HireQuest (HQI) 10-Q 9 Aug 21 2021 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jun. 30, 2021	Aug. 06, 2021
Cover [Abstract]
Entity Registrant Name	HIREQUEST, INC.
Entity Central Index Key	0001140102
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		13,640,074
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-53088
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	91-2079472
Entity Address Address Line 1	111 Springhall Drive
Entity Address City Or Town	Goose Creek
Entity Address State Or Province	SC
Entity Address Postal Zip Code	29445
City Area Code	843
Local Phone Number	723-7400
Security 12b Title	Common Stock, $0.001 par value
Trading Symbol	HQI
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Current assets
Cash	$ 2,204,648	$ 13,667,434
Accounts receivable, net of allowance for doubtful accounts	35,055,831	21,344,499
Notes receivable	1,519,939	2,178,299
Prepaid expenses, deposits, and other assets	952,620	344,091
Prepaid workers' compensation	1,417,098	1,434,583
Total current assets	41,150,136	38,968,906
Property and equipment, net	3,837,037	3,193,379
Workers compensation claim payment deposit	935,215	623,452
Deferred tax asset	0	79,379
Franchise agreements, net	19,511,471	0
Other intangible assets, net	667,948	342,697
Other assets	381,807	0
Notes receivable, net of current portion and reserve	3,235,465	5,887,229
Total assets	69,719,079	49,095,042
Current liabilities
Accounts payable	1,393,011	457,490
Term note payable	97,809	0
Other current liabilities	748,303	1,322,764
Accrued benefits and payroll taxes	3,720,775	743,431
Due to affiliates	89,584	67,398
Due to franchisees	5,396,470	3,228,777
Risk management incentive program liability	1,551,437	858,482
Workers' compensation claims liability	6,663,971	2,777,734
Total current liabilities	19,661,360	9,456,076
Workers' compensation claims liability, net of current portion	2,220,373	1,806,334
Deferred tax liability	954,600	0
Term note payable, net of current portion	3,055,691	0
Franchisee deposits	1,928,918	1,468,359
Total liabilities	27,820,942	12,730,769
Stockholders' equity
Preferred stock - $0.001 par value, 1,000,000 shares authorized; none issued	0	0
Common stock - $0.001 par value, 30,000,000 shares authorized; 13,673,166 and 13,628,675 shares issued, respectively	13,673	13,629
Additional paid-in capital	29,380,206	28,811,389
Treasury stock, at cost - 33,092 shares	(146,465)	(146,465)
Retained earnings	12,650,723	7,685,720
Total stockholders' equity	41,898,137	36,364,273
Total liabilities and stockholders' equity	$ 69,719,079	$ 49,095,042

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Stockholders' equity
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	1,000,000	1,000,000
Preferred stock shares issued	0	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	30,000,000	30,000,000
Common stock shares issued	13,673,166	13,628,675
Common stock shares outstanding	13,673,166	13,628,675
Treasury stock shares	33,092	33,092

Consolidated Statements of Inco

Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Consolidated Statements of Income (Unaudited)
Franchise royalties	$ 5,450,506	$ 2,639,287	$ 8,709,542	$ 6,344,529
Service revenue	255,822	261,703	399,768	676,441
Total revenue	5,706,328	2,900,990	9,109,310	7,020,970
Selling, general and administrative expenses	2,040,621	1,931,076	5,882,393	5,184,447
Depreciation and amortization	365,995	32,402	698,835	64,215
Income from operations	3,299,712	937,512	2,528,082	1,772,308
Other miscellaneous income	126,300	288,837	4,042,280	539,545
Interest and other financing expense	(20,317)	(17,850)	(24,917)	(29,139)
Net income before income taxes	3,405,695	1,208,499	6,545,445	2,282,714
Provision for income taxes	685,884	51,497	83,590	250,534
Net income	$ 2,719,811	$ 1,157,002	$ 6,461,855	$ 2,032,180
Earnings per share
Basic	$ 0.20	$ 0.09	$ 0.47	$ 0.15
Diluted	$ 0.20	$ 0.09	$ 0.47	$ 0.15
Weighted average shares outstanding
Basic	13,611,207	13,547,950	13,607,009	13,540,599
Diluted	13,863,924	13,549,727	13,834,013	13,542,758

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)
Balance, shares at Dec. 31, 2019		13,518,036
Balance, amount at Dec. 31, 2019	$ 31,282,082	$ 13,518	$ 0	$ 27,584,610	$ 3,683,954
Stock-based compensation	565,057	$ 0	0	565,057	0
Restricted stock granted for services, shares		57,087
Restricted stock granted for services, amount	57	$ 57	0	0	0
Net income	2,032,180	$ 0	0	0	2,032,180
Balance, shares at Jun. 30, 2020		13,575,123
Balance, amount at Jun. 30, 2020	33,879,376	$ 13,575	0	28,149,667	5,716,134
Balance, shares at Dec. 31, 2019		13,518,036
Balance, amount at Dec. 31, 2019	31,282,082	$ 13,518	0	27,584,610	3,683,954
Restricted stock granted for services, amount	179,000
Balance, shares at Dec. 31, 2020		13,628,675
Balance, amount at Dec. 31, 2020	36,364,273	$ 13,629	(146,465)	28,811,389	7,685,720
Balance, shares at Mar. 31, 2020		13,536,742
Balance, amount at Mar. 31, 2020	32,480,013	$ 13,537	0	27,907,344	4,559,132
Stock-based compensation	242,323	$ 0	0	242,323	0
Restricted stock granted for services, shares		38,381
Restricted stock granted for services, amount	38	$ 38	0	0	0
Net income	1,157,002	$ 0	0	0	1,157,002
Balance, shares at Jun. 30, 2020		13,575,123
Balance, amount at Jun. 30, 2020	33,879,376	$ 13,575	0	28,149,667	5,716,134
Balance, shares at Dec. 31, 2020		13,628,675
Balance, amount at Dec. 31, 2020	36,364,273	$ 13,629	(146,465)	28,811,389	7,685,720
Stock-based compensation	568,817	0	0	568,817	0
Net income	6,461,855	0	0	0	6,461,855
Common stock dividends	(1,496,852)	$ 0	0	0	(1,496,852)
Restricted common stock granted for services, shares		44,491
Restricted common stock granted for services, amount	44	$ 44	0	0	0
Balance, shares at Jun. 30, 2021		13,673,166
Balance, amount at Jun. 30, 2021	41,898,137	$ 13,673	(146,465)	29,380,206	12,650,723
Balance, shares at Mar. 31, 2021		13,638,041
Balance, amount at Mar. 31, 2021	39,694,150	$ 13,638	(146,465)	29,079,460	10,747,517
Stock-based compensation	300,746	0		300,746	0
Net income	2,719,811	0	0	0	2,719,811
Common stock dividends	(816,605)	$ 0	0	0	(816,605)
Restricted common stock granted for services, shares		35,125
Restricted common stock granted for services, amount	35	$ 35	0	0	0
Balance, shares at Jun. 30, 2021		13,673,166
Balance, amount at Jun. 30, 2021	$ 41,898,137	$ 13,673	$ (146,465)	$ 29,380,206	$ 12,650,723

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities
Net income	$ 6,461,855	$ 2,032,180
Adjustments to reconcile net income to net cash used in operations:
Depreciation and amortization	698,836	64,215
Allowance for losses on notes receivable	0	1,598,673
Stock based compensation	568,861	565,114
Deferred taxes	(591,550)	(1,070,070)
Loss on disposition of intangible assets	1,222,546	0
Bargain purchase gain	(4,959,169)
Changes in operating assets and liabilities:
Accounts receivable	(1,329,299)	8,554,362
Prepaid expenses, deposits, and other assets	(513,078)	(908,839)
Prepaid workers' compensation	17,485	(1,076,961)
Accounts payable	692,997	(168,486)
Risk management incentive program liability	692,955	209,688
Other current liabilities	(575,711)	(787,765)
Accrued benefits and payroll taxes	877,344	406,773
Due to franchisees	1,748,037	(866,009)
Workers' compensation claim payment deposit	6,908,808	0
Workers' compensation claims liability	(590,654)	911,611
Net cash provided by operating activities - continuing operations	11,330,263	9,464,486
Net cash provided by operating activities - discontinuing operations	0	201,440
Net cash provided by operating activities	11,330,263	9,665,926
Cash flows from investing activities
Purchase of acquisitions	(28,814,153)	0
Purchase of property and equipment	(710,741)	(952,212)
Proceeds from the sale of purchased locations	997,367	0
Proceeds from the sale of notes receivable	5,261,111	0
Proceeds from payments on notes receivable	330,715	1,002,858
Cash issued for notes receivable	(797,929)	(182,101)
Investment in intangible asset	(325,251)	(23,978)
Net change in franchisee deposits	64,256	10,711
Net cash used in investing activities	(23,994,625)	(144,722)
Cash flows from financing activities
Proceeds from term note payable	3,153,500	0
Payments related to debt issuance	(477,258)	0
Proceeds from affiliates	22,186	37,791
Payment of dividends	(1,496,852)	0
Net cash provided by financing activities	1,201,576	37,791
Net (decrease) increase in cash	(11,462,786)	9,558,995
Cash, beginning of period	13,667,434	4,187,450
Cash, end of period	2,204,648	13,746,445
Supplemental disclosure of non-cash investing and financing activities
Notes receivable issued for the sale of branches	1,247,040	0
Supplemental disclosure of cash flow information
Interest paid	24,917	29,139
Income taxes paid, net of refunds	$ 600,678	$ 1,665,099

Overview and Summary of Signifi

Overview and Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2021
Overview and Summary of Significant Accounting Policies
Note 1 - Overview and Summary of Significant Accounting Policies	Note 1 – Overview and Summary of Significant Accounting Policies Nature of Business HireQuest, Inc. (together with its subsidiaries, “HQI,” the “Company,” “we,” us,” or “our”) is a nationwide franchisor of offices providing on-demand labor solutions in the light industrial and blue-collar segments of the staffing industry and traditional commercial staffing. Our franchisees provide various types of temporary personnel through two business models operating under the trade names “HireQuest Direct,” “HireQuest,” “Snelling,” “LINK Staffing,” and “DriverQuest.” HireQuest Direct specializes primarily in unskilled and semi-skilled industrial and construction personnel. HireQuest, Snelling, and Link specialize primarily in skilled and semi-skilled industrial personnel, clerical and administrative personnel, and permanent placement services. DriverQuest specializes in commercial drivers serving a variety of industries and applications. On March 1, 2021, we completed our acquisition of Snelling Staffing and affiliates (“Snelling”). We acquired substantially all of the operating assets and assumed certain liabilities of Snelling for a purchase price of approximately $17.7 million subject to customary adjustments for net working capital. On March 22, 2021, we completed our asset acquisition of Link Staffing and affiliates (“Link”) in which we acquired all of the franchise relationships and certain other assets of Link for a purchase price of approximately $11.2 million. For additional information related to these transactions, see Note 2 – Acquisitions As of June 30, 2021 we had 212 franchisee-owned offices in 35 states and the District of Columbia. We are the employer of record to approximately 80,000 employees annually, who in turn provide services to thousands of clients in various industries including construction, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, and retail. We provide staffing, marketing, working capital funding, software, and administrative services to our franchisees. Basis of Presentation We have prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the periods presented. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report filed on Form 10-K for the year ended December 31, 2020. Results for the interim periods presented are not necessarily indicative of the results expected for the full year or for any other period. Consolidation The consolidated financial statements include the accounts of HQI and all of its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. U.S. GAAP requires the primary beneficiary of a variable interest entity (“VIE”) to consolidate that entity. To be the primary beneficiary of a VIE, an entity must have both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that are significant to the beneficiary. We provide acquisition financing to some of our franchisees that could result in our having to absorb losses. This results in some franchisees being considered VIEs. We have reviewed our relationship with each of these franchisees and determined that we are not the primary beneficiary of any of these entities. Accordingly, we have not consolidated these entities. COVID-19 Pandemic In December 2019, a novel strain of coronavirus disease ("COVID-19") was first reported in Wuhan, China. Less than four months later, on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The extent of COVID-19's ultimate effect on our operational and financial performance and the collectability of our notes receivable will depend on future developments, including the duration, spread, and intensity of the pandemic, all of which are uncertain and difficult to predict. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on our business. However, the pandemic has so far had a material adverse effect on our business and results of operations. If the pandemic continues to be a severe worldwide health crisis, it could continue to have a material adverse effect on our future business, results of operations, financial condition, and cash flows. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results could differ from those estimates. Significant estimates and assumptions underlie our workers’ compensation claim liabilities, our workers’ compensation risk management incentive program accrual, our deferred taxes, the reserve for losses on notes receivable, and the estimated fair value of assets acquired and liabilities assumed. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable consist of amounts due for labor services from customers of franchisees and of accounts receivable originating at company-owned locations. At June 30, 2021 and at December 31, 2020, all of our net accounts receivable were due from customers of franchisees. We own the accounts receivable from labor services provided by our franchisees until they age beyond a date agreed upon with each respective franchisee between 42 and 84 days. When accounts receivable age beyond the agreed-upon date, they are charged back to our franchisees. Accordingly, we do not record an allowance for doubtful accounts on these accounts receivable. Revenue Recognition Our primary source of revenue comes from royalty fees based on the operation of our franchised offices. Royalty fees from our HireQuest Direct business model are based on a percentage of sales for services our franchisees provide to customers, which ranges from 6% to 8%. Royalty fees from our HireQuest business line, including HireQuest franchisees, DriverQuest franchisees, and Snelling and Link franchisees who executed new franchise agreements upon closing, are 4.5% of the payroll we fund plus 18% of the gross margin for the territory. Royalty fees from the Snelling and Link franchise agreements assumed and not renegotiated at closing range from 5.0% to 8.0% of sales for services our franchisees provide to customers. In addition to royalty fees, we also charge a license fee to some locations that utilize our intellectual property but are not franchisees. License fees are 9% of the gross margin for the location. Our franchisees are responsible for taking customer orders, providing customers with services, establishing the prices charged for services, and controlling other aspects related to providing service to customers prior to the service being transferred to the customer, such as determining which temporary employees to dispatch to the customer and establishing pay rates for the temporary employees. Accordingly, we present revenue on a net basis as agent as opposed to a gross basis as principal. We recognize revenue when we satisfy our performance obligations. Our performance obligations take the form of a franchise license and promised services. Promised services consist primarily of paying temporary employees, completing all statutory payroll related obligations, and providing workers' compensation insurance on behalf of temporary employees. Because these performance obligations are interrelated, we do not consider them to be individually distinct and therefore account for them as a single performance obligation. Because our franchisees receive and consume the benefits of our services simultaneously, our performance obligations are satisfied when our services are provided. Franchise royalties are billed on a weekly basis. We also offer various incentive programs for franchisees including royalty incentives, royalty credits, and other support initiatives. Royalty fees are reduced to reflect any incentives earned or credits granted under these programs. These incentives and credits are provided to encourage new office development and organic growth, and to limit workers' compensation exposure. We present franchise royalty fees net of these incentives and credits. Below are summaries of our franchise royalties disaggregated by business model: Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 HireQuest Direct $ 3,006,054 $ 2,468,581 $ 5,912,124 $ 6,029,984 HireQuest 2,444,452 170,706 2,797,417 314,545 Total $ 5,450,506 $ 2,639,287 $ 8,709,541 $ 6,344,529 Service revenue, which forms the other component of our total revenue, consists of interest we charge our franchisees on overdue customer accounts receivable, trademark license fees, and other fees for optional services we provide. We recognize interest income based on the effective interest rate applied to the outstanding principal balance of overdue accounts. We recognize revenue from trademark license fees as we earn them. We recognize revenue from optional services as we provide them. Notes Receivable Notes receivable consist primarily of amounts due to us related to the financing of franchised locations. We report notes receivable at the principal balance outstanding less an allowance for losses. We charge interest at a fixed rate and interest income is calculated by applying the effective rate to the outstanding principal balance. Notes receivable are generally secured by the assets of each location and the ownership interests in the franchise. We monitor the financial condition of our franchisees and record provisions for estimated losses when we believe it is probable that our franchisees will be unable to make their required payments. We evaluate the potential impairment of notes receivable based on various analyses, including estimated discounted future cash flows, at least annually and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When a note receivable is deemed impaired, we discontinue accruing interest and only recognize interest income when payment is received. Our allowance for losses on notes receivable was approximately $1.6 million at June 30, 2021 and December 31, 2020. Intangible Assets Intangible assets acquired or internally developed are measured at cost. The costs of acquired intangible assets consist of their purchase price. Subsequent costs are capitalized only if it is probable that they will increase the future economic benefits associated with the specific asset. All other costs are expensed as incurred. The costs of internally developed intangibles consist of fees paid to third parties for development services and payroll costs for employees' time spent on development incurred during the application development stage. Costs originating during the preliminary project stage and post-implementation state are expensed as incurred. Intangible assets are reviewed for impairment at least annually and/or whenever events and circumstances arise that indicate impairment may exist. Intangible assets are amortized using the straight-line method over their estimated useful lives. The table below reflects information related to our finite-lived intangible assets. For additional information related to significant additions to intangible assets, see Note 2 – Acquisitions. June 30, 2021 December 31, 2020 Estimated useful life Gross Accumulated amortization Net Gross Accumulated amortization Net Finite-lived intangible assets: Franchise agreements 15 years $ 19,916,453 $ (404,982 ) $ 19,511,471 $ - $ - $ - Internally developed software 3 to 10 years 667,948 - 667,948 342,697 - 342,697 Total finite-lived intangible assets $ 20,584,401 $ (404,982 ) $ 20,179,419 $ 342,697 $ - $ 342,697 Earnings per Share We calculate basic earnings (loss) per share by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding. We do not include the impact of any potentially dilutive common stock equivalents in our basic earnings (loss) per share calculations. Diluted earnings per share reflect the potential dilution of securities that could share in our earnings through the conversion of common shares issuable via outstanding stock options and unvested restricted shares, except where their inclusion would be anti-dilutive. Outstanding common stock equivalents at June 30, 2021 and June 30, 2020 totaled approximately 328,000 and 29,000, respectively. We use the treasury stock method to calculate the diluted common shares outstanding which were as follows: Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Weighted average number of common shares used in basic net income per common share 13,611,207 13,547,950 13,607,009 13,540,599 Dilutive effects of unvested restricted stock and stock options 252,716 1,777 227,004 2,159 Weighted average number of common shares used in diluted net income per common share 13,863,924 13,549,727 13,834,013 13,542,758 Fair Value Measures Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. Our policy on fair value measures requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The policy prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to their short-term nature. The fair value of notes receivable approximates the net book value and balances are reviewed for impairment at least annually. The fair value of impaired notes receivable are determined based on estimated future payments discounted back to present value using the notes effective interest rate. Fair value Level June 30, 2021 December 31, 2020 Cash 1 $ 2,204,648 $ 13,667,434 Notes receivable 2 4,308,370 7,618,191 Notes receivable - impaired 3 447,034 447,034 Accounts receivable 2 35,055,831 21,344,499 Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today's “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This guidance is effective for annual periods beginning after December 15, 2022, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. We do not expect other accounting standards that the FASB or other standards-setting bodies have issued to have a material impact on our financial position, results of operations, or cash flows.

Acquisitions

Acquisitions	6 Months Ended
	Jun. 30, 2021
Acquisitions
Note 2 - Acquisitions	Note 2 – Acquisitions Business Combinations Snelling Staffing On March 1, 2021, we completed our acquisition of certain assets of Snelling in accordance with the terms of the Asset Purchase Agreement dated January 29, 2021 (the “Snelling Agreement”). Snelling is a 67-year-old staffing company headquartered in Richardson, TX. Pursuant to the Snelling Agreement, HQ Snelling Corporation (“HQ Snelling”), our wholly-owned subsidiary, acquired substantially all of the operating assets and assumed certain liabilities of the sellers for a purchase price of approximately $17.7 million, subject to customary adjustments for net working capital. Also on March 1, 2021, HQ Snelling entered into the First Amendment to the Purchase Agreement, pursuant to which HireQuest, Inc. agreed to advance $2.1 million to the sellers at closing so the seller could facilitate payment on behalf of HQ Snelling to settle accrued payroll liabilities HQ Snelling assumed pursuant to the Snelling Agreement. Substantially all of the locations where we assumed franchisor status in this transaction have subsequently signed our HireQuest franchise agreement and will continue to operate under the Snelling tradename. The following table summarizes the estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. These estimates are preliminary, pending final evaluation of certain assets and liabilities, and therefore are subject to revisions that may result in adjustments to the values presented below: Cash $ 17,691,242 Accounts receivable $ 12,292,830 Workers' compensation deposit 7,200,000 Franchise agreements 11,034,000 Customer lists 1,690,000 Other current assets 109,773 Workers' compensation claims liability (4,890,930 ) Accrued payroll (2,100,000 ) Current liabilities (663,430 ) Other liabilities (2,021,832 ) Bargain purchase (4,959,169 ) Purchase price allocation $ 17,691,242 The bargain purchase is attributable to the financial position of the seller and because there were few suitable potential buyers. The gain is included in the line item, “Other miscellaneous income,” in our consolidated statement of income. The following table presents unaudited pro forma information assuming the acquisition of Snelling had occurred on January 1, 2020. The unaudited pro forma information is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place on that date: Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Royalty revenue $ 5,450,506 $ 3,415,026 $ 9,520,013 $ 8,289,286 Net income 2,855,503 1,450,309 3,852,613 3,023,473 Basic earnings per share $ 0.21 $ 0.11 $ 0.28 $ 0.22 Basic weighted average shares outstanding 13,611,207 13,547,950 13,607,009 13,540,599 Diluted earnings per share $ 0.21 $ 0.11 $ 0.28 $ 0.22 Diluted weighted average shares outstanding 13,863,924 13,549,727 13,834,013 13,542,758 These calculations reflect increased amortization expense, increased payroll expense, the elimination of gains associated with the transaction, the elimination of transaction related costs, and the consequential tax effects that would have resulted had the acquisition closed on January 1, 2020. In connection with the acquisition, we sold the 10 locations that had been company-owned by Snelling located in Bakersfield, CA; Albany, NY; Arlington Heights, IL; Amherst, NY; Dallas, TX; Hayward, CA; Hoffman Estates, IL; Lathrop, CA; Ontario, CA; and Tracy, CA. Two of these locations were sold to franchisees. Four locations were sold to a third-party purchaser. Four offices were sold to a California purchaser (the “California Purchaser”) and operate under the Snelling name pursuant to a license agreement with us. The aggregate sale price for these 10 locations consisted of (i) $1.0 million in the form of a promissory note that bears interest at 6.0% per annum, (ii) the right to receive 1.5% of revenue generated at the Ontario location for the next 12 months, (iii) the right to receive 2.5% of revenue generated at the Tracy and Lathrop locations for the next 12 months, (iv) the right to receive 2.0% of revenue generated at the Princeton location for the next 36 months, and (v) approximately $1 million in cash. There were no remaining company-owned locations at March 31, 2021. One of the California locations operates pursuant to a license agreement whereby the California Purchaser licenses the Snelling trademark and pays us a royalty of 9% of their gross margin. In conjunction with the sale of assets acquired in this transaction, we recognized a gain of approximately $638,000 which is reflected on the line item, "Other miscellaneous income," in our consolidated statement of income. Asset Acquisition Link Staffing On March 22, 2021, we completed our acquisition of the franchise relationships and certain other assets of Link in accordance with the terms of the Asset Purchase Agreement dated February 12, 2021 (the "Link Agreement"). Link is a family-owned staffing company headquartered in Houston, TX. Pursuant to the Link Agreement, HQ Link Corporation ("HQ Link"), our wholly-owned subsidiary, acquired franchise agreements for approximately 35 locations, and other assets of Link Staffing for a purchase price of $11.1 million. Substantially all of the locations where we assumed franchisor status in this transaction have subsequently signed our HireQuest franchise agreement and operate under the Snelling tradename. The following table summarizes the estimated fair values of the identifiable assets acquired as of the acquisition date. These estimates are preliminary, pending final evaluation, and therefore are subject to revisions that may result in adjustments to the values presented below: Cash $ 11,122,911 Franchise agreements 10,886,178 Notes receivable 236,733 Purchase price allocation $ 11,122,911 We determined the Link transaction was an asset acquisition for accounting purposes as substantially all of the fair value of the gross assets acquired was concentrated in the franchise agreements. Accordingly, no pro forma financial information is presented. We assigned six of the franchise agreements we purchased in the transaction, all located in California, to the California Purchaser. These six franchisees operate pursuant to a Link trademark sublicense agreement whereby they pay us 9% of the gross margin of their offices in exchange for a sublicense to utilize the Link tradename. In conjunction with the sale of assets acquired in this transaction, we recognized a loss of approximately $1.9 million which is reflected on the line item, "Other miscellaneous income," in our consolidated statement of income.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2021
Related Party Transactions
Note 3 - Related Party Transactions	Note 3 – Related Party Transactions Several significant shareholders of HQI also own portions of Jackson Insurance Agency; Bass Underwriters, Inc; Insurance Technologies, Inc.; and a number of our franchisees. Jackson Insurance Agency ("Jackson Insurance") and Bass Underwriters, Inc. ("Bass") Mr. Jackson, a member of our Board and significant stockholder, and an immediate family of member of Mr. Jackson own Jackson Insurance. Mr. Jackson, Mr. Hermanns, our CEO, Chairman of our Board, and most significant stockholder, and irrevocable trusts set up by each of them, collectively own a majority of Bass, a large managing general agent. Bass purchased approximately $5.3 million of 6.0% notes receivable at book value in March 2021. For additional information related to this transaction, see Note 10 – Notes Receivable Jackson Insurance and Bass brokered property, casualty, general liability, and cybersecurity insurance for a series of predecessor entities (“Legacy HQ”) prior to the merger with Command Center, Inc. (the “Merger”). Since July 15, 2019, they have continued to broker these same policies for HQI. Jackson Insurance also brokers certain insurance policies on behalf of some of our franchisees, including the Worlds Franchisees (defined below). During the three months ended June 30, 2021 and June 30, 2020, Jackson Insurance and Bass invoiced HQI approximately $-0- and $101,000, respectively for premiums, taxes, and fees for these insurance policies. During the six months ended June 30, 2021 and June 30, 2020, Jackson Insurance and Bass invoiced HQI approximately $584,000 and $662,000, respectively for premiums, taxes, and fees for these insurance policies. Jackson Insurance and Bass do not retain the majority of the premiums invoiced to HQI, but they do retain a commission of approximately 9% - 15% of premiums. Insurance Technologies, Inc. ("Insurance Technologies") Mr. Jackson, Mr. Hermanns, and irrevocable trusts set up by each of them, collectively own a majority of Insurance Technologies, an IT development and security firm. On October 24, 2019, HQI entered into an agreement with Insurance Technologies to add certain cybersecurity protections to our existing information technology systems and to assist in developing future information technology systems within our HQ Webconnect software. In addition, Insurance Technologies assisted with the IT diligence and integration process with respect to the Snelling and Link acquisitions. During the three months ended June 30, 2021 and June 30, 2020, Insurance Technologies invoiced HQI approximately $90,000 and $50,000, respectively, for services provided pursuant to this agreement. During the six months ended June 30, 2021 and June 30, 2020, Insurance Technologies invoiced HQI approximately $193,000 and $100,000, respectively, for services provided pursuant to this agreement. We have retained a fulltime CIO and thus expect spending pursuant to this agreement to become immaterial in the third quarter of 2021 and onward. The Worlds Franchisees Mr. Jackson and immediate family members of Mr. Hermanns have significant ownership interests in certain of our franchisees (the “Worlds Franchisees”). There were 21 Worlds Franchisees at June 30, 2021 that operated 57 of our 212 offices. Transactions regarding the Worlds Franchisees are summarized below: Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Franchisee royalties $ 1,163,789 $ 1,089,020 $ 2,776,799 $ 2,462,895 Balances regarding the Worlds Franchisees are summarized below: June 30, 2021 December 31, 2020 Due to franchisee $ 816,392 $ 435,072 Risk management incentive program 957,278 499,199

Line of Credit and Term Loan

Line of Credit and Term Loan	6 Months Ended
	Jun. 30, 2021
Line of Credit and Term Loan
Note 4 - Line of Credit and Term Loan	Note 4 – Line of Credit and Term Loan In June 2021, we entered into a loan agreement with Truist for a $60 million revolving line of credit with a $20 million sublimit for letters of credit and a $3.2 million term loan. The loan agreement is a syndication agreement with Truist acting as the administrator. The line of credit is subject to a borrowing base that is derived from our accounts receivable, subject to certain reserves and other limitations. Under the agreement, Truist may also make swingline loans available in its discretion. All loans made under the line of credit are scheduled to mature on June 29, 2026. The line of credit and swingline loans bear interest at a variable rate equal to: (a) for LIBOR index rate loans,] the Daily One Month London Interbank Offering Rate, or LIBOR, plus a margin between 1.25% and 1.75% per annum or; (b), for base rate loans, the then applicable base rate plus a margin between 0.25% and 0.75% per annum. The margin is determined based on our average excess availability, which is generally equal to our total collateral less the outstanding balance, if any, under the loan agreement. At June 30, 2021 the effective interest rate was approximately 2.7%. A non-use fee of 0.250% accrues on the unused portion of the line of credit. As collateral for repayment of any and all obligations under this agreement, we granted Truist a security interest in substantially all of our operating assets and the operating assets of our subsidiaries. This agreement, and other loan documents, contain customary representations and warranties, affirmative and negative covenants, including without limitation, those covenants governing indebtedness, liens, fundamental changes, restrictions on certain payments, including dividends, unless certain conditions are met, transactions with affiliates, investments, and the sale of assets. This agreement requires us to comply with a fixed charge coverage ratio of at least 1.25:1.00, and a leverage ratio of not more than 3.0:1.0, tested monthly on a rolling twelve-month basis. At June 30, 2021 we were in compliance with these covenants. Our obligations under this agreement are subject to acceleration upon the occurrence of an event of default as defined in the loan agreement. At June 30, 2021, approximately $14.3 million of availability under the line of credit was utilized by outstanding letters of credit that secure our obligations to our workers’ compensation insurance carrier and $500,000 was utilized by a letter of credit that secures our paycard funding account. This loan agreement replaces our prior $30 million line of credit. For additional information related to the letter of credit securing our workers’ compensation obligations see Note 5 – Workers’ Compensation Insurance and Reserves. The term loan is scheduled to mature on June 29, 2036 and bears interest at a variable rate equal to LIBOR plus a margin of 2.0%. At June 30, 2021 the effective interest rate was approximately 3.0%. The term loan will be paid in equal monthly installments based upon a 15-year amortization of the original principal amount of the term loan, provided that any remaining principal balance is due and payable in full on the earlier of the date of termination of the commitments on the line of credit and June 29, 2036. The term loan is collateralized by all real property owned by us. The proceeds of approximately $3.2 million were used to pay off our prior credit facility and to pay transaction related fees and expenses. The loan agreement contains hardwired mechanics for the replacement of LIBOR with a rate based upon the secured overnight financing rate (“SOFR”) published by the Federal Reserve Bank of New York or a successor administrator upon LIBOR’s cessation or other benchmark transition event set forth in the loan agreement, together with a spread adjustment.

Workers' Compensation Insurance

Workers' Compensation Insurance and Reserves	6 Months Ended
	Jun. 30, 2021
Workers' Compensation Insurance and Reserves
Note 5 - Workers' Compensation Insurance and Reserves	Note 5 – Workers’ Compensation Insurance and Reserves Beginning in March 2014, Legacy HQ obtained its workers’ compensation insurance through Chubb Limited and ACE American Insurance Company (collectively, “ACE”), in all states in which it operated, other than monopolistic jurisdictions. The ACE policy was a high deductible policy pursuant to which Legacy HQ had primary responsibility for all claims with ACE providing insurance for covered losses and expenses in excess of $500,000 per incident. In addition to the ACE policy, Legacy HQ purchased a deductible reimbursement insurance policy from Hirequest Insurance Company (“HQ Ins.”), a captive insurer, to cover losses up to the $500,000 deductible with ACE. This resulted in Legacy HQ effectively being fully insured during this time period. Effective July 15, 2019, Legacy HQ terminated its deductible reimbursement policy with HQ Ins. We assumed the primary responsibility for all claims up to the deductible occurring on or after July 15, 2019. The primary responsibility of all claims occurring before July 15, 2019 remains with HQ Ins. Command Center, the predecessor entity that acquired Legacy HQ in 2019, also obtained its workers’ compensation insurance through ACE. Pursuant to Command Center’s most recent policy, which expired on March 1, 2020, ACE provided insurance for covered losses and expenses in excess of $500,000 per incident. Command Center’s ACE policy included a one-time obligation for the Company to pay any single claim filed under the Command Center policy within a policy year that exceeds $500,000 (if any), but only up to $750,000 for that claim. All other claims within the policy year were subject to the $500,000 deductible. Effective July 15, 2019, in connection with the Merger, we assumed all of the workers’ compensation claims of Command Center. We also assumed Command Center’s workers’ compensation policy with ACE. Under these high deductible programs, we are effectively self-insured. Per our contractual agreements with ACE, we must provide collateral deposits of approximately $14.3 million, which we accomplished by providing a letter of credit under our agreement with Truist. The amount of our current letter of credit includes an additional amount of $5.2 million that was issued in conjunction with the release of a $7.2 million cash deposit that was acquired in the Snelling transaction. For workers’ compensation claims originating in the monopolistic jurisdictions of North Dakota, Ohio, Washington, and Wyoming, we pay workers’ compensation insurance premiums and obtain full coverage under mandatory state administered programs. Our liability associated with claims in these jurisdictions is limited to premium payments based upon the amount of payroll paid within each jurisdiction. Accordingly, our consolidated financial statements reflect only the mandated workers’ compensation insurance premium liability for workers’ compensation claims in these jurisdictions.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2021
Stockholders' equity
Note 6 - Stockholders' Equity	Note 6 – Stockholders’ Equity Dividend In the third quarter of 2020, we initiated the payment of a quarterly dividend. We intend to continue to pay a quarterly dividend, based on our business results and financial position. The following common share dividends were paid during 2021 and 2020: Declaration date Dividend Total paid September 15, 2020 $ 0.05 $ 677,869 December 15, 2020 0.05 679,779 March 15, 2021 0.05 680,247 June 15, 2021 0.06 816,604 Treasury Stock Effective July 2020, our Board of Directors authorized a one-year repurchase plan for up to 1 million shares of our common stock. During the year ended December 31, 2020, we purchased 23,638 shares of our common stock at an aggregate cost of approximately $146,000 resulting in an average price of $6.20 per share. These shares are held in treasury. Additionally, there were 9,454 restricted shares that did not meet their vesting criteria, which are also held in treasury. We have not purchased any shares of our common stock during 2021.

Stock Based Compensation

Stock Based Compensation	6 Months Ended
	Jun. 30, 2021
Stock Based Compensation
Note 7 - Stock Based Compensation	Note 7 – Stock Based Compensation Employee Stock Incentive Plan In December 2019, our Board approved the 2019 HireQuest, Inc. Equity Incentive Plan (the “2019 Plan”). Subject to adjustment in accordance with the terms of the 2019 Plan, no more than 1,500,000 shares of common stock are available in the aggregate for the grant of awards under the 2019 Plan. No more than 1,000,000 shares may be issued in the aggregate pursuant to the exercise of incentive stock options. In addition, no more than 250,000 shares may be issued in the aggregate to any employee or consultant, and no more than 50,000 shares may be issued in the aggregate to any non-employee director in any twelve-month period. In September 2019, our Board approved a share purchase match program to encourage ownership and further align the interests of key employees and directors with those of our shareholders. Under this program, we will match 20% of any shares of our common stock purchased on the open market by or granted in lieu of cash compensation to key employees and directors up to $25,000 in aggregate value per individual within any calendar year. These shares vest on the second anniversary of the date on which the matched shares were purchased if the individual is still employed by the Company and certain other vesting criteria are met. During the first six months of 2021, we issued approximately 4,000 shares valued at approximately $61,000 under this program. During 2020, we issued approximately 22,000 shares valued at approximately $147,000 under this program. Thus far in 2021, we have issued 42,211 shares of restricted common stock pursuant to the 2019 Plan valued at approximately $845,000 to members of our Board of Directors for their services in lieu of cash compensation. Of these, 40,176 shares vested equally over the following three months. The remaining 2,035 shares were issued pursuant to our share purchase match program. Also in the first half of 2021, we have issued 2,280 shares of restricted common stock to certain Board members and employees pursuant to our share purchase match program valued at approximately $34,000. In 2020, we issued 81,943 shares of restricted common stock pursuant to the 2019 Plan valued at approximately $539,000 to members of our Board of Directors for their services in lieu of cash compensation. Of these, 61,868 shares vested equally over the following three months. The remaining 20,075 shares were issued pursuant to our share purchase match program. Also in 2020, we issued 25,000 shares of restricted common stock to an employee pursuant to the 2019 Plan valued at approximately $179,000 for services, and to encourage retention. These shares vest over four years, with 50% vesting on September 11, 2021, and 6.25% vesting each quarter thereafter for the next eight quarters. Also in 2020, we issued 1,742 shares of restricted common stock to certain employees pursuant to our share purchase match program valued at approximately $12,000. The following table summarizes our restricted stock outstanding at December 31, 2020, and changes during the six months ended June 30, 2021. Shares Weighted average grant date price Non-vested, December 31, 2020 258,456 7.21 Granted 44,491 19.74 Vested (31,805 ) 7.81 Non-vested, June 30, 2021 271,142 9.20 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 Command Center 2008 Plan, the Command Center 2016 Plan, and the corresponding award documents. There were approximately 17,000 and 15,000 stock options vested at June 30, 2021 and December 31, 2020, respectively. The following table summarizes our stock options outstanding at December 31, 2020, and changes during the six months ended June 30, 2021: Number of shares underlying options Weighted average exercise price per share Weighted average grant date fair value Outstanding, December 31, 2020 17,082 $ 6.10 $ 3.36 Granted - - - Outstanding, June 30, 2021 17,082 6.10 3.36 The following table summarizes our non-vested stock options outstanding at December 31, 2020, and changes during the six months ended June 30, 2021: Number of shares underlying options Weighted average exercise price per share Weighted average grant date fair value Non-vested, December 31, 2020 2,188 $ 5.50 $ 3.05 Vested (2,188 ) 5.50 3.05 Non-vested, June 30, 2021 - 5.50 3.05 The following table summarizes information about our outstanding stock options, and reflects the intrinsic value recalculated based on the closing price of our common stock of $18.51 at June 30, 2021: Number of shares underlying options Weighted average exercise price per share Weighted average remaining contractual life (years) Aggregate intrinsic value Outstanding & exercisable 17,082 $ 6.10 5.18 $ 212,072 At June 30, 2021, there was unrecognized stock-based compensation expense totaling approximately $1.1 million relating to non-vested restricted stock grants that will be recognized over the next 2.2 years.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2021
Commitments and Contingencies
Note 8 - Commitments and Contingencies	Note 8 – Commitments and Contingencies Franchise Acquisition Indebtedness New franchisees financed the purchase of several offices with promissory notes. In some instances, this financing resulted in certain franchises being considered VIEs. We have determined that we are not required to consolidate these entities because we do not have the power to direct these entities’ daily operations. If these franchises default on these notes, we bear the risk of loss of the outstanding balance on these notes, less what we could recoup from the potential resale of the repossessed office. The balance due from the franchises determined to be VIEs on June 30, 2021 and December 31, 2020 was approximately $3.3 million and $2.1 million, respectively. Legal Proceedings From time to time, we are involved in various legal and administrative proceedings. Based on information currently available to us, we do not expect material uninsured losses to arise from any of these matters. We believe the outcome of these matters, even if determined adversely, will not have a material adverse effect on our business, financial condition or results of operations. There have been no material changes in our legal proceedings as of June 30, 2021.

Income Tax

Income Tax	6 Months Ended
	Jun. 30, 2021
Income Tax
Note 9 - Income Tax	Note 9 – Income Tax Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year and changes in tax law and tax rates. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known, or the tax environment changes . Our effective tax rate for the three months ended June 30, 2021 and June 30. 2020 was 20.1% and 4.3%, respectively. Our effective tax rate for the six months ended June 30, 2021 and June 30. 2020 was 1.3% and 11.0%, respectively. The bulk of the difference between the statutory federal income tax rate of 21.0% and our effective income tax rate results from the bargain purchase gain, which is recorded net of deferred taxes and is treated as a permanent difference, and the federal Work Opportunity Tax Credit, which is designed to encourage employers to hire workers from certain targeted groups with higher-than-average unemployment rates. Other differences result from state income taxes, certain non-deductible expenses, and tax effects of stock-based compensation.

Notes Receivable

Notes Receivable	6 Months Ended
	Jun. 30, 2021
Notes Receivable
Note 10 - Notes Receivable	Note 10 – Notes Receivable Several franchisees, as well as the purchaser of our previously owned California locations, borrowed funds from us primarily to finance the initial purchase price of office assets. In March of 2021, we sold approximately $5.3 million of notes receivable to Bass, a related party. Virtually all of the notes sold to Bass originated from the sale of branch locations acquired in the Merger. These notes were sold at their current outstanding principal value. The proceeds from the sale of these notes were used to finance the Snelling and Link transactions. Notes outstanding, net of allowance for losses, were approximately $4.8 million and $8.1 million as of June 30, 2021 and December 31, 2020, respectively. Notes receivable generally bear interest at a fixed rate between 6.0% and 10.0%. Notes receivable are generally secured by the assets of each office and the ownership interests in the franchise. We report interest income on notes receivable as other miscellaneous income in our consolidated statements of operations. Interest income was approximately $96,000 and $176,000 during the three months ended June 30, 2021 and June 30, 2020, respectively. Interest income was approximately $231,000 and $374,000 during the six months ended June 30, 2021 and June 30, 2020, respectively. We estimate the allowance for losses for franchisees separately from the allowance for losses from non-franchisees because of the level of detailed sales information available to us with respect to the former. Based on our review of the financial condition of the borrowers, the underlying collateral value, and the potential future impact of COVID-19 on certain borrowers’ economic performance and estimated future cash flows, we have established an allowance of approximately $1.6 million as of June 30, 2021 and December 31, 2020 for potentially uncollectible notes receivable. The following table summarizes our notes receivable balance to franchisees: June 30, 2021 December 31, 2020 Note receivable $ 4,713,683 $ 8,023,807 Allowance for losses (405,313 ) (405,313 ) Notes receivable, net $ 4,308,370 $ 7,618,494 During 2020, one of our note holders experienced significant economic hardships due to the impacts of COVID-19. As a result, we restructured one note receivable in an effort to increase the probability of repayment. We granted near-term payment concessions to help the debtor attempt to improve its financial condition so it may eventually be able to repay the amount due. We recognized interest income on this note of approximately $42,000 and $44,000 during the three months ended June 30, 2021 and June 30, 2020, respectively. We recognized interest income on this note of approximately $83,000 and $87,000 during the six months ended June 30, 2021 and June 30, 2020, respectively. The following table summarizes our note receivable balance that has been deemed impaired: June 30, 2021 December 31, 2020 Note receivable $ 1,640,393 $ 1,640,393 Allowance for losses (1,193,359 ) (1,193,359 ) Notes receivable, net $ 447,034 $ 447,034

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2021
Subsequent Events
Note 11 - Subsequent Events	Note 11 – Subsequent Events On August 9, 2021 our Board declared a $0.06 per common share cash dividend to shareholders of record as of September 1, 2021, which will be paid on September 15, 2021.

Overview and Summary of Signi_2

Overview and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2021
Overview and Summary of Significant Accounting Policies
Nature of Business	HireQuest, Inc. (together with its subsidiaries, “HQI,” the “Company,” “we,” us,” or “our”) is a nationwide franchisor of offices providing on-demand labor solutions in the light industrial and blue-collar segments of the staffing industry and traditional commercial staffing. Our franchisees provide various types of temporary personnel through two business models operating under the trade names “HireQuest Direct,” “HireQuest,” “Snelling,” “LINK Staffing,” and “DriverQuest.” HireQuest Direct specializes primarily in unskilled and semi-skilled industrial and construction personnel. HireQuest, Snelling, and Link specialize primarily in skilled and semi-skilled industrial personnel, clerical and administrative personnel, and permanent placement services. DriverQuest specializes in commercial drivers serving a variety of industries and applications. On March 1, 2021, we completed our acquisition of Snelling Staffing and affiliates (“Snelling”). We acquired substantially all of the operating assets and assumed certain liabilities of Snelling for a purchase price of approximately $17.7 million subject to customary adjustments for net working capital. On March 22, 2021, we completed our asset acquisition of Link Staffing and affiliates (“Link”) in which we acquired all of the franchise relationships and certain other assets of Link for a purchase price of approximately $11.2 million. For additional information related to these transactions, see Note 2 – Acquisitions As of June 30, 2021 we had 212 franchisee-owned offices in 35 states and the District of Columbia. We are the employer of record to approximately 80,000 employees annually, who in turn provide services to thousands of clients in various industries including construction, recycling, warehousing, logistics, auctioneering, manufacturing, hospitality, landscaping, and retail. We provide staffing, marketing, working capital funding, software, and administrative services to our franchisees.
Basis of Presentation	We have prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the periods presented. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report filed on Form 10-K for the year ended December 31, 2020. Results for the interim periods presented are not necessarily indicative of the results expected for the full year or for any other period.
Consolidation	The consolidated financial statements include the accounts of HQI and all of its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. U.S. GAAP requires the primary beneficiary of a variable interest entity (“VIE”) to consolidate that entity. To be the primary beneficiary of a VIE, an entity must have both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that are significant to the beneficiary. We provide acquisition financing to some of our franchisees that could result in our having to absorb losses. This results in some franchisees being considered VIEs. We have reviewed our relationship with each of these franchisees and determined that we are not the primary beneficiary of any of these entities. Accordingly, we have not consolidated these entities.
COVID-19 Pandemic	In December 2019, a novel strain of coronavirus disease ("COVID-19") was first reported in Wuhan, China. Less than four months later, on March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The extent of COVID-19's ultimate effect on our operational and financial performance and the collectability of our notes receivable will depend on future developments, including the duration, spread, and intensity of the pandemic, all of which are uncertain and difficult to predict. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on our business. However, the pandemic has so far had a material adverse effect on our business and results of operations. If the pandemic continues to be a severe worldwide health crisis, it could continue to have a material adverse effect on our future business, results of operations, financial condition, and cash flows.
Use of Estimates	The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results could differ from those estimates. Significant estimates and assumptions underlie our workers’ compensation claim liabilities, our workers’ compensation risk management incentive program accrual, our deferred taxes, the reserve for losses on notes receivable, and the estimated fair value of assets acquired and liabilities assumed.
Accounts Receivable and Allowance for Doubtful Accounts	Accounts receivable consist of amounts due for labor services from customers of franchisees and of accounts receivable originating at company-owned locations. At June 30, 2021 and at December 31, 2020, all of our net accounts receivable were due from customers of franchisees. We own the accounts receivable from labor services provided by our franchisees until they age beyond a date agreed upon with each respective franchisee between 42 and 84 days. When accounts receivable age beyond the agreed-upon date, they are charged back to our franchisees. Accordingly, we do not record an allowance for doubtful accounts on these accounts receivable.
Revenue Recognition	Our primary source of revenue comes from royalty fees based on the operation of our franchised offices. Royalty fees from our HireQuest Direct business model are based on a percentage of sales for services our franchisees provide to customers, which ranges from 6% to 8%. Royalty fees from our HireQuest business line, including HireQuest franchisees, DriverQuest franchisees, and Snelling and Link franchisees who executed new franchise agreements upon closing, are 4.5% of the payroll we fund plus 18% of the gross margin for the territory. Royalty fees from the Snelling and Link franchise agreements assumed and not renegotiated at closing range from 5.0% to 8.0% of sales for services our franchisees provide to customers. In addition to royalty fees, we also charge a license fee to some locations that utilize our intellectual property but are not franchisees. License fees are 9% of the gross margin for the location. Our franchisees are responsible for taking customer orders, providing customers with services, establishing the prices charged for services, and controlling other aspects related to providing service to customers prior to the service being transferred to the customer, such as determining which temporary employees to dispatch to the customer and establishing pay rates for the temporary employees. Accordingly, we present revenue on a net basis as agent as opposed to a gross basis as principal. We recognize revenue when we satisfy our performance obligations. Our performance obligations take the form of a franchise license and promised services. Promised services consist primarily of paying temporary employees, completing all statutory payroll related obligations, and providing workers' compensation insurance on behalf of temporary employees. Because these performance obligations are interrelated, we do not consider them to be individually distinct and therefore account for them as a single performance obligation. Because our franchisees receive and consume the benefits of our services simultaneously, our performance obligations are satisfied when our services are provided. Franchise royalties are billed on a weekly basis. We also offer various incentive programs for franchisees including royalty incentives, royalty credits, and other support initiatives. Royalty fees are reduced to reflect any incentives earned or credits granted under these programs. These incentives and credits are provided to encourage new office development and organic growth, and to limit workers' compensation exposure. We present franchise royalty fees net of these incentives and credits. Below are summaries of our franchise royalties disaggregated by business model: Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 HireQuest Direct $ 3,006,054 $ 2,468,581 $ 5,912,124 $ 6,029,984 HireQuest 2,444,452 170,706 2,797,417 314,545 Total $ 5,450,506 $ 2,639,287 $ 8,709,541 $ 6,344,529 Service revenue, which forms the other component of our total revenue, consists of interest we charge our franchisees on overdue customer accounts receivable, trademark license fees, and other fees for optional services we provide. We recognize interest income based on the effective interest rate applied to the outstanding principal balance of overdue accounts. We recognize revenue from trademark license fees as we earn them. We recognize revenue from optional services as we provide them.
Notes Receivable	Notes receivable consist primarily of amounts due to us related to the financing of franchised locations. We report notes receivable at the principal balance outstanding less an allowance for losses. We charge interest at a fixed rate and interest income is calculated by applying the effective rate to the outstanding principal balance. Notes receivable are generally secured by the assets of each location and the ownership interests in the franchise. We monitor the financial condition of our franchisees and record provisions for estimated losses when we believe it is probable that our franchisees will be unable to make their required payments. We evaluate the potential impairment of notes receivable based on various analyses, including estimated discounted future cash flows, at least annually and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When a note receivable is deemed impaired, we discontinue accruing interest and only recognize interest income when payment is received. Our allowance for losses on notes receivable was approximately $1.6 million at June 30, 2021 and December 31, 2020.
Intangible Assets	Intangible assets acquired or internally developed are measured at cost. The costs of acquired intangible assets consist of their purchase price. Subsequent costs are capitalized only if it is probable that they will increase the future economic benefits associated with the specific asset. All other costs are expensed as incurred. The costs of internally developed intangibles consist of fees paid to third parties for development services and payroll costs for employees' time spent on development incurred during the application development stage. Costs originating during the preliminary project stage and post-implementation state are expensed as incurred. Intangible assets are reviewed for impairment at least annually and/or whenever events and circumstances arise that indicate impairment may exist. Intangible assets are amortized using the straight-line method over their estimated useful lives. The table below reflects information related to our finite-lived intangible assets. For additional information related to significant additions to intangible assets, see Note 2 – Acquisitions. June 30, 2021 December 31, 2020 Estimated useful life Gross Accumulated amortization Net Gross Accumulated amortization Net Finite-lived intangible assets: Franchise agreements 15 years $ 19,916,453 $ (404,982 ) $ 19,511,471 $ - $ - $ - Internally developed software 3 to 10 years 667,948 - 667,948 342,697 - 342,697 Total finite-lived intangible assets $ 20,584,401 $ (404,982 ) $ 20,179,419 $ 342,697 $ - $ 342,697
Earnings per Share	We calculate basic earnings (loss) per share by dividing net income or loss available to common stockholders by the weighted average number of common shares outstanding. We do not include the impact of any potentially dilutive common stock equivalents in our basic earnings (loss) per share calculations. Diluted earnings per share reflect the potential dilution of securities that could share in our earnings through the conversion of common shares issuable via outstanding stock options and unvested restricted shares, except where their inclusion would be anti-dilutive. Outstanding common stock equivalents at June 30, 2021 and June 30, 2020 totaled approximately 328,000 and 29,000, respectively. We use the treasury stock method to calculate the diluted common shares outstanding which were as follows: Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Weighted average number of common shares used in basic net income per common share 13,611,207 13,547,950 13,607,009 13,540,599 Dilutive effects of unvested restricted stock and stock options 252,716 1,777 227,004 2,159 Weighted average number of common shares used in diluted net income per common share 13,863,924 13,549,727 13,834,013 13,542,758
Fair Value Measures	Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. Our policy on fair value measures requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The policy establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The policy prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2: Applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3: Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current liabilities approximate fair values due to their short-term nature. The fair value of notes receivable approximates the net book value and balances are reviewed for impairment at least annually. The fair value of impaired notes receivable are determined based on estimated future payments discounted back to present value using the notes effective interest rate. Fair value Level June 30, 2021 December 31, 2020 Cash 1 $ 2,204,648 $ 13,667,434 Notes receivable 2 4,308,370 7,618,191 Notes receivable - impaired 3 447,034 447,034 Accounts receivable 2 35,055,831 21,344,499
Recently Issued Accounting Pronouncements	In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today's “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. This guidance is effective for annual periods beginning after December 15, 2022, and interim periods therein. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. We do not expect other accounting standards that the FASB or other standards-setting bodies have issued to have a material impact on our financial position, results of operations, or cash flows.

Overview and Summary of Signi_3

Overview and Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2021
Overview and Summary of Significant Accounting Policies
Disaggregation of revenue	Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 HireQuest Direct $ 3,006,054 $ 2,468,581 $ 5,912,124 $ 6,029,984 HireQuest 2,444,452 170,706 2,797,417 314,545 Total $ 5,450,506 $ 2,639,287 $ 8,709,541 $ 6,344,529
Intangible assets	June 30, 2021 December 31, 2020 Estimated useful life Gross Accumulated amortization Net Gross Accumulated amortization Net Finite-lived intangible assets: Franchise agreements 15 years $ 19,916,453 $ (404,982 ) $ 19,511,471 $ - $ - $ - Internally developed software 3 to 10 years 667,948 - 667,948 342,697 - 342,697 Total finite-lived intangible assets $ 20,584,401 $ (404,982 ) $ 20,179,419 $ 342,697 $ - $ 342,697
Diluted common shares outstanding	Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Weighted average number of common shares used in basic net income per common share 13,611,207 13,547,950 13,607,009 13,540,599 Dilutive effects of unvested restricted stock and stock options 252,716 1,777 227,004 2,159 Weighted average number of common shares used in diluted net income per common share 13,863,924 13,549,727 13,834,013 13,542,758
Fair value of cash, notes receivable and accounts receivable	Fair value Level June 30, 2021 December 31, 2020 Cash 1 $ 2,204,648 $ 13,667,434 Notes receivable 2 4,308,370 7,618,191 Notes receivable - impaired 3 447,034 447,034 Accounts receivable 2 35,055,831 21,344,499

Acquisitions (Tables)

Acquisitions (Tables)	6 Months Ended
	Jun. 30, 2021
Acquisitions
Identifiable assets acquired and liabilities assumed	Cash $ 17,691,242 Accounts receivable $ 12,292,830 Workers' compensation deposit 7,200,000 Franchise agreements 11,034,000 Customer lists 1,690,000 Other current assets 109,773 Workers' compensation claims liability (4,890,930 ) Accrued payroll (2,100,000 ) Current liabilities (663,430 ) Other liabilities (2,021,832 ) Bargain purchase (4,959,169 ) Purchase price allocation $ 17,691,242
Proforma information	Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Royalty revenue $ 5,450,506 $ 3,415,026 $ 9,520,013 $ 8,289,286 Net income 2,855,503 1,450,309 3,852,613 3,023,473 Basic earnings per share $ 0.21 $ 0.11 $ 0.28 $ 0.22 Basic weighted average shares outstanding 13,611,207 13,547,950 13,607,009 13,540,599 Diluted earnings per share $ 0.21 $ 0.11 $ 0.28 $ 0.22 Diluted weighted average shares outstanding 13,863,924 13,549,727 13,834,013 13,542,758
Estimated fair value	Cash $ 11,122,911 Franchise agreements 10,886,178 Notes receivable 236,733 Purchase price allocation $ 11,122,911

Related Party Transactions (Tab

Related Party Transactions (Tables)	6 Months Ended
	Jun. 30, 2021
Related Party Transactions
Related party balances	Three months ended Six months ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Franchisee royalties $ 1,163,789 $ 1,089,020 $ 2,776,799 $ 2,462,895 Balances regarding the Worlds Franchisees are summarized below: June 30, 2021 December 31, 2020 Due to franchisee $ 816,392 $ 435,072 Risk management incentive program 957,278 499,199

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2021
Stockholders' equity
Dividends	Declaration date Dividend Total paid September 15, 2020 $ 0.05 $ 677,869 December 15, 2020 0.05 679,779 March 15, 2021 0.05 680,247 June 15, 2021 0.06 816,604

Stock Based Compensation (Table

Stock Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2021
Stock Based Compensation
Restricted stock outstanding	Shares Weighted average grant date price Non-vested, December 31, 2020 258,456 7.21 Granted 44,491 19.74 Vested (31,805 ) 7.81 Non-vested, June 30, 2021 271,142 9.20
Stock options outstanding	Number of shares underlying options Weighted average exercise price per share Weighted average grant date fair value Outstanding, December 31, 2020 17,082 $ 6.10 $ 3.36 Granted - - - Outstanding, June 30, 2021 17,082 6.10 3.36
Nonvested stock options outstanding	Number of shares underlying options Weighted average exercise price per share Weighted average grant date fair value Non-vested, December 31, 2020 2,188 $ 5.50 $ 3.05 Vested (2,188 ) 5.50 3.05 Non-vested, June 30, 2021 - 5.50 3.05
Intrinsic value	Number of shares underlying options Weighted average exercise price per share Weighted average remaining contractual life (years) Aggregate intrinsic value Outstanding & exercisable 17,082 $ 6.10 5.18 $ 212,072

Notes Receivable (Tables)

Notes Receivable (Tables)	6 Months Ended
	Jun. 30, 2021
Notes Receivable (Tables)
Changes in notes receivable	June 30, 2021 December 31, 2020 Note receivable $ 4,713,683 $ 8,023,807 Allowance for losses (405,313 ) (405,313 ) Notes receivable, net $ 4,308,370 $ 7,618,494 June 30, 2021 December 31, 2020 Note receivable $ 1,640,393 $ 1,640,393 Allowance for losses (1,193,359 ) (1,193,359 ) Notes receivable, net $ 447,034 $ 447,034

Overview and Summary of Signi_4

Overview and Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenue	$ 5,450,506	$ 2,639,287	$ 8,709,541	$ 6,344,529
Hire Quest Direct [Member]
Revenue	3,006,054	2,468,581	5,912,124	6,029,984
Hire Quest [Member]
Revenue	$ 2,444,452	$ 170,706	$ 2,797,417	$ 314,545

Overview and Summary of Signi_5

Overview and Summary of Significant Accounting Policies (Details 1) - USD ($)	6 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Finite-lived intangible assets, gross	$ 20,584,401	$ 342,697
Accumulated amortization	(404,982)	0
Finite-lived intangible assets, net	20,179,419	342,697
Franchise Agreements
Finite-lived intangible assets, gross	19,916,453	0
Accumulated amortization	(404,982)	0
Finite-lived intangible assets, net	$ 19,511,471	0
Estimated useful life	15 years
Internally Developed Software
Finite-lived intangible assets, gross	$ 667,948	342,697
Accumulated amortization	0	0
Finite-lived intangible assets, net	$ 667,948	$ 342,697
Internally Developed Software | Minimum
Estimated useful life	3 years
Internally Developed Software | Maximum
Estimated useful life	10 years

Overview and Summary of Signi_6

Overview and Summary of Significant Accounting Policies (Details 2) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Overview and Summary of Significant Accounting Policies
Basic	13,611,207	13,547,950	13,607,009	13,540,599
Dilutive effects of stock options	252,716	1,777	227,004	2,159
Weighted average number of common shares used in diluted net income per common share	13,863,924	13,549,727	13,834,013	13,542,758

Overview and Summary of Signi_7

Overview and Summary of Significant Accounting Policies (Details 3) - USD ($)	Jun. 30, 2021	Dec. 31, 2020	Jun. 30, 2020	Dec. 31, 2019
Cash	$ 2,204,648	$ 13,667,434	$ 13,746,445	$ 4,187,450
Level 1
Cash	2,204,648	13,667,434
Level 2
Notes receivable	4,308,370	7,618,191
Accounts receivable	35,055,831	21,344,499
Level 3
Notes receivable - impaired	$ 447,034	$ 447,034

Overview and Summary of Signi_8

Overview and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended		12 Months Ended
	Mar. 22, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 30, 2020
Allowance for losse on notes receivable		$ 1,600,000		$ 1,600,000
Anti-dilutive securities		328,000	29,000
Other assets purchase price	$ 11,200,000
March 1, 2021
Net working capital		$ 17,700,000
Hire Quest [Member]
Gross margin of territory		18.00%
Payroll fund percentage		4.50%
License fees percentage		9.00%
Hire Quest [Member] | Maximum
Sales revenue percentage		6.00%
Royalty fees percentage		8.00%
Hire Quest [Member] | Minimum
Sales revenue percentage		8.00%
Royalty fees percentage		5.00%

Acquisitions (Details)

Acquisitions (Details)	6 Months Ended
	Jun. 30, 2021USD ($)
Bargain purchase	$ (4,959,169)
Snelling Staffing
Cash	17,691,242
Accounts receivable	12,292,830
Workers' compensation deposit	7,200,000
Franchise agreements	11,034,000
Customer lists	1,690,000
Other current assets	109,773
Workers' compensation claims liability	(4,890,930)
Accrued payroll and payroll liabilities	(2,100,000)
Current liabilities	(663,430)
Other liabilities	(2,021,832)
Bargain purchase	(4,959,169)
Purchase price allocation	$ 17,691,242

Acquisitions (Details 1)

Acquisitions (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Basic weighted average shares outstanding	13,611,207	13,547,950	13,607,009	13,540,599
Weighted average number of common shares used in diluted net income per common share	13,863,924	13,549,727	13,834,013	13,542,758
Snelling Staffing
Royalty revenue	$ 5,450,506	$ 3,415,026	$ 9,520,013	$ 8,289,286
Net income	$ 2,855,503	$ 1,450,309	$ 3,852,613	$ 3,023,473
Basic earnings per share	$ 0.21	$ 0.11	$ 0.28	$ 0.22
Basic weighted average shares outstanding	13,611,207	13,547,950	13,607,009	13,540,599
Diluted earnings per share	$ 0.21	$ 0.11	$ 0.28	$ 0.22
Weighted average number of common shares used in diluted net income per common share	13,863,924	13,549,727	13,834,013	13,542,758

Acquisitions (Details 2)

Acquisitions (Details 2) - Link Staffing	6 Months Ended
	Jun. 30, 2021USD ($)
Cash	$ 11,122,911
Purchase price allocation	11,122,911
Franchise agreements	10,886,178
Notes receivable	$ 236,733

Acquisitions (Details Narrative

Acquisitions (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended
	Mar. 22, 2021	Jun. 30, 2021
Other assets purchase price	$ 11,200,000
Hire Quest [Member]
Other miscellanous income expense		$ 638,000
Accrued payroll liabilities		2,100,000
Promissory note		1,000,000
Liabilities		$ 17,700,000
Interest rate		6.00%
Aggregate revenue generated description		the right to receive 1.5% of revenue generated at the Ontario location for the next 12 months, (iii) the right to receive 2.5% of revenue generated at the Tracy and Lathrop locations for the next 12 months, (iv) the right to receive 2.0% of revenue generated at the Princeton location for the next 36 months
Cash		$ 1,000,000
Link Staffing
Cash		11,122,911
Link Staffing | Hire Quest [Member]
Other assets purchase price		11,100,000
Other miscellaneous incomes		$ 1,900,000

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Related Party Transactions
Franchise royalties	$ 1,163,789	$ 1,089,020	$ 2,776,799	$ 2,462,895
Due to franchisees	816,392		816,392		$ 435,072
Risk management incentive program liability	$ 957,278		$ 957,278		$ 499,199

Related Party Transactions (D_2

Related Party Transactions (Details Narrative)	6 Months Ended
	Jun. 30, 2021USD ($)integer	Jun. 30, 2020USD ($)
Franchised and owned branch locations | integer	212
Related party transaction expenses	$ 193,000	$ 100,000
Premiums taxes and fees	$ 584,000	662,000
Commissions rate	15.00%
Notes receivables interest rate	6.00%
Jackson Insurance
Related party transaction expenses	$ 584,000	561,000
Premiums taxes and fees	$ 0	101,000
Commissions rate	9.00%
Notes receivables amount	$ 5,300,000
Insurance Technologies, Inc.
Related party transaction expenses	$ 90,000	$ 50,000
Worlds Franchisees
Franchised and owned branch locations | integer	57

Line of Credit Term Loan (Detai

Line of Credit Term Loan (Details Narrative)	6 Months Ended
	Jun. 30, 2021USD ($)
Workers compensation	$ 500,000
Loan amount	$ 30,000,000
Maturity date	Jun. 29, 2036
Interest rate	3.00%
Related fees and expense	$ 3,200,000
Letter of credit	$ 14,300,000
Line of credit description	The line of credit and swingline loans bear interest at a variable rate equal to: (a) for LIBOR index rate loans,] the Daily One Month London Interbank Offering Rate, or LIBOR, plus a margin between 1.25% and 1.75% per annum or; (b), for base rate loans, the then applicable base rate plus a margin between 0.25% and 0.75% per annum. The margin is determined based on our average excess availability, which is generally equal to our total collateral less the outstanding balance, if any, under the loan agreement. At June 30, 2021 the effective interest rate was approximately 2.7%. A non-use fee of 0.250% accrues on the unused portion of the line of credit. As collateral for repayment of any and all obligations under this agreement, we granted Truist a security interest in substantially all of our operating assets and the operating assets of our subsidiaries. This agreement, and other loan documents, contain customary representations and warranties, affirmative and negative covenants, including without limitation, those covenants governing indebtedness, liens, fundamental changes, restrictions on certain payments, including dividends, unless certain conditions are met, transactions with affiliates, investments, and the sale of assets. This agreement requires us to comply with a fixed charge coverage ratio of at least 1.25:1.00, and a leverage ratio of not more than 3.0:1.0
Line of credit	$ 20,000,000
June, 2021 [Member]
Letter of credit	3,200,000
Line of credit	$ 60,000,000

Workers Compensation Insurance

Workers Compensation Insurance and Reserves (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended
	Mar. 01, 2020	Jun. 30, 2021
Additional amount of current letter		$ 5,200,000
Snelling transaction amount		7,200,000
Reimburesement insurance amount		500,000
Collateral deposits		14,300,000
Estimated future claims losses and expenses at the end of the period		$ 500,000
ACE [Member]
Insurance description	ACE provided insurance for covered losses and expenses in excess of $500,000 per incident. Command Center’s ACE policy included a one-time obligation for the Company to pay any single claim filed under the Command Center policy within a policy year that exceeds $500,000 (if any), but only up to $750,000 for that claim. All other claims within the policy year were subject to the $500,000 deductible. Effective July 15, 2019

Stockholders Equity (Details)

Stockholders Equity (Details)	6 Months Ended
	Jun. 30, 2021USD ($)$ / shares
September 15, 2020
Dividend | $ / shares	$ 0.05
Total paid | $	$ 677,869
December 15, 2020
Dividend | $ / shares	$ 0.05
Total paid | $	$ 679,779
March 15, 2021
Dividend | $ / shares	$ 0.05
Total paid | $	$ 680,247
June 15, 2021
Dividend | $ / shares	$ 0.06
Total paid | $	$ 816,604

Stockholders Equity (Details Na

Stockholders Equity (Details Narrative) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2021	Dec. 31, 2020
Average exercise price per share		$ 6.20
Shares of common stock		23,638
Additionally restricted shares	9,454
Shares of common stock amount		$ 146,000
July, 2020 [Member]
Treasury shares of stock	1,000,000

Stock Based Compensation (Detai

Stock Based Compensation (Details)	6 Months Ended
	Jun. 30, 2021$ / sharesshares
Stock Based Compensation
Non-vested, beginning | shares	258,456
Granted | shares	44,491
Vested | shares	(31,805)
Non-vested, ending | shares	271,142
Weighted average grant date price, beginning | $ / shares	$ 7.21
Granted | $ / shares	19.74
Vested | $ / shares	7.81
Weighted average grant date price, ending | $ / shares	$ 9.20

Stock Based Compensation (Det_2

Stock Based Compensation (Details 1)	6 Months Ended
	Jun. 30, 2021$ / sharesshares
Stock Based Compensation
Number of options outstanding, beginning | shares	17,082
Granted | shares	0
Number of options outstanding, ending | shares	17,082
Weighted Average Exercise Price Per Share
Outstanding, beginning	$ 6.10
Granted	0
Outstanding, ending	6.10
Weighted Average Grant Date Fair Value Per Share
Outstanding, Beginning	3.36
Granted	0
Outstanding, ending	$ 3.36

Stock Based Compensation (Det_3

Stock Based Compensation (Details 2)	6 Months Ended
	Jun. 30, 2021$ / sharesshares
Stock Based Compensation
Number of nonvested options outstanding, beginning | shares	2,188
Vested | shares	(2,188)
Number of nonvested options outstanding, ending | shares	0
Weighted Average Exercise Price Per share
Outstanding, beginning	$ 5.50
Vested	5.50
Outstanding, ending	5.50
Outstanding, beginning	3.05
Vested	3.05
Outstanding, ending	$ 3.05

Stock Based Compensation (Det_4

Stock Based Compensation (Details 3) - USD ($)	6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020
Stock Based Compensation
Number of options outstanding, beginning	17,082	17,082	17,082
Outstanding, beginning	$ 6.10	$ 6.10	$ 6.10
Weighted average remaining contractual life (years), outstanding	5 years 2 months 4 days
Aggregate intrinsic value, outstanding	$ 212,072

Stock Based Compensation (Det_5

Stock Based Compensation (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Sep. 30, 2019	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Sep. 11, 2021
Vested		40,176				61,868
Vesting price rate		50.00%		50.00%			6.25%
Closing price of common stock		$ 18.51		$ 18.51
Restricted shares of common stock, shares	42,211			2,280		81,943
Restricted shares of common stock, amount	$ 845,000			$ 34,000		$ 539,000
Unrecognized share-based compensation expense		$ 1,100,000		$ 1,100,000
purchase shares of common stock	2,035					20,075
Unrecognized share-based compensation expense period of recogntion				2 years 2 months 12 days
Common stock shares issued for services				50,000	22,000	25,000
Common stock shares issued for services amount			$ 38		$ 57	$ 179,000
December, 2019 [Member]
Restricted shares of common stock, shares						1,742
Restricted shares of common stock, amount						$ 12,000
Common stock shares issued for services					22,000	4,000
Common stock shares issued for services amount					$ 147,000	$ 61,000
Shares of common stock				1,500,000
Aggregate exercise of stock options				1,000,000
Additionally shares to any employee				250,000
2016 Stock Incentive Plan
Vested				17,000		15,000

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($) $ in Millions	Jun. 30, 2021	Dec. 31, 2020
Commitments and Contingencies
Due from franchises	$ 3.3	$ 2.1

Income Tax (Details Narrative)

Income Tax (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Tax
Effective tax rate	20.10%	4.30%	1.30%	11.00%
Federal tax rate			21.00%

Notes Receivable (Details)

Notes Receivable (Details) - USD ($)	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020
Note receivable	$ 1,640,393		$ 1,640,393
Allowance for losses	(1,193,359)		(1,193,359)
Notes receivable	447,034	$ 5,300,000	447,034
Notes Receivable [Member]
Note receivable	4,713,683		8,023,807
Allowance for losses	(405,313)		(405,313)
Notes receivable	$ 4,308,370		$ 7,618,494

Notes Receivable (Details Narra

Notes Receivable (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Interest income on franchisee notes	$ 96,000	$ 176,000	$ 231,000	$ 374,000
Notes outstanding, net allowance losses			$ 4,800,000		$ 8,100,000
Interest rate description			Notes receivable generally bear interest at a fixed rate between 6.0% and 10.0%. Notes receivable are generally secured by the assets of each office and the ownership interests in the franchise
Notes receivable	5,300,000		$ 447,034		$ 447,034
2020 [Member]
Interest income on franchisee notes	$ 42,000	$ 44,000	$ 83,000	$ 87,000

Subsequent Events (Details Narr

Subsequent Events (Details Narrative)	Aug. 09, 2021$ / shares
Subsequent Event [Member] | September 1, 2021 [Member]
Dividend	$ 0.06