RCMT 10-K Fiscal year ended Jan. 2, 2021

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.  20549

RCM TECHNOLOGIES, INC. (Exact Name of Registrant as Specified in its Charter)

Nevada		95--1480559
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
2500 McClellan Avenue, Suite 350, Pennsauken, New Jersey		08109-4613
(Address of Principal Executive Offices)		(Zip Code)
Registrant's telephone number, including area code:		(856) 356-4500
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.05 per share	RCMT	The NASDAQ Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act:		None

Large Accelerated Filer [   ]	Accelerated Filer [   ]	Non-Accelerated Filer [X]	Smaller Reporting Company [X]
			Emerging Growth Company [  ]

RCM TECHNOLOGIES, INC.

FORM 10-K

TABLE OF CONTENTS

PART I			1
	Item 1.	Business	2
	Item 1A.	Risk Factors	14
	Item 1B.	Unresolved Staff Comments	20
	Item 2.	Properties	20
	Item 3.	Legal Proceedings	21
	Item 4.	Mine Safety Disclosures	21
PART II			22
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	22
	Item 6.	Selected Financial Data	22
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	43
	Item 8.	Financial Statements and Supplementary Data	43
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	43
	Item 9A.	Controls and Procedures	44
	Item 9B.	Other Information	45
PART III			46
	Item 10.	Directors, Executive Officers and Corporate Governance	46
	Item 11.	Executive Compensation	46
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	46
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	46
	Item 14.	Principal Accountant Fees and Services	46
PART IV			47
	Item 15.	Exhibits and Financial Statement Schedules	47
	Item 16.	Form 10-K Summary	49
	Signatures		50

PART I

ITEM 1.  BUSINESS

ITEM 1.  BUSINESS (CONTINUED)

ITEM 1.  BUSINESS (CONTINUED)

ITEM 1.  BUSINESS (CONTINUED)

ITEM 1.  BUSINESS (CONTINUED)

ITEM 1.  BUSINESS (CONTINUED)

ITEM 1.  BUSINESS (CONTINUED)

ITEM 1.  BUSINESS (CONTINUED)

LOCATION		NUMBER OF OFFICES	SERVICES PROVIDED(1)
UNITED STATES
	California	2	HC
	Connecticut	1	E
	Florida	1	HC
	Hawaii	1	HC
	Illinois	1	HC
	Maryland	1	IT
	Massachusetts	1	IT
	New Jersey	3	E, IT
	New York	4	E, HC, IT
	Pennsylvania	1	E
	Rhode Island	1	E
	Tennessee	1	HC
		18
CANADA		4	E, IT
PUERTO RICO		1	E, IT
SERBIA		3	E, IT

ITEM 1.  BUSINESS (CONTINUED)

Engineering Services	Health Care Services	Life Sciences & IT Services
Al-Corn Clean Fuel American Electric Power Bruce Power Con Edison Covanta Eversource Energy Exelon First Energy Hamilton Sundstrand HICO America Lockheed Martin Ontario Power Generation Pratt and Whitney Praxair Sikorsky Aircraft United Technologies Corporation Verizon WE Energies	AMN Healthcare Aya Healthcare Chicago Public Schools Cross Country Hawaii Department of Education New York City Board of Education Right Sourcing San Bernardino County Thera Dynamic Physical Therapy	ADP Amgen Bayada Bimbo Bakeries Bruckner Supply Company FlightSafety International Ginkgo Bioworks Johnson and Johnson Kronos Lily del Caribe Patheon Pfizer Regeneron Pharmaceuticals Triverus Consulting United Health Group Western Alliance Bank

ITEM 1.  BUSINESS (CONTINUED)

ITEM 1.  BUSINESS (CONTINUED)

ITEM 1.  BUSINESS (CONTINUED)

ITEM 1A.  RISK FACTORS

ITEM 1A.  RISK FACTORS (CONTINUED)

ITEM 1A.  RISK FACTORS (CONTINUED)

ITEM 1A.  RISK FACTORS (CONTINUED)

ITEM 1A.  RISK FACTORS (CONTINUED)

ITEM 1A.  RISK FACTORS (CONTINUED)

ITEM 1B.  UNRESOLVED STAFF COMMENTS

ITEM 2.  PROPERTIES

ITEM 3.  LEGAL PROCEEDINGS

ITEM 4.  MINE SAFETY DISCLOSURES

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
	MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 6.  SELECTED FINANCIAL DATA

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

	January 2, 2021		December 28, 2019
Engineering:
Time and Material	$43,359		$55,195
Fixed Fee	14,145		12,678
Permanent Placement Services	211		-
Total Engineering	$57,715		$67,873
Specialty Health Care:
Time and Material	$59,692		$88,057
Permanent Placement Services	789		1,291
Total Specialty Health Care	$60,481		$89,348
Information Technology:
Time and Material	$31,723		$33,384
Permanent Placement Services	490		495
Total Information Technology	$32,213		$33,879
	$150,409		$191,100

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

	Fiscal Years Ended
	January 2, 2021				December 28, 2019
	Amount		% of Revenue		Amount		% of Revenue
Revenues	$150,409		100.0		$191,100		100.0
Cost of services	111,554		74.2		142,508		74.6
Gross profit	38,855		25.8		48,592		25.4
Selling, general and administrative	37,551		25.0		40,390		21.1
Depreciation and amortization of property and equipment	1,065		0.7		1,261		0.7
Amortization of acquired intangible assets	321		0.2		327		0.2
Write-off of receivables and professional fees incurred related to arbitration	8,397		5.6		-		-
Impairment of right of use assets and related costs	2,231		1.5		-		-
Tax credit professional fees	240		0.1		47		0.0
Operating costs and expenses	49,805		33.1		42,025		22.0
Operating (loss) income	(10,950	)	(7.3	)	6,567		3.4
Other expense, net	(1,107	)	(0.7	)	(1,745	)	(0.9	)
(Loss) income before income taxes	(12,057	)	(8.0	)	4,822		2.5
Income tax (benefit) expense	(3,188	)	(2.1	)	764		0.4
Net (loss) income	($8,869	)	(5.9	)	$4,058		2.1

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

	Fifty-Three Week Period Ended January 2, 2021		Fifty-Two Week Period Ended December 28, 2019
GAAP net (loss) income	($8,869	)	$4,058
Income tax (benefit) expense	(3,188	)	764
Interest expense	778		1,695
Change in fair value of contingent consideration	145		61
Depreciation of property and equipment	1,065		1,261
Amortization of acquired intangible assets	321		327
EBITDA (non-GAAP)	($9,748	)	$8,166
Adjustments
Write-off of receivables and professional fees incurred related to arbitration	8,397		-
Impairment of right of use assets and related costs	2,231		-
Tax credit professional fees	240		47
Gain (loss) on foreign currency transactions	184		(11	)
Adjusted EBITDA (non-GAAP)	$1,304		$8,202

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

		Fiscal Years Ended
		January 2, 2021		December 28, 2019
Cash (used in) provided by:
	Operating activities	$25,203		($4,778	)
	Investing activities	($419	)	($363	)
	Financing activities	($25,632	)	$6,627

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Fiscal Year Ending	Operating Leases		Finance Leases
2021	2,019		255
2022	1,505		109
2023	955		-
2024	232		-
2025	48		-
Thereafter	-		-
Total lease payments	4,759		364
Less: imputed interest	(232	)	(11	)
Total	$4,527		$353

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

Fiscal Year Ending	Total
January 1, 2022	500
December 31, 2022	2,358
Estimated future contingent consideration payments	$2,858

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS (CONTINUED)

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
	FINANCIAL DISCLOSURE

ITEM 9A.

CONTROLS AND PROCEDURES

ITEM 9B.

OTHER INFORMATION

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11.

EXECUTIVE COMPENSATION

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
	AND RELATED STOCKHOLDER MATTERS

Plan category	Number of securities to be potentially issued upon realization of restricted stock awards	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for issuance under equity compensation plans, excluding securities reflected in column (a)
	(a)	(b)	(c)
Equity compensation plans approved by security holders	709,805 (1)	N/A	520,929
Equity compensation plans not approved by security holders	____________________	____________________	____________________
Total	709,805 (1)	N/A	520,929

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
	INDEPENDENCE

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	1. and 2. Financial Statement Schedules -- See “Index to Financial Statements and Schedules” on F-1.
	3. See Item (b) below.
(b)	Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this report (unless otherwise indicated, the file number with respect to each filed document is 1-10245):
		(3)(a)	Articles of Incorporation, as amended; incorporated by reference to Exhibit 3(a) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended October 31, 1994, filed with the Securities and Exchange Commission on January 4, 1995.
		(3)(b)	Certificate of Amendment of Articles of Incorporation; incorporated by reference to Exhibit A to the Registrant’s Proxy Statement, dated February 6, 1996, filed with the Securities and Exchange Commission on January 29, 1996.
		(3)(c)	Certificate of Amendment of Articles of Incorporation; incorporated by reference to Exhibit B to the Registrant’s Proxy Statement, dated February 6, 1996, filed with the Securities and Exchange Commission on January 29, 1996.
		(3)(d)	Amended and Restated Bylaws; incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 23, 2014 (the “January 2014 8-K”).
		(3)(e)	Certificate of Designation of Series A-3 Junior Participating Preferred Stock of RCM Technologies, Inc.; incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2020 (the “May 2020 8-K”).
		(4)(a)	Description of Capital Stock. (Filed herewith)
		(4)(b)	Rights Agreement, dated as of May 22, 2020, by and between RCM Technologies, Inc. and American Stock Transfer & Trust Company, LLC, as rights agent; incorporated by reference to Exhibit 4.1 to the May 2020 8-K.
	*	(10)(a)	RCM Technologies, Inc. 2000 Employee Stock Incentive Plan, dated January 6, 2000; incorporated by reference to Exhibit A to the Registrant’s Proxy Statement, dated March 3, 2000, filed with the Securities and Exchange Commission on February 28, 2000.
	*	(10)(b)	The RCM Technologies, Inc. 2007 Omnibus Equity Compensation Plan; incorporated by reference to Annex A to the Registrant’s Proxy Statement, dated April 20, 2007, filed with the Securities and Exchange Commission on April 19, 2007.
	*	(10)(c)	Executive Severance Agreement between RCM Technologies, Inc. and Kevin Miller dated December 27, 2012; incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K dated December 27, 2012, filed with the Securities and Exchange Commission on December 28, 2012.
	*	(10)(d)	Amendment No. 1 to Executive Severance Agreement between RCM Technologies, Inc. and Kevin Miller dated December 26, 2017; incorporated by reference to Exhibit 10(x) to the Registrant’s Annual Report on Form 10-K for this fiscal year ended December 28, 2019, filed with the Securities and Exchange Commission on March 8, 2018.

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)

(b)	Exhibits (Continued)
	*	(10)(e)	RCM Technologies, Inc. Amended and Restated 2014 Omnibus Equity Compensation Plan (as amended through December 17, 2020); incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on December 18, 2020.
	*	(10)(f)	Form of Stock Unit Agreement; incorporated by reference to Exhibit 99.2 to the December 2014 8-K.
	*	(10)(g)	RCM Technologies, Inc. Change in Control Plan for Selected Executive Management (filed as an exhibit to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 12, 2015 and incorporated herein by reference).
	*	(10)(h)	Amendment 2015-3 to the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan; incorporated by reference to Exhibit A to the Registrant’s Definitive Proxy Statement for the 2015 Annual Meeting filed with the Securities and Exchange Commission on October 30, 2015.
	*	(10)(i)	Amendment 2018-4 to the RCM Technologies, Inc. 2001 Employee Stock Purchase Plan; incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 18, 2018.
	*	(10)(j)	Executive Severance Agreement, dated as of June 1, 2018, by and between the Company and Bradley S. Vizi; incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 7, 2018.
		(10)(k)	Third Amended & Restated Loan and Security Agreement, dated as of August 9, 2018, by and among the Company and all of its subsidiaries, Citizens Bank of Pennsylvania, a Pennsylvania state chartered bank, in its capacity as administrative agent and arranger, and Citizens Bank of Pennsylvania, as lender; incorporated by reference to Exhibit 10(d) to the Registrant’s Quarterly Report on Form 10-Q for this fiscal quarter ended June 30, 2018, filed with the Securities and Exchange Commission on August 14, 2018.
		(10)(l)	First Amendment to Third Amended and Restated Loan Agreement, dated as of August 9, 2018, by and among the Company and all of its subsidiaries, and Citizens Bank, N.A., a national banking association (as successor by merger to Citizens Bank of Pennsylvania), in its capacities as lender and as administrative agent and arranger; incorporated by reference to Exhibit 99 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 22, 2019.
		(10)(m)	Amendment No. 2 to Third Amended and Restated Loan Agreement, dated as of June 2, 2020, by and among the Company and all of its subsidiaries, and Citizens Bank, N.A., a national banking association (as successor by merger to Citizens Bank of Pennsylvania), in its capacities as lender and as administrative agent and arranger; incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 2, 2020.
		(10)(n)	Amendment No. 3 to Third Amended and Restated Loan Agreement, dated as of September 29, 2020, by and among the Company and all of its subsidiaries, and Citizens Bank, N.A., a national banking association (as successor by merger to Citizens Bank of Pennsylvania), in its capacities as lender and as administrative agent and arranger; incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 1, 2020.

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (CONTINUED)

(b)	Exhibits (Continued)
		(21)	Subsidiaries of the Registrant.  (Filed herewith)
		(23.1)	Consent of Macias, Gini & O’Connell, LLP.  (Filed herewith)
		(31.1)	Certifications of Chief Executive Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.  (Filed herewith)
		(31.2)	Certifications of Chief Financial Officer Required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.  (Filed herewith)
		(32.1)	Certifications of Chief Executive Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended.  (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)  (Furnished herewith)
		(32.2)	Certifications of Chief Financial Officer Required by Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended.  (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)  (Furnished herewith)
		101.INS	XBRL Instance Document (Filed herewith)
		101.SCH	XBRL Taxonomy Extension Schema Document (Filed herewith)
		101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (Filed herewith)
		101.LAB	XBRL Taxonomy Extension Label Linkbase Document (Filed herewith)
		101.PRE	XBRL Taxonomy Extension Presentation Linkbase Documents (Filed herewith)
		101.DEF	XBRL Taxonomy Definition Linkbase Document (Filed herewith)
	*	Constitutes a management contract or compensatory plan or arrangement.
	+	The Registrant will furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.

ITEM 16.

FORM 10-K SUMMARY

SIGNATURES

		RCM Technologies, Inc.
Date:  April 2, 2021		By:	/s/ Bradley S. Vizi
			Bradley S. Vizi
			Executive Chairman and President
Date:  April 2, 2021		By:	/s/ Kevin D. Miller
			Kevin D. Miller
			Chief Financial Officer, Treasurer and Secretary

Date:  April 2, 2021		By:	/s/ Bradley S. Vizi
			Bradley S. Vizi
			Executive Chairman and President
Date:  April 2, 2021		By:	/s/ Kevin D. Miller
			Kevin D. Miller
			Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)
Date:  April 2, 2021		By:	/s/ Roger H. Ballou
			Roger H. Ballou
			Director
Date:  April 2, 2021		By:	/s/ Richard A. Genovese
			Richard A. Genovese
			Director
Date:  April 2, 2021		By:	/s/ Swarna Kakodkar
			Swarna Kakodkar
			Director
Date:  April 2, 2021		By:	/s/ Jayanth S. Komarneni
			Jayanth S. Komarneni
			Director

RCM TECHNOLOGIES, INC.

FORM 10-K

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

	Page
Consolidated Balance Sheets, January 2, 2021 and December 28, 2019	F-2
Consolidated Statements of Operations, Fiscal Years Ended January 2, 2021 and December 28, 2019	F-3
Consolidated Statements of Comprehensive (Loss) Income, Fiscal Years Ended January 2, 2021 and December 28, 2019	F-4
Consolidated Statements of Changes in Stockholders’ Equity, Fiscal Years Ended January 2, 2021 and December 28, 2019	F-5
Consolidated Statements of Cash Flows, Fiscal Years Ended January 2, 2021 and December 28, 2019	F-6
Notes to Consolidated Financial Statements	F-7
Report of Independent Registered Public Accounting Firm	F-41

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS January 2, 2021 and December 28, 2019 (Amounts in thousands, except share and per share amounts, unless otherwise indicated)

			January 2,		December 28,
			2021		2019
Current assets:
	Cash and cash equivalents		$734		$1,847
	Accounts receivable, net		36,007		59,760
	Transit accounts receivable		2,494		4,906
	Prepaid expenses and other current assets		4,699		4,144
		Total current assets	43,934		70,657
Property and equipment, net			2,078		2,717
Other assets:
	Deposits		169		209
	Deferred tax assets, net, domestic		3,300		-
	Goodwill		16,354		16,354
	Operating right of use asset		2,409		5,820
	Intangible assets, net		95		416
		Total other assets	22,327		22,799
		Total assets	$68,339		$96,173

Current liabilities:
	Accounts payable and accrued expenses			$7,895		$6,220
	Transit accounts payable			4,900		4,552
	Accrued payroll and related costs			12,877		7,713
	Finance lease payable			247		315
	Income taxes payable			436		130
	Operating right of use liability			1,886		2,134
	Liability for contingent consideration from acquisitions			500		344
			Total current liabilities	28,741		21,408
Deferred tax liability, foreign				365		382
Deferred tax liability, net, domestic				-		395
Finance lease payable				106		189
Liability for contingent consideration from acquisitions				2,358		2,714
Operating right of use liability, net of current position				2,641		3,921
Borrowings under line of credit				11,890		34,761
		Total liabilities		46,101		63,770
Stockholders’ equity:
	Preferred stock, $1.00 par value; 5,000,000 shares authorized;
			no shares issued or outstanding	-		-
	Common stock, $0.05 par value; 40,000,000 shares authorized;
			16,224,191 shares issued and 11,542,880 shares outstanding at January 2, 2021 and 15,826,891 shares issued and 13,003,719 shares outstanding at December 28, 2019	811		791
			Stock subscription receivable	(420	)	-
	Additional paid-in capital			109,588		108,452
	Accumulated other comprehensive loss			(2,550)		(2,748	)
	Accumulated deficit			(67,974	)	(59,105	)
	Treasury stock (4,681,311 shares at January 2, 2021 and 2,823,172 at December 28, 2019) at cost			(17,217	)	(14,987	)
			Stockholders’ equity	22,238		32,403
			Total liabilities and stockholders’ equity	$68,339		$96,173

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except per share amounts, unless otherwise indicated)

		January 2, 2021		December 28, 2019
Revenues		$150,409		$191,100
Cost of services		111,554		142,508
Gross profit		38,855		48,592
Operating costs and expenses
	Selling, general and administrative	37,551		40,390
	Depreciation and amortization of property and equipment	1,065		1,261
	Amortization of acquired intangible assets	321		327
	Write-off of receivables and professional fees incurred related to arbitration	8,397		-
	Impairment of right of use assets and related costs	2,231		-
	Tax credit professional fees	240		47
	Operating costs and expenses	49,805		42,025
Operating (loss) income		(10,950	)	6,567
Other (expense) income
	Interest expense and other, net	(778	)	(1,695	)
	Change in fair value of contingent consideration	(145	)	(61	)
	(Loss) gain on foreign currency transactions	(184	)	11
	Other expense, net	(1,107	)	(1,745	)
(Loss) income before income taxes		(12,057	)	4,822
Income tax (benefit) expense		(3,188	)	764
Net (loss) income		($8,869	)	$4,058
Basic and diluted net (loss) income per share		($0.73	)	$0.31

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands unless otherwise indicated)

	January 2,		December 28,
	2021		2019
Net (loss) income	($8,869	)	$4,058
Other comprehensive income	198		7
Total comprehensive (loss) income	($8,671	)	$4,065

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Fiscal Years Ended January 2, 2021 and December 28, 2019 (Amounts in thousands, except share amounts, unless otherwise indicated)

	Common Stock				Stock Subscription Receivable		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury Stock				Total
	Issued Shares		Amount										Shares		Amount
Balance, December 29, 2018	15,578,345		$778		-		$107,326		($2,755	)	($63,163	)	2,823,172		($14,987	)	$27,199
Issuance of stock under employee stock purchase plan	118,526		6		-		315		-		-		-		-		321
Translation adjustment	-		-		-		-		7		-		-		-		7
Issuance of stock upon vesting of restricted share awards	130,020		7		-		(7	)	-		-		-		-		-
Share based compensation expense	-		-		-		806		-		-		-		-		806
Accrued dividends forfeited	-		-		-		12		-		-		-		-		12
Net income	-		-		-		-		-		$4,058		-		-		$4,058
Balance, December 28, 2019	15,826,891		$791		-		$108,452		($2,748	)	($59,105	)	2,823,172		($14,987	)	$32,403
					-
Issuance of stock under employee stock purchase plan	117,983		6		-		202		-		-		-		-		208
Stock subscription receivable	-		-		(420	)	420		-		-		-		-		-
Translation adjustment	-		-		-		-		198		-		-		-		198
Issuance of stock upon vesting of restricted share awards	279,317		14		-		(14	)	-		-		-		-		-
Equity compensation expense from awards issued	-		-		-		528		-		-		-		-		528
Purchase of treasury stock	-		-		-		-		-		-		1,858,139		(2,230	)	(2,230	)
Net loss	-		-		-		-		-		(8,869	)	-		-		(8,869	)
Balance, January 2, 2021	16,224,191		$811		($420	)	$109,588		($2,550	)	($67,974	)	4,681,311		($17,217	)	$22,238

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands unless otherwise indicated)

				January 2, 2021		December 28, 2019
Cash flows from operating activities:
	Net (loss) income			($8,869	)	$4,058
	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
		Depreciation and amortization		1,386		1,588
		Change in fair value of contingent consideration		145		61
		Impairment of right of use assets and related costs		2,231		-
		Equity compensation expense		1,108		806
		Provision for losses on accounts receivable		7,911		322
		Deferred income tax (benefit) expense		(3,712	)	1,104
		Changes in assets and liabilities:
			Accounts receivable	15,947		(7,626		)
			Prepaid expenses and other current assets	(162	)	(645		)
			Net of transit accounts receivable and payable	2,757		(293		)
			Accounts payable and accrued expenses	1,639		(3,085		)
			Accrued payroll and related costs	4,557		(1,342		)
			Right of use assets	1,490		(5,820		)
			Right of use liabilities	(1,529	)	6,056
			Income taxes payable	304		38
	Total adjustments			34,072		(8,836		)
	Net cash provided by (used in) operating activities			25,203		(4,778		)
Cash flows from investing activities:
	Property and equipment acquired			(460	)	(367		)
	Decrease in deposits			41		4
	Net cash used in investing activities			(419	)	(363		)
Cash flows from financing activities:
	Borrowings under line of credit			73,238		95,554
	Repayments under line of credit			(96,109	)	(88,332		)
	Issuance of stock for employee stock purchase plan			208		321
	Changes in finance lease obligations			(394	)	(318		)
	Contingent consideration paid			(345	)	(598		)
	Payment of note payable for treasury stock			(2,230	)	-
	Net cash (used in) provided by financing activities			(25,632	)	6,627
Effect of exchange rate changes on cash and cash equivalents				(265	)	(121		)
(Decrease) increase in cash and cash equivalents				(1,113	)	1,365
Cash and cash equivalents at beginning of period				1,847		482
Cash and cash equivalents at end of period				$734		$1,847
Supplemental cash flow information:
	Cash paid for:
		Interest		$1,026		$1,657
		Income taxes		$264		$290
Non-cash financing activities:
	Equity awards issued			$492			$436
	Dividend forfeited on unvested restricted share awards			$     -			$  12
	Software purchase under finance leases			$258			$126

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

	January 2, 2021		December 28, 2019
Engineering:
Time and Material	$43,359		$55,195
Fixed Fee	14,145		12,678
Permanent Placement Services	211		-
Total Engineering	$57,715		$67,873
Specialty Health Care:
Time and Material	$59,692		$88,057
Permanent Placement Services	789		1,291
Total Specialty Health Care	$60,481		$89,348
Information Technology:
Time and Material	$31,723		$33,384
Permanent Placement Services	490		495
Total Information Technology	$32,213		$33,879
	$150,409		$191,100

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

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

	January 2, 2021		December 28, 2019
Billed	$25,926		$29,214
Accrued and unbilled	8,219		13,824
Work-in-progress	3,612		4,352
Accounts receivable subject to arbitration	-		14,095
Allowance for sales discounts and doubtful accounts	(1,750	)	(1,725	)
Accounts receivable, net	$36,007		$59,760

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

4.	ACCOUNTS RECEIVABLE, TRANSIT ACCOUNTS RECEIVABLE AND TRANSIT ACCOUNTS PAYABLE (CONTINUED)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

	January 2, 2021		December 28, 2019
Equipment and furniture	$264		$319
Computers and systems	4,686		5,628
Leasehold improvements	236		308
	5,185		6,255
Less: accumulated depreciation and amortization	3,107		3,538
Property and equipment, net	$2,078		$2,717

Fiscal Year Ending	Total
January 1, 2022	500
December 31, 2022	2,358
Estimated future contingent consideration payments	$2,858

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Balance as of December 29, 2018		$4,773
Contingent payments made		(598	)
Increase to contingent payment estimates		(1,178	)
Changes in fair value of contingent payments		61
Balance as of December 28, 2019		$3,058
Contingent payments made		(345	)
Changes in fair value of contingent consideration		145
Balance as of January 2, 2021		$2,858

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

		Engineering		Specialty Health Care		Information Technology		Total
Balance as of December 29, 2018		$13,096		$2,398		$2,038		$17,532
Adjustment to final TKE purchase price		(1,178	)	-		-		(1,178	)
Balance as of December 28, 2019		$11,918		$2,398		$2,038		$16,354
No change in fiscal 2020		-		-		-		-
Balance as of January 2, 2021		$11,918		$2,398		$2,038		$16,354

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

	January 2, 2021		December 28, 2019
Restricted covenants	$12		$28
Customer relationships	83		388
Total intangible assets	$95		$416

9.	LINE OF CREDIT

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

9.	LINE OF CREDIT (CONTINUED)

	Fiscal Years Ended
	January 2, 2021		December 28, 2019
Basic weighted average shares outstanding	12,152,042		12,913,912
Dilutive effect of outstanding restricted share awards	-		58,241
Weighted average dilutive shares outstanding	12,152,042		12,972,153

	January 2, 2021		December 28, 2019
Time-based restricted stock awards outstanding	459,805		151,725
Unvested subscription restricted share awards	250,000		-
Performance-based restricted stock awards outstanding	-		240,000
Future grants of options or shares	520,929		268,326
Shares reserved for employee stock purchase plan	149,894		267,877
Total	1,380,628		927,928

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

	Number of Time-Based Restricted Stock Awards		Weighted Average Grant Date Fair Value per Share
Outstanding non-vested at December 28, 2019	151,725		$3.64
Granted	719,805		$1.88
Vested	(139,225	)	$3.61
Forfeited or expired	(22,500	)	$1.55
Outstanding non-vested at January 2, 2021	709,805		$1.92

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

	Number of Performance- Based Restricted Stock Awards		Weighted Average Grant Date Fair Value per Share
Outstanding non-vested at December 28, 2019	240,000		$4.81
Granted	-		-
Vested	(40,000	)	$4.38
Forfeited or expired	(200,000	)	$4.89
Outstanding non-vested at January 2, 2021	-		-

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

	Number of Restricted Stock Awards		Weighted Average Grant Date Fair Value per Share
Outstanding non-vested at December 29, 2018	347,372		$4.74
Granted – time-based vesting	99,225		$3.02
Granted – performance-based vesting	167,148		$4.35
Vested	(130,020	)	$3.91
Forfeited or expired	(92,000	)	$4.98
Outstanding non-vested at December 28, 2019	391,725		$4.36
Granted – time-based vesting	719,805		$1.88
Granted – performance-based vesting	-		-
Vested	(179,225	)	$3.78
Forfeited or expired	(222,500	)	$4.55
Outstanding non-vested at January 2, 2021	709,805		$1.92

12.	TREASURY STOCK TRANSACTIONS

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

13.	NEW ACCOUNTING STANDARDS

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Fiscal Year Ended January 2, 2021	Engineering		Specialty Health Care		Information Technology		Corporate		Total
Revenue	$57,715		$60,481		$32,213		$   -		$150,409
Cost of services	41,227		47,116		23,211		-		111,554
Gross profit	16,488		13,365		9,002		-		38,855
Selling, general and administrative	12,931		15,504		9,116		-		37,551
Depreciation and amortization of property and equipment	638		319		108		-		1,065
Amortization of acquired intangible assets	321		-		-		-		321
Write-off of receivables and professional fees incurred related to arbitration	8,397		-		-		-		8,397
Impairment of right of use assets and related costs	-		-		-		2,231		2,231
Tax credit professional fees	-		-		-		240		240
Operating income (loss)	($5,799	)	($2,458	)	($222	)	($2,471	)	($10,950	)
Total assets as of January 2, 2021	$33,782		$19,141		$7,498		$7,918		$68,339
Capital expenditures	$26		$36		$48		$350		$460

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Fiscal Year Ended December 28, 2019	Engineering		Specialty Health Care		Information Technology		Corporate		Total
Revenue	$67,873		$89,348		$33,879		$     -		$191,100
Cost of services	49,395		68,464		24,649		-		142,508
Gross profit	18,478		20,884		9,230		-		48,592
Selling, general and administrative	13,648		17,643		9,099		-		40,390
Depreciation and amortization of property and equipment	841		336		84		-		1,261
Amortization of acquired intangible assets	327		-		-		-		327
Tax credit professional fees	-		-		-		47		47
Operating income (loss)	$3,662		$2,905		$47		($47	)	$6,567
Total assets as of December 28, 2019	$52,342		$29,781		$8,178		$5,872		$96,173
Capital expenditures	$82		$121		$69		$95		$367

		Fiscal Year Ended
		January 2,		December 28,
		2021		2019
Revenues
	United States	$126,238		$166,750
	Canada	15,310		16,822
	Puerto Rico	5,702		4,942
	Serbia	3,159		2,586
		$150,409		$191,100

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

		Fiscal Year Ended
		January 2,		December 28,
		2021		2019
Total Assets
	United States	$56,308		$82,110
	Canada	7,067		9,638
	Puerto Rico	1,483		1,103
	Serbia	3,481		3,322
		$68,339		$96,173

	January 2, 2021		December 28, 2019
Federal statutory rate	21.0	%	21.0	%
Tax expense on taxable (loss) income at federal statutory rate	($2,532	)	$1,013
State and Puerto Rico income taxes, net of Federal income tax benefit	(535	)	305
Prior year United States R&D tax credits in current year	-		(668	)
Permanent differences	154		77
Foreign income tax rates	(21	)	(101	)
Adjustments to NOL and repatriation taxes	(53	)	154
Other	(201	)	(16	)
Total income tax expense	($3,188	)	$764

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

		Fiscal Years Ended
		January 2, 2021		December 28, 2019
Current
	Federal	($32	)	($688	)
	State and local	174		181
	Foreign	382		166
		524		(341	)
Deferred
	Federal	(2,844	)	892
	State	(851	)	229
	Foreign	(17	)	(16	)
		(3,755	)	1,105
Total		($3,188	)	$764

	Fiscal Years Ended
	January 2, 2021		December 28, 2019
United States	($13,898	)	$3,626
Foreign jurisdictions	1,841		1,196
	($12,057	)	$4,822

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

	January 2, 2021		December 28, 2019
Deferred tax assets:
Allowance for doubtful accounts	$455		$432
Federal and state net operating loss carryforward	2,634		330
Reserves and accruals	1,491		255
Other	318		185
Total deferred tax assets	4,898		1,202
Deferred tax liabilities:
Acquisition amortization, net	(716	)	(569	)
Prepaid expense deferral	(602	)	(701	)
Bonus depreciation to be reversed	(280	)	(327	)
Canada deferred tax liability, net	(365	)	(382	)
Total deferred tax liabilities	(1,963	)	(1,979	)
Total deferred tax assets (liabilities), net	$2,935		($777	)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

		Fifty-Three Week Period Ended January 2, 2021		Fifty-Two Week Period Ended December 28, 2019
Operating lease cost		$2,524		$2,314
	Amortization of right of use assets	$366		$305
	Interest on lease liabilities	10		8
Total finance lease cost		$376		$313

		Fifty-Three Week Period Ended January 2, 2021		Fifty-Two Week Period Ended December 28, 2019
Cash paid for amounts included in the measurement of lease liabilities
	Operating cash flows from operating leases	$2,589		$2,290
	Operating cash flows from finance leases	$7		$8
	Financing cash flows from finance leases	$402		$310
Right of use assets obtained in exchange for lease obligations
	Operating leases	$1,257		$7,894
	Finance leases	$258		$126

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

		Fifty-Three Week Period Ended January 2, 2021		Fifty-Two Week Period Ended December 28, 2019
Operating leases
	Operating lease right of use assets	$2,409		$5,820
	Operating right of use liability - current	($1,886	)	($2,134	)
	Operating right of use liability - non-current	(2,641	)	(3,921	)
	Total operating lease liabilities	($4,527	)	($6,055	)
Finance leases
	Property and equipment - (right of use assets)	$1,140		$985
	Accumulated depreciation	(746	)	(475	)
	Property and equipment, net	$394		$510
	Other current liabilities	($247	)	($315	)
	Other long term liabilities	(106	)	(189	)
	Total finance lease liabilities	($353	)	($504	)
Weighted average remaining lease term
	Operating leases	2.03 Years		2.54 Years
	Finance leases	1.45 Years		1.62 Years
Weighted average discount rate
	Operating leases	4.06	%	4.11	%
	Finance leases	2.63	%	1.78	%

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

Fiscal Year Ending	Operating Leases		Finance Leases
2021	2,019		255
2022	1,505		109
2023	955		-
2024	232		-
2025	48		-
Thereafter	-		-
Total lease payments	4,759		364
Less: imputed interest	(232	)	(11	)
Total	$4,527		$353

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fiscal Years Ended January 2, 2021 and December 28, 2019 (Dollars in thousands, except share and per share amounts, unless otherwise indicated)

RCM TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share amounts, unless otherwise indicated)

EXHIBIT 21

EXHIBIT 23.1

EXHIBIT 31.1

Date: April 2, 2021	/s/	Bradley S. Vizi
		Bradley S. Vizi Executive Chairman and President

EXHIBIT 31.2

Date: April 2, 2021	/s/	Kevin D. Miller
		Kevin D. Miller Chief Financial Officer, Treasurer and Secretary

EXHIBIT 32.1

/s/	Bradley S. Vizi
	Bradley S. Vizi Executive Chairman and President April 2, 2021

EXHIBIT 32.2

/s/	Kevin D. Miller
	Kevin D. Miller Chief Financial Officer, Treasurer and Secretary April 2, 2021