On June 27, 2019, Regis Corporation (the Company) entered into a Second US and Canada Omnibus Settlement Agreement (the Settlement Agreement) with The Beautiful Group (TBG).
The Settlement Agreement, among other things, notes that TBG has entered into lease termination and concession agreements with certain landlords which has the effect of further reducing the Companys potential lease liability in connection with TBG operated salons and substitutes the master franchise agreement for a license agreement. In addition, pursuant to the Settlement Agreement, the Company releases and forgives TBG from approximately $6.6 million in respect of amounts for inventory invoiced through January 17, 2019, $1.3 million in respect of continuing fees invoiced through April 5, 2019, $28,000 in respect of amounts for services under the transition services agreement, and the obligations under the Secured Promissory Notes dated August 2, 2018 representing approximately $11.7 million in working capital receivables and $8.0 million in accounts receivable, plus accrued interest, which had a maturity date of August 2, 2020. As previously disclosed, based on TBGs inability to meet the requirements of the promissory notes, the Company previously recorded a full reserve against the promissory notes. The Settlement Agreement is filed as Exhibit 10.1 to this Form 8-K.
ITEM 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
The information set forth in Item1.01 above is hereby incorporated by reference into this Item1.02 with regard to the promissory notes.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
Second US and Canada Omnibus Settlement Agreement Credit Agreement dated as of June 27, 2019 among Regis Corp., Regis, Inc., Regis Holdings (Canada), Ltd., and The Barbers, Hairstyling for Men & Women, Inc. (Regis Entities), on the one hand, and The Beautiful Group Management, LLC, The Beautiful Group Salons (Canada) Ltd., The Beautiful Group Holdings, LLC, Archetype Capital Group, LLC, The Beautiful Group Ventures, LLC (f/k/a The Beautiful Group Real Estate, LLC), TBG IP Holder, LLC, and Regent Companies, LLC( TBG Entities), on the other hand (exhibits and schedules identified in the agreement have been omitted pursuant to Item 601(a)(6)of Regulation S-K and will be furnished to the Commission upon request).
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: July 3, 2019
/s/ Amanda P. Rusin
Name: Amanda P. Rusin, Title: Secretary
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CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER - March 19, 2020