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

text stringlengths 0 1.95M
of the lowest volume weighted average price of our common shares on any trading day during the five (5) trading days prior to the conversion
date; provided that such conversion price shall not be less than $0.03 (subject to adjustments). 91 The
conversion price of the notes and the exercise price of the warrants are subject to standard adjustments, including a price-based adjustment
in the event that we issue any common shares or other securities convertible into or exercisable for common shares at an effective price
per share that is lower than the conversion or exercise price, subject to certain exceptions. In addition, the notes and the warrants
contain an ownership limitation, such that we shall not effect any conversion or exercise, and the holders shall not have the right to
convert or exercise, any portion of the notes or the warrants to the extent that after giving effect to the issuance of common shares
upon conversion or exercise, such holder, together with its affiliates and any other persons acting as a group together with such holder
or any of its affiliates, would beneficially own in excess of 4.99% of the number of common shares outstanding immediately after giving
effect to the issuance of common shares upon conversion or exercise. Acquisition
of ICU Eyewear On
December 21, 2022, our newly formed wholly owned subsidiaries 1847 ICU and 1847 ICU Acquisition Sub Inc. entered into an agreement and
plan of merger, or the merger agreement, with ICU Eyewear Holdings Inc. and San Francisco Equity Partners, as the stockholder representative,
which was amended on February 9, 2023. On
February 9, 2023, closing of the transactions contemplated by the merger agreement was completed. Pursuant to the merger agreement, 1847
ICU Acquisition Sub Inc. merged with and into ICU Eyewear Holdings Inc., with ICU Eyewear Holdings Inc. surviving the merger as a wholly
owned subsidiary of 1847 ICU. The merger consideration paid by 1847 ICU to the stockholders of ICU Eyewear Holdings Inc. consists of
(i) $4,000,000 in cash, minus any unpaid debt of ICU Eyewear and certain transaction expenses, and (ii) 6% subordinated promissory notes
in the aggregate principal amount of $500,000. The
notes bear interest at the rate of 6% per annum with all principal and accrued interest being due and payable in one lump sum on February
9, 2024; provided that upon an event of default (as defined in the notes), such interest rate shall increase to 10%. 1847 ICU may prepay
all or any portion of the notes at any time prior to the maturity date without premium or penalty of any kind. The notes contain customary
events of default, including, without limitation, in the event of (i) non-payment, (ii) a default by 1847 ICU of any of its covenants
in the notes, the merger agreement or any other agreement entered into in connection with the merger agreement, or a breach of any of
the representations or warranties under such documents, (iii) the insolvency or bankruptcy of 1847 ICU or ICU Eyewear or (iv) a change
of control (as defined in the notes) of 1847 ICU or ICU Eyewear. The notes are unsecured and subordinated to all senior indebtedness
(as defined in the notes). Loan
and Security Agreement On
February 9, 2023, 1847 ICU and ICU Eyewear entered into a loan and security agreement, or the loan agreement, with Industrial Funding
Group, Inc. for a revolving loan of up to $5,000,000, which is evidenced by a secured promissory note in the principal amount of
up to $5,000,000. On February 9, 2023, we received an advance of $2,063,182 under the note, of which $1,963,182 was used to repay certain
debt of ICU Eyewear in connection with the merger agreement, with the remaining $100,000 used to pay lender fees. On February 11, 2023,
the Industrial Funding Group, Inc. sold and assigned the loan agreement, the note and related loan documents to GemCap Solutions, LLC. The
note matures on February 9, 2025 with all advances bearing interest at an annual rate equal to the greater of (i) the sum of (a) the
“Prime Rate” as reported in the “Money Rates” column of The Wall Street Journal, adjusted as and when such prime
rate changes, plus (b) eight percent (8.00%), and (ii) fifteen percent (15.00%); provided that following and during the continuation
of an event of default (as defined in the loan agreement), interest on the unpaid principal balance of the advances shall accrue at an
annual rate equal to such rate plus three percent (3.00%). Interest accrued on the advances shall be payable monthly commencing on March
7, 2023. We may voluntarily prepay the entire unpaid principal amount of the note without premium or penalty; provided that in the event
that we make such prepayment on or before February 9, 2024, then we must pay certain fees set forth in the note. The note is secured
by all of the assets of 1847 ICU and ICU Eyewear. The
loan agreement contains customary representations, warranties and affirmative and negative financial and other covenants for loans of
this type. The loan agreement contains customary events of default, including, among othe (i) for failure to pay principal and interest
on the note when due, or to pay any fees due under the loan agreement; (ii) for failure to perform any covenant or agreement contained
in the loan agreement or any document delivered in connection therewith; (iii) if any statement, representation or warranty in the loan
agreement or any document delivered in connection therewith is at any time found to have been false in any material respect at the time
such representation or warranty was made; (iv) if we default under any agreement or contract with a third party which default would result
in a liability to us in excess of $25,000; (v) for any voluntary or involuntary bankruptcy, insolvency, or dissolution or assignment
to creditors; (vi) if any judgments or attachments aggregating in excess of $10,000 at any given time are obtained against us which remain
unstayed for a period of ten (10) days or are enforced or if there is an indictment under an criminal statute or proceeding pursuant
to which remedies sought may include the forfeiture of any property; (vii) if a material adverse effect or change of control (each as
defined in the loan agreement) shall have occurred; (viii) for certain environmental claims; and (ix) for failure to notify the lender
of certain events or failure to deliver certain documentation required by the loan agreement. 92 Amendment
to Conversion Agreement On March 30, 2023, we entered into an amendment
to the conversion agreement described in “ —Liquidity and Capital Resources—Debt—Related Party Promissory Note ”
below, effective retroactively to October 1, 2022. Pursuant to the amendment, we agreed to pay a total of $642,544 in three monthly payments
commencing on April 5, 2023. Amendment to 6% Amortizing Promissory Note On April 6, 2023, we entered into an amendment
to the 6% amortizing promissory note described in in “ —Liquidity and Capital Resources—Debt—6% Amortizing
Promissory Note ” below, effective retroactively to October 20, 2022. Pursuant to the amendment, the parties agreed to extend
the maturity date of the note to July 30, 2023 and revised the repayment terms so that the outstanding principal amount and all accrued
interest thereon shall be payable in three payments on April 6, 2023, June 30, 2023 and July 30, 2023. As additional consideration for
entering into the amendment, we also agreed to pay an amendment fee of $84,362 on the maturity date. Impact
of Coronavirus Pandemic In
December 2019, a novel coronavirus disease, or COVID-19, was initially reported and on March 11, 2020, the World Health Organization
characterized COVID-19 as a pandemic. COVID-19 has had a widespread and detrimental effect on the global economy as a result of the continued
increase in the number of cases and affected countries and actions by public health and governmental authorities, businesses, other organizations,
and individuals to address the outbreak, including travel bans and restrictions, quarantines, shelter in place, stay at home or total
lock-down orders and business limitations and shutdowns. Despite
recent developments of vaccines, the duration and severity of COVID-19, mutations and possible additional mutations and the degree of
their impact on our business is uncertain and difficult to predict. The continued spread of the outbreak could result in one or more
of the following conditions that could have a material adverse impact on our business operations and financial conditi delays or difficulty
sourcing certain products and raw materials; increased costs for such products and raw materials; and loss of productivity due to employee
absences. Notably, approximately 90% of Wolo’s vendor base is located in China. The pandemic issues impacting ports in the U.S.
due to lack of personnel has had a ripple effect on Chinese suppliers. Containers are slow to be emptied in the U.S., causing a backlog
of ships waiting to get into ports and limiting containers and ships returning to China. The lack of containers and available space on
ships has escalated shipping costs by over 300% from 2020. Our inability to respond to and manage the potential impact of such events
effectively could have a material adverse effect on our business, financial condition, and results of operations. Our
efforts to help mitigate the negative impact of the outbreak on our business may not be effective, and we may be affected by a protracted
economic downturn. Furthermore, while many governmental authorities around the world have and continue to enact legislation to address
the impact of COVID-19, including measures intended to mitigate some of the more severe anticipated economic effects of the virus, we
may not benefit from such legislation, or such legislation may prove to be ineffective in addressing COVID-19’s impact on our and
our customer’s businesses and operations. Even after the COVID-19 outbreak has subsided, we may continue to experience impacts
to our business as a result of COVID-19’s global economic impact and any recession that has occurred or may occur in the future.
Further, as the COVID-19 situation is unprecedented and continuously evolving, COVID-19 may also affect our operating and financial results
in a manner that is not presently known to us or in a manner that we currently do not consider that may present significant risks to
our operations. The
extent to which the COVID-19 pandemic may impact our results will depend on future developments, which are highly uncertain
and cannot be predicted as of the date of this report. Nevertheless, the pandemic and the current financial, economic and capital markets
environment, and future developments in the global supply chain and other areas present material uncertainty and risk with respect to
our performance, financial condition, results of operations and cash flows. See also Item 1A “ Risk Factors ” for more
information. Management
Fees On
April 15, 2013, we and our manager entered into a management services agreement, pursuant to which we are required to pay our manager
a quarterly management fee equal to 0.5% of our adjusted net assets for services performed (which we refer to as the parent management
fee). The amount of the parent management fee with respect to any fiscal quarter is (i) reduced by the aggregate amount of any management
fees received by our manager under any offsetting management services agreements with respect to such fiscal quarter, (ii) reduced (or
increased) by the amount of any over-paid (or under-paid) parent management fees received by (or owed to) our manager as of the end of
such fiscal quarter, and (iii) increased by the amount of any outstanding accrued and unpaid parent management fees. We did not expense
any parent management fees for the years ended December 31, 2022 and 2021. 93 1847
Asien entered into an offsetting management services agreement with our manager on May 28, 2020, 1847 Cabinet entered into an offsetting

of the lowest volume weighted average price of our common shares on any trading day during the five (5) trading days prior to the conversion

date; provided that such conversion price shall not be less than $0.03 (subject to adjustments). 91 The

conversion price of the notes and the exercise price of the warrants are subject to standard adjustments, including a price-based adjustment

in the event that we issue any common shares or other securities convertible into or exercisable for common shares at an effective price

per share that is lower than the conversion or exercise price, subject to certain exceptions. In addition, the notes and the warrants

contain an ownership limitation, such that we shall not effect any conversion or exercise, and the holders shall not have the right to

convert or exercise, any portion of the notes or the warrants to the extent that after giving effect to the issuance of common shares

upon conversion or exercise, such holder, together with its affiliates and any other persons acting as a group together with such holder

or any of its affiliates, would beneficially own in excess of 4.99% of the number of common shares outstanding immediately after giving

effect to the issuance of common shares upon conversion or exercise. Acquisition

of ICU Eyewear On

December 21, 2022, our newly formed wholly owned subsidiaries 1847 ICU and 1847 ICU Acquisition Sub Inc. entered into an agreement and

plan of merger, or the merger agreement, with ICU Eyewear Holdings Inc. and San Francisco Equity Partners, as the stockholder representative,

which was amended on February 9, 2023. On

February 9, 2023, closing of the transactions contemplated by the merger agreement was completed. Pursuant to the merger agreement, 1847

ICU Acquisition Sub Inc. merged with and into ICU Eyewear Holdings Inc., with ICU Eyewear Holdings Inc. surviving the merger as a wholly

owned subsidiary of 1847 ICU. The merger consideration paid by 1847 ICU to the stockholders of ICU Eyewear Holdings Inc. consists of

(i) $4,000,000 in cash, minus any unpaid debt of ICU Eyewear and certain transaction expenses, and (ii) 6% subordinated promissory notes

in the aggregate principal amount of $500,000. The

notes bear interest at the rate of 6% per annum with all principal and accrued interest being due and payable in one lump sum on February

9, 2024; provided that upon an event of default (as defined in the notes), such interest rate shall increase to 10%. 1847 ICU may prepay

all or any portion of the notes at any time prior to the maturity date without premium or penalty of any kind. The notes contain customary

events of default, including, without limitation, in the event of (i) non-payment, (ii) a default by 1847 ICU of any of its covenants

in the notes, the merger agreement or any other agreement entered into in connection with the merger agreement, or a breach of any of

the representations or warranties under such documents, (iii) the insolvency or bankruptcy of 1847 ICU or ICU Eyewear or (iv) a change

of control (as defined in the notes) of 1847 ICU or ICU Eyewear. The notes are unsecured and subordinated to all senior indebtedness

(as defined in the notes). Loan

and Security Agreement On

February 9, 2023, 1847 ICU and ICU Eyewear entered into a loan and security agreement, or the loan agreement, with Industrial Funding

Group, Inc. for a revolving loan of up to $5,000,000, which is evidenced by a secured promissory note in the principal amount of

up to $5,000,000. On February 9, 2023, we received an advance of $2,063,182 under the note, of which $1,963,182 was used to repay certain

debt of ICU Eyewear in connection with the merger agreement, with the remaining $100,000 used to pay lender fees. On February 11, 2023,

the Industrial Funding Group, Inc. sold and assigned the loan agreement, the note and related loan documents to GemCap Solutions, LLC. The

note matures on February 9, 2025 with all advances bearing interest at an annual rate equal to the greater of (i) the sum of (a) the

“Prime Rate” as reported in the “Money Rates” column of The Wall Street Journal, adjusted as and when such prime

rate changes, plus (b) eight percent (8.00%), and (ii) fifteen percent (15.00%); provided that following and during the continuation

of an event of default (as defined in the loan agreement), interest on the unpaid principal balance of the advances shall accrue at an

annual rate equal to such rate plus three percent (3.00%). Interest accrued on the advances shall be payable monthly commencing on March

7, 2023. We may voluntarily prepay the entire unpaid principal amount of the note without premium or penalty; provided that in the event

that we make such prepayment on or before February 9, 2024, then we must pay certain fees set forth in the note. The note is secured

by all of the assets of 1847 ICU and ICU Eyewear. The

loan agreement contains customary representations, warranties and affirmative and negative financial and other covenants for loans of

this type. The loan agreement contains customary events of default, including, among othe (i) for failure to pay principal and interest

on the note when due, or to pay any fees due under the loan agreement; (ii) for failure to perform any covenant or agreement contained

in the loan agreement or any document delivered in connection therewith; (iii) if any statement, representation or warranty in the loan

agreement or any document delivered in connection therewith is at any time found to have been false in any material respect at the time

such representation or warranty was made; (iv) if we default under any agreement or contract with a third party which default would result

in a liability to us in excess of $25,000; (v) for any voluntary or involuntary bankruptcy, insolvency, or dissolution or assignment

to creditors; (vi) if any judgments or attachments aggregating in excess of $10,000 at any given time are obtained against us which remain

unstayed for a period of ten (10) days or are enforced or if there is an indictment under an criminal statute or proceeding pursuant

to which remedies sought may include the forfeiture of any property; (vii) if a material adverse effect or change of control (each as

defined in the loan agreement) shall have occurred; (viii) for certain environmental claims; and (ix) for failure to notify the lender

of certain events or failure to deliver certain documentation required by the loan agreement. 92 Amendment

to Conversion Agreement On March 30, 2023, we entered into an amendment

to the conversion agreement described in “ —Liquidity and Capital Resources—Debt—Related Party Promissory Note ”

below, effective retroactively to October 1, 2022. Pursuant to the amendment, we agreed to pay a total of $642,544 in three monthly payments

commencing on April 5, 2023. Amendment to 6% Amortizing Promissory Note On April 6, 2023, we entered into an amendment

to the 6% amortizing promissory note described in in “ —Liquidity and Capital Resources—Debt—6% Amortizing

Promissory Note ” below, effective retroactively to October 20, 2022. Pursuant to the amendment, the parties agreed to extend

the maturity date of the note to July 30, 2023 and revised the repayment terms so that the outstanding principal amount and all accrued

interest thereon shall be payable in three payments on April 6, 2023, June 30, 2023 and July 30, 2023. As additional consideration for

entering into the amendment, we also agreed to pay an amendment fee of $84,362 on the maturity date. Impact

of Coronavirus Pandemic In

December 2019, a novel coronavirus disease, or COVID-19, was initially reported and on March 11, 2020, the World Health Organization

characterized COVID-19 as a pandemic. COVID-19 has had a widespread and detrimental effect on the global economy as a result of the continued

increase in the number of cases and affected countries and actions by public health and governmental authorities, businesses, other organizations,

and individuals to address the outbreak, including travel bans and restrictions, quarantines, shelter in place, stay at home or total

lock-down orders and business limitations and shutdowns. Despite

recent developments of vaccines, the duration and severity of COVID-19, mutations and possible additional mutations and the degree of

their impact on our business is uncertain and difficult to predict. The continued spread of the outbreak could result in one or more

of the following conditions that could have a material adverse impact on our business operations and financial conditi delays or difficulty

sourcing certain products and raw materials; increased costs for such products and raw materials; and loss of productivity due to employee

absences. Notably, approximately 90% of Wolo’s vendor base is located in China. The pandemic issues impacting ports in the U.S.

due to lack of personnel has had a ripple effect on Chinese suppliers. Containers are slow to be emptied in the U.S., causing a backlog

of ships waiting to get into ports and limiting containers and ships returning to China. The lack of containers and available space on

ships has escalated shipping costs by over 300% from 2020. Our inability to respond to and manage the potential impact of such events

effectively could have a material adverse effect on our business, financial condition, and results of operations. Our

efforts to help mitigate the negative impact of the outbreak on our business may not be effective, and we may be affected by a protracted

economic downturn. Furthermore, while many governmental authorities around the world have and continue to enact legislation to address

the impact of COVID-19, including measures intended to mitigate some of the more severe anticipated economic effects of the virus, we

may not benefit from such legislation, or such legislation may prove to be ineffective in addressing COVID-19’s impact on our and

our customer’s businesses and operations. Even after the COVID-19 outbreak has subsided, we may continue to experience impacts

to our business as a result of COVID-19’s global economic impact and any recession that has occurred or may occur in the future.

Further, as the COVID-19 situation is unprecedented and continuously evolving, COVID-19 may also affect our operating and financial results

in a manner that is not presently known to us or in a manner that we currently do not consider that may present significant risks to

our operations. The

extent to which the COVID-19 pandemic may impact our results will depend on future developments, which are highly uncertain

and cannot be predicted as of the date of this report. Nevertheless, the pandemic and the current financial, economic and capital markets

environment, and future developments in the global supply chain and other areas present material uncertainty and risk with respect to

our performance, financial condition, results of operations and cash flows. See also Item 1A “ Risk Factors ” for more

information. Management

Fees On

April 15, 2013, we and our manager entered into a management services agreement, pursuant to which we are required to pay our manager

a quarterly management fee equal to 0.5% of our adjusted net assets for services performed (which we refer to as the parent management

fee). The amount of the parent management fee with respect to any fiscal quarter is (i) reduced by the aggregate amount of any management

fees received by our manager under any offsetting management services agreements with respect to such fiscal quarter, (ii) reduced (or

increased) by the amount of any over-paid (or under-paid) parent management fees received by (or owed to) our manager as of the end of

such fiscal quarter, and (iii) increased by the amount of any outstanding accrued and unpaid parent management fees. We did not expense

any parent management fees for the years ended December 31, 2022 and 2021. 93 1847

Asien entered into an offsetting management services agreement with our manager on May 28, 2020, 1847 Cabinet entered into an offsetting