Briefing: March 12, 2015

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Staffing 360 sells back cybersecurity firm for $1

Staffing 360 Solutions Inc. (OTCBB: STAF) sold its Cyber 360 Inc. subsidiary to various original owners of Cyber 360 Inc.’s business, which was formerly known as The Revolution Group. Cyber 360 provides staffing for the cybersecurity industry.

The buyers purchased the entity for a nominal purchase price of $1 and were issued 1.1 million shares of common stock in Staffing 360 at $1 per share. The sale eliminated over $1.6 million in liabilities from Staffing 360’s balance sheet, according to the company.

The transaction closed Feb. 27, and is effective retroactive to Jan. 1; buyers include Mark Aiello, Michael Consolazio and Heather Haughey. The new owners must transition from the “Cyber” and “360” trade names within one year.

Cyber 360 counts annual revenue of roughly $4 to $5 million.

Staffing 360 acquired The Revolution Group Ltd. in a stock purchase agreement in March 2013. Aiello remained a company president under a long-term agreement and joined Staffing 360’s executive senior management team; his employment agreement with Staffing 360 terminates with this transaction but he remains president of Cyber 360.

Staffing 360 elected to discontinue Cyber 360’s operations as part of its Pathway to Profitability initiative. Including this transaction, the company has eliminated an aggregate of over $8 million in liabilities since approving the initiative in September 2014.

“Our Pathway to Profitability is continuing to take shape,” said Executive Chairman Brendan Flood. “This sale supports our upcoming M&A plans, as well as our capital raising initiatives."

Staffing 360 has a term sheet in place for one of its next potential financings, according to Flood.

“Obviously, no financing is complete until due diligence is finalized and funds are in hand, but considering the improvements we have made to our balance sheet, combined with our current M&A pipeline, we believe we are making significant progress,” he said. “We are focusing on acquiring larger organizations with a keen eye on profitability as we position Staffing 360 Solutions for future growth.”

Staffing 360 Solutions launched in 2012 and is pursuing acquisition targets in the finance and accounting, administrative, engineering and IT industries. The company reported sales of $33.9 million in its fiscal second quarter ended Nov. 30.