arcee-ai/sec-data-full · Datasets at Hugging Face

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Company accrued dividends attributable to the series B senior convertible preferred shares in the amount of $ 52,820 and paid $ 48,681 of
previously accrued dividends. As of March 31, 2023 and December 31, 2022, the
Company had 464,899 series B senior convertible preferred shares issued and outstanding. Common Shares As of March 31, 2023 and December 31, 2022, the
Company was authorized to issue 500,000,000 common shares. As of March 31, 2023 and December 31, 2022, the Company had 4,655,636 and 4,079,137 common shares issued and outstanding, respectively. On January 30, 2023, the Company issued an aggregate
of 99,505 common shares to the holders of the series A senior convertible preferred shares, in settlement of $ 152,668 of accrued dividends.
Pursuant to the series A senior convertible preferred shares designations, dividends payable in common shares shall be calculated based
on a price equal to eighty percent ( 80 %) of the volume weighted average price for the common shares on the Company’s principal trading
market during the five (5) trading days immediately prior to the applicable dividend payment date. On February 3, 2023 and February 9, 2023, the
Company issued an aggregate of 415,605 common shares to two accredited investors as a commitment fee (see Note 10). On February 13, 2023, the Company issued 61,389 common shares upon the cashless exercises of warrants. 16 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2023 (UNAUDITED) Warrants On January 3, 2023, the Company issued warrants
for the purchase of 407,872 common shares as a dividend to common shareholders of record as of December 23, 2022 pursuant to a warrant
agent agreement, dated January 3, 2023, with VStock Transfer, LLC. Each holder of common shares received a warrant to purchase one (1)
common share for every ten (10) common shares owned as of the record date (with the number of shares underlying the warrant received rounded
down to the nearest whole number). Each warrant represents the right to purchase common shares at an initial exercise price of $ 4.20 per
share (subject to certain adjustments as set forth in the warrants). The Company may, at its option, voluntarily reduce the then-current
exercise price to such amount and for such period or periods of time which may be through the expiration date as may be deemed appropriate
by the board of directors. Cashless exercises of the warrants are not permitted. The warrants will generally be exercisable in
whole or in part beginning on the later of (i) January 3, 2024 or (ii) the date that a registration statement on Form S-3 with respect
to the issuance and registration of the common shares underlying the warrants has been filed with and declared effective by the SEC, and
thereafter until January 3, 2026. The Company may redeem the warrants at any time
in whole or in part at $ 0.001 per warrant (subject to equitable adjustment to reflect share splits, share dividends, share combinations,
recapitalizations and like occurrences) upon not less than 30 days’ prior written notice to the registered holders of the warrants. As a result of the issuance of warrants as a dividend to common shareholders,
the Company recognized a deemed dividend of approximately $ 0.6 million, which was calculated using a Black-Scholes pricing model. On February 3, 2023 (as described in Note 10),
the Company entered into securities purchase agreements with two accredited investors, pursuant to which the Company issued to such investors
(i) promissory notes in the aggregate principal amount of $ 604,000 and (ii) five -year warrants for the purchase of an aggregate of 125,833 common shares at an exercise price of $ 4.20 per share (subject to adjustment) for total cash proceeds of $ 540,000 . As additional consideration,
the Company issued an aggregate of 125,833 common shares to the investors as a commitment fee. Additionally, the Company issued a five-year
warrant to J.H. Darbie & Co (the broker) for the purchase of 892 common shares at an exercise price of $ 5.25 (subject to adjustment).
Accordingly, a portion of the proceeds were allocated to the warrants and common shares based on their relative fair value using the Geometric
Brownian Motion Stock Path Monte Carlo Simulation. The assumptions used in the model were as follows: (i) dividend yield of 0 %; (ii) expected
volatility of 162.3 %; (iii) weighted average risk-free interest rate of 4.1 %; (iv) expected life of five years ; (v) estimated fair value
of the common shares of $ 1.93 per share; (vi) exercise price ranging from $ 4.20 to $ 5.25 ; and (vii) various probability assumptions related
to down round price adjustments. The fair value of the warrants was $ 222,129 and the fair value of the commitment shares was $ 242,858 ,
resulting in the amount allocated to the warrants and commitment shares, based on their relative fair value of $ 218,172 , which was recorded
as additional paid-in capital. On February 9, 2023 (as described in Note 10),
the Company entered into securities purchase agreements with two accredited investors, pursuant to which the Company issued to such investors
(i) promissory notes in the aggregate principal amount of $ 2,557,575 and (ii) five -year warrants for the purchase of an aggregate of 532,827 common shares at an exercise price of $ 4.20 per share (subject to adjustment) for total cash proceeds of $ 2,271,818 . As additional consideration,
the Company issued 289,772 common shares to one investor and issued to the other investor a five-year warrant for the purchase of 243,055 common shares at an exercise price of 0.01 per share (subject to adjustment), which were issued as a commitment fee. Additionally, the
Company issued a five-year warrant to J.H. Darbie & Co (the broker) for the purchase of 11,923 common shares at an exercise price
of $ 5.25 (subject to adjustment). Accordingly, a portion of the proceeds were allocated to the warrants and common shares based on their
relative fair value using the Geometric Brownian Motion Stock Path Monte Carlo Simulation. The assumptions used in the model were as follows:
(i) dividend yield of 0 %; (ii) expected volatility of 162.0 %; (iii) weighted average risk-free interest rate of 4.3 %; (iv) expected life
of five years ; (v) estimated fair value of the common shares of $ 1.80 per share; (vi) exercise price ranging from $ 0.01 to $ 5.25 ; and
(vii) various probability assumptions related to down round price adjustments. The fair value of the warrants was $ 1,323,774 and the fair
value of the commitment shares was $ 521,590 , resulting in the amount allocated to the warrants and commitment shares, based on their relative
fair value of $ 879,829 , which was recorded as additional paid-in capital. On February 22, 2023 (as described in Note 10),
the Company entered into securities purchase agreement with one accredited investor, pursuant to which the Company issued to such investor
(i) a promissory note in the aggregate principal amount of $ 878,000 and (ii) five-year warrants for the purchase of an aggregate of 182,917 common shares at an exercise price of $ 4.20 per share (subject to adjustment) for total cash proceeds of $ 737,700 . As additional consideration,
the Company issued five-year warrants for the purchase of an aggregate of 198,343 common shares at an exercise price of $ 0.01 per share
(subject to adjustment) to the investor as a commitment fee. Additionally, the Company issued a five-year warrant to J.H. Darbie &
Co (the broker) for the purchase of 7,526 common shares at an exercise price of $ 5.25 (subject to adjustment). Accordingly, a portion
of the proceeds were allocated to the warrants based on their relative fair value using the Geometric Brownian Motion Stock Path Monte
Carlo Simulation. The assumptions used in the model were as follows: (i) dividend yield of 0 %; (ii) expected volatility of 161.6 %; (iii)
weighted average risk-free interest rate of 4.5 %; (iv) expected life of five years; (v) estimated fair value of the common shares of $ 1.51 per share; (vi) exercise price ranging from $ 0.01 to $ 5.25 ; and (vii) various probability assumptions related to down round price adjustments.
The fair value of the warrants was $ 556,485 , resulting in the amount allocated to the warrants, based on their relative fair value of
$ 261,945 , which was recorded as additional paid-in capital. As a result of the issuance of common shares in settlement of series
A senior convertible preferred shares accrued dividends on January 30, 2023, the exercise price of certain of the Company’s outstanding
warrants was adjusted to $ 1.53 pursuant to certain antidilution provisions of such warrants (down round feature). As a result, the Company
recognized a deemed dividend of approximately $ 1.2 million, which was calculated using a Black-Scholes pricing model. 17 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2023 (UNAUDITED) Below is a table summarizing the changes in warrants
outstanding during the three months ended March 31, 2023: Warrants Weighted- Average Exercise Price Outstanding at December 31, 2022 3,068,919 $ 4.14 Granted 1,711,188 3.13 Exercised ( 62,500 ) ( 0.04 ) Outstanding at March 31, 2023 4,717,607 $ 2.11 Exercisable at March 31, 2023 4,309,735 $ 1.92 As of March 31, 2023, the outstanding warrants
have a weighted average remaining contractual life of 2.31 years and a total intrinsic value of $ 432,570 . NOTE 13—EARNINGS (LOSS) PER SHARE The computation of weighted average shares outstanding
and the basic and diluted loss per common share attributable to common shareholders for the three months ended March 31, 2023 and 2022
consisted of the followin Three Months Ended March 31, 2023 2022 Net loss attributable to common shareholders’ $ ( 885,331 ) $ ( 1,008,245 ) Loss per common share attributable to 1847 holdings common shareholders’ Basic and diluted $ ( 0.20 ) $ ( 0.21 ) Weighted-average common shares outstanding Basic and diluted 4,419,917 4,915,655 For the three months ended March 31, 2023, there
were 8,991,587 potential common share equivalents from warrants excluded from the diluted earnings per share calculations as their effect
is anti-dilutive. For the three months ended March 31, 2022, there
were 5,217,882 potential common share equivalents from warrants, convertible debt, and series A and B convertible preferred shares excluded
from the diluted earnings per share calculations as their effect is anti-dilutive. NOTE 14—SUBSEQUENT EVENTS Amendment to 6% Amortizing Promissory Note On April 6, 2023, 1847 Asien entered into an amendment
to the 6 % amortizing promissory note described in Note 12, effective retroactively to October 20, 2022. Pursuant to the amendment, the
parties agreed to extend the maturity date of the note to July 30, 2023 and revised the repayment terms so that the outstanding principal
amount and all accrued interest thereon shall be payable in three payments on April 6, 2023, June 30, 2023 and July 30, 2023. As additional
consideration for entering into the amendment, 1847 Asien also agreed to pay an amendment fee of $ 84,362 on the maturity date. Common Share Issuances On April 30, 2023, the Company issued 187,075 common shares as payment of dividends on the series A senior convertible preferred shares. On May 10, 2023, the Company issued 232,216 common
shares upon the exercise of warrants. Amendments to Securities Purchase Agreements On May 15, 2023, the Company entered into amendments to the securities purchase agreements relating to the series A senior convertible
preferred shares and series B senior convertible preferred shares, pursuant to which the securities purchase agreements were amended to
include a provision requiring the exercise of warrants issued pursuant to such securities purchase agreements for the issuance of a number
of common shares equal to the quotient of (i) eighty percent ( 80 %) of the Black Scholes Value of the warrants divided by (ii) the applicable
exercise price of the warrants. The Company expects to issue a forced exercise notice on May 16, 2023 with the requisite shares being
issued on May 17, 2023. The Company is effecting the forced exercise in part to eliminate the anti-dilution adjustment provisions of the
warrants, including the “exploding” feature of the warrants issued in connection with the series A preferred financing which
would result not just in the exercise price of the warrants being reduced, but in the number of underlying warrant shares being increased
proportionately. 18 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following management’s discussion
and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment
and understanding of our plans and financial condition . The following financial information is derived from our financial statements
and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein. Use of Terms Except as otherwise indicated by the context and
for the purposes of this report only, references in this report to “we,” “us,” “our” and “our
company” refer to 1847 Holdings LLC, a Delaware limited liability company, and its consolidated subsidiaries. References to “our
manager” refer to 1847 Partners LLC, a Delaware limited liability company. Special Note Regarding Forward Looking Statements This report contains forward-looking statements
that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than
statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance
and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied
by these forward-looking statements. Forward-looking statements include, but are not limited to, statements ab ● our ability to effectively integrate and operate the businesses that we acquire; ● our ability to successfully identify and acquire additional businesses; ● our organizational structure, which may limit our ability to meet our dividend and distribution policy; ● our ability to service and comply with the terms of indebtedness; ● our cash flow available for distribution and our ability to make distributions to our common shareholders; ● our ability to pay the management fee, profit allocation and put price to our manager when due; ● labor disputes, strikes or other employee disputes or grievances; ● the regulatory environment in which our businesses operate under; ● trends in the industries in which our businesses operate; ● the competitive environment in which our businesses operate; ● changes in general economic or business conditions or economic or demographic trends in the United States
including changes in interest rates and inflation; ● our and our manager’s ability to retain or replace qualified employees of our businesses and our
manager; ● casualties, condemnation or catastrophic failures with respect to any of our business’ facilities; ● costs and effects of legal and administrative proceedings, settlements, investigations and claims; and ● extraordinary or force majeure events affecting the business or operations of our businesses. In some cases, you can identify forward-looking
statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,”
“plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,”
“potential,” “project” or “continue” or the negative of these terms or other comparable terminology.
These statements are only predictions. 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 our control and which could materially affect results.
Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item
1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022 and elsewhere in this report.
If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results
may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee

Company accrued dividends attributable to the series B senior convertible preferred shares in the amount of $ 52,820 and paid $ 48,681 of

previously accrued dividends. As of March 31, 2023 and December 31, 2022, the

Company had 464,899 series B senior convertible preferred shares issued and outstanding. Common Shares As of March 31, 2023 and December 31, 2022, the

Company was authorized to issue 500,000,000 common shares. As of March 31, 2023 and December 31, 2022, the Company had 4,655,636 and 4,079,137 common shares issued and outstanding, respectively. On January 30, 2023, the Company issued an aggregate

of 99,505 common shares to the holders of the series A senior convertible preferred shares, in settlement of $ 152,668 of accrued dividends.

Pursuant to the series A senior convertible preferred shares designations, dividends payable in common shares shall be calculated based

on a price equal to eighty percent ( 80 %) of the volume weighted average price for the common shares on the Company’s principal trading

market during the five (5) trading days immediately prior to the applicable dividend payment date. On February 3, 2023 and February 9, 2023, the

Company issued an aggregate of 415,605 common shares to two accredited investors as a commitment fee (see Note 10). On February 13, 2023, the Company issued 61,389 common shares upon the cashless exercises of warrants. 16 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2023 (UNAUDITED) Warrants On January 3, 2023, the Company issued warrants

for the purchase of 407,872 common shares as a dividend to common shareholders of record as of December 23, 2022 pursuant to a warrant

agent agreement, dated January 3, 2023, with VStock Transfer, LLC. Each holder of common shares received a warrant to purchase one (1)

common share for every ten (10) common shares owned as of the record date (with the number of shares underlying the warrant received rounded

down to the nearest whole number). Each warrant represents the right to purchase common shares at an initial exercise price of $ 4.20 per

share (subject to certain adjustments as set forth in the warrants). The Company may, at its option, voluntarily reduce the then-current

exercise price to such amount and for such period or periods of time which may be through the expiration date as may be deemed appropriate

by the board of directors. Cashless exercises of the warrants are not permitted. The warrants will generally be exercisable in

whole or in part beginning on the later of (i) January 3, 2024 or (ii) the date that a registration statement on Form S-3 with respect

to the issuance and registration of the common shares underlying the warrants has been filed with and declared effective by the SEC, and

thereafter until January 3, 2026. The Company may redeem the warrants at any time

in whole or in part at $ 0.001 per warrant (subject to equitable adjustment to reflect share splits, share dividends, share combinations,

recapitalizations and like occurrences) upon not less than 30 days’ prior written notice to the registered holders of the warrants. As a result of the issuance of warrants as a dividend to common shareholders,

the Company recognized a deemed dividend of approximately $ 0.6 million, which was calculated using a Black-Scholes pricing model. On February 3, 2023 (as described in Note 10),

the Company entered into securities purchase agreements with two accredited investors, pursuant to which the Company issued to such investors

(i) promissory notes in the aggregate principal amount of $ 604,000 and (ii) five -year warrants for the purchase of an aggregate of 125,833 common shares at an exercise price of $ 4.20 per share (subject to adjustment) for total cash proceeds of $ 540,000 . As additional consideration,

the Company issued an aggregate of 125,833 common shares to the investors as a commitment fee. Additionally, the Company issued a five-year

warrant to J.H. Darbie & Co (the broker) for the purchase of 892 common shares at an exercise price of $ 5.25 (subject to adjustment).

Accordingly, a portion of the proceeds were allocated to the warrants and common shares based on their relative fair value using the Geometric

Brownian Motion Stock Path Monte Carlo Simulation. The assumptions used in the model were as follows: (i) dividend yield of 0 %; (ii) expected

volatility of 162.3 %; (iii) weighted average risk-free interest rate of 4.1 %; (iv) expected life of five years ; (v) estimated fair value

of the common shares of $ 1.93 per share; (vi) exercise price ranging from $ 4.20 to $ 5.25 ; and (vii) various probability assumptions related

to down round price adjustments. The fair value of the warrants was $ 222,129 and the fair value of the commitment shares was $ 242,858 ,

resulting in the amount allocated to the warrants and commitment shares, based on their relative fair value of $ 218,172 , which was recorded

as additional paid-in capital. On February 9, 2023 (as described in Note 10),

the Company entered into securities purchase agreements with two accredited investors, pursuant to which the Company issued to such investors

(i) promissory notes in the aggregate principal amount of $ 2,557,575 and (ii) five -year warrants for the purchase of an aggregate of 532,827 common shares at an exercise price of $ 4.20 per share (subject to adjustment) for total cash proceeds of $ 2,271,818 . As additional consideration,

the Company issued 289,772 common shares to one investor and issued to the other investor a five-year warrant for the purchase of 243,055 common shares at an exercise price of 0.01 per share (subject to adjustment), which were issued as a commitment fee. Additionally, the

Company issued a five-year warrant to J.H. Darbie & Co (the broker) for the purchase of 11,923 common shares at an exercise price

of $ 5.25 (subject to adjustment). Accordingly, a portion of the proceeds were allocated to the warrants and common shares based on their

relative fair value using the Geometric Brownian Motion Stock Path Monte Carlo Simulation. The assumptions used in the model were as follows:

(i) dividend yield of 0 %; (ii) expected volatility of 162.0 %; (iii) weighted average risk-free interest rate of 4.3 %; (iv) expected life

of five years ; (v) estimated fair value of the common shares of $ 1.80 per share; (vi) exercise price ranging from $ 0.01 to $ 5.25 ; and

(vii) various probability assumptions related to down round price adjustments. The fair value of the warrants was $ 1,323,774 and the fair

value of the commitment shares was $ 521,590 , resulting in the amount allocated to the warrants and commitment shares, based on their relative

fair value of $ 879,829 , which was recorded as additional paid-in capital. On February 22, 2023 (as described in Note 10),

the Company entered into securities purchase agreement with one accredited investor, pursuant to which the Company issued to such investor

(i) a promissory note in the aggregate principal amount of $ 878,000 and (ii) five-year warrants for the purchase of an aggregate of 182,917 common shares at an exercise price of $ 4.20 per share (subject to adjustment) for total cash proceeds of $ 737,700 . As additional consideration,

the Company issued five-year warrants for the purchase of an aggregate of 198,343 common shares at an exercise price of $ 0.01 per share

(subject to adjustment) to the investor as a commitment fee. Additionally, the Company issued a five-year warrant to J.H. Darbie &

Co (the broker) for the purchase of 7,526 common shares at an exercise price of $ 5.25 (subject to adjustment). Accordingly, a portion

of the proceeds were allocated to the warrants based on their relative fair value using the Geometric Brownian Motion Stock Path Monte

Carlo Simulation. The assumptions used in the model were as follows: (i) dividend yield of 0 %; (ii) expected volatility of 161.6 %; (iii)

weighted average risk-free interest rate of 4.5 %; (iv) expected life of five years; (v) estimated fair value of the common shares of $ 1.51 per share; (vi) exercise price ranging from $ 0.01 to $ 5.25 ; and (vii) various probability assumptions related to down round price adjustments.

The fair value of the warrants was $ 556,485 , resulting in the amount allocated to the warrants, based on their relative fair value of

$ 261,945 , which was recorded as additional paid-in capital. As a result of the issuance of common shares in settlement of series

A senior convertible preferred shares accrued dividends on January 30, 2023, the exercise price of certain of the Company’s outstanding

warrants was adjusted to $ 1.53 pursuant to certain antidilution provisions of such warrants (down round feature). As a result, the Company

recognized a deemed dividend of approximately $ 1.2 million, which was calculated using a Black-Scholes pricing model. 17 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2023 (UNAUDITED) Below is a table summarizing the changes in warrants

outstanding during the three months ended March 31, 2023: Warrants Weighted- Average Exercise Price Outstanding at December 31, 2022 3,068,919 $ 4.14 Granted 1,711,188 3.13 Exercised ( 62,500 ) ( 0.04 ) Outstanding at March 31, 2023 4,717,607 $ 2.11 Exercisable at March 31, 2023 4,309,735 $ 1.92 As of March 31, 2023, the outstanding warrants

have a weighted average remaining contractual life of 2.31 years and a total intrinsic value of $ 432,570 . NOTE 13—EARNINGS (LOSS) PER SHARE The computation of weighted average shares outstanding

and the basic and diluted loss per common share attributable to common shareholders for the three months ended March 31, 2023 and 2022

consisted of the followin Three Months Ended March 31, 2023 2022 Net loss attributable to common shareholders’ $ ( 885,331 ) $ ( 1,008,245 ) Loss per common share attributable to 1847 holdings common shareholders’ Basic and diluted $ ( 0.20 ) $ ( 0.21 ) Weighted-average common shares outstanding Basic and diluted 4,419,917 4,915,655 For the three months ended March 31, 2023, there

were 8,991,587 potential common share equivalents from warrants excluded from the diluted earnings per share calculations as their effect

is anti-dilutive. For the three months ended March 31, 2022, there

were 5,217,882 potential common share equivalents from warrants, convertible debt, and series A and B convertible preferred shares excluded

from the diluted earnings per share calculations as their effect is anti-dilutive. NOTE 14—SUBSEQUENT EVENTS Amendment to 6% Amortizing Promissory Note On April 6, 2023, 1847 Asien entered into an amendment

to the 6 % amortizing promissory note described in Note 12, effective retroactively to October 20, 2022. Pursuant to the amendment, the

parties agreed to extend the maturity date of the note to July 30, 2023 and revised the repayment terms so that the outstanding principal

amount and all accrued interest thereon shall be payable in three payments on April 6, 2023, June 30, 2023 and July 30, 2023. As additional

consideration for entering into the amendment, 1847 Asien also agreed to pay an amendment fee of $ 84,362 on the maturity date. Common Share Issuances On April 30, 2023, the Company issued 187,075 common shares as payment of dividends on the series A senior convertible preferred shares. On May 10, 2023, the Company issued 232,216 common

shares upon the exercise of warrants. Amendments to Securities Purchase Agreements On May 15, 2023, the Company entered into amendments to the securities purchase agreements relating to the series A senior convertible

preferred shares and series B senior convertible preferred shares, pursuant to which the securities purchase agreements were amended to

include a provision requiring the exercise of warrants issued pursuant to such securities purchase agreements for the issuance of a number

of common shares equal to the quotient of (i) eighty percent ( 80 %) of the Black Scholes Value of the warrants divided by (ii) the applicable

exercise price of the warrants. The Company expects to issue a forced exercise notice on May 16, 2023 with the requisite shares being

issued on May 17, 2023. The Company is effecting the forced exercise in part to eliminate the anti-dilution adjustment provisions of the

warrants, including the “exploding” feature of the warrants issued in connection with the series A preferred financing which

would result not just in the exercise price of the warrants being reduced, but in the number of underlying warrant shares being increased

proportionately. 18 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following management’s discussion

and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment

and understanding of our plans and financial condition . The following financial information is derived from our financial statements

and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein. Use of Terms Except as otherwise indicated by the context and

for the purposes of this report only, references in this report to “we,” “us,” “our” and “our

company” refer to 1847 Holdings LLC, a Delaware limited liability company, and its consolidated subsidiaries. References to “our

manager” refer to 1847 Partners LLC, a Delaware limited liability company. Special Note Regarding Forward Looking Statements This report contains forward-looking statements

that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than

statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance

and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance

or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied

by these forward-looking statements. Forward-looking statements include, but are not limited to, statements ab ● our ability to effectively integrate and operate the businesses that we acquire; ● our ability to successfully identify and acquire additional businesses; ● our organizational structure, which may limit our ability to meet our dividend and distribution policy; ● our ability to service and comply with the terms of indebtedness; ● our cash flow available for distribution and our ability to make distributions to our common shareholders; ● our ability to pay the management fee, profit allocation and put price to our manager when due; ● labor disputes, strikes or other employee disputes or grievances; ● the regulatory environment in which our businesses operate under; ● trends in the industries in which our businesses operate; ● the competitive environment in which our businesses operate; ● changes in general economic or business conditions or economic or demographic trends in the United States

including changes in interest rates and inflation; ● our and our manager’s ability to retain or replace qualified employees of our businesses and our

manager; ● casualties, condemnation or catastrophic failures with respect to any of our business’ facilities; ● costs and effects of legal and administrative proceedings, settlements, investigations and claims; and ● extraordinary or force majeure events affecting the business or operations of our businesses. In some cases, you can identify forward-looking

statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,”

“plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,”

“potential,” “project” or “continue” or the negative of these terms or other comparable terminology.

These statements are only predictions. 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 our control and which could materially affect results.

Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item

1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022 and elsewhere in this report.

If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results

may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee