HOOKER FURNITURE CORPORATION (NASDAQ:HOFT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01Entry into a Material Definitive Agreement

On September 6, 2017, Hooker Furniture Corporation (the “Company”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Shenandoah Furniture, Inc. (“Shenandoah”) and its two shareholders, Gideon C. Huddle and Candace H. Payne (the “Shenandoah Shareholders”). The Asset Purchase Agreement provides for the Company to acquire substantially all of the assets of Shenandoah in exchange for $32,000,000 in cash and $8,000,000 in unregistered shares of the Company’s common stock (the “Stock Consideration”), with the cash consideration subject to adjustment for customary working capital estimates. The number of shares of common stock issuable at closing for the Stock Consideration will be determined by reference to the mean closing price of the Company’s common stock for the ten trading days immediately preceding the business day preceding the closing date. Under the Asset Purchase Agreement, the Company will also assume certain liabilities of Shenandoah, such as trade accounts payables.

As a closing condition, the Company will enter into (i) four leases with affiliated entities of the Shenandoah Shareholders for Shenandoah’s three operating facilities (in Mt. Airy, NC, Valdese, NC and Martinsville, VA) and one showroom (in High Point, NC), (ii) employment agreements for Candace H. Payne, Shenandoah’s current president, and John P. Payne, Shenandoah’s current executive vice president, and (iii) a 5-year non-competition agreement with Mr. Huddle. Further, the consummation of the transactions contemplated by the Asset Purchase Agreement is subject to certain specified closing conditions, including the receipt of certain third-party consents or approvals, the absence of a “material adverse effect” with respect to Shenandoah’s assets and operations, and other customary closing conditions, including the accuracy of each party’s representations and warranties and each party’s compliance with its obligations and covenants under the Asset Purchase Agreement. The Asset Purchase Agreement also provides Shenandoah and the Company with customary termination rights, including the right to terminate the Asset Purchase Agreement if (to no fault of the terminating party) the closing conditions are not fulfilled by November 5, 2017 (i.e., 60 days after the signing date). The transactions contemplated by the Asset Purchase Agreement have previously been approved by Shenandoah’s shareholders and do not require the approval of the Company’s shareholders.

The Asset Purchase Agreement further contains customary representations and warranties of each party and certain covenants made by each party. These covenants include, among other things, an obligation on the part of Shenandoah to operate its business in the ordinary course until closing and comply with a 5-year non-competition restriction after closing, and an obligation on the part of the Company to offer employment to substantially all of Shenandoah’s employees as of closing. The representations and warranties survive closing for 18 months, except that certain core representations survive for the applicable statute of limitations. Shenandoah’s indemnification obligations for breaches of non-core representation are capped at $4.0 million, with $2.0 million being held in escrow until the 18-month survival period expires.

The Company and Shenandoah currently anticipate that the transactions contemplated by the Asset Purchase Agreement will close during its third fiscal quarter of 2018, which ends on October 31, 2017.

Item 3.02Unregistered Sales of Equity Securities

The issuance of the Stock Consideration has not been and will not be registered under the Securities Act of 1933, as amended, and will be conducted in reliance on the exemption for nonpublic offerings provided by Rule 506 of Regulation D promulgated thereunder and analogous state securities law provisions.

Item 8.01Other Events

On September 7, 2017, the Company and Shenandoah issued a press release announcing their entry into the Asset Purchase Agreement, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Forward Looking Statements

This report includes certain forward-looking information that is subject to various risks and uncertainties. Words such as “expect,” “target,” “would,” “will,” “anticipate,” “believe,” “estimate,” “intend,” “may,” “plan,” “predict,” “project,” “should” and similar terms and phrases are used to identify forward-looking statements. There are a number of factors that could cause actual results to differ from those in the forward-looking statements. For example, the parties may not be able to obtain any necessary third-party consents or approvals or delays in obtaining any such consents or approvals may delay the closing of, or cause the parties to abandon, the transactions contemplated by the Asset Purchase Agreement, or conditions to the closing of the transactions contemplated by the Asset Purchase Agreement may not be satisfied. Accordingly, forward-looking statements are not guarantees or assurances of future outcomes and actual results could differ materially from those indicated by the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made.

Item 9.01Financial Statements and Exhibits

HOOKER FURNITURE CORP Exhibit
EX-99.1 2 ex99-1.htm EX-99.1 EXHIBIT 99.1 FOR IMMEDIATE RELEASE: September 7,…
To view the full exhibit click here

About HOOKER FURNITURE CORPORATION (NASDAQ:HOFT)

Hooker Furniture Corporation is a home furnishings marketing, design and logistics company offering sourcing of residential casegoods and upholstery, as well as domestically-produced leather and fabric-upholstered furniture. The Company operates through three segments: casegoods furniture, upholstered furniture and all other. The Company’s casegoods product categories include accents, home office, dining, bedroom and home entertainment furniture under the Hooker Furniture brand. Its residential upholstered seating companies include Bradington-Young, which is engaged in upscale motion and stationary leather furniture, and Sam Moore Furniture, which is engaged in upscale occasional chairs, settees, sofas and sectional seating with a focus on cover-to-frame customization. It also markets a line of imported leather upholstery under the Hooker Upholstery trade name. All other segment operates under the H Contract and Homeware brands.