Exhibit
4.1


 


DESCRIPTION
OF SECURITIES


 


General


 


The
following is a summary of the material terms of our shares as of December 31, 2020. The operating agreement provides for the issuance
of our shares, the terms relating to distributions with respect to our shares and the voting rights of holders of our shares.
In addition, the terms of the series A senior convertible preferred shares are governed by a certificate of designation, dated
September 30, 2020.


 


The
following description is subject to the provisions of the Delaware Limited Liability Company Act. Certain provisions of the operating
agreement are intended to be consistent with the General Corporation Law of the State of Delaware, and the powers of our company,
the governance processes and the rights of the holders of our shares are generally intended to be similar in many respects to
those that would exist if our company was a Delaware corporation under the General Corporation Law of the State of Delaware, with
certain exceptions.


 


The
statements that follow are subject to and are qualified in their entirety by reference to all of the provisions of the operating
agreement, a copy of which is included as an exhibit to this report.


 


We
are authorized to issue up to 500,000,000 common shares, 3,157,895 series A senior convertible preferred shares and 1,000 allocation
shares. As of December 31, 2020, we had 4,444,013 common shares and 2,632,278 series A senior convertible preferred shares issued
and outstanding. In connection with the formation of our company, our manager acquired 100% of the allocation shares for a capital
contribution of $1,000 by our manager. Other than the allocation shares held by our manager, our company will not be authorized
to issue any other allocation shares.


 


Common
Shares


 


Distribution
Rights. Holders of common shares are entitled to receive ratably those distributions, if any, as may be declared from time
to time by the board of directors out of legally available funds.


 


Liquidation
Rights. Upon our liquidation, dissolution or winding up in accordance with the terms of the operating agreement, the then
holders of common shares will be entitled to share in the assets of our company legally available for distribution, following
payment to creditors, in accordance with the positive balance in such holders’ tax-based capital accounts required by the
operating agreement, after giving effect to all contributions, distributions and allocations for all periods.


 


Voting
Rights. The holders of common shares are entitled to one vote for each share held of record on all matters submitted to a
vote of the shareholders. Under the operating agreement, any action to be taken by vote of shareholders other than for election
of directors shall be authorized by the affirmative vote of the majority of shares present or represented by proxy and entitled
to vote. Directors are elected by a plurality of votes cast.


 


Other
Rights. Holders of common shares have no preemptive, conversion or subscription rights and there are no redemption or sinking
fund provisions applicable to the common shares.


 


Series
A Senior Convertible Preferred Shares


 


Dividends.
Dividends at the rate per annum of 14.0% of the stated value ($2.00 per share, subject to adjustment) shall accrue on the
series A senior convertible preferred shares. Dividends shall accrue from day to day, whether or not declared, and shall be cumulative.
Dividends shall be payable quarterly in arrears on each dividend payment date in cash or common shares at our discretion. Dividends
payable in common shares shall be calculated based on a price equal to eighty percent (80%) of the volume weighted average price,
or VWAP, for the common shares on our principal trading market during the five (5) trading days immediately prior to the applicable
dividend payment date.


 


Liquidation.
Subject to the rights of our creditors and the holders of any senior securities or parity securities (in each case, as defined
in the certificate of designation), upon any liquidation of our company or its subsidiaries, before any payment or distribution
of the assets of our company (whether capital or surplus) shall be made to or set apart for the holders of securities that are
junior to the series A senior convertible preferred shares as to the distribution of assets on any liquidation of our company,
each holder of outstanding series A senior convertible preferred shares shall be entitled to receive an amount of cash equal to
115% of the stated value plus an amount of cash equal to all accumulated accrued and unpaid dividends thereon (whether or not
declared) to, but not including the date of final distribution to such holders. If, upon any liquidation of our company, the assets
of our company, or proceeds thereof, distributable among the holders of the series A senior convertible preferred shares shall
be insufficient to pay in full the preferential amount payable to the holders of the series A senior convertible preferred shares
and liquidating payments on any other shares of any class or series of parity securities as to the distribution of assets on any
liquidation of our company, then such assets, or the proceeds thereof, shall be distributed among the holders of series A senior
convertible preferred shares and any such other parity securities ratably in accordance with the respective amounts that would
be payable on such series A senior convertible preferred shares and any such other parity securities if all amounts payable thereon
were paid in full.


 






     


     


    

 








Voting
Rights. The series A senior convertible preferred shares do not have any voting rights; provided that, so long as any series
A senior convertible preferred shares are outstanding, the affirmative vote of holders of a majority of series A senior convertible
preferred shares, which majority must include Leonite Capital LLC so long as it holds any series A senior convertible preferred
shares (which we refer to as the requisite holders), voting as a separate class, shall be necessary for approving, effecting or
validating any amendment, alteration or repeal of any of the provisions of the certificate of designation. In addition, so long
as any series A senior convertible preferred shares are outstanding, the affirmative vote of requisite holders shall be required
prior to our company’s or Kyle’s creation or issuance of (i) any parity securities; (ii) any senior securities; and
(iii) any new indebtedness other than intercompany indebtedness by Kyle’s in favor of our company, except any financing
transaction the use of proceeds of which we will use to redeem the series A senior convertible preferred shares and the warrants.


 


Conversion
Rights. Each series A senior convertible preferred share, plus all accrued and unpaid dividends thereon, shall be convertible,
at the option of the holder thereof, at any time and from time to time into such number of fully paid and nonassessable common
shares determined by dividing the stated value, plus the value of the accrued, but unpaid, dividends thereon, by the conversion
price of $2.00 per share; provided that in no event shall the holder of any series A senior convertible preferred shares be entitled
to convert any number of series A senior convertible preferred shares that upon conversion the sum of (i) the number of common
shares beneficially owned by the holder and its affiliates and (ii) the number of common shares issuable upon the conversion of
the series A senior convertible preferred shares with respect to which the determination of this proviso is being made, would
result in beneficial ownership by the holder and its affiliates of more than 4.99% of the then outstanding common shares of our
company. This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than
sixty-one (61) days’ prior notice to our company.


 


Redemption.
We may redeem in whole (but not in part) the series A senior convertible preferred shares by paying in cash therefore a sum equal
to 115% of the stated value plus the amount of accrued and unpaid plus any other amounts due pursuant to the terms of the series
A senior convertible preferred shares.


 


Adjustments.
In addition to standard adjustments to the conversion price in the event of any share splits, share combinations, share reclassifications,
dividends paid in common shares, sales of substantially all of our assets, mergers, consolidations or similar transactions, the
certificate of designation contains a provision regarding adjustments to the dividend rate, stated value and conversion price
as follows:


 


		●	On
                                         the first day of the 12th month following the issuance date of any series
                                         A senior convertible preferred shares, 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
                                         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 shares, 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 shares, 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. 



 


Notwithstanding
the foregoing, the conversion price for purposes of the adjustments above shall not be adjusted to a number that is below $0.0075.


 






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Additional
Equity Interest. On the third adjustment date set forth above, we are required to cause Kyle’s to issue to the holders
of series A senior convertible preferred shares, on a pro rata basis, a ten percent (10%) equity stake Kyle’s. We are required
to cause Kyle’s to grant to the holders of the series A senior convertible preferred shares upon the issuance to them of
such equity interest a right to receive an additional number of shares of common stock of Kyle’s if Kyle’s issues
to any third party equity securities at a price below the acquisition price (as defined below). Such additional number of shares
of common stock of Kyle’s to be issued in such instance shall be equal to a number of shares of common stock of Kyle’s
which, when added to the number of shares of common stock of Kyle’s constituting such equity interest, would be equal to
the total number of shares of common stock which would have been issued to a holder of series A senior convertible preferred shares
if the price per share of common stock of Kyle’s was equivalent to the price per equity security paid by such third party
in Kyle’s. For purposes of this provision, “acquisition price” means the price per share of Kyle’s that
was paid by us upon the acquisition of Kyle’s.


 


Other
Rights. Holders of series A senior convertible preferred shares have no preemptive or subscription rights for additional securities
of our company.


 


Allocation
Shares


 


Distribution
Rights. Under the terms of the operating agreement, our company will pay a profit allocation to our manager, as holder of
the allocation shares. See Item 1 “Business—Our Manager—Our Manager as an Equity Holder—Manager’s
Profit Allocation” for a description of our manager’s profit allocation to be paid to our manager and an example
of the calculation of the profit allocation.


 


Liquidation
Rights. Upon a liquidation of our company, any accrued, but unpaid profit allocation due to our manager as a result of our
manager’s ownership of the allocation shares would be paid to our manager before any payment is made of any amounts due
upon a liquidation to the holders of our common shares.


 


Voting
Rights. The operating agreement provides that the holder of allocation shares will not be entitled to any voting rights, except
that the holder of the allocation shares will have:


 


		●	voting
rights in connection with the merger or consolidation of our company, the sale, lease or exchange of all or substantially all
of our company’s assets and certain other business combinations or transactions;



 


		●	a
                                         consent right with respect to the dissolution of our company in certain circumstances;



 


		●	a
                                         consent right with respect to the amendment of the provisions providing for distributions
                                         to the holders of allocation shares;



 


		●	a
                                         consent right to any amendment to the provisions entitling the holders of allocation
                                         shares to appoint and remove directors who will serve on our board of directors of our
                                         company;



 


		●	a
                                         consent right to any amendment to the provision regarding the quorum and voting requirements
                                         for board meetings;



 


		●	a
                                         consent right to any amendment to the provisions regarding the indemnification and liability
                                         of directors;



 


		●	a
                                         consent right with respect to any amendment of the provision of the operating agreement
                                         governing amendments thereof; and



 


		●	a
                                         consent right with respect to any amendment that would adversely affect the holder of
                                         allocation shares.



 


In
addition, the holder of the allocation shares has the right to appoint one (1) director to our board of directors for every four
(4) members constituting the entire board of directors. Any director appointed to our board of directors by the holder of the
allocation shares will not be required to stand for election by the holders of our common shares and will not have any special
voting rights.


 


Other
Rights. Holders of allocation shares have no preemptive, conversion or subscription rights and there are no redemption or
sinking fund provisions applicable to the allocation shares.


 






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Warrants


 


In
connection with the unit offering described elsewhere in this report, we issued warrants for the purchase of an aggregate of 2,632,278
common shares. Each warrant is exercisable within three years at an exercise price of $2.50 per common share (subject to adjustment,
including a full ratchet antidilution adjustment), which may be exercised on a cashless basis if the underlying warrant shares
are not then registered or otherwise freely tradeable. The warrants contains an ownership limitation, such that the we shall not
effect any exercise of any warrant, and the holder shall not have the right to exercise any portion of such warrant, to the extent
that after giving effect to issuance of common shares upon exercise such warrant, such holder, together with its affiliates, and
any other persons acting as a group together with such holder or any of its affiliates, would beneficially own in excess of 4.99%
of the number of common shares outstanding immediately after giving effect to the issuance of common shares issuable upon exercise
of such warrant. Upon no fewer than 61 days’ prior notice to us, a purchaser may increase or decrease such beneficial
ownership limitation provisions and any such increase or decrease will not be effective until the 61st day after such notice is
delivered to us.


 


We
may force the exercise of the warrants at any time after the one year anniversary of the date of the warrants, if (i) our company
is listed on a national securities exchange or the over-the-counter market, (ii) the underlying common shares are registered or
the holder of the warrant otherwise has the ability to trade the underlying common shares without restriction, (iii) the 30-day
volume-weighted daily average price of our common shares exceeds 200% of the exercise price, as adjusted and (iv) the average
daily trading volume is at least 100,000 common shares during such 30-day period.


 


We
may redeem the warrants held by any holder in whole (but not in part) by paying in cash to such holder as follows: (i) $0.50 per
share then underlying the warrant if within the first twelve (12) months of issuance; (ii) $1.00 per share then underlying the
warrant if after the first twelve (12) months, but before twenty-four (24) months of issuance; and (iii) $1.50 per share then
underlying the warrant if after twenty-four months, but before thirty-six (36) months.


 


Agreement
to be Bound by our Operating Agreement; Power of Attorney


 


By
purchasing our shares, you will be admitted as a member of our company and will be deemed to have agreed to be bound by the terms
of the operating agreement. Pursuant to the operating agreement, each shareholder and each person who acquires a share from a
shareholder grants to certain of our officers (and, if appointed, a liquidator) a power of attorney to, among other things, execute
and file documents required for our qualification, continuance or dissolution. The power of attorney also grants certain of our
officers the authority to make certain amendments to, and to make consents and waivers under and in accordance with, our operating
agreement.


 


Ratification
of Agreements


 


The
operating agreement provides that each holder, by acquiring shares, ratifies and confirms the various agreements entered into
by our company, including but not limited to, the management services agreement, the supplemental put provision of the operating
agreement, and that the execution of any of these agreements does not constitute a breach of any duty existing under the operating
agreement or otherwise existing at law, in equity or otherwise by any persons, including our manager, approving, negotiating or
executing such agreements on behalf our company.


 


Waiver
of Jury Trial


 


Our
operating agreement provides that, to the extent permitted by law, holders of common shares waive the right to a jury trial of
any claim they may have against us arising out of or relating to our operating agreement, including any claim under the U.S. federal
securities laws. If we opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable
under the facts and circumstances of that case in accordance with applicable case law. See Item 1A “Risk Factors—Risks
Related to Ownership of Our Common Shares—Holders of our common shares may not be entitled to a jury trial with respect
to claims arising under our operating agreement, which could result in less favorable outcomes to the plaintiffs in any such action.”


 


Election
by Our Company


 


The
operating agreement provides that our board of directors may, without the vote of holders of our shares, cause our company to
elect to be treated as a corporation for United States federal income tax purposes if the board receives an opinion from a nationally
recognized financial advisor to the effect that the market valuation of our company is expected to be significantly lower as a
result of our company continuing to be treated as a partnership for United States federal income tax purposes than if our company
instead elected to be treated as a corporation for United States federal income tax purposes.


 






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Amendment
of the Operating Agreement


 


The
operating agreement may be amended by a majority vote of our board of directors of our company, except that amending the following
provisions requires an affirmative vote of at least a majority of the then outstanding common shares:


 


		●	the
                                         purpose or powers of our company;



 


		●	an
                                         increase in the number of common shares authorized for issuance;



 


		●	the
                                         distribution rights of the common shares;



 


		●	the
                                         voting rights relating to the common shares;



 


		●	the
                                         hiring of a replacement manager following the termination of the management services
                                         agreement;



 


		●	the
                                         merger or consolidation of our company, the sale, lease or exchange of all or substantially
                                         all of our company’s assets and certain other business combinations or transactions;



 


		●	the
                                         right of our shareholders to vote on the dissolution, winding up and liquidation of our
                                         company; and



 


		●	the
                                         provision of the operating agreement governing amendments thereof.



 


Anti-Takeover
Provisions


 


Certain
provisions of the management services agreement and the operating agreement may make it more difficult for third parties to acquire
control of our company by various means. These provisions could deprive our shareholders of opportunities to realize a premium
on the shares owned by them. In addition, these provisions may adversely affect the prevailing market price of our shares. These
provisions are intended to:


 


		●	protect
                                         our manager and its economic interests in our company;



 


		●	protect
                                         the position of our manager and its rights to manage the business and affairs of our
                                         company under the management services agreement;



 


		●	enhance
                                         the likelihood of continuity and stability in the composition of our board of directors
                                         and in the policies formulated by our board of directors;



 


		●	discourage
                                         certain types of transactions which may involve an actual or threatened change in control
                                         of our company;



 


		●	discourage
                                         certain tactics that may be used in proxy fights;



 


		●	encourage
                                         persons seeking to acquire control of our company to consult first with our board of
                                         directors to negotiate the terms of any proposed business combination or offer; and



 


		●	reduce
                                         the vulnerability of our company to an unsolicited proposal for a takeover that does
                                         not contemplate the acquisition of all of the outstanding shares or that is otherwise
                                         unfair to our shareholders.



 


Anti-Takeover
Effects of the Management Services Agreement


 


The
limited circumstances in which our manager may be terminated means that it will be very difficult for a potential acquirer of
our company to take over the management and operation of our business. Under the terms of the management services agreement, our
manager may only be terminated by our company in certain limited circumstances. Furthermore, our manager has the right to resign
and terminate the management services agreement upon 120 days’ notice.


 


Upon
the termination of the management service agreement, seconded officers, employees, representatives and delegates of our manager
and its affiliates who are performing the services that are the subject of the management services agreement, will resign their
respective position with our company and cease to work at the date of our manager’s termination or at any other time as
determined by our manager. Any director on our board of directors appointed by the holder of the allocation shares may continue
serving on our board of directors subject to our manager’s continued ownership of the allocation shares and subject to such
director’s removal by the holder of the allocation shares.


 






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If
we terminate the management services agreement, our company and its businesses must cease using the term “1847,” including
any trademarks based on the name of our company that may be licensed to them by our manager under a license grant in the management
services agreement, entirely in their businesses and operations within 180 days of our termination of the management services
agreement. The license grant requires our company and its businesses to change their names to remove any reference to the term
“1847” or any reference to trademarks licensed to them by our manager upon termination of the license which would
occur upon termination of the management services agreement.


 


See
Item 1 “Business—Our Manager—Termination of Management Services Agreement” for more information
about the termination provisions set forth in the management services agreement.


 


Anti-Takeover
Provisions in the Operating Agreement


 


A
number of provisions of the operating agreement also could have the effect of making it more difficult for a third-party to acquire,
or of discouraging a third-party from acquiring, control of our company. The operating agreement prohibits the merger or consolidation
of our company with or into any limited liability company, corporation, statutory trust, business trust or association, real estate
investment trust, common-law trust or any other unincorporated business, including a partnership, or the sale, lease or exchange
of all or substantially all of our company’s property or assets unless, in each case, our board of directors adopts a resolution
by a majority vote approving such action and unless such action is approved by the affirmative vote of the holders of a majority
of each of the outstanding common shares and allocation shares entitled to vote thereon.


 


In
addition, the operating agreement contains provisions based generally on Section 203 of the General Corporation Law of the
State of Delaware which prohibits our company from engaging in a business combination with an interested holder of our common
shares unless such business combination is approved by the affirmative vote of the holders of 66 2/3% of each of the outstanding
common shares and allocation shares, excluding shares held by the interested holder or any affiliate or associate of the interested
holder of interests.


 


Subject
to the right of our manager to appoint directors and any successor in the event of a vacancy, the operating agreement authorizes
our board of directors to increase the size of the board of directors and to fill vacancies on our board of directors. This provision
could prevent a holder of common shares from effectively obtaining an indirect majority representation on our board of directors
by permitting the existing board of directors to increase the number of directors and to fill the vacancies with its own nominees.
The operating agreement also provides that directors may be removed, with or without cause, only by the affirmative vote of holders
of two-thirds of the then outstanding common shares. A director appointed by our manager may only be removed by our manager, as
holder of the allocation shares.


 


The
operating agreement provides that special meetings may only be called by the Chairman of our board of directors or by resolution
adopted by our board of directors.


 


The
operating agreement also provides that holders of common shares seeking to bring business before an annual meeting of members
or to nominate candidates for election as directors at an annual meeting of members must provide notice thereof in writing to
our company not less than 120 days and not more than 150 days prior to the anniversary date of the preceding year’s
annual meeting of members or as otherwise required by requirements of the Exchange Act. In addition, the holders of common shares
furnishing such notice must be a holder of record on both (i) the date of delivering such notice and (ii) the record
date for the determination of members entitled to vote at such meeting. The operating agreement specifies certain requirements
as to the form and content of a member’s notice. These provisions may preclude members from bringing matters before members
at an annual meeting or from making nominations for directors at an annual or special meeting.


 


Authorized
but unissued shares are available for future issuance, without further approval of our shareholders. These additional shares may
be utilized for a variety of purposes, including future public offerings to raise additional capital or to fund acquisitions,
as well as option plans for employees of our company or its businesses. The existence of authorized but unissued shares could
render more difficult or discourage an attempt to obtain control of our company by means of a proxy contest, tender offer, merger
or otherwise.


 


In
addition, our board of directors has broad authority to amend the operating agreement, as discussed above. Our board of directors
could, in the future, choose to amend the operating agreement to include other provisions which have the intention or effect of
discouraging takeover attempts.


 


Transfer
Agent and Registrar


 


The
transfer agent and registrar for our common shares is VStock Transfer, LLC. The address for VStock Transfer, LLC is 18 Lafayette
Pl, Woodmere, NY 11598, and the telephone number is (212) 828-8436.


 



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