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 $300,000 for the years ended December 31, 2022 and 2021. 1847
Cabinet expensed management fees of $500,000 and $350,000 for the years ended December 31, 2022 and 2021, respectively. 1847
Wolo expensed management fees of $300,000 and $225,000 for the years ended December 31, 2022 and 2021, respectively. On
a consolidated basis, our company expensed total management fees of $1,100,000 and $875,000 for the years ended December 31, 2022 and
2021, 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 December
31, 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,
also based in Reno, Nevada, specializes in custom cabinetry and countertops. The
automotive supplies segment is comprised of the business of Wolo, which is based in Deer Park, New York, and 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. 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. 94 Discontinued
Operations On
April 19, 2021, we entered into a stock purchase agreement with the original owners of Neese, pursuant to which they purchased our 55%
ownership interest in 1847 Neese for a purchase price of $325,000 in cash. As a result of this transaction, 1847 Neese is no longer a
subsidiary of our company. All financial information of 1847 Neese previously presented as part of land management services operations
are classified as discontinued operations and not presented as part of continuing operations for the year ended December 31, 2021. Results
of Operations The
following table sets forth key components of our results of operations during the years ended December 31, 2022 and 2021, both in dollars
and as a percentage of our revenues. Years
Ended December 31, 2022 2021 Amount %
of Revenues Amount %
of Revenues Revenues $ 48,929,124 100.00 % $ 30,660,984 100.0 % Operating Expenses Cost of revenues 33,227,730 67.9 % 20,100,906 65.6 % Personnel 9,531,101 19.5 % 3,803,497 12.4 % Depreciation
and amortization 2,037,112 4.2 % 908,982 3.0 % General
and administrative 9,872,689 20.2 % 6,951,498 22.7 % Total
Operating Expenses 54,668,632 111.7 % 31,764,883 103.6 % Loss From Operations (5,739,508 ) (11.7 )% (1,103,899 ) (3.6 )% Other Income (Expenses) Other
income (expense) (11,450 ) (0.0 )% 876 0.0 % Interest
expense (4,594,740 ) (9.4 )% (1,296,537 ) (4.2 )% Gain
on forgiveness of debt - - 360,302 1.2 % Gain
on disposal of property and equipment 65,417 0.1 % 10,885 0.0 % Gain
on disposition of subsidiary - - 3,282,804 10.7 % Loss
on extinguishment of debt (2,039,815 ) (4.2 )% (137,692 ) (0.4 )% Loss
on redemption of preferred shares - - (4,017,553 ) (13.1 )% Loss
on write-down of contingent note payable (158,817 ) (0.3 )% (602,204 ) (2.0 )% Total
Other Income (Expense) (6,739,405 ) (13.8 )% (2,399,119 ) (7.8 )% Net Loss Before Income Taxes (12,478,913 ) (25.5 )% (3,503,018 ) (11.4 )% Income
tax benefit (expense) 1,677,000 3.4 % (218,139 ) (0.7 )% Net Loss
From Continuing Operations $ (10,801,913 ) (22.1 )% $ (3,721,157 ) (12.1 )% Total
revenues . Our total revenues were $48,929,124 for the year ended December 31, 2022, as compared to $30,660,984 for the year ended
December 31, 2021. The
retail and appliances segment generates revenue through the sales of home furnishings, including appliances and related products. Revenues
from the retail and appliances segment decreased by $2,069,934, or 16.2%, to $10,671,129 for the year ended December 31, 2022 from $12,741,063
for the year ended December 31, 2021. Such decrease was primarily due to ongoing supply chain delays and cost increases with appliance
manufacturers, increased time it takes to receive products, and decreased customer demand. 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 $19,565,017, or 160.3%, to $31,768,907 for the year ended
December 31, 2022 from $12,203,890 for the year ended December 31, 2021. Such increase was primarily due to the acquisitions of High
Mountain and Innovative Cabinets, which were acquired in the fourth quarter of 2021. Excluding these acquisitions, revenues from the
construction segment increased by $514,545, or 9.5%. Such increase was primarily due to increases in the average customer contract in
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 increased by $773,057, or 13.5%, to $6,489,088 for the year ended December
31, 2022 from $5,716,031 for the year ended December 31, 2021. Such increase was primarily due to the acquisition of Wolo, which was
acquired on March 31, 2021. 95 Cost
of revenues . Our total cost of revenues was $33,227,730 for the year ended December 31, 2022, as compared to $20,100,906 for the year
ended December 31, 2021. 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 $1,579,436, or 16.1%, to $8,203,401 for the year ended December 31, 2022 from $9,782,837 for the
year ended December 31, 2021. Such decrease primarily due to the decrease in revenues from the retail and appliance segment. As a percentage
of retail and appliances revenues, cost of revenues for the retail and appliances segment was 76.9% and 76.8% for the years ended December
31, 2022 and 2021, respectively. 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 $14,270,276, or 212.7%, to $20,980,103
for the year ended December 31, 2022 from $6,709,827 for the year ended December 31, 2021. Such increase was primarily due to the acquisitions
of High Mountain and Innovative Cabinets, which were acquired in the fourth quarter of 2021. Excluding these acquisitions, cost of revenues
for the construction segment increased by $544,095, or 18.4%. Such increase was primarily due to the corresponding increase in revenues
from the construction segment, as well as increased product and delivery costs. As a percentage of construction revenues, cost of revenues
for the construction segment was 66.0% and 55.0% for the years ended December 31, 2022 and 2021, 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 increased by $435,984, or 12.1%, to $4,044,226 for the year ended December 31, 2022 from $3,608,242
for the year ended December 31, 2021. Such increase was primarily due to the acquisition of Wolo, which was acquired on March 31, 2021.

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 $300,000 for the years ended December 31, 2022 and 2021. 1847

Cabinet expensed management fees of $500,000 and $350,000 for the years ended December 31, 2022 and 2021, respectively. 1847

Wolo expensed management fees of $300,000 and $225,000 for the years ended December 31, 2022 and 2021, respectively. On

a consolidated basis, our company expensed total management fees of $1,100,000 and $875,000 for the years ended December 31, 2022 and

2021, 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 December

31, 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,

also based in Reno, Nevada, specializes in custom cabinetry and countertops. The

automotive supplies segment is comprised of the business of Wolo, which is based in Deer Park, New York, and 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. 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. 94 Discontinued

Operations On

April 19, 2021, we entered into a stock purchase agreement with the original owners of Neese, pursuant to which they purchased our 55%

ownership interest in 1847 Neese for a purchase price of $325,000 in cash. As a result of this transaction, 1847 Neese is no longer a

subsidiary of our company. All financial information of 1847 Neese previously presented as part of land management services operations

are classified as discontinued operations and not presented as part of continuing operations for the year ended December 31, 2021. Results

of Operations The

following table sets forth key components of our results of operations during the years ended December 31, 2022 and 2021, both in dollars

and as a percentage of our revenues. Years

Ended December 31, 2022 2021 Amount %

of Revenues Amount %

of Revenues Revenues $ 48,929,124 100.00 % $ 30,660,984 100.0 % Operating Expenses Cost of revenues 33,227,730 67.9 % 20,100,906 65.6 % Personnel 9,531,101 19.5 % 3,803,497 12.4 % Depreciation

and amortization 2,037,112 4.2 % 908,982 3.0 % General

and administrative 9,872,689 20.2 % 6,951,498 22.7 % Total

Operating Expenses 54,668,632 111.7 % 31,764,883 103.6 % Loss From Operations (5,739,508 ) (11.7 )% (1,103,899 ) (3.6 )% Other Income (Expenses) Other

income (expense) (11,450 ) (0.0 )% 876 0.0 % Interest

expense (4,594,740 ) (9.4 )% (1,296,537 ) (4.2 )% Gain

on forgiveness of debt - - 360,302 1.2 % Gain

on disposal of property and equipment 65,417 0.1 % 10,885 0.0 % Gain

on disposition of subsidiary - - 3,282,804 10.7 % Loss

on extinguishment of debt (2,039,815 ) (4.2 )% (137,692 ) (0.4 )% Loss

on redemption of preferred shares - - (4,017,553 ) (13.1 )% Loss

on write-down of contingent note payable (158,817 ) (0.3 )% (602,204 ) (2.0 )% Total

Other Income (Expense) (6,739,405 ) (13.8 )% (2,399,119 ) (7.8 )% Net Loss Before Income Taxes (12,478,913 ) (25.5 )% (3,503,018 ) (11.4 )% Income

tax benefit (expense) 1,677,000 3.4 % (218,139 ) (0.7 )% Net Loss

From Continuing Operations $ (10,801,913 ) (22.1 )% $ (3,721,157 ) (12.1 )% Total

revenues . Our total revenues were $48,929,124 for the year ended December 31, 2022, as compared to $30,660,984 for the year ended

December 31, 2021. The

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

from the retail and appliances segment decreased by $2,069,934, or 16.2%, to $10,671,129 for the year ended December 31, 2022 from $12,741,063

for the year ended December 31, 2021. Such decrease was primarily due to ongoing supply chain delays and cost increases with appliance

manufacturers, increased time it takes to receive products, and decreased customer demand. 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 $19,565,017, or 160.3%, to $31,768,907 for the year ended

December 31, 2022 from $12,203,890 for the year ended December 31, 2021. Such increase was primarily due to the acquisitions of High

Mountain and Innovative Cabinets, which were acquired in the fourth quarter of 2021. Excluding these acquisitions, revenues from the

construction segment increased by $514,545, or 9.5%. Such increase was primarily due to increases in the average customer contract in

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 increased by $773,057, or 13.5%, to $6,489,088 for the year ended December

31, 2022 from $5,716,031 for the year ended December 31, 2021. Such increase was primarily due to the acquisition of Wolo, which was

acquired on March 31, 2021. 95 Cost

of revenues . Our total cost of revenues was $33,227,730 for the year ended December 31, 2022, as compared to $20,100,906 for the year

ended December 31, 2021. 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 $1,579,436, or 16.1%, to $8,203,401 for the year ended December 31, 2022 from $9,782,837 for the

year ended December 31, 2021. Such decrease primarily due to the decrease in revenues from the retail and appliance segment. As a percentage

of retail and appliances revenues, cost of revenues for the retail and appliances segment was 76.9% and 76.8% for the years ended December

31, 2022 and 2021, respectively. 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 $14,270,276, or 212.7%, to $20,980,103

for the year ended December 31, 2022 from $6,709,827 for the year ended December 31, 2021. Such increase was primarily due to the acquisitions

of High Mountain and Innovative Cabinets, which were acquired in the fourth quarter of 2021. Excluding these acquisitions, cost of revenues

for the construction segment increased by $544,095, or 18.4%. Such increase was primarily due to the corresponding increase in revenues

from the construction segment, as well as increased product and delivery costs. As a percentage of construction revenues, cost of revenues

for the construction segment was 66.0% and 55.0% for the years ended December 31, 2022 and 2021, 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 increased by $435,984, or 12.1%, to $4,044,226 for the year ended December 31, 2022 from $3,608,242

for the year ended December 31, 2021. Such increase was primarily due to the acquisition of Wolo, which was acquired on March 31, 2021.