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

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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. 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. 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 On
October 20, 2022, 1847 Asien and Joerg Christian Wilhelmsen and Susan Kay Wilhelmsen, as trustees of the Wilhelmsen Family Trust, U/D/T
Dated May 1, 1992 (the “Asien’s Seller”) entered into a letter agreement to amend the terms of that certain 6% amortizing
promissory note in the aggregate principal amount of $1,037,500 described below. Pursuant to the letter agreement, the parties agreed
to extend the maturity date of this note to February 28, 2023 and revised the repayment terms so that the outstanding principal amount
and all accrued interest thereon shall be payable monthly, beginning on November 30, 2022, in accordance with the payment schedule set
forth on Exhibit A to the letter agreement. As additional consideration for entering into the letter agreement, 1847 Asien also agreed
to pay the Asien’s Seller $87,707 as an amendment fee. 26 Impact
of Coronavirus Pandemic In
December 2019, a novel coronavirus disease, or COVID-19, was initially reported and on March 11, 2020, the World Health Organization
characterized COVID-19 as a pandemic. COVID-19 has had a widespread and detrimental effect on the global economy as a result of the continued
increase in the number of cases and affected countries and actions by public health and governmental authorities, businesses, other organizations,
and individuals to address the outbreak, including travel bans and restrictions, quarantines, shelter in place, stay at home or total
lock-down orders and business limitations and shutdowns. Despite
recent developments of vaccines, the duration and severity of COVID-19, mutations and possible additional mutations and the degree of
their impact on our business is uncertain and difficult to predict. The continued spread of the outbreak could result in one or more
of the following conditions that could have a material adverse impact on our business operations and financial conditi delays or difficulty
sourcing certain products and raw materials; increased costs for such products and raw materials; and loss of productivity due to employee
absences. Notably, approximately 90% of Wolo’s vendor base is located in China. The pandemic issues impacting ports in the U.S.
due to lack of personnel has had a ripple effect on Chinese suppliers. Containers are slow to be emptied in the U.S., causing a backlog
of ships waiting to get into ports and limiting containers and ships returning to China. The lack of containers and available space on
ships has escalated shipping costs by over 300% from 2020. Our inability to respond to and manage the potential impact of such events
effectively could have a material adverse effect on our business, financial condition, and results of operations. Our
efforts to help mitigate the negative impact of the outbreak on our business may not be effective, and we may be affected by a protracted
economic downturn. Furthermore, while many governmental authorities around the world have and continue to enact legislation to address
the impact of COVID-19, including measures intended to mitigate some of the more severe anticipated economic effects of the virus, we
may not benefit from such legislation, or such legislation may prove to be ineffective in addressing COVID-19’s impact on our and
our customer’s businesses and operations. Even after the COVID-19 outbreak has subsided, we may continue to experience impacts
to our business as a result of COVID-19’s global economic impact and any recession that has occurred or may occur in the future.
Further, as the COVID-19 situation is unprecedented and continuously evolving, COVID-19 may also affect our operating and financial results
in a manner that is not presently known to us or in a manner that we currently do not consider that may present significant risks to
our operations. The
extent to which the COVID-19 pandemic may impact our results will depend on future developments, which are highly uncertain
and cannot be predicted as of the date of this report. Nevertheless, the pandemic and the current financial, economic and capital markets
environment, and future developments in the global supply chain and other areas present material uncertainty and risk with respect to
our performance, financial condition, results of operations and cash flows. Management
Fees On
April 15, 2013, the Company and the Manager entered into a management services agreement, pursuant to which the Company is required to
pay the Manager a quarterly management fee equal to 0.5% of its adjusted net assets for services performed (the “Parent Management
Fee”). The amount of the Parent Management Fee with respect to any fiscal quarter is (i) reduced by the aggregate amount of any
management fees received by the Manager under any offsetting management services agreements with respect to such fiscal quarter, (ii)
reduced (or increased) by the amount of any over-paid (or under-paid) Parent Management Fees received by (or owed to) the Manager as
of the end of such fiscal quarter, and (iii) increased by the amount of any outstanding accrued and unpaid Parent Management Fees. The
Company expensed $0 in Parent Management Fees for the nine months ended September 30, 2022 and 2021. 1847
Asien entered into an offsetting management services agreement with the Manager on May 28, 2020, 1847 Cabinet entered into an offsetting
management services agreement with the Manager on August 21, 2020 (which was amended and restated on October 8, 2021) and 1847 Wolo entered
into an offsetting management services agreement with the Manager on March 30, 2021. Pursuant to the offsetting management services agreements,
1847 Neese appointed the Manager to provide certain services to it for a quarterly management fee equal to $62,500, 1847 Asien appointed
the 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), 1847 Cabinet appointed the 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, and 1847 Wolo appointed the 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); 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 the 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 the Manager under other offsetting management services agreements. 27 Each
of these subsidiaries shall also reimburse the 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 the Manager or its affiliates on behalf
of these subsidiaries in connection with performing services under the offsetting management services agreements. 1847
Asien expensed management fees of $75,000 and $225,000 for the three and nine months ended September 30, 2022, respectively, and $75,000
and $225,000 for the three and nine months ended September 30, 2021, respectively. 1847
Cabinet expensed management fees of $125,000 and $375,000 for the three and nine months ended September 30, 2022, respectively, and $75,000
and $225,000 for the three and nine months ended September 30, 2021, respectively. 1847
Wolo expensed management fees of $75,000 and $225,000 for the three and nine months ended September 30, 2022, respectively, and $75,000
and $150,000 for the three and nine months ended September 30, 2021, respectively. On
a consolidated basis, the Company expensed total management fees of $275,000 and $825,000 for the three and nine months ended September
30, 2022, respectively, and $225,000 and $600,000 for the three and nine months ended September 30, 2021, respectively. Segments The
Financial Accounting Standards Board Accounting Standard Codification Topic 280, Segment Reporting , requires that an enterprise
report selected information about reportable segments in its financial reports issued to its shareholders. As of September 30, 2022,
we have three reportable segments - the retail and appliances segment, which is operated by Asien’s, 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 is comprised of the business of Asien’s, which is based in Santa Rosa, California, and provides a wide variety
of appliance services including sales, delivery, installation, service and repair, extended warranties, and financing. The construction
segment is comprised of the businesses of Kyle’s, High Mountain and Innovative Cabinets. Kyle’s, which is based in Boise,
Idaho, provides a wide variety of construction services including custom design and build of kitchen and bathroom cabinetry, delivery,
installation, service and repair, extended warranties, and financing. High Mountain, which is based in Reno, Nevada, 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, as well as window installation. Innovative Cabinets,

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. 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. 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 On

October 20, 2022, 1847 Asien and Joerg Christian Wilhelmsen and Susan Kay Wilhelmsen, as trustees of the Wilhelmsen Family Trust, U/D/T

Dated May 1, 1992 (the “Asien’s Seller”) entered into a letter agreement to amend the terms of that certain 6% amortizing

promissory note in the aggregate principal amount of $1,037,500 described below. Pursuant to the letter agreement, the parties agreed

to extend the maturity date of this note to February 28, 2023 and revised the repayment terms so that the outstanding principal amount

and all accrued interest thereon shall be payable monthly, beginning on November 30, 2022, in accordance with the payment schedule set

forth on Exhibit A to the letter agreement. As additional consideration for entering into the letter agreement, 1847 Asien also agreed

to pay the Asien’s Seller $87,707 as an amendment fee. 26 Impact

of Coronavirus Pandemic In

December 2019, a novel coronavirus disease, or COVID-19, was initially reported and on March 11, 2020, the World Health Organization

characterized COVID-19 as a pandemic. COVID-19 has had a widespread and detrimental effect on the global economy as a result of the continued

increase in the number of cases and affected countries and actions by public health and governmental authorities, businesses, other organizations,

and individuals to address the outbreak, including travel bans and restrictions, quarantines, shelter in place, stay at home or total

lock-down orders and business limitations and shutdowns. Despite

recent developments of vaccines, the duration and severity of COVID-19, mutations and possible additional mutations and the degree of

their impact on our business is uncertain and difficult to predict. The continued spread of the outbreak could result in one or more

of the following conditions that could have a material adverse impact on our business operations and financial conditi delays or difficulty

sourcing certain products and raw materials; increased costs for such products and raw materials; and loss of productivity due to employee

absences. Notably, approximately 90% of Wolo’s vendor base is located in China. The pandemic issues impacting ports in the U.S.

due to lack of personnel has had a ripple effect on Chinese suppliers. Containers are slow to be emptied in the U.S., causing a backlog

of ships waiting to get into ports and limiting containers and ships returning to China. The lack of containers and available space on

ships has escalated shipping costs by over 300% from 2020. Our inability to respond to and manage the potential impact of such events

effectively could have a material adverse effect on our business, financial condition, and results of operations. Our

efforts to help mitigate the negative impact of the outbreak on our business may not be effective, and we may be affected by a protracted

economic downturn. Furthermore, while many governmental authorities around the world have and continue to enact legislation to address

the impact of COVID-19, including measures intended to mitigate some of the more severe anticipated economic effects of the virus, we

may not benefit from such legislation, or such legislation may prove to be ineffective in addressing COVID-19’s impact on our and

our customer’s businesses and operations. Even after the COVID-19 outbreak has subsided, we may continue to experience impacts

to our business as a result of COVID-19’s global economic impact and any recession that has occurred or may occur in the future.

Further, as the COVID-19 situation is unprecedented and continuously evolving, COVID-19 may also affect our operating and financial results

in a manner that is not presently known to us or in a manner that we currently do not consider that may present significant risks to

our operations. The

extent to which the COVID-19 pandemic may impact our results will depend on future developments, which are highly uncertain

and cannot be predicted as of the date of this report. Nevertheless, the pandemic and the current financial, economic and capital markets

environment, and future developments in the global supply chain and other areas present material uncertainty and risk with respect to

our performance, financial condition, results of operations and cash flows. Management

Fees On

April 15, 2013, the Company and the Manager entered into a management services agreement, pursuant to which the Company is required to

pay the Manager a quarterly management fee equal to 0.5% of its adjusted net assets for services performed (the “Parent Management

Fee”). The amount of the Parent Management Fee with respect to any fiscal quarter is (i) reduced by the aggregate amount of any

management fees received by the Manager under any offsetting management services agreements with respect to such fiscal quarter, (ii)

reduced (or increased) by the amount of any over-paid (or under-paid) Parent Management Fees received by (or owed to) the Manager as

of the end of such fiscal quarter, and (iii) increased by the amount of any outstanding accrued and unpaid Parent Management Fees. The

Company expensed $0 in Parent Management Fees for the nine months ended September 30, 2022 and 2021. 1847

Asien entered into an offsetting management services agreement with the Manager on May 28, 2020, 1847 Cabinet entered into an offsetting

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

into an offsetting management services agreement with the Manager on March 30, 2021. Pursuant to the offsetting management services agreements,

1847 Neese appointed the Manager to provide certain services to it for a quarterly management fee equal to $62,500, 1847 Asien appointed

the 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), 1847 Cabinet appointed the 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, and 1847 Wolo appointed the 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); 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 the 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 the Manager under other offsetting management services agreements. 27 Each

of these subsidiaries shall also reimburse the 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 the Manager or its affiliates on behalf

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

Asien expensed management fees of $75,000 and $225,000 for the three and nine months ended September 30, 2022, respectively, and $75,000

and $225,000 for the three and nine months ended September 30, 2021, respectively. 1847

Cabinet expensed management fees of $125,000 and $375,000 for the three and nine months ended September 30, 2022, respectively, and $75,000

and $225,000 for the three and nine months ended September 30, 2021, respectively. 1847

Wolo expensed management fees of $75,000 and $225,000 for the three and nine months ended September 30, 2022, respectively, and $75,000

and $150,000 for the three and nine months ended September 30, 2021, respectively. On

a consolidated basis, the Company expensed total management fees of $275,000 and $825,000 for the three and nine months ended September

30, 2022, respectively, and $225,000 and $600,000 for the three and nine months ended September 30, 2021, respectively. Segments The

Financial Accounting Standards Board Accounting Standard Codification Topic 280, Segment Reporting , requires that an enterprise

report selected information about reportable segments in its financial reports issued to its shareholders. As of September 30, 2022,

we have three reportable segments - the retail and appliances segment, which is operated by Asien’s, 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 is comprised of the business of Asien’s, which is based in Santa Rosa, California, and provides a wide variety

of appliance services including sales, delivery, installation, service and repair, extended warranties, and financing. The construction

segment is comprised of the businesses of Kyle’s, High Mountain and Innovative Cabinets. Kyle’s, which is based in Boise,

Idaho, provides a wide variety of construction services including custom design and build of kitchen and bathroom cabinetry, delivery,

installation, service and repair, extended warranties, and financing. High Mountain, which is based in Reno, Nevada, 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, as well as window installation. Innovative Cabinets,