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

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the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding
paragraph and to eventually attain profitable operations. The accompanying consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern. If the Company is unable to obtain adequate capital,
it could be forced to cease operations. Sequencing Under
ASC Topic 815, Derivatives and Hedging , the Company has adopted a sequencing policy, whereby, in the event that reclassification
of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate
it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will
be allocated on the basis of the earliest maturity date of potentially dilutive instruments first, with the earliest maturity date of
grants receiving the first allocation of shares. Pursuant to ASC 815, issuances of securities to the Company’s employees and directors,
or to compensate grantees in a share-based payment arrangement, are not subject to the sequencing policy. Recent
Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial
Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this update,
among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical
experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use
forward-looking information to better inform their credit loss estimates. As a smaller reporting company, the guidance is effective for
our fiscal years beginning after December 15, 2022. The Company does not expect the adoption of this ASU to have a material impact on
the consolidated financial statements and related disclosures. In
August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts In An Entity’s Own Equity .
ASU 2020-06 simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with
a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments
will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, ASU 2020-06
amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury
stock method is no longer available. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years
beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, ASU 2020-06 is effective
for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted,
but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company
adopted this guidance on January 1, 2022. The Company’s adoption of this update did not have a material impact on the consolidated
financial statements and related disclosures. In
October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities
from Contracts with Customers . This ASU amends ASC 805 to require acquiring entities to apply ASC 606 to recognize and measure contract
assets and contract liabilities in business combinations. The ASU is effective for public entities for fiscal years beginning after December
15, 2022, including interim periods within those fiscal years. This ASU should be applied prospectively to acquisitions occurring on
or after the effective date of December 15, 2022, and early adoption is permitted. The Company adopted this guidance on January 1, 2022.
The Company’s adoption of this update did not have a material impact on the consolidated financial statements and related disclosures. F- 16 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 In
March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures (Topic 326): Financial
Instruments – Credit Losses . This amended guidance will eliminate the accounting designation of a loan modification as a TDR,
including eliminating the measurement guidance for TDRs. The amendments also enhance existing disclosure requirements and introduce new
requirements related to modifications of receivables made to borrowers experiencing financial difficulty. Additionally, this guidance
requires entities to disclose gross write-offs by year of origination for financing receivables, such as loans and interest receivable.
The ASU is effective January 1, 2023, and is required to be applied prospectively, except for the recognition and measurement of TDRs
which can be applied on a modified retrospective basis. The Company does not expect the adoption of this ASU to have a material impact
on the consolidated financial statements and related disclosures. NOTE
3—DISAGGREGATION OF REVENUES AND SEGMENT REPORTING The
Company has three reportable segments: The
Retail and Appliances Segment 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 provides finished carpentry products and services (door frames, base boards, crown molding, cabinetry, bathroom
sinks and cabinets, bookcases, built-in closets, fireplace mantles, windows, and custom design and build of cabinetry and countertops). The
Automotive Supplies Segment provides 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. The Company’s
revenues for the years ended December 31, 2022 and 2021 are disaggregated as follows: Year
Ended December 31, 2022 Retail
and Appliances Construction Automotive
Supplies Total Revenues Appliances $ 9,197,811 $ - $ - $ 9,197,811 Appliance accessories, parts,
and other 1,473,318 - - 1,473,318 Automotive horns - - 5,068,616 5,068,616 Automotive lighting - - 1,420,472 1,420,472 Custom cabinets and countertops - 10,644,283 - 10,644,283 Finished
carpentry - 21,124,624 - 21,124,624 Total Revenues $ 10,671,129 $ 31,768,907 $ 6,489,088 $ 48,929,124 F- 17 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 Year
Ended December 31, 2021 Retail
and Appliances Construction Automotive
Supplies Total Revenues Appliances $ 11,214,436 $ - $ - $ 11,214,436 Appliance accessories, parts,
and other 1,526,627 - - 1,526,627 Automotive horns - - 4,215,868 4,215,868 Automotive lighting - - 1,500,163 1,500,163 Custom cabinets and countertops - 7,391,959 - 7,391,959 Finished
carpentry - 4,811,931 - 4,811,931 Total Revenues $ 12,741,063 $ 12,203,890 $ 5,716,031 $ 30,660,984 Segment information
for the years ended December 31, 2022 and 2021 is as follows: Year
Ended December 31, 2022 Retail
and Appliances Construction Automotive
Supplies Corporate
Services Total Revenues $ 10,671,129 $ 31,768,907 $ 6,489,088 $ - $ 48,929,124 Operating expenses Cost of revenues 8,203,401 20,980,103 4,044,226 - 33,227,730 Personnel 822,539 6,100,374 1,094,361 1,513,827 9,531,101 Depreciation and amortization 222,438 1,607,148 207,526 - 2,037,112 General
and administrative 1,649,702 5,156,425 1,275,369 1,791,193 9,872,689 Total
Operating Expenses 10,898,080 33,844,050 6,621,482 3,305,020 54,668,632 Loss from Operations $ ( 226,951 ) $ ( 2,075,143 ) $ ( 132,394 ) $ ( 3,305,020 ) $ ( 5,739,508 ) Year
Ended December 31, 2021 Retail
and Appliances Construction Automotive
Supplies Corporate
Services Total Revenues $ 12,741,063 $ 12,203,890 $ 5,716,031 $ - $ 30,660,984 Operating expenses Cost of revenues 9,782,837 6,709,827 3,608,242 - 20,100,906 Personnel 783,913 1,463,443 1,014,895 541,246 3,803,497 Depreciation and amortization 182,714 570,378 155,890 - 908,982 General
and administrative 1,916,882 2,376,351 1,912,695 745,570 6,951,498 Total
Operating Expenses 12,666,346 11,119,999 6,691,722 1,286,816 31,764,883 Income (loss) from Operations $ 74,717 $ 1,083,891 $ ( 975,691 ) $ ( 1,286,816 ) $ ( 1,103,899 ) NOTE
4—DISCONTINUED OPERATIONS ASC Topic 360, Property, Plant, and Equipment ,
requires that a long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which a set of criteria
have been met, including criteria that the sale of the asset (disposal group) is probable, and actions required to complete the plan
indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. On
April 19, 2021, the Company 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 the Company. All financial information of 1847 Neese operations are classified as discontinued operations and
not presented as part of continuing operations for the year ended December 31, 2021. F- 18 1847
HOLDINGS LLC NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER
31, 2022 AND 2021 In
accordance with ASC Topic 205, Presentation of Financial Statements , the Company elected to not allocate consolidated interest
expense to discontinued operations where the debt is not directly attributable to or related to discontinued operations. The
following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated
statements of operations for the year ended December 31, 2021: Year Ended December 31, 2021 REVENUES Services $ 612,862 Sales
of parts and equipment 324,189 TOTAL REVENUE 937,051 OPERATING EXPENSES Cost of revenues 298,050 Personnel costs 485,774 Depreciation and amortization 360,746 Fuel 112,746 General
and administrative 290,872 TOTAL OPERATING EXPENSES 1,548,188 LOSS FROM OPERATIONS ( 611,137 ) OTHER INCOME (EXPENSE) Financing costs and loss

the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding

paragraph and to eventually attain profitable operations. The accompanying consolidated financial statements do not include any adjustments

that might be necessary if the Company is unable to continue as a going concern. If the Company is unable to obtain adequate capital,

it could be forced to cease operations. Sequencing Under

ASC Topic 815, Derivatives and Hedging , the Company has adopted a sequencing policy, whereby, in the event that reclassification

of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate

it has sufficient authorized shares as a result of certain securities with a potentially indeterminable number of shares, shares will

be allocated on the basis of the earliest maturity date of potentially dilutive instruments first, with the earliest maturity date of

grants receiving the first allocation of shares. Pursuant to ASC 815, issuances of securities to the Company’s employees and directors,

or to compensate grantees in a share-based payment arrangement, are not subject to the sequencing policy. Recent

Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial

Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this update,

among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical

experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use

forward-looking information to better inform their credit loss estimates. As a smaller reporting company, the guidance is effective for

our fiscal years beginning after December 15, 2022. The Company does not expect the adoption of this ASU to have a material impact on

the consolidated financial statements and related disclosures. In

August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts In An Entity’s Own Equity .

ASU 2020-06 simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with

a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments

will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, ASU 2020-06

amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury

stock method is no longer available. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years

beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, ASU 2020-06 is effective

for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted,

but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company

adopted this guidance on January 1, 2022. The Company’s adoption of this update did not have a material impact on the consolidated

financial statements and related disclosures. In

October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities

from Contracts with Customers . This ASU amends ASC 805 to require acquiring entities to apply ASC 606 to recognize and measure contract

assets and contract liabilities in business combinations. The ASU is effective for public entities for fiscal years beginning after December

15, 2022, including interim periods within those fiscal years. This ASU should be applied prospectively to acquisitions occurring on

or after the effective date of December 15, 2022, and early adoption is permitted. The Company adopted this guidance on January 1, 2022.

The Company’s adoption of this update did not have a material impact on the consolidated financial statements and related disclosures. F- 16 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 In

March 2022, the FASB issued ASU 2022-02, Troubled Debt Restructurings (“TDRs”) and Vintage Disclosures (Topic 326): Financial

Instruments – Credit Losses . This amended guidance will eliminate the accounting designation of a loan modification as a TDR,

including eliminating the measurement guidance for TDRs. The amendments also enhance existing disclosure requirements and introduce new

requirements related to modifications of receivables made to borrowers experiencing financial difficulty. Additionally, this guidance

requires entities to disclose gross write-offs by year of origination for financing receivables, such as loans and interest receivable.

The ASU is effective January 1, 2023, and is required to be applied prospectively, except for the recognition and measurement of TDRs

which can be applied on a modified retrospective basis. The Company does not expect the adoption of this ASU to have a material impact

on the consolidated financial statements and related disclosures. NOTE

3—DISAGGREGATION OF REVENUES AND SEGMENT REPORTING The

Company has three reportable segments: The

Retail and Appliances Segment 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 provides finished carpentry products and services (door frames, base boards, crown molding, cabinetry, bathroom

sinks and cabinets, bookcases, built-in closets, fireplace mantles, windows, and custom design and build of cabinetry and countertops). The

Automotive Supplies Segment provides 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. The Company’s

revenues for the years ended December 31, 2022 and 2021 are disaggregated as follows: Year

Ended December 31, 2022 Retail

and Appliances Construction Automotive

Supplies Total Revenues Appliances $ 9,197,811 $ - $ - $ 9,197,811 Appliance accessories, parts,

and other 1,473,318 - - 1,473,318 Automotive horns - - 5,068,616 5,068,616 Automotive lighting - - 1,420,472 1,420,472 Custom cabinets and countertops - 10,644,283 - 10,644,283 Finished

carpentry - 21,124,624 - 21,124,624 Total Revenues $ 10,671,129 $ 31,768,907 $ 6,489,088 $ 48,929,124 F- 17 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 Year

Ended December 31, 2021 Retail

and Appliances Construction Automotive

Supplies Total Revenues Appliances $ 11,214,436 $ - $ - $ 11,214,436 Appliance accessories, parts,

and other 1,526,627 - - 1,526,627 Automotive horns - - 4,215,868 4,215,868 Automotive lighting - - 1,500,163 1,500,163 Custom cabinets and countertops - 7,391,959 - 7,391,959 Finished

carpentry - 4,811,931 - 4,811,931 Total Revenues $ 12,741,063 $ 12,203,890 $ 5,716,031 $ 30,660,984 Segment information

for the years ended December 31, 2022 and 2021 is as follows: Year

Ended December 31, 2022 Retail

and Appliances Construction Automotive

Supplies Corporate

Services Total Revenues $ 10,671,129 $ 31,768,907 $ 6,489,088 $ - $ 48,929,124 Operating expenses Cost of revenues 8,203,401 20,980,103 4,044,226 - 33,227,730 Personnel 822,539 6,100,374 1,094,361 1,513,827 9,531,101 Depreciation and amortization 222,438 1,607,148 207,526 - 2,037,112 General

and administrative 1,649,702 5,156,425 1,275,369 1,791,193 9,872,689 Total

Operating Expenses 10,898,080 33,844,050 6,621,482 3,305,020 54,668,632 Loss from Operations $ ( 226,951 ) $ ( 2,075,143 ) $ ( 132,394 ) $ ( 3,305,020 ) $ ( 5,739,508 ) Year

Ended December 31, 2021 Retail

and Appliances Construction Automotive

Supplies Corporate

Services Total Revenues $ 12,741,063 $ 12,203,890 $ 5,716,031 $ - $ 30,660,984 Operating expenses Cost of revenues 9,782,837 6,709,827 3,608,242 - 20,100,906 Personnel 783,913 1,463,443 1,014,895 541,246 3,803,497 Depreciation and amortization 182,714 570,378 155,890 - 908,982 General

and administrative 1,916,882 2,376,351 1,912,695 745,570 6,951,498 Total

Operating Expenses 12,666,346 11,119,999 6,691,722 1,286,816 31,764,883 Income (loss) from Operations $ 74,717 $ 1,083,891 $ ( 975,691 ) $ ( 1,286,816 ) $ ( 1,103,899 ) NOTE

4—DISCONTINUED OPERATIONS ASC Topic 360, Property, Plant, and Equipment ,

requires that a long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which a set of criteria

have been met, including criteria that the sale of the asset (disposal group) is probable, and actions required to complete the plan

indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. On

April 19, 2021, the Company 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 the Company. All financial information of 1847 Neese operations are classified as discontinued operations and

not presented as part of continuing operations for the year ended December 31, 2021. F- 18 1847

HOLDINGS LLC NOTES

TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER

31, 2022 AND 2021 In

accordance with ASC Topic 205, Presentation of Financial Statements , the Company elected to not allocate consolidated interest

expense to discontinued operations where the debt is not directly attributable to or related to discontinued operations. The

following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated

statements of operations for the year ended December 31, 2021: Year Ended December 31, 2021 REVENUES Services $ 612,862 Sales

of parts and equipment 324,189 TOTAL REVENUE 937,051 OPERATING EXPENSES Cost of revenues 298,050 Personnel costs 485,774 Depreciation and amortization 360,746 Fuel 112,746 General

and administrative 290,872 TOTAL OPERATING EXPENSES 1,548,188 LOSS FROM OPERATIONS ( 611,137 ) OTHER INCOME (EXPENSE) Financing costs and loss