Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Resignation of Chief Executive Officer
On August 30, 2021, Douglas T. Moore resigned from his position as the Chief
Executive Officer of 1847 Goedeker Inc. (the "Company") and from its board of
directors. Mr. Moore's resignation was not due to any disagreement with the
Company on any matter relating to its operation, policies (including accounting
or financial policies) or practices.
On the same date, the Company entered into a separation and release agreement
(the "Separation Agreement") with Mr. Moore providing for the separation of his
employment with the Company effective as of August 30, 2021. Under the
Separation Agreement, the Company agreed, subject to Mr. Moore's compliance with
each and every provision of the Separation Agreement, to pay Mr. Moore a
severance payment equal to one year of his base salary at his current level
($650,000 per year), less applicable statutory deductions and authorized
withholdings, payable in equal installments on the Company's regular payroll
dates during the period commencing on September 1, 2021 and ending on August 31,
2022. The Company also agreed to continue to pay its share of Mr. Moore's health
care costs under the Company's medical, dental or vision plans in which Mr.
Moore participates for a period beginning as of September 1, 2021 and ending as
of August 31, 2022; provided, however, that Mr. Moore will be responsible for
the full amount of the applicable employee contribution as determined and
periodically modified by the Company. Mr. Moore is entitled to no additional
compensation, payments or benefits of any kind from the Company pursuant to the
Separation Agreement.
The Separation Agreement includes a customary release of claims by Mr. Moore in
favor of the Company and its affiliates, as well as customary confidentiality
and non-disparagement provisions.
Mr. Moore may revoke the Separation Agreement for a period of seven (7) days
after the date of the Separation Agreement by providing notice in writing to the
Company, and the Separation Agreement will not become fully effective and
enforceable until after the expiration of such seven-day revocation period.
The foregoing description of the Separation Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Separation Agreement filed as Exhibit 10.1 to this report, which is incorporated
herein by reference.
Appointment of Chief Executive Officer and Executive Chairman
On August 30, 2021, the board of directors of the Company appointed Albert
Fouerti, a member of the board and the President of the Company's subsidiary
Appliances Connection Inc. ("ACI") and its various subsidiaries (collectively,
"Appliances Connection"), as the new Chief Executive Officer of the Company. In
addition, the board of directors appointed Ellery W. Roberts, the current
Chairman of the Board, as the Executive Chairman of the Company.
Albert Fouerti, age 41, has served as the President of ACI and as a director of
the Company since June 2021. He has served as the President of Appliances
Connection since 1999. With over 20 years of experience in ecommerce and retail,
he made Appliances Connection into a household name for kitchen appliances. With
ACI's subsidiary 1 Stop Electronics Center, Inc. starting out as a small camera
and computer shop in Great Neck, NY, Mr. Fouerti was a pioneer for online
shopping. Driven by technology, he entered the appliance business in 2008, and
has contributed in taking the appliance industry into to the digital age. Along
with his brother, Elie Fouerti, they developed a process of delivering bulky
items across the United States.
Ellery W. Roberts, age 50, has served as the Chairman of the Board since the
Company's inception in January 2019. Mr. Roberts brings over 20 years of private
equity investing experience to the Company. Mr. Roberts has been the Chairman,
Chief Executive Officer, President and Chief Financial Officer of 1847 Holdings
LLC ("1847 Holdings") since its inception on January 22, 2013 and is also the
sole manager of 1847 Partners LLC, the Company's manager (the "Manager"). Mr.
Roberts has also been a director of Western Capital Resources, Inc., a public
company, since May 2010. In July 2011, Mr. Roberts formed The 1847 Companies
LLC, a company that is no longer active, where he began investing his own
personal capital and capital of high net worth individuals in select
transactions. Prior to forming The 1847 Companies LLC, Mr. Roberts was the
co-founder and was co-managing principal from October 2009 to June 2011 of RW
Capital Partners LLC, the recipient of a "Green Light" letter from the United
States Small Business Administration permitting RW Capital Partners LLC to raise
capital in pursuit of the Small Business Investment Company license with the
preliminary support of the Small Business Administration. Mr. Roberts was a
founding member of Parallel Investment Partners, LP (formerly SKM Growth
Investors, LP), a Dallas-based private equity fund focused on
re-capitalizations, buyouts and growth capital investments in lower middle
market companies throughout the United States. Previously, Mr. Roberts served as
Principal with Lazard Group LLC, a Senior Financial Analyst at Colony Capital,
Inc., and a Financial Analyst with the Corporate Finance Division of Smith
Barney Inc. (now known as Morgan Stanley Smith Barney LLC). Mr. Roberts
received his B.A. degree in English from Stanford University.
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Messrs. Fouerti and Roberts were elected until their successors are duly elected
and qualified. There are no arrangements or understandings between Messrs.
Fouerti or Roberts and any other persons pursuant to which they were selected as
officers. There are no family relationships that exist between Messrs. Fouerti
or Roberts and any directors or executive officers of the Company. In addition,
there has been no transaction, nor is there any currently proposed transaction,
between Messrs. Fouerti or Roberts and the Company that would require disclosure
under Item 404(a) of Regulation S-K, except for the following:
? On April 5, 2019, the Company entered into a management services agreement with
the Manager, which is owned and controlled by Mr. Roberts, pursuant to which
the Company appointed the Manager to provide certain services to it for a
quarterly management fee equal to $62,500. Under certain circumstances
specified in the management services agreement, the quarterly fee may be
reduced if similar fees payable to the Manager by subsidiaries of 1847 Holdings
exceed a threshold amount. Pursuant to the management services agreement, the
Company must also reimburse the Manager for all costs and expenses which are
specifically approved by the board of directors, including all out-of-pocket
costs and expenses, that are actually incurred by the Company or its affiliates
on behalf of the Company in connection with performing services under the
management services agreement. The Company expensed $125,000 in management fees
for the six months ended June 30, 2021 and 2020 and $250,000 and $183,790 for
the years ended December 31, 2020 and 2019, respectively.
? As of December 31, 2019, the Manager had funded $33,738 to the Company in
related party advances. These advances were unsecured, bore no interest, and
did not have formal repayment terms or arrangements. These advances were repaid
from the proceeds of the Company's initial public offering in August 2020.
? On June 2, 2021, the Company's subsidiary 1 Stop Electronics Center, Inc.
entered into a lease agreement with 1870 Bath Ave. LLC, an entity that is owned
by Mr. Fouerti and Elie Fouerti, for the Company's premises located at 1870
Bath Avenue, Brooklyn, NY. The lease is for a term of ten (10) years and
provides for a base rent of $74,263 per month during the first year with annual
increases to $96,896.37 during the last year of the term. 1 Stop Electronics
Center, Inc. is also responsible for all property taxes, insurance costs and
the utilities used on the premises. The lease contains customary events of
default.
? On June 2, 2021, the Company's subsidiary Joe's Appliances LLC entered into a
lease agreement with 812 5th Ave Realty LLC, an entity that is owned by Mr.
Fouerti and Elie Fouerti, for the Company's premises located at 7812 5th
Avenue, Brooklyn, NY. The lease is for a term of ten (10) years and provides
for a base rent of $6,365.40 per month during the first year with annual
increases to $8,305.40 during the last year of the term. Joe's Appliances LLC
is also responsible for all property taxes, insurance costs and the utilities
used on the premises. The lease contains customary events of default.
? The Company is a member of member of Dynamic Marketing, Inc. ("DMI"), an
appliance purchasing cooperative. DMI purchases consumer electronics and
appliances at wholesale prices from various vendors, and then makes such
products available to its members, including the Company, who sell such
products to end consumers. DMI's purchasing group arrangement provides its
members, including the Company, with leverage and purchasing power with
appliance vendors, and increases our ability to compete with competitors,
including big box appliance and electronics retailers. Mr. Fouerti is on the
board of DMI. At June 30, 2021, vendor rebate deposits due from DMI were
$10,009,836. During the three and six months ended June 30, 2021, total
purchases from DMI, net of holdbacks, were $26,999,225 and $27,970,121,
respectively. At December 31, 2020 and 2019, vendor rebate deposits, net, due
from DMI were $31,733,415 and $22,005,318, respectively, and vendor rebates
receivable were $4,691,514 and $3,284,594, respectively. During the year ended
December 31, 2020, the following transactions were carried out with DMI: total
purchases $175,630,820, vendor rebates $8,222,373, interest income $968,080,
consulting income $255,000, and rent expense $675,000. During the year ended
December 31, 2019, the following transactions were carried out with DMI: total
purchases $120,328,645, vendor rebates $3,284,594, interest income $1,428,546,
consulting income $188,617, and rent expense $337,500.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
10.1 Separation and Release Agreement, dated August 30, 2021, between
Douglas T. Moore and 1847 Goedeker Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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