UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 27, 2020 (November 20, 2020)
| 1847 HOLDINGS LLC |
| (Exact name of registrant as specified in its charter) |
| Delaware | 333-193821 | 38-3922937 | ||
|
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
| 590 Madison Avenue, 21st Floor, New York, NY | 10022 | |
| (Address of principal executive offices) | (Zip Code) |
| (212) 417-9800 |
| (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: None
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. |
As previously disclosed, on September 30, 2020, 1847 Holdings LLC (the “Company”) entered into several securities purchase agreements with certain purchasers, pursuant to which the Company sold an aggregate of 2,189,835 units, at a price of $1.90 per unit, for an aggregate purchase price of $4,160,684. Each unit consists of (i) one (1) series A senior convertible preferred share of the Company, and (ii) a three-year warrant to purchase one (1) common share of the Company at an exercise price of $2.50 per share (subject to adjustment), which may be exercised on a cashless basis under certain circumstances.
As previously disclosed, on October 26, 2020, the Company entered into several securities purchase agreements, in the same form as those entered into on September 30, 2020, with additional purchasers, pursuant to which the Company sold an aggregate of 442,443 units, at a price of $1.90 per unit, to such purchasers for an aggregate purchase price of $840,640.
As previously disclosed, the terms of the series A senior convertible preferred shares are governed by a share designation, dated September 30, 2020 (the “Designation”). The Designation contains a provision regarding adjustments to the dividend rate, stated value and conversion price of the series A senior convertible preferred shares as follows:
| · | On the first day of the 12th month following the issuance date of any series A 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 volume weighted average price (“VWAP”) of the ten (10) trading days immediately preceding such date. |
| · | On the first day of the 24th month following the issuance date of any series A senior convertible preferred, the stated dividend rate shall automatically increase by an additional five percent (5.0%) per annum, the stated value shall automatically increase by ten percent (10%) 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 36th month following the issuance date of any series A senior convertible preferred share, the stated dividend rate shall automatically increase by an additional five percent (5.0%) per annum, the stated value shall automatically increase by ten percent (10%) 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 the third adjustment date. |
On November 20, 2020, the Company and the holders of a majority of the series A senior convertible preferred shares entered into Amendment No. 1 to the Designation (the “Designation Amendment”) to amend the Designation to provide that, notwithstanding anything to the contrary contained in the Designation, the conversion price for purposes of the adjustments described above shall not be adjusted to a number that is below $0.0075.
The foregoing description of the Designation Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Designation Amendment filed as Exhibit 4.2 to this Form 8-K, which is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
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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: November 27, 2020 | 1847 HOLDINGS LLC |
| /s/ Ellery W. Roberts | |
| Name: Ellery W. Roberts | |
| Title: Chief Executive Officer |
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Exhibit 4.2
AMENDMENT NUMBER 1
TO
SHARE DESIGNATION
OF
SERIES A SENIOR CONVERTIBLE PREFERRED SHARES
(no par value per share)
AMENDMENT NUMBER 1 TO SHARE DESIGNATION OF SERIES A SENIOR CONVERTIBLE PREFERRED SHARES, dated as of November 20, 2020 (this “Amendment”), by and between 1847 HOLDINGS LLC, a Delaware limited liability company (the “Company”) and the Requisite Holders (as defined below). Capitalized terms used, but not otherwise defined, herein have the meanings ascribed to such terms in the Designation (as hereinafter defined).
RECITALS
A. On September 30, 2020, the Company entered into several securities purchase agreements with certain purchasers, pursuant to which the Company sold an aggregate of 2,189,835 units, at a price of $1.90 per unit, to such purchasers for an aggregate purchase price of $4,160,684. Each unit consists of (i) one (1) Series A Senior Convertible Preferred Share (a “Series A Preferred Share”) of the Company and (ii) a three-year warrant to purchase one (1) Common Share of the Company at an exercise price of $2.50 per Common Share (subject to adjustment), which may be exercised on a cashless basis under certain circumstances.
B. On October 26, 2020, the Company entered into several securities purchase agreements, in the same form as those entered into on September 30, 2020, with additional purchasers, pursuant to which the Company sold an aggregate of 442,443 units, at a price of $1.90 per unit, to such purchasers for an aggregate purchase price of $840,640.
C. The terms of the Series A Preferred Shares are set forth in a Share Designation of Series A Convertible Preferred Shares (the “Designation”), which was duly adopted by the Company on September 30, 2020 in accordance with the Operating Agreement.
D. Section 7 of the Designation provides that the Designation may be amended by the Company if the Company first obtains the written consent of the holders of a majority of the Series A Preferred Shares, which majority must include Leonite Capital, LLC so long as Leonite Capital, LLC holds any Series A Preferred Shares (the “Requisite Holders”).
E. The Company and the Requisite Holders are executing this amendment to reflect the consent of the Requisite Holders and the Company to an amendment to Section 11 of the Designation as specified below.
NOW, THEREFORE, the parties hereto, intending to be legally bound and in consideration of the mutual agreements and covenants contained herein and, in the Designation, hereby agree to amend the Designation as follows:
1. Amendment to Section 11. Section 11 of the Designation is hereby amended by adding the following paragraph to the end of Section 11:
“Notwithstanding anything to the contrary contained in this Section 11, the Conversion Price for purposes of this Section 11 shall not be adjusted to a number that is below $0.0075.”
2. Agreement Remains in Force. Except as expressly set forth in this Amendment, the Designation remains unmodified and in full force and effect.
3. Counterparts; Facsimile Execution. This Amendment may be executed in any number of counterparts and by the parties hereto on separate counterparts but all such counterparts shall together constitute one and the same instrument. Facsimile execution and delivery of this Agreement is legal valid and binding execution and delivery for all purposes.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.
| 1847 holdings LLC | |||
| By: | /s/ Ellery W. Roberts | ||
| Name: | Ellery W. Roberts | ||
| Title: | Chief Executive Officer | ||
| Leonite capital, LLC | |||
| By: | /s/ Avi Geller | ||
| Name: | Avi Geller | ||
| Title: | Chief Investment Officer | ||
| Other Holders of Series A Preferred Shares: | |||
| Leonite LLC | |||
| Print Name Above | |||
| /s/ Avi Geller | |||
| Sign Above | |||
| If signer is an entity, specify name and title of authorized signer below: | |||
| Name: | Avi Geller | ||
| Title: | CIO | ||
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first set forth above.
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