arcee-ai/sec-data-full · Datasets at Hugging Face

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securities like the series A senior convertible preferred shares and the unavailability at the time of conversion of Rule 144, the pricing
provisions that are based upon the lowest VWAP of the previous ten (10) trading days immediately preceding the relevant adjustment date
shall be removed unless the common shares issuable upon conversion are then registered under an effective registration statement. Additional
Equity Interest. On the third adjustment date set forth above, the Company is required to cause Kyle’s and Wolo to issue to
the holders of series A senior convertible preferred shares, on a pro rata basis, a ten percent ( 10 %) equity stake Kyle’s and/or
Wolo. The holders of series A senior convertible preferred shares issued in connection with the financing to complete the acquisition
of Kyle’s shall receive the equity stake in Kyle’s and the holders of series A senior convertible preferred shares issued
in connection with the financing to complete the acquisition of Wolo shall receive the equity stake in Wolo. The Company is required
to cause Kyle’s and Wolo to grant to the holders of the series A senior convertible preferred shares upon the issuance to them
of such equity interest a right to receive an additional number of shares of common stock of Kyle’s or Wolo if Kyle’s or
Wolo issues to any third-party equity securities at a price below the acquisition price (as defined below). Such additional number of
shares of common stock of Kyle’s or Wolo to be issued in such instance shall be equal to a number of shares of common stock of
Kyle’s or Wolo which, when added to the number of shares of common stock of Kyle’s or Wolo constituting the initial additional
equity interest, would be equal to the total number of shares of common stock which would have been issued to a holder of series A senior
convertible preferred shares if the price per share of common stock of Kyle’s or Wolo was equivalent to the price per equity security
paid by such third-party in Kyle’s or Wolo. For purposes of this provision, “acquisition price” means the price per
share of Kyle’s and Wolo that was paid by the Company upon the acquisition of Kyle’s and Wolo, respectively. On
March 26, 2021, the Company sold an aggregate of 1,818,182 units, at a price of $ 1.65 per unit, for aggregate gross proceeds of $ 3,000,000 .
Each unit consists of one (1) series A senior convertible preferred share and a three-year warrant to purchase one (1) common share at
an exercise price of $ 10.00 per common share (subject to adjustments), which such exercise price was adjusted to $ 4.20 following the
adjustments (see Note 17), and may be exercised on a cashless basis under certain circumstances. The embedded conversion options of the
series A senior convertible preferred shares and warrants were clearly and closely related to the equity host and did not require bifurcation. The $3,000,000 of proceeds were allocated on a relative fair value basis of $1,527,086 to the series A preferred shares and $1,472,914
to the warrants. The series A preferred shares fair value was derived using an Option Pricing Method and the warrants fair value was
derived using a Monte Carlo Simulation Model. F- 33 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 On
October 12, 2021, the Company redeemed 2,632,278 series A senior convertible preferred shares for a total redemption price, including
dividends through such date, of $ 6,395,645 . On
February 16, 2022, 133,333 shares of series A senior convertible preferred shares were converted into 38,096 common shares. On August
12, 2022, the Company redeemed 90,909 series A senior convertible preferred shares for a total redemption price of $ 209,091 . During
the year ended December 31, 2022, the Company accrued dividends attributable to the series A senior convertible preferred shares in the
amount of $ 590,162 and paid prior period accrued dividends of $ 615,593 . During the year ended December 31, 2021, the Company accrued
dividends attributable to the series A senior convertible preferred shares in the amount of $ 984,176 and paid prior period accrued dividends
of $ 1,032,806 . As
of December 31, 2022 and 2021, the Company had 1,593,940 and 1,818,182 series A senior convertible preferred shares issued and outstanding,
respectively. Series
B Senior Convertible Preferred Shares On
February 17, 2022, the Company executed a share designation to designate 583,334 of its shares as series B senior convertible preferred
shares. Following is a description of the rights of the series B senior convertible preferred shares. Ranking .
The series B senior convertible preferred shares rank, with respect to the payment of dividends and the distribution of assets upon liquidation,
(i) senior to all common shares, allocation shares, and each other class or series that is not expressly made senior to or on parity
with the series B senior convertible preferred shares; (ii) on parity with the series A senior convertible preferred shares and each
other class or series that is not expressly subordinated or made senior to the series A senior convertible preferred shares; and (iii)
junior to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company and each other
class or series that is expressly made senior to the series B senior convertible preferred shares. Dividend
Rights . Holders of series B senior convertible preferred shares are entitled to dividends at a rate per annum of 14.0 % of the stated
value ($ 3.00 per share, subject to adjustment). Dividends shall accrue from day to day, whether or not declared, and shall be cumulative.
Dividends shall be payable quarterly in arrears on each dividend payment date in cash or common shares at the Company’s discretion.
Dividends payable in common shares shall be calculated based on a price equal to eighty percent ( 80 %) of the VWAP during the five (5)
trading days immediately prior to the applicable dividend payment date; provided, however, that if the common shares are not registered,
and rulemaking regarding the Rule 144 holding period referred to below is effective on the payment date, the dividends payable in common
shares shall be calculated based upon the fixed price of $ 2.70 ; provided further, that the Company may only elect to pay dividends in
common shares based upon such fixed price if the VWAP for the five (5) trading days immediately prior to the applicable dividend payment
date is $ 2.70 or higher. Liquidation
Rights . Subject to the rights of creditors and the holders of any senior securities or parity securities (in each case, as defined
in the share designation), upon any liquidation of the Company or its subsidiaries, before any payment or distribution of the assets
of the Company (whether capital or surplus) shall be made to or set apart for the holders of securities that are junior to the series
B senior convertible preferred shares as to the distribution of assets on any liquidation of the Company, including the common shares
and allocation shares, each holder of outstanding series B senior convertible preferred shares shall be entitled to receive an amount
of cash equal to 115 % of the stated value plus an amount of cash equal to all accumulated accrued and unpaid dividends thereon (whether
or not declared) to, but not including the date of final distribution to such holders. If, upon any liquidation, the assets, or proceeds
thereof, distributable among the holders of the series B senior convertible preferred shares shall be insufficient to pay in full the
preferential amount payable to the holders of the series B senior convertible preferred shares and liquidating payments on any other
shares of any class or series of parity securities as to the distribution of assets on any liquidation, then such assets, or the proceeds
thereof, shall be distributed among the holders of series B senior convertible preferred shares and any such other parity securities
ratably in accordance with the respective amounts that would be payable on such series B senior convertible preferred shares and any
such other parity securities if all amounts payable thereon were paid in full. F- 34 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 Voting
Rights . The series B senior convertible preferred shares do not have any voting rights; provided that, so long as any series B senior
convertible preferred shares are outstanding, the affirmative vote of holders of a majority of series B senior convertible preferred
shares, voting as a separate class, shall be necessary for approving, effecting or validating (i) any amendment, alteration or repeal
of any of the provisions of the share designation or (ii) the Company’s creation or issuance of any parity securities or any senior
securities. Notwithstanding the foregoing, such vote of the holders shall not be required in connection with the issuance of parity securities
or senior securities if, and so long as, the proceeds resulting from the issuance of such securities are used to redeem in full the outstanding
series B senior convertible preferred shares. Conversion
Rights . Each series B senior convertible preferred share, plus all accrued and unpaid dividends thereon, shall be convertible, at
the option of the holder thereof, at any time and from time to time, into such number of fully paid and nonassessable common shares determined
by dividing the stated value ($ 3.00 per share), plus the value of the accrued, but unpaid, dividends thereon, by the conversion price
of $ 12.00 per share (subject to adjustments); provided that in no event shall the holder of any series B senior convertible preferred
shares be entitled to convert any number of series B senior convertible preferred shares that upon conversion the sum of (i) the number
of common shares beneficially owned by the holder and its affiliates and (ii) the number of common shares issuable upon the conversion
of the series B senior convertible preferred shares with respect to which the determination of this proviso is being made, would result
in beneficial ownership by the holder and its affiliates of more than 4.99 % of the then outstanding common shares. This limitation may
be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-one (61) days’ prior notice
to the Company. Redemption
Rights . The Company may redeem in whole (but not in part) the series B senior convertible preferred shares by paying in cash therefore
a sum equal to 115 % of the stated value plus the amount of accrued and unpaid dividends and any other amounts due pursuant to the terms
of the series B senior convertible preferred shares. Adjustments .
The share designation contains standard adjustments to the conversion price in the event of any share splits, share combinations, share
reclassifications, dividends paid in common shares, sales of substantially all of the Company’s assets, mergers, consolidations
or similar transactions. In addition, the share designation provides that the stated dividend rate, the stated value and the conversion
price shall automatically adjust as follows: ● On
the first day of the 12th month following the issuance of the first series B senior convertible preferred share, the stated dividend
rate shall automatically increase by five percent (5.0%) per annum and the conversion price shall automatically adjust to the lower of
the (i) initial conversion price and (ii) the price equal to the lowest VWAP of the ten (10) trading days immediately preceding such
date. ● On
the first day of the 24th month following the issuance of the first series B senior convertible

securities like the series A senior convertible preferred shares and the unavailability at the time of conversion of Rule 144, the pricing

provisions that are based upon the lowest VWAP of the previous ten (10) trading days immediately preceding the relevant adjustment date

shall be removed unless the common shares issuable upon conversion are then registered under an effective registration statement. Additional

Equity Interest. On the third adjustment date set forth above, the Company is required to cause Kyle’s and Wolo to issue to

the holders of series A senior convertible preferred shares, on a pro rata basis, a ten percent ( 10 %) equity stake Kyle’s and/or

Wolo. The holders of series A senior convertible preferred shares issued in connection with the financing to complete the acquisition

of Kyle’s shall receive the equity stake in Kyle’s and the holders of series A senior convertible preferred shares issued

in connection with the financing to complete the acquisition of Wolo shall receive the equity stake in Wolo. The Company is required

to cause Kyle’s and Wolo to grant to the holders of the series A senior convertible preferred shares upon the issuance to them

of such equity interest a right to receive an additional number of shares of common stock of Kyle’s or Wolo if Kyle’s or

Wolo issues to any third-party equity securities at a price below the acquisition price (as defined below). Such additional number of

shares of common stock of Kyle’s or Wolo to be issued in such instance shall be equal to a number of shares of common stock of

Kyle’s or Wolo which, when added to the number of shares of common stock of Kyle’s or Wolo constituting the initial additional

equity interest, would be equal to the total number of shares of common stock which would have been issued to a holder of series A senior

convertible preferred shares if the price per share of common stock of Kyle’s or Wolo was equivalent to the price per equity security

paid by such third-party in Kyle’s or Wolo. For purposes of this provision, “acquisition price” means the price per

share of Kyle’s and Wolo that was paid by the Company upon the acquisition of Kyle’s and Wolo, respectively. On

March 26, 2021, the Company sold an aggregate of 1,818,182 units, at a price of $ 1.65 per unit, for aggregate gross proceeds of $ 3,000,000 .

Each unit consists of one (1) series A senior convertible preferred share and a three-year warrant to purchase one (1) common share at

an exercise price of $ 10.00 per common share (subject to adjustments), which such exercise price was adjusted to $ 4.20 following the

adjustments (see Note 17), and may be exercised on a cashless basis under certain circumstances. The embedded conversion options of the

series A senior convertible preferred shares and warrants were clearly and closely related to the equity host and did not require bifurcation. The $3,000,000 of proceeds were allocated on a relative fair value basis of $1,527,086 to the series A preferred shares and $1,472,914

to the warrants. The series A preferred shares fair value was derived using an Option Pricing Method and the warrants fair value was

derived using a Monte Carlo Simulation Model. F- 33 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 On

October 12, 2021, the Company redeemed 2,632,278 series A senior convertible preferred shares for a total redemption price, including

dividends through such date, of $ 6,395,645 . On

February 16, 2022, 133,333 shares of series A senior convertible preferred shares were converted into 38,096 common shares. On August

12, 2022, the Company redeemed 90,909 series A senior convertible preferred shares for a total redemption price of $ 209,091 . During

the year ended December 31, 2022, the Company accrued dividends attributable to the series A senior convertible preferred shares in the

amount of $ 590,162 and paid prior period accrued dividends of $ 615,593 . During the year ended December 31, 2021, the Company accrued

dividends attributable to the series A senior convertible preferred shares in the amount of $ 984,176 and paid prior period accrued dividends

of $ 1,032,806 . As

of December 31, 2022 and 2021, the Company had 1,593,940 and 1,818,182 series A senior convertible preferred shares issued and outstanding,

respectively. Series

B Senior Convertible Preferred Shares On

February 17, 2022, the Company executed a share designation to designate 583,334 of its shares as series B senior convertible preferred

shares. Following is a description of the rights of the series B senior convertible preferred shares. Ranking .

The series B senior convertible preferred shares rank, with respect to the payment of dividends and the distribution of assets upon liquidation,

(i) senior to all common shares, allocation shares, and each other class or series that is not expressly made senior to or on parity

with the series B senior convertible preferred shares; (ii) on parity with the series A senior convertible preferred shares and each

other class or series that is not expressly subordinated or made senior to the series A senior convertible preferred shares; and (iii)

junior to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company and each other

class or series that is expressly made senior to the series B senior convertible preferred shares. Dividend

Rights . Holders of series B senior convertible preferred shares are entitled to dividends at a rate per annum of 14.0 % of the stated

value ($ 3.00 per share, subject to adjustment). Dividends shall accrue from day to day, whether or not declared, and shall be cumulative.

Dividends shall be payable quarterly in arrears on each dividend payment date in cash or common shares at the Company’s discretion.

Dividends payable in common shares shall be calculated based on a price equal to eighty percent ( 80 %) of the VWAP during the five (5)

trading days immediately prior to the applicable dividend payment date; provided, however, that if the common shares are not registered,

and rulemaking regarding the Rule 144 holding period referred to below is effective on the payment date, the dividends payable in common

shares shall be calculated based upon the fixed price of $ 2.70 ; provided further, that the Company may only elect to pay dividends in

common shares based upon such fixed price if the VWAP for the five (5) trading days immediately prior to the applicable dividend payment

date is $ 2.70 or higher. Liquidation

Rights . Subject to the rights of creditors and the holders of any senior securities or parity securities (in each case, as defined

in the share designation), upon any liquidation of the Company or its subsidiaries, before any payment or distribution of the assets

of the Company (whether capital or surplus) shall be made to or set apart for the holders of securities that are junior to the series

B senior convertible preferred shares as to the distribution of assets on any liquidation of the Company, including the common shares

and allocation shares, each holder of outstanding series B senior convertible preferred shares shall be entitled to receive an amount

of cash equal to 115 % of the stated value plus an amount of cash equal to all accumulated accrued and unpaid dividends thereon (whether

or not declared) to, but not including the date of final distribution to such holders. If, upon any liquidation, the assets, or proceeds

thereof, distributable among the holders of the series B senior convertible preferred shares shall be insufficient to pay in full the

preferential amount payable to the holders of the series B senior convertible preferred shares and liquidating payments on any other

shares of any class or series of parity securities as to the distribution of assets on any liquidation, then such assets, or the proceeds

thereof, shall be distributed among the holders of series B senior convertible preferred shares and any such other parity securities

ratably in accordance with the respective amounts that would be payable on such series B senior convertible preferred shares and any

such other parity securities if all amounts payable thereon were paid in full. F- 34 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 Voting

Rights . The series B senior convertible preferred shares do not have any voting rights; provided that, so long as any series B senior

convertible preferred shares are outstanding, the affirmative vote of holders of a majority of series B senior convertible preferred

shares, voting as a separate class, shall be necessary for approving, effecting or validating (i) any amendment, alteration or repeal

of any of the provisions of the share designation or (ii) the Company’s creation or issuance of any parity securities or any senior

securities. Notwithstanding the foregoing, such vote of the holders shall not be required in connection with the issuance of parity securities

or senior securities if, and so long as, the proceeds resulting from the issuance of such securities are used to redeem in full the outstanding

series B senior convertible preferred shares. Conversion

Rights . Each series B senior convertible preferred share, plus all accrued and unpaid dividends thereon, shall be convertible, at

the option of the holder thereof, at any time and from time to time, into such number of fully paid and nonassessable common shares determined

by dividing the stated value ($ 3.00 per share), plus the value of the accrued, but unpaid, dividends thereon, by the conversion price

of $ 12.00 per share (subject to adjustments); provided that in no event shall the holder of any series B senior convertible preferred

shares be entitled to convert any number of series B senior convertible preferred shares that upon conversion the sum of (i) the number

of common shares beneficially owned by the holder and its affiliates and (ii) the number of common shares issuable upon the conversion

of the series B senior convertible preferred shares with respect to which the determination of this proviso is being made, would result

in beneficial ownership by the holder and its affiliates of more than 4.99 % of the then outstanding common shares. This limitation may

be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-one (61) days’ prior notice

to the Company. Redemption

Rights . The Company may redeem in whole (but not in part) the series B senior convertible preferred shares by paying in cash therefore

a sum equal to 115 % of the stated value plus the amount of accrued and unpaid dividends and any other amounts due pursuant to the terms

of the series B senior convertible preferred shares. Adjustments .

The share designation contains standard adjustments to the conversion price in the event of any share splits, share combinations, share

reclassifications, dividends paid in common shares, sales of substantially all of the Company’s assets, mergers, consolidations

or similar transactions. In addition, the share designation provides that the stated dividend rate, the stated value and the conversion

price shall automatically adjust as follows: ● On

the first day of the 12th month following the issuance of the first series B senior convertible preferred share, the stated dividend

rate shall automatically increase by five percent (5.0%) per annum and the conversion price shall automatically adjust to the lower of

the (i) initial conversion price and (ii) the price equal to the lowest VWAP of the ten (10) trading days immediately preceding such

date. ● On

the first day of the 24th month following the issuance of the first series B senior convertible