Blog: HIREQUEST, INC. : Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statements and Exhibits (form 8-K) –

Item 1.01 Entry into a Material Definitive Agreement.

On November 16, 2022, 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 MRI Network Holdings, Inc.,
Management Recruiters International, Inc., MRI International, LLC, and MRI
Contract Staffing, LLC (collectively, the “Sellers”), and Bert Miller, as the
Sellers’ Representative.

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 $13.5 million, subject to cash
adjustments at closing for certain net working capital assets and liabilities
and an escrow of $800,000. Of the $13.5 million purchase price, $500,000 is
contingent upon the Sellers’ assets producing at least 95% percent of the
trailing twelve month revenue in the first year following closing.

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, and the delivery by
each party of standard documents, certificates, and resolutions authorizing and
evidencing the Transaction. There also shall not have been any Material Adverse
Effect, as defined in the Purchase Agreement. In addition, Buyer shall have
entered into employment or consulting agreements with a small number of key
employees and shall have entered into an agreement with People 2.0 to provide
certain services to acquired franchisees. 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 in December 2022.

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 November 16, 2022, 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 November 16, 2022 between and among
MRI Network Holdings, LLC, Management Recruiters International, Inc., MRI
International, LLC, MRI Contract Staffing, LLC, Bert Miller, as Sellers’
Representative, and HQ Snelling Corporation.
99.1 Press Release dated November 16, 2022 (furnished only).
104 Cover Page Interactive Data File (embedded within the Inline XBRL

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 when and whether the
Transaction will close, the potential benefits of additional franchised
offerings and exposure to additional segments in the staffing industry, the
interactions between a new franchised offering and the Company’s existing
franchised offerings, increased earnings, revenue, and scale, 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

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; 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, 2021, and 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.


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