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1.95M
assets, net 11,079,205 11,443,897 Other
long-term assets 85,691 85,691 TOTAL
ASSETS $ 47,612,901 $ 47,006,547 LIABILITIES,
MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT Current
Liabilities Accounts
payable and accrued expenses $ 5,911,576 $ 4,818,672 Contract
liabilities 1,696,449 2,547,903 Customer
deposits 3,677,543 3,465,259 Due
to related parties 193,762 193,762 Current
portion of operating lease liabilities 595,039 613,696 Current
portion of finance lease liabilities 143,865 100,652 Current
portion of notes payable, net 686,285 692,522 Total
Current Liabilities 12,904,519 12,432,466 Operating
lease liabilities, net of current portion 2,542,790 2,607,862 Finance
lease liabilities, net of current portion 698,409 455,905 Notes
payable, net of current portion 222,399 251,401 Convertible
notes payable, net of current portion 26,880,029 26,630,655 Contingent
note payable, net of current portion 1,001,183 1,001,183 Deferred
tax liability, net 1,981,000 2,070,000 TOTAL
LIABILITIES 46,230,329 45,449,472 Mezzanine
Equity Series A senior convertible preferred shares, 4,450,460 shares designated; 1,684,849 and 1,818,182 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively 1,415,100 1,655,404 Series B senior convertible preferred shares, 583,334 shares designated; 426,999 and zero shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively 1,113,650 - TOTAL
MEZZANINE EQUITY 2,528,750 1,655,404 Shareholders’ Deficit Allocation shares, 1,000 shares authorized; 1,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021 1,000 1,000 Common shares, $ 0.001 par value, 500,000,000 shares authorized; 4,995,232 and 4,842,851 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively 4,995 4,843 Distribution
receivable ( 2,000,000 ) ( 2,000,000 ) Additional
paid-in capital 21,983,594 21,719,410 Accumulated
deficit ( 22,012,401 ) ( 20,754,394 ) TOTAL
1847 HOLDINGS SHAREHOLDERS’ DEFICIT ( 2,022,812 ) ( 1,029,141 ) NON-CONTROLLING
INTERESTS 876,634 930,812 TOTAL
SHAREHOLDERS’ DEFICIT ( 1,146,178 ) ( 98,329 ) TOTAL
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT $ 47,612,901 $ 47,006,547 The
accompanying notes are an integral part of these condensed consolidated financial statements. 2 1847
HOLDINGS LLC CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, 2022 2021 Revenues $ 12,073,878 $ 4,780,275 Operating Expenses Cost of sales 7,749,130 3,260,682 Personnel 1,577,700 484,672 Depreciation and amortization 511,371 122,106 General and administrative 2,166,207 1,324,196 Total Operating Expenses 12,004,408 5,191,656 INCOME (LOSS) FROM OPERATIONS 69,470 ( 411,381 ) Other Income (Expenses) Other income 318 - Interest expense ( 906,743 ) ( 45,121 ) Gain on forgiveness of debt - 360,302 Gain on disposal of property and equipment 32,747 - Loss on adjustment shares - ( 757,792 ) Total Other Income (Expenses) ( 873,678 ) ( 442,611 ) NET LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES ( 804,208 ) ( 853,992 ) INCOME TAX EXPENSE ON CONTINUING OPERATIONS ( 123,000 ) - NET LOSS FROM CONTINUING OPERATIONS $ ( 927,208 ) $ ( 853,992 ) NET INCOME FROM DISCONTINUED OPERATIONS - 178,510 NET INCOME FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS - 80,329 NET INCOME FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO 1847 HOLDINGS COMMON SHAREHOLDERS - 98,181 NET LOSS $ ( 927,208 ) ( 755,811 ) NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS ( 54,178 ) ( 25,370 ) NET LOSS ATTRIBUTABLE TO 1847 HOLDINGS $ ( 873,030 ) $ ( 730,441 ) PREFERRED SHARE DIVIDENDS ( 135,215 ) ( 188,709 ) DEEMED DIVIDEND RELATED TO ISSUANCE OF PREFERRED SHARES - ( 1,527,086 ) NET LOSS ATTRIBUTABLE TO 1847 HOLDINGS COMMON SHAREHOLDERS $ ( 1,008,245 ) $ ( 2,446,236 ) EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO 1847 HOLDINGS COMMON SHAREHOLDERS LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS – BASIC AND DILUTED $ ( 0.21 ) $ ( 0.19 ) EARNINGS PER COMMON SHARE FROM DISCONTINUED OPERATIONS – BASIC AND DILUTED - 0.02 LOSS PER COMMON SHARE – BASIC AND DILUTED $ ( 0.21 ) $ ( 0.55 ) WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED 4,915,655 4,466,171 The
accompanying notes are an integral part of these condensed consolidated financial statements. 3 1847
HOLDINGS LLC CONDENSED
CONSOLIDATED STATEMENTS OF MEZZANINE
EQUITY AND SHAREHOLDERS’ DEFICIT (UNAUDITED) Three
Months Ended March 31, 2022 Series
A Senior Convertible Preferred Shares Series
B Senior Convertible Preferred Shares Allocation Common Shares Distribution Additional Paid-In Accumulated Non- Controlling Total Shareholders’ Shares Amount Shares Amount Shares Shares Amount Receivable Capital Deficit Interests (Deficit) Balance at December 31, 2021 1,818,182 $ 1,655,404 - $ - $ 1,000 4,842,851 $ 4,843 $ ( 2,000,000 ) $ 21,719,410 $ ( 20,754,394 ) $ 930,812 $ ( 98,329 ) Issuance
of common shares upon conversion of series A preferred shares ( 133,333 ) ( 111,986 ) - - - 152,381 152 - 111,834 - - 111,986 Issuance
of series B convertible preferred shares and warrants - - 426,999 1,113,650 - - - - 152,350 - - 152,350 Dividends
- common shares - - - - - - - - - ( 249,762 ) - ( 249,762 ) Dividends
- series A senior convertible preferred shares - ( 128,318 ) - - - - - - - ( 121,455 ) - ( 121,455 ) Dividends
- series B senior convertible preferred shares - - - - - - - - - ( 13,760 ) - ( 13,760 ) Net
loss - - - - - - - - - ( 873,030 ) ( 54,178 ) ( 927,208 ) Balance
at March 31, 2022 1,684,849 $ 1,415,100 426,999 $ 1,113,650 $ 1,000 4,995,232 $ 4,995 $ ( 2,000,000 ) $ 21,983,594 $ ( 22,012,401 ) $ 876,634 $ ( 1,146,178 ) Three
Months Ended March 31, 2021 Series
A Senior Convertible Preferred Shares Series
B Senior Convertible Preferred Shares Allocation Common Shares Distribution Additional Paid-In Accumulated Non- Controlling Total Shareholders’ Shares Amount Shares Amount Shares Shares Amount Receivable Capital Deficit Interests (Deficit) Balance at December 31, 2020 2,633,278 $ 2,971,427 - $ - $ 1,000 4,444,013 $ 4,444 $ ( 2,000,000 ) $ 17,005,491 $ ( 13,856,973 ) $ ( 879,239 ) $ 274,723 Issuance
of series A senior convertible preferred shares and warrants 1,818,182 1,527,086 - - - - - - 3,000,000 ( 1,527,086 ) - 1,472,914 Issuance
of common adjustment shares - - - - - 398,838 399 - 757,393 - - 757,792 Dividends
- series A senior convertible preferred shares - 11,759 - - - - - - - ( 188,709 ) - ( 188,709 ) Net
loss - - - - - - - - - ( 730,441 ) 54,959 ( 675,482 ) Balance
at March 31, 2021 4,451,460 $ 4,510,272 - $ - $ 1,000 4,842,851 $ 4,843 $ ( 2,000,000 ) $ 20,762,884 $ ( 16,303,209 ) $ ( 824,280 ) $ 1,641,238 The
accompanying notes are an integral part of these condensed consolidated financial statements. 4 1847
HOLDINGS LLC CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three
Months Ended March 31, 2022 2021 CASH
FLOWS FROM OPERATING ACTIVITIES Net
loss $ ( 927,208 ) $ ( 755,811 ) Adjustments
to reconcile net income (loss) to net cash (used in) provided by operating activiti Income
from discontinued operations - ( 98,181 ) Gain
on forgiveness of debt - ( 360,302 ) Gain
on disposal of property and equipment ( 32,747 ) - Loss
on redemption of series A senior convertible preferred shares - 757,792 Deferred
tax asset (liability) ( 89,000 ) - Depreciation
and amortization 511,371 122,106 Amortization
of debt discounts 249,374 - Amortization
of right-of-use assets 98,031 16,928 Changes
in operating assets and liabiliti Receivables ( 539,818 ) ( 124,065 ) Contract
assets 18,731 - Inventories ( 378,192 ) ( 115,545 ) Prepaid
expenses and other current assets 311,511 ( 62,071 ) Accounts
payable and accrued expenses 964,586 65,969 Contract
liabilities ( 851,454 ) ( 122,247 ) Customer
deposits 212,284 328,580 Due
to related parties - 1,785 Operating
lease liabilities ( 83,729 ) ( 15,657 ) Net
cash used in operating activities from continuing operations ( 536,260 ) ( 360,719 ) Net
cash used in operating activities from discontinued operations - ( 123,086 ) Net
cash used in operating activities ( 536,260 ) ( 483,805 ) CASH
FLOWS FROM INVESTING ACTIVITIES Net
cash acquired in acquisitions - 1,094,524 Purchases
of property and equipment ( 66,291 ) ( 148,820 ) Proceeds
from disposal of property and equipment 35,498 - Investments
in certificates of deposit ( 262 ) - Net
cash (used in) provided by investing activities from continuing operations ( 31,055 ) 945,704 Net
cash provided by investing activities from discontinued operations - 534,343 Net
cash (used in) provided by investing activities ( 31,055 ) 1,480,047 CASH
FLOWS FROM FINANCING ACTIVITIES Proceeds
from notes payable - 123,405 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 1,266,000 - Proceeds
from line of credit - 569,395 Repayments
of notes payable and finance lease liabilities ( 58,317 ) ( 143,432 ) Repayments
to sellers - ( 3,033,630 ) Cash
paid for financing costs - ( 165,229 ) Dividends
on series A senior convertible preferred shares ( 121,455 ) ( 176,950 ) Dividends
on series B senior convertible preferred shares ( 13,760 ) - Dividends
on common shares ( 249,762 ) - Net
cash provided by financing activities from continuing operations 822,706 173,559 Net