JanOne sells three subsidiaries to CFO-led entity for min $24M in monthly payments and $17.6M liability reduction

AI Financial Corp

Reduced liabilities ~$17.6M; will receive min $24M in monthly payments plus a $1M revolving credit line.
Buyer is VM7 Corp, whose principal is JanOne CFO Virland A. Johnson; deal approved by JanOne board and closed immediately.
Monthly payments: greater of $140k (or $100k in Jan/Feb) or % of revenue: 5% up to $2M, 4% $2-3M, 3% above $3M.
Additional consideration includes 50% of any California tax settlement and ~$931K IRS employee retention credits passed to JanOne.
Pledge agreement: Johnson pledges VM7 stock; VM7 pledges subsidiary equity; upon default JanOne can foreclose.

Key facts

Extracted from this filing and checked against the source text.

Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

AI Financial Corp entered into Stock Purchase Agreement with VM7 Corporation valued at not less than $24.0 million in aggregate monthly payments (effective 2023-03-09).

Action: entry
Agreement: asset purchase
Counterparty: VM7 Corporation
Value: not less than $24.0 million in aggregate monthly payments
Effective: 2023-03-09

Exact text from the filing

On March 9, 2023, JanOne Inc. (“our,” “us,” “we,” or the “Company”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) with VM7 Corporation, a Delaware corporation (the “Buyer”), under which the Buyer agreed to acquire all of the outstanding equity interests of (a) ARCA Recycling, Inc., a California corporation (“ARCA”), (b) Customer Connexx LLC, a Nevada limited liability company (“Connexx”), and (c) ARCA Canada Inc.

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281 material agreements filed in the last 30 days. Browse all material agreements →

AI Financial Corp filing history →

Source: SEC EDGAR

accession 0000950170-23-008213

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