Financial Position - As of September 30, 2024, total assets decreased to $16.90 million from $39.37 million as of December 31, 2023, representing a decline of approximately 57.1%[12] - Current liabilities decreased to $19.34 million from $28.14 million, a reduction of about 31.5%[12] - The accumulated deficit increased to $87.49 million from $74.84 million, reflecting a rise of about 16.9%[12] - Total shareholders' deficit grew to $26.27 million from $20.04 million, an increase of approximately 31.1%[12] - The company has no goodwill reported as of September 30, 2024, down from $0.68 million as of December 31, 2023[12] - As of December 31, 2023, the total shareholders' deficit was $(20,040,689) with accumulated non-controlling interests of $(1,314,280) and total liabilities of $(74,835,392)[19] - The balance of accumulated deficit increased to $57,315,859, indicating ongoing financial challenges[23] - The balance at March 31, 2023, showed a total shareholders' deficit of $42,804,608, indicating a deteriorating financial position[22] Revenue and Income - Revenues for the three months ended September 30, 2024, were $4,759,090, compared to $4,676,365 for the same period in 2023, representing an increase of 1.77%[15] - The company reported a net income from discontinued operations of $7,873,389 for the three months ended September 30, 2024, compared to a loss of $(722,357) in the prior year[15] - The net income attributable to common shareholders for the three months ended September 30, 2024, was $2,757,873, compared to a loss of $(5,981,334) in the same period last year[15] - For the nine months ended September 30, 2024, total revenues reached $12,390,797, up from $11,657,475 in 2023, indicating a growth of 6.29%[91] - Automotive horns revenue for Q3 2024 was $934,848, a significant increase from $616,189 in Q3 2023, reflecting a growth of 51.63%[88] - Custom cabinets and countertops revenue for the nine months ended September 30, 2024, was $8,555,880, compared to $8,150,092 in 2023, marking an increase of 4.97%[91] Operating Expenses - Total operating expenses increased to $8,172,328 for the three months ended September 30, 2024, from $5,883,608 in the prior year, a rise of 38.88%[15] - The company incurred a personnel expense of $2,406,855 for the three months ended September 30, 2024, up from $1,663,261 in the same period last year, an increase of 44.61%[15] - Total operating expenses for Q3 2024 were $8,172,328, compared to $6,018,904 in Q3 2023, an increase of 36.00%[91] - The company’s personnel expenses for the nine months ended September 30, 2024, were $4,975,516, compared to $4,435,727 in 2023, reflecting an increase of 12.16%[91] Cash Flow - Net cash used in operating activities from continuing operations was $11,688,488 for the nine months ended September 30, 2024, compared to $7,953,559 for the same period in 2023, indicating a 46.5% increase in cash outflow[26] - The company reported net cash provided by investing activities of $17,501,868 for the nine months ended September 30, 2024, compared to a cash outflow of $3,901,545 for the same period in 2023[26] - Net cash provided by financing activities was $2,028,866 for the nine months ended September 30, 2024, compared to $10,576,260 for the same period in 2023, reflecting a decrease of 80.8%[26] - Cash from continuing operations at the end of the period was $10,217,191, a significant increase from $452,284 at the end of the previous period[26] Discontinued Operations - The company recognized a gain on the disposition of subsidiaries amounting to $10,083,621[26] - For the nine months ended September 30, 2024, revenues from discontinued operations were $870,952, compared to $6,887,589 for the same period in 2023[58] - The net loss from discontinued operations for the nine months ended September 30, 2024, was $299,115, compared to a loss of $1,011,969 in 2023[58] - The company recognized a gain on the disposition of ICU Eyewear's assets amounting to $4,841,735 for the nine months ended September 30, 2024[62] - Revenues from discontinued operations for the three months ended September 30, 2024, were $1,239,327, a decrease of 70.8% compared to $4,243,254 for the same period in 2023[68] Debt and Financing - The Company issued 20% original issue discount subordinated promissory notes in the aggregate principal amount of $3,125,000, due on February 11, 2024[118] - The Company recognized a loss on extinguishment of debt totaling $1,476,560 during the nine months ended September 30, 2024[124] - The Company entered into a non-recourse funding agreement for the sale of future revenues totaling $1,965,000, resulting in net cash proceeds of $1,410,000, with weekly payments of $39,300[159] - The combined total outstanding principal balance of secured convertible promissory notes is $22,790,057, net of a debt discount of $1,304,637[167] Management and Future Plans - The Company has generated operating losses since its inception and expects insufficient cash to sustain operations without additional financing within the next twelve months[48] - Management plans to secure additional financing through debt and equity offerings to address liquidity concerns[50]
1847 LLC(EFSH) - 2024 Q3 - Quarterly Report