<SEC-DOCUMENT>0001683168-17-002460.txt : 20170922
<SEC-HEADER>0001683168-17-002460.hdr.sgml : 20170922
<ACCEPTANCE-DATETIME>20170922161011
ACCESSION NUMBER:		0001683168-17-002460
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20170920
ITEM INFORMATION:		Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
FILED AS OF DATE:		20170922
DATE AS OF CHANGE:		20170922

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			APPLIANCE RECYCLING CENTERS OF AMERICA INC /MN
		CENTRAL INDEX KEY:			0000862861
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES [5700]
		IRS NUMBER:				411454591
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			0103

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-19621
		FILM NUMBER:		171097743

	BUSINESS ADDRESS:	
		STREET 1:		175 JACKSON AVE N
		STREET 2:		SUITE 102
		CITY:			MINNEAPOLIS
		STATE:			MN
		ZIP:			55343
		BUSINESS PHONE:		9529309000

	MAIL ADDRESS:	
		STREET 1:		175 JACKSON AVE N
		STREET 2:		SUITE 102
		CITY:			MINNEAPOLIS
		STATE:			MN
		ZIP:			55343
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>arca_8k-092017.htm
<DESCRIPTION>CURRENT REPORT
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<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B><BR>
<B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FORM 8-K </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Date of Report (Date of earliest event reported):
<B>September 20, 2017</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Appliance Recycling Centers of America,
Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <TD STYLE="width: 33%; font-weight: bold; text-align: center">Minnesota</TD>
    <TD STYLE="width: 33%; font-weight: bold; text-align: center">000-19621</TD>
    <TD STYLE="font-weight: bold; text-align: center; width: 33%">41-1454591</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">(State or other jurisdiction <BR>of incorporation)</TD>
    <TD STYLE="text-align: center">(Commission <BR>File Number)</TD>
    <TD STYLE="text-align: center">(IRS Employer<BR>
Identification No.)</TD></TR>
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    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>175 Jackson Avenue North, Suite 102,
        </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Minneapolis, MN</B></P></TD>
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>55343-4565</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">(Address of principal executive offices)</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">(Zip Code)</TD></TR>
<TR>
    <TD STYLE="width: 35%">&nbsp;</TD>
    <TD STYLE="width: 16%">&nbsp;</TD>
    <TD STYLE="width: 16%">&nbsp;</TD>
    <TD STYLE="width: 33%">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Registrant&rsquo;s telephone number, including
area code: <B>(952) 930-9000</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Not Applicable</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Former name or former address, if changed
since last report.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%; font-size: 10pt">&#9744;</TD>
    <TD STYLE="width: 97%; font-size: 10pt">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&#9744;</TD>
    <TD STYLE="font-size: 10pt">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&#9744;</TD>
    <TD STYLE="font-size: 10pt">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&#9744;</TD>
    <TD STYLE="font-size: 10pt">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD></TR>
</TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (&sect;230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (&sect;240.12b-2 of this chapter).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">Emerging growth company&nbsp;&nbsp;&nbsp;&#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.&nbsp; &#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>ITEM 2.04</B></TD><TD><B>Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement.</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On September 20, 2017, Appliance Recycling Centers of America,
Inc. (the &ldquo;Company&rdquo;) received a written notice of default, dated September 20, 2017 (the &ldquo;Notice of Default&rdquo;),
from MidCap Funding X Trust (the &ldquo;Agent&rdquo;), asserting that events of default had occurred with respect to that certain
Credit and Security Agreement dated May&nbsp;10, 2017 (the &ldquo;Loan Agreement&rdquo;), by and among the Agent and certain other
Lenders (the &ldquo;Lenders&rdquo;), and the Company and certain of its subsidiaries (the &ldquo;Borrowers&rdquo;). The Agent alleges
in the Notice of Default that, as a result of the Company&rsquo;s recent acquisition of GeoTraq Inc. (&ldquo;GeoTraq&rdquo;), and
the issuance of promissory notes to the stockholders of GeoTraq in connection with such acquisition, the Borrowers have failed
to comply with certain terms of the Loan Agreement, and that such failure constitutes one or more Events of Default under the Loan
Agreement. Specifically, the Notice of Default states that as a result of the acquisition and related issuance of promissory notes,
the Borrowers have failed to comply with (i) a covenant not to incur additional indebtedness other than Permitted Debt (as defined
in the Loan Agreement), without the Agent&rsquo;s prior written consent, and a covenant not to make acquisitions or investments
other than Permitted Acquisitions or Permitted Investments (as defined in the Loan Agreement). The Notice of Default also states
that the Borrowers&rsquo; failure to pledge the stock in GeoTraq as collateral under the Loan Agreement and to make GeoTraq a &ldquo;Borrower
&ldquo; under the Loan Agreement will become an Event of Default if not cured within the applicable cure period. The Agent has
reserved the right to avail itself of any other rights and remedies available to it at law or by contract, including the right
to (a) withhold funding, increase reserves and suspend making further advances under the Loan Agreement, (b) declare all principal,
interest and other sums owing in connection with the Loan Agreement immediately due and payable in full, (c) charge the Default
Rate on amounts outstanding under the Loan Agreement, and/or (d) exercise one or more rights and remedies with respect to any and
all collateral securing the Loan Agreement. The Agent has not declared the amounts outstanding under the Loan Agreement to be immediately
due and payable but has imposed the default rate of interest 10.73%, which is 5% in excess of the rates otherwise payable under
the Loan Agreement), effective as of August 18, 2017 and continuing until the Agent notifies the Borrowers that the specified Events
of Default have been waived and no other Events of Default exist. As of the filing of this Current Report on Form 8-K, the outstanding
balance of borrowings under the Loan Agreement was approximately $3,021,375.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company strongly disagrees with the Lenders that any Event
of Default has occurred and is reserving all of its options with respect to the Loan Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Company and the Agent have begun discussions for forbearance
of the default, however there can be no assurance the Company and the Agent will be able to agree on terms of the forbearance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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    <TD STYLE="vertical-align: bottom; width: 50%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 50%; font-size: 10pt"><B>Appliance Recycling Centers of America, Inc.</B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">Date: September 22, 2017</TD>
    <TD STYLE="border-bottom: black 1pt solid; font-size: 10pt">/s/ Tony Isaac</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Tony Isaac</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Chief Executive Officer</P></TD></TR>
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