Attached files
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| EX-99.1 - PRESS RELEASE - HireQuest, Inc. | press_release.htm |
| EX-2.2 - NOTE PURCHASE AGREEMENT - HireQuest, Inc. | notepurchaseagreement.htm |
| EX-2.1 - FIRST AMENDMENT TO APA - HireQuest, Inc. | firstamendmenttoapa.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): March 1,
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. ☐
Introductory Note.
On
March 1, 2021, HQ Snelling Corporation (“HQ Snelling”),
a wholly-owned subsidiary of HireQuest, Inc. (the
“Company”) completed its acquisition of certain assets
and assumption of certain liabilities (the
“Transaction”) of Snelling Staffing, LLC, Snelling
Services, LLC, Snelling Employment, LLC, Snelling Medical Staffing,
LLC, and Snelling Investments, Inc. (collectively, the
“Sellers”) in accordance with the terms of the Asset
Purchase Agreement (the “Purchase Agreement”) dated
January 29, 2021 by and among HQ Snelling, the Sellers, Snelling
Holdings, LLC as Sellers’ Representative, and the Company
(solely in its capacity as guarantor of the obligations of HQ
Snelling). The assets acquired included the working capital of
Sellers, customer lists and agreements, and other items set forth
in the Purchase Agreement which was filed as Exhibit 2.1 to the
Company’s Form 8-K filed with the Securities and Exchange
Commission (“SEC”) on February 1, 2021 and which is
incorporated herein by reference, as amended by the First
Amendment, filed herewith as Exhibit 2.1 and incorporated herein by
reference.
The
various agreements described below were entered into in connection
with the Transaction.
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Purchase Agreement
On
March 1, 2021, HQ Snelling entered into the First Amendment to the
Purchase Agreement (the “First Amendment”) dated March
1, 2021 by and among the Sellers, HQ Snelling, and the Company.
Pursuant to the First Amendment, the Company agreed to advance $2.1
million to be paid to the Seller at Closing to be used to pay
accrued payroll liabilities that HQ Snelling assumed pursuant to
the Purchase Agreement.
The
foregoing description of the First Amendment does not purport to be
complete and is qualified in its entirety by reference to the First
Amendment, a copy of which is filed as Exhibit 2.1 hereto and is
incorporated herein by reference, and the Purchase Agreement the
full text of which was filed as Exhibit 2.1 to the Company’s
Form 8-K filed with the Securities and Exchange Commission
(“SEC”) on February 1, 2021 and which is incorporated
herein by reference.
Note Purchase Agreement
Also on
March 1, 2021, HQ Financial Corporation (“HQ
Financial”), a wholly-owned subsidiary of the Company,
entered into a definitive note purchase agreement (the “Note
Purchase Agreement”) with Bass Underwriters, Inc.
(“Bass”), whereby HQ Financial Corporation sold and
conveyed existing notes receivable due from Company franchisees to
Bass for their current principal value of approximately $5.3
million. Bass is a related party to the Company owned, in part, by
Richard Hermanns, Edward Jackson, and trusts they have established.
The transaction was reviewed and approved unanimously by all of the
disinterested members of the Company's board of directors. The Note
Purchase Agreement provides that Bass will have no recourse against
HQ Financial in the event of a default under any of the notes
subject to the agreement.
The
foregoing description of the Note Purchase Agreement does not
purport to be complete and is qualified in its entirety by
reference to the Note Purchase Agreement, a copy of which is filed
as Exhibit 2.2 hereto and is incorporated herein by
reference.
Item 2.01 Completion of Acquisition or Disposition of
Assets.
The
description contained under the Introductory Note above is hereby
incorporated by reference into this Item 2.01. The description
contained in Item 1.01 under the heading “Note Purchase
Agreement” is incorporated by reference into this Item
2.01.
The
description of the effects of the Transaction does not purport to
be complete and is subject to, and qualified in its entirety by
reference to the full text of the Purchase Agreement which was
filed as Exhibit 2.1 to the Company’s Form 8-K filed with the
Securities and Exchange Commission (“SEC”) on February
1, 2021 and which is incorporated herein by reference, as amended
by the First Amendment, filed herewith as Exhibit 2.1 and
incorporated herein by reference.
Item 8.01 Other Events.
On
February 28, 2021, HQ Snelling entered into a License Agreement
(the “License Agreement”) with Lyneer Staffing
Solutions, Inc. (“Lyneer”) whereby, effective March 1,
2021, HQ Snelling licensed to Lyneer use of certain assets of the
Amherst and Albany, NY, Arlington Heights, IL, and Hayward, CA
offices (the "Assets") it had acquired from the Sellers for a
two-week period (the “Term”) in exchange for a fee of
$50,000. The parties entered into the License Agreement with the
express purpose of negotiating and finalizing an asset purchase
agreement between themselves for the Assets and agreed to use
commercially reasonable efforts to finalize the asset purchase
agreement during the Term.
On
March 2, 2021, the Company issued a press release announcing the
closing of the Transactions, a copy of which is furnished as
Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d)
Exhibits
Cautionary Note Regarding Forward Looking
Statements.
This release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 including
statements regarding the acquisition of certain assets of Snelling
Staffing and the expected benefits from such transaction including
increased earnings and revenue and the effects of expanded scale.
In addition, the release attached hereto contains forward-looking
statements regarding potential asset sale transactions and the
effects of those transactions including expectations regarding
completion of these transactions and the potential execution and
effects of a trademark license agreement. All statements other than
statements of historical facts contained herein, including the
statements identified in the preceding sentences 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,”
“expectation,” “intend,”
“anticipate,” “will,”
“believe,” “may,” “estimate,”
“continue,” “should,” “plan,”
“could,” “target,” “potential,”
“is likely,” and similar expressions as they relate to
the company or Snelling Staffing, are intended to identify
forward-looking statements. We have based these forward-looking
statements largely on management’s expectations and
projections regarding future events, negotiations, 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 sale transactions or trademark license
arrangement will not be executed or close including without
limitation, due to the failure of the parties to reach an
agreement; the possibility that the anticipated benefits of the
asset acquisition or asset sales will not be realized or will not
be realized within the expected time period; the risk that Snelling
Staffing’s business may not be integrated successfully; the
risk that disruption from the acquisition may make it more
difficult to maintain existing 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, our current report on
Form 8-K filed with the SEC on February 1, 2021, 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: March 2,
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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