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
January 27, 2017 (January 25, 2017)
Date of Report (Date of earliest event reported)
STAFFING 360 SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
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Nevada
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001-37575
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68-0680859
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(State or other jurisdiction of
incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification Number)
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641 Lexington Avenue
27
th
Floor
New York, NY 10022
(Address of principal executive offices)
(646) 507-5710
(Registrant’s telephone number, including area code)
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:
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Forward-Looking Statements
Certain matters discussed within this Current Report on Form 8-K are forward-looking statements including, but not limited to the ability to comply with NASDAQ Listing Rules regarding the trading price of our common stock, the timing and ability to enter into any additional acquisitions and expand our business, as well as the size of future revenue or trading volume or future access to capital markets. Although Staffing 360 Solutions, Inc. believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Specifically, in order for the Company to achieve annualized revenues of $300 million, the Company will need to successfully raise sufficient capital, to consummate additional target acquisitions, successfully integrate any newly acquired companies, organically grow its business, successfully defend any potential future litigation, as well as various additional contingencies, many of which are unknown at this time and generally out of the Company’s control. The Company can give no assurance that it will be able to achieve these objectives. Staffing 360 Solutions does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in local or national economic conditions, our ability to access the capital markets on terms acceptable to us, or at all, our ability to comply with our contractual covenants, including in respect of our debt and other risks detailed from time to time in Staffing 360 Solutions’ reports filed with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.
ITEM 3.01
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On January 25, 2017, Staffing 360 Solutions, Inc. (the “Company”) received a letter from the Listing Qualifications Department of The NASDAQ Stock Market (“NASDAQ”) notifying the Company that, based upon the closing bid price of the Company’s common stock for the last 30 consecutive business days, the common stock did not meet the minimum bid price of $1.00 per share required by NASDAQ Listing Rule 5550(a)(2) (the “Minimum Bid Rule”), initiating an automatic 180 calendar-day grace period for the Company to regain compliance.
The notice has no immediate effect on the listing or trading of the Company’s common stock, and the common stock will continue to trade on the NASDAQ under the symbol “STAF”.
In accordance with NASDAQ Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days from the date of the notification, or until July 24, 2017, to achieve compliance with the Minimum Bid Rule. The Company will regain compliance with the Minimum Bid Rule if at any time before July 24, 2017, the bid price for the Company’s common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days.
The Company intends
to meet the requirements for the Minimum Bid Rule in the future and is evaluating the manner to do so.
ITEM 3.03
Material Modifications to Rights of Security Holders.
The information included in Item 5.03 is incorporated by reference herein.
ITEM 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
Staffing 360 Solutions, Inc. 2016 Omnibus Incentive Plan
On January 26, 2017, the stockholders of the Company approved the
Staffing 360 Solutions, Inc.
2016 Omnibus Incentive Plan (“2016 Plan”).
The Company’s Board of Directors adopted the 2016 Plan to, among other things, attract and retain the best available personnel, to provide additional incentive to employees, directors and consultants and to promote the success of our business.
The 2016 Plan will be administered by the Compensation Committee. Employees, directors, officers, advisors and consultants of the Company or its affiliates are eligible to participate in the 2016 Plan. The 2016 Plan provides for an aggregate of 2,500,000 shares of common stock to be available for awards. The Compensation Committee may grant awards of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing. Notwithstanding anything to the contrary in the 2016 Plan (but subject to adjustment as set forth in the 2016 Plan), the Compensation Committee may not grant to any one participant in any one calendar year awards (i) for more than 400,000 common shares in the aggregate or (ii) payable in cash in an amount exceeding $750,000 in the aggregate. The 2016 Plan will have a term of ten years from the effective date of the 2016 Plan. The Board of Directors may amend, suspend or terminate the 2016 Plan at any time; however, shareholder approval to amend the 2016 Plan may be necessary if applicable law or listing rule so requires.
Additional details regarding the 2016 Plan are included in the Company’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on December 21, 2016 (the “Proxy Statement”), under the heading “Proposal 3 – Approval of the
Staffing 360 Solutions, Inc. 2016 Omnibus Incentive Plan.” The foregoing summary is qualified in its entirety by the full text of the 2016 Plan, a copy of which is set forth as Appendix D to the Proxy Statement and inco
rporated by reference herein.
Staffing 360 Solutions, Inc. 2016 Long-Term Incentive Plan
On January 26, 2017, the stockholders of the Company approved the
Staffing 360 Solutions, Inc.
2016 Long Term Incentive Plan (“2016 LTIP”).
The purpose of the 2016 LITP is to advance the interests of the Company by (i) encouraging and providing for the acquisition of equity interests in the Company by participants, thereby increasing the stake in the future growth and prosperity of the Company, and furthering the participants’ identity of interest with those of the Company’s shareholders, and (ii) enabling the Company to compete with other organizations in attracting, retaining, promoting and rewarding the services of participants.
The 2016 LTIP will be administered by the Compensation Committee of the Board of Directors. The Compensation Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, and to determine the specific terms and conditions of each award, subject to the provisions of the 2016 LTIP.
Persons eligible to participate in the 2016 LTIP will be those officers, employees, consultants and independent contractors of the Company and its subsidiaries as selected from time to time by the Compensation Committee in its discretion.
The Board of Directors may, without shareholder approval, modify, revise or terminate the 2016 LTIP at any time and from time to time. Unless the Board of Directors elects to terminate the 2016 LTIP earlier, the 2016 LTIP will terminate on December 31, 2018.
The 2016 LTIP permits the granting of performance units to participants under the 2016 LTIP. The number of shares issued under an award is determined by multiplying the number of performance units granted to the participant by the vesting rate which is determined by measuring the market cap of the Company.
Additional details regarding the 2016 LTIP are included in the Company’s Proxy Statement under the heading “Proposal 4 – Approval of the Staffing 360 Solutions, Inc. 2016 Long Term Incentive Plan.” The foregoing summary is qualified in its entirety by the full text of the 2016 LTIP, a copy of which is set forth as Appendix E to the Proxy Statement and incorporated by reference herein.
ITEM 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On January 25, 2017, the Company filed a Certificate of Correction for the Series D Preferred Stock, par value $0.00001 per share, which fixed a typographical error. The foregoing description of the Certificate of Correction is a summary and is qualified in its entirety by reference to the complete text of the amendment, which is attached as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference herein.
On January 26, 2017, the Company filed an amendment to its Articles of Incorporation to increase the number of authorized shares of common stock from 20,000,000 to 40,000,000. The foregoing description of the amendment to the Articles of Incorporation of the Company is a summary and is qualified in its entirety by reference to the complete text of the amendment, which is attached as Exhibit 3.2 to this Current Report on Form 8-K and is incorporated by reference herein.
ITEM 5.07
Submission of Matters to a Vote of Security Holders.
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(a)
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On January 26, 2017, the “Company held its Annual Meeting of Stockholders (the “Annual Meeting”).
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(b)
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The final results of voting for each matter submitted to a vote of stockholders at the Annual Meeting are set forth below.
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(1) The following directors were elected at the Annual Meeting and the voting for each director was as follows:
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For
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Against
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Abstain
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Broker Non-Votes
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Brendan Flood
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3,920,042
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521,201
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369,297
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2,038,691
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Matthew Briand
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3,910,108
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531,435
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368,997
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2,038,691
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Dimitri Villard
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3,954,442
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463,401
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392,697
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2,038,691
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Jeff Grout
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3,818,453
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571,123
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420,964
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2,038,691
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Nicholas Florio
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3,967,507
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468,436
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374,597
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2,038,691
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(2)
The change in our corporate domicile from the state of Nevada to the state of Delaware was not approved by the following vote:
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For
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Against
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Abstain
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Broker Non-Vote
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Change in corporate domicile
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4,226,077
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354,955
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229,508
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2,038,691
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(3) The 2016 Omnibus Incentive Plan was approved by the following vote:
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For
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Against
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Abstain
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Broker Non-Votes
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2016 Omnibus Incentive Plan
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3,014,190
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1,402,557
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393,793
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2,038,691
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(4) The 2016 Long Term Incentive Plan was approved by the following vote:
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For
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Against
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Abstain
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Broker Non-Votes
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2016 Long Term Incentive Plan
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3,013,219
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1,426,822
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370,499
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2,038,691
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(5) The advisory vote on executive compensation was approved by the following vote:
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For
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Against
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Abstain
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Broker Non-Votes
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Advisory vote on executive compensation
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3,050,317
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1,369,184
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391,039
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2,038,691
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(6) The frequency of the advisory vote was as follows:
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Every Year
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Every Two Years
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Every Three Years
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Abstain
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Broker Non-Votes
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Frequency of advisory vote
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1,795,111
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111,771
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2,574,651
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329,007
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0
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(7) The potential issuance of more than 19.99% of our common stock was approved by the following vote:
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For
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Against
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Abstain
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Broker Non-Votes
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19.99% approval
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3,740,851
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777,442
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292,247
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2,038,691
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(8) The amendment to our Articles of Incorporation to increase the number of authorized shares was approved by the following vote:
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For
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Against
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Abstain
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Broker Non-Votes
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Authorized shares increase
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4,668,358
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1,861,596
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319,277
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0
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ITEM 8.01
Other Events.
On January 26, 2017, the Company issued a press release announcing a $7.4 million financing with Jackson Investment Group, LLC. The press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 9.01
Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed as part of this report:
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Exhibit
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Description
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3.1
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Certificate of Correction for the Series D Preferred Stock of Staffing 360 Solutions, Inc., dated January 25, 2017
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3.2
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Amendment to Articles of Incorporation of Staffing 360 Solutions, Inc., effective January 26, 2017
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10.1
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Staffing 360 Solutions, Inc. 2016 Omnibus Incentive Plan (Incorporated by reference from Appendix D to the Company’s Definitive Proxy Statement on Schedule 14A, filed on December 21, 2016)
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10.2
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Staffing 360 Solutions, Inc. 2016 Long Term Incentive Plan (Incorporated by reference from Appendix E to the Company’s Definitive Proxy Statement on Schedule 14A, filed on December 21, 2016)
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99.1
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Press Release dated January 26, 2017
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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.
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Date: January 27, 2017
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STAFFING 360 SOLUTIONS, INC.
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By:
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/s/ Brendan Flood
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Brendan Flood
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Executive Chairman
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BARBARA K. CEGAVSKE
Secretary of State
202 North Carson Street
Carson City, Nevada 89701-4201 (775) 684-5708
Website: www.nvsos.gov
Certificate of Correction
(PURSUANT TO NRS CHAPTERS 78, 78A, 80, 81, 82, 84, 86, 87, 87A, 88,
88A, 89 AND 92A)
USE BLACK INK ONLY - DO NOT HIGHLIGHT
Certificate of Correction
ABOVE SPACE IS FOR OFFICE USE ONLY
(Pursuant to NRS Chapters 78, 78A, 80, 81, 82, 84, 86, 87, 87A, 88, 88A, 89 and 92A)
1. The name of the entity for which correction is being made:
Staffing 360 Solutions, Inc.
2. Description of the original document for which correction is being made:
Certificate of Designation (Document No. 20160284321-39)
June 27, 2016
3. Filing date of the original document for which correction is being made:
4. Description
of
the
inaccuracy
or
defect:
Section I.D.2(b) of the original document includes a typographical error.
5. Correction
of
the
inaccuracy
or
defect:
Section I.D.2(b) of the original document is hereby corrected to read in its entirety as follows:
"Corporation issues shares of Preferred Stock that are senior to the Series D Preferred Stock in any respect,"
6. Signature:
Executive Chairman
January 25, 2017
X
/s/ Brendan
Flood
Authorized
Signature
Title
*
Date
*
If entity is a corporation, it must be signed by an officer if stock has been issued, OR an incorporator or director if stock has not been issued; a limited-liability company, by a manager or managing members; a limited partnership or limited-liability limited partnership, by a general partner; a limited-liability partnership, by a managing partner; a business trust, by a trustee.
IMPORTANT:
Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.
This
form
must
be
accompanied
by
appropriate
fees.
Nevada Secretary of State Correction
Revised: 1-5-15
BARBARA K. CEGAVSKE
Secretary of State
202 North Carson Street
Carson City, Nevada 89701-4201 (775) 684-5708
Website: www.nvsos.gov
Certificate of Amendment
(PURSUANT TO NRS 78.385 AND 78.390)
USE BLACK INK ONLY - DO
NOT
HIGHLIGHT
ABOVE SPACE IS FOR OFFICE USE ONLY
Certificate of Amendment to Articles of Incorporation
For Nevada Profit Corporations
(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)
Staffing 360 Solutions, Inc.
1. Name of
corporation:
2. The articles have been amended as follows:
(provide article numbers, if
available)
Article 3 is amended to read in its entirety as follows;
"The corporation is authorized to issue a total of 60,000,000 shares of stock, par value $0.00001 per share, of which 40,000,000 shares shall be common stock and 20,000,000 shares shall be preferred stock. The board of directors of the corporation is hereby vested, to the fullest extent permitted under law, with the authority to designate from time to time, by duly adopted resolution(s), one or more classes or series of the preferred stock, to fix the number of shares constituting such class or series and to prescribe the voting powers, designations, preferences, qualifications, limitations, restrictions and relative, participating, optional and other rights of such class or series."
Approval % 51.07
3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation* have voted in favor of the amendment
is:
4. Effective date and time of filing:
(optional)
5. Signature:
(required)
Date:
Time:
(must not be later than 90 days after the certificate is filed)
X /s/ Brendan Flood
Signature of Officer
*If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless to limitations or restrictions on the voting power thereof.
IMPORTANT:
Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.
This
form
must
be
accompanied
by
appropriate
fees.
Nevada Secretary of State Amend Profit-After
Revised: 1-5-15
Exhibit 99.1
Staffing 360 Solutions Announces $7.4 Million Non-Convertible Strategic Financing
Jackson Investment Group Provides Funding to Strengthen the Company’s Balance Sheet and Position Staffing 360 for Its Next Stage of Growth
New York, NY –January 26, 2017 – Staffing 360 Solutions, Inc. (Nasdaq: STAF), a public company executing a global buy-and-build strategy through the acquisition of staffing organizations in the United States and in the United Kingdom, today announced a $7.4 million financing with Jackson Investment Group, LLC, a private investment firm led by staffing industry entrepreneur Richard Jackson, that manages over $1.5 billion of assets and owns one of the largest staffing firms in the United States. The transaction is expected to close on or before January 27, 2017, contingent on the outcome of the Company’s annual shareholder meeting.
“This is a game-changing development for Staffing 360 Solutions as we continue to strengthen our balance sheet and position the company for the next wave of growth,” stated Brendan Flood, Executive Chairman of Staffing 360 Solutions. “With this financing we have reduced our short-term debt obligations (excluding receivables financing) to $1.9 million over the next twelve months, which we are confident can be covered by the operating cash flow coming from our underlying Adjusted EBITDA of $5.36 million. Additionally, with this transaction brings a true strategic partner, Richard Jackson, who has been a successful entrepreneur with highly relevant experience, owning over 20 staffing companies during his 40 years in the industry. This financing will help give us the financial flexibility that we have been heavily focused on over the past year.”
“We are excited to announce this deal with Staffing 360 Solutions,” said Richard Jackson, Chairman and Chief Executive Officer of Jackson Investment Group. “I’ve been impressed with the management team and their current $190 million in annualized revenue that they’ve been able to achieve in such a short period of time. I believe Staffing 360 represents a tremendous opportunity for growth as the company continues to execute and achieve new milestones. We are looking forward to helping the company strengthen its balance sheet and supporting them through the next stage of its journey.”
The $7.4 million in secured debt has a term of 18 months and an interest rate of 6%, payable at maturity. The debt includes 1,650,000 shares of common stock of the Company issued to the investor at closing. The principal balance of the debt is non-convertible, however, up to 50% of the interest may be paid in the form of common stock valued at $2.00 per share.
In connection with the financing, Staffing 360 Solutions issued to Jackson Investment Group 3,150,000 common stock purchase warrants, which are cash-exercise only, and
have
an above-market strike price of $1.35
.
The transaction was in reliance upon exemptions from registration pursuant to the provisions of Section 4(a)(2) or Rule 506 of Regulation D under the Securities Act of 1933, as amended.
About Staffing 360 Solutions, Inc.
Staffing 360 Solutions, Inc. (Nasdaq: STAF) is a public company in the staffing sector engaged in the execution of a global buy-and-build strategy through the acquisition of domestic and international staffing organizations in the United States and in the United Kingdom. The Company believes the staffing industry offers opportunities for accretive acquisitions that will drive its annual revenues to $300 million. As part of its targeted consolidation model, the Company is pursuing acquisition targets in the finance and accounting, administrative, engineering and IT staffing space. For more information, please visit:
www.staffing360solutions.com
.
Follow Staffing 360 Solutions on
Facebook
,
LinkedIn
and
Twitter
.
Forward-Looking Statements
Certain matters discussed within this press release are forward-looking statements including, but not limited to the timing and ability to enter into any additional acquisitions and expand our business, as well as the size of future revenue or trading volume or future access to capital markets. Although Staffing 360 Solutions, Inc. believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Specifically, in order for the Company to achieve annualized revenues of $300 million, the Company will need to successfully raise sufficient capital, to consummate additional target acquisitions, successfully integrate any newly acquired companies, organically grow its business, successfully defend any potential future litigation, as well as various additional contingencies, many of which are unknown at this time and generally out of the Company’s control. The Company can give no assurance that it will be able to achieve these objectives. Staffing 360 Solutions does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in local or national economic conditions, our ability to access the capital markets on terms acceptable to us, or at all, our ability to comply with our contractual covenants, including in respect of our debt and other risks detailed from time to time in Staffing 360 Solutions’ reports filed with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.
Corporate Investor Contact:
Staffing 360 Solutions, Inc.
Darren Minton, Executive Vice President
646.507.5712
darren.minton@staffing360solutions.com
Financial Contact:
Staffing 360 Solutions, Inc.
David Faiman, Chief Financial Officer
646.507.5711
info@staffing360solutions.com