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

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our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. As
required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision
of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls
and procedures, as of June 30, 2023. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial
officer determined that, because of the material weaknesses described in Item 9A “Controls and Procedures” of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2022, which we are still in the process of remediating as of June 30, 2023,
our disclosure controls and procedures were not effective. Investors are directed to Item 9A of our Annual Report on Form 10-K for the
fiscal year ended December 31, 2022 for the description of these weaknesses. 43 Changes
in Internal Control Over Financial Reporting We
regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls
and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities
as implementing new, more efficient systems, consolidating activities, and migrating processes. During
its evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2023, our management identified the
following material weakness ● We
did not have appropriate policies and procedures in place to evaluate the proper accounting
and disclosures of key documents and agreements. ● We
do not have adequate segregation of duties with our limited accounting personnel and rely
upon outsourced accounting services. ● We
do not have sufficient and skilled accounting personnel with an appropriate level of technical
accounting knowledge and experience in the application of GAAP commensurate with our financial
reporting requirements. As
disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, our management has identified the steps necessary
to address the material weaknesses, and in the second quarter of 2023, we continued to implement the following remedial procedu ● We
plan to make necessary changes by providing training to our financial team and our other
relevant personnel on the GAAP accounting guidelines applicable to financial reporting requirements. ● We
have put in place new policies and procedures at the subsidiary level to standardize accounting
procedures across all business units. We also plan to hire additional skilled accounting
personnel at the subsidiary companies to implement the policies and procedures. We
intend to complete the remediation of the material weaknesses discussed above as soon as practicable but we can give no assurance that
we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires
us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources
to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken
and intend to take may not fully address the material weaknesses that we have identified, and material weaknesses in our disclosure controls
and procedures may be identified in the future. Should we discover such conditions, we intend to remediate them as soon as practicable.
We are committed to taking appropriate steps for remediation, as needed. Other
than in connection with the implementation of the remedial measures described above, there were no changes in our internal controls over
financial reporting during the second quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting. 44 PART
II OTHER
INFORMATION ITEM
1. LEGAL PROCEEDINGS. From
time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may
harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect
on our business, financial condition or operating results. ITEM
1A. RISK FACTORS. Not
applicable. ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. We
have not sold any equity securities during the three months ended June 30, 2023 that were not previously disclosed in a current report
on Form 8-K that was filed during the quarter. We
did not repurchase any of our common shares during the three months ended June 30, 2023. ITEM
3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM
4. MINE SAFETY DISCLOSURES. Not
applicable. ITEM
5. OTHER INFORMATION. None. ITEM
6. EXHIBITS. Exhibit
No. Description
of Exhibit 3.1 Certificate
of Formation of 1847 Holdings LLC (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed on February
7, 2014) 3.2 Second
Amended and Restated Operating Agreement of 1847 Holdings LLC, dated January 19, 2018 (incorporated by reference to Exhibit 3.1 to
the Current Report on Form 8-K filed on January 22, 2018) 3.3 Amendment
No. 1 to Second Amended and Restated Operating Agreement of 1847 Holdings LLC, dated August 5, 2021 (incorporated by reference to
Exhibit 3.1 to the Current Report on Form 8-K filed on August 11, 2021) 4.1 Amended
and Restated Share Designation of Series A Senior Convertible Preferred Shares (incorporated by reference to Exhibit 4.1 to the Current
Report on Form 8-K filed on April 1, 2021) 4.2 Amendment
No. 1 to Amended and Restated Share Designation of Series A Senior Convertible Preferred Shares (incorporated by reference to Exhibit
4.2 to the Current Report on Form 8-K filed on October 5, 2021) 4.3 Share
Designation of Series B Senior Convertible Preferred Shares (incorporated by reference to Exhibit 4.1 to the Current Report on Form
8-K filed on March 2, 2022) 4.4 Common
Share Purchase Warrant issued by 1847 Holdings LLC to Mast Hill Fund, L.P. on February 22, 2023 (incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K filed on February 28, 2023) 4.5 Common
Share Purchase Warrant issued by 1847 Holdings LLC to Mast Hill Fund, L.P. on February 22, 2023 (incorporated by reference to Exhibit
4.2 to the Current Report on Form 8-K filed on February 28, 2023) 4.6 Common
Share Purchase Warrant issued by 1847 Holdings LLC to J.H. Darbie & Co., Inc. on February 22, 2023 (incorporated by reference
to Exhibit 4.6 to Amendment No. 1 to Registration Statement on Form S-3 filed on April 28, 2023) 4.7 Common
Share Purchase Warrant issued by 1847 Holdings LLC to Leonite Fund I, LP on February 9, 2023 (incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K filed on February 13, 2023) 4.8 Common
Share Purchase Warrant issued by 1847 Holdings LLC to Leonite Fund I, LP on February 9, 2023 (incorporated by reference to Exhibit
4.2 to the Current Report on Form 8-K filed on February 13, 2023) 4.9 Common
Share Purchase Warrant issued by 1847 Holdings LLC to Mast Hill Fund, L.P. on February 9, 2023 (incorporated by reference to Exhibit
4.3 to the Current Report on Form 8-K filed on February 13, 2023) 4.10 Common
Share Purchase Warrant issued by 1847 Holdings LLC to J.H. Darbie & Co., Inc. on February 9, 2023 (incorporated by reference
to Exhibit 4.10 to Amendment No. 1 to Registration Statement on Form S-3 filed on April 28, 2023) 4.11 Common
Share Purchase Warrant issued by 1847 Holdings LLC to Leonite Fund I, LP on February 3, 2023 (incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K filed on February 9, 2023) 45 4.12 Common
Share Purchase Warrant issued by 1847 Holdings LLC to Mast Hill Fund, L.P. on February 3, 2023 (incorporated by reference to Exhibit
4.2 to the Current Report on Form 8-K filed on February 9, 2023) 4.13 Common
Share Purchase Warrant issued by 1847 Holdings LLC to J.H. Darbie & Co., Inc. on February 3, 2023 (incorporated by reference
to Exhibit 4.13 to Amendment No. 1 to Registration Statement on Form S-3 filed on April 28, 2023) 4.14 Warrant
Agent Agreement, dated January 3, 2023, between 1847 Holdings LLC and VStock Transfer, LLC and form of Warrant (incorporated by reference
to Exhibit 4.1 to the Current Report on Form 8-K filed on January 9, 2023) 4.15 Common
Share Purchase Warrant issued to Craft Capital Management LLC on August 5, 2022 (incorporated by reference to Exhibit 4.1 to
the Current Report on Form 8-K filed on August 8, 2022) 4.16 Common
Share Purchase Warrant issued to R.F. Lafferty & Co. Inc. on August 5, 2022 (incorporated by reference to Exhibit 4.2 to
the Current Report on Form 8-K filed on August 8, 2022) 4.17 Warrant
for Common Shares issued by 1847 Holdings LLC to J.H. Darbie & Co., Inc. on July 8, 2022 (incorporated by reference to Exhibit
4.18 to the Registration Statement on Form S-3 filed on February 1, 2023) 4.18 Warrant
for Common Shares issued by 1847 Holdings LLC to Leonite Capital LLC on October 8, 2021 (incorporated by reference to Exhibit 4.2
to the Current Report on Form 8-K filed on October 13, 2021) 31.1* Certifications

our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. As

required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision

of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls

and procedures, as of June 30, 2023. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial

officer determined that, because of the material weaknesses described in Item 9A “Controls and Procedures” of our Annual

Report on Form 10-K for the fiscal year ended December 31, 2022, which we are still in the process of remediating as of June 30, 2023,

our disclosure controls and procedures were not effective. Investors are directed to Item 9A of our Annual Report on Form 10-K for the

fiscal year ended December 31, 2022 for the description of these weaknesses. 43 Changes

in Internal Control Over Financial Reporting We

regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls

and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities

as implementing new, more efficient systems, consolidating activities, and migrating processes. During

its evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2023, our management identified the

following material weakness ● We

did not have appropriate policies and procedures in place to evaluate the proper accounting

and disclosures of key documents and agreements. ● We

do not have adequate segregation of duties with our limited accounting personnel and rely

upon outsourced accounting services. ● We

do not have sufficient and skilled accounting personnel with an appropriate level of technical

accounting knowledge and experience in the application of GAAP commensurate with our financial

reporting requirements. As

disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, our management has identified the steps necessary

to address the material weaknesses, and in the second quarter of 2023, we continued to implement the following remedial procedu ● We

plan to make necessary changes by providing training to our financial team and our other

relevant personnel on the GAAP accounting guidelines applicable to financial reporting requirements. ● We

have put in place new policies and procedures at the subsidiary level to standardize accounting

procedures across all business units. We also plan to hire additional skilled accounting

personnel at the subsidiary companies to implement the policies and procedures. We

intend to complete the remediation of the material weaknesses discussed above as soon as practicable but we can give no assurance that

we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires

us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources

to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken

and intend to take may not fully address the material weaknesses that we have identified, and material weaknesses in our disclosure controls

and procedures may be identified in the future. Should we discover such conditions, we intend to remediate them as soon as practicable.

We are committed to taking appropriate steps for remediation, as needed. Other

than in connection with the implementation of the remedial measures described above, there were no changes in our internal controls over

financial reporting during the second quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our

internal control over financial reporting. 44 PART

II OTHER

INFORMATION ITEM

1. LEGAL PROCEEDINGS. From

time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However,

litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may

harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect

on our business, financial condition or operating results. ITEM

1A. RISK FACTORS. Not

applicable. ITEM

2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. We

have not sold any equity securities during the three months ended June 30, 2023 that were not previously disclosed in a current report

on Form 8-K that was filed during the quarter. We

did not repurchase any of our common shares during the three months ended June 30, 2023. ITEM

3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM

4. MINE SAFETY DISCLOSURES. Not

applicable. ITEM

5. OTHER INFORMATION. None. ITEM

6. EXHIBITS. Exhibit

No. Description

of Exhibit 3.1 Certificate

of Formation of 1847 Holdings LLC (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 filed on February

7, 2014) 3.2 Second

Amended and Restated Operating Agreement of 1847 Holdings LLC, dated January 19, 2018 (incorporated by reference to Exhibit 3.1 to

the Current Report on Form 8-K filed on January 22, 2018) 3.3 Amendment

No. 1 to Second Amended and Restated Operating Agreement of 1847 Holdings LLC, dated August 5, 2021 (incorporated by reference to

Exhibit 3.1 to the Current Report on Form 8-K filed on August 11, 2021) 4.1 Amended

and Restated Share Designation of Series A Senior Convertible Preferred Shares (incorporated by reference to Exhibit 4.1 to the Current

Report on Form 8-K filed on April 1, 2021) 4.2 Amendment

No. 1 to Amended and Restated Share Designation of Series A Senior Convertible Preferred Shares (incorporated by reference to Exhibit

4.2 to the Current Report on Form 8-K filed on October 5, 2021) 4.3 Share

Designation of Series B Senior Convertible Preferred Shares (incorporated by reference to Exhibit 4.1 to the Current Report on Form

8-K filed on March 2, 2022) 4.4 Common

Share Purchase Warrant issued by 1847 Holdings LLC to Mast Hill Fund, L.P. on February 22, 2023 (incorporated by reference to Exhibit

4.1 to the Current Report on Form 8-K filed on February 28, 2023) 4.5 Common

Share Purchase Warrant issued by 1847 Holdings LLC to Mast Hill Fund, L.P. on February 22, 2023 (incorporated by reference to Exhibit

4.2 to the Current Report on Form 8-K filed on February 28, 2023) 4.6 Common

Share Purchase Warrant issued by 1847 Holdings LLC to J.H. Darbie & Co., Inc. on February 22, 2023 (incorporated by reference

to Exhibit 4.6 to Amendment No. 1 to Registration Statement on Form S-3 filed on April 28, 2023) 4.7 Common

Share Purchase Warrant issued by 1847 Holdings LLC to Leonite Fund I, LP on February 9, 2023 (incorporated by reference to Exhibit

4.1 to the Current Report on Form 8-K filed on February 13, 2023) 4.8 Common

Share Purchase Warrant issued by 1847 Holdings LLC to Leonite Fund I, LP on February 9, 2023 (incorporated by reference to Exhibit

4.2 to the Current Report on Form 8-K filed on February 13, 2023) 4.9 Common

Share Purchase Warrant issued by 1847 Holdings LLC to Mast Hill Fund, L.P. on February 9, 2023 (incorporated by reference to Exhibit

4.3 to the Current Report on Form 8-K filed on February 13, 2023) 4.10 Common

Share Purchase Warrant issued by 1847 Holdings LLC to J.H. Darbie & Co., Inc. on February 9, 2023 (incorporated by reference

to Exhibit 4.10 to Amendment No. 1 to Registration Statement on Form S-3 filed on April 28, 2023) 4.11 Common

Share Purchase Warrant issued by 1847 Holdings LLC to Leonite Fund I, LP on February 3, 2023 (incorporated by reference to Exhibit

4.1 to the Current Report on Form 8-K filed on February 9, 2023) 45 4.12 Common

Share Purchase Warrant issued by 1847 Holdings LLC to Mast Hill Fund, L.P. on February 3, 2023 (incorporated by reference to Exhibit

4.2 to the Current Report on Form 8-K filed on February 9, 2023) 4.13 Common

Share Purchase Warrant issued by 1847 Holdings LLC to J.H. Darbie & Co., Inc. on February 3, 2023 (incorporated by reference

to Exhibit 4.13 to Amendment No. 1 to Registration Statement on Form S-3 filed on April 28, 2023) 4.14 Warrant

Agent Agreement, dated January 3, 2023, between 1847 Holdings LLC and VStock Transfer, LLC and form of Warrant (incorporated by reference

to Exhibit 4.1 to the Current Report on Form 8-K filed on January 9, 2023) 4.15 Common

Share Purchase Warrant issued to Craft Capital Management LLC on August 5, 2022 (incorporated by reference to Exhibit 4.1 to

the Current Report on Form 8-K filed on August 8, 2022) 4.16 Common

Share Purchase Warrant issued to R.F. Lafferty & Co. Inc. on August 5, 2022 (incorporated by reference to Exhibit 4.2 to

the Current Report on Form 8-K filed on August 8, 2022) 4.17 Warrant

for Common Shares issued by 1847 Holdings LLC to J.H. Darbie & Co., Inc. on July 8, 2022 (incorporated by reference to Exhibit

4.18 to the Registration Statement on Form S-3 filed on February 1, 2023) 4.18 Warrant

for Common Shares issued by 1847 Holdings LLC to Leonite Capital LLC on October 8, 2021 (incorporated by reference to Exhibit 4.2

to the Current Report on Form 8-K filed on October 13, 2021) 31.1* Certifications