Englobal (ENGC) 10-Q12 Nov 242024 Q3 Quarterly reportFinancial data

Company Profile

Cover

Cover - shares	9 Months Ended
Cover - shares	Sep. 28, 2024	Nov. 12, 2024
Cover [Abstract]
Entity Registrant Name	ENGlobal Corporation
Entity Central Index Key	0000933738
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 28, 2024
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Entity Common Stock Shares Outstanding		5,156,583
Entity File Number	001-14217
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	88-0322261
Entity Address Address Line 1	11740 Katy Fwy – Energy Tower III
Entity Address Address Line 2	11th floor
Entity Address City Or Town	Houston
Entity Address State Or Province	TX
Entity Address Postal Zip Code	77079
City Area Code	281
Local Phone Number	878-1000
Security 12b Title	Common Stock, $0.001 par value
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false
Trading Symbol	ENG
Entity Interactive Data Current	Yes

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 30, 2023
Condensed Consolidated Statements of Operations (Unaudited)
Operating revenues	$ 5,682	$ 9,450	$ 18,350	$ 32,381
Operating costs	5,207	7,613	16,660	32,748
Gross profit (loss)	475	1,837	1,690	(367)
Selling, general and administrative expenses	894	2,512	4,791	10,850
Operating loss	(419)	(675)	(3,101)	(11,217)
Other income (expense):
Other income, net	3	3	231	52
Interest expense, net	(62)	(27)	(166)	(158)
Loss from continuing operations before income taxes	(478)	(699)	(3,036)	(11,323)
Provision (benefit) for federal and state income taxes	22	22	66	66
Net loss	$ (500)	$ (721)	$ (3,102)	$ (11,389)
Basic and diluted loss per common share:	$ (0.10)	$ (0.14)	$ (0.60)	$ (2.30)
Basic and diluted weighted average shares used in computing loss per share:	5,157	5,104	5,157	4,949

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 28, 2024	Dec. 30, 2023
Current Assets:
Cash	$ 1,231	$ 615
Trade receivables, net of allowances of $3,227 and $4,336	3,807	6,432
Prepaid expenses and other current assets	108	992
Payroll taxes receivable	102	102
Contract assets	4,376	3,296
Total Current Assets	9,624	11,437
Property and equipment, net	714	1,360
Goodwill	720	720
Other assets
Right-of-use asset	2,006	5,079
Deposits and other assets	166	191
Total Other Assets	2,172	5,270
Total Assets	13,230	18,787
Current Liabilities:
Accounts payable	7,614	7,005
Accrued compensation and benefits	1,283	1,445
Current portion of operating leases	955	1,726
Current portion of finance leases	131	263
Contract liabilities	1,064	1,195
Other current liabilities	941	977
Legal contingency	1,464	0
Short-term debt	2,304	1,047
Total Current Liabilities	15,756	13,658
Long-term debt	0	0
Long-term unearned revenue	338	375
Long-term operating leases	1,333	5,761
Long-term finance leases	238	548
Total Liabilities	17,665	20,342
Stockholders' Equity:
Common stock - $0.001 par value; 75,000,000 shares authorized; 5,156,583 shares issued and outstanding at September 28, 2024 and December 30, 2023	5	5
Additional paid-in capital	61,576	61,354
Accumulated deficit	(66,016)	(62,914)
Total Stockholders' Deficit	(4,435)	(1,555)
Total Liabilities and Stockholders' Deficit	$ 13,230	$ 18,787

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 28, 2024	Dec. 30, 2023
Condensed Consolidated Balance Sheets
Trade Receivables, Allowances	$ 3,227	$ 4,336
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	75,000,000	75,000,000
Common Stock, Shares Issued	5,156,583	5,156,583
Common Stock, Shares Outstanding	5,156,583	5,156,583

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023
Cash Flows from Operating Activities:
Net loss	$ (3,102)	$ (11,389)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	467	450
Share-based compensation expense	222	202
Loss (gain) on disposal of fixed assets	(29)	287
Impairment of ROU asset	(878)	197
Reclassification of ROU liabilities, net	(1,413)	0
Changes in current assets and liabilities:
Trade accounts receivable	2,625	140
Contract assets	(1,080)	218
Other current assets	909	2,803
Accounts payable	609	2,632
Accrued compensation and benefits	(162)	614
Contract liabilities	(131)	910
Income taxes payable	51	10
Other current liabilities, net	1,340	(904)
Net cash used in operating activities	(572)	(3,830)
Cash Flows from Investing Activities:
Property and equipment acquired	0	(277)
Proceeds from sale of property and equipment	372	0
Net cash provided by (used in) investing activities	372	(277)
Cash Flows from Financing Activities:
Common stock and warrants issued, net	0	2,962
Payments on finance leases	(168)	(188)
Payoff of finance leases	(272)	0
Proceeds from Amended Credit Agreement	1,256	1,018
Payments on revolving credit facility, net	0	(1,661)
Net cash provided by financing activities	816	2,131
Net change in cash	616	(1,976)
Cash at beginning of period	615	3,464
Cash at end of period	1,231	1,488
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	166	158
Fair value of warrants at issuance date	0	2,782
Right of use assets obtained in exchange for new financing lease liability	0	289
Right of use assets obtained in exchange for new operating lease liability	0	524
Cash paid during the period for income taxes (net of refunds)	$ 8	$ 55

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Stockholders Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)
Balance, amount at Dec. 31, 2022		$ 4	$ 58,087	$ (47,761)
Common stock issued		0
Share-based compensation			202
Fair value of warrants at issuance date			2,782
Proceeds from common stock issued, net			180
Net Income (Loss)	$ (11,389)			(11,389)
Balance, amount at Sep. 30, 2023	2,105	4	61,251	(59,150)
Balance, amount at Jul. 01, 2023		4	61,138	(58,429)
Common stock issued		0
Share-based compensation			113
Net Income (Loss)	(721)			(721)
Balance, amount at Sep. 30, 2023	2,105	4	61,251	(59,150)
Balance, amount at Dec. 30, 2023	(1,555)	5	61,354	(62,914)
Common stock issued		0
Share-based compensation			222
Fair value of warrants at issuance date			0
Proceeds from common stock issued, net			0
Net Income (Loss)	(3,102)			(3,102)
Balance, amount at Sep. 28, 2024	(4,435)	5	61,576	(66,016)
Balance, amount at Jun. 29, 2024		5	61,562	(65,516)
Common stock issued		0
Share-based compensation			14
Net Income (Loss)	(500)			(500)
Balance, amount at Sep. 28, 2024	$ (4,435)	$ 5	$ 61,576	$ (66,016)

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
BASIS OF PRESENTATION	Sep. 28, 2024
BASIS OF PRESENTATION
BASIS OF PRESENTATION	NOTE 1 – BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements of ENGlobal Corporation (which may be referred to as “ENGlobal,” the “Company,” “we,” “us,” or “our”) were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, these condensed financial statements do not include all of the information or note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP. These condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 30, 2023, included in the Company’s 2023 Annual Report on Form 10-K filed with the SEC. The condensed financial statements included herein are unaudited for the three- and nine-month periods ended September 28, 2024 and September 30, 2023, and in the case of the condensed balance sheet as of December 30, 2023 have been derived from the audited financial statements of the Company. These financial statements reflect all adjustments (consisting of normal recurring adjustments), which are, in the opinion of management, necessary to fairly present the results for the periods presented. The Company has assessed subsequent events through the date of filing of these condensed financial statements with the SEC and believes that the disclosures made herein are adequate to make the information presented herein not misleading. We had no items of other comprehensive income in any period presented; therefore, no other components of comprehensive income are presented. For our fiscal year 2024, all four quarters will be comprised of 13 weeks each. Reverse Stock Split

ACCOUNTING STANDARDS

ACCOUNTING STANDARDS	9 Months Ended
ACCOUNTING STANDARDS	Sep. 28, 2024
ACCOUNTING STANDARDS
ACCOUNTING STANDARDS	NOTE 2 – ACCOUNTING STANDARDS The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) as of January 1, 2023. We adopted the standard using a modified retrospective approach which did not have a material impact on our financial position, results of operations, or cash flows. Revenue Recognition A majority of sales of fabrication and assembled systems are under fixed-price contracts. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We generally recognize revenue over time as we perform because of continuous transfer of control to the customer. Our customer typically controls the work in process as evidenced either by contractual termination clauses or by our rights to payment for work performed to date plus a reasonable profit to deliver products or services that do not have an alternative use to the Company. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or service to be provided, which measures the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. We generally use the cost-to-cost method on the labor portion of a project for revenue recognition to measure progress of our contracts because it best depicts the transfer of control to the customer which occurs as we consume the materials on the contracts. Therefore, revenues and estimated profits are recorded proportionally as labor costs are incurred. Under the typical payment terms of our fixed-price contracts, the customer pays us progress payments. These progress payments are based on quantifiable measures of performance or on the achievement of specified events or milestones. The customer may retain a small portion of the contract price until completion of the contract. Revenue recognized in excess of billings is recorded as a contract asset on the balance sheet. Amounts billed and due from our customers are classified as receivables on the balance sheet. The portion of the payments retained by the customer until final contract settlement is not considered a significant financing component because the intent is to protect the customer should we fail to adequately complete some or all of our obligations under the contract. For some contracts we may receive advance payments from the customer. We record a liability for these advance payments in contract liabilities on the balance sheet. The advance payment typically is not considered a significant financing component because it is used to meet working capital demand that can be higher in the early stages of a contract and to protect us from the other party failing to adequately complete some or all of its obligations under the contract. To determine proper revenue recognition for contracts, we evaluate whether two or more contracts should be combined and accounted for as one single performance obligation or whether a single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment and the decision to combine a group of contracts or separate a single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. For most of our contracts, we provide a significant service of integrating a complex set of tasks and components into a single project. Hence, the entire contract is accounted for as one performance obligation. Less commonly, we may provide distinct goods or services within a contract in which case we separate the contract into more than one performance obligation. If a contract is separated into more than one performance obligation, we allocate the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling price of the promised goods or services underlying each performance obligation and use the expected cost plus margin approach to estimate the standalone selling price of each performance obligation. Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion is complex, subject to variables and requires significant judgment. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. Contracts are often modified to account for changes in contract specifications and requirements. We consider contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of our contract modifications are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase or a reduction of revenue) on a cumulative catch-up basis. We have a standard, monthly process in which management reviews the progress and execution of our performance obligations. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenues and costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the schedule, technical requirements, and other contractual requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation, execution by our subcontractors, the availability and timing of funding from our customer and overhead cost rates, among other variables. Based on this analysis, any adjustments to revenue, operating costs and the related impact to operating income are recognized as necessary in the period they become known. These adjustments may result from positive performance and may result in an increase in operating income during the performance of individual performance obligations if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities. When estimates of total costs to be incurred exceed total estimates to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss becomes known. Likewise, these adjustments may result in a decrease in operating income if we determine we will not be successful in mitigating these risks or realizing related opportunities. Changes in estimates of net revenue, operating costs and the related impact to operating income are recognized monthly on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation’s percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. Related Parties – Property and Equipment

REVENUE RECOGNITION

REVENUE RECOGNITION	9 Months Ended
REVENUE RECOGNITION	Sep. 28, 2024
REVENUE RECOGNITION
REVENUE RECOGNITION	NOTE 3 – REVENUE RECOGNITION Our revenue by contract type was as follows (dollars in thousands): For the Three Months Ended For the Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Fixed-price revenue $ 3,250 $ 7,079 $ 10,815 $ 23,596 Time-and-material revenue 2,432 2,371 7,535 8,785 Total Revenue 5,682 9,450 18,350 32,381

CONTRACT ASSETS AND CONTRACT LI

CONTRACT ASSETS AND CONTRACT LIABILITIES	9 Months Ended
CONTRACT ASSETS AND CONTRACT LIABILITIES	Sep. 28, 2024
CONTRACT ASSETS AND CONTRACT LIABILITIES
CONTRACT ASSETS AND CONTRACT LIABILITIES	NOTE 4 – CONTRACT ASSETS AND CONTRACT LIABILITIES Our contract assets consist of unbilled amounts typically resulting from sales under long-term contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Our contract liabilities consist of advance payments and billings in excess of costs incurred. Costs, estimated earnings and billings on uncompleted contracts consisted of the following (dollars in thousands): September 28, 2024 December 30, 2023 Costs incurred on uncompleted contracts $ 16,433 $ 23,318 Estimated earnings on uncompleted contracts 1,448 3,602 Earned revenues 17,881 26,920 Less: billings to date 14,569 24,819 Net costs in excess of billings on uncompleted contracts $ 3,312 $ 2,101 Costs and estimated earnings in excess of billings on uncompleted contracts $ 4,376 $ 3,296 Billings in excess of costs and estimated earnings on uncompleted contracts (1,064 ) (1,195 ) Net costs in excess of billings on uncompleted contracts $ 3,312 $ 2,101

DEBT

DEBT	9 Months Ended
DEBT	Sep. 28, 2024
DEBT
DEBT	NOTE 5 – DEBT The components of debt were as follows (dollars in thousands): September 28, 2024 December 30, 2023 Amended Credit Agreement (1) 2,304 1,047 Total debt 2,304 1,047 Amount due within one year 2,304 1,047 Total long-term debt $ — $ — (1) On June 15, 2023, the Company entered into the Credit Agreement (the “Credit Agreement”) with Alliance, pursuant to which Alliance agreed, subject to certain terms and conditions, to extend up to two term loans in the aggregate principal amount of $1,250,000 to the Company. In connection with entering into the Credit Agreement, (i) the Company and its subsidiaries, ENGlobal U.S., Inc., a Texas corporation, ENGlobal Government Services, Inc., a Texas corporation, and ENGlobal Technologies, LLC, a Texas limited liability company (collectively, the “Guarantors”), entered into a security agreement granting a security interest in favor of Alliance on substantially all of the Company’s and Guarantors’ assets to secure all of the indebtedness and other obligations owed to Alliance under the Credit Agreement and (ii) the Guarantors entered into a continuing guaranty pursuant to which the Guarantors guaranteed the payment of all indebtedness owed to Alliance. On April 24, 2024, the Company entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with Alliance pursuant to which the parties amended and restated the Credit Agreement to, among other things, (i) modify the existing term loans in the aggregate original principal amount of $1,200,000 (the “Term Loans”) to (a) extend the maturity date to July 2, 2025, and (b) reduce the applicable interest rate from 8.5% to 8.0% per annum, and (ii) provide a revolving credit facility (the “Line of Credit”) of up to the lesser of (a) the Borrowing Base (as defined below) and (b) $1,000,000. The borrowing base (the “Borrowing Base”) will be an amount equal to up to 95% of Eligible Receivables (as defined in the Amended Credit Agreement) as determined by Alliance from time to time, less any reserves established by Lender in its sole discretion from time to time. As of September 28, 2024 and the date of the filing of this Quarterly Report on Form 10-Q, the Company does not have available funds to borrow under the Amended Credit Agreement. On November 11, 2024, the Company entered into an amendment to the Amended Credit Agreement with Alliance to (i) increase the interest rate from 8.0% per annum to 12.0% per annum under the Term Loans and (ii) provide that interest will be payable at maturity instead of monthly in arrears under the Term Loans and the Line of Credit. The Amended Credit Agreement matures on July 2, 2025. The future scheduled maturities of our debt are (in thousands): Amended Credit Agreement 2024 — 2025 2,304 Thereafter — $ 2,304

SEGMENT INFORMATION

SEGMENT INFORMATION	9 Months Ended
SEGMENT INFORMATION	Sep. 28, 2024
SEGMENT INFORMATION
SEGMENT INFORMATION	NOTE 6 – SEGMENT INFORMATION Our operating segments are strategic business units that offer our services and products to customers in their respective industries. The operating performance is regularly reviewed with operational leaders in charge of these segments, the Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”) and others. This group represents the chief operating decision maker (“CODM”) for ENGlobal. Our three operating segments are: (i) Automation, (ii) Engineering, and (iii) Government Services. Our Automation group provides the design and programming of automated control systems as well as designs, fabricates, integrates and commissions modular systems that include remote instrumentation control stations, on-line process analytical data, continuous emission monitoring, and electric power distribution. Often these packaged systems are housed in a fabricated metal enclosure, modular building or freestanding metal rack, which are commonly included in our scope of work. We provide automation engineering, procurement, fabrication, systems integration, programing and on-site commissioning services to our clients for both new and existing facilities. Our Engineering group focuses on providing engineering, procurement, construction, and automation services as well as fabricated products to downstream refineries and petrochemical facilities as well as midstream pipeline, storage and other transportation related companies. These services are often applied to small capital improvement and maintenance projects within refineries and petrochemical facilities. For our transportation clients, we work on facilities that include pumping, compression, gas processing, metering, storage terminals, product loading and blending systems. This group also provides engineering, fabrication and automation services to clients who have operations in the U.S. oil and gas exploration and development markets. The operations are usually associated with the completion, purification, storage and transmission of the oil and gas from the well head to the terminal or pipeline destination. Our Government Services group provides services related to the engineering, design, installation and maintenance of automated fuel handling and tank gauging systems for the U.S. military across the globe. Our corporate and other expenses that do not individually meet the criteria for segment reporting are reported separately as Corporate expenses. We have two reportable segments: Commercial and Government Services. Our Engineering and Automation groups are aggregated into one reportable segment, Commercial. Revenue, operating income, identifiable assets, capital expenditures and depreciation for each segment are set forth in the following table. The amount identified as Corporate includes those activities that are not allocated to the operating segments and include costs related to business development, executive functions, finance, accounting, safety, human resources and information technology that are not specifically identifiable with the segments. Segment information is as follows (dollars in thousands): Commercial Government Services Corporate Consolidated For the three months ended September 28, 2024: Revenue $ 4,292 1,390 — 5,682 Gross profit (loss) 538 (63 ) — 475 Gross profit (loss) margin 12.5 % (4.5 )% 8.4 % SG&A (180 ) 72 1,002 894 Operating profit (loss) 718 (135 ) (1,002 ) (419 ) Other income, net 3 Interest expense, net (62 ) Tax expense (22 ) Net loss (500 ) Commercial Government Services Corporate Consolidated For the three months ended September 30, 2023: Revenue $ 5,862 3,588 — 9,450 Gross profit (loss) 323 1,514 — 1,837 Gross profit (loss) margin 5.5 % 42.2 % 19.4 % SG&A 1,203 161 1,148 2,512 Operating profit (loss) (880 ) 1,353 (1,148 ) (675 ) Other income, net 3 Interest expense, net (27 ) Tax expense (22 ) Net loss (721 ) Commercial Government Services Corporate Consolidated For the nine months ended September 28, 2024: Revenue $ 13,292 5,058 — 18,350 Gross profit (loss) 1,783 (93 ) — 1,690 Gross profit (loss) margin 13.4 % (1.8 )% 9.2 % SG&A 1,276 268 3,247 4,791 Operating income (loss) 507 (361 ) (3,247 ) (3,101 ) Other income, net 231 Interest expense, net (166 ) Tax expense (66 ) Net loss (3,102 ) Commercial Government Services Corporate Consolidated For the nine months ended September 30, 2023: Revenue $ 25,124 7,257 — 32,381 Gross profit (loss) (2,479 ) 2,112 — (367 ) Gross profit (loss) margin (9.9 )% 29.1 % (1.1 )% SG&A 6,448 438 3,964 10,850 Operating profit (loss) (8,927 ) 1,674 (3,964 ) (11,217 ) Other income, net 52 Interest expense, net (158 ) Tax expense (66 ) Net loss (11,389 ) Total assets by segment are as follows (dollars in thousands): Total Assets by Segment As of September 28, 2024 As of December 30, 2023 (dollars in thousands) Commercial $ 7,026 $ 11,740 Government Services 4,142 3,780 Corporate 2,062 3,267 Consolidated $ 13,230 $ 18,787

FEDERAL AND STATE INCOME TAXES

FEDERAL AND STATE INCOME TAXES	9 Months Ended
FEDERAL AND STATE INCOME TAXES	Sep. 28, 2024
FEDERAL AND STATE INCOME TAXES
FEDERAL AND STATE INCOME TAXES	NOTE 7 – FEDERAL AND STATE INCOME TAXES The Company accounts for income taxes in accordance with FASB Accounting Standards Codification 740, “Income Taxes” (“ASC 740”). Under ASC 740-270 we estimate an annual effective tax rate based on year-to-date operating results and our projection of operating results for the remainder of the year. We apply this annual effective tax rate to the year-to-date operating results. If our actual results differ from the estimated annual projection, our estimated annual effective tax rate can change affecting the tax expense for successive interim results as well as the estimated annual tax expense results. Certain states are not included in the calculation of the estimated annual effective tax rate because the underlying basis for the tax is related to revenues and not taxable income. Amounts for Texas margin taxes are reported as income tax expense. The Company applies a more likely than not recognition threshold for all tax uncertainties. The FASB guidance for uncertain tax positions only allows the recognition of those tax benefits, based on their technical merits that are greater than 50 percent likelihood of being sustained upon examination by the taxing authorities. Management has reviewed the Company’s tax positions and determined there are no uncertain tax positions requiring recognition in the financial statements. U.S. federal tax returns prior to 2018 and Texas margins tax returns prior to 2017 are closed. Generally, the applicable statues of limitations are three to four years from their filings. The Company recorded income tax expense of $22 thousand for the three months ended September 28, 2024 as compared to income tax expense of $22 thousand for the three months ended September 30, 2023. The effective income tax rate for the three months ended September 28, 2024 was (4.6)% as compared to (0.9)% for the three months ended September 30, 2023. The Company recorded income tax expense of $66 thousand for the nine months ended September 28, 2024 as compared to $66 thousand for the nine months ended September 30, 2023. The effective income tax rate for the nine months ended September 28, 2024 was (2.2)% and for the nine months ended September 30, 2023 was (0.6)%. The effective tax rate differed from the federal statutory rate of 21% primarily due to the effect of the valuation allowances related to the expected unrealized deferred tax asset generated by the current year benefit.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Sep. 28, 2024
Commitments and Contingencies (Note 8)
COMMITMENTS AND CONTINGENCIES	NOTE 8 – COMMITMENTS AND CONTINGENCIES From time to time, ENGlobal or one or more of its subsidiaries is involved in various legal proceedings or is subject to claims that arise in the ordinary course of business alleging, among other things, claims of breach of contract or negligence in connection with the performance or delivery of goods and/or services. The outcome of any such claims or proceedings cannot be predicted with certainty. Except as set forth below, management is not aware of any pending or threatened lawsuits or proceedings that are expected to have a material effect on our financial position, results of operations or liquidity. On March 12, 2024, ENGlobal U.S. Inc. was served with a lawsuit by VEnergy Industrial Park I, LLC (the “Plaintiff”). The lawsuit is pending in the County Court of Waller County, Texas. The Plaintiff is seeking monetary damages of $1.3 million for a breach of lease cause of action. We disagree with the Plaintiff’s claims and expect to petition the court with affirmative defenses. However, litigation is inherently uncertain, and an adverse outcome could have a material impact on our financial condition. On August 1, 2024, ENGlobal U.S. Inc. was served with a lawsuit by 5V Leasing, LLC and Hector Venegas (the “Plaintiffs”). The lawsuit is pending in the District Court of Ward County, Texas. The Plaintiffs are seeking monetary damages of $250 thousand for a breach of lease cause of action. We disagree with the Plaintiffs’ claims and expect to petition the court with affirmative defenses. However, litigation is inherently uncertain, and an adverse outcome could have a material impact on our financial condition. We carry a broad range of insurance coverage, including general and business automobile liability, commercial property, professional errors and omissions, workers’ compensation insurance, directors’ and officers’ liability insurance and a general umbrella policy, all with standard self-insured retentions/deductibles. We also provide health insurance to our employees (including vision and dental) which is partially self-funded for these claims. Provisions for expected future payments are accrued based on our experience, and specific stop loss levels provide protection for the Company. We believe we have adequate reserves for the self-funded portion of our insurance policies. We are not aware of any claims that are not covered by these policies or which are likely to materially exceed the Company’s insurance limits.

LEASES

LEASES	9 Months Ended
LEASES	Sep. 28, 2024
LEASES
LEASES	NOTE 9 – LEASES The Company leases land, office and shop space, and equipment. Arrangements are assessed at inception to determine if a lease exists and, with the adoption of ASC 842, “Leases,” right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of lease payments over the lease term. Because the Company’s leases do not provide an implicit rate of return, the Company uses its incremental borrowing rate at the inception of a lease to calculate the present value of lease payments. The Company has elected to apply the short-term lease exception for all asset classes, excluding lease liabilities from the balance sheet and recognizing the lease payments in the period they are incurred. The components of lease expense were as follows (dollars in thousands): Three Months Ended Nine Months Ended Financial Statement Classification September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Finance leases: Amortization expense SG&A Expense $ 21 $ 61 $ 83 $ 176 Interest expense Interest expense, net 7 13 27 39 Total finance lease expense 28 74 110 215 Operating leases: Operating costs Operating costs 8 23 30 710 Selling, general and administrative expenses SG&A Expense (370 ) 691 593 1,900 Total operating lease expense (362 ) 714 623 2,610 Total lease expense $ (334 ) $ 788 $ 733 $ 2,825 Supplemental balance sheet information related to leases was as follows (dollars in thousands): Financial Statement Classification September 28, 2024 December 30, 2023 ROU Assets: Operating leases Right of use asset $ 2,006 $ 5,079 Finance leases Property and equipment, net 369 795 Total ROU Assets: $ 2,375 $ 5,874 Lease liabilities: Current liabilities Operating leases Current portion of leases $ 955 $ 1,726 Finance leases Current portion of leases 131 263 Noncurrent Liabilities: Operating leases Long-term leases 1,333 5,761 Finance leases Long-term leases 238 548 Total lease liabilities $ 2,657 $ 8,298 The weighted average remaining lease term and weighted average discount rate were as follows: At September 28, 2024 Weighted average remaining lease term (years) Operating leases 3.3 Finance leases 2.8 Weighted average discount rate Operating leases 0.9 % Finance leases 9.9 % Maturities of operating lease liabilities as of September 28, 2024 are as follows (dollars in thousands): Years ending: Operating leases Finance leases Total 2024 (remaining months) 273 38 311 2025 853 153 1,006 2026 371 149 520 2027 384 62 446 2028 and thereafter 429 9 438 Total lease payments 2,310 411 2,721 Less: imputed interest (23 ) (41 ) (64 ) Total lease liabilities 2,287 $ 370 $ 2,657

STOCKHOLDERS EQUITY

STOCKHOLDERS EQUITY	9 Months Ended
STOCKHOLDERS EQUITY	Sep. 28, 2024
Stockholders' Equity:
STOCKHOLDERS EQUITY	NOTE 10 – STOCKHOLDERS’ EQUITY On February 1, 2023, we entered into a securities purchase agreement (the “RDO Purchase Agreement”) providing for the sale and issuance by the Company to a single institutional investor of 496,375 shares (the “Shares”) of the Company’s common stock at an offering price of $6.80 per Share in a registered direct offering. Concurrently with the sale of the Shares and pursuant to the RDO Purchase Agreement, the Company also sold and issued in a private placement, for no additional consideration to the investor, warrants to purchase up to 496,375 shares of the Company’s common stock (the “Warrants”). The net proceeds to the Company from the offerings were approximately $3.0 million after deducting the placement agent’s fees and related offering expenses, and excluding the proceeds, if any, from the exercise of the Warrants. The Company used the net proceeds of the offering for working capital and general corporate purposes. We recorded the fair value of the warrants issued within additional paid-in capital. The warrants may be exercised by physical settlement or net share settlement, determined by the holder. In 2023, we issued stock-based compensation in the form of non-vested restricted stock awards to certain employees, directors, and officers. We apply the provisions of ASC Topic 718 “Compensation – Stock Compensation” (“ASC 718”) and recognize compensation expense over the applicable service period for all stock-based compensation based on the grant date fair value of the award. For the three months ended September 28, 2024, we recognized share-based compensation expense of $14 thousand, compared to $0.1 million for the three months ended September 30, 2023. For the nine months ended September 28, 2024, we recognized share-based compensation expense of $0.2 million, compared to $0.2 million for the nine months ended September 30, 2023.

LIQUIDITY

LIQUIDITY	9 Months Ended
LIQUIDITY	Sep. 28, 2024
LIQUIDITY
LIQUIDITY	NOTE 11 – LIQUIDITY We define liquidity as our ability to pay liabilities as they become due, fund business operations and meet monetary contractual obligations. Our primary sources of liquidity are cash on hand, internally generated funds and borrowings under the Amended Credit Agreement. On June 15, 2023, the Company entered into the Credit Agreement with Alliance, pursuant to which Alliance agreed, subject to certain terms and conditions, to extend up to two term loans in the aggregate principal amount of $1,250,000 to the Company. On April 24, 2024, the Company entered into the Amended Credit Agreement with Alliance that modified the Credit Agreement. The modification includes adding a Line of Credit which allows the Company to borrow up to the lesser of (i) the Borrowing Base (as defined in the Amended Credit Agreement), or (ii) $1,000,000. On February 1, 2023, we entered into the RDO Purchase Agreement providing for the sale and issuance by the Company to a single institutional investor of the Shares, at an offering price of $6.80 per Share in a registered direct offering. Concurrently with the sale of the Shares and pursuant to the RDO Purchase Agreement, the Company also sold and issued in a private placement, for no additional consideration to the investor, the Warrants. The gross proceeds to the Company from the offerings were approximately $3.4 million before deducting the placement agent’s fees and related offering expenses, and excluding the proceeds, if any, from the exercise of the Warrants. The Company used the net proceeds of the offering for working capital and general corporate purposes. We have had to extend the payment terms for our suppliers beyond our standard terms. In some cases, we have signed an agreement stipulating scheduled payment dates and amounts to provide assurance to the supplier that the balance will be paid in full. The payment terms for these arrangements are between a few weeks and 12 months depending on various factors such as amount, age, and how critical they are to our on-going operations. As of September 28, 2024, approximately $1.1 million of our trade payables have a payment schedule agreement. Our recurring losses, negative cash flows from operating activities, need for additional financing and the uncertainties surrounding our ability to obtain such financing, raise substantial doubt about our ability to continue as a going concern. We have limited cash on hand and will need additional working capital to fund our planned operations. We are subject to significant risks and uncertainties, including failing to secure additional capital to fund our planned operations or failing to profitably operate the business. We intend to raise funds through various potential sources, such as equity or debt financings; however, we can provide no assurance that such financing will be available on acceptable terms, or at all. If adequate financing is not available or we do not achieve profitability and positive cash flows from operating activities, we may be required to significantly curtail or cease our operations, and our business would be jeopardized. Cash and the availability of cash could be materially restricted if (1) outstanding invoices billed are not collected or are not collected in a timely manner, (2) circumstances prevent the timely internal processing of invoices, (3) we lose one or more of our major customers or our major customers significantly reduce the amount of work requested from us, (4) we are unable to win new projects that we can perform on a profitable basis or (5) we are unable to reverse our use of cash to fund losses. If any such event occurs, we would be forced to consider alternative financing options. Our Board of Directors continues to review strategic transactions, which could include strategic acquisitions, mergers, reverse mergers, the issuance or buyback of public shares, or the purchase or sale of specific assets, in addition to other potential actions aimed at increasing shareholder value. The Company does not intend to disclose or comment on developments related to its review unless and until the Board has approved a specific transaction or otherwise determined that further disclosure is appropriate. There can be no assurance that the Board’s strategic review will result in any transaction, or any assurance as to its outcome or timing.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
SUBSEQUENT EVENTS	Sep. 28, 2024
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 12 – SUBSEQUENT EVENTS On November 11, 2024, the Company entered into an amendment to the Amended Credit Agreement with Alliance to (i) increase the interest rate from 8.0% per annum to 12.0% per annum under the Term Loans and (ii) provide that interest will be payable at maturity instead of monthly in arrears under the Term Loans and the Line of Credit.

REVENUE RECOGNITION (Tables)

REVENUE RECOGNITION (Tables)	9 Months Ended
REVENUE RECOGNITION (Tables)	Sep. 28, 2024
REVENUE RECOGNITION
Revenue By Contract Type	For the Three Months Ended For the Nine Months Ended September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Fixed-price revenue $ 3,250 $ 7,079 $ 10,815 $ 23,596 Time-and-material revenue 2,432 2,371 7,535 8,785 Total Revenue 5,682 9,450 18,350 32,381

CONTRACTS ASSETS AND CONTRACT L

CONTRACTS ASSETS AND CONTRACT LIABILITIES (Tables)	9 Months Ended
CONTRACTS ASSETS AND CONTRACT LIABILITIES (Tables)	Sep. 28, 2024
CONTRACTS ASSETS AND CONTRACT LIABILITIES (Tables)
Costs, Estimated Earnings And Billings On Uncompleted Contracts	September 28, 2024 December 30, 2023 Costs incurred on uncompleted contracts $ 16,433 $ 23,318 Estimated earnings on uncompleted contracts 1,448 3,602 Earned revenues 17,881 26,920 Less: billings to date 14,569 24,819 Net costs in excess of billings on uncompleted contracts $ 3,312 $ 2,101 Costs and estimated earnings in excess of billings on uncompleted contracts $ 4,376 $ 3,296 Billings in excess of costs and estimated earnings on uncompleted contracts (1,064 ) (1,195 ) Net costs in excess of billings on uncompleted contracts $ 3,312 $ 2,101

DEBT (Tables)

DEBT (Tables)	9 Months Ended
DEBT (Tables)	Sep. 28, 2024
DEBT
Schedule of Debt	September 28, 2024 December 30, 2023 Amended Credit Agreement (1) 2,304 1,047 Total debt 2,304 1,047 Amount due within one year 2,304 1,047 Total long-term debt $ — $ —
Maturities Of Debt	Amended Credit Agreement 2024 — 2025 2,304 Thereafter — $ 2,304

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	9 Months Ended
SEGMENT INFORMATION (Tables)	Sep. 28, 2024
SEGMENT INFORMATION
Schedule of Segment Information	Commercial Government Services Corporate Consolidated For the three months ended September 28, 2024: Revenue $ 4,292 1,390 — 5,682 Gross profit (loss) 538 (63 ) — 475 Gross profit (loss) margin 12.5 % (4.5 )% 8.4 % SG&A (180 ) 72 1,002 894 Operating profit (loss) 718 (135 ) (1,002 ) (419 ) Other income, net 3 Interest expense, net (62 ) Tax expense (22 ) Net loss (500 ) Commercial Government Services Corporate Consolidated For the three months ended September 30, 2023: Revenue $ 5,862 3,588 — 9,450 Gross profit (loss) 323 1,514 — 1,837 Gross profit (loss) margin 5.5 % 42.2 % 19.4 % SG&A 1,203 161 1,148 2,512 Operating profit (loss) (880 ) 1,353 (1,148 ) (675 ) Other income, net 3 Interest expense, net (27 ) Tax expense (22 ) Net loss (721 ) Commercial Government Services Corporate Consolidated For the nine months ended September 28, 2024: Revenue $ 13,292 5,058 — 18,350 Gross profit (loss) 1,783 (93 ) — 1,690 Gross profit (loss) margin 13.4 % (1.8 )% 9.2 % SG&A 1,276 268 3,247 4,791 Operating income (loss) 507 (361 ) (3,247 ) (3,101 ) Other income, net 231 Interest expense, net (166 ) Tax expense (66 ) Net loss (3,102 ) Commercial Government Services Corporate Consolidated For the nine months ended September 30, 2023: Revenue $ 25,124 7,257 — 32,381 Gross profit (loss) (2,479 ) 2,112 — (367 ) Gross profit (loss) margin (9.9 )% 29.1 % (1.1 )% SG&A 6,448 438 3,964 10,850 Operating profit (loss) (8,927 ) 1,674 (3,964 ) (11,217 ) Other income, net 52 Interest expense, net (158 ) Tax expense (66 ) Net loss (11,389 )
Schedule of Total Assets by Segment	Total Assets by Segment As of September 28, 2024 As of December 30, 2023 (dollars in thousands) Commercial $ 7,026 $ 11,740 Government Services 4,142 3,780 Corporate 2,062 3,267 Consolidated $ 13,230 $ 18,787

LEASES (Tables)

LEASES (Tables)	9 Months Ended
LEASES (Tables)	Sep. 28, 2024
LEASES
Lease Expense	Three Months Ended Nine Months Ended Financial Statement Classification September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Finance leases: Amortization expense SG&A Expense $ 21 $ 61 $ 83 $ 176 Interest expense Interest expense, net 7 13 27 39 Total finance lease expense 28 74 110 215 Operating leases: Operating costs Operating costs 8 23 30 710 Selling, general and administrative expenses SG&A Expense (370 ) 691 593 1,900 Total operating lease expense (362 ) 714 623 2,610 Total lease expense $ (334 ) $ 788 $ 733 $ 2,825
Supplemental Balance Sheet Information Related To Leases	Financial Statement Classification September 28, 2024 December 30, 2023 ROU Assets: Operating leases Right of use asset $ 2,006 $ 5,079 Finance leases Property and equipment, net 369 795 Total ROU Assets: $ 2,375 $ 5,874 Lease liabilities: Current liabilities Operating leases Current portion of leases $ 955 $ 1,726 Finance leases Current portion of leases 131 263 Noncurrent Liabilities: Operating leases Long-term leases 1,333 5,761 Finance leases Long-term leases 238 548 Total lease liabilities $ 2,657 $ 8,298
Weighted Average Remaining Lease Term And Weighted Average Discount Rate	At September 28, 2024 Weighted average remaining lease term (years) Operating leases 3.3 Finance leases 2.8 Weighted average discount rate Operating leases 0.9 % Finance leases 9.9 %
Maturities Of Operating Lease Liabilities	Years ending: Operating leases Finance leases Total 2024 (remaining months) 273 38 311 2025 853 153 1,006 2026 371 149 520 2027 384 62 446 2028 and thereafter 429 9 438 Total lease payments 2,310 411 2,721 Less: imputed interest (23 ) (41 ) (64 ) Total lease liabilities 2,287 $ 370 $ 2,657

ACCOUNTING STANDARDS (Details N

ACCOUNTING STANDARDS (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 28, 2024	Sep. 28, 2024	Sep. 30, 2023
ACCOUNTING STANDARDS
Depreciation expense		$ 305	$ 404
Net gain from sale of property and equipment		29
Proceeds from sale of property and equipment	$ 372	$ 372	$ 0

REVENUE RECOGNITION (Details)

REVENUE RECOGNITION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 30, 2023
Total revenue	$ 5,682	$ 9,450	$ 18,350	$ 32,381
Fixed-Price Revenue
Total revenue	3,250	7,079	10,815	23,596
Time-and-Material Revenue
Total revenue	$ 2,432	$ 2,371	$ 7,535	$ 8,785

CONTRACT ASSETS AND CONTRACT _2

CONTRACT ASSETS AND CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 28, 2024	Dec. 30, 2023
CONTRACT ASSETS AND CONTRACT LIABILITIES
Costs incurred on uncompleted contracts	$ 16,433	$ 23,318
Estimated earnings on uncompleted contracts	1,448	3,602
Earned revenues	17,881	26,920
Less: billings to date	14,569	24,819
Net costs in excess of billings on uncompleted contracts	3,312	2,101
Costs and estimated earnings in excess of billings on uncompleted contracts	4,376	3,296
Billings in excess of costs and estimated earnings on uncompleted contracts	(1,064)	(1,195)
Net costs in excess of billings on uncompleted contracts	$ 3,312	$ 2,101

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	Sep. 28, 2024	Dec. 30, 2023
DEBT
Credit agreement	$ 2,304	$ 1,047
Total debt	2,304	1,047
Amount due within one year	2,304	1,047
Total long-term debt	$ 0	$ 0

DEBT (Details 1)

DEBT (Details 1) - USD ($) $ in Thousands	Sep. 28, 2024	Dec. 30, 2023
Long-term debt	$ 0	$ 0
Revolving Credit Facility
2024	0
2025	2,304
Thereafter	0
Long-term debt	$ 2,304

DEBT (Details Narrative)

DEBT (Details Narrative) - USD ($)	1 Months Ended		9 Months Ended
DEBT (Details Narrative) - USD ($)	Apr. 24, 2024	Jun. 15, 2023	Sep. 28, 2024
Minimum [Member]
Discount rate	8%
Maximum [Member]
Discount rate	8.50%
Amended Credit Agreement [Member] \| Minimum [Member]
Interest rate			8%
Amended Credit Agreement [Member] \| Maximum [Member]
Interest rate			12%
Revolving Credit Facility
Aggregate principal amount		$ 1,250,000
Description of credit agreement	Amended Credit Agreement”) with Alliance pursuant to which the parties amended and restated the Credit Agreement to, among other things, (i) modify the existing term loans in the aggregate original principal amount of $1,200,000 (the “Term Loans”) to (a) extend the maturity date to July 2, 2025, and (b) reduce the applicable interest rate from 8.5% to 8.0% per annum, and (ii) provide a revolving credit facility (the “Line of Credit”) of up to the lesser of (a) the Borrowing Base (as defined below) and (b) $1,000,000. The borrowing base (the “Borrowing Base”) will be an amount equal to up to 95% of Eligible Receivables (as defined in the Amended Credit Agreement) as determined by Alliance from time to time, less any reserves established by Lender in its sole discretion from time to time
Maturity Date	Jul. 02, 2025

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 28, 2024	Sep. 30, 2023	Dec. 30, 2023
Revenue	$ 5,682	$ 9,450	$ 18,350		$ 32,381
Gross profit (loss)	475	1,837	1,690		(367)
SG&A	894	2,512	4,791		10,850
Other income, net	3	3	231		52
Interest expense, net	(62)	(27)	(166)		(158)
Tax expense	(22)	(22)	(66)		(66)
Net loss				$ 3,102	11,389
Total assets	13,230		13,230	13,230		$ 18,787
Commercial [Member]
Revenue	4,292	5,862	13,292		25,124
Gross profit (loss)	$ 538	$ 323	$ 1,783		$ (2,479)
Gross profit (loss) margin	12.50%	5.50%	13.40%		(9.90%)
SG&A	$ 180	$ 1,203	$ 1,276		$ 6,448
Operating profit (loss)	718	(880)	507		(8,927)
Total assets	7,026		7,026	7,026		11,740
Corporate
Revenue	0	0	0		0
Gross profit (loss)	0	0	0		0
SG&A	1,002	1,148	3,247		3,964
Operating profit (loss)	(1,002)	(1,148)	(3,247)		(3,964)
Total assets	2,062		2,062	2,062		3,267
Consolidated [Member]
Revenue	5,682	9,450	18,350		32,381
Gross profit (loss)	$ 475	$ 1,837	$ 1,690		$ (367)
Gross profit (loss) margin	8.40%	19.40%	9.20%		(1.10%)
SG&A	$ 894	$ 2,512	$ 4,791		$ 10,850
Operating profit (loss)	(419)	(675)	(3,101)		(11,217)
Other income, net	3	3	231		52
Interest expense, net	(62)	(27)	(166)		(158)
Tax expense	22	22	66		66
Net loss	(500)	(721)	(3,102)		(11,389)
Total assets	13,230		13,230	13,230		18,787
Government Segment [Member]
Revenue	1,390	3,588	5,058		7,257
Gross profit (loss)	$ (63)	$ 1,514	$ (93)		$ 2,112
Gross profit (loss) margin	(4.50%)	42.20%	(1.80%)		29.10%
SG&A	$ 72	$ 161	$ 268		$ 438
Operating profit (loss)	(135)	$ 1,353	(361)		$ 1,674
Total assets	$ 4,142		$ 4,142	$ 4,142		$ 3,780

FEDERAL AND STATE INCOME TAXES

FEDERAL AND STATE INCOME TAXES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 30, 2023
FEDERAL AND STATE INCOME TAXES
Income tax expense	$ 22	$ 22	$ 66	$ 66
Effective income tax rate	(4.60%)	(0.90%)	(2.20%)	(0.60%)
Effective tax rate federal statutory rate			21%

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands	Aug. 01, 2024	Mar. 12, 2024
Commitments and Contingencies (Note 8)
Contingent liability	$ 250	$ 1,300

LEASES (Details)

LEASES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
LEASES (Details) - USD ($) $ in Thousands	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 30, 2023
Total finance lease expense	$ 28	$ 74	$ 110	$ 215
Total operating lease expense	362	714	623	2,610
Total lease expense	334	788	733	2,825
SG&A Expense
Amortization expense	21	61	83	176
Total operating lease expense	370	691	593	1,900
Operating Costs
Total operating lease expense	8	23	30	710
Interest Expense, Net
Interest expense	$ 7	$ 13	$ 27	$ 39

LEASES (Details 1)

LEASES (Details 1) - USD ($) $ in Thousands	Sep. 28, 2024	Dec. 30, 2023
ROU assets	$ 2,375	$ 5,874
Current lease liabilities - operating leases	955	1,726
Current lease liabilities - finance leases	131	263
Noncurrent lease liabilities - operating leases	1,333	5,761
Noncurrent lease liabilities - finance leases	238	548
Total lease liabilities	2,657	8,298
ROU assets - operating leases	2,006	5,079
Property and Equipment, Net
ROU assets - finance leases	369	795
Right of Use Asset
ROU assets - operating leases	$ 2,006	$ 5,079

LEASES (Details 2)

LEASES (Details 2)	9 Months Ended
LEASES (Details 2)	Sep. 28, 2024
LEASES
Weighted average remaining lease term (years) - operating leases	3 years 3 months 18 days
Weighted average discount rate - operating leases	0.90%
Weighted average remaining lease term (years) - finance leases	2 years 9 months 18 days
Weighted average discount rate - finance leases	9.90%

LEASES (Details 3)

LEASES (Details 3) $ in Thousands	Sep. 28, 2024 USD ($)
Operating Leases
2024 (remaining months)	$ 273
2025	853
2026	371
2027	384
2028 and thereafter	429
Total lease payments	2,310
Less: imputed interest	(23)
Total lease liabilities	2,287
Finance Leases
2024 (remaining months)	38
2025	153
2026	149
2027	62
2028 and thereafter	9
Total lease payments	411
Less: imputed interest	(41)
Total lease liabilities	370
Total
2024 (remaining months)	311
2025	1,006
2026	520
2027	446
2028 and thereafter	438
Total lease payments	2,721
Less: imputed interest	(64)
Total lease liabilities	$ 2,657

STOCKHOLDERS EQUITY (Details Na

STOCKHOLDERS EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 28, 2024	Sep. 30, 2023	Sep. 28, 2024	Sep. 30, 2023	Feb. 01, 2023
Warrants to purchase					496,375
Purchase Agreement [Member]
Stock issued					496,375
Offering price					$ 6.80
Proffessional fees			$ 3,000
Share-based compensation expense	$ 14	$ 100	$ 200	$ 200

LIQUIDITY (Details Narrative)

LIQUIDITY (Details Narrative) - Purchase Agreement [Member] - USD ($)	1 Months Ended
	Apr. 24, 2024	Sep. 28, 2024	Jun. 15, 2023	Feb. 01, 2023
Trade payables		$ 1,100,000
Aggregate principal amount			$ 1,250,000
Borrowing description	The modification includes adding a Line of Credit which allows the Company to borrow up to the lesser of (i) the Borrowing Base (as defined in the Amended Credit Agreement), or (ii) $1,000,000
Offering price				$ 6.80
February 1, 2023 [Member]
Gross proceeds	$ 3,400,000
Offering price		$ 6.80

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - Amended Credit Agreement [Member]		9 Months Ended
	Nov. 11, 2024	Sep. 28, 2024
Minimum [Member]
Interest rate		8%
Maximum [Member]
Interest rate		12%
Subsequent Event [Member] \| Minimum [Member]
Interest rate	8%
Subsequent Event [Member] \| Maximum [Member]
Interest rate	12%