Attached files
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| EX-99.1 - PRESS RELEASE - HireQuest, Inc. | pressrelease_snelling.htm |
| EX-2.1 - ASSET PURCHASE AGREEMENT - HireQuest, Inc. | assetpurchaseagreement_sn.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 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): January 29,
2021
HIREQUEST,
INC.
(Exact
name of registrant as specified in its Charter)
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Delaware
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000-53088
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91-2079472
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(State
or Other Jurisdiction of
Incorporation
or Organization)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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111
Springhall Drive, Goose Creek, SC
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29445
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(843)
723-7400
(Registrant’s
telephone number, including area code)
(Former
name, former address and former fiscal year, 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
(see General Instruction A.2.
below):
☐ 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))
Securities
registered pursuant to Section 12(b) of the Act:
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Title of Each
Class
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Trading
Symbol(s)
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Name of Each
Exchange on Which Registered
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Common Stock,
$0.001 par value
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HQI
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The NASDAQ Stock
Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
Item
1.01
Entry
into a Material Definitive Agreement
On
January 29, 2021, HQ Snelling Corporation ("HQ Snelling"), a
wholly-owned subsidiary of HireQuest, Inc. (the "Company"), entered
into a definitive Asset Purchase Agreement (the "Purchase
Agreement") with Snelling Staffing, LLC, Snelling Services, LLC,
Snelling Employment, LLC, Snelling Medical Staffing, LLC and
Snelling Investments, Inc. (collectively, the "Sellers"), Snelling
Holdings, LLC, as the Sellers' Representative, and the Company
(solely in its capacity as guarantor of the obligations of HQ
Snelling).
Pursuant
to the Purchase Agreement, HQ Snelling will acquire certain assets
and assume certain liabilities of the Sellers (such acquisition and
assumption, the "Transaction"), for a purchase price of $17.3
million, subject to customary adjustments for net working capital
and an escrow of $1.4 million. The purchase price is subject to
further adjustment in an amount equal to the collateral released to
Sellers by their workers' compensation insurer which HQ Snelling's
affiliate, Hire Quest, LLC, will replace with the insurer. The
Company has agreed to guarantee the payment and performance by HQ
Snelling of its obligations, covenants, and agreements under the
Purchase Agreement and other documents effecting the
Transaction.
Consummation
of the Transaction is subject to the satisfaction or waiver of
customary closing conditions including, without limitation, the
accuracy (in certain cases subject to a materiality qualifier) of
each party's representations and warranties, the performance by
each party in all material respects of their obligations under the
Purchase Agreement, the delivery by each party of standard
documents, certificates, and resolutions authorizing and evidencing
the Transaction, and obtaining certain consents and approvals.
There also shall not have been any Material Adverse Effect, as
defined in the Purchase Agreement. In addition the Transaction must
be approved by the United States Bankruptcy Court for the District
of Delaware which is presiding over the bankruptcy proceeding in
which the Sellers' corporate parents are debtors. The Transaction
will be financed with cash-on-hand and existing credit facilities
and is not subject to any financing condition. Subject to the
satisfaction or waiver of the conditions above, the closing of the
Transaction is expected to occur on February 28, 2021.
The
Purchase Agreement contains customary representations, warranties,
covenants, and termination rights. The parties have agreed to
customary indemnification rights subject to certain deductibles and
caps.
The
foregoing description of the Purchase Agreement and the Transaction
does not purport to be complete and is qualified in its entirety by
reference to the Purchase Agreement, a copy of which is filed as
Exhibit 2.1 hereto and is incorporated herein by reference. The
representations, warranties, and covenants made by the parties in
the Purchase Agreement: (a) were made solely for the benefit of the
parties to the Purchase Agreement; (b) are subject to limitations
agreed upon by the contracting parties, including being qualified
by confidential disclosure schedules; (c) may have been made for
the purposes of allocating contractual risk between the parties to
the Purchase Agreement instead of establishing matters as facts;
and (d) are subject to the standards of materiality applicable to
the contracting parties that may differ from those applicable to
investors. Investors should not rely on any representations,
warranties, or covenants contained in the Purchase Agreement, or
any descriptions thereof, as characterizations of the actual state
of facts or conditions of the Company, HQ Snelling, or the Sellers
or any of their respective subsidiaries or affiliates. Information
concerning the subject matter of any such representations,
warranties, and covenants may change after the date of the Purchase
Agreement. Accordingly, investors should read the representations
and warranties in the Purchase Agreement not in isolation, but only
in conjunction with the other information about the Company that it
includes in reports, statements, and other filings it makes with
the Securities and Exchange Commission ("SEC").
Item
7.01
Regulation
FD Disclosure
On February 1,
2021, the Company issued a press release announcing the
Transaction. A copy of the press release is attached hereto as
Exhibit 99.1.
The information
contained in Exhibit 99.1 is furnished pursuant to Item 7.01 and
shall not be deemed to be "filed" for the purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that Section or
Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended
(the "Securities Act"). In addition, the information included in
Exhibit 99.1 shall not be deemed to have been incorporated by
reference into any filing of the Company, whether made before or
after the date hereof, regardless of any general incorporation
language in such filing, unless expressly incorporated by specific
reference into such filing. The furnishing of this information
hereby shall not be deemed an admission as to the materiality of
such information.
Item 9.01
Financial
Statements and Exhibits
(d)
Exhibits
2.1
Asset Purchase Agreement
dated January 29, 2021 by and among Snelling Staffing, LLC,
Snelling Services, LLC, Snelling Employment, LLC, Snelling Medical
Staffing, LLC, Snelling Investments, Inc., Snelling Holdings, LLC
as the Sellers' Representative, HQ Snelling Corporation, and
HireQuest, Inc.
Cautionary Note Regarding Forward Looking
Statements
This Current Report on Form 8-K and the Exhibits attached hereto
and furnished herewith, contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
including statements regarding the Purchase Agreement, the
acquisition of certain assets of the Sellers, and the expected
benefits from such Transaction including the increased ability to
attract franchisees or national accounts, increased earnings and
revenue, maintenance of certain margins, and the effects of
expanded scale. All statements other than statements of historical
facts contained herein, including the statements identified in the
preceding sentence and other statements regarding our future
financial position and results of operations, liquidity, business
strategy, and plans and objectives of management for future
operations, are forward-looking statements. The words
“expect,” “intend,”
“anticipate,” “will,”
“believe,” “may,” “estimate,”
“continue,” “should,” “plan,”
“could,” “target,” “potential,”
“is likely,” and similar expressions as they relate to
the Company, HQ Snelling, or the Sellers, are intended to identify
forward-looking statements. We have based these forward-looking
statements largely on management’s expectations and
projections regarding future events and financial trends that we
believe may affect our financial condition, operating performance,
business strategy, and financial needs. These forward-looking
statements involve a number of risks and
uncertainties.
Important factors that could cause actual results to differ
materially from these forward-looking statements include: the
possibility that the asset acquisition will not close including
without limitation, due to the failure to satisfy any closing
conditions, including without limitation, the failure of the
Bankruptcy Court for the District of Delaware to approve the
Transaction; the possibility that the anticipated benefits
of the asset acquisition will not be realized or will not be
realized within the expected time period; the risk that Sellers'
business may not be integrated successfully and disruption from the
acquisition may make it more difficult to maintain business and
operational relationships; and several other factors.
Further information on risks we face is detailed in our filings
with the Securities and Exchange Commission, including our Form
10-K for the fiscal year ended December 31, 2019, our quarterly
reports on Form 10-Q filed since that date, and will be contained
in our SEC filings in connection with this acquisition. Any
forward-looking statement made by us herein speaks only as of the
date on which it is made. Factors or events that could cause our
actual results to differ may emerge from time to time, and it is
not possible for us to predict all of them. The Company undertakes
no obligations to publicly update any forward-looking statements,
whether as a result of new information, future developments or
otherwise, except as may otherwise be required by law.
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.
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HIREQUEST,
INC.
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(Registrant)
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Date: February 1,
2021
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/s/ John McAnnar
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John
McAnnar
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Chief Legal
Officer
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