PART I ITEM 1. Business 1847 Holdings LLC acquires and manages small North American businesses, focusing on organic growth and add-on acquisitions in Construction and Automotive Supplies - 1847 Holdings LLC is an acquisition holding company focused on acquiring and managing small businesses (enterprise value < $50 million) in various industries across North America19 - The company's strategy involves acquiring controlling interests in businesses with long-term macroeconomic growth opportunities, positive and stable earnings/cash flows, minimal obsolescence threats, and strong management teams21 - Acquisition strategy targets capital-light businesses in niche geographical markets with competitive advantages, specifically in business services, consumer services, consumer products, consumable industrial products, industrial services, niche light manufacturing, distribution, alternative/specialty finance, and select specialty retail33 - The company aims to limit external acquisition leverage, with debt not exceeding the market value of acquired assets and a debt to EBITDA ratio not exceeding 1.25x to 1 for operating subsidiaries27 - As of December 31, 2024, the company had 6 full-time employees (excluding operating subsidiaries)59 - The company is classified as a partnership for U.S. federal income tax purposes, meaning shareholders are taxed on their allocable share of income, not the company itself62 - The Construction business segment accounted for approximately 76.1% of total revenues in 2024, up from 67.9% in 2023146 - The Automotive Supplies business segment accounted for approximately 23.9% of total revenues in 2024, down from 32.1% in 2023176 ITEM 1A. Risk Factors The company faces significant risks including going concern, acquisition integration, competition, and operational challenges in its construction and automotive segments - Auditors issued a going concern opinion due to recurring losses, negative cash flows, and a working capital deficit of $111,927,759 as of December 31, 2024216219 - The company's ability to realize anticipated benefits from acquisitions depends on successful integration, which is complex, costly, and time-consuming220 - The construction business is highly dependent on U.S. home improvement, repair, remodel, and new home construction activity, making it vulnerable to housing market fluctuations and interest rate changes242243 - The automotive supply business is highly dependent on key suppliers, with 52.0% of purchases in 2024 and 81.3% in 2023 from five third-party vendors, primarily in China and Taiwan, exposing it to supply chain disruptions and geopolitical risks263266270 - The management fee and profit allocation to the manager are significant cash obligations, senior to shareholder distributions, and may induce decisions not optimal for long-term business performance322326 - Shareholders are subject to U.S. federal income taxation on their allocable share of taxable income, even if no cash distributions are received, due to the company's partnership classification328329 ITEM 1B. Unresolved Staff Comments The company has no unresolved staff comments from the SEC - No unresolved staff comments are applicable to the company360 ITEM 1C. Cybersecurity The company integrates cybersecurity risk management, engaging third-party experts and escalating significant matters to the board - Cybersecurity risk management is integrated into overall risk management processes, with continuous evaluation and alignment with business objectives363 - The company plans to engage external experts (consultants, auditors) for evaluating and testing risk management systems, including annual audits and ongoing threat assessments364 - Management is responsible for assessing, monitoring, and managing cybersecurity risks, ensuring industry-standard measures, and overseeing an incident response plan368369 - As of the report date, the company has not encountered cybersecurity challenges that have materially affected its business strategy, results of operations, or financial condition366 ITEM 2. Properties The company and its subsidiaries lease office, production, and warehouse facilities across New York, Idaho, and Nevada, which are adequately maintained - The company's principal office is in New York, NY, leased from Regus Management Group, LLC for $210 per month371 - Subsidiaries lease facilities in Boise, ID (Kyle's - 6,600 sq ft and 9,530 sq ft), Reno, NV (Innovative Cabinets - 24,000 sq ft), Las Vegas, NV (CMD - 15,000 sq ft and 15,288 sq ft), and Deer Park, NY (Wolo - 10,000 sq ft)372373374375376377 - Lease terms vary, typically 5 years with renewal options, and include base rent plus responsibility for taxes, insurance, and operating costs372373374375376377 ITEM 3. Legal Proceedings The company is not aware of any legal proceedings or claims expected to materially affect its business or financial condition - The company is not currently aware of any legal proceedings or claims that are believed to have a material adverse effect on its business, financial condition, or operating results379 ITEM 4. Mine Safety Disclosures The company has no disclosures related to mine safety - Mine Safety Disclosures are not applicable to the company380 PART II ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common shares are listed on NYSE American, with preferred share dividend policies and plans for common share distributions based on cash flow - Common shares are listed on NYSE American under the symbol "EFSH"382 - As of March 28, 2025, there were approximately 86 shareholders of record382 Preferred Share Dividend Rights | Share Class | Dividend Rate (per annum) | Stated Value | Payment Term | | :---------- | :------------------------ | :----------- | :----------- | | Series A | 24.0% | $2.42/share | Quarterly (cash or common shares) | | Series C | 6.0% | $10.00/share | Upon conversion or liquidation | | Series D | 10.0% | $0.339/share | Upon conversion or liquidation | - The company plans to make regular distributions on common shares, subject to sufficient cash flow from operating subsidiaries and board approval, aiming to increase distributions over time386387 - No repurchases of common shares were made during the fourth quarter of 2024390 ITEM 6. [Reserved] This item is reserved and contains no information ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported a significant net loss in 2024, driven by warrant liabilities, and faces liquidity challenges despite revenue growth in construction - Authorized common shares increased from 500 million to 2 billion on March 11, 20253951012 - A warrant exchange on March 25, 2025, converted remaining Series A warrants and exercised shares into 1,027 Series F convertible preferred shares3971017 Management Fees Expensed (Consolidated) | Year | From Continued Operations
1847 LLC(EFSH) - 2024 Q4 - Annual Report