arcee-ai/sec-data-full · Datasets at Hugging Face

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2021, in conformity with accounting principles generally accepted in the United States of America. Basis
for Opinion These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion. Critical
Audit Matters The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and tha (1) related to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical matters
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Acquisitions
– Refer to Note 10 to the Consolidated Financial Statements Critical
Audit Matter Description During
the year ended December 31, 2021, the Company completed two business acquisitions. On March 30, 2021, the Company acquired 100% of the
outstanding capital stock of Wolo Mfg. Corp and Wolo Industrial Horn & Signal, Inc., for an aggregate purchase price of $8,344,056.
On October 8, 2021, the Company acquired 100% of the outstanding capital stock of High Mountain Door & Trim, Inc. and Sierra Homes
LLC, Inc. for an aggregate purchase price of $15,441,173. The Company accounted for these two acquisitions as business combinations.
Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed at fair value as of the transaction dates.
The Company utilized a third-party valuation specialist to assist in determining the fair value of the consideration granted and identifiable
intangible assets acquired in each acquisition. We identified the estimation of the fair value of the consideration transferred, assets
acquired, and liabilities assumed in these acquisitions as a critical audit matter. We
identified the valuation of the consideration transferred, assets acquired, and liabilities assumed as a critical audit matter because
of the significant estimates and assumptions management made to determine the fair value of certain of these assets. This required a
high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of
valuation methodologies applied and the assumptions used such as forecasted sales growth rates, cash flows, attrition rates, market-based
royalty rates, and estimated discount rates. In addition, the audit effort involved the use of professionals with specialized skill and
knowledge. F- 2 How
the Critical Audit Matter was Addressed in the Audit Our
audit procedures related to the followin ● We
evaluated management’s and the valuation specialist’s identification of assets
acquired and liabilities assumed. ● We
obtained management’s purchase price allocation detailing fair values assigned to acquired
tangible and intangible assets. ● We
obtained valuation report prepared by valuation specialist engaged by management to assist
in the purchase price allocation, including determination of fair values assigned to acquired
intangible assets, and examined valuation methods used and qualifications of specialist. ● We
examined the completeness and accuracy of the underlying data supporting the significant
assumptions and estimates used in the valuation report, including historical and projected
financial information. ● We
evaluated the accuracy and completeness of the financial statement presentation and disclosure
of the acquisitions. In
addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in the evaluations of the
valuation methodologies deployed and the reasonableness of the significant assumptions used. Going
Concern Critical
Audit Matter Description As
described further in Note 2 to the consolidated financial statements, the Company has incurred losses since inception, has negative cash
flows from operations, and has an accumulated deficit. Accordingly, the Company has determined that these factors raise substantial doubt
about its ability to continue as a going concern. However, management believes, based on the Company’s operating plan, that current
working capital and current and expected additional financing is sufficient to fund operations and satisfy the Company’s obligations
as they come due for at least one year from the financial statement issuance date. We
determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty
regarding the Company’s future cash flows, available capital and the risk of bias in management’s judgments and assumptions
in their determination. How
the Critical Audit Matter Was Addressed in the Audit Our
audit procedures related to the followin ● We
performed testing procedures such as analytical procedures to identify conditions and
events that indicate there could be substantial doubt about the entity's ability to
continue as a going concern for a reasonable period of time. ● We
reviewed and evaluated management's plans for dealing with adverse effect of these conditions
and events. ● We
inquired of Company management and reviewed company records to assess whether there are additional
factors that contribute to the uncertainties disclosed. ● We assessed whether the Company’s determination that there is substantial doubt about its ability to continue as a going
concern, and that such doubt was alleviated by management’s plans, was adequately disclosed. /s/ Sadler, Gibb & Associates, LLC We
have served as the Company’s auditor since 2017. Draper,
UT March
31, 2022 F- 3 1847 HOLDINGS LLC CONSOLIDATED BALANCE SHEETS December 31, 2021 December 31, 2020 ASSETS Current Assets Cash $ 1,383,533 $ 976,538 Restricted
cash - 403,811 Investments 276,429 - Accounts
receivable, net 3,378,996 525,625 Contract
assets 88,466 70,230 Inventories,
net 5,427,302 2,022,754 Prepaid
expenses and other current assets 582,048 550,964 Discontinued
operations – current assets - 1,324,608 TOTAL
CURRENT ASSETS 11,136,774 5,874,530 Property
and equipment, net 1,695,311 398,503 Investments
long-term - 276,270 Operating
lease right-of-use assets 3,192,604 357,208 Goodwill 19,452,270 5,989,817 Intangible
assets, net 11,443,897 3,885,467 Other assets 85,691 375 Discontinued
operations – long-term assets - 2,457,770 TOTAL
ASSETS $ 47,006,547 $ 19,239,940 LIABILITIES
AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts
payable and accrued expenses $ 4,818,672 $ 2,558,559 Contract
liabilities 2,547,903 77,403 Customer
deposits 3,465,259 3,370,957 Current
portion of operating lease liability 613,696 66,803 Advances,
related party 193,762 190,192 Lines of credit - 301,081 Due to
seller - 33,630 Note payable
– related party - 56,900 Current
portion of notes payable 793,174 429,183 Discontinued
operations – current liabilities - 999,122 TOTAL

2021, in conformity with accounting principles generally accepted in the United States of America. Basis

for Opinion These

financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s

financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We

conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding

the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits

provide a reasonable basis for our opinion. Critical

Audit Matters The

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and tha (1) related to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical matters

below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Acquisitions

– Refer to Note 10 to the Consolidated Financial Statements Critical

Audit Matter Description During

the year ended December 31, 2021, the Company completed two business acquisitions. On March 30, 2021, the Company acquired 100% of the

outstanding capital stock of Wolo Mfg. Corp and Wolo Industrial Horn & Signal, Inc., for an aggregate purchase price of $8,344,056.

On October 8, 2021, the Company acquired 100% of the outstanding capital stock of High Mountain Door & Trim, Inc. and Sierra Homes

LLC, Inc. for an aggregate purchase price of $15,441,173. The Company accounted for these two acquisitions as business combinations.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed at fair value as of the transaction dates.

The Company utilized a third-party valuation specialist to assist in determining the fair value of the consideration granted and identifiable

intangible assets acquired in each acquisition. We identified the estimation of the fair value of the consideration transferred, assets

acquired, and liabilities assumed in these acquisitions as a critical audit matter. We

identified the valuation of the consideration transferred, assets acquired, and liabilities assumed as a critical audit matter because

of the significant estimates and assumptions management made to determine the fair value of certain of these assets. This required a

high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of

valuation methodologies applied and the assumptions used such as forecasted sales growth rates, cash flows, attrition rates, market-based

royalty rates, and estimated discount rates. In addition, the audit effort involved the use of professionals with specialized skill and

knowledge. F- 2 How

the Critical Audit Matter was Addressed in the Audit Our

audit procedures related to the followin ● We

evaluated management’s and the valuation specialist’s identification of assets

acquired and liabilities assumed. ● We

obtained management’s purchase price allocation detailing fair values assigned to acquired

tangible and intangible assets. ● We

obtained valuation report prepared by valuation specialist engaged by management to assist

in the purchase price allocation, including determination of fair values assigned to acquired

intangible assets, and examined valuation methods used and qualifications of specialist. ● We

examined the completeness and accuracy of the underlying data supporting the significant

assumptions and estimates used in the valuation report, including historical and projected

financial information. ● We

evaluated the accuracy and completeness of the financial statement presentation and disclosure

of the acquisitions. In

addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in the evaluations of the

valuation methodologies deployed and the reasonableness of the significant assumptions used. Going

Concern Critical

Audit Matter Description As

described further in Note 2 to the consolidated financial statements, the Company has incurred losses since inception, has negative cash

flows from operations, and has an accumulated deficit. Accordingly, the Company has determined that these factors raise substantial doubt

about its ability to continue as a going concern. However, management believes, based on the Company’s operating plan, that current

working capital and current and expected additional financing is sufficient to fund operations and satisfy the Company’s obligations

as they come due for at least one year from the financial statement issuance date. We

determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty

regarding the Company’s future cash flows, available capital and the risk of bias in management’s judgments and assumptions

in their determination. How

the Critical Audit Matter Was Addressed in the Audit Our

audit procedures related to the followin ● We

performed testing procedures such as analytical procedures to identify conditions and

events that indicate there could be substantial doubt about the entity's ability to

continue as a going concern for a reasonable period of time. ● We

reviewed and evaluated management's plans for dealing with adverse effect of these conditions

and events. ● We

inquired of Company management and reviewed company records to assess whether there are additional

factors that contribute to the uncertainties disclosed. ● We assessed whether the Company’s determination that there is substantial doubt about its ability to continue as a going

concern, and that such doubt was alleviated by management’s plans, was adequately disclosed. /s/ Sadler, Gibb & Associates, LLC We

have served as the Company’s auditor since 2017. Draper,

UT March

31, 2022 F- 3 1847 HOLDINGS LLC CONSOLIDATED BALANCE SHEETS December 31, 2021 December 31, 2020 ASSETS Current Assets Cash $ 1,383,533 $ 976,538 Restricted

cash - 403,811 Investments 276,429 - Accounts

receivable, net 3,378,996 525,625 Contract

assets 88,466 70,230 Inventories,

net 5,427,302 2,022,754 Prepaid

expenses and other current assets 582,048 550,964 Discontinued

operations – current assets - 1,324,608 TOTAL

CURRENT ASSETS 11,136,774 5,874,530 Property

and equipment, net 1,695,311 398,503 Investments

long-term - 276,270 Operating

lease right-of-use assets 3,192,604 357,208 Goodwill 19,452,270 5,989,817 Intangible

assets, net 11,443,897 3,885,467 Other assets 85,691 375 Discontinued

operations – long-term assets - 2,457,770 TOTAL

ASSETS $ 47,006,547 $ 19,239,940 LIABILITIES

AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts

payable and accrued expenses $ 4,818,672 $ 2,558,559 Contract

liabilities 2,547,903 77,403 Customer

deposits 3,465,259 3,370,957 Current

portion of operating lease liability 613,696 66,803 Advances,

related party 193,762 190,192 Lines of credit - 301,081 Due to

seller - 33,630 Note payable

– related party - 56,900 Current

portion of notes payable 793,174 429,183 Discontinued

operations – current liabilities - 999,122 TOTAL