8-K/A: 1847 Holdings Completes Acquisition of CMD Companies, Files Pro Forma Financials

1847 Holdings LLC amends its Form 8-K to include financial statements and pro forma information related to the acquisition of CMD Inc. and CMD Finish Carpentry LLC.

Summary

• 1847 Holdings LLC has amended its Form 8-K to include the financial statements of CMD Inc. and CMD Finish Carpentry LLC (collectively, the CMD Companies), following their acquisition by 1847 CMD Inc., a subsidiary of 1847 Holdings LLC.
• The amendment includes audited consolidated financial statements for the CMD Companies for the years ended December 31, 2023 and 2022, as well as unaudited condensed consolidated financial statements for the nine months ended September 30, 2024 and 2023.
• The filing also contains unaudited pro forma combined financial information giving effect to the acquisition.
• The acquisition was completed on December 16, 2024, with 1847 CMD acquiring all outstanding capital stock of CMD and membership interests of CMD Finish Carpentry LLC from The CD Trust.
• The aggregate purchase price was $18,750,000, consisting of $17,750,000 in cash and a $1,050,000 promissory note.
• The purchase price is subject to a post-closing working capital adjustment.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. The acquisition itself is a positive strategic move, and CMD's recent financial performance is strong. However, the pro forma combined financials show net losses, which tempers the overall sentiment.

Positives

• The acquisition of CMD Companies is expected to enhance 1847 Holdings' portfolio.
• CMD Inc. reported revenues of $27,097,696 for the year ended December 31, 2023, and net income of $5,791,553.
• For the nine months ended September 30, 2024, CMD Inc. reported revenues of $23,296,729 and net income of $6,569,055.

Negatives

• The pro forma combined statement of operations for the year ended December 31, 2023, shows a net loss of $26,154,524.
• The pro forma combined statement of operations for the nine months ended September 30, 2024, shows a net loss of $6,620,720.

Risks

• The purchase price is subject to a post-closing working capital adjustment, which could result in either 1847 CMD issuing a promissory note to the seller or the seller paying cash to 1847 CMD.
• The promissory note issued to the seller is secured by the assets of 1847 CMD and the CMD Companies, and is guaranteed by 1847 Holdings and the CMD Companies.
• The lease agreements entered into with Delancey LLC and CD Gowan LLC contain provisions that could increase the base rent if the mortgage lenders call the mortgage loans due to the change in tenant and refinancing is required.

Future Outlook

The pro forma financial information is presented for informational purposes only and is not necessarily indicative of future financial position or operating results.

Industry Context

The acquisition of CMD Companies allows 1847 Holdings to expand its presence in the construction and home improvement sectors.

Stakeholder Impact

• Shareholders of 1847 Holdings will be impacted by the acquisition and its effect on the company's financial performance.
• Employees of CMD Companies will become part of 1847 Holdings.
• Customers and suppliers of both 1847 Holdings and CMD Companies may experience changes as a result of the acquisition.

Next Steps

• 1847 CMD must deliver to the Seller an audited balance sheet of the CMD Companies as of December 12, 2024, within 75 days of the closing date.
• Potential working capital adjustments will be determined based on the final audited balance sheet.

Key Dates