text
stringlengths 0
1.95M
|
|---|
INVESTING AND FINANCING ACTIVITIES Net
|
assets acquired in the acquisition of ICU Eyewear $ 7,139,861 $ - Deemed
|
dividend from issuance of warrants to common shareholders $ 618,000 $ - Deemed
|
dividend from down round provision in warrants $ 1,751,000 $ - Accrued
|
dividends on series A preferred shares $ 220,096 $ - Accrued
|
dividends on series B preferred shares $ 107,996 $ - Issuance
|
of common shares upon settlement of accrued series A dividends $ 263,937 $ - Issuance
|
of common shares upon conversion of series A preferred shares $ - $ 111,986 Issuance
|
of common shares upon conversion of series B preferred shares $ 221,686 $ - Issuance
|
of common shares upon cashless exercise of warrants $ 1,300 $ - Debt
|
discount on notes payable $ 2,405,419 $ - Financed
|
purchases of property and equipment $ - $ 328,504 Operating
|
lease right-of-use asset and liability remeasurement $ - $ 254,713 The accompanying notes are an integral part of
|
these condensed consolidated financial statements. 6 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED
|
FINANCIAL STATEMENTS JUNE 30, 2023 (UNAUDITED) NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION The accompanying unaudited condensed consolidated
|
financial statements of 1847 Holdings LLC (the “Company,” “we,” “us,” or “our”) have
|
been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim
|
financial information and with the instructions to Form 10-Q of Regulation S-X. They do not include all the information and footnotes
|
required by GAAP for complete financial statements. The December 31, 2022 consolidated balance sheet data was derived from audited financial
|
statements but do not include all disclosures required by GAAP. However, except as disclosed herein, there has been no material change
|
in the information disclosed in the notes to the consolidated financial statements for the year ended December 31, 2022 included in the
|
Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on April 11, 2023. The interim unaudited
|
condensed consolidated financial statements should be read in conjunction with those consolidated financial statements included in the
|
Form 10-K. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting
|
solely of normal recurring adjustments, have been made. Operating results for the three and six months ended June 30, 2023 are not necessarily
|
indicative of the results that may be expected for the year ending December 31, 2023. Reclassifications Certain reclassifications within operating expenses
|
have been made to the prior period’s financial statements to conform to the current period financial statement presentation. There
|
is no impact in total to the results of operations and cash flows in all periods presented. NOTE 2—RECENT ACCOUNTING PRONOUNCEMENTS The Company considers the applicability and impact
|
of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”). The
|
Company has evaluated all recent accounting pronouncements and determined that the adoption of pronouncements applicable to the Company
|
has not had or is not expected to have a material impact on the Company’s condensed consolidated financial statements. NOTE 3—LIQUIDITY AND GOING CONCERN ASSESSMENT Management assesses liquidity and going concern
|
uncertainty in the Company’s condensed consolidated financial statements to determine whether there is sufficient cash on hand
|
and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated
|
financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined
|
in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider
|
various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected
|
cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital,
|
if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around
|
implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations
|
can be achieved and management has the proper authority to execute them within the look-forward period. As of June 30, 2023, the Company had cash and
|
cash equivalents of $ 559,650 . For the six months ended June 30, 2023, the Company incurred a loss from operations of $ 909,933 , cash flows
|
used in operations of $ 2,547,967 and working capital deficit of $ 3,653,054 . The Company has generated operating losses since its inception
|
and has relied on cash on hand, sales of securities, external bank lines of credit, and issuance of third-party and related party debt
|
to support cashflow from operations, which creates substantial doubt about its ability to continue as a going concern for a period at
|
least one year from the date of issuance of these condensed consolidated financial statements. Management plans to address the above as needed
|
by, securing additional bank lines of credit and obtaining additional financing through debt or equity transactions. Management has implemented
|
tight cost controls to conserve cash. The ability of the Company to continue as a going
|
concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and to eventually attain
|
profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary
|
if the Company is unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease
|
operations. 7 1847
|
HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2023 (UNAUDITED) NOTE 4—DISAGGREGATION OF REVENUES AND
|
SEGMENT REPORTING The Company has four reportable segments: The Retail and Appliances Segment provides a
|
wide variety of appliance products (laundry, refrigeration, cooking, dishwashers, outdoor, accessories, parts, and other appliance related
|
products) and services (delivery, installation, service and repair, extended warranties, and financing). The Retail and Eyewear Segment provides a wide
|
variety of eyewear products (non-prescription reading glasses, sunglasses, blue light blocking eyewear, sun readers and outdoor specialty
|
sunglasses). The Construction Segment provides finished carpentry
|
products and services (door frames, base boards, crown molding, cabinetry, bathroom sinks and cabinets, bookcases, built-in closets,
|
fireplace mantles, windows, and custom design and build of cabinetry and countertops). The Automotive Supplies Segment provides 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. The Company provides general corporate services
|
to its segments; however, these services are not considered when making operating decisions and assessing segment performance. These
|
services are reported under “Corporate Services” below and these include costs associated with executive management, financing
|
activities and public company compliance. The Company’s revenues for the three and
|
six months ended June 30, 2023 and 2022 are disaggregated as follows: Three Months Ended June 30, 2023 Retail and Appliances Retail and Eyewear Construction Automotive Supplies Total Revenues Appliances $ 1,774,297 $ - $ - $ - $ 1,774,297 Appliance accessories, parts, and other 254,349 - - - 254,349 Eyewear - 2,904,109 - - 2,904,109 Eyewear accessories, parts, and other - 1,589,952 - - 1,589,952 Automotive horns - - - 797,032 797,032 Automotive lighting - - - 567,105 567,105 Custom cabinets and countertops - - 2,240,625 - 2,240,625 Finished carpentry - - 9,263,270 - 9,263,270 Total Revenues $ 2,028,646 $ 4,494,061 $ 11,503,895 $ 1,364,137 $ 19,390,739 Three Months Ended June 30, 2022 Retail and Appliances Retail and Eyewear Construction Automotive Supplies Total Revenues Appliances $ 2,509,217 $ - $ - $ - $ 2,509,217 Appliance accessories, parts, and other 357,794 - - - 357,794 Eyewear - - - - - Eyewear accessories, parts, and other - - - - - Automotive horns - - - 1,471,923 1,471,923 Automotive lighting - - - 511,131 511,131 Custom cabinets and countertops - - 3,130,143 - 3,130,143 Finished carpentry - - 4,911,035 - 4,911,035 Total Revenues $ 2,867,011 $ - $ 8,041,178 $ 1,983,054 $ 12,891,243 8 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2023 (UNAUDITED) Six Months Ended June 30, 2023 Retail and Appliances Retail and Eyewear Construction Automotive Supplies Total Revenues Appliances $ 3,919,122 $ - $ - $ - $ 3,919,122 Appliance accessories, parts, and other 547,459 - - - 547,459 Eyewear - 4,658,849 - - 4,658,849 Eyewear accessories, parts, and other - 2,627,924 - - 2,627,924 Automotive horns - - - 1,792,449 1,792,449 Automotive lighting - - - 831,854 831,854 Custom cabinets and countertops - - 4,356,807 - 4,356,807 Finished carpentry - - 16,059,813 - 16,059,813 Total Revenues $ 4,466,581 $ 7,286,773 $ 20,416,620 $ 2,624,303 $ 34,794,277 Six Months Ended June 30, 2022 Retail and Appliances Retail and Eyewear Construction Automotive Supplies Total Revenues Appliances $ 4,713,842 $ - $ - $ - $ 4,713,842 Appliance accessories, parts, and other 673,953 - - - 673,953 Eyewear - - - - - Eyewear accessories, parts, and other - - - - - Automotive horns - - - 2,671,779 2,671,779 Automotive lighting - - - 953,266 953,266 Custom cabinets and countertops - - 7,297,944 - 7,297,944 Finished carpentry - - 8,654,337 - 8,654,337 Total Revenues $ 5,387,795 $ - $ 15,952,281 $ 3,625,045 $ 24,965,121 Segment information for the three and six months
|
ended June 30, 2023 and 2022 are as follows: Three Months Ended June 30, 2023 Retail and Appliances Retail and Eyewear Construction Automotive Supplies Corporate Services Total Revenues $ 2,028,646 $ 4,494,061 $ 11,503,895 $ 1,364,137 $ - $ 19,390,739 Operating Expenses Cost of revenues 1,672,052 2,772,880 7,200,651 825,112 - 12,470,695 Personnel 264,790 1,450,096 2,009,215 314,509 ( 173,350 ) 3,865,260 Personnel – corporate allocation ( 83,300 ) - ( 249,900 ) ( 83,300 ) 416,500 - Depreciation and amortization 46,603 107,125 413,130 51,939 - 618,797 General and administrative 357,031 622,632 1,681,495 277,266 ( 20,337 ) 2,918,087 General and administrative – management fees 75,000 75,000 125,000 75,000 - 350,000 General and administrative – corporate
|
allocation ( 26,816 ) - ( 343,148 ) ( 88,627 ) 458,591 - Total Operating Expenses 2,305,360 5,027,733 10,836,443 1,371,899 681,404 20,222,839 Income (loss) from operations $ ( 276,714 ) $ ( 533,672 ) $ 667,452 $ ( 7,762 ) $ ( 681,404 ) $ ( 832,100 ) 9 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2023 (UNAUDITED) Three Months Ended June 30, 2022 Retail and Appliances Retail and Eyewear Construction Automotive Supplies Corporate Services Total Revenues $ 2,867,011 $ - $ 8,041,178 $ 1,983,054 $ - $ 12,891,243 Operating Expenses Cost of revenues 2,185,805 - 4,534,311 1,151,256 - 7,871,372 Personnel 288,276 - 1,574,461 373,177 ( 242,147 ) 1,993,767 Personnel – corporate allocation ( 103,500 ) - ( 310,500 ) ( 103,500 ) 517,500 - Depreciation and amortization 48,019 - 399,085 51,870 - 498,974 General and administrative 450,681 - 1,353,135 368,287 ( 265,742 ) 1,906,361 General and administrative – management fees 75,000 - 125,000 75,000 - 275,000 General and administrative – corporate
|
allocation ( 15,197 ) - ( 204,852 ) ( 130,684 ) 350,733 - Total Operating Expenses 2,929,084 - 7,470,640 1,785,406 360,344 12,545,474 Income (loss) from operations $ ( 62,073 ) $ - $ 570,538 $ 197,648 $ ( 360,344 ) $ 345,769 Six Months Ended June 30, 2023 Retail and Appliances Retail and Eyewear Construction Automotive Supplies Corporate Services Total Revenues $ 4,466,581 $ 7,286,773 $ 20,416,620 $ 2,624,303 $ - $ 34,794,277 Operating Expenses Cost of revenues 3,485,835 4,440,322 12,575,678 1,535,368 - 22,037,203 Personnel 537,994 2,256,740 3,781,151 646,829 ( 331,261 ) 6,891,453 Personnel – corporate allocation ( 154,700 ) - ( 464,100 ) ( 154,700 ) 773,500 - Depreciation and amortization 93,206 169,203 826,119 103,878 - 1,192,406 General and administrative 707,632 800,435 2,649,817 539,499 260,765 4,958,148 General and administrative – management fees 150,000 75,000 250,000 150,000 - 625,000 General and administrative – corporate
|
allocation ( 76,983 ) - ( 462,593 ) ( 121,442 ) 661,018 - Total Operating Expenses 4,742,984 7,741,700 19,156,072 2,699,432 1,364,022 35,704,210 Income (loss) from operations $ ( 276,403 ) $ ( 454,927 ) $ 1,260,548 $ ( 75,129 ) $ ( 1,364,022 ) $ ( 909,933 ) Six Months Ended June 30, 2022 Retail and Appliances Retail and Eyewear Construction Automotive Supplies Corporate Services Total Revenues $ 5,387,795 $ - $ 15,952,281 $ 3,625,045 $ - $ 24,965,121 Operating Expenses Cost of revenues 4,062,021 - 9,290,987 2,160,468 - 15,513,476 Personnel 529,630 - 2,744,224 715,005 ( 195,009 ) 3,793,850 Personnel – corporate allocation ( 145,000 ) - ( 435,000 ) ( 145,000 ) 725,000 - Depreciation and amortization 127,816 - 778,789 103,740 - 1,010,345 General and administrative 866,139 - 2,602,145 684,141 ( 470,214 ) 3,682,211 General and administrative – management fees 150,000 - 250,000 150,000 - 550,000 General and administrative – corporate
|
allocation ( 30,393 ) - ( 522,260 ) ( 209,132 ) 761,785 - Total Operating Expenses 5,560,213 - 14,708,885 3,459,222 821,562 24,549,882 Income (loss) from operations $ ( 172,418 ) $ - $ 1,243,396 $ 165,823 $ ( 821,562 ) $ 415,239 10 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2023 (UNAUDITED) NOTE 5—PROPERTY AND EQUIPMENT Property and equipment at June 30, 2023 and December
|
31, 2022 consisted of the followin June 30, 2023 December 31, 2022 Equipment and machinery $ 1,406,531 $ 1,403,817 Office furniture and equipment 156,960 156,960 Transportation equipment 883,077 883,077 Displays 753,293 - Leasehold improvements 181,206 166,760 Total property and equipment 3,381,067 2,610,614 L Accumulated depreciation ( 1,188,430 ) ( 725,408 ) Property and equipment, net $ 2,192,637 $ 1,885,206 Depreciation expense for the three and six months
|
ended June 30, 2023 was $ 254,105 and $ 463,022 , respectively. In comparison, depreciation expense for the three and six months ended June
|
30, 2022 was $ 134,282 and $ 280,961 , respectively. NOTE 6—INTANGIBLE ASSETS Intangible assets at June 30, 2023 and December
|
31, 2022 consisted of the followin June 30, 2023 December 31, 2022 Customer relationships $ 9,024,000 $ 9,024,000 Marketing-related 2,992,000 2,684,000 Technology-related 623,000 623,000 Total intangible assets 12,639,000 12,331,000 L accumulated amortization ( 3,075,255 ) ( 2,345,871 ) Intangible assets, net $ 9,563,745 $ 9,985,129 Amortization expense for the three and six months
|
ended June 30, 2023 and 2022 was $ 364,692 and $ 729,384 , respectively. Estimated amortization expense for intangible
|
assets for the next five years consists of the following as of June 30, 2023: Year Ending December 31, Amount 2023 - remaining $ 729,384 2024 1,458,768 2025 1,325,778 2026 1,150,640 2027 909,142 Thereafter 3,990,032 Total $ 9,563,745 11 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2023 (UNAUDITED) NOTE 7—SELECTED ACCOUNT INFORMATION Receivables Receivables at June 30, 2023 and December 31,
|
2022 consisted of the followin June 30, 2023 December 31, 2022 Trade accounts receivable $ 8,180,291 $ 4,867,749 Vendor rebates receivable 3,260 460 Credit card payments in process of settlement 113,228 102,917 Retainage 1,065,403 603,442 Total receivables 9,362,182 5,574,568 Allowance for doubtful accounts ( 637,190 ) ( 359,000 ) Total receivables, net $ 8,724,992 $ 5,215,568 Inventories Inventories at June 30, 2023 and December 31,
|
2022 consisted of the followin June 30, 2023 December 31, 2022 Appliances $ 2,010,458 $ 2,155,839 Eyewear 9,312,052 - Automotive 808,278 934,683 Construction 1,507,508 1,519,345 Total inventories 13,638,296 4,609,867 Less reserve for obsolescence ( 500,848 ) ( 425,848 ) Total inventories, net $ 13,137,448 $ 4,184,019 Inventory balances are composed of finished goods.
|
Raw materials and work in process inventory are immaterial to the condensed consolidated financial statements. Accounts payable and accrued expenses Accounts payable and accrued expenses at June
|
30, 2023 and December 31, 2022 consisted of the followin June 30, 2023 December 31, 2022 Trade accounts payable $ 9,632,669 $ 4,129,393 Credit cards payable 51,068 357,964 Accrued payroll liabilities 891,569 824,369 Accrued interest 2,152,433 1,179,875 Accrued dividends 94,536 136,052 Other accrued liabilities 1,068,319 114,116 Total accounts payable and accrued expenses $ 13,890,594 $ 6,741,769 12 1847 HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2023 (UNAUDITED) NOTE 8—LEASES Operating Leases The following was included in the condensed consolidated
|
balance sheets at June 30, 2023 and December 31, 2022 : June 30, 2023 December 31, 2022 Operating lease right-of-use assets $ 2,490,304 $ 2,854,196 Lease liabilities, current portion 734,146 713,100 Lease liabilities, long-term 1,864,221 2,237,797 Total operating lease liabilities $ 2,598,367 $ 2,950,897 Weighted-average remaining lease term (months) 41 47 Weighted average discount rate 4.34 % 4.36 % Rent expense for the three and six months ended
|
June 30, 2023 was $ 389,593 and $ 730,185 , respectively. In comparison, rent expense for the three and six months ended June 30, 2022 was
|
$ 290,283 and $ 525,721 , respectively. As of June 30, 2023, maturities of operating
|
lease liabilities were as follows: Year Ending December 31, Amount 2023 - remaining $ 414,531 2024 846,987 2025 802,413 2026 512,756 2027 228,889 Thereafter - Total 2,805,576 L imputed interest ( 207,209 ) Total operating lease liabilities $ 2,598,367 Finance Leases As of June 30, 2023, maturities of financing
|
lease liabilities were as follows: Year Ending December 31, Amount 2023 - remaining $ 117,405 2024 218,099 2025 211,332 2026 211,332 2027 210,042 Thereafter 28,833 Total 997,043 L amount representing interest ( 118,718 ) Present value of minimum lease payments $ 878,325 As of June 30, 2023, the weighted-average remaining
|
lease term for all finance leases is 4.50 years. 13 1847
|
HOLDINGS LLC NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2023 (UNAUDITED) NOTE 9—BUSINESS COMBINATIONS ICU Eyewear On December 21, 2022, the Company’s newly
|
formed wholly owned subsidiaries 1847 ICU Holdings Inc. (“1847 ICU”) and 1847 ICU Acquisition Sub Inc. entered into an agreement
|
and plan of merger with ICU Eyewear Holdings, Inc. (“ICU Eyewear”) and San Francisco Equity Partners, as the stockholder
|
representative, which was amended on February 9, 2023. On February 9, 2023, closing of the transactions
|
contemplated by the agreement and plan of merger was completed. Pursuant to the agreement and plan of merger, 1847 ICU Acquisition Sub
|
Inc. merged with and into ICU Eyewear, with ICU Eyewear surviving the merger as a wholly owned subsidiary of 1847 ICU. The merger consideration
|
paid by 1847 ICU to the stockholders of ICU Eyewear consists of (i) $ 4,000,000 in cash, minus any unpaid debt of ICU Eyewear and certain
|
transaction expenses, and (ii) 6 % subordinated promissory notes in the aggregate principal amount of $ 500,000 . ICU Eyewear specializes in the sale and distribution of reading eyewear and sunglasses,
|
blue light blocking eyewear, sun readers, and other outdoor specialty sunglasses, as well as select health and personal care items, including
|
face masks. This transaction aligned with the Company’s
|
acquisition strategy of targeting small businesses in various industries that the Company expects will face minimal threats of technological
|
or competitive obsolescence, produce positive and stable earnings and cash flow, as well as achieve attractive returns on the Company’s
|
invested capital. The Company accounted for the acquisition using
|
the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. In accordance with ASC 805, the Company
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.