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

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to the “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 the 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 the Manager’s ability
to retain or replace qualified employees of our businesses and the 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, 2021. 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 of future performance. 25 In addition, statements that “we believe”
and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available
to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information
may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or
review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not
to unduly rely upon these statements. The forward-looking statements made in this report
relate only to events or information as of the date on which the statements are made in this report. Except as expressly required by
the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result
of new information, future events, changed circumstances or any other reason. Overview We are an acquisition holding company focused
on acquiring and managing a group of small businesses, which we characterize as those that have an enterprise value of less than $50
million, in a variety of different industries headquartered in North America. To date, we have completed six acquisitions and subsequently
spun off two of the acquired companies. On May 28, 2020, our subsidiary 1847 Asien Inc.
(“1847 Asien”) acquired Asien’s Appliance, Inc., a California corporation (“Asien’s”). Asien’s
has been in business since 1948 serving the North Bay area of Sonoma County, California. It provides a wide variety of appliance services,
including sales, delivery/installation, in-home service and repair, extended warranties, and financing. Its main focus is delivering
personal sales and exceptional service to its customers at competitive prices. On September 30, 2020, our subsidiary 1847 Cabinet
Inc. (“1847 Cabinet”) acquired Kyle’s Custom Wood Shop, Inc., an Idaho corporation (“Kyle’s”). Kyle’s
is a leading custom cabinetry maker servicing contractors and homeowners since 1976 in Boise, Idaho and the surrounding area. Kyle’s
focuses on designing, building, and installing custom cabinetry primarily for custom and semi-custom builders. On March 30, 2021, our subsidiary 1847 Wolo Inc.
(“1847 Wolo”) acquired Wolo Mfg. Corp., a New York corporation, and Wolo Industrial Horn & Signal, Inc., a New York corporation
(together, “Wolo”). Headquartered in Deer Park, New York and founded in 1965, Wolo designs and sells horn and safety products
(electric, air, truck, marine, motorcycle and industrial equipment), and offers vehicle emergency and safety warning lights for cars,
trucks, industrial equipment and emergency vehicles. On October 8, 2021, our subsidiary 1847 Cabinet
acquired High Mountain Door & Trim Inc., a Nevada corporation (“High Mountain”), and Sierra Homes, LLC d/b/a Innovative
Cabinets & Design, a Nevada limited liability company (“Innovative Cabinets”). Headquartered in Reno, Nevada and founded
in 2014, High Mountain specializes in all aspects of finished carpentry products and services, including doors, door frames, base boards,
crown molding, cabinetry, bathroom sinks and cabinets, bookcases, built-in closets, and fireplace mantles, among others, working primarily
with large homebuilders of single-family homes and commercial and multi-family developers. Innovative Cabinets is headquartered in Reno,
Nevada and was founded in 2008. It specializes in custom cabinetry and countertops for a client base consisting of single-family homeowners,
builders of multi-family homes, as well as commercial clients. Our first acquisition was on March 3, 2017, pursuant
to which our subsidiary 1847 Neese Inc. (“1847 Neese”) acquired Neese, Inc., a business specializing in providing a wide
range of land application services and selling equipment and parts in Grand Junction, Iowa. On April 19, 2021, we sold 1847 Neese back
to the original owners. On April 5, 2019, our subsidiary 1847 Goedeker
Inc. (“1847 Goedeker”) acquired substantially all of the assets of Goedeker Television Co., a one-stop e-commerce destination
for home furnishings, including appliances, furniture, home goods and related products. On October 23, 2020, we distributed all of the
shares of 1847 Goedeker that we held to our shareholders, so we no longer own 1847 Goedeker. Through our structure, we offer investors an
opportunity to participate in the ownership and growth of a portfolio of businesses that traditionally have been owned and managed by
private equity firms, private individuals or families, financial institutions or large conglomerates. We believe that our management
and acquisition strategies will allow us to achieve our goals to grow regular distributions to our common shareholders and increasing
common shareholder value over time. 26 We seek to acquire controlling interests in small
businesses that we believe operate in industries with long-term macroeconomic growth opportunities, and that have positive and stable
earnings and cash flows, face minimal threats of technological or competitive obsolescence and have strong management teams largely in
place. We believe that private company operators and corporate parents looking to sell their businesses will consider us to be an attractive
purchaser of their businesses. We make these businesses our majority-owned subsidiaries and actively manage and grow such businesses.
We expect to improve our businesses over the long term through organic growth opportunities, add-on acquisitions and operational improvements. Recent Developments Reverse Share Split On August 3, 2022, we effected a 1-for-4 reverse
split of our outstanding common shares. All share and per share data throughout this report have been retroactively adjusted to reflect
the reverse share split. Securities Purchase Agreement On July 8, 2022, we entered into a securities
purchase agreement with Mast Hill Fund, L.P., pursuant to which we issued to it a promissory note in the principal amount of $600,000,
which includes an original issue discount in the amount of $60,000, and a five-year warrant for the purchase of 100,000 common shares
at an exercise price of $6.00 per share (subject to adjustment), which may be exercised on a cashless basis if the market price of our
common shares is greater than the exercise price, for a total purchase price of $540,000. The note bears interest at a rate of 12% per
annum and matures on July 8, 2023; provided that any principal amount or interest which is not paid when due shall bear interest at a
rate of the lesser of 16% per annum or the maximum amount permitted by law from the due date thereof until the same is paid. The note
requires monthly payments of $60,000, plus accrued interest, commencing on October 6, 2022. We may voluntarily prepay the outstanding
principal amount and accrued interest in whole upon payment of a fee of $750. In addition, if at any time we receive cash proceeds of
more than $1 million in the aggregate from any source or series of related or unrelated sources, including, but not limited to, the issuance
of equity or debt, the exercise of outstanding warrants, the issuance of securities pursuant to an equity line of credit (as defined
in the note) or the sale of assets outside of the ordinary course of business, the holder shall have the right in its sole discretion
to require us to immediately apply up to 50% of such proceeds in excess of $1 million to repay all or any portion of the outstanding
principal amount and interest then due under the note. The note is convertible into common shares at the option of the holder at any
time on or following the date that an event of default (as defined in the note) occurs under the note at a conversion price of $5.20
(subject to adjustment). The note is unsecured and has priority over all of our other unsecured indebtedness. The note contains customary
affirmative and negative covenants and events of default for a loan of this type. The conversion price of the note and the exercise
price of the warrant are subject to standard adjustments, including a price-based adjustment in the event that we issue any common shares
or other securities convertible into or exercisable for common shares at an effective price per share that is lower than the conversion
or exercise price, subject to certain exceptions. In addition, the note and the warrant contain an ownership limitation, such that we
shall not effect any conversion or exercise, and the holder shall not have the right to convert or exercise, or any portion of the note
or the warrant to the extent that after giving effect to the issuance of common shares upon conversion or exercise, the holder, together
with its affiliates and any other persons acting as a group together with the 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 upon conversion

to the “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 the 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 the Manager’s ability

to retain or replace qualified employees of our businesses and the 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, 2021. 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 of future performance. 25 In addition, statements that “we believe”

and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available

to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information

may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or

review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not

to unduly rely upon these statements. The forward-looking statements made in this report

relate only to events or information as of the date on which the statements are made in this report. Except as expressly required by

the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result

of new information, future events, changed circumstances or any other reason. Overview We are an acquisition holding company focused

on acquiring and managing a group of small businesses, which we characterize as those that have an enterprise value of less than $50

million, in a variety of different industries headquartered in North America. To date, we have completed six acquisitions and subsequently

spun off two of the acquired companies. On May 28, 2020, our subsidiary 1847 Asien Inc.

(“1847 Asien”) acquired Asien’s Appliance, Inc., a California corporation (“Asien’s”). Asien’s

has been in business since 1948 serving the North Bay area of Sonoma County, California. It provides a wide variety of appliance services,

including sales, delivery/installation, in-home service and repair, extended warranties, and financing. Its main focus is delivering

personal sales and exceptional service to its customers at competitive prices. On September 30, 2020, our subsidiary 1847 Cabinet

Inc. (“1847 Cabinet”) acquired Kyle’s Custom Wood Shop, Inc., an Idaho corporation (“Kyle’s”). Kyle’s

is a leading custom cabinetry maker servicing contractors and homeowners since 1976 in Boise, Idaho and the surrounding area. Kyle’s

focuses on designing, building, and installing custom cabinetry primarily for custom and semi-custom builders. On March 30, 2021, our subsidiary 1847 Wolo Inc.

(“1847 Wolo”) acquired Wolo Mfg. Corp., a New York corporation, and Wolo Industrial Horn & Signal, Inc., a New York corporation

(together, “Wolo”). Headquartered in Deer Park, New York and founded in 1965, Wolo designs and sells horn and safety products

(electric, air, truck, marine, motorcycle and industrial equipment), and offers vehicle emergency and safety warning lights for cars,

trucks, industrial equipment and emergency vehicles. On October 8, 2021, our subsidiary 1847 Cabinet

acquired High Mountain Door & Trim Inc., a Nevada corporation (“High Mountain”), and Sierra Homes, LLC d/b/a Innovative

Cabinets & Design, a Nevada limited liability company (“Innovative Cabinets”). Headquartered in Reno, Nevada and founded

in 2014, High Mountain specializes in all aspects of finished carpentry products and services, including doors, door frames, base boards,

crown molding, cabinetry, bathroom sinks and cabinets, bookcases, built-in closets, and fireplace mantles, among others, working primarily

with large homebuilders of single-family homes and commercial and multi-family developers. Innovative Cabinets is headquartered in Reno,

Nevada and was founded in 2008. It specializes in custom cabinetry and countertops for a client base consisting of single-family homeowners,

builders of multi-family homes, as well as commercial clients. Our first acquisition was on March 3, 2017, pursuant

to which our subsidiary 1847 Neese Inc. (“1847 Neese”) acquired Neese, Inc., a business specializing in providing a wide

range of land application services and selling equipment and parts in Grand Junction, Iowa. On April 19, 2021, we sold 1847 Neese back

to the original owners. On April 5, 2019, our subsidiary 1847 Goedeker

Inc. (“1847 Goedeker”) acquired substantially all of the assets of Goedeker Television Co., a one-stop e-commerce destination

for home furnishings, including appliances, furniture, home goods and related products. On October 23, 2020, we distributed all of the

shares of 1847 Goedeker that we held to our shareholders, so we no longer own 1847 Goedeker. Through our structure, we offer investors an

opportunity to participate in the ownership and growth of a portfolio of businesses that traditionally have been owned and managed by

private equity firms, private individuals or families, financial institutions or large conglomerates. We believe that our management

and acquisition strategies will allow us to achieve our goals to grow regular distributions to our common shareholders and increasing

common shareholder value over time. 26 We seek to acquire controlling interests in small

businesses that we believe operate in industries with long-term macroeconomic growth opportunities, and that have positive and stable

earnings and cash flows, face minimal threats of technological or competitive obsolescence and have strong management teams largely in

place. We believe that private company operators and corporate parents looking to sell their businesses will consider us to be an attractive

purchaser of their businesses. We make these businesses our majority-owned subsidiaries and actively manage and grow such businesses.

We expect to improve our businesses over the long term through organic growth opportunities, add-on acquisitions and operational improvements. Recent Developments Reverse Share Split On August 3, 2022, we effected a 1-for-4 reverse

split of our outstanding common shares. All share and per share data throughout this report have been retroactively adjusted to reflect

the reverse share split. Securities Purchase Agreement On July 8, 2022, we entered into a securities

purchase agreement with Mast Hill Fund, L.P., pursuant to which we issued to it a promissory note in the principal amount of $600,000,

which includes an original issue discount in the amount of $60,000, and a five-year warrant for the purchase of 100,000 common shares

at an exercise price of $6.00 per share (subject to adjustment), which may be exercised on a cashless basis if the market price of our

common shares is greater than the exercise price, for a total purchase price of $540,000. The note bears interest at a rate of 12% per

annum and matures on July 8, 2023; provided that any principal amount or interest which is not paid when due shall bear interest at a

rate of the lesser of 16% per annum or the maximum amount permitted by law from the due date thereof until the same is paid. The note

requires monthly payments of $60,000, plus accrued interest, commencing on October 6, 2022. We may voluntarily prepay the outstanding

principal amount and accrued interest in whole upon payment of a fee of $750. In addition, if at any time we receive cash proceeds of

more than $1 million in the aggregate from any source or series of related or unrelated sources, including, but not limited to, the issuance

of equity or debt, the exercise of outstanding warrants, the issuance of securities pursuant to an equity line of credit (as defined

in the note) or the sale of assets outside of the ordinary course of business, the holder shall have the right in its sole discretion

to require us to immediately apply up to 50% of such proceeds in excess of $1 million to repay all or any portion of the outstanding

principal amount and interest then due under the note. The note is convertible into common shares at the option of the holder at any

time on or following the date that an event of default (as defined in the note) occurs under the note at a conversion price of $5.20

(subject to adjustment). The note is unsecured and has priority over all of our other unsecured indebtedness. The note contains customary

affirmative and negative covenants and events of default for a loan of this type. The conversion price of the note and the exercise

price of the warrant are subject to standard adjustments, including a price-based adjustment in the event that we issue any common shares

or other securities convertible into or exercisable for common shares at an effective price per share that is lower than the conversion

or exercise price, subject to certain exceptions. In addition, the note and the warrant contain an ownership limitation, such that we

shall not effect any conversion or exercise, and the holder shall not have the right to convert or exercise, or any portion of the note

or the warrant to the extent that after giving effect to the issuance of common shares upon conversion or exercise, the holder, together

with its affiliates and any other persons acting as a group together with the 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 upon conversion