Current Report Filing (8-k)
September 20 2018 - 4:01PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 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):
September 20, 2018 (May 30, 2018)
QUEST
SOLUTION, INC.
(Exact
name of registrant as specified in charter)
Delaware
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000-09047
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20-3454263
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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860
Conger Street, Eugene, OR 97402
(Address
of Principal Executive Offices) (Zip Code)
(714)
899-4800
(Registrant’s
Telephone Number, Including Area Code)
Not
Applicable
(Former
Name or Former Address, 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):
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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 mart 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 Agreement
On
September 14, 2018, Quest Solution, Inc. (the “Company”) formally entered into the following agreements (the “Modification
Agreements”) with ScanSource, Inc. (“ScanSource”) its senior creditor concerning its outstanding secured promissory
note with ScanSource dated July 1, 2016 (the “Original Note”), and other agreements originally entered into with ScanSource
on July 1, 2016 (the “Original ScanSource Agreements”):
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(i)
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Amendment
to Security Agreement;
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(ii)
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Amendment
to Pledge and Security Agreement;
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(iii)
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Prepayment
Agreement;
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(iv)
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Amendment
#9 to Trade Credit Extension Letter; and
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(v)
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Amendment
#6 to Secured Promissory Note.
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The
Company had been in default on the Original Note which had an original balance of $12,492,136.51 and a current balance of $1,926,915.61.
In addition, the Company owed ScanSource $6,763,549.41 under the Trade Credit Extension Letter dated July 1, 2016. The Company
and ScanSource agreed to amend the amount of the Original Note (the “Modified Note”) to include the $6,763,549.41
balance under the Trade Credit Extension Letter for a total amount of $8,690,465.02. The Modified Note, as amended, provides for
repayment as follows:
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(i)
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$300,000
on September 15, 2018 (which payment has been made);
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(ii)
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$300,000
on October 15, 2018;
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(iii)
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$300,000
on November 15, 2018;
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(iv)
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$500,000
on December 15, 2018; and
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(v)
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The
balance on January 15, 2019.
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The
Modified Note bears interest at 12% per annum and is secured by all of the Company’s assets pursuant to the Company’s
Security Agreement with ScanSource dated July 1, 2016 which has been amended in connection with this new arrangement. These terms
are identical to the Original ScanSource Agreements.
The
Company and ScanSource also amended the Trade Credit Extension Letter originally dated July 1, 2016 to provide for the establishment
of a New Temporary Trade Credit Extension amount of $8,753,752.02. Accordingly, as the Company makes the payments under the Note
as outlined above, the Company will have additional trade credit available.
While
the Modification Agreements are each dated September 7, 2018, they were formally entered into on September 14, 2018. The foregoing
description of the Modification Agreements entered into is not complete and are qualified in their entirety to the full text of
such Modification Agreements which are filed as Exhibits 10.1 - 10.5 of this Current Report on Form 8-K.
Item
2.03 Creation of a Direct Financial Obligation
As
described in Item 1.01 above, the Company issued ScanSource a new promissory note in the principal amount of $8,690,465.02 (the
“Modified Note”) which encompasses the total amount owed by the Company to ScanSource.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
The
exhibits listed in the following Exhibit Index are filed as part of this Current Report on Form 8-K.
Exhibit
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Number
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Description
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10.1
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Amendment to Security Agreement with ScanSource, Inc. dated September 7, 2018
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10.2
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Amendment to Pledge and Security Agreement with ScanSource, Inc. dated September 7, 2018
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10.3
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Prepayment Agreement with ScanSource, Inc. dated September 7, 2018
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10.4
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Amendment #9 to Trade Credit Extension Letter with ScanSource, Inc. dated September 7, 2018
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10.5
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Amendment #6 to Secured Promissory Note with ScanSource, Inc. dated September 7, 2018 (the “Modified Note”)
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SIGNATURE
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.
Date:
September 20, 2018
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QUEST SOLUTION, INC.
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By:
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/s/
Shai S. Lustgarten
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Shai
S. Lustgarten
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President
and CEO
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