UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 5, 2023 (
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
| ( |
| (Registrant’s telephone number, including area code) |
| (Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Conversion Agreement
As previously disclosed, on September 30, 2020, 1847 Cabinet Inc. (“1847 Cabinet”), a subsidiary of 1847 Holdings LLC (the “Company”), issued an 8% vesting promissory note in the principal amount of up to $1,260,000 (the “Note”) to Stephen Mallatt, Jr. and Rita Mallatt (the “Holders”).
As previously disclosed, on July 26, 2022, the Company, 1847 Cabinet and the Holders entered into a conversion agreement (the “Conversion Agreement”), pursuant to which the Holders agreed to convert $797,221 of the vesting note into 189,815 common shares at a conversion price of $4.20 per share. Pursuant to the Conversion Agreement, the Note was cancelled and the Company agreed to pay $558,734 to the Holders no later than October 1, 2022.
On March 30, 2023, the Company, 1847 Cabinet and the Holders entered into a letter agreement to amend the terms of the Conversion Agreement, effective retroactively to October 1, 2022 (the “Conversion Agreement Amendment”). Pursuant to the Conversion Agreement Amendment, the Company agreed to pay a total of $642,544 to the Holders in three monthly payments commencing on April 5, 2023.
The foregoing description of the Conversion Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of Conversion Agreement Amendment filed as Exhibit 10.3 to this report, which is incorporated herein by reference.
Amendments to Management Services Agreements
As previously disclosed, the Company’s subsidiaries 1847 Asien Inc., 1847 Wolo Inc. and 1847 ICU Holdings Inc. (the “Subsidiaries) entered into management services agreements with the Company’s manager, 1847 Partners LLC (the “Manager”), on May 28, 2020, March 30, 2021 and February 9, 2023, respectively (collectively, the “Management Services Agreements”). Pursuant to the Management Services Agreements, the Manager provides certain management services to the Subsidiaries in exchange for certain management fees.
On March 30, 2023, the Subsidiaries entered into amendments to the Management Services Agreements with the Manager (the “MSA Amendments”), pursuant to which the provisions regarding the removal of the Manager and payments upon termination of the Manager were revised. Pursuant to the MSA Amendments, the Manager may be removed by the Subsidiaries at any time upon sixty (60) days’ prior written notice to the Manager, subject to the payment of a termination fee equal to three times (3x) the then current maximum annual management fee payable to the Manager. The MSA Amendments also provide that if the Manager resigns, the Subsidiaries shall pay the accrued management fees and all costs and expenses of the Subsidiaries that are incurred by the Manager through the date of effectiveness of such resignation.
The foregoing description of the MSA Amendments does not purport to be complete and is qualified in its entirety by reference to the full text of the MSA Amendments filed as Exhibits 10.5, 10.7 and 10.9 to this report, which are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is incorporated by reference into this Item 2.03.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 30, 2023, Glyn C. Milburn resigned from the board of directors of the Company. Mr. Milburn’s resignation was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. As previously disclosed, Mr. Milburn joined the Company as Vice President of Operations on February 23, 2023.
1
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 5, 2023 | 1847 HOLDINGS LLC |
| /s/ Ellery W. Roberts | |
| Name: Ellery W. Roberts | |
| Title: Chief Executive Officer |
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Exhibit 10.3
1847 Holdings LLC
590 Madison Avenue, 21st Floor
New York, NY 10022
March 30, 2023
Stephen Mallatt, Jr. and Rita Mallatt
2950 E. Lucca Dr.
Meridian, Id 83642
Attention: Stephen Mallatt, Jr.
Mr. Mallatt,
Reference is made to that certain Conversion Agreement, dated July 26, 2022 (the “Conversion Agreement”) by and between 1847 Holdings LLC, a Delaware limited liability company (the “Company”), 1847 Cabinet Inc., a Delaware corporation (“Cabinet”) and Stephen Mallatt, Jr., and Rita Mallatt (together, the “Holder”). Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Conversion Agreement.
The Company, Cabinet and the Holder desire and agree to amend the Conversion Agreement as follows: (i) Section 2 of the Conversion Agreement is hereby amended such that payment of the sum of $642,544, which represents the full Vested principal amount of the Note, plus accrued interest and amendment fee, shall be payable in accordance with the schedule set forth on Exhibit A hereto; and (ii) the parties hereto agree that the amendment described above is effective retroactively to October 1, 2022.
By signing below, the Holder hereby consents and agrees to amend the terms of the Note and agrees to the Amendment Fee as consideration therefor, as set forth herein.
| Very truly yours, | ||
| 1847 Holdings LLC | ||
| By: | /s/ Ellery W. Roberts | |
| Name: | Ellery W. Roberts | |
| Title: | Executive Chairman | |
| AGREED, CONSENT TO AND ACKNOWLEDGED: | ||
| 1847 Cabinet Inc. | ||
| By: | /s/ Ellery W. Roberts | |
| Name: | Ellery W. Roberts | |
| Title: | Executive Chairman | |
| HOLDER: | ||
| /s/ Stephen Mallatt, Jr. | ||
| Stephen Mallatt, Jr. | ||
| /s/ Rita Mallatt | ||
| Rita Mallatt | ||
2
EXHIBIT A
PAYMENT SCHEDULE
| Payment Date | Payment Amount | Balance | ||||||
| April 5, 2023 | $ | 64,254 | $ | 642,544 | ||||
| June 30, 2023 | $ | 289,145 | ||||||
| July 30, 2023 | $ | 289,145 | ||||||
| TOTAL: | $ | 642,544 | ||||||
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Exhibit 10.5
AMENDMENT NO. 1
TO MANAGEMENT SERVICES AGREEMENT
This AMENDMENT NO. 1 TO MANAGEMENT SERVICES AGREEMENT (this “Amendment”), dated as of March 30, 2023, is entered into by and between 1847 Asien Inc., a Delaware corporation (the “Company”), and 1847 PARTNERS LLC, a Delaware limited liability company (the “Manager”).
RECITALS
A. The Company and the Manager have previously entered into that certain Management Services Agreement, dated May 28, 2020 (the “MSA”).
B. The Company and the Manager desire to amend the MSA as set forth herein effective as of the date first listed above.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Amendments.
(i) Section 8.2 of the MSA is amended and restated in its entirety to read as follows:
“Section 8.2 Removal of the Manager
The Manager may be removed by the Company at any time upon sixty (60) days’ prior written notice to the Manager, which right shall not be contingent upon the finding of a replacement manager, subject to the payment of a Termination Fee, as defined in Section 8.5 below.”
(ii) Section 8.5 of the MSA is amended and restated in its entirety to read as follows:
“Section 8.5 Payments Upon Termination
(a) Notwithstanding anything in this Agreement to the contrary, the fees, costs and expenses payable to the Manager pursuant to Article VII hereof shall be payable to the Manager upon, and with respect to, the termination of this Agreement pursuant to this Article VIII. All payments made pursuant to this Section 8.5 shall be made in accordance with Article VII hereto.
(b) In the event that the Manager resigns in accordance with Section 8.1, the Company shall pay the accrued Management Fees and all costs and expenses of the Company that are incurred by the Manager, through the date of effectiveness of such resignation, payable on the effective date of the Manager’s resignation.
(c) In the event that the Manager is removed in accordance with Section 8.2, or this Agreement is otherwise terminated by the Company, the Company shall pay a termination fee to the Manager that is equal to three times (3x) the then current maximum annual Management Fee payable to the Manager hereunder (the “Termination Fee”) and all costs and expenses of the Company that are incurred by the Manager. Such Termination Fee and related costs and expenses are due and payable in full on the effective date of such removal or such termination. Any payments made pursuant to this Section 8.5 shall be made in U.S. dollars by wire transfer in immediately available funds to an account or accounts designated by the Manager.”
2. Effective Time of Amendment; Effect of Amendment. This Amendment is effective upon the date hereof. Except as amended as set forth above, the MSA shall continue in full force and effect. In the event of a conflict between the provisions of this Amendment and the MSA, this Amendment shall prevail and govern.
3. Counterparts. This Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
4. Governing Law. This Amendment shall be governed by and interpreted and construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions thereof to the extent such principles or rules would require or permit the application of the laws of another jurisdiction.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
| 1847 Asien INC. | ||
| By: | /s/ Robert Patterson | |
| Name: | Robert Patterson | |
| Title: | Chief Executive Officer | |
| 1847 PARTNERS LLC | ||
| By: | /s/ Ellery W. Roberts | |
| Name: | Ellery W. Roberts | |
| Title: | Manager | |
- 3 -
Exhibit 10.7
AMENDMENT NO. 1
TO MANAGEMENT SERVICES AGREEMENT
This AMENDMENT NO. 1 TO MANAGEMENT SERVICES AGREEMENT (this “Amendment”), dated as of March 30, 2023, is entered into by and between 1847 Wolo Inc., a Delaware corporation (the “Company”), and 1847 PARTNERS LLC, a Delaware limited liability company (the “Manager”).
RECITALS
A. The Company and the Manager have previously entered into that certain Management Services Agreement, dated March 30, 2021 (the “MSA”).
B. The Company and the Manager desire to amend the MSA as set forth herein effective as of the date first listed above.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Amendments.
(i) Section 8.2 of the MSA is amended and restated in its entirety to read as follows:
“Section 8.2 Removal of the Manager
The Manager may be removed by the Company at any time upon sixty (60) days’ prior written notice to the Manager, which right shall not be contingent upon the finding of a replacement manager, subject to the payment of a Termination Fee, as defined in Section 8.5 below.”
(ii) Section 8.5 of the MSA is amended and restated in its entirety to read as follows:
“Section 8.5 Payments Upon Termination
(a) Notwithstanding anything in this Agreement to the contrary, the fees, costs and expenses payable to the Manager pursuant to Article VII hereof shall be payable to the Manager upon, and with respect to, the termination of this Agreement pursuant to this Article VIII. All payments made pursuant to this Section 8.5 shall be made in accordance with Article VII hereof.
(b) In the event that the Manager resigns in accordance with Section 8.1, the Company shall pay the accrued Management Fees and all costs and expenses of the Company that are incurred by the Manager, through the date of effectiveness of such resignation, payable on the effective date of the Manager’s resignation.
(c) In the event that the Manager is removed in accordance with Section 8.2, or this Agreement is otherwise terminated by the Company, the Company shall pay a termination fee to the Manager that is equal to three times (3x) the then current maximum annual Management Fee payable to the Manager hereunder (the “Termination Fee”) and all costs and expenses of the Company that are incurred by the Manager. Such Termination Fee and related costs and expenses are due and payable in full on the effective date of such removal or such termination. Any payments made pursuant to this Section 8.5 shall be made in U.S. dollars by wire transfer in immediately available funds to an account or accounts designated by the Manager.”
2. Effective Time of Amendment; Effect of Amendment. This Amendment is effective upon the date hereof. Except as amended as set forth above, the MSA shall continue in full force and effect. In the event of a conflict between the provisions of this Amendment and the MSA, this Amendment shall prevail and govern.
3. Counterparts. This Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
4. Governing Law. This Amendment shall be governed by and interpreted and construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions thereof to the extent such principles or rules would require or permit the application of the laws of another jurisdiction.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
| 1847 WOLO INC. | ||
| By: | /s/ Dan Brown | |
| Name: | Dan Brown | |
| Title: | Chief Executive Officer | |
| 1847 PARTNERS LLC | ||
| By: | /s/ Ellery W. Roberts | |
| Name: | Ellery W. Roberts | |
| Title: | Manager | |
- 3 -
Exhibit 10.9
AMENDMENT NO. 1
TO MANAGEMENT SERVICES AGREEMENT
This AMENDMENT NO. 1 TO MANAGEMENT SERVICES AGREEMENT (this “Amendment”), dated as of March 30, 2023, is entered into by and between 1847 ICU Holdings Inc., a Delaware corporation (the “Company”), and 1847 PARTNERS LLC, a Delaware limited liability company (the “Manager”).
RECITALS
A. The Company and the Manager have previously entered into that certain Management Services Agreement, dated February 8, 2023 (the “MSA”).
B. The Company and the Manager desire to amend the MSA as set forth herein effective as of the date first listed above.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Amendments.
(i) Section 8.2 of the MSA is amended and restated in its entirety to read as follows:
“Section 8.2 Removal of the Manager
The Manager may be removed by the Company at any time upon sixty (60) days’ prior written notice to the Manager, which right shall not be contingent upon the finding of a replacement manager, subject to the payment of a Termination Fee, as defined in Section 8.5 below.”
(ii) Section 8.5 of the MSA is amended and restated in its entirety to read as follows:
“Section 8.5 Payments Upon Termination
(a) Notwithstanding anything in this Agreement to the contrary, the fees, costs and expenses payable to the Manager pursuant to Article VII hereof shall be payable to the Manager upon, and with respect to, the termination of this Agreement pursuant to this Article VIII. All payments made pursuant to this Section 8.5 shall be made in accordance with Article VII hereof.
(b) In the event that the Manager resigns in accordance with Section 8.1, the Company shall pay the accrued Management Fees and all costs and expenses of the Company that are incurred by the Manager, through the date of effectiveness of such resignation, payable on the effective date of the Manager’s resignation.
(c) In the event that the Manager is removed in accordance with Section 8.2, or this Agreement is otherwise terminated by the Company, the Company shall pay a termination fee to the Manager that is equal to three times (3x) the then current maximum annual Management Fee payable to the Manager hereunder (the “Termination Fee”) and all costs and expenses of the Company that are incurred by the Manager. Such Termination Fee and related costs and expenses are due and payable in full on the effective date of such removal or such termination. Any payments made pursuant to this Section 8.5 shall be made in U.S. dollars by wire transfer in immediately available funds to an account or accounts designated by the Manager.”
2. Effective Time of Amendment; Effect of Amendment. This Amendment is effective upon the date hereof. Except as amended as set forth above, the MSA shall continue in full force and effect. In the event of a conflict between the provisions of this Amendment and the MSA, this Amendment shall prevail and govern.
3. Counterparts. This Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
4. Governing Law. This Amendment shall be governed by and interpreted and construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions thereof to the extent such principles or rules would require or permit the application of the laws of another jurisdiction.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
| 1847 ICU HOLDINGS INC. | ||
| By: | /s/ Kirk Hobbs | |
| Name: | Kirk Hobbs | |
| Title: | Chief Executive Officer | |
| 1847 PARTNERS LLC | ||
| By: | /s/ Ellery W. Roberts | |
| Name: | Ellery W. Roberts | |
| Title: | Manager | |
- 3 -
Cover |
Mar. 30, 2023 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Mar. 30, 2023 |
| Entity File Number | 001-41368 |
| Entity Registrant Name | 1847 Holdings LLC |
| Entity Central Index Key | 0001599407 |
| Entity Tax Identification Number | 38-3922937 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 590 Madison Avenue |
| Entity Address, Address Line Two | 21st Floor |
| Entity Address, City or Town | New York |
| Entity Address, State or Province | NY |
| Entity Address, Postal Zip Code | 10022 |
| City Area Code | 212 |
| Local Phone Number | 417-9800 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Shares |
| Trading Symbol | EFSH |
| Security Exchange Name | NYSEAMER |
| Entity Emerging Growth Company | false |
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