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

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and countertops. The Automotive Supplies Segment is comprised
of the business of Wolo, which is based in Deer Park, NY, and designs and sells horn and safety products (electric, air, truck, marine,
motorcycle and industrial equipment), and offers vehicle emergency and safety warning lights for cars, trucks, industrial equipment,
and emergency vehicles. The Company provides general corporate services
to its segments; however, these services are not considered when making operating decisions and assessing segment performance. These
services are reported under “Corporate Services” below and these include costs associated with executive management, financing
activities and public company compliance. Cash and Cash Equivalents The Company considers all highly liquid investments
with the original maturities of three months or less to be cash equivalents. F- 9 1847 HOLDINGS LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 AND 2020 Use of Estimates The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. Impact of COVID-19 The impact of COVID-19 on the Company’s
business has been considered in management’s estimates and assumptions; however, it is too early to know the full impact of COVID-19
or its timing on a return to more normal operations. Further, the recently enacted Coronavirus Aid, Relief and Economic Security Act (the
“CARES Act”) provides for economic assistance loans through the United States Small Business Administration (the “SBA”).
On April 28, 2020, Asien’s received $ 357,500 in Paycheck Protection Program (“PPP”) loans from the SBA under the CARES
Act. The PPP provides that the PPP loans may be partially or wholly forgiven if the funds are used for certain qualifying expenses as
described in the CARES Act. Asien’s used the proceeds from the PPP loans for qualifying expenses and to applied for forgiveness
of the PPP loans in accordance with the terms of the CARES Act. On February 16, 2021, Asien’s received notice from Exchange
Bank that its loan had been forgiven in its entirety by the Small Business Administration (See Note 11). Reclassifications Certain Statements of Operations reclassifications
have been made in the presentation of the Company’s prior financial statements and accompanying notes to conform to the presentation
for the year ended December 31, 2021. The Company reclassified certain operating expense accounts in the Consolidated Statement of Operations.
The reclassification had no impact on financial position, net income, or shareholder’s equity. Revenue Recognition and Cost of Revenue On January 1, 2018, the Company adopted Accounting
Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue
recognition requirements in ASC Topic 605, Revenue Recognition . This ASU is based on the principle that revenue is recognized
to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to
be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing,
and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments. The Company’s
adoption of this ASU resulted in no change to the Company’s results of operations or balance sheet. Retail and Appliances Segment The Company collects 100% of the payment for
special-order models including tax and 50% of the payment for non-special orders from the customer at the time the order is placed. The
Company does not incur incremental costs obtaining purchase orders from customers, however, if it did, because all contracts are less
than a year in duration, any contract costs incurred would be expensed rather than capitalized. Performance Obligations – The revenue that
the Company recognizes arises from orders it receives from customers. The Company performance obligations under the customer orders correspond
to each sale of merchandise that it makes to customers under the purchase orders; as a result, each purchase order generally contains
only one performance obligation based on the merchandise sale to be completed. Control of the delivery transfers to customers when the
customer can direct the use of, and obtain substantially all the benefits from, the Company’s products, which generally occurs
when the customer assumes the risk of loss. The transfer of control generally occurs at the point of pickup, shipment, or installation.
Once this occurs, the Company has satisfied its performance obligation and it recognizes revenue. Transaction Price ‒ The Company agrees
with customers on the selling price of each transaction. This transaction price is generally based on the agreed upon sales price. In
the Company’s contracts with customers, it allocates the entire transaction price to the sales price, which is the basis for the
determination of the relative standalone selling price allocated to each performance obligation. Any sales tax that the Company collects
concurrently with revenue-producing activities are excluded from revenue. F- 10 1847 HOLDINGS LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 AND 2020 Cost of revenue includes the cost of purchased
merchandise plus freight and any applicable delivery charges from the vendor to the Company. Substantially all sales are to individual
retail consumers (homeowners), builders and designers. The large majority of customers are homeowners and their contractors, with the
homeowner being key in the final decisions. The Company has a diverse customer base with no one client accounting for more than 5 % of
total revenue. Customer deposits ‒ The Company records
customer deposits when payments are received in advance of the delivery of the merchandise. The Company expects that substantially all
of the customer deposits will be recognized within six months as the performance obligations are satisfied. Construction Segment The Company’s construction segment revenues
are derived primarily through contracts with customers whereby the Company specializes in all aspects of products and services relating
to finished carpentry, custom cabinetry, and countertops. The Company recognizes revenue when control of the promised goods or services
is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those
goods or services. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties
are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. A contract’s transaction price is allocated
to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Since most contracts
are bundled to include both material and installation services, the Company combines these items into one performance obligation as the
overall promise to transfer the individual goods or services is not separately identifiable from other promises in the contract and,
therefore, is not distinct. The Company does offer assurance-type warranties on certain of its installed products and services that do
not represent a separate performance obligation and, as such, do not impact the timing or extent of revenue recognition. For any contracts that are not complete at the
reporting date, the Company recognizes revenue over time, because of the continuous transfer of control to the customer as work is performed
at the customer’s site and, therefore, the customer controls the asset as it is being installed. The Company utilizes the cost-to-cost
measure of progress method as it believes this best depicts the transfer of control of assets to the customer, which occurs as costs
are incurred. When this method is used, the Company estimates the costs to complete individual contracts and record as revenue that portion
of the total contract price that is considered complete based on the relationship of costs incurred to date to total anticipated costs.
Unforeseen events and circumstances can alter the estimate of the costs associated with a particular contract. Total estimated costs
at completion can be impacted by changes in productivity, scheduling, cost of labor, and materials. Additionally, external factors such
as weather, and customer delays may affect the progress of a project’s completion, and thus the timing and amount of revenue recognition,
cash flow, and profitability from a particular contract may be adversely affected. An insignificant portion of sales, primarily
retail sales, is accounted for on a point-in-time basis when the sale occurs. Sales taxes, when incurred, are recorded as a liability
and excluded from revenue on a net basis. Contracts can be subject to modification to account
for changes in contract specifications and requirements. The Company considers contract modifications to exist when the modification
either creates new, or changes the existing, enforceable rights and obligations. Most contract modifications are for goods or services
that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and
are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and
the Company’s measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue
on a cumulative catch-up basis. All contracts are billed either contractually
or as work is performed. Billing on long-term contracts occurs primarily on a monthly basis throughout the contract period whereby the
Company submits progress invoices for customer payment based on actual or estimated costs incurred during the billing period. On some
contracts, the customer may withhold payment on an invoice equal to a percentage of the invoice amount, which will be subsequently paid
after satisfactory completion of each project. This amount is referred to as retainage and is common practice in the construction industry,
as it allows for customers to ensure the quality of the service performed prior to full payment. The retention provisions are not considered
a significant financing component. Cost of revenues earned include all direct material
and labor costs and those indirect costs related to contract performance. The cost of significant uninstalled materials, re-work, or
scrap is generally excluded from the cost-to-cost measure of progress as it is not proportionate to the entity’s progress in satisfying
the performance obligation. F- 11 1847 HOLDINGS LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 AND 2020 Contract Assets and Contract Liabilities The Company records a contract asset when it
has satisfied its performance obligation prior to billing and a contract liability when a customer payment is received prior to the satisfaction
of the Company’s performance obligation. The difference between the beginning and ending balances of contract assets and liabilities
primarily results from the timing of the Company’s performance and the customer’s payment. At times, the Company has a right
to payment from previous performance that is conditional on something other than passage of time, such as retainage, which is included
in contract assets or contract liabilities, as determined on a contract-by-contract basis. Automotive Supplies Segment The Company’s automotive supplies segment
designs and sells horn and safety products (electric, air, truck, marine, motorcycle and industrial equipment), and offers vehicle emergency
and safety warning lights for cars, trucks, industrial equipment and emergency vehicles. Focused on the automotive and industrial after-market,
the Company sells its products to big-box national retail chains, through specialty and industrial distributors, as well as online/mail
order retailers and original equipment manufacturers. The Company collects 100 % of the payment for
internet and phone orders, including tax, from the customer at the time the order is shipped. Customers placing orders with a purchase
order through the EDI (Electronic Data Interface) are allowed to purchase on credit and make payment after receipt of product on the
agreed upon terms. Performance Obligations – The revenue that
the Company recognizes arises from orders it receives from contracts with customers. The Company’s performance obligations under
the customer orders correspond to each sale of merchandise that it makes to customers and each order generally contains only one performance
obligation based on the merchandise sale to be completed. Control of the delivery transfers to customers when the customer can direct
the use of, and obtain substantially all the benefits from, the Company’s products, which generally occurs when the customer assumes
the risk of loss. The transfer of control generally occurs at the point of shipment of the order. Once this occurs, the Company has satisfied

and countertops. The Automotive Supplies Segment is comprised

of the business of Wolo, which is based in Deer Park, NY, and designs and sells horn and safety products (electric, air, truck, marine,

motorcycle and industrial equipment), and offers vehicle emergency and safety warning lights for cars, trucks, industrial equipment,

and emergency vehicles. The Company provides general corporate services

to its segments; however, these services are not considered when making operating decisions and assessing segment performance. These

services are reported under “Corporate Services” below and these include costs associated with executive management, financing

activities and public company compliance. Cash and Cash Equivalents The Company considers all highly liquid investments

with the original maturities of three months or less to be cash equivalents. F- 9 1847 HOLDINGS LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 AND 2020 Use of Estimates The preparation of financial statements in conformity

with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during

the reporting period. Actual results could differ from those estimates. Impact of COVID-19 The impact of COVID-19 on the Company’s

business has been considered in management’s estimates and assumptions; however, it is too early to know the full impact of COVID-19

or its timing on a return to more normal operations. Further, the recently enacted Coronavirus Aid, Relief and Economic Security Act (the

“CARES Act”) provides for economic assistance loans through the United States Small Business Administration (the “SBA”).

On April 28, 2020, Asien’s received $ 357,500 in Paycheck Protection Program (“PPP”) loans from the SBA under the CARES

Act. The PPP provides that the PPP loans may be partially or wholly forgiven if the funds are used for certain qualifying expenses as

described in the CARES Act. Asien’s used the proceeds from the PPP loans for qualifying expenses and to applied for forgiveness

of the PPP loans in accordance with the terms of the CARES Act. On February 16, 2021, Asien’s received notice from Exchange

Bank that its loan had been forgiven in its entirety by the Small Business Administration (See Note 11). Reclassifications Certain Statements of Operations reclassifications

have been made in the presentation of the Company’s prior financial statements and accompanying notes to conform to the presentation

for the year ended December 31, 2021. The Company reclassified certain operating expense accounts in the Consolidated Statement of Operations.

The reclassification had no impact on financial position, net income, or shareholder’s equity. Revenue Recognition and Cost of Revenue On January 1, 2018, the Company adopted Accounting

Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue

recognition requirements in ASC Topic 605, Revenue Recognition . This ASU is based on the principle that revenue is recognized

to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to

be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing,

and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments. The Company’s

adoption of this ASU resulted in no change to the Company’s results of operations or balance sheet. Retail and Appliances Segment The Company collects 100% of the payment for

special-order models including tax and 50% of the payment for non-special orders from the customer at the time the order is placed. The

Company does not incur incremental costs obtaining purchase orders from customers, however, if it did, because all contracts are less

than a year in duration, any contract costs incurred would be expensed rather than capitalized. Performance Obligations – The revenue that

the Company recognizes arises from orders it receives from customers. The Company performance obligations under the customer orders correspond

to each sale of merchandise that it makes to customers under the purchase orders; as a result, each purchase order generally contains

only one performance obligation based on the merchandise sale to be completed. Control of the delivery transfers to customers when the

customer can direct the use of, and obtain substantially all the benefits from, the Company’s products, which generally occurs

when the customer assumes the risk of loss. The transfer of control generally occurs at the point of pickup, shipment, or installation.

Once this occurs, the Company has satisfied its performance obligation and it recognizes revenue. Transaction Price ‒ The Company agrees

with customers on the selling price of each transaction. This transaction price is generally based on the agreed upon sales price. In

the Company’s contracts with customers, it allocates the entire transaction price to the sales price, which is the basis for the

determination of the relative standalone selling price allocated to each performance obligation. Any sales tax that the Company collects

concurrently with revenue-producing activities are excluded from revenue. F- 10 1847 HOLDINGS LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 AND 2020 Cost of revenue includes the cost of purchased

merchandise plus freight and any applicable delivery charges from the vendor to the Company. Substantially all sales are to individual

retail consumers (homeowners), builders and designers. The large majority of customers are homeowners and their contractors, with the

homeowner being key in the final decisions. The Company has a diverse customer base with no one client accounting for more than 5 % of

total revenue. Customer deposits ‒ The Company records

customer deposits when payments are received in advance of the delivery of the merchandise. The Company expects that substantially all

of the customer deposits will be recognized within six months as the performance obligations are satisfied. Construction Segment The Company’s construction segment revenues

are derived primarily through contracts with customers whereby the Company specializes in all aspects of products and services relating

to finished carpentry, custom cabinetry, and countertops. The Company recognizes revenue when control of the promised goods or services

is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those

goods or services. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties

are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. A contract’s transaction price is allocated

to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Since most contracts

are bundled to include both material and installation services, the Company combines these items into one performance obligation as the

overall promise to transfer the individual goods or services is not separately identifiable from other promises in the contract and,

therefore, is not distinct. The Company does offer assurance-type warranties on certain of its installed products and services that do

not represent a separate performance obligation and, as such, do not impact the timing or extent of revenue recognition. For any contracts that are not complete at the

reporting date, the Company recognizes revenue over time, because of the continuous transfer of control to the customer as work is performed

at the customer’s site and, therefore, the customer controls the asset as it is being installed. The Company utilizes the cost-to-cost

measure of progress method as it believes this best depicts the transfer of control of assets to the customer, which occurs as costs

are incurred. When this method is used, the Company estimates the costs to complete individual contracts and record as revenue that portion

of the total contract price that is considered complete based on the relationship of costs incurred to date to total anticipated costs.

Unforeseen events and circumstances can alter the estimate of the costs associated with a particular contract. Total estimated costs

at completion can be impacted by changes in productivity, scheduling, cost of labor, and materials. Additionally, external factors such

as weather, and customer delays may affect the progress of a project’s completion, and thus the timing and amount of revenue recognition,

cash flow, and profitability from a particular contract may be adversely affected. An insignificant portion of sales, primarily

retail sales, is accounted for on a point-in-time basis when the sale occurs. Sales taxes, when incurred, are recorded as a liability

and excluded from revenue on a net basis. Contracts can be subject to modification to account

for changes in contract specifications and requirements. The Company considers contract modifications to exist when the modification

either creates new, or changes the existing, enforceable rights and obligations. Most contract modifications are for goods or services

that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and

are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price and

the Company’s measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue

on a cumulative catch-up basis. All contracts are billed either contractually

or as work is performed. Billing on long-term contracts occurs primarily on a monthly basis throughout the contract period whereby the

Company submits progress invoices for customer payment based on actual or estimated costs incurred during the billing period. On some

contracts, the customer may withhold payment on an invoice equal to a percentage of the invoice amount, which will be subsequently paid

after satisfactory completion of each project. This amount is referred to as retainage and is common practice in the construction industry,

as it allows for customers to ensure the quality of the service performed prior to full payment. The retention provisions are not considered

a significant financing component. Cost of revenues earned include all direct material

and labor costs and those indirect costs related to contract performance. The cost of significant uninstalled materials, re-work, or

scrap is generally excluded from the cost-to-cost measure of progress as it is not proportionate to the entity’s progress in satisfying

the performance obligation. F- 11 1847 HOLDINGS LLC NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 AND 2020 Contract Assets and Contract Liabilities The Company records a contract asset when it

has satisfied its performance obligation prior to billing and a contract liability when a customer payment is received prior to the satisfaction

of the Company’s performance obligation. The difference between the beginning and ending balances of contract assets and liabilities

primarily results from the timing of the Company’s performance and the customer’s payment. At times, the Company has a right

to payment from previous performance that is conditional on something other than passage of time, such as retainage, which is included

in contract assets or contract liabilities, as determined on a contract-by-contract basis. Automotive Supplies Segment The Company’s automotive supplies segment

designs and sells horn and safety products (electric, air, truck, marine, motorcycle and industrial equipment), and offers vehicle emergency

and safety warning lights for cars, trucks, industrial equipment and emergency vehicles. Focused on the automotive and industrial after-market,

the Company sells its products to big-box national retail chains, through specialty and industrial distributors, as well as online/mail

order retailers and original equipment manufacturers. The Company collects 100 % of the payment for

internet and phone orders, including tax, from the customer at the time the order is shipped. Customers placing orders with a purchase

order through the EDI (Electronic Data Interface) are allowed to purchase on credit and make payment after receipt of product on the

agreed upon terms. Performance Obligations – The revenue that

the Company recognizes arises from orders it receives from contracts with customers. The Company’s performance obligations under

the customer orders correspond to each sale of merchandise that it makes to customers and each order generally contains only one performance

obligation based on the merchandise sale to be completed. Control of the delivery transfers to customers when the customer can direct

the use of, and obtain substantially all the benefits from, the Company’s products, which generally occurs when the customer assumes

the risk of loss. The transfer of control generally occurs at the point of shipment of the order. Once this occurs, the Company has satisfied