Staffing 360 Solutions Announces $4.7 Million Private Placement

Rhea-AI Summary

Staffing 360 Solutions, Inc. (STAF) announced a private placement of 4,697.6328 shares of Series F convertible preferred stock at $1,000 each, along with warrants to purchase 7,829,388 shares of common stock at $0.60 per share. The company expects to raise approximately $4.7 million from the offering. Proceeds will be used for working capital and to repay existing debt. The offering is expected to close around April 23, 2021, and includes a requirement to file a registration statement within 30 days for the resale of common stock underlying the securities.

Positive

• Expected gross proceeds of approximately $4.7 million from the private placement.
• Intended use of proceeds for working capital and debt repayment could strengthen the company's financial position.

Negative

• The Series F Preferred Stock has no preferences over common stock, including liquidation rights.
• The company must meet certain conditions for full conversion of Series F Preferred Stock and exercise of Warrants.

NEW YORK, April 21, 2021 (GLOBE NEWSWIRE) -- Staffing 360 Solutions, Inc. (NASDAQ: STAF) (“Staffing” or “the Company”), a staffing company executing an international buy-integrate-build strategy through the acquisition of staffing organizations in the United States and the United Kingdom, today announced it has entered into a securities purchase agreement with certain institutional investors in connection with a private placement of 4,697.6328 shares of Series F convertible preferred stock (the “Series F Preferred Stock”) at a price of $1,000 per share and warrants to purchase upon to an aggregate of 7,829,388 shares of common stock at an exercise price of $0.60 per share (the “Warrants”). The Company expects to receive gross proceeds from the private placement of approximately $4.7 million. The offering is expected to close on or about April 23, 2021, subject to satisfaction of customary closing conditions.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

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 Company amending its certificate of incorporation to provide for the full conversion of the Series F Preferred Stock, the full exercise of the Warrants and the satisfaction of the minimum bid requirements of the Nasdaq Capital Market (the “Amendment Date”). The Series F Preferred Stock is only entitled to dividends in the event dividends are paid on the Company's common stock and will not have any preferences over the Company's common stock, including liquidation rights. The Warrants are exercisable upon the later of the Amendment Date and six months following the closing of the private placement, and will expire five years following the date that the Warrants first become exercisable.

Staffing intends to use $1,000,000 of the net proceeds received from the offering for working capital purposes and the remaining proceeds will be used to repay existing debt and/or redeem shares of Series E Convertible Preferred Stock.

The offer and sale of the foregoing securities are being made in a transaction not involving a public offering and have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. Accordingly, the securities may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

Under an agreement with the investors, the Company is required to file an initial registration statement with the Securities and Exchange Commission (the “SEC”) covering the resale of the shares of the Company’s common stock underlying the Series F Preferred Stock and the Warrants no later than 30 days after today and to use best efforts to have the registration statement declared effective as promptly as practical thereafter, and in any event no later than 60 days after the Amendment Date.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state.

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. For more information, visit www.staffing360solutions.com.

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. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified, and include, among others, the satisfaction of the conditions to the closing of the private placement and the consummation thereof, statements regarding the intended use of net proceeds from the private placement; consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation; the Company’s ability to retain the listing of its common stock on the Nasdaq Capital Market; the geographic, social and economic impact of COVID-19 on the Company’s ability to conduct its business and raise capital in the future when needed; weakness in general economic conditions and levels of capital spending by customers in the industries the Company serves; weakness or volatility in the financial and capital markets, which may result in the postponement or cancellation of customer capital projects or the inability of the Company’s customers to pay the Company’s fees; the termination of a major customer contract or project; delays or reductions in U.S. government spending; credit risks associated with the Company’s customers; competitive market pressures; the availability and cost of qualified labor; the Company’s level of success in attracting, training and retaining qualified management personnel and other staff employees; changes in tax laws and other government regulations, including the impact of health care reform laws and regulations; the possibility of incurring liability for the Company’s business activities, including, but not limited to, the activities of the Company’s temporary employees; the Company’s performance on customer contracts; negative outcome of pending and future claims and litigation; government policies, legislation or judicial decisions adverse to the Company’s businesses; the Company’s ability to access the capital markets by pursuing additional debt and equity financing to fund its business plan and expenses on terms acceptable to the Company or at all; the Company’s ability to achieve loan forgiveness under Paycheck Protection Program; and the Company’s ability to comply with its contractual covenants, including in respect of its debt agreements, 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. The Company does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. 

Investor Relations Contacts:
Terri MacInnis, VP of IR
Bibicoff + MacInnis, Inc.
(818) 379-8500 x2
terri@bibimac.com

FAQ

What is the purpose of Staffing 360 Solutions' recent private placement announcement on April 21, 2021?

The private placement aims to raise approximately $4.7 million, with proceeds intended for working capital and debt repayment.

What are the terms of the Series F convertible preferred stock issued by Staffing 360 Solutions?

The Series F Preferred Stock is priced at $1,000 per share and convertible into approximately 7,829,388 shares of common stock at a conversion price of $0.60 per share.

When is the expected closing date for Staffing 360 Solutions' securities offering?

The offering is expected to close on or about April 23, 2021, subject to customary closing conditions.

What are the implications of the warrants associated with Staffing 360 Solutions' private placement?

The warrants allow for the purchase of 7,829,388 common shares at an exercise price of $0.60 per share, exercisable after certain conditions are met.

What is Staffing 360 Solutions required to do following the private placement?

The company must file an initial registration statement with the SEC covering the resale of common stock underlying the Series F Preferred Stock and Warrants within 30 days.