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

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management services agreement with our manager on August 21, 2020 (which was amended and restated on October 8, 2021), 1847 Wolo entered
into an offsetting management services agreement with our manager on March 30, 2021 and 1847 ICU entered into an offsetting management
services agreement with our manager on February 9, 2023. Pursuant to the offsetting management services agreements, each of 1847 Asien,
1847 Wolo and 1847 ICU appointed our manager to provide certain services to it for a quarterly management fee equal to the greater of
$75,000 or 2% of adjusted net assets (as defined in the management services agreement) and 1847 Cabinet appointed our manager to provide
certain services to it for a quarterly management fee equal to the greater of $75,000 or 2% of adjusted net assets (as defined in the
management services agreement), which was increased to $125,000 or 2% of adjusted net assets on October 8, 2021; provided, however, in
each case that if the aggregate amount of management fees paid or to be paid by such entities, together with all other management fees
paid or to be paid to our manager under other offsetting management services agreements, exceeds, or is expected to exceed, 9.5% of our
gross income in any fiscal year or the parent management fee in any fiscal quarter, then the management fee to be paid by such entities
shall be reduced, on a pro rata basis determined by reference to the other management fees to be paid to our manager under other offsetting
management services agreements. Each
of these entities shall also reimburse our manager for all of their costs and expenses which are specifically approved by their board
of directors, including all out-of-pocket costs and expenses, which are actually incurred by our manager or its affiliates on behalf
of these entities in connection with performing services under the offsetting management services agreements. 1847
Asien expensed management fees of $75,000 and $150,000 for the three and six months ended June 30, 2023 and 2022, respectively. 1847
Cabinet expensed management fees of $125,000 and $250,000 for the three and six months ended June 30, 2023 and 2022, respectively. 1847
Wolo expensed management fees of $75,000 and $150,000 for the three and six months ended June 30, 2023 and 2022, respectively. 1847
ICU expensed management fees of $75,000 for the three and six months ended June 30, 2023. On
a consolidated basis, our company expensed total management fees of $350,000 and $625,000 for the three and six months ended June 30,
2023, respectively, compared to $275,000 and $550,000 for the three and six months ended June 30, 2022, respectively. Segments The
Financial Accounting Standards Board, or FASB, Accounting Standard Codification, or ASC, Topic 280, Segment Reporting , requires
that an enterprise report selected information about reportable segments in its financial reports issued to its shareholders. As of June
30, 2023, we have four reportable segments – the retail and appliances segment, which is operated by Asien’s, the retail
and eyewear segment, which is operated by ICU Eyewear, the construction segment, which is operated by Kyle’s, High Mountain and
Innovative Cabinets, and the automotive supplies segment, which is operated by Wolo. 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. We
provide general corporate services to our 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. 31 Results
of Operations Comparison
of the Three Months Ended June 30, 2023 and 2022 The
following table sets forth key components of our results of operations during the three months ended June 30, 2023 and 2022, both in
dollars and as a percentage of our revenues. Three
Months Ended June 30, 2023 2022 Amount %
of Revenues Amount %
of Revenues Revenues $ 19,390,739 100.0 % $ 12,891,243 100.0 % Operating expenses Cost of revenues 12,470,695 64.3 % 7,871,372 61.1 % Personnel 3,865,260 19.9 % 1,993,767 15.5 % Depreciation and amortization 618,797 3.2 % 498,974 3.9 % General and administrative 3,268,087 16.9 % 2,181,361 16.9 % Total operating expenses 20,222,839 104.3 % 12,545,474 97.3 % Income (loss) from operations (832,100 ) (4.3 )% 345,769 2.7 % Other income (expenses) Other income 18,800 0.1 % 357 0.0 % Interest expense (2,225,415 ) (11.5 )% (932,123 ) (7.2 )% Loss on sale of property
and equipment - - (671 ) (0.0 )% Total other expense (2,206,615 ) (11.4 )% (932,437 ) (7.2 )% Net loss before income taxes (3,038,715 ) (15.7 )% (586,668 ) (4.6 )% Income tax benefit (expense) (931,321 ) (4.8 )% 439,000 3.4 % Net loss $ (3,970,036 ) (20.5 )% $ (147,668 ) (1.1 )% Revenues .
Our total revenues were $19,390,739 for the three months ended June 30, 2023, as compared to $12,891,243 for the three months ended June
30, 2022. The
retail and appliances segment generates revenue through sales of home furnishings, including appliances and related products. Revenues
from the retail and appliances segment decreased by $838,365, or 29.2%, to $2,028,646 for the three months ended June 30, 2023, from
$2,867,011 for the three months ended June 30, 2022. The decline in revenues was primarily attributed to ongoing supply chain delays
and cost increases with appliance manufacturers, increased time it takes to receive products, and decreased customer demand. The
retail and eyewear segment generates revenue through sales of eyewear products, including non-prescription reading glasses, sunglasses,
blue light blocking eyewear, sun readers and outdoor specialty sunglasses. Revenues for the retail and eyewear segment were $4,494,061
for the three months ended June 30, 2023. The
construction segment generates revenue through the sale 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, as well
as kitchen countertops. Revenues from the construction segment increased by $3,462,717, or 43.1%, to $11,503,895 for the three months
ended June 30, 2023, from $8,041,178 for the three months ended June 30, 2022. The increase in revenues was primarily attributed to growth
in the average customer contract value within the construction segment. The
automotive supplies segment generates revenue through the design and sale of horn and safety products (electric, air, truck, marine,
motorcycle and industrial equipment), including vehicle emergency and safety warning lights for cars, trucks, industrial equipment and
emergency vehicles. Revenues from the automotive supplies segment decreased by $618,917, or 31.2%, to $1,364,137 for the three months
ended June 30, 2023, from $1,983,054 for the three months ended June 30, 2022. The decline in revenues was primarily attributed to ongoing
supply chain delays with manufacturers, increased time it takes to receive products, and decreased customer demand. 32 Cost
of revenues . Our total cost of revenues was $12,470,695 for the three months ended June 30, 2023, as compared to $7,871,372 for
the three months ended June 30, 2022. Cost
of revenues for the retail and appliances segment consists of the cost of purchased merchandise plus the cost of delivering merchandise
and where applicable installation, net of promotional rebates and other incentives received from vendors. Cost of revenues for the retail
and appliances segment decreased by $513,753, or 23.5%, to $1,672,052 for the three months ended June 30, 2023, from $2,185,805 for the
three months ended June 30, 2022. Such decrease was primarily attributed to the corresponding decrease in revenues, offset by increased
product costs from the retail and appliance segment. As a percentage of retail and appliances revenues, cost of revenues for the retail
and appliances segment was 82.4% and 76.2% for the three months ended June 30, 2023 and 2022, respectively. Cost
of revenues for the retail and eyewear segment consists of the costs of purchased finished goods plus freight and tariff costs. Cost
of revenues for the retail and eyewear segment was $2,772,880, or 61.7% of retail and eyewear revenues, for the three months ended June
30, 2023. Cost
of revenues for the construction segment consists of finished goods, lumber, hardware and materials and plus direct labor and related
costs, net of any material discounts from vendors. Cost of revenues for the construction segment increased by $2,666,340, or 58.8%, to
$7,200,651 for the three months ended June 30, 2023, from $4,534,311 for the three months ended June 30, 2022. Such increase was primarily
attributed to the corresponding increase in revenues and cost of materials from the construction segment. As a percentage of construction
revenues, cost of revenues for the construction segment was 62.6% and 56.4% for the three months ended June 30, 2023 and 2022, respectively. Cost
of revenues for the automotive supplies segment consists of the costs of purchased finished goods plus freight and tariff costs. Cost
of revenues for the automotive supplies segment decreased by $326,144, or 28.3%, to $825,112 for the three months ended June 30, 2023,
from $1,151,256 for the three months ended June 30, 2022. Such decrease was primarily attributed to the corresponding decrease in revenues,
offset by increased product costs from the automotive supplies segment. As a percentage of automotive supplies revenues, cost of revenues
for the automotive supplies segment was 60.5% and 58.1% for the three months ended June 30, 2023 and 2022, respectively. Personnel
costs . Personnel costs include employee salaries and bonuses plus related payroll taxes. It also includes health insurance premiums,
401(k) contributions, and training costs. Our total personnel costs were $3,865,260 for the three months ended June 30, 2023, as compared
to $1,993,767 for the three months ended June 30, 2022. Personnel
costs for the retail and appliances segment decreased by $3,286, or 1.8%, to $181,490 for the three months ended June 30, 2023, from
$184,776 for the three months ended June 30, 2022. Such decrease was primarily attributed to decreased employee headcount as a result
of decreased revenues, offset by annual wage increases in the retail and appliances segment. As a percentage of retail and appliances
revenue, personnel costs for the retail and appliances segment were 8.9% and 6.4% for the three months ended June 30, 2023 and 2022,
respectively. Personnel
costs for the retail and eyewear segment was $1,450,096, or 32.3% of retail and eyewear revenues, for the three months ended June 30,
2023. Personnel
costs for the construction segment increased by $495,354, or 39.2%, to $1,759,315 for the three months ended June 30, 2023, from $1,263,961
for the three months ended June 30, 2022. Such increase was primarily attributed to increased employee headcount as a result of increased
revenues. As a percentage of construction revenue, personnel costs for the construction segment were 15.3% and 15.7% for the three months
ended June 30, 2023 and 2022, respectively. Personnel
costs for the automotive supplies segment decreased by $38,468, or 14.3%, to $231,209 for the three months ended June 30, 2023, from

management services agreement with our manager on August 21, 2020 (which was amended and restated on October 8, 2021), 1847 Wolo entered

into an offsetting management services agreement with our manager on March 30, 2021 and 1847 ICU entered into an offsetting management

services agreement with our manager on February 9, 2023. Pursuant to the offsetting management services agreements, each of 1847 Asien,

1847 Wolo and 1847 ICU appointed our manager to provide certain services to it for a quarterly management fee equal to the greater of

$75,000 or 2% of adjusted net assets (as defined in the management services agreement) and 1847 Cabinet appointed our manager to provide

certain services to it for a quarterly management fee equal to the greater of $75,000 or 2% of adjusted net assets (as defined in the

management services agreement), which was increased to $125,000 or 2% of adjusted net assets on October 8, 2021; provided, however, in

each case that if the aggregate amount of management fees paid or to be paid by such entities, together with all other management fees

paid or to be paid to our manager under other offsetting management services agreements, exceeds, or is expected to exceed, 9.5% of our

gross income in any fiscal year or the parent management fee in any fiscal quarter, then the management fee to be paid by such entities

shall be reduced, on a pro rata basis determined by reference to the other management fees to be paid to our manager under other offsetting

management services agreements. Each

of these entities shall also reimburse our manager for all of their costs and expenses which are specifically approved by their board

of directors, including all out-of-pocket costs and expenses, which are actually incurred by our manager or its affiliates on behalf

of these entities in connection with performing services under the offsetting management services agreements. 1847

Asien expensed management fees of $75,000 and $150,000 for the three and six months ended June 30, 2023 and 2022, respectively. 1847

Cabinet expensed management fees of $125,000 and $250,000 for the three and six months ended June 30, 2023 and 2022, respectively. 1847

Wolo expensed management fees of $75,000 and $150,000 for the three and six months ended June 30, 2023 and 2022, respectively. 1847

ICU expensed management fees of $75,000 for the three and six months ended June 30, 2023. On

a consolidated basis, our company expensed total management fees of $350,000 and $625,000 for the three and six months ended June 30,

2023, respectively, compared to $275,000 and $550,000 for the three and six months ended June 30, 2022, respectively. Segments The

Financial Accounting Standards Board, or FASB, Accounting Standard Codification, or ASC, Topic 280, Segment Reporting , requires

that an enterprise report selected information about reportable segments in its financial reports issued to its shareholders. As of June

30, 2023, we have four reportable segments – the retail and appliances segment, which is operated by Asien’s, the retail

and eyewear segment, which is operated by ICU Eyewear, the construction segment, which is operated by Kyle’s, High Mountain and

Innovative Cabinets, and the automotive supplies segment, which is operated by Wolo. 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. We

provide general corporate services to our 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. 31 Results

of Operations Comparison

of the Three Months Ended June 30, 2023 and 2022 The

following table sets forth key components of our results of operations during the three months ended June 30, 2023 and 2022, both in

dollars and as a percentage of our revenues. Three

Months Ended June 30, 2023 2022 Amount %

of Revenues Amount %

of Revenues Revenues $ 19,390,739 100.0 % $ 12,891,243 100.0 % Operating expenses Cost of revenues 12,470,695 64.3 % 7,871,372 61.1 % Personnel 3,865,260 19.9 % 1,993,767 15.5 % Depreciation and amortization 618,797 3.2 % 498,974 3.9 % General and administrative 3,268,087 16.9 % 2,181,361 16.9 % Total operating expenses 20,222,839 104.3 % 12,545,474 97.3 % Income (loss) from operations (832,100 ) (4.3 )% 345,769 2.7 % Other income (expenses) Other income 18,800 0.1 % 357 0.0 % Interest expense (2,225,415 ) (11.5 )% (932,123 ) (7.2 )% Loss on sale of property

and equipment - - (671 ) (0.0 )% Total other expense (2,206,615 ) (11.4 )% (932,437 ) (7.2 )% Net loss before income taxes (3,038,715 ) (15.7 )% (586,668 ) (4.6 )% Income tax benefit (expense) (931,321 ) (4.8 )% 439,000 3.4 % Net loss $ (3,970,036 ) (20.5 )% $ (147,668 ) (1.1 )% Revenues .

Our total revenues were $19,390,739 for the three months ended June 30, 2023, as compared to $12,891,243 for the three months ended June

30, 2022. The

retail and appliances segment generates revenue through sales of home furnishings, including appliances and related products. Revenues

from the retail and appliances segment decreased by $838,365, or 29.2%, to $2,028,646 for the three months ended June 30, 2023, from

$2,867,011 for the three months ended June 30, 2022. The decline in revenues was primarily attributed to ongoing supply chain delays

and cost increases with appliance manufacturers, increased time it takes to receive products, and decreased customer demand. The

retail and eyewear segment generates revenue through sales of eyewear products, including non-prescription reading glasses, sunglasses,

blue light blocking eyewear, sun readers and outdoor specialty sunglasses. Revenues for the retail and eyewear segment were $4,494,061

for the three months ended June 30, 2023. The

construction segment generates revenue through the sale 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, as well

as kitchen countertops. Revenues from the construction segment increased by $3,462,717, or 43.1%, to $11,503,895 for the three months

ended June 30, 2023, from $8,041,178 for the three months ended June 30, 2022. The increase in revenues was primarily attributed to growth

in the average customer contract value within the construction segment. The

automotive supplies segment generates revenue through the design and sale of horn and safety products (electric, air, truck, marine,

motorcycle and industrial equipment), including vehicle emergency and safety warning lights for cars, trucks, industrial equipment and

emergency vehicles. Revenues from the automotive supplies segment decreased by $618,917, or 31.2%, to $1,364,137 for the three months

ended June 30, 2023, from $1,983,054 for the three months ended June 30, 2022. The decline in revenues was primarily attributed to ongoing

supply chain delays with manufacturers, increased time it takes to receive products, and decreased customer demand. 32 Cost

of revenues . Our total cost of revenues was $12,470,695 for the three months ended June 30, 2023, as compared to $7,871,372 for

the three months ended June 30, 2022. Cost

of revenues for the retail and appliances segment consists of the cost of purchased merchandise plus the cost of delivering merchandise

and where applicable installation, net of promotional rebates and other incentives received from vendors. Cost of revenues for the retail

and appliances segment decreased by $513,753, or 23.5%, to $1,672,052 for the three months ended June 30, 2023, from $2,185,805 for the

three months ended June 30, 2022. Such decrease was primarily attributed to the corresponding decrease in revenues, offset by increased

product costs from the retail and appliance segment. As a percentage of retail and appliances revenues, cost of revenues for the retail

and appliances segment was 82.4% and 76.2% for the three months ended June 30, 2023 and 2022, respectively. Cost

of revenues for the retail and eyewear segment consists of the costs of purchased finished goods plus freight and tariff costs. Cost

of revenues for the retail and eyewear segment was $2,772,880, or 61.7% of retail and eyewear revenues, for the three months ended June

30, 2023. Cost

of revenues for the construction segment consists of finished goods, lumber, hardware and materials and plus direct labor and related

costs, net of any material discounts from vendors. Cost of revenues for the construction segment increased by $2,666,340, or 58.8%, to

$7,200,651 for the three months ended June 30, 2023, from $4,534,311 for the three months ended June 30, 2022. Such increase was primarily

attributed to the corresponding increase in revenues and cost of materials from the construction segment. As a percentage of construction

revenues, cost of revenues for the construction segment was 62.6% and 56.4% for the three months ended June 30, 2023 and 2022, respectively. Cost

of revenues for the automotive supplies segment consists of the costs of purchased finished goods plus freight and tariff costs. Cost

of revenues for the automotive supplies segment decreased by $326,144, or 28.3%, to $825,112 for the three months ended June 30, 2023,

from $1,151,256 for the three months ended June 30, 2022. Such decrease was primarily attributed to the corresponding decrease in revenues,

offset by increased product costs from the automotive supplies segment. As a percentage of automotive supplies revenues, cost of revenues

for the automotive supplies segment was 60.5% and 58.1% for the three months ended June 30, 2023 and 2022, respectively. Personnel

costs . Personnel costs include employee salaries and bonuses plus related payroll taxes. It also includes health insurance premiums,

401(k) contributions, and training costs. Our total personnel costs were $3,865,260 for the three months ended June 30, 2023, as compared

to $1,993,767 for the three months ended June 30, 2022. Personnel

costs for the retail and appliances segment decreased by $3,286, or 1.8%, to $181,490 for the three months ended June 30, 2023, from

$184,776 for the three months ended June 30, 2022. Such decrease was primarily attributed to decreased employee headcount as a result

of decreased revenues, offset by annual wage increases in the retail and appliances segment. As a percentage of retail and appliances

revenue, personnel costs for the retail and appliances segment were 8.9% and 6.4% for the three months ended June 30, 2023 and 2022,

respectively. Personnel

costs for the retail and eyewear segment was $1,450,096, or 32.3% of retail and eyewear revenues, for the three months ended June 30,

2023. Personnel

costs for the construction segment increased by $495,354, or 39.2%, to $1,759,315 for the three months ended June 30, 2023, from $1,263,961

for the three months ended June 30, 2022. Such increase was primarily attributed to increased employee headcount as a result of increased

revenues. As a percentage of construction revenue, personnel costs for the construction segment were 15.3% and 15.7% for the three months

ended June 30, 2023 and 2022, respectively. Personnel

costs for the automotive supplies segment decreased by $38,468, or 14.3%, to $231,209 for the three months ended June 30, 2023, from