UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934 (Amendment No. 7)*
Staffing 360 Solutions, Inc.
(Name of Issuer)
Common Stock, $0.00001 par value per share
(Title of Class of Securities)
095428108
(CUSIP Number)
Jackson Investment Group, LLC
2655 Northwinds Parkway
Alpharetta, GA 30009
Attention: Jay D. Mitchell, General Counsel
770-643-5500
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 26, 2020
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box. ¨
Note: Schedules filed in paper format shall include a
signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are
to be sent.
* The remainder of this cover page shall be filled out for a
reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”)
or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
1.
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NAMES
OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Jackson Investment Group, LLC 20-5783109
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2.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)
(a) ¨
(b) ¨
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3.
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SEC USE ONLY
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4.
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SOURCE
OF FUNDS (see instructions)
OO
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5.
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CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ¨
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6.
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CITIZENSHIP
OR PLACE OF ORGANIZATION
State of Georgia, United States of America
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
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7.
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SOLE VOTING POWER
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8.
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SHARED VOTING POWER
4,241,343 (1)
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9.
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SOLE DISPOSITIVE POWER
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10.
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SHARED DISPOSITIVE POWER
4,241,343 (1)
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11.
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,241,343 (1)
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12.
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CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(see instructions) ¨
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13.
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.9%(2)
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14.
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TYPE OF REPORTING PERSON (see instructions)
OO
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(a) 2,068,696 shares of Common Stock directly owned,
(b) 905,508 shares of Common Stock which may be purchased
upon exercise pursuant to that certain Amended and Restated Warrant Agreement, dated April 25, 2018 between Jackson Investment
Group, LLC (“JIG LLC”) and Staffing 360 Solutions, Inc. (the “Issuer”), as amended by that certain Amendment
No. 1 to Amended and Restated Warrant Agreement, dated as of August 27, 2018, that certain Amendment No. 2 to the Amended and Restated
Warrant Agreement, dated November 15, 2018 and that certain Amendment No. 3 to the Amended and Restated Warrant Agreement,
dated October 26, 2020 (the “A&R Warrant”), and which amended and restated that certain Warrant, dated January
26, 2017, between JIG LLC and the Issuer, as amended by that certain Amendment 1 to Warrant Agreement, dated as of March 14, 2017
and that certain Amendment 2 to Warrant Agreement, dated as of April 5, 2017, and
(c) 1,267,139 shares of Common Stock which are issuable
upon conversion of the 1,267 shares of Series E-1 Convertible Preferred Stock outstanding on October 31, 2020, which are currently
convertible at the holder’s option.
Does not reflect:
(a) 13,000 shares of Series E Convertible Preferred
Stock which are convertible into shares of Common Stock at the holder’s option at any time from and after the earlier of
October 31, 2022 or the occurrence of an event of default as specified in the Certificate of Designation of the Series E Convertible
Preferred Stock at an initial conversion rate of 1,000 shares of Common Stock for each share of Series E Preferred Stock converted,
subject to adjustment to the liquidation value applicable to the Series E Convertible Preferred Stock,
(b) any shares of Common Stock payable to JIG LLC
as an additional fee (any such shares of Common Stock payable, the “PIK Interest Fee Shares”) in an amount equal to
$25,000 divided by the average closing price, as reported by Nasdaq, of such shares of Common Stock over the 5 trading days prior
to the applicable monthly interest payment date, provided that, if such average market price is less than $0.50, or is otherwise
undeterminable because such shares of Common Stock are no longer publicly traded or the closing price is no longer reported by
Nasdaq, then the average closing price for these purposes shall be deemed to be $0.50, and if such average closing price is greater
than $3.50, then the average closing price for these purposes shall be deemed to be $3.50 (the “Average Closing Price”)
in the event that the Issuer elects under the terms of the Second Amended and Restated Note Purchase Agreement, dated as of October
26, 2020 by and among JIG LLC, the Issuer and the subsidiary guarantors party thereto (“Amended Note Purchase Agreement”)
and the Amended and Restated Senior Secured 12% Promissory Note to JIG LLC from the Issuer (the “Amended Note”) to
pay PIK Interest (as defined in Item 3 below) by adding any such PIK Interest to the outstanding principal balance of the Amended
Note,
(c) adjustments based on any changes to the liquidation
value of such Series E Convertible Preferred Stock in the event that the Issuer elects, under the terms of the Amended Note and
the second Certificate of Amendment (the “Second Certificate Amendment”) to the Certificate of Designation of Series
E Convertible Preferred Stock (the “Certificate of Designation”), to pay in kind up to 50% of the monthly cash dividends
on the shares of Series E Convertible Preferred Stock (the “Base Series E Preferred Stock” and collectively with the
Series E-1 Preferred Stock, “Series E Preferred Stock”) by adding to the outstanding liquidation value of the Base
Series E Preferred Stock (the “PIK Dividend Payment”), commencing on October 26, 2020 and ending on October 25, 2022,
or
(d) if the PIK Dividend Payment is elected by the
Issuer, shares of Common Stock payable as an additional fee in an amount equal to $10,000 divided by the Average Closing Price
(the “PIK Dividend Fee Shares”).
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(2)
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Based on 9,322,563 shares of Common Stock outstanding
as of August 11, 2020, as reported in the Issuer’s Form 10-Q filed on August 11, 2020.
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1.
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NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Richard L. Jackson
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2.
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CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(see instructions)
(a) ¨
(b) ¨
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3.
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SEC USE
ONLY
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4.
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SOURCE OF FUNDS (see instructions)
OO(3) PF(4)
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5.
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CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ❑
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6.
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CITIZENSHIP
OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
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7.
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SOLE
VOTING POWER
144
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8.
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SHARED
VOTING POWER
4,241,343 (1)
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9.
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SOLE
DISPOSITIVE POWER
144
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10.
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SHARED
DISPOSITIVE POWER
4,241,343 (1)
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11.
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AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,241,487 (1)
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12.
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CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(see instructions) ¨
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13.
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.9%(2)
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14.
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TYPE OF REPORTING PERSON (see instructions)
IN; HC
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(a) 2,068,696 shares of Common Stock directly owned,
(b) 905,508 shares of Common Stock which may be purchased
upon exercise pursuant to the A&R Warrant, and
(c) 1,267,139 shares of Common Stock which are issuable
upon conversion of the 1,267 shares of Series E-1 Convertible Preferred Stock outstanding on October 31, 2020, which are currently
convertible at the holder’s option.
Does not reflect:
(a) 13,000 shares of Series E Convertible Preferred
Stock which are convertible into shares of Common Stock at the holder’s option at any time from and after the earlier of
October 31, 2022 or the occurrence of an event of default as specified in the Certificate of Designation at an initial conversion
rate of 1,000 shares of Common Stock for each share of Series E Preferred Stock converted, subject to adjustment to the liquidation
value applicable to the Series E Convertible Preferred Stock,
(b) any PIK Interest Fee Shares in an amount equal
to $25,000 divided by the Average Closing Price in the event that the Issuer elects under the terms of the Amended Note Purchase
Agreement and the Amended Note to pay PIK Interest by adding any such PIK Interest to the outstanding principal balance of the
Amended Note,
(c) adjustments based on any changes to the liquidation
value of such Series E Convertible Preferred Stock in the event that the Issuer elects, under the terms of the Second Certificate
Amendment to pay PIK Dividend Payments, commencing on October 26, 2020 and ending on October 25, 2022, or
(d) if the PIK Dividend Payment is elected by the
Issuer, the PIK Dividend Fee Shares.
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(2)
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Based on 9,322,563 shares of Common Stock outstanding as of August 11, 2020, as reported in the Issuer’s Form 10-Q filed
on August 11, 2020.
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(3)
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With respect to all shares other than the 144 shares referenced in footnote 4 that are reported
herein.
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(4)
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With respect to the 144 shares personally owned by Rick Jackson reported in lines 7 and 9 above.
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EXPLANATORY NOTES
This Amendment No.
7 to Schedule 13D (this “Amendment No. 7”) is being filed jointly by JIG LLC and Richard L. Jackson and amends the
statement on the Schedule 13D that was originally filed jointly by JIG LLC and Richard L. Jackson with the Securities and Exchange
Commission (the “Commission”) on February 7, 2017 and was amended on March 23, 2017, April 7, 2017, August 8, 2017,
September 18, 2017, September 4, 2018 and November 15, 2018 (collectively, the “Statement”), with respect to the common
stock, par value $0.00001, of the Issuer.
This Amendment No.
7 amends the Statement as specifically set forth herein. Unless otherwise indicated herein, each capitalized term used but not
otherwise defined herein shall have the meaning assigned to such term in the Statement.
Item 3. Source or Amount of Funds or Other Consideration.
Item 3 of the Statement is hereby further
amended to add the following paragraphs:
On October 26, 2020, JIG LLC entered into the Amended Note Purchase
Agreement, which is Exhibit 1 hereto, and the Amended Note, which is Exhibit 2 hereto, which amended and restated the Issuer’s
Amended and Restated Note Purchase Agreement with JIG LLC dated September 15, 2017 (the “Existing Note Purchase Agreement”
and collectively, the “Amendment Transaction”). The Amended Note Purchase Agreement extended the maturity of the loan
made pursuant to, and revised certain of the terms and conditions of, the Existing Note Purchase Agreement. In connection with
the Amendment Transaction, JIG LLC received an amendment fee of $488,123.92.
Pursuant to the Amended Note Purchase Agreement and the Amended
Note, the Issuer is required to pay interest on the loan made pursuant thereto at a per annum rate of 12%, which interest is payable
monthly in cash, subject to the Issuer’s right to elect to pay up to 50% of monthly interest payable under such Amended Note
in-kind (“PIK Interest”) by adding such PIK Interest to the outstanding principal balance of the Amended Note. For
any month that the Issuer elects to pay such PIK Interest, it is required to issue to JIG LLC the PIK Interest Fee Shares.
As part of the Amendment Transaction, JIG LLC and the Issuer
also entered into that certain Omnibus Amendment and Reaffirmation Agreement, dated October 26, 2020 among JIG LLC, the Issuer
and certain of its subsidiaries, as guarantors (the “Subsidiary Guarantors”), which is Exhibit 3 hereto, which among
other things amended that certain Amended and Restated Security Agreement, dated September 15, 2017, as amended, and that certain
Amended and Restated Pledge Agreement, dated September 15, 2017, as amended.
In connection with the Amendment Transaction, JIG LLC and the
Issuer amended the A&R Warrant, which is Exhibit 4 hereto. Pursuant to Amendment No. 3 to the Amended and Restated Warrant
Agreement, the exercise price of the A&R Warrant was reduced from $1.66 per share to $1.00 per share and the term of the A&R
Warrant was extended to January 26, 2026.
No new funds were provided by JIG LLC to the Issuer in connection
with the Amendment Transaction. The source of funds for JIG LLC’s prior investments in the Issuer were reported by JIG LLC
in prior Amendments to this Statement.
Item 4. Purpose of the Transaction.
JIG LLC entered into the Amendment Transaction for the purpose
of extending the maturity date of the loan made pursuant to the Existing Note Purchase Agreement and revising certain other terms
and conditions of the Existing Note Purchase Agreement and related agreements. The Reporting Persons are continually reviewing
its investment in the Issuer.
Depending upon:
(1) the Reporting Persons’ assessment of the Issuer’s
businesses, assets and prospects and the Issuer’s ability to secure future financing from sources other than the Reporting
Persons, as well as prospects for the industries which the Issuer’s business serves, (2) the contractual provisions, limitations
and other terms of JIG LLC’s financing-related agreements with the Issuer, (3) other plans and requirements of the Reporting
Persons, (4) general economic conditions and overall market conditions, (5) the ability of the Reporting Persons to carry out transactions
without liability under Section 16 of the Securities and Exchange Act, (6) the price at which shares of Common Stock are available
(i) for purchase, including through private or public market offerings or pursuant to the purchase rights of the various derivative
securities held by JIG LLC as reported in this Statement, or (ii) for sale, and (7) availability of alternative investment opportunities
and the Reporting Persons’ investment strategy at the time,
the Reporting Persons may:
(A) seek to make additional investments in the Issuer, which
could include an acquisition of the Issuer or funding specific cash needs of the Issuer if they arise and satisfactory terms can
be agreed, (B) determine not to pursue any further investments in the Issuer and/or not to extend its current loan beyond its September
2022 maturity date, and instead decrease their holdings of Common Stock, (C) seek to engage in communications with management or
the Board of Directors of the Issuer or with other stockholders of the Issuer concerning the Issuer’s businesses, prospects,
operations, strategy, personnel, directors, ownership and capitalization, and (D) either individually or together with others may
make proposals with respect to the Issuer that may involve one or more of the types of transactions specified in clauses (a) through
(j) of Item 4 of Schedule 13D. The Reporting Persons have no other plans or proposals which relate to or would result in any of
the events described in (a) through (j) of Item 4 of the Statement, except as described above.
The response to Item 3 and Exhibits 1-5 are hereby incorporated
herein.
Subparts (e) and (g) of Item 4 of the Statement
are hereby further amended to add the following:
In connection with the Amendment Transaction, the Issuer filed
with the Secretary of State of the State of Delaware the Second Certificate Amendment, which is attached as Exhibit 5 hereto. Under
the Second Certificate Amendment, holders of Series E Preferred Stock are entitled to monthly cash dividends on shares of Series
E Preferred Stock at a per annum rate of 12%. At the Issuer’s option commencing on October 26, 2020 and ending on October
25, 2022, up to 50% of the cash dividend on the Base Series E Preferred Stock may be paid in kind by adding such 50% portion to
the outstanding liquidation value of the Base Series E Preferred Stock. If such PIK Dividend Payment is elected by the Issuer,
a holder of Base Series E Preferred Stock is entitled to PIK Dividend Fee Shares as an additional fee to be paid in shares of the
Issuer’s Common Stock in an amount equal to $10,000 divided by the Average Closing Price. Dividends on the Series E-1 Preferred
Stock may only be paid in cash.
Under the terms of the Second Certificate Amendment,
shares of Series E-1 Preferred Stock are convertible into the Issuer’s Common Stock at any time at a conversion rate
equal to the liquidation value of each shares of Series E-1 Preferred Stock plus any accrued but unpaid dividends, divided by
$1.00 per share (which was decreased from $1.66 per share). Each share of Series E-1 Preferred Stock has a liquidation value
of $1,000 per share, and as of October 31, 2020 JIG LLC beneficially owned a total of 1,267 shares of Series E-1 Preferred
Stock. JIG LLC’s shares of Base Series E Preferred Stock will be convertible at JIG LLC’s option into shares of
the Issuer’s Common Stock after October 31, 2022 or upon the occurrence of an event of default specified in the Second
Amended Certificate, whichever occurs earlier. The conversion rate for the Issuer’s Base Series E Preferred Stock is
equal to the liquidation value of each share of Base Series E Preferred Stock plus any accrued but unpaid dividends, divided
by $1.00 per share. Each share of Base Series E Preferred Stock has a liquidation value of $1,000 per share and as of
October 27, 2020 JIG LLC beneficially owned a total of 13,000 shares of Base Series E Preferred Stock.
Item 5. Interest in Securities of the Issuer.
The introduction of Item 5 of the Statement is hereby amended
and restated in its entirety to read as follows:
The following disclosure assumes 9,322,563 shares of Common
Stock outstanding as of August 11, 2020, as reported in the Issuer’s Form 10-Q filed with the Commission on August 11, 2020.
Subparts (a) and (b) of Item 5 of the Statement
are hereby amended and restated in their entirety to read as follows:
(a) Pursuant to Rule
13d-3 of the Securities Exchange Act, the Reporting Persons may be deemed to beneficially own 4,241,343 shares of Common Stock,
which constitutes approximately 36.9% of the outstanding shares of Common Stock (assuming the exercise in full of the A&R Warrant
and conversion into Common Stock of the outstanding Series E-1 Preferred Stock held by the Reporting Persons as of October 31,
2020, as contemplated in Rule 13d-3). Of the shares deemed to be beneficially owned, (1) 905,508 are not outstanding and consist
of shares which may be acquired by JIG LLC pursuant to the A&R Warrant at any time prior to January 26, 2026 and (2) 1,267,139
are not outstanding and consist of shares which may be converted from shares of Series E-1 Preferred Stock at the holder’s
option at any time from and after the earlier of October 31, 2020 or the occurrence of an event of default specified in the Certificate
of Designation. In addition to the 4,241,343 shares referenced above, Richard L. Jackson individually and beneficially owns 144
shares of Common Stock (which together with the 4,241,343 shares constitutes approximately 36.9% of the outstanding shares of Common
Stock of the Issuer). With the exception of the 144 shares personally owned, Richard L. Jackson disclaims beneficial ownership
of all of the shares reported to be beneficially owned by him except to the extent of his pecuniary interest therein.
(b) The Reporting Persons
share the power to vote and direct the disposition of 4,241,343 shares of Common Stock reported as being beneficially owned. Richard
L. Jackson has the sole power to vote and direct the disposition of the 144 shares of Common Stock reported as being beneficially
owned by him.
Subpart (c) of Item 5 is hereby further amended to add the following
paragraph:
(c) The response to
Items 3 and 4 and Exhibits 1 through 5 are hereby incorporated herein.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Item 6 of the Statement is hereby further
amended to add the following paragraphs:
The responses to Items 3, 4 and 5 and Exhibits 1 through 5 are
hereby incorporated herein.
The foregoing descriptions of the agreements and documents attached
as Exhibits 1 through 5 hereto do not purport to be complete and are qualified in their entirety by reference to the full text
of each such agreement and document, respectively.
Item 7. Material to Be Filed as Exhibits.
Item 7 of the Statement is hereby further
amended to add the following exhibits:
Exhibit 1
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Second Amended and Restated Note Purchase Agreement, dated October 26, 2020, between JIG LLC and the Issuer (attached as Exhibit 10.1 to the Form 8-K filed by Staffing 360 Solutions, Inc. on October 26, 2020 and incorporated herein by reference)
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Exhibit 2
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Amended and Restated Senior Secured 12% Promissory Note issued on October 26, 2020 (attached as Exhibit 10.2 to the Form 8-K filed by Staffing 360 Solutions, Inc. on October 26, 2020 and incorporated herein by reference)
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Exhibit 3
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Omnibus Amendment and Reaffirmation Agreement, dated October 26, 2020, between JIG LLC, the Issuer and the Subsidiary Guarantors
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Exhibit 4
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Amendment No. 3, dated October 26, 2020, to the Amended and Restated Warrant Agreement, between the Issuer and JIG LLC
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Exhibit 5
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Certificate of Amendment to the Certificate of Designation of Series E Convertible Preferred Stock of the Issuer (attached as Exhibit 3.1 to the Form 8-K filed by Staffing 360 Solutions, Inc. on October 26, 2020 and incorporated herein by reference)
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SIGNATURES
After reasonable inquiry and to the best
of each of the undersigned’s knowledge and belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
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Date: November 10, 2020
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JACKSON INVESTMENT GROUP, LLC
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By:
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/s/ Richard L. Jackson
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Richard L. Jackson, Chief Executive Officer
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Date: November 10, 2020
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RICHARD L. JACKSON
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/s/ Richard L. Jackson
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