Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 10, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | 1847 Goedeker Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 6,111,200 | |
Amendment Flag | false | |
Entity Central Index Key | 0001810140 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity File Number | 001-39418 | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 1,309,374 | $ 934,729 |
Restricted cash | 10,094,932 | 8,977,187 |
Receivables | 948,354 | 1,998,232 |
Vendor deposits | 742,926 | 547,648 |
Merchandise inventory, net | 5,883,484 | 5,147,241 |
Prepaid expenses and other current assets | 525,960 | 635,084 |
Total Current Assets | 19,505,030 | 18,240,121 |
Property and equipment, net | 355,581 | 245,948 |
Operating lease right-of-use assets, net | 3,404,860 | 1,578,235 |
Goodwill | 4,725,689 | 4,725,689 |
Intangible assets, net | 1,276,088 | 1,381,937 |
Other long-term assets | 45,000 | 45,000 |
TOTAL ASSETS | 29,312,248 | 26,216,930 |
Current Liabilities | ||
Accounts payable and accrued expenses | 12,356,822 | 12,701,715 |
Customer deposits | 22,269,406 | 21,879,210 |
Short term notes payable, net | 3,347,763 | |
Current portion of notes payable, net | 668,744 | 663,339 |
Current portion of operating lease liabilities | 664,043 | 450,712 |
Total Current Liabilities | 39,306,778 | 35,694,976 |
Notes payable, net of current portion, net | 2,358,068 | 2,522,030 |
Operating lease liabilities, net of current portion | 2,803,203 | 1,127,523 |
Contingent note payable | 188,170 | 188,170 |
TOTAL LIABILITIES | 44,656,219 | 39,532,699 |
Stockholders’ Deficit | ||
Preferred stock, $.0001 par value, 20,000,000 shares authorized; none issued and outstanding as of March 31, 2021 or December 31, 2020 | ||
Common stock, $.0001 par value, 200,000,000 shares authorized; 6,111,200 shares issued and outstanding as of March 31, 2021 and December 31, 2020 | 611 | 611 |
Additional paid-in capital | 14,874,341 | 13,409,328 |
Accumulated deficit | (30,218,923) | (26,725,708) |
Total Stockholders’ Deficit | (15,343,971) | (13,315,769) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ 29,312,248 | $ 26,216,930 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 6,111,200 | 6,111,200 |
Common stock, shares outstanding | 6,111,200 | 6,111,200 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Product sales, net | $ 13,697,368 | $ 9,677,178 |
Cost of goods sold | 11,068,911 | 8,111,170 |
Gross profit | 2,628,457 | 1,566,008 |
Operating Expenses | ||
Personnel | 1,931,324 | 1,311,484 |
Advertising | 1,083,248 | 666,436 |
Bank and credit card fees | 532,742 | 244,740 |
Depreciation and amortization | 122,331 | 91,841 |
General and administrative | 2,239,498 | 1,439,840 |
Total Operating Expenses | 5,909,143 | 3,754,341 |
LOSS FROM OPERATIONS | (3,280,686) | (2,188,333) |
Other Income (Expense) | ||
Interest income | 10,096 | |
Interest expense | (232,831) | (456,070) |
Other income | 10,206 | 2,383 |
Total Other Income (Expense) | (212,529) | (453,687) |
NET LOSS BEFORE INCOME TAXES | (3,493,215) | (2,642,020) |
INCOME TAX BENEFIT | 435,000 | |
NET LOSS | $ (3,493,215) | $ (2,207,020) |
LOSS PER COMMON SHARE – BASIC AND DILUTED (in Dollars per share) | $ (0.57) | $ (0.44) |
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED (in Shares) | 6,111,200 | 5,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity Deficit (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance, at Dec. 31, 2019 | $ 475 | $ 1,079,179 | $ (5,157,871) | $ (4,078,217) |
Balance (in Shares) at Dec. 31, 2019 | 4,750,000 | |||
Net loss | (2,207,020) | (2,207,020) | ||
Balance at Mar. 31, 2020 | $ 475 | 1,079,179 | (7,364,891) | (6,285,237) |
Balance (in Shares) at Mar. 31, 2020 | 4,750,000 | |||
Balance, at Dec. 31, 2020 | $ 611 | 13,409,328 | (26,725,708) | (13,315,769) |
Balance (in Shares) at Dec. 31, 2020 | 6,111,200 | |||
Stock-based compensation expense | 124,575 | 124,575 | ||
Issuance of warrants in connection with notes payable | 1,340,438 | 1,340,438 | ||
Net loss | (3,493,215) | (3,493,215) | ||
Balance at Mar. 31, 2021 | $ 611 | $ 14,874,341 | $ (30,218,923) | $ (15,343,971) |
Balance (in Shares) at Mar. 31, 2021 | 6,111,200 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (3,493,215) | $ (2,207,020) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 127,596 | 91,841 |
Amortization of debt discount | 98,201 | 209,132 |
Stock-based compensation expense | 124,575 | |
Non-cash lease expense | 127,397 | 103,145 |
Deferred tax assets | (435,000) | |
Changes in operating assets and liabilities: | ||
Receivables | 1,049,878 | 290,707 |
Vendor deposits | (195,278) | |
Merchandise inventory | (736,243) | 310,631 |
Prepaid expenses and other assets | 109,124 | (14,687) |
Accounts payable and accrued expenses | (344,893) | 1,442,264 |
Customer deposits | 390,196 | 1,270,488 |
Operating lease liabilities | (65,011) | (103,145) |
Net cash provided by (used in) operating activities | (2,807,673) | 958,356 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (126,115) | |
Net cash used in investing activities | (126,115) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from short term notes payable | 4,590,000 | |
Repayment on notes payable | (163,822) | (93,750) |
Net payments on lines of credit | (681,408) | |
Net cash provided by (used in) financing activities | 4,426,178 | (775,158) |
NET CHANGE IN CASH AND RESTRICTED CASH | 1,492,390 | 183,198 |
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD | 9,911,916 | 64,470 |
CASH AND RESTRICTED CASH, END OF PERIOD | 11,404,306 | 247,668 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 29,473 | 92,398 |
Cash paid for taxes | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Debt discount, warrants on short-term note payable | 1,340,438 | |
Original issue discount on short-term note payable | 910,000 | |
Adjustment to fair value of goodwill based on final purchase price allocation | 121,736 | |
Right of use asset acquired | 1,954,022 | |
Right of use liability assumed | (1,954,022) | |
Cash, cash equivalents, and restricted cash consist of the following: | ||
Cash and cash equivalents | 1,309,374 | 247,668 |
Restricted cash | 10,094,932 | |
Cash and cash equivalents and restricted cash total | 11,404,306 | 247,668 |
Cash, cash equivalents, and restricted cash consist of the following | ||
Cash and cash equivalents | 934,729 | 471,308 |
Restricted cash | 8,977,187 | |
Cash and cash equivalents and restricted cash total | $ 9,911,916 | $ 471,308 |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1—ORGANIZATION AND NATURE OF BUSINESS 1847 Goedeker Inc. (the “Company”) was formed under the laws of the State of Delaware on January 10, 2019 for the sole purpose of acquiring the business of Goedeker Television Co. Prior to the acquisition, the Company did not have any operations other than operations relating to its incorporation and organization. On April 5, 2019, the Company acquired substantially all the assets and assumed substantially all the liabilities of Goedeker Television Co., a Missouri corporation (“Goedeker”). As a result of this transaction, the Company acquired the former business of Goedeker and continues to operate this business. October 20, 2020, the Company formed Appliances Connection Inc. (“ACI”) as a wholly owned subsidiary in the State of Delaware. At December 31, 2020, ACI had no assets or liabilities. The Company is a one-stop e-commerce destination for home furnishings, including appliances, furniture, home goods and related products. Since Goedeker’s founding in 1951, it has evolved from a local brick and mortar operation serving the St. Louis metro area to a large nationwide omnichannel retailer that offers one-stop shopping. While the Company still maintains its St. Louis showroom, over 95% of its sales are placed through its website at www.goedekers.com. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements of the Company and ACI have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and with the instructions to Article 8 of Regulation S-X. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2020. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiary, ACI. All significant intercompany balances and transactions have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated. Stock Split On July 30, 2020, the Company completed a 4,750-for-1 forward stock split of its outstanding common stock. As a result of this stock split, the Company’s issued and outstanding common stock increased from 1,000 to 4,750,000 shares. Accordingly, all share and per share information has been restated to retroactively show the effect of this stock split. Use of Estimates The preparation of these unaudited condensed consolidated 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 unaudited condensed consolidated 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 equivalents include: (1) currency on hand, (2) demand deposits with banks or financial institutions, (3) other kinds of accounts that have the general characteristics of demand deposits, and (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The majority of payments due from financial institutions for the settlement of credit card and debit card transactions process within two business days and are, therefore, classified as cash and cash equivalents. Other payment methods that take more time to settle are classified as receivables. At March 31, 2021, restricted cash includes approximately $3,120,000 pledged to secure a note, $100,000 to secure a vendor letter of credit and $6,874,932 withheld by credit card processors as security for the Company’s customer refund claims and credit card chargebacks. The cash pledged to secure the note payable will be released as the note is repaid, the cash pledged to secure the letter of credit will be released when the vendor offers the Company credit terms, and the cash held by credit card processors will be released at the discretion of the credit card companies. Revenue Recognition and Cost of Revenue The Company records revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606. 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. ASC 606 also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments. The Company collects the full sales price from the customer at the time the order is placed, which is recorded as customer deposits on the accompanying consolidated balance sheet. The Company does not incur incremental costs obtaining purchase orders from customers, however, if the Company did, because all the Company’s contracts are less than a year in duration, any contract costs incurred would be expensed rather than capitalized. The revenue that the Company recognizes arises from orders it receives from its customers. The Company’s performance obligations under the customer orders correspond to each sale of merchandise that it makes to customers under the purchase orders; as a result, each purchase order generally contains only one performance obligation based on the merchandise sale to be completed. Control of the delivery transfers to customers when the customer can direct the use of, and obtain substantially all the benefits from, the Company’s products, which generally occurs when the customer assumes the risk of loss. The risk of loss shifts to the customer at different times depending on the method of delivery. The Company delivers products to its customers in three possible ways. The first way is through a shipment of the products through a third-party carrier from the Company’s warehouse to the customer (a “Company Shipment”). The second way is through a shipment of the products through a third-party carrier from a warehouse other than the Company’s warehouse to the customer (a “Drop Shipment”) and the third way is where the Company itself delivers the products to the customer and often also installs the product (a “Local Delivery”). In the case of a Local Delivery, the Company loads the product on to its own truck and delivers and installs the product at the customer’s location. When a product is delivered through a Local Delivery, risk of loss passes to the customer at the time of installation and revenue is recognized upon installation at the customer’s location. In the case of a Company Shipment and a Drop Shipment, the delivery to the customer is made free on board, or FOB, shipping point (whether from the Company’s warehouse or a third party’s warehouse). Therefore, risk of loss and title transfers to the customer once the products are shipped (i.e., leaves the Company’s warehouse or a third-party’s warehouse). After shipment and prior to delivery, the customer is able to redirect the product to a different destination, which demonstrates the customer’s control over the product once shipped. Once the risk of loss has shifted to the customer, the Company has satisfied its performance obligation and the Company recognizes revenue. The Company agrees with customers on the selling price of each transaction. This transaction price is generally based on the agreed upon sales price. In the Company’s contracts with customers, it allocates the entire transaction price to the sales price, which is the basis for the determination of the relative standalone selling price allocated to each performance obligation. Any sales tax, value added tax, and other tax the Company collects concurrently with revenue-producing activities are excluded from revenue. Cost of revenue includes the cost of purchased merchandise plus the cost of shipping merchandise and where applicable installation, net of promotional rebates and other incentives received from vendors. Substantially all the Company’s sales are to individual retail consumers. Shipping and Handling ‒ The Company bills its customers for shipping and handling charges, which are included in net sales for the applicable period, and the corresponding shipping and handling expense is reported in cost of sales. Disaggregated Revenue The Company’s disaggregated revenue by product type is as follows: March 31, 2021 2020 Appliance sales $ 10,273,393 $ 7,802,104 Furniture sales 2,327,834 1,281,836 Other sales 1,096,141 593,238 Total $ 13,697,368 $ 9,677,178 The Company also sells extended warranty contracts. The Company is an agent for the warranty company and earns a commission on the warranty contracts purchased by customers; therefore, the cost of the warranty contracts is netted against warranty revenue in the accompanying consolidated statement of operations. The Company assumes no liability for repairs to products on which it has sold a warranty contract. The Company experiences operational trends which are primarily holidays such as Presidents Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and Christmas and Black Friday and Cyber Monday. Receivables Receivables represent rebates receivable due from manufacturers from whom the Company purchases products and amounts due from credit card processors that do not settle within two days. Rebates receivable are stated at the amount that management expects to collect from manufacturers, net of accounts payable amounts due the vendor. Rebates are calculated on product and model sales programs from specific vendors. The rebates are paid at intermittent periods either in cash or through issuance of vendor credit memos, which can be applied against vendor accounts payable. Based on the Company’s assessment of the credit history with its manufacturers, it has concluded that there should be no allowance for uncollectible accounts. The Company historically collects substantially all of its outstanding rebates receivables. Uncollectible balances are expensed in the period it is determined to be uncollectible. Merchandise Inventory Inventory consists of finished products acquired for resale and is valued at the lower-of-cost-or-market with cost determined on an average item basis. The Company periodically evaluates the value of items in inventory and provides write-downs to inventory based on its estimate of market conditions. Property and Equipment Property and equipment is stated at the historical cost. Maintenance and repairs of property and equipment are charged to operations as incurred. Leasehold improvements are amortized over the lesser of the base term of the lease or estimated life of the leasehold improvements. Depreciation is computed using the straight-line method over estimated useful lives as follows: Category Useful Life Machinery and equipment 5 Office equipment 5 Vehicles 5 Goodwill The Company tests its goodwill for impairment at least annually on December 31 and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company’s consolidated financial results. The Company tests goodwill by estimating fair value using a Discounted Cash Flow (“DCF”) model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant’s weighted-average cost of capital used to discount future cash flows to their present value. There were no impairment charges during three months ended March 31, 2021 and 2020. Intangible Assets As of March 31, 2021 and December 31, 2020, definite-lived intangible assets primarily consisted of tradenames and customer relationships which are being amortized over their estimated useful lives, or 5 years. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives. In applying the acquisition method of accounting, amounts assigned to identifiable assets and liabilities acquired were based on estimated fair values as of the date of acquisition, with the remainder recorded as goodwill. Identifiable intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Identifiable intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. Intangible assets with indefinite lives are tested for impairment within one year of acquisitions or annually as of December 1, and whenever indicators of impairment exist. The fair values of intangible assets are compared against their carrying values, and an impairment loss would be recognized for the amount by which a carrying amount exceeds its fair value. At March 31, 2021 and December 31, 2020, there were no impairments in intangible or the right of use (“ROU”) assets. Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles (including ROU asset) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The test for impairment is required to be performed by management upon triggering events. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. At March 31, 2021 and December 31, 2020, there were no impairments in long-lived assets. Lease Liabilities Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term at the lease commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The determination of the IBR requires judgment and is primarily based on publicly available information for companies within the same industry and with similar credit profiles. The Company adjusts the rate for the impact of collateralization, the lease term and other specific terms included in each lease arrangement. The IBR is determined at the lease commencement and is subsequently reassessed upon a modification to the lease arrangement. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company reviews the ROU asset for impairment whenever events or changes in circumstances indicate that the carrying amount of the ROU asset may not be recoverable. When such events occur, the Company compares the carrying amount of the ROU asset to the undiscounted expected future cash flows related to the ROU asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the ROU asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the ROU asset. Fair Value of Financial Instruments The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Cash, restricted cash, receivables, inventory, and prepaid expenses approximate fair value, due to their short-term nature. The fair value hierarchy is defined in the following three categories: Level 1: Quoted market 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. Customer Deposits Customer deposits represent the amount collected from customers when an order is placed. The deposits are transferred to revenue when the order ships to the customer or returned to the Company if the order is subsequently cancelled. Income Taxes Under the Company’s accounting policies, the Company initially recognizes a tax position in its unaudited condensed consolidated financial statements when it becomes more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax positions that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authorities assuming full knowledge of the position and all relevant facts. Although the Company believes its provisions for unrecognized tax positions are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which the Company has reflected in its income tax provisions and accruals. The tax law is subject to varied interpretations, and the Company has taken positions related to certain matters where the law is subject to interpretation. Such differences could have a material impact on the Company’s income tax provisions and operating results in the period(s) in which the Company makes such determination. Sales Tax Liability On June 21, 2018, the U.S. Supreme Court issued an opinion in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018) Quill Corp v. North Dakota Basic Income (Loss) Per Share Basic income (loss) per share is calculated by dividing the net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive securities. For the three months ended March 31, 2021, the potentially dilutive securities were warrants for the purchase of 455,560 shares of common stock and options for the purchase of 555,000 shares of common stock. The potentially dilutive securities for the three months ended March 31, 2020 were warrants for the purchase of 250,000 shares of common stock. These potentially dilutive securities were excluded from diluted loss per share. Reclassifications Certain accounts have been reclassified to conform with classifications adopted in the period ended March 31, 2021. Such reclassifications had no effect on net earnings or financial position. Going Concern Assessment Management assesses going concern uncertainty in the Company’s unaudited condensed consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period. The Company has generated significant losses since its acquisition and has relied on cash on hand, external bank lines of credit, proceeds from the IPO described below, issuance of third party and related party debt and the issuance of a note to support cashflow from operations. For the three months ended March 31, 2021, the Company incurred operating losses of approximately $3,280,686, cash flows used in operations of $2,807,673 and negative working capital of $19,801,748. Management has prepared estimates of operations for fiscal years 2021 and 2022 and believes that sufficient funds will be generated from operations to fund its operations, and to service its debt obligations for one year from the date of the filing of these unaudited condensed consolidated financial statements in the Company’s Form 10-Q. As described in Note 10 below, the Company received net proceeds of $4,590,000 from the sale of 10% OID senior secured promissory notes due December 19, 2021 and warrants on March 19, 2021. These proceeds will supplement the Company’s cash flow from operations and provide additional liquidity. The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is too early to know the full impact of COVID-19 or its timing on a return to more normal operations. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Management believes that based on relevant conditions and events that are known and reasonably knowable that its forecasts, for one year from the date of the filing of these unaudited condensed consolidated financial statements, indicate improved operations and the Company’s ability to continue operations as a going concern. The Company has contingency plans to reduce or defer expenses and cash outlays should operations not improve in the look forward period. Recent Accounting Pronouncements Recently Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments The Company currently believes that all other issued and not yet effective accounting standards are not relevant to the Company’s unaudited condensed consolidated financial statements. |
Restatement of Financial Statem
Restatement of Financial Statements | 3 Months Ended |
Mar. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
RESTATEMENT OF FINANCIAL STATEMENTS | NOTE 3—RESTATEMENT OF FINANCIAL STATEMENTS The Company restated its previously issued financial statements as for the three months ended March 31, 2020 to reflect the modification of a sales tax liability. The Company determined that it should accrue a liability for potential 2020 sales taxes that might be payable to the states in which it operates as a result of the Wayfair decision (See Note 2 – Sales Tax Liability). Accordingly, the Company accrued a liability of $921,900, representing a potential liability for sales taxes and penalties of $873,200 and interest expense of $48,700. The following tables summarize the effect of the restatement on the specific items presented in the Company’s previously reported financial statements: 1847 GOEDEKER INC. STATEMENTS OF OPERATIONS Three Months Ended March 31, 2020 As Filed Adjustments As Restated Gross profit $ 1,566,008 $ - $ 1,566,008 Operating Expenses General and administrative 566,640 873,200 1,439,840 Total Operating Expenses 2,881,141 873,200 3,754,341 LOSS FROM OPERATIONS (1,315,133 ) (873,200 ) (2,188,333 ) Total Other Income (Expense) (404,987 ) (48,700 ) (453,687 ) NET LOSS BEFORE INCOME TAXES (1,720,120 ) (921,900 ) (2,642,020 ) INCOME TAX BENEFIT (EXPENSE) 435,000 - 435,000 NET LOSS $ (1,285,120 ) $ (921,900 ) $ (2,207,020 ) LOSS PER COMMON SHARE – BASIC AND DILUTED $ (0.26 ) $ (0.44 ) WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED 5,000,000 5,000,000 1847 GOEDEKER INC. STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) Three Months Ended March 31, 2020 Common Stock Additional Accumulated Total Shares Amount Capital Deficit Deficit As Filed: Balance, January 1, 2020 4,750,000 $ 475 $ 1,079,179 $ (2,068,150 ) $ (795,954 ) Net loss - - - (1,285,120 ) (1,285,120 ) Balance, March 31, 2020 4,750,000 $ 475 $ 1,079,179 $ (3,353,270 ) $ (2,081,074 ) As Restated: Balance, January 1, 2020 4,750,000 $ 475 $ 1,079,179 $ (5,157,871 ) $ (4,078,217 ) Net loss - - - (2,207,020 ) (2,207,020 ) Balance, March 31, 2020 4,750,000 $ 475 $ 1,079,179 $ (7,364,891 ) $ (6,285,237 ) 1847 GOEDEKER INC. STATEMENTS OF CASH FLOWS Three Months Ended March 31, 2020 As Filed Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (1,285,120 ) $ (921,900 ) $ (2,207,020 ) Accounts payable and accrued expenses 520,364 921,900 1,442,264 Net cash provided by (used in) operating activities 958,356 - 958,356 CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in investing activities - - - CASH FLOWS FROM FINANCING ACTIVITIES Net cash provided by (used in) financing activities (775,158 ) - (775,158 ) NET CHANGE IN CASH AND RESTRICTED CASH 183,198 - 183,198 CASH AND RESTRICTED CASH, BEGINNING OF PERIOD 64,470 - 64,470 CASH AND RESTRICTED CASH, END OF PERIOD $ 247,668 $ - $ 247,668 |
Receivables
Receivables | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
RECEIVABLES | NOTE 4—RECEIVABLES At March 31, 2021 and December 31, 2020, receivables consisted of the following: respectively. March 31, December 31, Vendor rebates receivable $ 604,372 $ 1,337,791 Credit cards in process of collection 343,982 660,441 Total receivables $ 948,354 $ 1,998,232 |
Merchandise Inventory
Merchandise Inventory | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
MERCHANDISE INVENTORY | NOTE 5—MERCHANDISE INVENTORY At March 31, 2021 and December 31, 2020, the inventory balances are composed of: March 31, December 31, Appliances $ 5,985,757 $ 5,285,975 Furniture 249,008 194,852 Other 73,719 91,414 Total merchandise inventory 6,308,484 5,572,241 Allowance for inventory obsolescence (425,000 ) (425,000 ) Merchandise inventory, net $ 5,883,484 $ 5,147,241 |
Vendor Deposits
Vendor Deposits | 3 Months Ended |
Mar. 31, 2021 | |
Vendor Deposits Disclosure [Abstract] | |
VENDOR DEPOSITS | NOTE 6—VENDOR DEPOSITS Deposits with vendors represent cash on deposit with one vendor arising from accumulated rebates paid by the vendor. The deposits are used by the vendor to seek to secure the Company’s purchases. The deposit can be withdrawn at any time up to the amount of the Company’s credit line with the vendor. Alternatively, the Company could secure their credit line with a floor plan line from a lender and withdraw all its deposits. The Company has elected to leave the deposits with the vendor on which it earns interest income. Prior to obtaining an open line of credit with a major vendor, the Company paid in advance for its purchases. The vendor did not ship product to the Company until an order was complete. As a result, the vendor held Company funds. A second vendor uses the Company’s vendor deposit account as collateral. Orders from this vendor exceeded the deposit account and the Company prepaid for some orders. Vendor deposits as of March 31, 2021 and December 31, 2020 were $742,926 and $547,648, respectively. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7—PROPERTY AND EQUIPMENT Property and equipment consist of the following at March 31, 2021 and December 31, 2020: March 31, December 31, Equipment $ 69,336 $ 69,336 Warehouse equipment 61,070 61,070 Furniture and fixtures 512 512 Transportation equipment 63,784 63,784 Leasehold improvements 136,931 136,931 Construction in progress 126,116 - Total property and equipment 457,749 331,633 Accumulated depreciation (102,168 ) (85,685 ) Property and equipment, net $ 355,581 $ 245,948 Depreciation expense for the three months ended March 31, 2021 and 2020 was $16,483 and $10,959, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 8—INTANGIBLE ASSETS The following provides a breakdown of identifiable intangible assets as of March 31, 2021 and December 31, 2020: March 31, December 31, Customer relationships $ 749,000 $ 749,000 Marketing related - tradename 1,368,000 1,368,000 Total intangible assets 2,117,000 2,117,000 Accumulated amortization (840,912 ) (735,063 ) Intangible assets, net $ 1,276,088 $ 1,381,937 In connection with the acquisition of Goedeker, the Company identified intangible assets of $2,117,000, representing trade names and customer relationships. These assets are being amortized on a straight-line basis over their weighted average estimated useful life of 3 years. Amortization expense for the three months ended March 31, 2021 and 2020 was $105,849 and $80,882, respectively. As of March 31, 2021, the estimated annual amortization expense for each of the next five years is as follows: 2021 (remainder of year) $ 317,547 2022 423,396 2023 423,396 2024 111,749 Total $ 1,276,088 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 9—ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following is schedule of accounts payable and accrued expenses at March 31, 2021 and December 31, 2020: March 31, December 31, Trade accounts payable $ 5,267,392 $ 5,975,486 Sales tax 5,915,910 5,804,100 Accrued payroll liabilities 510,388 492,573 Accrued interest 10,000 10,000 Accrued liability for sales returns 200,000 200,000 Other accrued liabilities 453,132 219,556 Total accounts payable and accrued expenses $ 12,356,822 $ 12,701,715 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 10—NOTES PAYABLE Arvest Loan On August 25, 2020, the Company entered into a promissory note and security agreement with Arvest Bank for a loan in the principal amount of $3,500,000. As of March 31, 2021, the outstanding balance of this loan is $3,026,812, comprised of principal of $3,119,806, net of unamortized loan costs of $92,994. The Company classified $668,744 as a current liability and the balance as a long-term liability. The loan matures on August 25, 2025 and bears interest at 3.250% per annum; provided that, upon an event of default, the interest rate shall increase by 6% until paid in full. Pursuant to the terms of the loan agreement, the Company is required to make monthly payments of $63,353 beginning on September 25, 2020 and until the maturity date, at which time all unpaid principal and interest will be due. The Company may prepay the loan in full or in part at any time without penalty. The loan agreement contains customary events of default and affirmative and negative covenants for a loan of this type. The loan is secured by all financial assets credited to the Company’s securities account held by Arvest Investments, Inc. Maturities of the debt are as follows: For the years ended December 31, 2021 (remainder of year) $ 499,517 2022 685,222 2023 707,826 2024 731,177 2025 496,064 Total $ 3,119,806 Less: Loan costs (92,994 ) Total $ 3,026,812 The Company repaid this loan on May 10, 2021. See Note 15. 10% OID Senior Promissory Notes On March 19, 2021, the Company entered into a securities purchase agreement with two institutional investors, pursuant to which the Company issued to each investor (i) a 10% OID senior secured promissory note in the principal amount of $2,750,000 and (ii) a four-year warrant to purchase 200,000 shares of the Company’s common stock at an exercise price of $12.00, subject to adjustments, which may be exercised on a cashless basis, for a purchase price of $2,500,000 each, or $5,000,000 in the aggregate, the relative fair value of which is $1,340,438 and was recorded as debt discount. After deducting a placement fee and other expenses, the Company received net proceeds of $4,590,000. As of March 31, 2021, the outstanding balance of the notes is $3,347,763, comprised of principal of $5,500,000, net of unamortized loan costs of $2,152,237. Loan costs consist of unamortized original issue discount of $870,291 and unamortized warrant value of $1,281,946. The original issue discount and warrant expense are amortized as interest expense. See also Note 13. The notes bear interest at a rate of 10% per annum and mature on December 19, 2021. The notes may be prepaid by the Company in whole or in part at any time or from time to time without penalty or premium upon at least five (5) days prior written notice, which notice period may be waived by the holder. In addition, if the Company issues and sells shares of its equity securities to investors on or before the maturity date in an equity financing with total gross proceeds of not less than $10,000,000 (excluding the conversion of the notes or other convertible securities issued for capital raising purposes), then the Company must repay the then-outstanding principal amount of the notes and any accrued but unpaid interest. The notes are secured by a first priority security interest in all of the Company’s assets and contain customary events of default. Upon, and during the continuance of, an event of default, the notes are convertible, in whole or in part, at the option of the holder into shares of common stock at a conversion price equal to $12.00, or if lower, 80% of the lowest volume weighted average price for the twenty (20) consecutive trading days prior to the applicable conversion date, but in no event less than $9.00. The conversion price will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the common stock. In addition, if the Company sells or grants any common stock or securities convertible into or exchangeable for common stock or grants any right to reprice such securities at an effective price per share that is lower than the then conversion price, the conversion price shall be reduced to such price, subject to certain exceptions. See Note 13 for additional terms of the warrants. |
Operating leases
Operating leases | 3 Months Ended |
Mar. 31, 2021 | |
ASU 2016-02 Transition [Abstract] | |
OPERATING LEASES | NOTE 11—OPERATING LEASES On April 5, 2019, the Company entered into a lease agreement with S.H.J., L.L.C., a Missouri limited liability company and affiliate of the Company at that time. The lease is for a term five (5) years and provides for a base rent of $45,000 per month. In addition, the Company is responsible for all taxes and insurance premiums during the lease term. In the event of late payment, interest shall accrue on the unpaid amount at the rate of eighteen percent (18%) per annum. The lease contains customary events of default. On January 13, 2021, the Company entered into a lease agreement with Westgate 200, LLC for a new premises in St. Charles, Missouri. The lease is for a term of 63 months with two (2) options to renew for additional five (5) year periods and provides for a base rent of $4.35 per square foot per year with 2.5% annual increases and a three-month abatement, resulting in a base rent during the first year of $20,977 per month, increasing to a base rent during the fifth year of $23,147 per month. The Company must also pay its 29% pro rata portion of the property taxes, operating expenses and insurance costs and is also responsible to pay for the utilities used on the premises. The lease contains customary events of default. On March 31, 2021, the Company amended the lease agreement with Westgate 200, LLC that increased the space available to the Company. The amendment increased the Company’s share of the pro rata portion property taxes, operating expenses and insurance costs from 29% to 43.4%. The initial term of the lease is extended by one year to April 30, 2027. Monthly rent payments remain at $20,977 until September 30, 2021 and increase to $31,465 per month until April 30, 2022 and then increases at approximately 2.5% per month every year. In connection with the new leases, the Company recorded a Right of Use asset and liability of $1,954,022 representing the present value of future lease payments. During the three months ended March 31, 2021, the Company accrued rent expense of $62,386. During the three months ended March 31, 2020, the Company paid and expensed rent payments of $135,000. Supplemental balance sheet information related to leases at March 31, 2021 was as follows: Operating lease right-of-use assets $ 3,404,861 Lease liabilities, current portion $ 664,043 Lease liabilities, long-term 2,803,203 Total operating lease liabilities $ 3,467,246 Weighted average remaining lease term (months) 57 Weighted average discount rate 5.9 % Maturities of the lease liabilities for each of the next five years is as follows: 2021 (remainder of year) $ 604,279 2022 923,945 2023 933,493 2024 538,041 2025 413,168 Thereafter 565,936 Total lease payments $ 3,978,862 Less imputed interest (511,616 ) Total lease liability $ 3,467,246 |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 12—RELATED PARTIES On April 5, 2019, the Company entered into an offsetting management services agreement with 1847 Partners LLC (the “Manager”), a company owned and controlled by Ellery W. Roberts, the Company’s chairman and a significant stockholder. This agreement was amended on April 21, 2020 with the amendment becoming effective at the closing of IPO on August 4, 2020. Pursuant to the offsetting management services agreement, as amended, the Company appointed the Manager to provide certain services to it for a quarterly management fee equal to $62,500; provided, however, that, (i) pro-rated payments shall be made in the first quarter and the last quarter of the term, (ii) if the aggregate amount of management fees paid or to be paid by the Company, together with all other management fees paid or to be paid by all other subsidiaries of 1847 Holdings to the Manager, in each case, with respect to any fiscal year exceeds, or is expected to exceed, 9.5% of 1847 Holdings’ gross income with respect to such fiscal year, then the management fee to be paid by the Company for any remaining fiscal quarters in such fiscal year shall be reduced, on a pro rata basis determined by reference to the management fees to be paid to the Manager by all of the subsidiaries of 1847 Holdings, until the aggregate amount of the management fee paid or to be paid by the Company, together with all other management fees paid or to be paid by all other subsidiaries of 1847 Holdings to the Manager, in each case, with respect to such fiscal year, does not exceed 9.5% of 1847 Holdings’ gross income with respect to such fiscal year, and (iii) if the aggregate amount the management fee paid or to be paid by the Company, together with all other management fees paid or to be paid by all other subsidiaries of 1847 Holdings to the Manager, in each case, with respect to any fiscal quarter exceeds, or is expected to exceed, the aggregate amount of the parent management fee (as defined in the offsetting management services agreement) with respect to such fiscal quarter, then the management fee to be paid by the Company for such fiscal quarter shall be reduced, on a pro rata basis, until the aggregate amount of the management fee paid or to be paid by the Company, together with all other management fees paid or to be paid by all other subsidiaries of 1847 Holdings to the Manager, in each case, with respect to such fiscal quarter, does not exceed the parent management fee calculated and payable with respect to such fiscal quarter. The Company shall also reimburse the Manager for all costs and expenses of the Company which are specifically approved by the board of directors of the Company, including all out-of-pocket costs and expenses, that are actually incurred by the Manager or its affiliates on behalf of Goedeker in connection with performing services under the offsetting management services agreement. The Company did not pay any expenses for the three months ended March 31, 2021 and 2020. The Company expensed $62,500 in management fees for the three months ended March 31, 2021 and 2020. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ DEFICIT | NOTE 13—STOCKHOLDERS’ DEFICIT As of March 31, 2021, the Company was authorized to issue 200,000,000 shares of common stock, $0.0001 par value per share, and 20,000,000 shares of “blank check” preferred stock, 0.0001 par value per share. To date, the Company has not designated or issued any shares of preferred stock. Common Stock As of March 31, 2021 and December 31, 2020, the Company had 6,111,200 shares of common stock issued and outstanding. Each share entitles the holder thereof to one vote per share on all matters coming before the stockholders of the Company for a vote. The Company did not issue any shares of common stock during the three months ended March 31, 2021 and 2020. Equity Incentive Plan Effective as of July 30, 2020, the Company established the 1847 Goedeker Inc. 2020 Equity Incentive Plan (the “Plan”). The Plan was approved by the Company’s board of directors and stockholders on April 21, 2020. The Plan is administered by compensation committee of the board of directors. The Plan permits the grant of restricted stock, stock options and other forms of incentive compensation to the Company’s officers, employees, directors and consultants. As of March 31, 2021, the maximum number of shares of common stock that may be issued pursuant to awards granted under the Plan was 555,000 shares and there were 555,000 shares granted. See also Note 15. During the year ended December 31, 2020, the Company issued options for the purchase of 555,000 shares of common stock with a total value of $1,848,056. The Company recorded stock option expense of $124,575 for the three months ended March 31, 2021. The remaining compensation expense of $1,324,573 will be recognized over the remaining vesting period of forty months. The following table presents activity relating to stock options for the three months ended March 31, 2021: Shares Weighted Average Weighted Outstanding at January 1, 2021 555,000 $ 9.00 9 Granted - - - Exercised - - - Forfeited / Cancelled / Expired - - - Outstanding at March 31, 2021 555,000 $ 9.00 8.75 Exercisable at March 31, 2021 65,790 $ 9.00 8.75 As of March 31, 2021, vested outstanding stock options had no intrinsic value as the exercise price is greater than the estimated fair value of the underlying common stock. The Company recognizes compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period. Warrants On August 4, 2020, the Company issued warrants for the purchase of 55,560 shares of common stock to affiliates of the representative in the IPO. These warrants are exercisable at any time and from time to time, in whole or in part, beginning on January 26, 2021 until July 30, 2025, at a per share exercise price equal to $11.25. On March 19, 2021, the Company issued four-year warrants to purchase an aggregate of 400,000 shares of common stock to two investors at an exercise price of $12.00, subject to adjustments, which may be exercised on a cashless basis (See Note 10). The following table presents activity relating to the warrants for the three months ended March 31, 2021: Shares Weighted Weighted Outstanding at January 1, 2021 55,560 $ 11.25 4.5 Granted 400,000 12.00 4.0 Exercised - - - Cancelled / Expired - - - Outstanding at March 31, 2021 455,560 $ 11.91 4.1 The Company recognizes stock issuance expense for the warrants on a straight-line basis over the vesting period of the warrants. The following assumptions were used to calculate warrant expense for the three months ended March 31, 2021: Volatility 74.2 % Risk-free interest rate 0.615 % Dividend yield 0.0 % Term 4.0 years |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14—COMMITMENTS AND CONTINGENCIES On January 18, 2019, the Company entered into an asset purchase agreement with Goedeker, Steve Goedeker and Mike Goedeker, pursuant to which on April 5, 2019 the Company acquired substantially all of the assets of Goedeker used in its retail appliance and furniture business (the “Goedeker Business”). Pursuant to the asset purchase agreement, Goedeker entitled to receive an earn out payment of $200,000 if the EBITDA (as defined in the asset purchase agreement) of the Goedeker Business for the trailing twelve (12) month period from April 5, 2022 is $2,500,000 or greater, and may be entitled to receive a partial earn out payment if the EBITDA of the Goedeker Business is less than $2,500,000 but greater than $1,500,000. The Company expects to meet this target and adjusted the contingent note payable in the condensed consolidated balance sheet to the present value of the amount due. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15—SUBSEQUENT EVENTS In accordance with ASC 855-10, the Company has analyzed its operations subsequent to March 31, 2021 to the date these unaudited condensed consolidated financial statements were issued and has determined that it does not have any material subsequent events to disclose in these unaudited condensed consolidated financial statements, except as set forth below. Amendment to Securities Purchase Agreement On October 20, 2020, the Company entered into a securities purchase agreement, which was amended on December 8, 2020, with ACI and 1 Stop Electronics Center, Inc., Gold Coast Appliances, Inc., Superior Deals Inc., Joe’s Appliances LLC and YF Logistics LLC (collectively, “Appliances Connection”) and the sellers set forth on Exhibit A thereto, pursuant to which ACI agreed to acquire all of the issued and outstanding capital stock or other equity securities of Appliances Connection for an aggregate purchase price of $210,000,000, subject to adjustment, consisting of (i) $168,000,000 in cash, (ii) 2,333,333 shares of the Company’s common stock having a stated value that is equal to $21,000,000, and (iii) a number of shares of the Company’s common stock that is equal to (A) $21,000,000 divided by (B) the average of the closing price of the Company’s common stock (as reported on the NYSE American) for the 20 trading days immediately preceding the 3rd trading day prior to the closing date of the transaction. On April 6, 2021, the parties entered into an amendment to the securities purchase agreement, pursuant to which (i) the outside date (as defined in the securities purchase agreement) by which the closing of the securities purchase agreement must be completed was changed to June 30, 2021, (ii) the definition of net working capital set forth in the securities purchase agreement was revised to clarify that the accrued liabilities for potential sales tax will not be included in such calculation, and (iii) the condition to closing the transaction contemplated by the securities purchase agreement relating to a lease for the Gold Coast location was deleted, because such lease has since been terminated. Amendment to Equity Incentive Plan Increase On April 9, 2021, the board of directors approved an amendment to the Plan to increase the number of shares of common Stock reserved for issuance under the Plan from 555,000 to 1,000,000 shares. Such increase was approved by the Company’s stockholders effective as of May 13, 2021. Repayment of Note On May 10, 2021, the Company repaid the Arvest loan (see Note 10) by transferring principal and accrued interest from the restricted cash account. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of the Company and ACI have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and with the instructions to Article 8 of Regulation S-X. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the three months March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2020. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its consolidated subsidiary, ACI. All significant intercompany balances and transactions have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated. |
Stock Split | Stock Split On July 30, 2020, the Company completed a 4,750-for-1 forward stock split of its outstanding common stock. As a result of this stock split, the Company’s issued and outstanding common stock increased from 1,000 to 4,750,000 shares. Accordingly, all share and per share information has been restated to retroactively show the effect of this stock split. |
Use of Estimates | Use of Estimates The preparation of these unaudited condensed consolidated 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 unaudited condensed consolidated 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 Cash and equivalents include: (1) currency on hand, (2) demand deposits with banks or financial institutions, (3) other kinds of accounts that have the general characteristics of demand deposits, and (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The majority of payments due from financial institutions for the settlement of credit card and debit card transactions process within two business days and are, therefore, classified as cash and cash equivalents. Other payment methods that take more time to settle are classified as receivables. At March 31, 2021, restricted cash includes approximately $3,120,000 pledged to secure a note, $100,000 to secure a vendor letter of credit and $6,874,932 withheld by credit card processors as security for the Company’s customer refund claims and credit card chargebacks. The cash pledged to secure the note payable will be released as the note is repaid, the cash pledged to secure the letter of credit will be released when the vendor offers the Company credit terms, and the cash held by credit card processors will be released at the discretion of the credit card companies. |
Revenue Recognition and Cost of Revenue | Revenue Recognition and Cost of Revenue The Company records revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606. 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. ASC 606 also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer purchase orders, including significant judgments. The Company collects the full sales price from the customer at the time the order is placed, which is recorded as customer deposits on the accompanying consolidated balance sheet. The Company does not incur incremental costs obtaining purchase orders from customers, however, if the Company did, because all the Company’s contracts are less than a year in duration, any contract costs incurred would be expensed rather than capitalized. The revenue that the Company recognizes arises from orders it receives from its customers. The Company’s performance obligations under the customer orders correspond to each sale of merchandise that it makes to customers under the purchase orders; as a result, each purchase order generally contains only one performance obligation based on the merchandise sale to be completed. Control of the delivery transfers to customers when the customer can direct the use of, and obtain substantially all the benefits from, the Company’s products, which generally occurs when the customer assumes the risk of loss. The risk of loss shifts to the customer at different times depending on the method of delivery. The Company delivers products to its customers in three possible ways. The first way is through a shipment of the products through a third-party carrier from the Company’s warehouse to the customer (a “Company Shipment”). The second way is through a shipment of the products through a third-party carrier from a warehouse other than the Company’s warehouse to the customer (a “Drop Shipment”) and the third way is where the Company itself delivers the products to the customer and often also installs the product (a “Local Delivery”). In the case of a Local Delivery, the Company loads the product on to its own truck and delivers and installs the product at the customer’s location. When a product is delivered through a Local Delivery, risk of loss passes to the customer at the time of installation and revenue is recognized upon installation at the customer’s location. In the case of a Company Shipment and a Drop Shipment, the delivery to the customer is made free on board, or FOB, shipping point (whether from the Company’s warehouse or a third party’s warehouse). Therefore, risk of loss and title transfers to the customer once the products are shipped (i.e., leaves the Company’s warehouse or a third-party’s warehouse). After shipment and prior to delivery, the customer is able to redirect the product to a different destination, which demonstrates the customer’s control over the product once shipped. Once the risk of loss has shifted to the customer, the Company has satisfied its performance obligation and the Company recognizes revenue. The Company agrees with customers on the selling price of each transaction. This transaction price is generally based on the agreed upon sales price. In the Company’s contracts with customers, it allocates the entire transaction price to the sales price, which is the basis for the determination of the relative standalone selling price allocated to each performance obligation. Any sales tax, value added tax, and other tax the Company collects concurrently with revenue-producing activities are excluded from revenue. Cost of revenue includes the cost of purchased merchandise plus the cost of shipping merchandise and where applicable installation, net of promotional rebates and other incentives received from vendors. Substantially all the Company’s sales are to individual retail consumers. Shipping and Handling ‒ The Company bills its customers for shipping and handling charges, which are included in net sales for the applicable period, and the corresponding shipping and handling expense is reported in cost of sales. Disaggregated Revenue The Company’s disaggregated revenue by product type is as follows: March 31, 2021 2020 Appliance sales $ 10,273,393 $ 7,802,104 Furniture sales 2,327,834 1,281,836 Other sales 1,096,141 593,238 Total $ 13,697,368 $ 9,677,178 The Company also sells extended warranty contracts. The Company is an agent for the warranty company and earns a commission on the warranty contracts purchased by customers; therefore, the cost of the warranty contracts is netted against warranty revenue in the accompanying consolidated statement of operations. The Company assumes no liability for repairs to products on which it has sold a warranty contract. The Company experiences operational trends which are primarily holidays such as Presidents Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, and Christmas and Black Friday and Cyber Monday. |
Receivables | Receivables Receivables represent rebates receivable due from manufacturers from whom the Company purchases products and amounts due from credit card processors that do not settle within two days. Rebates receivable are stated at the amount that management expects to collect from manufacturers, net of accounts payable amounts due the vendor. Rebates are calculated on product and model sales programs from specific vendors. The rebates are paid at intermittent periods either in cash or through issuance of vendor credit memos, which can be applied against vendor accounts payable. Based on the Company’s assessment of the credit history with its manufacturers, it has concluded that there should be no allowance for uncollectible accounts. The Company historically collects substantially all of its outstanding rebates receivables. Uncollectible balances are expensed in the period it is determined to be uncollectible. |
Merchandise Inventory | Merchandise Inventory Inventory consists of finished products acquired for resale and is valued at the lower-of-cost-or-market with cost determined on an average item basis. The Company periodically evaluates the value of items in inventory and provides write-downs to inventory based on its estimate of market conditions. |
Property and Equipment | Property and Equipment Property and equipment is stated at the historical cost. Maintenance and repairs of property and equipment are charged to operations as incurred. Leasehold improvements are amortized over the lesser of the base term of the lease or estimated life of the leasehold improvements. Depreciation is computed using the straight-line method over estimated useful lives as follows: Category Useful Life Machinery and equipment 5 Office equipment 5 Vehicles 5 |
Goodwill | Goodwill The Company tests its goodwill for impairment at least annually on December 31 and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in the Company’s expected future cash flows; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and the Company’s consolidated financial results. The Company tests goodwill by estimating fair value using a Discounted Cash Flow (“DCF”) model. The key assumptions used in the DCF model to determine the highest and best use of estimated future cash flows include revenue growth rates and profit margins based on internal forecasts, terminal value and an estimate of a market participant’s weighted-average cost of capital used to discount future cash flows to their present value. There were no impairment charges during three months ended March 31, 2021 and 2020. |
Intangible Assets | Intangible Assets As of March 31, 2021 and December 31, 2020, definite-lived intangible assets primarily consisted of tradenames and customer relationships which are being amortized over their estimated useful lives, or 5 years. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives. In applying the acquisition method of accounting, amounts assigned to identifiable assets and liabilities acquired were based on estimated fair values as of the date of acquisition, with the remainder recorded as goodwill. Identifiable intangible assets are initially valued at fair value using generally accepted valuation methods appropriate for the type of intangible asset. Identifiable intangible assets with definite lives are amortized over their estimated useful lives and are reviewed for impairment if indicators of impairment arise. Intangible assets with indefinite lives are tested for impairment within one year of acquisitions or annually as of December 1, and whenever indicators of impairment exist. The fair values of intangible assets are compared against their carrying values, and an impairment loss would be recognized for the amount by which a carrying amount exceeds its fair value. At March 31, 2021 and December 31, 2020, there were no impairments in intangible or the right of use (“ROU”) assets. |
Long-Lived Assets | Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles (including ROU asset) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The test for impairment is required to be performed by management upon triggering events. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. At March 31, 2021 and December 31, 2020, there were no impairments in long-lived assets. |
Lease Liabilities | Lease Liabilities Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term at the lease commencement date. As most of the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The determination of the IBR requires judgment and is primarily based on publicly available information for companies within the same industry and with similar credit profiles. The Company adjusts the rate for the impact of collateralization, the lease term and other specific terms included in each lease arrangement. The IBR is determined at the lease commencement and is subsequently reassessed upon a modification to the lease arrangement. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company reviews the ROU asset for impairment whenever events or changes in circumstances indicate that the carrying amount of the ROU asset may not be recoverable. When such events occur, the Company compares the carrying amount of the ROU asset to the undiscounted expected future cash flows related to the ROU asset. If the comparison indicates that an impairment exists, the amount of the impairment is calculated as the difference between the excess of the carrying amount over the fair value of the ROU asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the ROU asset. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Cash, restricted cash, receivables, inventory, and prepaid expenses approximate fair value, due to their short-term nature. The fair value hierarchy is defined in the following three categories: Level 1: Quoted market 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. |
Customer Deposits | Customer Deposits Customer deposits represent the amount collected from customers when an order is placed. The deposits are transferred to revenue when the order ships to the customer or returned to the Company if the order is subsequently cancelled. |
Income Taxes | Income Taxes Under the Company’s accounting policies, the Company initially recognizes a tax position in its unaudited condensed consolidated financial statements when it becomes more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax positions that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authorities assuming full knowledge of the position and all relevant facts. Although the Company believes its provisions for unrecognized tax positions are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which the Company has reflected in its income tax provisions and accruals. The tax law is subject to varied interpretations, and the Company has taken positions related to certain matters where the law is subject to interpretation. Such differences could have a material impact on the Company’s income tax provisions and operating results in the period(s) in which the Company makes such determination |
tax position, description | tax positions are initially and subsequently measured as the largest amount of tax positions that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authorities assuming full knowledge of the position and all relevant facts. |
Sales Tax Liability | Sales Tax Liability On June 21, 2018, the U.S. Supreme Court issued an opinion in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018) Quill Corp v. North Dakota |
Basic Income (Loss) Per Share | Basic Income (Loss) Per Share Basic income (loss) per share is calculated by dividing the net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive securities. For the three months ended March 31, 2021, the potentially dilutive securities were warrants for the purchase of 455,560 shares of common stock and options for the purchase of 555,000 shares of common stock. The potentially dilutive securities for the three months ended March 31, 2020 were warrants for the purchase of 250,000 shares of common stock. These potentially dilutive securities were excluded from diluted loss per share. |
Reclassifications | Reclassifications Certain accounts have been reclassified to conform with classifications adopted in the period ended March 31, 2021. Such reclassifications had no effect on net earnings or financial position. |
Going Concern Assessment | Going Concern Assessment Management assesses going concern uncertainty in the Company’s unaudited condensed consolidated financial statements to determine whether there is sufficient cash on hand and working capital, including available borrowings on loans, to operate for a period of at least one year from the date the consolidated financial statements are issued or available to be issued, which is referred to as the “look-forward period”, as defined in GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management will consider various scenarios, forecasts, projections, estimates and will make certain key assumptions, including the timing and nature of projected cash expenditures or programs, its ability to delay or curtail expenditures or programs and its ability to raise additional capital, if necessary, among other factors. Based on this assessment, as necessary or applicable, management makes certain assumptions around implementing curtailments or delays in the nature and timing of programs and expenditures to the extent it deems probable those implementations can be achieved and management has the proper authority to execute them within the look-forward period. The Company has generated significant losses since its acquisition and has relied on cash on hand, external bank lines of credit, proceeds from the IPO described below, issuance of third party and related party debt and the issuance of a note to support cashflow from operations. For the three months ended March 31, 2021, the Company incurred operating losses of approximately $3,280,686, cash flows used in operations of $2,807,673 and negative working capital of $19,801,748. Management has prepared estimates of operations for fiscal years 2021 and 2022 and believes that sufficient funds will be generated from operations to fund its operations, and to service its debt obligations for one year from the date of the filing of these unaudited condensed consolidated financial statements in the Company’s Form 10-Q. As described in Note 10 below, the Company received net proceeds of $4,590,000 from the sale of 10% OID senior secured promissory notes due December 19, 2021 and warrants on March 19, 2021. These proceeds will supplement the Company’s cash flow from operations and provide additional liquidity. The impact of COVID-19 on the Company’s business has been considered in these assumptions; however, it is too early to know the full impact of COVID-19 or its timing on a return to more normal operations. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis under which the Company is expected to be able to realize its assets and satisfy its liabilities in the normal course of business. Management believes that based on relevant conditions and events that are known and reasonably knowable that its forecasts, for one year from the date of the filing of these unaudited condensed consolidated financial statements, indicate improved operations and the Company’s ability to continue operations as a going concern. The Company has contingency plans to reduce or defer expenses and cash outlays should operations not improve in the look forward period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments The Company currently believes that all other issued and not yet effective accounting standards are not relevant to the Company’s unaudited condensed consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of disaggregated revenue | March 31, 2021 2020 Appliance sales $ 10,273,393 $ 7,802,104 Furniture sales 2,327,834 1,281,836 Other sales 1,096,141 593,238 Total $ 13,697,368 $ 9,677,178 |
Schedule of property and equipment estimated useful life | Category Useful Life Machinery and equipment 5 Office equipment 5 Vehicles 5 |
Restatement of Financial Stat_2
Restatement of Financial Statements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of restatement of previously issued financial statements of operations | As Filed Adjustments As Restated Gross profit $ 1,566,008 $ - $ 1,566,008 Operating Expenses General and administrative 566,640 873,200 1,439,840 Total Operating Expenses 2,881,141 873,200 3,754,341 LOSS FROM OPERATIONS (1,315,133 ) (873,200 ) (2,188,333 ) Total Other Income (Expense) (404,987 ) (48,700 ) (453,687 ) NET LOSS BEFORE INCOME TAXES (1,720,120 ) (921,900 ) (2,642,020 ) INCOME TAX BENEFIT (EXPENSE) 435,000 - 435,000 NET LOSS $ (1,285,120 ) $ (921,900 ) $ (2,207,020 ) LOSS PER COMMON SHARE – BASIC AND DILUTED $ (0.26 ) $ (0.44 ) WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED 5,000,000 5,000,000 |
Schedule of restatement of previously issued financial statements of equity | Common Stock Additional Accumulated Total Shares Amount Capital Deficit Deficit As Filed: Balance, January 1, 2020 4,750,000 $ 475 $ 1,079,179 $ (2,068,150 ) $ (795,954 ) Net loss - - - (1,285,120 ) (1,285,120 ) Balance, March 31, 2020 4,750,000 $ 475 $ 1,079,179 $ (3,353,270 ) $ (2,081,074 ) As Restated: Balance, January 1, 2020 4,750,000 $ 475 $ 1,079,179 $ (5,157,871 ) $ (4,078,217 ) Net loss - - - (2,207,020 ) (2,207,020 ) Balance, March 31, 2020 4,750,000 $ 475 $ 1,079,179 $ (7,364,891 ) $ (6,285,237 ) |
Schedule of restatement of previously issued financial statements of cash flow | As Filed Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (1,285,120 ) $ (921,900 ) $ (2,207,020 ) Accounts payable and accrued expenses 520,364 921,900 1,442,264 Net cash provided by (used in) operating activities 958,356 - 958,356 CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in investing activities - - - CASH FLOWS FROM FINANCING ACTIVITIES Net cash provided by (used in) financing activities (775,158 ) - (775,158 ) NET CHANGE IN CASH AND RESTRICTED CASH 183,198 - 183,198 CASH AND RESTRICTED CASH, BEGINNING OF PERIOD 64,470 - 64,470 CASH AND RESTRICTED CASH, END OF PERIOD $ 247,668 $ - $ 247,668 |
Receivables (Tables)
Receivables (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of receivables | March 31, December 31, Vendor rebates receivable $ 604,372 $ 1,337,791 Credit cards in process of collection 343,982 660,441 Total receivables $ 948,354 $ 1,998,232 |
Merchandise Inventory (Tables)
Merchandise Inventory (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory balances | March 31, December 31, Appliances $ 5,985,757 $ 5,285,975 Furniture 249,008 194,852 Other 73,719 91,414 Total merchandise inventory 6,308,484 5,572,241 Allowance for inventory obsolescence (425,000 ) (425,000 ) Merchandise inventory, net $ 5,883,484 $ 5,147,241 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, December 31, Equipment $ 69,336 $ 69,336 Warehouse equipment 61,070 61,070 Furniture and fixtures 512 512 Transportation equipment 63,784 63,784 Leasehold improvements 136,931 136,931 Construction in progress 126,116 - Total property and equipment 457,749 331,633 Accumulated depreciation (102,168 ) (85,685 ) Property and equipment, net $ 355,581 $ 245,948 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | March 31, December 31, Customer relationships $ 749,000 $ 749,000 Marketing related - tradename 1,368,000 1,368,000 Total intangible assets 2,117,000 2,117,000 Accumulated amortization (840,912 ) (735,063 ) Intangible assets, net $ 1,276,088 $ 1,381,937 |
Schedule of annual amortization expense | 2021 (remainder of year) $ 317,547 2022 423,396 2023 423,396 2024 111,749 Total $ 1,276,088 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | March 31, December 31, Trade accounts payable $ 5,267,392 $ 5,975,486 Sales tax 5,915,910 5,804,100 Accrued payroll liabilities 510,388 492,573 Accrued interest 10,000 10,000 Accrued liability for sales returns 200,000 200,000 Other accrued liabilities 453,132 219,556 Total accounts payable and accrued expenses $ 12,356,822 $ 12,701,715 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of maturities of debt | For the years ended December 31, 2021 (remainder of year) $ 499,517 2022 685,222 2023 707,826 2024 731,177 2025 496,064 Total $ 3,119,806 Less: Loan costs (92,994 ) Total $ 3,026,812 |
Operating leases (Tables)
Operating leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
ASU 2016-02 Transition [Abstract] | |
Schedule of supplemental balance sheet information related to leases | Operating lease right-of-use assets $ 3,404,861 Lease liabilities, current portion $ 664,043 Lease liabilities, long-term 2,803,203 Total operating lease liabilities $ 3,467,246 Weighted average remaining lease term (months) 57 Weighted average discount rate 5.9 % |
Schedule of maturities of the lease liability | 2021 (remainder of year) $ 604,279 2022 923,945 2023 933,493 2024 538,041 2025 413,168 Thereafter 565,936 Total lease payments $ 3,978,862 Less imputed interest (511,616 ) Total lease liability $ 3,467,246 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of activity relating to stock options and underwriter warrants | Shares Weighted Average Weighted Outstanding at January 1, 2021 555,000 $ 9.00 9 Granted - - - Exercised - - - Forfeited / Cancelled / Expired - - - Outstanding at March 31, 2021 555,000 $ 9.00 8.75 Exercisable at March 31, 2021 65,790 $ 9.00 8.75 Shares Weighted Weighted Outstanding at January 1, 2021 55,560 $ 11.25 4.5 Granted 400,000 12.00 4.0 Exercised - - - Cancelled / Expired - - - Outstanding at March 31, 2021 455,560 $ 11.91 4.1 |
Schedule of stock-based compensation expense of assumptions | Volatility 74.2 % Risk-free interest rate 0.615 % Dividend yield 0.0 % Term 4.0 years |
Organization and Nature of Bu_2
Organization and Nature of Business (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Online sales, percentage | 95.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jul. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Forward stock split, description | the Company completed a 4,750-for-1 forward stock split of its outstanding common stock. As a result of this stock split, the Company’s issued and outstanding common stock increased from 1,000 to 4,750,000 shares. | |||
Restricted cash and cash equivalents, description | restricted cash includes approximately $3,120,000 pledged to secure a note, $100,000 to secure a vendor letter of credit and $6,874,932 withheld by credit card processors as security for the Company’s customer refund claims and credit card chargebacks. | |||
Intangible assets estimated useful lives | 5 years | |||
Accounts payable and accrued expenses | $ 5,915,910 | $ 5,804,100 | ||
Potential sales tax liability | 82,000 | |||
Operating lossses | (3,280,686) | $ (2,188,333) | ||
Cash flows used in operations | (2,807,673) | 958,356 | ||
Negative working capital | $ 19,801,748 | |||
Net proceeds | $ 4,590,000 | |||
Sale of ODI percentage | 10.00% | |||
Warrant [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Potentially dilutive securities (in Shares) | 455,560 | 250,000 | ||
Share-based Payment Arrangement, Option [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Potentially dilutive securities (in Shares) | 555,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of disaggregated revenue - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of disaggregated revenue [Abstract] | ||
Appliance sales | $ 10,273,393 | $ 7,802,104 |
Furniture sales | 2,327,834 | 1,281,836 |
Other sales | 1,096,141 | 593,238 |
Total | $ 13,697,368 | $ 9,677,178 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life | 3 Months Ended |
Mar. 31, 2021 | |
Machinery and Equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life [Line Items] | |
Vehicles | 5 years |
Office Equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life [Line Items] | |
Vehicles | 5 years |
Vehicles [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life [Line Items] | |
Vehicles | 5 years |
Restatement of Financial Stat_3
Restatement of Financial Statements (Details) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Condensed Financial Information Disclosure [Abstract] | |
Accrued liability | $ 921,900 |
Sales taxes and penalties | 873,200 |
Interest expense | $ 48,700 |
Restatement of Financial Stat_4
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of operations - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
As Filed [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Gross profit | $ 1,566,008 | |
Operating Expenses | ||
General and administrative | 566,640 | |
Total Operating Expenses | 2,881,141 | |
LOSS FROM OPERATIONS | (1,315,133) | |
Total Other Income (Expense) | (404,987) | |
NET LOSS BEFORE INCOME TAXES | (1,720,120) | |
INCOME TAX BENEFIT (EXPENSE) | 435,000 | |
NET LOSS | $ (1,285,120) | $ 1,285,120 |
LOSS PER COMMON SHARE – BASIC AND DILUTED (in Dollars per share) | $ (0.26) | |
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED (in Shares) | 5,000,000 | |
Adjustments [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Gross profit | ||
Operating Expenses | ||
General and administrative | 873,200 | |
Total Operating Expenses | 873,200 | |
LOSS FROM OPERATIONS | (873,200) | |
Total Other Income (Expense) | (48,700) | |
NET LOSS BEFORE INCOME TAXES | (921,900) | |
INCOME TAX BENEFIT (EXPENSE) | ||
NET LOSS | (921,900) | |
As Restated [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Gross profit | 1,566,008 | |
Operating Expenses | ||
General and administrative | 1,439,840 | |
Total Operating Expenses | 3,754,341 | |
LOSS FROM OPERATIONS | (2,188,333) | |
Total Other Income (Expense) | (453,687) | |
NET LOSS BEFORE INCOME TAXES | (2,642,020) | |
INCOME TAX BENEFIT (EXPENSE) | 435,000 | |
NET LOSS | $ (2,207,020) | $ 2,207,020 |
LOSS PER COMMON SHARE – BASIC AND DILUTED (in Dollars per share) | $ (0.44) | |
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED (in Shares) | 5,000,000 |
Restatement of Financial Stat_5
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of equity - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
As Filed [Member] | ||
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of equity [Line Items] | ||
Balance | $ (795,954) | |
Net loss | $ 1,285,120 | (1,285,120) |
Balance | $ (2,081,074) | |
As Filed [Member] | Common Stock [Member] | ||
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of equity [Line Items] | ||
Balance (in Shares) | 4,750,000 | |
Balance | $ 475 | |
Net loss | ||
Balance (in Shares) | 4,750,000 | |
Balance | $ 475 | |
As Filed [Member] | Additional Paid-in Capital [Member] | ||
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of equity [Line Items] | ||
Balance | 1,079,179 | |
Net loss | ||
Balance | 1,079,179 | |
As Filed [Member] | Accumulated Deficit [Member] | ||
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of equity [Line Items] | ||
Balance | (2,068,150) | |
Net loss | (1,285,120) | |
Balance | (3,353,270) | |
As Restated [Member] | ||
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of equity [Line Items] | ||
Balance | (4,078,217) | |
Net loss | $ 2,207,020 | (2,207,020) |
Balance | $ (6,285,237) | |
As Restated [Member] | Common Stock [Member] | ||
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of equity [Line Items] | ||
Balance (in Shares) | 4,750,000 | |
Balance | $ 475 | |
Net loss | ||
Balance (in Shares) | 4,750,000 | |
Balance | $ 475 | |
As Restated [Member] | Additional Paid-in Capital [Member] | ||
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of equity [Line Items] | ||
Balance | 1,079,179 | |
Net loss | ||
Balance | 1,079,179 | |
As Restated [Member] | Accumulated Deficit [Member] | ||
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of equity [Line Items] | ||
Balance | (5,157,871) | |
Net loss | (2,207,020) | |
Balance | $ (7,364,891) |
Restatement of Financial Stat_6
Restatement of Financial Statements (Details) - Schedule of restatement of previously issued financial statements of cash flow - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
As Filed [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,285,120) | $ 1,285,120 |
Accounts payable and accrued expenses | 520,364 | |
Net cash provided by (used in) operating activities | 958,356 | |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net cash used in investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net cash provided by (used in) financing activities | (775,158) | |
NET CHANGE IN CASH AND RESTRICTED CASH | 183,198 | |
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD | 64,470 | |
CASH AND RESTRICTED CASH, END OF PERIOD | 247,668 | |
Adjustments [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | (921,900) | |
Accounts payable and accrued expenses | 921,900 | |
Net cash provided by (used in) operating activities | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net cash used in investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net cash provided by (used in) financing activities | ||
NET CHANGE IN CASH AND RESTRICTED CASH | ||
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD | ||
CASH AND RESTRICTED CASH, END OF PERIOD | ||
As Restated [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | (2,207,020) | $ 2,207,020 |
Accounts payable and accrued expenses | 1,442,264 | |
Net cash provided by (used in) operating activities | 958,356 | |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net cash used in investing activities | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net cash provided by (used in) financing activities | (775,158) | |
NET CHANGE IN CASH AND RESTRICTED CASH | 183,198 | |
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD | 64,470 | |
CASH AND RESTRICTED CASH, END OF PERIOD | $ 247,668 |
Receivables (Details) - Schedul
Receivables (Details) - Schedule of receivables - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of receivables [Abstract] | ||
Vendor rebates receivable | $ 604,372 | $ 1,337,791 |
Credit cards in process of collection | 343,982 | 660,441 |
Total receivables | $ 948,354 | $ 1,998,232 |
Merchandise Inventory (Details)
Merchandise Inventory (Details) - Schedule of inventory balances - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory [Line Items] | ||
Total merchandise inventory | $ 6,308,484 | $ 5,572,241 |
Allowance for inventory obsolescence | (425,000) | (425,000) |
Merchandise inventory, net | 5,883,484 | 5,147,241 |
Appliances [Member] | ||
Inventory [Line Items] | ||
Total merchandise inventory | 5,985,757 | 5,285,975 |
Furniture [Member] | ||
Inventory [Line Items] | ||
Total merchandise inventory | 249,008 | 194,852 |
Other [Member] | ||
Inventory [Line Items] | ||
Total merchandise inventory | $ 73,719 | $ 91,414 |
Vendor Deposits (Details)
Vendor Deposits (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Vendor Deposits Disclosure [Abstract] | ||
Vendor deposits | $ 742,926 | $ 547,648 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 16,483 | $ 10,959 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 457,749 | $ 331,633 |
Accumulated depreciation | (102,168) | (85,685) |
Property and equipment, net | 355,581 | 245,948 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 69,336 | 69,336 |
Warehouse equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 61,070 | 61,070 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 512 | 512 |
Transportation Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 63,784 | 63,784 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 136,931 | $ 136,931 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 126,116 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Identifiable intangible assets | $ 2,117,000 | $ 2,117,000 | |
Weighted average estimated useful life | 3 years | ||
Amortization expense | $ 105,849 | $ 80,882 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of intangible assets [Abstract] | ||
Customer relationships | $ 749,000 | $ 749,000 |
Marketing related - tradename | 1,368,000 | 1,368,000 |
Total intangible assets | 2,117,000 | 2,117,000 |
Accumulated amortization | (840,912) | (735,063) |
Intangible assets, net | $ 1,276,088 | $ 1,381,937 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of annual amortization expense | Mar. 31, 2021USD ($) |
Schedule of annual amortization expense [Abstract] | |
2021 (remainder of year) | $ 317,547 |
2022 | 423,396 |
2023 | 423,396 |
2024 | 111,749 |
Total | $ 1,276,088 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of accounts payable and accrued expenses [Abstract] | ||
Trade accounts payable | $ 5,267,392 | $ 5,975,486 |
Sales tax | 5,915,910 | 5,804,100 |
Accrued payroll liabilities | 510,388 | 492,573 |
Accrued interest | 10,000 | 10,000 |
Accrued liability for sales returns | 200,000 | 200,000 |
Other accrued liabilities | 453,132 | 219,556 |
Total accounts payable and accrued expenses | $ 12,356,822 | $ 12,701,715 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 19, 2021 | Mar. 31, 2021 | Aug. 25, 2020 | |
Notes Payable (Details) [Line Items] | |||
Outstanding balance | $ 3,347,763 | ||
Comprised of principal | 5,500,000 | ||
Unamortized loan costs | 2,152,237 | ||
Long-term liability | $ 668,744 | ||
Notes payable maturity date | Dec. 19, 2021 | ||
Long-term liability | $ 3,119,806 | ||
Securities purchase agreement, description | (i) a 10% OID senior secured promissory note in the principal amount of $2,750,000 and (ii) a four-year warrant to purchase 200,000 shares of the Company’s common stock at an exercise price of $12.00, subject to adjustments, which may be exercised on a cashless basis, for a purchase price of $2,500,000 each, or $5,000,000 in the aggregate, the relative fair value of which is $1,340,438 and was recorded as debt discount. | ||
Net proceeds | $ 4,590,000 | ||
Unamortized original issue discount | 870,291 | ||
Unamortized warrant value | $ 1,281,946 | ||
Interest rate | 10.00% | ||
Gross proceeds not less | $ 10,000,000 | ||
Conversion, description | Upon, and during the continuance of, an event of default, the notes are convertible, in whole or in part, at the option of the holder into shares of common stock at a conversion price equal to $12.00, or if lower, 80% of the lowest volume weighted average price for the twenty (20) consecutive trading days prior to the applicable conversion date, but in no event less than $9.00. | ||
Arvest Loan [Member] | |||
Notes Payable (Details) [Line Items] | |||
Term loan principal amount | $ 3,500,000 | ||
Outstanding balance | $ 3,026,812 | ||
Comprised of principal | 3,119,806 | ||
Unamortized loan costs | $ 92,994 | ||
Notes payable maturity date | Aug. 25, 2025 | ||
Loan bears interest rate | 3.25% | ||
Increase by interest rate | 6.00% | ||
Long-term liability | $ 63,353 |
Notes Payable (Details) - Sched
Notes Payable (Details) - Schedule of maturities of debt | Mar. 31, 2021USD ($) |
Schedule of maturities of debt [Abstract] | |
2021 (remainder of year) | $ 499,517 |
2022 | 685,222 |
2023 | 707,826 |
2024 | 731,177 |
2025 | 496,064 |
Total | 3,119,806 |
Less: Loan costs | (92,994) |
Total | $ 3,026,812 |
Operating leases (Details)
Operating leases (Details) - USD ($) | Jan. 13, 2021 | Apr. 05, 2019 | Mar. 31, 2021 |
ASU 2016-02 Transition [Abstract] | |||
Term of lease | 5 years | 5 years | |
Base rent per month | $ 45,000 | ||
Interest rate | 18.00% | ||
Lease agreement, description | base rent of $4.35 per square foot per year with 2.5% annual increases and a three-month abatement, resulting in a base rent during the first year of $20,977 per month, increasing to a base rent during the fifth year of $23,147 per month. The Company must also pay its 29% pro rata portion of the property taxes, operating expenses and insurance costs and is also responsible to pay for the utilities used on the premises. | the Company amended the lease agreement with Westgate 200, LLC that increased the space available to the Company. The amendment increased the Company’s share of the pro rata portion property taxes, operating expenses and insurance costs from 29% to 43.4%. The initial term of the lease is extended by one year to April 30, 2027. Monthly rent payments remain at $20,977 until September 30, 2021 and increase to $31,465 per month until April 30, 2022 and then increases at approximately 2.5% per month every year. | |
Right of use assets | $ 1,954,022 | ||
Right of use liability | 1,954,022 | ||
Accrued rent expense | 62,386 | ||
Rent payments | $ 135,000 |
Operating leases (Details) - Sc
Operating leases (Details) - Schedule of supplemental balance sheet information related to leases - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of supplemental balance sheet information related to leases [Abstract] | ||
Operating lease right-of-use assets | $ 3,404,860 | $ 1,578,235 |
Lease liabilities, current portion | 664,043 | |
Lease liabilities, long-term | 2,803,203 | |
Total operating lease liabilities | $ 3,467,246 | |
Weighted average remaining lease term (months) | 57 months | |
Weighted average discount rate | 5.90% |
Operating leases (Details) - _2
Operating leases (Details) - Schedule of maturities of the lease liability | Mar. 31, 2021USD ($) |
Schedule of maturities of the lease liability [Abstract] | |
2021 (remainder of year) | $ 604,279 |
2022 | 923,945 |
2023 | 933,493 |
2024 | 538,041 |
2025 | 413,168 |
Thereafter | 565,936 |
Total lease payments | 3,978,862 |
Less imputed interest | (511,616) |
Total lease liability | $ 3,467,246 |
Related Parties (Details)
Related Parties (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Parties (Details) [Line Items] | ||
Service fee to manager | $ 62,500 | |
Management fee | $ 62,500 | $ 62,500 |
Management Services Agreement [Member] | ||
Related Parties (Details) [Line Items] | ||
Description of gross income | expected to exceed, 9.5% of 1847 Holdings’ gross income with respect to such fiscal year |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - USD ($) | Aug. 04, 2020 | Mar. 19, 2021 | Jul. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Stockholders' Deficit (Details) [Line Items] | |||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||
Common stock, shares issued | 6,111,200 | 6,111,200 | |||
Common Stock, Shares, Outstanding | 6,111,200 | 6,111,200 | |||
Certificate of incorporation, description | the Company established the 1847 Goedeker Inc. 2020 Equity Incentive Plan (the “Plan”). The Plan was approved by the Company’s board of directors and stockholders on April 21, 2020. The Plan is administered by compensation committee of the board of directors. The Plan permits the grant of restricted stock, stock options and other forms of incentive compensation to the Company’s officers, employees, directors and consultants. As of March 31, 2021, the maximum number of shares of common stock that may be issued pursuant to awards granted under the Plan was 555,000 shares and there were 555,000 shares granted. | ||||
Options issued to purchase of common stock (in Dollars) | $ 555,000 | ||||
Shares issued during the period (in Dollars) | 1,848,056 | ||||
Option expense (in Dollars) | 124,575 | ||||
Remaining compensation expense (in Dollars) | $ 1,324,573 | ||||
Warrant [Member] | |||||
Stockholders' Deficit (Details) [Line Items] | |||||
Certificate of incorporation, description | the Company issued warrants for the purchase of 55,560 shares of common stock to affiliates of the representative in the IPO. These warrants are exercisable at any time and from time to time, in whole or in part, beginning on January 26, 2021 until July 30, 2025, at a per share exercise price equal to $11.25. | the Company issued four-year warrants to purchase an aggregate of 400,000 shares of common stock to two investors at an exercise price of $12.00, subject to adjustments, which may be exercised on a cashless basis (See Note 10). |
Stockholders' Deficit (Detail_2
Stockholders' Deficit (Details) - Schedule of activity relating to stock options and underwriter warrants | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Stockholders' Deficit (Details) - Schedule of activity relating to stock options and underwriter warrants [Line Items] | |
Number of Shares Outstanding beginning balance | shares | 55,560 |
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares | $ 11.25 |
Weighted Average Contractual Term in Years beginning balance | 4 years 6 months |
Number of Shares Outstanding, ending balance | shares | 455,560 |
Weighted Average Exercise Price, Outstanding ending balance | $ / shares | $ 11.91 |
Weighted Average Contractual Term in Years ending balance | 4 years 36 days |
Number of Shares, Granted | shares | 400,000 |
Weighted Average Exercise Price, Granted | $ / shares | $ 12 |
Weighted Average Contractual Term in Years, Granted | 4 years |
Number of Shares, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Contractual Term in Years, Exercised | |
Number of Shares, Forfeited / Cancelled / Expired | shares | |
Weighted Average Exercise Price Forfeited / Cancelled / Expired | $ / shares | |
Weighted Average Contractual Term in Years, Forfeited / Cancelled / Expired | |
Underwriter Warrants [Member] | |
Stockholders' Deficit (Details) - Schedule of activity relating to stock options and underwriter warrants [Line Items] | |
Number of Shares Outstanding beginning balance | shares | 555,000 |
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares | $ 9 |
Weighted Average Contractual Term in Years beginning balance | 9 years |
Number of Shares Outstanding, ending balance | shares | 555,000 |
Weighted Average Exercise Price, Outstanding ending balance | $ / shares | $ 9 |
Weighted Average Contractual Term in Years ending balance | 8 years 9 months |
Number of Shares, Exercisable | shares | 65,790 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 9 |
Weighted Average Contractual Term in Years, Exercisable | 8 years 9 months |
Number of Shares, Granted | shares | |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Contractual Term in Years, Granted | |
Number of Shares, Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Contractual Term in Years, Exercised | |
Number of Shares, Forfeited / Cancelled / Expired | shares | |
Weighted Average Exercise Price Forfeited / Cancelled / Expired | $ / shares | |
Weighted Average Contractual Term in Years, Forfeited / Cancelled / Expired |
Stockholders' Deficit (Detail_3
Stockholders' Deficit (Details) - Schedule of stock-based compensation expense of assumptions | 3 Months Ended |
Mar. 31, 2021 | |
Schedule of stock-based compensation expense of assumptions [Abstract] | |
Volatility | 74.20% |
Risk-free interest rate | 0.615% |
Dividend yield | 0.00% |
Term | 4 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Asset purchase agreement, description | Pursuant to the asset purchase agreement, Goedeker entitled to receive an earn out payment of $200,000 if the EBITDA (as defined in the asset purchase agreement) of the Goedeker Business for the trailing twelve (12) month period from April 5, 2022 is $2,500,000 or greater, and may be entitled to receive a partial earn out payment if the EBITDA of the Goedeker Business is less than $2,500,000 but greater than $1,500,000. |
Subsequent Events (Details)
Subsequent Events (Details) - shares | 1 Months Ended | |
Oct. 20, 2020 | Apr. 09, 2021 | |
Subsequent Events (Details) [Line Items] | ||
Securities purchase agreement, description | the Company entered into a securities purchase agreement, which was amended on December 8, 2020, with ACI and 1 Stop Electronics Center, Inc., Gold Coast Appliances, Inc., Superior Deals Inc., Joe’s Appliances LLC and YF Logistics LLC (collectively, “Appliances Connection”) and the sellers set forth on Exhibit A thereto, pursuant to which ACI agreed to acquire all of the issued and outstanding capital stock or other equity securities of Appliances Connection for an aggregate purchase price of $210,000,000, subject to adjustment, consisting of (i) $168,000,000 in cash, (ii) 2,333,333 shares of the Company’s common stock having a stated value that is equal to $21,000,000, and (iii) a number of shares of the Company’s common stock that is equal to (A) $21,000,000 divided by (B) the average of the closing price of the Company’s common stock (as reported on the NYSE American) for the 20 trading days immediately preceding the 3rd trading day prior to the closing date of the transaction. | |
Minimum [Member] | Subsequent Event [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Stock reserved for issuance under the Plan | 555,000 | |
Maximum [Member] | Subsequent Event [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Stock reserved for issuance under the Plan | 1,000,000 |