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Form PRE 14A Staffing 360 Solutions, For: May 14

May 17, 2021 8:16 AM EDT

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

 

 

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

 

 

 

Filed by the Registrant

[X]

Filed by a Party other than the Registrant

 [  ]

 

Check the appropriate box:

 

[X] Preliminary Proxy Statement
[  ] Confidential, For Use of the Commission Only (As Permitted by Rule 14a-6(e)(2))
[  ] Definitive Proxy Statement
[  ] Definitive Additional Materials
[  ] Soliciting Material under Rule 14a-12

 

Staffing 360 Solutions, Inc.
(Name of Registrant as Specified in Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

[X] No fee required
   
[  ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

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Total fee paid:

     

[  ]

Fee paid previously with preliminary materials.

   

[  ]

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

   
 

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641 Lexington Avenue
27th Floor
New York, NY 10022

 

May 7, 2021

 

Dear Stockholder:

 

You are invited to attend the Special Meeting of Stockholders (the “Special Meeting”) of Staffing 360 Solutions, Inc. (the “Company”) on June 21, 2021, which will be held at www.virtualshareholdermeeting.com/STAF2021SM, at 10:00 a.m., New York time. In light of the ongoing developments related to the novel coronavirus (“COVID-19”), the Company has determined that the Special Meeting will be a virtual meeting conducted exclusively via live webcast. You or your proxyholder will be able to attend the virtual Special Meeting online, vote, view the list of stockholders1 entitled to vote at the Special Meeting and submit questions during the Special Meeting by visiting www.virtualshareholdermeeting.com/STAF2021SM and entering the 16-digit control number included on your proxy card or voting instruction form, as applicable. To receive access to the virtual Special Meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement. Enclosed with this letter are your Notice of Special Meeting of Stockholders, Proxy Statement and Proxy Voting Card. The Proxy Statement included with this notice discusses the proposals to be considered at the Special Meeting. Please review the voting materials at www.proxyvote.com.

 

At this Special Meeting, you will be asked to consider and vote upon a proposal to approve an amendment to our amended and restated certificate of incorporation to effect, at the discretion of our Board of Directors (the “Board”) but prior to our 2021 annual stockholder meeting, a reverse stock split of all of the outstanding shares of our common stock, par value $0.00001 per share (“Common Stock”), at a ratio in the range of 1-for-2 to 1-for-20, such ratio to be determined by the Board (the “Reverse Stock Split”). The Reverse Split proposal was approved by the Board, at a ratio to be determined by the Board in its discretion, and requires the vote of a majority of the holders of the total number of shares outstanding. We are now submitting this proposal to vote at the Special Meeting to obtain the requisite votes, so we can proceed with the Reverse Stock Split.

 

Our Board has fixed the close of business on May 7, 2021 as the record date for determining the stockholders entitled to notice of and to vote at the Special Meeting and any adjournment and postponements thereof (the “Record Date”).

 

Accordingly, we urge you to review the accompanying material carefully and to promptly return the enclosed proxy card or voting instruction. On the following pages, we provide answers to frequently asked questions about the Special Meeting. The Notice and Proxy Statement are also available at www.proxyvote.com.

 

Your vote is important. Whether or not you expect to attend the Special Meeting, you are requested to read the enclosed Proxy Statement and to sign, date and return the accompanying proxy card or voting instruction as soon as possible. I encourage you to vote by telephone, over the Internet, or if you requested to receive printed proxy materials, by marking, signing, dating and returning your proxy card so that your shares will be represented and voted at the Special Meeting, whether or not you plan to attend. If you attend the Special Meeting, you will, of course, have the right to revoke the proxy and vote your shares online.

 

If your shares are held in the name of a broker, trust, bank or other nominee, and you receive notice of the Special Meeting through your broker or through another intermediary, please vote or return the materials in accordance with the instructions provided to you by such broker or other intermediary or contact your broker directly in order to obtain a proxy issued to you by your nominee holder to attend the meeting and vote online. Failure to do so may result in your shares not being eligible to be voted by proxy at the meeting.

 

On behalf of the Board, I urge you to submit your proxy as soon as possible, even if you currently plan to attend the meeting online.

 

Thank you for your ongoing support.

 

Sincerely,

 
   

/s/ Brendan Flood

 

Brendan Flood

 

Chairman and Chief Executive Officer

 

 

 

 

 

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

 

Meeting Date: June 21, 2021

 

To the Stockholders of Staffing 360 Solutions, Inc.:

 

Notice is hereby given that the Special Meeting of Stockholders will be held on June 21, 2021 at 10:00 a.m., New York time, via a live webcast on the Internet. Stockholders will be able to virtually attend the Special Meeting online, vote and submit questions during the Special Meeting by visiting www.virtualshareholdermeeting.com/STAF2021SM. During the Special Meeting, stockholders will be asked to approve an amendment to our amended and restated certificate of incorporation to effect, at the discretion of the Board but prior to our 2021 annual stockholder meeting, a reverse stock split of all of the outstanding shares of our Common Stock, at a ratio in the range of 1-for-2 to 1-for-20, such ratio to be determined by the Board in its discretion and included in a public announcement (the “Reverse Stock Split Proposal”), as more fully described in the accompanying proxy statement (the “Proxy Statement”). The Reverse Split Proposal was approved by the Board, at a ratio to be determined by the Board in its discretion, and requires the vote of a majority of the holders of the total number of shares of our common stock, par value $0.00001 per share (“Common Stock”) (including any shares of Common Stock represented by shares of Series F Convertible Preferred Stock, par value $0.00001 (“Series F Preferred Stock”) or shares of Series G Convertible Preferred Stock, par value $0.00001 (“Series G Preferred Stock”), in each case voting on an as-converted basis) outstanding.

 

Stockholders are referred to the Proxy Statement for more detailed information with respect to the matters to be considered at the Special Meeting. After careful consideration, the Board recommends a vote FOR the Reverse Stock Split Proposal.

 

The Board has fixed the close of business on May 7, 2021 as the record date (the “Record Date”) for determining the stockholders entitled to notice of, and to vote at, the Special Meeting or any adjournments thereof. Only the stockholders of record of our Common Stock, our Series F Preferred Stock and our Series G Preferred Stock are entitled to receive notice of, and to vote at, the Special Meeting or any adjournments thereof. The date of mailing this Notice of Meeting and Proxy Statement is on or about May 24, 2021.

 

A complete list of registered stockholders entitled to vote at the Special Meeting will be available for inspection by stockholders online (upon request to us by email at [email protected]) for the 10 calendar days prior to and during the Special Meeting, and online during the Special Meeting.

 

You are cordially invited to attend the meeting online. Whether or not you expect to attend the Special Meeting, you are requested to read the enclosed Proxy Statement and to sign, date and return the accompanying proxy card or voting instruction card as soon as possible. This will assure your representation and a quorum for the transaction of business at the Special Meeting. If you attend the Special Meeting online, the proxy will not be used if you so request by revoking it as described in the Proxy Statement.

 

Hard copies of the Company’s Proxy Statement to security holders in connection with the Special Meeting are being mailed to stockholders of record as of the close of business on May 7, 2021, beginning on or about May 24, 2021. The Company’s Proxy Statement to security holders is also available at www.proxyvote.com.

 

If you have any questions about accessing materials or voting, please call 1-800-690-6903.

 

YOUR VOTE AND PARTICIPATION IN THE COMPANY’S AFFAIRS ARE IMPORTANT.

 

If your shares are registered in your name, even if you plan to attend the Special Meeting or any postponement or adjournment of the Special Meeting online, we request that you vote by telephone, over the Internet, or complete, sign and mail your proxy card to ensure that your shares will be represented at the Special Meeting.

 

If your shares are held in the name of a broker, trust, bank or other nominee, and you receive notice of the Special Meeting through your broker or through another intermediary, please vote or complete and return the materials in accordance with the instructions provided to you by such broker or other intermediary or contact your broker directly in order to obtain a proxy issued to you by your nominee holder to attend the Special Meeting and vote online. Failure to do so may result in your shares not being eligible to be voted by proxy at the Special Meeting.

 

By order of our Board,

 

/s/ Brendan Flood

 

Brendan Flood

 

Chairman and Chief Executive Officer

 

 

 

 

 

PROXY STATEMENT

 

SPECIAL MEETING OF STOCKHOLDERS

 

TO BE HELD ON JUNE 21, 2021

 

This proxy statement (the “Proxy Statement”) is furnished to you by the Board of Directors (the “Board”) of Staffing 360 Solutions, Inc. in connection with the solicitation of proxies for use at the special meeting of stockholders (the “Special Meeting”) to be held via a live webcast on the Internet at www.virtualshareholdermeetin.com/STAF2021SM, on June 21, 2021 at 10:00 a.m., New York time, for the purposes set forth in the accompanying Notice of Special Meeting of Stockholders (the “Notice”), and at any postponement(s), adjournment(s) or recess(es) thereof. Hard copies of this Proxy Statement, along with the Notice and either a proxy card or a voting instruction card, are being mailed to our stockholders of record as of the close of business on May 7, 2021, beginning on or about May 24, 2021.

 

Unless the context otherwise requires, in this Proxy Statement, we use the terms “Staffing,” “we,” “our,” “us” and the “Company” to refer to Staffing 360 Solutions, Inc. and its subsidiaries. In addition, unless the context otherwise requires, references to “stockholders” are to the holders of our common stock, par value $0.00001 per share (“Common Stock”), our Series F Convertible Preferred Stock, par value $0.00001 per share (“Series F Preferred Stock”), and our Series G Convertible Preferred Stock, par value $0.00001 per share (“Series G Preferred Stock”).

 

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING

 

What am I voting on?

 

At the Special Meeting, you will be asked to approve the proposal to authorize the Board, in its discretion but prior to our 2021 annual stockholder meeting, to amend our amended and restated certificate of incorporation to effect a reverse stock split of all of the outstanding shares of our Common Stock, at a ratio in the range of 1-for-2 to 1-for-20, such ratio to be determined by the Board and included in a public announcement (the “Reverse Stock Split Proposal”).

 

Why is the Company electing to effect a reverse stock split?

 

Our Board has unanimously adopted a resolution declaring advisable, and recommending to our stockholders for their approval, an amendment to our amended and restated certificate of incorporation (the “Reverse Stock Split Amendment”) authorizing a reverse stock split of the outstanding shares of our Common Stock at a ratio in the range of 1-for-2 to 1-for-20, such ratio to be determined by the Board and included in a public announcement (the “Reverse Stock Split”), and granting the Board the discretion to file a certificate of amendment to our amended and restated certificate of incorporation with the Secretary of State of the State of Delaware effecting the Reverse Stock Split prior to our 2021 annual stockholder meeting or to abandon the Reverse Stock Split altogether. The form of the proposed Reverse Stock Split Amendment is attached to this proxy statement as Annex A. The Reverse Stock Split Amendment will effect the Reverse Stock Split by reducing the number of outstanding shares of Common Stock as compared to the number of outstanding shares immediately prior to the effectiveness of the Reverse Stock Split, but will not increase the par value of Common Stock, and will not change the number of authorized shares of our capital stock. Stockholders are urged to carefully read Annex A. If implemented, the number of shares of our Common Stock owned by each of our stockholders will be reduced by the same proportion as the reduction in the total number of shares of our Common Stock outstanding, so that the percentage of our outstanding Common Stock owned by each of our stockholders will remain approximately the same, except to the extent that the Reverse Stock Split could result in some or all of our stockholders receiving one share of Common Stock in lieu of a fractional share.

 

Who is entitled to vote at the Special Meeting, and how many votes do they have?

 

Stockholders of record, including holders of our Common Stock, par value $0.00001 per share, holders of our Series F Preferred Stock and holders of our Series G Preferred Stock, at the close of business on May 7, 2021 (the “Record Date”) may vote at the Special Meeting. Pursuant to the rights of our stockholders contained in our charter documents, each share of our Common Stock is entitled to one vote on all matters listed in this proxy statement; each holder of Series F Preferred Stock is entitled to the number of votes equal to the number of whole shares of Common Stock into which the shares of Series F Preferred Stock held by such holder are then convertible at the deemed conversion price of $0.725 (subject to certain ownership limitations) with respect to any and all matters presented to the common stockholders for their action or consideration; and each holder of Series G Preferred Stock is entitled to the number of votes equal to the number of whole shares of Common Stock into which the shares of Series G Preferred Stock held by such holder are then convertible with respect to any and all matters presented to the common stockholders for their action or consideration. There are 39,166,528 shares of Common Stock, 4,697.6328 shares of Series F Preferred Stock, and 6,172 and 1,493 shares of Series G Preferred Stock and Series G-1 Preferred Stock, respectively, outstanding on the Record Date. A complete list of registered stockholders entitled to vote at the Special Meeting will be available for inspection by stockholders online (upon request to us by email at [email protected]) for the 10 calendar days prior to and during the Special Meeting, and online during the Special Meeting.

 

What is a proxy?

 

A proxy is a person you appoint to vote on your behalf. By using the methods discussed above, you will be appointing Brendan Flood, Khalid Anwar and Nick Koutsivitis as our proxy agent(s) as your proxy. The proxy agent will vote on your behalf, and will have the authority to appoint a substitute to act as proxy. If you are unable to attend the Special Meeting, please vote by proxy so that your shares may be voted.

 

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What is a proxy statement?

 

A proxy statement is a document that regulations of the SEC require that we give to you when we ask you to sign a proxy card to vote your stock at the Special Meeting.

 

What is the difference between a stockholder of record and a “street name” holder?

 

If your shares are registered directly in your name with Vstock or, with respect to the Series F Preferred Stock or Series G Preferred Stock, Continental Stock Transfer & Trust Company, our stock transfer agents, you are considered the stockholder of record with respect to those shares. The Notice has been sent directly to you by us.

 

If your shares are held in a stock brokerage account or by a bank or other nominee, the nominee is considered the record holder of those shares. You are considered the beneficial owner of these shares, and your shares are held in “street name.” A notice or Proxy Statement and voting instruction card have been forwarded to you by your nominee. As the beneficial owner, you have the right to direct your nominee concerning how to vote your shares by using the voting instructions they included in the mailing or by following their instructions for voting by telephone or the Internet.

 

What is a broker non-vote?

 

Broker non-votes occur when shares are held indirectly through a broker, bank or other intermediary on behalf of a beneficial owner (referred to as held in “street name”) and the broker submits a proxy but does not vote for a matter because the broker has not received voting instructions from the beneficial owner and (i) the broker does not have discretionary voting authority on the matter or (ii) the broker chooses not to vote on a matter for which it has discretionary voting authority. Under the rules of the New York Stock Exchange (the “NYSE”) that govern how brokers may vote shares for which they have not received voting instructions from the beneficial owner, brokers are permitted to exercise discretionary voting authority only on “routine” matters when voting instructions have not been timely received from a beneficial owner. The Reverse Stock Split Proposal is considered a “routine matter.” Therefore, if you do not provide voting instructions to your broker regarding the Reverse Stock Split Proposal, your broker will be permitted to exercise discretionary voting authority to vote your shares on the Reverse Stock Split Proposal.

 

If I am a beneficial owner of shares, can my brokerage firm vote my shares?

 

If you are a beneficial owner and do not vote via the Internet or telephone or by returning a signed voting instruction card to your broker, your shares may be voted only with respect to so-called “routine” matters where your broker has discretionary voting authority over your shares. Under the rules of the NYSE, the Reverse Stock Split Proposal is considered a “routine” matter. Accordingly, brokers will have such discretionary authority to vote on the Reverse Stock Split Proposal and may vote “FOR” the Reverse Stock Split Proposal.

 

We encourage you to provide instructions to your brokerage firm via the Internet or telephone or by returning your signed voting instruction card. This ensures that your shares will be voted at the Special Meeting with respect to the proposal described in this Proxy Statement.

 

How do I vote?

 

You may vote over the Internet, by telephone, by mail or online at the Special Meeting. Please be aware that if you vote by telephone or over the Internet, you may incur costs such as telephone and Internet access charges for which you will be responsible.

 

Vote by Internet. You can vote via the Internet at www.proxyvote.com. You will need to use the control number appearing on your proxy card to vote via the Internet. You can use the Internet to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 20, 2021, which is the day before the meeting date. Internet voting is available 24 hours a day. If you vote via the Internet, you do not need to vote by telephone or return a proxy card.

 

Vote by Telephone. You can vote by telephone by calling the toll-free telephone number 1-800-690-6903. You will need to use the control number appearing on your proxy card to vote by telephone. You may transmit your voting instructions from any touch-tone telephone up until 11:59 p.m. Eastern Time on June 20, 2021, which is the day before the meeting date. Telephone voting is available 24 hours a day. If you vote by telephone, you do not need to vote over the Internet or return a proxy card.

 

Vote by Mail. If you received a printed proxy card, you can vote by marking, dating and signing it, and returning it in the postage-paid envelope provided to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Please promptly mail your proxy card or voting instruction card to ensure that it is received prior to the closing of the polls at the Special Meeting.

 

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Vote Online at the Meeting. To vote online during the Special Meeting, you must be logged in and registered to virtually attend the Special Meeting and cast your vote before the announcement of the close of voting during the Special Meeting. You are entitled to virtually attend the Special Meeting only if you were a stockholder of the Company as of the close of business on the Record Date or hold a valid proxy for the Special Meeting. If your shares are registered directly in your name, you are considered the stockholder of record and you have the right to vote virtually at the Special Meeting. If your shares are held in the name of your broker or other nominee, you are considered the beneficial owner of shares held in street name. As a beneficial owner, if you wish to vote at the Special Meeting, you will need to bring to the Special Meeting a legal proxy from your broker or other nominee authorizing you to vote those shares.

 

If you are not a stockholder of record but hold shares through a broker, bank, trustee or nominee (i.e., in street name), you should provide proof of beneficial ownership as of the Record Date (such as your most recent account statement prior to the Record Date), a copy of the voting instruction card provided by your broker, bank, trustee or nominee, or similar evidence of ownership.

 

If you vote by any of the methods discussed above, you will be designating Brendan Flood, Khalid Anwar or Nick Koutsivitis, as your proxy, and they will vote your shares on your behalf as you indicate.

 

Submitting a proxy will not affect your right to attend the Special Meeting and vote virtually.

 

If your shares are held in the name of a bank, broker or other nominee, you will receive separate voting instructions from your bank, broker or other nominee describing how to vote your shares. The availability of Internet voting will depend on the voting process of your bank, broker or other nominee. Please check with your bank, broker or other nominee and follow the voting instructions it provides.

 

How will my proxy vote my shares?

 

If you are a stockholder of record, your proxy will vote according to your instructions. If you choose to vote by mail and complete and return the enclosed proxy card but do not indicate your vote, your proxy will vote

 

  “FOR” the approval of the amendment to our amended and restated certificate of incorporation to effect, at the discretion of the Company’s board of directors but prior to our 2021 annual stockholder meeting, a reverse stock split of all of the outstanding shares of our common stock, par value $0.00001 per share, at a ratio in the range of 1-for-2 to 1-for-20, such ratio to be determined by the Company’s board of directors and included in a public announcement.

 

We do not intend to bring any other matter for a vote at the Special Meeting, and we do not know of anyone else who intends to do so. Your proxies are authorized to vote on your behalf, however, using their best judgment, on any other business that properly comes before the Special Meeting.

 

If your shares are held in the name of a bank, broker or other nominee, you will receive separate voting instructions from your bank, broker or other nominee describing how to vote your shares. The availability of Internet voting will depend on the voting process of your bank, broker or other nominee. Please check with your bank, broker or other nominee and follow the voting instructions your bank, broker or other nominee provides.

 

As described above, under the rules of the NYSE, the Reverse Stock Split Proposal is considered to be a “routine” matter. Accordingly, brokers will have such discretionary authority to vote on the Reverse Stock Split Proposal and may vote “FOR” the Reverse Stock Split Proposal.

 

How do I change my vote?

 

If you are a stockholder of record, you may revoke your proxy at any time before your shares are voted at the Special Meeting by:

 

  Notifying Corporate Secretary, Nick Koutsivitis, in writing at 641 Lexington Avenue, 27th Floor, New York, New York 10022, that you are revoking your proxy before the closing of the polls;
     
  Submitting a proxy at a later date via the Internet, or by signing and delivering a proxy card relating to the same shares and bearing a later date than the date of the previous proxy prior to the vote at the Special Meeting, in which case your later-submitted proxy will be recorded and your earlier proxy revoked; or
     
 

Attending and voting by ballot at the Special Meeting.

 

How are abstentions and broker non-votes treated for purposes of the Special Meeting?

 

Abstentions are included in the determination of the number of shares of Common Stock present at the Special Meeting for determining a quorum at the meeting. An abstention is not an “affirmative vote,” but an abstaining stockholder is considered “entitled to vote” at the Special Meeting. Accordingly, an abstention will have the effect of a vote against the Reverse Stock Split Proposal.

 

Broker non-votes will be included in the determination of the number of shares of Common Stock present at the Special Meeting for determining a quorum at the meeting. Broker non-votes, to the extent applicable, will have the effect of a vote against the Reverse Stock Split Proposal. Because your broker will have discretionary voting authority with respect to the Reverse Stock Split Proposal, a broker non-vote would only arise in the event that your broker does not receive your voting instructions and chooses not to exercise its discretionary voting authority with respect to such matter.

 

If your shares are held in the name of a bank, broker or other nominee, you should check with your bank, broker or other nominee and follow the voting instructions provided. Attendance at the Special Meeting alone will not revoke your proxy.

 

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Who counts the votes?

 

All votes will be tabulated by the inspector of election appointed for the Special Meeting.

 

What constitutes a quorum?

 

The holders of a majority of the Company’s eligible votes as of the record date, either present or represented by proxy, constitute a quorum. A quorum is necessary in order to conduct the Special Meeting. If you choose to have your shares represented by proxy at the Special Meeting, you will be considered part of the quorum. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. Regardless of whether a quorum is present at the Special Meeting, the chairman of the Board or the person presiding as chairman of the Special Meeting may adjourn the Special Meeting to a later date, without notice other than announcement at the Special Meeting. If an adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, we will provide notice of the adjourned meeting to each stockholder of record entitled to vote at the meeting.

 

What vote is required to approve each proposal?

 

The affirmative vote of holders of a majority of the shares of our Common Stock (including shares of Series F Preferred Stock and Series G Preferred Stock, voting on an as-converted basis) outstanding as of the Record Date is required to approve the Reverse Stock Split Proposal. The principal terms of the amendment to the amended and restated certificate of incorporation have been approved by the Board. Because the vote is based on the total number of shares outstanding rather than the votes cast at the Special Meeting, your failure to vote or marking “ABSTAIN” on your proxy or ballot with respect to the Reverse Stock Split Proposal has the same effect as a vote against this proposal. We expect that the directors and executive officers will vote all their shares in favor of the Reverse Stock Split Proposal.

 

What are the consequences if the Reverse Stock Split Proposal is not approved by stockholders?

 

If stockholders fail to approve the Reverse Stock Split Proposal our Board would not have the authority to effect the Reverse Stock Split to, among other things, facilitate the continued listing of our Common Stock on Nasdaq by increasing the per share trading price of our Common Stock to help ensure a share price high enough to satisfy the $1.00 per share minimum bid price requirement. Any inability of our Board to effect the Reverse Stock Split could expose us to delisting from Nasdaq. In addition, our financing alternatives will be limited by the lack of any available unissued and unreserved authorized shares of Common Stock, and stockholder value may be harmed by this limitation. Moreover, our future success depends upon our ability to attract, retain and motivate highly-skilled employees, and if this proposal is not approved by our stockholders, the lack of any available unissued and unreserved authorized shares of Common Stock to provide future equity incentive opportunities could adversely impact our ability to achieve these goals.

 

Will the Company change its name as a result of the Reverse Stock Split?

 

No. The Company will retain the name “Staffing 360 Solutions, Inc.” and will remain incorporated under the laws of the State of Delaware.

 

Will the Reverse Stock Split change the business of Staffing?

 

No. The Reverse Stock Split will not change the current business of the Company. Following the Reverse Stock Split, we will continue to operate in the staffing sector.

 

Will Staffing have the same directors and executive officers that the Company currently has following the Reverse Stock Split?

 

Yes. The executive officers and members of the Board will not change as a result of the Reverse Stock Split.

 

Who is soliciting proxies, how are they being solicited, and who pays the cost?

 

Proxies are being solicited by the Board on behalf of the Company. In addition, we have engaged Morrow Sodali LLC (“Morrow”), the proxy solicitation firm hired by the Company, at an approximate cost of $7,500, to solicit proxies on behalf of our Board. Morrow may solicit the return of proxies, either by mail, telephone, telecopy, e-mail or through personal contact. The fees of Morrow as well as the reimbursement of expenses of Morrow will be borne by us. Our officers, directors, and employees may also solicit proxies personally or in writing, by telephone, e-mail, or otherwise. These officers and employees will not receive additional compensation but will be reimbursed for out-of-pocket expenses. Brokerage houses and other custodians, nominees, and fiduciaries, in connection with shares of the Common Stock registered in their names, will be asked to forward solicitation material to the beneficial owners of shares of Common Stock. We will reimburse brokerage houses and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation materials and collecting voting instructions.

 

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Do I have any dissenters’ or appraisal rights or cumulative voting rights with respect to any of the matters to be voted on at the Special Meeting?

 

No. None of our stockholders have any dissenters’ or appraisal rights or cumulative voting rights with respect to the matter to be voted on at the Special Meeting.

 

Where can I find the voting results of the Special Meeting?

 

The Company expects to publish the voting results of the Special Meeting in a Current Report on Form 8-K, which it expects to file with the SEC within four business days following the date of the Special Meeting.

 

The information provided above in this “Question and Answer” format is for your convenience only and is merely a summary of the information contained in this Proxy Statement. We urge you to carefully read this entire Proxy Statement, including the documents we refer to in this Proxy Statement. If you have any questions, or need additional material, please feel free to contact the firm assisting us in the solicitation of proxies, Morrow Sodali, if you have any questions or need assistance in voting your shares. Banks and brokers may call Morrow Sodali at 203-658-9400. Shareholders may call Morrow Sodali toll-free at 1-800-662-5200 or may send an email to [email protected].

 

How many shares of Common Stock and Preferred Stock are outstanding?

 

As of May 7, 2021, there are 39,166,528 shares of Common Stock, 4,697.6328 shares of Series F Preferred Stock (representing 7,829,388 shares of Common Stock on an as-converted basis for purposes of voting on the Reverse Stock Split Proposal), and 7,665 shares of Series G Preferred Stock (including shares of both Series G Convertible Preferred Stock and Series G-1 Convertible Preferred Stock, and representing 7,665,000 shares of Common Stock on a fully-converted basis for purposes of voting on the Reverse Stock Split Proposal) outstanding.

 

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PROPOSAL 1 - APPROVAL OF THE REVERSE STOCK SPLIT PROPOSAL

 

Reasons for the Reverse Stock Split Amendment

 

Maintain Nasdaq Listing

 

On the date of the mailing of this proxy statement, our Common Stock was listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “STAF.” The continued listing requirements of Nasdaq, among other things, require that our Common Stock must maintain a closing bid price in excess of $1.00 per share. On April 27, 2021, we received a letter from Nasdaq noting the Company’s failure to maintain a minimum bid price of $1 per share for 30 consecutive trading days. Nasdaq rules provide an initial 180-day period within which the Company may regain compliance by achieving ten consecutive trading days with a closing bid of $1. If the Company is not able to regain compliance during the initial 180 day period, Nasdaq will grant an additional 180 day period, provided the Company meets the applicable market value of publicly held shares requirement for continued listing, meets all other applicable standards for initial listing other than bid price, and notifies Nasdaq of its intent to cure the deficiency and its willingness to effect a reverse stock split should it become necessary. However, if it appears to Nasdaq that the Company will be unable to regain compliance after the additional 180 day cure period, or if the Company is not otherwise eligible for the additional 180 day cure period, Nasdaq will provide notice that our Common Stock will be subject to delisting. If our Common Stock is delisted from Nasdaq, the Board believes that the trading market for our Common Stock could become significantly less liquid, which could reduce the trading price of our Common Stock and increase the transaction costs of trading in shares of our Common Stock.

 

If the Reverse Stock Split Amendment is effected, it would cause a decrease in the total number of shares of our Common Stock outstanding and increase the market price of our Common Stock. The Board intends to effect the Reverse Stock Split only if it believes that a decrease in the number of shares outstanding is in the best interests of the Company and our stockholders and is likely to improve the trading price of our Common Stock and improve the likelihood that we will be allowed to maintain our listing on Nasdaq. Accordingly, our Board approved the Reverse Stock Split as being in the best interests of the Company.

 

Additional Authorized and Unissued Shares of Common Stock

 

On February 12, 2021, we closed a public offering (the “February 2021 Offering”) of 20,851,199 shares of our Common Stock at an offering price of price of $0.90 per share, as well as pre-funded warrants to purchase 1,004,081 shares of Common Stock to certain purchasers at a purchase price of $0.8999 per pre-funded warrant (equal to the price per share at which shares of Common Stock were sold to the public in the February 2021 Offering, minus the exercise price of $0.0001 for each pre-funded warrant). While the Board believes that the February 2021 Offering provided the Company with much needed equity financing, the February 2021 Offering required us to utilize all of the remaining authorized shares of Common Stock that were unreserved and available for issuance.

 

The Board believes that unless we obtain stockholder approval to effect the Reverse Stock Split Amendment, we will be severely limited by the inability to issue additional shares of Common Stock in connection with future capital raising transactions or strategic transactions. This may cause a delay in our future capital raising or other strategic transactions and may have a material adverse effect on our business and financial condition. Accordingly, our Board approved the Reverse Stock Split as being in the best interests of the Company.

 

As of May 7, 2021, 39,166,528 shares of Common Stock were outstanding, with the remaining 833,472 shares of authorized Common Stock reserved for issuance. As of May 7, 2021, we had reserved, pursuant to various equity award plans, 162,100 shares of Common Stock, of which 76,500 were reserved for options granted and outstanding and 85,600 were reserved for future grants to our employees and Board. In addition, as of that date, we had outstanding warrants to purchase up to 671,372 shares of Common Stock.

 

In addition to the above, as of May 7, 2021, 7,829,388 shares of Common Stock were issuable upon the conversion of the Series F Preferred Stock (which may only be converted upon the Company amending its Certificate of Incorporation to effect a reverse stock split within a range of 2-into-1 to up to 20-into-1 to be determined by the Board, which must be in a ratio sufficient to provide for the full conversion of the Series F Preferred Stock, the full exercise of the Jackson Warrants and the satisfaction of the minimum bid requirements of the Nasdaq Capital Market (the “Reverse Stock Split Condition”)), and 8,570,507 shares of Common Stock were issuable upon the conversion of the Series G Preferred Stock and the exercise of warrants (the “Jackson Warrants”) owned by Jackson Investment Group, LLC (“Jackson”). As further described below under “Jackson Waiver,” Jackson temporarily waived its right to convert or exercise such securities in order to facilitate the February 2021 Offering.

 

Thus, as of the Record Date, we had zero shares of authorized common stock remaining that were unissued and unreserved for issuance.

 

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Jackson Waiver

 

On February 5, 2021, we received a waiver from Jackson (the “Jackson Waiver”) in connection with the February 2021 Offering. As part of the Jackson Waiver, Jackson agreed that it would not convert any shares of the Base Series E Preferred Stock or Series E-1 Preferred Stock into shares of our Common Stock or exercise any Jackson Warrants until April 6, 2021, in order to allow us to utilize the authorized shares of Common Stock otherwise reserved for such issuances in the February 2021 Offering. Jackson was the sole holder of our outstanding shares of Base Series E Preferred Stock and Series E-1 Preferred Stock, and is the sole holder of our outstanding shares of Series G Preferred Stock, issued in exchange for the Series E Preferred Stock pursuant to the Exchange (as defined herein). This agreement was subsequently extended, most recently by the letter agreement between the Company and Jackson, dated May 6, 2021, pursuant to which Jackson extended the waiver to June 30, 2021.

 

As of May 7, 2021, without giving effect to such agreement not to exercise or convert, and giving effect to the recent exchange between the Company and Jackson of its shares of Base Series E Preferred Stock and Series E-1 Preferred Stock for the same number of Series G Convertible Preferred Stock and Series G-1 Convertible Preferred Stock respectively, consummated on May 6, 2021 (the “Exchange”), 1,493,000 shares of Common Stock were issuable upon conversion of the 1,493 shares of Series G-1 Preferred Stock outstanding, 6,172,000 shares of Common Stock were issuable after October 31, 2022 upon conversion of the 6,172 shares of Series G Convertible Preferred Stock outstanding, and 905,508 shares of Common Stock were issuable upon the conversion of the Jackson Warrants.

 

Under the terms of the Jackson Waiver, we agreed to take all actions necessary to cause a meeting of stockholders to be held as soon as is reasonably possible and to present at such meeting a proposal to increase the number of authorized shares of Common Stock to at least a total of 100,000,000 shares, and to use our reasonable best efforts to solicit votes of our stockholders in favor of such proposal. Pursuant to such agreement, on March 1, 2021 we filed a proxy statement with a proposal to effect the foregoing, with a special meeting date set for April 5, 2021, later adjourned to April 20, 2021. The proposal to increase the number of authorized shares of Common Stock to at least a total of 100,000,000 shares was not successful.

 

Series F Convertible Preferred Stock

 

As of May 7, 2021, the Series F Preferred Stock is convertible into an aggregate of approximately 7,829,388 shares of Common Stock at a conversion price of $0.60 per share, subject to certain ownership limitations, upon the occurrence of the Reverse Stock Split Condition. Under the terms of the securities purchase agreement entered into in connection with the sale of the Series F Preferred Stock, we are required to hold a special meeting of shareholders by June 22, 2021 for the purpose of obtaining stockholder approval of the Reverse Stock Split Amendment.

 

The Series F Preferred Stock is only entitled to dividends in the event dividends are paid on our Common Stock and will not have any preferences over our Common Stock, including liquidation rights.

 

Subject to certain beneficial ownership limitations, the Series F Preferred Stock shall vote on an “as converted” basis on all matters submitted to the holders of Common Stock for approval; provided, however, that solely for purposes of determining the number of votes that the Series F Preferred Stock is entitled to, the “Conversion Price” of the Series F Preferred Stock shall be deemed $0.725.

 

Series G Convertible Preferred Stock and Series G-1 Convertible Preferred Stock

 

The Series G Preferred Stock ranks senior to each of the Company’s Common Stock, Series A Convertible Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible Preferred Stock, and any other classes and series of stock of the Company now or hereafter authorized, issued or outstanding, which by their terms expressly provide that they are junior to the Series G Preferred Stock or which do not specify their rank (which includes the Series F Preferred Stock). Each share of Series G Preferred Stock is initially convertible into 1,000 shares of Common Stock at any time from and after, (i) with respect to the Series G Convertible Preferred Stock, the earlier of October 31, 2022 or the occurrence of a Preferred Default (as defined in the Certificate of Designation of Series G Preferred Stock (the “Certificate of Designation”)) and, (ii) with respect to the Series G-l Convertible Preferred Stock, October 31, 2020. A holder of Series G Preferred Stock is not required to pay any additional consideration in exchange for conversion of the Series G Preferred Stock into the Company’s Common Stock.

 

The Series G Convertible Preferred Stock carries monthly dividend rights of (a) cash dividends accruing (i) at an annual rate per share equal to 12% from the date of issuance (plus any accrued dividends with respect to the Series E Convertible Preferred Stock unpaid as of the date of the Exchange) and (ii) 17% after the occurrence of a Preferred Default, and (b) a dividend payable in shares of Series G-1 Convertible Preferred Stock. The shares of Series G-1 Convertible Preferred Stock have all the same terms, preferences and characteristics as the Series G Convertible Preferred Stock (including, without limitation, the right to receive cash dividends), except Series G-1 Convertible Preferred Stock are mandatorily redeemable by the Company within thirty (30) days after written demand received from any holder at any time after the earlier of the occurrence of a Preferred Default or September 30, 2022, for a cash payment equal to the Liquidation Value (as defined in the Certificate of Designation) plus any accrued and unpaid dividends thereon.

 

As of May 7, 2021, 6,172,000 shares and 1,493,000 shares of Common Stock were issuable upon the potential conversion of Series G Convertible Preferred Stock and Series G-1 Convertible Preferred Stock, respectively. The Series G Preferred Stock shall vote on an “as converted” basis on all matters submitted to the holders of Common Stock for approval.

 

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Potential Consequences if the Reverse Stock Split Proposal is Not Approved

 

If the Reverse Stock Split Proposal is not approved by our stockholders, our Board will not have the authority to effect the Reverse Stock Split Amendment to, among other things, facilitate the continued listing of our Common Stock on Nasdaq by increasing the per share trading price of our Common Stock to help ensure a share price high enough to satisfy the $1.00 per share minimum bid price requirement. Any inability of our Board to effect the Reverse Stock Split could expose us to delisting from Nasdaq. In addition, our financing alternatives will be limited by the lack of any available unissued and unreserved authorized shares of Common Stock, and stockholder value may be harmed by this limitation. Moreover, our future success depends upon our ability to attract, retain and motivate highly-skilled employees, and if this proposal is not approved by our stockholders, the lack of any available unissued and unreserved authorized shares of Common Stock to provide future equity incentive opportunities could adversely impact our ability to achieve these goals. In short, if our stockholders do not approve this proposal, we may not be able to maintain our Nasdaq listing, access the capital markets, complete corporate collaborations, partnerships or other strategic transactions, attract, retain and motivate employees, and pursue other business opportunities integral to our growth and success.

 

Additionally, in the event we may fail to secure the requisite stockholder approval for the Reverse Stock Split Proposal or to effect the Reverse Stock Split Amendment by June 30, 2021, it will result in a “Preferred Default” under the Certificate of Designation, which would result in the higher interest rate of 17% being triggered, which would have an adverse effect on our business, financial condition and results of operations.

 

Additionally, the Certificate of Designation only permits us to pay a quarterly cash dividend of one cent per share of issued and outstanding common stock, provided, that such cash dividend does not exceed $100,000 in the aggregate per fiscal quarter. We may not pay such dividends if any Preferred Default exists under the Certificate of Designation.

 

Management has historically been able to obtain from Jackson waivers of any non-compliance and management expects to continue to be able to obtain necessary waivers in the event of future non-compliance; however, there can be no assurance that we will be able to obtain such waivers. Furthermore, Jackson may require fees and expenses to be paid or other changes to terms in connection with waivers or amendments. If we are forced to refinance these borrowings on less favorable terms, our results of operations and financial condition could be adversely affected by increased costs and rates.

 

Effective Time

 

If the Reverse Stock Split proposal is approved by our stockholders, the Board will have the discretion to implement the Reverse Stock Split or to not effect the Reverse Stock Split at all. The Board currently intends to effect the Reverse Stock Split. If the trading price of our Common Stock increases without effecting the Reverse Stock Split, the Reverse Stock Split may not be necessary. Following the Reverse Stock Split, if implemented, there can be no assurance that the market price of our Common Stock will rise in proportion to the reduction in the number of outstanding shares resulting from the Reverse Stock Split or that the market price of the post-split Common Stock can be maintained above $1.00. There also can be no assurance that our Common Stock will not be delisted from Nasdaq for other reasons.

 

If our stockholders approve the Reverse Stock Split proposal at the special meeting, the Reverse Stock Split will be effected, if at all, only upon a determination by the Board that the Reverse Stock Split is in the best interests of the Company and its stockholders at that time. No further action on the part of the stockholders will be required to either effect or abandon the Reverse Stock Split. If our Board does not implement the Reverse Stock Split prior to our 2021 annual stockholder meeting, the authority granted in this proposal to implement the Reverse Stock Split will terminate and the Reverse Stock Split Amendment will be abandoned.

 

The market price of our Common Stock is dependent upon our performance and other factors, some of which are unrelated to the number of shares outstanding. If the Reverse Stock Split is effected and the market price of our Common Stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of the Reverse Stock Split. Furthermore, the reduced number of shares that will be outstanding after the Reverse Stock Split could significantly reduce the trading volume and otherwise adversely affect the liquidity of our Common Stock.

 

We have not proposed the Reverse Stock Split in response to any effort of which we are aware to accumulate our shares of Common Stock or obtain control of the Company, nor is it a plan by management to recommend a series of similar actions to our Board or our stockholders. Notwithstanding the decrease in the number of outstanding shares of Common Stock following the Reverse Stock Split, our Board does not intend for this transaction to be the first step in a “going private transaction” within the meaning of Rule 13e-3 of the Securities Exchange Act of 1934 (the “Exchange Act”).

 

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Anti-Takeover Effects

 

In addition, we have not proposed the Reverse Stock Split, with its corresponding increase in the authorized and unissued number of shares of Common Stock, with the intention of using the additional shares for anti-takeover purposes, although we could theoretically use the additional shares to make more difficult or to discourage an attempt to acquire control of the Company.

 

We do not believe that our officers or directors have interests in this proposal that are different from or greater than those of any other of our stockholders.

 

Effects of the Reverse Stock Split on Common Stock

 

Pursuant to the Reverse Stock Split, each holder of our Common Stock outstanding immediately prior to the effectiveness of the Reverse Stock Split (“Old Common Stock”) will become the holder of fewer shares of our Common Stock (“New Common Stock”) after consummation of the Reverse Stock Split.

 

Although the Reverse Stock Split will not, by itself, impact our assets or prospects, the Reverse Stock Split could result in a decrease in the aggregate market value of our Common Stock. The Board believes that this risk is outweighed by the benefits of continued listing of our Common Stock on the Nasdaq exchange.

 

If effected, the Reverse Stock Split will result in some stockholders owning “odd-lots” of less than 100 shares of Common Stock. Brokerage commissions and other costs of transactions in odd-lots are generally higher than the costs of transactions in “round-lots” of even multiples of 100 shares.

 

Based on 39,166,528 shares of our Common Stock outstanding as of the date hereof, the following table reflects the approximate number of shares of our Common Stock that would be outstanding as a result of the Reverse Stock Split under certain possible exchange ratios.

 

Proposed Ratio (Old Common Stock:
New Common Stock)
  Percentage Reduction in
Outstanding Common Stock
   Approximate Number of Shares of
Common Stock to be Outstanding
after the Reverse Stock Split
 
2:1   50%   19,583,264 
3:1   66.67%   13,055,509 
4:1   75%   9,791,632 
5:1   80%   7,833,306 
6:1   83.33%   6,527,755 
7:1   85.71%   5,595,218 
8:1   87.5%   4,895,816 
9:1   88.88%   4,351,836 
10:1   90%   3,916,653 
11:1   90.91%   3,560,593 
12:1   91.67%   3,263,877 
13:1   92.31%   3,012,810 
14:1   92.86%   2,797,609 
15:1   93.33%   2,611,102 
16:1   93.75%   2,447,908 
17:1   94.12%   2,303,913 
18:1   94.44%   2,175,918 
19:1   94.74%   2,061,396 
20:1   95%   1,958,326 

 

The Reverse Stock Split will affect all stockholders equally and will not affect any stockholder’s proportionate equity interest in the Company, except for those stockholders who receive an additional share of our Common Stock in lieu of a fractional share. None of the rights currently accruing to holders of our Common Stock will be affected by the Reverse Stock Split. Following the Reverse Stock Split, each share of New Common Stock will entitle the holder thereof to one vote per share and will otherwise be identical to Old Common Stock. The Reverse Stock Split also will have no effect on the number of authorized shares of our Common Stock. The shares of New Common Stock will be fully paid and non-assessable.

 

The par value per share of the Common Stock will remain unchanged at $0.00001 per share after the Reverse Stock Split. As a result, on the effective date of the Reverse Stock Split, if any, the stated capital on our balance sheet attributable to the Common Stock will be reduced proportionately based on the Reverse Stock Split ratio, from its present amount, and the additional paid-in capital account will be credited with the amount by which the stated capital is reduced. After the Reverse Stock Split, net income or loss per share and other per share amounts will be increased because there will be fewer shares of our Common Stock outstanding. In future financial statements, net income or loss per share and other per share amounts for periods ending before the Reverse Stock Split would be recast to give retroactive effect to the Reverse Stock Split. As described below under “Effects of the Reverse Stock Split on Outstanding Equity Awards and Warrants to Purchase Common Stock,” the per share exercise price of outstanding option awards and warrants would increase proportionately, and the number of shares of our Common Stock issuable upon the exercise of outstanding options and warrants, or that relate to other equity awards (e.g., restricted stock awards) would decrease proportionately, in each case based on the Reverse Stock Split ratio selected by the Board. The Company does not anticipate that any other accounting consequences would arise as a result of the Reverse Stock Split.

 

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We are currently authorized to issue a maximum of 40,000,000 shares of our Common Stock. As of the Record Date, there were 39,166,528 shares of our Common Stock issued and outstanding. Although the number of authorized shares of our Common Stock will not change as a result of the Reverse Stock Split, the number of shares of our Common Stock issued and outstanding will be reduced in proportion to the ratio selected by the Board. Thus, the Reverse Stock Split will effectively increase the number of authorized and unissued shares of our Common Stock available for future issuance by the amount of the reduction effected by the Reverse Stock Split. Conversely, with respect to the number of shares reserved for issuance under, for example, our 2020 Omnibus Incentive Plan (the “2020 Plan”), our Board will proportionately reduce such reserve in accordance with the terms of the 2020 Plan. As of the Record Date, there were 750,000 shares of Common Stock reserved for issuance under the 2020 Plan, of which 718,997 remained available for future awards, and following the Reverse Stock Split, if any, such reserve will be reduced to between 37,500 - 375,000 shares of Common Stock, of which between approximately 35,950 - 359,499 shares will be available for future awards.

 

Following the Reverse Stock Split, the Board will have the authority, subject to applicable securities laws, to issue all authorized and unissued shares without further stockholder approval, upon such terms and conditions as the Board deems appropriate. We do not currently have any plans, proposals or understandings to issue the additional shares that would be available if the Reverse Stock Split is approved and effected, but some of the additional shares underlie warrants or shares of convertible preferred stock, which could be exercised or converted after the Reverse Stock Split Amendment is effected.

 

Effects of the Reverse Stock Split on Outstanding Equity Awards and Warrants to Purchase Common Stock

 

If the Reverse Stock Split is effected, all outstanding options entitling their holders to purchase shares of our Common Stock, as well as any other equity awards granted pursuant to the 2020 Plan (e.g., restricted stock awards) or pursuant to the 2014 Equity Incentive Plan (the “2014 Plan”), the 2015 Omnibus Incentive Plan (the “2015 Plan”), or the 2016 Omnibus Incentive Plan (the “2016 Plan”, and together with the 2014 Plan, the 2015 Plan, and the 2020 Plan referred to herein as, the “Incentive Plans”), will be proportionately reduced, in accordance with the terms of the applicable Incentive Plan, in the same ratio as the reduction in the number of shares of outstanding Common Stock, except that any fractional shares resulting from such reduction will be rounded down to the nearest whole share to comply with the requirements of Code Sections 409A and 424. Correspondingly, the per share exercise price of any such options will be increased in direct proportion to the Reverse Stock Split ratio (rounded up to the nearest whole cent), so that the aggregate dollar amount payable for the purchase of the shares subject to the options will remain materially unchanged. For example, assuming that we effect the Reverse Stock Split at a ratio of 1-for-5, and that an optionee holds options to purchase 1,033 shares of our Common Stock at an exercise price of $1.00 per share, upon the effectiveness of the Reverse Stock Split at such ratio, the number of shares of the Common Stock subject to that option would be reduced to 206 (rounded down from 206.6 to account for fractional shares) and the exercise price would be proportionately increased to $5.00 per share.

 

As of May 7, 2021, there are 1,576,879 warrants to purchase Common Stock outstanding, representing 1,576,879 shares of Common Stock at a weighted average exercise price of $0.99 per share. If the Reverse Stock Split is effected, the outstanding warrants will automatically be reduced in the same ratio as the reduction in the number of shares of outstanding Common Stock. Correspondingly, the per share exercise price of such warrants will be increased in direct proportion to the Reverse Stock Split ratio, so that the aggregate dollar amount payable for the purchase of the shares subject to the warrants will remain unchanged.

 

Effects of the Reverse Stock Split on Preferred Stock

 

As of May 7, 2021, there are 4,697.6328 shares of Series F Preferred Stock, representing 7,829,388 shares of Common Stock, and 7,665 shares of Series G Preferred Stock (including shares of both Series G Convertible Preferred Stock and Series G-1 Convertible Preferred Stock) representing 7,665,000 shares of Common Stock. If the Reverse Stock Split is effected, each of our outstanding series of convertible preferred stock have adjustment provisions such that the number of shares of Common Stock issuable upon conversion of such preferred stock shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding.

 

Shares of Common Stock Issued and Outstanding

 

With the exception of the number of shares issued and outstanding, the rights and preferences of the shares of our Common Stock prior and subsequent to the Reverse Stock Split will remain the same. After the effectiveness of the Reverse Stock Split, we do not anticipate that our financial condition, the percentage ownership of management, the number of our stockholders, or any aspect of our business would materially change as a result of the Reverse Stock Split.

 

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Our Common Stock is currently registered under Section 12(b) of the Exchange Act, and as a result, we are subject to the periodic reporting and other requirements of the Exchange Act. If effected, the proposed Reverse Stock Split will not affect the registration of our Common Stock under the Exchange Act or our periodic or other reporting requirements thereunder.

 

Increase of Shares of Common Stock Available for Future Issuance

 

As a result of the Reverse Stock Split, there will be a reduction in the number of shares of our Common Stock issued and outstanding, and an associated increase in the number of authorized shares that would be unissued and available for future issuance after the Reverse Stock Split. Such shares could be used for any proper corporate purpose approved by the Board including, among other purposes, future financing transactions.

 

Holders of our Common Stock have no preemptive or other subscription rights.

 

Effectiveness of the Reverse Stock Split

 

The Reverse Stock Split, if approved by our stockholders, will become effective upon the filing with the Secretary of State of the State of Delaware of a certificate of amendment to our amended and restated certificate of incorporation in substantially the form of the Reverse Stock Split Amendment attached to this proxy statement as Annex A. The exact timing of the filing of the Reverse Stock Split Amendment will be determined by the Board based upon its evaluation of when such action will be most advantageous to the Company and our stockholders. The Board reserves the right, notwithstanding stockholder approval and without further action by our stockholders, to elect not to proceed with the Reverse Stock Split if, at any time prior to filing such Reverse Stock Split Amendment, the Board, in its sole discretion, determines that it is no longer in the best interests of the Company and our stockholders. The Board currently intends to effect the Reverse Stock Split. If our Board does not implement the Reverse Stock Split prior to our 2021 annual stockholder meeting, the authority granted in this proposal to implement the Reverse Stock Split will terminate and the Reverse Stock Split Amendment to effect the Reverse Stock Split will be abandoned.

 

Effect on Registered and Beneficial Stockholders

 

Upon the Reverse Stock Split, the Company intends to treat stockholders holding shares of our Common Stock in “street name” (that is, held through a bank, broker or other nominee) in the same manner as stockholders of record whose shares of Common Stock are registered in their names. Banks, brokers or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding shares of our Common Stock in “street name”; however, these banks, brokers or other nominees may apply their own specific procedures for processing the Reverse Stock Split. If you hold your shares of our Common Stock with a bank, broker or other nominee, and have any questions in this regard, the Company encourages you to contact your nominee.

 

Effect on “Book-Entry” Stockholders of Record

 

The Company’s stockholders of record may hold some or all of their shares electronically in book-entry form. These stockholders will not have stock certificates evidencing their ownership of our Common Stock. They are, however, provided with a statement reflecting the number of shares of Common Stock registered in their accounts.

 

If you hold registered shares of Old Common Stock in a book-entry form, you do not need to take any action to receive your shares of New Common Stock in registered book-entry form, if applicable. A transaction statement will automatically be sent to your address of record as soon as practicable after the effective time of the Reverse Stock Split indicating the number of shares of New Common Stock you hold.

 

Effect on Registered Certificated Shares

 

Some stockholders of record hold their shares of our Common Stock in certificate form or a combination of certificate and book-entry form. If any of your shares of our Common Stock are held in certificate form, you will receive a transmittal letter from the Company’s transfer agent as soon as practicable after the effective time of the Reverse Stock Split, if any. The transmittal letter will be accompanied by instructions specifying how to exchange your certificate representing the Old Common Stock for a statement of holding or a certificate of New Common Stock.

 

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STOCKHOLDERS SHOULD NOT DESTROY ANY SHARE CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.

 

Fractional Shares

 

Fractional shares will not be issued in connection with the Reverse Stock Split. Each stockholder who would otherwise hold a fractional share as a result of the Reverse Stock Split will receive one share of Common Stock in lieu of such fractional share.

 

Appraisal Rights

 

Under the Delaware General Corporation Law, our stockholders are not entitled to appraisal or dissenter’s rights with respect to the Reverse Stock Split, and we will not independently provide our stockholders with any such rights.

 

Regulatory Approvals

 

The Reverse Stock Split will not be consummated, if at all, until after approval of the Company’s stockholders is obtained. The Company is not obligated to obtain any governmental approvals or comply with any state or federal regulations prior to consummating the Reverse Stock Split other than the filing of the Reverse Stock Split Amendment with the Secretary of State of the State of Delaware.

 

Certain Federal Income Tax Consequences

 

The following is a discussion of certain material U.S. federal income tax consequences of the Reverse Stock Split to U.S. holders (as defined below). This discussion is included for general information purposes only and does not purport to address all aspects of U.S. federal income tax law that may be relevant to U.S. holders in light of their particular circumstances. This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), and current Treasury regulations, administrative rulings and court decisions, all of which are subject to change, possibly on a retroactive basis, and any such change could affect the continuing validity of this discussion.

 

STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR FEDERAL, STATE, LOCAL, OR FOREIGN TAX CONSEQUENCES TO THEM OF THE REVERSE STOCK SPLIT.

 

This discussion does not address tax consequences to stockholders that are subject to special tax rules, such as banks, insurance companies, regulated investment companies, personal holding companies, U.S. holders whose functional currency is not the U.S. dollar, partnerships (or other flow-through entities for U.S. federal income purposes and their partners or members), persons who acquired their shares or equity awards in connection with employment or other performance of services (who will not incur a taxable event in connection with the reverse stock split), broker-dealers, foreign entities, nonresident alien individuals and tax-exempt entities. This summary also assumes that the Old Common Stock shares were, and the New Common stock shares will be, held as a “capital asset,” as defined in Section 1221 of the Code.

 

As used herein, the term “U.S. holder” means a holder that is, for U.S. federal income tax purposes:

 

  an individual citizen or resident of the United States;
  a corporation or other entity taxed as a corporation created or organized in or under the laws of the United States or any political subdivision thereof;
  an estate the income of which is subject to U.S. federal income tax regardless of its source; or
  a trust (A) if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more “U.S. persons” (as defined in the Code) have the authority to control all substantial decisions of the trust or (B) that has a valid election in effect to be treated as a U.S. person.

 

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Other than with respect to any stockholder that receives a full share for a fractional share (which will not apply to outstanding equity awards granted under the Incentive Plans), a stockholder generally will not recognize a gain or loss by reason of such stockholder’s receipt of shares of New Common Stock pursuant to the Reverse Stock Split solely in exchange for shares of Old Common Stock held by such stockholder immediately prior to the Reverse Stock Split. A stockholder’s aggregate tax basis in the shares of New Common Stock received pursuant to the Reverse Stock Split (including any fractional shares) will equal the stockholder’s aggregate basis in the Old Common Stock exchanged therefore and will be allocated among the shares of New Common Stock received in the Reverse Stock Split on a pro-rata basis. Stockholders who have used the specific identification method to identify their basis in the shares of Old Common Stock held immediately prior to the Reverse Stock Split should consult their own tax advisers to determine their basis in the shares of New Common Stock received in exchange therefor in the Reverse Stock Split. A stockholder’s holding period in the shares of New Common Stock received pursuant to the Reverse Stock Split will include the stockholder’s holding period in the shares of Old Common Stock surrendered in exchange therefore, provided the shares of Old Common Stock surrendered are held as capital assets at the time of the Reverse Stock Split.

 

No gain or loss will be recognized by us as a result of the Reverse Stock Split.

 

Required Vote

 

The approval of the proposal to effect the Reverse Stock Split will require the affirmative vote of the holders of a majority of the shares of the Company’s outstanding Common Stock. Because the vote is based on the total number of shares outstanding rather than the votes cast at the Special Meeting, your failure to vote on the Reverse Stock Split Proposal has the same effect as a vote against the Reverse Stock Split.

 

With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their own discretion.

 

If you sign and return your proxy card but do not specify how you want to vote your shares, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board.

 

Recommendation

 

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS

 

VOTE “FOR” APPROVAL OF THE REVERSE STOCK SPLIT.

 

13
 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth certain information with respect to the beneficial ownership of our Common Stock as of May 7, 2021 for: (i) each of our directors; (ii) each of our executive officers; (iii) all of our directors and executive officers as a group; and (iv) all persons, to our knowledge, that are the beneficial owners of more than five percent (5%) of the outstanding shares of Common Stock. Beneficial ownership is determined in accordance with the rules of the SEC, and includes voting or investment power with respect to the securities.

 

Except as indicated in footnotes to this table, we believe each person named in this table has sole voting and investment power with respect to the shares of capital stock set forth opposite such person’s name. Percentage ownership is based on 39,166,528 shares of Common Stock outstanding on May 7, 2021.

 

Name of Beneficial Owner  Address  Common Stock Beneficially Owned (1)   Percent of Common Stock 
Brendan Flood (2)  3 London Wall Buildings, London Wall, London, EC2M 5SY   714,712    1.8%
Khalid Anwar (3)  641 Lexington Avenue, Suite 2701 New York, NY 10022   10,000    * 
Dimitri Villard (4)  8721 Santa Monica Blvd, Suite 100 Los Angeles, CA 90069   44,350    * 
Jeff Grout (5)  3 London Wall Buildings, London Wall, London, EC2M 5SY   44,934    * 
Nicholas Florio (6)  Citrin Cooperman & Company LLP 529 Fifth Avenue New York, NY 10017   45,499    * 
Alicia Barker (7)  641 Lexington Avenue, Suite 2701 New York, NY 10022   76,800    * 
              
Directors and officers as a group      936,295    2.4%
              
Greater than 5% Holders:             
Jackson Investment Group, LLC (8)  2655 Northwinds Parkway Alpharetta, GA 30009   4,467,204    10.7%

 

  (1) Shares of common stock beneficially owned and the respective percentages of beneficial ownership of common stock assume the exercise of all options and other securities convertible into common stock beneficially owned by such person or entity currently exercisable or exercisable within 60 days of the Record Date, except as otherwise noted. Shares issuable pursuant to the exercise of stock options and other securities convertible into common stock exercisable within 60 days are deemed outstanding and held by the holder of such options or other securities for computing the percentage of outstanding common stock beneficially owned by such person, but are not deemed outstanding for computing the percentage of outstanding common stock beneficially owned by any other person.
     
  (2) Includes 695,512 shares of common stock owned and 19,200 options that are currently exercisable or may be exercised by Mr. Flood within 60 days of May 7, 2021.
     
  (3) Mr. Anwar owns 10,000 shares of common stock.
     
  (4) Includes 5,550 shares of common stock held personally by Mr. Villard and 37,800 shares held through Byzantine Productions, Inc., for which Mr. Villard is deemed the beneficial owner with sole voting and dispositive power over the securities held by the entity, and Mr. Villard holds options to purchase 1,000 shares.
     
  (5) Mr. Grout owns 43,934 shares of common stock and holds options to purchase 1,000 shares of stock.
     
  (6) Includes 4,200 shares of common stock held personally by Mr. Florio and 40,299 shares of common stock and options to purchase 1,000 shares of common stock held in the name of Citrin Cooperman for which Mr. Florio is deemed the beneficial owner with sole voting and dispositive power over the securities held by the firm.
     
  (7) Ms. Barker owns 76,800 shares of common stock.
     
  (8) Includes 2,068,696 shares of common stock owned, 905,508 shares of common stock issuable upon the exercise of warrants with an exercise price of $1.00, and 1,493,000 shares of common stock issuable upon conversion of 1,493 shares of Series G-1 Preferred Stock. Does not give effect to the Limited Waiver and Agreement executed by Jackson and the Company on February 5, 2021 and extended on each of April 8, 2021 and May 6, 2021.

 

14
 

 

REQUIREMENTS FOR ADVANCE NOTIFICATION OF NOMINATIONS
AND STOCKHOLDER PROPOSALS

 

Pursuant to Rule 14a-8 under the Exchange Act, a stockholder proposal submitted for inclusion in our proxy statement for the 2021 annual meeting must be received no later than April 16, 2021. However, pursuant to such rule, if the 2021 Annual Meeting is held on a date that is before August 30, 2021 or after October 29, 2021, then a stockholder proposal submitted for inclusion in our proxy statement for the 2021 Annual Meeting must be received by us a reasonable time before we begin to print and mail our proxy statement for the 2021 Annual Meeting. Stockholder proposals should be addressed to the Company at 641 Lexington Avenue, Suite 2701, New York NY 10022.

 

Proposals submitted outside Rule 14a-8 of the Exchange Act must comply with our bylaws. To be timely in connection with our next annual meeting, a stockholder proposal concerning director nominations or other business must be received by the Company at its principal executive offices between June 1, 2021 and July 1, 2021; provided, however, if and only if the 2021 Annual Meeting is not scheduled to be held before August 30, 2021 or after December 8, 2021, such stockholder’s notice must be delivered not earlier than 120 days prior to the date of the 2021 annual meeting and not later than the later of (A) the tenth day following the date of the public announcement of the date of the 2021 Annual Meeting or (B) the date which is 90 days prior to the date of the 2021 Annual Meeting. Recommendations from stockholders which are received after the applicable deadline likely will not be considered timely for consideration by our Nominating and Corporate Governance Committee for next year’s annual meeting.

 

15
 

 

OTHER MATTERS

 

The Board does not intend to bring any other matters before the Special Meeting and has no reason to believe any other matters will be presented.

 

If you and other residents at your mailing address own shares in street name, your broker or bank may have sent you a notice that your household will receive only one copy of proxy materials for each company in which you hold shares through that broker or bank. This practice of sending only one copy of proxy materials is known as householding. If you did not respond that you did not want to participate in householding, you were deemed to have consented to the process. If the foregoing procedures apply to you, your broker has sent one copy of our Proxy Statement to your address. If you want to receive separate copies of the proxy materials in the future, or you are receiving multiple copies and would like to receive only one copy per household, you should contact your stockbroker, bank or other nominee record holder, or you may contact us at the address or telephone number below. In any event, if you did not receive an individual copy of this Proxy Statement, we will send a copy to you if you address your written request to, or call, the corporate Secretary of Staffing 360 Solutions, Inc., 641 Lexington Avenue, 27th Floor, New York NY 10022, telephone number 646-507-5716.

 

Copies of the documents referred to above that appear on our website are also available upon request by any stockholder addressed to our corporate Secretary, Staffing 360 Solutions, Inc., 641 Lexington Avenue, 27th Floor, New York NY 10022.

 

WHERE YOU CAN FIND ADDITIONAL INFORMATION

 

We are subject to the informational requirements of the Exchange Act and, therefore, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public on the SEC’s website at www.sec.gov. The SEC’s website contains reports, proxy and information statements and other information regarding issuers, such as us, that file electronically with the SEC. You may also read and copy any document we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of its Public Reference Room.

 

16
 

 

Annexes

(see following pages for each Annex referenced in the Proxy Statement)

 

 
 

 

Annex A

 

Proposed Amendment
to the
Amended and Restated Certificate of Incorporation
of
Staffing 360 Solutions, Inc.

 

If the Reverse Stock Split Proposal is approved, the amended and restated certificate of incorporation of Staffing 360 Solutions, Inc. will be amended to add the following as paragraph (e) of Article FOURTH in the form below:

 

“(e). Upon the effectiveness of the filing of this Certificate of Amendment (the “Effective Time”) each share of the Corporation’s common stock, $0.00001 par value per share (the “Old Common Stock”), either issued or outstanding or held by the Corporation as treasury stock, immediately prior to the Effective Time, will be automatically reclassified as (without any further act) into a smaller number of shares such that each two (2) to twenty (20) shares of Old Common Stock issued and outstanding or held by the Company as treasury stock immediately prior to the Effective Time is reclassified into one share of Common Stock, $0.00001 par value per share, of the Corporation (the “New Common Stock”), the exact ratio within such range to be determined by the board of directors of the Corporation prior to the Effective Time and publicly announced by the Corporation (the “Reverse Stock Split”). The Board of Directors shall make provision for the issuance of that number of fractions of New Common Stock such that any fractional share of a holder otherwise resulting from the Reverse Stock Split shall be rounded up to the next whole number of shares of New Common Stock. Any stock certificate that, immediately prior to the Effective Time, represented shares of the Old Common Stock will, from and after the Effective Time, automatically and without the necessity of presenting the same for exchange, represent the number of shares of the New Common Stock into which such shares of Old Common Stock shall have been reclassified plus the fraction, if any, of a share of New Common Stock issued as aforesaid.

 

A-1
 

 

STAFFING 360 SOLUTIONS, INC.

 

THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD

 

The undersigned stockholder hereby appoint(s) Brendan Flood, Khalid Anwar or Nick Koutsivitis, or any of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on this ballot, upon the following items more fully described in the notice of proxy statement for the Special Meeting (receipt of which is hereby acknowledged), all of the shares of common stock of Staffing 360 Solutions, Inc. (the “Company”) that the stockholders are entitled to vote (including any shares of Series F Preferred Stock and/or Series G Preferred Stock, voting on an as-converted basis) at the Special Meeting of the Stockholders to be held at 10:00 a.m. Eastern Time on June 21, 2021, via live webcast at www.virtualshareholdermeeting.com/STAF2021SM, and at any adjournments thereof. The undersigned hereby revokes any proxy or proxies previously given to represent or vote such shares and hereby ratifies and confirms all actions that said proxy, his substitutes, or any of them, may lawfully take in accordance with the terms hereof.

 

The Board of Directors unanimously recommends a vote FOR proposal 1.

 

Proposal 1

 

For

 

Against

 

Abstain

To approve the proposal to authorize the Company’s board of directors, in its discretion but prior to the Company’s 2021 annual stockholder meeting, to amend the Company’s certificate of incorporation to effect a reverse stock split of the Company’s common stock, at a ratio in the range of 1-for-2 to 1-for-20, such ratio to be determined by the Company’s board of directors and included in a public announcement.

 

[_]

 

[_]

 

[_]

 

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.

 

IF NO SUCH DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” PROPOSAL 1.

 

In their discretion, the Proxies (or any of them) are authorized to vote as they deem advisable on such other matters as may properly come before the Special Meeting of Stockholders or any adjournment(s) or postponement(s) thereof.

 

Please mark, sign, date and return this Proxy promptly using the accompanying postage pre-paid envelope.

 

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF STAFFING 360 SOLUTIONS, INC.

 

     
Signature   Date
     
     
Signature if jointly owned    
     
 
Print name (Entity’s name, officer’s name and title if applicable)

 

Please sign exactly as the name appears on your stock certificate. When shares of capital stock are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee, guardian, or corporate officer, please include full title as such. If the shares of capital stock are owned by a corporation, sign in the full corporate name by an authorized officer. If the shares of capital stock are owned by a partnership, sign in the name of the partnership by an authorized officer.

 

PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY

 

IN THE ENCLOSED ENVELOPE

 

A-2
 

 

 

 
 

 

 

 

 



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