JanOne sells three subsidiaries to CFO-owned entity for up to $24M in monthly payments

AI Financial Corp

Liabilities reduced by ~$17.6M; company will receive minimum $24M over 15 years in monthly payments.
Monthly payments: greater of $140k (or $100k in Jan/Feb) or 3-5% of subsidiary gross revenue tiers.
Buyer VM7 controlled by JanOne CFO Virland Johnson; board unanimously approved the deal.
IRS employee retention credit payments of ~$931k due to JanOne within 10 days of receipt.
CFO Johnson's salary set at $400k for 2023 then 1% of subsidiaries' aggregate gross revenues.

Key facts

Extracted from this filing and checked against the source text.

Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.95

AI Financial Corp entered into Stock Purchase Agreement with VM7 Corporation valued at reduced liabilities by $17.6M, receives minimum $24M aggregate monthly payments over 15 years (effective 2023-03-19).

Action: entry
Agreement: asset purchase
Counterparty: VM7 Corporation
Value: reduced liabilities by $17.6M, receives minimum $24M aggregate monthly payments over 15 years
Effective: 2023-03-19

Exact text from the filing

On March 19, 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., a corporation organized under the laws of Ontario, Canada (“ARCA Canada”; and, together with ARCA and Connexx, the “Subsidiaries”).

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AI Financial Corp filing history →

Source: SEC EDGAR

accession 0000950170-23-008681

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