8-K/A - LBRA - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The SecuritiesExchange Act of 1934

Date of Report (Date of earliest event reported): February

14, 2025 (December 13, 2024)

1847 HOLDINGS LLC
(Exact name of registrant as specified in its charter)
Delaware	000-56128	38-3922937
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(State or other jurisdiction<br><br>of incorporation)	(Commission File Number)	(IRS Employer <br><br>Identification No.)
260 Madison Avenue, 8th Floor, New York, NY	10016
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(Address of principal executive offices)	(Zip Code)
(212) 417-9800
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(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

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 complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

EXPLANATORYNOTE

On December 16, 2024, 1847 CMD Inc. (“1847 CMD”), a subsidiary of 1847 Holdings LLC (the “Company”), acquired all of the issued and outstanding capital stock of CMD Inc., a Nevada corporation (“CMD”), and all of the membership interests of CMD Finish Carpentry LLC, a Nevada limited liability company (“Finish,” and together with CMD, the “CMD Companies”), pursuant to a stock and membership interest purchase agreement, dated November 4, 2024 and amended on December 5, 2024 and December 13, 2024, between 1847 CMD and The CD Trust, dated October 18, 2021.

This Amendment No. 1 to Current Report on Form 8-K/A amends the Form 8-K that the Company filed on December 18, 2024 to include the financial statements of the business acquired as required by Items 9.01(a) and 9.01(b) of Form 8-K.

Item9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired

The audited consolidated financial statements of the CMD Companies for the years ended December 31, 2023 and 2022 and the accompanying notes thereto are filed as Exhibit 99.1 attached hereto and are incorporated by reference herein.

The unaudited condensed consolidated financial statements of the CMD Companies for the nine months ended September 30, 2024 and 2023 and the accompanying notes thereto are filed as Exhibit 99.2 attached hereto and are incorporated by reference herein.

(b) Pro forma financial information

The unaudited pro forma combined financial information giving effect to the acquisition is filed as Exhibit 99.3 attached hereto and is incorporated herein by reference.

(d) Exhibits

Exhibit No.	Description of Exhibit
4.1	Form of Pre-Funded Warrant to Purchase Common Shares, dated December 16, 2024 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on December 18, 2024)
4.2	Form of Series A Warrant to Purchase Common Shares, dated December 16, 2024 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on December 18, 2024)
4.3	Form of Series B Warrant to Purchase Common Shares, dated December 16, 2024 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed on December 18, 2024)
10.1	Stock and Membership Interest Purchase Agreement, dated November 4, 2024, between 1847 CMD Inc. and Chris Day (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 18, 2024)
10.2	Amended and Restated Stock and Membership Interest Purchase Agreement, dated December 5, 2024, between 1847 CMD Inc. and Chris Day (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on December 18, 2024)
10.3	Amendment No. 1 to Amended and Restated Stock and Membership Interest Purchase Agreement, dated December 13, 2024, between 1847 CMD Inc., Chris Day and The CD Trust, dated October 18, 2021 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on December 18, 2024)
10.4	Amendment No. 2 to Amended and Restated Stock and Membership Interest Purchase Agreement, dated December 16, 2024, between 1847 CMD Inc., Chris Day and The CD Trust, dated October 18, 2021 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on December 18, 2024)
10.5	Promissory Note issued by 1847 CMD Inc. to The CD Trust, dated October 18, 2021 on December 16, 2024 (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed on December 18, 2024)
10.6	Security Agreement, dated December 16, 2024, among 1847 CMD Inc., CMD Inc., CMD Finish Carpentry LLC and The CD Trust, dated October 18, 2021 (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed on December 18, 2024)
10.7	Pledge Agreement, dated December 16, 2024, between 1847 Holdings LLC and The CD Trust, dated October 18, 2021 (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed on December 18, 2024)
10.8	Pledge Agreement, dated December 16, 2024, between 1847 CMD Inc. and The CD Trust, dated October 18, 2021 (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed on December 18, 2024)
10.9	Guaranty, dated December 16, 2024, among 1847 Holdings LLC, CMD Inc., CMD Finish Carpentry LLC and The CD Trust, dated October 18, 2021 (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K filed on December 18, 2024)
10.10	Lease, dated December 16, 2024, between Delancey LLC and 1847 CMD Inc. (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K filed on December 18, 2024)
10.11	Lease, dated December 16, 2024, between CD Gowan LLC and 1847 CMD Inc. (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed on December 18, 2024)
10.12	Management Services Agreement, dated December 16, 2024, 1847 Partners LLC and 1847 CMD Inc. (incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K filed on December 18, 2024)
10.13	Placement Agency Agreement, dated December 13, 2024, between 1847 Holdings LLC and Spartan Capital Securities, LLC (incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K filed on December 18, 2024)
10.14	Form of Securities Purchase Agreement, dated December 13, 2024, among 1847 Holdings LLC and the Purchasers signatory thereto (incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K filed on December 18, 2024)
10.15	Form of Registration Rights Agreement, dated December 13, 2024, among 1847 Holdings LLC and the Purchasers signatory thereto (incorporated by reference to Exhibit 10.15 to the Current Report on Form 8-K filed on December 18, 2024)
10.16	Form of Amendment No. 1 to Securities Purchase Agreement, dated December 13, 2024, among 1847 Holdings LLC and the purchasers signatory thereto (incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K filed on December 18, 2024)
99.1	Audited Consolidated Financial Statements for the Years Ended December 31, 2023 and 2022
99.2	Unaudited Condensed Consolidated Financial Statements for the Nine Months Ended September 30, 2024 and 2023
99.3	Unaudited Pro Forma Combined Financial Statements
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 14, 2025	1847 HOLDINGS LLC
	/s/ Ellery W. Roberts
	Name: Ellery W. Roberts
	Title: Chief Executive Officer

Exhibit 99.1

CMD Inc.

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED

DECEMBER 31, 2023 and 2022

TABLE OF CONTENTS

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations and Changes in Owners’ Equity (Deficit)	F-4
Consolidated Statements of Cash Flows	F-5
Consolidated Notes to Financial Statements	F-6 – F-16

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of CMD Inc. (“the Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and changes in owners’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

/s/ Sadler, Gibb & Associates, LLC

We have served as the Company’s auditor since 2025.

Draper, UT

February 14, 2025

F-2

CMD Inc.

CONSOLIDATED BALANCE SHEETS

	December 31,<br> 2023		December 31,<br> 2022
ASSETS
Current Assets
Cash and cash equivalents	$	641,526	$	282,691
Marketable securities		-		472,568
Accounts receivables, net		5,284,862		2,420,660
Contract assets, net		1,373,107		309,144
Inventories		1,239,067		911,537
Prepaid expenses and other current assets		80,898		1,300
Total Current Assets		8,619,460		4,397,900
Property and equipment, net		3,147,878		3,254,397
TOTAL ASSETS	$	11,767,338	$	7,652,297
LIABILITIES AND OWNERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses	$	1,317,270	$	1,760,129
Contract liabilities		1,901,655		1,945,963
Current portion of finance lease liabilities		126,520		112,185
Current portion of notes payable		240,946		295,450
Lines of credit		-		500,000
Total Current Liabilities		3,586,391		4,613,727
Finance lease liabilities, net of current portion		202,233		300,500
Notes payable, net of current portion		3,826,836		4,031,347
TOTAL LIABILITIES		7,615,460		8,945,574
OWNERS’ EQUITY (DEFICIT)		4,151,878		(1,293,277	)
TOTAL LIABILITIES AND OWNERS’ EQUITY (DEFICIT)	$	11,767,338	$	7,652,297

The accompanying notes are an integral part of theseconsolidated financial statements

F-3

CMD Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND

CHANGES IN OWNERS’ EQUITY (DEFICIT)

	For the Years Ended <br> December 31,
	2023			2022
Revenues	$	27,097,696		$	13,722,754
Cost of revenues		16,289,200			9,963,563
Gross Profit		10,808,496			3,759,191
Operating Expenses
Personnel		3,226,398			3,370,895
Depreciation		267,107			266,643
General and administrative		1,300,843			1,254,363
Professional fees		40,328			123,218
Total Operating Expenses		4,834,676			5,015,119
INCOME (LOSS) FROM OPERATIONS		5,973,820			(1,255,928	)
Other Income (Expenses)
Other income		8,251			4,252
Interest expense		(207,671	)		(225,961	)
Gain on disposal of property and equipment		34,867			110,873
Realized income from marketable securities		(17,714	)		(1,671	)
Unrealized loss from marketable securities		-			(137,487	)
Total Other Expenses		(182,267	)		(249,994	)
NET INCOME (LOSS)	$	5,791,553		$	(1,505,922	)
OWNERS’ EQUITY – BEGINNING		(1,293,277	)		743,954
OWNERS’ DISTRIBUTIONS		(346,398	)		(531,309	)
NET INCOME (LOSS)		5,791,553			(1,505,922	)
OWNERS’ EQUITY – ENDING	$	4,151,878		$	(1,293,277	)

The accompanying notes are an integral part of theseconsolidated financial statements

F-4

CMD Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended<br> December 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	5,791,553			(1,505,922	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Gain on disposal of property and equipment		(34,967	)		(110,873	)
Change in fair value of marketable securities		-			137,487
Current expected credit losses		39,600			74,600
Depreciation		267,107			266,643
Changes in operating assets and liabilities:
Accounts receivable		(2,874,702	)		(916,831	)
Inventories		(327,530	)		(359,664	)
Contract assets		(1,093,063	)		402,931
Prepaid expenses and other current assets		(79,598	)		81,510
Accounts payable and accrued expenses		(442,859	)		565,390
Contract liabilities		(44,308	)		422,384
Net cash provided by (used in) operating activities		1,201,233			(942,345	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(137,993	)		(234,832	)
Proceeds from disposal of property and equipment		43,300			158,335
Net investment in marketable securities		472,568			983,613
Net cash provided by investing activities		377,875			907,116
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		-			248,526
Repayments of notes payable and finance lease liabilities		(373,875	)		(299,807	)
Repayments of lines of credit		(500,000	)		(196,000	)
Distributions paid		(346,398	)		(531,309	)
Net cash used in financing activities		(1,220,273	)		(778,590	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		358,835			(813,819	)
CASH AND CASH EQUIVALENTS
Beginning of the period		282,691			1,096,510
End of the period	$	641,526			282,691
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	221,799			187,492
NON-CASH INVESTING AND FINANCING ACTIVITIES
Financed purchases of property and equipment	$	87,615		$	1,665,474
Building loan refinanced into new loan	$	-		$	732,000

The accompanying notes are an integral part of theseconsolidated financial statements

F-5

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

NOTE 1—ORGANIZATION, NATURE OF BUSINESS, AND SUMMARY OF SIGNIFICANTACCOUNTING POLICIES

CMD Inc. (“CMD” or the “Company”) was formed under the laws of the State of Nevada on September 7, 2012. Headquartered in Las Vegas, CMD specializes in finish carpentry and related products and services, including doors, frames, trim, hardware, millwork, cabinetry, and specialty construction accessories for general contractors, commercial developers, residential builders and homeowners, and government entities.

Basis of Presentation

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) as codified in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of CMD, as well as variable interest entities (“VIEs”) of which CMD is deemed to be the primary beneficiary (see Note 3). All intercompany accounts and transactions have been eliminated.

Variable Interest Entities

The Company accounts for VIEs in which CMD is deemed to be the primary beneficiary in accordance with ASC 810, “Consolidation.” A VIE must be consolidated by the primary beneficiary when the primary beneficiary has both (1) the power to direct the activities of the VIE that most significantly affect that entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. The Company reconsiders whether an entity is still a VIE only upon certain triggering events and continually assesses its consolidated VIEs to determine if it continues to be the primary beneficiary.

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.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. The Company maintains deposits in several financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits. As of December 31, 2023 and 2022, the Company had $386,823 and $0 in excess of FDIC limits, respectively.

Marketable Securities

The Company accounts for marketable securities in accordance with ASC 320, “Investments – Debt and Equity Securities.” The Company classifies its investments in marketable securities based on the nature of the securities and their intended use in current operations. Marketable securities are stated at fair value, with all realized and unrealized gains and losses on marketable securities recognized in other income. The Company determines realized and unrealized gains and losses using the specific identification method.

F-6

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

Revenue Recognition and Cost of Revenue

The Company records revenue in accordance with ASC 606, “Revenue from Contracts with Customers.” 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. To achieve this core principle, the Company applies the following five-step approach: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as a performance obligation is satisfied.

Revenue is primarily derived from contracts with customers for finish carpentry and related products and services, including doors, frames, trim, hardware, millwork, cabinetry, and specialty construction accessories. The Company recognizes revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it 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 and payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.

The transaction price is allocated to each distinct performance obligation within a contract and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s contracts consist of a single performance obligation, as the promised goods and services are highly interdependent and not separately identifiable from other promises within the contract and, therefore, are not distinct.

Revenue for each contract is generally recognized over time due to 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 generally measures progress toward completion using the cost-to-cost input method, as it best depicts the transfer of control of goods and services to the customer. Under this method, progress is measured based on the ratio of costs incurred to date to the total estimated costs at completion, with revenue recognized proportionally as costs are incurred. Incurred costs include all direct materials, labor, subcontractor expenses, and other indirect costs related to contract performance.

Estimating the total expected cost at completion requires significant judgment. The Company regularly reviews and updates cost estimates quarterly or more frequently if circumstances change. External factors such as weather conditions, supply chain distributions, and customer delays may impact contract progress, potentially affecting the timing and amount of revenue recognition, cash flow, and overall contract profitability.

For certain customers, the Company applies the right-to-invoice practical expedient and recognizes revenue in the amount it is entitled to invoice when that amount corresponds directly with the value of the performance to date.

Contracts can be subject to modification to account for changes in contract specifications and requirements. A contract modification exists when a change in scope or price creates new, or modifies existing, enforceable rights and obligations. 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.

The Company provides assurance-type warranties on certain installed products and services, which do not represent a separate performance obligation. Due to the nature of the Company’s projects, including contract owner inspections during construction and prior to acceptance, warranty-related costs have historically been immaterial.

Contract Assets and Liabilities

Contract assets represent revenue recognized in excess of customer billings. This includes rights to payment for completed performance that are conditional on factors other than the passage of time, such as retainage. Retainage consists of amounts withheld by the customer that are not invoiced until specific contractual milestones are met, typically upon contract completion.

Contract liabilities represent customer billings in excess of revenue recognized, including advance payments received before the satisfaction of performance obligations.

F-7

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

Contract assets are evaluated for expected credit losses in accordance with ASC 326, “Financial Instruments – Credit Losses.” The Company estimates expected credit losses on contract assets using the loss-rate method, incorporating historical collection experience, prevailing economic conditions, and reasonable and supportable forward-looking information. As of December 31, 2023, and 2022, the allowance for expected credit losses for contract assets amounted to $36,800 and $7,700, respectively.

Accounts Receivable

Accounts receivable include amounts billed and currently due from customers. Accounts receivables are recorded at the invoiced amount, net of an allowance for current expected credit losses. In accordance with ASC 326 the Company estimates expected credit losses on accounts receivable using the aging schedule method, incorporating historical bad debt experience, the creditworthiness of customers, prevailing economic conditions, and reasonable and supportable forward-looking information. Accounts receivable balances are written off when they are determined to be uncollectible. As of December 31, 2023 and 2022, the allowance for current expected credit losses for accounts receivable amounted to $77,400 and 66,900, respectively.

Inventories

Inventories primarily consist of job-specific raw materials and purchased components directly attributable to customer contracts. The Company procures materials exclusively for awarded contracts and, therefore, does not maintain a significant general inventory. Inventories are stated at the lower of cost or net realizable value, with cost determined using the specific identification method. Inventories are not recognized as incurred costs in the measure of progress toward completion (cost-to-cost method) until delivered onsite to the customer.

Given that inventories are procured on a job-specific basis and typically utilized shortly after purchase, the Company does not maintain significant excess inventory. The Company periodically evaluates its inventories and records a provision for estimated losses related to excess, damaged, slow-moving, or obsolete inventories. As of December 31, 2023 and 2022, the Company recorded no reserve for inventory obsolescence.

Property and Equipment

Property and equipment is stated at historical cost less accumulated depreciation. Maintenance and repairs of property and equipment are expensed as incurred.

Depreciation is calculated using the straight-line method over the estimated useful lives as follows:

Description	Useful Life (Years)
Machinery and equipment	5
Office furniture and equipment	3
Transportation equipment	5
Buildings	30
Land	N/A

Leases

The Company evaluates all contracts at inception or upon modification to determine whether such contract contains a lease in accordance with ASC 842, “Leases.” A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of the identified asset means the lessee has both the right to obtain substantially all the economic benefits from the use of the asset and the right to direct the use of the asset. Contracts containing a lease are further evaluated for classification as a right-of-use (“ROU”) operating lease or a finance lease.

F-8

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

Long-Lived Assets

The Company reviews the carrying value of long-lived assets such as property and equipment for impairment in accordance with ASC 360, “Property, Plant, and Equipment,” whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These events and circumstances may include significant decreases in the market price of an asset or asset group, significant changes in the extent or manner in which an asset or asset group is being used by the Company or in its physical condition, a significant change in legal factors or in the business climate, a history or forecast of future operating or cash flow losses, significant disposal activity, a significant decline in revenue or adverse changes in the economic environment.

If such facts indicate a potential impairment, the Company assess the recoverability of an asset group by determining if the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the use and eventual disposition of the assets over the remaining economic life of the primary asset in the asset group. If the recoverability test indicates that the carrying value of the asset group is not recoverable, the Company estimates the fair value of the asset group using appropriate valuation methodologies, which would typically include an estimate of discounted cash flows. Any impairment would be measured as the difference between the asset group’s carrying amount and its estimated fair value. During the years ended December 31, 2023 and 2022, there were no impairments of long-lived assets.

Fair Value of Financial Instruments

The fair value of a financial instrument is the amount the Company would receive to sell an asset, or pay to transfer a liability, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction.

According to ASC 820, “Fair Value Measurement,” the fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. The Company uses appropriate valuation techniques based on available inputs to measure the fair value of its assets and liabilities. The fair value hierarchy is defined in the following three categories:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, marketable securities, receivables, inventories, prepaid expenses, accounts payable and accrued expenses, and contract assets and liabilities approximate fair value given the short-term nature of these instruments.

The carrying amounts of lease obligations and notes payable approximates fair value given these instruments bear prevailing market interest rates.

Income Taxes

The Company elected to be taxed as an “S Corporation” under the provisions of the Internal Revenue Code and comparable state income tax law. As an S Corporation, the Company is generally not subject to corporate income taxes and the Company’s net income or loss is reported on the individual tax return of the stockholder of the Company. Therefore, no provision or liability for income taxes is reflected in the combined financial statements.

Management has evaluated its tax positions and has concluded that the Company had taken no uncertain tax positions that could require adjustment or disclosure in the combined financial statements to comply with provisions set forth in ASC 740, “Income Taxes.”

F-9

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this update, among other things, require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, for private companies. Early adoption is permitted. The Company elected to early adopt this guidance effective January 1, 2022. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The amendments in this update require acquiring entities to apply ASC 606 to recognize and measure contract assets and contract liabilities in business combinations. The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, for private companies. The Company will adopt this guidance for business combinations occurring on or after the effective date. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

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

NOTE 2—VARIABLE INTEREST ENTITIES

CMD consolidates Delancey LLC (“Delancey”) and CD Gowan LLC (“CD Gowan”) in accordance with ASC 810, as CMD is deemed to be the primary beneficiary of these entities. These entities were established solely to own and lease real estate to CMD, which is their sole tenant and primary source of cash flows. A VIE is consolidated by the primary beneficiary when it has both (1) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. As a result, Delancey and CD Gowan are included in the Company’s consolidated financial statements, and all intercompany transactions, including lease payments, are eliminated in consolidation.

Delancey LLC

Delancey is a single-member LLC wholly owned by Christopher Day, the 100% and sole owner of CMD. Delancey was formed solely to own and lease commercial property located in Las Vegas, Nevada, which CMD utilizes as one of its primary operating facilities. CMD is the sole tenant and makes monthly lease payments to Delancey. The only significant activities of Delancey consist of collecting rent from CMD and servicing its mortgage obligation on the property. CMD determined that Delancey qualifies as a VIE because its equity investment at risk is insufficient to independently finance its activities without financial reliance on CMD as its primary tenant. CMD is the primary beneficiary of Delancey because it has the power to direct the most significant activities affecting the entity’s economic performance, including the use of the property and lease arrangements.

CD Gowan LLC

CD Gowan is a single-member LLC wholly owned by Christopher Day, the 100% and sole owner of CMD. CD Gowan was formed solely to own and lease commercial property located in North Las Vegas, Nevada, which CMD utilizes as one of its primary operating facilities. CMD is the sole tenant and makes monthly lease payments to CD Gowan. The only significant activities of CD Gowan consist of collecting rent from CMD and servicing its mortgage obligation on the property. CMD determined that CD Gowan qualifies as a VIE because its equity investment at risk is insufficient to independently finance its activities without financial reliance on CMD as its primary tenant. CMD is the primary beneficiary of CD Gowan because it has the power to direct the most significant activities affecting the entity’s economic performance, including the use of the property and lease arrangements.

F-10

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

CMD does not provide direct financial support to Delancey or CD Gowan beyond lease payments and does not guarantee the mortgage obligations of these entities. However, as the primary beneficiary, CMD may be exposed to financial risks associated with the performance of these entities, including potential fluctuations in property values, changes in lease terms, and obligations that may arise if the VIEs experience financial distress. CMD continually reassesses its involvement with Delancey and CD Gowan to determine whether any changes in facts or circumstances affect its primary beneficiary status, including modifications to lease agreements, changes in financial condition, or other significant events impacting the VIEs.

The carrying amounts and classification of assets and liabilities for variable interest entities in the consolidated balance sheet as of December 31, 2023 and 2022 are as follows:

	December 31,<br> 2023			December 31,<br> 2022
ASSETS
Current Assets
Cash and cash equivalents	$	20,170		$	5,894
Total Current Assets		20,170			5,894
Property and equipment, net		2,508,560			2,595,200
TOTAL ASSETS	$	2,528,730		$	2,601,094
LIABILITIES AND OWNERS’ DEFICIT
Current Liabilities
Current portion of notes payable	$	115,221		$	110,513
Total Current Liabilities		115,221			110,513
Notes payable, net of current portion		3,255,142			3,370,363
TOTAL LIABILITIES		3,370,363			3,480,876
OWNERS’ DEFICIT		(841,633	)		(879,782	)
TOTAL LIABILITIES AND OWNERS’ DEFICIT	$	2,528,730		$	2,601,094

NOTE 3—DISAGGREGATION OF REVENUES

Revenue is primarily derived from contracts with customers for finished carpentry and related products and services, including doors, frames, trim, hardware, millwork, cabinetry, and specialty construction accessories.

The Company’s revenues for the years ended December 31, 2023 and 2022 are disaggregated as follows:

	For the Years Ended<br> <br>December 31,
	2023		2022
Doors, frames, hardware, and trim	$	21,899,282	$	10,507,324
Cabinetry and millwork		4,717,193		3,183,170
Specialty construction accessories		481,221		32,260
Total revenues	$	27,097,696	$	13,722,754

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

As of December 31, 2023 and 2022, the Company had approximately $36.4 million and $25.8 million, respectively, of estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially satisfied).

F-11

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

NOTE 4—PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 2023 and 2022 consisted of the following:

	December 31,<br> 2023			December 31,<br> 2022
Machinery and equipment	$	696,854		$	856,219
Office furniture and equipment		195,021			160,010
Transportation equipment		361,606			337,012
Buildings ^[1]^		2,600,000			2,600,000
Land ^[1]^		305,000			305,000
Total property and equipment		4,158,481			4,258,241
Less: accumulated depreciation		(1,010,603	)		(1,003,844	)
Total property and equipment, net	$	3,147,878		$	3,254,397

^[1]^ The buildings and land were owned by VIEs in which CMD is deemed to be the primary beneficiary. Refer to Note 2 for further details.

Depreciation expense for the years ended December 31, 2023 and 2022 was $267,107 and $266,643, respectively.

NOTE 5—ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses as of December 31, 2023 and 2022 consisted of the following:

	December 31,<br> 2023		December 31,<br> 2022
Trade accounts payable	$	1,110,869	$	1,257,585
Credit cards payable		19,324		170,944
Accrued payroll liabilities		126,821		106,719
Accrued sales and use tax		37,981		188,478
Accrued interest		22,275		36,403
Total accounts payable and accrued expenses	$	1,317,270	$	1,760,129

NOTE 6—FINANCE LEASES

On August 17, 2021, the Company entered into an equipment financing lease to purchase machinery and equipment for $77,714, which matures in November 2024.

On December 30, 2021, the Company entered into an equipment financing lease to purchase machinery and equipment for $455,175, which matures in November 2026.

On May 5, 2023, the Company entered into an equipment financing lease to purchase machinery and equipment for $35,972, which matures in May 2026.

F-12

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

Finance leases as of December 31, 2023 and 2022 consisted of the following:

	December 31,<br> 2023			December 31,<br> 2022
Machinery and equipment	$	568,861		$	532,889
Less: accumulated depreciation		(222,421	)		(111,704	)
Total leased equipment, net	$	346,440		$	421,185
Finance lease liabilities, current portion		126,520			112,185
Finance lease liabilities, long-term		202,233			300,500
Total finance lease liabilities	$	328,753		$	412,685
Weighted-average remaining lease term (months)		2.7			3.7
Weighted average discount rate		5.0	%		4.5	%

The components of finance lease expense consisted of the following for the years ended December 31, 2023 and 2022:

	December 31,<br> 2023		December 31, <br> 2022
Depreciation expense	$	110,717	$	106,524
Interest expense		19,018		21,889
Total finance lease expense	$	129,735	$	128,413

Estimated future minimum payments of finance leases for the next five years consists of the following as of December 31, 2023:

Year Ending December 31,	Amount
2024	$	139,732
2025		113,673
2026		97,342
Total		350,747
Less: amount representing interest		(21,994	)
Total finance lease liabilities	$	328,753

NOTE 7—LINES OF CREDIT

Revolving line of credit as of December 31, 2023 and 2022 consisted of the following:

	December 31,<br> 2023		December 31,<br> 2022
Line of credit	$	-	$	500,000
Current portion of line of credit	$	-	$	500,000
Line of credit, net of current portion	$	-	$	-

On November 24, 2020, the Company entered into a revolving line of credit agreement with Wells Fargo Advisors (“WFA”). The amount of credit extended on the revolving line is based on the total amounts held in the WFA marketable securities brokerage account. The line of credit matures on August 31, 2022, and bears interest at a rate of prime plus 3.25% per annum.

The WFA revolving line of credit was paid off prior to maturity.

F-13

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

On February 9, 2022, the Company entered into an agreement with Chase Bank for a line of credit up to $500,000. The line of credit matured on February 25, 2023, and bears interest at a rate of Term SOFR for a one-month plus 3.964% per annum. On March 13, 2023, the Company extended the line of credit agreement with Chase Bank for six months to September 24, 2023, and bears interest at a rate of Term SOFR for a one-month plus 7.728% per annum. On October 19, 2023, the Company extended the line of credit agreement with Chase Bank for six additional months to June 19, 2024, and bears interest at a rate of Term SOFR for a one-month plus 7.963% per annum.

As of December 31, 2023 and 2022, the outstanding balance on the Chase Bank line of credit was $0 and $500,000, respectively.

NOTE 8—NOTES PAYABLE

Notes payable as of December 31, 2023 and 2022 consisted of the following:

	December 31,<br> 2023		December 31,<br> 2022
Vehicle loans	$	105,148	$	139,063
SBA EIDL loan		500,000		500,000
Chase Bank loan (Delancey building)^[1]^		1,817,128		1,889,575
Chase Bank loan (CD Gowan building) ^[1]^		848,507		868,983
SBA loan (CD Gowan building) ^[1]^		704,728		722,318
Note payable (materials purchase)		92,271		206,858
Total notes payable	$	4,067,782	$	4,326,797
Current portion of notes payable	$	240,946	$	295,450
Notes payable, net of current portion	$	3,826,836	$	4,031,347

^[1]^ These three loans represent building loans held by VIEs in which CMD is deemed to be the primary beneficiary. Refer to Note 2 for further details.

SBA EIDL Loan

On May 5, 2020, the Company received a $500,000 Economic Injury Disaster Loan (“EIDL”) loan from the Small Business Administration (“SBA”) under provisions of the Coronavirus Aid, Relief, and Economic Security Act. The EIDL loan has a 30-year term and bears interest at a rate of 3.75% per annum.

As of December 31, 2023 and 2022, the outstanding principal balance was $500,000, with an accrued interest balance of $22,275 and $35,207, respectively.

Note Payable

On July 18, 2022, the Company entered into a $250,000 note payable in order to purchase materials for a large commercial contract. The note matures in two years and is payable in monthly installments of $10,417, funded through progress payments received from the large commercial contract

As of December 31, 2023 and 2022, the outstanding note balance is $92,271 and $206,858, respectively.

Vehicle Loans

The Company has financed purchases of vehicles with notes payable, which are secured by the vehicles purchased. These notes have five-year terms and interest rates ranging from 1.99% to 26%. As of December 31, 2023, the total outstanding balance is $105,148.

F-14

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

Estimated future minimum principal payments of notes payable for the next five years consists of the following as of December 31, 2023:

Year Ending December 31,	Amount
2024	$	240,946
2025		154,856
2026		138,280
2027		142,526
2028		144,615
Thereafter		3,246,559
Total payments	$	4,067,782

NOTE 9—SUPPLIER AND CUSTOMER CONCENTRATIONS

Significant customers and suppliers are those that account for greater than ten percent of the Company’s revenues and purchases.

In 2023 and 2022, the Company had two customers, whose revenue accounted for 23.6% percent and 44.8% percent of the Company’s revenue, respectively.

In 2023 and 2022, the Company purchased a substantial portion of finished goods from one third-party vendor, which compromised 38.4% percent and 37.6% percent of the Company’s purchases, respectively. The Company believes there are other suppliers that could be substituted should any of the suppliers become unavailable or non-competitive.

NOTE 10—COMMITMENTS AND CONTINGENCIES

There are no legal proceedings which the Company believes will have a material adverse effect on its financial position.

NOTE 11—SUBSEQUENT EVENTS

Completed Acquisition

On November 4, 2024, 1847 CMD Inc. (“1847 CMD”), a wholly owned subsidiary of 1847 Holdings LLC (the “1847 Holdings”), entered into a stock and membership interest purchase agreement with Christopher M. Day (who owns 100% of CMD), which was amended and restated on December 5, 2024 and further amended on December 13, 2024 and December 16, 2024 (as so amended, the “CMD Purchase Agreement”). Pursuant to the CMD Purchase Agreement, 1847 CMD agreed to acquire (the “Acquisition”), all of the issued and outstanding capital stock of CMD and all of the membership interests of CMD Finish Carpentry LLC, a Nevada limited liability company (“Finish” and together with CMD, the “CMD Companies”), from The CD Trust, dated October 18, 2021 (the “Seller”).

On December 16, 2024, closing of the transactions contemplated by the CMD Purchase Agreement was completed. Pursuant to the CMD Purchase Agreement, 1847 CMD acquired the CMD Companies for an aggregate purchase price of $18,750,000, consisting of $17,750,000 in cash (subject to adjustments) and $1,000,000 of a promissory note in the principal amount of $1,050,000 (collectively, the “Purchase Price”), the remaining $50,000 of which is allocated for Seller’s expenses. 1847 CMD also paid $25,000 in cash at the closing to be applied towards the Seller’s legal fees. Upon the execution of the CMD Purchase Agreement, 1847 CMD also paid the Seller a deposit of $1,000,000, which was not applied to the Purchase Price at closing since the closing did not occur prior to December 3, 2024, as originally required by the CMD Purchase Agreement.

The Purchase Price is subject to a post-closing working capital adjustment provision. Under this provision, the Seller delivered to 1847 CMD at the closing an unaudited balance sheet of the CMD Companies as of December 12, 2024 (the “Preliminary Balance Sheet”). On or before the 75th day following the closing, 1847 CMD must deliver to the Seller an audited balance sheet of the CMD Companies as of December 12, 2024 (the “Final Balance Sheet”). If the final net working capital reflected in the Final Balance Sheet exceeds the estimated net working capital reflected in the Preliminary Balance Sheet, 1847 CMD must issue to the Seller a promissory note in the principal amount equal to such excess. If the estimated net working capital reflected in the Preliminary Balance Sheet exceeds the final net working capital reflected in the Final Balance Sheet, the Seller must, within thirty (30) days, pay to 1847 CMD an amount in cash equal to such excess.

F-15

CMD Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023 and 2022

As noted above, a portion of the Purchase Price was paid by the issuance of a promissory note in the principal amount of $1,050,000 by 1847 CMD to the Seller (the “Note”). The Note is due and payable on February 16, 2025 and does not bear interest; provided that upon a default, as described in the Note, interest shall accrue at a rate of fifteen percent (15%) per annum until such default is cured. Additionally, if any payment of principal or interest is past due by five (5) days or more, a late fee will be due in an amount equal to 7.5% of the payment due. Subject to the rights of the Senior Lenders (as defined in the Note), the Note is secured by all of the assets of 1847 CMD and the CMD Companies, pursuant to a security agreement, dated December 16, 2024, among 1847 CMD, the CMD Companies and the Seller, a pledge agreement, dated December 16, 2024, between 1847 Holdings and the Seller relating to the equity interests of 1847 CMD, and a pledge agreement, dated December 16, 2024, between 1847 CMD and the Seller relating to the equity interests of the CMD Companies. The Note is also guaranteed by 1847 Holdings and the CMD Companies, pursuant to a Guaranty, dated December 16, 2024, by 1847 Holdings and the CMD Companies in favor of the Seller.

Lease Agreements

On December 16, 2024, 1847 CMD also entered into a lease agreement with Delancey (the “Delancey Lease”) relating to the properties leased by the CMD Companies prior to the Acquisition located at 4485 Delancey Drive, Las Vegas, Nevada 89103 and 4495 Delancey Drive, Las Vegas, Nevada 89103 (collectively, the “Delancy Property”). The Delancey Lease provides for a base rent of $20,000 per month, which shall increase annually by an amount equal to three percent (3%) of the previous year’s base rent. In addition, 1847 CMD will be responsible for all taxes, insurance and certain operating costs during the lease term. Further, in the event that the mortgage lender on the Delancy Property calls the mortgage loan due to the change in tenant and Delancy is required to refinance the Delancy Property, 1847 CMD agreed to pay the costs associated with such refinancing, and the increase in the monthly mortgage payments resulting from such refinancing, if any, will be added to the base rent. The Delancey Lease expires on December 31, 2029; provided that the term may be extended for two (2) additional five (5) year periods.

On December 16, 2024, 1847 CMD also entered into a lease agreement with CD Gowan (the “Gowan Lease”) relating to the property leased by the CMD Companies prior to the Acquisition located at 2421 East Gowan Road, North Las Vegas, Nevada 89030 (the Gowan Property”). The Gowan Lease provides for a base rent of $15,000 per month, which shall increase annually by an amount equal to three percent (3%) of the previous year’s base rent. In addition, 1847 CMD will be responsible for all taxes, insurance and certain operating costs during the lease term. Further, in the event that the mortgage lender on the Gowan Property calls the mortgage loan due to the change in tenant and CD Gowan is required to refinance the Gowan Property, 1847 CMD agreed to pay the costs associated with such refinancing, and the increase in the monthly mortgage payments resulting from such refinancing, if any, will be added to the base rent. The Gowan Lease expires on December 31, 2029; provided that the term may be extended for two (2) additional five (5) year periods

F-16

Exhibit 99.2

CMD Inc.

CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED

SEPTEMBER 30, 2024 and 2023

(UNAUDITED)

TABLE OF CONTENTS

Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023	F-2
Condensed Consolidated Statements of Income and Changes in Owners’ Equity for the Nine Months Ended September 30, 2024 and 2023 (Unaudited)	F-3
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (Unaudited)	F-4
Condensed Consolidated Notes to Financial Statements (Unaudited)	F-5 – F-10

F-1

CMD Inc.

CONDENSED CONSOLIDATED

BALANCE SHEETS

	September 30, <br> 2024		December 31,<br> 2023
ASSETS	(Unaudited)
Current Assets
Cash and cash equivalents	$	4,813,138	$	641,526
Accounts receivables, net		6,178,698		5,284,862
Contract assets, net		1,860,806		1,373,107
Inventory		880,809		1,239,067
Prepaid expenses and other current assets		1,350		80,898
Total Current Assets		13,734,801		8,619,460
Property and equipment, net		2,949,642		3,147,878
TOTAL ASSETS	$	16,684,443	$	11,767,338
LIABILITIES AND OWNERS’ EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	1,215,689	$	1,317,270
Contract liabilities		2,305,055		1,901,655
Current portion of finance lease liabilities		110,172		311,117
Current portion of notes payable		115,558		240,946
Total Current Liabilities		3,746,474		3,770,988
Finance lease liabilities, net of current portion		122,642		17,636
Notes payable, net of current portion		3,701,960		3,826,836
TOTAL LIABILITIES		7,571,076		7,615,460
OWNERS’ EQUITY		9,113,367		4,151,878
TOTAL LIABILITIES AND OWNERS’ EQUITY	$	16,684,443	$	11,767,338

The accompanying notes are an integral part of thesecondensed consolidated financial statements

F-2

CMD Inc.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND CHANGES IN OWNERS’ EQUITY

(UNAUDITED)

	For the Nine Months Ended <br> September 30,
	2024			2023
Revenues	$	23,296,729		$	19,128,810
Cost of revenues		12,513,565			12,002,943
Gross Profit		10,783,164			7,125,867
Operating Expenses
Personnel		2,818,439			2,402,610
Depreciation		223,584			196,652
General and administrative		994,240			892,171
Professional fees		71,665			34,186
Total Operating Expenses		4,107,928			3,525,619
INCOME FROM OPERATIONS		6,675,236			3,600,248
Other Income (Expenses)
Other income		22,127			836
Interest expense		(128,308	)		(165,867	)
Gain on disposal of property and equipment		-			28,767
Realized loss from marketable securities		-			(17,714	)
Total Other Expenses		(106,181	)		(153,978	)
NET INCOME	$	6,569,055		$	3,446,270
OWNERS’ EQUITY – BEGINNING		4,151,878			(1,293,277	)
OWNERS’ DISTRIBUTIONS		(1,607,566	)		(273,837	)
NET INCOME		6,569,055			3,446,270
OWNERS’ EQUITY – ENDING	$	9,113,367		$	1,879,156

The accompanying notes are an integral part of thesecondensed consolidated financial statements

F-3

CMD Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended<br> September 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	6,569,055		$	3,446,270
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposal of property and equipment		-			(28,767	)
Depreciation		223,584			196,652
Changes in operating assets and liabilities:
Accounts receivable		(893,836	)		(3,260,862	)
Inventory		358,258			(92,483	)
Contract assets		(487,699	)		(466,197	)
Prepaid expenses and other current assets		79,548			(500	)
Accounts payable and accrued expenses		(101,581	)		936,765
Contract liabilities		403,400			802,112
Net cash provided by operating activities		6,150,729			1,532,990
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(25,348	)		(28,969	)
Proceeds from disposal of property and equipment		-			37,100
Net investment in marketable securities		-			472,568
Net cash provided by (used in) investing activities		(25,348	)		480,699
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of notes payable and finance lease liabilities		(346,203	)		(276,986	)
Repayments of lines of credit		-			(305,000	)
Distributions paid		(1,607,566	)		(273,837	)
Net cash used in financing activities		(1,953,769	)		(855,823	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		4,171,612			1,157,866
CASH AND CASH EQUIVALENTS
Beginning of the period		641,526			282,691
End of the period	$	4,813,138			1,440,557
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	138,604			176,477
NON-CASH INVESTING AND FINANCING ACTIVITIES
Financed purchases of property and equipment	$	-		$	87,615

The accompanying notes are an integral part of thesecondensed consolidated financial statements

F-4

CMD Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(UNAUDITED)

NOTE 1—BASIS OF PRESENTATION AND OTHER INFORMATION

The accompanying unaudited interim condensed consolidated financial statements of CMD Inc. (“CMD” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as codified in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and do not include all the information and footnotes required by GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the years ended December 31, 2023 and 2022. 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 nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of CMD, its wholly owned subsidiary CMD Finish Carpentry LLC, as well as variable interest entities (“VIEs”) of which CMD is deemed to be the primary beneficiary (see Note 2). All intercompany accounts and transactions have been eliminated in consolidation.

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilitiesfrom Contracts with Customers.” The amendments in this update require acquiring entities to apply ASC 606, “Revenue fromContracts with Customers,” to recognize and measure contract assets and contract liabilities in business combinations. The amendments in this update are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, for private companies. The Company will adopt this guidance for business combinations occurring on or after the effective date. The adoption of this standard is not expected to have a material impact on the Company’s 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—VARIABLE INTEREST ENTITIES

CMD consolidates Delancey LLC (“Delancey”) and CD Gowan LLC (“CD Gowan”) in accordance with ASC 810,”Consolidation,” as CMD is deemed to be the primary beneficiary of these entities. These entities were established solely to own and lease real estate to CMD, which is their sole tenant and primary source of cash flows. A VIE is consolidated by the primary beneficiary when it has both (1) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. As a result, Delancey and CD Gowan are included in the Company’s condensed consolidated financial statements, and all intercompany transactions, including lease payments, are eliminated in consolidation.

F-5

CMDInc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(UNAUDITED)

The carrying amounts and classification of assets and liabilities for variable interest entities in the condensed consolidated balance sheet as of September 30, 2024 and December 31, 2023 are as follows:

	September 30, <br><br>2024			December 31,<br> 2023
ASSETS
Current Assets
Cash and cash equivalents	$	10,972		$	20,170
Total Current Assets		10,972			20,170
Property and equipment, net		2,443,580			2,508,560
TOTAL ASSETS	$	2,454,552		$	2,528,730
LIABILITIES AND OWNERS’ DEFICIT
Current Liabilities
Current portion of notes payable	$	88,680		$	115,221
Total Current Liabilities		88,680			115,221
Notes payable, net of current portion		3,193,003			3,255,142
TOTAL LIABILITIES		3,281,683			3,370,363
OWNERS’ DEFICIT		(827,131	)		(841,633	)
TOTAL LIABILITIES AND OWNERS’ DEFICIT	$	2,454,552		$	2,528,730

NOTE 3—DISAGGREGATION OF REVENUES

The Company’s revenues for the nine months ended September 30, 2024 and 2023 are disaggregated as follows:

	For the Nine Months Ended <br><br>September 30,
	2024		2023
Doors, frames, hardware, and trim	$	16,949,735	$	15,899,464
Cabinetry and millwork		5,809,779		2,930,235
Specialty construction accessories		537,215		299,111
Total revenues	$	23,296,729	$	19,128,810

NOTE 4—PROPERTY AND EQUIPMENT

Property and equipment as of September 30, 2024 and December 31, 2023 consisted of the following:

	September 30,<br> 2024			December 31,<br> 2023
Machinery and equipment	$	702,625		$	696,854
Office furniture and equipment		214,598			195,021
Transportation equipment		361,606			361,606
Buildings ^[1]^		2,600,000			2,600,000
Land ^[1]^		305,000			305,000
Total property and equipment		4,183,829			4,158,481
Less: accumulated depreciation		(1,234,187	)		(1,010,603	)
Total property and equipment, net	$	2,949,642		$	3,147,878
^[1]^	The buildings and land were owned by VIEs in which CMD is<br>deemed to be the primary beneficiary. Refer to Note 2 for further details.
---	---

Depreciation expense for the nine months ended September 30, 2024 and 2023 was $223,584 and $196,652, respectively.

F-6

CMD Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(UNAUDITED)

NOTE 5—ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses as of September 30, 2024 and December 31, 2023 consisted of the following:

	September 30, <br><br>2024		December 31,<br> 2023
Trade accounts payable	$	1,081,486	$	1,110,869
Credit cards payable		20,868		19,324
Accrued payroll liabilities		62,357		126,821
Accrued sales and use tax		38,999		37,981
Accrued interest		11,979		22,275
Total accounts payable and accrued expenses	$	1,215,689	$	1,317,270

NOTE 6—FINANCE LEASES

Finance leases as of September 30, 2024 and December 31, 2023 consisted of the following:

	September 30,<br><br> <br>2024			December 31,<br> 2023
Machinery and equipment	$	568,861		$	568,861
Less: accumulated depreciation		(307,705	)		(222,421	)
Total leased equipment, net	$	261,156		$	346,440
Finance lease liabilities, current portion		110,172			311,117
Finance lease liabilities, long-term		122,642			17,636
Total finance lease liabilities	$	232,814		$	328,753
Weighted-average remaining lease term (months)		2.1			2.7
Weighted average discount rate		4.7	%		5.0	%

Depreciation expense from financed equipment for the nine months ended September 30, 2024 and 2023 was $85,284 and $82,289, respectively. Interest expense from financed equipment for the nine months ended September 30, 2024 and 2023 was $10,637 and $14,537, respectively.

Estimated future minimum payments of finance leases for the next five years consists of the following as of September 30, 2024:

Year Ending December 31,	Amount
2024 (remaining)	$	33,156
2025		113,673
2026		97,342
Total		244,171
Less: amount representing interest		(11,357	)
Total finance lease liabilities	$	232,814

F-7

CMD Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(UNAUDITED)

NOTE 7—NOTES PAYABLE

Notes payable as of September 30, 2024 and December 31, 2023 consisted of the following:

	September 30,<br> 2024		December 31,<br> 2023
Vehicle loans	$	35,835	$	105,148
SBA EIDL loan		500,000		500,000
Chase Bank loan (Delancey building)^[1]^		1,761,389		1,817,128
Chase Bank loan (CD Gowan building) ^[1]^		829,304		848,507
SBA loan (CD Gowan building) ^[1]^		690,990		704,728
Note payable (materials purchase)		-		92,271
Total notes payable	$	3,817,518	$	4,067,782
Current portion of notes payable	$	115,558	$	240,946
Notes payable, net of current portion	$	3,701,960	$	3,826,836

^[1]^	These three loans represent building loans held by VIEs in<br>which CMD is deemed to be the primary beneficiary. Refer to Note 2 for further details.

Estimated future minimum principal payments of notes payable for the next five years consists of the following as of September 30, 2024:

Year Ending December 31,	Amount
2024 (remaining)	$	36,218
2025		120,251
2026		147,707
2027		195,547
2028		246,262
Thereafter		3,071,433
Total payments	$	3,817,518

NOTE 8—SUPPLIER AND CUSTOMER CONCENTRATIONS

Significant customers and suppliers are those that account for greater than ten percent of the Company’s revenues and purchases.

For the nine months ended September 30, 2024 and 2023, the Company had six customers, whose total revenue accounted for 48.2% percent and 53.8% percent of the Company’s revenue, respectively.

For the nine months ended September 30, 2024 and 2023, the Company purchased a substantial portion of finished goods from two third-party vendors, which compromised 35.9% percent and 41.6% percent of the Company’s purchases, respectively. The Company believes there are other suppliers that could be substituted should any of the suppliers become unavailable or non-competitive.

NOTE 9—COMMITMENTS AND CONTINGENCIES

There are no legal proceedings which the Company believes will have a material adverse effect on its financial position.

F-8

CMD Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(UNAUDITED)

NOTE 10—SUBSEQUENT EVENTS

Completed Acquisition

Lease Agreements

F-9

CMD Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024

(UNAUDITED)

F-10

Exhibit 99.3

UnauditedPro Forma Combined Financial Information

The unaudited pro forma financial information presented below sets forth the financial position and results of operations of 1847 Holdings LLC (the “Company”) after giving effect to the acquisition of CMD Inc. and CMD Finish Carpentry LLC (the “CMD Companies”). The following unaudited pro forma combined financial statements were prepared in accordance with the regulations of the Securities and Exchange Commission (the “SEC”).

The unaudited pro forma combined balance sheet as of September 30, 2024 combines the historical balance sheet of the Company with the historical balance sheet of the CMD Companies and was prepared as if the acquisition had occurred on September 30, 2024.

The unaudited pro forma combined statement of operations for the nine months ended September 30, 2024 combines the historical statement of operations of the Company with the historical statement of operations of the CMD Companies and was prepared as if the acquisition had occurred on January 1, 2024.

The unaudited pro forma combined statement of operations for the year ended December 31, 2023 combines the historical statement of operations of the Company with the historical statement of operations of the CMD Companies and was prepared as if the acquisition had occurred on January 1, 2023.

The pro forma financial information is presented for informational purposes only and is not necessarily indicative of what the Company’s financial position would have been had the acquisition been completed on the dates indicated or what the Company’s results of operations would have been had the acquisition been completed as of the beginning of the periods indicated. In addition, the pro forma combined financial statements do not purport to project the future financial position or operating results of the Company. The pro forma combined financial statements include adjustments for events that are (1) directly attributable to the acquisition, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the combined results.

The pro forma financial information has been derived from and should be read in conjunction with (i) the unaudited condensed consolidated financial statements and related notes of the Company for the nine months ended September 30, 2024, (ii) the unaudited condensed consolidated financial statements and related notes of the CMD Companies for the nine months ended September 30, 2024, (iii) the audited consolidated financial statements and related notes of the Company for the years ended December 31, 2023 and 2022 and (iv) the audited consolidated financial statements and related notes of the CMD Companies for the years ended December 31, 2023 and 2022.

1847 HOLDINGS LLC

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

SEPTEMBER 30, 2024

	Historical Balances					Pro Forma				Pro Forma
	1847 Holdings			CMD		Adjustments			Notes	Combined
ASSETS
Current Assets
Cash and cash equivalents	$	1,517,191		$	4,813,138	$	(529,160	)	(a)	$	5,790,197
							(10,972	)	(c)
Restricted cash and cash equivalents		8,700,000			-		(7,000,000	)	(a)		1,700,000
Investments		-			-		-				-
Receivables, net		1,828,116			6,178,698		-				8,006,814
Contract assets		57,852			1,860,806		-				1,918,658
Inventories, net		684,895			880,809		-				1,565,704
Prepaid expenses and other current assets		703,059			1,350		-				704,409
Total Current Assets		13,491,113			13,734,801		(7,540,132	)			19,685,782
Property and equipment, net		743,235			2,949,642		(2,443,580	)	(c)		1,249,297
Operating lease right-of-use assets		594,738			-		-				594,738
Long-term deposits		49,535			-		-				49,535
Intangible assets, net		2,017,091			-		-				2,017,091
Goodwill		-			-		8,165,265		(e)		8,165,265
TOTAL ASSETS	$	16,895,712		$	16,684,443	$	(1,818,447	)		$	31,761,708
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued expenses	$	4,957,013		$	1,215,689	$	(7,922	)	(d)	$	6,164,780
Contract liabilities		427,894			2,305,055		-				2,732,949
Due to related parties		193,762			-		-				193,762
Current portion of operating lease liabilities		436,253			-		-				436,253
Current portion of finance lease liabilities		179,489			110,172		(88,673	)	(d)		200,988
Current portion of notes payable, net		11,288,901			115,558		1,050,000		(b)		12,365,779
							(88,680	)	(c)
Current portion of convertible notes payable, net		724,281			-		-				724,281
Current portion of related party note payable		578,290			-		-				578,290
Derivative liabilities		544,000			-		-				544,000
Warrant liabilities		9,900			-		-				9,900
Total Current Liabilities		19,339,783			3,746,474		864,725				23,950,982
Operating lease liabilities, net of current portion		198,747			-		-				198,747
Finance lease liabilities, net of current portion		470,245			122,642		(122,642	)	(d)		470,245
Notes payable, net of current portion		9,700			3,701,960		(3,193,003	)	(c)		18,657
							(500,000	)	(d)
Convertible notes payable, net		22,790,057			-		-				22,790,057
Deferred tax liability, net		360,000			-		-				360,000
TOTAL LIABILITIES		43,168,532			7,571,076		(2,950,920	)			47,788,688
Shareholders’ Equity (Deficit)
Series A convertible preferred shares		39,877			-		-				39,877
Series C convertible preferred shares		214,900			-		-				214,900
Series D convertible preferred shares		600,100			-		-				600,100
Allocation shares		1,000			-		-				1,000
Common shares		46			-		3,437		(a)		3,483
Distribution receivable		(785,000	)		-		-				(785,000	)
Additional paid-in capital		62,943,899			-		10,242,403		(a)		73,186,302
Accumulated deficit		(87,485,047	)		-		-				(87,485,047	)
Owners’ equity		-			9,113,367		827,131		(c)		-
							719,237		(d)
							(10,659,735	)	(f)
TOTAL 1847 HOLDINGS SHAREHOLDERS’ EQUITY (DEFICIT)		(24,470,225	)		9,113,367		1,132,473				(14,224,385	)
NON-CONTROLLING INTERESTS		(1,802,595	)		-		-				(1,802,595	)
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)		(26,272,820	)		9,113,367		1,132,473				(16,026,980	)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)	$	16,895,712		$	16,684,443	$	(1,818,447	)		$	31,761,708

1847 HOLDINGS LLC

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2024

	Historical Balances						Pro Forma				Pro Forma
	1847 Holdings			CMD			Adjustments			Notes	Combined
Revenues	$	12,390,797		$	23,296,729		$	-			$	35,687,526
Operating Expenses
Cost of revenues		6,554,871			12,513,565			-				19,068,436
Personnel		4,975,516			2,818,439			-				7,793,955
Depreciation and amortization		507,324			223,584			(64,980	)	(c)		665,928
General and administrative		3,798,524			994,240			177,899		(c)		5,195,663
								225,000		(h)
Professional fees		4,435,727			71,665			-				4,507,392
Impairment of goodwill and intangible assets		679,175			-			-				679,175
Total Operating Expenses		20,951,137			16,621,493			337,919				37,910,549
INCOME (LOSS) FROM OPERATIONS		(8,560,340	)		6,675,236			(337,919	)			(2,223,023	)
Other Income (Expenses)
Other income (expense)		(1,277,446	)		22,127			-				(1,255,319	)
Interest expense		(3,135,373	)		(128,308	)		98,417		(c)		(3,165,264	)
Amortization of debt discounts		(7,976,758	)		-			-				(7,976,758	)
Loss on extinguishment of debt		(2,843,451	)		-			-				(2,843,451	)
Change in fair value of warrant liability		1,841,000			-			-				1,841,000
Change in fair value of derivative liabilities		1,689,410			-			-				1,689,410
Total Other Income (Expenses)		(11,702,618	)		(106,181	)		98,417				(11,710,382	)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(20,262,958	)		6,569,055			(239,502	)			(13,933,405	)
INCOME TAX (EXPENSE) BENEFIT		751,000			-			-				751,000
NET INCOME (LOSS) FROM CONTINUING OPERATIONS		(19,511,958	)		6,569,055			(239,502	)			(13,182,405	)
Net loss from discontinued operations		(3,521,936	)		-			-				(3,521,936	)
Gain on disposition of subsidiary		10,083,621			-			-				10,083,621
NET INCOME (LOSS)	$	(12,950,273	)	$	6,569,055		$	(239,502	)		$	(6,620,720	)
NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS FROM CONTINUING OPERATIONS		211,983			-			-				211,983
NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS FROM DISCONTINUED OPERATIONS		276,332			-			-				276,332
NET INCOME (LOSS) ATTRIBUTABLE TO 1847 HOLDINGS	$	(12,461,958	)	$	6,569,055		$	(239,502	)		$	(6,132,405	)
NET LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO 1847 HOLDINGS		(19,299,975	)		6,569,055			(239,502	)			(12,970,422	)
NET LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO 1847 HOLDINGS		6,838,017			-			-				6,838,017
NET INCOME (LOSS) ATTRIBUTABLE TO 1847 HOLDINGS	$	(12,461,958	)	$	6,569,055		$	(239,502	)		$	(6,132,405	)
PREFERRED SHARE DIVIDENDS		(186,697	)		-			-				(186,697	)
DEEMDED DIVIDENDS		(1,000	)		-			-				(1,000	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(12,649,655	)	$	6,569,055		$	(239,502	)		$	(6,320,102	)
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO 1847 HOLDINGS COMMON SHAREHOLDERS
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE FROM CONTINUING OPERATIONS	$	(605.64	)								$	(369.46	)
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS		212.51										192.00
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE	$	(393.13	)								$	(177.46	)
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
BASIC		32,177										35,614
DILUTED		32,177										35,614

1847 HOLDINGS LLC

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2023

	Historical Balances						Pro Forma				Pro Forma
****	1847 Holdings		****	CMD		****	Adjustments		****	Notes	Combined		****
Revenues	$	14,190,135		$	27,097,696		$	-			$	41,287,831
Operating Expenses
Cost of revenues		7,637,496			16,289,200			-				23,926,696
Personnel		4,990,561			3,226,398			-				8,216,959
Depreciation and amortization		1,162,295			267,107			(86,640	)	(c)		1,342,762
General and administrative		3,272,333			1,300,843			249,092		(c)		5,122,268
								300,000		(h)
Professional fees		2,378,190			40,328			-				2,418,518
Impairment of goodwill and intangible assets		10,456,087			-			-				10,456,087
Total Operating Expenses		29,896,962			21,123,876			462,452				51,483,290
INCOME (LOSS) FROM OPERATIONS		(15,706,827	)		5,973,820			(462,452	)			(10,195,459	)
Other Income (Expenses)
Other income (expense)		12,611			(9,463	)		-				3,148
Interest expense		(4,628,194	)		(207,671	)		124,302		(c)		(4,711,563	)
Amortization of debt discounts		(4,232,231	)		-			-				(4,232,231	)
Gain (loss) on disposal of property and equipment		-			34,867			-				34,867
Change in fair value of warrant liability		(27,900	)		-			-				(27,900	)
Change in fair value of derivative liabilities		385,138			-			-				385,138
Total Other Income (Expenses)		(8,490,576	)		(182,267	)		124,302				(8,548,541	)
NET INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(24,197,403	)		5,791,553			(338,150	)			(18,744,000	)
INCOME TAX (EXPENSE) BENEFIT		209,000			-			-				209,000
NET INCOME (LOSS) FROM CONTINUING OPERATIONS		(23,988,403	)		5,791,553			(338,150	)			(18,535,000	)
Net loss from discontinued operations		(7,619,524	)		-			-				(7,619,524	)
NET INCOME (LOSS)	$	(31,607,927	)	$	5,791,553		$	(338,150	)		$	(26,154,524	)
NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS FROM CONTINUING OPERATIONS		1,286,593			-			-				1,286,593
NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS FROM DISCONTINUED OPERATIONS		316,186			-			-				316,186
NET INCOME (LOSS) ATTRIBUTABLE TO 1847 HOLDINGS	$	(30,005,148	)	$	5,791,553		$	(338,150	)		$	(24,551,745	)
NET LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO 1847 HOLDINGS		(22,701,810	)		5,791,553			(338,150	)			(17,248,407	)
NET LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO 1847 HOLDINGS		(7,303,338	)		-			-				(7,303,338	)
NET INCOME (LOSS) ATTRIBUTABLE TO 1847 HOLDINGS	$	(30,005,148	)	$	5,791,553		$	(338,150	)		$	(24,551,745	)
PREFERRED SHARE DIVIDENDS		(512,967	)		-			-				(512,967	)
DEEMDED DIVIDENDS		(2,398,000	)		-			-				(2,398,000	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(32,916,115	)	$	5,791,553		$	(338,150	)		$	(27,462,712	)
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO 1847 HOLDINGS COMMON SHAREHOLDERS
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE FROM CONTINUING OPERATIONS	$	(3,837.70	)								$	(1,993.81	)
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS		(1,094.30	)									(722.32	)
BASIC f DILUTED EARNINGS (LOSS) PER COMMON SHARE	$	(4,931.99	)								$	(2,716.12	)
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
BASIC		6,674										10,111
DILUTED		6,674										10,111

PRO FORMA ADJUSTMENTS

The following is a summary of pro forma adjustments reflected in the unaudited pro forma combined financial information based on preliminary estimates, which may change as additional information is obtained:

The adjustments included in the unaudited pro forma combined financial statements are as follows:

(a)	Reflects the cash consideration for the acquisition of CMD and the sources of those funds, including $10.25 million in net proceeds<br>raised from a private equity offering.
(b)	Reflects the issuance of a promissory note to the seller of CMD as part of the consideration for the acquisition.
---	---
(c)	Reflects the removal of previously consolidated VIEs, as these entities no longer qualify as VIEs following the acquisition of CMD.
---	---
(d)	Reflects the removal of debt paid off by the Seller in connection with the acquisition of CMD.
---	---
(e)	Reflects the preliminary goodwill recognized based on the fair value of net assets acquired in the acquisition of CMD.
---	---
(f)	Reflects the elimination of the remaining historical equity accounts of CMD upon acquisition.
---	---
(g)	Reflects non-recurring transaction costs incurred related to the acquisition.
---	---
(h)	Reflects the recurring management fees to the Manager.
---	---