Attached files
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EX-99.1 - Corporate Resource Services, Inc. | v209620_ex99-1.htm |
EX-10.2 - Corporate Resource Services, Inc. | v209620_ex10-2.htm |
EX-10.1 - Corporate Resource Services, Inc. | v209620_ex10-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): February 1, 2011 (January
31, 2011)
CORPORATE RESOURCE SERVICES,
INC.
|
(Exact
name of registrant as specified in its
charter)
|
Delaware
|
000-30734
|
80-0551965
|
||
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
160 Broadway, 11th Floor, New York, NY
|
10038
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s telephone number, including area code:
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(646) 443-2380
|
(Former
name or former address, if changed since last
report)
|
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
On
January 31, 2011, Diamond Staffing Services, Inc. (“DSS”), a wholly-owned
subsidiary of Corporate Resource Services, Inc. (the “Company”) entered into an
account purchase agreement (“Account Purchase Agreement”) with Wells Fargo Bank,
National Association (“Wells Fargo”) in order to provide financing to
DSS. Under the terms of the Account Purchase Agreement, DSS will sell
its trade receivables to Wells Fargo, with the maximum amount of trade
receivables that may be sold at any one time being $18,000,000. For
each trade receivable sold to Wells Fargo, it will advance 90% of the purchased
receivables’ value upon sale, with the remainder, less certain offsets, to be
credited upon the receivables final collection to an account established for the
satisfaction of fees, charges or other obligations owed by DSS under the Account
Purchase Agreement. Interest on the aggregate amount of purchased
receivables shall be charged at prime rate plus 2.50%.
The risk
DSS bears from bad debt losses on trade receivables sold is retained by DSS, and
receivables sold which become greater than 90 days old can be charged back to
DSS by Wells Fargo. Additionally, Wells Fargo has the right to
require DSS to repurchase its receivables from time to time in Wells Fargo’s
sole discretion. In connection with the entry into the Account
Purchase Agreement, DSS granted a security interest to Wells Fargo in
substantially all of DSS’ assets.
The New
Account Purchase Agreement is for a term commencing on January 31, 2011 through
August 27, 2013, and thereafter for subsequent 24 month periods unless Wells
Fargo or DSS notifies the other party in writing at least sixty days in advance
of the renewal term. The Account Purchase Agreement may also be
terminated earlier by DSS upon 30 days prior notice to Wells Fargo, or by Wells
Fargo upon the occurrence of certain events of termination. Upon the
occurrence of an event of termination, Wells Fargo may, among other things,
accelerate all indebtedness of DSS owed to Wells Fargo, require DSS to
repurchase any and all receivables purchased by Wells Fargo, or take possession
and sell any of the collateral that Wells Fargo has a security interest
in.
In
connection with its entry into the Account Purchase Agreement, DSS executed a
Continuing Guaranty in favor of Wells Fargo. The Continuing Guaranty
provides that DSS guarantees the current and future obligations of the direct or
indirect subsidiaries of the Company to Wells
Fargo. Accountabilities, Inc., Insurance Overload Services, Inc. and
Corporate Resource Development, each a wholly-owned subsidiary of the Company,
are also parties to account purchase agreements with Wells Fargo and receive
financing pursuant to such agreements. Integrated Consulting Group, Inc.,
another subsidiary of the Company, which conducts business as Impact Staffing,
is not a party to an account purchase agreement with Wells Fargo, and therefore
does not have any obligations that are guaranteed under the Continuing
Guaranty. The Company, Insurance Overload Services, Inc., Robert
Cassera, a director of the Company and the beneficial owner of approximately 84%
of the Company’s outstanding shares of common stock (which includes the shares
issued to Mr. Cassera’s affiliate as part of the Acquisition (as defined below),
and Tri-State Employment Services, Inc., an entity wholly-owned by Mr. Cassera,
also previously executed a Continuing Guaranty in favor of Wells
Fargo.
Item 2.01.
|
Completion
of Acquisition or Disposition of
Assets.
|
On
January 31, 2011 (the “Closing Date”), the Company completed its acquisition
(the “Acquisition”) of Tri-Diamond Staffing, Inc. (“Tri-Diamond”) pursuant to an
Agreement and Plan of Merger among the Company, DSS, Tri-Diamond, TS Staffing
Corp., the former sole owner of all of the outstanding shares of Tri-Diamond
(“TS Staffing”), and Diamond Staffing, Inc., a wholly-owned subsidiary of
Tri-Diamond (“Diamond Staffing”). As part of the consummation of the
Acquisition, Tri-Diamond was merged with and into DSS, with DSS as the surviving
entity.
2
The
purchase price for Tri-Diamond was $25,000,000, which was paid by the issuance
of 29,411,765 shares of unregistered common stock of the Company to TS
Staffing. The Company believes that the issuance of shares as payment
of the purchase price was exempt from registration pursuant to Section 4(2) of
the Securities Act of 1933, as amended, as a transaction not involving a public
offering. TS Staffing is wholly-owned by Robert Cassera, a director
of the Company and the beneficial owner of approximately 84% of the Company’s
outstanding shares of common stock (which includes the shares issued to TS
Staffing as consideration for the sale of Tri-Diamond).
Item
2.03.
|
Creation
of a Direct Financial Obligation or an Obligation under an Off Balance
Sheet Arrangement of a Registrant.
|
The
information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
Item
3.02
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Unregistered
Sales of Equity Securities.
|
The
information set forth in Item 2.01 regarding the issuance by the Company of
29,411,765 shares of unregistered common stock of the Company is incorporated
herein by reference.
Item
8.01
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Other
Events.
|
On
January 31, 2011, the Company issued a press release announcing the completion
of the acquisition Tri-Diamond. A copy of this press release is
attached to this report as Exhibit 99.1.
Item
9.01
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Financial
Statements and Exhibits.
|
(a)
Financial Statements.
The
financial statements required by Item 9.01(a) of Form 8-K are not included in
this Current Report on Form 8-K. The Company intends to file these
financial statements by an amendment within the time permitted by Item
9.01(a).
(b) Pro
Form Financial Information.
Pro forma
financial information required by Item 9.01(b) of Form 8-K is not included in
this Current Report on Form 8-K. The Company intends to file this pro
form financial information by an amendment within the time permitted by Item
9.01(b).
(d)
Exhibits.
Exhibit Number
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Description of Exhibit
|
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10.1
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Account
Purchase Agreement, dated as of January 31, 2011, between Wells Fargo
Bank, National Association and Diamond Staffing Services,
Inc.
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10.2
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Continuing
Guaranty, dated January 31, 2011, executed by Diamond Staffing Services,
Inc. in favor of Wells Fargo Bank, National Association
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99.1
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Corporate
Resource Services, Inc. Press Release, distributed January 31,
2011
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3
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Corporate
Resource Services, Inc.
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||
By:
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/s/
Jay H. Schecter
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Name: Jay H.
Schecter
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Title:
Chief Executive
Officer
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Dated: February
1, 2011
4
EXHIBIT
INDEX
Exhibit Number
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Description of Exhibit
|
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10.1
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Account
Purchase Agreement, dated as of January 31, 2011, between Wells Fargo
Bank, National Association and Diamond Staffing Services,
Inc.
|
|
10.2
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Continuing
Guaranty, dated January 31, 2011, executed by Diamond Staffing Services,
Inc. in favor of Wells Fargo Bank, National Association
|
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99.1
|
Corporate
Resource Services, Inc. Press Release, distributed January 31,
2011
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5