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

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of series B preferred shares and warrants - - - - - - - - 172,050 - - 172,050 Issuance
of common shares upon cashless exercise of warrants - - - - - 126,669 126 - ( 126 ) - - - Issuance
of common shares upon partial extinguishment of convertible notes payable - - - - - 800,000 800 - 4,639,200 - - 4,640,000 Issuance
of common shares upon partial extinguishment of related party note payable - - - - - 189,815 190 - 1,100,737 - - 1,100,927 Issuance
of common shares upon settlement of debt - - - - - 285,067 285 - 1,653,104 - - 1,653,389 Issuance
of common shares and warrants in connection with a public offering - - - - - 1,428,572 1,429 - 5,147,271 - - 5,148,700 Issuance
of warrants in connection with notes payable - - - - - - - - 402,650 - - 402,650 Reclassification
of preferred shares from mezzanine equity to permanent equity 1,684,849 1,415,100 481,566 1,257,650 - - - - - - - 2,672,750 Redemption
of series A preferred shares ( 90,909 ) ( 76,354 ) - - - - - - - ( 132,737 ) - ( 209,091 ) Redemption
of series B preferred shares - - ( 16,667 ) ( 43,469 ) - - - - - ( 14,032 ) - ( 57,501 ) Dividends
– common shares - - - - - - - - - ( 1,093,354 ) - ( 1,093,354 ) Dividends
– series A preferred shares - - - - - - - - - ( 590,162 ) - ( 590,162 ) Dividends
– series B preferred shares - - - - - - - - - ( 162,268 ) - ( 16,268 ) Deemed
dividend – down round provision in warrants - - - - - - - - 9,012,730 ( 9,012,730 ) - - Net
loss - - - - - - - - - ( 10,159,600 ) ( 642,313 ) ( 10,801,913 ) Balance
at December 31, 2022 1,593,940 $ 1,338,746 464,899 $ 1,214,181 $ 1,000 4,079,137 $ 4,079 $ ( 2,000,000 ) $ 43,962,606 $ ( 41,919,277 ) $ 288,499 $ 2,889,834 The
accompanying notes are an integral part of these consolidated financial statements F- 6 1847
HOLDINGS LLC CONSOLIDATED
STATEMENTS OF CASH FLOWS Years
Ended December
31 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 10,801,913 ) $ ( 3,480,752 ) Adjustments to reconcile net loss to net cash
used in operating activiti Income from discontinued
operations - ( 240,405 ) Gain on disposition of
subsidiary - ( 3,282,804 ) Gain on forgiveness of
debt - ( 360,302 ) Gain on disposal of property
and equipment ( 65,417 ) ( 10,885 ) Loss on redemption of
preferred shares - 4,017,553 Loss on extinguishment
of debt 2,039,815 - Loss on write-down of
contingent note payable 158,817 602,204 Deferred tax asset (liability) ( 1,471,000 ) 75,000 Inventory reserve 38,000 - Depreciation and amortization 2,037,112 908,982 Amortization of debt
discounts 1,900,194 382,565 Amortization of right-of-use
assets 593,121 181,032 Changes in operating assets and liabiliti Receivables ( 1,836,572 ) 48,930 Contract assets ( 1,108 ) - Inventories 1,205,283 389,110 Prepaid expenses and
other current assets 202,173 182,366 Other assets 3,494 - Accounts payable and
accrued expenses 2,992,107 719,890 Contract liabilities ( 194,608 ) ( 950,640 ) Customer deposits ( 405,601 ) 94,302 Due to related parties - 3,570 Operating
lease liabilities ( 525,374 ) ( 177,282 ) Net cash used in operating
activities from continuing operations ( 4,131,477 ) ( 897,566 ) Net
cash used in operating activities from discontinued operations - ( 170,580 ) Net
cash used in operating activities ( 4,131,477 ) ( 1,068,146 ) CASH FLOWS FROM INVESTING ACTIVITIES Net cash paid in
acquisitions - ( 15,857,295 ) Purchases of property
and equipment ( 256,677 ) ( 177,475 ) Proceeds from disposal
of property and equipment 97,140 25,000 Proceeds from disposition
of subsidiary - 325,000 Investments
in certificates of deposit ( 881 ) - Net cash used in investing
activities from continuing operations ( 160,418 ) ( 15,684,770 ) Net
cash provided by investing activities from discontinued operations - 644,303 Net
cash used in investing activities ( 160,418 ) ( 15,040,467 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from convertible
notes payable, net of fees and debt discounts - 23,744,975 Net proceeds from notes
payable 499,600 3,550,000 Payment of notes
payable – related party - ( 100,000 ) Proceeds from (repayment
on) lines of credit - ( 301,081 ) Repayment of grid note
– related party - ( 56,900 ) Net proceeds from issuance
of common shares and warrants in public offering 5,148,700 - Net proceeds from issuance
of series A senior convertible preferred shares - 3,000,000 Net proceeds from issuance
of series B senior convertible preferred shares 1,429,700 - Repayments of notes payable
and finance lease liabilities ( 977,907 ) ( 5,021,511 ) Repayments to sellers - ( 977,686 ) Cash paid for financing
costs - ( 165,230 ) Redemption of series
A senior convertible preferred shares ( 209,091 ) ( 6,054,241 ) Redemption of series
B senior convertible preferred shares ( 57,501 ) - Dividends on series A
senior convertible preferred shares ( 590,162 ) ( 1,032,806 ) Dividends on series B
senior convertible preferred shares ( 162,268 ) - Dividends
on common shares ( 1,093,354 ) - Net cash provided by financing
activities from continuing operations 3,987,717 16,585,520 Net
cash used in financing activities from discontinued operations - ( 208,693 ) Net
cash provided by financing activities 3,987,717 16,376,827 NET CHANGE IN CASH AND CASH EQUIVALENTS FROM
CONTINUING OPERATIONS ( 304,178 ) 3,184 NET CHANGE IN CASH AND CASH EQUIVALENT FROM
DISCONTINUED OPERATIONS - 265,030 CASH AND CASH EQUIVALENTS
AVAILABLE FROM DISCONTINUED OPERATIONS - 265,030 CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATIONS Beginning of the period 1,383,533 1,380,349 End of the period $ 1,079,355 $ 1,383,533 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash
paid for interest $ 2,115,140 $ 176,204 Cash
paid for income taxes $ 188,224 $ 50,000 NON-CASH INVESTING AND
FINANCING ACTIVITIES Net
assets acquired in the acquisition of High Mountain and Innovative Cabinets $ - $ 3,716,375 Net
assets acquired in the acquisition of Wolo $ - $ 6,606,403 Due
to seller (net cash paid to seller after closing) $ - $ 977,685 Notes
payable sellers $ - $ 6,730,345 Accrued
common share dividends $ - $ 242,160 Deemed
dividend related to issuance of preferred shares $ - $ 1,527,086 Additional
paid in capital – common shares and warrants issued $ - $ 757,792 Issuance
of common shares upon conversion of series A preferred shares $ 111,986 $ - Issuance of common
shares upon cashless exercise of warrants $ 126 $ - Deemed
dividend from down round provision in warrants $ 9,012,730 $ - Financed
purchases of property and equipment $ 568,764 $ 688,978 Debt
discount on notes payable issued with warrants $ 503,050 $ - Operating
lease right-of-use asset and liability remeasurement $ 254,713 $ 2,184,477 The
accompanying notes are an integral part of these consolidated financial statements F- 7 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 NOTE 1—ORGANIZATION
AND NATURE OF BUSINESS 1847
Holdings LLC (the “Company”) was formed under the laws of the State of Delaware on January 22, 2013. The Company is
in the business of acquiring small businesses in a variety of different industries. On
March 27, 2020, the Company and the Company’s wholly owned subsidiary 1847 Asien Inc., a Delaware corporation (“1847 Asien”),
entered into a stock purchase agreement with Asien’s Appliance, Inc., a California corporation (“Asien’s”), 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”), pursuant to which 1847 Asien acquired all of the issued and outstanding stock of Asien’s on May 28, 2020. As a
result of this transaction, the Company owns 95% of 1847 Asien, with the remaining 5% held by a third-party, and 1847 Asien owns 100%
of Asien’s. On
August 27, 2020, the Company and the Company’s wholly owned subsidiary 1847 Cabinet Inc., a Delaware corporation (“1847 Cabinet”),
entered into a stock purchase agreement with Kyle’s Custom Wood Shop, Inc., an Idaho corporation (“Kyle’s”),
and Stephen Mallatt, Jr. and Rita Mallatt (the “Kyle’s Sellers”), pursuant to which 1847 Cabinet acquired all of the
issued and outstanding stock of Kyle’s on September 30, 2020. As a result of this transaction, the Company owns 92.5% of 1847 Cabinet,
with the remaining 7.5% held by a third-party, and 1847 Cabinet owns 100% of Kyle’s. On

of series B preferred shares and warrants - - - - - - - - 172,050 - - 172,050 Issuance

of common shares upon cashless exercise of warrants - - - - - 126,669 126 - ( 126 ) - - - Issuance

of common shares upon partial extinguishment of convertible notes payable - - - - - 800,000 800 - 4,639,200 - - 4,640,000 Issuance

of common shares upon partial extinguishment of related party note payable - - - - - 189,815 190 - 1,100,737 - - 1,100,927 Issuance

of common shares upon settlement of debt - - - - - 285,067 285 - 1,653,104 - - 1,653,389 Issuance

of common shares and warrants in connection with a public offering - - - - - 1,428,572 1,429 - 5,147,271 - - 5,148,700 Issuance

of warrants in connection with notes payable - - - - - - - - 402,650 - - 402,650 Reclassification

of preferred shares from mezzanine equity to permanent equity 1,684,849 1,415,100 481,566 1,257,650 - - - - - - - 2,672,750 Redemption

of series A preferred shares ( 90,909 ) ( 76,354 ) - - - - - - - ( 132,737 ) - ( 209,091 ) Redemption

of series B preferred shares - - ( 16,667 ) ( 43,469 ) - - - - - ( 14,032 ) - ( 57,501 ) Dividends

– common shares - - - - - - - - - ( 1,093,354 ) - ( 1,093,354 ) Dividends

– series A preferred shares - - - - - - - - - ( 590,162 ) - ( 590,162 ) Dividends

– series B preferred shares - - - - - - - - - ( 162,268 ) - ( 16,268 ) Deemed

dividend – down round provision in warrants - - - - - - - - 9,012,730 ( 9,012,730 ) - - Net

loss - - - - - - - - - ( 10,159,600 ) ( 642,313 ) ( 10,801,913 ) Balance

at December 31, 2022 1,593,940 $ 1,338,746 464,899 $ 1,214,181 $ 1,000 4,079,137 $ 4,079 $ ( 2,000,000 ) $ 43,962,606 $ ( 41,919,277 ) $ 288,499 $ 2,889,834 The

accompanying notes are an integral part of these consolidated financial statements F- 6 1847

HOLDINGS LLC CONSOLIDATED

STATEMENTS OF CASH FLOWS Years

Ended December

31 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 10,801,913 ) $ ( 3,480,752 ) Adjustments to reconcile net loss to net cash

used in operating activiti Income from discontinued

operations - ( 240,405 ) Gain on disposition of

subsidiary - ( 3,282,804 ) Gain on forgiveness of

debt - ( 360,302 ) Gain on disposal of property

and equipment ( 65,417 ) ( 10,885 ) Loss on redemption of

preferred shares - 4,017,553 Loss on extinguishment

of debt 2,039,815 - Loss on write-down of

contingent note payable 158,817 602,204 Deferred tax asset (liability) ( 1,471,000 ) 75,000 Inventory reserve 38,000 - Depreciation and amortization 2,037,112 908,982 Amortization of debt

discounts 1,900,194 382,565 Amortization of right-of-use

assets 593,121 181,032 Changes in operating assets and liabiliti Receivables ( 1,836,572 ) 48,930 Contract assets ( 1,108 ) - Inventories 1,205,283 389,110 Prepaid expenses and

other current assets 202,173 182,366 Other assets 3,494 - Accounts payable and

accrued expenses 2,992,107 719,890 Contract liabilities ( 194,608 ) ( 950,640 ) Customer deposits ( 405,601 ) 94,302 Due to related parties - 3,570 Operating

lease liabilities ( 525,374 ) ( 177,282 ) Net cash used in operating

activities from continuing operations ( 4,131,477 ) ( 897,566 ) Net

cash used in operating activities from discontinued operations - ( 170,580 ) Net

cash used in operating activities ( 4,131,477 ) ( 1,068,146 ) CASH FLOWS FROM INVESTING ACTIVITIES Net cash paid in

acquisitions - ( 15,857,295 ) Purchases of property

and equipment ( 256,677 ) ( 177,475 ) Proceeds from disposal

of property and equipment 97,140 25,000 Proceeds from disposition

of subsidiary - 325,000 Investments

in certificates of deposit ( 881 ) - Net cash used in investing

activities from continuing operations ( 160,418 ) ( 15,684,770 ) Net

cash provided by investing activities from discontinued operations - 644,303 Net

cash used in investing activities ( 160,418 ) ( 15,040,467 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from convertible

notes payable, net of fees and debt discounts - 23,744,975 Net proceeds from notes

payable 499,600 3,550,000 Payment of notes

payable – related party - ( 100,000 ) Proceeds from (repayment

on) lines of credit - ( 301,081 ) Repayment of grid note

– related party - ( 56,900 ) Net proceeds from issuance

of common shares and warrants in public offering 5,148,700 - Net proceeds from issuance

of series A senior convertible preferred shares - 3,000,000 Net proceeds from issuance

of series B senior convertible preferred shares 1,429,700 - Repayments of notes payable

and finance lease liabilities ( 977,907 ) ( 5,021,511 ) Repayments to sellers - ( 977,686 ) Cash paid for financing

costs - ( 165,230 ) Redemption of series

A senior convertible preferred shares ( 209,091 ) ( 6,054,241 ) Redemption of series

B senior convertible preferred shares ( 57,501 ) - Dividends on series A

senior convertible preferred shares ( 590,162 ) ( 1,032,806 ) Dividends on series B

senior convertible preferred shares ( 162,268 ) - Dividends

on common shares ( 1,093,354 ) - Net cash provided by financing

activities from continuing operations 3,987,717 16,585,520 Net

cash used in financing activities from discontinued operations - ( 208,693 ) Net

cash provided by financing activities 3,987,717 16,376,827 NET CHANGE IN CASH AND CASH EQUIVALENTS FROM

CONTINUING OPERATIONS ( 304,178 ) 3,184 NET CHANGE IN CASH AND CASH EQUIVALENT FROM

DISCONTINUED OPERATIONS - 265,030 CASH AND CASH EQUIVALENTS

AVAILABLE FROM DISCONTINUED OPERATIONS - 265,030 CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATIONS Beginning of the period 1,383,533 1,380,349 End of the period $ 1,079,355 $ 1,383,533 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash

paid for interest $ 2,115,140 $ 176,204 Cash

paid for income taxes $ 188,224 $ 50,000 NON-CASH INVESTING AND

FINANCING ACTIVITIES Net

assets acquired in the acquisition of High Mountain and Innovative Cabinets $ - $ 3,716,375 Net

assets acquired in the acquisition of Wolo $ - $ 6,606,403 Due

to seller (net cash paid to seller after closing) $ - $ 977,685 Notes

payable sellers $ - $ 6,730,345 Accrued

common share dividends $ - $ 242,160 Deemed

dividend related to issuance of preferred shares $ - $ 1,527,086 Additional

paid in capital – common shares and warrants issued $ - $ 757,792 Issuance

of common shares upon conversion of series A preferred shares $ 111,986 $ - Issuance of common

shares upon cashless exercise of warrants $ 126 $ - Deemed

dividend from down round provision in warrants $ 9,012,730 $ - Financed

purchases of property and equipment $ 568,764 $ 688,978 Debt

discount on notes payable issued with warrants $ 503,050 $ - Operating

lease right-of-use asset and liability remeasurement $ 254,713 $ 2,184,477 The

accompanying notes are an integral part of these consolidated financial statements F- 7 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 NOTE 1—ORGANIZATION

AND NATURE OF BUSINESS 1847

Holdings LLC (the “Company”) was formed under the laws of the State of Delaware on January 22, 2013. The Company is

in the business of acquiring small businesses in a variety of different industries. On

March 27, 2020, the Company and the Company’s wholly owned subsidiary 1847 Asien Inc., a Delaware corporation (“1847 Asien”),

entered into a stock purchase agreement with Asien’s Appliance, Inc., a California corporation (“Asien’s”), 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”), pursuant to which 1847 Asien acquired all of the issued and outstanding stock of Asien’s on May 28, 2020. As a

result of this transaction, the Company owns 95% of 1847 Asien, with the remaining 5% held by a third-party, and 1847 Asien owns 100%

of Asien’s. On

August 27, 2020, the Company and the Company’s wholly owned subsidiary 1847 Cabinet Inc., a Delaware corporation (“1847 Cabinet”),

entered into a stock purchase agreement with Kyle’s Custom Wood Shop, Inc., an Idaho corporation (“Kyle’s”),

and Stephen Mallatt, Jr. and Rita Mallatt (the “Kyle’s Sellers”), pursuant to which 1847 Cabinet acquired all of the

issued and outstanding stock of Kyle’s on September 30, 2020. As a result of this transaction, the Company owns 92.5% of 1847 Cabinet,

with the remaining 7.5% held by a third-party, and 1847 Cabinet owns 100% of Kyle’s. On