340 ) 9,590 25,415 (743 ) 24,672 Income (Loss) From Operations (353 ) 340 (13 ) (588 ) 743 155 Other Expenses (4,803 ) (2,632 ) (7,435 ) (8,553 ) (2,556 ) (11,109 ) Loss Before Provision for Income Taxes (5,156 ) (2,292 ) (7,448 ) (9,141 ) (1,813 ) (10,954 ) Provision for Income Taxes (206 ) - (206 ) (213 ) - (213 ) Net Loss (5,362 ) (2,292 ) (7,654 ) (9,354 ) (1,813 ) (11,167 ) Series A Dividend 50 - 50 150 - 150 Series D Deemed Dividend - - - - 2,009 2,009 Net Loss Attributable to Common Stock Holders $ (5,412 ) $ (2,292 ) $ (7,704 ) $ (9,504 ) $ (3,822 ) $ (13,326 ) Basic and Diluted Net Loss per Share: Net Loss $ (1.67 ) $ (0.96 ) $ (2.63 ) $ (3.26 ) $ (0.99 ) $ (4.25 ) Net Loss Attributable to Common Stock Holders $ (1.69 ) $ (0.96 ) $ (2.65 ) $ (3.31 ) $ (1.76 ) $ (5.07 ) Weighted Average Shares Outstanding - Basic and Diluted 3,206,063 (295,924 ) 2,910,139 2,868,089 (239,176 ) 2,628,913 Three Months Ended October 1, 2016 Nine Months Ended October 1, 2016 Previously As Previously As Reported Adjustments Restated Reported Adjustments Restated Revenue $ 45,950 $ - $ 45,950 $ 135,423 $ - $ 135,423 Gross Profit 8,405 - 8,405 23,621 - 23,621 SG&A 7,795 122 7,917 24,102 92 24,194 Depreciation 727 - 727 2,059 - 2,059 Total Operating Expenses 8,522 122 8,644 26,161 92 26,253 Loss From Operations (117 ) (122 ) (239 ) (2,540 ) (92 ) (2,632 ) Other Expenses (1,234 ) - (1,234 ) (3,420 ) - (3,420 ) Loss Before Provision for Income Taxes (1,351 ) (122 ) (1,473 ) (5,960 ) (92 ) (6,052 ) Benefit from (Provision for) Income Taxes 375 - 375 (260 ) - (260 ) Net Loss (976 ) (122 ) (1,098 ) (6,220 ) (92 ) (6,312 ) Non-Controlling Interest - - - (37 ) - (37 ) Net Loss Before Preferred Share Dividends (976 ) (122 ) (1,098 ) (6,257 ) (92 ) (6,349 ) Series A Dividend 50 - 50 150 - 150 Series D Deemed Dividend - 927 927 - 1,660 1,660 Net Loss Attributable to Common Stock Holders $ (1,026 ) $ (1,049 ) $ (2,075 ) $ (6,407 ) $ (1,752 ) $ (8,159 ) Basic and Diluted Net Loss per Share: Net Loss $ (0.64 ) $ (0.13 ) $ (0.77 ) $ (2.17 ) $ (3.10 ) $ (5.27 ) Net Loss Attributable to Common Stock Holders $ (0.67 ) $ (0.78 ) $ (1.45 ) $ (2.23 ) $ (4.58 ) $ (6.81 ) Weighted Average Shares Outstanding - Basic and Diluted 1,529,481 (102,543 ) 1,426,938 2,868,089 (1,670,409 ) 1,197,680 Nine Months Ended September 30, 2017 Nine Months Ended October 1, 2016 Previously As Previously As Reported Adjustments Restated Reported Adjustments Restated Net Loss $ (9,354 ) $ (1,813 ) $ (11,167 ) $ (6,220 ) $ (92 ) $ (6,312 ) Adjustments to reconcile net loss to net cash Provided by (used in) operating activities: Non-cash addbacks 10,529 1,978 12,507 4,265 92 4,357 Changes in operating assets and liabilities (3,962 ) (153 ) (4,115 ) 2,742 - 2,742 Net cash (used in) provided by operating activities (2,787 ) 12 (2,775 ) 787 - 787 Net cash used in investing activities (22,080 ) 1,094 (20,986 ) (1,855 ) 104 (1,751 ) Net cash provided by financing activities 29,599 (1,106 ) 28,493 1,433 (104 ) 1,329 Net increase in cash 4,732 - 4,732 365 - 365 Foreign currency translation (2 ) - (2 ) - - - Cash - beginning of period 650 - 650 991 - 991 Cash - end of period $ 5,380 $ - $ 5,380 $ 1,356 $ - $ 1,356 |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Loss Per Common Share | The Company utilizes the guidance per ASC 260, “Earnings per Share”. Basic earnings per share are calculated by dividing income available to stockholders by the weighted average number of common stock shares outstanding during each period. Our Series A preferred stock holders (related parties) receive certain dividends or dividend equivalents that are considered participating securities and our earnings (loss) per share is computed using the two-class method. For the period ended September 30, 2017 and October 1, 2016, pursuant to the two-class method, as a result of the net loss, losses were not allocated to the participating securities. 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, convertible notes 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 September 30, 2017 and October 1, 2016 have been excluded from the per share computations, since their inclusion would be anti-dilutive: September 30, October 1, 2017 2016 Convertible bonds - Series B — 1,155 Convertible promissory notes — 428,215 Convertible preferred shares 43,239 118,438 Warrants 932,234 16,753 Restricted shares - unvested 463,052 77,322 Long term incentive plan (LTIP) 178,728 178,728 Options 122,400 62,760 Total 1,739,653 883,371 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | September 30, 2017 December 31, 2016 Bonds: Bonds - Series B $ — $ 50 Convertible Notes: Non-interest Bearing Convertible Note (January 6, 2016) — 359 Non-interest Bearing Convertible Note (September 10, 2016) — 477 8% Convertible Note (July 8, 2015) — 1,960 8% Convertible Note (February 8, 2016) — 728 Lighthouse- Seller Note #1 — 1,874 Lighthouse - Seller Note #2 — 234 Promissory Notes: Staffing (UK) - Seller Note — 112 PeopleServe - Seller Note — 329 Term Loans: Jackson Investment Group - related party 40,000 — Midcap Financial Trust — 2,025 ABN AMRO 377 694 Sterling National Bank — 168 Total Debt 40,377 9,010 Less Debt Discount and Deferred Financing Costs (1,380 ) (1,374 ) Total Debt, Net 38,997 7,636 Less: Current Portion, Net (367 ) (3,639 ) Total Long-Term Debt, Net $ 38,630 $ 3,997 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders Equity Note [Abstract] | |
Schedule of Stockholders Equity | The Company issued 2,009,805 shares of common stock during the period ended September 30, 2017 as summarized below: Shares issued to/for: Number of common shares issued Fair Value of shares issued Fair Value at Issuance (per share) Conversion of Series D Preferred Stock 394,600 $ 972 $ 2.80 $ 3.80 Jackson Investment Group 945,581 2,527 2.75 3.70 Employees 338,240 408 2.75 4.70 Extension of convertible notes 120,000 498 4.15 4.15 CBS Butler Acquisition 100,000 430 4.30 4.30 Board and Committee members 44,900 166 3.10 4.70 At-the-Market Facility 61,984 208 3.15 3.50 Consultants 4,500 20 3.50 4.70 2,009,805 $ 5,229 |
Schedule Of Warrant Activity | Transactions involving the Company’s warrant issuances are summarized as follows: Number of shares Weighted Average Price Per Share Outstanding at December 31, 2016 6,726 $ 97.62 Issued 925,508 5.00 Exercised — — Expired or cancelled — — Outstanding at September 30, 2017 932,234 $ 5.67 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Company used the following assumptions for determining the fair value of options granted under the Black-Scholes option pricing model: Exercise price $ 6.75 Market price at date of grant $ 3.10 Volatility 99.38 % Expected dividend rate — Expected term (years) 5 Risk-free interest rate 1.93 % |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segments Geographical Areas [Abstract] | |
Schedule of Revenues Gross Profit and Assets by Geographical Segment | The Company’s operating segments, which are consistent with its reportable segments, are organized by geography in accordance with its internal management and reporting structure. For the period ended September 30, 2017 and October 1, 2016, the Company generated revenue and gross profit by segment as follows: July 2, 2017 to September 30, 2017 July 3, 2016 to October 1, 2016 January 1, 2017 to September 30, 2017 January 3, 2016 to October 1, 2016 United States $ 37,830 $ 38,845 $ 107,441 $ 112,557 United Kingdom 12,452 7,074 25,634 22,790 Canada 63 31 99 76 Total Revenue $ 50,345 $ 45,950 $ 133,174 $ 135,423 United States $ 7,033 $ 6,815 $ 19,441 $ 18,842 United Kingdom 2,523 1,581 5,352 4,744 Canada 21 9 34 35 Total Gross Profit $ 9,577 $ 8,405 $ 24,827 $ 23,621 Selling, general and administrative expenses, excluding depreciation and amortization stated below $ (8,800 ) $ (7,917 ) $ (22,362 ) $ (24,194 ) Depreciation and amortization (790 ) (727 ) (2,310 ) (2,059 ) Interest expense (761 ) (615 ) (1,843 ) (2,007 ) Amortization of beneficial conversion feature — (183 ) — (550 ) Amortization of debt discount and deferred financing costs (1,212 ) (401 ) (2,610 ) (1,310 ) Loss on extinguishment of debt, net (4,764 ) — (6,132 ) — Change in fair value of warrants (688 ) — (493 ) — Gain on settlement of warrants — — — 485 Other expense (10 ) (35 ) (31 ) (38 ) Loss Before Provision for Income Tax $ (7,448 ) $ (1,473 ) $ (10,954 ) $ (6,052 ) As of September 30, 2017, and December 31, 2016, the Company has assets in the U.S., the U.K. and Canada as follows: September 30, December 31, 2017 2016 United States $ 60,795 $ 44,990 United Kingdom 33,261 8,936 Canada 69 31 Total Assets $ 94,125 $ 53,957 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Identifiable Intangible Assets Acquisition | Based upon a preliminary valuation, the Company recorded the following identifiable intangible assets in connection with the acquisition of FirstPro and CBS Butler: CBS Butler FirstPro Goodwill (1) $ 13,754 $ 3,829 Intangible assets Tradenames $ 1,123 $ 35 Non-compete 150 193 Customer Relationships 4,473 3,136 $ 5,746 $ 3,364 (1) Goodwill amounts are shown net of adjustments of $811 and $702 for CBS Butler and FirstPro, respectively, for discounting of deferred payment and earnouts and other purchases accounting adjustments. |
Schedule of Unaudited Pro Forma Consolidated Results of Operations | The following unaudited pro forma consolidated results of operation have been prepared, as if the acquisition of FirstPro and CBS Butler had occurred as of January 1, 2016: July 2, 2017 to September 30, 2017 July 3, 2016 to October 1, 2016 January 1, 2017 to September 30, 2017 January 3, 2016 to October 1, 2016 Revenues $ 63,854 $ 66,944 $ 184,995 $ 201,611 Net loss from continuing operations (7,837 ) (1,311 ) (11,674 ) (8,468 ) |
SUPPLEMENTAL CASH FLOW INFORM27
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Cash Flow Supplemental Information | January 1, 2017 to September 30, 2017 January 3, 2016 to October 1, 2016 Cash paid for: Interest $ 1,827 $ 1,559 Income taxes 140 132 Non Cash Investing and Financing Activities: Shares issued in connection with convertible note $ 498 $ — Shares issued in connection with Jackson term loan 2,527 — Warrants issued in connection with Jackson term loan 2,303 — Shares issued in connection with Series D payoff 208 — Shares issued in connection with CBS Butler acquisition 430 — Deemed Dividends 2,009 1,660 Dividends - Series A preferred stock - related party — 150 Conversion of a convertible note payable — (1,066 ) Shares issued in connection with convertible notes — 315 Shares issued in connection with promissory notes — 65 CSI earnout (payment with surety bond) 1,405 — |
ORGANIZATION AND DESCRIPTION 28
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Textual) | Jan. 03, 2018 | Sep. 17, 2015 | Sep. 30, 2017 |
Business Acquisition [Line Items] | |||
Stockholders' Equity, Reverse Stock Split | one-for-ten reverse stock split on September 17, 2015 and a one-for-five reverse stock split on January 3, 2018. | ||
Reverse stock split, ratio | 0.1 | ||
Subsequent Event [Member] | |||
Business Acquisition [Line Items] | |||
Reverse stock split, ratio | 0.2 |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) £ in Thousands, $ in Thousands | Sep. 15, 2017USD ($)Installmentshares | Sep. 15, 2017GBP (£)shares | Jan. 26, 2017shares | Aug. 31, 2017shares | Sep. 30, 2017USD ($) | Oct. 01, 2016USD ($) | Sep. 30, 2017USD ($)shares | Oct. 01, 2016USD ($) | Sep. 15, 2017GBP (£)Installment | Apr. 05, 2017USD ($) |
Accounting Policies [Line Items] | ||||||||||
Payments of financing costs | $ 2,311 | $ 777 | ||||||||
Shares issued, shares | shares | 2,009,805 | |||||||||
Loss on extinguishment of debt, net | $ 4,764 | $ 0 | $ 6,132 | $ 0 | ||||||
Effective income tax rate | 4.00% | (37.60%) | 2.30% | 4.30% | ||||||
Common Stock [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Shares issued, shares | shares | 2,009,805 | |||||||||
Firstpro Acquisition [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Aggregate consideration price | $ 8,000 | |||||||||
Cash payment | 4,500 | |||||||||
Business acquisition cost of acquired entity quarterly installment payment | 825 | |||||||||
Business acquisition cost of acquired entity each quarterly installment payment | 75 | |||||||||
Business acquisition quarterly installment payment beginning date | Oct. 1, 2017 | |||||||||
Business acquisition cost of acquired entity annual equal installment payment | $ 2,675 | |||||||||
Business combination number of equal annual installments. | Installment | 3 | 3 | ||||||||
Business acquisition annual equal installment payment beginning date | Sep. 15, 2018 | |||||||||
CBS Butler Acquisition [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Shares issued, shares | shares | 100,000 | |||||||||
CBS Butler Acquisition [Member] | Share Purchase Agreement [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Cash payment | £ | £ 13,810 | |||||||||
Business combination earn-out payment payable month and year | 2018-12 | |||||||||
Business combination deferred consideration | £ | £ 150 | |||||||||
CBS Butler Acquisition [Member] | Share Purchase Agreement [Member] | Maximum [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Business combination earn-out payment | £ | £ 4,214 | |||||||||
CBS Butler Acquisition [Member] | Share Purchase Agreement [Member] | Common Stock [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Shares issued in acquisition (in shares) | shares | 100,000 | 100,000 | ||||||||
Jackson Investment Group, LLC [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Debt Instrument, Face Amount | $ 1,650 | |||||||||
Debt instrument, interest rate, stated percentage | 6.00% | |||||||||
Shares issued, shares | shares | 330,000 | 945,581 | ||||||||
Jackson Investment Group, LLC [Member] | Common Stock [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Shares issued, shares | shares | 32,000 | |||||||||
Term Loan [Member] | Jackson Investment Group, LLC [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Payments of financing costs | $ 40,000 | |||||||||
Jackson Note [Member] | A&R Note Purchase Agreement [Member] | ||||||||||
Accounting Policies [Line Items] | ||||||||||
Debt Instrument, Face Amount | 40,000 | |||||||||
Principal amount of exchange for senior secured note | 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 | Sep. 15, 2020 | Sep. 15, 2020 | |||||||
Debt instrument, interest rate, stated percentage | 12.00% | 12.00% | ||||||||
Debt instrument, payment terms | The Jackson Note will accrue interest at 12% per annum, due quarterly on January 1, April 1, July 1 and October 1 in each year, with the first such payment due on January 1, 2018. | |||||||||
Debt instrument, interest payment period | quarterly | |||||||||
Debt instrument, date of first required payment | Jan. 1, 2018 | Jan. 1, 2018 | Jan. 1, 2018 | |||||||
Debt instrument, interest payment due description | Interest on any overdue payment of principal or interest due under the 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% | 5.00% | ||||||||
Payment of closing fee | $ 1,000 | |||||||||
Shares issued, shares | shares | 450,000 | 450,000 | ||||||||
Extinguishment of Debt, Amount | $ 11,165 | |||||||||
Loss on extinguishment of debt, net | 4,764 | |||||||||
Deferred debt issuance costs | $ 1,385 |
CORRECTION OF ERRORS IN PREVI30
CORRECTION OF ERRORS IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||
Current Assets | $ 40,351 | $ 23,537 |
Long-Term Assets | 53,774 | 30,420 |
Total Assets | 94,125 | 53,957 |
Current Liabilities | 46,742 | 38,994 |
Long-Term Liabilities | 47,548 | 6,685 |
Total Liabilities | 94,290 | 45,679 |
Mezzanine Equity | 884 | |
Common Stock | 0 | 0 |
Preferred Stock | ||
Additional Paid-In Capital | 56,991 | 53,190 |
Accumulated Other Comprehensive Loss | 662 | 855 |
Accumulated deficit | (57,818) | (46,651) |
Total Stockholders' (Deficit) Equity | (165) | 7,394 |
Total Liabilities, Mezzanine Equity and Stockholders' (Deficit) Equity | 94,125 | 53,957 |
Previously Reported [Member] | ||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||
Current Assets | 40,351 | 23,537 |
Long-Term Assets | 53,774 | 30,420 |
Total Assets | 94,125 | 53,957 |
Current Liabilities | 46,841 | 38,628 |
Long-Term Liabilities | 43,189 | 7,051 |
Total Liabilities | 90,030 | 45,679 |
Mezzanine Equity | 612 | |
Preferred Stock | ||
Additional Paid-In Capital | 60,784 | 54,658 |
Accumulated Other Comprehensive Loss | 662 | 855 |
Accumulated deficit | (57,351) | (47,847) |
Total Stockholders' (Deficit) Equity | 4,095 | 7,666 |
Total Liabilities, Mezzanine Equity and Stockholders' (Deficit) Equity | 94,125 | 53,957 |
Adjustments [Member] | ||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||
Current Liabilities | (99) | 366 |
Long-Term Liabilities | 4,359 | (366) |
Total Liabilities | 4,260 | |
Mezzanine Equity | 272 | |
Preferred Stock | ||
Additional Paid-In Capital | (3,793) | (1,468) |
Accumulated deficit | (467) | 1,196 |
Total Stockholders' (Deficit) Equity | $ (4,260) | $ (272) |
CORRECTION OF ERRORS IN PREVI31
CORRECTION OF ERRORS IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Revenue | $ 50,345 | $ 45,950 | $ 133,174 | $ 135,423 |
Gross Profit | 9,577 | 8,405 | 24,827 | 23,621 |
SG&A | 8,800 | 7,917 | 22,362 | 24,194 |
Depreciation and amortization | 790 | 727 | 2,310 | 2,059 |
Total Operating Expenses | 9,590 | 8,644 | 24,672 | 26,253 |
(Loss) Income From Operations | (13) | (239) | 155 | (2,632) |
Other Expenses | (7,435) | (1,234) | (11,109) | (3,420) |
Loss Before Provision for Income Tax | (7,448) | (1,473) | (10,954) | (6,052) |
Benefit from (Provision for) Income Taxes | (206) | 375 | (213) | (260) |
Net Loss | (7,654) | (1,098) | (11,167) | (6,312) |
Non-Controlling Interest | 0 | 0 | 0 | (37) |
Net Loss Before Preferred Share Dividends | (7,654) | (1,098) | (11,167) | (6,349) |
Series A Dividend | 50 | 50 | 150 | 150 |
Series D Deemed Dividend | 0 | 927 | 2,009 | 1,660 |
Net Loss Attributable to Common Stock Holders | $ (7,704) | $ (2,075) | $ (13,326) | $ (8,159) |
Basic and Diluted Net Loss per Share: | ||||
Net Loss | $ (2.63) | $ (0.77) | $ (4.25) | $ (5.27) |
Net Loss Attributable to Common Stock Holders | $ (2.65) | $ (1.45) | $ (5.07) | $ (6.81) |
Weighted Average Shares Outstanding – Basic and Diluted | 2,910,139 | 1,426,938 | 2,628,913 | 1,197,680 |
Previously Reported [Member] | ||||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Revenue | $ 50,345 | $ 45,950 | $ 133,174 | $ 135,423 |
Gross Profit | 9,577 | 8,405 | 24,827 | 23,621 |
SG&A | 9,140 | 7,795 | 23,105 | 24,102 |
Depreciation and amortization | 790 | 727 | 2,310 | 2,059 |
Total Operating Expenses | 9,930 | 8,522 | 25,415 | 26,161 |
(Loss) Income From Operations | (353) | (117) | (588) | (2,540) |
Other Expenses | (4,803) | (1,234) | (8,553) | (3,420) |
Loss Before Provision for Income Tax | (5,156) | (1,351) | (9,141) | (5,960) |
Benefit from (Provision for) Income Taxes | (206) | 375 | (213) | (260) |
Net Loss | (5,362) | (976) | (9,354) | (6,220) |
Non-Controlling Interest | (37) | |||
Net Loss Before Preferred Share Dividends | (976) | (6,257) | ||
Series A Dividend | 50 | 50 | 150 | 150 |
Net Loss Attributable to Common Stock Holders | $ (5,412) | $ (1,026) | $ (9,504) | $ (6,407) |
Basic and Diluted Net Loss per Share: | ||||
Net Loss | $ (1.67) | $ (0.64) | $ (3.26) | $ (2.17) |
Net Loss Attributable to Common Stock Holders | $ (1.69) | $ (0.67) | $ (3.31) | $ (2.23) |
Weighted Average Shares Outstanding – Basic and Diluted | 3,206,063 | 1,529,481 | 2,868,089 | 2,868,089 |
Adjustments [Member] | ||||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
SG&A | $ (340) | $ 122 | $ (743) | $ 92 |
Total Operating Expenses | (340) | 122 | (743) | 92 |
(Loss) Income From Operations | 340 | (122) | 743 | (92) |
Other Expenses | (2,632) | (2,556) | ||
Loss Before Provision for Income Tax | (2,292) | (122) | (1,813) | (92) |
Net Loss | (2,292) | (122) | (1,813) | (92) |
Net Loss Before Preferred Share Dividends | (122) | (92) | ||
Series D Deemed Dividend | 927 | 2,009 | 1,660 | |
Net Loss Attributable to Common Stock Holders | $ (2,292) | $ (1,049) | $ (3,822) | $ (1,752) |
Basic and Diluted Net Loss per Share: | ||||
Net Loss | $ (0.96) | $ (0.13) | $ (0.99) | $ (3.10) |
Net Loss Attributable to Common Stock Holders | $ (0.96) | $ (0.78) | $ (1.76) | $ (4.58) |
Weighted Average Shares Outstanding – Basic and Diluted | (295,924) | (102,543) | (239,176) | (1,670,409) |
CORRECTION OF ERRORS IN PREVI32
CORRECTION OF ERRORS IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Net Loss | $ (7,654) | $ (1,098) | $ (11,167) | $ (6,312) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||
Non-cash addbacks | 12,507 | 4,357 | ||
Changes in operating assets and liabilities | (4,115) | 2,742 | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (2,775) | 787 | ||
Net cash used in investing activities | (20,986) | (1,751) | ||
Net cash provided by financing activities | 28,493 | 1,329 | ||
NET INCREASE IN CASH | 4,732 | 365 | ||
Foreign currency translation | (2) | 0 | ||
Cash - Beginning of period | 650 | 991 | ||
Cash - End of period | 5,380 | 1,356 | 5,380 | 1,356 |
Previously Reported [Member] | ||||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Net Loss | (5,362) | (976) | (9,354) | (6,220) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||
Non-cash addbacks | 10,529 | 4,265 | ||
Changes in operating assets and liabilities | (3,962) | 2,742 | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (2,787) | 787 | ||
Net cash used in investing activities | (22,080) | (1,855) | ||
Net cash provided by financing activities | 29,599 | 1,433 | ||
NET INCREASE IN CASH | 4,732 | 365 | ||
Foreign currency translation | (2) | |||
Cash - Beginning of period | 650 | 991 | ||
Cash - End of period | 5,380 | 1,356 | 5,380 | 1,356 |
Adjustments [Member] | ||||
Quantifying Misstatement In Current Year Financial Statements [Line Items] | ||||
Net Loss | $ (2,292) | $ (122) | (1,813) | (92) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||
Non-cash addbacks | 1,978 | 92 | ||
Changes in operating assets and liabilities | (153) | |||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | 12 | |||
Net cash used in investing activities | 1,094 | 104 | ||
Net cash provided by financing activities | $ (1,106) | $ (104) |
LOSS PER COMMON SHARE (Details)
LOSS PER COMMON SHARE (Details) - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 01, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 1,739,653 | 883,371 |
Convertible bonds - Series B [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 1,155 | |
Convertible promissory notes [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 428,215 | |
Convertible preferred shares [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 43,239 | 118,438 |
Warrants [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 932,234 | 16,753 |
Restricted shares - unvested [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 463,052 | 77,322 |
Long term incentive plan (LTIP) [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 178,728 | 178,728 |
Options [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Shares excluded in computation of earnings per common share | 122,400 | 62,760 |
LOSS PER COMMON SHARE ((Details
LOSS PER COMMON SHARE ((Details Textual)) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Apr. 30, 2017 | Apr. 05, 2017 | |
Earnings Per Share [Line Items] | ||||||
Deemed dividends | $ 0 | $ 927 | $ 2,009 | $ 1,660 | ||
Series D Preferred Stock [Member] | ||||||
Earnings Per Share [Line Items] | ||||||
Redemption of remaining shares | 62 | 62 | ||||
Termination of future conversion rights for cash | $ 1,500 | $ 1,500 | ||||
Deemed dividends | 0 | $ 927 | 2,009 | $ 1,660 | ||
Temporary equity beneficial conversion feature | $ 615 | $ 615 | ||||
Series D Preferred Stock [Member] | Common Stock [Member] | ||||||
Earnings Per Share [Line Items] | ||||||
Termination of future conversion rights for shares | 60,000 | 60,000 |
ACCOUNTS RECEIVABLE BASED FIN35
ACCOUNTS RECEIVABLE BASED FINANCING FACILITIES (Details Textual) - Midcap Financial Trust [Member] | Sep. 15, 2017USD ($) |
Accounts Receivable Based Financing Activities [Line Items] | |
Lending facility | $ 25,000,000 |
Additional lending facility | $ 25,000,000 |
Debt instrument, interest rate, stated percentage | 4.00% |
LIBOR floor rate | 1.00% |
Unbilled receivables, maximum incremental borrowing percentage | 85.00% |
Unbilled receivables, maximum incremental borrowing | $ 1,300,000 |
ACCOUNTS RECEIVABLE BASED FIN36
ACCOUNTS RECEIVABLE BASED FINANCING FACILITIES - HSBC Invoice Finance (UK) Ltd (Details Textual) - HSBC [Member] - CBS Butler Acquisition [Member] | 9 Months Ended |
Sep. 30, 2017GBP (£) | |
Accounts Receivable Based Financing Activities [Line Items] | |
Lending facility | £ 8,500,000 |
Original expiration date | 2011-01 |
Notice for termination period by either parties | 90 days |
Deferred Purchase Price [Member] | |
Accounts Receivable Based Financing Activities [Line Items] | |
Percentage of cash received equal to sold receivables | 90.00% |
ACCOUNTS RECEIVABLE BASED FIN37
ACCOUNTS RECEIVABLE BASED FINANCING FACILITIES - HSBC Invoice Finance (UK) Ltd New Facility (Details Textual) - HSBC Invoice Finance (UK) Ltd – New Facility [Member] - CBS Butler, Longbridge and The JM Group [Member] - Subsequent Event [Member] | Feb. 08, 2018GBP (£)Subsidiary |
Accounts Receivable Based Financing Activities [Line Items] | |
Lending facility | £ 11,500,000 |
Number of subsidiaries | Subsidiary | 3 |
Factoring Arrangement Advance Percentage Eligible Receivable | 90.00% |
Percentage of secured borrowing line of unbilled receivables | 70.00% |
Unbilled receivables, maximum secured borrowing | £ 1,000,000 |
Arrangement initial term | 12 months |
Arrangement automatic rolling extension period | 3 months |
Percentage of service charge | 1.80% |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Debt instrument | $ 40,377 | $ 9,010 |
Less Debt Discount and Deferred Financing Costs | (1,380) | (1,374) |
Total Debt, Net | 38,997 | 7,636 |
Less: Current Portion, Net | (367) | (3,639) |
Total Long-Term Debt, Net | 38,630 | 3,997 |
8% Convertible Note - July 8, 2015 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 1,960 |
8% Convertible Note - February 8, 2016 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 728 |
Bonds - Series B [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 50 |
Non-interest Bearing Convertible Note - January 6, 2016 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 359 |
Non-interest Bearing Convertible Note - September 10, 2016 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 477 |
Lighthouse Seller Note #1 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 1,874 |
Lighthouse Seller Note #2 [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 234 |
Staffing (UK) - Seller Note [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 112 |
PeopleServe - Seller Note [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 329 |
Jackson Investment Group - related party [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 40,000 | 0 |
Midcap Financial Trust [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 0 | 2,025 |
ABN AMRO [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | 377 | 694 |
Sterling National Bank [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument | $ 0 | $ 168 |
DEBT (Parenthetical) (Details)
DEBT (Parenthetical) (Details) | Sep. 30, 2017 |
8% Convertible Note - July 8, 2015 [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate, stated percentage | 8.00% |
8% Convertible Note - February 8, 2016 [Member] | |
Debt Instrument [Line Items] | |
Debt instrument, interest rate, stated percentage | 8.00% |
DEBT (Details Textual)
DEBT (Details Textual) $ / shares in Units, £ in Thousands | Sep. 18, 2017USD ($) | Sep. 15, 2017USD ($)shares | Sep. 01, 2017USD ($) | Jun. 15, 2017 | Apr. 11, 2017USD ($) | Apr. 05, 2017USD ($)$ / sharesshares | Mar. 14, 2017 | Jan. 26, 2017USD ($)$ / sharesshares | Jan. 03, 2017USD ($)$ / sharesshares | Sep. 10, 2016USD ($) | Aug. 31, 2017USD ($)shares | Mar. 31, 2017USD ($) | Sep. 30, 2017USD ($)shares | Oct. 01, 2016USD ($) | Sep. 30, 2017USD ($)shares | Oct. 01, 2016USD ($) | Oct. 01, 2016GBP (£) | Dec. 31, 2016shares |
Debt Instrument [Line Items] | ||||||||||||||||||
Proceeds from convertible notes | $ 400,000 | $ 578,000 | ||||||||||||||||
Loss on extinguishment of debt | $ (4,764,000) | $ 0 | $ (6,132,000) | 0 | ||||||||||||||
Shares issued, shares | shares | 2,009,805 | |||||||||||||||||
Warrant liability | $ 2,303,000 | $ 2,303,000 | ||||||||||||||||
Common stock, shares outstanding | shares | 3,837,764 | 3,837,764 | 1,827,959 | |||||||||||||||
Proceeds from Issuance Of Debt | $ 0 | 783,000 | ||||||||||||||||
Common Stock [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Shares issued, shares | shares | 2,009,805 | |||||||||||||||||
Jackson Investment Group, LLC [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt Instrument, Face Amount | $ 1,650,000 | |||||||||||||||||
Debt instrument, interest rate, stated percentage | 6.00% | |||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 7.50 | |||||||||||||||||
Shares issued, shares | shares | 330,000 | 945,581 | ||||||||||||||||
Class of Warrant or Right Exercisable Term | 4 years 6 months | |||||||||||||||||
Jackson Investment Group, LLC [Member] | Common Stock [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Shares issued, shares | shares | 32,000 | |||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 5 | $ 6.75 | ||||||||||||||||
Jackson Investment Group, LLC [Member] | Common Stock [Member] | Maximum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 630,000 | |||||||||||||||||
PeopleSERVE - Sellers Note [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | $ 0 | 197,000 | $ 329,000 | 592,000 | ||||||||||||||
Jackson Investment Group Term Loan Note #1 [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | $ 0 | |||||||||||||||||
Debt Instrument, Maturity Date | Jul. 25, 2018 | |||||||||||||||||
Debt Instrument, Face Amount | $ 7,400,000 | |||||||||||||||||
Debt instrument, interest rate, stated percentage | 6.00% | |||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 10 | |||||||||||||||||
Redemption of outstanding principal amount, multiples | $ 100,000 | |||||||||||||||||
Redemption of aggregate principal amount of outstanding notes, description | At any time during the term of the note, upon notice to Jackson, the Company may also, at its option, redeem all or some of the then outstanding principal amount of the note by paying to Jackson an amount not less than $100 of the outstanding principal (and in multiples of $100), plus any accrued but unpaid interest and liquidated damages and other amounts due under the note. | |||||||||||||||||
Percentage of accrued interest convertible into shares of common stock | 50.00% | |||||||||||||||||
Minimum threshold limit of ownership interest percentage | 19.99% | 19.99% | ||||||||||||||||
Class of Warrant or Right Exercisable Term | 4 years 6 months | |||||||||||||||||
Jackson Investment Group Term Loan Note #1 [Member] | Minimum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Redemption of outstanding principal amount | $ 100,000 | |||||||||||||||||
Jackson Investment Group Term Loan Note #2 [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | $ 0 | |||||||||||||||||
Debt Instrument, Maturity Date | Jun. 8, 2019 | |||||||||||||||||
Debt Instrument, Face Amount | $ 1,650,000 | |||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 7.50 | |||||||||||||||||
Shares issued, shares | shares | 59,397 | |||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 5 | |||||||||||||||||
Redemption of outstanding principal amount, multiples | $ 100,000 | |||||||||||||||||
Redemption of aggregate principal amount of outstanding notes, description | At any time during the term of the second note, upon notice to Jackson, the Company may also, at its option, redeem all or some of the then outstanding principal amount of the note by paying to Jackson an amount not less than $100 of the outstanding principal (and in multiples of $100), plus any accrued but unpaid interest and liquidated damages and other amounts due under the note. | |||||||||||||||||
Percentage of accrued interest convertible into shares of common stock | 50.00% | |||||||||||||||||
Minimum threshold limit of ownership interest percentage | 19.99% | |||||||||||||||||
Additional stock issued during period shares to be issued in excess percentage | shares | 74,184 | |||||||||||||||||
Additional stock issued during period shares new issues | shares | 275,508 | |||||||||||||||||
Restated debt instrument, maturity date | Jul. 25, 2018 | |||||||||||||||||
Warrant liability | 2,303,000 | $ 2,303,000 | ||||||||||||||||
Jackson Investment Group Term Loan Note #2 [Member] | Minimum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Redemption of outstanding principal amount | $ 100,000 | |||||||||||||||||
Midcap Financial Trust - Term Loan [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 1,425,000 | 113,000 | 2,025,000 | 238,000 | ||||||||||||||
Write off of deferred financing costs | $ 533,000 | |||||||||||||||||
ABN AMRO - Term Loan [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 119,000 | 131,000 | $ 356,000 | 391,000 | ||||||||||||||
Proceeds from Issuance Of Debt | £ | £ 219 | |||||||||||||||||
8% Convertible Note (July 8, 2015) and 8% Convertible Note (February 8, 2016) [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt instrument refinanced aggregate amount | $ 2,688,000 | |||||||||||||||||
Debt Instrument, Maturity Date | Oct. 1, 2018 | |||||||||||||||||
Financing Original Issue Term | 21 months | |||||||||||||||||
Debt Instrument, Face Amount | $ 3,126,000 | |||||||||||||||||
Debt instrument, interest rate, stated percentage | 8.00% | |||||||||||||||||
Debt instrument, payment terms | No interest payments due until October 1, 2017, payable quarterly thereafter, and an overall term of 21 months with principal due at maturity. | |||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 15 | |||||||||||||||||
Debt instrument percentage of prepayment penalty for early redemption | 20.00% | |||||||||||||||||
Common stock issued to holder | shares | 120,000 | |||||||||||||||||
Common stock issued to holder, value | $ 498,000 | |||||||||||||||||
Extinguishment of Debt, Amount | 2,688,000 | |||||||||||||||||
Loss on extinguishment of debt | $ (498,000) | $ (870,000) | ||||||||||||||||
8% Convertible Note (July 8, 2015) [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 980,000 | |||||||||||||||||
Jackson Note – Related Party [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Common stock, shares outstanding | shares | 526,697 | |||||||||||||||||
Warrant, outstanding | shares | 905,508 | |||||||||||||||||
Jackson Note – Related Party [Member] | A&R Note Purchase Agreement [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt Instrument, Maturity Date | Sep. 15, 2020 | Sep. 15, 2020 | ||||||||||||||||
Debt Instrument, Face Amount | $ 40,000,000 | |||||||||||||||||
Debt instrument, interest rate, stated percentage | 12.00% | |||||||||||||||||
Debt instrument, payment terms | The 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. | |||||||||||||||||
Extinguishment of Debt, Amount | $ 11,165,000 | |||||||||||||||||
Loss on extinguishment of debt | $ (4,764,000) | |||||||||||||||||
Shares issued, shares | shares | 450,000 | |||||||||||||||||
Proceeds from sale of secured notes to repay existing subordinated notes aggregate principal amount | $ 11,165,000 | |||||||||||||||||
Debt instrument, frequency of periodic payment | quarterly | |||||||||||||||||
Debt instrument, date of first required payment | Jan. 1, 2018 | Jan. 1, 2018 | ||||||||||||||||
Debt instrument, interest payment due description | Interest on any overdue payment of principal or interest due under the 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% | |||||||||||||||||
Payment of closing fee | $ 1,000,000 | |||||||||||||||||
Debt issuance costs | $ 1,385,000 | |||||||||||||||||
Convertible bonds - Series B [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 689,000 | |||||||||||||||||
Non-interest Bearing Convertible Note - September 10, 2016 [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Convertible notes, extended maturity date | 2017-09 | |||||||||||||||||
Convertible Notes Payable | $ 477,000 | $ 565,000 | ||||||||||||||||
Proceeds from convertible notes | $ 400,000 | |||||||||||||||||
Convertible notes, maturity date | 2017-03 | |||||||||||||||||
Non-interest Bearing Convertible Note - April 11, 2017 [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Convertible Notes Payable | $ 477,000 | |||||||||||||||||
Proceeds from convertible notes | $ 400,000 | |||||||||||||||||
Convertible notes, maturity date | 2017-10 | |||||||||||||||||
Lighthouse Seller Note #1 [Member] | Lighthouse Placement Services [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 1,624,000 | 125,000 | $ 1,874,000 | 375,000 | ||||||||||||||
Lighthouse Seller Note #2 [Member] | Lighthouse Placement Services [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | 78,000 | 78,000 | 234,000 | 234,000 | ||||||||||||||
Promissory Note [Member] | Jackson Investment Group Term Loan Note #3 [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Financing Original Issue Term | 60 days | |||||||||||||||||
Debt Instrument, Face Amount | $ 1,600,000 | |||||||||||||||||
Debt instrument, interest rate, stated percentage | 10.00% | |||||||||||||||||
Promissory Note [Member] | Jackson Investment Group Term Loan Note #4 [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Financing Original Issue Term | 31 days | |||||||||||||||||
Debt Instrument, Face Amount | $ 515,000 | |||||||||||||||||
Debt instrument, interest rate, stated percentage | 12.00% | |||||||||||||||||
Sterling National Bank Promissory Note [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Principal payments | $ 70,000 | $ 44,000 | $ 168,000 | $ 126,000 |
EQUITY (Details Textual)
EQUITY (Details Textual) - USD ($) | Sep. 15, 2017 | May 12, 2017 | Apr. 05, 2017 | Jan. 26, 2017 | Jun. 24, 2016 | Aug. 31, 2017 | Sep. 30, 2017 | Oct. 01, 2016 | Jun. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2016 | Apr. 30, 2017 | Dec. 31, 2016 |
Stockholders Equity [Line Items] | |||||||||||||
Shares issued, shares | 2,009,805 | ||||||||||||
Common Stock, Shares Authorized | 40,000,000 | 40,000,000 | 20,000,000 | ||||||||||
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||
Common Stock, Shares, Issued | 3,837,764 | 3,837,764 | 1,827,959 | ||||||||||
Common Stock, Shares, Outstanding | 3,837,764 | 3,837,764 | 1,827,959 | ||||||||||
Shares issued | $ 5,229,000 | ||||||||||||
Stock based compensation | 962,000 | $ 773,000 | |||||||||||
Dividends to Series A preferred stock holders | $ 515,000 | 0 | |||||||||||
Temporary equity, shares outstanding | 0 | 0 | 93 | ||||||||||
Deemed dividends | $ 0 | $ 927,000 | $ 2,009,000 | $ 1,660,000 | |||||||||
Cashless Warrants [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 20,000 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5 | ||||||||||||
Class of Warrant or Right Exercisable Term | 3 years | ||||||||||||
Proceeds from issuance of warrants | $ 28,000 | ||||||||||||
Jackson Investment Group, LLC [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Shares issued, shares | 330,000 | 945,581 | |||||||||||
Shares issued | $ 2,527,000 | ||||||||||||
Class of Warrant or Right Exercisable Term | 4 years 6 months | ||||||||||||
Debt Instrument, Face Amount | $ 1,650,000 | ||||||||||||
Share Price | $ 5 | ||||||||||||
Warrant modification cost | $ 91,000 | ||||||||||||
Series A Preferred Stock - Related Party [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Dividends to Series A preferred stock holders | $ 515,000 | ||||||||||||
Series D Preferred Stock [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Shares issued, shares | 394,600 | ||||||||||||
Shares issued | $ 972,000 | ||||||||||||
Temporary equity, shares outstanding | 211 | ||||||||||||
Temporary equity face value per share | $ 10 | ||||||||||||
Temporary equity discount on shares percent | 5.00% | ||||||||||||
Temporary equity conversion price per share | $ 2.50 | ||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 2,000,000 | ||||||||||||
Conversion of Stock, Shares Converted | 31 | 118 | |||||||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 334,600 | 268,192 | 334,600 | 268,192 | |||||||||
Temporary Equity Beneficial Conversion Feature | $ 615,000 | $ 615,000 | |||||||||||
Deemed dividends | 0 | $ 927,000 | 2,009,000 | $ 1,660,000 | |||||||||
Redemption of remaining shares | 62 | 62 | |||||||||||
Termination of future conversion rights for cash | $ 1,500,000 | $ 1,500,000 | |||||||||||
Stock Options [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Stock based compensation | $ 96,000 | 90,000 | $ 283,000 | 270,000 | |||||||||
2015 And 2016 Omnibus Incentive Plan [Member] | Restricted Shares [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Share-based Compensation arrangement by share-based payment award, expiration period | 3 years | ||||||||||||
Unvested shares issued | 463,053 | 463,053 | |||||||||||
Stock based compensation | $ 206,000 | $ 134,000 | $ 575,000 | $ 373,000 | |||||||||
2016 Omnibus Incentive Plan [Member] | Stock Options [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Shares reserved for future issuance | 500,000 | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 49,660 | 49,660 | |||||||||||
2016 Omnibus Incentive Plan [Member] | Stock Options [Member] | Employees and Consultants [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Shares issued | 387,640 | ||||||||||||
Options granted | 62,700 | ||||||||||||
Options, exercise price | $ 6.75 | $ 6.75 | |||||||||||
Scenario, Forecast [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Shares issued, shares | 300,501 | ||||||||||||
Shares issued | $ 874,000 | ||||||||||||
Maximum [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Shares issued | $ 3,000,000 | ||||||||||||
Maximum [Member] | Jackson Investment Group, LLC [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Additional stock issuable, shares | 275,508 | ||||||||||||
Common Shares [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Shares issued, shares | 2,009,805 | ||||||||||||
Common Shares [Member] | Jackson Investment Group, LLC [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Shares issued, shares | 32,000 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5 | $ 6.75 | |||||||||||
Common Shares [Member] | Series D Preferred Stock [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Termination of future conversion rights for shares | 60,000 | 60,000 | |||||||||||
Common Shares [Member] | Maximum [Member] | Jackson Investment Group, LLC [Member] | |||||||||||||
Stockholders Equity [Line Items] | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 630,000 |
EQUITY (Details)
EQUITY (Details) - USD ($) | May 12, 2017 | Jan. 26, 2017 | Sep. 30, 2017 |
Stockholders Equity [Line Items] | |||
Number of common shares issued | 2,009,805 | ||
Fair Value of shares issued | $ 5,229,000 | ||
Series D preferred stock [Member] | |||
Stockholders Equity [Line Items] | |||
Number of common shares issued | 394,600 | ||
Fair Value of shares issued | $ 972,000 | ||
Jackson Investment Group [Member] | |||
Stockholders Equity [Line Items] | |||
Number of common shares issued | 330,000 | 945,581 | |
Fair Value of shares issued | $ 2,527,000 | ||
Extension of convertible notes [Member] | |||
Stockholders Equity [Line Items] | |||
Number of common shares issued | 120,000 | ||
Fair Value of shares issued | $ 498,000 | ||
At-the-Market Facility [Member] | |||
Stockholders Equity [Line Items] | |||
Number of common shares issued | 61,984 | ||
Fair Value of shares issued | $ 208,000 | ||
Minimum [Member] | Series D preferred stock [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 2.80 | ||
Minimum [Member] | Jackson Investment Group [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | 2.75 | ||
Minimum [Member] | Extension of convertible notes [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | 4.15 | ||
Minimum [Member] | At-the-Market Facility [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | 3.15 | ||
Maximum [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value of shares issued | $ 3,000,000 | ||
Maximum [Member] | Series D preferred stock [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | 3.80 | ||
Maximum [Member] | Jackson Investment Group [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | 3.70 | ||
Maximum [Member] | Extension of convertible notes [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | 4.15 | ||
Maximum [Member] | At-the-Market Facility [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 3.50 | ||
CBS Butler Acquisition [Member] | |||
Stockholders Equity [Line Items] | |||
Number of common shares issued | 100,000 | ||
Fair Value of shares issued | $ 430,000 | ||
CBS Butler Acquisition [Member] | Minimum [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 4.30 | ||
CBS Butler Acquisition [Member] | Maximum [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 4.30 | ||
Consultants [Member] | |||
Stockholders Equity [Line Items] | |||
Number of common shares issued | 4,500 | ||
Fair Value of shares issued | $ 20,000 | ||
Consultants [Member] | Minimum [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 3.50 | ||
Consultants [Member] | Maximum [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 4.70 | ||
Board and Committee members [Member] | |||
Stockholders Equity [Line Items] | |||
Number of common shares issued | 44,900 | ||
Fair Value of shares issued | $ 166,000 | ||
Board and Committee members [Member] | Minimum [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 3.10 | ||
Board and Committee members [Member] | Maximum [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 4.70 | ||
Employees [Member] | |||
Stockholders Equity [Line Items] | |||
Number of common shares issued | 338,240 | ||
Fair Value of shares issued | $ 408,000 | ||
Employees [Member] | Minimum [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 2.75 | ||
Employees [Member] | Maximum [Member] | |||
Stockholders Equity [Line Items] | |||
Fair Value at Issuance (per share) | $ 4.70 |
EQUITY (Details 2)
EQUITY (Details 2) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Statement Of Stockholders Equity [Abstract] | |
Outstanding at December 31, 2016 | shares | 6,726 |
Issued | shares | 925,508 |
Outstanding at September 30, 2017 | shares | 932,234 |
Outstanding at December 31, 2016 | $ / shares | $ 97.62 |
Issued | $ / shares | 5 |
Outstanding at September 30, 2017 | $ / shares | $ 5.67 |
EQUITY (Details 3)
EQUITY (Details 3) - Stock Options [Member] | 9 Months Ended |
Sep. 30, 2017$ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Exercise price | $ 6.75 |
Market price at date of grant | $ 3.10 |
Volatility | 99.38% |
Expected term (years) | 5 years |
Risk-free interest rate | 1.93% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Earn-out Liabilities and Stock Value Guarantees (Details Textual) £ in Thousands | Aug. 14, 2017USD ($) | Nov. 04, 2013USD ($) | Aug. 14, 2013USD ($) | Jan. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Oct. 01, 2016USD ($) | Oct. 31, 2015GBP (£) | Dec. 31, 2016USD ($) | Oct. 31, 2015USD ($) | Oct. 31, 2015GBP (£) |
Commitments And Contingencies [Line Items] | ||||||||||
Payments To Earn Out Agreement | $ 1,094,000 | $ 104,000 | ||||||||
Accrual final payments | $ 1,582,000 | |||||||||
Performance Based Compensation Percentage Of Gross Profit Below Threshold | 90.00% | |||||||||
CSI Acquisition [Member] | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Performance Based Compensation Percentage Of Gross Profit Above Threshold | 20.00% | |||||||||
Business Combination Maximum Contingent Consideration | $ 2,100,000 | |||||||||
Payments To Earn Out Agreement | $ 68,000 | $ 104,000 | ||||||||
JM Group Acquisition [Member] | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Performance Based Compensation Percentage Of Gross Profit Above Threshold | 90.00% | |||||||||
Performance based compensation, gross profit threshold | £ | £ 850 | |||||||||
Business Combination, Contingent Consideration, Liability | $ 1,180,000 | £ 850 | ||||||||
JM Group Acquisition [Member] | Other Current Liabilities [Member] | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Business Combination, Contingent Consideration, Liability | $ 1,026,000 | |||||||||
Business Combination Contingent Consideration Percentage Of Accrued Interest Rate On Liability | 10.25% | |||||||||
NewCSI Inc [Member] | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Payments To Earn Out Agreement | $ 1,400,000 | |||||||||
Subsequent Event [Member] | NewCSI Inc [Member] | ||||||||||
Commitments And Contingencies [Line Items] | ||||||||||
Accrual final payments | $ 45,000 |
COMMITMENTS AND CONTINGENCIES46
COMMITMENTS AND CONTINGENCIES - Legal Proceedings (Details Textual) - USD ($) $ in Thousands | May 30, 2018 | Nov. 17, 2017 | Sep. 29, 2017 | Aug. 29, 2017 | Aug. 14, 2017 | Sep. 21, 2016 | Jan. 26, 2016 | Oct. 21, 2015 | Jun. 03, 2015 | May 20, 2015 | Aug. 14, 2013 | Jun. 30, 2018 | Jan. 31, 2018 | Sep. 30, 2017 | Oct. 01, 2016 | Jan. 31, 2016 | Dec. 31, 2014 |
Commitments And Contingencies [Line Items] | |||||||||||||||||
Payments To Earn Out Agreement | $ 1,094 | $ 104 | |||||||||||||||
Purchase agreement commitment earn out amount | $ 2,100 | ||||||||||||||||
Loss Contingency, Final Award | $ 1,433 | ||||||||||||||||
Loss contingency, amount paid | $ 1,582 | ||||||||||||||||
NewCSI Inc [Member] | |||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||
Payments To Earn Out Agreement | $ 1,400 | ||||||||||||||||
Loss Contingency Damages Sought Deferred Tax Assets Percentage | 50.00% | ||||||||||||||||
Acceleration of Earn Out Payments Amount | $ 1,152 | 429 | |||||||||||||||
Purchase agreement commitment earn out amount remaining balance | $ 1,671 | ||||||||||||||||
Damage sought, deferred tax asset | 154 | $ 154 | |||||||||||||||
Litigation Settlement, Amount | $ 1,384 | $ 1,307 | $ 154 | ||||||||||||||
Litigation Reserve | $ 552 | ||||||||||||||||
Remaining judgment amount to be paid | $ 5 | ||||||||||||||||
Litigation settlement attorney's seeking fees | $ 629 | ||||||||||||||||
NewCSI Inc [Member] | Subsequent Event [Member] | |||||||||||||||||
Commitments And Contingencies [Line Items] | |||||||||||||||||
Litigation settlement judge recommended award fees | $ 606 | ||||||||||||||||
Litigation Settlement legal fees | $ 606 | ||||||||||||||||
Litigation Settlement | $ 607 | ||||||||||||||||
Loss contingency, amount paid | $ 45 |
SEGMENTS (Details)
SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Revenue | $ 50,345 | $ 45,950 | $ 133,174 | $ 135,423 | |
Gross Profit | 9,577 | 8,405 | 24,827 | 23,621 | |
Selling, general and administrative expenses, excluding depreciation and amortization stated below | (8,800) | (7,917) | (22,362) | (24,194) | |
Depreciation and amortization | (790) | (727) | (2,310) | (2,059) | |
Interest expense | (761) | (615) | (1,843) | (2,007) | |
Amortization of beneficial conversion feature | 0 | (183) | 0 | (550) | |
Amortization of debt discount and deferred financing costs | (1,212) | (401) | (2,610) | (1,310) | |
Loss on extinguishment of debt, net | (4,764) | 0 | (6,132) | 0 | |
Change in fair value of warrants | (688) | 0 | (493) | 0 | |
Gain on settlement of warrants | 0 | 0 | 0 | 485 | |
Other expense | (10) | (35) | (31) | (38) | |
Loss Before Provision for Income Tax | (7,448) | (1,473) | (10,954) | (6,052) | |
Assets, Total | 94,125 | 94,125 | $ 53,957 | ||
UNITED STATES [Member] | |||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Revenue | 37,830 | 38,845 | 107,441 | 112,557 | |
Gross Profit | 7,033 | 6,815 | 19,441 | 18,842 | |
Assets, Total | 60,795 | 60,795 | 44,990 | ||
UNITED KINGDOM [Member] | |||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Revenue | 12,452 | 7,074 | 25,634 | 22,790 | |
Gross Profit | 2,523 | 1,581 | 5,352 | 4,744 | |
Assets, Total | 33,261 | 33,261 | 8,936 | ||
CANADA [Member] | |||||
Revenues From External Customers And Long Lived Assets [Line Items] | |||||
Revenue | 63 | 31 | 99 | 76 | |
Gross Profit | 21 | $ 9 | 34 | $ 35 | |
Assets, Total | $ 69 | $ 69 | $ 31 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Sep. 15, 2017 | Dec. 31, 2016 |
Acquired Indefinite Lived Intangible Assets [Line Items] | |||
Goodwill | $ 33,362 | $ 15,779 | |
CBS Butler [Member] | |||
Acquired Indefinite Lived Intangible Assets [Line Items] | |||
Goodwill | $ 13,754 | ||
Intangible assets | |||
Intangible assets | 5,746 | ||
CBS Butler [Member] | Tradenames [Member] | |||
Intangible assets | |||
Intangible assets | 1,123 | ||
CBS Butler [Member] | Non-compete [Member] | |||
Intangible assets | |||
Intangible assets | 150 | ||
CBS Butler [Member] | Customer Relationships [Member] | |||
Intangible assets | |||
Intangible assets | 4,473 | ||
FirstPro [Member] | |||
Acquired Indefinite Lived Intangible Assets [Line Items] | |||
Goodwill | 3,829 | ||
Intangible assets | |||
Intangible assets | 3,364 | ||
FirstPro [Member] | Tradenames [Member] | |||
Intangible assets | |||
Intangible assets | 35 | ||
FirstPro [Member] | Non-compete [Member] | |||
Intangible assets | |||
Intangible assets | 193 | ||
FirstPro [Member] | Customer Relationships [Member] | |||
Intangible assets | |||
Intangible assets | $ 3,136 |
ACQUISITIONS (Parenthetical) (D
ACQUISITIONS (Parenthetical) (Details) $ in Thousands | Sep. 15, 2017USD ($) |
CBS Butler Acquisition [Member] | |
Acquired Indefinite Lived Intangible Assets [Line Items] | |
Goodwill, adjustments | $ 811 |
FirstPro [Member] | |
Acquired Indefinite Lived Intangible Assets [Line Items] | |
Goodwill, adjustments | $ 702 |
ACQUISITIONS (Details Textual)
ACQUISITIONS (Details Textual) $ in Thousands | Sep. 15, 2017USD ($)Business | Sep. 30, 2017USD ($) |
Tradenames [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted average estimated useful life | 10 years | |
Customer Relationships [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted average estimated useful life | 10 years | |
Non-compete [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Weighted average estimated useful life | 10 years | |
CBS Butler [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 5,746 | |
CBS Butler [Member] | Tradenames [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Intangible assets | 1,123 | |
CBS Butler [Member] | Customer Relationships [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Intangible assets | 4,473 | |
CBS Butler [Member] | Non-compete [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Intangible assets | 150 | |
FirstPro [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Intangible assets | 3,364 | |
FirstPro [Member] | Tradenames [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Intangible assets | 35 | |
FirstPro [Member] | Customer Relationships [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Intangible assets | 3,136 | |
FirstPro [Member] | Non-compete [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Intangible assets | 193 | |
FirstPro and CBS Butler [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Business acquired receivables and fair value | 8,527 | |
Revenues from acquisitions | $ 6,768 | |
FirstPro and CBS Butler [Member] | Selling, General and Administrative Expenses, Excluding Depreciation and Amortization [Member] | ||
Acquired Finite Lived Intangible Assets [Line Items] | ||
Business acquisition expenses related to third party | $ 384 | |
Number of business acquired | Business | 2 |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - FirstPro and CBS Butler [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | |
Business Acquisition Pro Forma Information Nonrecurring Adjustment [Line Items] | ||||
Revenues | $ 63,854 | $ 66,944 | $ 184,995 | $ 201,611 |
Net loss from continuing operations | $ (7,837) | $ (1,311) | $ (11,674) | $ (8,468) |
OTHER RELATED PARTY TRANSACTI52
OTHER RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Oct. 01, 2016 | Sep. 30, 2017 | Oct. 01, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Share based compensation expense recognized | $ 962 | $ 773 | |||
Accounts payable and accrued expenses | $ 22,052 | 22,052 | $ 18,110 | ||
Dimitri Villard [Member] | |||||
Related Party Transaction [Line Items] | |||||
Consulting Fees Related Parties | 19 | $ 13 | $ 50 | 38 | |
Stock Issued During Period, Shares, as Bonus | 13,200 | ||||
Stock Issued During Period, Value, as Bonus | $ 54 | ||||
Share based compensation expense recognized | $ 56 | $ 42 | |||
Shares vesting period | 3 years | ||||
Accounts payable and accrued expenses | 0 | $ 0 | |||
Dimitri Villard [Member] | Common Stock [Member] | |||||
Related Party Transaction [Line Items] | |||||
Stock Issued During Period, Shares, Issued for Services | 1,700 | 1,200 | |||
Stock Issued During Period, Value, Issued for Services | $ 6 | $ 15 | |||
Jeff Grout [Member] | |||||
Related Party Transaction [Line Items] | |||||
Consulting Fees Related Parties | 19 | 13 | $ 50 | 38 | |
Stock Issued During Period, Shares, as Bonus | 13,200 | ||||
Stock Issued During Period, Value, as Bonus | $ 54 | ||||
Share based compensation expense recognized | $ 56 | $ 42 | |||
Shares vesting period | 3 years | ||||
Accounts payable and accrued expenses | 0 | $ 0 | |||
Jeff Grout [Member] | Common Stock [Member] | Board and Committee members [Member] | |||||
Related Party Transaction [Line Items] | |||||
Stock Issued During Period, Shares, Issued for Services | 1,700 | 1,200 | |||
Stock Issued During Period, Value, Issued for Services | $ 6 | $ 15 | |||
Nick Florio [Member] | |||||
Related Party Transaction [Line Items] | |||||
Consulting Fees Related Parties | 19 | $ 13 | $ 50 | 38 | |
Stock Issued During Period, Shares, as Bonus | 13,200 | ||||
Stock Issued During Period, Value, as Bonus | $ 54 | ||||
Share based compensation expense recognized | $ 54 | $ 41 | |||
Shares vesting period | 3 years | ||||
Accounts payable and accrued expenses | $ 0 | $ 0 | |||
Nick Florio [Member] | Common Stock [Member] | Board and Committee members [Member] | |||||
Related Party Transaction [Line Items] | |||||
Stock Issued During Period, Shares, Issued for Services | 1,900 | 1,000 | |||
Stock Issued During Period, Value, Issued for Services | $ 7 | $ 12 |
SUPPLEMENTAL CASH FLOW INFORM53
SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Oct. 01, 2016 | |
Cash paid for: | ||
Interest | $ 1,827 | $ 1,559 |
Income taxes | 140 | 132 |
Non Cash Investing and Financing Activities: | ||
Deemed Dividends | 2,009 | 1,660 |
CSI earnout (payment with surety bond) | 1,405 | 0 |
Convertible Note [Member] | ||
Non Cash Investing and Financing Activities: | ||
Shares issued | 498 | 0 |
Convertible Notes [Member] | ||
Non Cash Investing and Financing Activities: | ||
Shares issued | 0 | 315 |
Promissory Notes [Member] | ||
Non Cash Investing and Financing Activities: | ||
Shares issued | 0 | 65 |
Convertible Notes Payable [Member] | ||
Non Cash Investing and Financing Activities: | ||
Conversion of debt instrument | 0 | (1,066) |
Jackson Investment Group Term Loan [Member] | ||
Non Cash Investing and Financing Activities: | ||
Shares issued | 2,527 | 0 |
Warrants issued in connection with Jackson term loan | 2,303 | 0 |
Series D Payoff [Member] | ||
Non Cash Investing and Financing Activities: | ||
Shares issued | 208 | 0 |
Series A Preferred Stock - Related Party [Member] | ||
Non Cash Investing and Financing Activities: | ||
Dividends | 0 | 150 |
CBS Butler Acquisition [Member] | ||
Non Cash Investing and Financing Activities: | ||
Shares issued | $ 430 | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended |
Jun. 30, 2018 | Sep. 30, 2017 | |
PeopleServe PRS, Inc [Member] | Scenario, Forecast [Member] | ||
Subsequent Event [Line Items] | ||
Divestiture of business | $ 1,700 | |
PeopleServe Reporting Unit [Member] | ||
Subsequent Event [Line Items] | ||
Impairment of goodwill | $ 4,790 |