text
stringlengths 0
1.95M
|
|---|
its performance obligation and it recognizes revenue. Transaction Price ‒ The Company agrees |
with customers on the selling price of each transaction. This transaction price is generally based on the agreed upon sales price. In |
the Company’s contracts with customers, it allocates the entire transaction price to the sales price, which is the basis for the |
determination of the relative standalone selling price allocated to each performance obligation. Any sales tax that the Company collects |
concurrently with revenue-producing activities are excluded from revenue. Cost of sales includes the cost of purchased |
merchandise plus freight, warehouse salaries, tariffs, and any applicable delivery charges from the vendor to the Company. Warranties vary and are typically 90 days to |
consumers and manufacturing defect warranty to are available to resellers. At times, depending on the product, the Company can also offer |
a warranty up to 12 months. Receivables Receivables consist of trade accounts receivable |
from customer, credit card transactions in the process of settlement, and vendor rebates receivable. Vendor rebates receivable represent |
amounts due from manufactures from whom the Company purchases products. Rebates receivables are stated at the amount that management |
expects to collect from manufacturers, net of accounts payable amounts due the vendor. Rebates are calculated on product and model sales |
programs from specific vendors. The rebates are paid at intermittent periods either in cash or through issuance of vendor credit memos, |
which can be applied against vendor accounts payable. Based on the Company’s assessment of the credit history with its manufacturers, |
it has concluded that there should be no allowance for uncollectible accounts. The Company historically collects substantially all of |
its outstanding rebates receivable. Retainage receivables represent the amount retained by customers to ensure the quality of the |
installation and is received after satisfactory completion of each installation project. Management regularly reviews aging of retainage receivables |
and changes in payment trends and records an allowance when collection of amounts due are considered at risk. The allowance for doubtful |
accounts amounted to $ 359,000 and $ 0 for the years ended December 31, 2021 and 2020, respectively. Uncollectible balances are expensed |
in the periods they are determined to be uncollectible. F- 12 1847 HOLDINGS LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 AND 2020 Inventory For Asien’s, inventory mainly consists of |
appliances that are acquired for resale and is valued at the average cost determined on a specific item basis. Inventory also consists |
of parts that are used in service and repairs and may or may not be charged to the customer depending on warranty and contractual relationship. |
Kyle’s typically orders inventory on a job-by-job basis and those jobs are put into production within hours of being received. The |
inventory in production is accounted for in the contract assets and liabilities and follows the percentage completion methodology. Inventories |
consisting of materials and supplies are stated at lower of costs or market. High Mountain and Innovative Cabinets’ inventory mainly |
consists of doors, door frames, baseboards, crown molding, cabinetry, countertops, custom cabinets, closet shelving, and other related |
products. The Company values inventory at each balance sheet date to ensure that it is carried at the lower of cost or net realizable |
value with cost determined based on the average cost basis. Wolo’s inventory consists of finished goods acquired for resale and |
is valued at the weighted-average cost determined on a specific item basis. The Company periodically evaluates the value of items in inventory |
and provides write-downs to inventory based on its estimate of market conditions. The Company estimated an obsolescence allowance of $ 387,848 and $ 12,824 at December 31, 2021 and 2020, respectively. Property and Equipment Property and equipment is stated at historical |
cost less accumulated depreciation. Depreciation of furniture, vehicles and equipment is calculated using the straight-line method over |
the estimated useful lives as follows: Useful Life (Years) Building and Improvements 4 Machinery and Equipment 3 - 7 Trucks and Vehicles 3 - 6 Goodwill and Intangible Assets In applying the acquisition method of accounting, |
amounts assigned to identifiable assets and liabilities acquired were based on estimated fair values as of the date of acquisition, with |
the remainder recorded as goodwill. Identifiable intangible assets are initially recorded at fair value using generally accepted valuation |
methods appropriate for the type of intangible asset. Identifiable intangible assets with definite lives are amortized over their estimated |
useful lives and are reviewed for impairment if indicators of impairment arise. Intangible assets with indefinite lives are tested for |
impairment within one year of acquisitions or annually as of December 1, and whenever indicators of impairment exist. The fair value |
of intangible assets are compared with their carrying values, and an impairment loss would be recognized for the amount by which a carrying |
amount exceeds its fair value. Acquired identifiable intangible assets are amortized over the following |
periods: Acquired intangible Asset Amortization Basis Expected Life (years) Customer-Related Straight-line basis 5 - 15 Marketing-Related Straight-line basis 5 Long-Lived Assets The Company reviews its property and equipment |
and any identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset |
may not be recoverable. The test for impairment is required to be performed by management at least annually. Recoverability of assets |
to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected |
to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount |
by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the |
lower of carrying amount or fair value less costs to sell. F- 13 1847 HOLDINGS LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 AND 2020 Fair Value of Financial Instruments The Company’s financial instruments consist |
of cash and cash equivalents, certificates of deposit and amounts due to shareholders. The carrying amount of these financial instruments |
approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise |
disclosed in these financial statements. The fair value of a financial instrument is the |
amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market |
participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. |
Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability |
of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of |
input that is significant to the fair value measurement. The three-level hierarchy is as follows: Level 1 – Quoted market prices in active markets |
for identical assets or liabilities. Level 2 – Observable market-based inputs or inputs |
that are corroborated by market data. Level 3 - Unobservable inputs that are not corroborated |
by market date. The Company’s held to maturity |
securities are comprised of certificates of deposit. Derivative Instrument Liability The Company accounts for derivative instruments |
in accordance with ASC 815, Derivatives and Hedging , which establishes accounting and reporting standards for derivative instruments |
and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts, and requires recognition |
of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair |
value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships |
designated are based on the exposures hedged. Income Taxes Income taxes are computed using the asset and |
liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences |
between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. |
A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. Stock-Based Compensation The Company records stock-based compensation |
in accordance with ASC 718, Compensation-Stock Compensation . All transactions in which goods or services are the consideration |
received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value |
of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services |
received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over |
the employees required service period, which is generally the vesting period. Basic Income (Loss) Per Share Basic income (loss) per share is calculated by |
dividing the net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings |
per share is calculated by dividing the net income available to common shareholders by the diluted weighted average number of shares outstanding |
during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially |
dilutive debt or equity. As the Company had a net loss for the year ended December 31, 2021, potentially dilutive securities were included |
in diluted loss per share under the treasury metho 5,200,460 for outstanding warrants, 2,257,404 for principal and accrued interest |
of series A convertible preferred shares, and 10,131,076 for the principal and accrued interest of convertible notes. As the Company had |
a net loss for the year ended December 31, 2020, the following 2,632,278 potentially dilutive securities were excluded from diluted loss |
per sh 2,632,278 for outstanding warrants. F- 14 1847 HOLDINGS LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 AND 2020 Operating Leases ASC 842 requires recognition of leases on the |
consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s |
right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments |
arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future |
minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company |
used its estimated incremental borrowing rate based on the information available at commencement date in determining the present value |
of lease payments. A number of the lease agreements contain options to renew and options to terminate the leases early. The lease term |
used to calculate ROU assets and lease liabilities only includes renewal and termination options that are deemed reasonably certain to |
be exercised. The Company recognized lease liabilities, with |
corresponding ROU assets, based on the present value of unpaid lease payments for existing operating leases longer than twelve months. |
The ROU assets were adjusted per ASC 842 transition guidance for existing lease-related balances of accrued and prepaid rent, and unamortized |
lease incentives provided by lessors. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease |
term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes |
and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable |
lease payments are based occur. The Company has elected not to separate lease and non-lease components for all property leases for the |
purposes of calculating ROU assets and lease liabilities. Going Concern Assessment Management assesses going concern uncertainty |
in the Company’s 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 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.