Management Fees and Profit Allocation - The manager entered into offsetting management services agreements with five subsidiaries, which may vary in management fees based on future agreements[105] - The quarterly management fee is calculated as 0.5% of adjusted net assets, resulting in a hypothetical fee of $450,000 based on total assets of $100 million[108] - Total offsetting management fees from acquired companies amounted to $400,000, leading to a net quarterly management fee payable of $50,000[108] - Transaction services agreements allow the manager to charge fees based on a tiered structure: 2.0% for the first $50 million, 1.5% for the next $50 million, and 1.0% for amounts over $100 million[110] - The manager's profit allocation is set at 20% of profits exceeding an 8% hurdle rate, calculated based on the subsidiary's net income since acquisition[120] - The termination fee for the management services agreement is calculated as two times the sum of the quarterly management fees for the four quarters preceding termination[119] - The company is responsible for reimbursing the manager for costs incurred on its behalf, excluding overhead and costs related to unpursued acquisitions[115][116] - The board of directors will review and approve the manager's profit allocation calculation, which is not paid annually but upon specific trigger events[121][126] - The calculation of the manager's profit allocation will undergo a "true-up" process based on available financial statements, potentially delaying realization of benefits[125] - Any disputes regarding the manager's profit allocation calculation will be resolved by independent accounting firms, with their determination being binding[127] - The manager's profit allocation will be calculated based on a total profit allocation amount that exceeds the business' level 1 hurdle amount, which is based on an 8% annualized hurdle rate[128] - For Company A, a capital gain of $25 million was realized over its net book value at the time of sale, with a contribution-based profit of $5 million since acquisition[133] - Company B's contribution-based profit since acquisition is $7 million, with cumulative gains and losses amounting to $20 million[134] - The total profit allocation amount for Company A is $30 million, while for Company B it is $27 million[134] - The level 1 hurdle amount for Company A is calculated to be $12 million, and for Company B it is $10 million[134] - The manager's profit allocation for Company A is $6 million, while for Company B it is $1.4 million[134] - The high-water mark allocation for Company B is $4 million, which is deducted from the manager's profit allocation[134] - Tax distributions will be paid to the manager if taxable income is allocated but not realized through distributions equal to the taxes payable[129] - The management services agreement termination does not affect the manager's rights to profit allocations unless the put right is exercised[132] - The put price upon termination of the management services agreement will be based on two separate calculations of the manager's profit allocation as of the exercise date[139] Business Operations and Market Presence - The construction business accounted for approximately 97.6% and 76.1% of total revenues for the years ended December 31, 2025, and 2024, respectively[147] - The company has expanded its coverage area to include the greater Las Vegas metro area, southern Utah, and northern Arizona, which are among the fastest-growing economic regions in the Western U.S.[148] - As of December 31, 2025, the construction companies employed 170 full-time employees, with no representation by labor unions[171] - CMD utilizes in-house technology programs and machinery, including CNC machinery, to enhance production efficiency and manage project workflows[153] - The company has established long-term relationships with builders such as Toll Brothers and Whiting Turner Construction, contributing to high customer retention levels[160] - The pricing strategy focuses on delivering quality and performance at a value-based price target, offering better features than competitors[156] - The company sources raw materials from multiple suppliers, with a significant portion coming from Asian-based suppliers, which may be subject to import tariffs[157] - The construction business is subject to various environmental regulations, and compliance efforts do not eliminate the risk of potential liabilities or penalties[173] - The company has a strong regional presence in the greater Las Vegas and Boise metro areas, which are key markets for growth opportunities[169] - CMD's competitive strengths include a superior reputation, established blue-chip clients, and streamlined operations that enhance efficiency and profitability[168] - The automotive supplies business accounted for approximately 2.4% and 23.9% of total revenues for the years ended December 31, 2025 and 2024, respectively[177] - The company has established long-term relationships with suppliers, with many spanning over 15 years, and has implemented volume discounts to offset increased material and labor costs[192] - The company has been granted 37 patents, with about half being utility patents that protect product functionality, providing a competitive advantage[206] - The company is expanding its warehouse space and operations in Nevada to capture additional bid opportunities in the ready-to-assemble cabinet segment[179] - The top-selling product, the Bad Boy horn, is designed for easy installation and produces a sound that is two times louder than factory horns[181] - The company has entered the motorcycle and industrial aftermarket segments, as well as a product line for the marine parts aftermarket[201] - The company has a diverse customer base, including major retailers like Amazon and AutoZone, with many customer relationships lasting over 10 years[200] - The company is pursuing growth through new product development and expanding online sales platforms, including its own website and major e-commerce sites[205] - The company has implemented an integrated EDI system to improve order fulfillment efficiency and reduce errors[202] - The company is focused on geographic expansion into areas like Idaho and Nevada, targeting both residential and commercial projects[179] - The company is subject to various federal, state, and local laws and regulations, including those related to labor, discrimination, and data privacy, but compliance has not adversely affected operations to date[210] - There are no applicable quantitative and qualitative disclosures about market risk for the company[506]

Revenue Growth - 1847 Holdings reported a 207% increase in revenue for 2025, reaching $48.3 million, compared to $15.7 million in 2024[3] - CMD generated $40.5 million in revenue for 2025, reflecting a 32% year-over-year growth on a pro forma basis[1] - Gross profit increased to $23.9 million in 2025, up 208% from $7.8 million in 2024[2] Profitability Improvement - The company achieved a net income of $66.5 million in 2025, a significant turnaround from a net loss of $106.8 million in 2024[3] - Total Adjusted EBITDA for the company was reported at $9.8 million for 2025, compared to a loss of $3.3 million in 2024[3] - CMD's Adjusted EBITDA rose to $14.3 million in 2025, an 84% increase from $7.7 million in the previous year[1] - Operating income improved to $4.0 million in 2025, compared to a loss of $12.0 million in 2024, marking a $16.0 million improvement[3] Strategic Initiatives - CMD has a record bid pipeline exceeding $160 million, providing strong visibility into future revenue opportunities[4] - The company is exploring strategic alternatives for CMD, including potential refinancing or sale, to enhance shareholder value[4] - 1847 Holdings is actively repositioning its subsidiaries to capture new opportunities in e-commerce logistics and high-growth construction markets[4] Investor Relations - Crescendo Communications, LLC is the contact for investor relations inquiries[21]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Results - 1847 Holdings LLC reported its financial results for the quarter ended September 30, 2025[6] - The press release regarding the financial results was issued on November 12, 2025[6] Company Classification - The company is not classified as an emerging growth company under the Securities Act[5] Financial Metrics - No specific financial metrics or performance indicators were provided in the available documents[6]

Business Acquisitions and Sales - The company focuses on acquiring and managing small businesses with an enterprise value of less than $50 million across various industries in North America [143]. - On September 30, 2024, the company sold High Mountain for an aggregate cash purchase price of $17 million, subject to adjustments [162]. - The company acquired CMD Inc. on December 16, 2024, which specializes in finish carpentry and related products [148]. - ICU Eyewear was sold for $4.25 million following a foreclosure process, with no retained financial interest by the company [161]. Financial Performance - Revenues increased by $9,757,991, or 256.4%, to $13,563,612 for the three months ended September 30, 2025, compared to $3,805,621 for the same period in 2024, primarily due to the acquisition of CMD [166]. - For the nine months ended September 30, 2025, revenues increased by $27,897,661, or 326.1%, to $36,453,541, primarily due to the acquisition of CMD contributing $31,248,023 [178]. - Net income from continuing operations was $32,619,148 for the three months ended September 30, 2025, compared to a net loss of $5,380,030 for the same period in 2024 [175]. - Net income from continuing operations was $56,071,965 for the nine months ended September 30, 2025, compared to a net loss of $18,932,970 for the same period in 2024 [188]. - Total other income for the three months ended September 30, 2025, was $30,569,890, compared to total other expense of $2,456,721 for the same period in 2024 [173]. - Total other income, net, was $52,416,021 for the nine months ended September 30, 2025, compared to a net expense of $11,574,592 for the same period in 2024 [186]. Cost and Expenses - Cost of revenues rose by $5,472,601, or 384.0%, to $6,897,848 for the three months ended September 30, 2025, with cost as a percentage of revenues increasing to 50.9% from 37.5% [167]. - Cost of revenues for the nine months ended September 30, 2025, increased by $13,813,700, or 338.2%, to $17,898,193, with a percentage of revenues at 49.1% compared to 47.7% in 2024 [179]. - Personnel costs decreased by $285,720, or 13.1%, to $1,887,153 for the three months ended September 30, 2025, with a percentage of revenue dropping to 13.9% from 57.1% [168]. - Personnel costs increased by $1,458,210, or 34.9%, to $5,630,713 for the nine months ended September 30, 2025, with a percentage of revenue at 15.4% compared to 48.8% in 2024 [180]. - General and administrative expenses decreased by $840,765, or 42.4%, to $1,143,422 for the three months ended September 30, 2025, representing 8.4% of revenues compared to 52.1% in 2024 [170]. - Professional fees decreased by $878,881, or 20.5%, to $3,417,821 for the nine months ended September 30, 2025, compared to $4,296,702 for the same period in 2024, with professional fees as a percentage of revenue at 9.4% in 2025 versus 50.2% in 2024 [183]. Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were $2,690,688 as of September 30, 2025, down from $10,184,622 at the end of September 30, 2024 [198]. - Net cash provided by operating activities from continuing operations was $3,002,642 for the nine months ended September 30, 2025, compared to net cash used of $11,657,794 for the same period in 2024 [198]. - Net cash used in investing activities was $896,075 for the nine months ended September 30, 2025, compared to net cash provided of $17,501,868 for the same period in 2024 [199]. - Management has implemented tight cost controls to conserve cash and address liquidity challenges [190]. Debt and Financing - Total combined debt as of September 30, 2025, was $31,758,985, with total debt, net, amounting to $31,371,385 [202]. - The company plans to secure additional bank lines of credit and obtain financing through debt or equity transactions to support operations and future acquisitions [190]. Management and Strategy - The company expects to improve its businesses through organic growth opportunities, add-on acquisitions, and operational improvements [150]. - The company aims to make regular distributions to common shareholders and increase shareholder value over time [149]. - The management fee for 1847 Cabinet is set at the greater of $125,000 or 2% of adjusted net assets, with $375,000 expensed for the nine months ended September 30, 2025 [152]. - The management services agreement requires a quarterly management fee equal to 0.5% of adjusted net assets [151]. - The company has one reportable segment, the construction segment, which provides finish carpentry and related products and services [159]. - The company recorded no impairment of goodwill and intangible assets for the three months ended September 30, 2025, compared to $679,175 in 2024 [172]. - The company recorded no impairment of goodwill and intangible assets for the nine months ended September 30, 2025, compared to an impairment of $679,175 for the same period in 2024 [184].

Core Viewpoint - 1847 Holdings LLC is set to begin trading on the OTC Pink Limited tier and aims to relist on a senior U.S. exchange as soon as practical, highlighting strong financial performance and growth potential [1][2][3]. Financial Performance - The company reported a record revenue growth of 380% year-over-year in Q2 2025, with significant gross profit expansion and positive operating cash flow [3]. - Management has reaffirmed its 2025 revenue guidance to exceed $40 million and operating income of approximately $6 million, with projections for 2026 of more than $50 million in revenue and operating income of approximately $12 million [3]. Business Strategy - 1847 Holdings focuses on acquiring undervalued middle-market businesses, enhancing their operations, and potentially monetizing them through sales or IPOs at higher valuations [4]. - The company believes that moving through the OTC market tiers and ultimately returning to a senior exchange will unlock greater value for shareholders [3].

Core Insights - 1847 Holdings LLC reported significant financial improvements in Q2 2025, with revenue increasing by 380.4% year-over-year to $12.8 million and gross profit rising by 461.8% to $6.7 million, resulting in a gross margin of 52.2% [2][3] - The company generated a net income from continuing operations of $23.7 million, an increase of $26.6 million compared to a loss in the prior year, largely driven by a gain on the change in fair value of warrant liabilities [5][6] - For the first half of 2025, revenue reached $22.9 million, marking an increase of $18.1 million from the previous year, and the company achieved positive cash flow from continuing operations of $973,606 [1][2] Financial Performance - Q2 2025 revenue was $12.8 million compared to $2.7 million in Q2 2024, reflecting a growth of $10.1 million [3] - Gross profit for Q2 2025 was $6.7 million, up from $1.2 million in Q2 2024, indicating a substantial increase [2][4] - Operating income improved to $2.5 million in Q2 2025 from a loss of $1.7 million in the same quarter of the previous year [2][4] Future Guidance - The company reaffirmed its 2025 guidance, projecting net income of approximately $1.3 million on revenue exceeding $45 million, and anticipates 2026 net income of around $5.0 million on revenue surpassing $60 million [1][2] - 1847 Holdings is transitioning its shares to the OTCID Basic Market following a delisting from NYSE American, with plans to reapply for a national exchange listing in the future [2][7] Strategic Focus - The company focuses on acquiring undervalued businesses, enhancing their operations, and monetizing them for higher valuations, which aligns with its investment thesis of capitalizing on market inefficiencies [7]

[Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents 1847 Holdings LLC's unaudited condensed consolidated financial statements, prepared in accordance with GAAP interim financial information and Form 10-Q instructions [Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements for 1847 Holdings LLC, prepared under GAAP for interim reporting [Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) This section presents the condensed consolidated balance sheets for 1847 Holdings LLC as of June 30, 2025, and December 31, 2024 Balance Sheet Key Data Comparison | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change Amount ($) | Change Percentage | | :--------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Cash and Cash Equivalents | $1,033,578 | $2,457,086 | $(1,423,508) | (57.9%) | | Accounts Receivable, Net | $9,159,479 | $5,361,405 | $3,798,074 | 70.8% | | Total Current Assets | $14,827,624 | $12,630,493 | $2,197,131 | 17.4% | | Total Assets | $34,846,296 | $33,647,738 | $1,198,558 | 3.6% | | Accounts Payable and Accrued Expenses | $11,828,446 | $5,853,307 | $5,975,139 | 102.1% | | Total Current Liabilities | $102,170,786 | $124,558,252 | $(22,387,466) | (18.0%) | | Total Liabilities | $107,948,744 | $130,113,775 | $(22,165,031) | (17.0%) | | Total Shareholders' Deficit | $(73,102,448) | $(96,466,037) | $23,363,589 | 24.2% | [Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section presents the condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 Statements of Operations Key Data (Continuing Operations) | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $12,806,457 | $2,665,805 | $22,889,929 | $4,750,259 | | Total Operating Expenses | $10,333,149 | $4,329,841 | $20,515,243 | $9,582,328 | | Operating Income (Loss) | $2,473,308 | $(1,664,036) | $2,374,686 | $(4,832,069) | | Total Other Income (Expense) | $22,046,876 | $(1,590,795) | $21,846,131 | $(9,117,871) | | Income (Loss) from Continuing Operations Before Income Taxes | $24,520,184 | $(3,254,831) | $24,220,817 | $(13,949,940) | | Income Tax Benefit (Provision) | $(840,000) | $308,000 | $(768,000) | $397,000 | | Net Income (Loss) from Continuing Operations | $23,680,184 | $(2,946,831) | $23,452,817 | $(13,552,940) | | Net Income (Loss) Attributable to 1847 Holdings | $22,603,964 | $(4,875,229) | $22,200,863 | $(15,275,742) | | Basic Earnings (Loss) Per Share Attributable to Common Stockholders | $0.71 | $(29.15) | $0.76 | $(97.05) | | Diluted Earnings (Loss) Per Share Attributable to Common Stockholders | $0.15 | $(29.15) | $0.16 | $(97.05) | [Condensed Consolidated Statements of Shareholders' Deficit for the Three and Six Months Ended June 30, 2025 and 2024](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Deficit%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section presents the condensed consolidated statements of shareholders' deficit for the three and six months ended June 30, 2025 and 2024 Shareholders' Deficit Changes | Metric | December 31, 2024 ($) | March 31, 2025 ($) | June 30, 2025 ($) | | :----------------------------------- | :---------------- | :--------------- | :-------------- | | Total Shareholders' Deficit | $(96,466,037) | $(95,560,794) | $(73,102,448) | | Common Shares Issued | 25,400,386 | 26,539,774 | 32,303,735 | | Net Income (Loss) Attributable to 1847 Holdings (Three Months Ended June 30, 2025) | N/A | N/A | $22,603,964 | [Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section presents the condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 Cash Flow Statement Key Data (Continuing Operations) | Cash Flow Activity | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :----------------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by (Used in) Operating Activities | $973,606 | $(4,696,037) | | Net Cash Used in Investing Activities | $(880,518) | $0 | | Net Cash Provided by (Used in) Financing Activities | $(2,374,635) | $4,644,899 | | Net Change in Cash and Cash Equivalents from Continuing Operations | $(2,281,547) | $(51,138) | | Cash and Cash Equivalents from Continuing Operations, End of Period | $1,534,507 | $559,044 | - Financial statements are prepared in accordance with GAAP interim financial information and Form 10-Q instructions[27](index=27&type=chunk) - Management believes all necessary adjustments, including only normal recurring adjustments, have been completed for a fair presentation of the financial statements[27](index=27&type=chunk) - Operating results for the six months ended June 30, 2025, are not necessarily indicative of results for the year ending December 31, 2025[27](index=27&type=chunk) Condensed Consolidated Balance Sheet Key Data | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------- | :------------ | :---------------- | | Total Assets | $34,846,296 | $33,647,738 | | Total Liabilities | $107,948,744 | $130,113,775 | | Total Shareholders' Deficit | $(73,102,448) | $(96,466,037) | Condensed Consolidated Statements of Operations Key Data (Continuing Operations) | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $12,806,457 | $2,665,805 | $22,889,929 | $4,750,259 | | Net Income (Loss) from Continuing Operations | $23,680,184 | $(2,946,831) | $23,452,817 | $(13,552,940) | | Basic Earnings (Loss) Per Share Attributable to Common Stockholders | $0.75 | $(17.36) | $0.80 | $(85.66) | | Diluted Earnings (Loss) Per Share Attributable to Common Stockholders | $0.16 | $(17.36) | $0.17 | $(85.66) | Condensed Consolidated Statements of Cash Flows Key Data (Continuing Operations) | Cash Flow Activity | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :----------------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by (Used in) Operating Activities | $973,606 | $(4,696,037) | | Net Cash Used in Investing Activities | $(880,518) | $0 | | Net Cash Provided by (Used in) Financing Activities | $(2,374,635) | $4,644,899 | | Net Change in Cash and Cash Equivalents from Continuing Operations | $(2,281,547) | $(51,138) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering presentation basis, liquidity, discontinued operations, and key accounts [NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION](index=12&type=section&id=NOTE%201%E2%80%94BASIS%20OF%20PRESENTATION%20AND%20OTHER%20INFORMATION) This section outlines the basis of presentation for the financial statements and other relevant accounting information - The company has committed to selling Wolo Mfg. Corp. and Wolo Industrial Horn & Signal, Inc. (collectively "Wolo"), which constitutes the automotive products segment, with completion expected in 2025, classified as discontinued operations due to a strategic shift[28](index=28&type=chunk)[30](index=30&type=chunk) - Certain prior period amounts related to discontinued operations have been reclassified and separately presented in the condensed consolidated financial statements and notes to conform with the current period's presentation[31](index=31&type=chunk) - ASU 2023-05 (Joint Venture Formations) issued by the FASB has been adopted but had no material impact on the company's condensed consolidated financial statements[32](index=32&type=chunk) - ASU 2023-09 (Improvements to Income Tax Disclosures) and ASU 2024-03 (Disaggregation of Expenses—Income Statement) issued by the FASB are not yet effective, and the company is evaluating their impact on the financial statements[34](index=34&type=chunk)[35](index=35&type=chunk) [NOTE 2—LIQUIDITY AND GOING CONCERN ASSESSMENT](index=13&type=section&id=NOTE%202%E2%80%94LIQUIDITY%20AND%20GOING%20CONCERN%20ASSESSMENT) This section assesses the company's liquidity position and its ability to continue as a going concern - As of June 30, 2025, the company had **$1,033,578** in cash and cash equivalents, **$500,929** in restricted cash, and a working capital deficit of **$87,343,162**[38](index=38&type=chunk) - For the six months ended June 30, 2025, the company generated **$2,374,686** in operating income and **$973,606** in cash flow from continuing operations[38](index=38&type=chunk) - The company has incurred operating losses since inception and anticipates insufficient cash and other resources to sustain current operations or meet obligations over the next twelve months without additional financing, raising substantial doubt about its ability to continue as a going concern[39](index=39&type=chunk) - Management plans to address these concerns through additional debt and equity financing, but there is no assurance that these plans will effectively provide the necessary funding[42](index=42&type=chunk) [NOTE 3—DISCONTINUED OPERATIONS](index=14&type=section&id=NOTE%203%E2%80%94DISCONTINUED%20OPERATIONS) This section details the financial results and status of operations that have been or are planned to be discontinued - The company plans to sell Wolo (automotive products segment) in 2025, classifying it as discontinued operations[44](index=44&type=chunk) Wolo Assets and Liabilities Held for Sale | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------------- | :------------ | :---------------- | | Total Assets Held for Sale | $901,347 | $1,132,626 | | Total Liabilities Held for Sale | $284,497 | $361,368 | Wolo Discontinued Operations Performance | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $208,447 | $1,103,087 | $1,116,886 | $2,881,448 | | Net Loss from Discontinued Operations | $(289,252) | $(304,723) | $(477,838) | $(412,363) | - Asien's Appliance, Inc. transferred its assets to creditors on February 26, 2024, and the company no longer holds a financial interest, with its results reported as discontinued operations[49](index=49&type=chunk) - ICU Eyewear, Inc.'s assets were sold through foreclosure on August 5, 2024, due to loan default, with the company receiving no cash and no longer holding a financial interest, its results reported as discontinued operations[53](index=53&type=chunk) - High Mountain Door & Trim Inc.'s assets were sold on September 30, 2024, for **$17,000,000**, and the company reduced the retained amount by **$858,039** for post-closing working capital adjustments during the six months ended June 30, 2025[59](index=59&type=chunk)[60](index=60&type=chunk) [NOTE 4—DISAGGREGATION OF REVENUES AND SEGMENT REPORTING](index=22&type=section&id=NOTE%204%E2%80%94DISAGGREGATION%20OF%20REVENUES%20AND%20SEGMENT%20REPORTING) This section provides a breakdown of revenues and details the company's reportable segments - Following the divestiture of the automotive products segment, the company currently has only one reportable segment: the Construction segment, which provides finish carpentry and related products and services[65](index=65&type=chunk) - The company aggregates all other non-reportable business activities into the Corporate Services segment, which includes costs associated with executive management, financing activities, and other public company-related expenses[66](index=66&type=chunk) Revenue by Product/Service | Revenue Category | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cabinets and Millwork | $6,375,565 | $2,665,805 | $10,478,163 | $4,750,259 | | Doors, Frames, Hardware, and Trim | $6,194,681 | $- | $11,971,519 | $- | | Specialty Building Accessories | $236,211 | $- | $440,247 | $- | | **Total Revenue** | **$12,806,457** | **$2,665,805** | **$22,889,929** | **$4,750,259** | Segment Operating Income (Loss) | Segment | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :---------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Construction | $2,208,297 | $(1,110,873) | $2,559,419 | $(1,822,895) | | Corporate Services | $265,011 | $(553,163) | $(184,733) | $(3,009,174) | | **Total** | **$2,473,308** | **$(1,664,036)** | **$2,374,686** | **$(4,832,069)** | [NOTE 5—PROPERTY AND EQUIPMENT](index=24&type=section&id=NOTE%205%E2%80%94PROPERTY%20AND%20EQUIPMENT) This section provides details on the company's property and equipment, net of accumulated depreciation Property and Equipment, Net | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :----------------------- | :------------ | :---------------- | | Property and Equipment, Net | $968,504 | $1,115,208 | - Depreciation expense for the three months ended June 30, 2025, was **$110,272**, an increase of **$4,944 (4.7%)** from the prior year period; for the six months ended June 30, 2025, it was **$219,879**, an increase of **$5,185 (2.4%)** from the prior year period[72](index=72&type=chunk) [NOTE 6—INTANGIBLE ASSETS](index=25&type=section&id=NOTE%206%E2%80%94INTANGIBLE%20ASSETS) This section details the company's intangible assets, net of accumulated amortization Intangible Assets, Net | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------- | :------------ | :---------------- | | Intangible Assets, Net | $12,040,780 | $12,524,346 | - Amortization expense for the three months ended June 30, 2025, was **$241,783**, an increase of **$179,039 (285.4%)** from the prior year period; for the six months ended June 30, 2025, it was **$483,566**, an increase of **$358,078 (285.4%)** from the prior year period[74](index=74&type=chunk) Estimated Future Amortization Expense for Intangible Assets | Year Ended December 31 | Amount ($) | | :------------------- | :--------- | | 2025 (Remaining) | $483,566 | | 2026 | $967,132 | | 2027 | $967,132 | | 2028 | $967,132 | | 2029 | $967,132 | | Thereafter | $7,688,686 | | **Total Estimated Amortization Expense** | **$12,040,780** | [NOTE 7—ACCOUNTS PAYABLE AND ACCRUED EXPENSES](index=25&type=section&id=NOTE%207%E2%80%94ACCOUNTS%20PAYABLE%20AND%20ACCRUED%20EXPENSES) This section provides a breakdown of accounts payable and accrued expenses Accounts Payable and Accrued Expenses | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change Amount ($) | Change Percentage | | :----------------------- | :------------ | :---------------- | :--------- | :--------- | | Total Accounts Payable and Accrued Expenses | $11,828,446 | $5,853,307 | $5,975,139 | 102.1% | | Trade Accounts Payable | $3,771,154 | $1,633,593 | $2,137,561 | 130.8% | | Accrued Payroll Liabilities | $1,541,925 | $1,185,900 | $356,025 | 30.0% | | Accrued Interest | $3,901,691 | $1,841,011 | $2,060,680 | 111.9% | | Accrued Taxes | $1,354,510 | $79,420 | $1,275,090 | 1605.5% | [NOTE 8—LEASES](index=26&type=section&id=NOTE%208%E2%80%94LEASES) This section outlines the company's lease arrangements, including operating and finance leases - In February 2025, subsidiary CMD Inc. entered into a three-year office lease agreement, resulting in a right-of-use asset and liability of **$97,379**[78](index=78&type=chunk) - In May 2025, the company recognized an impairment loss of **$112,705** on a right-of-use asset related to an abandoned lease due to closing a warehouse facility and relocating operations[79](index=79&type=chunk) Operating Lease Liabilities | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Operating Lease Right-of-Use Assets ($) | $1,659,413 | $1,964,276 | | Total Operating Lease Liabilities ($) | $1,825,658 | $2,017,604 | | Weighted-Average Remaining Lease Term (Years) | 3.89 | 4.19 | | Weighted-Average Discount Rate | 14.54% | 14.17% | - Rent expense for the three months ended June 30, 2025, was **$230,017**, an increase of **$116,608 (102.8%)** from the prior year period; for the six months ended June 30, 2025, it was **$455,218**, an increase of **$230,732 (102.8%)** from the prior year period[80](index=80&type=chunk) Finance Lease Liabilities | Metric | June 30, 2025 ($) | | :--------------------------------- | :------------ | | Total Finance Lease Liabilities | $515,491 | | Weighted-Average Remaining Lease Term (Years) | 2.61 | | Weighted-Average Discount Rate | 5.15% | [NOTE 9—FAIR VALUE MEASUREMENTS](index=27&type=section&id=NOTE%209%E2%80%94FAIR%20VALUE%20MEASUREMENTS) This section provides information on assets and liabilities measured at fair value on a recurring basis Fair Value Measurements (June 30, 2025) | Description | Level 3 ($) | Total ($) | | :-------------------- | :------------ | :------------ | | Warrant Liabilities | $57,860,005 | $57,860,005 | - For the six months ended June 30, 2025, derivative liabilities decreased from **$185,000** to **$0** due to a fair value change gain of **$(185,000)**, and warrant liabilities decreased from **$85,779,788** to **$57,860,005** due to a fair value change gain of **$(27,723,683)** and extinguishment upon settlement of **$(196,100)**[84](index=84&type=chunk) [NOTE 10—NOTES PAYABLE](index=27&type=section&id=NOTE%2010%E2%80%94NOTES%20PAYABLE) This section details the company's notes payable, including terms and changes during the period Notes Payable, Net | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------- | :------------ | :---------------- | | Notes Payable, Net | $7,422,716 | $7,794,441 | - The maturity date of the 20% OID Subordinated Promissory Note from March 2024 was extended to November 7, 2025, with an additional **$1,358,966** as a modification fee, resulting in a debt extinguishment loss[87](index=87&type=chunk) - The purchase and sale agreement for future revenue loans was amended, increasing the outstanding balance by **$845,650** for net cash proceeds of **$465,650**, with an effective interest rate of **82.2%**[89](index=89&type=chunk) - On May 9, 2025, a default event occurred on the 12% Service Promissory Note, leading to a **$250,000** increase in principal and recognition of a debt extinguishment loss[91](index=91&type=chunk) [NOTE 11—RELATED PARTIES](index=28&type=section&id=NOTE%2011%E2%80%94RELATED%20PARTIES) This section discloses transactions and balances with related parties - On June 27, 2025, subsidiary 1847 Cabinet Inc. issued an 8% promissory note with a principal of **$1,567,621** to Stephen Mallatt, Jr. and Rita Mallatt, resulting in a debt extinguishment loss of **$458,218**[92](index=92&type=chunk) - As of June 30, 2025, the total outstanding principal balance for related party notes payable was **$1,567,621**[93](index=93&type=chunk) [NOTE 12—SHAREHOLDERS' DEFICIT](index=29&type=section&id=NOTE%2012%E2%80%94SHAREHOLDERS'%20DEFICIT) This section provides details on changes in shareholders' deficit, including preferred stock, common stock, and warrants - For the three months ended June 30, 2025, dividends accrued for Series A, Series C, and Series D preferred stock were **$8,852**, **$12,506**, and **$53,189**, respectively[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - On March 25, 2025, the company established Series F Convertible Preferred Stock with a par value of **$1,000** per share and a conversion price of **$0.1549** per share, which ranks senior to common stock, distribution shares, Series C, and Series D preferred stock, but junior to Series A Senior Convertible Preferred Stock and all debt, regarding dividends and liquidation distributions[98](index=98&type=chunk)[103](index=103&type=chunk) - The company issued **1,027** shares of Series F Convertible Preferred Stock in exchange for Series A warrants, resulting in a Series A warrant extinguishment loss of **$942,232**[105](index=105&type=chunk) - On March 11, 2025, the number of authorized common shares was increased from **500 million** to **2 billion**[107](index=107&type=chunk) - For the six months ended June 30, 2025, the company issued **1,139,388** common shares for convertible note conversions and **5,763,961** common shares for cashless exercise of prepaid warrants[108](index=108&type=chunk) - On March 11, 2025, the exercise prices for Series A and Series B warrants were adjusted from **$1.50** and **$0.81** to **$0.81** and **$0.54**, respectively, with a proportional increase in warrant quantities; as of June 30, 2025, **158,844,463** warrants were outstanding with a weighted-average exercise price of **$0.53** and a remaining contractual term of **3.98** years[109](index=109&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) [NOTE 13—EARNINGS (LOSS) PER SHARE](index=31&type=section&id=NOTE%2013%E2%80%94EARNINGS%20(LOSS)%20PER%20SHARE) This section presents the basic and diluted earnings (loss) per share calculations Basic Earnings (Loss) Per Share (Continuing Operations) | Period | 2025 ($) | 2024 ($) | | :--------------------------- | :----- | :----- | | Three Months Ended June 30 | $0.75 | $(17.36) | | Six Months Ended June 30 | $0.80 | $(85.66) | Diluted Earnings (Loss) Per Share (Continuing Operations) | Period | 2025 ($) | 2024 ($) | | :--------------------------- | :----- | :----- | | Three Months Ended June 30 | $0.16 | $(17.36) | | Six Months Ended June 30 | $0.17 | $(85.66) | - For the three and six months ended June 30, 2025, **139,281,660** potential common share equivalents from warrants, Series C preferred stock, and Series D preferred stock were excluded from diluted earnings per share calculations due to their anti-dilutive effect[114](index=114&type=chunk) [NOTE 14—SUBSEQUENT EVENTS](index=31&type=section&id=NOTE%2014%E2%80%94SUBSEQUENT%20EVENTS) This section discloses significant events that occurred after the balance sheet date - In July 2025, the company issued **4,011,080** common shares (prepaid warrants) and **1,837,500** common shares (Series A warrants) through cashless exercise[115](index=115&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of the company's financial condition, operating results, and liquidity, emphasizing its acquisition strategy and capital needs - The company is an acquisition holding company focused on acquiring and managing small businesses in North America with enterprise values under **$50 million**[123](index=123&type=chunk) - The company seeks to acquire controlling interests in small businesses operating in industries with long-term macroeconomic growth opportunities, positive and stable earnings and cash flows, minimal technological or competitive obsolescence threats, and strong management teams[129](index=129&type=chunk) - The company aims to enhance businesses over the long term through organic growth opportunities, add-on acquisitions, and operational improvements, with the goal of paying regular dividends to common stockholders and increasing common stockholder value[128](index=128&type=chunk)[129](index=129&type=chunk) [Overview](index=33&type=section&id=Overview) This section outlines the company's business model, recent acquisitions and divestitures, and its strategy as an acquisition holding company - The company focuses on acquiring and managing small businesses in North America with enterprise values under **$50 million**[123](index=123&type=chunk)[129](index=129&type=chunk) - Recent acquisitions include Kyle's Custom Wood Shop, Inc. (September 2020), Wolo Mfg. Corp. (March 2021, planned for sale in 2025), and CMD Inc. (December 2024)[124](index=124&type=chunk)[125](index=125&type=chunk)[127](index=127&type=chunk) - Recent divestitures include High Mountain Door & Trim Inc. (sold September 2024)[126](index=126&type=chunk) [Management Fees](index=34&type=section&id=Management%20Fees) This section details the company's management fee structure, including parent and subsidiary fees, and reports related expenses for the period - Parent company management fees are **0.5%** of adjusted net assets, reduced by offsetting management fees paid by subsidiaries; no parent company management fees were incurred for the three and six months ended June 30, 2025 and 2024[130](index=130&type=chunk) - Subsidiary management fees for the three months ended June 30, 2025, were **$125,000** for 1847 Cabinet, **$75,000** for 1847 Wolo (included in discontinued operations), and **$75,000** for 1847 CMD[131](index=131&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk) - Consolidated management fees from continuing operations totaled **$200,000** for the three months ended June 30, 2025, and **$400,000** for the six months ended June 30, 2025[136](index=136&type=chunk) [Segments](index=34&type=section&id=Segments) This section identifies the company's sole reportable segment as Construction, post-divestitures, and clarifies the Corporate Services segment's role - Following recent divestitures, the company currently has only one reportable segment: the Construction segment, which provides finish carpentry and related products and services[137](index=137&type=chunk) - The Corporate Services segment includes costs associated with executive management, financing activities, and other public company-related expenses, but is not considered for operating decisions and segment performance evaluation[138](index=138&type=chunk) [Discontinued Operations](index=35&type=section&id=Discontinued%20Operations) This section outlines the company's recent discontinued operations, including ICU Eyewear, High Mountain, and Wolo, all representing strategic shifts - ICU Eyewear's assets were sold through foreclosure on August 5, 2024, due to loan default, and the company no longer holds a financial interest, with its operating results reported as discontinued operations[140](index=140&type=chunk) - High Mountain's assets were sold on September 30, 2024, for **$17,000,000**, and the retained amount was reduced by **$858,039** for post-closing working capital adjustments during the six months ended June 30, 2025[141](index=141&type=chunk) - The company has committed to selling Wolo (automotive products segment), with completion expected in 2025, and its operating results are reported as discontinued operations[142](index=142&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section analyzes the company's continuing operations, showing significant revenue growth, a shift to operating income, and net profit, driven by acquisition and warrant fair value changes - Company revenue significantly increased, primarily due to the **CMD acquisition**[145](index=145&type=chunk)[156](index=156&type=chunk) - The company transitioned from a significant net loss to net profit, mainly driven by **fair value changes in warrant liabilities**[152](index=152&type=chunk)[163](index=163&type=chunk) - Cost of revenue, personnel costs, depreciation and amortization, and general and administrative expenses substantially increased due to the CMD acquisition but decreased as a percentage of revenue, while professional fees decreased in absolute terms[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) [Comparison of the Three Months Ended June 30, 2025 and 2024](index=35&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the company's continuing operations performance for the three months ended June 30, 2025, and 2024 Continuing Operations Performance Comparison for the Three Months Ended June 30, 2025 and 2024 | Metric (Continuing Operations) | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Change Amount ($) | Change Percentage | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Revenue | $12,806,457 | $2,665,805 | $10,140,652 | 380.4% | | Cost of Revenue | $6,125,355 (47.8% of revenue) | $1,476,547 (55.4% of revenue) | $4,648,808 | 314.8% | | Personnel Costs | $1,995,320 (15.6% of revenue) | $1,089,039 (40.9% of revenue) | $906,281 | 83.2% | | Depreciation and Amortization | $352,055 | $168,072 | $183,983 | 109.5% | | General and Administrative Expenses | $1,072,720 (8.4% of revenue) | $502,183 (18.8% of revenue) | $570,537 | 113.6% | | Professional Fees | $674,994 (5.3% of revenue) | $1,094,000 (41.0% of revenue) | $(419,006) | (38.3)% | | Right-of-Use Asset Abandonment Loss | $112,705 | $- | $112,705 | N/A | | Operating Income (Loss) | $2,473,308 | $(1,664,036) | $4,137,344 | N/A | | Total Other Income (Expense) | $22,046,876 | $(1,590,795) | $23,637,671 | N/A | | Net Income (Loss) from Continuing Operations | $23,680,184 | $(2,946,831) | $26,627,015 | N/A | [Comparison of the Six Months Ended June 30, 2025 and 2024](index=37&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the company's continuing operations performance for the six months ended June 30, 2025, and 2024 Continuing Operations Performance Comparison for the Six Months Ended June 30, 2025 and 2024 | Metric (Continuing Operations) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | Change Amount ($) | Change Percentage | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Revenue | $22,889,929 | $4,750,259 | $18,139,670 | 381.9% | | Cost of Revenue | $11,000,345 (48.1% of revenue) | $2,659,246 (56.0% of revenue) | $8,341,099 | 313.7% | | Personnel Costs | $3,743,560 (16.4% of revenue) | $1,999,630 (42.1% of revenue) | $1,743,930 | 87.2% | | Depreciation and Amortization | $703,445 | $340,182 | $363,263 | 106.8% | | General and Administrative Expenses | $2,181,632 (9.5% of revenue) | $944,081 (19.9% of revenue) | $1,237,551 | 131.1% | | Professional Fees | $2,773,556 (12.1% of revenue) | $3,639,189 (76.6% of revenue) | $(865,633) | (23.8)% | | Right-of-Use Asset Abandonment Loss | $112,705 | $- | $112,705 | N/A | | Operating Income (Loss) | $2,374,686 | $(4,832,069) | $7,206,755 | N/A | | Total Other Income (Expense) | $21,846,131 | $(9,117,871) | $30,964,002 | N/A | | Net Income (Loss) from Continuing Operations | $23,452,817 | $(13,552,940) | $37,005,757 | N/A | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, financing history, and future capital needs, highlighting reliance on additional financing for going concern - As of June 30, 2025, the company had **$1,033,578** in cash and cash equivalents and **$500,929** in restricted cash[166](index=166&type=chunk) - The company's operations are primarily financed through operating income, cash proceeds from financing activities, borrowings, and equity contributions from shareholders[166](index=166&type=chunk) - The company requires additional capital to execute its business plan, pursue future acquisitions, cover public company expenses, and make payments to management (management fees, profit distributions, and put option prices)[169](index=169&type=chunk)[170](index=170&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - The company's ability to continue as a going concern depends on successfully executing its financing plans and ultimately achieving profitable operations; management is implementing strict cost controls and seeking new credit facilities/debt/equity financing[167](index=167&type=chunk)[168](index=168&type=chunk) [Debt](index=40&type=section&id=Debt) This section provides the company's total short-term and long-term debt and its composition as of June 30, 2025 Total Debt as of June 30, 2025 | Metric | Short-Term Debt ($) | Long-Term Debt ($) | Total Debt ($) | | :--------------------------- | :--------- | :--------- | :--------- | | Notes Payable, Net | $7,422,716 | $- | $7,422,716 | | Related Party Notes Payable | $616,883 | $950,738 | $1,567,621 | | Convertible Notes, Net | $22,467,583 | $- | $22,467,583 | | Finance Leases | $187,201 | $328,290 | $515,491 | | **Total Consolidated Debt, Net** | **$30,694,383** | **$1,279,028** | **$31,973,411** | [Contractual Obligations](index=40&type=section&id=Contractual%20Obligations) This section outlines the company's primary contractual obligations, including loans and management service agreements, which may significantly impact cash flow - The company's primary commitments include obligations under the aforementioned loans and other contractual commitments described in the management services agreements and operating agreements[180](index=180&type=chunk)[183](index=183&type=chunk) - These obligations include management fees, potential profit distributions, and potential put option prices payable to management, which take precedence over distributions to shareholders and could significantly reduce cash available for operations and investing activities[170](index=170&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) [Off-Balance Sheet Arrangements](index=40&type=section&id=Off-Balance%20Sheet%20Arrangements) This section states the company has no off-balance sheet arrangements with a material impact on its financial condition or operations - The company has no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on its financial condition, revenues, expenses, results of operations, liquidity, capital expenditures, or capital resources[180](index=180&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section notes that financial statement preparation requires management estimates and assumptions, advising consultation of the annual report for detailed accounting policies - The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities[181](index=181&type=chunk) - These estimates are based on management's historical industry experience and various other assumptions believed to be reasonable under the circumstances, but actual results may differ from these estimates[181](index=181&type=chunk) - For accounting policies that management believes involve the most significant judgments and estimates, and that could have a material impact on the reported financial condition, results of operations, or cash flows, refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies" section in the annual report[182](index=182&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states the company has no quantitative and qualitative disclosures about market risk to report - Not applicable[184](index=184&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the assessment of disclosure controls and procedures, noting ineffectiveness due to material weaknesses, but affirming fair financial statement presentation and ongoing remediation - As of June 30, 2025, the company's disclosure controls and procedures were deemed ineffective due to material weaknesses described in the annual report[185](index=185&type=chunk) - Despite the identified material weaknesses, management, including the Chief Executive Officer and Chief Financial Officer, believes the consolidated financial statements included in this report fairly present the company's financial position, results of operations, and cash flows in all material respects in accordance with GAAP[185](index=185&type=chunk) - The company continued to implement remediation efforts during the second quarter of 2025, including increasing personnel resources and technical accounting expertise within the accounting function, engaging internal control consultants for financial reporting risk assessment and internal control system design, and preparing written documentation of internal control policies and procedures[189](index=189&type=chunk)[190](index=190&type=chunk) - Material weaknesses cannot be considered remediated until the related controls have operated for a sufficient period[189](index=189&type=chunk) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company currently has no legal proceedings or claims identified that would materially adversely affect its business, financial condition, or results of operations - The company currently has no legal proceedings or claims identified that would materially adversely affect its business, financial condition, or results of operations[192](index=192&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section states that risk factors are not applicable to this quarterly report, advising consultation of the annual report for comprehensive risk discussion - Not applicable[193](index=193&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not make any previously undisclosed unregistered sales of equity securities or repurchase common stock during the three months ended June 30, 2025 - The company did not make any previously undisclosed unregistered sales of equity securities during the three months ended June 30, 2025[194](index=194&type=chunk) - The company did not repurchase any common stock during the three months ended June 30, 2025[195](index=195&type=chunk) [Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company did not experience any defaults upon senior securities during the reporting period - None[196](index=196&type=chunk) [Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Not applicable[197](index=197&type=chunk) [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) The company has no other information to disclose for the reporting period - None[198](index=198&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of Form 10-Q, including organizational documents, share designations, warrant forms, and certifications - Exhibits include the Certificate of Incorporation, amendments to operating agreements, Series A, C, D, and F share designations, various warrant forms, and certifications from the Chief Executive Officer and Chief Financial Officer[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk)

Core Viewpoint - 1847 Holdings LLC is transitioning its common shares to the OTCQB® Venture Market to enhance trading access and visibility for shareholders following a delisting from NYSE American [1][2]. Company Performance - The company reported a revenue growth of over 380% in Q1 2025, significant gross profit expansion, and meaningful debt reduction through strategic initiatives, including the divestiture of High Mountain Door & Trim Inc. for approximately $17 million [2]. - The company reaffirms its 2025 guidance with expected revenue exceeding $45 million and net income of approximately $1.3 million, and anticipates revenue surpassing $60 million with net income rising to approximately $5.0 million in 2026 [2]. Strategic Initiatives - The company aims to strengthen its financial performance and balance sheet by acquiring, enhancing, and monetizing undervalued businesses, which is part of its disciplined approach to value creation [2][4]. - Following the delisting from NYSE American, the company plans to reapply for listing on a national securities exchange at an appropriate time as it continues to execute its strategy [2]. Company Background - 1847 Holdings LLC is a diversified acquisition holding company that focuses on identifying overlooked, deep-value investment opportunities in middle market businesses [1][4]. - The company believes that capital market inefficiencies have left many small business stakeholders with limited exit options, allowing 1847 Holdings to acquire businesses at reasonable multiples of cash flow [4].

[Form 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This section details the Form 10-Q filing, registrant information, and NYSE American's delisting notification for common shares - Quarterly report for the period ended **March 31, 2025**[2](index=2&type=chunk) - Registrant: **1847 HOLDINGS LLC**, Delaware, Commission File Number: **001-41368**[2](index=2&type=chunk) - NYSE American notified the Company on **April 3, 2025**, of its determination to commence delisting proceedings for common shares (**EFSH**), with trading suspended; a review hearing is scheduled for **June 5, 2025**[3](index=3&type=chunk) Registrant Status | Status | Checkmark | | :--- | :--- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☐ | - As of **May 14, 2025**, there were **32,303,735** common shares issued and outstanding[5](index=5&type=chunk) [Table of Contents](index=2&type=section&id=TABLE%20OF%20CONTENTS) This section outlines the Form 10-Q structure, detailing items in Part I Financial Information and Part II Other Information - Report is structured into **PART I FINANCIAL INFORMATION** (Items 1-4) and **PART II OTHER INFORMATION** (Items 1-6)[7](index=7&type=chunk) [PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS.](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS.) This section presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, shareholders' deficit, cash flows, and notes - Includes unaudited condensed consolidated financial statements prepared in accordance with GAAP for interim financial information and Form 10-Q instructions[24](index=24&type=chunk) - December 31, 2024 balance sheet data derived from audited financial statements but without all GAAP disclosures[24](index=24&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased from **$33.65 million** to **$32.31 million**, with liabilities decreasing and shareholders' deficit slightly improving Condensed Consolidated Balance Sheet Summary | Metric | March 31, 2025 (Unaudited) ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | $1,108,477 | $2,457,086 | | Total Current Assets | $11,736,683 | $12,630,493 | | Total Assets | $32,305,185 | $33,647,738 | | Total Current Liabilities | $122,761,892 | $124,558,252 | | Total Liabilities | $127,865,979 | $130,113,775 | | Total Shareholders' Deficit | $(95,560,794) | $(96,466,037) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss significantly reduced to **$(415,953)** from **$(10.36 million)**, driven by increased revenues and a gain on warrant liabilities Condensed Consolidated Statements of Operations (Three Months Ended March 31) | Metric | 2025 (Unaudited) ($) | 2024 (Unaudited) ($) | | :--- | :--- | :--- | | Revenues | $10,083,472 | $2,084,454 | | Total Operating Expenses | $10,182,094 | $5,252,487 | | Loss from Operations | $(98,622) | $(3,168,033) | | Total Other Income (Expense) | $(200,745) | $(7,527,076) | | Net Loss | $(415,953) | $(10,359,061) | | Net Loss Attributable to 1847 Holdings | $(403,101) | $(10,400,513) | | Loss Per Common Share (Basic and Diluted) | $(0.02) | $(70.17) | - Gain on change in fair value of warrant liabilities was **$3,669,798** in Q1 2025, compared to a loss of **$(1,902,200)** in Q1 2024[14](index=14&type=chunk) - Loss on extinguishment of debt increased to **$(2,301,198)** in Q1 2025 from **$(421,875)** in Q1 2024[14](index=14&type=chunk) [Condensed Consolidated Statements of Shareholders' Deficit](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Deficit) Total shareholders' deficit decreased from **$(96.47 million)** to **$(95.56 million)**, influenced by share issuances and net loss Changes in Shareholders' Deficit (Three Months Ended March 31, 2025) | Item | Amount ($) | | :--- | :--- | | Balance at December 31, 2024 | $(96,466,037) | | Issuance of common shares upon conversion of convertible notes payable | $256,590 | | Issuance of series F preferred shares upon settlement of series A warrants | $1,138,332 | | Dividends – series A convertible preferred shares | $(8,755) | | Dividends – series C convertible preferred shares | $(12,369) | | Dividends – series D convertible preferred shares | $(52,602) | | Net loss | $(415,953) | | Balance at March 31, 2025 | $(95,560,794) | - Common shares outstanding increased from **25,400,386** at December 31, 2024, to **26,539,774** at March 31, 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly improved to **$755,750**, while investing activities provided cash and financing activities used cash Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31) | Cash Flow Activity | 2025 (Unaudited) ($) | 2024 (Unaudited) ($) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $755,750 | $(3,542,690) | | Net cash provided by investing activities | $43,760 | $0 | | Net cash provided by (used in) financing activities | $(2,157,968) | $3,370,056 | | Net change in cash and cash equivalents from continuing operations | $(1,348,609) | $(456,318) | | Cash and cash equivalents from continuing operations at end of period | $2,467,445 | $153,864 | - Cash paid for interest decreased significantly from **$1,171,608** in Q1 2024 to **$9,267** in Q1 2025[21](index=21&type=chunk) - Issuance of common shares upon conversion of convertible notes payable was **$256,590** in Q1 2025, compared to **$1,261,193** in Q1 2024[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, significant events, financial instruments, discontinued operations, going concern, revenue disaggregation, and asset/liability breakdowns [NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION](index=10&type=section&id=NOTE%201%E2%80%94BASIS%20OF%20PRESENTATION%20AND%20OTHER%20INFORMATION) This note outlines GAAP-compliant financial statement preparation, classifies Wolo as discontinued operations, and discusses recent accounting pronouncements - Unaudited condensed consolidated financial statements prepared in accordance with GAAP for interim financial information and Form 10-Q instructions[24](index=24&type=chunk) - Company committed to a plan to sell Wolo Mfg. Corp. and Wolo Industrial Horn & Signal, Inc. (Automotive Supplies Segment) during Q1 2025, classifying them as assets held for sale and discontinued operations due to a strategic shift[25](index=25&type=chunk)[27](index=27&type=chunk) - Adopted ASU 2023-05 (Business Combinations—Joint Venture Formations) with no material impact[29](index=29&type=chunk) - Evaluating ASU 2023-09 (Income Taxes) and ASU 2024-03 (Income Statement – Expense Disaggregation) for future impact[31](index=31&type=chunk)[32](index=32&type=chunk) [NOTE 2—LIQUIDITY AND GOING CONCERN ASSESSMENT](index=11&type=section&id=NOTE%202%E2%80%94LIQUIDITY%20AND%20GOING%20CONCERN%20ASSESSMENT) Substantial doubt exists about the Company's going concern due to a **$111.03 million** working capital deficit and historical losses, despite management's financing plans Liquidity Position (March 31, 2025) | Metric | Amount ($) | | :--- | :--- | | Cash and cash equivalents | $1,108,477 | | Restricted cash | $1,358,968 | | Total working capital deficit | $(111,025,209) | | Operating loss (Q1 2025) | $(98,622) | | Cash flows provided by operating activities from continuing operations (Q1 2025) | $765,599 | - Company has generated operating losses since inception and relies on external financing; expects insufficient cash within 12 months without additional funding, raising substantial doubt about going concern[36](index=36&type=chunk) - Management plans to secure additional financing through debt and equity offerings, but success is not assured and is subject to market conditions and third-party reliance[40](index=40&type=chunk) [NOTE 3—DISCONTINUED OPERATIONS](index=12&type=section&id=NOTE%203%E2%80%94DISCONTINUED%20OPERATIONS) This note details discontinued operations including the planned sale of Wolo, the assignment of Asien's Appliance, and the sales of ICU Eyewear and High Mountain assets - Wolo (Automotive Supplies Segment) classified as held for sale and discontinued operations, with a sale expected in 2025[42](index=42&type=chunk) Wolo Assets and Liabilities Held for Sale | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Total assets held for sale | $1,263,806 | $1,132,626 | | Total liabilities held for sale | $386,297 | $361,368 | | Total net assets held for sale | $877,509 | $771,258 | Wolo Results of Discontinued Operations (Three Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Revenues | $908,439 | $1,778,361 | | Total Operating Expenses | $990,932 | $1,842,789 | | Net loss from discontinued operations | $(188,586) | $(107,640) | - Asien's Appliance, Inc. entered into a general assignment for the benefit of creditors on **February 26, 2024**, with results reported as discontinued operations for Q1 2024[47](index=47&type=chunk) - ICU Eyewear, Inc. assets were sold via foreclosure on **August 5, 2024**, due to loan default, with results reported as discontinued operations for Q1 2024[51](index=51&type=chunk) - High Mountain Door & Trim Inc. assets were sold on **September 30, 2024**, for **$17,000,000** cash, with results reported as discontinued operations for Q1 2024[57](index=57&type=chunk) [NOTE 4—DISAGGREGATION OF REVENUES AND SEGMENT REPORTING](index=20&type=section&id=NOTE%204%E2%80%94DISAGGREGATION%20OF%20REVENUES%20AND%20SEGMENT%20REPORTING) The Company now operates one reportable segment, Construction, with Q1 2025 revenues significantly increasing to **$10.08 million** due to the CMD acquisition - Company operates one reportable segment: Construction, providing finish carpentry and related products/services[62](index=62&type=chunk) Revenues by Product/Service (Three Months Ended March 31) | Revenue Category | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Cabinetry and millwork | $4,102,598 | $2,084,454 | | Doors, frames, hardware, and trim | $5,776,838 | $0 | | Specialty construction accessories | $204,036 | $0 | | Total revenues | $10,083,472 | $2,084,454 | Segment Operating Results (Three Months Ended March 31, 2025) | Segment | Revenues ($) | Operating Expenses ($) | Income (Loss) from Operations ($) | | :--- | :--- | :--- | :--- | | Construction | $10,083,472 | $9,732,350 | $351,122 | | Corporate Services | $0 | $449,744 | $(449,744) | | Total | $10,083,472 | $10,182,094 | $(98,622) | [NOTE 5—PROPERTY AND EQUIPMENT](index=21&type=section&id=NOTE%205%E2%80%94PROPERTY%20AND%20EQUIPMENT) Net property and equipment decreased from **$1.12 million** to **$1.02 million**, with Q1 2025 depreciation expense at **$109,607** Property and Equipment, Net | Category | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Total property and equipment, net | $1,015,395 | $1,115,208 | - Depreciation expense for Q1 2025 was **$109,607**, compared to **$109,366** for Q1 2024[67](index=67&type=chunk) [NOTE 6—INTANGIBLE ASSETS](index=22&type=section&id=NOTE%206%E2%80%94INTANGIBLE%20ASSETS) Net intangible assets decreased from **$12.52 million** to **$12.28 million**, with amortization expense significantly increasing to **$241,783** Intangible Assets, Net | Category | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Total intangible assets, net | $12,282,563 | $12,524,346 | - Amortization expense for Q1 2025 was **$241,783**, a substantial increase from **$62,744** in Q1 2024[70](index=70&type=chunk) Estimated Amortization Expense for Intangible Assets (as of March 31, 2025) | Year Ending December 31, | Amount ($) | | :--- | :--- | | 2025 (remaining) | $725,349 | | 2026 | $967,132 | | 2027 | $967,132 | | 2028 | $967,132 | | 2029 | $967,132 | | Thereafter | $7,688,686 | | Total estimated amortization expense | $12,282,563 | [NOTE 7—ACCOUNTS PAYABLE AND ACCRUED EXPENSES](index=22&type=section&id=NOTE%207%E2%80%94ACCOUNTS%20PAYABLE%20AND%20ACCRUED%20EXPENSES) Total accounts payable and accrued expenses increased by **$2.68 million** (**45.8%**) to **$8.53 million**, driven by trade payables and accrued interest Accounts Payable and Accrued Expenses | Category | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Trade accounts payable | $2,668,997 | $1,633,593 | | Accrued interest | $2,953,832 | $1,841,011 | | Total accounts payable and accrued expenses | $8,532,741 | $5,853,307 | [NOTE 8—LEASES](index=22&type=section&id=NOTE%208%E2%80%94LEASES) Operating lease assets and liabilities slightly decreased, while Q1 2025 rent expense significantly increased to **$225,201**, with lease maturities detailed - CMD Inc. entered a new three-year office lease in **February 2025**, adding **$97,379** to ROU asset and liability[73](index=73&type=chunk) Operating Lease Liabilities | Metric | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Operating lease right-of-use assets | $1,920,569 | $1,964,276 | | Total operating lease liabilities | $1,974,025 | $2,017,604 | | Weighted-average remaining lease term (months) | 48 | 50 | | Weighted-average discount rate | 14.38% | 14.17% | - Rent expense for Q1 2025 was **$225,201**, up from **$111,077** in Q1 2024[75](index=75&type=chunk) Maturities of Operating Lease Liabilities (as of March 31, 2025) | Year Ending December 31, | Amount ($) | | :--- | :--- | | 2025 (remaining) | $605,459 | | 2026 | $581,006 | | 2027 | $509,551 | | 2028 | $465,881 | | 2029 | $472,714 | | Total operating lease liabilities | $1,974,025 | Maturities of Finance Lease Liabilities (as of March 31, 2025) | Year Ending December 31, | Amount ($) | | :--- | :--- | | 2025 (remaining) | $158,499 | | 2026 | $211,332 | | 2027 | $210,042 | | 2028 | $28,833 | | Total finance lease liabilities | $560,679 | [NOTE 9—FAIR VALUE MEASUREMENTS](index=24&type=section&id=NOTE%209%E2%80%94FAIR%20VALUE%20MEASUREMENTS) Recurring fair value measurements, primarily Level 3 warrant and derivative liabilities, show warrant liabilities decreasing to **$81.91 million** due to a fair value gain Recurring Fair Value Measurements (March 31, 2025) | Description | Level 3 ($) | Total ($) | | :--- | :--- | :--- | | Derivative liabilities | $220,000 | $220,000 | | Warrant liabilities | $81,913,890 | $81,913,890 | | Total | $82,133,890 | $82,133,890 | - Gain on change in fair value of warrant liabilities was **$3,669,798** for Q1 2025[80](index=80&type=chunk) - Loss on change in fair value of derivative liabilities was **$35,000** for Q1 2025[80](index=80&type=chunk) [NOTE 10—NOTES PAYABLE](index=24&type=section&id=NOTE%2010%E2%80%94NOTES%20PAYABLE) Total notes payable, net, decreased to **$7.19 million**, with a significant amendment to the 20% OID subordinated promissory note incurring a **$1.36 million** fee Notes Payable, Net | Category | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Total notes payable, net | $7,186,674 | $7,794,441 | | Current portion of notes payable, net | $7,185,266 | $7,785,911 | | Notes payable, net of current portion | $1,408 | $8,530 | - 20% OID subordinated promissory note amended on **March 31, 2025**, extending maturity to **November 7, 2025**, and incurring a **$1,358,966** amendment fee recognized as a loss on extinguishment of debt[82](index=82&type=chunk) - Outstanding principal balance of 20% OID subordinated promissory note was **$4,076,898** as of **March 31, 2025**[83](index=83&type=chunk) [NOTE 11—SHAREHOLDERS' DEFICIT](index=25&type=section&id=NOTE%2011%E2%80%94SHAREHOLDERS'%20DEFICIT) This note details changes in shareholders' deficit, including accrued preferred dividends, the establishment of Series F preferred shares, and warrant term adjustments - Accrued dividends for Series A, C, and D senior convertible preferred shares totaled **$8,755**, **$12,369**, and **$52,602**, respectively, for Q1 2025[86](index=86&type=chunk)[88](index=88&type=chunk)[90](index=90&type=chunk) - Series F convertible preferred shares established on **March 25, 2025**, with **1,027** shares issued (stated value **$1,000/share**) upon exchange for Series A warrants[91](index=91&type=chunk)[98](index=98&type=chunk) - Series F preferred shares rank senior to common, allocation, Series C, and Series D shares, on parity with other non-subordinated shares, and junior to Series A preferred shares and all indebtedness[91](index=91&type=chunk) - Conversion price for Series F preferred shares is **$0.1549** per share, subject to adjustments, with a conversion limit of **5,385,291** common shares (**19.99%** of outstanding common shares) prior to shareholder approval[96](index=96&type=chunk) - Issuance of **1,139,388** common shares upon conversion of a convertible promissory note, totaling **$256,590**, during Q1 2025[102](index=102&type=chunk) - Exercise price of Series A and Series B warrants (issued Oct 31, 2024) reduced on **March 11, 2025**, from **$1.50** to **$0.81** and **$0.54**, respectively, proportionally increasing warrant numbers[104](index=104&type=chunk) Changes in Warrants Outstanding (Three Months Ended March 31, 2025) | Metric | Warrants (Shares) | Weighted Average Exercise Price ($) | | :--- | :--- | :--- | | Outstanding at December 31, 2024 | 138,639,165 | $0.61 | | Warrant adjustment | 26,602,249 | $0.54 | | Settlement | (632,990) | $(0.81) | | Outstanding at March 31, 2025 | 164,608,424 | $0.51 | [NOTE 12—SUBSEQUENT EVENTS](index=27&type=section&id=NOTE%2012%E2%80%94SUBSEQUENT%20EVENTS) On **April 2, 2025**, the CMD Purchase Agreement was amended, waiving the working capital adjustment and confirming no purchase price adjustment was due - Amendment No. 3 to CMD Purchase Agreement on **April 2, 2025**, waived working capital adjustment provision and confirmed no purchase price adjustment was due[107](index=107&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.](index=28&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS.) Management discusses the Company's financial condition, results of operations, acquisition strategy, segment performance, and liquidity, including forward-looking statements [Overview](index=29&type=section&id=Overview) 1847 Holdings LLC is an acquisition holding company focused on acquiring and growing small North American businesses, including recent acquisitions like CMD - Company is an acquisition holding company focused on small businesses (enterprise value < **$50 million**) in North America[116](index=116&type=chunk) - Acquired Kyle's Custom Wood Shop (custom cabinetry) in **2020**, Wolo (horn and safety products, now held for sale) in **2021**, Innovative Cabinets (custom cabinetry and countertops) in **2021**, and CMD (finish carpentry and related services) in **2024**[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - Strategy involves acquiring controlling interests in businesses with long-term growth, positive/stable earnings, minimal obsolescence threats, and strong management, then improving them through organic growth, add-on acquisitions, and operational improvements[122](index=122&type=chunk) [Management Fees](index=30&type=section&id=Management%20Fees) The Company pays its manager a quarterly parent management fee of **0.5%** of adjusted net assets, with Q1 2025 consolidated fees totaling **$275,000** - Parent management fee is **0.5%** of adjusted net assets quarterly, reduced by offsetting management fees from subsidiaries[124](index=124&type=chunk) - 1847 Cabinet expensed **$125,000** in management fees for Q1 2025 and 2024[125](index=125&type=chunk) - 1847 Wolo expensed **$75,000** in management fees for Q1 2025 and 2024 (included in discontinued operations)[126](index=126&type=chunk) - 1847 CMD expensed **$75,000** in management fees for Q1 2025[128](index=128&type=chunk) Consolidated Management Fees (Three Months Ended March 31) | Category | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | From continuing operations | $200,000 | $83,333 | | From discontinued operations | $75,000 | $241,667 | [Segments](index=30&type=section&id=Segments) The Company now operates one reportable segment, Construction, with Corporate Services handling executive management and public company costs - One reportable segment: Construction, providing finish carpentry and related products and services[131](index=131&type=chunk) - Corporate Services segment includes costs for executive management, financing activities, and other public company-related costs[132](index=132&type=chunk) [Discontinued Operations](index=31&type=section&id=Discontinued%20Operations) This section reiterates details of discontinued operations, including the sales of ICU Eyewear and High Mountain assets, and the planned sale of Wolo - ICU Eyewear assets sold via foreclosure on **August 5, 2024**, due to loan default; results reported as discontinued operations for Q1 2024[134](index=134&type=chunk) - High Mountain assets sold on **September 30, 2024**, for **$17,000,000** cash; results reported as discontinued operations for Q1 2024[135](index=135&type=chunk) - Wolo (Automotive Supplies Segment) committed for sale in Q1 2025, with results reported as discontinued operations for Q1 2025 and 2024[136](index=136&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Q1 2025 revenues increased by **383.7%** to **$10.08 million**, significantly reducing loss from operations to **$(98,622)** and net loss from continuing operations to **$(227,367)** Key Components of Continuing Operations (Three Months Ended March 31) | Metric | 2025 Amount ($) | 2025 % of Revenues (%) | 2024 Amount ($) | 2024 % of Revenues (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $10,083,472 | 100.0% | $2,084,454 | 100.0% | | Cost of revenues | $4,874,990 | 48.3% | $1,182,699 | 56.7% | | Personnel | $1,748,240 | 17.3% | $910,591 | 43.7% | | Depreciation and amortization | $351,390 | 3.5% | $172,110 | 8.3% | | General and administrative | $1,108,912 | 11.0% | $441,898 | 21.2% | | Professional fees | $2,098,562 | 20.8% | $2,545,189 | 122.1% | | Loss from operations | $(98,622) | (1.0)% | $(3,168,033) | (152.0)% | | Net loss from continuing operations | $(227,367) | (2.3)% | $(10,606,109) | (508.8)% | - Revenues increased by **$7,999,018** (**383.7%**) to **$10,083,472** in Q1 2025, primarily due to the CMD acquisition (**$8,221,120** contribution)[139](index=139&type=chunk) - Cost of revenues increased by **$3,692,291** (**312.2%**) to **$4,874,990** in Q1 2025, mainly from CMD acquisition (**$3,898,835** contribution); as a percentage of revenues, it decreased from **56.7%** to **48.3%**[140](index=140&type=chunk) - Total other expense, net, significantly decreased to **$(200,745)** in Q1 2025 from **$(7,527,076)** in Q1 2024, driven by a gain on change in fair value of warrant liabilities[145](index=145&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) As of **March 31, 2025**, cash and cash equivalents were **$1.11 million**, with management planning additional financing and cost controls to address liquidity and going concern - As of **March 31, 2025**, cash and cash equivalents were **$1,108,477**, and restricted cash was **$1,358,968**[148](index=148&type=chunk) - Management plans to secure additional bank lines of credit and obtain additional financing through debt or equity transactions, alongside tight cost controls[149](index=149&type=chunk) - The Company's ability to continue as a going concern is dependent on successfully implementing these plans and achieving profitable operations[150](index=150&type=chunk) - Primary use of funds includes future acquisitions, public company expenses, distributions to shareholders, payments to the manager (management fee, profit allocation, potential put price), which are senior to shareholder distributions[152](index=152&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) [Summary of Cash Flow](index=34&type=section&id=Summary%20of%20Cash%20Flow) Net cash from operating activities significantly improved to **$765,599**, while investing activities provided cash and financing activities used cash due to repayments Net Cash Flows from Continuing Operations (Three Months Ended March 31) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $765,599 | $(3,920,506) | | Net cash provided by investing activities | $43,760 | $0 | | Net cash provided by (used in) financing activities | $(2,157,968) | $3,464,188 | | Net change in cash and cash equivalents and restricted cash | $(1,348,609) | $(456,318) | | Cash and cash equivalents and restricted cash at end of period | $2,467,445 | $153,864 | - Increase in net cash from operating activities primarily due to decreased net loss and increased accounts payable and accrued expenses, offset by decreased contract assets[156](index=156&type=chunk) - Decrease in net cash from financing activities primarily due to no debt or equity offerings and repayments of notes payable in Q1 2025[158](index=158&type=chunk) [Debt](index=34&type=section&id=Debt) As of **March 31, 2025**, total combined debt, net, was **$30.48 million**, with **$30.10 million** classified as short-term Total Debt (as of March 31, 2025) | Category | Short-Term ($) | Long-Term ($) | Total Debt ($) | | :--- | :--- | :--- | :--- | | Notes Payable, net | $7,185,266 | $1,408 | $7,186,674 | | Related Party Promissory Note | $578,290 | $0 | $578,290 | | Convertible Notes Payable, net | $22,152,424 | $0 | $22,152,424 | | Finance Leases | $184,605 | $376,074 | $560,679 | | Total combined debt, net | $30,100,585 | $377,482 | $30,478,067 | [Contractual Obligations](index=35&type=section&id=Contractual%20Obligations) Principal commitments include loan obligations and contractual commitments with the manager, covering management fees, profit allocations, and a put provision - Principal commitments include obligations under loans and contractual commitments with the manager[161](index=161&type=chunk) - Agreements with manager cover management fees, profit allocations, and a supplemental put provision for allocation shares[166](index=166&type=chunk) - Management fees, profit allocation, and potential put price are significant cash obligations paid before distributions to shareholders[152](index=152&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company has no off-balance sheet arrangements with a material current or future effect on its financial condition or results - No off-balance sheet arrangements that are material or reasonably likely to have a material effect on financial condition or results[161](index=161&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statements require management estimates and assumptions based on historical experience, with detailed policies available in the Annual Report on Form 10-K - Financial statements require management estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses[162](index=162&type=chunk) - Estimates are based on historical industry experience and other reasonable assumptions; actual results may differ[162](index=162&type=chunk) - Detailed critical accounting policies are described in Item 7 of the Annual Report on Form 10-K[163](index=163&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.](index=35&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) This section confirms no quantitative and qualitative disclosures about market risk are applicable for the reporting period - Not applicable[164](index=164&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES.](index=35&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) Disclosure controls were ineffective as of **March 31, 2025**, due to material weaknesses, with ongoing remediation efforts including increased accounting expertise [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Disclosure controls were ineffective as of **March 31, 2025**, due to material weaknesses, though management believes financial statements are fairly presented - Disclosure controls and procedures were not effective as of **March 31, 2025**, due to material weaknesses described in Item 9A of the Annual Report[165](index=165&type=chunk) - Management believes the consolidated financial statements in this report fairly represent the Company's financial condition, results of operations, and cash flows[165](index=165&type=chunk) [Changes in Internal Control Over Financial Reporting](index=36&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred, apart from ongoing remedial actions to address identified material weaknesses - No material changes in internal control over financial reporting during the period, other than remedial changes[168](index=168&type=chunk) - Remedial procedures include increasing personnel resources and technical accounting expertise, engaging internal control consultants, and preparing written documentation of internal control policies[170](index=170&type=chunk)[171](index=171&type=chunk) - Material weaknesses cannot be considered remediated until relevant controls operate for a sufficient period[170](index=170&type=chunk) [PART II OTHER INFORMATION](index=37&type=section&id=PART%20II%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS.](index=37&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS.) The Company is unaware of any legal proceedings or claims expected to have a material adverse effect on its business or financial condition - No legal proceedings or claims are currently known to have a material adverse effect on the Company's business, financial condition, or operating results[173](index=173&type=chunk) [ITEM 1A. RISK FACTORS.](index=37&type=section&id=ITEM%201A.%20RISK%20FACTORS.) This section is not applicable for this quarterly report, as risk factors are typically detailed in the Annual Report on Form 10-K - Not applicable[174](index=174&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.](index=37&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS.) The Company did not engage in unregistered sales of equity securities or repurchase common shares during the three months ended **March 31, 2025** - No unregistered sales of equity securities not previously disclosed in a Form 8-K during Q1 2025[175](index=175&type=chunk) - No common shares repurchased during Q1 2025[176](index=176&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES.](index=37&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES.) The Company reported no defaults upon senior securities for the period - None[177](index=177&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES.](index=37&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES.) This section is not applicable to the Company - Not applicable[178](index=178&type=chunk) [ITEM 5. OTHER INFORMATION.](index=37&type=section&id=ITEM%205.%20OTHER%20INFORMATION.) No other information is reported in this section for the period - None[179](index=179&type=chunk) [ITEM 6. EXHIBITS.](index=37&type=section&id=ITEM%206.%20EXHIBITS.) This section lists all exhibits filed with the Form 10-Q, including organizational documents, share designations, warrant forms, and certifications - Lists various exhibits, including Certificate of Formation, Operating Agreement amendments, Share Designations (Series A, C, D, F Preferred Shares), and Common Share Purchase Warrants[180](index=180&type=chunk)[181](index=181&type=chunk) - Includes certifications of Principal Executive Officer and Principal Financial and Accounting Officer (Sections 302 and 906 of Sarbanes-Oxley Act)[181](index=181&type=chunk)