UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

  

FORM 8-K

 

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 31, 2015 (December 30, 2015)

 

 

 

 

STAFFING 360 SOLUTIONS, INC.

 (Exact name of registrant as specified in its charter)

 

 

 

 

Nevada 000-54515 68-0680859

(State or other jurisdiction of

incorporation)

(Commission File Number)

(I.R.S. Employer

Identification Number)

 

641 Lexington Avenue

Suite 1526

New York, NY 10022

(Address of principal executive offices) (Zip Code)

 

(212) 634-6462
(Registrant’s telephone number, including area code)

 

N/A
(Former name or former address, if changed since last report)

 

 

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  

 

 

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On December 30, 2015, Staffing 360 Solutions, Inc. (the “ Company ”) filed a Certificate of Designations, Preferences and Rights of Series B Preferred Stock (the “ Certificate of Designation ”) with the Nevada Secretary of State, whereby the Company designated 200,000 shares as Series B Preferred Stock, par value $0.00001 per share (the “ Series B Preferred Stock ”). The Series B Preferred Stock shall have a stated value of $10.00 per share (the “ Stated Value ”). The Certificate of Designation sets forth the powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series B Preferred Stock.

 

In the event of a liquidation, dissolution or winding up of the Company, the remaining assets of the Company available for distribution to its stockholders shall be distributed on a pari passu basis among the holders of shares of the Series B Preferred Stock (each a “ Holder ”) and the holders of the Company’s common stock, par value $0.00001 per share (the “ Common Stock ”), pro rata based on the number of shares held by each such holder.

 

There will be no dividends associated with the Series B Preferred Stock or payable to the Holders. If a Holder elects to convert the Series B Preferred Stock, in accordance with Section 3 of the Certificate of Designation, into Common Stock, then the Holder will have the same rights and receive the same dividends, if any, as the holders of the Common Stock.

 

At any time each Holder may elect to convert the shares of Series B Preferred Stock held by such Holder into shares of Common Stock (“ Series B Conversion ”). Upon the Series B Conversion, a Holder shall receive one share of Common Stock for every one share of Series B Preferred Stock that the Holder elects to convert (subject to adjustment per Section 3.2 of the Certificate of Designation, the “ Conversion Rate ”); provided , however , that (i) to the extent that the Holder’s right to receive such amount of Common Stock upon conversion of the shares of Series B Preferred Stock would result in the Holder holding in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of the Series B Preferred Stock (the “ Beneficial Ownership Limitation ”), then the Holder shall not be entitled to convert such shares of Series B Preferred Stock into a number of Common Stock that exceeds such Beneficial Ownership Limitation, and (ii) notwithstanding any other provision of the Certificate of Designation to the contrary, in no event can conversion of the Series B Preferred Stock pursuant the Certificate of Designation result in the issuance of shares of Common Stock that would exceed the “Exchange Cap”. The "Exchange Cap" shall be deemed to have been reached if, at any time prior to the shareholders of the Company approving any transaction(s) pursuant to which Series B Preferred Stock, any stock or other securities convertible into or exchangeable for Common Stock (such convertible or exchangeable stock or securities being herein called “ Convertible Securities ”) and/or Common Stock are issuable that may be aggregated with such shares of Common Stock issuable upon conversion of Series B Preferred Stock (“ Transaction(s) ”), the number of shares of Common Stock issuable under outstanding shares of Series B Preferred Stock and other Convertible Securities and shares of Common Stock issued pursuant to such Transactions(s) would exceed 19.9% of the shares of Common Stock outstanding as of the date of the earliest Transaction(s).

 

The Holders of two-thirds of the Series B Preferred Stock then outstanding, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation; provided , that the Beneficial Ownership Limitation in no event shall exceed 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of the outstanding Series B Preferred Stock.

 

Except as otherwise required by law, the Series B Preferred Stock shall have no voting rights.

 

The Certificate of Designation was filed in connection with the Company’s issuance of an aggregate of 100,000 shares of Series B Preferred Stock to Hillair Capital Investments L.P. (“Hillair”) in exchange for the surrender of two warrants that entitled Hillair to purchase up to 392,000 shares of Common Stock (adjusted for the reverse stock split on September 17, 2015) for each warrant, or 784,000 shares of Common Stock on an aggregate basis, pursuant to an exchange agreement dated December 30, 2015 (the “Hillair Exhange Agreement”). The Certificate of Designation and Hillair Exchange Agreement were approved by the Company’s board of directors.

 

A copy of the Certificate of Designation as filed with the Secretary of State of Nevada is attached as Exhibit 3.1 hereto and is incorporated herein by reference. The foregoing description of the material terms of the Certificate of Designation and Series B Preferred Stock does not purport to be complete and is qualified in its entirety by reference to such exhibit.

 

 

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits .

 

The exhibits listed in the following Exhibit Index are filed as part of this current report.

 

Exhibit No.   Description
3.1   Certificate of Designations, Preferences and Rights of Series B Preferred Stock

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date:  December 31, 2015 STAFFING 360 SOLUTIONS, INC.
 

 
  By: /s/ Brendan Flood
    Brendan Flood
    Executive Chairman

 

 

 

 

Exhibit 3.1

 

 

 

 

 

 

 

 

 

 

 

 

CERTIFICATE OF DESIGNATIONS,

PREFERENCES AND RIGHTS

OF

SERIES B PREFERRED STOCK

OF

STAFFING 360 SOLUTIONS INC.

_______________

 

The undersigned, being the Executive Chairman of Staffing 360 Solutions, Inc., a Nevada corporation (the “ Company ”), in accordance with the provisions of the Nevada Revised Statutes, does hereby certify that, pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation of the Company, the following resolution creating a series of Series B Preferred Stock, was duly adopted on December 24, 2015:

 

RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Company by provisions of the Articles of Incorporation of the Company, as amended (the “ Articles of Incorporation ”), there hereby is created out of the shares of preferred stock of the Company, par value $0.00001 per share, as authorized in Article III of the Articles of Incorporation (the “ Preferred Stock ”), a series of Preferred Stock of the Company, to be named “Series B Preferred Stock” consisting of 200,000 shares;

 

1.                   Designation and Amount . The shares of such series shall have a par value of $0.00001 per share and shall be designated as “Series B Preferred Stock” and the number of shares constituting the Series B Preferred Stock shall be 200,000 shares. The Series B Preferred Stock shall have a stated value of $10.00 per share (the “ Stated Value ”).

 

2.                   Dividends .

 

No Payment of Dividends . There will be no dividends associated with the Series B Preferred Stock or payable to the holders of the Series B Preferred Stock (each a “ Holder ”). If a Holder elects to convert the Series B Preferred Stock, in accordance with Section 3, into common stock of the Company, par value $0.00001 per share (the “ Common Stock ”), then the Holder will have the same rights and receive the same dividends, if any, as the holders of the Common Stock.

 

3.                   Conversion .

 

3.1               Restrictive Legend . Each certificate evidencing shares of Common Stock issued to the Holder following the conversion of the Series B Preferred Stock shall bear the following restrictive legend or a similar legend until such time as the transfer of such security is not restricted under the federal securities laws:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR UNDER APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

 

 

 

 

3.2               Adjustment of Conversion Rate . The number of shares of Common Stock issuable upon the conversion of the Series B Preferred Stock shall be subject to adjustment from time to time as follows:

 

(i)                  Adjustment for Stock Splits and Combinations . If the Company shall at any time (i) subdivide the outstanding Common Stock, (ii) combine the outstanding Common Stock into a smaller number of shares, or (iii) declare a dividend or otherwise distribute to all holders of Common Stock (including any such distribution made to the stockholders of the Company in connection with a consolidation or merger in which the Company is the continuing company) evidences of its indebtedness, or assets, or rights, options, or warrants to subscribe for or purchase Common Stock, or securities convertible into or exchangeable for shares of Common Stock, then, in each case, the number of shares of Common Stock issuable upon the conversion of the Series B Preferred Stock shall be proportionately adjusted so that the Holder after such time shall be entitled to receive the aggregate number and kind of shares, evidences, rights, options, warrants or securities which, if the Series B Preferred Stock had been converted immediately prior to such time, the Holder would have owned upon such conversion and been entitled to receive by virtue of such dividend, subdivision, combination, or distribution.

 

(ii)                Change in Conversion Shares upon Consolidations and Mergers in Which the Company Is Not the Surviving Company and upon Certain Sales, Leases, and Conveyances . In case of any consolidation with or merger of the Company with or into another corporation or other entity (other than a merger or consolidation in which the Company is the surviving or continuing corporation), or in case of any sale, lease, or conveyance to another corporation or entity of the property and assets of any nature of the Company as an entirety or substantially as an entirety (such actions being hereinafter collectively referred to as “ Reorganizations ”), there shall thereafter be deliverable upon conversion of the Series B Preferred Stock (in lieu of the number of shares of Common Stock theretofore deliverable) the kind and amount of shares of stock or other securities or property receivable upon such Reorganization by a holder of the number of shares of Common Stock equal to the number of shares of Common Stock issuable upon the conversion of the Series B Preferred Stock for which the Series B Preferred Stock might have been redeemed immediately prior to such Reorganization. The Company shall not effect any such Reorganization unless upon or prior to the consummation thereof the successor corporation, or if the Company shall be the surviving corporation in any such Reorganization and is not the issuer of the shares of stock or other securities or property to be delivered to holders of shares of the Common Stock outstanding at the effective time thereof, then such issuer, shall assume by written instrument the obligation to deliver to the Holder such shares of stock, securities, cash or other property as the Holder shall be entitled to upon a conversion of the Series B Preferred Stock in accordance with the foregoing provisions.

 

(iii)              Change in Shares upon Certain Reclassifications, Consolidations, and Mergers . In case of any reclassification or change of the Common Stock (other than a change in par value or from no par value to a specified par value, or as a result of a subdivision or combination of the outstanding shares of Common Stock, but including any change of the shares of Common Stock into two or more classes or series of shares), or in case of any consolidation or merger of another corporation or entity into the Company in which the Company is the continuing corporation and in which there is a reclassification or change (including a change to the right to receive cash or other property) of the shares of Common Stock (other than a change in par value, or from no par value to a specified par value, or as a result of a subdivision or combination of the outstanding shares of Common Stock, but including any change of the shares into two or more classes or series of shares), the Holder shall have the right thereafter to receive upon conversion of the Series B Preferred Stock solely the kind and amount of shares of stock and other securities, property, cash, or any combination thereof receivable upon such reclassification, change, consolidation, or merger by a holder of the number of shares of Common Stock equal to the number of shares of Common Stock for which the Series B Preferred Stock might have been redeemed immediately prior to such reclassification, change, consolidation, or merger.

 

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(iv)              Other Events . If any event occurs of the type contemplated by the provisions of this Section 3.2 but not expressly provided for by such provisions (including, without limitation, the granting to stockholders of the Company as a whole of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Conversion Rate so as to protect the rights of the Holder under this Certificate.

 

(v)                No Impairment . The Company will not, through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company.

 

(vi)              Record Date . If the Company takes a record of the holders of Common Stock for the purpose of entitling them (i) to receive a dividend or other distribution payable in Common Stock, or in any rights, options or warrants to subscribe for or to purchase Common Stock (such rights or options or warrants being herein called “ Options ”) or in any stock or other securities convertible into or exchangeable for Common Stock (such convertible or exchangeable stock or securities being herein called “ Convertible Securities ”) or (ii) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

 

3.3               Optional Conversion . At any time each Holder may elect to convert the shares of Series B Preferred Stock held by such Holder into shares of Common Stock (“ Series B Conversion ”). Upon the Series B Conversion, a Holder shall receive one share of Common Stock for every one share of Series B Preferred Stock that the Holder elects to convert (subject to adjustment per Section 3.2, the “ Conversion Rate ”); provided , however , that (i) to the extent that the Holder’s right to receive such amount of Common Stock upon conversion of the shares of Series B Preferred Stock would result in the Holder exceeding the Beneficial Ownership Limitation (as defined below), then the Holder shall not be entitled to convert such shares of Series B Preferred Stock into a number of Common Stock that exceeds such Beneficial Ownership Limitation, and (ii) notwithstanding any other provision to the contrary, in no event can conversion of the Series B Preferred Stock pursuant to the terms of this Certificate of Designations, Preferences and Rights of Series B Preferred Stock (the “ Certificate ”) result in the issuance of shares of Common Stock that would exceed the “Exchange Cap”. The "Exchange Cap" shall be deemed to have been reached if, at any time prior to the shareholders of the Company approving any transaction(s) pursuant to which Series B Preferred Stock, Convertible Securities and/or Common Stock are issuable that may be aggregated with such shares of Common Stock issuable upon conversion of Series B Preferred Stock (“ Transaction(s) ”), the number of shares of Common Stock issuable under outstanding shares of Series B Preferred Stock and other Convertible Securities and shares of Common Stock issued pursuant to such Transactions(s) would exceed 19.9% of the shares of Common Stock outstanding as of the date of the earliest Transaction(s). The “ Beneficial Ownership Limitation ” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of the Series B Preferred Stock. For purposes of this Section 3.3, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. The Holders of two-thirds of the Series B Preferred Stock then outstanding, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 3.3; provided , that the Beneficial Ownership Limitation in no event shall exceed 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of the outstanding Series B Preferred Stock and the provisions of this Section 3.3 shall continue to apply with respect to such increased or decreased Beneficial Ownership Limitation, as the case may be. Any increase in the Beneficial Ownership Limitation will not be effective until the sixty-first (61 st ) day after such notice is delivered to the Company. The provisions of this Section 3.3 shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.3 to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this Section 3.3 shall apply to a successor holder of the Series B Preferred Stock.

 

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4.                   Liquidation . In the event of a liquidation, dissolution or winding up of the Company, the remaining assets of the Company available for distribution to its stockholders shall be distributed on a pari passu basis among the holders of shares of the Series B Preferred Stock and Common Stock, pro rata based on the number of shares held by each such holder.

 

5.                   Voting Rights . Except as otherwise required by law, the Series B Preferred Stock shall have no voting rights.

 

6.                   Miscellaneous .

 

6.1               Amendments in Writing . Except as otherwise provided herein, the provisions of the Series B Preferred Stock may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holders representing at least two thirds of the outstanding Series B Preferred Stock.

 

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6.2               Mutilated, Lost, Stolen or Destroyed Certificate . In case the Series B Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Company shall issue and deliver in exchange and substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the certificate, mutilated, lost, stolen or destroyed, a new certificate of like tenor and representing an equivalent right or interest, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and an indemnity or bond, if requested, also reasonably satisfactory to it.

 

6.3               Notices . Notice to any Holder of the Series B Preferred Stock shall be given to the registered address set forth in the Company’s records for such Holder. With respect to any notice to a Holder required to be provided herein, neither failure to mail such notice, nor any defect therein or in the mailing thereof, to any particular Holder shall affect the sufficiency of the notice or the validity of the proceedings referred to in such notice with respect to the other Holders or affect the legality or validity of any distribution, rights, warrant, reclassification, consolidation, merger, conveyance, transfer, dissolution, liquidation or winding-up, any other corporate action or the vote upon any such action. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the holder receives the notice.

 

6.4               Upon receipt by the Company of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any preferred stock certificates representing the shares of Series B Preferred Stock, and, in the case of loss, theft or destruction, of any indemnification undertaking by the holder to the Company and, in the case of mutilation, upon surrender and cancellation of the preferred stock certificate(s), the Company shall execute and deliver new preferred stock certificate(s) of like tenor and date; provided, however, that the Company shall not be obligated to re-issue preferred stock certificates if the holder contemporaneously requests the Company to convert such shares of Series B Preferred Stock into Common Stock.

 

6.5               This Certificate of Designation may be amended with the approval of the Board of Directors and the consent of the holders of a majority of the then outstanding shares of the Series B Preferred Stock.

 

6.6               This Certificate of Designation shall become effective upon the filing thereof with the Secretary of State of the State of Nevada.

 

IN WITNESS WHEREOF, the Company has caused this Certificate of Designations, Preferences and Rights to be signed in its name and on its behalf on this 24th day of December, 2015 by a duly authorized officer of the Company.

 

  STAFFING 360 SOLUTIONS INC.
     
  By: /s/ Brendan Flood
    Name: Brendan Flood
    Title: Executive Chairman

 

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