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

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As a percentage of automotive supplies revenues, cost of revenues for the automotive supplies segment was 62.3% and 63.1% for the years
ended December 31, 2022 and 2021, 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 $9,531,101 for the year ended December 31, 2021, as compared
to $3,803,497 for the year ended December 31, 2021. Personnel
costs for the retail and appliances segment increased by $38,626, or 4.9%, to $822,539 for the year ended December 31, 2022 from $783,913
for the year ended December 31, 2021. Such increase was primarily to increased employee headcount as a result of previous staffing shortages
in the retail and appliances segment. As a percentage of retail and appliances revenue, personnel costs for the retail and appliances
segment were 7.7% and 6.2% for the years ended December 31, 2022 and 2021, respectively. Personnel
costs for the construction segment increased by $4,636,931, or 316.9%, to $6,100,374 for the year ended December 31, 2022 from $1,463,443
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, personnel costs for the construction segment decreased by
$47,132, or 4.9%. Such decrease was primarily due to decreased office personnel headcount in the construction segment. As a percentage
of construction revenue, personnel costs for the construction segment were 19.2% and 12.0% for the years ended December 31, 2022 and
2021, respectively. Personnel
costs for the automotive supplies segment increased by $79,466, or 12.1%, to $1,094,361 for the year ended December 31, 2022 from $1,014,895
for the year ended December 31, 2021. Such increase was primarily due to the acquisition of Wolo, which was acquired on March 31, 2021.
As a percentage of automotive supplies revenues, personnel costs for the automotive supplies segment was 16.9% and 17.8% for the years
ended December 31, 2022 and 2021, respectively. Personnel
costs for our holding company increased by $972,581, or 179.7%, to $1,513,827 for the year ended December 31, 2022 from $541,246 for
the year ended December 31, 2021. Such increase was primarily due to increased headcount and management bonuses. Depreciation
and amortization . Our total depreciation and amortization expense increased by $1,128,130, or 124.1%, to $2,037,112 for the year
ended December 31, 2022 from $908,982 for the year ended December 31, 2021. Such increase was primarily as a result of the intangible
assets and property and equipment acquired in the acquisitions of High Mountain and Innovative Cabinets, which were acquired in the fourth
quarter of 2021. 96 General
and administrative expenses . Our general and administrative expenses consist primarily of professional advisor fees, stock-based
compensation, bad debts reserve, rent expense, advertising, bank fees, and other expenses incurred in connection with general operations.
Our total general and administrative expenses were $9,872,689 for the year ended December 31, 2022, as compared to $6,951,498 for the
year ended December 31, 2021. General
and administrative expenses for the retail and appliances segment decreased by $267,180, or 13.9%, to $1,649,702 for the year ended December
31, 2022 from $1,916,882 for the year ended December 31, 2021. Such decrease was primarily due to the decrease in revenues from the retail
and appliance segment. As a percentage of retail and appliances revenue, general and administrative expenses for the retail and appliances
segment were 15.5% and 15.0% for the years ended December 31, 2022 and 2021, respectively. General
and administrative expenses for the construction segment increased by $2,780,074, or 117.0%, to $5,156,425 for the year ended December
31, 2022 from $2,376,351 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, general and administrative expenses
for the construction segment decreased by $26,926, or 2.5%. Such decrease was primarily attributable to a decrease in management fees
as a result of the acquisitions of High Mountain and Innovative Cabinets, offset by increased rent from a new facility lease in the construction
segment. As a percentage of construction revenue, general and administrative expenses for the construction segment were 16.2% and 19.5%
for the years ended December 31, 2022 and 2021, respectively. General
and administrative expenses for the automotive supplies segment decreased by $637,326, or 33.3%, to $1,275,369 for the year ended December
31, 2022 from $1,912,695 for the year ended December 31, 2021. Such decrease was primarily due to the lack of acquisition related costs
during the current period. As a percentage of automotive supplies revenue, general and administrative expenses for the automotive supplies
segment were 19.7% and 33.5% for the years ended December 31, 2022 and 2021, respectively. General
and administrative expenses for our holding company increased by $1,045,623, or 140.2%, to $1,791,193 for the year ended December 31,
2022 from $745,570 for the year ended December 31, 2021. Such increase was primarily due to increased professional fees and corporate
insurance. Total
other income (expense) . We had $6,739,405 in total other expense, net, for the year ended December 31, 2022, as compared to other
expense, net, of $2,399,119 for the year ended December 31, 2021. Other expense, net, for the year ended December 31, 2022 consisted
of interest expense of $4,594,740, a loss on extinguishment of debt of $2,039,815, a loss on write-down of contingent note payable of
$158,817 and other expense of $11,450, offset by a gain on disposal of property and equipment of $65,417, while other expense, net, for
the year ended December 31, 2021 consisted of a loss on redemption of preferred shares of $4,017,553, interest expense of $1,296,537,
a loss on write-down of contingent note payable of $602,204 and a loss on extinguishment of debt of $137,692, offset by a gain on disposition
of subsidiary of $3,282,804 related to the disposition of Neese, a gain on forgiveness of debt of $360,302, a gain on sale of property
and equipment of $10,885 and other income of $876. The loss on extinguishment of debt was a result of partially settling debt through
the issuance of common shares and the significant increase in interest expense was primarily a result of note issuances during the period
and convertible debt issuances during the fourth quarter of 2021 in order to help finance the acquisitions of High Mountain and Innovative
Cabinets. Income
tax benefit (expense) . We had an income tax benefit of $1,677,000 for the year ended December 31, 2022, as compared
to an income tax expense of $218,139 for the year ended December 31, 2021. Net
loss from continuing operations . As a result of the cumulative effect of the factors described above, our net loss from continuing
operations was $10,801,913 for the year ended December 31, 2022, as compared to $3,721,157 for the year ended December 31, 2021, an increase
of $7,080,756, or 190.3%. Liquidity
and Capital Resources As
of December 31, 2022, we had cash and cash equivalents of $1,079,355. To date, we have financed our operations primarily through revenue
generated from operations, cash proceeds from financing activities, borrowings, and equity contributions by our shareholders. 97 Although we do not believe that we will require additional cash to
continue our operations over the next twelve months, we do believe additional funds are required to execute our business plan and our
strategy of acquiring additional businesses. The funds required to execute our business plan will depend on the size, capital structure
and purchase price consideration that the seller of a target business deems acceptable in a given transaction. The amount of funds needed
to execute our business plan also depends on what portion of the purchase price of a target business the seller of that business is willing
to take in the form of seller notes or our equity or equity in one of our subsidiaries. We will seek growth as funds become available
from cash flow, borrowings, additional capital raised privately or publicly, or seller retained financing. Our
primary use of funds will be for future acquisitions, public company expenses including regular distributions to our shareholders, investments
in future acquisitions, payments to our manager pursuant to the management services agreement, potential payment of profit allocation
to our manager and potential put price to our manager in respect of the allocation shares it owns. The management fee, expenses, potential
profit allocation and potential put price are paid before distributions to shareholders and may be significant and exceed the funds we
hold, which may require us to dispose of assets or incur debt to fund such expenditures. Item 1 “ Business—Our Manager ”
for more information concerning the management fee, the profit allocation and put price. The
amount of management fee paid to our manager by us is reduced by the aggregate amount of any offsetting management fees, if any, received
by our manager from any of our businesses. As a result, the management fee paid to our manager may fluctuate from quarter to quarter.
The amount of management fee paid to our manager may represent a significant cash obligation. In this respect, the payment of the management
fee will reduce the amount of cash available for distribution to shareholders. Our
manager, as holder of 100% of our allocation shares, is entitled to receive a twenty percent (20%) profit allocation as a form of preferred
equity distribution, subject to an annual hurdle rate of eight percent (8%), as follows. Upon the sale of a subsidiary, our manager will
be paid a profit allocation if the sum of (i) the excess of the gain on the sale of such subsidiary over a high-water mark plus (ii)
the subsidiary’s net income since its acquisition by us exceeds the 8% hurdle rate. The 8% hurdle rate is the product of (i) a
2% rate per quarter, multiplied by (ii) the number of quarters such subsidiary was held by us, multiplied by (iii) the subsidiary’s
average share (determined based on gross assets, generally) of our consolidated net equity (determined according to GAAP with certain
adjustments). In certain circumstances, after a subsidiary has been held for at least 5 years, our manager may also trigger a profit
allocation with respect to such subsidiary (determined based solely on the subsidiary’s net income since its acquisition). The
amount of profit allocation may represent a significant cash payment and is senior in right to payments of distributions to our shareholders.
Therefore, the amount of profit allocation paid, when paid, will reduce the amount of cash available to us for our operating and investing
activities, including future acquisitions. See Item 1 “ Business—Our Manager—Our Manager as an Equity Holder—Manager’s
Profit Allocation ” for more information on the calculation of the profit allocation. Our
operating agreement also contains a supplemental put provision, which gives our manager the right, subject to certain conditions, to
cause us to purchase the allocation shares then owned by our manager upon termination of the management services agreement. The amount
of put price under the supplemental put provision is determined by assuming all of our subsidiaries are sold at that time for their fair
market value and then calculating the amount of profit allocation would be payable in such a case. If the management services agreement
is terminated for any reason other than our manager’s resignation, the payment to our manager could be as much as twice the amount
of such hypothetical profit allocation. As is the case with profit allocation, the calculation of the put price is complex and based

As a percentage of automotive supplies revenues, cost of revenues for the automotive supplies segment was 62.3% and 63.1% for the years

ended December 31, 2022 and 2021, 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 $9,531,101 for the year ended December 31, 2021, as compared

to $3,803,497 for the year ended December 31, 2021. Personnel

costs for the retail and appliances segment increased by $38,626, or 4.9%, to $822,539 for the year ended December 31, 2022 from $783,913

for the year ended December 31, 2021. Such increase was primarily to increased employee headcount as a result of previous staffing shortages

in the retail and appliances segment. As a percentage of retail and appliances revenue, personnel costs for the retail and appliances

segment were 7.7% and 6.2% for the years ended December 31, 2022 and 2021, respectively. Personnel

costs for the construction segment increased by $4,636,931, or 316.9%, to $6,100,374 for the year ended December 31, 2022 from $1,463,443

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, personnel costs for the construction segment decreased by

$47,132, or 4.9%. Such decrease was primarily due to decreased office personnel headcount in the construction segment. As a percentage

of construction revenue, personnel costs for the construction segment were 19.2% and 12.0% for the years ended December 31, 2022 and

2021, respectively. Personnel

costs for the automotive supplies segment increased by $79,466, or 12.1%, to $1,094,361 for the year ended December 31, 2022 from $1,014,895

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

As a percentage of automotive supplies revenues, personnel costs for the automotive supplies segment was 16.9% and 17.8% for the years

ended December 31, 2022 and 2021, respectively. Personnel

costs for our holding company increased by $972,581, or 179.7%, to $1,513,827 for the year ended December 31, 2022 from $541,246 for

the year ended December 31, 2021. Such increase was primarily due to increased headcount and management bonuses. Depreciation

and amortization . Our total depreciation and amortization expense increased by $1,128,130, or 124.1%, to $2,037,112 for the year

ended December 31, 2022 from $908,982 for the year ended December 31, 2021. Such increase was primarily as a result of the intangible

assets and property and equipment acquired in the acquisitions of High Mountain and Innovative Cabinets, which were acquired in the fourth

quarter of 2021. 96 General

and administrative expenses . Our general and administrative expenses consist primarily of professional advisor fees, stock-based

compensation, bad debts reserve, rent expense, advertising, bank fees, and other expenses incurred in connection with general operations.

Our total general and administrative expenses were $9,872,689 for the year ended December 31, 2022, as compared to $6,951,498 for the

year ended December 31, 2021. General

and administrative expenses for the retail and appliances segment decreased by $267,180, or 13.9%, to $1,649,702 for the year ended December

31, 2022 from $1,916,882 for the year ended December 31, 2021. Such decrease was primarily due to the decrease in revenues from the retail

and appliance segment. As a percentage of retail and appliances revenue, general and administrative expenses for the retail and appliances

segment were 15.5% and 15.0% for the years ended December 31, 2022 and 2021, respectively. General

and administrative expenses for the construction segment increased by $2,780,074, or 117.0%, to $5,156,425 for the year ended December

31, 2022 from $2,376,351 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, general and administrative expenses

for the construction segment decreased by $26,926, or 2.5%. Such decrease was primarily attributable to a decrease in management fees

as a result of the acquisitions of High Mountain and Innovative Cabinets, offset by increased rent from a new facility lease in the construction

segment. As a percentage of construction revenue, general and administrative expenses for the construction segment were 16.2% and 19.5%

for the years ended December 31, 2022 and 2021, respectively. General

and administrative expenses for the automotive supplies segment decreased by $637,326, or 33.3%, to $1,275,369 for the year ended December

31, 2022 from $1,912,695 for the year ended December 31, 2021. Such decrease was primarily due to the lack of acquisition related costs

during the current period. As a percentage of automotive supplies revenue, general and administrative expenses for the automotive supplies

segment were 19.7% and 33.5% for the years ended December 31, 2022 and 2021, respectively. General

and administrative expenses for our holding company increased by $1,045,623, or 140.2%, to $1,791,193 for the year ended December 31,

2022 from $745,570 for the year ended December 31, 2021. Such increase was primarily due to increased professional fees and corporate

insurance. Total

other income (expense) . We had $6,739,405 in total other expense, net, for the year ended December 31, 2022, as compared to other

expense, net, of $2,399,119 for the year ended December 31, 2021. Other expense, net, for the year ended December 31, 2022 consisted

of interest expense of $4,594,740, a loss on extinguishment of debt of $2,039,815, a loss on write-down of contingent note payable of

$158,817 and other expense of $11,450, offset by a gain on disposal of property and equipment of $65,417, while other expense, net, for

the year ended December 31, 2021 consisted of a loss on redemption of preferred shares of $4,017,553, interest expense of $1,296,537,

a loss on write-down of contingent note payable of $602,204 and a loss on extinguishment of debt of $137,692, offset by a gain on disposition

of subsidiary of $3,282,804 related to the disposition of Neese, a gain on forgiveness of debt of $360,302, a gain on sale of property

and equipment of $10,885 and other income of $876. The loss on extinguishment of debt was a result of partially settling debt through

the issuance of common shares and the significant increase in interest expense was primarily a result of note issuances during the period

and convertible debt issuances during the fourth quarter of 2021 in order to help finance the acquisitions of High Mountain and Innovative

Cabinets. Income

tax benefit (expense) . We had an income tax benefit of $1,677,000 for the year ended December 31, 2022, as compared

to an income tax expense of $218,139 for the year ended December 31, 2021. Net

loss from continuing operations . As a result of the cumulative effect of the factors described above, our net loss from continuing

operations was $10,801,913 for the year ended December 31, 2022, as compared to $3,721,157 for the year ended December 31, 2021, an increase

of $7,080,756, or 190.3%. Liquidity

and Capital Resources As

of December 31, 2022, we had cash and cash equivalents of $1,079,355. To date, we have financed our operations primarily through revenue

generated from operations, cash proceeds from financing activities, borrowings, and equity contributions by our shareholders. 97 Although we do not believe that we will require additional cash to

continue our operations over the next twelve months, we do believe additional funds are required to execute our business plan and our

strategy of acquiring additional businesses. The funds required to execute our business plan will depend on the size, capital structure

and purchase price consideration that the seller of a target business deems acceptable in a given transaction. The amount of funds needed

to execute our business plan also depends on what portion of the purchase price of a target business the seller of that business is willing

to take in the form of seller notes or our equity or equity in one of our subsidiaries. We will seek growth as funds become available

from cash flow, borrowings, additional capital raised privately or publicly, or seller retained financing. Our

primary use of funds will be for future acquisitions, public company expenses including regular distributions to our shareholders, investments

in future acquisitions, payments to our manager pursuant to the management services agreement, potential payment of profit allocation

to our manager and potential put price to our manager in respect of the allocation shares it owns. The management fee, expenses, potential

profit allocation and potential put price are paid before distributions to shareholders and may be significant and exceed the funds we

hold, which may require us to dispose of assets or incur debt to fund such expenditures. Item 1 “ Business—Our Manager ”

for more information concerning the management fee, the profit allocation and put price. The

amount of management fee paid to our manager by us is reduced by the aggregate amount of any offsetting management fees, if any, received

by our manager from any of our businesses. As a result, the management fee paid to our manager may fluctuate from quarter to quarter.

The amount of management fee paid to our manager may represent a significant cash obligation. In this respect, the payment of the management

fee will reduce the amount of cash available for distribution to shareholders. Our

manager, as holder of 100% of our allocation shares, is entitled to receive a twenty percent (20%) profit allocation as a form of preferred

equity distribution, subject to an annual hurdle rate of eight percent (8%), as follows. Upon the sale of a subsidiary, our manager will

be paid a profit allocation if the sum of (i) the excess of the gain on the sale of such subsidiary over a high-water mark plus (ii)

the subsidiary’s net income since its acquisition by us exceeds the 8% hurdle rate. The 8% hurdle rate is the product of (i) a

2% rate per quarter, multiplied by (ii) the number of quarters such subsidiary was held by us, multiplied by (iii) the subsidiary’s

average share (determined based on gross assets, generally) of our consolidated net equity (determined according to GAAP with certain

adjustments). In certain circumstances, after a subsidiary has been held for at least 5 years, our manager may also trigger a profit

allocation with respect to such subsidiary (determined based solely on the subsidiary’s net income since its acquisition). The

amount of profit allocation may represent a significant cash payment and is senior in right to payments of distributions to our shareholders.

Therefore, the amount of profit allocation paid, when paid, will reduce the amount of cash available to us for our operating and investing

activities, including future acquisitions. See Item 1 “ Business—Our Manager—Our Manager as an Equity Holder—Manager’s

Profit Allocation ” for more information on the calculation of the profit allocation. Our

operating agreement also contains a supplemental put provision, which gives our manager the right, subject to certain conditions, to

cause us to purchase the allocation shares then owned by our manager upon termination of the management services agreement. The amount

of put price under the supplemental put provision is determined by assuming all of our subsidiaries are sold at that time for their fair

market value and then calculating the amount of profit allocation would be payable in such a case. If the management services agreement

is terminated for any reason other than our manager’s resignation, the payment to our manager could be as much as twice the amount

of such hypothetical profit allocation. As is the case with profit allocation, the calculation of the put price is complex and based