Item 2.01 Completion of Acquisition or Disposition of Assets.
On March 22, 2021, HQ Link Corporation ("HQ Link"), a wholly-owned subsidiary of
HireQuest, Inc. (the "Company") completed its acquisition of certain assets (the
"Transaction") of Link Staffing Services Corporation, Franlink, Inc., and
Stafflink, Inc. (collectively, the "Sellers") in accordance with the terms of
the Asset Purchase Agreement (the "Purchase Agreement") dated February 12, 2021
by and between HQ Link and Sellers. The aggregate consideration paid by HQ Link
was $11.1 million cash. The assets acquired included the Sellers' franchise
relationships and agreements, customer lists and agreements, and other items set
forth in the Purchase Agreement.
The description 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 16, 2021
and which is incorporated herein by reference.
Item 8.01 Other Events.
On March 23, 2021, the Company issued a press release announcing the closing of
the Transaction, a copy of which is furnished as Exhibit 99.4 to this Current
Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
The audited consolidated financial statements of Sellers as of and for the years
ended December 29, 2019 and December 30, 2018, and the related notes thereto,
are filed as Exhibit 99.1 to this Form 8-K and are incorporated in their
entirety into this item by reference. The unaudited consolidated balance sheets
at September 27, 2020 and December 29, 2019, the unaudited consolidated
statement of operations for the quarter and three quarters ended September 27,
2020 and September 29, 2019, and the unaudited consolidated statement of cash
flows for the quarter ended September 27, 2020, and September 29, 2019, and the
related notes thereto, of Sellers are filed as Exhibit 99.2 to this Form 8-K and
are incorporated in their entirety into this item by reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial statements, which include
the unaudited pro forma condensed combined balance sheet as of September 30,
2020 and the unaudited pro forma condensed combined statements of operations for
the quarter ended September 30, 2020, the three quarters ended September 30,
2020, and the year ended December 31, 2019, and the related notes thereto, are
filed as Exhibit 99.3 to this Form 8-K and are incorporated in their entirety
into this item by reference.
The unaudited pro forma condensed combined financial statements were derived
from the Company's and the Sellers' separate historical consolidated financial
statements. These pro forma financial statements may not necessarily reflect
what the Company's results of operations and financial position would have been
had the Transaction occurred during the periods presented in the pro forma
financial statements, or what the Company's results of operations and financial
position will be in the future.
(c) Not Applicable
(d) Exhibits
23.1 Consent of Calvetti Ferguson
99.1 Audited consolidated financial statements of Sellers as of and
for the years ended December 29, 2019 and December 30, 2018, and the related
notes thereto .
99.2 Unaudited consolidated balance sheets at September 27, 2020 and
December 29, 2019, the unaudited consolidated statement of operations for the
quarter and three quarters ended September 27, 2020 and September 29, 2019, and
the unaudited consolidated statement of cash flows for the quarter ended
September 27, 2020, and September 29, 2019, and the related notes thereto, of
Sellers.
99.3 Unaudited pro forma condensed combined financial statements,
which include the unaudited pro forma condensed combined balance sheet as of
September 30, 2020 and the unaudited pro forma condensed combined statements of
operations for the quarter ended September 30, 2020, the three quarters ended
September 30, 2020, and the year ended December 31, 2019, and the related notes
thereto.
99.4 Press Release dated March 23, 2021 (furnished only).
Cautionary Note Regarding Forward Looking Statements.
This Current Report on Form 8-K, the exhibits attached hereto and incorporated
herein by reference, and the press release furnished as Exhibit 99.4 contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 including statements regarding the acquisition of
certain assets of Sellers and Snelling Staffing and the expected benefits from
such transactions including increased earnings and revenue, growth, and the
effects of expanded scale. 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, Sellers, 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 anticipated
benefits of the asset acquisitions will not be realized or will not be realized
within the expected time period; the risk that Sellers' or Snelling Staffing's
business may not be integrated successfully; the risk that disruption from the
acquisitions 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, and our current reports on Form 8-K filed with the SEC on February 1,
February 16, and March 2, 2021, and will be contained in our SEC filings in
connection with this acquisition and the Snelling 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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