Filed
pursuant to Rule 424(b)(5)
Registration
No. 333-230503
PROSPECTUS
SUPPLEMENT
(To
prospectus dated April 11, 2019)
Staffing
360 Solutions, Inc.
4,188,405
Shares of Common Stock
We
are offering 4,188,405 shares of our common stock pursuant to this
prospectus supplement and the accompanying prospectus. Our common
stock is listed on The Nasdaq Capital Market (“Nasdaq”) under the
symbol “STAF.” The last reported sale price of our common stock on
Nasdaq on December 22, 2020 was $0.90 per share.
As of the date of this prospectus supplement, the aggregate market
value of our outstanding shares of common stock held by
non-affiliates, or our public float, was $8,677,104, based on a
total of 9,644,363 outstanding shares of common stock, of which
6,674,696 shares of common stock were held by non-affiliates, and a
price of $1.30 per share, which was the last reported sale price of
our common stock on Nasdaq on October 26, 2020. Pursuant to General
Instruction I.B.6. of Form S-3, in no event will we sell
securities, registered on the registration statement, of which this
prospectus supplement is a part, in a public primary offering with
a value exceeding more than one-third of the aggregate market value
of our common stock in any 12-month period so long as the aggregate
market value of our outstanding common stock held by non-affiliates
remains below $75 million. We have not offered any securities
pursuant to General Instruction I.B.6 of Form S-3 during the 12
calendar months prior to and including the date of this prospectus
supplement (excluding the value of the shares of common stock sold
in this offering).
Investing
in our common stock involves a high degree of risk. See “Risk
Factors” beginning on page S-5 of this prospectus supplement and
page 4 of the accompanying prospectus.
Neither
the Securities and Exchange Commission (the “SEC”) nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement is truthful
or complete. Any representation to the contrary is a criminal
offense.
| |
|
Per Share |
|
|
Total |
|
| Public offering price |
|
$ |
0.600 |
|
|
$ |
2,513,043 |
|
| Underwriting
discounts and commissions(1) |
|
$ |
0.045 |
|
|
$ |
188,478 |
|
| Proceeds, before expenses, to us |
|
$ |
0.555 |
|
|
$ |
2,324,565 |
|
|
(1) |
In
addition, we have agreed to reimburse the underwriter for certain
offering-related expenses, including a management fee of 1.0% of
the gross proceeds raised in this offering, and to issue to the
underwriter or its designees warrants to purchase a number of
shares of common stock equal to 7.5% of the shares of common stock
sold in this offering. See the section of this prospectus
supplement entitled “Underwriting” on page S-16 for a description
of the compensation payable to the underwriter. |
We
have granted the underwriter a 30-day option to purchase up to an
additional 628,260 shares of our common stock from us at the public
offering price per share, less underwriting discounts and
commissions. If the underwriter exercises its option in full, the
total underwriting discounts and commissions payable by us will be
$216,750, and the total proceeds to us, before expenses, will be
$2,673,249.
The
underwriter expects to deliver the shares of common stock on or
about December 29, 2020.
H.C.
Wainwright & Co.
The
date of this prospectus supplement is December 23, 2020.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
document is part of the registration statement that we filed with
the SEC, using a “shelf” registration process and consists of two
parts. The first part is this prospectus supplement, including the
documents incorporated by reference, which describes the specific
terms of this offering. The second part, the accompanying
prospectus, including the documents incorporated by reference,
gives more general information, some of which may not apply to this
offering. Generally, when we refer only to the “prospectus,” we are
referring to both parts combined. This prospectus supplement may
add to, update or change information in the accompanying prospectus
and the documents incorporated by reference into this prospectus
supplement or the accompanying prospectus.
If
information in this prospectus supplement is inconsistent with the
accompanying prospectus or with any document incorporated by
reference that was filed with the SEC before the date of this
prospectus supplement, you should rely on this prospectus
supplement. This prospectus supplement, the accompanying prospectus
and the documents incorporated into each by reference include
important information about us, the securities being offered and
other information you should know before investing in our
securities. You should also read and consider information in the
documents we have referred you to in the section of this prospectus
supplement and the accompanying prospectus entitled “Where You Can
Find More Information” and “Incorporation of Certain Information by
Reference.”
You
should rely only on this prospectus supplement, the accompanying
prospectus, and the information incorporated or deemed to be
incorporated by reference in this prospectus supplement and the
accompanying prospectus. We have not authorized, and the
underwriter has not authorized, anyone to provide you with
information that is in addition to or different from that contained
or incorporated by reference in this prospectus supplement and the
accompanying prospectus. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not
offering to sell these securities in any jurisdiction where the
offer or sale is not permitted. You should not assume that the
information contained or incorporated by reference in this
prospectus supplement or the accompanying prospectus is accurate as
of any date other than as of the date of this prospectus supplement
or the accompanying prospectus, as the case may be, or in the case
of the documents incorporated by reference, the date of such
documents regardless of the time of delivery of this prospectus
supplement and the accompanying prospectus or any sale of our
securities. Our business, financial condition, liquidity, results
of operations and prospects may have changed since those
dates.
No
action is being taken in any jurisdiction outside the United States
to permit a public offering of the securities or possession or
distribution of this prospectus supplement, or the accompanying
prospectus, in that jurisdiction. Persons who come into possession
of this prospectus supplement, or the accompanying prospectus, in
jurisdictions outside the United States are required to inform
themselves about and to observe any restrictions as to this
offering and the distribution of this prospectus supplement, or the
accompanying prospectus, applicable to that jurisdiction. This
prospectus supplement and the accompanying prospectus do not
constitute, and may not be used in connection with, an offer to
sell, or a solicitation of an offer to buy, any securities offered
by this prospectus supplement and the accompanying prospectus by
any person in any jurisdiction in which it is unlawful for such
person to make such an offer or solicitation.
PROSPECTUS SUPPLEMENT
SUMMARY
This
summary provides an overview of selected information contained
elsewhere or incorporated by reference in this prospectus
supplement and accompanying prospectus and does not contain all of
the information you should consider before investing in our
securities. You should carefully read the prospectus supplement and
the accompanying prospectus in their entirety before investing in
our securities, including the information discussed under “Risk
Factors” in this prospectus supplement and the accompanying
prospectus, as well as the documents and financial statements and
related notes that are incorporated by reference herein. Unless the
context requires otherwise, references in this prospectus to
“Staffing 360,” “we,” “us” and “our” refer to Staffing 360
Solutions, Inc. together with its consolidated
subsidiaries.
Business
Overview
We
are an international staffing company engaged in the acquisition of
United States and United Kingdom based staffing companies. Our
services principally consist of providing temporary contractors,
and, to a much lesser extent, the recruitment of candidates for
permanent placement. As part of our consolidation model, we pursue
a broad spectrum of staffing companies supporting primarily
accounting and finance, information technology, engineering,
administration and commercial disciplines. Our business model is
based on finding and acquiring, suitable, mature, profitable,
operating, domestic and international staffing companies. Our
targeted consolidation model is focused specifically on the
accounting and finance, information technology, engineering,
administration and light industrial disciplines. We have completed
ten acquisitions since November 2013.
Recent
Developments
COVID-19
In
December 2019, a strain of coronavirus (“COVID-19”) was reported to
have surfaced in Wuhan, China, and has spread globally, resulting
in government-imposed quarantines, travel restrictions and other
public health safety measures in affected countries. The COVID-19
pandemic is impacting worldwide economic activity, and activity in
the United States and the United Kingdom where our operations are
based. Much of the independent contractor work we provide to our
clients is performed at the site of our clients. As a result, we
are subject to the plans and approaches our clients have made to
address the COVID-19 pandemic, such as whether they support remote
working or if they have simply closed their facilities and
furloughed employees. To the extent that our clients were to decide
or are required to close their facilities, or not permit remote
work when they close facilities, we would no longer generate
revenue and profit from that client. In addition, in the event that
our clients’ businesses suffer or close as a result of the COVID-19
pandemic, we may experience decline in our revenue or write-off of
receivables from such clients. Moreover, developments such as
social distancing and shelter-in-place directives have impacted our
ability to deploy our staffing workforce effectively, thereby
impacting contracts with customers in our commercial staffing and
professional staffing business streams, where we have had declines
in revenues during Q2 2020 and Q3 2020 compared to the respective
periods in 2019. While some government-imposed precautionary
measures have been relaxed in certain countries or states, there is
no assurance that more strict measures will be put in place again
due to a resurgence in COVID-19 cases, as has occurred recently in
the United Kingdom in response to the spread of a new strain of
COVID-19. As a result of the newly imposed government restrictions
in the United Kingdom, we had to close both of our offices in the
United Kingdom, and our employees have been forced to operate
remotely from their homes. Therefore, the ongoing COVID-19 pandemic
may continue to affect our operation and to disrupt the marketplace
in which we operate and may negatively impact our sales in fiscal
year 2021 and our overall liquidity.
While
the ultimate economic impact brought by, and the duration of, the
COVID-19 pandemic may be difficult to assess or predict, including
new information which may emerge concerning the severity of
COVID-19 and the actions to contain COVID-19 or treat its impact,
among others, the pandemic has resulted in significant disruptions
in the general commercial activity and the global economy and
caused financial market volatility and uncertainty in significant
and unforeseen ways in the recent months. A continuation or
worsening of the levels of market disruption and volatility seen in
the recent past could have an adverse effect on our ability to
access capital and on the market price of our common stock, and we
may not be able to successfully raise needed capital. If we are
unsuccessful in raising capital in the future, we may need to
reduce activities, curtail or cease operations.
In
addition, the continuation of the COVID-19 pandemic or an outbreak
of other infectious diseases could result in a widespread health
crisis that could adversely affect the economies and financial
markets worldwide, resulting in an economic downturn that could
impact our business, financial condition and results of
operations.
Nasdaq
Minimum Stockholders’ Equity Requirement
On
June 3, 2020, we received a letter from the Listing Qualifications
Department notifying us that we are no longer in compliance with
the minimum stockholders’ equity requirement for continued listing
on Nasdaq. Nasdaq Listing Rule 5550(b)(1) requires listed companies
to maintain stockholders’ equity of at least $2.5 million. Further,
as of June 9, 2020, we did not meet the alternative compliance
standards relating to the market value of listed securities or net
income from continuing operations.
In
accordance with the Nasdaq Listing Rules, we were afforded the
opportunity to submit a plan to regain compliance with the minimum
stockholders’ equity standard. Based on our submissions, the
Listing Qualifications Department granted us an extension to regain
compliance with Rule 5550(b)(1) until November 30, 2020.
On
December 1, 2020, we received notice that because we had not met
the terms of the extension, our common stock would be subject to
delisting from Nasdaq, unless we timely requested a hearing before
a Nasdaq Hearings Panel (the “Panel”). We timely subsequently
requested a hearing before the Panel, which automatically stayed
any suspension or delisting action pending the issuance of a
decision by the Panel following the hearing and the expiration of
any additional extension period granted by the Panel. The hearing
is scheduled for January 21, 2021.
There
can be no assurance that the Panel will not delist our stock
following our hearing on January 21, 2021. Although we expect to
take actions intended to restore our compliance with the listing
requirements, we can provide no assurance that any action taken by
us would be successful. Should a delisting occur, an investor would
likely find it significantly more difficult to dispose of, or to
obtain accurate quotations as to the value of our common stock, and
our ability to raise future capital through the sale of our common
stock could be severely limited. In addition, delisting could harm
our ability to raise capital through alternative financing sources
on terms acceptable to us, or at all, and may result in the
potential loss of confidence by investors, suppliers, customers and
employees and fewer business development opportunities.
Change
in Principal Financial Officer
On
December 15, 2020, Sharnika Viswakula, our former Corporate
Controller, principal financial officer and principal accounting
officer, resigned from all positions with our Company. Following
Ms. Viswakula’s resignation, we appointed Khalid Anwar as our
principal financial officer and principal accounting officer,
effective as of December 15, 2020. Khalid Anwar is Senior Vice
President of Corporate Finance of the Company, which he joined in
February 2020.
Corporate
Information
Staffing
360 Solutions, Inc., was incorporated in the State of Nevada on
December 22, 2009, as Golden Fork Corporation, which changed its
name to Staffing 360 Solutions, Inc., and its trading symbol to
“STAF,” on March 16, 2012. On June 15, 2017, we changed our state
of domicile to the State of Delaware. Our principal executive
office is located at 641 Lexington Avenue, 27th Floor, New York,
New York 10022, and our telephone number is (646) 507-5710. Our
website is www.staffing360solutions.com, and the information
included in, or linked to our website is not part of this
prospectus. We have included our website address in this prospectus
solely as a textual reference.
The
Offering
|
Common
stock offered by us |
|
4,188,405
shares.
|
| Underwriter’s
option to purchase additional shares of common stock |
|
We
have granted the underwriter an option, exercisable for 30 days
from the date of this prospectus supplement, to purchase up to an
additional 628,260 shares of our common stock from us. |
| |
|
|
| Common
stock outstanding after this offering(1) |
|
13,832,768
shares (or 14,461,028 shares if the underwriter exercises its
option to purchase additional shares in full). |
| |
|
|
| Use
of proceeds |
|
Pursuant
to the certificate of designation (the “Series E Certificate of
Designation”) of our Series E Convertible Preferred Stock (“Base
Series E Preferred Stock”) and Series E-1 Convertible Preferred
Stock (“Series E-1 Preferred Stock,” and collectively with the Base
Series E Preferred Stock, the “Series E Preferred Stock”), while
our Series E Preferred Stock are outstanding, we are generally
prohibited from using the proceeds from offerings of equity
securities for any purpose other than redeeming our Series E
Preferred Stock, subject to certain limited exceptions.
We
received a waiver from Jackson Investment Group, LLC (“Jackson”),
the sole holder of the outstanding shares of our Series E Preferred
Stock to use approximately (i) 75% of the net proceeds from this
offering to redeem a portion of the Second Amended and Restated 12%
Senior Secured Note due September 30, 2022, which currently has
outstanding principal amount and accrued interest of $35,739,794
and (ii) 25% of the net proceeds from this offering to redeem a
portion of our Base Series E Preferred Stock.
See
“Use of Proceeds” on page S-12.
|
| |
|
|
|
Risk
factors |
|
See
“Risk Factors” beginning on page S-5 of this prospectus supplement
and page 4 of the accompanying prospectus and in the documents
incorporated by reference in this prospectus supplement for a
discussion of factors you should consider carefully when making an
investment decision. |
| |
|
|
| Nasdaq
symbol |
|
STAF |
(1)
The number of shares of our common stock to be outstanding
immediately after the closing of this offering is based on
9,644,363 shares of common stock outstanding as of December 22,
2020 and, unless otherwise indicated, excludes, as of that
date:
|
|
● |
76,500
shares of common stock issuable upon exercise of stock
options; |
|
|
● |
27,024
shares of common stock issuable upon potential conversion of Series
A Preferred Stock; |
|
|
● |
11,700,000
shares of common stock issuable upon potential conversion of 11,700
shares of Base Series E Preferred Stock; |
|
|
● |
1,316,000
shares of common stock issuable upon potential conversion of 1,316
shares of Series E-1 Preferred Stock issued as dividends to the
holders of the Base Series E Preferred Stock; |
|
|
● |
1,015,934
shares of common stock issuable upon the exercise of warrants
outstanding prior to this offering at a weighted average exercise
price of $1.10; |
|
|
● |
up to
1,121,250 additional shares of common stock issuable upon potential
conversion of shares of Series E-1 Preferred Stock issuable as
dividends payable to the holders of our Base Series E Preferred
Stock, based on 6,500 shares of preferred stock designated as
Series E-1 Preferred Stock pursuant to the Series E Certificate of
Designation; |
|
|
● |
155,000
shares of common stock issuable pursuant to outstanding performance
awards; and |
|
|
● |
up to
314,130 shares of common stock (or if the underwriter exercises its
option to purchase additional shares of common stock in full, up to
361,250 shares of common stock) issuable upon the exercise of
warrants with an exercise price of $0.75 per share to be issued to
the underwriter or its designees in connection with this
offering. |
Except
as otherwise indicated, the information in this prospectus
supplement assumes (i) no exercise of the underwriter’s option to
purchase additional shares of common stock, (ii) no exercise of the
warrants to be issued to the underwriter or its designees in
connection with this offering, and (iii) no exercise of options or
exercise of warrants and no conversion of any shares of preferred
stock described above.
RISK
FACTORS
Before
deciding to invest in our securities, you should consider carefully
the following discussion of risks and uncertainties affecting us
and our securities, together with other information in this
prospectus supplement, the accompanying prospectus and the other
information and documents incorporated by reference in this
prospectus supplement, including the risks, uncertainties and
assumptions discussed under the heading “Risk Factors” in our most
recent Annual Report on Form 10-K or any updates in our Quarterly
Reports on Form 10-Q. Our business, business prospects, financial
condition or results of operations could be seriously harmed as a
result of these risks. This could cause the trading price of our
common stock to decline, resulting in a loss of all or part of your
investment. Additional risks and uncertainties not presently known
to us or that we currently deem immaterial also may materially and
adversely affect our business, financial condition and results of
operations. Please also read carefully the section below entitled
“Special Note Regarding Forward-Looking Statements.”
Risks
Related to Our Business
The recent COVID-19 outbreak may adversely affect our
business.
In
December 2019, a strain of coronavirus was reported to have
surfaced in Wuhan, China, and has spread globally, resulting in
government-imposed quarantines, travel restrictions and other
public health safety measures in affected countries. The COVID-19
pandemic is impacting worldwide economic activity, and activity in
the United States and the United Kingdom where our operations are
based. Much of the independent contractor work we provide to our
clients is performed at the site of our clients. As a result, we
are subject to the plans and approaches of our clients have made to
address the COVID-19 pandemic, such as whether they support remote
working or if they have simply closed their facilities and
furloughed employees. To the extent that our clients were to decide
or are required to close their facilities, or not permit remote
work when they close facilities, we would no longer generate
revenue and profit from that client. In addition, in the event that
our clients’ businesses suffer or close as a result of the COVID-19
pandemic, we may experience decline in our revenue or write-off of
receivables from such clients. Moreover, developments such as
social distancing and shelter-in-place directives have impacted our
ability to deploy our staffing workforce effectively, thereby
impacting contracts with customers in our commercial staffing and
professional staffing business streams, where we had declines in
revenues during Q2 2020 and Q3 2020 compared to the respective
periods in 2019. While some government-imposed precautionary
measures have been relaxed in certain countries or states, there is
no assurance that more strict measures will be put in place again
due to a resurgence in COVID-19 cases, as has occurred recently in
the United Kingdom in response to the spread of a new strain of
COVID-19. As a result of the newly imposed government restrictions
in the United Kingdom, we had to close both of our offices in the
United Kingdom and our employees have been forced to operate
remotely from their homes. Therefore, the ongoing COVID-19 pandemic
may continue to affect our operation and to disrupt the marketplace
in which we operate and may negatively impact our sales in fiscal
year 2021 and our overall liquidity.
While
the ultimate economic impact brought by, and the duration of, the
COVID-19 pandemic may be difficult to assess or predict, including
new information which may emerge concerning the severity of
COVID-19 and the actions to contain COVID-19 or treat its impact,
among others, the pandemic has resulted in significant disruptions
in the general commercial activity and the global economy and
caused financial market volatility and uncertainty in significant
and unforeseen ways in the recent months. A continuation or
worsening of the levels of market disruption and volatility seen in
the recent past could have an adverse effect on our ability to
access capital and on the market price of our common stock, and we
may not be able to successfully raise needed capital. If we are
unsuccessful in raising capital in the future, we may need to
reduce activities, curtail or cease operations.
In
addition, the continuation of the COVID-19 pandemic or an outbreak
of other infectious diseases could result in a widespread health
crisis that could adversely affect the economies and financial
markets worldwide, resulting in an economic downturn that could
impact our business, financial condition and results of
operations.
Provisions in our corporate charter documents and under Delaware
law could make an acquisition of us more difficult and may prevent
attempts by our stockholders to replace or remove our current
management.
Provisions
in our amended and restated certificate of incorporation, as
amended (the “Certificate of Incorporation”) and our amended and
restated bylaws (the “Bylaws”) may discourage, delay or prevent a
merger, acquisition or other change in control of us that
stockholders may consider favorable, including transactions in
which stockholders might otherwise receive a premium for their
shares. These provisions could also limit the price that investors
might be willing to pay in the future for shares of our common
stock, thereby depressing the market price of our common stock. In
addition, these provisions may frustrate or prevent any attempts by
our stockholders to replace or remove our current management by
making it more difficult for stockholders to replace members of our
board of directors (the “Board”). Because our Board is responsible
for appointing the members of our management team, these provisions
could in turn affect any attempt by our stockholders to replace
current members of our management team. Among others, these
provisions include that:
|
|
● |
our
Board has the exclusive right to expand the size of our Board and
to elect directors to fill a vacancy created by the expansion of
the Board or the resignation, death or removal of a director, which
prevents stockholders from being able to fill vacancies on our
Board; |
| |
● |
a
special meeting of stockholders may be called only by a majority of
the Board, the executive chairman or the president, which may delay
the ability of our stockholders to force consideration of a
proposal or to take action, including the removal of
directors; |
| |
● |
our
stockholders do not have the right to cumulate votes in the
election of directors, which limits the ability of minority
stockholders to elect director candidates; |
| |
● |
our
Board may alter our Bylaws without obtaining stockholder
approval; |
| |
● |
stockholders
must provide advance notice and additional disclosures in order to
nominate individuals for election to the Board or to propose
matters that can be acted upon at a stockholders’ meeting, which
may discourage or deter a potential acquiror from conducting a
solicitation of proxies to elect the acquiror’s own slate of
directors or otherwise attempting to obtain control of our company;
and |
| |
● |
our
Board is authorized to issue shares of preferred stock and to
determine the terms of those shares, including preferences and
voting rights, without stockholder approval, which could be used to
significantly dilute the ownership of a hostile
acquiror. |
In
addition, our debt agreement with Jackson limits our ability to
consolidate, merge, or transfer all or substantially all of our
assets or to effect a change in control of ownership of our
company. A breach of such restrictions could result in a default
under our debt agreement, under which Jackson may elect to declare
all outstanding borrowings under the debt agreement, together with
accrued interest and other amounts payable thereunder, to be
immediately due and payable.
Moreover,
because we are incorporated in Delaware, we are governed by the
provisions of Section 203 of the Delaware General Corporation Law,
which prohibits a person who owns in excess of 15% of our
outstanding voting stock from merging or combining with us for a
period of three years after the date of the transaction in which
the person acquired in excess of 15% of our outstanding voting
stock, unless the merger or combination is approved in a prescribed
manner.
Furthermore,
our Certificate of Incorporation specifies that, unless we consent
in writing to the selection of an alternative forum, a state court
located within the State of Delaware will be the sole and exclusive
forum for most legal actions involving actions brought against us
by stockholders, which may include federal claims and derivative
actions, except that if no state court located within the State of
Delaware has jurisdiction over such claims (including subject
matter jurisdiction), the sole and exclusive forum for such claim
shall be the federal district court for the District of Delaware.
We believe these provisions may benefit us by providing increased
consistency in the application of Delaware law and federal
securities laws by chancellors and judges, as applicable,
particularly experienced in resolving corporate disputes, efficient
administration of cases on a more expedited schedule relative to
other forums and protection against the burdens of multi-forum
litigation. However, these provisions may have the effect of
discouraging lawsuits against our directors and officers. The
enforceability of similar choice of forum provisions in other
companies’ certificates of incorporation has been challenged in
legal proceedings, and it is possible that, in connection with any
applicable action brought against us, a court could find the choice
of forum provisions contained in the Certificate of Incorporation
to be inapplicable or unenforceable in such action. Specifically,
the choice of forum provision in requiring that the state courts of
the State of Delaware be the exclusive forum for certain suits
would (i) not be enforceable with respect to any suits brought to
enforce any liability or duty created by the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and (ii) have
uncertain enforceability with respect to claims under the
Securities Act of 1933, as amended (the “Securities Act”). The
choice of forum provision in the Certificate of Incorporation does
not have the effect of causing our stockholders to have waived our
obligation to comply with the federal securities laws and the rules
and regulations thereunder.
Risks
Related to Our Common Stock and this Offering
We are subject to restrictions concerning our use of the proceeds
of this offering.
Pursuant
to the Series E Certificate of Designation, while our Series E
Preferred Stock is outstanding, we are required to use the proceeds
of any sales of equity securities, including the shares of common
stock offered hereby, exclusively to redeem any outstanding shares
of Series E Preferred Stock. Accordingly, without obtaining a
waiver from the requisite holders of the Series E Preferred Stock,
any proceeds from this offering or future equity offerings must be
used to redeem the Series E Preferred Stock.
We
received a waiver from Jackson, the sole holder of our outstanding
shares of Series E Preferred Stock to use the proceeds from this
offering to redeem approximately (i) 75% of the net proceeds from
this offering to redeem a portion of the Second Amended and
Restated 12% Senior Secured Note due September 30, 2022, which
currently has outstanding principal amount and accrued interest of
$35,739,794 and (ii) 25% of the net proceeds from this offering to
redeem a portion of our Base Series E Preferred Stock. You will not
have the opportunity, as part of your investment decision, to
direct the use of the net proceeds. It is possible that the net
proceeds will be used in a way that does not yield a favorable, or
any, return for us. The failure to use such funds effectively could
have a material adverse effect on our business, financial
condition, operating results, and cash flow.
You will experience immediate and substantial dilution if you
purchase securities in this offering.
As of
September 26, 2020, our net tangible book value was approximately
$(57,800,000), or $(6.19) per share. Since the public offering
price per share of our common stock being offered in this offering
is substantially higher than the net tangible book value per share
of our common stock, you will suffer substantial dilution with
respect to the net tangible book value of the common stock you
purchase in this offering. Based on the public offering price and
our net tangible book value per share as of September 26, 2020, if
you purchase shares of common stock in this offering, you will
suffer immediate and substantial dilution of $4.70 per share with
respect to the net tangible book value of the common stock. See the
section entitled “Dilution” for a more detailed discussion of the
dilution you will incur if you purchase securities in this
offering.
There may be future sales of our securities or other dilution of
our equity, which may adversely affect the market price of our
common stock.
We
are generally not restricted from issuing additional common stock,
including any securities that are convertible into or exchangeable
for, or that represent the right to receive, common stock, subject
to consent from holders of the Series E Preferred Stock. The market
price of our common stock could decline as a result of sales of
common stock or securities that are convertible into or
exchangeable for, or that represent the right to receive, common
stock after this offering or the perception that such sales could
occur. In addition, under the terms of the certificate of
designation of Series A Preferred Stock, we are required to redeem
all outstanding shares of Series A Preferred Stock on December 31,
2020 for cash or for shares of our common stock, at our sole
discretion, subject to consent from the holders of our Series E
Preferred Stock for such redemption. As of the date of this
prospectus supplement, we currently have 1,039,380 shares of Series
A Preferred Stock outstanding, with an aggregate redemption price
of $436,540 based on the stated value of $1.00 per share of Series
A Preferred Stock and previously paid dividends on Series A
Preferred Stock of approximately $602,840. These 1,039,380 shares
of Series A Preferred Stock are convertible into 27,024 shares of
common stock. If we elect to redeem such Series A Preferred Stock
in shares of common stock, such issuance may cause further dilution
to our stockholders, including investors in this
offering.
Future sales of our common stock may cause the prevailing market
price of our shares to decrease.
As of
December 22, 2020, we had 9,644,363 outstanding shares of common
stock. In addition, as of that date, we had outstanding warrants to
acquire 1,015,934 shares of common stock, and options to acquire
76,500 shares of common stock. In addition, 27,024 shares of common
stock were issuable upon potential conversion of Series A Preferred
Stock, 11,700,000 shares of common stock were issuable upon
potential conversion of 11,700 Base Series E Preferred Stock, and
1,316,000 shares of common stock were issuable upon potential
conversion of 1,316 shares of Series E-1 Preferred Stock.
Additionally, a dividend payable in shares of Series E-1 Preferred
Stock will accrue at a rate of 5% per year of the liquidation value
of the outstanding Base Series E Preferred Stock while the Base
Series E Preferred Stock remains outstanding. Shares of Series E-1
Preferred Stock issuable in the future, based on 11,700 shares of
Series E Preferred Stock outstanding as of December 22, 2020, are
convertible into 1,121,250 shares of common stock.
The
issuance of shares of common stock upon the exercise of warrants or
options or conversion of preferred stock would dilute the
percentage ownership interest of all stockholders, might dilute the
book value per share of our common stock and would increase the
number of our publicly traded shares, which could depress the
market price of our common stock. The perceived risk of dilution as
a result of the significant number of outstanding warrants, options
and shares of convertible preferred stock may cause our common
stockholders to be more inclined to sell their shares, which would
contribute to a downward movement in the price of our common stock.
Moreover, the perceived risk of dilution and the resulting downward
pressure on our common stock price could encourage investors to
engage in short sales of our common stock, which could further
contribute to price declines in our common stock. The fact that our
stockholders, warrant holders and option holders can sell
substantial amounts of our common stock in the public market,
whether or not sales have occurred or are occurring, could make it
more difficult for us to raise additional funds through the sale of
equity or equity-related securities in the future at a time and
price that we deem reasonable or appropriate, or at all.
We will need to raise additional capital in the future to finance
our operations, which may not be available on acceptable terms, or
at all. Failure to obtain this necessary capital when needed may
force us to delay, limit or terminate our product development
efforts or other operations.
We
have had recurring losses from operations, negative operating cash
flow and have an accumulated deficit. We must raise additional
funds in order to continue financing our operations. If additional
capital is not available to us when needed or on acceptable terms,
we may not be able to continue to operate our business pursuant to
our business plan or we may have to discontinue our operations
entirely. In addition, under the terms of the certificate of
designation of our Series A Preferred Stock, we are required to
redeem all outstanding shares of Series A Preferred Stock on
December 31, 2020 for cash or for shares of our common stock, at
our sole discretion, subject to consent from the holders of Series
E Preferred Stock for such redemption. If we elect to redeem such
shares of Series A Preferred Stock in cash, we may need additional
capital for such redemption. Any additional capital raised through
the sale of equity or equity-backed securities may dilute our
stockholders’ ownership percentages and could also result in a
decrease in the market value of our equity securities. The terms of
any securities issued by us in future capital transactions may be
more favorable to new investors, and may include preferences,
superior voting rights and the issuance of warrants or other
derivative securities, which may have a further dilutive effect on
the holders of any of our securities then outstanding.
If we
are unable to secure additional funds when needed or on acceptable
terms, we may be required to defer, reduce or eliminate significant
planned expenditures, restructure, curtail or eliminate some or all
of our operations, dispose of technology or assets, pursue an
acquisition of our company by a third party at a price that may
result in a loss on investment for our stockholders, file for
bankruptcy or cease operations altogether. Any of these events
could have a material adverse effect on our business, financial
condition and results of operations. Moreover, if we are unable to
obtain additional funds on a timely basis, there will be
substantial doubt about our ability to continue as a going concern
and increased risk of insolvency and up to a total loss of
investment by our stockholders.
Our common stock may be delisted from Nasdaq.
On
June 3, 2020, we received a letter from the Listing Qualifications
Department notifying us that we are no longer in compliance with
the minimum stockholders’ equity requirement for continued listing
on Nasdaq. Nasdaq Listing Rule 5550(b)(1) requires listed companies
to maintain stockholders’ equity of at least $2,500,000. Further,
as of June 9, 2020, we did not meet the alternative compliance
standards relating to the market value of listed securities or net
income from continuing operations.
In
accordance with the Nasdaq Listing Rules, we were afforded the
opportunity to submit a plan to regain compliance with the minimum
stockholders’ equity standard. Based on our submissions, the
Listing Qualifications Department granted us an extension to regain
compliance with Rule 5550(b)(1) until November 30, 2020.
On
December 1, 2020, we received notice that because we had not met
the terms of the extension, our common stock would be subject to
delisting from Nasdaq, unless we timely requested a hearing before
the Panel. We timely subsequently requested a hearing before the
Panel, which automatically stayed any suspension or delisting
action pending the issuance of a decision by the Panel following
the hearing and the expiration of any additional extension period
granted by the Panel. The hearing is scheduled for January 21,
2021.
There
can be no assurance that the Panel will not delist our stock
following our hearing on January 21, 2021. Although we expect to
take actions intended to restore our compliance with the listing
requirements, we can provide no assurance that any action taken by
us would be successful. Should a delisting occur, an investor would
likely find it significantly more difficult to dispose of, or to
obtain accurate quotations as to the value of our common stock, and
our ability to raise future capital through the sale of our common
stock could be severely limited. In addition, delisting could harm
our ability to raise capital through alternative financing sources
on terms acceptable to us, or at all, and may result in the
potential loss of confidence by investors, suppliers, customers and
employees and fewer business development opportunities.
A low trading price could lead the Nasdaq Stock Market to take
actions toward delisting our common stock, including immediately
delisting of our common stock.
On
September 24, 2020, we received a letter from the Listing
Qualifications Department indicating that, based upon the closing
bid price of our common stock for the 30 consecutive business day
period between August 12, 2020 through September 23, 2020, we did
not meet the minimum bid price of $1.00 per share required for
continued listing on Nasdaq pursuant to Nasdaq Listing Rule
5550(a)(2).
Although
on November 12, 2020, we received a written notice from the Listing
Qualifications Department informing us that we have regained
compliance with Rule 5550(a)(2), if we are again determined to be
below the minimum closing bid price requirement, the Listing
Qualifications Department will then take the appropriate action,
which depending on the circumstances, may include delisting
proceedings. There can be no assurance that the market price of our
common stock will remain above the levels viewed as abnormally low
for a substantial period of time. In any event, other factors
unrelated to the number of shares of our common stock outstanding,
such as negative financial or operational results, could adversely
affect the market price of our common stock to fall below the
levels viewed as low selling price for a substantial period of time
and may be delisted from trading on the Nasdaq.
The price of our common stock has been, and may continue to be,
volatile. This may affect the ability of our investors to sell
their shares, and the value of an investment in our common shares
may decline.
Historically,
the market price of our common stock has fluctuated over a wide
range. During the 12-months period ended December 22, 2020, our
common stock traded as high as $3.34 per share and as low as $0.28
per share. The market prices of our common stock may continue to be
volatile and could fluctuate widely in response to various factors,
many of which are beyond our control, including the
following:
|
|
● |
our
quarterly or annual operating results; |
| |
● |
changes
in our earnings estimates; |
| |
● |
investment
recommendations by securities analysts following our business or
our industry; |
| |
● |
additions
or departures of key personnel; |
| |
● |
negative
outcome of pending and future claims and litigation; |
| |
● |
changes
in the business, earnings estimates or market perceptions of our
competitors; |
| |
● |
our
failure to achieve operating results consistent with securities
analysts’ projections; |
| |
● |
changes
in industry, general market or economic conditions, including
levels of capital spending by customers in the industries we serve;
and |
| |
● |
announcements
of legislative or regulatory changes. |
Furthermore,
the stock market in general has experienced extreme price
fluctuations in recent years that have significantly affected the
quoted prices of the securities of many companies, including
companies in the staffing industry. The changes often appear to
occur without regard to specific operating performance. The price
of our common stock could fluctuate based upon factors that have
little or nothing to do with us and these fluctuations could
materially reduce our stock price. Furthermore, the COVID-19
pandemic has resulted in significant financial market volatility
and uncertainty in recent months. A continuation or worsening of
the levels of market disruption and volatility seen in the recent
past could have an adverse effect on our ability to access capital
and on the market price of our common stock.
There has been a limited trading market for our common stock in the
past, and we cannot ensure that an active trading market for our
common stock can be sustained.
Historically,
there has been relatively limited trading volume in the market for
our common stock in the past, and the market for our common stock
was illiquid. Although the trading volume of our common stock has
increased in the recent months, a more active and sustained, liquid
public trading market may not develop. Limited liquidity in the
trading market for our common stock may adversely affect a
stockholder’s ability to sell its shares of common stock at the
time it wishes to sell them or at a price that it considers
acceptable. If an active trading market for our common stock is not
sustained, we may be limited in our ability to raise capital by
selling shares of common stock and our ability to acquire other
companies or assets by using shares of our common stock as
consideration. In addition, if there is a thin trading market or
“float” for our stock, the market price for our common stock may
fluctuate significantly more than the stock market as a whole.
Without a large float, our common stock would be less liquid than
the stock of companies with broader public ownership and, as a
result, the trading prices of our common stock may be more volatile
and it would be harder for a stockholder to liquidate any
investment in our common stock.
We do not anticipate paying dividends on our common stock and,
accordingly, stockholders must rely on stock appreciation for any
return on their investment.
At
the Board’s discretion, we paid a quarterly cash dividend of $0.01
per share to holders of our common stock on February 28, 2019 and
May 30, 2019. We are limited in our ability to pay dividends by
certain of our existing debt agreements and the certificates of
designations of our Series A Preferred Stock and Series E Preferred
Stock. In particular, our Series E 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 events of default
exist under our debt agreements or the Series E Certificate of
Designation. In addition, so long as any shares of Series A
Preferred Stock are outstanding, as they are at this time, we are
not able to declare, pay or set apart for payment any dividend on
any shares of common stock, unless at the time of such dividend we
have paid all accrued and unpaid dividends on the outstanding
shares of Series A Preferred Stock. As of the date of this
prospectus supplement, pursuant to the Series E Certificate of
Designation, we may not issue any further dividend payments to
shares of Series A Preferred Stock so, as a consequence, we will
not declare a common stock dividend while the Series E Preferred
Stock are outstanding.
Accordingly,
we do not expect to pay or declare any further cash dividends on
our common stock for the foreseeable future. We expect to retain
our future earnings, if any, for use in the operation of our
business, including the repayment of our outstanding indebtedness.
Consequently, investors must rely on sales of their common stock
after price appreciation, which may never occur, as the primary way
to realize any gains on their investment.
Upon our dissolution, you may not recoup all or any portion of your
investment.
In
the event of a liquidation, dissolution or winding-up of our
company, whether voluntary or involuntary, the proceeds and/or
assets of our company remaining after giving effect to such
transaction, and the payment of all of our debts and liabilities
will be distributed to the stockholders of common stock on a pro
rata basis. There can be no assurance that we will have available
assets to pay to the holders of common stock, or any amounts, upon
such a liquidation, dissolution or winding-up of our company. In
this event, you could lose some or all of your
investment.
Special note regarding FORWARD-LOOKING
STATEMENTS
This
prospectus supplement may include or incorporate by reference
“forward-looking statements” within the meaning of Section 27A of
the Securities Act, and Section 21E of the Exchange Act. Our use of
the words “may,” “will,” “would,” “could,” “should,” “believes,”
“estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,”
“intends,” “evaluates,” “pursues,” “anticipates,” “continues,”
“designs,” “impacts,” “forecasts,” “target,” “outlook,”
“initiative,” “objective,” “designed,” “priorities,” “goal” or the
negative of those words or other similar expressions is intended to
identify forward-looking statements that represent our current
judgment about possible future events. Forward-looking statements
should not be read as a guarantee of future performance or results
and will probably not be accurate indications of when such
performance or results will be achieved. All statements included or
incorporated by reference in this prospectus supplement and in
related comments by our management, other than statements of
historical facts, including without limitation, statements about
future events or financial performance, are forward-looking
statements that involve certain risks and uncertainties.
These
statements are based on certain assumptions and analyses made in
light of our experience and perception of historical trends,
current conditions and expected future developments as well as
other factors that we believe are appropriate in the circumstances.
While these statements represent our judgment on what the future
may hold, and we believe these judgments are reasonable, these
statements are not guarantees of any events or financial results.
Whether actual future results and developments will conform with
our expectations and predictions is subject to a number of risks
and uncertainties, including the risks and uncertainties discussed
in this prospectus supplement, the accompanying prospectus and the
documents incorporated by reference under the captions “Risk
Factors” and “Special Note Regarding Forward-Looking Statements”
and elsewhere in those documents.
Consequently,
all of the forward-looking statements made in this prospectus
supplement and the accompanying prospectus, as well as all of the
forward-looking statements incorporated by reference to our filings
under the Exchange Act, are qualified by these cautionary
statements and there can be no assurance that the actual results or
developments that we anticipate will be realized or, even if
realized, that they will have the expected consequences to or
effects on us and our subsidiaries or our businesses or operations.
We caution investors not to place undue reliance on forward-looking
statements. We undertake no obligation to update publicly or
otherwise revise any forward-looking statements, whether as a
result of new information, future events, or other such factors
that affect the subject of these statements, except where we are
expressly required to do so by law.
USE
OF PROCEEDS
We
estimate that we will receive net proceeds of approximately $2.1
million (or approximately $2.4 million if the underwriter’s option
to purchase additional shares is exercised in full) from the sale
of the shares offered by us in this offering, after deducting the
estimated underwriting discounts and commissions and estimated
offering expenses payable by us.
While
our Series E Preferred Stock is outstanding, we are required to use
the proceeds of any sales of equity securities, including the
common stock offered hereby, exclusively to redeem any outstanding
shares of Series E Preferred Stock, subject to certain limitations.
We received a waiver from Jackson, the sole holder of our
outstanding shares of Series E Preferred Stock to use the proceeds
from this offering to redeem approximately (i) 75% of the net
proceeds from this offering to redeem a portion of the Second
Amended and Restated 12% Senior Secured Note due September 30,
2022, which currently has outstanding principal amount and accrued
interest of $35,739,794 and (ii) 25% of the net proceeds from this
offering to redeem a portion of our Base Series E Preferred
Stock.
To
the extent there are any net proceeds from this offering in excess
of the above described redemptions, we intend to invest such net
proceeds in a variety of capital preservation investments,
including short-term, investment-grade and interest-bearing
instruments. However, we currently do not anticipate having any
such excess net proceeds from this offering.
DIVIDEND POLICY
At
our Board’s discretion, we paid a quarterly cash dividend of $0.01
per share to holders of our common stock on February 28, 2019 and
May 30, 2019.
We
are limited in our ability to pay dividends by certain of our
existing agreements and the certificates of designations of our
preferred stock. In particular, our Series E 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
events of default exist under our debt agreements or the Series E
Certificate of Designation. In addition, so long as any shares of
Series A Preferred Stock are outstanding, as they are at this time,
we are not able to declare, pay or set apart for payment any
dividend on any shares of common stock, unless at the time of such
dividend we have paid all accrued and unpaid dividends on the
outstanding shares of Series A Preferred Stock. As of the date of
this prospectus supplement, pursuant to the terms of the Series E
Certificate of Designation, we may not issue any further dividend
payments to shares of Series A Preferred Stock so, as a
consequence, we will not declare a common stock dividend while the
Series E Preferred Stock are outstanding.
In
addition, our ability to issue dividends is subject to the
requirements of Delaware law, which generally requires that any
dividends must be paid out of our surplus capital or, if there is
no surplus capital, out of net profits for the fiscal year in which
a dividend is declared and/or the preceding fiscal year. Our
ability to pay future dividends will depend upon, among other
factors, our cash balances and potential future capital
requirements, debt service requirements, earnings, financial
condition, the general economic and regulatory climate and other
factors beyond our control that our board of directors may deem
relevant. Investors should not purchase our common stock with the
expectation of receiving cash dividends.
Accordingly,
we do not expect to pay or declare any further cash dividends on
our common stock for the foreseeable future. We expect to retain
our future earnings, if any, for use in the operation of our
business, including the repayment of our outstanding indebtedness.
Consequently, investors must rely on sales of their common stock
after price appreciation, which may never occur, as the primary way
to realize any future gains on their investment. There is no
guarantee that shares of our common stock will appreciate in value
or even maintain the price at which our stockholders have purchased
their shares.
DILUTION
If
you invest in our common stock in this offering, your interest will
be diluted to the extent of the difference between the public
offering price per share and the net tangible book value per share
of our common stock after this offering.
Our
net tangible book value as of September 26, 2020, was approximately
$(57,800,000), or $(6.19) per share of our common stock, based upon
9,333,763 shares of our common stock outstanding as of that date.
Net tangible book value per share is determined by dividing our
total tangible assets, less total liabilities, by the number of
shares of our common stock outstanding as of September 26, 2020.
Dilution in net tangible book value per share represents the
difference between the amount per share paid by purchasers of
shares of common stock in this offering and the net tangible book
value per share of our common stock immediately after this
offering.
After
giving effect to (i) the refinancing of an aggregate of $35.7
million of debt provided by Jackson pursuant to that certain
Amended and Restated Note Purchase Agreement, dated September 15,
2017, including the payment of an amendment fee of approximately
$488,000, subsequent to September 26, 2020, (ii) the issuance of
300,000 shares of restricted stock to Brendan Flood as
compensations for his services as our director and chief executive
officer, of which (A) 100,000 shares vested upon the completion of
the refinancing of our debt, (B) 100,000 shares may become vested
upon the satisfaction of the minimum stockholders equity
requirements of the Nasdaq, and (C) 100,000 shares may become
vested upon the closing of this offering provided that we raise
more than $2,000,000 in this offering, subsequent to September 26,
2020, (iii) the issuance of 5,600 shares of common stock to our
directors for Board services, subsequent to September 26, 2020, and
(iv) the issuance of 5,000 shares of common stock awarded to our
employees upon the completion of refinancing of our debt,
subsequent to September 26, 2020, our pro forma net tangible book
value as of September 26, 2020 would have been approximately
$(58,300,000), or $(6.04) per share of common stock.
After giving further effect to (i) the sale of 4,188,405 shares of
our common stock in this offering at the public offering price
of $0.60 per share and after deducting the underwriting discounts
and commissions and estimated offering expenses payable by us, our
pro forma as adjusted net tangible book value as of September 26,
2020 would have been approximately $(56,700,000), or $(4.10) per
share of common stock. This represents an immediate increase in net
tangible book value of $1.94 per share to our existing
stockholders, and an immediate dilution of $4.70 per share to new
investors purchasing our common stock in this offering at the
public offering price.
The
following table illustrates this dilution on a per share
basis:
| Public offering price per
share |
|
|
|
|
|
$ |
0.60 |
|
| Historical net tangible book value per
share as of September 26, 2020 |
|
$ |
(6.19 |
) |
|
|
|
|
| Increase in net
tangible book value per share attributable to the adjustments
described above |
|
|
0.15 |
|
|
|
|
|
| Pro forma net tangible book value per
share as of September 26, 2020 |
|
$ |
(6.04 |
) |
|
|
|
|
| Increase in pro forma net tangible
book value per share attributable to this offering |
|
$ |
1.94 |
|
|
|
|
|
| Pro forma
as-adjusted net tangible book value per share as of September 26,
2020 after giving further effect to this offering |
|
|
|
|
|
$ |
(4.10 |
) |
| Dilution in pro forma as-adjusted net
tangible book value per share to investors participating in this
offering |
|
|
|
|
|
$ |
4.70 |
|
If the underwriter exercises in full its option to purchase up to
628,260 additional shares of common stock at the public offering
price of $0.60 per share, less underwriting discounts and
commissions, the pro forma as adjusted net tangible book value
after this offering would be $(56,500,000), or $(3.90) per share,
representing an increase in net tangible book value of $2.14 per
share to existing stockholders and immediate dilution in net
tangible book value of $4.50 per share to investors purchasing our
securities in this offering at the public offering price.
The
foregoing discussion and table does not take into account further
dilution to investors in this offering that could occur upon the
exercise of outstanding options and warrants having a per share
exercise price less than the public offering price per share in
this offering.
The
number of shares of our common stock outstanding was 9,333,763
shares of common stock outstanding as of September 26, 2020 and
excludes, as of that date:
|
|
● |
76,500
shares of common stock issuable upon exercise of stock
options; |
|
|
● |
27,024
shares of common stock issuable upon potential conversion of Series
A Preferred Stock; |
|
|
● |
11,700,000
shares of common stock issuable upon potential conversion of 11,700
shares of Base Series E Preferred Stock, with such conversion given
effect in the pro forma calculation in the table above; |
|
|
● |
1,219,000
shares of common stock issuable upon potential conversion of 1,219
shares of Series E-1 Preferred Stock issued as dividends to the
holders of the Base Series E Preferred Stock; |
|
|
● |
1,015,934
shares of common stock issuable upon the exercise of warrants
outstanding prior to this offering at a weighted average exercise
price of $1.10; |
|
|
● |
up to
1,354,167 additional shares of common stock issuable upon potential
conversion of shares of Series E-1 Preferred Stock issuable as
dividends payable to the holders of our Base Series E Preferred
Stock, based on 6,500 shares of preferred stock designated as
Series E-1 Preferred Stock pursuant to the Series E Certificate of
Designation;
|
|
|
● |
177,500
shares of
common stock issuable pursuant to outstanding performance awards;
and |
|
|
● |
up to
314,130 shares of common stock (or if the underwriter exercises its
option to purchase additional shares of common stock in full, up to
361,250 shares of common stock) issuable upon the exercise of
warrants with an exercise price of $0.75 to be issued to the
underwriter or its designees in connection with this
offering. |
To
the extent that options or warrants outstanding as of September 26,
2020 have been or may be exercised or we issue other shares,
investors purchasing common stock in this offering may experience
further dilution. In addition, we may seek to raise additional
capital in the future through the sale of equity or convertible
debt securities. To the extent that we raise additional capital
through the sale of equity or convertible debt securities, the
issuance of these securities could result in further dilution to
our stockholders.
Underwriting
Pursuant
to the underwriting agreement with H.C. Wainwright & Co., LLC,
we have agreed to issue and sell, and the underwriter agreed to
purchase, the number of shares of common stock listed opposite its
name below, less the underwriting discounts and commissions, on the
closing date, subject to the terms and conditions contained in the
underwriting agreement. The underwriting agreement provides that
the obligations of the underwriter are subject to certain customary
conditions precedent, representations and warranties contained
therein.
|
Name of Underwriter |
|
Number of Shares of
Common Stock |
|
|
H.C. Wainwright & Co., LLC |
|
|
4,188,405 |
|
Pursuant
to the underwriting agreement, the underwriter has agreed to
purchase all of the shares sold under the underwriting agreement if
any of these shares are purchased, other than those shares covered
by the underwriter’s option to purchase additional shares of common
stock described below. The underwriter has advised us that they do
not intend to confirm sales to any account over which they exercise
discretionary authority.
Discounts,
Commissions and Expenses
The
underwriter is offering the shares, subject to prior sale, when, as
and if issued to and accepted by it, subject to approval of legal
matters and other conditions specified in the underwriting
agreement. The underwriter reserves the right to withdraw, cancel
or modify offers to the public and to reject orders in whole or in
part.
We
have granted to the underwriter an option to purchase up to an
additional 628,260 shares of common stock (up to 15% of the shares
of common stock in this offering) at the public offering price,
less the underwriting discounts and commissions. The option is
exercisable for 30 days.
Any
shares sold by the underwriter to securities dealers will be sold
at the public offering price less a selling concession not in
excess of $0.027 per share.
The
following table shows the public offering price, underwriting
discounts and commissions and proceeds, before expenses, to us.
These amounts are shown assuming both no exercise and full exercise
of the underwriter’s option to purchase additional
shares.
| Per Share |
|
Total Without Option |
|
|
Total With Option |
|
| Public
offering price |
|
$ |
2,513,043 |
|
|
$ |
2,889,999 |
|
| Underwriting discounts and
commissions payable by us |
|
$ |
188,478 |
|
|
$ |
216,750 |
|
| Proceeds, before expenses, to
us |
|
$ |
2,324,565 |
|
|
$ |
2,673,249 |
|
In
addition, we have agreed to issue to the underwriter or its
designees warrants, or the underwriter warrants, to purchase up to
314,130 shares of common stock (or if the underwriter exercises its
option to purchase additional shares of common stock in full, up to
361,250 shares of common stock) (representing 7.5% of the aggregate
number of shares of common stock sold in this offering, including
those pursuant to the option), at an exercise price of $0.75 per
share (representing 125% of the public offering price for a share
of common stock to be sold in this offering). The underwriter
warrants will be exercisable immediately and will expire five years
from the commencement of sales under this offering.
We
have also agreed to pay the underwriter a management fee equal to
1% of the aggregate gross proceeds we receive in this offering. We
have agreed to reimburse the expenses of the underwriter in the
non-accountable sum of $50,000 in connection with this offering,
reimburse the legal expenses of the underwriter up to $100,000 in
connection with this offering, and reimburse up to $12,900 for the
underwriter’s clearing expenses in connection with this
offering.
We
estimate that the total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately
$270,000.
Tail
Financing Payments
In
the event that any investors that were contacted by the underwriter
or were introduced to the Company by the underwriter during the
term of our engagement agreement with the underwriter provide any
capital to us in a public or private offering or capital-raising
transaction within 12 months following the date of engagement of
the underwriter, we shall pay the underwriter the cash and warrant
compensation provided above on the gross proceeds from such
investors.
Right
of First Refusal
We
have granted the underwriter a 12-month right of first refusal to
act as our exclusive underwriter or placement agent for any future
capital raising transactions undertaken by us, provided that this
offering is consummated.
Lock-Up
Agreement
We
have agreed with the underwriter that we will not (subject to
certain exceptions), for a period of 10 days following the closing
of this offering, issue, enter into any agreement to issue or
announce the issuance or proposed issuance of any shares of common
stock or securities exercisable or convertible into common stock.
In addition, we have agreed that we will not, for a period of one
year from the date of the underwriting agreement, effect or enter
into an agreement to effect any issuance by the Company of common
stock or securities convertible into common stock involving a
variable rate transaction (as defined in the underwriting
agreement).
Indemnification
We
have agreed to indemnify the underwriter against certain
liabilities, including civil liabilities under the Securities Act,
or to contribute to payments that the underwriter may be required
to make in respect of those liabilities.
Price
Stabilization, Short Positions and Penalty Bids
In
connection with this offering, the underwriter may engage in
stabilizing transactions, overallotment transactions, syndicate
covering transactions and penalty bids in connection with our
common stock.
Stabilizing
transactions permit bids to purchase shares of common stock so long
as the stabilizing bids do not exceed a specified
maximum.
Overallotment
transactions involve sales by the underwriter of shares of common
stock in excess of the number of shares the underwriter is
obligated to purchase. This creates a syndicate short position
which may be either a covered short position or a naked short
position. In a covered short position, the number of shares
over-allotted by the underwriter is not greater than the number of
shares that it may purchase in the overallotment option. In a naked
short position, the number of shares involved is greater than the
number of shares in the overallotment option. The underwriter may
close out any short position by exercising its overallotment option
and/or purchasing shares in the open market.
Syndicate
covering transactions involve purchases of common stock in the open
market after the distribution has been completed in order to cover
syndicate short positions. Such a naked short position would be
closed out by buying securities in the open market. A naked short
position is more likely to be created if the underwriter is
concerned that there could be downward pressure on the price of the
securities in the open market after pricing that could adversely
affect investors who purchase in the offering.
Penalty
bids permit the underwriter to reclaim a selling concession from a
syndicate member when the securities originally sold by the
syndicate member are purchased in a stabilizing or syndicate
covering transaction to cover syndicate short positions.
These
stabilizing transactions, syndicate covering transactions and
penalty bids may have the effect of raising or maintaining the
market price of our common stock or preventing or retarding a
decline in the market price of our common stock. As a result, the
price of our common stock in the open market may be higher than it
would otherwise be in the absence of these transactions. Neither we
nor the underwriter make any representation or prediction as to the
effect that the transactions described above may have on the price
of our common stock. These transactions may be effected on Nasdaq,
in the over-the-counter market or otherwise and, if commenced, may
be discontinued at any time.
In
connection with this offering, the underwriter also may engage in
passive market making transactions in our common stock in
accordance with Regulation M during a period before the
commencement of offers or sales of shares of our common stock in
this offering and extending through the completion of the
distribution. In general, a passive market maker must display its
bid at a price not in excess of the highest independent bid for
that security. However, if all independent bids are lowered below
the passive market maker’s bid that bid must then be lowered when
specific purchase limits are exceeded. Passive market making may
stabilize the market price of the securities at a level above that
which might otherwise prevail in the open market and, if commenced,
may be discontinued at any time.
Electronic
Distribution
A
prospectus in electronic format may be made available on the
websites maintained by the underwriter, if any, participating in
this offering and the underwriter may distribute prospectuses
electronically. Other than the prospectus in electronic format, the
information on these websites is not part of this prospectus or the
registration statement of which this prospectus form a part, has
not been approved or endorsed by us or the underwriter, and should
not be relied upon by investors.
Other
Relationships
From
time to time, the underwriter and its affiliates may provide
various advisory, investment and commercial banking and other
services to us in the ordinary course of business, for which they
may receive customary fees and commissions.
Transfer
Agent
The
transfer agent and registrar for our common stock is Continental
Stock Transfer & Trust Company.
Nasdaq
listing
Our
shares of common stock are listed on Nasdaq under the symbol
“STAF.”
LEGAL MATTERS
The
validity of the securities offered by this prospectus supplement
will be passed upon by Haynes and Boone, LLP, New York, New York.
Certain matters will be passed upon for the underwriter by
Sichenzia Ross Ference LLP, New York, New York.
EXPERTS
BDO
USA, LLP an independent registered public accounting firm, has
audited our consolidated financial statements for the fiscal years
ended December 28, 2019 and December 29, 2018 included in our
Annual Report on Form 10-K for the fiscal year ended December 28,
2019, as set forth in their report, which is incorporated by
reference in this prospectus.
Our
consolidated financial statements are incorporated by reference in
reliance on the reports of BDO USA, LLP (which contains an
explanatory paragraph relating to our ability to continue as a
going concern as described in Note 2 to the financial statements)
given on their authority as experts in accounting and
auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the informational requirements of the Exchange Act
and in accordance therewith file annual, quarterly and current
reports, proxy statements and other information with the SEC. The
SEC maintains a website that contains reports, proxy and
information statements and other information regarding registrants
that file electronically with the SEC. The address of the SEC’s
website is www.sec.gov.
We
make available free of charge on or through our website at
www.staffing360solutions.com, our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Exchange Act as soon as reasonably
practicable after we electronically file such material with or
otherwise furnish it to the SEC.
This
prospectus supplement constitutes a part of a registration
statement on Form S-3 that we have filed with the SEC under the
Securities Act. This prospectus supplement does not contain all of
the information set forth in the registration statement. You can
obtain a copy of the registration statement for free at
www.sec.gov. The registration statement and the documents referred
to below under “Incorporation of Certain Information By Reference”
are also available on our website,
www.staffing360solutions.com.
We
have not incorporated by reference into this prospectus the
information on our website, and you should not consider it to be a
part of this prospectus.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
The
SEC allows us to “incorporate by reference” the information we have
filed with it, which means that we can disclose important
information to you by referring you to those documents. The
information we incorporate by reference is an important part of
this prospectus supplement, and later information that we file with
the SEC will automatically update and supersede this information.
We incorporate by reference the documents listed below and any
future documents (excluding information furnished pursuant to Items
2.02 and 7.01 of Form 8-K) we file with the SEC pursuant to
Sections l3(a), l3(c), 14 or l5(d) of the Exchange Act subsequent
to the date of this prospectus supplement and prior to the
termination of the offering:
|
|
● |
The
portions of our Definitive Proxy Statement on Schedule 14A that are deemed
“filed” with the SEC under the Exchange Act, filed with the SEC on
August 14, 2020; |
|
|
● |
Our
Quarterly Report on Form 10-Q for the quarter ended
March 28, 2020, filed with the SEC on June 26, 2020;
|
|
|
● |
Our
Quarterly Report on Form 10-Q for the quarter ended
June 27, 2020, filed with the SEC on August 11, 2020;
|
|
|
● |
Our
Quarterly Report on Form 10-Q for the quarter ended
September 26, 2020, filed with the SEC on November 10,
2020;
|
|
|
● |
The
description of our common stock contained in our Registration
Statement on Form 8-A, filed with the SEC on
September 28, 2015, as updated or amended in any amendment or
report filed for such purpose, as supplemented and amended by the
description of our common stock contained in Exhibit 4.5 to our Annual Report
on Form 10-K for the year ended December 28, 2019, filed with the
SEC on May 11, 2020; and |
|
|
● |
Our
Current Reports on Form 8-K, filed with the SEC on January 29, 2020, February 5, 2020, February 21, 2020, March 27, 2020, April 17, 2020, May 11, 2020, May 15, 2020, May 26, 2020, June 8, 2020, July 1, 2020, July 6, 2020, September 10, 2020, September 17, 2020, September 29, 2020, October 1, 2020, October 27, 2020, December 4, 2020, and December 21, 2020. |
Any
statement contained in a document incorporated by reference into
this prospectus supplement will be deemed to be modified or
superseded for the purposes of this prospectus supplement to the
extent that a later statement contained in this prospectus
supplement or in any other document incorporated by reference into
this prospectus supplement modifies or supersedes the earlier
statement. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part
of this prospectus supplement.
We
will provide without charge to each person to whom a copy of this
prospectus supplement is delivered, upon written or oral request, a
copy of any or all of the reports or documents that have been
incorporated by reference in this prospectus supplement but not
delivered with this prospectus supplement (other than an exhibit to
these filings, unless we have specifically incorporated that
exhibit by reference in this prospectus supplement). Any such
request should be addressed to us at:
Staffing
360 Solutions, Inc.
Attn:
Khalid Anwar, Senior Vice President of Corporate Finance
641
Lexington Ave., 27th Floor
New
York, New York 10022
(646)
507-5710
You
may also access the documents incorporated by reference in this
prospectus supplement through our website at
www.staffing360solutions.com. Except for the specific incorporated
documents listed above, no information available on or through our
website shall be deemed to be incorporated in this prospectus
supplement or the accompanying prospectus.
$50,000,000
Common Stock
Preferred Stock
Warrants
Units
Staffing 360 Solutions, Inc.
We may offer and sell from time to time, in one or more series or
issuances and on terms that we will determine at the time of the
offering, any combination of the securities described in this
prospectus, up to an aggregate amount of $50,000,000.
We will provide specific terms of any offering in a supplement to
this prospectus. Any prospectus supplement may also add, update, or
change information contained in this prospectus. You should
carefully read this prospectus and the applicable prospectus
supplement as well as the documents incorporated or deemed to be
incorporated by reference in this prospectus before you purchase
any of the securities offered hereby.
These securities may be offered and sold in the same offering or in
separate offerings; to or through underwriters, dealers, and
agents; or directly to purchasers. The names of any underwriters,
dealers, or agents involved in the sale of our securities, their
compensation and any over-allotment options held by them will be
described in the applicable prospectus supplement. See “Plan of
Distribution.”
Our common stock is listed on the Nasdaq Capital Market under the
symbol “STAF.” On March 25, 2019, the last reported sale price of
our common stock as reported on the Nasdaq Capital Market was $1.47
per share. We recommend that you obtain current market quotations
for our common stock prior to making an investment decision. We
will provide information in any applicable prospectus supplement
regarding any listing of securities other than shares of our common
stock on any securities exchange.
As of March 21, 2019, the aggregate market value of our common
stock held by non-affiliates, or our public float, was $13,998,392
based on a total number of 8,234,348 shares of common stock
outstanding, of which 6,271,381 shares of common stock were held by
non-affiliates, and a price of $1.70 per share, the closing price
of our common stock on March 21, 2019. Pursuant to General
Instruction I.B.6. of Form S-3, in no event will we sell
the securities covered hereby in a public primary offering with a
value exceeding more than one-third of the aggregate market value
of our common stock in any 12-month period so long as the aggregate
market value of our outstanding common stock held by non-affiliates
remains below $75 million. During the 12 calendar months prior
to and including the date of this prospectus, we have not offered
or sold any shares of common stock pursuant to General
Instruction I.B.6. of Form S-3.
You should carefully read this prospectus, any prospectus
supplement relating to any specific offering of securities, and all
information incorporated by reference herein and therein.
Investing in our securities involves a high degree of risk. These
risks are discussed in this prospectus under “Risk Factors”
beginning on page 4 and in the documents incorporated by reference
into this prospectus.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is April 11, 2019
TABLE OF CONTENTS
i
ABOUT
THIS
PROSPECTUS
This prospectus is part of a registration statement on Form S-3
that we filed with the Securities and Exchange Commission using a
“shelf” registration process. Under this shelf process, we may,
from time to time, sell any combination of the securities described
in this prospectus in one or more offerings up to a total amount of
$50,000,000.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will
provide a prospectus supplement that will contain specific
information about the terms of that offering. We may also add,
update or change in a prospectus supplement any information
contained in this prospectus. To the extent any
statement made in a prospectus supplement or a document
incorporated by reference herein after the date hereof is
inconsistent with the statements made in this prospectus, the
statements made in this prospectus will be deemed modified or
superseded by those made in the prospectus supplement or the
incorporated document.
The prospectus supplement to be attached to the front of this
prospectus may describe, as applicable: the terms of the securities
offered; the public offering price; the price paid for the
securities; net proceeds; and the other specific terms related to
the offering of the securities.
You should only rely on the information contained or incorporated
by reference in this prospectus and any prospectus supplement or
issuer free writing prospectus relating to a particular offering.
No person has been authorized to give any information or make any
representations in connection with this offering other than those
contained or incorporated by reference in this prospectus, any
accompanying prospectus supplement and any related issuer free
writing prospectus in connection with the offering described herein
and therein, and, if given or made, such information or
representations must not be relied upon as having been authorized
by us. Neither this prospectus nor any prospectus supplement nor
any related issuer free writing prospectus shall constitute an
offer to sell or a solicitation of an offer to buy offered
securities in any jurisdiction in which it is unlawful for such
person to make such an offering or solicitation. This prospectus
does not contain all of the information included in the
registration statement. For a more complete understanding of the
offering of the securities, you should refer to the registration
statement, including its exhibits.
You should read the entire prospectus and any prospectus supplement
and any related issuer free writing prospectus, as well as the
documents incorporated by reference into this prospectus or any
prospectus supplement or any related issuer free writing
prospectus, before making an investment decision. Neither the
delivery of this prospectus or any prospectus supplement or any
issuer free writing prospectus nor any sale made hereunder shall
under any circumstances imply that the information contained or
incorporated by reference herein or in any prospectus supplement or
issuer free writing prospectus is correct as of any date subsequent
to the date hereof or of such prospectus supplement or issuer free
writing prospectus, as applicable. You should assume that the
information appearing in this prospectus, any prospectus supplement
or any document incorporated by reference is accurate only as of
the date of the applicable documents, regardless of the time of
delivery of this prospectus or any sale of securities. Our
business, financial condition, results of operations and prospects
may have changed since that date.
ii
PROSPECTUS SUMMARY
This summary provides an overview of selected information contained
elsewhere or incorporated by reference in this prospectus and does
not contain all of the information you should consider before
investing in our securities. You should carefully read the
prospectus, the information incorporated by reference and the
registration statement of which this prospectus is a part in their
entirety before investing in our securities, including the
information discussed under “Risk Factors” in this prospectus and
the documents incorporated by reference and our financial
statements and related notes that are incorporated by reference in
this prospectus. Unless the context requires otherwise, references
in this prospectus to “Staffing 360,” “we,” “us” and “our” refer to
Staffing 360 Solutions, Inc. together with its wholly-owned
subsidiaries.
Overview
Business overview
We are a high-growth international staffing company engaged in the
acquisition of United States and United Kingdom based staffing
companies. Our services principally consist of providing temporary
contractors, and, to a much lesser extent, the recruitment of
candidates for permanent placement. As part of our consolidation
model, we pursue a broad spectrum of staffing companies supporting
primarily accounting and finance, information technology,
engineering, administration and commercial disciplines. As a
rapidly growing public company in the international staffing
sector, our high-growth business model is based on finding and
acquiring, suitable, mature, profitable, operating, domestic and
international staffing companies. Our targeted consolidation model
is focused specifically on the accounting and finance, information
technology, engineering, administration and light industrial
disciplines. Our typical acquisition model is based on
paying consideration in the form of cash, stock, earn-outs and/or
promissory notes. In furthering our business model, we are
regularly in discussions and negotiations with various suitable,
mature acquisition targets. To date, we have completed ten
acquisitions since November 2013.
Corporate information
Staffing 360 Solutions, Inc., was incorporated in the State of
Nevada on December 22, 2009, as Golden Fork Corporation, which
changed its name to Staffing 360 Solutions, Inc., and its trading
symbol to “STAF”, on March 16, 2012. On June 15, 2017, we changed
our state of domicile to the State of Delaware. Our principal
executive office is located at 641 Lexington Avenue, 27th Floor,
New York, New York 10022, and our telephone number is (646)
507-5710. Our website is www.staffing360solutions.com, and the
information included in, or linked to our website is not part of
this prospectus. We have included our website address in this
prospectus solely as a textual reference.
3
RISK FACTORS
An investment in our securities involves a high degree of risk. The
prospectus supplement applicable to each offering of our securities
will contain a discussion of the risks applicable to an investment
in our securities. Before deciding whether to invest in our
securities, you should carefully consider the specific factors
discussed under the heading “Risk Factors” in the applicable
prospectus supplement, together with all of the other information
contained or incorporated by reference in the prospectus supplement
or appearing or incorporated by reference in this prospectus. You
should also consider the risks, uncertainties and assumptions
discussed under Item 1A, “Risk Factors,” in our most recent Annual
Report on Form 10-K or any updates in our Quarterly Reports on Form
10-Q, together with all other information appearing in or
incorporated by reference into this prospectus or the applicable
prospectus supplement, before deciding whether to purchase any
securities being offered. If any of these risks actually occurs,
our business, business prospects, financial condition or results of
operations could be seriously harmed. This could cause the trading
price of our common stock to decline, resulting in a loss of all or
part of your investment. Please also read carefully the section
below entitled “Special Note Regarding Forward-Looking
Statements.”
SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus, each prospectus supplement and the information
incorporated by reference in this prospectus and each prospectus
supplement contain “forward-looking statements,” which include
information relating to future events, future financial
performance, strategies, expectations, competitive environment and
regulation. Our use of the words “may,” “will,” “would,” “could,”
“should,” “believes,” “estimates,” “projects,” “potential,”
“expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,”
“anticipates,” “continues,” “designs,” “impacts,” “forecasts,”
“target,” “outlook,” “initiative,” “objective,” “designed,”
“priorities,” “goal” or the negative of those words or other
similar expressions is intended to identify forward-looking
statements that represent our current judgment about possible
future events. Forward-looking statements should not be read as a
guarantee of future performance or results and will probably not be
accurate indications of when such performance or results will be
achieved. All statements included or incorporated by reference in
this prospectus, and in related comments by our management, other
than statements of historical facts, including without limitation,
statements about future events or financial performance, are
forward-looking statements that involve certain risks and
uncertainties.
These statements are based on certain assumptions and analyses made
in light of our experience and perception of historical trends,
current conditions and expected future developments as well as
other factors that we believe are appropriate in the circumstances.
While these statements represent our judgment on what the future
may hold, and we believe these judgments are reasonable, these
statements are not guarantees of any events or financial results.
Whether actual future results and developments will conform with
our expectations and predictions is subject to a number of risks
and uncertainties, including the risks and uncertainties discussed
in this prospectus, any prospectus supplement and the documents
incorporated by reference under the captions “Risk Factors” and
“Special Note Regarding Forward-Looking Statements” and elsewhere
in those documents.
Consequently, all of the forward-looking statements made in this
prospectus and any applicable prospectus supplement , as well as
all of the forward-looking statements incorporated by reference to
our filings under the Securities Exchange Act of 1934, as amended,
are qualified by these cautionary statements and there can be no
assurance that the actual results or developments that we
anticipate will be realized or, even if realized, that they will
have the expected consequences to or effects on us and our
subsidiaries or our businesses or operations. We caution investors
not to place undue reliance on forward-looking statements. We
undertake no obligation to update publicly or otherwise revise any
forward-looking statements, whether as a result of new information,
future events, or other such factors that affect the subject of
these statements, except where we are expressly required to do so
by law.
4
USE OF PROCEEDS
While our Series E Convertible Preferred Stock (the “Base Series E
Preferred Stock”) and Series E-1 Convertible Preferred Stock (the
“Series E-1 Preferred Stock,” and collectively with the Base Series
E Preferred Stock, the “Series E Preferred Stock”) are outstanding,
we are required to use the proceeds of any sales of equity
securities, including any securities offered hereby, exclusively to
redeem any outstanding shares of Series E Preferred Stock, except
that we are permitted to use up to an aggregate of $3,000,000 of
the gross proceeds from any equity offerings completed on or before
November 15, 2019 for working capital purposes (the “Working
Capital Basket”). As of the date of this prospectus, we had fully
utilized the Working Capital Basket with the gross proceeds
generated from previous equity offerings. Accordingly, without
obtaining a waiver from the requisite holders of the Series E
Preferred Stock, any proceeds from this offering or future equity
offerings must be used to redeem the Series E Preferred Stock. As
of March 25, 2019, we had 13,000 shares of Base Series E Preferred
Stock and 243 shares of Series E-1 Preferred Stock outstanding
having an aggregate redemption value of $13,243,000.
In the future, we may seek a waiver from the holders of the Series
E Preferred stock to permit us utilize a portion of the proceeds of
this offering for purposes other than redeeming the Series E
Preferred Stock. The holders of our Series E Preferred Stock may
not agree to sign any such waiver on terms that are favorable to
us, or at all. Accordingly, unless we specify another use in the
applicable prospectus supplement, we will use the net proceeds from
the sale of the securities offered by us:
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|
•
|
first, to redeem the
Series E Preferred Stock; and
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•
|
second, only after the
Series E Preferred Stock has been fully redeemed or the
restrictions related to the proceeds of this offering have been
waived, for general corporate purposes, which may include, among
other things, working capital, capital expenditures, and to the
extent we have any debt, debt repayment.
|
We may set forth additional information on the use of net proceeds
from the sale of the securities we offer under this prospectus in a
prospectus supplement related to a specific offering.
Pending application of the net proceeds as described above, we
intend to invest the net proceeds to us from this offering in a
variety of capital preservation investments, including short-term,
investment-grade and interest-bearing instruments.
5
DESCRIPTION
OF CAPITAL STOCK
The following description of common stock and preferred stock
summarizes the material terms and provisions of the common stock
and preferred stock that we may offer under this prospectus, but is
not complete. For the complete terms of our common stock and
preferred stock, please refer to our amended and restated
certificate of incorporation, as amended, any certificates of
designation for our preferred stock, and our amended and restated
bylaws, as may be amended from time to time. While the terms we
have summarized below will apply generally to any future common
stock or preferred stock that we may offer, we will describe the
specific terms of any series of preferred stock in more detail in
the applicable prospectus supplement. If we so indicate in a
prospectus supplement, the terms of any preferred stock we offer
under that prospectus supplement may differ from the terms we
describe below.
Our amended and restated certificate of incorporation authorizes us
to issue 60,000,000 shares of capital stock, of which 40,000,000
are shares of common stock and 20,000,000 are shares of preferred
stock. As of March 25, 2019, we had 8,234,348 shares of common
stock, 1,663,008 shares of Series A Preferred Stock, 13,000 shares
of Base Series E preferred Stock and 243 shares of Series E-1
Preferred Stock issued and outstanding. We currently have 1,663,008
shares designated as the Series A Preferred Stock and 19,500 shares
designated as the Series E Preferred Stock, with the latter
consisting of 13,000 shares designated as the Base Series E
Preferred Stock and 6,500 shares as the Series E-1 Preferred
Stock.
The authorized and unissued shares of common stock and the
authorized and undesignated shares of preferred stock are available
for issuance without further action by our stockholders, unless
such action is required by applicable law or the rules of any stock
exchange on which our securities may be listed. Unless approval of
our stockholders is so required, our board of directors does not
intend to seek stockholder approval for the issuance and sale of
our common stock or preferred stock.
Common Stock
As of March 25, 2019, there were 8,234,348 shares of our common
stock outstanding. The holders of our common stock are entitled to
the following rights:
Voting
Our common stock is entitled to one vote for each share held on all
matters submitted to a vote of the stockholders, including the
election of directors, and does not have cumulative voting rights.
Accordingly, the holders of a majority of the shares of our common
stock entitled to vote in any election of directors can elect all
of the directors standing for election.
Dividends
Subject to preferences that may be applicable to any
then-outstanding preferred stock, the holders of common stock are
entitled to receive dividends, if any, as may be declared from time
to time by our board of directors out of legally available funds.
On January 29, 2019, our board of directors approved a dividend
program under which we intend to pay a regular quarterly cash
dividend of $0.01 per share to holders of our common stock, subject
to the requirements of applicable law and our material
agreements.
Liquidation
In the event of our liquidation, dissolution or winding-up, holders
of our common stock will be entitled to share ratably in the net
assets legally available for distribution to stockholders after the
payment of all of our debts and other liabilities, subject to the
satisfaction of any liquidation preference granted to the holders
of any outstanding shares of preferred stock.
Rights and Preferences
6
Holders
of our common stock have no preemptive, conversion or subscription
rights, and there are no redemption or sinking fund provisions
applicable to our common stock. The rights, preferences and
privileges of the holders
of our common stock are subject to, and may be adversely affected
by, the rights of the holders of shares of any series of our
preferred stock that are outstanding or that we may designate and
issue in the future.
Preferred Stock
As of March 25, 2019, we had 1,663,008 shares of Series A Preferred
Stock, 13,000 shares of Base Series E Preferred Stock and 243
shares of Series E-1 Preferred Stock issued and outstanding.
Our board of directors has the authority, without further action by
the stockholders, to issue up to an aggregate of 20,000,000 shares
of preferred stock in one or more series, to establish from time to
time the number of shares to be included in each such series, to
fix the rights, preferences and privileges of the shares of each
wholly unissued series and any qualifications, limitations or
restrictions thereon and to increase or decrease the number of
shares of any such series, but not below the number of shares of
such series then outstanding. Issuance of preferred stock by our board of
directors may result in such shares having dividend and/or
liquidation preferences senior to the rights of the holders of our
common stock and could dilute the voting rights of the holders of
our common stock.
Prior to the issuance of shares of each series of preferred stock,
the board of directors is required by the Delaware General
Corporation Law and our certificate of incorporation to adopt
resolutions and file a certificate of designation with the
Secretary of State of the State of Delaware. The certificate of
designation fixes for each class or series the designations,
powers, preferences, rights, qualifications, limitations and
restrictions, including, but not limited to, some or all of the
following:
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the number of shares
constituting that series and the distinctive designation of that
series, which number may be increased or decreased (but not below
the number of shares then outstanding) from time to time by action
of the board of directors;
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the dividend rate and
the manner and frequency of payment of dividends on the shares of
that series, whether dividends will be cumulative, and, if so, from
which date;
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whether that series will
have voting rights, in addition to any voting rights provided by
law, and, if so, the terms of such voting rights;
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whether that series will
have conversion privileges, and, if so, the terms and conditions of
such conversion, including provision for adjustment of the
conversion rate in such events as the board of directors may
determine;
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whether or not the
shares of that series will be redeemable, and, if so, the terms and
conditions of such redemption;
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whether that series will
have a sinking fund for the redemption or purchase of shares of
that series, and, if so, the terms and amount of such sinking
fund;
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whether or not the
shares of the series will have priority over or be on a parity with
or be junior to the shares of any other series or class in any
respect;
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the rights of the shares
of that series in the event of voluntary or involuntary
liquidation, dissolution or winding up of the corporation, and the
relative rights or priority, if any, of payment of shares of that
series; and
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any other relative
rights, preferences and limitations of that series.
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7
Once
designated by our board of directors, each series
of preferred stock may have specific financial and other terms that
will be described in a prospectus supplement. The description of
the preferred stock that is set forth in any prospectus supplement
is not complete without reference to the documents that
govern the preferred stock. These include our certificate of
incorporation and any certificates of designation that our board of
directors may adopt.
All shares of preferred stock offered hereby will, when issued, be
fully paid and nonassessable, including shares of preferred stock
issued upon the exercise of preferred stock warrants or
subscription rights, if any.
Although our board of directors has no intention at the present
time of doing so, it could authorize the issuance of a series of
preferred stock that could, depending on the terms of such series,
impede the completion of a merger, tender offer or other takeover
attempt.
Anti-Takeover Effects of Provisions of Our Articles of
Incorporation, Our Bylaws and Delaware Law
We are
subject to Section 203 of the Delaware General Corporation Law.
Section 203 generally prohibits a public Delaware corporation from
engaging in a “business combination” with an “interested
stockholder” for a period of three years after the date of the
transaction in which the person became
an interested stockholder, unless:
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prior to the date of the
transaction, the board of directors of the corporation approved
either the business combination or the transaction which resulted
in the stockholder becoming an interested stockholder;
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the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced,
excluding for purposes of determining the number of shares
outstanding (i) shares owned by persons who are directors and also
officers and (ii) shares owned by employee stock plans in which
employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or
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on or subsequent to the
date of the transaction, the business combination is approved by
the board and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote
of at least 66 2/3% of the outstanding voting stock which is not
owned by the interested stockholder.
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Section 203 defines a business combination to include:
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merger or consolidation
involving the corporation and the interested
stockholder;
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any sale, transfer,
pledge or other disposition involving the interested stockholder of
10% or more of the assets of the corporation;
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subject to exceptions,
any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested
stockholder; or
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the receipt by the
interested stockholder of the benefit of any loans, advances,
guarantees, pledges or other financial benefits provided by or
through the corporation.
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In general, Section 203 defines an interested stockholder as any
entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation and any entity or person affiliated
with, or controlling, or controlled by, the entity or person. The
term “owner” is broadly defined to include any person that,
individually, with or through that person’s affiliates or
associates, among other things, beneficially owns the stock,
or has the right to acquire the stock, whether or not the right is
immediately exercisable, under any agreement or understanding or
upon the exercise of warrants or options or otherwise or has the
right to vote the stock under any agreement or understanding,
or has an agreement or understanding with the beneficial owner of
the stock for the purpose of acquiring, holding, voting or
disposing of the stock.
The
restrictions in Section 203 do not apply to corporations that have
elected, in the manner provided in Section 203, not to be subject
to Section 203 of the Delaware General Corporation Law or, with
certain exceptions,
8
which do not have a class of voting stock that is listed on a
national
securities exchange or authorized for quotation on the Nasdaq Stock
Market or held of record by more than 2,000 stockholders. Our
certificate of incorporation and bylaws do not opt out of Section
203.
Section 203 could delay or prohibit mergers or other takeover or
change in control attempts with respect to us and, accordingly, may
discourage attempts to acquire us even though such a transaction
may offer our stockholders the opportunity to sell their stock at a
price above the prevailing market price.
Certificate of Incorporation and Bylaws
Provisions of our certificate of incorporation and bylaws may delay
or discourage transactions involving an actual or potential change
in our control or change in our management, including transactions
in which stockholders might otherwise receive a premium for their
shares, or transactions that our stockholders might otherwise deem
to be in their best interests. Therefore, these provisions could
adversely affect the price of our common stock. Among other things,
our certificate of incorporation and bylaws:
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permit our board of
directors to issue up to 20,000,000 shares of preferred stock,
without further action by the stockholders, with any rights,
preferences and privileges as they may designate, including the
right to approve an acquisition or other change in
control;
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provide that the
authorized number of directors may be changed only by resolution of
the board of directors;
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except for directors, if
any, elected by the holders of any series of preferred stock as
provided for or fixed pursuant to any other provision, provide that
all vacancies, including newly created directorships, may, except
as otherwise required by law, be filled by the affirmative vote of
a majority of directors then in office, even if less than a
quorum;
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do not provide for
cumulative voting rights (therefore allowing the holders of a
majority of the shares of common stock entitled to vote in any
election of directors to elect all of the directors standing for
election, if they should so choose);
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provide that special
meetings of our stockholders may be called only by our board of
directors; and
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provide for a classified
board of directors.
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Nasdaq Capital Market Listing
Our common stock is listed on the Nasdaq Capital Market under the
symbol “STAF.”
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is VStock
Transfer, LLC. The transfer agent’s address is 18 Lafayette Place,
Woodmere, New York 11598.
9
DESCRIPTION
OF WARRANTS
As of March 25, 2019, warrants to purchase an aggregate of 925,934
shares of our common stock with a weighted average exercise price
of $1.76 per share were outstanding.
We may issue warrants for the purchase of common stock or preferred
stock in one or more series. We may issue warrants independently or
together with common stock or preferred stock, and the warrants may
be attached to or separate from these securities.
We will evidence each series of warrants by warrant certificates
that we may issue under a separate agreement. We may enter into a
warrant agreement with a warrant agent. Each warrant agent may be a
bank that we select which has its principal office in the United
States. We may also choose to act as our own warrant agent. We will
indicate the name and address of any such warrant agent in the
applicable prospectus supplement relating to a particular series of
warrants.
We will describe in the applicable prospectus supplement the terms
of the series of warrants, including:
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the offering price and aggregate number of warrants offered;
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if applicable, the designation and terms of the securities with
which the warrants are issued and the number of warrants issued
with each such security or each principal amount of such
security;
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if applicable, the date on and after which the warrants and the
related securities will be separately transferable;
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in the case of warrants to purchase common stock or preferred
stock, the number or amount of shares of common stock or preferred
stock, as the case may be, purchasable upon the exercise of one
warrant and the price at which and currency in which these shares
may be purchased upon such exercise;
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the manner of exercise of the warrants, including any cashless
exercise rights;
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the warrant agreement under which the warrants will be issued;
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the effect of any merger, consolidation, sale or other disposition
of our business on the warrant agreement and the warrants;
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anti-dilution provisions of the warrants, if any;
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the terms of any rights to redeem or call the warrants;
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any provisions for changes to or adjustments in the exercise price
or number of securities issuable upon exercise of the warrants;
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the dates on which the right to exercise the warrants will commence
and expire or, if the warrants are not continuously exercisable
during that period, the specific date or dates on which the
warrants will be exercisable;
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the manner in which the warrant agreement and warrants may be
modified;
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the identities of the warrant agent and any calculation or other
agent for the warrants;
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federal income tax consequences of holding or exercising the
warrants;
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the terms of the securities issuable upon exercise of the
warrants;
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10
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any securities exchange or quotation system on which the warrants
or any securities deliverable upon exercise of the warrants may be
listed or quoted; and
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any other specific terms, preferences, rights or limitations of or
restrictions on the warrants.
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Before exercising their warrants, holders of warrants may not have
any of the rights of holders of the securities purchasable upon
such exercise, including, in the case of warrants to purchase
common stock or preferred stock, the right to receive dividends, if
any, or, payments upon our liquidation, dissolution or winding up
or to exercise voting rights, if any.
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities
that we specify in the applicable prospectus supplement at the
exercise price that we describe in the applicable prospectus
supplement. Unless we otherwise specify in the applicable
prospectus supplement, holders of the warrants may exercise the
warrants at any time up to 5:00 P.M. eastern time, the close of
business, on the expiration date that we set forth in the
applicable prospectus supplement. After the close of business on
the expiration date, unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering the
warrant certificate representing the warrants to be exercised
together with specified information and paying the required
exercise price by the methods provided in the applicable prospectus
supplement. We will set forth on the reverse side of the warrant
certificate, and in the applicable prospectus supplement, the
information that the holder of the warrant will be required to
deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificate
properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the
applicable prospectus supplement, we will issue and deliver the
securities purchasable upon such exercise. If fewer than all of the
warrants represented by the warrant certificate are exercised, then
we will, if required by the terms of the warrant, issue a new
warrant certificate for the remaining amount of warrants.
Enforceability of Rights By Holders of Warrants
Any warrant agent will act solely as our agent under the applicable
warrant agreement and will not assume any obligation or
relationship of agency or trust with any holder of any warrant. A
single bank or trust company may act as warrant agent for more than
one issue of warrants. A warrant agent will have no duty or
responsibility in case of any default by us under the applicable
warrant agreement or warrant, including any duty or responsibility
to initiate any proceedings at law or otherwise, or to make any
demand upon us. Any holder of a warrant may, without the consent of
the related warrant agent or the holder of any other warrant,
enforce by appropriate legal action the holder’s right to exercise,
and receive the securities purchasable upon exercise of, its
warrants in accordance with their terms.
Warrant Agreement Will Not Be Qualified Under Trust Indenture
Act
No warrant agreement will be qualified as an indenture, and no
warrant agent will be required to qualify as a trustee, under the
Trust Indenture Act. Therefore, holders of warrants issued under a
warrant agreement will not have the protection of the Trust
Indenture Act with respect to their warrants.
Governing Law
Unless we provide otherwise in the applicable prospectus
supplement, each warrant agreement and any warrants issued under
the warrant agreements will be governed by New York law.
11
DESCRIPTION
OF UNITS
We may issue units comprised of one or more of the other securities
described in this prospectus or any prospectus supplement in any
combination. Each unit will be issued so that the holder of the
unit is also the holder, with the rights and obligations of a
holder, of each security included in the unit. The unit agreement
under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately, at
any time or at any times before a specified date or upon the
occurrence of a specified event or occurrence.
The applicable prospectus supplement will describe:
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the designation and the
terms of the units and of the securities comprising the units,
including whether and under what circumstances those securities may
be held or transferred separately;
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any unit agreement under
which the units will be issued;
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any provisions for the
issuance, payment, settlement, transfer or exchange of the units or
of the securities comprising the units; and
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whether the units will
be issued in fully registered or global
form.
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12
PLAN
OF
DISTRIBUTION
We may sell the securities offered pursuant to this prospectus from
time to time in one or more transactions, including, without
limitation:
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to or through
underwriters;
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through broker-dealers
(acting as agent or principal);
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directly by us to one or
more purchasers (including our affiliates and stockholders),
through a specific bidding or auction process, a rights offering or
otherwise;
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through a combination of
any such methods of sale; or
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through any other
methods described in a prospectus supplement or free writing
prospectus.
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The distribution of securities may be effected, from time to time,
in one or more transactions, including:
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block transactions
(which may involve crosses) and transactions on The Nasdaq Capital
Market or any other organized market where the securities may be
traded;
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purchases by a
broker-dealer as principal and resale by the broker-dealer for its
own account pursuant to a prospectus supplement or free writing
prospectus;
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ordinary brokerage
transactions and transactions in which a broker-dealer solicits
purchasers;
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sales “at the market” to
or through a market maker or into an existing trading market, on an
exchange or otherwise; and
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sales in other ways not
involving market makers or established trading markets, including
direct sales to purchasers.
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The applicable prospectus supplement or free writing prospectus
will describe the terms of the offering of the securities,
including:
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the name or names of any
underwriters, if, and if required, any dealers or
agents;
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the purchase price of
the securities and the proceeds we will receive from the
sale;
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any underwriting
discounts and other items constituting underwriters’
compensation;
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any discounts or
concessions allowed or re-allowed or paid to dealers;
and
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any securities exchange
or market on which the securities may be listed or
traded.
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We may distribute the securities from time to time in one or more
transactions at:
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a fixed price or prices,
which may be changed;
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market prices prevailing
at the time of sale;
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prices related to such
prevailing market prices; or
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13
Only underwriters named in the prospectus supplement are
underwriters of the securities offered by the prospectus
supplement.
If underwriters are used in an offering, we will execute an
underwriting agreement with such underwriters and will specify the
name of each underwriter and the terms of the transaction
(including any underwriting discounts and other terms constituting
compensation of the underwriters and any dealers) in a prospectus
supplement or free writing prospectus. The securities may be
offered to the public either through underwriting syndicates
represented by managing underwriters or directly by one or more
investment banking firms or others, as designated. If an
underwriting syndicate is used, the managing underwriter(s) will be
specified on the cover of the prospectus supplement. If
underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own accounts and may be
resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. Any public offering
price and any discounts or concessions allowed or re-allowed or
paid to dealers may be changed from time to time. Unless otherwise
set forth in the prospectus supplement or free writing prospectus,
the obligations of the underwriters to purchase the offered
securities will be subject to conditions precedent, and the
underwriters will be obligated to purchase all of the offered
securities, if any are purchased.
We may grant to the underwriters options to purchase additional
securities to cover over-allotments, if any, at the public offering
price, with additional underwriting commissions or discounts, as
may be set forth in a related prospectus supplement or free writing
prospectus. The terms of any over-allotment option will be set
forth in the prospectus supplement or free writing prospectus for
those securities.
If a dealer is used in the sale of the securities, we, or an
underwriter, will sell the securities to the dealer, as principal.
The dealer may then resell the securities to the public at varying
prices to be determined by the dealer at the time of resale. To the
extent required, we will set forth in the prospectus supplement,
document incorporated by reference or free writing prospectus, as
applicable, the name of the dealer and the terms of the
transactions.
We may sell the securities directly or through agents we designate
from time to time. We will name any agent involved in the offering
and sale of securities and we will describe any commissions we will
pay the agent in the prospectus supplement.
We may authorize agents or underwriters to solicit offers by
institutional investors to purchase securities from us at the
public offering price set forth in the prospectus supplement or
free writing prospectus pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the
future. We will describe the conditions to these contracts and the
commissions we must pay for solicitation of these contracts in the
prospectus supplement or free writing prospectus.
In connection with the sale of the securities, underwriters,
dealers or agents may receive compensation from us or from
purchasers of the securities for whom they act as agents, in the
form of discounts, concessions or commissions. Underwriters may
sell the securities to or through dealers, and those dealers may
receive compensation in the form of discounts, concessions or
commissions from the underwriters or commissions from the
purchasers for whom they may act as agents. Underwriters, dealers
and agents that participate in the distribution of the securities,
and any institutional investors or others that purchase securities
directly for the purpose of resale or distribution, may be deemed
to be underwriters, and any discounts or commissions received by
them from us and any profit on the resale of the common stock by
them may be deemed to be underwriting discounts and commissions
under the Securities Act. No FINRA member firm may receive
compensation in excess of that allowable under FINRA rules,
including Rule 5110, in connection with the offering of the
securities.
We may provide agents, underwriters and other purchasers with
indemnification against particular civil liabilities, including
liabilities under the Securities Act, or contribution with respect
to payments that the agents, underwriters or other purchasers may
make with respect to such liabilities. Agents and underwriters may
engage in transactions with, or perform services for, us in the
ordinary course of business.
14
To
facilitate the public offering of a series of securities, persons
participating in the offering may engage in transactions in
accordance with Regulation M under the Exchange Act that stabilize,
maintain, or otherwise affect
the market price of the securities. This may include
over-allotments or short sales of the securities, which involves
the sale by persons participating in the offering of more
securities than have been sold to them by us. In addition, those
persons may
stabilize or maintain the price of the securities by bidding for or
purchasing securities in the open market or by imposing penalty
bids, whereby selling concessions allowed to underwriters or
dealers participating in any such offering may be reclaimed
if
securities sold by them are repurchased in connection with
stabilization transactions. The effect of these transactions may be
to stabilize or maintain the market price of the securities at a
level above that which might otherwise prevail in the open
market.
Such transactions, if commenced, may be discontinued at any time.
We make no representation or prediction as to the direction or
magnitude of any effect that the transactions described above, if
implemented, may have on the price of our securities.
Unless otherwise specified in the applicable prospectus supplement
or free writing prospectus, any common stock sold pursuant to a
prospectus supplement will be eligible for trading as listed on The
Nasdaq Capital Market. Any underwriters who are qualified market
makers to whom securities are sold by us for public offering and
sale may make a market in the securities in accordance with Rule
103 of Regulation M, but such underwriters will not be obligated to
do so and may discontinue any market making at any time without
notice.
In order to comply with the securities laws of some states, if
applicable, the securities offered pursuant to this prospectus will
be sold in those states only through registered or licensed brokers
or dealers. In addition, in some states securities may not be sold
unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or
qualification requirement is available and complied with.
So long as the aggregate market value of our voting and non-voting
common equity held by non-affiliates is less than $75,000,000 and
so long as required by the rules of the SEC, the amount of
securities we may offer hereunder will be limited such that the
aggregate market value of securities sold by us during a period of
12 calendar months cannot exceed one-third of the aggregate market
value of the voting and non-voting common equity held by
non-affiliates.
To the extent required, this prospectus may be amended or
supplemented from time to time to describe a specific plan of
distribution.
15
LEGAL
MATTERS
The validity of the securities offered by this prospectus will be
passed upon by Haynes and Boone, LLP, New York, New York.
EXPERTS
The financial statements as of December 29, 2018 and December 30,
2017 and for each of the two years in the period ended December 29,
2018 incorporated by reference in this Prospectus have been so
incorporated in reliance on the report of BDO USA, LLP, an
independent registered public accounting firm, incorporated herein
by reference, given on the authority of said firm as experts in
auditing and accounting.
Our consolidated financial statements are incorporated by reference
in reliance on the reports of BDO USA, LLP given on their authority
as experts in accounting and auditing.
WHERE YOU CAN FIND
MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith file
annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. The
Securities and Exchange Commission maintains a website that
contains reports, proxy and information statements and other
information regarding registrants that file electronically with the
Securities and Exchange Commission. The address of the Securities
and Exchange Commission’s website is www.sec.gov.
We make available free of charge on or through our website at
www.staffing360solutions.com, our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K and amendments to those reports filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended, as soon as reasonably practicable after we
electronically file such material with or otherwise furnish it to
the Securities and Exchange Commission.
We have filed with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as
amended, relating to the offering of these securities. The
registration statement, including the attached exhibits, contains
additional relevant information about us and the securities. This
prospectus does not contain all of the information set forth in the
registration statement. You can obtain a copy of the registration
statement for free at www.sec.gov. The registration statement and
the documents referred to below under “Incorporation of Certain
Information By Reference” are also available on our website,
www.staffing360solutions.com.
We have not incorporated by reference into this prospectus the
information on our website, and you should not consider it to be a
part of this prospectus.
16
INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE
The Securities and Exchange Commission allows us to “incorporate by
reference” the information we have filed with it, which means that
we can disclose important information to you by referring you to
those documents. The information we incorporate by reference is an
important part of this prospectus, and later information that we
file with the Securities and Exchange Commission will automatically
update and supersede this information. We incorporate by reference
the documents listed below and any future documents (excluding
information furnished pursuant to Items 2.02 and 7.01 of Form 8-K)
we file with the Securities and Exchange Commission pursuant to
Sections l3(a), l3(c), 14 or l5(d) of the Securities Exchange Act
of 1934, as amended, subsequent to the date of this prospectus and
prior to the termination of the offering:
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Our Annual Report on
Form 10-K for the year ended December 29, 2018, filed with the SEC
on March 25, 2019;
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The description of our
common stock contained in our Registration Statement on Form 8-A
filed on September 28, 2015 together with any amendments thereto;
and
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Our Current Reports on
Form 8-K, filed with the SEC on January 23, 2019 (two reports),
January 24, 2019, January 30, 2019, February 11, 2019 (two
reports), February 12, 2019 and March 5, 2019.
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All filings filed by us pursuant to the Securities Exchange Act of
1934, as amended, after the date of the initial filing of this
registration statement and prior to the effectiveness of such
registration statement (excluding information furnished pursuant to
Items 2.02 and 7.01 of Form 8-K) shall also be deemed to be
incorporated by reference into the prospectus.
You should rely only on the information incorporated by reference
or provided in this prospectus. We have not authorized anyone else
to provide you with different information. Any statement contained
in a document incorporated by reference into this prospectus will
be deemed to be modified or superseded for the purposes of this
prospectus to the extent that a later statement contained in this
prospectus or in any other document incorporated by reference into
this prospectus modifies or supersedes the earlier statement. Any
statement so modified or superseded will not be deemed, except as
so modified or superseded, to constitute a part of this prospectus.
You should not assume that the information in this prospectus is
accurate as of any date other than the date of this prospectus or
the date of the documents incorporated by reference in this
prospectus.
We will provide without charge to each person to whom a copy of
this prospectus is delivered, upon written or oral request, a copy
of any or all of the reports or documents that have been
incorporated by reference in this prospectus but not delivered with
this prospectus (other than an exhibit to these filings, unless we
have specifically incorporated that exhibit by reference in this
prospectus). Any such request should be addressed to us at:
Staffing 360 Solutions, Inc.
Attn: Chief Financial Officer
641 Lexington Ave., 27th Floor
New York, New York 10022
(646) 507-5710
You may also access the documents incorporated by reference in this
prospectus through our website at www.staffing360solutions.com.
Except for the specific incorporated documents listed above, no
information available on or through our website shall be deemed to
be incorporated in this prospectus or the registration statement of
which it forms a part.
17
4,188,405
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COMMON
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PROSPECTUS
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H.C.
Wainwright & Co.
December
23, 2020
