S-1: 1847 Holdings Seeks to Register 778.5 Million Common Shares for Selling Shareholders Amid Delisting Review

1847 Holdings LLC is registering 778,524,571 common shares for resale by selling shareholders, including shares issuable upon the exercise of warrants, while facing potential delisting from NYSE American.

Summary

• 1847 Holdings LLC has filed a registration statement on Form S-1 to register 778,524,571 common shares for resale by selling shareholders.
• These shares include 507,733,417 common shares issuable upon the exercise of Series A warrants and 270,791,154 common shares issuable upon the exercise of Series B warrants.
• The company will not receive any proceeds from the sale of these shares by the selling shareholders or from the exercise of pre-funded warrants or Series A warrants, but will receive funds from the exercise of the Series B warrants.
• 1847 Holdings is requesting a review of NYSE American's decision to delist its common shares, which were suspended from trading on April 3, 2025.
• The selling shareholders may offer and sell the common shares in public or private transactions at fixed, market, related, or negotiated prices.
• The company has engaged 1847 Partners LLC as its manager, which is entitled to a quarterly management fee equal to 0.5% (2.0% annualized) of the company's adjusted net assets.
• The manager also owns allocation shares, entitling it to a 20% profit allocation upon the sale of a subsidiary if certain hurdle rates are met.
• In December 2024, the company issued units to purchasers for gross proceeds of approximately $11.42 million, including common shares, pre-funded warrants, Series A warrants, and Series B warrants.
• The exercise prices of the Series A and Series B warrants are subject to adjustments, including resets based on share combination events, registration resets, and subsequent equity sales, with a floor price of $0.054 after shareholder approval on March 11, 2025.
• The company held a special meeting on March 11, 2025, where shareholders approved proposals related to the issuance of shares upon exercise of warrants and resets of exercise prices.
• The company has filed a registration statement to register additional common shares underlying the Series A and Series B warrants due to adjustments based on the adjusted Floor Price of $0.054.
• The company's principal executive offices are located in New York, NY, and it maintains a website at www.1847holdings.com.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the potential delisting from NYSE American and the need to register a large number of shares for selling shareholders, indicating potential dilution. However, the company may receive funds from the exercise of Series B warrants, which is a positive.

Positives

• The company may receive up to approximately $22.8 million from the exercise of series B warrants held by selling shareholders.
• Shareholders approved proposals related to the issuance of shares upon exercise of warrants and resets of exercise prices at a special meeting on March 11, 2025.

Negatives

• NYSE American has initiated proceedings to delist the company's common shares, leading to a suspension of trading.
• The company will not receive any proceeds from the sale of common shares by selling shareholders or from the exercise of pre-funded warrants or Series A warrants.
• The company has incurred losses in the past and may continue to incur losses in the future.

Risks

• The company faces the risk of being delisted from NYSE American, which could negatively impact the liquidity and trading price of its common shares.
• The company's reliance on its manager, 1847 Partners LLC, and the potential for conflicts of interest could pose risks.
• The company's ability to raise capital in the future could be adversely affected if an active market for its common shares does not develop.
• The company's business is subject to various risks and uncertainties, including those related to its construction and automotive supplies businesses.

Future Outlook

The company expects to use the net proceeds from the exercise of the Series B warrants for working capital and other general corporate purposes, and may also use a portion of the proceeds to acquire, license, or invest in complementary products, technologies, or businesses.

Industry Context

1847 Holdings operates in the acquisition holding company space, focusing on acquiring and managing small businesses. This strategy is common among private equity firms and holding companies seeking to consolidate fragmented industries and improve operational efficiencies. The company's focus on businesses with enterprise values less than $50 million suggests a strategy of targeting smaller, often family-owned or privately held businesses that may not be attractive to larger private equity firms.

Comparison to Industry Standards

• Comparable companies in the acquisition holding company space include firms like Berkshire Hathaway, though 1847 Holdings focuses on much smaller acquisitions.
• Other comparable companies include TransDigm Group Incorporated, which acquires and manages proprietary aerospace components, systems and subsystems.
• Unlike TransDigm, 1847 Holdings operates across a variety of different industries headquartered in North America.
• The management fee structure of 2.0% annualized of adjusted net assets is within the typical range for externally managed holding companies, although the offsetting management fees from subsidiaries are a unique feature.
• The 20% profit allocation to the manager upon the sale of a subsidiary, subject to hurdle rates, is a common incentive structure in private equity and holding company arrangements.

Related Party Transactions

• The company has engaged 1847 Partners LLC, an affiliate of the company's CEO, as its manager and pays it a quarterly management fee.

Stakeholder Impact

• Shareholders face potential dilution from the registration of a large number of common shares for resale.
• The potential delisting from NYSE American could negatively impact the liquidity and trading price of the company's common shares.

Next Steps

• The company is requesting a review of NYSE American's delisting determination.
• The selling shareholders may offer and sell the common shares being offered by this prospectus from time to time in public or private transactions.
• The company will use the net proceeds that it receives from the exercise of the series B warrants for working capital and other general corporate purposes.

Key Dates

Keywords

common shares, warrants, registration statement, selling shareholders, delisting, NYSE American, 1847 Holdings, securities, exercise price, private placement