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

February 7, 2019

 

Date of Report (Date of earliest event reported)

STAFFING 360 SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Delaware

 

001-37575

 

68-0680859

 

(State or other jurisdiction of

incorporation)

 

(Commission File Number)

 

(I.R.S. Employer

Identification Number)

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:

 

 

 

 

 

 

 

 

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))

 

 


 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


 


 

Item 1.01 Entry into a Material Definitive Agreement.

 

Jackson Omnibus Agreement

 

On February 7, 2019, Staffing 360 Solutions, Inc. (the “Company”), as borrower, and certain domestic subsidiaries of the Company, as guarantors, entered into a Third Omnibus Amendment, Joinder and Reaffirmation Agreement with Jackson Investment Group, LLC, as lender (the “Jackson Omnibus”), which among other things amended that certain Amendment and Restated Note Purchase Agreement, dated as of September 15, 2017, as amended by that certain First Omnibus Amendment and Reaffirmation Agreement, dated as of August 27, 2018, and that certain Second Omnibus Amendment and Reaffirmation Agreement dated as of November 15, 2018 (as amended, the “Purchase Agreement”) to permit the Company (a) to pay a quarterly cash dividend made by the Company to the holders of its common stock in the amount of one cent per share of common stock issued and outstanding, provided , that (1) such cash dividend does not exceed $100,000 in the aggregate per fiscal quarter of the Company and (2) at the time of the making of such dividend no Event of Default (as specifically defined in the Purchase Agreement) exists or would result therefrom, and (b) to pay cash dividends payable in respect of the Company’s Series E Convertible Preferred Stock (the “Series E Preferred Stock”) and the Series E-1 Convertible Preferred Stock (the “Series E-1 Preferred Stock”) pursuant to the terms of the Certificate of Designation of Series E Convertible Preferred Stock (the “Certificate of Designation”) and permit any repurchase or redemption of the Series E Preferred Stock and/or Series E-1 Preferred Stock.

 

The Jackson Omnibus contains representations, warranties and indemnification obligations of the parties customary for transactions similar to those contemplated by the Jackson Omnibus.  

 

Amendment to Credit Agreement

 

On February 7, 2019, the Company and certain domestic subsidiaries (the “Borrowers”) of the Company entered into an amendment to the Credit and Security Agreement, dated as of April 8, 2015, as amended, and entered into Amendment No.11 (“Amendment No. 11”) to the Credit and Security Agreement (as amended, the “Credit Agreement”), with MidCap Funding X Trust, as successor-by-assignment to Midcap Financial Trust (“Midcap”) to permit the Company (a) to pay a quarterly cash dividend to its shareholders in the amount of one cent per share of common stock issued and outstanding,   provided , that such cash dividend does not exceed $100,000 in the aggregate per fiscal quarter, (b) to pay cash dividends payable in respect of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”), Series E Preferred Stock and Series E-1 Preferred Stock in accordance with their respective terms in effect on February 7, 2019, pursuant to the Company’s Amended and Restated Certificate of Incorporation (the “Charter”) and the Certificate of Designation, and (c) to redeem or repurchase for cash the Series A Preferred Stock, Series E Preferred Stock and Series E-1 Preferred Stock in accordance with their respective terms in effect on February 7, 2019, pursuant to the Charter and the Certificate of Designation.

 

In addition, the Company also agreed not to (a) declare issue any shares of preferred stock other than those in existence as of February 7, 2019, or issued in accordance with the terms and conditions of the Certificate of Designation or (b) amend, modify, supplement and/or restate (i) the Company’s previously announced Debt Exchange Agreement, dated as of November 15, 2018 with Jackson, (ii) the Certificate of Designation or the terms and conditions of its obligations under the Certificate of Designation.  

 

Amendment No. 11 contains representations, warranties and indemnification obligations of the parties customary for transactions similar to those contemplated by Amendment No. 11.

 

Intercreditor Agreement

 

In connection with the Company’s previously announced exchange of $13,000,000 of indebtedness of the Company held by Jackson in exchange for 13,000 shares of Series E Preferred Stock (the “Debt Exchange”), on February 7, 2019, Jackson, Midcap, the Company and certain subsidiaries of the Company entered into a Second Amendment to Intercreditor Agreement to reflect the Debt Exchange.

 

 

Item 3.03 Material Modifications to Rights of Security Holders.

 

 


 

The information set forth under Item 1.01 above with respect to the Jackson Omnibus and Amendment No. 11 and set forth under Item 5.03 below is incorporated herein by referenc e.

 

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

 

On February 7, 2019, the Company filed a Certificate of Amendment to Certificate of Designation of Series E Convertible Preferred Stock (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware.  The Certificate of Amendment amended the Certificate of Designation to permit the Company, during the period commencing on November 15, 2018, and ending on November 14, 2019, to (a) pay cash dividends with respect to the Series A Preferred Stock provided that the aggregate monthly amount of all such Series A Preferred Stock dividends does not exceed $17,000, and (b) pay a quarterly cash dividend to the holders of its common stock in the amount of one cent per share of common stock issued and outstanding, provided , that such cash dividend does not exceed $100,000 in the aggregate per fiscal quarter of the Company, and provided with respect to both subsections (a) and (b), at the time of the making of such dividend no Preferred Default (as specifically defined in the Certificate of Designation) exists or would result therefrom.  

 

The foregoing description of the Certificate of Amendment is qualified in its entirety by reference to the full text of the Certificate of Amendment, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference herein.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

 

 

 

Exhibit No.

Description

3.1

Certificate of Amendment to Certificate of Designation of Series E Convertible Preferred Stock, dated February 7, 2019

 

 


 


 

 

 

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:  February 11, 2019

STAFFING 360 SOLUTIONS, INC.

 

 

 

 

 

 

By:

/s/ Brendan Flood

 

 

Brendan Flood

 

 

Chairman and Chief Executive Officer

 

 

 

 

 

 

 

 

Exhibit 3.1

 

 

 

CERTIFICATE OF AMENDMENT

TO

CERTIFICATE OF DESIGNATION

OF

SERIES E CONVERTIBLE PREFERRED STOCK

OF

STAFFING 360 SOLUTIONS.

 

Staffing 360 Solutions, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “ Corporation ”), in accordance with the provisions of Section 242 thereof, hereby certifies that the following resolutions amending the rights of the Series E Convertible Preferred Stock (which shall include Series E and Series E-1 Convertible Preferred Stock) (a) were duly adopted by the Board of Directors of the Corporation (the “ Board of Directors ”) pursuant to authority conferred upon the Board of Directors by the provisions of the Amended and Restated Certificate of Incorporation of the Corporation, as amended (the “ Certificate of Incorporation ”), and the Amended and Restated Bylaws of the Corporation (the “ Bylaws ”), at a duly held meeting of the Board of Directors held on February 7, 2019, and (b) was consented to by the sole holder of the outstanding shares of Series E Convertible Preferred Stock and Series E-1 Convertible Preferred Stock (the “ Series E Preferred Stock ”).

 

RESOLVED , that effective upon the filing of this Certificate of Amendment to Certificate of Series E Convertible Preferred Stock (this “ Certificate of Amendment ”), the Certificate of Designation of Series E Convertible Preferred Stock dated and filed with the Delaware Secretary of State on November 18, 2018 (the “ Certificate of Designation ”), are hereby amended as follows:

 

 

1.

Section 3.3 of the Certificate Designation is hereby amended and restated in its entirety to read as follows:

“3.3 Priority.  No dividends shall be declared or paid nor funds set apart for the payment of dividends on any Junior Securities for so long as any Series E Convertible Preferred Stock is issued and outstanding. Notwithstanding the foregoing, the Company shall be permitted to (a) in respect of the Series A Preferred Stock of the Company, during the period commencing on November 15, 2018, and ending on November 14, 2019, pay cash dividends thereon provided that the aggregate monthly amount of all such Series A Preferred Stock dividends shall not exceed $17,000, and (b) pay a quarterly cash dividend to the holders of its Common Stock in the amount of one cent per share of Common Stock issued and outstanding, provided , that such cash dividend does not exceed $100,000 in the aggregate per fiscal quarter of the Company, and provided with respect to both subsections (a) and (b), at the time of the making of such dividend no Preferred Default shall exist or would result therefrom .  

 

RESOLVED , that the Certificate of Designation as amended by the Certificate of Amendment shall remain in full force and effect except as expressly amended hereby.

 

 

[signature page follows]

 


THE UNDERSIGNED, being a duly authorized officer of the Corporation, does file this Certificate of Amendment to Certificate of Series E C onvertible Preferred Stock, hereby declaring and certifying that the facts herein stated are true and accordingly has hereunto set his hand this 7th day of February, 2019.

 

 

 

By: /s/ Brendan Flood

Name: Brendan Flood

 

Title:

President and Chief Executive Officer