Quest Resource Holding Corporation filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Other Events, Financial Statements and Exhibits
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 31, 2025, Quest Resource Management Group, LLC (“Seller”), a wholly-owned subsidiary of Quest Resource Holding Corporation (the “Company”), entered into an asset purchase agreement (the “APA”) by and between Seller and Lincoln Waste Solutions, LLC, a Connecticut limited liability company (“Purchaser”), and completed the sale to Purchaser of substantially all of the assets used in the business of Seller, as set forth in the APA (the “Transaction”).
As consideration for the Transaction, the APA provides for purchase price payable to Seller comprised of the following: (i) $5,004,164 in cash, which was paid at the closing of the Transaction, plus (ii) additional amounts payable to Seller, not to exceed $6,500,000 in the aggregate, based on the performance of the contracts acquired under the APA during each of (a) the twelve (12) month period ending on the first anniversary of the closing date, (b) the twelve (12) month period ending on the second anniversary of the closing date and (c) the twelve (12) month period ending on the third anniversary of the closing date (collectively, the “Milestone Payments”), plus (iii) a one-time payment based on Purchaser’s ability to collect the accounts receivable, notes receivable and other monies due to Seller for sales and deliveries of goods, performance of services and other business transactions (whether or not on the books of Seller) related to Seller’s business arising prior to the date of the APA and any claim, remedy or other right related to any of the foregoing from each applicable third party within the first one-hundred twenty (120) days following the closing (collectively, the “Acquired AR Remittance Amount”), less (iv) any offset against the Milestone Payments and Acquired AR Remittance Amount, calculated in accordance with the terms of the APA.
In connection with the Transaction, on March 31, 2025, the Company and certain of its domestic subsidiaries entered into an amendment, consent and partial release agreement (the “Monroe Amendment”) to that certain Credit Agreement, dated as of October 19, 2020 (as amended and as may be further amended, restated, supplemented, or otherwise modified from time to time, the “Monroe Credit Agreement”), with Monroe Capital Management Advisors, LLC, as administrative agent for the lenders thereto (the “Lenders”) and the Lenders, pursuant to which the Lenders consented to the Transaction, the parties provided for the application of the proceeds from the Transaction and the Monroe Credit Agreement was amended to modify the definition of “Total Senior Debt”. The information contained in Exhibit 10.2 filed herewith is hereby incorporated by reference into this Item 1.01.
On March 31, 2025, the Company and certain of its domestic subsidiaries entered into an amendment, consent and partial release agreement (the “PNC Amendment”) to that certain Loan, Security and Guaranty Agreement, dated as of August 5, 2020 (as amended and as may be further amended restated, supplemented or otherwise modified from time to time, the “PNC Loan Agreement”), with PNC Bank, National Association, successor to BBVA USA, as a lender, and as administrative agent, collateral agent, and issuing bank (“PNC”), pursuant to which PNC consented to the Transaction, the parties provided for the application of the proceeds from the Transaction and the PNC Loan Agreement was amended to modify the definition of “Total Senior Debt”. The information contained in Exhibit 10.3 filed herewith is hereby incorporated by reference to this Item 1.01.
The foregoing summary of the APA and the Transaction, the Monroe Amendment and the PNC Amendment does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the APA, the Monroe Amendment and the PNC Amendment which are filed as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registration. |
Certain information with respect to the Monroe Amendment and the PNC Amendment set forth above in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
| Item 8.01. | Other Events. |
On April 4, 2025, the Company issued a press release relating to the signing of the APA and the closing of the Transaction. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (a) | Exhibits. |
* The schedules and exhibits to this Exhibit have been omitted. The Company agrees to furnish a copy of the omitted schedules and exhibits to the Securities and Exchange Commission on a supplemental basis upon its request.
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.
| QUEST RESOURCE HOLDING CORPORATION | |||
| Dated: April 4, 2025 | By: | /s/ Brett Johnston | |
| Name: | Brett Johnston | ||
| Title: | Chief Financial Officer | ||