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 27, 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.  

 


 

It em 1.01 Entry into a Material Definitive Agreement.

 

As previously announced, on September 15, 2017, Staffing 360 Georgia, LLC (“Staffing Georgia”), a wholly-owned subsidiary of Staffing 360 Solutions, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Firstpro Inc. (“FPI”), Firstpro Georgia, LLC (“FPL”, and together with FPI, the “Sellers”), and certain individuals (the “Principals”), pursuant to which the Sellers sold substantially all of their assets to Staffing Georgia (the “Firstpro Transaction”).  The purchase price in connection with the Firstpro Transaction was $8 million, of which, (a) $4.5 million was paid at closing, (b) $825,000 (the “Quarterly Consideration”) was payable in quarterly installments of $75,000 beginning on October 1, 2017, and (c) $2.675 million (the “Deferred Consideration” and together with the Quarterly Consideration, the “Outstanding Consideration”) was payable annually in three equal installments beginning on October 30, 2018.

 

On February 27, 2019, Staffing Georgia, the Sellers and the Principals entered into an Amendment Agreement (the “Agreement”), pursuant to which the parties agreed that (i) Staffing Georgia will, within five (5) business days of February 27, 2019, make a single lump sum payment of $1,125,000 (the “Final Payment”) in full and final satisfaction of any Outstanding Consideration payable to the Sellers under the Asset Purchase Agreement and (ii) the Asset Purchase Agreement will be deemed automatically amended to reflect the foregoing upon delivery of the Final Payment to the Sellers by Staffing Georgia.  

 

In addition, the Agreement also amended that certain Trademark License Agreement (the “TLA”), dated as of September 15, 2017, between Staffing Georgia and FPI, to make the term of license given thereunder perpetual.  

 

The foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

 

Item 8.01 Other Events

On March 5, 2019, the Company announced that it had entered into the Agreement to settle the Outstanding Consideration in exchange for the Final Payment and to extend the license under the TLA in perpetuity.

Item 9.01 Financial Statements and Exhibits.

 

 

(d) Exhibits

 

 

Exhibit No.

Description

10.1

Amendment Agreement, dated February 27, 2019, by and among Staffing 360 Georgia, LLC, Firstpro, Inc., Firstpro Georgia, LLC, April F. Nagel and Philip Nagel

99.1

Press release, dated March 5, 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:  March 5, 2019

STAFFING 360 SOLUTIONS, INC.

 

 

 

 

 

 

By:

/s/ Brendan Flood

 

 

Brendan Flood

 

 

Executive Chairman

 

 

 

 

Exhibit 10.1

 

AMENDMENT AGREEMENT

 

 

This AMENDMENT AGREEMENT, dated as of February __, 2019 (this “ Amendment ”), is entered into by and among Staffing 360 Georgia, LLC, a Georgia limited liability company (“ Buyer ”), Firstpro Inc., a Georgia corporation (“ FPI ”), Firstpro Georgia, LLC, a Georgia limited liability company (“ FPL ” and, together with FPI, “ Sellers ” and, each individually, a “ Seller ”), April F. Nagel, an individual (“ Mrs. Nagel ”), and Philip Nagel, an individual (“ Mr. Nagel ” and together with Mrs. Nagel, the “ Principals ”).

RECITALS

WHEREAS, Buyer, Sellers and Principals are parties to that certain Asset Purchase Agreement dated as of September 15, 2017 (the “ APA ”);

WHEREAS, Sellers and Buyer have agreed that Buyer will make a single lump sum payment of $1,125,000 (the “ Final Payment ”) in full and final satisfaction of any remaining amounts payable to the Sellers under Section 1.05 of the APA;

WHEREAS, in connection with the parties’ execution and delivery of the APA, the Buyer and FPI entered into a Trademark License Agreement, dated September 15, 2017 (the “ TLA ”);

WHEREAS, Buyer and FPI desire to amend the TLA to make the term of the license given thereunder perpetual; and

WHEREAS, Buyer, Sellers and Principals desire to amend the APA and TLA to, among other things, give effect to the foregoing.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Capitalized Terms

.   Capitalized terms used herein and not defined herein shall have the meanings ascribed to such terms in the APA.

2. The Final Payment .  Within five (5) Business Days after the date of this Agreement, the Buyer shall make the Final Payment to the Sellers by wire transfer of immediately available funds to an account identified in writing by Sellers. The Final Payment shall be in full and final satisfaction of all amounts that remain payable to Sellers under Section 1.05 of the APA.  

Amendments to APA

.  Upon Buyer’s deliver of the Final Payment, the APA shall automatically be deemed amended as follows;

(i)

by deleting clauses (b), (c), (d) and (e) of Sections 1.05 thereof in their entirety;

1

 

CH\1964176.1


 

(ii) by replacing Section 7.07 in its entirety with the following

“7.07[Reserved]”

(ii) by deleted the definition of “ Deferred Payment Amount ” in its entirety from Section 8.01 of the APA.  

4. Amendments to TLA.   Upon Buyer’s deliver of the Final Payment, Section 5(a) of the TLA shall automatically be deemed amended as follows:

“a. Subject to the Licensor’s termination rights set forth in Section 5(b), the term of this License shall be perpetual.”

Governing Law

(a) ; Jurisdiction. Sections 9.09 – 9.11 of the APA are incorporated herein by reference and made a part hereof.

6. Confirmation of the APA.   Except as expressly modified hereby, the APA and TLA shall remain in full force and effect and is hereby ratified and confirmed in all respects.

7. Amendments; Waiver; Entire Agreement. This Amendment may be amended, supplemented or modified in whole or in part if, but only if, such amendment, supplement or modification is in writing and is signed by each party hereto.  Any provision of this Amendment may be waived if, but only if, such waiver is in writing and is signed by the party or parties against whom enforcement of any such waiver is sought and specific reference to this Amendment is made in such writing.  The waiver by any party of a breach of any provision of this Amendment shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach.  No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. This Amendment together with the APA and TLA is the entire agreement among the parties hereto with respect to the subject matter hereof.

 

[ Signature page follows .]

 

2

 

CH\1964176.1


 

IN WITNESS WHEREOF this Amendment has been duly executed and delivered by each Party as of the date first above written.

 

BUYER:

Staffing 360 georgia, llc

 

 

By:
Name: Brendan Flood
Title: Chairman and Chief Executive Officer

 

 

SELLERS:

FIRSTPRO INC.

 

 

By:
Name:
Title:

 

 

FIRSTPRO GEORGIA, LLC

 

 

By:
Name:
Title:

 

PRINCIPAS:

By:
Name: April F. Nagle

 

 

By:
Name: Philip A. Nagle

 

[Signature Page to Amendment Agreement]

Exhibit 99.1

Staffing 360 Solutions, Inc. Settles Remaining Deferred Consideration from the Acquisition of first PRO at 50% Discount to its Face Value

 

NEW YORK, March 5, 2019 – Staffing 360 Solutions, Inc. ( NASDAQ: STAF ), a company executing an international buy-integrate-build strategy through the acquisition of domestic and international staffing organizations in the United States and United Kingdom, today announced that it had come to an agreement with the seller of first PRO, its professional staffing operation in Atlanta, Georgia, to settle $2.158 million of remaining deferred consideration for a total of $1.125 million in full and final settlement. Funds for this transaction were available from the proceeds raised in the Company’s recent equity offering. Additionally, the license to use the first PRO name, which would have expired in September 2019, has been extended in perpetuity. The transaction is expected to result in an income gain of approximately $840,000 in the first quarter.

 

Brendan Flood, Chairman and CEO of Staffing 360 Solutions Inc., stated, “This settlement is a strong economic and operational gain for us. The continued use of the first PRO trademark indefinitely is a boost to our team in Atlanta, Georgia, and the settlement of the deferred consideration means a reduction of $1.033 million in cash outflows over the next eighteen months and a positive use of the proceeds from the equity offering.”

About Staffing 360 Solutions, Inc.

Staffing 360 Solutions, Inc. is engaged in the execution of an international buy-integrate-build strategy through the acquisition of domestic and international staffing organizations in the United States and United Kingdom. The Company believes that the staffing industry offers opportunities for accretive acquisitions that will drive its annual profitable revenues to $500 million. As part of its targeted consolidation model, the Company is pursuing acquisition targets in the finance and accounting, administrative, engineering, IT, and Light Industrial staffing space. For more information, please visit: www.staffing360solutions.com. Follow Staffing 360 Solutions on Facebook, LinkedIn and Twitter .

 

Forward-Looking Statements

This press release contains forward-looking statements, which may be identified by words such as "expect," "look forward to," "anticipate" "intend," "plan," "believe," "seek," "estimate," "will," "project" or words of similar meaning. Although Staffing 360 Solutions, Inc. believes such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Actual results may vary materially from those expressed or implied by the statements herein due to the Company’s ability to successfully raise sufficient capital on reasonable terms or at all, available cash on hand and contractual and statutory limitations that could impair our ability to pay future dividends, our ability consummate additional acquisitions and successfully integrate newly acquired companies, to organically grow our business, to successfully defend potential future litigation, changes in local or national economic conditions, the ability to comply with contractual covenants, including in respect of its debt, as well as various additional risks, many of which are now unknown and generally out of the Company’s control, and which are detailed from time to time in reports filed by the Company with the SEC, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Staffing 360 Solutions does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law.

 

 

 


Investor Relations Contact:
Harvey Bibicoff, CEO

Bibicoff + MacInnis, Inc.

+1 818.379.8500   harvey@bibimac.com