The Company records revenue under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, 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 service streams we provide to our customers.

We evaluate our revenue contracts with customers based on the five-step model under ASC 606: (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 and Life Sciences, Data and Solutions segments provide consulting and project solutions. The Healthcare segment specializes in long-term and short-term staffing and placement services for hospitals, schools, and long-term care facilities, among others. All of the Company’s segments perform staff augmentation services and derive revenue from permanent placement fees.

The following table presents our revenue disaggregated by revenue source for the thirteen and twenty-six weeks ended July 4, 2026, and June 28, 2025:

Time and Material

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

Fixed Fee

The Company periodically enters into fixed-fee contracts, primarily within the Engineering segment, to provide specified services or project-based deliverables. These arrangements are generally governed by master services agreements that establish standard terms and conditions, while project-specific purchase orders define the scope, pricing, and duration of each engagement. These engagements are typically completed within six to nine months.

Revenue from fixed-fee arrangements is recognized over time as performance obligations are satisfied, as the customer simultaneously receives and consumes the benefits of the services performed. The Company measures progress toward completion using either an input method (e.g., costs incurred relative to total estimated costs) or an output method (e.g., achievement of contractual milestones or delivery of specified units), depending on which method best depicts the transfer of control of services to the customer. The Company primarily applies an input method based on costs incurred relative to total estimated costs (cost-to-cost method). In contrast, output methods are used in arrangements in which milestones or deliverables correspond directly to the transfer of control to the customer.

Billings in excess of revenue recognized are recorded as contract liabilities (deferred revenue), while revenue recognized in excess of billings is recorded as contract assets. Certain contracts may include provisions that limit total billings or the timing of revenue recognition. The Company evaluates contracts for potential losses and records provisions for estimated losses in the period such losses become probable and can be reasonably estimated. Costs incurred in fulfilling contracts are expensed as incurred unless they qualify for capitalization under applicable accounting guidance.

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 for 90 days. In the event a candidate is not retained for the 90-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.

Deferred Revenue

There was $8.2 million of deferred revenue as of July 4, 2026. Deferred revenue was $14.8 million as of January 3, 2026. Revenue is recognized when the service has been performed. Deferred revenue may be recognized over a period exceeding one year from the time it was recorded on the balance sheet, although this is an infrequent occurrence. For the thirteen weeks ended July 4, 2026, and June 28, 2025, the Company recognized revenue of $5.2 million and $1.1 million, respectively, that was included in deferred revenue at the beginning of the reporting period. For the twenty-six weeks ended July 4, 2026, and June 28, 2025, the Company recognized revenue of $11.6 million and $4.2 million, respectively, that was included in deferred revenue at the beginning of the reporting period.

Concentration

During the twenty-six weeks ended July 4, 2026, the Company had three customers that exceeded 10% of consolidated revenue, two customers in the Company’s Specialty Health Care segment, representing 23.3% and 13.3% of consolidated revenue, respectively, and one customer in the Company’s Engineering segment, representing 13.5%. During the twenty-six weeks ended June 28, 2025, the Company had two customers that exceeded 10% of consolidated revenue, both in the Company’s Specialty Health Care segment, representing 22.5% and 13.1% of consolidated revenue, respectively.