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In a recent filing with the Securities and Exchange Commission, Quest Resource Holding Corp (NASDAQ:QRHC), currently valued at $48.6 million and trading significantly below its InvestingPro Fair Value, disclosed a Cooperation Agreement with the Wynnefield Group, leading to changes in the company’s board structure. The company’s stock has faced challenges, declining over 70% in the past six months. The agreement, effective Wednesday, May 7, 2025, will expand the board from six to seven directors. Robert Lipstein has been appointed as a new Class III director, with his term set to expire at the 2027 annual meeting of stockholders. This board restructuring comes at a crucial time, as InvestingPro data shows the company operating with a significant debt burden and rapidly burning through cash, though maintaining a healthy current ratio of 1.69.
The Cooperation Agreement stipulates that if Lipstein is unable to serve and the Wynnefield Group maintains a minimum ownership threshold, both parties will collaborate to identify a suitable replacement. This replacement will be subject to the board’s and the Nominations and Corporate Governance Committee’s approval and must be acceptable to the Wynnefield Group.
Additionally, the agreement includes voting commitments, standstill provisions, and mutual non-disparagement clauses, effective until thirty days before the deadline for stockholder nominations for the 2027 annual meeting. This period may extend to the 2028 annual meeting if certain conditions are met.
Lipstein will also join the Audit Committee and receive compensation according to the company’s standard program for non-employee directors, as detailed in Quest Resource’s annual report filed on March 12, 2025. He will enter into the company’s standard indemnification agreement for directors.
The filing did not report any related party transactions between the company and Lipstein requiring disclosure under Item 404(a) of Regulation S-K. The full text of the Cooperation Agreement has been filed as Exhibit 10.1 in the SEC filing.
This article is based on a press release statement.
In other recent news, Quest Resource Holding Corporation reported its fourth-quarter 2024 financial results, which showed a significant miss on both earnings per share (EPS) and revenue estimates. The company posted an EPS of -$0.09, missing the forecasted $0.03, and reported revenue of $69.98 million, falling short of the anticipated $73.63 million. In an effort to streamline operations, Quest implemented cost-saving measures, including a 15% reduction in its workforce, which is expected to save $3 million annually. Additionally, Quest Resource completed the divestiture of its tenant-direct segment of the RWS commercial property management business to Lincoln Waste Solutions for approximately $5 million. This sale is part of Quest’s strategy to focus on core operations and reduce debt. Analysts from various firms have taken note of these developments, with some expressing optimism about the company’s potential for growth in 2025. Quest’s management remains committed to improving operational efficiency and stabilizing financial performance.
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