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

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December 22, 2020, the Company and its wholly-owned subsidiary 1847 Wolo Inc. (“1847 Wolo”) entered into a stock purchase
agreement with Wolo Mfg. Corp., a New York corporation (“Wolo Mfg”), and Wolo Industrial Horn & Signal, Inc., a New York
corporation (“Wolo H&S”), and Barbara Solow and Stanley Solow (together, the “Wolo Sellers”), pursuant to
which 1847 Wolo acquired all of the issued and outstanding stock of Wolo Mfg and Wolo H&S on March 30, 2021 (see Note 11). As a result
of this transaction, the Company owns 92.5% of 1847 Wolo, with the remaining 7.5% held by a third-party, and 1847 Wolo owns 100% of Wolo
Mfg and Wolo H&S. On
March 3, 2017, the Company’s wholly owned subsidiary 1847 Neese Inc., a Delaware corporation (“1847 Neese”), entered
into a stock purchase agreement with Neese, Inc., an Iowa corporation (“Neese”), and Alan Neese and Katherine Neese (the
“Neese Sellers”), pursuant to which 1847 Neese acquired all of the issued and outstanding capital stock of Neese on March
3, 2017. As a result of this transaction, the Company owned 55% of 1847 Neese, with the remaining 45% held by the Neese Sellers. On April
19, 2021, the Company entered into a stock purchase agreement with the Neese Sellers, pursuant to which the Neese Sellers purchased the
Company’s 55% ownership interest in 1847 Neese for a purchase price of $325,000 in cash (the “Neese Spin-Off”). As
a result of the Neese Spin-Off, 1847 Neese is no longer a subsidiary of the Company (see Note 4). On
September 23, 2021, 1847 Cabinet entered into a securities purchase agreement with 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”), and Steven J. Parkey and Jose D. Garcia-Rendon (together, the “H&I Sellers”), pursuant to which 1847
Cabinet acquired all of the issued and outstanding capital stock or other equity securities of High Mountain and Innovative Cabinets
on October 8, 2021 (see Note 11). As a result of this transaction, 1847 Cabinet acquired 92.5% of High Mountain and Innovative Cabinets,
with the remaining 7.5% held by a third-party. On April 1, 2022, 1847 Cabinet transferred all of its shares of High Mountain to Innovative
Cabinets, as a result of which Innovative Cabinets now owns 92.5% of High Mountain, with the remaining 7.5% held by a third-party. NOTE 2—SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the
United States of America (“GAAP”) and are presented in US dollars. The
results of 1847 Neese are included within discontinued operations for the year ended December 31, 2021. Principles
of Consolidation The
consolidated financial statements of the Company include the accounts of the Company and its majority-owned or controlled subsidiaries.
Intercompany accounts and transactions have been eliminated in consolidation. F- 8 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 Reverse
Share Split On
August 2, 2022, the Company effected a 1-for-4 reverse split of its outstanding common shares. All outstanding common shares and warrants
were adjusted to reflect the 1-for-4 reverse split, with respective exercise prices of the warrants proportionately increased. The outstanding
convertible notes and series A and B convertible senior preferred shares conversion prices were adjusted to reflect a proportional decrease
in the number of common shares to be issued upon conversion. All
share and per share data throughout these condensed consolidated financial statements have been retroactively adjusted to reflect the
reverse share split. The total number of authorized common shares did not change. As a result of the reverse common share split, an amount
equal to the decreased value of common shares was reclassified from “common shares” to “additional paid-in capital.” Use
of Estimates The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Segment
Reporting The
Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 280, Segment
Reporting , requires that an enterprise report selected information about reportable segments in its financial reports issued to its
shareholders. The Company has 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 Mfg and Wolo H&S (together, “Wolo”). The Retail
and Appliances Segment is comprised of the business of Asien’s, which is based in Santa Rosa, CA, and provides a wide variety of
appliance products (laundry, refrigeration, cooking, dishwashers, outdoor, accessories, parts, and other appliance related products)
and services (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, 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, NY, 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. The
Company provides general corporate services to its 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. Cash and Cash Equivalents, and Marketable Securities Cash and cash equivalents consist of cash on hand
and highly liquid investments with original maturities of three months or less. The Company maintains deposits in several financial institutions,
which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”).
The Company has not experienced any losses related to amounts in excess of FDIC limits. As of December 31, 2022 and 2021, the Company
had $ 380,401 and $ 369,963 in excess of FDIC limits, respectively. The Company’s investments in
marketable securities are classified based on the nature of the securities and their availability for use in current operations. The
Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual
maturity date. F- 9 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 Reclassifications Certain
reclassifications within property and equipment, notes payable, preferred shares, and operating expenses have been made to prior period’s
financial statements to conform to the current period financial statement presentation. There is no impact in total to the results of
operations and cash flows in all periods presented. Revenue
Recognition and Cost of Revenue The
Company records revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers . Revenue is recognized to
depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services. ASC 606 also requires additional disclosure about the nature, amount, timing, and uncertainty
of revenue and cash flows arising from customer purchase orders, including significant judgments. Retail
and Appliances Segment The Company collects payment for special-order
models including tax and partial payment for non-special orders from the customer at the time the order is placed. The Company does not
incur incremental costs obtaining purchase orders from customers, however, if it did, because all contracts are less than a year in duration,
any contract costs incurred would be expensed rather than capitalized. Performance
Obligations – The revenue that the Company recognizes arises from orders it receives from customers. The Company’s performance
obligations under the customer orders correspond to each sale of merchandise that it makes to customers under the purchase orders; as
a result, each purchase order generally contains only one performance obligation based on the merchandise sale to be completed. Control
of the delivery transfers to customers when the customer can direct the use of, and obtain substantially all the benefits from, the Company’s
products, which generally occurs when the customer assumes the risk of loss. The transfer of control generally occurs at the point of
pickup, shipment, or installation. Once this occurs, the Company has satisfied 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 revenue includes the cost of purchased merchandise plus freight and any applicable delivery charges from the vendor to the Company.
Substantially all sales are to individual retail consumers (homeowners), builders and designers. The large majority of customers are
homeowners and their contractors, with the homeowner being key in the final decisions. The Company has a diverse customer base with no
one client accounting for more than 10 % of total revenue. Customer

December 22, 2020, the Company and its wholly-owned subsidiary 1847 Wolo Inc. (“1847 Wolo”) entered into a stock purchase

agreement with Wolo Mfg. Corp., a New York corporation (“Wolo Mfg”), and Wolo Industrial Horn & Signal, Inc., a New York

corporation (“Wolo H&S”), and Barbara Solow and Stanley Solow (together, the “Wolo Sellers”), pursuant to

which 1847 Wolo acquired all of the issued and outstanding stock of Wolo Mfg and Wolo H&S on March 30, 2021 (see Note 11). As a result

of this transaction, the Company owns 92.5% of 1847 Wolo, with the remaining 7.5% held by a third-party, and 1847 Wolo owns 100% of Wolo

Mfg and Wolo H&S. On

March 3, 2017, the Company’s wholly owned subsidiary 1847 Neese Inc., a Delaware corporation (“1847 Neese”), entered

into a stock purchase agreement with Neese, Inc., an Iowa corporation (“Neese”), and Alan Neese and Katherine Neese (the

“Neese Sellers”), pursuant to which 1847 Neese acquired all of the issued and outstanding capital stock of Neese on March

3, 2017. As a result of this transaction, the Company owned 55% of 1847 Neese, with the remaining 45% held by the Neese Sellers. On April

19, 2021, the Company entered into a stock purchase agreement with the Neese Sellers, pursuant to which the Neese Sellers purchased the

Company’s 55% ownership interest in 1847 Neese for a purchase price of $325,000 in cash (the “Neese Spin-Off”). As

a result of the Neese Spin-Off, 1847 Neese is no longer a subsidiary of the Company (see Note 4). On

September 23, 2021, 1847 Cabinet entered into a securities purchase agreement with 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”), and Steven J. Parkey and Jose D. Garcia-Rendon (together, the “H&I Sellers”), pursuant to which 1847

Cabinet acquired all of the issued and outstanding capital stock or other equity securities of High Mountain and Innovative Cabinets

on October 8, 2021 (see Note 11). As a result of this transaction, 1847 Cabinet acquired 92.5% of High Mountain and Innovative Cabinets,

with the remaining 7.5% held by a third-party. On April 1, 2022, 1847 Cabinet transferred all of its shares of High Mountain to Innovative

Cabinets, as a result of which Innovative Cabinets now owns 92.5% of High Mountain, with the remaining 7.5% held by a third-party. NOTE 2—SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES Basis

of Presentation The

consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the

United States of America (“GAAP”) and are presented in US dollars. The

results of 1847 Neese are included within discontinued operations for the year ended December 31, 2021. Principles

of Consolidation The

consolidated financial statements of the Company include the accounts of the Company and its majority-owned or controlled subsidiaries.

Intercompany accounts and transactions have been eliminated in consolidation. F- 8 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 Reverse

Share Split On

August 2, 2022, the Company effected a 1-for-4 reverse split of its outstanding common shares. All outstanding common shares and warrants

were adjusted to reflect the 1-for-4 reverse split, with respective exercise prices of the warrants proportionately increased. The outstanding

convertible notes and series A and B convertible senior preferred shares conversion prices were adjusted to reflect a proportional decrease

in the number of common shares to be issued upon conversion. All

share and per share data throughout these condensed consolidated financial statements have been retroactively adjusted to reflect the

reverse share split. The total number of authorized common shares did not change. As a result of the reverse common share split, an amount

equal to the decreased value of common shares was reclassified from “common shares” to “additional paid-in capital.” Use

of Estimates The

preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Segment

Reporting The

Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 280, Segment

Reporting , requires that an enterprise report selected information about reportable segments in its financial reports issued to its

shareholders. The Company has 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 Mfg and Wolo H&S (together, “Wolo”). The Retail

and Appliances Segment is comprised of the business of Asien’s, which is based in Santa Rosa, CA, and provides a wide variety of

appliance products (laundry, refrigeration, cooking, dishwashers, outdoor, accessories, parts, and other appliance related products)

and services (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, 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, NY, 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. The

Company provides general corporate services to its 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. Cash and Cash Equivalents, and Marketable Securities Cash and cash equivalents consist of cash on hand

and highly liquid investments with original maturities of three months or less. The Company maintains deposits in several financial institutions,

which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”).

The Company has not experienced any losses related to amounts in excess of FDIC limits. As of December 31, 2022 and 2021, the Company

had $ 380,401 and $ 369,963 in excess of FDIC limits, respectively. The Company’s investments in

marketable securities are classified based on the nature of the securities and their availability for use in current operations. The

Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual

maturity date. F- 9 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 Reclassifications Certain

reclassifications within property and equipment, notes payable, preferred shares, and operating expenses have been made to prior period’s

financial statements to conform to the current period financial statement presentation. There is no impact in total to the results of

operations and cash flows in all periods presented. Revenue

Recognition and Cost of Revenue The

Company records revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers . Revenue is recognized to

depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be

entitled in exchange for those goods or services. ASC 606 also requires additional disclosure about the nature, amount, timing, and uncertainty

of revenue and cash flows arising from customer purchase orders, including significant judgments. Retail

and Appliances Segment The Company collects payment for special-order

models including tax and partial payment for non-special orders from the customer at the time the order is placed. The Company does not

incur incremental costs obtaining purchase orders from customers, however, if it did, because all contracts are less than a year in duration,

any contract costs incurred would be expensed rather than capitalized. Performance

Obligations – The revenue that the Company recognizes arises from orders it receives from customers. The Company’s performance

obligations under the customer orders correspond to each sale of merchandise that it makes to customers under the purchase orders; as

a result, each purchase order generally contains only one performance obligation based on the merchandise sale to be completed. Control

of the delivery transfers to customers when the customer can direct the use of, and obtain substantially all the benefits from, the Company’s

products, which generally occurs when the customer assumes the risk of loss. The transfer of control generally occurs at the point of

pickup, shipment, or installation. Once this occurs, the Company has satisfied 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 revenue includes the cost of purchased merchandise plus freight and any applicable delivery charges from the vendor to the Company.

Substantially all sales are to individual retail consumers (homeowners), builders and designers. The large majority of customers are

homeowners and their contractors, with the homeowner being key in the final decisions. The Company has a diverse customer base with no

one client accounting for more than 10 % of total revenue. Customer