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v3.23.1

Restatement (Tables) | 12 Months Ended
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Dec. 31, 2022
Prior Period Adjustment [Abstract] |
Schedule of Balance Sheet Table |
|  | July 2, 2022 |  |  | January 1, 2022 |
|  | (Unaudited) |  |  |  |  |  |  |  |
|  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 1,181 |  | $ | — |  | $ | 1,181 |  |  | $ | 705 |
Trade and other receivables, net |  |  | 4,273 |  |  | — |  |  | 4,273 |  |  |  | 4,220 |
Income taxes receivable |  |  | 12 |  |  | — |  |  | 12 |  |  |  | — |
Inventories |  |  | 494 |  |  | — |  |  | 494 |  |  |  | 1,209 |
Prepaid expenses and other current assets |  |  | 869 |  |  | — |  |  | 869 |  |  |  | 1,423 |
Total current assets |  |  | 6,829 |  |  | — |  |  | 6,829 |  |  |  | 7,557 |
Property and equipment, net |  |  | 2,676 |  |  | — |  |  | 2,676 |  |  |  | 2,113 |
Right to use asset - operating leases |  |  | 4,268 |  |  | — |  |  | 4,268 |  |  |  | 3,671 |
Intangible assets, net |  |  | 345 |  |  | — |  |  | 345 |  |  |  | 268 |
Note receivable, net |  |  | 11,277 |  |  | (1,812 | ) |  | 9,465 |  |  |  | — |
Marketable securities |  |  | 570 |  |  | — |  |  | 570 |  |  |  | — |
Deposits and other assets |  |  | 1,554 |  |  | — |  |  | 1,554 |  |  |  | 1,556 |
Total assets |  | $ | 27,519 |  | $ | (1,812 | ) | $ | 25,707 |  |  | $ | 15,165 |
Liabilities and Stockholders' Equity (Deficit) |  |
Liabilities: |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 5,839 |  | $ | — |  | $ | 5,839 |  |  | $ | 5,266 |
Accrued liabilities - other |  |  | 4,963 |  |  | — |  |  | 4,963 |  |  |  | 5,232 |
Accrued liability - California Sales Taxes |  |  | 6,140 |  |  | — |  |  | 6,140 |  |  |  | 6,022 |
Lease obligation short–term - operating leases |  |  | 1,405 |  |  | — |  |  | 1,405 |  |  |  | 1,304 |
Short–term debt |  |  | — |  |  | — |  |  | — |  |  |  | 288 |
Current portion of notes payable |  |  | 315 |  |  | — |  |  | 315 |  |  |  | 261 |
Current portion of related party note payable |  |  | 223 |  |  | — |  |  | 223 |  |  |  | 1,000 |
Total current liabilities |  |  | 18,885 |  |  | — |  |  | 18,885 |  |  |  | 19,373 |
Lease obligation long term - operating leases |  |  | 2,964 |  |  | — |  |  | 2,964 |  |  |  | 2,470 |
Long–term portion of notes payable |  |  | 1,509 |  |  | — |  |  | 1,509 |  |  |  | 1,318 |
Long-term portion related party note payable |  |  | 724 |  |  | — |  |  | 724 |  |  |  | — |
Other noncurrent liabilities |  |  | 219 |  |  | — |  |  | 219 |  |  |  | 680 |
Total liabilities |  |  | 24,301 |  |  | — |  |  | 24,301 |  |  |  | 23,841 |
Commitments and contingencies (Note 15) |  |  |  |  |  |  |  |  |  |
Stockholders' equity (deficit): |  |  |  |  |  |  |  |  |  |
Preferred stock, series A - par value $0.001 per share 2,000,000 authorized, 222,588 and 238,729 shares issued and outstanding at July 2, 2022 and January 1, 2022, respectively |  |  | — |  |  | — |  |  | — |  |  |  | — |
Common stock, par value $0.001 per share, 10,000,000 shares authorized, 3,150,230 and 2,827,410 shares issued and outstanding at July 2, 2022 and January 1, 2022, respectively |  |  | 2 |  |  | — |  |  | 2 |  |  |  | 2 |
Additional paid-in capital |  |  | 45,747 |  |  | — |  |  | 45,747 |  |  |  | 45,743 |
Accumulated deficit |  |  | (41,914 | ) |  | (1,812 | ) |  | (43,726 | ) |  |  | (53,804 | )
Accumulated other comprehensive loss |  |  | (617 | ) |  | — |  |  | (617 | ) |  |  | (617 | )
Total stockholders' equity (deficit) |  |  | 3,218 |  |  | (1,812 | ) |  | 1,406 |  |  |  | (8,676 | )
Total liabilities and stockholders' equity (deficit) |  | $ | 27,519 |  | $ | (1,812 | ) | $ | 25,707 |  |  | $ | 15,165 |
|  | October 1, 2022 |  |  | January 1, 2022 |
|  | (Unaudited) |  |  |  |  |  |  |  |
|  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 868 |  | $ | — |  | $ | 868 |  |  | $ | 705 |
Trade and other receivables, net |  |  | 6,834 |  |  | — |  |  | 6,834 |  |  |  | 4,220 |
Inventories |  |  | 415 |  |  | — |  |  | 415 |  |  |  | 1,209 |
Prepaid expenses and other current assets |  |  | 1,248 |  |  | — |  |  | 1,248 |  |  |  | 1,423 |
Total current assets |  |  | 9,365 |  |  | — |  |  | 9,365 |  |  |  | 7,557 |
Property and equipment, net |  |  | 2,656 |  |  | — |  |  | 2,656 |  |  |  | 2,113 |
Right to use asset - operating leases |  |  | 5,733 |  |  | — |  |  | 5,733 |  |  |  | 3,671 |
Intangible assets, net |  |  | 328 |  |  | — |  |  | 328 |  |  |  | 268 |
Note receivable, net |  |  | 11,345 |  |  | (1,719 | ) |  | 9,626 |  |  |  | — |
Marketable securities |  |  | 300 |  |  | — |  |  | 300 |  |  |  | — |
Deposits and other assets |  |  | 1,577 |  |  | — |  |  | 1,577 |  |  |  | 1,556 |
Total assets |  | $ | 31,304 |  | $ | (1,719 | ) | $ | 29,585 |  |  | $ | 15,165 |
Liabilities and Stockholders' Equity (Deficit) |  |
Liabilities: |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 6,065 |  |  | — |  | $ | 6,065 |  |  | $ | 5,266 |
Accrued liabilities - other |  |  | 5,575 |  |  | — |  |  | 5,575 |  |  |  | 5,232 |
Accrued liability - California Sales Taxes |  |  | 6,202 |  |  | — |  |  | 6,202 |  |  |  | 6,022 |
Lease obligation short–term - operating leases |  |  | 1,711 |  |  | — |  |  | 1,711 |  |  |  | 1,304 |
Short–term debt |  |  | 3,657 |  |  | — |  |  | 3,657 |  |  |  | 288 |
Current portion of notes payable |  |  | 406 |  |  | — |  |  | 406 |  |  |  | 261 |
Current portion of related party note payable |  |  | 228 |  |  | — |  |  | 228 |  |  |  | 1,000 |
Total current liabilities |  |  | 23,844 |  |  | — |  |  | 23,844 |  |  |  | 19,373 |
Lease obligation long term - operating leases |  |  | 4,179 |  |  | — |  |  | 4,179 |  |  |  | 2,470 |
Notes payable - long term portion |  |  | 1,425 |  |  | — |  |  | 1,425 |  |  |  | 1,318 |
Long-term portion related party note payable |  |  | 665 |  |  | — |  |  | 665 |  |  |  | — |
Other noncurrent liabilities |  |  | 46 |  |  | — |  |  | 46 |  |  |  | 680 |
Total liabilities |  |  | 30,159 |  |  | — |  |  | 30,159 |  |  |  | 23,841 |
Commitments and contingencies (Note 16) |  |  |  |  |  |  |  |  |  |
Stockholders' equity (deficit): |  |  |  |  |  |  |  |  |  |
Preferred stock, series A - par value $0.001 per share 2,000,000 authorized, 222,588 and 238,729 shares issued and outstanding at October 1, 2022 and January 1, 2022, respectively |  |  | — |  |  | — |  |  | — |  |  |  | — |
Common stock, par value $0.001 per share, 200,000,000 shares authorized, 3,150,230 and 2,827,410 shares issued and outstanding at October 1, 2022 and January 1, 2022, respectively |  |  | 3 |  |  | — |  |  | 3 |  |  |  | 2 |
Additional paid-in capital |  |  | 45,747 |  |  | — |  |  | 45,747 |  |  |  | 45,743 |
Accumulated deficit |  |  | (43,988 | ) |  | (1,719 | ) |  | (45,707 | ) |  |  | (53,804 | )
Accumulated other comprehensive loss |  |  | (617 | ) |  | — |  |  | (617 | ) |  |  | (617 | )
Total stockholders' equity (deficit) |  |  | 1,145 |  |  | (1,719 | ) |  | (574 | ) |  |  | (8,676 | )
Total liabilities and stockholders' equity (deficit) |  | $ | 31,304 |  | $ | (1,719 | ) | $ | 29,585 |  |  | $ | 15,165 |
Schedule of Income Statement Table |
|  | For the Thirteen Weeks Ended |  |  | For the Twenty Six Weeks Ended |
|  | July 2, 2022 |  |  | July 3, 2021 |  |  | July 2, 2022 |  |  | July 3, 2021 |
|  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |  |  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |
Revenues |  | $ | 10,538 |  | $ | — |  | $ | 10,538 |  |  | $ | 8,606 |  |  | $ | 19,862 |  | $ | — |  | $ | 19,862 |  |  | $ | 17,278 |
Cost of revenues |  |  | 8,889 |  |  | — |  |  | 8,889 |  |  |  | 6,863 |  |  |  | 16,360 |  |  | — |  |  | 16,360 |  |  |  | 14,114 |
Gross profit |  |  | 1,649 |  |  | — |  |  | 1,649 |  |  |  | 1,743 |  |  |  | 3,502 |  |  | — |  |  | 3,502 |  |  |  | 3,164 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expenses |  |  | 2,908 |  |  | — |  |  | 2,908 |  |  |  | 4,595 |  |  |  | 5,853 |  |  | — |  |  | 5,853 |  |  |  | 8,125 |
Gain on sale of GeoTraq |  |  | (12,091 | ) |  | 12,091 |  |  | — |  |  |  | — |  |  |  | (12,091 | ) |  | 12,091 |  |  | — |  |  |  | — |
Operating income (loss) |  |  | 10,832 |  |  | (12,091 | ) |  | (1,259 | ) |  |  | (2,852 | ) |  |  | 9,740 |  |  | (12,091 | ) |  | (2,351 | ) |  |  | (4,961 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net |  |  | (98 | ) |  | (38 | ) |  | (136 | ) |  |  | (125 | ) |  |  | (290 | ) |  | (38 | ) |  | (328 | ) |  |  | (198 | )
Gain on Payroll Protection Program loan forgiveness |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | 1,872 |
Gain (loss) on litigation settlement, net |  |  | — |  |  | — |  |  | — |  |  |  | (1,950 | ) |  |  | 1,835 |  |  | — |  |  | 1,835 |  |  |  | (1,950 | )
Gain on settlement of vendor advance payments |  |  | — |  |  | — |  |  | — |  |  |  | 131 |  |  |  | — |  |  | — |  |  | — |  |  |  | 941 |
Gain on reversal of contingency loss |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  |  | 637 |  |  | — |  |  | 637 |  |  |  | — |
Unrealized loss on marketable securities |  |  | (376 | ) |  | — |  |  | (376 | ) |  |  | — |  |  |  | (376 | ) |  | — |  |  | (376 | ) |  |  | — |
Other income, net |  |  | 333 |  |  | — |  |  | 333 |  |  |  | 22 |  |  |  | 359 |  |  | — |  |  | 359 |  |  |  | 22 |
Total other income (expense), net |  |  | (141 | ) |  | (38 | ) |  | (179 | ) |  |  | (1,922 | ) |  |  | 2,165 |  |  | (38 | ) |  | 2,127 |  |  |  | 687 |
Income (loss) from operations before provision for income taxes |  |  | 10,691 |  |  | (12,129 | ) |  | (1,438 | ) |  |  | (4,774 | ) |  |  | 11,905 |  |  | (12,129 | ) |  | (224 | ) |  |  | (4,274 | )
Provision (benefit) for income taxes |  |  | 4 |  |  | — |  |  | 4 |  |  |  | 205 |  |  |  | 7 |  |  | — |  |  | 7 |  |  |  | 203 |
Net income (loss) from continuing operations |  |  | 10,687 |  |  | (12,129 | ) |  | (1,442 | ) |  |  | (4,979 | ) |  |  | 11,898 |  |  | (12,129 | ) |  | (231 | ) |  |  | (4,477 | )
Net income from discontinued operations |  |  | — |  | $ | 10,317 |  | $ | 10,317 |  |  |  | — |  |  |  | — |  |  | 10,317 |  |  | 10,317 |  |  |  | — |
Net income (loss) |  | $ | 10,687 |  | $ | (1,812 | ) | $ | 8,875 |  |  | $ | (4,979 | ) |  | $ | 11,898 |  | $ | (1,812 | ) | $ | 10,086 |  |  | $ | (4,477 | )
Net income (loss) per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic income per share from continuing operations |  | $ | 3.39 |  | $ | (3.85 | ) | $ | (0.46 | ) |  | $ | (2.07 | ) |  | $ | 3.78 |  | $ | (3.85 | ) | $ | (0.07 | ) |  | $ | (1.94 | )
Diluted income per share from continuing operations |  | $ | 3.06 |  | $ | (3.85 | ) | $ | (0.46 | ) |  | $ | (2.07 | ) |  | $ | 3.40 |  | $ | (3.85 | ) | $ | (0.07 | ) |  | $ | (1.94 | )
Basic income per share from discontinued operations |  | $ | — |  | $ | 3.27 |  | $ | 3.27 |  |  | $ | — |  |  | $ | — |  | $ | 3.27 |  | $ | 3.27 |  |  | $ | — |
Diluted income per share from discontinued operations |  | $ | — |  | $ | 2.95 |  | $ | 2.95 |  |  | $ | — |  |  | $ | — |  | $ | 2.95 |  | $ | 2.95 |  |  | $ | — |
Basic income per share |  | $ | 3.39 |  | $ | (0.58 | ) | $ | 2.82 |  |  | $ | (2.07 | ) |  | $ | 3.78 |  | $ | (0.58 | ) | $ | 3.20 |  |  | $ | (1.94 | )
Diluted income per share |  | $ | 3.06 |  | $ | (0.58 | ) | $ | 2.54 |  |  | $ | (2.07 | ) |  | $ | 3.40 |  | $ | (0.58 | ) | $ | 2.88 |  |  | $ | (1.94 | )
Weighted average common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 3,150,230 |  |  | 3,150,230 |  |  | 3,150,230 |  |  |  | 2,405,410 |  |  |  | 3,150,230 |  |  | 3,150,230 |  |  | 3,150,230 |  |  |  | 2,312,024 |
Diluted |  |  | 3,496,250 |  |  | 3,496,250 |  |  | 3,496,250 |  |  |  | 2,405,410 |  |  |  | 3,496,250 |  |  | 3,496,250 |  |  | 3,496,250 |  |  |  | 2,312,024 |
Net income (loss) |  | $ | 10,687 |  | $ | (1,812 | ) | $ | 8,875 |  |  | $ | (4,979 | ) |  | $ | 11,898 |  | $ | (1,812 | ) | $ | 10,086 |  |  | $ | (4,477 | )
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Effect of foreign currency translation adjustments |  |  | 41 |  |  | — |  |  | — |  |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | (42 | )
Total other comprehensive income (loss), net of tax |  |  | 41 |  |  | — |  |  | — |  |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | (42 | )
Comprehensive income (loss) |  | $ | 10,728 |  | $ | (1,812 | ) | $ | 8,875 |  |  | $ | (4,979 | ) |  | $ | 11,898 |  | $ | (1,812 | ) | $ | 10,086 |  |  | $ | (4,519 | )
|  | Series A Preferred |  |  | Common Stock |  |  | Additional Paid-in |  |  | Accumulated |  |  | Accumulated Other Comprehensive |  |  | Total Stockholders' |
|  | Shares |  |  | Amount |  |  | Shares |  |  | Amount |  |  | Capital |  |  | Deficit |  |  | Deficit |  |  | Equity (Deficit) |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (As restated) |
Balance, January 1, 2022 |  |  | 238,729 |  |  | $ | — |  |  |  | 2,827,410 |  |  | $ | 2 |  |  | $ | 45,743 |  |  | $ | (53,804 | ) |  | $ | (617 | ) |  | $ | (8,676 | )
Share based compensation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | 4 |
Other comprehensive loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (8 | ) |  |  | (41 | ) |  |  | (49 | )
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,211 |  |  |  | — |  |  |  | 1,211 |
Balance, April 2, 2022 |  |  | 238,729 |  |  |  | — |  |  |  | 2,827,410 |  |  |  | 2 |  |  |  | 45,747 |  |  |  | (52,601 | ) |  |  | (658 | ) |  |  | (7,510 | )
Series A-1 preferred converted |  |  | (16,141 | ) |  |  | — |  |  |  | 322,820 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Other comprehensive income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 41 |  |  |  | 41 |
Net income, as restated |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10,687 |  |  |  | — |  |  |  | 10,687 |
Balance, July 2, 2022 |  |  | 222,588 |  |  | $ | — |  |  |  | 3,150,230 |  |  | $ | 2 |  |  | $ | 45,747 |  |  | $ | (41,914 | ) |  | $ | (617 | ) |  | $ | 3,218 |
|  | For the Twenty Six Weeks Ended |
|  | July 2, 2022 |  |  | July 3, 2021 |
|  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |
OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 11,898 |  | $ | (12,129 | ) | $ | (231 | ) |  | $ | (4,477 | )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 270 |  |  | — |  |  | 270 |  |  |  | 2,090 |
Amortization of debt issuance costs |  |  | 7 |  |  | — |  |  | 7 |  |  |  | — |
Stock based compensation expense |  |  | 4 |  |  | — |  |  | 4 |  |  |  | 180 |
Accretion of note receivable discount |  |  | (27 | ) |  | (38 | ) |  | (65 | ) |  |  | — |
Gain on legal settlement |  |  | (115 | ) |  | — |  |  | (115 | ) |  |  | — |
Gain on Payroll Protection Program loan forgiveness |  |  | — |  |  | — |  |  | — |  |  |  | (1,872 | )
Gain on settlement of vendor advance payments |  |  | — |  |  | — |  |  | — |  |  |  | (941 | )
Gain on reversal of contingent liability |  |  | (637 | ) |  | — |  |  | (637 | ) |  |  | — |
Gain on sale of GeoTraq |  |  | (12,091 | ) |  | 1,850 |  |  | (10,241 | ) |  |  | — |
Unrealized loss on marketable securities |  |  | 376 |  |  | — |  |  | 376 |  |  |  | — |
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | (53 | ) |  | — |  |  | (53 | ) |  |  | (204 | )
Income taxes receivable |  |  | (12 | ) |  | — |  |  | (12 | ) |  |  | 173 |
Prepaid expenses and other current assets |  |  | 554 |  |  | — |  |  | 554 |  |  |  | 110 |
Inventories |  |  | 610 |  |  | — |  |  | 610 |  |  |  | 303 |
Right of use assets |  |  | (597 | ) |  | — |  |  | (597 | ) |  |  | (681 | )
Lease liability |  |  | 595 |  |  | — |  |  | 595 |  |  |  | 650 |
Accounts payable and accrued expenses |  |  | 713 |  |  | — |  |  | 713 |  |  |  | 2,485 |
Deposits and other Assets |  |  | (6 | ) |  | — |  |  | (6 | ) |  |  | (123 | )
Net cash provided by (used in) operating activities |  |  | 1,489 |  |  | (10,317 | ) |  | (8,828 | ) |  |  | (2,307 | )
INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Purchases of property and equipment |  |  | (721 | ) |  | — |  |  | (721 | ) |  |  | (1,458 | )
Purchases of intangibles |  |  | (189 | ) |  | — |  |  | (189 | ) |  |  | (65 | )
Net cash used in investing activities |  |  | (910 | ) |  | — |  |  | (910 | ) |  |  | (1,523 | )
FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Proceeds from equity financing, net |  |  | — |  |  | — |  |  | — |  |  |  | 5,544 |
Proceeds from stock option exercise |  |  | — |  |  | — |  |  | — |  |  |  | 27 |
Proceeds from notes payable |  |  | 366 |  |  | — |  |  | 366 |  |  |  | 1,835 |
Payments on related party notes payable |  |  | (53 | ) |  | — |  |  | (53 | ) |  |  | — |
Payments on notes payable |  |  | (128 | ) |  | — |  |  | (128 | ) |  |  | (59 | )
Payments on short-term notes payable |  |  | (288 | ) |  | — |  |  | (288 | ) |  |  | (144 | )
Net cash provided by (used in) financing activities |  |  | (103 | ) |  | — |  |  | (103 | ) |  |  | 7,203 |
Effect of changes in exchange rate on cash and cash equivalents |  |  | — |  |  |  |  | — |  |  |  | (42 | )
INCREASE IN CASH AND CASH EQUIVALENTS |  |  | 476 |  |  | (10,317 | ) |  | (9,841 | ) |  |  | 3,331 |
CASH AND CASH EQUIVALENTS, beginning of period |  |  | 705 |  |  |  |  | 705 |  |  |  | 379 |
CASH AND CASH EQUIVALENTS, end of period |  | $ | 1,181 |  | $ | (10,317 | ) | $ | (9,136 | ) |  | $ | 3,710 |
Supplemental cash flow disclosures: |  |  |  |  |  |  |  |  |  |
Interest paid |  | $ | 120 |  | $ | — |  | $ | 120 |  |  | $ | 84 |
Income taxes paid |  |  | 54 |  |  | — |  |  | 54 |  |  |  | 28 |
Right to use asset - operating leases capitalized |  |  | 1,451 |  |  | — |  |  | 1,451 |  |  |  | 1,244 |
|  | October 1, 2022 |  |  | January 1, 2022 |
|  | (Unaudited) |  |  |  |  |  |  |  |
|  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 868 |  | $ | — |  | $ | 868 |  |  | $ | 705 |
Trade and other receivables, net |  |  | 6,834 |  |  | — |  |  | 6,834 |  |  |  | 4,220 |
Inventories |  |  | 415 |  |  | — |  |  | 415 |  |  |  | 1,209 |
Prepaid expenses and other current assets |  |  | 1,248 |  |  | — |  |  | 1,248 |  |  |  | 1,423 |
Total current assets |  |  | 9,365 |  |  | — |  |  | 9,365 |  |  |  | 7,557 |
Property and equipment, net |  |  | 2,656 |  |  | — |  |  | 2,656 |  |  |  | 2,113 |
Right to use asset - operating leases |  |  | 5,733 |  |  | — |  |  | 5,733 |  |  |  | 3,671 |
Intangible assets, net |  |  | 328 |  |  | — |  |  | 328 |  |  |  | 268 |
Note receivable, net |  |  | 11,345 |  |  | (1,719 | ) |  | 9,626 |  |  |  | — |
Marketable securities |  |  | 300 |  |  | — |  |  | 300 |  |  |  | — |
Deposits and other assets |  |  | 1,577 |  |  | — |  |  | 1,577 |  |  |  | 1,556 |
Total assets |  | $ | 31,304 |  | $ | (1,719 | ) | $ | 29,585 |  |  | $ | 15,165 |
Liabilities and Stockholders' Equity (Deficit) |  |
Liabilities: |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 6,065 |  |  | — |  | $ | 6,065 |  |  | $ | 5,266 |
Accrued liabilities - other |  |  | 5,575 |  |  | — |  |  | 5,575 |  |  |  | 5,232 |
Accrued liability - California Sales Taxes |  |  | 6,202 |  |  | — |  |  | 6,202 |  |  |  | 6,022 |
Lease obligation short–term - operating leases |  |  | 1,711 |  |  | — |  |  | 1,711 |  |  |  | 1,304 |
Short–term debt |  |  | 3,657 |  |  | — |  |  | 3,657 |  |  |  | 288 |
Current portion of notes payable |  |  | 406 |  |  | — |  |  | 406 |  |  |  | 261 |
Current portion of related party note payable |  |  | 228 |  |  | — |  |  | 228 |  |  |  | 1,000 |
Total current liabilities |  |  | 23,844 |  |  | — |  |  | 23,844 |  |  |  | 19,373 |
Lease obligation long term - operating leases |  |  | 4,179 |  |  | — |  |  | 4,179 |  |  |  | 2,470 |
Notes payable - long term portion |  |  | 1,425 |  |  | — |  |  | 1,425 |  |  |  | 1,318 |
Long-term portion related party note payable |  |  | 665 |  |  | — |  |  | 665 |  |  |  | — |
Other noncurrent liabilities |  |  | 46 |  |  | — |  |  | 46 |  |  |  | 680 |
Total liabilities |  |  | 30,159 |  |  | — |  |  | 30,159 |  |  |  | 23,841 |
Commitments and contingencies (Note 16) |  |  |  |  |  |  |  |  |  |
Stockholders' equity (deficit): |  |  |  |  |  |  |  |  |  |
Preferred stock, series A - par value $0.001 per share 2,000,000 authorized, 222,588 and 238,729 shares issued and outstanding at October 1, 2022 and January 1, 2022, respectively |  |  | — |  |  | — |  |  | — |  |  |  | — |
Common stock, par value $0.001 per share, 200,000,000 shares authorized, 3,150,230 and 2,827,410 shares issued and outstanding at October 1, 2022 and January 1, 2022, respectively |  |  | 3 |  |  | — |  |  | 3 |  |  |  | 2 |
Additional paid-in capital |  |  | 45,747 |  |  | — |  |  | 45,747 |  |  |  | 45,743 |
Accumulated deficit |  |  | (43,988 | ) |  | (1,719 | ) |  | (45,707 | ) |  |  | (53,804 | )
Accumulated other comprehensive loss |  |  | (617 | ) |  | — |  |  | (617 | ) |  |  | (617 | )
Total stockholders' equity (deficit) |  |  | 1,145 |  |  | (1,719 | ) |  | (574 | ) |  |  | (8,676 | )
Total liabilities and stockholders' equity (deficit) |  | $ | 31,304 |  | $ | (1,719 | ) | $ | 29,585 |  |  | $ | 15,165 |
|  | For the Thirteen Weeks Ended |  |  | For the Thirty-Nine Weeks Ended |
|  | October 1, 2022 |  |  | October 2, 2021 |  |  | October 1, 2022 |  |  | October 2, 2021 |
|  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |  |  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |
Revenues |  | $ | 8,587 |  | $ | — |  | $ | 8,587 |  |  | $ | 12,113 |  |  | $ | 28,449 |  | $ | — |  | $ | 28,449 |  |  | $ | 29,391 |
Cost of revenues |  |  | 7,553 |  |  | — |  |  | 7,553 |  |  |  | 9,032 |  |  |  | 23,913 |  |  | — |  |  | 23,913 |  |  |  | 23,146 |
Gross profit |  |  | 1,034 |  |  | — |  |  | 1,034 |  |  |  | 3,081 |  |  |  | 4,536 |  |  | — |  |  | 4,536 |  |  |  | 6,245 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative expenses |  |  | 2,858 |  |  | — |  |  | 2,858 |  |  |  | 3,925 |  |  |  | 8,711 |  |  | — |  |  | 8,711 |  |  |  | 12,050 |
Gain on sale of GeoTraq |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  |  | (12,091 | ) |  | 12,091 |  |  | — |  |  |  | — |
Operating income (loss) |  |  | (1,824 | ) |  | — |  |  | (1,824 | ) |  |  | (844 | ) |  |  | 7,916 |  |  | (12,091 | ) |  | (4,175 | ) |  |  | (5,805 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income (expense), net |  |  | 36 |  |  | (68 | ) |  | (32 | ) |  |  | (125 | ) |  |  | (254 | ) |  | (106 | ) |  | (360 | ) |  |  | (323 | )
Gain on Payroll Protection Program loan forgiveness |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | 1,872 |
Gain (loss) on litigation settlement, net |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  |  | 1,835 |  |  | — |  |  | 1,835 |  |  |  | (1,950 | )
Gain on settlement of vendor advance payments |  |  | — |  |  | — |  |  | — |  |  |  | 11 |  |  |  | — |  |  | — |  |  | — |  |  |  | 952 |
Gain on reversal of contingency loss |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  |  | 637 |  |  | — |  |  | 637 |  |  |  | — |
Unrealized loss on marketable securities |  |  | (270 | ) |  | — |  |  | (270 | ) |  |  | — |  |  |  | (646 | ) |  | — |  |  | (646 | ) |  |  | — |
Other income, net |  |  | — |  |  | — |  |  | — |  |  |  | 23 |  |  |  | 359 |  |  | — |  |  | 359 |  |  |  | 45 |
Total other income (expense), net |  |  | (234 | ) |  | (68 | ) |  | (302 | ) |  |  | (91 | ) |  |  | 1,931 |  |  | (106 | ) |  | 1,825 |  |  |  | 596 |
Income (loss) from operations before provision for income taxes |  |  | (2,058 | ) |  | (68 | ) |  | (2,126 | ) |  |  | (935 | ) |  |  | 9,847 |  |  | (12,197 | ) |  | (2,350 | ) |  |  | (5,209 | )
Provision for income taxes |  |  | 16 |  |  | — |  |  | 16 |  |  |  | 33 |  |  |  | 23 |  |  |  |  | 23 |  |  |  | 236 |
Net income (loss) |  |  | (2,074 | ) |  | (68 | ) |  | (2,142 | ) |  |  | (968 | ) |  |  | 9,824 |  |  | (12,197 | ) |  | (2,373 | ) |  |  | (5,445 | )
Net income from discontinued operations |  |  | — |  |  | 94 |  |  | 94 |  |  |  | — |  |  |  | — |  |  | 10,478 |  |  | 10,478 |  |  |  |
Net income (loss) |  | $ | (2,074 | ) | $ | 26 |  | $ | (2,048 | ) |  | $ | (968 | ) |  | $ | 9,824 |  | $ | (1,719 | ) | $ | 8,105 |  |  | $ | (5,445 | )
Net income (loss) per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic income per share from continuing operations |  | $ | (0.66 | ) | $ | (0.02 | ) | $ | (0.68 | ) |  | $ | (0.34 | ) |  | $ | 3.12 |  | $ | (3.87 | ) | $ | (0.75 | ) |  | $ | (2.09 | )
Diluted income per share from continuing operations |  | $ | (0.66 | ) | $ | (0.02 | ) | $ | (0.68 | ) |  | $ | (0.34 | ) |  | $ | 2.81 |  | $ | (3.87 | ) | $ | (0.75 | ) |  | $ | (2.09 | )
Basic income per share from discontinued operations |  | $ | — |  | $ | 0.03 |  | $ | 0.03 |  |  | $ | — |  |  | $ | — |  | $ | 3.33 |  | $ | 3.33 |  |  | $ | — |
Diluted income per share from discontinued operations |  | $ | — |  | $ | 0.03 |  | $ | 0.03 |  |  | $ | — |  |  | $ | — |  | $ | 3.00 |  | $ | 3.00 |  |  | $ | — |
Basic income per share |  | $ | (0.66 | ) | $ | 0.01 |  | $ | (0.65 | ) |  | $ | (0.34 | ) |  | $ | 3.12 |  | $ | (0.55 | ) | $ | 2.57 |  |  | $ | (2.09 | )
Diluted income per share |  | $ | (0.66 | ) | $ | 0.01 |  | $ | (0.65 | ) |  | $ | (0.34 | ) |  | $ | 2.81 |  | $ | (0.55 | ) | $ | 2.32 |  |  | $ | (2.09 | )
Weighted average common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 3,150,230 |  |  | 3,150,230 |  |  | 3,150,230 |  |  |  | 2,827,410 |  |  |  | 3,150,230 |  |  | 3,150,230 |  |  | 3,150,230 |  |  |  | 2,601,827 |
Diluted |  |  | 3,150,230 |  |  | 3,150,230 |  |  | 3,150,230 |  |  |  | 2,827,410 |  |  |  | 3,496,003 |  |  | 3,496,003 |  |  | 3,496,003 |  |  |  | 2,601,827 |
Net income (loss) |  | $ | (2,074 | ) | $ | 26 |  | $ | (2,048 | ) |  | $ | (968 | ) |  | $ | 9,824 |  | $ | (1,719 | ) | $ | 8,105 |  |  | $ | (5,445 | )
Other comprehensive loss, net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Effect of foreign currency translation adjustments |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | (42 | )
Total other comprehensive income loss, net of tax |  |  | — |  |  | — |  |  | — |  |  |  | — |  |  |  | — |  |  | — |  |  | — |  |  |  | (42 | )
Comprehensive income (loss) |  | $ | (2,074 | ) | $ | 26 |  | $ | (2,048 | ) |  | $ | (968 | ) |  | $ | 9,824 |  | $ | (1,719 | ) | $ | 8,105 |  |  | $ | (5,487 | )
|  | Series A Preferred |  |  | Common Stock |  |  | Additional Paid-in |  |  | Accumulated |  |  | Accumulated Other Comprehensive |  |  | Total Stockholders' |
|  | Shares |  |  | Amount |  |  | Shares |  |  | Amount |  |  | Capital |  |  | Deficit |  |  | Deficit |  |  | Equity (Deficit) |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (As restated) |
Balance, January 1, 2022 |  |  | 238,729 |  |  | $ | — |  |  |  | 2,827,410 |  |  | $ | 2 |  |  | $ | 45,743 |  |  | $ | (53,804 | ) |  | $ | (617 | ) |  | $ | (8,676 | )
Share based compensation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | 4 |
Other comprehensive loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (8 | ) |  |  | (41 | ) |  |  | (49 | )
Net income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,211 |  |  |  | — |  |  |  | 1,211 |
Balance, April 2, 2022 |  |  | 238,729 |  |  |  | — |  |  |  | 2,827,410 |  |  |  | 2 |  |  |  | 45,747 |  |  |  | (52,601 | ) |  |  | (658 | ) |  |  | (7,510 | )
Series A-1 preferred converted |  |  | (16,141 | ) |  |  | — |  |  |  | 322,820 |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |
Other comprehensive income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 41 |  |  |  | 41 |
Net income, as restated |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10,687 |  |  |  | — |  |  |  | 10,687 |
Balance, July 2, 2022 |  |  | 222,588 |  |  |  | — |  |  |  | 3,150,230 |  |  |  | 3 |  |  |  | 45,747 |  |  |  | (41,914 | ) |  |  | (617 | ) |  |  | 3,219 |
Net income, as restated |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,074 | ) |  |  | — |  |  |  | (2,074 | )
Balance, October 1, 2022 |  |  | 222,588 |  |  | $ | — |  |  |  | 3,150,230 |  |  | $ | 3 |  |  | $ | 45,747 |  |  | $ | (43,988 | ) |  | $ | (617 | ) |  | $ | 1,145 |
|  | For the Thirty-Nine Weeks Ended |
|  | October 1, 2022 |  |  | October 2, 2021 |
|  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |
OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 9,824 |  | $ | (12,197 | ) | $ | (2,373 | ) |  | $ | (5,445 | )
Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 347 |  |  | — |  |  | 347 |  |  |  | 3,136 |
Amortization of debt issuance costs |  |  | 10 |  |  | — |  |  | 10 |  |  |  | — |
Stock based compensation expense |  |  | 4 |  |  | — |  |  | 4 |  |  |  | 274 |
Accretion of note receivable discount |  |  | (95 | ) |  | (131 | ) |  | (226 | ) |  |  | — |
Gain on legal settlement |  |  | (115 | ) |  | — |  |  | (115 | ) |  |  | — |
Gain on Payroll Protection Program loan forgiveness |  |  | — |  |  | — |  |  | — |  |  |  | (1,872 | )
Gain on settlement of vendor advance payments |  |  | — |  |  | — |  |  | — |  |  |  | (952 | )
Gain on reversal of contingent liability |  |  | (637 | ) |  | — |  |  | (637 | ) |  |  | — |
Gain on sale of GeoTraq |  |  | (12,091 | ) |  | 1,850 |  |  | (10,241 | ) |  |  | — |
Unrealized loss on marketable securities |  |  | 646 |  |  | — |  |  | 646 |  |  |  | — |
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | (2,614 | ) |  | — |  |  | (2,614 | ) |  |  | (1,931 | )
Income taxes receivable |  |  | — |  |  | — |  |  | — |  |  |  | 196 |
Prepaid expenses and other current assets |  |  | 176 |  |  | — |  |  | 176 |  |  |  | (71 | )
Inventories |  |  | 689 |  |  | — |  |  | 689 |  |  |  | 478 |
Right of use assets |  |  | 54 |  |  | — |  |  | 54 |  |  |  | (995 | )
Lease liability |  |  | — |  |  | — |  |  | — |  |  |  | 971 |
Accounts payable and accrued expenses |  |  | 1,440 |  |  | — |  |  | 1,440 |  |  |  | 2,840 |
Deposits and other Assets |  |  | (29 | ) |  | — |  |  | (29 | ) |  |  | (114 | )
Net cash used in operating activities |  |  | (2,391 | ) |  | (10,478 | ) |  | (12,869 | ) |  |  | (3,485 | )
INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Purchases of property and equipment |  |  | (736 | ) |  | — |  |  | (736 | ) |  |  | (1,530 | )
Purchases of intangibles |  |  | (214 | ) |  | — |  |  | (214 | ) |  |  | (65 | )
Net cash used in investing activities |  |  | (950 | ) |  | — |  |  | (950 | ) |  |  | (1,595 | )
FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Proceeds from equity financing, net |  |  | — |  |  | — |  |  | — |  |  |  | 5,544 |
Proceeds from issuance of short-term notes payable |  |  | 648 |  |  | — |  |  | 648 |  |  |  | 538 |
Proceeds from stock option exercise |  |  | — |  |  | — |  |  | — |  |  |  | 27 |
Proceeds from notes payable |  |  | 4,052 |  |  | — |  |  | 4,052 |  |  |  | 1,835 |
Payments on related party notes payable |  |  | (107 | ) |  | — |  |  | (107 | ) |  |  | — |
Payments on notes payable |  |  | — |  |  | — |  |  | — |  |  |  | (58 | )
Payments on short-term notes payable |  |  | (1,089 | ) |  | — |  |  | (1,089 | ) |  |  | (323 | )
Net cash provided by financing activities |  |  | 3,504 |  |  | — |  |  | 3,504 |  |  |  | 7,563 |
Effect of changes in exchange rate on cash and cash equivalents |  |  | — |  |  |  |  | — |  |  |  | (42 | )
INCREASE IN CASH AND CASH EQUIVALENTS |  |  | 163 |  |  | (10,478 | ) |  | (10,315 | ) |  |  | 2,441 |
CASH AND CASH EQUIVALENTS, beginning of period |  |  | 705 |  |  | — |  |  | 705 |  |  |  | 379 |
CASH AND CASH EQUIVALENTS, end of period |  | $ | 868 |  | $ | (10,478 | ) | $ | (9,610 | ) |  | $ | 2,820 |
Supplemental cash flow disclosures: |  |  |  |  |  |  |  |  |  |
Interest paid |  | $ | 235 |  |  | — |  | $ | 235 |  |  | $ | 146 |
Income taxes paid |  |  | 54 |  |  | — |  |  | 54 |  |  |  | 28 |
Right to use asset - operating leases capitalized |  |  | 1,902 |  |  | — |  |  | 1,902 |  |  |  | 1,815 |
Note 29: Subsequent events The Company has evaluated subsequent events through the filing of this Form 10-K, and determined that there have been no events that have occurred that would require adjustments to disclosures in its consolidated financial statements other than as discussed below: ARCA and Subsidiaries Disposition On March 19, 2023, the Company entered into a Stock Purchase Agreement with VM7 Corporation, a Delaware corporation, under which the Buyer agreed to acquire all of the outstanding equity interests of (a) ARCA Recycling, Inc., a California corporation, (b) Customer Connexx LLC, a Nevada limited liability company, and (c) ARCA Canada Inc., a corporation organized under the laws of Ontario, Canada (“ARCA Canada”; and, together with ARCA and Connexx, the “Subsidiaries”). The principal of the Buyer is Virland A. Johnson, our Chief Financial Officer. The sale of all of the outstanding equity interests of the Subsidiaries to the Buyer under the Purchase Agreement was consummated simultaneously with the execution of the Purchase Agreement. The Company's Board of Directors unanimously approved the Purchase Agreement and the Disposition Transaction. The economic aspects of the Disposition Transaction are: (i) the Company reduced the liabilities on its consolidated balance sheets by approximately $17.6 million, excluding those related to the California Business Fee and Tax Division; (ii) the Company will receive not less than $24.0 million in aggregate monthly payments from the Buyer, which payments are subject to potential increase due to the Subsidiaries’ future performance; and (iii) during the next five years, the Company may request that the Buyer prepay aggregate monthly payments in the aggregate amount of $1 million. The Company also received one thousand dollars for the equity of each of the Subsidiaries at the closing. Each monthly payment is to be the greater of (a) $140,000 (or $100,000 for each January and February during the 15-year payment period) or (b) a monthly percentage-based payment, which is an amount calculated as follows: (i) 5% of the Subsidiaries’ aggregate gross revenues up to $2,000,000 for the relevant month, plus (ii) 4% of the Subsidiaries’ aggregate gross revenues between $2,000,000 and $3,000,000 for the relevant month, plus (iii) 3% of the Subsidiaries aggregate gross revenues over $3,000,000 for the relevant month. The Buyer will receive credit toward the payment of the first monthly payment (March of 2023) for any payments, distributions, or cash dividends paid by any of the Subsidiaries to the Seller on or after March 19, 2023. Securities Purchase Agreement On March 22, 2023, the Company entered into a Securities Purchase Agreement with certain institutional investors for the sale by the Company in a registered direct offering of 361,000 shares of the Company’s common stock, par value $0.001 per share, at a purchase price per share of Common Stock of $1.17. The offering closed on March 24, 2023. The aggregate gross proceeds for the sale of the shares of Common Stock were approximately $422,000, before deducting the placement agent fees and related expenses. The Company intends to use the net proceeds for working capital and general corporate purposes. ITEM 9. Changes in and Disagreements with Accou ntants on Accounting and Financial Disclosures None. ITEM 9A. Control s and Procedures Evaluation of Disclosure control and Procedures. We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2022, the period covered in this report, our disclosure controls and procedures were not effective because of the material weaknesses discussed below. In light of the conclusion that our internal disclosure controls are ineffective as of December 31, 2022, we have applied procedures and processes as necessary to ensure the reliability of our financial reporting in regard to this annual report. Accordingly, the Company believes, based on its knowledge, that: (i) this annual report does not contain any untrue statement of a material fact or omit a material fact; and (ii) the financial statements, and other financial information included in this annual report, fairly present in all material respects our financial condition, results of operations and cash flows as of and for the periods presented in this annual report. Management’s Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013 regarding Internal Control – Integrated Framework. Based on our assessment using those criteria, our management concluded that our internal control over financial reporting was not effective as of December 31, 2022. Management noted material weaknesses in internal control when conducting their evaluation of internal control as of December 31, 2022. (1) Insufficient information technology general controls and segregation of duties. (2) inadequate control design or lack of sufficient controls over significant accounting processes; (3) insufficient assessment of the impact of potentially significant transactions; and (4) insufficient processes and procedures related to proper recordkeeping of agreements and contracts. These material weaknesses remained outstanding as of the filing date of this Form 10-K and management is currently working to remedy these outstanding material weaknesses. The Company’s management, including the Company’s CEO and CFO, do not expect that the Company’s disclosure controls and procedures or the Company’s internal control over financial reporting will prevent or detect all error and all fraud. A control system, regardless of how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be met. These inherent limitations include the following: judgements in decision-making can be faulty, and control and process breakdowns can occur because of simple errors or mistakes, controls can be circumvented by individuals, acting alone or in collusion with each other, or by management override, the design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Changes in Internal Control Over Financial Reporting. There were no changes in the Company’s internal control over financial reporting during the fiscal year ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. ITEM 9B. Other Information None. ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. PART III ITEM 10. DIRECTORS, EXECUTIVE OF FICERS AND CORPORATE GOVERNANCE The directors and executive officers of the Company and their ages as of December 31, 2022, are as follows:
Name |  | Age |  |  | Position
Richard D. Butler, Jr. |  |  | 72 |  |  | Director
Nael Hajjar |  |  | 38 |  |  | Director
John Bitar |  |  | 60 |  |  | Director
Tony Isaac |  |  | 69 |  |  | President and Chief Executive Officer
Virland A. Johnson |  |  | 62 |  |  | Chief Financial Officer
Richard D. Butler, Jr. has been a director of the Company since May 2015. Mr. Butler is the owner of an advisory firm that provides real estate, corporate, and financial advisory services since 1999, and is the co-Founder, Managing Director, and, since 2005, a major stockholder of Ref-Razzer Company, a whistle manufacturing and vending company. Prior to this, Mr. Butler was the Co-Founder and Executive Vice President of Aspen Healthcare, Inc. from 1996 to 1999. From 1993 to 1996, Mr. Butler was a Managing Director at Landmark Financial and from 1989 to 1993 he was a Partner at Cal Ventures Real Estate Investment Group. Prior to this, Mr. Butler has also served as the President and Chief Executive Officer of Mt. Whitney Savings Bank, Chief Executive Officer of First Federal Mortgage Bank, Chief Executive Officer of Trafalgar Mortgage, and Executive Officer and Member of the President’s Advisory Committee at State Savings & Loan Association (peak assets $14 billion) and American Savings & Loan Association (NYSE: FCA; peak assets $34 billion). Mr. Butler has served on the board of directors of Live Ventures (Nasdaq: Live)”) since August 2006. On December 9, 2019, ApplianceSmart, a subsidiary of Live Ventures, filed a voluntary petition in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of Title 11 of the United States Code. Mr. Butler attended Bowling Green University in Ohio, San Joaquin Delta College in California, and Southern Oregon State College. We believe that Mr. Butler brings to the Board extensive experience in financial management and executive roles, which enable him to provide important expertise in financial, operating and strategic matters that impact our Company. Nael Hajjar has been a director of the Company since August 2018. Mr. Hajjar is currently the Unit Head for the Annual Wholesale Trade Survey in Statistics Canada’s Manufacturing and Wholesale Trade Division. From March 2011 through May 2016, Mr. Hajjar was a Senior Analyst – Economist of Statistics Canada’s Producer Prices Division where he developed Canada’s first ever Investment Banking Services Price Index while leading the development of a variety of Financial Services Price Index development projects. We believe that Mr. Hajjar brings to the Board extensive experience in research and analysis of financial statistics, economics, and business practices in a variety of industries including manufacturing, logging, Wholesale Trade, and financial services. We believe that Mr. Hajjar also has extensive experience in project management, and he holds a Bachelor of Social Science, Honors in Economics, and Bachelor of Commerce, Option in Finance, from the University of Ottawa. John Bitar has been a director of the Company since January 2020. Since 2012, Mr. Bitar has been providing consulting services to companies and clients on business and legal strategies, management, operations, and cost controls. From 2007 to 2012, Mr. Bitar co-founded and was Managing Partner of a worker’s compensation law firm. Mr. Bitar has been an attorney admitted to the California State Bar since 1999. Mr. Bitar graduated from the University of Southern California in 1996 and earned his Juris Doctorate Degree in 1999 from University of the Pacific, McGeorge School of Law. We believe that Mr. Bitar has significant business experience and brings operational expertise to the Board. Tony Isaac has been a director of the Company since May 2015 and Chief Executive Officer of the Company since May 2016. He served as Interim Chief Executive Officer of the Company from February 2016 until May 2016. Mr. Isaac has served as Financial Planning and Strategist/Economist of Live Ventures since July 2012. He is the Chairman and Co-Founder of Isaac Organization, a privately held investment company. Mr. Isaac has invested in various companies, both private and public from 1980 to the present. Mr. Isaac’s specialty is negotiation and problem-solving of complex real estate and business transactions. Mr. Isaac has served as a director of Live Ventures since December 2011. Mr. Isaac graduated from Ottawa University in 1981, where he majored in Commerce and Business Administration and Economics. We believe that Mr. Isaac has significant investment and financial expertise and public board experience that he brings to the Board. Virland A. Johnson was appointed Chief Financial Officer of the Company on August 21, 2017. Mr. Johnson had previously served the Company as a consultant beginning in February 2017. Mr. Johnson also served as Chief Financial Officer for Live Ventures from January 3, 2017 through October 1, 2021. Mr. Johnson is a director and Chief Financial Officer and Secretary of ApplianceSmart. Prior to joining Live Ventures Incorporated, Mr. Johnson was Sr. Director of Revenue for JDA Software from February 2010 to April 2016, where he was responsible for revenue recognition determination, sales and contract support while acting as a subject matter expert. Prior to joining JDA, Mr. Johnson provided leadership and strategic direction while serving in C-Level executive roles in public and privately held companies such as Cultural Experiences Abroad, Inc., Fender Musical Instruments Corp., Triumph Group, Inc., Unitech Industries, Inc. and Younger Brothers Group, Inc. Mr. Johnson’s more than 25 years of experience is primarily in the areas of process improvement, complex debt financings, SEC and financial reporting, turn-arounds, corporate restructuring, global finance, merger and acquisitions and returning companies to profitability and enhancing stockholder value. Mr. Johnson holds a Bachelor’s degree in Accountancy from Arizona State University, and holds an active CPA license in the State of Arizona. Delinquent Section 16(a) Reports Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the SEC. Such officers, directors and 10% stockholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file. Based solely on its review of copies of such forms received by it, or written representations from certain reporting persons, the Company believes that, during the fiscal year ended December 31, 2022, all of its officers, directors and 10% stockholders complied with all Section 16(a) timely filing requirements. Code of Ethics Our Audit Committee has adopted a code of ethics applicable to our directors and officers (including our Chief Executive Officer and Chief Financial Officer) and other of our senior executives and employees in accordance with applicable rules and regulations of the SEC and The Nasdaq Stock Market. A copy of the code of ethics may be obtained upon request, without charge, by addressing a request to Investor Relations, JanOne Inc., 325 E. Warm Springs Road, Suite 102, Las Vegas, Nevada 89119. The code of ethics is also posted on our website at www.janone.com under “Investor Relations — Corporate Governance.” We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding the amendment to, or waiver from, a provision of the code of ethics by posting such information on our website at the address and location specified above and, to the extent required by the listing standards of the Nasdaq Capital Market, by filing a Current Report on Form 8-K with the SEC disclosing such information. Audit Committee The Audit Committee of the Board of Directors is comprised entirely of non-employee directors. In fiscal 2021, the members of the Audit Committee were Mr. Butler (Chair), Mr. Bitar, and Mr. Hajjar. Each of Messrs. Bitar, Butler, and Hajjar was an “independent” director as defined under the rules of The Nasdaq Stock Market. The Audit Committee is responsible for selecting and approving the Company’s independent auditors, for relations with the independent auditors, for review of internal auditing functions (whether formal or informal) and internal controls, and for review of financial reporting policies to assure full disclosure of financial condition. The Audit Committee operates under a written charter adopted by the Board of Directors, which is posted on the Company’s website at www.janone.com under the caption “Investor Relations - Governance.” The Board has determined that Mr. Butler is an “audit committee financial expert” as defined in SEC rules. Compensation and Benefits Committee The Compensation Committee of the Board of Directors is comprised entirely of non-employee directors. In fiscal 2021, the members of the Compensation Committee were Mr. Butler (Chair) and Mr. Hajjar, each of whom was also an “independent” director as defined under the rules of The Nasdaq Stock Market. The Compensation Committee is responsible for review and approval of officer salaries and other compensation and benefits programs and determination of officer bonuses. Annual compensation for the Company’s executive officers, other than the CEO, is recommended by the CEO and approved by the Compensation Committee. The annual compensation for the CEO is recommended by the Compensation Committee and formally approved by the full Board of Directors. In the performance of its duties, the Compensation Committee may select independent compensation consultants to advise the committee when appropriate. In addition, the Compensation Committee may delegate authority to subcommittees where appropriate. The Compensation Committee may separately meet with management if deemed necessary and appropriate. The Compensation Committee operates under a written charter adopted by the Board of Directors in March 2011, which is posted on the Company’s website at www.janone.com under the caption “Investor Relations - Governance.” Governance Committee The Nominating and Corporate Governance Committee (the “Governance Committee”) is comprised entirely of non-employee directors. In fiscal 2021, the members of the Governance Committee were Mr. Butler (Chair) and Mr. Bitar, each of whom was also an “independent” director as defined under the rules of The Nasdaq Stock Market. The primary purpose of the Governance Committee is to ensure an appropriate and effective role for the Board of Directors in the governance of the Company. The principal recurring duties and responsibilities of the Governance Committee include (i) making recommendations to the Board regarding the size and composition of the Board, (ii) identifying and recommending to the Board of Directors candidates for election as directors, (iii) reviewing the Board’s committee structure, composition and membership and recommending to the Board candidates for appointment as members of the Board’s standing committees, (iv) reviewing and recommending to the Board corporate governance policies and procedures, (v) reviewing the Company’s Code of Business Ethics and Conduct and compliance therewith, and (vi) ensuring that emergency succession planning occurs for the positions of Chief Executive Officer, other key management positions, the Board chairperson and Board members. The Governance Committee operates under a written charter adopted by the Board of Directors in March 2011, which is posted on the Company’s website at www.janone.com under the caption “Investor Relations - Governance.” The Governance Committee will consider director candidates recommended by stockholders. The criteria applied by the Governance Committee in the selection of director candidates is the same whether the candidate was recommended by a Board member, an executive officer, a stockholder or a third party, and, accordingly, the Governance Committee has not deemed it necessary to adopt a formal policy regarding consideration of candidates recommended by stockholders. Stockholders wishing to recommend candidates for Board membership should submit the recommendations in writing to the Secretary of the Company. The Governance Committee identifies director candidates primarily by considering recommendations made by directors, management, and stockholders. The Governance Committee also has the authority to retain third parties to identify and evaluate director candidates and to approve any associated fees or expenses. Board candidates are evaluated on the basis of a number of factors, including the candidate’s background, skills, judgment, diversity, experience with companies of comparable complexity and size, the interplay of the candidate’s experience with the experience of other Board members, the candidate’s independence or lack of independence, and the candidate’s qualifications for committee membership. The Governance Committee does not assign any particular weighting or priority to any of these factors and considers each director candidate in the context of the current needs of the Board as a whole. Director candidates recommended by stockholders are evaluated in the same manner as candidates recommended by other persons. ITEM 11. EXECUTI VE COMPENSATION The following table sets forth the cash and non-cash compensation for fiscal years ended December 31, 2022 and January 1, 2022, earned by each person who served as Chief Executive Officer and our other two most highly compensated executive officers who held office as of December 31, 2022 (“named executive officers”): Summary Compensation Table
Name and Principal Position (1) |  | Year |  | Salary ($) |  |  | Bonus ($) |  |  | Stock Award ($) |  |  |  | Option Awards ($) |  |  | All Other Compensation ($) |  |  | Total ($) |
Tony Isaac |  | 2022 |  |  | 550,324 |  |  |  | 75,000 |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | 625,324 |
President, Chief Executive Officer, and Secretary |  | 2021 |  |  | 550,324 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | 550,324 |
Virland A. Johnson |  | 2022 |  |  | 250,324 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | 250,324 |
Chief Financial Officer |  | 2021 |  |  | 149,363 |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  | 149,363 |
(1) The Company only had two executive officers as of December 31, 2022. Outstanding Equity Awards at December 31, 2022 The following table provides a summary of equity awards outstanding for our Named Executive Officers at December 31, 2022:
Name | Number of Securities Underlying Unexercised Options (in shares) Exercisable |  |  | Number of Securities Underlying Unexercised Options (in shares) Unexercisable |  |  | Option Exercise Price ($) |  |  | Option Expiration Date
Tony Isaac |  | 2,000 |  |  |  | — |  |  |  | 9.90 |  |  | 05/18/2025
Virland A. Johnson |  | — |  |  |  | — |  |  |  | — |  |  |
Stock Option Plans The Company uses stock options to attract and retain executives, directors, consultants and key employees. Stock options are currently outstanding under three stock option plans. The Company’s 2016 Equity Incentive Plan (the “2016 Plan”) was adopted by the Board of Directors in October 2016 and approved by the stockholders at the 2016 annual meeting of stockholders. Under the 2016 Plan, the Company has reserved an aggregate of 400,000 shares of its common stock for option grants. On November 4, 2020, at the Annual Meeting, the Company’s stockholders approved an amendment (the “Plan Amendment”) to the 2016 Plan to increase the total number of shares of the Company’s common stock reserved for issuance under the 2016 Plan from 400,000 shares to 800,000 shares. The Company’s 2011 Stock Compensation Plan (the “2011 Plan”) was adopted by the Board of Directors in March 2011 and approved by the stockholders at the 2011 annual meeting of stockholders. The 2011 Plan expired on December 29, 2016; but, options granted under the 2011 Plan before it expired will continue to be exercisable in accordance with their terms. As of December 31, 2022, options to purchase an aggregate of 117,500 shares were outstanding, including options for 90,000 shares under the 2016 Plan and options for 27,500 shares under the 2011 Plan. The Plans are administered by the Compensation Committee or the full Board of Directors acting as the Committee. The 2016 Plan permits the grant of the following types of awards, in the amounts and upon the terms determined by the Administrator: • Options. Options may either be incentive stock options (“ISOs”) which are specifically designated as such for purposes of compliance with Section 422 of the Internal Revenue Code or non-qualified stock options (“NSOs”). Options shall vest as determined by the Administrator, subject to certain statutory limitations regarding the maximum term of ISOs and the maximum value of ISOs that may vest in one year. The exercise price of each share subject to an ISO will be equal to or greater than the fair market value of a share on the date of the grant of the ISO, except in the case of an ISO grant to a stockholder who owns more than 10% of the Company’s outstanding shares, in which case the exercise price will be equal to or greater than 110% of the fair market value of a share on the grant date. The exercise price of each share subject to an NSO shall be determined by the Board at the time of grant but will be equal to or greater than the fair market value of a share on the date of grant. Recipients of options have no rights as a stockholder with respect to any shares covered by the award until the award is exercised and a stock certificate or book entry evidencing such shares is issued or made, respectively. • Restricted Stock Awards. Restricted stock awards consist of shares granted to a participant that are subject to one or more risks of forfeiture. Restricted stock awards may be subject to risk of forfeiture based on the passage of time or the satisfaction of other criteria, such as continued employment or Company performance. Recipients of restricted stock awards are entitled to vote and receive dividends attributable to the shares underlying the award beginning on the grant date. • Restricted Stock Units. Restricted stock units consist of a right to receive shares (or cash, in the Administrator’s discretion) on one or more vesting dates in the future. The vesting dates may be based on the passage of time or the satisfaction of other criteria, such as continued employment or Company performance. Recipients of restricted stock units have no rights as a stockholder with respect to any shares covered by the award until the date a stock certificate or book entry evidencing such shares is issued or made, respectively. Compensation of Non-Employee Directors The Company uses cash compensation to attract and retain qualified candidates to serve on the Board of Directors. In setting director compensation, the Company considers the significant amount of time that directors expend fulfilling their duties to the Company as well as the skill level required by the Company of members of the Board. All of the Company’s directors are reimbursed for reasonable travel expenses incurred in attending meetings. The table below presents cash and non-cash compensation paid to non-employee directors during the last fiscal year. Non-Management Director Compensation for Fiscal Year Ended December 31, 2022
Name |  | Fees Earned or Paid in Cash ($) |  |  | Option Awards ($) |  |  | All Other Compensation ($) |  |  | Total ($) |
John Bitar |  |  | 18,000 |  |  |  | — |  |  |  | — |  |  |  | 18,000 |
Richard D. Butler, Jr. |  |  | 30,000 |  |  |  | — |  |  |  | — |  |  |  | 30,000 |
Nael Hajjar |  |  | 14,400 |  |  |  | — |  |  |  | — |  |  |  | 14,400 |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OW NERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The following table sets forth as of April 12, 2023 the beneficial ownership of common stock by each of the Company’s directors, each of the named executive officers, and all directors and executive officers of the Company as a group, as well as information about beneficial owners of 5.0% or more of the Company’s voting securities. Beneficial ownership includes shares that may be acquired in the next 60 days through the exercise of options or warrants.
Beneficial Owner |  | Position with Company |  | Number of Shares Beneficially Owned (1) |  |  | Percent of Outstanding Common (2) |
Directors and executive officers: |  |  |  |  |  |  |  |
Tony Isaac (3) |  | President, Chief Executive Officer, and Secretary |  |  | 94,000 |  |  |  | 2.6 | %
Virland A. Johnson |  | Chief Financial Officer |  |  | — |  |  | * |
Richard D. Butler, Jr. (3) |  | Director |  |  | 18,000 |  |  | * |
John Bitar |  | Director |  |  | 2,000 |  |  | * |
Nael Hajjar |  | Director |  |  | — |  |  | * |
All directors and executive officers as a group (5 persons) (3) |  |  |  |  | 114,000 |  |  |  | 3.2 | %
Other 5% stockholders: |  |  |  |  |  |  |  |
Isaac Capital Group, LLC (4) |  |  |  |  | 675,761 |  |  |  | 18.7 | %
Juan Yunis (5) |  |  |  |  | 460,000 |  |  |  | 12.7 | %
Michael Bigger (6) |  |  |  |  | 361,000 |  |  |  | 10.0 | %
* Indicates ownership of less than 1% of the outstanding shares (1) Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to such shares. (2) Applicable percentage of ownership is based on 3,614,937 shares of common stock outstanding as of April 12, 2023, plus, for each stockholder, all shares that such stockholder could purchase within 60 days upon the exercise of existing stock options. (3) Includes shares that could be purchased within 60 days upon the exercise of existing stock options, as follows: Mr. Isaac, 2,000 shares and Mr. Butler, 4,000 shares. All directors and executive officers as a group could purchase 6,000 shares. The address for each individual is 325 E. Warm Springs Road Suite 102, Las Vegas, Nevada, 89119. (4) ICG beneficially owned 675,761 shares of common stock. Jon Isaac has sole dispositive power and sole voting power as to all 675,761 shares for ICG. The address for ICG is 505 East Windmill Lane, Suite 1C-295, Las Vegas, Nevada 89123. (5) Mr. Yunis beneficially owned 490,000 shares of common stock. The business address for Mr. Yunis with respect to the shares of common stock is c/o JanOne Inc., 325 E. Warm Springs Road, Suite 102, Las Vegas, Nevada 89119. See also footnote 5 to the Series A-1 Convertible Preferred Stock chart, below. (6) Mr. Bigger beneficially owned 361,000 shares of common stock. The business address for Mr. Bigger with respect to the shares of common stock is 2250 Red Springs Drive, Las Vegas, NV 89135. Beneficial Ownership of Series A-1 Convertible Preferred Stock The following table sets forth, as of April 12, 2023, the beneficial ownership of Series A-1 Convertible Preferred Stock by each owner of 5% or more of the Company’s Series A-1 Convertible Preferred Stock. No officers or directors of the Company have beneficial ownership of Series A-1 Convertible Preferred Stock. There are no options or warrants to purchase shares of Series A-1 Convertible Preferred Stock.
Beneficial Owner |  | Number of Shares Beneficially Owned (1) |  |  | Percent of Outstanding Series A Preferred (2) |
Gregg Sullivan (3) |  |  | 28,859 |  |  |  | 13.0 | %
Juan Yunis (4) |  |  | 193,730 |  |  |  | 87.0 | %
(1) Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to such shares. (2) Applicable percentage of ownership is based on 222,588 shares of Series A-1 Convertible Preferred Stock outstanding as of April 12, 2023. (3) The business address for Mr. Sullivan is c/o JanOne Inc., 325 E. Warm Springs Road, Suite 102, Las Vegas, Nevada 89119. On January 16, 2019, GeoTraq terminated the employment of Mr. Sullivan pursuant to the terms of the employment agreement dated August 18, 2017 between GeoTraq and Mr. Sullivan. On April 9, 2021, the Company entered into a settlement agreement (the “Settlement Agreement”) with Mr. Sullivan, under which he may not convert such 28,859 shares of Series A-1 Convertible Preferred Stock except in accordance with the Settlement Agreement or in the event that the Company is not in compliance with the terms of the Settlement Agreement (see Note 17 to the Consolidated Financial Statements above for a more in-depth discussion) If converted in full, Mr. Sullivan would own 577,172 shares of Common Stock. (4) The business address for Mr. Yunis with respect to the shares of Series A-1 Convertible Preferred Stock is c/o JanOne Inc., 325 E. Warm Springs Road, Suite 102, Las Vegas, Nevada 89119. Under his Series A-1 Convertible Preferred Stock agreement, Mr. Yunis is restricted to a beneficial ownership limit of 9.9% of the outstanding Common Stock of the Company. As a result of this restriction, as of December 31, 2022, Mr. Yunis could only convert 346,505 shares of Series A-1 Convertible Preferred Stock. If converted, Mr. Yunis would own 806,505 shares of Common Stock, which would result in his reporting beneficial ownership of 25.6% in the “Percent of Outstanding Common” in the Common Stock chart, above. The following table provides aggregate information under our equity compensation plans as of January 1, 2022:
|  | (a) |  |  | (b) |  |  | (c) |
|  | Number of Securities to be Issued Upon Exercise of Outstanding Options and Warrants |  |  | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights |  |  | Number of Securities Available for Future Issuance Under Equity Compensation Plans, Excluding Securities Reflected in Column (a) |
Equity compensation plans approved by stockholders |  |  | 110,000 |  |  | $ | 6.27 |  |  |  | 710,000 |
Equity compensation plans not approved by stockholders |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 110,000 |  |  | $ | 6.27 |  |  |  | 710,000 |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Review, Approval or Ratification of Transactions with Related Persons There are no family relationships among any of the directors or executive officers of the Company. Of the current directors, each of Messrs. Butler, Bitar, and Hajjar is an “independent” director, as defined under the rules of The Nasdaq Stock Market and each has been an independent director since each joined the Board. In accordance with its charter, the Audit Committee reviews and recommends for approval all related party transactions (as such term is defined for purposes of Item 404 of Regulation S-K). The Audit Committee participated in the approval of the transactions described above. Related Party Transactions Tony Isaac, our Chief Executive Officer, is the father of Jon Isaac, President and Chief Executive Officer of Live Ventures and managing member of ICG, a greater than 5% stockholder of the Company. Tony Isaac and Richard Butler are also members of the Board of Directors of Live Ventures. We also share certain executive, accounting, and legal services with Live Ventures. The total services shared were approximately $314,000 and approximately $296,000 for fiscal years ending December 31, 2022 and January 1, 2022, respectively. Connexx rents approximately 9,900 square feet of office space from Live Ventures at its Las Vegas, Nevada office. The total rent and common area expense were approximately $215,000 and approximately $227,000 for fiscal years ending December 31, 2022 and January 1, 2022, respectively. ApplianceSmart Note As stated in Note 5, on December 30, 2017, the Company sold its retail appliance segment, ApplianceSmart, Inc. (“ApplianceSmart”) to ApplianceSmart Holdings LLC (the “Purchaser”), a wholly owned subsidiary of Live Ventures Incorporated, pursuant to a Stock Purchase Agreement (the “Agreement”). Pursuant to the Agreement, the Purchaser purchased from the Company all of the issued and outstanding shares of capital stock of ApplianceSmart in exchange for $6.5 million. On April 25, 2018, the Purchaser delivered to the Company a promissory note (the “ApplianceSmart Note”) in the original principal amount of approximately $3.9 million. On December 9, 2019, ApplianceSmart filed a voluntary petition in the United States Bankruptcy Court for the Southern District of New York seeking relief under Chapter 11 of Title 11 of the United States Code. Consequently, the Company recorded an impairment charge of approximately $3.0 million for the amount owed by ApplianceSmart to the Company as of December 28, 2019. On October 13, 2021, a hearing was held to consider approval of a disclosure statement filed by ApplianceSmart in conjunction with its bankruptcy proceedings. On December 14, 2021, a hearing was held to confirm ApplianceSmart’s plan for reorganization (the “Plan”). On January 10, 2022, ApplianceSmart paid $25,000 to JanOne in settlement of its debt, as provided for in the confirmed Plan, and the ApplianceSmart Note was reversed. A final decree was issued by the court on February 28, 2022, upon the full satisfaction of the Plan, at which time ApplianceSmart emerged from Chapter 11. The outstanding balance of the ApplianceSmart Note at December 31, 2022 and January 1, 2022 was zero and approximately $3.0 million, respectively, exclusive of the impairment charge. For discussion related to potential obligations and or guarantees under ApplianceSmart Leases, see Note 24. Related Party Note On August 28, 2019, ARCA Recycling entered into and delivered to ICG a secured revolving line of credit promissory note, whereby ICG agreed to provide ARCA Recycling with a $2.5 million revolving credit facility (the “ICG Note”). The ICG Note originally matured on August 28, 2020. On August 25, 2020, the ICG Note was amended to extend the maturity date to December 31, 2020. On March 30, 2021, ARCA Recycling entered into a Second Amendment and Waiver (the “Second Amendment”) to the ICG Note to further extend the maturity date to August 18, 2021 and waive certain defaults under the ICG Note. The ICG Note bears interest at 8.75% per annum and provides for the payment of interest, monthly in arrears. ARCA Recycling will pay a loan fee of 2.0% on each borrowing made under the ICG Note. In connection with entering into the ICG Note, the Borrower also entered into a security agreement in favor of the Lender, pursuant to which ARCA Recycling granted a security interest in all of its assets to the Lender. The obligations of ARCA Recycling under the ICG Note are guaranteed by the Company. The foregoing transaction did not include the issuance of any shares of the Company’s common stock, warrants, or other derivative securities. As of January 1, 2022, the balance due on ICG note was $1.0 million. Beginning in April 2022, the revolving credit facility was converted to a term note that amortizes ratably through its maturity date of March 2026. The principal amount of the note is $1.0 million, and bears interest at 8.75% per annum. Monthly payments on this note will be approximately $24,767. ICG is a record and beneficial owner of 13.9% of the outstanding common stock of the Company. Jon Isaac is the manager and sole member of ICG, and the son of Tony Isaac, the Chief Executive Officer of JanOne and ARCA Recycling. As of December 31, 2022, the principal balance of the note is approximately $838,000. ARCA Purchasing Agreement On April 5, 2022, ARCA entered into a Purchasing Agreement with Live Ventures. Pursuant to the agreement, Live agrees to purchase inventory from time to time for ARCA, as set forth in submitted purchase orders. The inventory is owned by Live until which time payment by ARCA is received. All purchases made by the ARCA shall be paid back to Live in full plus an additional five percent surcharge or broker-type fee. The term of the Agreement is one year, and automatically renews if not terminated by either party, as provided for in the Agreement. As of the year ended December 31, 2022, the amount due to Live Ventures was approximately $624,000. For the year ended December 31, 2022, the Company paid broker fees of approximately $59,000. ARCA and Subsidiaries Disposition On March 19, 2023, the Company entered into a Stock Purchase Agreement with VM7 Corporation, a Delaware corporation, under which the Buyer agreed to acquire all of the outstanding equity interests of (a) ARCA Recycling, Inc., a California corporation, (b) Customer Connexx LLC, a Nevada limited liability company, and (c) ARCA Canada Inc., a corporation organized under the laws of Ontario, Canada (“ARCA Canada”; and, together with ARCA and Connexx, the “Subsidiaries”). The principal of the Buyer is Virland A. Johnson, our Chief Financial Officer. The sale of all of the outstanding equity interests of the Subsidiaries to the Buyer under the Purchase Agreement was consummated simultaneously with the execution of the Purchase Agreement. The Company's Board of Directors unanimously approved the Purchase Agreement and the Disposition Transaction. The economic aspects of the Disposition Transaction are: (i) the Company reduced the liabilities on its consolidated balance sheets by approximately $17.6 million, excluding those related to the California Business Fee and Tax Division; (ii) the Company will receive not less than $24.0 million in aggregate monthly payments from the Buyer, which payments are subject to potential increase due to the Subsidiaries’ future performance; and (iii) during the next five years, the Company may request that the Buyer prepay aggregate monthly payments in the aggregate amount of $1 million. The Company also received one thousand dollars for the equity of each of the Subsidiaries at the closing. Each monthly payment is to be the greater of (a) $140,000 (or $100,000 for each January and February during the 15-year payment period) or (b) a monthly percentage-based payment, which is an amount calculated as follows: (i) 5% of the Subsidiaries’ aggregate gross revenues up to $2,000,000 for the relevant month, plus (ii) 4% of the Subsidiaries’ aggregate gross revenues between $2,000,000 and $3,000,000 for the relevant month, plus (iii) 3% of the Subsidiaries aggregate gross revenues over $3,000,000 for the relevant month. The Buyer will receive credit toward the payment of the first monthly payment (March of 2023) for any payments, distributions, or cash dividends paid by any of the Subsidiaries to the Seller on or after March 19, 2023. ITEM 14. PRINCIPAL ACCOU NTING FEES AND SERVICES Each year, the Audit Committee approves the annual audit engagement in advance. The Audit Committee also has established procedures to pre-approve all non-audit services provided by the Company’s independent registered public accounting firm. All non-audit services for the fiscal years ended December 31, 2022, and January 1, 2022 that are listed below were pre-approved. Audit Fees: Audit fees include fees for the audit of the Corporation’s consolidated financial statements and interim reviews of the Corporation’s quarterly financial statements, comfort letters, consents and other services related to Securities and Exchange Commission matters. Audit-Related Fees: Audit-related fees primarily include fees for certain audits of subsidiaries not required for purposes of WSRP's audit of the Corporation’s consolidated financial statements or for any other statutory or regulatory requirements, and consultations on various other accounting and reporting matters Tax Fees: This category consists of professional services rendered by our independent auditors for tax compliance. All Other Fees consist of fees for services other than the services described above. The following fees were billed to us by our independent registered public accounting firms , WSRP, LLC (“WSRP”) and Frazier & Deeter, LLC (“Frazier & Deeter”) for 2022 and WSRP in 2021:
Description |  | December 31, 2022 |  |  | January 1, 2022 |
Audit fees |  | $ | 353,500 |  |  | $ | 212,725 |
Audit-related fees |  |  | — |  |  |  | 11,466 |
Tax fees |  |  | 40,800 |  |  |  | 48,459 |
All other fees |  |  | 4,000 |  |  |  | — |
Total |  | $ | 398,300 |  |  | $ | 272,650 |
PART IV ITEM 15. EXHIBITS AND FINA NCIAL STATEMENT SCHEDULES (a) Financial Statements, Financial Statement Schedules and Exhibits 1. Financial Statements See Index to Financial Statements under Item 8 of this report. 2. Financial Statement Schedules None. 3. Exhibits See Index to Exhibits ITEM 16. FORM 10-K SUMMARY None. Index to Exhibits
Exhibit No. |  | Description
2.1 |  | Agreement and Plan of Merger dated August 18, 2017, between the Company, Appliance Recycling Acquisition Corp., GeoTraq Inc., and the stockholders of GeoTraq Inc. [filed as Exhibit 10.9 to the Company’s Form 10-Q/A for the quarterly period ended July 1, 2017 (File No. 0-19621) and incorporated herein by reference].
2.2 |  | Stock Purchase Agreement dated December 30, 2017 [filed as Exhibit 10.28 to the Company’s Form 10-K for the fiscal year ended December 30, 2017 (File No. 0-19621) and incorporated herein by reference].
2.3 |  | Asset Purchase Agreement among JanOne Inc., ARCA Recycling, Inc., and Customer Connexx LLC, on the one hand, and ARCA Affiliated Holdings Corporation, ARCA Services Inc., and Connexx Services Inc., on the other hand, dated February 19, 2021 [filed as 10.1 to the Company’s Form 8-K filed on February 25, 2021 (File No. 0-19621) and incorporated herein by reference].
3.1 |  | Articles of Incorporation of Appliance Recycling Centers of America, Inc. [filed as Exhibit 3.3 to the Company’s Form 8-K filed on March 13, 2018 (File No. 0-19621) and incorporated herein by reference].
3.2 |  | Articles of Conversion [filed as Exhibit 3.1 to the Company’s Form 8-K filed on March 13, 2018 (File No. 0-19621) and incorporated herein by reference].
3.3 |  | Articles of Conversion [filed as Exhibit 3.2 to the Company’s Form 8-K filed on March 13, 2018 (File No. 0-19621) and incorporated herein by reference].
3.4 |  | Certificate of Correction to Articles of Incorporation [filed as Exhibit 3.1 to the Company’s Form 10-Q for the quarterly period ended June 30, 2018 (File No 0-19621) and incorporated herein by reference].
3.5 |  | Certificate of Change [filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 22, 2019 (File No. 0-19621) and incorporated herein by reference].
3.6 |  | Certificate of Correction to Articles of Incorporation of Appliance Recycling Centers of America, Inc. [filed as Exhibit 3.7 to the Company’s Current Report on Form 8-K filed on June 24, 2019 (File No. 0-19621) and incorporated herein by reference].
3.7 |  | Certificate of Designation of Powers, Preferences, and Rights of Series A-1 Convertible Preferred Stock of Appliance Recycling Centers of America, Inc. [filed as Exhibit 3.8 to the Company’s Current Report on Form 8-K filed on June 24, 2019 (File No. 0-19621) and incorporated herein by reference].
3.8(a) |  | Amended and Restated Certificate of Designation of the Preferences, Rights, and Limitations of the Series A-1 Convertible Preferred Stock of JanOne Inc., dated October 1, 2020 [filed as Exhibit 3.8(a) to the Company’s Current Report on Form 8-K filed on October 2, 2020 (File No. 0-19621) and incorporated herein by reference].
3.8(b) |  | Second Amendment and Restated Certificate of Designation of the Preferences, Rights, and Limitations of the Series A-1 Convertible Preferred Stock of JanOne Inc., dated April 13, 2021 [filed as Exhibit 3.8(b) to the Company’s Current Report on Form 8-K filed on April 16, 2021 (File No. 0-19621) and incorporated herein by reference]
3.9 |  | Articles of Incorporation of JanOne Inc. (the Name Change Subsidiary), filed with the Secretary of State of the State of Nevada on September 6, 2019 [filed as Exhibit 3.9 to the Company’s Current Report on Form 8-K filed on September 13, 2019 (File No. 0-19621) and incorporated herein by reference].
3.10 |  | Certificate of Amendment to Articles of Incorporation, filed with the Secretary of State for the State of Nevada on November 5, 2020 [filed as 3.9 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 26, 2020 filed on November 10, 2020 (File No. 0-19621) and incorporated herein by reference].
3.11 |  | Articles of Merger for JanOne Inc. into Appliance Recycling Centers of America, Inc., filed with the Secretary of State of the State of Nevada on September 9, 2019, and effective on September 10, 2019 [filed as Exhibit 3.10 to the Company’s Current Report on Form 8-K filed on September 13, 2019 (File No. 0-19621) and incorporated herein by reference].
3.12 |  | Bylaws of Appliance Recycling Centers of America, Inc. [filed as Exhibit 3.4 to the Company’s Form 8-K filed on March 13, 2018 (File No. 0-19621) and incorporated herein by reference].
3.13 |  | First Amendment to Bylaws of Appliance Recycling Centers of America, Inc. [filed as Exhibit 3.1 to the Company’s Form 8-K filed on December 31, 2018 (File No. 0-19621) and incorporated herein by reference].
3.14+ |  | Certificate of Designation of the Rights, Preferences, and Limitations of Series S Convertible Preferred Stock, filed with the Secretary of State of the State of Nevada on December 28, 2022.
4.1+ |  | Description of Our Securities
4.2 |  | Specimen Stock Certificate [filed as Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 26, 2020 filed on November 10, 2020 (File No. 0-19621) and incorporated herein by reference].
10.1 X |  | Patent and Know How License Agreement dated November 19, 2019, by and among JanOne Inc., and UAB Research Foundation, TheraVasc, Inc., and the Board of Supervisors of Louisiana State University and Agricultural and Mechanical College, acting on behalf of LSU Health Sciences Center at Shreveport [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 25, 2019 (File No. 0-19621) and incorporated herein by reference].
10.2 X |  | Master Agreement for Development, Manufacturing and Supply Services dated February 5, 2020 by and between JanOne Inc. and CoreRx Inc. [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 7, 2020 (File No. 0-19621) and incorporated herein by reference].
10.3 |  | Promissory Note between JanOne Inc., as the borrower, and Texas Capital Bank, N.A., as lender [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 4, 2020 (File No. 0-19621) and incorporated herein by reference].
10.4 |  | Amended and Restated Promissory Note, effective April 1, 2018, issued by ApplianceSmart Holdings LLC [filed as Exhibit 10.1 to the Company’s Form 8-K filed on December 31, 2018 (File No. 0-19621) and incorporated herein by reference].
10.5 |  | Security Agreement dated December 26, 2018 by and between ApplianceSmart Holdings LLC and Appliance Recycling Centers of America, Inc. [filed as Exhibit 10.2 to the Company’s Form 8-K filed on December 31, 2018 (File No. 0-19621) and incorporated herein by reference].
10.6 |  | Security Agreement dated December 26, 2018 by and between ApplianceSmart, Inc. and Appliance Recycling Centers of America, Inc. [filed as Exhibit 10.3 to the Company’s Form 8-K filed on December 31, 2018 (File No. 0-19621) and incorporated herein by reference].
10.7 |  | Security Agreement dated December 26, 2018 by and between ApplianceSmart Contracting Inc. and Appliance Recycling Centers of America, Inc. [filed as Exhibit 10.4 to the Company’s Form 8-K filed on December 31, 2018 (File No. 0-19621) and incorporated herein by reference].
10.8 |  | Subordination Agreement, dated March 15, 2019, from Appliance Recycling Centers of America, Inc. to Crossroads Financing, LLC [filed as Exhibit 10.1 to the Company’s Form 8-K filed on March 21, 2019 (File No. 0-19621) and incorporated herein by reference].
10.9 |  | Intercreditor and Subordination Agreement, dated March 18, 2019, by and between Appliance Recycling Centers of America, Inc. and Crossroads Financing, LLC [filed as Exhibit 10.2 to the Company’s Form 8-K filed on March 21, 2019 (File No. 0-19621) and incorporated herein by reference].
10.10 |  | Secured Revolving Line of Credit Promissory Note [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 30, 2019 (File No. 0-19621) and incorporated herein by reference].
10.11 |  | Amendment to Secured Line of Credit Promissory Note dated August 25, 2020 between ARCA Recycling, Inc. and Isaac Capital Group, LLC [filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 10, 2020 (File No. 0-19621) and incorporated herein by reference].
10.12 |  | Second Amendment and Waiver to Secured Line of Credit Promissory Note dated March 30, 2021 between ARCA Recycling, Inc. and Isaac Capital Group, LLC [filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed on March 30, 2021 (File No. 0-19621) and incorporated herein by reference].
10.13 |  | Securities Purchase Agreement dated November 8, 2016, between Energy Efficiency Investments, LLC and the Company [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 15, 2016 (File No. 0-19621) and incorporated herein by reference].
10.14 |  | Termination Agreement by and between Energy Efficiency Investments, LLC and JanOne Inc [filed as 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019 filed on April 6, 2020 (File No. 0-19621) and incorporated herein by reference]
10.15 |  | Form of 3% Original Issue Discount Senior Convertible Promissory Note issuable under Securities Purchase Agreement dated November 8, 2016, between Energy Efficiency Investments, LLC and the Company [filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 15, 2016 (File No. 0-19621) and incorporated herein by reference].
10.16 |  | Form of Common Stock Purchase Warrant issuable under Securities Purchase Agreement dated November 8, 2016, between Energy Efficiency Investments, LLC and the Company [filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on November 15, 2016 (File No. 0-19621) and incorporated herein by reference].
10.17* |  | 2011 Stock Compensation Plan [filed with the Company’s Schedule DEF 14A on March 31, 2011 and incorporated herein by reference].
10.18* |  | 2016 Equity Incentive Plan [filed as Exhibit 10.3 to the Company’s Form 10-K for the fiscal year ended December 31, 2016 (File No. 0-19621) and incorporated herein by reference]
10.19* |  | First Amendment to the JanOne Inc. 2016 Equity Incentive Plan [filed with the Company’s Schedule DEF 14A on October 2, 2020 and incorporated herein by reference]
10.20*× |  | Master Equipment Finance Agreement dated as of March 25, 2021 between KLC Financial, Inc. and ARCA Recycling, Inc. [filed as Exhibit 10.20 to the Company’s Form 10-K for the fiscal year ended January 2, 2021 (File No. 0-19621) and incorporated herein by reference]
10.21 |  | Asset Purchase Agreement among JanOne Inc., ARCA Recycling, Inc., and Customer Connexx LLC, on the one hand, and ARCA Affiliated Holdings Corporation, ARCA Services Inc., and Connexx Services Inc., on the other hand, dated February 19, 2021 [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 25, 2021 (File No. 0-19621) and incorporated herein by reference].
10.22 |  | Second Amendment and Waiver to Secured Line of Credit Promissory Note dated March 30, 2021 between ARCA Recycling, Inc. and Isaac Capital Group, LLC. [filed as Exhibit 10.12 to the Company’s Form 10-K for the fiscal year ended January 2, 2021 (File No. 0-19621) and incorporated herein by reference]
10.23 |  | Securities Purchase Agreement dated January 29, 2021 by and between JanOne Inc. and the purchasers listed therein. [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 29, 2021 (File No. 0-19621) and incorporated herein by reference].
10.24 |  | Addendum to Master Equipment Finance Agreement dated as of April 14, 2021 between KLC Financial, LLC and ARCA Recycling, Inc. [filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 17, 2021 (File No. 0-19621) and incorporated herein by reference].
10.25 |  | Settlement Agreement and Mutual Release of Claims dated April 9, 2021 by and among JanOne Inc. (f/k/a Appliance Recycling Centers of America, Inc.); GeoTraq, Inc.; Antonio Isaac; and Gregg Sullivan. [filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on August 16, 2021 (File No. 0-19621) and incorporated herein by reference].
10.26 |  | Amendment No. One to Asset Purchase Agreement among JanOne Inc., ARCA Recycling, Inc. and Customer Connexx LLC, on the one hand, and ARCA Affiliated Holdings Corporation, ARCA Services Inc., and Connexx Services Inc., on the other hand [filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 16, 2021 (File No. 0-19621) and incorporated herein by reference].
10.27+ |  | Third Amendment to Secured Revolving Line of Credit Promissory Note dated March 17, 2022 with Isaac Capital Group, LLC.
10.28 |  | Asset Purchase Agreement between JanOne Inc. and SPYR Technologies Inc., dated May 24, 2022.
10.29 |  | Promissory Note of SPYR Technologies Inc. in favor of JanOne Inc., dated May 24, 2022.
10.92 |  | General Credit and Security Agreement, dated as of September 26, 2022, between Gulf Coast Bank and Trust Company and ARCA.
10.93 |  | Guaranty to Gulf Coast Bank and Trust by JanOne Inc., dated as of September 21, 2022.
10.94 |  | Debt Subordination Agreement by Isaac Capital Group, dated as of September 21, 2022.
10.95+ |  | Agreement and Plan of Merger made and entered into as of December 28, 2022, among the registrant, STI Merger Sub Inc., Soin Therapeutics, LLC, and Amol Soin, M.D.
21.1+ |  | List of Subsidiaries of the Registrant
23.1+ |  | Consent of Frazier & Deeter, LLC, Independent Registered Public Accounting Firm.
23.2+ |  | Consent of WSRP, LLC, Independent Registered Public Accounting Firm.
31.1+ |  | Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2+ |  | Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1† |  | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2† |  | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101+ |  | The following materials from our Annual Report on Form 10-K for the fiscal year ended January 1, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Shareholders’ Equity, (v) the Notes to Consolidated Financial Statements, and (vi) document and entity information.
104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* |  | Items that are management contracts or compensatory plans or arrangements required to be filed as an exhibit pursuant to Item 14(a)3 of this Form 10-K.
+ |  | Filed herewith.
† |  | Furnished herewith.
× |  | Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv)
SIGNAT URES Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on our behalf by the undersigned, thereunto duly authorized.
April 17, 2023 | JANONE INC. (Registrant)
| By | /s/ Tony Isaac
|  | Tony Isaac
|  | Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature |  | Title |  | Date
Principal Executive Officer |  |  |  |
/s/ Tony Isaac |  | Chief Executive Officer, Treasurer |  | April 17, 2023
Tony Isaac |  |  |  |
Principal Financial and Accounting Officer |  |  |  |
/s/ Virland A. Johnson |  | Chief Financial Officer |  | April 17, 2023
Virland A. Johnson |  |  |  |
Directors |  |  |  |
/s/ Tony Isaac |  | Director |  | April 17, 2023
Tony Isaac |  |  |  |
/s/ Richard Butler |  | Director |  | April 17, 2023
Richard Butler |  |  |  |
/s/ John Bitar |  | Director |  | April 17, 2023
John Bitar |  |  |  |
/s/ Nael Hajjar |  | Director |  | April 17, 2023
Nael Hajjar |  |  |  |
Schdeule of Cash Flow Statement Table |
|  | For the Twenty Six Weeks Ended |
|  | July 2, 2022 |  |  | July 3, 2021 |
|  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |
OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 11,898 |  | $ | (12,129 | ) | $ | (231 | ) |  | $ | (4,477 | )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 270 |  |  | — |  |  | 270 |  |  |  | 2,090 |
Amortization of debt issuance costs |  |  | 7 |  |  | — |  |  | 7 |  |  |  | — |
Stock based compensation expense |  |  | 4 |  |  | — |  |  | 4 |  |  |  | 180 |
Accretion of note receivable discount |  |  | (27 | ) |  | (38 | ) |  | (65 | ) |  |  | — |
Gain on legal settlement |  |  | (115 | ) |  | — |  |  | (115 | ) |  |  | — |
Gain on Payroll Protection Program loan forgiveness |  |  | — |  |  | — |  |  | — |  |  |  | (1,872 | )
Gain on settlement of vendor advance payments |  |  | — |  |  | — |  |  | — |  |  |  | (941 | )
Gain on reversal of contingent liability |  |  | (637 | ) |  | — |  |  | (637 | ) |  |  | — |
Gain on sale of GeoTraq |  |  | (12,091 | ) |  | 1,850 |  |  | (10,241 | ) |  |  | — |
Unrealized loss on marketable securities |  |  | 376 |  |  | — |  |  | 376 |  |  |  | — |
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | (53 | ) |  | — |  |  | (53 | ) |  |  | (204 | )
Income taxes receivable |  |  | (12 | ) |  | — |  |  | (12 | ) |  |  | 173 |
Prepaid expenses and other current assets |  |  | 554 |  |  | — |  |  | 554 |  |  |  | 110 |
Inventories |  |  | 610 |  |  | — |  |  | 610 |  |  |  | 303 |
Right of use assets |  |  | (597 | ) |  | — |  |  | (597 | ) |  |  | (681 | )
Lease liability |  |  | 595 |  |  | — |  |  | 595 |  |  |  | 650 |
Accounts payable and accrued expenses |  |  | 713 |  |  | — |  |  | 713 |  |  |  | 2,485 |
Deposits and other Assets |  |  | (6 | ) |  | — |  |  | (6 | ) |  |  | (123 | )
Net cash provided by (used in) operating activities |  |  | 1,489 |  |  | (10,317 | ) |  | (8,828 | ) |  |  | (2,307 | )
INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Purchases of property and equipment |  |  | (721 | ) |  | — |  |  | (721 | ) |  |  | (1,458 | )
Purchases of intangibles |  |  | (189 | ) |  | — |  |  | (189 | ) |  |  | (65 | )
Net cash used in investing activities |  |  | (910 | ) |  | — |  |  | (910 | ) |  |  | (1,523 | )
FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Proceeds from equity financing, net |  |  | — |  |  | — |  |  | — |  |  |  | 5,544 |
Proceeds from stock option exercise |  |  | — |  |  | — |  |  | — |  |  |  | 27 |
Proceeds from notes payable |  |  | 366 |  |  | — |  |  | 366 |  |  |  | 1,835 |
Payments on related party notes payable |  |  | (53 | ) |  | — |  |  | (53 | ) |  |  | — |
Payments on notes payable |  |  | (128 | ) |  | — |  |  | (128 | ) |  |  | (59 | )
Payments on short-term notes payable |  |  | (288 | ) |  | — |  |  | (288 | ) |  |  | (144 | )
Net cash provided by (used in) financing activities |  |  | (103 | ) |  | — |  |  | (103 | ) |  |  | 7,203 |
Effect of changes in exchange rate on cash and cash equivalents |  |  | — |  |  |  |  | — |  |  |  | (42 | )
INCREASE IN CASH AND CASH EQUIVALENTS |  |  | 476 |  |  | (10,317 | ) |  | (9,841 | ) |  |  | 3,331 |
CASH AND CASH EQUIVALENTS, beginning of period |  |  | 705 |  |  |  |  | 705 |  |  |  | 379 |
CASH AND CASH EQUIVALENTS, end of period |  | $ | 1,181 |  | $ | (10,317 | ) | $ | (9,136 | ) |  | $ | 3,710 |
Supplemental cash flow disclosures: |  |  |  |  |  |  |  |  |  |
Interest paid |  | $ | 120 |  | $ | — |  | $ | 120 |  |  | $ | 84 |
Income taxes paid |  |  | 54 |  |  | — |  |  | 54 |  |  |  | 28 |
Right to use asset - operating leases capitalized |  |  | 1,451 |  |  | — |  |  | 1,451 |  |  |  | 1,244 |
|  | For the Thirty-Nine Weeks Ended |
|  | October 1, 2022 |  |  | October 2, 2021 |
|  | Previously Reported |  | Effect of Restatement |  | As restated |  |  |  |
OPERATING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 9,824 |  | $ | (12,197 | ) | $ | (2,373 | ) |  | $ | (5,445 | )
Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 347 |  |  | — |  |  | 347 |  |  |  | 3,136 |
Amortization of debt issuance costs |  |  | 10 |  |  | — |  |  | 10 |  |  |  | — |
Stock based compensation expense |  |  | 4 |  |  | — |  |  | 4 |  |  |  | 274 |
Accretion of note receivable discount |  |  | (95 | ) |  | (131 | ) |  | (226 | ) |  |  | — |
Gain on legal settlement |  |  | (115 | ) |  | — |  |  | (115 | ) |  |  | — |
Gain on Payroll Protection Program loan forgiveness |  |  | — |  |  | — |  |  | — |  |  |  | (1,872 | )
Gain on settlement of vendor advance payments |  |  | — |  |  | — |  |  | — |  |  |  | (952 | )
Gain on reversal of contingent liability |  |  | (637 | ) |  | — |  |  | (637 | ) |  |  | — |
Gain on sale of GeoTraq |  |  | (12,091 | ) |  | 1,850 |  |  | (10,241 | ) |  |  | — |
Unrealized loss on marketable securities |  |  | 646 |  |  | — |  |  | 646 |  |  |  | — |
Changes in assets and liabilities: |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | (2,614 | ) |  | — |  |  | (2,614 | ) |  |  | (1,931 | )
Income taxes receivable |  |  | — |  |  | — |  |  | — |  |  |  | 196 |
Prepaid expenses and other current assets |  |  | 176 |  |  | — |  |  | 176 |  |  |  | (71 | )
Inventories |  |  | 689 |  |  | — |  |  | 689 |  |  |  | 478 |
Right of use assets |  |  | 54 |  |  | — |  |  | 54 |  |  |  | (995 | )
Lease liability |  |  | — |  |  | — |  |  | — |  |  |  | 971 |
Accounts payable and accrued expenses |  |  | 1,440 |  |  | — |  |  | 1,440 |  |  |  | 2,840 |
Deposits and other Assets |  |  | (29 | ) |  | — |  |  | (29 | ) |  |  | (114 | )
Net cash used in operating activities |  |  | (2,391 | ) |  | (10,478 | ) |  | (12,869 | ) |  |  | (3,485 | )
INVESTING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Purchases of property and equipment |  |  | (736 | ) |  | — |  |  | (736 | ) |  |  | (1,530 | )
Purchases of intangibles |  |  | (214 | ) |  | — |  |  | (214 | ) |  |  | (65 | )
Net cash used in investing activities |  |  | (950 | ) |  | — |  |  | (950 | ) |  |  | (1,595 | )
FINANCING ACTIVITIES: |  |  |  |  |  |  |  |  |  |
Proceeds from equity financing, net |  |  | — |  |  | — |  |  | — |  |  |  | 5,544 |
Proceeds from issuance of short-term notes payable |  |  | 648 |  |  | — |  |  | 648 |  |  |  | 538 |
Proceeds from stock option exercise |  |  | — |  |  | — |  |  | — |  |  |  | 27 |
Proceeds from notes payable |  |  | 4,052 |  |  | — |  |  | 4,052 |  |  |  | 1,835 |
Payments on related party notes payable |  |  | (107 | ) |  | — |  |  | (107 | ) |  |  | — |
Payments on notes payable |  |  | — |  |  | — |  |  | — |  |  |  | (58 | )
Payments on short-term notes payable |  |  | (1,089 | ) |  | — |  |  | (1,089 | ) |  |  | (323 | )
Net cash provided by financing activities |  |  | 3,504 |  |  | — |  |  | 3,504 |  |  |  | 7,563 |
Effect of changes in exchange rate on cash and cash equivalents |  |  | — |  |  |  |  | — |  |  |  | (42 | )
INCREASE IN CASH AND CASH EQUIVALENTS |  |  | 163 |  |  | (10,478 | ) |  | (10,315 | ) |  |  | 2,441 |
CASH AND CASH EQUIVALENTS, beginning of period |  |  | 705 |  |  | — |  |  | 705 |  |  |  | 379 |
CASH AND CASH EQUIVALENTS, end of period |  | $ | 868 |  | $ | (10,478 | ) | $ | (9,610 | ) |  | $ | 2,820 |
Supplemental cash flow disclosures: |  |  |  |  |  |  |  |  |  |
Interest paid |  | $ | 235 |  |  | — |  | $ | 235 |  |  | $ | 146 |
Income taxes paid |  |  | 54 |  |  | — |  |  | 54 |  |  |  | 28 |
Right to use asset - operating leases capitalized |  |  | 1,902 |  |  | — |  |  | 1,902 |  |  |  | 1,815 |

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