Item 8.01 Other Events.
As previously disclosed, following the annual meeting of stockholders of
Polished.com Inc. (formerly known as 1847 Goedeker Inc.) (the "Company") held on
December 21, 2021 (the "2021 Meeting"), certain purported beneficial owners of
the Company's common stock, par value $0.0001 per share ("Common Stock")
expressed concerns about a statement in the Company's proxy statement related to
the 2021 Meeting, specifically questioning, in light of the proxy statement, the
ability of brokerage firms and other custodians to vote shares of Common Stock
held by them for the benefit of their customers in the absence of instructions
from the beneficial owners on a proposal to approve an amendment (the "Charter
Amendment") to the Company's Amended and Restated Certificate of Incorporation,
dated July 30, 2020 (the "Certificate of Incorporation"), increasing the number
of authorized shares of Common Stock by 50,000,000 shares of Common Stock (such
proposal, the "Share Increase Proposal"). In light of the demands and to ensure
against any future question as to the validity of the newly authorized shares
following stockholder approval of the Share Increase Proposal at the 2021
Meeting, the Company elected to seek validation of the Charter Amendment through
a Petition to the Court of Chancery of the State of Delaware (the "Court")
pursuant to Section 205 of the Delaware General Corporation Law (the "205
Petition"). The action, styled In re 1847 Goedeker Inc., C.A. 2022-0219-SG (the
"Action"), sought entry by the Court of an order validating and declaring
effective the Charter Amendment, and validating the additional shares of Common
Stock authorized under the Share Increase Proposal. Two purported stockholders
objected to the 205 Petition. One such objecting, purported stockholder (the
"Stockholder Plaintiff") filed his own lawsuit (which was then consolidated with
the 205 Petition) requesting that such relief not be granted and asserting two
claims for relief: first, against the Company for alleged violation of the
Delaware General Corporation Law Section 225(b) for improper tabulation of the
stockholder vote on the Share Increase Proposal; and second, asserting that the
Company's directors breached their fiduciary duties by incorrectly tabulating
the stockholder vote, and by causing a purportedly invalid amendment to the
Certificate of Incorporation to be filed with the Delaware Secretary of State.
The Court held a hearing on May 27, 2022, to consider the Company's motion for
entry of an order under Section 205 and subsequently entered an order denying
the motion without prejudice on June 30, 2022. On July 7, 2022, the Company
filed a Certificate of Correction with the Secretary of State of the State of
Delaware, voiding the Charter Amendment and causing the number of authorized
shares of Common Stock to remain at 200,000,000.
On June 12, 2023, the Company submitted to the Court a Stipulation and
[Proposed] Order Regarding Notice and Closing of the Case regarding the Action
(the "Dismissal Order"). As stated in the Dismissal Order, the Company and the
other parties to the Action negotiated at arm's length and resolved the
stockholders' claims to entitlement to a mootness fee award, and the Company
agreed to pay $475,000 for attorneys' fees and expenses to the stockholders'
counsel (the "Attorneys' Fees"). Pursuant to Court of Chancery Rules 23(e) and
41(a), the parties to the Action stipulated to voluntary dismissal of the Action
with prejudice as to the Stockholder Plaintiff and without prejudice as to any
actual or potential claims of any other members of the putative class, and such
dismissal was granted by the Court on June 13, 2023. As stipulated in the
Dismissal Order, the Company shall, (i) no later than June 24, 2023, file with
the Court an affidavit that the Company has filed the Current Report on Form 8-K
providing the Company's stockholders with the notice required by the Dismissal
Order and (ii) no later than June 28, 2023, pay or cause to be paid the
Attorneys' Fee to the stockholders' counsel to an account designated by the
stockholders' counsel. Such payment will fully satisfy and resolve the
stockholders' and the stockholders' counsel's entitlement to any fees or
expenses in the Action, and the stockholders' counsel shall not seek any
additional fees, expenses, or costs related to the Action.
Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" that are
subject to substantial risks and uncertainties. All statements, other than
statements of historical fact, contained in this Current Report on Form 8-K are
forward-looking statements. Forward-looking statements contained in this Current
Report on Form 8-K may be identified by the use of words such as "anticipate,"
"believe," "contemplate," "could," "estimate," "expect," "intend," "seek,"
"may," "might," "plan," "potential," "predict," "project," "target," "aim,"
"should," "will", "would," or the negative of these words or other similar
expressions, although not all forward-looking statements contain these words.
Forward-looking statements are based on the Company's current expectations and
are subject to inherent uncertainties, risks and assumptions that are difficult
to predict. Further, certain forward-looking statements are based on assumptions
as to future events that may not prove to be accurate. You should not place
undue reliance on forward-looking statements because they involve known and
unknown risks, uncertainties and other factors, which are, in some cases, beyond
the Company's control and which could materially affect results. Factors that
may cause actual results to differ materially from current expectations include,
among other things, those described more fully in the section titled "Risk
Factors" of the Company's Annual Report on Form 10-K for the year ended December
31, 2021, and Quarterly Report on Form 10-Q for the quarter ended March 31,
2022, filed with the Securities and Exchange Commission. Forward-looking
statements contained in this announcement are made as of this date, and the
Company undertakes No duty to update such information except as required under
applicable law.
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