Approximately how many shares were issued by Management Recruit
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
10,413 shares vested equally over the three months post grant. The remaining 2,085 shares were issued pursuant to our share purchase match program. Also in 2023, we issued 6,131 shares pursuant to our share purchase match program related to open market purchases by members of our Board of Directors.
Also in 2023, we issued 65,431 shares of restricted common stock pursuant to the 2019 Plan valued at approximately $1.3 million to key employees for their services in lieu of cash compensation. Of these, 9,272 shares were issued to our CEO and vest equally over the three months post grant. Of the remaining shares, 55,000 vest over 4 years and 1,159 shares were issued pursuant to our share purchase match program and vest the second anniversary of the date of grant.
In 2022, we have issued 35,606 shares of restricted common stock pursuant to the 2019 Plan valued at approximately $536 thousand to members of our Board of Directors for their services in lieu of cash compensation. Of these, 33,379 shares vested equally over the following three months. The remaining 2,227 shares were issued pursuant to our share purchase match program.
Also in 2022, we have issued 104,871 shares of restricted common stock pursuant to the 2019 Plan valued at approximately $1.6 million to key employees for their services in lieu of cash compensation. Of these, 41,066 shares vested equally over the following three months. Of the remaining 63,805 shares, 50,000 were issued to our CEO pursuant to his employment contract and vest over 4 years, and 3,805 shares were issued pursuant to our share purchase match program. In addition, we issued 28,735 shares of restricted common stock pursuant to the 2019 Plan valued at approximately $537 thousand to the vast majority of our workforce for services and to encourage retention. These shares vest on the first anniversary of the date of grant.
The following table summarizes our restricted stock outstanding at December 31, 2021, and changes during the years ended December 31, 2022 and December 31, 2023 (number of shares in thousands):
| Weighted average | ||
|---|---|---|
| Shares | grant date price | |
| Non-vested, December 31, 2021 | 196 | 11.26 |
| Granted | 173 | 15.97 |
| Vested | (167) | 11.46 |
| Non-vested, December 31, 2022 | 202 | 15.15 |
| Granted | 79 | 19.43 |
| Vested | (126) | 15.50 |
| Non-vested, December 31, 2023 | 155 | 17.52 |
At December 31, 2023, there was unrecognized stock-based compensation expense totaling approximately $1.6 million relating to non-vested restricted stock grants that will be recognized over the next 3.9 years.
Stock options that were outstanding at Command Center were deemed to be issued on the date of the Merger. Outstanding awards continue to remain in effect according to the terms of the 2008 Plan, the 2016 Plan, and the corresponding award documents. There were approximately 13 thousand stock options vested at December 31, 2023 and December 31, 2022. All outstanding stock options were vested at December 31, 2023 and December 31, 2022. There were no options issued in 2023 or 2022.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the company issued shares of restricted common stock in 2021, 2022, and 2023. In 2021, Management Recruiters issued 51,155 shares to its Board of Directors, 60,000 shares to key employees, and 111 shares to certain employees through a share purchase match program. In 2022, the company issued 35,606 shares to the Board of Directors, 104,871 shares to key employees, and 28,735 shares to the workforce. In 2023, Management Recruiters issued 65,431 shares to key employees.
The shares issued were part of the 2019 HireQuest, Inc. Equity Incentive Plan, which was approved in December 2019 and by shareholders in June 2020. The plan allows for a maximum of 1,500,000 shares of common stock to be granted as awards, with specific limits on the number of shares that can be issued to employees, consultants, and non-employee directors within a given period. The purpose of these issuances is to encourage ownership and align the interests of key employees and directors with those of the shareholders.
Additionally, in October 2021, Management Recruiters issued 4,166 shares of stock through the exercise of common stock options. These options had a strike price of $8.04, resulting in a total purchase price of $33,495. The shares available for distribution under the Plan may consist of authorized and unissued shares, treasury shares, or shares reacquired by the Company.
For a prospective franchisee, this indicates that Management Recruiters uses stock-based compensation as part of its overall compensation and incentive strategy. This could be a positive sign, as it suggests that the company is focused on aligning the interests of its employees and leadership with the long-term success of the company. However, it is important for potential franchisees to understand the implications of stock dilution and how it might affect the value of their investment.