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

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may elect to perform an optional qualitative assessment to determine whether it is more likely than not that the fair value of its reporting
units has fallen below their carrying value. This assessment is based on several factors, including industry and market conditions, overall
financial performance, including an assessment of cash flows in comparison to actual and projected results of prior periods. If it is
determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value based on such qualitative
analysis, or if the Company elects to skip this step, the Company performs a Step 1 quantitative analysis to determine the fair value
of the reporting unit. At December 31, 2022 and 2021, there were no impairments of goodwill. Intangible
Assets Acquired
identifiable intangible assets are amortized over the following periods: Acquired intangible Asset Amortization
Basis Expected
Life (years) Customer-Related Straight-line basis 9 - 15 Marketing-Related Straight-line basis 5 Technology-Related Straight-line basis 7 The
Company periodically evaluates the reasonableness of the useful lives of these assets. These assets are reviewed for impairment when
events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written
down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives.
At December 31, 2022 and 2021, there were no impairments of intangible assets. Long-Lived
Assets The
Company reviews its property and equipment and right-of-use (“ROU”) assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset group may not be recoverable. The test for impairment is required to be performed by management
upon triggering events. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to
the future undiscounted 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. At December 31, 2022 and 2021,
there were no impairments of long-lived assets. F- 13 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 Fair
Value of Financial Instruments 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 fair value hierarchy is defined in the following three
categori Level
1: Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level
2: Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly
or indirectly. Level
3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management
judgment. The Company’s marketable securities are
considered held to maturity are comprised of certificates of deposit and are categorized as Level 2 in the fair value hierarchy. Cash and cash equivalents, receivables, inventories,
prepaid expenses, accounts payable, accrued expenses, customer deposits, and contract assets and liabilities approximate fair value, due
to their short-term nature. The carrying value of notes payable and short and long-term debt also approximates fair value since these
instruments bear market rates of interest. Assets
and liabilities that are measured at fair value on a nonrecurring basis relate primarily to long-lived assets, intangible assets, and
goodwill, which are remeasured when the derived fair value is below carrying value in the consolidated balance sheets. Income
Taxes Income
taxes are accounted for under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred
income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial
reporting purposes and for income tax purposes. Where, based on the weight of available evidence, it is more likely than not that some
amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s
judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. A tax position must
meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position
that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related
appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest
amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Stock-Based
Compensation The
Company records stock-based compensation in accordance with ASC Topic 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. F- 14 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 Basic
Income (Loss) Per Share Basic
earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding
during each period. Diluted earnings (loss) per share is calculated by adjusting the weighted average number of shares of common stock
outstanding for the dilutive effect, if any, of common stock equivalents. Common stock equivalents whose effect would be antidilutive
are not included in diluted earnings (loss) per share. The Company uses the treasury stock method to determine the dilutive effect, which
assumes that all common stock equivalents have been exercised at the beginning of the period and that the funds obtained from those exercises
were used to repurchase shares of common stock of the Company at the average closing market price during the period (see Note 18). Operating
Leases The
Company accounts for leases in accordance with ASC Topic 842, Leases . The Company determines whether a contract is a lease at
contract inception or for a modified contract at the modification date. At inception or modification, the Company recognizes ROU assets
and related lease liabilities on the balance sheet for all leases greater than one year in duration. Lease liabilities and their corresponding
ROU assets are initially measured at the present value of the unpaid lease payments as of the lease commencement date. If the lease contains
a renewal and/or termination option, the exercise of the option is included in the term of the lease if the Company is reasonably certain
that a renewal or termination option will be exercised. As the Company’s leases do not provide an implicit rate, the Company uses
an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective
lease to determine the present value of future payments. The IBR is determined by estimating what it would cost the Company to borrow
a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location
of the leased asset. Operating
lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed
to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess
of cash payments during the early years of a lease and rent expense less than cash payments in later years. The difference between rent
expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability. When
calculating the present value of minimum lease payments, the Company accounts for leases as one single lease component if a lease has
both lease and non-lease fixed cost components. Variable lease and non-lease cost components are expensed as incurred. The
Company does not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less. The Company recognizes the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term. F- 15 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 Liquidity and Going Concern Assessment As of December 31, 2022, the Company had cash
and cash equivalents of $ 1,079,355 . For the year ended December 31, 2022, the Company incurred a loss from operations of $ 5,739,508 (before
deducting losses attributable to non-controlling interests), cash flows used in operations of $ 4,131,477 , and working capital deficit
of $ 2,935,590 . The Company has generated operating losses since its inception and has relied on cash on hand, sales of securities, external
bank lines of credit, and issuance of third-party and related party debt to support cashflow from operations, which creates substantial
doubt about its ability to continue as a going concern for a period at least one year from the date of issuance of these consolidated
financial statements. Management
plans to address the above as needed by, securing additional bank lines of credit and obtaining additional financing through debt or
equity transactions. Management has implemented tight cost controls to conserve cash. The ability of

may elect to perform an optional qualitative assessment to determine whether it is more likely than not that the fair value of its reporting

units has fallen below their carrying value. This assessment is based on several factors, including industry and market conditions, overall

financial performance, including an assessment of cash flows in comparison to actual and projected results of prior periods. If it is

determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value based on such qualitative

analysis, or if the Company elects to skip this step, the Company performs a Step 1 quantitative analysis to determine the fair value

of the reporting unit. At December 31, 2022 and 2021, there were no impairments of goodwill. Intangible

Assets Acquired

identifiable intangible assets are amortized over the following periods: Acquired intangible Asset Amortization

Basis Expected

Life (years) Customer-Related Straight-line basis 9 - 15 Marketing-Related Straight-line basis 5 Technology-Related Straight-line basis 7 The

Company periodically evaluates the reasonableness of the useful lives of these assets. These assets are reviewed for impairment when

events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written

down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives.

At December 31, 2022 and 2021, there were no impairments of intangible assets. Long-Lived

Assets The

Company reviews its property and equipment and right-of-use (“ROU”) assets for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset group may not be recoverable. The test for impairment is required to be performed by management

upon triggering events. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to

the future undiscounted 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. At December 31, 2022 and 2021,

there were no impairments of long-lived assets. F- 13 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 Fair

Value of Financial Instruments 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 fair value hierarchy is defined in the following three

categori Level

1: Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level

2: Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly

or indirectly. Level

3: Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management

judgment. The Company’s marketable securities are

considered held to maturity are comprised of certificates of deposit and are categorized as Level 2 in the fair value hierarchy. Cash and cash equivalents, receivables, inventories,

prepaid expenses, accounts payable, accrued expenses, customer deposits, and contract assets and liabilities approximate fair value, due

to their short-term nature. The carrying value of notes payable and short and long-term debt also approximates fair value since these

instruments bear market rates of interest. Assets

and liabilities that are measured at fair value on a nonrecurring basis relate primarily to long-lived assets, intangible assets, and

goodwill, which are remeasured when the derived fair value is below carrying value in the consolidated balance sheets. Income

Taxes Income

taxes are accounted for under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities

are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing

assets and liabilities and their respective tax bases. Deferred

income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial

reporting purposes and for income tax purposes. Where, based on the weight of available evidence, it is more likely than not that some

amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s

judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized. A tax position must

meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position

that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related

appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest

amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Stock-Based

Compensation The

Company records stock-based compensation in accordance with ASC Topic 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. F- 14 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 Basic

Income (Loss) Per Share Basic

earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of shares of common stock outstanding

during each period. Diluted earnings (loss) per share is calculated by adjusting the weighted average number of shares of common stock

outstanding for the dilutive effect, if any, of common stock equivalents. Common stock equivalents whose effect would be antidilutive

are not included in diluted earnings (loss) per share. The Company uses the treasury stock method to determine the dilutive effect, which

assumes that all common stock equivalents have been exercised at the beginning of the period and that the funds obtained from those exercises

were used to repurchase shares of common stock of the Company at the average closing market price during the period (see Note 18). Operating

Leases The

Company accounts for leases in accordance with ASC Topic 842, Leases . The Company determines whether a contract is a lease at

contract inception or for a modified contract at the modification date. At inception or modification, the Company recognizes ROU assets

and related lease liabilities on the balance sheet for all leases greater than one year in duration. Lease liabilities and their corresponding

ROU assets are initially measured at the present value of the unpaid lease payments as of the lease commencement date. If the lease contains

a renewal and/or termination option, the exercise of the option is included in the term of the lease if the Company is reasonably certain

that a renewal or termination option will be exercised. As the Company’s leases do not provide an implicit rate, the Company uses

an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective

lease to determine the present value of future payments. The IBR is determined by estimating what it would cost the Company to borrow

a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location

of the leased asset. Operating

lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed

to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess

of cash payments during the early years of a lease and rent expense less than cash payments in later years. The difference between rent

expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability. When

calculating the present value of minimum lease payments, the Company accounts for leases as one single lease component if a lease has

both lease and non-lease fixed cost components. Variable lease and non-lease cost components are expensed as incurred. The

Company does not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less. The Company recognizes the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term. F- 15 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 Liquidity and Going Concern Assessment As of December 31, 2022, the Company had cash

and cash equivalents of $ 1,079,355 . For the year ended December 31, 2022, the Company incurred a loss from operations of $ 5,739,508 (before

deducting losses attributable to non-controlling interests), cash flows used in operations of $ 4,131,477 , and working capital deficit

of $ 2,935,590 . The Company has generated operating losses since its inception and has relied on cash on hand, sales of securities, external

bank lines of credit, and issuance of third-party and related party debt to support cashflow from operations, which creates substantial

doubt about its ability to continue as a going concern for a period at least one year from the date of issuance of these consolidated

financial statements. Management

plans to address the above as needed by, securing additional bank lines of credit and obtaining additional financing through debt or

equity transactions. Management has implemented tight cost controls to conserve cash. The ability of