RCM TECHNOLOGIES INC

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

RCM TECHNOLOGIES, INC.

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of RCM Technologies, Inc. and Subsidiaries (the “Company”) as of December 30, 2023 and December 31, 2022, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity and cash flows for the fiscal years ended December 30, 2023 and December 31, 2022, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 30, 2023 and December 31, 2022, and the results of its operations and its cash flows for the fiscal years ended December 30, 2023 and December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 14, 2024, expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

The Company’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that responds to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition–** Fixed-Price Contracts**

Description of the Matter

As disclosed in Note 1 to the consolidated financial statements, the Company generally recognizes revenue over time as performance obligations are satisfied. For fixed price contracts, the Company generally measures its progress to completion using an input measure of total costs incurred divided by total costs expected to be incurred. Recognition of revenue and profit over time as performance obligations are satisfied is highly judgmental as it required the Company to prepare estimates of total contract revenue and total contract costs, including costs to complete contracts that are in process. These estimates are dependent on a number of subjective factors and involve judgment as changes in these assumptions could have an impact on the amount of revenue recognized.

Audit Response

We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over the timing of revenue recognition, including testing the internal controls over the proper accumulation of labor costs by contract as well as the approval of monthly and weekly invoices for accuracy and completeness and reviewing key provisions and deliverables within customer contracts. We evaluated management’s application of their revenue recognition policies in the determination of revenue recognition conclusions. Our audit procedures included, among others, selecting a sample of revenue transactions and performing the following procedures: we reviewed the signed contract; we reviewed the recorded timesheet data related to the selected invoices, which corroborated management's assessment towards the completion of the performance obligation; and we reviewed the signed contract related to the selected invoice, noting each task has an agreed upon unit price per contract and the unit price matched what was shown on the invoice. We also tested for proper revenue recognition cut off.

/s/WithumSmith+Brown, PC

We have served as the Company's auditor since 2022.

Red Bank, New Jersey

March 14, 2024

PCAOB ID Number 100

Opinion on Internal Control Over Financial Reporting

We have audited RCM Technologies, Inc. and Subsidiaries’ (the “Company”) internal control over financial reporting as of December 30, 2023, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 30, 2023, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s assessment in section “Item 9A” Management’s Report on Internal Control over Financial Reporting. Management has identified that the Company did not design and maintain information technology controls relevant to preparing its financial statements, specifically concerning (i). separation of duties to their SAP ERP and General Ledger and (ii) user access controls that ensure appropriate segregation of duties and adequately restrict user access to financial applications, programs, and data. As a result, the Company's related process-level IT-dependent manual and automated controls that rely upon the affected ITGCs, or information coming from IT systems with affected ITGCs, were also deemed ineffective.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 30, 2023 and December 31, 2022, the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity and cash flows for the fiscal years ended December 30, 2023 and December 31, 2022, and the related notes. This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report, dated March 14, 2024, on the consolidated financial statements, which expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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.

/s/ WithumSmith+Brown, PC

Red Bank, New Jersey

March 14, 2024

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of RCM Technologies, Inc. and Subsidiaries (the “Company") as of January 1, 2022 and the related consolidated statement of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows for the year ended January 1, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 1, 2022, and the results of its operations and its cash flows for the year ended January 1, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Macias Gini & O’Connell LLP

We have served as the Company’s auditor since 2019.

San Diego, California

April 4, 2022

PCAOB ID Number 324

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 30, 2023, December 31, 2022 and January 1, 2022 (Amounts in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Amounts in thousands, except share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business and Basis of Presentation

RCM Technologies, Inc. (the “Company” or “RCM”) is a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced engineering, life sciences and information technology services. Additionally, the Company provides specialty health care staffing services through its Specialty Health Care Services group. RCM’s offices are primarily located in major metropolitan centers throughout North America, with additional offices in the Netherlands, Serbia and Germany.

The consolidated financial statements are comprised of the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

The Company considers its holdings of highly liquid money-market instruments and certificates of deposit to be cash equivalents if the securities mature within90 days from the date of acquisition. These investments are carried at cost, which approximates fair value. The Company has significant cash balances at financial institutions, which, throughout the year, regularly exceed the federally insured limit of*$250.* Any loss incurred or lack of access to uninsured funds could have a significant adverse impact on the Company’s financial condition, results of operations and cash flows.

The Company held $103, $79 and $21 of cash and cash equivalents in Canadian banks as of* December 30, 2023,** December 31, 2022and January 1, 2022,respectively, which was held principally in Canadian dollars. The Company held $638, $203 and $169 of cash and cash equivalents in Serbian banks as of December 30, 2023,** December 31, 2022and January 1, 2022,respectively, which was held in various currencies. The Company held $54 of cash and cash equivalents in German banks as of December 30, 2023,which was held primarily in Euros. The office in Germany was opened in April 2023.The Company held $4, $16 and $2 of cash and cash equivalents in Netherlands banks as of December 30, 2023,** December 31, 2022and January 1, 2022,*respectively, which was held in various currencies.

Fair Value of Financial Instruments

The Company’s carrying value of financial instruments, consisting primarily of accounts receivable, transit accounts receivable, accounts payable and accrued expenses, transit accounts payable and borrowings under line of credit approximates fair value due to their liquidity or their short-term nature and the line of credit’s variable interest rate. The Company doesnot have derivative products in place to manage risks related to foreign currency fluctuations for its foreign operations or for interest rate changes.

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s accounts receivable are primarily due from trade customers. Credit is extended based on evaluation of customers’ financial condition and, generally, collateral isnot required. Accounts receivable payment terms vary and are stated in the financial statements at amounts due from customers net of an allowance for doubtful accounts. The Company adopted ASU2016-13 in thefirst quarter of2023. There wasno material impact on the results of operation.** **The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy and the industry as a whole. The Company writes off accounts receivable when they become uncollectible, and payments subsequently received on such receivables previously written off are credited to bad debt expense.

F-12

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Unbilled Accounts Receivable and Work-in-Process

Unbilled receivables primarily represent revenue earned whereby those services are ready to be billed as of the balance sheet ending date. Work-in-process primarily represents revenue earned under contracts which the Company is contractually precluded from invoicing until future dates as project milestones are realized. The Company follows Accounting Standards Codification (“ASC”) Topic606, Revenue from Contracts with Customers when recording revenue on unbilled accounts receivable and work-in-process. See Note4 for further details.

Transit Accounts Receivable and Transit Accounts Payable

From time to time, the Company’s Engineering segment enters into agreements to provide, among other things, construction management and engineering services. Pursuant to these agreements, the Company a)* maypurchase equipment on behalf of the Company’s customer or engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumesno* ownership or risks of inventory. In such situations, the Company acts as an agent under the provisions of FASB ASC606 “Revenue from Contracts with Customers” and therefore recognizes revenue on a “net-basis.” The Company records revenue on a “net” basis on relevant engineering and construction management projects, which require subcontractor/procurement costs or transit costs. In those situations, the Company charges the client a negotiated fee, which is reported as net revenue when earned.

Under the terms of the agreements, the Company is typicallynot required to pay the subcontractor until after the corresponding payment from the Company’s end-client is received. Upon invoicing the end-client on behalf of the subcontractor or staffing agency, the Company records this amount simultaneously as both a “transit account receivable” and “transit account payable,” as the amount when paid to the Company is due to and generally paid to the subcontractor within a few days. The Company typically doesnot pay a given transit account payable until the related transit account receivable is collected. The Company is typically obligated to pay the subcontractor or staffing agency whether ornot the client pays the Company. The Company’s transit accounts payable generally exceeds the Company’s transit accounts receivable but absolute amounts and spreads fluctuate significantly from quarter to quarter in the normal course of business.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization, and are depreciated or amortized on the straight-line method at rates calculated to provide for retirement of assets at the end of their estimated useful lives. Computer hardware and software, and furniture and office equipment are typically depreciated over five years. Leasehold improvements are amortized over the shorter of the estimated life of the asset or the lease term.

F-13

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Intangible Assets

The Company’s intangible assets have been generated through acquisitions. The Company maintains responsibility for valuing and determining the useful life of intangible assets. As a general rule, the Company amortizes restricted covenants over four years and customer relationships oversix years. However, circumstances* maydictate other amortization terms as determined by the Company and assisted by theirthird* party advisors.

Canadian Sales Tax

The Company is required to charge and collect sales tax for all Canadian clients and remits invoiced sales tax monthly to the Canadian taxing authorities whether collected ornot. The Company doesnot collect the sales tax from its clients until they have paid their respective invoices. The Company includes uncollected Canadian sales tax invoiced to clients in its prepaid and other current assets.

Goodwill

Goodwill isnot amortized but is subject to periodic testing for impairment in accordance with FASB ASC350 “Intangibles - Goodwill and Other.” The Company tests goodwill for impairment on an annual basis as of the last day of the Company’s fiscal* Decembereach year or more frequently if events occur or circumstances change indicating that the fair value of the goodwill maybe below its carrying amount. The Company hasthree reporting units. The Company uses a market-based approach to determine the fair value of the reporting units. This approach uses earnings/revenue multiples of similar companies recently completing acquisitions and the ability of our reporting units to generate cash flows as measures of fair value of our reporting units. The Company adopted Accounting Standards Update (“ASU”)2017-04, “Intangibles - Goodwill and Other (Topic350*): Simplifying the Test for Goodwill Impairment” effective* December 30, 2017which has eliminated Step2* from the goodwill impairment test. Under this update, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. To satisfy the “Step0 Test”, the Company reviewed industry and market conditions, reporting unit specific events as well as overall financial performance and foundno impairment of goodwill.

The Company didnot record a goodwill impairment charge in fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022.There can beno* assurance that future indicators of impairment and tests of goodwill impairment willnot result in an impairment charge.

F-14

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Long-Lived and Intangible Assets

The Company evaluates long-lived assets and intangible assets with definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset* may**not* be recoverable. When the Company determines that it is probable that undiscounted future cash flows willnot be sufficient to recover an asset’s carrying amount, the asset is written down to its fair value. Assets to be disposed of by sale, if any, are reported at the lower of the carrying amount or fair value less cost to sell. The Company’s intangible assets consist of customer relationships and non-compete agreements.

Software

In accordance with FASB ASC350-40 “Accounting for Internal Use Software,” certain costs related to the development or purchase of internal-use software are capitalized and amortized over the estimated useful life of the software. During the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022,the Company capitalized $1,947, $282 and $1,256, respectively, for software costs. The net balance after accumulated depreciation for all software costs capitalized as of December 30, 2023,** December 31, 2022and January 1, 2022*was $2,325, $977 and $1,350, respectively.

Income Taxes

The Company makes judgments and interpretations based on enacted tax laws, published tax guidance, as well as estimates of future earnings. These judgments and interpretations affect the provision for income taxes, deferred tax assets and liabilities and the valuation allowance. The Company evaluated the deferred tax assets and determined on the basis of objective factors that the net assets will be realized through future years’ taxable income. In the event that actual results differ from these estimates and assessments, additional valuation allowances* maybe required. The Company didnot have any valuation allowance as of December 30, 2023,** December 31, 2022and January 1, 2022.*

The Company accounts for income taxes in accordance with FASB ACS740 “Income Taxes” (FASB ASC740) which requires an asset and liability approach of accounting for income taxes. FASB ASC740 requires assessment of the likelihood of realizing benefits associated with deferred tax assets for purposes of determining whether a valuation allowance is needed for such deferred tax assets. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The Company measures its deferred tax assets and liabilities using the tax rates that the Company believes will apply in the years in which the temporary differences are expected to be recovered or paid. The Company and its wholly owned United States subsidiaries file a consolidated federal income tax return. The Company also files tax returns in Canada, Germany, Puerto Rico and Serbia.

The Company also follows the provisions of FASB ASC740 which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition. The Company’s policy is to record interest and penalty, if any, as interest expense.

F-15

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Revenue Recognition

The Company records revenue under Accounting Standards Codification (“ASC”) Topic606, Revenue from Contracts with Customers. Revenue is recognized when we satisfy a performance obligation by transferring services promised in a contract to a customer, in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate service streams that we provide to our customers.

We evaluate our revenue contracts with customers based on thefive-step model under ASC606: (1) Identify the contract with the customer; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to separate performance obligations; and (5) Recognize revenue when (or as) each performance obligation is satisfied.

The Company derives its revenue from several sources. The Company’s Engineering Services, Life Sciences and Information Technology segments perform consulting and project solution services. The Healthcare segment specializes in long-term and short-term staffing and placement services to hospitals, schools and long-term care facilities amongst others. All of the Company’s segments perform staff augmentation services and derive revenue from permanent placement fees. The majority of the Company’s revenue is invoiced on a time and materials basis.

The following table presents our revenue disaggregated by revenue source for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022:*

F-16

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Revenue Recognition (Continued)

Time and Material

The Company’s Health Care segment predominantly recognizes revenue through time and material work while its Engineering and Life Sciences and Information Technology segments recognize revenue through both time and material and fixed fee work. The Company’s time and material contracts are typically based on the number of hours worked at contractually agreed upon rates, therefore revenue associated with these time and materials contracts are recognized based on hours worked at contracted rates.

Fixed Fee

From time to time and predominantly in our Engineering segment, the Company enters into contracts requiring the completion of specific deliverables. The Company has master services agreements with many of its customers that broadly define terms and conditions. Actual services performed under fixed fee arrangements are typically delivered under purchase orders that more specifically define terms and conditions related to that fixed fee project. While these master services agreements can often span several years, the Company’s fixed fee purchase orders are typically performed oversix tonine month periods. In instances where project services are provided on a fixed-price basis, revenue is recorded in accordance with the terms of each contract. In certain instances, revenue is invoiced at the time certain milestones are reached, as defined in the contract. Revenue under these arrangements are recognized as the costs on these contracts are incurred. From time-to-time, amounts paid in excess of revenue earned and recognized are recorded as deferred revenue, included in accounts payable and accrued expenses on the accompanying consolidated balance sheets. Additionally, some contracts contain “Performance Fees” (bonuses) for completing a contract under budget. Performance Fees, if any, are recorded when earned. Some contracts also limit revenue and billings to specified maximum amounts. Provisions for contract losses, if any, are made in the period such losses are determined. For contracts where there is a specific deliverable and the work isnot complete and the revenue isnot recognized, the costs incurred are deferred as a prepaid asset. The associated costs are expensed when the related revenue is recognized.

Permanent Placement Services

The Company earns permanent placement fees from providing permanent placement services. These fees are typically based on a percentage of the compensation paid to the person placed with the Company’s client. The Company guarantees its permanent placements on a prorated basis for90 days. In the event a candidate isnot retained for the90-day period, the Company will provide a suitable replacement candidate. In the event a replacement candidate cannot be located, the Company will provide a prorated refund to the client. An allowance for refunds, based upon the Company’s historical experience, is recorded in the financial statements. Permanent placement revenue was $1.7 million, $2.2 million and $1.8 million for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022,*respectively.

The deferred revenue balance as of* December 30, 2023,** December 31, 2022and January 1, 2022was $1.9 million, $1.1 million and $3.4 million, respectively. Revenue is recognized when the service has been performed. Deferred revenue maybe recognized over a period exceedingone* year from the time it was recorded on the balance sheet, although this is an infrequent occurrence. In fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022,*the Company recognized revenue of $1.1 million, $3.4 million and $0.4 million, respectively, that was included in deferred revenue at the beginning of the period.

F-17

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Revenue Recognition (Continued)

Transit Receivables and Transit Payables

From time to time, the Company’s Engineering segment enters into agreements to provide, among other things, construction management and engineering services. Pursuant to these agreements, the Company a)* maypurchase equipment on behalf of the Company’s customer or engage subcontractors to provide construction or other services; b) typically earns a fixed percentage of the total project value; and c) assumesno* ownership or risks of inventory. Under the terms of the agreements, the Company is typicallynot required to pay the subcontractor until after the corresponding payment from the Company’s end-client is received. Upon invoicing the end-client on behalf of the subcontractor or staffing agency, the Company records this amount simultaneously as both a “transit account receivable” and “transit account payable,” as the amount when paid to the Company is due to and generally paid to the subcontractor within a few days. The Company typically doesnot pay a given transit account payable until the related transit account receivable is collected. The Company is typically obligated to pay the subcontractor or staffing agency whether ornot the client pays the Company. The Company’s transit accounts payable generally exceeds the Company’s transit accounts receivable but absolute amounts and spreads fluctuate significantly from quarter to quarter in the normal course of business. The transit accounts receivable was $8.9 million and related transit accounts payable was $31.1 million, for a net payable of $22.2 million, as of* December 30, 2023.The transit accounts receivable was $3.3 million and related transit accounts payable was $9.8 million, for a net payable of $6.5 million, as of December 31, 2022.The transit accounts receivable was $1.0 million and related transit accounts payable was $2.1 million, for a net payable of $1.1 million, as of January 1, 2022.*

Concentrations

During the fiscal year ended* December 30, 2023,the Company hadtwo customers exceed10%* of consolidated revenue, representing 17.1% and 10.1% of consolidated revenue, respectively. During the fiscal year ended* December 31, 2022,the Company hadtwo customers exceed10%* of consolidated revenue, representing 13.2% and 12.7% of consolidated revenue, respectively. During the fiscal year ended* January 1, 2022,*no client accounted for10% or more of consolidated revenue. All customers exceeding10% of consolidated revenue during the periods presented are included in the Company’s Specialty Health Care segment.

The Company’s five, ten andtwenty largest customers accounted for approximately 39.1%,50.4% and 62.7%, respectively, of the Company’s revenue for the fiscal year ended* December 30, 2023.The Company’s five, ten andtwenty largest customers accounted for approximately 43.0%,53.7% and 67.0%, respectively, of the Company’s revenue for the fiscal year ended December 31, 2022.The Company’s five, ten andtwenty largest customers accounted for approximately 35.8%,52.5% and 65.1%, respectively, of the Company’s revenue for the fiscal year ended January 1, 2022.*

As of* December 30, 2023,two clients represented more than10%* of the Company’s accounts receivable, net, representing 21.2% and 14.7%, respectively. As of* December 31, 2022,two clients represented more than10%* of the Company’s accounts receivable, net, representing 16.1% and 12.5%, respectively. As of* January 1, 2022,two clients represented more than10%* of the Company’s accounts receivable, net, representing 15.3% and 14.2%.

F-18

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Foreign Currency Translation

The functional currency of the Company’s Canadian, Serbian and German subsidiaries is the local currency. Assets and liabilities are translated at period-end exchange rates. Income and expense items are translated at weighted average rates of exchange prevailing during the year. Any translation adjustments are included in the accumulated other comprehensive income account in stockholders’ equity. Transactions executed in different currencies resulting in exchange adjustments are translated at spot rates and resulting foreign exchange transaction gains and losses are included in the results of operations.

Comprehensive Income

Comprehensive income consists of net income and foreign currency translation adjustments.

Per Share Data

Basic net income per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted net income per share is calculated using the weighted-average number of common shares plus dilutive potential common shares outstanding during the period. Potential dilutive common shares consist of stock options and other stock-based awards under the Company’s stock compensation plans, when their impact is dilutive. Because of the Company’s capital structure, all reported earnings pertain to common shareholders andno other adjustments are necessary.

Share - Based Compensation

The Company recognizes share-based compensation over the vesting period of an award based on fair value at the grant date determined using the Black-Scholes option pricing model. Certain assumptions are used to determine the fair value of stock-based payment awards on the date of grant and require subjective judgment. Because employee stock options have characteristics significantly different from those of traded options, and because changes in the input assumptions can materially affect the fair value estimate, the existing models* may**not* provide a reliable single measure of the fair value of the employee stock options. Management assesses the assumptions and methodologies used to calculate estimated fair value of stock-based compensation when share-based awards are granted. Circumstances* maychange and additional data maybecome available over time, which could result in changes to these assumptions and methodologies and thereby materially impact our fair value determination. If an employee leaves the firm before the vesting period has been met, those shares are forfeited and removed from the share – based compensation expense calculation. See Note11* for additional share-based compensation information.

Restricted share and share unit awards are recognized at their fair value. The amount of compensation cost is measured on the grant date fair value of the equity instrument issued. The compensation cost of the restricted share and share unit awards is recognized over the vesting period of the restricted share and share unit awards on a straight-line basis. Restricted share and share unit awards typically include dividend accrual equivalents, which means that any dividends paid by the Company during the vesting period become due and payable after the vesting period assuming the grantee’s restricted share or share unit award fully vests. Dividends for these grants are accrued on the dividend payment dates and included in accounts payable and accrued expenses on the accompanying consolidated balance sheet. Dividends for restricted share and share unit awards that ultimately donot vest are forfeited.

F-19

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Advertising Costs

Advertising costs are expensed as incurred. Total advertising expense was $781, $925 and $914 for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022,*respectively.

Fair Value Measurements

The Company values its financial assets and liabilities based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a fair value hierarchy was established that prioritizes observable and unobservable inputs used to measure fair value intothree broad levels, which are described below:

Level1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level1 inputs.

Level2: Observable inputs other than Level1 prices such as quoted prices for similar assets or liabilities; quoted prices in inactive markets; or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data.

Level3: Unobservable inputs are used when little orno market data is available. The fair value hierarchy gives the lowest priority to Level3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

Reclassification

Certain prior year amounts have been reclassified to conform with the current year presentation. These classifications hadno effect on the previously reported results of operations.

The Company follows a52/53 week fiscal reporting calendar ending on the Saturday closest to* December 31.The fiscal years ended December 30, 2023 (fiscal2023*),* December 31, 2022 (fiscal2022*) and* January 1, 2022 (fiscal2021*) consisted offifty-two weeks each.

F-20

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

The Company uses estimates to determine an allowance for doubtful accounts on its accounts receivable, litigation, medical claims, vacation, goodwill impairment, if any, equity compensation, the tax rate applied and the valuation of certain assets and liability accounts. In addition, the Company reviews its estimated costs to complete a contract and adjusts those costs when necessary. These estimates can be significant to the operating results and financial position of the Company. The estimates are based upon various factors including current and historical trends, as well as other pertinent industry and regulatory authority information. Management regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes.

The Company has risk participation arrangements with respect to workers compensation and health care insurance. The amounts included in the Company’s costs related to this risk participation are estimated and can vary based on changes in assumptions, the Company’s claims experience or the providers included in the associated insurance programs.

The Company can be affected by a variety of factors including uncertainty relating to the performance of the general economy, competition, demand for the Company’s services, adverse litigation and claims and the hiring, training and retention of key employees.

Fair Value of Financial Instruments

The Company’s carrying value of financial instruments, consisting primarily of accounts receivable, transit accounts receivable, accounts payable and accrued expenses, transit accounts payable and borrowings under line of credit approximates fair value due to their liquidity or their short-term nature and the line of credit’s variable interest rate. The Company doesnot have derivative products in place to manage risks related to foreign currency fluctuations for its foreign operations or for interest rate changes.

The Company re-measures the fair value of the contingent consideration at each reporting period and any change in the fair value from either the passage of time or events occurring after the acquisition date, is recorded in earnings in the accompanying consolidated statement of operations.

F-21

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

4. ACCOUNTS RECEIVABLE, TRANSIT ACCOUNTS RECEIVABLE AND TRANSIT ACCOUNTS PAYABLE

The Company’s accounts receivable are comprised as follows:

Unbilled receivables primarily represent revenue earned whereby those services are ready to be billed as of the balance sheet ending date. Work-in-progress primarily represents revenue earned under contracts which the Company contractually invoices at future dates.

5. PROPERTY AND EQUIPMENT

Property and equipment are comprised of the following:

The Company periodically writes off fully depreciated and amortized assets. The Company wrote off fully depreciated and amortized assets of $1,201, $901 and $1,671 during the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022,respectively. For the fiscal years ended December 30, 2023,** December 31, 2022and January 1, 2022,*depreciation and amortization expense for property and equipment was $1,052, $995 and $1,007, respectively.

F-22

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

6. ACQUISITIONS AND DIVESTITURES

The purchase method of accounting in accordance with FASB ASC805, “Business Combination,” was applied for all acquisitions. This requires the cost of an acquisition to be allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition with the excess cost accounted for as goodwill. Goodwill arising from the acquisitions is attributable to expected sales synergies from combining the operations of the acquired business with those of the Company.

TalentHerder Acquisition

Effective* October 2, 2022,*the Company acquired the business operations of TalentHerder, LLC, a California limited liability company. TalentHerder is a leading talent acquisition services company. TalentHerder’s business bridges the gap between in-house and external recruiting, specializing in high-growth companies. It works with clients to help identify and hire top-quality talent across all critical functions, enabling companies to scale teams quickly, efficiently, and cost-effectively. TalentHerder’s proven recruitment processes can help scale both in-person and remote working environments for companies across the globe. The acquisition will bolster the Company’s existing capabilities by expanding its recruitment process outsourcing ("RPO") service footprint, enhancing the Company's candidate sourcing reach, and enabling the Company's in-house recruiting team to respond more rapidly to client needs.

The consideration and estimated fair value of assets acquired and liabilities assumed is as follows:

The seller of TalentHerder is eligible to receive post-closing contingent consideration upon the business exceeding certain base levels of operating income, potentially earned overfive years. The amount recorded for the contingent consideration represents the acquisition date fair value of expected consideration to be paid based on TalentHerder’s forecasted operating income during thefive year period. Expected consideration was valued based on different possible scenarios for projected operating income. Each case was assigned a probability which was used to calculate an estimate of the forecasted future payments. Then a discount rate was applied to these forecasted future payments to determine the acquisition date fair value to be recorded. The preliminary estimated purchase price has been allocated as follows:

F-23

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

6. ACQUISITIONS AND DIVESTITURES (CONTINUED)

In thefourth quarter of2021, the Company remeasured the value of its contingent consideration. The primary driver for remeasuring the contingent consideration was the performance by TKE. This remeasurement led to a $1.7 million reduction to the contingent consideration liability relating to the TKE acquisition. TKE had high yearly performance targets to achieve earn-out consideration. Two factors primarily contributed to TKEnot hitting its performance targets. Thefirst was the COVID-19 pandemic which overlapped earn-out yearstwo and three. TKE had numerous projects in its pipeline that were delayed or eliminated by prospective clients. Thesecond factor relates to a specific client in earn-out year three. This client was dissatisfied with the product output, and TKE agreed to fix the equipment. The additional cost caused TKE to miss its earn-out target. Based on these factors, the Company determined to amend its asset purchase agreement with TKE, whereby TKE could receive maximum contingent consideration of $0.4 million in2022 and $0.3 million in2023. TKE earned $0.3 million in2022, so the Company recorded a remeasurement of contingent consideration for $0.1 million in2022.

Potential future contingent payments to be made to all active acquisitions after* December 30, 2023are capped at a cumulative maximum of $9.6 million. The Company paid contingent consideration of $0.3 million, $0.1 million and $0.5 million during the fiscal years ended December 30, 2023,** December 31, 2022and January 1, 2022,*respectively.

The changes in the liability for contingent consideration from acquisitions for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022*are as follows:

F-24

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

6. ACQUISITIONS AND DIVESTITURES (CONTINUED)

Future Contingent Payments

As of* December 30, 2023,the Company hadtwo* acquisition agreements whereby additional contingent consideration* maybe earned by the sellers:1) effective September 30, 2018,the Company acquired certain assets of Thermal Kinetics Engineering, PLLC and Thermal Kinetics Systems, LLC, and2*) effective* October 2, 2022,the Company acquired certain assets of TalentHerder LLC. The Company estimates future contingent payments at December 30, 2023*as follows:

For acquisitions that involve contingent consideration, the Company records a liability equal to the fair value of the estimated contingent consideration obligation as of the acquisition date. The Company determines the acquisition date fair value of the contingent consideration based on the likelihood of paying the additional consideration. The fair value is estimated using projected future operating results and the corresponding future earn-out payments that can be earned upon the achievement of specified operating objectives and financial results by acquired companies using Level3 inputs and the amounts are then discounted to present value. These liabilities are measured quarterly at fair value, and any change in the fair value of the contingent consideration liability is recognized in the consolidated statements of operations. During the measurement period, which* maybe up toone* year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding adjustment to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in the consolidated statements of operations.

Estimates of future contingent payments are subject to significant judgment and actual payments* maymaterially differ from estimates. The Company estimates future contingent consideration payments based on forecasted performance and recorded the fair value of those expected payments as of December 30, 2023.Contingent consideration related to acquisitions is recorded at fair value (level3*) with changes in fair value recorded in other (expense) income, net.

Divestiture of Assets

On* July 30, 2021,the Company sold the principal assets and certain liabilities of its Pickering and Kincardine offices in Ontario, Canada. Thesetwo* offices were often called Canada Power Systems and principally provided engineering services totwo major nuclear power providers in Canada. Thetwo Canada Power Systems offices were part of a reporting unit within the Company’s Engineering segment. The Company will continue to offer other engineering services in Canada and similar services in the United States. The Company evaluated this transaction under ASC205-20, discontinued operations, and determined it didnot meet the requirements to be treated as such. The transaction netted a gain on sale of assets of $2.4 million for the year ended* January 1, 2022.The purchase agreement provided for a typical indemnity escrow held by an independent escrow agent. The net proceeds released from the escrow account generated a gain on sale of assets of $0.4 million and $0.2 million for the years ended December 30, 2023,and December 31, 2022,respectively. For the fiscal year ended January 1, 2022,thesetwo* offices generated revenue of $4.9 million.

F-25

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

7. GOODWILL

Goodwill represents the premium paid over the fair value of the net tangible and intangible assets acquired in business combinations. The Company tests goodwill for impairment on an annual basis as of the last day of the Company's fiscal year or more frequently if events occur or circumstances change indicating that the fair value of goodwill* maybe below the carrying amount. The Company reviewed industry and market conditions, reporting unit specific events as well as overall financial performance and determined thatno* indicators of impairment of goodwill existed during the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022.As such, no impairment loss on the Company’s goodwill during the fiscal years ended December 30, 2023,** December 31, 2022or January 1, 2022*was recorded as a result of such review.

The changes in the carrying amount of goodwill for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022*are as follows:

F-26

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

8. INTANGIBLE ASSETS

The Company evaluates long-lived assets and intangible assets with definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset* may**not* be recoverable. When the Company determines that it is probable that undiscounted future cash flows willnot be sufficient to recover an asset’s carrying amount, the asset is written down to its fair value. Assets to be disposed of by sale, if any, are reported at the lower of the carrying amount or fair value less cost to sell. The Company’s intangible assets consist of customer relationships and non-compete agreements. During all periods presented, the Company determined thatno impairment of intangible assets exists.

All of the Company’s intangible assets are associated with the Engineering segment. Intangible assets other than goodwill are amortized over their useful lives. Intangible assets are carried at cost, less accumulated amortization.

Details of intangible assets by class at* December 30, 2023,** December 31, 2022and January 1, 2022:*

Amortization of acquired intangible assets for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022was $182, $46 and $95, respectively. The remaining intangible asset balance will be amortized through fiscal2027.*

Estimated future amortization expense, by fiscal years, for these intangibles assets are as follows:

F-27

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

9. LINE OF CREDIT

On* April 24, 2023,the Company entered into a Fourth Amended and Restated Loan Agreement (the “Fourth Amended and Restated Loan Agreement”) with Citizens Bank, N.A., as lender (in such capacity, the “Lender”) and as administrative agent and arranger (in such capacity, the “Administrative Agent”), to amend and restate in its entirety that certain Third Amended and Restated Agreement dated as of the August 9, 2018 (*as the same has been amended and modified prior to the date hereof, the “Existing Loan Agreement”).

The Fourth Amended and Restated Loan Agreement provides for a $45.0 million revolving credit facility (the “Revolving Credit Facility”), hasno limitation for letters of credit, and expires on* April 24, 2026.*

Borrowings under the Revolving Credit Facility bear interest atone oftwo alternative rates, as selected by the Company at each incremental borrowing. These alternatives are: (i) SOFR (Secured Overnight Financing Rate), plus applicable margin or (ii) the agent bank’s prime rate generally borrowed over shorter durations. The Company also pays unused line fees based on the amount of the Revolving Credit Facility that isnot drawn. Unused line fees are recorded as interest expense. The effective weighted average interest rate, including unused line fees, for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022*were 6.5%,2.2% and 2.0%, respectively.

All borrowings under the Fourth Amended and Restated Loan Agreement remain collateralized with substantially all of the Company’s assets, as well as the capital stock of its subsidiaries. The Revolving Credit Facility also contains various financial and non-financial covenants, such as a covenant that restricts the Company’s ability to borrow in order to pay dividends. As of* December 30, 2023,the Company was in compliance with all covenants contained in the Revolving Credit Facility*.**The Company believes that it will maintain compliance with its financial covenants for the foreseeable future.

Borrowings under the line of credit as of* December 30, 2023,** December 31, 2022and January 1, 2022were $30.8 million, $8.8 million and $14.2 million, respectively. At December 30, 2023,** December 31, 2022and January 1, 2022,there were letters of credit outstanding for $2.0 million, $1.9 million, and$1.9 million, respectively. At December 30, 2023,*the Company had availability for additional borrowings under the Revolving Credit Facility of $12.1 million.

F-28

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

10. PER SHARE DATA

The Company uses the treasury stock method to calculate the weighted-average shares outstanding used for diluted earnings per share. The number of weighted-average shares used to calculate basic and diluted earnings per share for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022*was determined as follows:

For the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022,there wereno anti-dilutive shares included in the calculation of common stock equivalents as there wereno* stock options outstanding.

Unissued shares of common stock were reserved for the following purposes:

F-29

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

11. SHARE BASED COMPENSATION

At* December 30, 2023,the Company hadtwo* share-based employee compensation plans, the Employee Stock Purchase Plan and the2014 Omnibus Equity Compensation Plan.

The Company measures the fair value of share-based awards, if and when granted, based on the Black-Scholes method and using the closing market price of the Company’s common stock on the date of grant. Awards typically vest over periods ranging fromone tofive years and expire within 10 years of issuance. The Company* mayalso issue immediately vested equity awards. Share-based compensation expense related to time-based awards is amortized in accordance with applicable vesting periods using the straight-line method. The Company expenses performance-based awards only when the performance metrics are likely to be achieved and the associated awards are therefore likely to vest. Performance-based share awards that are likely to vest are also expensed on a straight-line basis over the vesting period but may*vest on a retroactive basis or be reversed, depending on when it is determined that they are likely to vest, or in the case of a reversal when they are later determined to be unlikely to vest or forfeited. Discussion of share and share-based awards herein references awards of shares and share units.

Share-based compensation expense of $2.1 million, $1.6 million, and $1.4 million was recognized for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022,respectively. Share-based compensation for performance-based equity agreements were $0.7 million, $0.8 million and $0.4 million for the fiscal years ended December 30, 2023,** December 31, 2022and January 1, 2022,respectively. As of December 30, 2023,*there were 100,000 performance-based restricted stock awards outstanding. Share-based compensation expense is included in selling, general and administrative expense in the Company’s statement of operations.

As of* December 30, 2023,the Company had $3.2 million of total unrecognized compensation cost, with nearly all of the unrecognized compensation cost related to time-based non-vested share-based awards outstanding. The Company expects to recognize the expense associated with time-based non-vested share-based awards through fiscal2027.* These amounts donot include a) the cost of any additional share-based awards granted after* December 30, 2023*or b) the impact of any potential changes in the Company’s forfeiture rate.

Incentive Share-Based Plans

Employee Stock Purchase Plan

The Company implemented the2001 Employee Stock Purchase Plan (the “Purchase Plan”) with shareholder approval, effective* January 1, 2001.Under the Purchase Plan, employees meeting certain specific employment qualifications are eligible to participate and can purchase shares of common stock semi-annually through payroll deductions at the lower of 85% of the fair market value of the stock at the commencement or end of the offering period. The purchase plan permits eligible employees to purchase shares of common stock through payroll deductions for up to 10% of qualified compensation, subject to maximum purchases in anyone* fiscal year of 3,000 shares.

F-30

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Employee Stock Purchase Plan (Continued)

In fiscal2015, the Company amended the Purchase Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance or transfer under the Purchase Plan by an additional 300,000 shares so that the total number of shares of stock reserved for issuance or transfer under the Plan shall be 1,100,000 shares and to extend the expiration date of the Purchase Plan to* December 31, 2025.In fiscal2018,* the Company amended the Purchase Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance or transfer under the Purchase Plan by an additional 300,000 shares so that the total number of shares of stock reserved for issuance or transfer under the Plan shall be 1,400,000 shares. In fiscal2021, the Company amended the Purchase Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance or transfer under the Purchase Plan by an additional 400,000 shares so that the total number of shares of stock reserved for issuance or transfer under the Plan shall be 1,800,000 shares and the termination date of the Purchase Plan was extended to* December 31, 2030.*

The Company hastwo offering periods in the Purchase Plan coinciding with the Company’sfirst two fiscal quarters and the lasttwo fiscal quarters. Actual shares are issued on thefirst business day of the subsequent offering period for the prior offering period payroll deductions. During the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022,there were 66,501,83,879 and 101,784 shares issued under the Purchase Plan for net proceeds of $0.7 million, $0.4 million and $0.1 million, respectively. As of December 30, 2023,there were 297,730 shares available for issuance under the Purchase Plan. Compensation expense, representing the discount to the quoted market price, for the Purchase Plan for the fiscal years ended December 30, 2023,** December 31, 2022and January 1, 2022*was $0.3 million, $0.3 million and $0.1 million, respectively.

2014 Omnibus Equity Compensation Plan (the2014 Plan)

The2014 Plan, approved by the Company’s shareholders in* December 2014,initially provided for the issuance of up to 625,000 shares of the Company’s common stock to officers, non-employee directors, employees of the Company and its subsidiaries, or consultants and advisors utilized by the Company. In fiscal2016,* fiscal2020 and fiscal2022, the Company amended, or amended and restated, the2014 Plan with shareholder approval to increase the aggregate number of shares of stock reserved for issuance under the Plan by an additional 500,000,850,000 and 1,000,000 shares, respectively, so that the total number of shares of stock reserved for issuance under the Plan is 2,975,000 shares. The expiration date of the Plan is* December 17, 2030,unless the2014* Plan is terminated earlier by the Board or is extended by the Board with the approval of the stockholders. The Compensation Committee of the Board of Directors determines the vesting period at the time of grant.

All stock awards typically include dividend accrual equivalents, which means that any dividends paid by the Company during the vesting period become due and payable after the vesting period assuming the grantee’s stock award fully vests. Dividends for these grants are accrued on the dividend payment dates and included in accounts payable and accrued expenses on the accompanying consolidated balance sheet. As of* December 30, 2023,there wereno accrued dividends. Dividends for stock awards that ultimately donot* vest are forfeited.

F-31

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

2014 Omnibus Equity Compensation Plan (the2014 Plan) (Continued)

As of* December 30, 2023,under the2014* Plan,376,618 time-based shares were outstanding,100,000 performance-based restricted stock awards were outstanding and 603,044 shares were available for awards thereunder.

The intrinsic value of all equity grants for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022*was $13.8 million, $3.5 million and $2.9 million, respectively. These amounts are based on the equity price on the last trading day in the period presented.

Time-Based Restricted Stock Awards

From time-to-time the Company issues time-based restricted stock awards. The following summarizes the activity in the time-based restricted stock awards under the2014 Plan during the fiscal year ended* December 30, 2023:*

Based on the closing price of the Company’s common stock of $29.04 per share on* December 29, 2023 (the last trading day prior to December 30, 2023),the intrinsic value of the time-based non-vested restricted stock awards at December 30, 2023was approximately $10.9 million. As of December 30, 2023,there was approximately $3.2 million of total unrecognized compensation cost related to time-based restricted stock awards, which is expected to be recognized over the average weighted remaining vesting period of the restricted stock awards through fiscal2028.*

F-32

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Performance-Based Restricted Stock Awards

From time-to-time the Company issues performance-based restricted stock awards to its executives. Performance-based restricted stock awards are typically vested based on certain multi-year performance metrics as determined by the Board of Directors Compensation Committee.

The following summarizes the activity in the performance-based restricted stock awards during the fiscal year ended* December 30, 2023:*

As of* December 30, 2023,there wasone* outstanding grant for performance-based restricted stock awards issued to Bradley Vizi, the Company’s Chief Executive Officer. In* December 2022,the Company issued a performance-based restricted stock unit grant of 100,000 shares, subject to increase up to 125,000 shares, based on fiscal2023* performance (the*“2023* Grant”). The Company hasnot made a determination as to how many shares it expects to issue under the2023 Grant.

The Company assesses at each reporting date whether achievement of any performance condition is probable and recognizes the expense when achievement of the performance condition becomes probable. The Company will then recognize the appropriate expense cumulatively in the year performance becomes probable and recognize the remaining compensation cost over the remaining requisite service period. If at a later measurement date, the Company determines that performance-based restricted stock awards deemed as likely to vest are deemed as unlikely to vest, the expense recognized will be reversed.

Share-based compensation for performance-based equity agreement was $0.7 million, $0.8 million and $0.4 million for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022,*respectively.

During the fiscal year ended* December 30, 2023,the Company awarded 4,762 immediately vested share awards at an average price of $10.50. During the fiscal year ended December 31, 2022,the Company awarded 1,000 immediately vested share awards at an average price of $18.48. During the fiscal year ended January 1, 2022,*the Company awarded 125,000 immediately vested share awards at an average price of $2.17.

F-33

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Based on the closing price of the Company’s common stock of $29.04 per share on* December 29, 2023,the intrinsic value of all outstanding unvested equity awards at December 30, 2023*was $13.8 million.

12. TREASURY STOCK TRANSACTIONS

On* April 25, 2023,the Board authorized a program to repurchase shares of its common stock up to an amountnot* to exceed $25.0 million. This program succeeds the Company’s prior repurchase program authorized in* November 2021,which was substantially completed in April 2023.The program is designed to provide the Company with enhanced flexibility over the long term to optimize its capital structure. Shares of the Common Stock maybe repurchased in the open market or through negotiated transactions. The program maybe terminated or suspended at any time at the discretion of the Company. The Company mayenter into a Rule10b5*-1 trading plan to effect a portion of the authorized purchases if the criteria set forth in the plan are met. Such a plan would enable the Company to repurchase its shares during periods outside of its normal trading windows when the Company typically wouldnot be active in the market.

On* April 24, 2023,*the Company agreed to repurchase, in a private transaction approved by the Board,333,686 shares of common stock at a per-share price of $11.91 per share.

During the fiscal year ended* December 30, 2023,the Company purchased 1,825,957 shares at an average price of $14.00 per share. During the fiscal year ended December 31, 2022,the Company purchased 1,309,427 shares at an average price of $12.63 per share. During the fiscal year ended January 1, 2022,the Company purchased 1,930,911 shares at an average price of $4.68 per share. As of December 30, 2023,*the Company has $13.6 million available for future treasury stock purchases.

The Company accrued $0.2 million in excise tax associated with its Treasury Stock Repurchase Plan during the fiscal year ended* December 30, 2023.*

F-34

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

13. NEW ACCOUNTING STANDARDS

In* June 2016,the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)2016-13, Financial Instruments - Credit Losses (Topic326).The new standard amends guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. In February 2020,the FASB issued ASU2020*-02, Financial Instruments-Credit Losses (Topic326*) and Leases (Topic842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting BulletinNo. 119 and Update to SEC Section on Effective Date Related to Accounting Standards UpdateNo. 2016-02, Leases (Topic842),* which amends the effective date of the original pronouncement for smaller reporting companies. ASU2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after* December 15, 2022.CECL estimates of expected credit losses on trade receivables over their life will be required to be recorded at inception, based on historical information, current conditions, and reasonable and supportable forecasts. The Company adopted the standard in itsfirst* quarter of2023. There wasno material impact on the results of operations.

In* March 2020,the FASB issued ASUNo.* 2020-04, Reference Rate Reform (Topic848*): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.* This standard only applies to contracts and other transactions that reference London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued due to reference rate reform. This guidance provides temporary optional expedients and exceptions to accounting guidance on contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the LIBOR and other interbank offered rates to alternative reference rates. In* December 2022,the FASB issued ASUNo.* 2022-06, Deferral of the sunset date of Topic848.* This update defers the sunset date from December 31, 2022to December 31, 2024.The Company mayelect to apply the amendments prospectively through December 31, 2024.*The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and related disclosures.

In* November 2023,the Financial Accounting Standard Board (FASB) issued ASU2023*-07, “Segment reporting (Topic280)”, which is intended to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. The amendments require disclosure of significant segment expenses regularly provided to the chief operating decision maker (CODM) as well as other segment items, extend certain annual disclosures to interim periods, clarify the applicability to single reportable segment entities, permit more thanone measure of profit or loss to be reported under certain conditions, and require disclosure of the title and position of the CODM. The ASU is effective for annual periods beginning after* December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024.Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. We are currently evaluating the provisions of this ASU and expect to adopt them for the fiscal year ending December 28, 2024.*

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures, which requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU2023-09 is effective for the Company’s annual reporting periods beginning after* December 15, 2024,with early adoption permitted, and should be applied on a prospective basis, with a retrospective option. We are currently evaluating the effect that adoption of ASU2023*-09 will have on our disclosures.

F-35

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

14. SEGMENT INFORMATION

The Company followsASC280, “Segment Reporting,” which establishes standards for companies to report information about operating segments, geographic areas and major customers. The accounting policies of each reportable segment are the same as those described in the summary of significant accounting policies (see Note1 to the Company’s Consolidated Financial Statements).

Segment operating income (loss) includes selling, general and administrative expenses directly attributable to that segment as well as charges for allocating corporate costs to each of the operating segments. The following tables reflect the results of the reportable segments consistent with the Company’s management system:

F-36

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

F-37

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

The Company derives a majority of its revenue from offices in the United States. Revenue reported for each operating segment are all from external customers. The Company is domiciled in the United States and its segments operate in the United States, Canada, Germany, Puerto Rico and Serbia. Revenue by geographic area for the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022*are as follows:

F-38

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Total assets by geographic area as of the reported periods are as follows:

15. ** INCOME TAXES**

Generally, the Company’s relative income or loss generated in each of its jurisdictions can materially impact the consolidated effective income tax rate of the Company, particularly the ratio of Canadian and Serbian pretax income, versus United States pretax income. The consolidated effective income tax rate for fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022were 24.2%,26.7% and 21.0%, respectively. The Company’s United States Federal statutory tax rate for fiscal years ended December 30, 2023,** December 31, 2022and January 1, 2022,before any adjustments, was21.0%.* The income tax provisions reconciled to the tax computed at the United States Federal statutory rate for fiscal years2023, 2022 and2021 are as follows:

F-39

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

15. ** INCOME TAXES (CONTINUED)**

The components of income tax expense (benefit) are as follows:

The components of earnings before income taxes by United States and foreign jurisdictions were as follows:

A reconciliation of the unrecognized tax benefits for the year* December 30, 2023:*

F-40

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

15. ** INCOME TAXES (CONTINUED)**

The total amount of unrecognized tax benefits relating to the Company’s tax positions is subject to change based on future events including, butnot limited to, the settlements of ongoing audits and/or the expiration of applicable statutes of limitations. Although the outcomes and timing of such events are highly uncertain, it is reasonably possible that the balance of gross unrecognized tax benefits willnot change during the next12 months. However, changes in the occurrence, expected outcomes and timing of those events could cause the Company’s current estimate to change materially in the future.

The Company accounts for penalties or interest related to uncertain tax positions as part of its provision for income taxes and records such amounts to tax expense. The Company recordedno expense for penalties or interest in the fiscal years ended* December 30, 2023,** December 31, 2022and January 1, 2022.*

At* December 30, 2023,** December 31, 2022and January 1, 2022,*deferred tax assets and liabilities consist of the following:

The Company has gross state net operating losses of $0.6 million and foreign net operating losses of $0.1 million to be applied to the net income of future tax returns, respectively. The state net operating losses are subject to various expiration periods. The foreign net operating losses have an indefinite carryforward period.

The Company conducts its operations in multiple tax jurisdictions in the United States, Canada, Germany, Puerto Rico and Serbia. The Company and its subsidiaries file a consolidated United States Federal income tax return and file in various states. The Company hasno open federal or state audits as of* December 30, 2023.The Company isno* longer subject to audits by state and local tax authorities for tax years prior to2019. The Company isno longer subject to audit in Canada for the tax years prior to tax year2019. The Company isno longer subject to audit in Puerto Rico for the tax years prior to tax year2018.

Differences between the effective tax rate and the applicable U.S. federal statutory rate* mayarise, primarily from the effect of state and local income taxes, and share-based compensation. The actual2023* effective tax rate* may*vary from the estimate depending on the actual operating income earned in various jurisdictions, and the exercise of stock options and vesting of share-based awards.

F-41

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

15. INCOME TAXES (CONTINUED)

Under APB23, foreign earnings are generallynot subject to U.S. tax until repatriated or deemed repatriated under the anti-deferral rules. The Company has determined that as of* December 30, 2023,all current and future earnings in its foreign subsidiaries will be permanently reinvested. Based on this determination, the anti-deferral rules haveno* material impact on the Company.

From time to time, the Company is a defendant in various legal actions that arise in the ordinary business course. These matters* mayrelate to professional liability, tax, compensation, contract, competitor disputes, and employee-related matters and include individual and class action lawsuits, as well as inquiries and investigations by governmental agencies regarding the Company’s employment and compensation practices. Additionally, some of the Company’s clients mayalso become subject to claims, governmental inquiries and investigations, and legal actions relating to the Company’s professional services. Depending upon the particular facts and circumstances, the Company may*also be subject to indemnification obligations under its contracts with such clients relating to these matters.

As such, the Company is required to assess the likelihood of any adverse outcomes to these matters as well as potential ranges of losses and possible recoveries. The Company* may**not* be covered by insurance as it pertains to some or all of these matters. A determination of the amount of the provision required for these commitments and contingencies, if any, which would be charged to earnings, is made after careful analysis of each matter. The Company records a liability when management believes an adverse outcome from a loss contingency is both probable and the amount, or a range, can be reasonably estimated. From time to time, the Company must estimate the potential loss even though the party adverse to the Company hasnot asserted any specific amounts. Significant judgment is required to determine both the probability of loss and the estimated amount. The Company reviews its loss contingencies at least quarterly and it adjusts its accruals and/or disclosures to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, or other new information, as deemed necessary. Once established, a provision* may*change in the future due to new developments or changes in circumstances. The Company could increase or decrease its earnings in the period that the changes are made.

The Company is exposed to various asserted claims as of* December 30, 2023,where the Company believes it has a probability of loss. Additionally, the Company is exposed to other asserted claims whereby an amount of loss hasnot* been declared, and the Company cannot determine the potential loss. Any of these various claims could result in an unfavorable outcome or settlement that exceeds the accrued amounts. However, the Company believes that such matters willnot, either individually or in the aggregate, have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows. As of* December 30, 2023,*the Company has accrued $2.9 million for asserted claims.

In* April 2022,a client of the Company’s Industrial Processing Group alleged that a system partially designed by the Company isnot* operating as intended and that the Company is responsible. The Company hasnot determined if it has any liability. In the event of liability, the Company believes its damages are contractually limited to an amountno higher than $3.3 million. Furthermore, the Company believes that if it were found liable, any damages would be covered by insurance, subject to a deductible of $0.5 million and maximum coverage of $5.0 million. While the Company attempts to find a mutually agreeable solution, the Company has reserved*$0.5* million for this project. The Company can giveno assurance that its liability is limited to*$3.3* million or that liability over*$0.5* million, if any, will be covered by insurance.

The Company is also subject to other pending legal proceedings and claims that arise from time to time in the ordinary course of its business, which* may**not* be covered by insurance.

F-42

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

17. RETIREMENT PLANS

Profit Sharing Plans

The Company maintains a401(k) profit sharing plan for the benefit of eligible employees in the United States and other similar plans in Canada, Puerto Rico and Serbia (the “Retirement Plans”). The401(k) plan includes a cash or deferred arrangement pursuant to Section401(k) of the Internal Revenue Code sponsored by the Company to provide eligible employees an opportunity to defer compensation and have such deferred amounts contributed to the401(k) plan on a pre-tax basis, subject to certain limitations. The Company, at the discretion of the Board of Directors,* maymake contributions of cash to match deferrals of compensation by participants in the Retirement Plans. Contributions to the Retirement Plans charged to operations by the Company for the fiscal years ended December 30, 2023,** December 31, 2022and January 1, 2022*were $698, $626 and $721, respectively.

18. COMMITMENTS

Executive Severance Agreements

The Company is a party to an Executive Severance Agreement (the “Executive Severance Agreement”) with each of Bradley S. Vizi, the Company's Executive Chairman and President (dated as of* June 1, 2018),and Kevin D. Miller, the Company’s Chief Financial Officer (dated as of February 28, 2014,as amended), which set forth the terms and conditions of certain payments to be made by the Company to the executive in the event, while employed by the Company, such executive experiences (a) a termination of employment unrelated to a “Change in Control” (as defined therein) or (b) there occurs a Change in Control and either (i) the executive’s employment is terminated for a reason related to the Change in Control or (ii) in the case of Mr. Miller, the executive remains continuously employed with the Company for a period ofthree* months following the Change in Control. Each Executive Severance Agreement also provide for certain payments, if either (a) the executive is involuntarily terminated by the Company for any reason other than “Cause” (as defined therein), “Disability” (as defined therein) or death, or (b) the executive resigns for “Good Reason” (as defined therein), and, in each case, the termination isnot a “Termination Related to a Change in Control” (as defined therein).

Leases

Leases are recorded in accordance with FASB ASC842, Leases which requires lessees to recognize a right of use (“ROU”) asset and an operating right of use liability for all leases with terms greater than12 months and requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases.

F-43

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

The Company determines if an arrangement is a lease at inception. For leases where the Company is the lessee, right of use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases donot provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments**.**The right of use asset also consists of any lease incentives received. The lease terms used to calculate the right of use asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as depreciation expense and interest expense using the accelerated interest method of recognition. The Company has lease agreements which require payments for lease and non-lease components. The Company has elected to account for these as a single lease component with the exception of its real estate leases.

The components of lease expense were as follows:

Supplemental Cash Flow information related to leases was as follows:

F-44

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Supplemental Balance Sheet information as of* December 30, 2023,** December 31, 2022and January 1, 2022*related to leases was as follows:

F-45

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Maturities of lease liabilities are as follows:

19. RELATED PARTY TRANSACTIONS

There have beenno related party transactions during the periods presented.