UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File Number: 001-41368

1847 HOLDINGS LLC

(Exact name of registrant as specified in its charter)

Delaware		38-3922937
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

260 Madison Avenue, 8th Floor, New York, NY		10016
(Address of principal executive offices)		(Zip Code)

(212) 417-9800

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Shares		EFSH		NYSE American LLC⁽¹⁾

(1)

On April 3, 2025, NYSE American notified the Company that it has determined to commence proceedings to delist the Company’s common shares and trading of the Company’s common shares on NYSE American was suspended on such date. The Company has requested review of NYSE American’s determination to delist the Company’s common shares and the hearing for such review is schedule for June 5, 2025. Accordingly, trading of the Company’s common shares will remain suspended pending the outcome of that review. If the delisting determination is upheld, NYSE American will file a Form 25 with the U.S. Securities and Exchange Commission to delist the common shares from NYSE American. The deregistration of the common shares under Section 12(b) of the Act will be effective 90 days, or such shorter period as the U.S. Securities and Exchange Commission may determine, after filing of the Form 25.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for comply with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 14, 2025, there were 32,303,735 common shares of the registrant issued and outstanding.

1847 HOLDINGS LLC

Quarterly Report on Form 10-Q

Period Ended March 31, 2025

TABLE OF CONTENTS

	PART I
	FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

	PART II
	OTHER INFORMATION

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	34

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

1847 HOLDINGS LLC

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page
Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024		2
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (Unaudited)		3
Condensed Consolidated Statements of Shareholders’ Deficit for the Three Months Ended March 31, 2025 and 2024 (Unaudited)		4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)		6
Notes to Condensed Consolidated Financial Statements (Unaudited)		7

1847 HOLDINGS LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2025			December 31, 2024
	(Unaudited)
ASSETS

Current Assets
Cash and cash equivalents	$	1,108,477		$	2,457,086
Restricted cash		1,358,968			1,358,968
Accounts receivable, net		5,149,547			5,361,405
Contract assets		2,392,170			1,892,532
Inventories, net		11,830			18,530
Prepaid expenses and other current assets		451,885			478,386
Assets held for sale		1,263,806			1,063,586
Total Current Assets		11,736,683			12,630,493

Property and equipment, net		1,015,395			1,115,208
Operating lease right-of-use assets		1,920,569			1,964,276
Long-term deposits		40,099			34,499
Intangible assets, net		12,282,563			12,524,346
Goodwill		5,309,876			5,309,876
Non-current assets held for sale		-			69,040
TOTAL ASSETS	$	32,305,185		$	33,647,738

LIABILITIES AND SHAREHOLDERS’ DEFICIT

Current Liabilities
Accounts payable and accrued expenses	$	8,532,741		$	5,853,307
Contract liabilities		1,078,959			1,199,587
Current portion of operating lease liabilities		529,420			543,809
Current portion of finance lease liabilities		184,605			182,043
Current portion of notes payable, net		7,185,266			7,785,911
Current portion of convertible notes payable, net		22,152,424			22,089,149
Related party note payable		578,290			578,290
Derivative liabilities		220,000			185,000
Warrant liabilities		81,913,890			85,779,788
Liabilities held for sale		386,297			361,368
Total Current Liabilities		122,761,892			124,558,252

Operating lease liabilities, net of current portion		1,444,605			1,473,795
Finance lease liabilities, net of current portion		376,074			423,198
Notes payable, net of current portion		1,408			8,530
Deferred tax liabilities, net		3,282,000			3,650,000
TOTAL LIABILITIES		127,865,979			130,113,775

Shareholders’ Deficit
Series A senior convertible preferred shares, no par value, 4,450,460 shares designated; 50,592 shares issued and outstanding as of March 31, 2025 and December 31, 2024		39,877			39,877
Series C senior convertible preferred shares, no par value, 83,603 shares designated; 83,603 shares issued and outstanding as of March 31, 2025 and December 31, 2024		403,470			403,470
Series D senior convertible preferred shares, no par value, 7,292,036 shares designated; 6,293,022 shares issued and outstanding as of March 31, 2025 and December 31, 2024		600,100			600,100
Series F convertible preferred shares, no par value, 1,027 shares designated; 1,027 and 0 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		1,138,332			-
Allocation shares, 1,000 shares authorized; 1,000 shares issued and outstanding as of March 31, 2025 and December 31, 2024		1,000			1,000
Common shares, $0.001 par value, 500,000,000 shares authorized; 26,539,774 and 25,400,386 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		26,540			25,400
Additional paid-in capital		79,659,243			79,403,793
Accumulated deficit		(175,572,981	)		(175,096,154	)
TOTAL 1847 HOLDINGS SHAREHOLDERS’ DEFICIT		(93,704,419	)		(94,622,514	)
NON-CONTROLLING INTERESTS		(1,856,375	)		(1,843,523	)
TOTAL SHAREHOLDERS’ DEFICIT		(95,560,794	)		(96,466,037	)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	32,305,185		$	33,647,738

The accompanying notes are an integral part of these condensed consolidated financial statements.

1847 HOLDINGS LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended March 31,
	2025			2024
Revenues	$	10,083,472		$	2,084,454

Operating Expenses
Cost of revenues		4,874,990			1,182,699
Personnel		1,748,240			910,591
Depreciation and amortization		351,390			172,110
General and administrative		1,108,912			441,898
Professional fees		2,098,562			2,545,189
Total Operating Expenses		10,182,094			5,252,487

LOSS FROM OPERATIONS		(98,622	)		(3,168,033	)

Other Income (Expense)
Other income		727			3,338
Gain on disposal of property and equipment		53,554			-
Interest expense		(1,123,576	)		(1,001,770	)
Amortization of debt discounts		(465,050	)		(3,592,107	)
Loss on extinguishment of debt		(2,301,198	)		(421,875	)
Gain (loss) on change in fair value of warrant liabilities		3,669,798			(1,902,200	)
Loss on change in fair value of derivative liabilities		(35,000	)		(612,462	)
Total Other Income (Expense)		(200,745	)		(7,527,076	)

NET LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(299,367	)		(10,695,109	)
Income tax provision		72,000			89,000
NET LOSS FROM CONTINUING OPERATIONS	$	(227,367	)	$	(10,606,109	)
Net loss from discontinued operations		(188,586	)		(813,047	)
Gain on disposition of subsidiaries		-			1,060,095
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS		(188,586	)		247,048
NET LOSS	$	(415,953	)	$	(10,359,061	)

NET (INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS FROM CONTINUING OPERATIONS		(1,292	)		37,660
NET (INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS FROM DISCONTINUED OPERATIONS		14,144			(79,112	)
NET LOSS ATTRIBUTABLE TO 1847 HOLDINGS	$	(403,101	)	$	(10,400,513	)

NET LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO 1847 HOLDINGS		(228,659	)		(10,568,449	)
NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO 1847 HOLDINGS		(174,442	)		167,936
NET LOSS ATTRIBUTABLE TO 1847 HOLDINGS	$	(403,101	)	$	(10,400,513	)

PREFERRED SHARE DIVIDENDS		(73,726	)		(122,468	)
DEEMED DIVIDENDS		-			(1,000	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(476,827	)	$	(10,523,981	)

LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS – BASIC AND DILUTED	$	(0.01	)	$	(71.29	)
EARNINGS (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS – BASIC AND DILUTED		(0.01	)		1.12
LOSS PER COMMON SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS – BASIC AND DILUTED	$	(0.02	)	$	(70.17	)

WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING – BASIC AND DILUTED		26,273,917			149,981

The accompanying notes are an integral part of these condensed consolidated financial statements.

1847 HOLDINGS LLC

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT

(UNAUDITED)

	Series A Senior Convertible Preferred Shares				Series C Senior Convertible Preferred Shares				Series D Senior Convertible Preferred Shares				Series F Convertible Preferred Shares				Allocation		Common Shares				Additional Paid-In		Accumulated			Non- Controlling			Total Shareholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Shares		Amount		Capital		Deficit			Interests			Deficit
Balance at December 31, 2024		50,592	$	39,877		83,603	$	403,470		6,293,022	$	600,100		-	$	-	$	1,000		25,400,386	$	25,400	$	79,403,793	$	(175,096,154	)	$	(1,843,523	)	$	(96,466,037	)
Issuance of common shares upon conversion of convertible notes payable		-		-		-		-		-		-		-		-		-		1,139,388		1,140		255,450		-			-			256,590
Issuance of series F preferred shares upon settlement of series A warrants		-		-		-		-		-		-		1,027		1,138,332		-		-		-		-		-			-			1,138,332
Dividends – series A convertible preferred shares		-		-		-		-		-		-		-		-		-		-		-		-		(8,755	)		-			(8,755	)
Dividends – series C convertible preferred shares		-		-		-		-		-		-		-		-		-		-		-		-		(12,369	)		-			(12,369	)
Dividends – series D convertible preferred shares		-		-		-		-		-		-		-		-		-		-		-		-		(52,602	)		-			(52,602	)
Net loss		-		-		-		-		-		-		-		-		-		-		-		-		(403,101	)		(12,852	)		(415,953	)
Balance at March 31, 2025		50,592	$	39,877		83,603	$	403,470		6,293,022	$	600,100		1,027	$	1,138,332	$	1,000		26,539,774	$	26,540	$	79,659,243	$	(175,572,981	)	$	(1,856,375	)	$	(95,560,794	)

1847 HOLDINGS LLC

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT

(UNAUDITED)

	Series A Senior Convertible Preferred Shares						Series B Senior Convertible Preferred Shares						Allocation		Common Shares				Distribution			Additional Paid-In			Accumulated			Non- Controlling			Total Shareholders’
	Shares			Amount			Shares			Amount			Shares		Shares		Amount		Receivable			Capital			Deficit			Interests			Deficit
Balance at December 31, 2023		226,667		$	190,377			91,567		$	240,499		$	1,000		142,278	$	142	$	(2,000,000	)	$	57,676,965		$	(74,835,392	)	$	(1,314,280	)	$	(20,040,689	)
Issuance of common shares upon settlement of accrued series A preferred share dividends		-			-			-			-			-		625		1		-			130,967			-			-			130,968
Issuance of common shares upon settlement of accrued series B preferred share dividends		-			-			-			-			-		51		-		-			13,299			-			-			13,299
Issuance of common shares and warrants in public offering		-			-						-			-		9,364		9		-			4,334,991			-			-			4,335,000
Fair value of warrant liabilities recognized upon issuance of warrants		-			-			-			-			-		-		-		-			(4,335,000	)		-			-			(4,335,000	)
Extinguishment of warrant liabilities upon exercise of warrants		-			-			-			-			-		-		-		-			844,500			-			-			844,500
Issuance of common shares upon exercise of warrants		-			-						-			-		2,591		3		-			(3	)		-			-			-
Issuance of common shares upon conversion of convertible notes payable		-			-			-			-			-		1,984		2		-			1,261,191			-			-			1,261,193
Issuance of common shares upon conversion of series A preferred shares		(181,212	)		(152,200	)		-			-			-		2,437		3		-			152,197			-			-			-
Issuance of common shares upon conversion of series B preferred shares		-			-			(80,110	)		(210,264	)		-		1,305		1		-			210,263			-			-			-
Dividends - series A senior convertible preferred shares		-			-						-			-		-		-		-			-			(119,492	)		-			(119,492	)
Dividends - series B senior convertible preferred shares		-			-						-			-		-		-		-			-			(2,976	)		-			(2,976	)
Deemed dividend from down round provision in warrants		-			-			-			-			-		-		-		-			1,000			(1,000	)		-			-
Net loss		-			-						-			-		-		-		-			-			(10,400,513	)		41,452			(10,359,061	)
Balance at March 31, 2024		45,455		$	38,177			11,457		$	30,235		$	1,000		160,635	$	161	$	(2,000,000	)	$	60,290,370		$	(85,359,373	)	$	(1,272,828	)	$	(28,272,258	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

1847 HOLDINGS LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(415,953	)	$	(10,359,061	)
Net loss from discontinued operations		188,586			813,047
Gain on disposition of subsidiaries		-			(1,060,095	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Gain on disposal of property and equipment		(53,554	)		-
Loss on extinguishment of debt		2,301,198			421,875
(Gain) loss on change in fair value of warrant liabilities		(3,669,798	)		1,902,200
Loss on change in fair value of derivative liabilities		35,000			612,462
Deferred taxes		(368,000	)		(11,000	)
Depreciation and amortization		351,390			172,110
Amortization of debt discounts		465,050			3,592,107
Amortization of right-of-use assets		141,086			81,775
Changes in operating assets and liabilities:
Accounts receivable		211,858			(68,719	)
Contract assets		(499,638	)		17,752
Inventories		6,700			(154,455	)
Prepaid expenses and other current assets		26,501			(732,385	)
Other assets		(5,600	)		-
Accounts payable and accrued expenses		2,312,359			1,128,573
Contract liabilities		(120,628	)		(191,574	)
Operating lease liabilities		(140,958	)		(85,118	)
Net cash provided by (used in) operating activities from continuing operations		765,599			(3,920,506	)
Net cash provided by (used in) operating activities from discontinued operations		(9,849	)		377,816
Net cash provided by (used in) operating activities		755,750			(3,542,690	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(18,240	)		-
Proceeds from the disposal of property and equipment		62,000			-
Net cash provided by investing activities from continuing operations		43,760			-
Net cash provided by investing activities from discontinued operations		-			-
Net cash provided by investing activities		43,760			-

CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from notes payable		-			1,124,900
Net proceeds from issuance of common shares and warrants in connection with a public offering		-			4,335,000
Repayments of notes payable and finance lease liabilities		(2,157,968	)		(1,995,712	)
Net cash provided by (used in) financing activities from continuing operations		(2,157,968	)		3,464,188
Net cash used in financing activities from discontinued operations		-			(94,132	)
Net cash provided by (used in) financing activities		(2,157,968	)		3,370,056

NET CHANGE IN CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATIONS		(1,348,609	)		(456,318	)

CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATIONS
Cash from continuing operations at the beginning of the period	$	3,816,054		$	610,182
Cash from continuing operations at the end of the period	$	2,467,445			153,864

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	9,267		$	1,171,608
Cash paid for income taxes	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES
Net assets from the disposition of subsidiaries	$	-		$	1,060,095
Operating lease right-of-use asset and liability measurement	$	97,379			-
Deemed dividend from down round provision in warrants	$	-		$	1,000
Accrued dividends on series A preferred shares	$	8,755		$	119,492
Accrued dividends on series B preferred shares	$	-		$	2,976
Accrued dividends on series C preferred shares	$	12,369		$	-
Accrued dividends on series D preferred shares	$	52,602		$	-
Issuance of common shares upon settlement of accrued series A dividends	$	-		$	130,968
Issuance of common shares upon settlement of accrued series B dividends	$	-		$	13,299
Issuance of common shares upon conversion of series A shares	$	-		$	152,200
Issuance of common shares upon conversion of series B shares	$	-		$	210,264
Issuance of common shares upon cashless exercise of warrants	$	-		$	3
Debt discount on notes payable	$	-		$	437,600
Fair value of warrant liabilities recognized upon issuance of warrants	$	-		$	4,335,000
Extinguishment of warrant liabilities upon exercise of warrants	$	-		$	844,500
Issuance of common shares upon conversion of convertible notes payable	$	256,590		$	1,261,193
Reclassification of accrued interest to convertible notes payable	$	-		$	17,954

The accompanying notes are an integral part of these condensed consolidated financial statements.

1847 HOLDINGS LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(UNAUDITED)

NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION

The accompanying unaudited condensed consolidated financial statements of 1847 Holdings LLC (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q of Regulation S-X. They do not include all the information and footnotes required by GAAP for complete financial statements. The December 31, 2024 consolidated balance sheet data was derived from audited financial statements but do not include all disclosures required by GAAP. The interim unaudited condensed consolidated financial statements should be read in conjunction with those consolidated financial statements included in the Form 10-K, as filed with the Securities and Exchange Commission on March 31, 2025. In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Assets Held for Sale and Discontinued Operations

During the three months ended March 31, 2025, the Company committed to a plan to sell Wolo Mfg. Corp. and Wolo Industrial Horn & Signal, Inc. (collectively referred to as “Wolo”), which makes up the Automotive Supplies Segment. The Company is currently engaged in an active program to sell Wolo, which is expected to occur in 2025.

The Company evaluated whether its intent to sell Wolo qualifies for reporting as discontinued operations in accordance with Accounting Standards Codification (“ASC”) Topic 205-20, “Discontinued Operations.” A disposal of a component or a group of components is reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on the Company’s operations and financial results when the following occurs: (1) a component (or group of components) meets the criteria to be classified as held for sale; (2) the component or group of components is disposed of by sale; or (3) the component or group of components is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spin-off). For any component classified as held for sale or disposed of by sale or other than by sale, qualifying for presentation as a discontinued operation, the Company reports the results of operations of the discontinued operations (including any gain or loss recognized on the disposal or loss recognized on classification as held for sale of a discontinued operation), less applicable income taxes (benefit), as a separate component in the consolidated statement of operations for current and all prior periods presented. The Company also reports assets and liabilities associated with discontinued operations as separate line items on the consolidated balance sheet for prior periods.

The Company determined that its decision to sell Wolo is considered a strategic shift that will have a major effect on the Company’s operations and financial results and met the criteria for classification as discontinued operations. As a result, the assets and liabilities of Wolo are presented as held for sale in the unaudited condensed consolidated balance sheets and the operating results are presented as discontinued operations in the unaudited condensed consolidated statements of operations for all periods presented. Unless otherwise noted, amounts and disclosures throughout these notes to the condensed consolidated financial statements relate solely to continuing operations and exclude all discontinued operations. See Note 3 for additional information.

Reclassifications

Certain prior period amounts related to discontinued operations have been reclassified and separately presented in the condensed consolidated financial statements and accompanying notes to conform to the current period financial statement presentation.

Recently Adopted Accounting Pronouncements

In August 2023, the FASB issued ASU 2023-05, “Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement,” which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted for joint ventures formed before the effective date. The adoption of ASU 2023-05 did not have a material impact on the Company’s condensed consolidated financial statements.

1847 HOLDINGS LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(UNAUDITED)

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. These amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires disclosure of qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact this standard will have on its condensed consolidated financial statements.

The Company currently believes there are no other issued and not yet effective accounting standards that are materially relevant to its condensed consolidated financial statements.

NOTE 2—LIQUIDITY AND GOING CONCERN ASSESSMENT

Management assesses liquidity and going concern uncertainty in the Company’s condensed consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the financial statements are issued, which is referred to as the “look-forward period,” as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management considered various scenarios, forecasts, projections, estimates and made certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, management made certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period.

As of March 31, 2025, the Company had cash and cash equivalents of $1,108,477, restricted cash and cash equivalents of $1,358,968 and a total working capital deficit of $111,025,209. For the three months ended March 31, 2025, the Company incurred an operating loss of $98,622 and cash flows provided by operating activities from continuing operations of $765,599.

The Company has generated operating losses since its inception and has relied on cash on hand, sales of securities, external bank lines of credit, and issuance of third-party and related party debt to support cashflows from operations. The Company expects that within the next twelve months it will not have sufficient cash and other resources on hand to sustain its current operations or meet its obligations as they become due unless it obtains additional financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

An assessment was performed to determine whether there were conditions or events that, considered in the aggregate, raised substantial doubt about the Company’s ability to continue as a going concern within one year after the condensed consolidated financial statements are issued. Initially, this assessment did not consider the potential mitigating effect of management’s plans that had not been fully implemented. Based on this assessment, substantial doubt exists regarding the Company’s ability to continue as a going concern.

1847 HOLDINGS LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(UNAUDITED)

Management plans to address these concerns by securing additional financing through debt and equity offerings. Management assessed the mitigating effect of its plans to determine if it is probable that the plans would be effectively implemented within one year after the consolidated financial statements are issued and when implemented, would mitigate the relevant conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. These plans are subject to market conditions and reliance on third parties, and there is no assurance that effective implementation of the Company’s plans will result in the necessary funding to continue current operations and satisfy current debt obligations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern beyond one year from the date the condensed consolidated financial statements are issued.

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

NOTE 3—DISCONTINUED OPERATIONS

Wolo Assets Held for Sale

As described above, during the three months ended March 31, 2025, the Company committed to a plan to sell Wolo. The Company received approval from the Board and is currently engaged in an active program to sell Wolo, which is expected to occur in 2025. The Company determined that its decision to sell Wolo is considered a strategic shift that will have a major effect on the Company’s operations and financial results and met the criteria for classification as discontinued operations.

The following table summarizes the carrying amounts of the major classes of assets and liabilities of Wolo, which have been classified as assets and liabilities held for sale in the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024:

	March 31, 2025		December 31, 2024
Assets
Cash and cash equivalents	$	35,515	$	45,364
Accounts receivable, net		792,970		471,965
Inventories, net		363,264		456,123
Prepaid expenses and other current assets		25,655		90,134
Property and equipment, net		729		798
Operating lease right-of-use assets		30,637		53,206
Security deposits		15,036		15,036
Total assets held for sale	$	1,263,806	$	1,132,626

Liabilities
Accounts payable and accrued expenses	$	354,792	$	306,643
Operating lease liabilities		31,505		54,725
Total liabilities held for sale		386,297		361,368

Total net assets held for sale	$	877,509	$	771,258

1847 HOLDINGS LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(UNAUDITED)

The following table presents the results of operations of Wolo, which have been included in discontinued operations in the condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31,
	2025			2024
Revenues	$	908,439		$	1,778,361

Operating Expenses
Cost of revenues		564,191			1,168,362
Personnel		166,269			300,412
Depreciation and amortization		69			69
General and administrative		235,286			285,925
Professional fees		25,117			88,021
Total Operating Expenses		990,932			1,842,789

Loss from operations		(82,493	)		(64,428	)

Interest expense		(106,093	)		(40,212	)

Net loss from discontinued operations before income taxes		(188,586	)		(106,640	)
Income tax provision		-			(3,000	)
Net loss from discontinued operations	$	(188,586	)	$	(107,640	)

Net loss attributable to non-controlling interests from discontinued operations		14,144			8,073
Net loss from discontinued operations attributable to 1847 Holdings	$	(174,442	)	$	(99,567	)

The following table presents cash flow information from the discontinued operations of Wolo for the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31,
	2025			2024
Cash flows from operating activities
Net loss	$	(188,586	)	$	(107,640	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		69			69
Amortization of right-of-use assets		22,569			21,237
Changes in operating assets and liabilities:
Accounts receivable		(321,005	)		41,830
Inventories		92,859			125,401
Prepaid expenses and other current assets		64,479			(30,759	)
Accounts payable and accrued expenses		342,986			(16,167	)
Operating lease liabilities		(23,220	)		(21,306	)
Net cash provided by (used in) operating activities from discontinued operations		(9,849	)		12,665

Cash flows from investing activities
Net cash from investing activities from discontinued operations		-			-

Cash flows from financing activities
Net cash from financing activities from discontinued operations		-			-

Net change in cash and cash equivalents from discontinued operations	$	(9,849	)	$	12,665

1847 HOLDINGS LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(UNAUDITED)

Asien’s Assignment for the Benefit of Creditors

On February 26, 2024, the Company’s subsidiary Asien’s Appliance, Inc. (“Asien’s”) entered into a general assignment for the benefit of its creditors (the “Assignment Agreement”), pursuant to which Asien’s transferred ownership of all or substantially all of its right, title, and interest in, as well as custody and control of, its assets to SG Service Co., LLC in trust. The Company received no cash consideration related to the assignment. Following the assignment, the Company retained no financial interest in Asien’s. The assignment of Asien’s represents a strategic shift and its results are reported as discontinued operations for the three months ended March 31, 2024.

The following table presents the results of operations of Asien’s, which have been included in discontinued operations in the condensed consolidated statements of operations for the three months ended March 31, 2024:

	Three Months Ended March 31, 2024
Revenues	$	870,952

Operating Expenses
Cost of revenues		744,706
Personnel		98,213
Depreciation and amortization		7,702
General and administrative		203,377
Professional fees		78,807
Total Operating Expenses		1,132,805

Loss from operations		(261,853	)

Interest expense		(724	)

Net loss from discontinued operations before income taxes		(262,577	)
Income tax provision		-
Net loss from discontinued operations	$	(262,577	)

Net loss attributable to non-controlling interests from discontinued operations		13,129
Net loss from discontinued operations attributable to 1847 Holdings	$	(249,448	)

1847 HOLDINGS LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(UNAUDITED)

The following table presents cash flow information from the discontinued operations of Asien’s for the three months ended March 31, 2024:

	Three Months Ended
	March 31, 2024
Cash flows from operating activities
Net loss	$	(262,577	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		7,702
Changes in operating assets and liabilities:
Receivables		73,769
Inventories		213,399
Prepaid expenses and other current assets		108,686
Accounts payable and accrued expenses		320,362
Customer deposits		(474,803	)
Net cash used in operating activities from discontinued operations		(13,462	)

Cash flows from investing activities
Net cash from investing activities from discontinued operations		-

Cash flows from financing activities
Repayments of notes payable		(4,836	)
Net cash used in financing activities from discontinued operations		(4,836	)

Net change in cash and cash equivalents from discontinued operations	$	(18,298	)

ICU Eyewear Foreclosure Sale

The Company’s subsidiary ICU Eyewear, Inc. (“ICU Eyewear”) was in default under an Amended and Restated Credit and Security Agreement (the “ICU Loan Agreement”) that was entered into on September 11, 2023 between AB Lending SPV I LLC d/b/a Mountain Ridge Capital (the “ICU Lender”), ICU Eyewear and the Company’s subsidiaries ICU Eyewear Holdings, Inc., and 1847 ICU Holdings Inc. (together with ICU Eyewear, the “ICU Parties”) and, with the approval of the other ICU Parties, consented to a foreclosure by the ICU Lender and private sale of substantially all of its assets in an Article 9 sale process, pursuant to Section 9-610 of the Uniform Commercial Code as in effect in the State of New York and Section 9-610 of the Uniform Commercial Code as in effect in the State of California. On August 5, 2024, ICU Eyecare Solutions Inc., an entity that is not affiliated with the Company, was the successful bidder with a cash bid of $4,250,000. Pursuant to an agreement dated August 5, 2024, and in consideration for such purchase price, the ICU Lender having foreclosed on its security interest in all of the assets of ICU Eyewear then conveyed all of its rights, title, and interest in all of such assets to ICU Eyecare Solutions Inc. The Company received no cash consideration related to the sale. Following the sale, the Company retained no financial interest in ICU Eyewear. The sale of ICU Eyewear represents a strategic shift and its results are reported as discontinued operations for the three months ended March 31, 2024.

1847 HOLDINGS LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2025

(UNAUDITED)

The following table presents the results of operations of ICU Eyewear, which have been included in discontinued operations in the condensed consolidated statements of operations for the three months ended Ma

SEC Form 10-Q filed by 1847 Holdings LLC