BGSF, INC.

For the period ended Dec 28, 2025. Filed Mar 30, 2026.

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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.

FY2025 · Filed Mar 30, 2026

BGSF$4.07+3.6%Stored close · as of Nov 10, 2026

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Contents

Item 8. Report of Independent Registered Public Accounting Firm

To the Board of Directors and

Stockholders of BGSF, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of BGSF, Inc., and its subsidiaries (the “Company”) as of December 28, 2025 and December 29, 2024, and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 28, 2025, 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 28, 2025 and December 29, 2024, and the results of their operations and cash flows for each of the three years in the period ended December 28, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have 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 28, 2025, based on criteria established in 2013 Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 30, 2026 expressed an adverse opinion.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. 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 audits 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 consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated 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 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 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 account or disclosures to which it relates.

Assessment of Realizability of Deferred Tax Assets

Critical Audit Matter Description

As disclosed in Note 2 and Note 10 to the consolidated financial statements, the Company recognizes deferred income taxes for tax attributes and for differences between the financial statement and tax carrying amounts of assets and liabilities at enacted statutory tax rates in effect for the years in which the deferred tax liability or asset are expected to be settled or realized. The Company continually reviews the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for the valuation allowance, the Company considers both positive and negative evidence related to the likelihood of realization of deferred tax assets. Future sources of taxable income are also considered in determining the amount of the recorded valuation allowance. As of December 28, 2025, the Company has deferred tax assets of approximately $9.5 million. Auditing management’s assessment of recoverability of deferred tax assets involved subjective estimation and complex auditor judgment in determining whether sufficient future taxable income, including projected pre-tax income, will be generated to support the realization of the existing deferred tax assets before expiration.

How We Addressed the Matter

We evaluated the assumptions used by the Company to develop projections of future taxable income, including the pre-tax income, by income tax jurisdiction and tested the completeness and accuracy of the underlying data used in the projections. For example, we compared the projections of, and inputs used to calculate pre-tax income with the actual results of prior periods, as well as management’s consideration of current industry and economic trends. We also compared the projections of future pre-tax income with other forecasted financial information prepared by the Company. We also performed a sensitivity analysis on the significant assumption to evaluate how changes in those assumptions would impact the utilization of the deferred tax assets.

We evaluated the methodology and models used in management’s forecasting of the reversal of deferred income tax assets and liabilities in order to determine whether such methodologies were consistent with GAAP, including management’s consideration of definite-lived deferred income tax balances and indefinite-lived deferred income tax balances.

/s/Whitley Penn LLP

We have served as the Company’s auditor since 2013.

Plano, Texas

March 30, 2026

(in thousands, except share amounts)

December 28, 2025 · December 29, 2024
ASSETS
Current assets
	Cash and cash equivalents		$19,018			$32
	Accounts receivable (net of allowance for credit losses of $1,156 and $910, respectively)		11,898			17,148
	Escrow receivable		4,950			—
	Prepaid expenses		1,126			1,600
	Other current assets		1,458			2,213
	Current assets of discontinued operations		—			24,354
		Total current assets		38,450			45,347
Property and equipment, net		244			608
Other assets
	Deposits		1,938			2,003
	Software as a service, net		3,002			4,068
	Deferred income taxes, net		9,496			7,849
	Right-of-use asset - operating leases, net		630			1,083
	Intangible assets, net		3,003			4,385
	Goodwill		1,074			1,074
	Noncurrent assets of discontinued operations		—			83,694
		Total other assets		19,143			104,156
	Total assets		$57,837			$150,111
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
	Accounts payable		$503			$80
	Accrued payroll and expenses		4,441			4,868
	Transition services payable		3,064			—
	Long-term debt, current portion (net of debt issuance costs of $0 and $24, respectively)		—			3,801
	Accrued interest		—			223
	Income taxes payable		76			212
	Note payable		449			—
	Convertible note		—			4,368
	Severance payable, current portion		392			—
	Lease liabilities, current portion		409			544
	Current liabilities of discontinued operations		—			11,824
		Total current liabilities		9,334			25,920
Line of credit (net of debt issuance costs of $0 and $770, respectively)		—			5,625
Long-term debt, less current portion (net of debt issuance costs of $0 and $198, respectively)		—			32,527
Severance payable, less current portion		100			—
Lease liabilities, less current portion		298			698
Noncurrent liabilities of discontinued operations		—			3,072
		Total liabilities		9,732			67,842
Commitments and contingencies
Preferred stock, $0.01 par value per share, 500,000 shares authorized, -0- shares issued and outstanding		—			—
Common stock, $0.01 par value per share; 19,500,000 shares authorized, 11,227,197 and 11,038,623 shares issued and outstanding, respectively		112			110
Additional paid in capital		71,445			70,260
(Accumulated deficit) retained earnings		(21,874)			11,956
Treasury stock of 355,150 and 3,930 shares, respectively		(1,578)			(57)
		Total stockholders’ equity		48,105			82,269
		Total liabilities and stockholders’ equity		$57,837			$150,111

(in thousands, except per share and dividend amounts)

2025 · 2024 · 2023
Revenues, net		$93,310		$104,402		$125,077
Cost of services		59,977		66,033		75,292
	Gross profit		33,333		38,369		49,785
Selling, general, and administrative expenses		41,136		42,902		45,402
Contingent consideration adjustment		(450)		—		—
Depreciation and amortization		1,550		1,334		1,313
	Operating (loss) income		(8,903)		(5,867)		3,070
Interest expense, net		(4,511)		(4,921)		(5,976)
	Loss before income taxes from continuing operations		(13,414)		(10,788)		(2,906)
Income tax benefit from continuing operations		1,881		2,084		831
	Loss from continuing operations		(11,533)		(8,704)		(2,075)
Income (loss) from discontinued operations:
	Income (loss)		4,423		7,080		(10,253)
	Loss on sale		(3,723)		—		—
	Income tax (expense) benefit		(597)		(1,714)		2,105
	Net loss		$(11,430)		$(3,338)		$(10,223)
Net (loss) income per share - basic and diluted:
	Net loss from continuing operations		$(1.05)		$(0.80)		$(0.20)
Net income (loss) from discontinued operations:
	Income (loss)		0.40		0.65		(0.95)
	Loss on sale		(0.34)		—		—
	Income tax (expense) benefit		(0.05)		(0.16)		0.20
	Net loss per share - basic and diluted		$(1.04)		$(0.31)		$(0.95)
Weighted average shares outstanding:
	Basic and Diluted		11,025		10,896		10,766
Cash dividends declared per common share		$2.00		$0.15		$0.60

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common Stock
	PreferredStock	Shares	Par Value	Treasury Stock Amount	Additional Paid in Capital	(Accumulated Deficit) RetainedEarnings	Total
Stockholders’ equity, January 01, 2023	—	10,772	$108	$(38)	$67,003	$33,663	$100,736
Share-based compensation from continuing operations	—	—	—	—	957	—	957
Share-based compensation from discontinued operations	—	—	—	—	72	—	72
Issuance of restricted shares, net of 2,085 shares of treasury stock	—	57	1	(19)	(23)	—	(41)
Issuance of ESPP shares	—	54	—	—	512	—	512
Exercise of common stock options	—	5	—	—	30	—	30
Cash dividends declared	—	—	—	—	—	(6,507)	(6,507)
Net loss from continuing operations	—	—	—	—	—	(10,223)	(10,223)
Stockholders’ equity, December 31, 2023	—	10,888	109	(57)	68,551	16,933	85,536
Share-based compensation from continuing operations	—	—	—	—	908	—	908
Share-based compensation from discontinued operations	—	—	—	—	81	—	81
Issuance (cancellation) of restricted shares	—	51	1	—	(1)	—	—
Issuance of ESPP shares	—	61	—	—	459	—	459
Exercise of common stock options	—	39	—	—	262	—	262
Cash dividends declared	—	—	—	—	—	(1,639)	(1,639)
Net loss from continuing operations	—	—	—	—	—	(3,338)	(3,338)
Stockholders’ equity, December 29, 2024	—	11,039	$110	$(57)	$70,260	$11,956	$82,269

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)

	Common Stock
	PreferredStock	Shares	Par Value	Treasury Stock Amount	Additional Paid in Capital	(Accumulated Deficit) RetainedEarnings	Total
Stockholders’ equity, December 29, 2024	—	11,039	$110	$(57)	$70,260	$11,956	$82,269
Share-based compensation from continuing operations	—	—	—	—	1,006	—	1,006
Share-based compensation from discontinued operations	—	—	—	—	47	—	47
Issuance (cancellation) of restricted shares	—	157	2	—	(2)	—	—
Repurchase of common stock, 351,200 shares	—	—	—	(1,521)	—	—	(1,521)
Issuance of ESPP shares	—	31	—	—	134	—	134
Cash dividends declared	—	—	—	—	—	(22,400)	(22,400)
Net loss	—	—	—	—	—	(11,430)	(11,430)
Stockholders’ equity, December 28, 2025	—	11,227	$112	$(1,578)	$71,445	$(21,874)	$48,105

2025 · 2024 · 2023
Cash flows from operating activities
Net loss		$(11,430)			$(3,338)			$(10,223)
	Net (income) loss from discontinued operations		(3,826)			(5,366)			8,148
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
	Depreciation		113			152			183
	Amortization		1,437			1,182			1,130
	Loss on sale of discontinued operations		3,723			—			—
	Loss on disposal of property and equipment		164			3			10
	Contingent consideration adjustment		(450)			—			—
	Amortization of debt issuance costs		1,022			425			199
	Interest expense on note payable		136			—			—
	Provision for credit losses		1,857			1,859			798
	Share-based compensation		1,006			908			957
	Deferred income taxes		(1,647)			378			(4,214)
Net changes in operating assets and liabilities, net of effects of acquisitions:
		Accounts receivable		3,393			8,188			(815)
		Escrow receivable		(4,950)			—			—
		Prepaid expenses		563			928			(333)
		Other current assets		(346)			794			2,944
		Deposits		66			593			(27)
		Software as a service		1,073			669			193
		Accounts payable		423			(14)			(492)
		Accrued payroll and expenses		618			(1,716)			(1,000)
		Transition services payable		3,064			—			—
		Accrued interest		(223)			(215)			165
		Income taxes payable		(80)			103			(478)
		Severance payable		492			—			—
		Other current liabilities		—			—			(1,000)
		Operating leases		(82)			(85)			(23)
		Other long-term liabilities		4,001			13,937			16,800
	Net cash (used in) provided by continuing operating activities		117			19,385			12,922
	Net cash provided by discontinued operating activities		25			4,994			7,464
	Net cash (used in) provided by operating activities		142			24,379			20,386
Cash flows from investing activities
Proceeds from business sold		91,528			—			—
Capital expenditures		(138)			(1,217)			(2,152)
	Net cash provided by (used in) continuing investing activities		91,390			(1,217)			(2,152)
	Net cash used in discontinued investing activities		(193)			(423)			(7,362)
	Net cash provided by (used in) investing activities		91,197			(1,640)			(9,514)

2025 · 2024 · 2023
Cash flows from financing activities
	Net payments under line of credit		(10,220)			(18,479)			2,312
	Proceeds from issuance of long-term debt		—			4,250			—
	Principal payments on long-term debt		(32,725)			(1,700)			(7,008)
	Payments of convertible note		(4,368)			—			—
	Payments of dividends		(22,400)			(1,639)			(6,507)
	Issuance of ESPP shares		134			459			512
	Issuance of shares under the 2013 Long-Term Incentive Plan		—			262			(10)
	Note payable paid		(1,392)			—			—
	Payments of debt issuance costs		(29)			(1,289)			(69)
	Repurchase of common stock		(1,521)			—			—
		Net cash used in continuing financing activities		(72,521)			(18,136)			(10,770)
		Net cash used in discontinued financing activities		—			(4,250)			(102)
		Net cash used in financing activities		(72,521)			(22,386)			(10,872)
Net change in cash and cash equivalents, continuing operations		18,818			353			—
Less: net change in cash and cash equivalents, discontinued operations		(168)			321			—
Cash and cash equivalents, beginning of year, continuing operations		32			—			—
Cash and cash equivalents, end of year, continuing operations		$19,018			$32			$—
Supplemental cash flow information:
	Cash paid for interest, net - continuing operations		$3,266			$4,475			$4,668
	Cash paid for taxes (federal), net of refunds - continuing operations		$—			$4			$630
	Cash paid for taxes (state), net of refunds
	Continuing operations		335			469			518
	Discontinued operations		170			212			230
	Total cash paid for taxes (state), net of refunds		$505			$685			$1,378

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