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

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Kyle’s. 1847 Cabinet was formed in the State of Delaware on August 21, 2020 and Kyle’s was formed in the State of Idaho on
May 7, 1991. On March 30, 2021, our newly formed wholly-owned
subsidiary 1847 Wolo acquired all of the issued and outstanding capital stock of Wolo for an aggregate purchase price of $8,344,055, consisting
of (i) $6,550,000 in cash, (ii) a 6% secured promissory note in the aggregate principal amount of $850,000 and (iii) cash paid to seller,
net of working capital adjustment, of $944,055. As a result of this transaction, we own 92.5% of 1847 Wolo, with the remaining 7.5% held
by Leonite, and 1847 Wolo owns 100% of Wolo Mfg. Corp and Wolo Industrial Horn & Signal, Inc. 1847 Wolo was formed in the State of
Delaware on December 3, 2020. Wolo Mfg. Corp. was formed in the State of New York on August 6, 1965 and Wolo Industrial Horn & Signal,
Inc. was formed in the State of New York on January 28, 1999. On October 8, 2021, 1847 Cabinet acquired all
of the issued and outstanding capital stock or other equity securities of High Mountain and Innovative Cabinets for an aggregate purchase
price of $16,567,845 (subject to adjustment), consisting of (i) $10,687,500 in cash (subject to adjustment) and (ii) the issuance by
1847 Cabinet of 6% subordinated convertible promissory notes in the aggregate principal amount of $5,880,345. The purchase price is
subject to a post-closing working capital adjustment provision. Under this provision, the sellers delivered to 1847 Cabinet at the
closing an unaudited balance sheet of High Mountain and Innovative Cabinets and a calculation of estimated net working capital of High
Mountain and Innovative Cabinets as of that date. On or before the 75th day following the closing, 1847 Cabinet must deliver to the
sellers an unaudited balance sheet of High Mountain and Innovative Cabinets and its calculation of the final net working capital of High
Mountain and Innovative Cabinets as of the closing date. If such final net working capital exceeds the estimated net working capital,
1847 Cabinet must, within seven days, pay to the sellers an amount of cash that is equal to such excess. If the estimated net working
capital exceeds the final net working capital, the sellers must, within seven days, pay to 1847 Cabinet an amount in cash equal to such
excess. As of the date of this report, the post-closing working capital adjustment has not been completed notwithstanding the fact that
the date of this report is past the 75th day following closing. 1847 Cabinet has agreed with the sellers to finalize the post-working
capital adjustment. As a result of this transaction, 1847 Cabinet
owns 92.5% of High Mountain and Innovative Cabinets, with the remaining 7.5% held by Leonite. High Mountain was formed in the State of
Nevada on April 4, 2014 and Innovative Cabinets was formed in the State of Nevada on June 17, 2008. On May 14, 2021, we formed 1847 HQ Inc.
as a wholly-owned subsidiary in the State of Delaware to manage our benefit plans. 9 The following chart depicts our current organizational structu See “ —Our Manager ” for
more details regarding the ownership of our manager. OUR MANAGER Overview of Our Manager Our manager, 1847 Partners LLC, is a Delaware
limited liability company. It has two classes of limited liability interests known as Class A interests and Class B interests. The Class
A interests, which give the holder the right to the profit allocation received by our manager as a result of holding our allocation shares,
are owned in their entirety by 1847 Partners Class A Member LLC; and the Class B interests, which give the holder the right to all other
profits or losses of our manager, including the management fee payable to our manager by us, are owned in their entirety by 1847 Partners
Class B Member LLC. 1847 Partners Class A Member LLC is owned 52% by Ellery W. Roberts, our Chief Executive Officer, 38% by 1847 Founders
Capital LLC, which is owned by Edward J. Tobin, and approximately 9% by Louis A. Bevilacqua, the managing member of Bevilacqua PLLC, our
outside counsel, with the balance being owned by a former contractor to such law firm. 1847 Partners Class B Member LLC is owned 54% by
Ellery W. Roberts, 36% by 1847 Founders Capital LLC and 10% by Louis A. Bevilacqua. Mr. Roberts is also the sole manager of both entities.
In the future, Mr. Roberts may cause 1847 Partners Class A Member LLC or 1847 Partners Class B Member LLC to issue units to employees
of our manager to incentivize those employees by providing them with the ability to participate in our manager’s incentive allocation
and management fee. Key Personnel of Our Manager The key personnel of our manager are Ellery W.
Roberts, our Chief Executive Officer, and Edward J. Tobin. Each of these individuals will be compensated entirely by our manager from
the management fees it receives. As employees of our manager, these individuals devote a substantial majority of their time to the affairs
of our company. Collectively, the management team of our manager
has more than 60 years of combined experience in acquiring and managing small businesses and has overseen the acquisitions and financing
of over 50 businesses. 10 Acquisition and Disposition Opportunities Our manager has exclusive responsibility for
reviewing and making recommendations to our board of directors with respect to acquisition and disposition opportunities. If our manager
does not originate an opportunity, our board of directors will seek a recommendation from our manager prior to making a decision concerning
such opportunity. In the case of any acquisition or disposition opportunity that involves an affiliate of our manager or us, our nominating
and corporate governance committee, or, if we do not have such a committee, the independent members of our board of directors, will be
required to authorize and approve such transaction. Our manager will review each acquisition or disposition
opportunity presented to our manager to determine if such opportunity satisfies the acquisition and disposition criteria established by
our board of directors. The acquisition and disposition criteria provide that our manager will review each acquisition opportunity presented
to it to determine if such opportunity satisfies our acquisition and disposition criteria, and if it is determined, in our manager’s
sole discretion, that an opportunity satisfies the criteria, our manager will refer the opportunity to our board of directors for its
authorization and approval prior to the consummation of any such opportunity. Our investment criteria include the followin ● Revenue
of at least $5.0 million ● Current
year EBITDA/Pre-tax Income of at least $1.5 million with a history of positive cash flow ● Clearly
identifiable “blueprint” for growth with the potential for break-out returns ● Well-positioned
companies within our core industry categories (consumer-driven, business-to-business, light
manufacturing and specialty finance) with strong returns on capital ● Opportunities
wherein building management team, infrastructure and access to capital are the primary drivers
of creating value ● Headquartered
in North America We believe we will be able to acquire small businesses
for multiples ranging from three to six times EBITDA. With respect to investment opportunities that do not fall within the criteria set
forth above, our manager must first present such opportunities to our board of directors. Our board of directors and our manager will
review these criteria from time to time and our board of directors may make changes and modifications to such criteria as we make additional
acquisitions and dispositions. If an acquisition opportunity is referred to our
board of directors by our manager and our board of directors determines not to timely pursue such opportunity in whole or in part, any
part of such opportunity that we do not promptly pursue may be pursued by our manager or may be referred by our manager to any person,
including affiliates of our manager. In this case, our manager is likely to devote a portion of its time to the oversight of this opportunity,
including the management of a business that we do not own. If there is a disposition, our manager must use
its commercially reasonable efforts to manage a process through which the value of such disposition can be maximized, taking into consideration
non-financial factors such as those relating to competition, strategic partnerships, potential favorable or adverse effects on us, our
businesses, or our investments or any similar factors that may reasonably perceived as having a short- or long-term impact on our business,
results of operations and financial condition. Management Services Agreement The management services agreement sets forth
the services performed by our manager. Our manager performs such services subject to the oversight and supervision of our board of directors. In general, our manager performs those services
for us that would be typically performed by the executive officers of a company. Specifically, our manager performs the following services,
which we refer to as the management services, pursuant to the management services agreemen ● manage our day-to-day business and operations, including
our liquidity and capital resources and compliance with applicable law; 11 ● identify,
evaluate, manage, perform due diligence on, negotiate and oversee acquisitions of target
businesses and any other investments; ● evaluate
and oversee the financial and operational performance of our businesses, including monitoring
the business and operations of such businesses, and the financial performance of any other
investments that we make; ● provide,
on our behalf, managerial assistance to our businesses; ● evaluate,
manage, negotiate and oversee dispositions of all or any part of any of our property, assets
or investments, including disposition of all or any part of our businesses; ● provide or second, as necessary, employees of our manager to serve as our executive officers or other
employees or as members of our board of directors; and ● perform
any other services that would be customarily performed by executive officers and employees
of a publicly listed or quoted company. We and our manager have the right at any time
during the term of the management services agreement to change the services provided by our manager. In performing management services,
our manager has all necessary power and authority to perform, or cause to be performed, such services on our behalf, and, in this respect,
our manager is the only provider of management services to us. Nonetheless, our manager is required to obtain authorization and approval
of our board of directors in all circumstances where executive officers of a corporation typically would be required to obtain authorization
and approval of a corporation’s board of directors, including, for example, with respect to the consummation of an acquisition of
a target business, the issuance of securities or the entry into credit arrangements. While our Chief Executive Officer, Mr. Ellery
W. Roberts, intends to devote substantially all of his time to the affairs of our company, neither Mr. Roberts, nor our manager, is expressly
prohibited from investing in or managing other entities. In this regard, the management services agreement does not require our manager
and its affiliates to provide management services to us exclusively. Secondment of Our Executive Officers In accordance with the terms of the management
services agreement, our manager may second to us our executive officers, which means that these individuals will be assigned by our manager
to work for us during the term of the management services agreement. Our board of directors has appointed Mr. Roberts as an executive
officer of our company. Although Mr. Roberts is an employee of our manager, he will report directly, and be subject, to our board of directors.
In this respect, our board of directors may, after due consultation with our manager, at any time request that our manager replace any
individual seconded to us and our manager will, as promptly as practicable, replace any such individual; however, our Chief Executive

Kyle’s. 1847 Cabinet was formed in the State of Delaware on August 21, 2020 and Kyle’s was formed in the State of Idaho on

May 7, 1991. On March 30, 2021, our newly formed wholly-owned

subsidiary 1847 Wolo acquired all of the issued and outstanding capital stock of Wolo for an aggregate purchase price of $8,344,055, consisting

of (i) $6,550,000 in cash, (ii) a 6% secured promissory note in the aggregate principal amount of $850,000 and (iii) cash paid to seller,

net of working capital adjustment, of $944,055. As a result of this transaction, we own 92.5% of 1847 Wolo, with the remaining 7.5% held

by Leonite, and 1847 Wolo owns 100% of Wolo Mfg. Corp and Wolo Industrial Horn & Signal, Inc. 1847 Wolo was formed in the State of

Delaware on December 3, 2020. Wolo Mfg. Corp. was formed in the State of New York on August 6, 1965 and Wolo Industrial Horn & Signal,

Inc. was formed in the State of New York on January 28, 1999. On October 8, 2021, 1847 Cabinet acquired all

of the issued and outstanding capital stock or other equity securities of High Mountain and Innovative Cabinets for an aggregate purchase

price of $16,567,845 (subject to adjustment), consisting of (i) $10,687,500 in cash (subject to adjustment) and (ii) the issuance by

1847 Cabinet of 6% subordinated convertible promissory notes in the aggregate principal amount of $5,880,345. The purchase price is

subject to a post-closing working capital adjustment provision. Under this provision, the sellers delivered to 1847 Cabinet at the

closing an unaudited balance sheet of High Mountain and Innovative Cabinets and a calculation of estimated net working capital of High

Mountain and Innovative Cabinets as of that date. On or before the 75th day following the closing, 1847 Cabinet must deliver to the

sellers an unaudited balance sheet of High Mountain and Innovative Cabinets and its calculation of the final net working capital of High

Mountain and Innovative Cabinets as of the closing date. If such final net working capital exceeds the estimated net working capital,

1847 Cabinet must, within seven days, pay to the sellers an amount of cash that is equal to such excess. If the estimated net working

capital exceeds the final net working capital, the sellers must, within seven days, pay to 1847 Cabinet an amount in cash equal to such

excess. As of the date of this report, the post-closing working capital adjustment has not been completed notwithstanding the fact that

the date of this report is past the 75th day following closing. 1847 Cabinet has agreed with the sellers to finalize the post-working

capital adjustment. As a result of this transaction, 1847 Cabinet

owns 92.5% of High Mountain and Innovative Cabinets, with the remaining 7.5% held by Leonite. High Mountain was formed in the State of

Nevada on April 4, 2014 and Innovative Cabinets was formed in the State of Nevada on June 17, 2008. On May 14, 2021, we formed 1847 HQ Inc.

as a wholly-owned subsidiary in the State of Delaware to manage our benefit plans. 9 The following chart depicts our current organizational structu See “ —Our Manager ” for

more details regarding the ownership of our manager. OUR MANAGER Overview of Our Manager Our manager, 1847 Partners LLC, is a Delaware

limited liability company. It has two classes of limited liability interests known as Class A interests and Class B interests. The Class

A interests, which give the holder the right to the profit allocation received by our manager as a result of holding our allocation shares,

are owned in their entirety by 1847 Partners Class A Member LLC; and the Class B interests, which give the holder the right to all other

profits or losses of our manager, including the management fee payable to our manager by us, are owned in their entirety by 1847 Partners

Class B Member LLC. 1847 Partners Class A Member LLC is owned 52% by Ellery W. Roberts, our Chief Executive Officer, 38% by 1847 Founders

Capital LLC, which is owned by Edward J. Tobin, and approximately 9% by Louis A. Bevilacqua, the managing member of Bevilacqua PLLC, our

outside counsel, with the balance being owned by a former contractor to such law firm. 1847 Partners Class B Member LLC is owned 54% by

Ellery W. Roberts, 36% by 1847 Founders Capital LLC and 10% by Louis A. Bevilacqua. Mr. Roberts is also the sole manager of both entities.

In the future, Mr. Roberts may cause 1847 Partners Class A Member LLC or 1847 Partners Class B Member LLC to issue units to employees

of our manager to incentivize those employees by providing them with the ability to participate in our manager’s incentive allocation

and management fee. Key Personnel of Our Manager The key personnel of our manager are Ellery W.

Roberts, our Chief Executive Officer, and Edward J. Tobin. Each of these individuals will be compensated entirely by our manager from

the management fees it receives. As employees of our manager, these individuals devote a substantial majority of their time to the affairs

of our company. Collectively, the management team of our manager

has more than 60 years of combined experience in acquiring and managing small businesses and has overseen the acquisitions and financing

of over 50 businesses. 10 Acquisition and Disposition Opportunities Our manager has exclusive responsibility for

reviewing and making recommendations to our board of directors with respect to acquisition and disposition opportunities. If our manager

does not originate an opportunity, our board of directors will seek a recommendation from our manager prior to making a decision concerning

such opportunity. In the case of any acquisition or disposition opportunity that involves an affiliate of our manager or us, our nominating

and corporate governance committee, or, if we do not have such a committee, the independent members of our board of directors, will be

required to authorize and approve such transaction. Our manager will review each acquisition or disposition

opportunity presented to our manager to determine if such opportunity satisfies the acquisition and disposition criteria established by

our board of directors. The acquisition and disposition criteria provide that our manager will review each acquisition opportunity presented

to it to determine if such opportunity satisfies our acquisition and disposition criteria, and if it is determined, in our manager’s

sole discretion, that an opportunity satisfies the criteria, our manager will refer the opportunity to our board of directors for its

authorization and approval prior to the consummation of any such opportunity. Our investment criteria include the followin ● Revenue

of at least $5.0 million ● Current

year EBITDA/Pre-tax Income of at least $1.5 million with a history of positive cash flow ● Clearly

identifiable “blueprint” for growth with the potential for break-out returns ● Well-positioned

companies within our core industry categories (consumer-driven, business-to-business, light

manufacturing and specialty finance) with strong returns on capital ● Opportunities

wherein building management team, infrastructure and access to capital are the primary drivers

of creating value ● Headquartered

in North America We believe we will be able to acquire small businesses

for multiples ranging from three to six times EBITDA. With respect to investment opportunities that do not fall within the criteria set

forth above, our manager must first present such opportunities to our board of directors. Our board of directors and our manager will

review these criteria from time to time and our board of directors may make changes and modifications to such criteria as we make additional

acquisitions and dispositions. If an acquisition opportunity is referred to our

board of directors by our manager and our board of directors determines not to timely pursue such opportunity in whole or in part, any

part of such opportunity that we do not promptly pursue may be pursued by our manager or may be referred by our manager to any person,

including affiliates of our manager. In this case, our manager is likely to devote a portion of its time to the oversight of this opportunity,

including the management of a business that we do not own. If there is a disposition, our manager must use

its commercially reasonable efforts to manage a process through which the value of such disposition can be maximized, taking into consideration

non-financial factors such as those relating to competition, strategic partnerships, potential favorable or adverse effects on us, our

businesses, or our investments or any similar factors that may reasonably perceived as having a short- or long-term impact on our business,

results of operations and financial condition. Management Services Agreement The management services agreement sets forth

the services performed by our manager. Our manager performs such services subject to the oversight and supervision of our board of directors. In general, our manager performs those services

for us that would be typically performed by the executive officers of a company. Specifically, our manager performs the following services,

which we refer to as the management services, pursuant to the management services agreemen ● manage our day-to-day business and operations, including

our liquidity and capital resources and compliance with applicable law; 11 ● identify,

evaluate, manage, perform due diligence on, negotiate and oversee acquisitions of target

businesses and any other investments; ● evaluate

and oversee the financial and operational performance of our businesses, including monitoring

the business and operations of such businesses, and the financial performance of any other

investments that we make; ● provide,

on our behalf, managerial assistance to our businesses; ● evaluate,

manage, negotiate and oversee dispositions of all or any part of any of our property, assets

or investments, including disposition of all or any part of our businesses; ● provide or second, as necessary, employees of our manager to serve as our executive officers or other

employees or as members of our board of directors; and ● perform

any other services that would be customarily performed by executive officers and employees

of a publicly listed or quoted company. We and our manager have the right at any time

during the term of the management services agreement to change the services provided by our manager. In performing management services,

our manager has all necessary power and authority to perform, or cause to be performed, such services on our behalf, and, in this respect,

our manager is the only provider of management services to us. Nonetheless, our manager is required to obtain authorization and approval

of our board of directors in all circumstances where executive officers of a corporation typically would be required to obtain authorization

and approval of a corporation’s board of directors, including, for example, with respect to the consummation of an acquisition of

a target business, the issuance of securities or the entry into credit arrangements. While our Chief Executive Officer, Mr. Ellery

W. Roberts, intends to devote substantially all of his time to the affairs of our company, neither Mr. Roberts, nor our manager, is expressly

prohibited from investing in or managing other entities. In this regard, the management services agreement does not require our manager

and its affiliates to provide management services to us exclusively. Secondment of Our Executive Officers In accordance with the terms of the management

services agreement, our manager may second to us our executive officers, which means that these individuals will be assigned by our manager

to work for us during the term of the management services agreement. Our board of directors has appointed Mr. Roberts as an executive

officer of our company. Although Mr. Roberts is an employee of our manager, he will report directly, and be subject, to our board of directors.

In this respect, our board of directors may, after due consultation with our manager, at any time request that our manager replace any

individual seconded to us and our manager will, as promptly as practicable, replace any such individual; however, our Chief Executive