text stringlengths 0 1.95M |
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on early extinguishment of debt ( 320 ) Gain on forgiveness of debt 380,247 Gain on sale of assets 548,723 Interest expense ( 78,308 ) Other |
income (expense) 1,200 TOTAL OTHER INCOME (EXPENSE) 851,542 NET LOSS BEFORE INCOME TAXES 240,405 INCOME TAX EXPENSE - NET INCOME BEFORE NON-CONTROLLING INTERESTS 240,405 LESS |
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS 108,182 NET INCOME ATTRIBUTABLE |
TO SHAREHOLDERS $ 132,223 F- 19 1847 |
HOLDINGS LLC NOTES |
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER |
31, 2022 AND 2021 The |
following information presents the major classes of line items constituting significant operating, investing and financing cash flow |
activities in the unaudited consolidated statements of cash flows relating to discontinued operations for the year ended December 31, |
2021: Year |
Ended December 31, 2021 Cash flows from operating activities of discontinued operatio Net Income $ 240,405 Adjustments to reconcile |
net loss to net cash provided by (used in) operating activities of discontinued operatio Depreciation and amortization 360,746 Amortization of financing |
costs and warrant features 2,187 Amortization of operating |
lease right-of-use assets 19,007 Gain on forgiveness of |
PPP loans ( 380,247 ) Gain on sale of equipment ( 548,723 ) Changes in operating assets |
and liabiliti Accounts receivable 10,698 Inventory ( 161,286 ) Prepaid expenses and other |
assets 49,222 Accounts payable and accrued |
expenses 118,980 Operating lease liability ( 19,007 ) Accrued |
expense long-term 137,438 Net |
cash used in operating activities from discontinued operations $ ( 170,580 ) Cash flows from investing |
activities in discontinued operatio Proceeds from sale of equipment $ 675,000 Purchase of equipment ( 30,697 ) Net cash provided by |
investing activities in discontinued operations $ 644,303 Cash flows from financing |
activities in discontinued operatio Proceeds from note payable $ 380,385 Repayments |
of notes payable ( 589,078 ) Net |
cash used in financing activities in discontinued operations $ ( 208,693 ) NOTE |
5—RECEIVABLES Receivables |
at December 31, 2022 and 2021 consisted of the followin December 31, 2022 December 31, 2021 Trade accounts receivable $ 4,867,749 $ 2,691,702 Vendor rebates receivable 460 126,118 Credit card payments in process of settlement 102,917 116,187 Retainage 603,442 803,989 Total receivables 5,574,568 3,737,996 Allowance for doubtful |
accounts ( 359,000 ) ( 359,000 ) Total receivables, net $ 5,215,568 $ 3,378,996 F- 20 1847 |
HOLDINGS LLC NOTES |
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER |
31, 2022 AND 2021 NOTE 6—INVENTORIES Inventories |
at December 31, 2022 and 2021 consisted of the followin December 31, 2022 December 31, 2021 Appliances $ 2,155,839 $ 2,206,336 Automotive 934,683 2,064,834 Construction 1,519,345 1,543,980 Total inventories 4,609,867 5,815,150 Less reserve for obsolescence ( 425,848 ) ( 387,848 ) Total inventories, net $ 4,184,019 $ 5,427,302 Inventory |
balances are composed of finished goods. Raw materials and work in process inventory are immaterial to the consolidated financial statements. NOTE 7—PROPERTY |
AND EQUIPMENT Property |
and equipment at December 31, 2022 and 2021 consisted of the followin December 31, 2022 December 31, 2021 Equipment and machinery $ 1,403,817 $ 808,592 Office furniture and equipment 156,960 105,203 Transportation equipment 883,077 864,121 Leasehold improvements 166,760 112,356 Total property and equipment 2,610,614 1,890,272 L Accumulated depreciation ( 725,408 ) ( 194,961 ) Property and equipment, |
net $ 1,885,206 $ 1,695,311 Depreciation |
expense for the years ended December 31, 2022 and 2021 was $ 578,344 and $ 166,412 , respectively. NOTE 8—INTANGIBLE |
ASSETS Intangible |
assets at December 31, 2022 and 2021 consisted of the followin December 31, 2022 December 31, 2021 Customer relationships $ 9,024,000 $ 9,024,000 Marketing-related 2,684,000 2,684,000 Technology-related 623,000 623,000 Total intangible assets 12,331,000 12,331,000 L accumulated amortization ( 2,345,871 ) ( 887,103 ) Intangible assets, net $ 9,985,129 $ 11,443,897 F- 21 1847 |
HOLDINGS LLC NOTES |
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER |
31, 2022 AND 2021 Amortization |
expense for the years ended December 31, 2022 and 2021 was $ 1,458,768 and $ 742,570 , respectively. Estimated |
amortization expense for intangible assets for the next five years consists of the following as of December 31, 2022: Year |
Ending December 31, Amount 2023 $ 1,458,768 2024 1,458,768 2025 1,325,778 2026 1,150,640 2027 909,142 Thereafter 3,682,033 Total $ 9,985,129 NOTE 9—ACCOUNTS |
PAYABLE AND ACCRUED EXPENSES Accounts |
payable and accrued expenses at December 31, 2022 and 2021 consisted of the followin December 31, 2022 December 31, 2021 Trade accounts payable $ 4,129,393 $ 3,117,825 Credit cards payable 357,964 52,300 Accrued payroll liabilities 824,369 263,590 Accrued interest 1,179,875 711,258 Accrued dividends 136,052 242,160 Other accrued liabilities 114,116 431,539 Total accounts payable |
and accrued expenses $ 6,741,769 $ 4,818,672 On |
July 26, 2022, the Company entered into a conversion agreement with Bevilacqua PLLC, pursuant to which it agreed to convert $ 1,197,280 of the accounts payable owed to it into 285,067 common shares of the Company at a conversion price of $ 4.20 per share. As a result, the |
Company recognized a loss on extinguishment of debt of $ 456,109 . F- 22 1847 |
HOLDINGS LLC NOTES |
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER |
31, 2022 AND 2021 NOTE 10—LEASES Operating |
Leases On |
June 9, 2021, Kyle’s entered into an additional industrial lease agreement with a third party. The lease commenced on January 1, |
2022 and is for a term of 62 months, with an option for a renewal term of five years, and provides for a base rent of $3,336 for months |
3-4 (with no payments for the first two months), with gradual increases to $7,508 for final year. In addition, Kyle’s is responsible |
for its proportionate share of all taxes, insurance and certain operating costs during the lease term. The lease agreement contains customary |
events of default, representations, warranties and covenants. The lease increased the operating lease right to use asset and corresponding |
operating lease liability by $ 361,158 . On |
October 29, 2021, High Mountain entered into a new lease agreement with a third party. The term of the lease commenced on June 1, 2022 |
(upon the completion of improvements) and is for a period of 61 months. The base rent is $29,400 for months 2-13 (with no payments for |
the first month), with gradual increases to $34,394 for months 50-61. In addition, High Mountain is responsible for its proportionate |
share of all taxes, insurance and certain operating costs during the lease term. The lease agreement contains customary events of default, |
representations, warranties and covenants. The lease increased the operating lease right to use asset and corresponding operating lease |
liability by $ 1,718,183 . In |
April 2022, Wolo entered into a lease amendment to renew its office and warehouse space in the automotive supplies segment, located in |
Deer Park, New York. The lease renewal commenced on August 1, 2022 and shall expire on July 31, 2025. Under the terms of the lease renewal, |
Wolo will lease the premises at the monthly rate of $7,518 for the first year, with scheduled annual increases. The lease agreement contains |
customary events of default, representations, warranties, and covenants. The remeasurement of the ROU asset and liability associated |
with this operating lease was $ 254,713 . The |
following was included in the consolidated balance sheets at December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Operating lease right-of-use assets $ 2,854,196 $ 3,192,604 Lease liabilities, current portion 713,100 613,696 Lease liabilities, long-term 2,237,797 2,607,862 Total operating lease |
liabilities $ 2,950,897 $ 3,221,558 Weighted-average remaining lease term (months) 47 59 Weighted average discount rate 4.36 % 4.29 % Rent |
expense for the years ended December 31, 2022 and 2021 was $ 1,054,936 and $ 448,510 , respectively. As |
of December 31, 2022, maturities of operating lease liabilities were as follows: Year |
Ending December 31, Amount 2023 $ 829,045 2024 846,987 2025 802,413 2026 512,756 2027 228,889 Thereafter - Total 3,220,090 L imputed interest ( 269,193 ) Total operating lease |
liabilities $ 2,950,897 F- 23 1847 |
HOLDINGS LLC NOTES |
TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER |
31, 2022 AND 2021 Financing |
Leases On |
May 6, 2021, Kyle’s entered in an equipment financing lease to purchase equipment for $ 276,896 , which matures in December 2027 . |
The balance payable was $ 229,080 as of December 31, 2022. On |
October 12, 2021, Kyle’s entered in an equipment financing lease to purchase equipment for $ 245,376 , which matures in December |
2027 . The balance payable was $ 203,169 as of December 31, 2022. On |
March 28, 2022, Kyle’s entered an equipment financing lease to purchase machinery and equipment for $ 316,798 , which matures in January 2028 . The balance payable was $ 274,527 as of December 31, 2022. On |
April 11, 2022, Kyle’s entered in an equipment financing lease to purchase machinery and equipment for $ 11,706 , which matures in June 2027 . The balance payable was $ 10,237 as of December 31, 2022. On |
July 13, 2022, Kyle’s entered in an equipment financing lease to purchase machinery and equipment for $ 240,260 , which matures in June 2028 . The balance payable was $ 223,179 as of December 31, 2022. As |
of December 31, 2022, maturities of financing lease liabilities were as follows: Year |
Ending December 31, Amount 2023 $ 234,556 2024 218,099 2025 211,332 2026 211,332 2027 210,042 Thereafter 28,833 Total 1,114,194 L amount representing |
interest ( 144,328 ) Present value of minimum |
lease payments $ 969,866 NOTE 11—BUSINESS |
COMBINATIONS Wolo On |
December 22, 2020, the Company 1847 Wolo entered into a stock purchase agreement with Wolo and the Wolo Sellers, pursuant to which 1847 |
Wolo agreed to acquire all of the issued and outstanding capital stock of Wolo. On |
March 30, 2021, the Company, 1847 Wolo, Wolo and the Wolo Sellers entered into amendment No. 1 to the stock purchase agreement and closing |
of the acquisition of all of the issued and outstanding capital stock of Wolo was completed (the “Wolo Acquisition”). The |
aggregate purchase price was $ 8,344,056 , consisting of (i) $ 6,550,000 in cash, (ii) a 6 % secured promissory note in the aggregate principal |
amount of $ 850,000 and (iii) cash paid to seller, net of working capital adjustment, of $ 944,056 . The |
Company accounted for the Wolo Acquisition using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations . |
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