What changed in this filing

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Item 1A. Risk Factors

2024-03-15 compared with 2023-03-16 · 15 added, 23 removed, 244 unchanged (13% of the section changed)

19 unchanged sentences

• Aggressively price products and services and increase benefits in ways that we may not be able to match.

In order to compete effectively in our markets, we must target our potential client partners carefully, continue to improve our efficiencies and the scope and quality of our workforce solutions, and rely on our service quality, innovation, education and

program clarity.

If our competitive advantages are not compelling or sustainable, then we are unlikely to increase or sustain profits and our stock price could significantly decline.

20 unchanged sentences

Moreover, use of our copyrights, trademarks, service marks, trade names, domain names, or other intellectual property by third parties, including but not limited to unauthorized use by third parties for criminal purposes or otherwise, even if such use is outside our reasonable control, may significantly harm our reputation or the value of our copyrights, trademarks, service marks, trade names, domain names, or other intellectual property, or subject us to legal proceedings, and therefore have a material adverse effect on our business, results of operations, or financial condition.

Our rebranding plan may take a significant amount of time and involve substantial costs and may not be favorably received by our client partners.

In early 2023, our board of directors approved our management’s plan to rebrand as BGSF, eliminating various current trade names.

We intend to complete this rebranding by the end of the second quarter of 2023.

We may incur substantial costs as a result of the rebranding and may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition and status previously enjoyed by certain of our brands.

The failure of our rebranding initiative could adversely affect our ability to attract and retain client partners, which could cause us not to realize some or all of the anticipated benefits contemplated by the rebranding.

We would be adversely affected by the loss of key personnel.

37 unchanged sentences

If our working capital needs increase in the future, we may be forced to seek additional sources of capital, which may not be available on commercially reasonable terms, or at all.

The maximum amount we are entitled to borrow under our revolving credit facility is currently $35.0 million and the availability of unused funds is affected by financial, business, economic and other factors, as well as by the daily timing of cash collections and cash outflows.

At the end of fiscal 2023, the maximum amount we were entitled to borrow under our revolving credit facility was $41.0 million and the availability of unused funds was affected by financial, business, economic and other factors, as well as by the daily timing of cash collections and cash outflows.

We typically experience significant seasonal and other fluctuations in our borrowings and borrowing availability, and we aggressively manage our cash flow to ensure adequate funds to meet working capital needs.

9 unchanged sentences

In accordance with generally accepted accounting principles, we are required to review our goodwill and intangible assets for impairment at least annually.

Our goodwill and intangibles assets from continuing operations were $55.2 million and $47.6 million, respectively, at the end of fiscal year 2022.

Our goodwill and intangibles assets were $59.6 million and $30.4 million, respectively, at the end of fiscal year 2023.

An unfavorable evaluation could cause us to write-off these assets in future periods.

Any future write-offs could have a material adverse impact on our results of operations.

For example, at the February, 2023 Board of Director's meeting, management's plan was approved to rebrand as BGSF, eliminating various current trade names.

See “Note 8 - Intangible Assets” in our Consolidated Financial Statements included elsewhere in this report for additional information.

For example, in 2023, the Board of Director approved management’s plan to rebrand as BGSF, eliminating various current trade names.

See “Note 2 - Summary of Significant Accounting Policies” in our Consolidated Financial Statements included elsewhere in this report for additional information.

The amount of collateral that we are required to maintain to support our workers’ compensation obligations could increase, reducing the amount of capital we have available to support and grow our field operations.

15 unchanged sentences

These obligations are fixed, whether or not the client partner makes payments required by our workforce solutions agreement, which exposes us to credit risks.

We attempt to mitigate this risk by generally invoicing our client partners weekly and having a high number of client partners who are geographically and industry diverse.

We attempt to mitigate this risk by generally invoicing our client partners

weekly and having a high number of client partners who are geographically and industry diverse.

We also carefully monitor the timeliness of our client partners’ payments and impose strict credit standards on our client partners.

If we fail to successfully manage our credit risk, we may suffer significant losses which would decrease our profitability.

Our business is subject to federal, state and local labor and employment laws and a failure to comply could materially harm our business.

We are subject to regulation by numerous federal, state and local regulatory agencies, including but not limited to the U.S.

Our business is subject to foreign, federal, state and local labor and employment laws and a failure to comply could materially harm our business.

We are subject to regulation by numerous foreign, federal, state and local regulatory agencies, including but not limited to the U.S.

Department of Labor, which sets employment practice standards for workers, and similar state and local agencies.

17 unchanged sentences

Because of the uncertainty surrounding this replacement health care reform legislation, we cannot predict with any certainty the likely impact of the Health Care Reform Laws’ repeal or the adoption of any other health care reform legislation on our financial condition or operating results.

Whether or not there is alternative health care legislation enacted in

the U.S., there is likely to be significant disruption to the health care market in the coming months and years and the costs of our health care expenditures may increase.

Whether or not there is alternative health care legislation enacted in the U.S., there is likely to be significant disruption to the health care market in the coming months and years and the costs of our health care expenditures may increase.

We may be exposed to employment-related claims and losses, including class action lawsuits, which could have a material adverse effect on our business.

38 unchanged sentences

As a result of any of the foregoing, our relationships with our client partners may be impaired, we may lose client partners, our ability to attract new client partners may be adversely affected and we could be exposed to contractual liability.

Precautions in place to protect us from, or minimize the effect of, such events may not be adequate.

Precautions in place to protect us from, or minimize the effect of, such

events may not be adequate.

In addition, our business involves the storage and transmission of field talent or client partners’ proprietary information, and security breaches, computer viruses or cyber-attacks, including attacks motivated by grievances against the business industry in general or against us in particular, could expose us to a risk of loss of this information, litigation and possible liability.

23 unchanged sentences

• changes in financial or operational estimates or projections;

• duration and impact of the COVID-19 pandemic and efforts to mitigate its spread;

• changes in the economic performance or market valuations of companies similar to ours;

6 unchanged sentences

In the future we may issue additional securities up to our total authorized and unissued amounts, including shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock, resulting in the dilution of the ownership interests of our stockholders.

We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock in connection with hiring or retaining personnel, option exercises, future acquisitions or future placements of our securities for capital-raising or other business purposes.

We may issue additional shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock in connection with hiring or retaining personnel, option exercises, 2020 ESPP purchases, future acquisitions or future placements of our securities for capital-raising or other business purposes.

Moreover, the exercise of our existing outstanding stock options, which are exercisable for or convertible into shares of our common stock, would dilute our existing common stockholders.

14 unchanged sentences

We cannot be sure we will pay dividends in the future, and consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

While we have declared and paid dividends for the prior thirty-three quarterly periods, we are limited in our ability to pay dividends by our credit agreement, and therefore, we cannot be certain if we will pay any cash dividends to holders of our common stock in the future.

While we have declared and paid dividends for the prior thirty-seven quarterly periods, we are limited in our ability to pay dividends by our credit agreement, and therefore, we cannot be certain if we will pay any cash dividends to holders of our common stock in the future.

Any future determination with respect to the payment of dividends will be at the discretion of our board of directors and will be dependent upon, among other things, our financial condition, results of operations, capital requirements, the terms of our then existing indebtedness, contractual restrictions, future prospects, general economic conditions and other factors considered relevant by our board of directors.

19 unchanged sentences

Our certificate of incorporation contains provisions that have the same effect as Section 203, except that they generally provide that Taglich Private Equity LLC, Taglich Brothers, Inc.

of our shares, or any person that becomes an interested stockholder as a result of a transfer of 5% or more of our voting stock by the forgoing persons to such person, will be excluded from the “interested stockholder” definition in our certificate of incorporation and will therefore not be subject to the restrictions set forth therein that have the same effect as Section 203.

or any of their respective affiliates or associates, including any investment funds or portfolio companies managed by any of the foregoing, or any other person with whom any of the foregoing act as a group for the purpose of acquiring, voting or disposing of our shares, or any person that becomes an interested stockholder as a result of a transfer of 5% or more of our voting stock by the forgoing persons to such person, will be excluded from the “interested stockholder” definition in our certificate of incorporation and will therefore not be subject to the restrictions set forth therein that have the same effect as Section 203.

While these provisions have the effect of encouraging persons seeking to acquire control of our company to negotiate with our board of directors, they could enable the board of directors to hinder or frustrate a transaction that some, or a majority, of the stockholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

UNRESOLVED STAFF COMMENTS.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors