v2.4.1.9
ORGANIZATION AND DESCRIPTION OF BUSINESS
6 Months Ended
Nov. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
 
Staffing 360 Solutions, Inc. (“we,” “us,” “our,” “Staffing 360,” or the “Company”) was incorporated in the State of Nevada on December 22, 2009, as Golden Fork Corporation (“Golden Fork”), which changed its name to Staffing 360 Solutions, Inc., ticker symbol “STAF”, on March 16, 2012.
 
On May 11, 2015, the Company restructured its U.K. subsidiary, Staffing 360 Solutions (U.K.) Limited (“Staffing (U.K.)”). The Company paid an in-kind dividend to Staffing 360 Solutions Limited and as a result Faro Recruitment America, Inc. (“Faro”) along with its subsidiary Monroe Staffing Services, LLC (“Monroe”) is now a subsidiary of the parent company, Staffing 360 Solutions, Inc.
 
On May 29, 2015, Staffing 360 designated 1,663,008 shares of preferred stock as Series A Preferred Stock, par value $0.00001 per share. The Series A Preferred Stock has a stated value of $10.00 per share along with a twelve percent (12%) annual dividend payable monthly. Shares of the Series A Preferred Stock are convertible into shares of Common Stock at the holder’s election at any time prior to December 31, 2018 (“the Redemption Date”), at a conversion rate of one and three tenths (1.3) shares of Common Stock for every one share of Series A Preferred Stock that the holder elects to convert. Except as otherwise required by law, the Series A Preferred Stock shall have no voting rights.
 
On July 8, 2015, the Company completed its seventh acquisition by purchasing one hundred percent (100%) of the membership interests in Lighthouse Placement Services, LLC (“Lighthouse”). The aggregate purchase price was $6,133,521, paid as follows: (i) cash of $2,498,379; (ii) 62,460 restricted common stock shares valued at $8.20 totaling $512,168; (iii) a three (3) year unsecured promissory note of $2,498,379 and (iv) a two (2) year unsecured promissory note of $624,595.
 
The Company effected a one-for-ten reverse stock split on September 17, 2015. Following the reverse split, the Company’s issued and outstanding shares of Common Stock decreased from 45,732,674 to 4,573,360. All share and per share information have been retroactively adjusted to reflect this reverse stock split.
 
On November 5, 2015, the Company, through Longbridge Recruitment 360 Limited, a subsidiary of Staffing (UK), completed its eighth acquisition by entering into (i) a Purchase Agreement with the majority owners of the issued and outstanding equity interests of The JM Group Limited, an England and Wales company (“JM” or “The JM Group”), and (ii) certain minority shareholders. Pursuant to the agreement, the Company purchased one hundred percent (100%) of the issued and outstanding equity interests of JM. In connection with the Acquisition, on the closing date the Company paid to the Sellers the following: cash of £750,000 (approximately $1,155,000 USD); an aggregate of 40,000 shares of the Company’s common stock valued at $4.70 totaling $188,000 and unsecured promissory notes in the aggregate principal amount of £500,000 (approximately $770,000 USD), with an interest rate of 6% per year and a term of six (6) months. In addition, after the Closing Date, the Company shall pay to the Sellers performance based compensation in an amount in cash equal to £850,000 (approximately $1,310,000 USD), if Gross Profit of JM for the 12 month period ending on the first anniversary of the Closing Date (the “Anniversary Gross Profit”) is equal to 90% or more of the Gross Profit for the twelve month period ending on October 31, 2015 (the “Completion Gross Profit”); or if the Anniversary Gross Profit is less than 90% of the Completion Gross Profit, an amount equal to the product of (i) the Anniversary Gross Profit divided by the Completion Gross Profit and (ii) multiplied by £850,000. The Company shall also issue to the Sellers and existing holders of stock options issued by JM performance-based compensation in the form of shares of Common Stock as follows: an aggregate of 20,000 shares of Common Stock, if the Anniversary Gross Profit is 100% or more the Completion Gross Profit; or if the Anniversary Gross Profit is greater than or equal to 75% of the Completion Gross Profit, but less than 100% of the Completion Gross Profit, an amount of shares equal to the product of (i) the Anniversary Gross Profit divided by the Completion Gross Profit and (ii) multiplied by 20,000. 
 
On December 30, 2015, Staffing 360 filed a Certificate of Designations, Preferences and Rights of Series B Preferred Stock with the Nevada Secretary of State, whereby the Company designated 200,000 shares as Series B Preferred Stock, par value $0.00001 per share. The Series B Preferred Stock shall have a stated value of $10.00 per share. Except as otherwise required by law, the Series B Preferred Stock shall have no voting rights.