Staffing 360 Solutions, Inc. (NASDAQ:STAF), a Delaware corporation specializing in staffing services, has entered into a First Amendment to the Agreement and Plan of Merger, as disclosed in a recent 8-K filing with the Securities and Exchange Commission (SEC).
According to InvestingPro data, the company currently has a market capitalization of $3.49 million and operates with challenging financial metrics, including a weak overall financial health score of 1.21. The amendment, effective January 7, 2025, involves Staffing 360 Solutions, Atlantic International Corp., and A36 Merger Sub Inc., a wholly-owned subsidiary of Atlantic.
The amendment stipulates that upon completion of the merger, each share of Series H Convertible Preferred Stock and Series I Preferred Stock, with certain exceptions, will be converted into the right to receive a number of shares of Atlantic common stock, subject to the applicable Exchange Ratio. Additionally, any fractional shares will be rounded to the nearest whole share.
In connection with the merger, Staffing 360 Solutions will enter into a settlement agreement with Jackson Investment Group, LLC, which will convert the principal amount of the loan into 5,600,000 shares of Series I Preferred Stock.
This restructuring comes as InvestingPro analysis shows the company carries a substantial debt burden of $41.32 million and a concerning current ratio of 0.32, indicating potential liquidity challenges. A lock-up agreement will also be in place, restricting the tradability of the merger consideration shares for one year post-closing, with the exception of 600,000 shares.
In separate but related amendments, Staffing 360 Solutions and MidCap Funding IV Trust have agreed to extend the Commitment Expiry Date of their Credit and Security Agreement to January 10, 2025, and modify the Additional Reserve Amount to $490,000. The company has agreed to pay a modification fee of $150,000 to MidCap.
The company has stated that this report contains forward-looking statements and that actual results may differ materially from those projected. For comprehensive analysis, InvestingPro subscribers have access to over 12 additional key insights about STAF's financial health, including detailed metrics on cash flow, profitability, and growth potential.
In other recent news, Staffing 360 Solutions has been actively managing its financial situation. The company extended its credit agreement with MidCap Funding IV Trust, providing financial flexibility despite a negative EBITDA of -$10.49 million in the last twelve months on revenues of $176.82 million. The extension of the credit agreement is a significant development, indicating the company's ongoing relationship with MidCap as a source of financial support.
In addition, Staffing 360 Solutions has been facing challenges with Nasdaq due to non-compliance with the minimum stockholders’ equity requirement. However, after an appeal and a hearing, the company has been granted a conditional extension to continue its listing. This is a key development for investors to note.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.