Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2021 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | 1847 Goedeker Inc. |
Entity Central Index Key | 0001810140 |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | Amendment No. 1 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Incorporation State Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets | |||
Cash and cash equivalents | $ 1,309,374 | $ 934,729 | $ 471,308 |
Restricted cash | 10,094,932 | 8,977,187 | |
Receivables | 948,354 | 1,998,232 | 1,455,248 |
Vendor deposits | 742,926 | 547,648 | 294,960 |
Merchandise inventory, net | 5,883,484 | 5,147,241 | 1,380,090 |
Prepaid expenses and other current assets | 525,960 | 635,084 | 892,796 |
Total Current Assets | 19,505,030 | 18,240,121 | 4,494,402 |
Property and equipment, net | 355,581 | 245,948 | 185,606 |
Operating lease right-of-use assets, net | 3,404,860 | 1,578,235 | 2,000,755 |
Goodwill | 4,725,689 | 4,725,689 | 4,603,953 |
Intangible assets, net | 1,276,088 | 1,381,937 | 1,878,844 |
Deferred tax assets | 698,303 | ||
Other long-term assets | 45,000 | 45,000 | 45,000 |
TOTAL ASSETS | 29,312,248 | 26,216,930 | 13,906,863 |
Current Liabilities | |||
Accounts payable and accrued expenses | 12,356,822 | 12,701,715 | 5,375,420 |
Customer deposits | 22,269,406 | 21,879,210 | 4,164,296 |
Short term notes payable, net | 3,347,763 | ||
Advances, related party | 137,500 | ||
Lines of credit | 1,250,930 | ||
Current portion of notes payable, related parties | 1,068,075 | ||
Current portion of notes payable, net | 668,744 | 663,339 | 999,200 |
Convertible notes payable | 584,943 | ||
Warrant liability | 122,344 | ||
Current portion of operating lease liabilities | 664,043 | 450,712 | 422,520 |
Total Current Liabilities | 39,306,778 | 35,694,976 | 14,125,228 |
Notes payable, related parties, net of current portion | 2,232,369 | ||
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 | 1,578,235 |
Contingent note payable | 188,170 | 188,170 | 49,248 |
TOTAL LIABILITIES | 44,656,219 | 39,532,699 | 17,985,080 |
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 | 475 |
Additional paid-in capital | 14,874,341 | 13,409,328 | 1,079,179 |
Accumulated deficit | (30,218,923) | (26,725,708) | (5,157,871) |
Total Stockholders' Deficit | (15,343,971) | (13,315,769) | (4,078,217) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 29,312,248 | $ 26,216,930 | $ 13,906,863 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 |
Common stock, shares issued | 6,111,200 | 6,111,200 | 4,750,000 |
Common stock, shares outstanding | 6,111,200 | 6,111,200 | 4,750,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 05, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | |
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 (EXPENSE) | 435,000 | $ (698,303) | |||
NET LOSS | $ (3,493,215) | $ (2,207,020) | |||
LOSS PER COMMON SHARE – BASIC AND DILUTED | $ (0.57) | $ (0.44) | |||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED | 6,111,200 | 5,000,000 | |||
Successor [Member] | |||||
Product sales, net | $ 34,668,112 | 55,133,653 | |||
Cost of goods sold | 28,596,129 | 47,878,541 | |||
Gross profit | 6,071,983 | 7,255,112 | |||
Operating Expenses | |||||
Personnel | 2,909,751 | 6,565,380 | |||
Advertising | 1,996,507 | 4,865,361 | |||
Bank and credit card fees | 870,877 | 1,806,620 | |||
Depreciation and amortization | 271,036 | 549,712 | |||
General and administrative | 4,728,571 | 7,900,566 | |||
Total Operating Expenses | 10,776,742 | 21,687,639 | |||
LOSS FROM OPERATIONS | (4,704,759) | (14,432,527) | |||
Other Income (Expense) | |||||
Interest income | 2,479 | ||||
Financing costs – amortization of debt discount | (520,160) | (762,911) | |||
Adjustment in value of contingency | 32,246 | (138,922) | |||
Interest expense | (785,411) | (870,847) | |||
Loss on extinguishment of debt | (1,756,095) | ||||
Write-off of acquisition receivable | (809,000) | ||||
Change in fair value of warrant liability | 106,900 | (2,127,656) | |||
Other income | 15,010 | 25,945 | |||
Total Other Income (Expense) | (1,151,415) | (6,437,007) | |||
NET LOSS BEFORE INCOME TAXES | (5,856,174) | (20,869,534) | |||
INCOME TAX BENEFIT (EXPENSE) | 698,303 | (698,303) | |||
NET LOSS | $ (5,157,871) | $ (21,567,837) | |||
LOSS PER COMMON SHARE – BASIC AND DILUTED | $ (1.03) | $ (3.95) | |||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED | 5,000,000 | 5,463,603 | |||
Predecessor [Member] | |||||
Product sales, net | $ 12,946,901 | ||||
Cost of goods sold | 11,004,842 | ||||
Gross profit | 1,942,059 | ||||
Operating Expenses | |||||
Personnel | 913,919 | ||||
Advertising | 714,276 | ||||
Bank and credit card fees | 329,247 | ||||
Depreciation and amortization | 9,675 | ||||
General and administrative | 451,214 | ||||
Total Operating Expenses | 2,418,331 | ||||
LOSS FROM OPERATIONS | (476,272) | ||||
Other Income (Expense) | |||||
Interest income | 23,807 | ||||
Financing costs – amortization of debt discount | |||||
Adjustment in value of contingency | |||||
Interest expense | |||||
Loss on extinguishment of debt | |||||
Write-off of acquisition receivable | |||||
Change in fair value of warrant liability | |||||
Other income | 7,200 | ||||
Total Other Income (Expense) | 31,007 | ||||
NET LOSS BEFORE INCOME TAXES | (445,265) | ||||
INCOME TAX BENEFIT (EXPENSE) | |||||
NET LOSS | $ (445,265) | ||||
LOSS PER COMMON SHARE – BASIC AND DILUTED | $ (63.61) | ||||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED | 7,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity Deficit (Unaudited) - USD ($) | Common StockPredecessor | Common StockSuccessor | Common Stock | Additional Paid-in CapitalPredecessor | Additional Paid-in CapitalSuccessor | Additional Paid-in Capital | Accumulated DeficitPredecessor | Accumulated DeficitSuccessor | Accumulated Deficit | Predecessor | Successor | Total |
Beginning Balance at Dec. 31, 2018 | $ 7,000 | $ 707,049 | $ 2,684,628 | $ 3,398,677 | ||||||||
Beginning Balance, Shares at Dec. 31, 2018 | 7,000 | |||||||||||
Net loss | (445,265) | (445,265) | ||||||||||
Ending Balance at Apr. 05, 2019 | $ 7,000 | $ 707,049 | $ 2,239,363 | $ 2,953,412 | ||||||||
Ending Balance, Shares at Apr. 05, 2019 | 7,000 | |||||||||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co. | $ 475 | 786,506 | 786,981 | |||||||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co., Shares | 4,750,000 | |||||||||||
Issuance of warrants in connection with notes payable | 292,673 | 292,673 | ||||||||||
Net loss | (5,157,871) | (5,157,871) | ||||||||||
Ending Balance at Dec. 31, 2019 | $ 475 | $ 475 | 1,079,179 | $ 1,079,179 | (5,157,871) | $ (5,157,871) | (4,078,217) | $ (4,078,217) | ||||
Ending Balance, Shares at Dec. 31, 2019 | 4,750,000 | 4,750,000 | ||||||||||
Net loss | (2,207,020) | (2,207,020) | ||||||||||
Ending Balance at Mar. 31, 2020 | $ 475 | 1,079,179 | (7,364,891) | (6,285,237) | ||||||||
Ending Balance, Shares at Mar. 31, 2020 | 4,750,000 | |||||||||||
Beginning Balance at Dec. 31, 2019 | $ 475 | $ 475 | 1,079,179 | 1,079,179 | (5,157,871) | (5,157,871) | (4,078,217) | (4,078,217) | ||||
Beginning Balance, Shares at Dec. 31, 2019 | 4,750,000 | 4,750,000 | ||||||||||
Issuance of 1847 Holdings warrants in connection with notes payable | 566,711 | 566,711 | ||||||||||
Forgiveness of related party debt | 137,500 | 137,500 | ||||||||||
Issuance of 1847 Holdings shares in connection with conversion of notes payable | 375,000 | 375,000 | ||||||||||
Issuance of common stock for cash | $ 111 | 8,602,055 | 8,602,166 | |||||||||
Issuance of common stock for cash, Shares | 1,111,200 | |||||||||||
Issuance of common stock in connection with exercise of warrant | $ 25 | 2,249,975 | 2,250,000 | |||||||||
Issuance of common stock in connection with exercise of warrant, Shares | 250,000 | |||||||||||
Stock-based compensation expense | 398,908 | 398,908 | ||||||||||
Net loss | (21,567,837) | (21,567,837) | ||||||||||
Ending Balance at Dec. 31, 2020 | $ 611 | $ 611 | $ 13,409,328 | 13,409,328 | $ (26,725,708) | (26,725,708) | $ (13,315,769) | (13,315,769) | ||||
Ending Balance, Shares at Dec. 31, 2020 | 6,111,200 | 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) | ||||||||||
Ending Balance at Mar. 31, 2021 | $ 611 | $ 14,874,341 | $ (30,218,923) | $ (15,343,971) | ||||||||
Ending Balance, Shares at Mar. 31, 2021 | 6,111,200 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 05, 2019 | Dec. 31, 2019 | Dec. 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 finance costs | 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 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 YEAR | 9,911,916 | 64,470 | $ 64,470 | ||
CASH AND RESTRICTED CASH, END OF YEAR | 11,404,306 | 247,668 | $ 64,470 | 9,911,916 | |
Cash, cash equivalents and restricted cash consist of the following: End of year | |||||
Cash and cash equivalents | 1,309,374 | 247,668 | 471,308 | 934,729 | |
Restricted cash | 10,094,932 | 8,977,187 | |||
Cash and cash equivalents and restricted cash total | 11,404,306 | 247,668 | 471,308 | 9,911,916 | |
Cash, cash equivalents and restricted cash consist of the following: Beginning of year | |||||
Cash and cash equivalents | 934,729 | 471,308 | 471,308 | ||
Restricted cash | 8,977,187 | ||||
Cash and cash equivalents and restricted cash total | 9,911,916 | 471,308 | 471,308 | ||
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) | ||||
Successor [Member] | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net loss | (5,157,871) | (21,567,837) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||
Depreciation and amortization | 271,036 | 549,712 | |||
Amortization of finance costs | 599,814 | 681,976 | |||
Loss on extinguishment of debt | 1,756,095 | ||||
Write-off of acquisition receivable | 809,000 | ||||
Adjustment in contingent liability | (32,246) | 138,922 | |||
Stock-based compensation expense | 398,908 | ||||
Change in fair value of warrant liability | (106,900) | 2,127,656 | |||
Non-cash lease expense | 299,245 | 422,520 | |||
Deferred tax assets | (698,303) | 698,303 | |||
Changes in operating assets and liabilities: | |||||
Receivables | (999,066) | (664,720) | |||
Vendor deposits | (294,960) | (252,688) | |||
Merchandise inventory | 471,161 | (3,767,151) | |||
Prepaid expenses and other assets | 167,066 | (551,288) | |||
Accounts payable and accrued expenses | 1,625,064 | 7,337,081 | |||
Customer deposits | 1,855,990 | 17,714,914 | |||
Operating lease liabilities | (299,245) | (422,520) | |||
Net cash provided by (used in) operating activities | (2,299,215) | 5,408,883 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Purchases of property and equipment | (2,200) | (113,147) | |||
Net cash used in investing activities | (2,200) | (113,147) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from initial public offering, net | 8,602,166 | ||||
Proceeds from note payable | 1,500,000 | 642,600 | |||
Payments on notes payable | (357,207) | (2,883,754) | |||
Proceeds from convertible notes payable | 650,000 | ||||
Payments on convertible notes payable | (771,431) | ||||
Net borrowings (payments) on lines of credit | 1,339,430 | (1,339,430) | |||
Cash paid for financing costs | (359,500) | (105,279) | |||
Net cash provided by financing activities | 2,772,723 | 4,144,872 | |||
NET CHANGE IN CASH AND RESTRICTED CASH | 471,308 | 9,440,608 | |||
CASH AND RESTRICTED CASH, BEGINNING OF YEAR | 9,911,916 | 471,308 | 471,308 | ||
CASH AND RESTRICTED CASH, END OF YEAR | 471,308 | 9,911,916 | |||
Cash, cash equivalents and restricted cash consist of the following: End of year | |||||
Cash and cash equivalents | 471,308 | 9,911,916 | |||
Restricted cash | 8,977,187 | ||||
Cash and cash equivalents and restricted cash total | 471,308 | 9,911,916 | |||
Cash, cash equivalents and restricted cash consist of the following: Beginning of year | |||||
Cash and cash equivalents | 9,911,916 | 471,308 | 471,308 | ||
Restricted cash | 8,977,187 | ||||
Cash and cash equivalents and restricted cash total | $ 9,911,916 | $ 471,308 | 471,308 | ||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||
Cash paid for interest | 292,890 | 764,424 | |||
Cash paid for taxes | |||||
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||
Adjustment to fair value of goodwill based on final purchase price allocation | 121,736 | ||||
Operating lease right-of-use asset and liability | 2,300,000 | ||||
Debt discounts on notes payable | 64,286 | ||||
Warrants in 1847 Holdings contributed on notes payable | 229,673 | 566,711 | |||
1847 Holdings common shares contributed on note payable | 137,500 | ||||
Acquisition of Goedeker Television Co. | 4,725,689 | ||||
Conversion of debt through issuance of 1847 Holdings common shares | 375,000 | ||||
Derecognition of related party debt | 137,500 | ||||
Conversion of warrant into common stock | 2,250,000 | ||||
Issuance of note payable to repay Seller note | $ 3,500,000 | ||||
Predecessor [Member] | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net loss | (445,265) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||
Depreciation and amortization | 9,675 | ||||
Amortization of finance costs | |||||
Loss on extinguishment of debt | |||||
Write-off of acquisition receivable | |||||
Adjustment in contingent liability | |||||
Stock-based compensation expense | |||||
Change in fair value of warrant liability | |||||
Non-cash lease expense | |||||
Deferred tax assets | |||||
Changes in operating assets and liabilities: | |||||
Receivables | 1,730,079 | ||||
Vendor deposits | (73,770) | ||||
Merchandise inventory | 595,466 | ||||
Prepaid expenses and other assets | 2,784 | ||||
Accounts payable and accrued expenses | 196,565 | ||||
Customer deposits | (1,404,266) | ||||
Operating lease liabilities | |||||
Net cash provided by (used in) operating activities | 611,268 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Purchases of property and equipment | |||||
Net cash used in investing activities | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from initial public offering, net | |||||
Proceeds from note payable | |||||
Payments on notes payable | |||||
Proceeds from convertible notes payable | |||||
Net borrowings (payments) on lines of credit | |||||
Cash paid for financing costs | |||||
Net cash provided by financing activities | |||||
NET CHANGE IN CASH AND RESTRICTED CASH | 611,268 | ||||
CASH AND RESTRICTED CASH, BEGINNING OF YEAR | 1,525,693 | 2,136,961 | |||
CASH AND RESTRICTED CASH, END OF YEAR | 2,136,961 | ||||
Cash, cash equivalents and restricted cash consist of the following: End of year | |||||
Cash and cash equivalents | 2,136,961 | ||||
Restricted cash | |||||
Cash and cash equivalents and restricted cash total | |||||
Cash, cash equivalents and restricted cash consist of the following: Beginning of year | |||||
Cash and cash equivalents | 1,525,693 | 2,136,961 | |||
Restricted cash | |||||
Cash and cash equivalents and restricted cash total | 1,525,693 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION | |||||
Cash paid for interest | |||||
Cash paid for taxes | |||||
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||
Adjustment to fair value of goodwill based on final purchase price allocation | |||||
Operating lease right-of-use asset and liability | |||||
Debt discounts on notes payable | |||||
Warrants in 1847 Holdings contributed on notes payable | |||||
1847 Holdings common shares contributed on note payable | |||||
Acquisition of Goedeker Television Co. | |||||
Conversion of debt through issuance of 1847 Holdings common shares | |||||
Derecognition of related party debt | |||||
Conversion of warrant into common stock | |||||
Issuance of note payable to repay Seller note |
Organization and Nature of Busi
Organization and Nature of Business | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [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. | 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 | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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. | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The 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 are presented in US dollars. Management has analyzed the impact of the Coronavirus pandemic ("COVID-19") on its consolidated financial statements as of December 31, 2020 and has determined that the changes to its significant judgments and estimates did not have a material impact with respect to goodwill, intangible assets or long-lived assets. Principles of Consolidation The 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. Predecessor and Successor Reporting The acquisition of Goedeker, as described in Note 1, was accounted for under the acquisition method of accounting in accordance with GAAP. For the purpose of financial reporting, Goedeker was deemed to be the predecessor company and the Company is deemed to be the successor company in accordance with the rules and regulations issued by the Securities and Exchange Commission. The assets and liabilities of Goedeker were recorded at their respective fair values as of the acquisition date. Fair value adjustments related to the transaction are reflected in the books of the Company, resulting in assets and liabilities of the Company being recorded at fair value at April 6, 2019. Therefore, the Company's financial information prior to the transaction is not comparable to its financial information subsequent to the transaction. As a result of the impact of pushdown accounting, the consolidated financial statements and certain note presentations separate the Company's presentations into two distinct periods, the period before the consummation of the transaction (labeled "Predecessor") and the period after that date (labeled "Successor"), to indicate the application of a different basis of accounting between the periods presented. Use of Estimates The preparation of 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 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. Restricted cash includes $3,298,529 pledged to secure a note, $100,000 to secure a vendor letter of credit and $5,578,658 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: Successor Predecessor Year Ended Period from Period from Appliance sales $ 40,113,568 $ 28,487,053 $ 9,784,525 Furniture sales 11,800,277 4,405,866 2,456,085 Other sales 3,219,808 1,775,193 706,291 Total $ 55,133,653 $ 34,668,112 $ 12,946,901 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 (Years) 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 the years ended December 31, 2020 and 2019. Intangible Assets As of December 31, 2020 and 2019, 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 December 31, 2020 and 2019, 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 December 31, 2020 and 2019, 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. Derivative Instrument Liability The Company accounts for derivative instruments in accordance with ASC 815, Derivatives and Hedging Income Taxes Under the Company's accounting policies, the Company initially recognizes a tax position in its 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 year ended December 31, 2020, the potentially dilutive securities were warrants for the purchase of 55,560 shares of common stock issued to affiliates of the underwriter in its initial public offering described below and options for the purchase of 555,000 shares of common stock. For the year ended December 31, 2019, the potentially dilutive securities were penny warrants for the purchase of 250,000 shares of common stock, which were included in basic loss per share, but excluded from diluted loss per share. Reclassifications Certain accounts have been reclassified to conform with classifications adopted in the period ended December 31, 2020. Such reclassifications had no effect on net earnings or financial position. Going Concern Assessment Management assesses going concern uncertainty in the Company's 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 year ended December 31, 2020, the Company incurred operating losses of approximately $14.4 million, cash flows from operations of $5.4 million, and negative working capital of $17.5 million. 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 consolidated financial statements in the Company's 10-K. On August 4, 2020, the Company completed an initial public offering of its common stock, pursuant to which the Company sold 1,111,200 shares of its common stock, at a purchase price of $9.00 per share, for total gross proceeds of $10,000,800 (the "IPO"). After deducting the underwriting commission and offering expenses, the Company received net proceeds of $8,602,166. The Company used a portion of the proceeds from the IPO to pay off certain debt as described below. As described in Note 19 below, the Company received net proceeds of $4,590,000 from the sale of 10% OID senior secured promissory note 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 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 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 February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In June 2018, the FASB issued Accounting Standards Update ("ASU") 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, Compensation - Stock Compensation In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities 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 consolidated financial statements. |
Restatement of Financial Statem
Restatement of Financial Statements | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Restatement of Financial Statements [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 | NOTE 3—RESTATEMENT OF FINANCIAL STATEMENTS The Company restated its previously issued financial statements as of and for the year ended December 31, 2019 to reflect the modification of a sales tax liability and purchase accounting adjustments: (1) The Company determined that it should accrue a liability for potential 2019 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 $2,910,200, representing a potential liability for sales taxes and penalties of $2,808,000 and interest expense of $102,200. (2) The Company adjusted the fair value of ownership interests in Holdco that were transferred to seller and the value of liabilities assumed in the April 5, 2019 acquisition (see Note 10) resulting in a $372,063 reduction in Goodwill; a $192,542 reduction in Additional Paid in Capital, and $179,521 reduction in liabilities assumed, which was recognized as a general and administrative expense. The following tables summarize the effect of the restatement on the specific items presented in our historical financial statements included in our previously reported December 31, 2019 financial statements: 1847 GOEDEKER INC. December 31, Adjustments December 31, ASSETS Total Current Assets 4,494,402 - 4,494,402 Goodwill 4,976,016 (2) (372,063 ) 4,603,953 TOTAL ASSETS $ 14,278,926 $ (372,063 ) $ 13,906,863 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable and accrued expenses $ 2,465,220 (1) $ 2,910,200 $ 5,375,420 Total Current Liabilities 11,215,028 2,910,200 14,125,228 TOTAL LIABILITIES 15,074,880 2,910,200 17,985,080 Stockholders' Deficit Additional paid-in capital 1,271,721 (2) (192,542 ) 1,079,179 Accumulated deficit (2,068,150 ) (1) (2,910,200 ) (5,157,871 ) (2) (179,521 ) Total Stockholders' Deficit (795,954 ) (3,282,263 ) (4,078,217 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 14,278,926 $ (372,063 ) $ 13,906,863 1847 GOEDEKER INC. Period from Adjustments Period from Gross profit 6,071,983 - 6,071,983 Operating Expenses General and administrative 1,741,050 (1) 2,808,000 4,728,571 (2) 179,521 Total Operating Expenses 7,789,221 2,987,521 10,776,742 LOSS FROM OPERATIONS (1,717,238 ) (2,987,521 ) (4,704,759 ) Total Other Income (Expense) (1,049,215 ) (102,200 ) (1,151,415 ) NET LOSS BEFORE INCOME TAXES (2,766,453 ) (3,089,721 ) (5,856,174 ) INCOME TAX BENEFIT (EXPENSE) 698,303 - 698,303 NET LOSS $ (2,068,150 ) $ (3,089,721 ) $ (5,157,871 ) LOSS PER COMMON SHARE – BASIC AND DILUTED $ (0.41 ) $ (1.03 ) WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED 5,000,000 5,000,000 1847 GOEDEKER INC. Common Stock Additional Accumulated Total Shares Amount Capital Deficit (Deficit) As Filed: Capital contribution by Holdco for the acquisition of Goedeker Television Co. 4,750,000 475 979,048 - 979,523 Net loss for the period from April 6, 2019 through December 31, 2019 - - - (2,068,150 ) (2,068,150 ) Balance, December 31, 2019 4,750,000 $ 475 $ 1,272,195 $ (2,068,150 ) $ (795,954 ) As Restated: Capital contribution by Holdco for the acquisition of Goedeker Television Co. 4,750,000 475 786,506 - 786,981 Net loss for the period from April 6, 2019 through December 31, 2019 - - - (5,157,871 ) (5,157,871 ) Balance, December 31, 2019 4,750,000 $ 475 $ 1,079,179 $ (5,157,871 ) $ (4,078,217 ) 1847 GOEDEKER INC. Period from Adjustments Period from CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (2,068,150 ) (1) $ (2,910,200 ) $ (5,157,871 ) (2) (179,521 ) Accounts payable and accrued expenses (1,464,657 ) (1) 2,910,200 (2) 179,521 1,625,064 Net cash provided by (used in) operating activities (2,299,215 ) - (2,299,215 ) CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in investing activities (2,200 ) (2,200) CASH FLOWS FROM FINANCING ACTIVITIES Net cash provided by financing activities 2,772,723 - 2,772,723 NET CHANGE IN CASH AND RESTRICTED CASH 471,308 - 471,308 CASH AND RESTRICTED CASH, BEGINNING OF YEAR - - - CASH AND RESTRICTED CASH, END OF YEAR $ 471,308 $ - $ 471,308 |
Receivables
Receivables | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | NOTE 4—RECEIVABLES At December 31, 2020 and 2019, receivables consisted of the following: respectively. December 31, December 31, Vendor rebates receivable $ 1,337,791 $ 1,455,248 Credit cards in process of collection 660,441 - Total receivables $ 1,998,232 $ 1,455,248 |
Merchandise Inventory
Merchandise Inventory | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | NOTE 5—MERCHANDISE INVENTORY At December 31, 2020 and 2019, the inventory balances are composed of: December 31, December 31, Appliances $ 5,285,975 $ 1,538,552 Furniture 194,852 184,755 Other 91,414 81,783 Total merchandise inventory 5,572,241 1,805,090 Allowance for inventory obsolescence (425,000 ) (425,000 ) Merchandise inventory, net $ 5,147,241 $ 1,380,090 |
Vendor Deposits
Vendor Deposits | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Vendor Deposits [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. | 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 December 31, 2020 and 2019 were $547,648 and $294,960, respectively. |
Property and Equipment
Property and Equipment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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. | NOTE 7—PROPERTY AND EQUIPMENT Property and equipment consist of the following at December 31, 2020 and 2019: December 31, December 31, Equipment $ 69,336 $ 7,376 Warehouse equipment 61,070 29,188 Furniture and fixtures 512 512 Transportation equipment 63,784 63,784 Leasehold improvements 136,931 117,626 Total property and equipment 331,633 218,486 Accumulated depreciation (85,685 ) (32,880 ) Property and equipment, net $ 245,948 $ 185,606 Depreciation expense for the year ended December 31, 2020, the period April 6, 2019 to December 31, 2019 and the period January 1, 2019 to April 5, 2019 was approximately $53,000, $33,000 and $10,000, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | NOTE 8—INTANGIBLE ASSETS The following provides a breakdown of identifiable intangible assets as of December 31, 2020 and 2019: December 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 (735,063 ) (238,156 ) Intangible assets, net $ 1,381,937 $ 1,878,844 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 3.3 years. Amortization expense for the year ended December 31, 2020, the period April 6, 2019 to December 31, 2019 and the period January 1, 2019 to April 5, 2019 was $496,907, $238,156 and $-0-, respectively. As of December 31, 2020, the estimated annual amortization expense for each of the next five years is as follows: 2021 $ 423,396 2022 423,396 2023 423,396 2024 111,749 Total $ 1,381,937 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | NOTE 9—ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following is schedule of accounts payable and accrued expenses at December 31, 2020 and 2019: December 31, December 31, Trade accounts payable $ 5,975,486 $ 1,644,216 Sales tax 5,804,100 2,910,200 Accrued payroll liabilities 492,573 192,305 Accrued interest 10,000 253,678 Accrued liability for sales returns 200,000 200,000 Other accrued liabilities 219,556 175,021 Total accounts payable and accrued expenses $ 12,701,715 $ 5,375,420 |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | NOTE 10—BUSINESS COMBINATION On January 18, 2019, the Company entered into an asset purchase agreement with Goedeker and Steve Goedeker and Mike Goedeker (the "Stockholders"), pursuant to which the Company agreed to acquire substantially all of the assets of Goedeker used in its retail appliance and furniture business (the "Goedeker Business"). On April 5, 2019, the Company, Goedeker and the Stockholders entered into an amendment to the asset purchase agreement and closing of the acquisition of substantially all of the assets of Goedeker was completed. The aggregate purchase price, recorded as a capital contribution from the Company's parent company at that time, 1847 Goedeker Holdco Inc. ("Holdco"), was $4,175,373 consisting of: (i) the issuance of a promissory note in the principal amount of $4,100,000 and a deemed fair value of $3,637,898; (ii) up to $600,000 in earn out payments (as described below) with a deemed fair value of $81,494; (iii) a 22.5% ownership interest in Holdco transferred to the Stockholders with a deemed fair value of $786,981, (iv) cash of $478,000, and (v) net of a working capital adjustment of $809,000. The asset purchase agreement provided for an adjustment to the purchase price based on the difference between actual working capital at closing and the seller's preliminary estimate of closing date working capital. In accordance with the asset purchase agreement, an independent CPA firm was retained by the Company and Goedeker to resolve differences in the working capital amounts. The report issued by that CPA firm determined that Goedeker owed the Company $809,000, which Goedeker has not paid. On or about March 23, 2020, the Company submitted a claim for arbitration to the American Arbitration Association relating to Goedeker's failure to pay. The claim alleged, inter alia On June 2, 2020, the Company entered into a settlement agreement with Goedeker, Steve Goedeker, Mike Goedeker and 1847 Holdings LLC, the Company's indirect parent company at such time ("1847 Holdings"). The settlement agreement and the related transaction documents that are exhibits to the settlement agreement were all signed on June 2, 2020 only became effective upon the closing of the IPO on August 4, 2020. Pursuant to the settlement agreement, the parties entered into an amendment and restatement of the 9% subordinated promissory note described below (see Note 13). In addition, the parties agreed that the arbitration action described above would be settled effective upon the closing of the IPO and that each party to such arbitration action would release all claims that it has against the other parties to such action. As part of the settlement of the arbitration action, the Company agreed that the sellers will not have to pay the $809,000 working capital adjustment amount, which resulted in a loss on write-off of acquisition receivable during the year ended December 31, 2020. Goedeker is also entitled to receive the following earn out payments to the extent the Goedeker Business achieves the applicable EBITDA (as defined in the asset purchase agreement) targets: 1. An earn out payment of $200,000 if the EBITDA of the Goedeker Business for the trailing twelve (12) month period from the closing date is $2,500,000 or greater, which target was not met; 2. An earn out payment of $200,000 if the EBITDA of the Goedeker Business for the trailing twelve (12) month period from the first anniversary of closing date is $2,500,000 or greater, which target the Company does not expect to meet; and 3. An earn out payment of $200,000 if the EBITDA of the Goedeker Business for the trailing twelve (12) month period from the second anniversary of the closing date is $2,500,000 or greater. The Company expects to meet this target and adjusted the contingent note payable in the consolidated balance sheet to the present value of the amount due. To the extent the EBITDA of the Goedeker Business for any applicable period is less than $2,500,000 but greater than $1,500,000, the Company must pay a partial earn out payment to Goedeker in an amount equal to the product determined by multiplying (i) the EBITDA Achievement Percentage by (ii) the applicable earn out payment for such period, where the "Achievement Percentage" is the percentage determined by dividing (A) the amount of (i) the EBITDA of the Goedeker Business for the applicable period less (ii) $1,500,000, by (B) $1,000,000. For avoidance of doubt, no partial earn out payments shall be earned or paid to the extent the EBITDA of the Goedeker Business for any applicable period is equal or less than $1,500,000. For the trailing twelve (12) month period from the closing date, EBITDA for the Goedeker Business was ($2,825,000) so Goedeker is not entitled to an earn our payment for that period. To the extent Goedeker is entitled to all or a portion of an earn out payment, the applicable earn out payment(s) (or portion thereof) shall be paid on the date that is three (3) years from the closing date, and shall accrue interest from the date on which it is determined Goedeker is entitled to such earn out payment (or portion thereof) at a rate equal to five percent (5%) per annum, computed on the basis of a 360 day year for the actual number of days elapsed. The Company determined the fair value of the earnout on the date of acquisition was $81,494. Such amount was recorded as a contingent consideration liability within the accounts payable and accrued expense line item on the consolidated balance sheet and is revalued to fair value each reporting period until settled. The year 1 contingent liability of $32,246 was written-off in the year ended December 31, 2019 as the target was not met and the balance of the liability at December 31, 2019 is $49,248. Management reviewed the contingent consideration due at December 31, 2020 and adjusted the balance to the present value of the amount it estimates will be due in April 2022. The fair value of the purchase consideration issued to Goedeker was allocated to the net tangible assets acquired. The Company accounted for the acquisition as the purchase of a business under GAAP under the acquisition method of accounting, and the assets and liabilities acquired were recorded as of the acquisition date, at their respective fair values and consolidated with those of the Company. The fair value of the net liabilities assumed was approximately $550,316. The excess of the aggregate fair value of the net tangible assets has been allocated to goodwill. Provisional goodwill was estimated at $4,603,953 at December 31, 2019 due to the preliminary valuation. During the year ended December 31, 2020, the Company subsequently adjusted the value of goodwill by $121,736 to $4,725,689 based on the finalized purchase price allocation. The table below shows the analysis of the Goedeker asset purchase: Purchase consideration at fair value (as restated): Note payable, net of $462,102 debt discount and $215,500 of capitalized financing costs $ 3,637,898 Cash to seller at closing 478,000 Working capital adjustment (809,000 ) Contingent note payable 81,494 Fair value of ownership interest in Holdco transferred to seller 786,981 Amount of consideration $ 4,175,373 Assets acquired and liabilities assumed at fair value Accounts receivable $ 456,183 Inventories 1,851,251 Other assets 295,863 Property and equipment 216,286 Customer related intangibles 749,000 Marketing related intangibles - tradename 1,368,000 Accounts payable and accrued expenses (3,056,855 ) Customer deposits (2,430,044 ) Net tangible assets acquired (liabilities assumed) $ (550,316 ) Total net assets acquired (liabilities assumed) $ (550,316 ) Consideration paid 4,175,373 Goodwill $ 4,725,689 |
Lines of Credit
Lines of Credit | 12 Months Ended |
Dec. 31, 2020 | |
Lines of Credit [Abstract] | |
LINES OF CREDIT | NOTE 11—LINES OF CREDIT Burnley Capital LLC On April 5, 2019, the Company, as borrower, and Holdco entered into a loan and security agreement with Burnley Capital LLC ("Burnley") for revolving loans in an aggregate principal amount that will not exceed the lesser of (i) the borrowing base (as defined in the loan and security agreement) or (ii) $1,500,000 minus reserves established Burnley at any time in accordance with the loan and security agreement. In connection with the closing of the acquisition of Goedeker on April 5, 2019, the Company borrowed $744,000 under the loan and security agreement and issued a revolving note to Burnley in the principal amount of up to $1,500,000. As of December 31, 2019, the balance of the line of credit was $571,997. On August 4, 2020, the Company used a portion of the proceeds from the IPO to repay the revolving note in full and the loan and security agreement was terminated. The total payoff amount was $118,194, consisting of principal of $32,350, interest of $42 and prepayment, legal, and other fees of $85,802. Northpoint Commercial Finance LLC On June 24, 2019, the Company, as borrower, entered into a loan and security agreement with Northpoint Commercial Finance LLC, which was amended on August 2, 2019, for revolving loans up to an aggregate maximum loan amount of $1,000,000 for the acquisition, financing or refinancing by the Company of inventory at an interest rate of LIBOR plus 7.99%. As of December 31, 2019, the balance of the line of credit was $678,993. The loan and security agreement was terminated on May 18, 2020 and there is no outstanding balance as of December 31, 2020. |
Notes Payable
Notes Payable | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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. | NOTE 12—NOTES PAYABLE AND WARRANT LIABILITY 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 December 31, 2020, the outstanding balance of this loan is $3,185,369 comprised of principal of $3,283,628, net of unamortized loan costs of $98,259. The Company classified $663,339 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 $ 663,339 2022 685,222 2023 707,826 2024 731,177 2025 496,064 Total $ 3,283,628 Less: Loan costs (98,259 ) Total $ 3,185,369 Small Business Community Capital II, L.P. On April 5, 2019, the Company, as borrower, and Holdco entered into a loan and security agreement with Small Business Community Capital II, L.P. ("SBCC") for a term loan in the principal amount of $1,500,000, pursuant to which the Company issued to SBCC a term note in the principal amount of up to $1,500,000 and a ten-year warrant to purchase shares of the most senior capital stock of the Company equal to 5.0% of the outstanding equity securities of the Company on a fully-diluted basis for an aggregate price equal to $100. As of December 31, 2019, the balance of the note was $999,201. On August 4, 2020, the Company used a portion of the proceeds from the IPO to repay the term note in full and the loan and security agreement was terminated. The total payoff amount was $1,122,412 consisting of principal of $1,066,640, interest of $11,773 and prepayment, legal, and other fees of $43,999. The Company classified the warrant as a derivative liability on the balance sheet at June 30, 2020 of $2,250,000 based on the estimated value of the warrant in the IPO. The increase in the value of the warrant from the estimated value of $122,344 at December 31, 2019 resulted in a charge of $2,127,656 during the year ended December 31, 2020. Immediately prior to the closing of the IPO on August 4, 2020, SBCC converted the warrant into 250,000 shares of common stock. |
Notes Payable, Related Parties
Notes Payable, Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Notes Payable, Related Parties [Abstract] | |
NOTES PAYABLE, RELATED PARTIES | NOTE 13—NOTES PAYABLE, RELATED PARTIES As noted in Note 10, a portion of the purchase price for the acquisition was paid by the issuance by the Company to Steve Goedeker, as representative of Goedeker, of a 9% subordinated promissory note in the principal amount of $4,100,000. As of December 31, 2019, the balance of the note was $ 3,300,444. Pursuant to the settlement agreement described above (see Note 10), the parties entered into an amendment and restatement of the note that became effective as of the closing of the IPO on August 4, 2020, pursuant to which (i) the principal amount of the existing note was increased by $250,000, (ii) upon the closing of the IPO, the Company agreed to make all payments of principal and interest due under the note through the date of the closing, and (iii) from and after the closing, the interest rate of the note was increased from 9% to 12%. In accordance with the terms of the amended and restated note, the Company used a portion of the proceeds from the IPO to pay $1,083,842 of the balance of the note representing a $696,204 reduction in the principal balance and interest accrued through August 4, 2020 of $387,638. The Company repaid this note payable with proceeds from the Arvest Loan. In connection with the refinance, the Company recorded a $757,239 loss on extinguishment of debt consisting of a $250,000 forbearance fee, write-off of unamortized loan discount of $338,873, and write-off of unamortized debt costs of $168,366. |
Convertible Promissory Note
Convertible Promissory Note | 12 Months Ended |
Dec. 31, 2020 | |
Convertible Promissory Note [Abstract] | |
CONVERTIBLE PROMISSORY NOTE | NOTE 14—CONVERTIBLE PROMISSORY NOTE On April 5, 2019, 1847 Holdings, Holdco and the Company (collectively, "1847") entered into a securities purchase agreement with Leonite Capital LLC, a Delaware limited liability company ("Leonite"), pursuant to which 1847 issued to Leonite a secured convertible promissory note in the aggregate principal amount of $714,286. As additional consideration for the purchase of the note, (i) 1847 Holdings issued to Leonite 50,000 common shares (valued at $137,500), (ii) 1847 Holdings issued to Leonite a five-year warrant to purchase 200,000 common shares at an exercise price of $1.25 per share (subject to adjustment), which may be exercised on a cashless basis, and (iii) Holdco issued to Leonite shares of common stock equal to a 7.5% non-dilutable interest in Holdco. As of December 31, 2019, the balance of the note was $584,943. As a result of this transaction, Leonite became a related party. On May 11, 2020, 1847 and Leonite entered into a first amendment to secured convertible promissory note, pursuant to which the parties agreed (i) to extend the maturity date of the note to October 5, 2020, (ii) that 1847's failure to repay the note on the original maturity date of April 5, 2020 shall not constitute and event of default under the note and (iii) to increase the principal amount of the note by $207,145, as a forbearance fee. The Company accounted for this transaction as a loss on extinguishment of debt. In connection with the amendment, (i) 1847 Holdings issued to Leonite another five-year warrant to purchase 200,000 common shares at an exercise price of $1.25 per share (subject to adjustment), which may be exercised on a cashless basis and (ii) upon closing of 1847 Holdings' acquisition of Asien's Appliance, Inc., 1847 Holdings' wholly owned subsidiary 1847 Asien Inc. issued to Leonite shares of common stock equal to a 5% interest in 1847 Asien Inc. The Company accounted for the issuance of the 200,000 additional warrants as a $566,711 loss on debt restructuring and an increase in additional paid-in-capital, representing the estimated fair value of the 200,000 additional warrants for a five-year period. 1847 Holdings issued 50,000 common shares valued at $137,500 and a debt-discount related to the warrants valued at $292,673. In the second quarter of 2020, the $137,500 value of the shares was transferred from a liability to 1847 Holdings to additional paid-in-capital. The Company amortized $129,343 of financing costs related to the shares and warrants in the year ended December 31, 2020. Under the note, Leonite had the right at any time at its option to convert all or any part of the outstanding and unpaid principal amount and accrued and unpaid interest of the note into fully paid and non-assessable common shares or any shares of capital stock or other securities of 1847 Holdings into which such common shares may be changed or reclassified. On May 4, 2020, Leonite converted $100,000 of the outstanding balance of the note into 100,000 common shares of 1847 Holdings. The Company accounted for this transaction as a $100,000 reduction in the principal amount of the debt, a $175,000 loss on extinguishment of debt, and a $275,000 increase in additional paid-in-capital representing the fair value of the 1847 Holdings common shares on the conversion date. On July 24, 2020, Leonite converted $50,000 of the outstanding balance of the note into 50,000 common shares of 1847 Holdings. The Company accounted for this transaction as a $50,000 reduction in the principal amount of the debt, a $50,000 loss on extinguishment of debt, and a $100,000 increase in additional paid-in-capital representing the fair value of the 1847 Holdings common shares on the conversion date. As a result of the activity on this note, $948,856 was recorded as loss on extinguishment of debt for the year ended December 31, 2020. On August 4, 2020, the Company used a portion of the proceeds from the IPO to repay the note in full. The total payoff amount was $780,653, consisting of principal of $771,431 and interest of $9,222. On September 2, 2020, 1847 Holdings and Leonite entered into an amendment to the warrant issued on April 5, 2019, pursuant to which the warrant was amended to allow for the exercise of the warrant for 180,000 common shares of 1847 Holdings in exchange for Leonite's surrender of the remaining 20,000 common shares underlying that warrant, as well as all 200,000 common shares underlying the second warrant issued to Leonite on May 11, 2020. On September 18, 2020, Leonite exercised the warrant in accordance with the foregoing for 180,000 common shares of 1847 Holdings. As a result, both warrants have terminated. |
Operating Lease
Operating Lease | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
OPERATING LEASE | 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 | NOTE 15—OPERATING LEASE 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, including if: (i) the Company shall fail to pay rent within five (5) days after the due date; (ii) any insurance required to be maintained by the Company pursuant to the lease shall be canceled, terminated, expire, reduced, or materially changed; (iii) the Company shall fail to comply with any term, provision, or covenant of the lease and shall not begin and pursue with reasonable diligence the cure of such failure within fifteen (15) days after written notice thereof to the Company; (iv) the Company shall become insolvent, make an assignment for the benefit of creditors, or file a petition under any section or chapter of the Bankruptcy Code, or under any similar law or statute of the United States of America or any State thereof; or (v) a receiver or trustee shall be appointed for the leased premises or for all or substantially all of the assets of the Company. During the year ended December 31, 2020 and the period April 6 to December 31, 2019, the Company paid and expensed rent payments of $540,000 and $397,500, respectively. At December 31, 2019, the operating lease right of use asset was $2,000,755. Supplemental balance sheet information related to lease at December 31, 2020 was as follows: Operating lease right-of-use asset $ 1,578,235 Lease liability, current portion $ 450,712 Lease liability, long-term 1,127,523 Total operating lease liability $ 1,578,235 Weighted average remaining lease term (months) 39 Weighted average discount rate 6.5 % Maturities of the lease liability for each of the next five years is as follows: 2021 $ 540,000 2022 540,000 2023 540,000 2024 135,000 Total lease payments $ 1,755,000 Less imputed interest (176,765 ) Total lease liability $ 1,578,235 |
Related Parties
Related Parties | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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. | NOTE 16—RELATED PARTIES Offsetting Management Services Agreement 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 years ended December 31, 2020 and 2019. The Company expensed $250,000 and $183,790 in management fees for the years ended December 31, 2020 and 2019, respectively. Other Transactions See Note 14 for a description of the securities purchase agreement and secured convertible promissory note that the Company entered into with 1847 Holdings, Holdco and Leonite, as well as the related shares and warrants issued by 1847 Holdings, the Company's indirect parent company at such time. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Equity [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 | NOTE 17—STOCKHOLDERS' DEFICIT As of December 31, 2020, the Company was authorized to issue 200,000,000 $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 December 31, 2020 and 2019, the Company had 6,111,200 and 4,750,000 shares of common stock issued and outstanding, respectively. Each share entitles the holder thereof to one vote per share on all matters coming before the stockholders of the Company for a vote. Upon the Company's inception on January 10, 2019, the Company issued shares of common stock for a purchase price of $1.00. On August 4, 2020, the Company sold 1,111,200 shares of common stock for total gross proceeds of $10,000,800. After deducting the underwriting commission and expenses, the Company received net proceeds of $8,602,166. On August 4, 2020, the Company issued 250,000 shares of common stock to SBCC upon conversion of its warrant (see Note 12). Equity Incentive Plan Effective as of July 30, 2020, the Company established the 1847 Goedeker Inc. 2020 Equity Incentive Plan ("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. The maximum number of shares of common stock that may be issued pursuant to awards granted under the Plan is 555,000 shares. As of December 31, 2020, there were 555,000 shares granted and no shares available for grant. 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 $398,908 and for the year ended December 31, 2020. The remaining compensation expense of $1,449,148 will be recognized over the remaining vesting periods. The following table presents activity relating to stock options for the year ended December 31, 2020: Shares Weighted Weighted Outstanding at December 31, 2019 - $ - - Granted 555,000 9.00 10 Exercised - - - Forfeited / Cancelled / Expired - - - Outstanding at December 31, 2020 555,000 $ 9.00 9 Exercisable at December 31, 2020 65,790 $ 9.00 9 As of December 31, 2020, 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 Volatility 46.6 % Risk-free interest rate 0.47 % Dividend yield 0.0 % Expected term 6.25 Years The following table sets forth stock-based compensation expense for the year ended December 31, 2020 and the four succeeding years: Year Ended December 31, 2020 $ 398,908 2021 483,185 2022 462,024 2023 367,198 2024 136,741 2025 - Total stock-based compensation $ 1,848,056 Warrants On August 4, 2020, the Company issued . The Underwriter Warrants are exercisable at any time and from time to time, in whole or in part, January 26, 2021 at a per share exercise price equal to $11.25. On April 5, 2019, the Company issued to SBCC a ten-year warrant to purchase shares of the most senior capital stock of the Company equal to 5.0% of the outstanding equity securities of the Company on a fully-diluted basis for an aggregate price equal to $100. SBCC exercised this warrant for the purchase of 250,000 shares of common stock on August 4, 2020. The following table presents activity relating to the Underwriter Warrants for the year ended December 31, 2020: Shares Weighted Weighted Outstanding at December 31, 2019 - $ - - Granted 55,560 11.25 5 Exercised - - - Cancelled / Expired - - - Outstanding at December 31, 2020 55,560 $ 11.25 4.5 Exercisable at December 31, 2020 -0- $ 11.25 4.5 The Company recognizes stock issuance expense for the Underwriter Warrants on a straight-line basis over the vesting period of the Underwriter Warrants. The following assumptions were used to calculate stock issuance expense for the year ended December 31, 2020: Volatility 46.5 % Risk-free interest rate 0.47 % Dividend yield 0.0 % Term 4.5 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. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 18—INCOME TAXES As of December 31, 2020 and 2019, the Company had net operating loss carry forwards of approximately $15,002,557 and $1,593,680, respectively, that may be available to reduce future years' taxable income indefinitely. Future tax benefits which may arise as a result of these losses have not been recognized in these consolidated financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. The net change in the valuation allowance resulted in an increase of $4,377,815 and $709,582 for the years ended December 31, 2020 and 2019, respectively. The provision for Federal and state income tax consists of the following. The cumulative tax effect at the expected rate of 25.7% and 25.7% of significant items comprising the Company's net deferred tax amount is as follows. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards incurred prior to 2018 for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years. The components for the provision of income taxes include: December 31, December 31, Current Federal and State $ - $ - Deferred Federal and State 698,303 (698,303 ) Total provision (benefit) for income taxes $ 698,303 $ (698,303 ) A reconciliation of the statutory US Federal income tax rate to the Company's effective income tax rate is as follows: December 31, December 31, Federal tax $ (4,382,602 ) $ (1,229,797 ) State tax, net of Federal benefit (891,129 ) (250,059 ) Change in warrant value 537,535 - Write-off of acquisition and other receivables 238,540 - Other 108,439 71,971 Valuation allowance 5,087,396 709,582 Total income tax provision (benefit) $ 698,303 $ (698,303 ) Effective tax rate (3.3 )% 11.92 % Deferred income taxes reflect the net tax effect of temporary differences between amounts recorded for financial reporting purposes and amounts used for tax purposes. The major components of deferred tax assets and liabilities are as follows: December 31, December 31, Deferred tax assets Inventory $ 107,398 $ 107,398 Accrued expenses 1,589,889 792,845 Interest limitation 319,698 191,886 Other 6,597 - Lease liability 398,820 505,591 Loss carryforward 3,791,146 339,287 Valuation allowance (5,796,978 ) (709,582 ) Total deferred tax assets $ 416,595 $ 1,227,425 Deferred tax liabilities Other - (94 ) Right of use assets (398,820 ) (505,591 ) Intangibles $ (17,775 ) $ (23,437 ) Total deferred tax liabilities $ (416,595 ) $ (529,122 ) Total net deferred income tax assets (liabilities) $ - $ 698,303 The Company accrues interest and penalties related to unrecognized tax benefits. The Company does not believe it has any unrecognized tax benefits for December 31, 2020 and 2019 that would have a material impact on the financial statements. The Company's income tax returns are open to examination by the Internal Revenue Service and various State jurisdictions. December 31, December 31, Net deferred tax asset (liability) $ 5,796,978 $ 1,407,885 Valuation allowance $ (5,796,978 ) $ (709,852 ) |
Subsequent Events
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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. | NOTE 19—SUBSEQUENT EVENTS In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2020 to the date these consolidated financial statements were issued and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, except as set forth below. Lease Agreement 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 $20,976.79 per month, increasing to a base rent during the fifth year of $23,146.80 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. In the event of late payment, interest shall accrue on the unpaid amount at the rate equal to the greater of (i) two (2) percentage points in excess of the prime lending rate as established by U.S. Bank, N.A., or (ii) the default rate applicable to the first priority mortgage in effect at the time such default interest rate is imposed. The lease contains customary events of default, including (i) if the Company shall fail to pay rent within five (5) days after the due date, (ii) if the Company shall fail to observe or perform any other terms, covenants, conditions or provisions under the lease and fail to cure such default within thirty (30) days after written notice to the Company, (iii) if the Company fails to occupy all or any material portion of the lease premises for more than ninety (90) consecutive days, for reasons other than force majeure, and fails to pay all costs incurred by the landlord as a result of such failure to occupy, and other customary representations, warranties and covenants. Securities Purchase Agreement On March 19, 2021, the Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with two institutional investors (each, a "Purchaser" and together, the "Purchasers"), pursuant to which the Company issued to each Purchaser (i) a 10% OID senior secured promissory note in the principal amount of $2,750,000 (together, the "Notes") 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 (together, the "Warrants"), for a purchase price of $2,500,000 each, or $5,000,000 in the aggregate. After deducting a placement fee and other expenses, the Company received net proceeds of $4,590,000. 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 set forth in the Notes. Notwithstanding the foregoing, the Company shall not effect any conversion of a Note, and a holder shall not have the right to convert any principal and/or interest of a Note, to the extent that after giving effect to the conversion the holder (together with the holder's affiliates and any persons acting as a group together with the holder or any of the holder's affiliates) would beneficially own over 4.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the Note. The holder may, upon not less than 61 days' prior notice to the Company, increase or decrease such limitation, provided that such limitation in no event exceeds 9.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the Note. The Warrants also contain this beneficial ownership limitation. The Purchase Agreement contains customary representations, warranties and covenants for a transaction of this type. Pursuant to the Purchase Agreement, the Purchasers were granted piggy-back registration rights with respect to the shares issuable upon conversion of the Notes and exercise of the Warrants. The Company also agreed that, until the date that no Purchasers own any securities, the Company will timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act. In addition, the Company agreed that, so long as any of the Notes remain outstanding, neither the Company, nor any subsidiary of the Company, shall, without each Purchaser's written consent and subject to certain exceptions set forth in the Purchase Agreement: ● sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business; ● incur, create, assume or suffer to exist any lien on any of its property or assets, except for certain liens set forth in the Purchase Agreement; ● incur or suffer to exist or guarantee any indebtedness that is senior to or pari passu ● pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock, other than dividends on shares of common stock solely in the form of additional shares of common stock, or directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock; ● redeem, repurchase or otherwise acquire in any one transaction or series of related transactions any shares of capital stock of the Company or any warrants, rights or options to purchase or acquire any such shares, or repay any pari passu ● lend money, give credit, make advances to or enter into any transaction with any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Company, except loans, credits or advances (i) in existence or committed on the closing date and which the Company has informed each Purchaser in writing prior to the closing date, (ii) in regard to transactions with unaffiliated third parties, made in the ordinary course of business, or (iii) in regard to transactions with unaffiliated third parties, not in excess of $50,000; or ● repay any affiliate (as defined in Rule 144) of the Company in connection with any indebtedness or accrued amounts owed to any such party. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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. | Basis of Presentation The 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 are presented in US dollars. Management has analyzed the impact of the Coronavirus pandemic ("COVID-19") on its consolidated financial statements as of December 31, 2020 and has determined that the changes to its significant judgments and estimates did not have a material impact with respect to goodwill, intangible assets or long-lived assets. |
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. | Principles of Consolidation The 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. | 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. |
Predecessor and Successor Reporting | Predecessor and Successor Reporting The acquisition of Goedeker, as described in Note 1, was accounted for under the acquisition method of accounting in accordance with GAAP. For the purpose of financial reporting, Goedeker was deemed to be the predecessor company and the Company is deemed to be the successor company in accordance with the rules and regulations issued by the Securities and Exchange Commission. The assets and liabilities of Goedeker were recorded at their respective fair values as of the acquisition date. Fair value adjustments related to the transaction are reflected in the books of the Company, resulting in assets and liabilities of the Company being recorded at fair value at April 6, 2019. Therefore, the Company's financial information prior to the transaction is not comparable to its financial information subsequent to the transaction. As a result of the impact of pushdown accounting, the consolidated financial statements and certain note presentations separate the Company's presentations into two distinct periods, the period before the consummation of the transaction (labeled "Predecessor") and the period after that date (labeled "Successor"), to indicate the application of a different basis of accounting between the periods presented. | |
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. | Use of Estimates The preparation of 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 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. | 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. Restricted cash includes $3,298,529 pledged to secure a note, $100,000 to secure a vendor letter of credit and $5,578,658 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. | 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: Successor Predecessor Year Ended Period from Period from Appliance sales $ 40,113,568 $ 28,487,053 $ 9,784,525 Furniture sales 11,800,277 4,405,866 2,456,085 Other sales 3,219,808 1,775,193 706,291 Total $ 55,133,653 $ 34,668,112 $ 12,946,901 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. | 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. | 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 | 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 (Years) 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. | 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 the years ended December 31, 2020 and 2019. |
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. | Intangible Assets As of December 31, 2020 and 2019, 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 December 31, 2020 and 2019, 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. | 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 December 31, 2020 and 2019, 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. | 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. | 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. | 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. |
Derivative Instrument Liability | Derivative Instrument Liability The Company accounts for derivative instruments in accordance with ASC 815, Derivatives and Hedging | |
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. | Income Taxes Under the Company's accounting policies, the Company initially recognizes a tax position in its 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 | 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 | 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. | 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 year ended December 31, 2020, the potentially dilutive securities were warrants for the purchase of 55,560 shares of common stock issued to affiliates of the underwriter in its initial public offering described below and options for the purchase of 555,000 shares of common stock. For the year ended December 31, 2019, the potentially dilutive securities were penny warrants for the purchase of 250,000 shares of common stock, which were included in basic loss per share, but 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. | Reclassifications Certain accounts have been reclassified to conform with classifications adopted in the period ended December 31, 2020. 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. | Going Concern Assessment Management assesses going concern uncertainty in the Company's 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 year ended December 31, 2020, the Company incurred operating losses of approximately $14.4 million, cash flows from operations of $5.4 million, and negative working capital of $17.5 million. 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 consolidated financial statements in the Company's 10-K. On August 4, 2020, the Company completed an initial public offering of its common stock, pursuant to which the Company sold 1,111,200 shares of its common stock, at a purchase price of $9.00 per share, for total gross proceeds of $10,000,800 (the "IPO"). After deducting the underwriting commission and offering expenses, the Company received net proceeds of $8,602,166. The Company used a portion of the proceeds from the IPO to pay off certain debt as described below. As described in Note 19 below, the Company received net proceeds of $4,590,000 from the sale of 10% OID senior secured promissory note 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 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 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. | Recent Accounting Pronouncements Recently Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In June 2018, the FASB issued Accounting Standards Update ("ASU") 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, Compensation - Stock Compensation In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities 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 consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | Successor Predecessor Year Ended Period from Period from Appliance sales $ 40,113,568 $ 28,487,053 $ 9,784,525 Furniture sales 11,800,277 4,405,866 2,456,085 Other sales 3,219,808 1,775,193 706,291 Total $ 55,133,653 $ 34,668,112 $ 12,946,901 |
Schedule of property and equipment useful lives | Category Useful Life Machinery and equipment 5 Office equipment 5 Vehicles 5 | Category Useful Life (Years) Machinery and equipment 5 Office equipment 5 Vehicles 5 |
Restatement of Financial Stat_2
Restatement of Financial Statements (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Restatement of Financial Statements [Abstract] | ||
Schedule of restatement of previously issued financial statements | (1) The Company determined that it should accrue a liability for potential 2019 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 $2,910,200, representing a potential liability for sales taxes and penalties of $2,808,000 and interest expense of $102,200. (2) The Company adjusted the fair value of ownership interests in Holdco that were transferred to seller and the value of liabilities assumed in the April 5, 2019 acquisition (see Note 10) resulting in a $372,063 reduction in Goodwill; a $192,542 reduction in Additional Paid in Capital, and $179,521 reduction in liabilities assumed, which was recognized as a general and administrative expense. 1847 GOEDEKER INC. December 31, Adjustments December 31, ASSETS Total Current Assets 4,494,402 - 4,494,402 Goodwill 4,976,016 (2) (372,063 ) 4,603,953 TOTAL ASSETS $ 14,278,926 $ (372,063 ) $ 13,906,863 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable and accrued expenses $ 2,465,220 (1) $ 2,910,200 $ 5,375,420 Total Current Liabilities 11,215,028 2,910,200 14,125,228 TOTAL LIABILITIES 15,074,880 2,910,200 17,985,080 Stockholders' Deficit Additional paid-in capital 1,271,721 (2) (192,542 ) 1,079,179 Accumulated deficit (2,068,150 ) (1) (2,910,200 ) (5,157,871 ) (2) (179,521 ) Total Stockholders' Deficit (795,954 ) (3,282,263 ) (4,078,217 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 14,278,926 $ (372,063 ) $ 13,906,863 1847 GOEDEKER INC. Period from Adjustments Period from Gross profit 6,071,983 - 6,071,983 Operating Expenses General and administrative 1,741,050 (1) 2,808,000 4,728,571 (2) 179,521 Total Operating Expenses 7,789,221 2,987,521 10,776,742 LOSS FROM OPERATIONS (1,717,238 ) (2,987,521 ) (4,704,759 ) Total Other Income (Expense) (1,049,215 ) (102,200 ) (1,151,415 ) NET LOSS BEFORE INCOME TAXES (2,766,453 ) (3,089,721 ) (5,856,174 ) INCOME TAX BENEFIT (EXPENSE) 698,303 - 698,303 NET LOSS $ (2,068,150 ) $ (3,089,721 ) $ (5,157,871 ) LOSS PER COMMON SHARE – BASIC AND DILUTED $ (0.41 ) $ (1.03 ) WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED 5,000,000 5,000,000 1847 GOEDEKER INC. Common Stock Additional Accumulated Total Shares Amount Capital Deficit (Deficit) As Filed: Capital contribution by Holdco for the acquisition of Goedeker Television Co. 4,750,000 475 979,048 - 979,523 Net loss for the period from April 6, 2019 through December 31, 2019 - - - (2,068,150 ) (2,068,150 ) Balance, December 31, 2019 4,750,000 $ 475 $ 1,272,195 $ (2,068,150 ) $ (795,954 ) As Restated: Capital contribution by Holdco for the acquisition of Goedeker Television Co. 4,750,000 475 786,506 - 786,981 Net loss for the period from April 6, 2019 through December 31, 2019 - - - (5,157,871 ) (5,157,871 ) Balance, December 31, 2019 4,750,000 $ 475 $ 1,079,179 $ (5,157,871 ) $ (4,078,217 ) 1847 GOEDEKER INC. Period from Adjustments Period from CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (2,068,150 ) (1) $ (2,910,200 ) $ (5,157,871 ) (2) (179,521 ) Accounts payable and accrued expenses (1,464,657 ) (1) 2,910,200 (2) 179,521 1,625,064 Net cash provided by (used in) operating activities (2,299,215 ) - (2,299,215 ) CASH FLOWS FROM INVESTING ACTIVITIES Net cash used in investing activities (2,200 ) (2,200) CASH FLOWS FROM FINANCING ACTIVITIES Net cash provided by financing activities 2,772,723 - 2,772,723 NET CHANGE IN CASH AND RESTRICTED CASH 471,308 - 471,308 CASH AND RESTRICTED CASH, BEGINNING OF YEAR - - - CASH AND RESTRICTED CASH, END OF YEAR $ 471,308 $ - $ 471,308 | |
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 | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | December 31, December 31, Vendor rebates receivable $ 1,337,791 $ 1,455,248 Credit cards in process of collection 660,441 - Total receivables $ 1,998,232 $ 1,455,248 |
Merchandise Inventory (Tables)
Merchandise Inventory (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Schedule of inventory | 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 | December 31, December 31, Appliances $ 5,285,975 $ 1,538,552 Furniture 194,852 184,755 Other 91,414 81,783 Total merchandise inventory 5,572,241 1,805,090 Allowance for inventory obsolescence (425,000 ) (425,000 ) Merchandise inventory, net $ 5,147,241 $ 1,380,090 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | December 31, December 31, Equipment $ 69,336 $ 7,376 Warehouse equipment 61,070 29,188 Furniture and fixtures 512 512 Transportation equipment 63,784 63,784 Leasehold improvements 136,931 117,626 Total property and equipment 331,633 218,486 Accumulated depreciation (85,685 ) (32,880 ) Property and equipment, net $ 245,948 $ 185,606 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | December 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 (735,063 ) (238,156 ) Intangible assets, net $ 1,381,937 $ 1,878,844 |
Schedule of annual amortization expense | 2021 (remainder of year) $ 317,547 2022 423,396 2023 423,396 2024 111,749 Total $ 1,276,088 | 2021 $ 423,396 2022 423,396 2023 423,396 2024 111,749 Total $ 1,381,937 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | December 31, December 31, Trade accounts payable $ 5,975,486 $ 1,644,216 Sales tax 5,804,100 2,910,200 Accrued payroll liabilities 492,573 192,305 Accrued interest 10,000 253,678 Accrued liability for sales returns 200,000 200,000 Other accrued liabilities 219,556 175,021 Total accounts payable and accrued expenses $ 12,701,715 $ 5,375,420 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of preliminary analysis for the Goedeker asset purchase | Purchase consideration at fair value (as restated): Note payable, net of $462,102 debt discount and $215,500 of capitalized financing costs $ 3,637,898 Cash to seller at closing 478,000 Working capital adjustment (809,000 ) Contingent note payable 81,494 Fair value of ownership interest in Holdco transferred to seller 786,981 Amount of consideration $ 4,175,373 Assets acquired and liabilities assumed at fair value Accounts receivable $ 456,183 Inventories 1,851,251 Other assets 295,863 Property and equipment 216,286 Customer related intangibles 749,000 Marketing related intangibles - tradename 1,368,000 Accounts payable and accrued expenses (3,056,855 ) Customer deposits (2,430,044 ) Net tangible assets acquired (liabilities assumed) $ (550,316 ) Total net assets acquired (liabilities assumed) $ (550,316 ) Consideration paid 4,175,373 Goodwill $ 4,725,689 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
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 | For the years ended December 31, 2021 $ 663,339 2022 685,222 2023 707,826 2024 731,177 2025 496,064 Total $ 3,283,628 Less: Loan costs (98,259 ) Total $ 3,185,369 |
Operating Lease (Tables)
Operating Lease (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Leases [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 % | Operating lease right-of-use asset $ 1,578,235 Lease liability, current portion $ 450,712 Lease liability, long-term 1,127,523 Total operating lease liability $ 1,578,235 Weighted average remaining lease term (months) 39 Weighted average discount rate 6.5 % |
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 | 2021 $ 540,000 2022 540,000 2023 540,000 2024 135,000 Total lease payments $ 1,755,000 Less imputed interest (176,765 ) Total lease liability $ 1,578,235 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Equity [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 | Shares Weighted Weighted Outstanding at December 31, 2019 - $ - - Granted 555,000 9.00 10 Exercised - - - Forfeited / Cancelled / Expired - - - Outstanding at December 31, 2020 555,000 $ 9.00 9 Exercisable at December 31, 2020 65,790 $ 9.00 9 Shares Weighted Weighted Outstanding at December 31, 2019 - $ - - Granted 55,560 11.25 5 Exercised - - - Cancelled / Expired - - - Outstanding at December 31, 2020 55,560 $ 11.25 4.5 Exercisable at December 31, 2020 -0- $ 11.25 4.5 |
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 | Volatility 46.6 % Risk-free interest rate 0.47 % Dividend yield 0.0 % Expected term 6.25 Years Volatility 46.5 % Risk-free interest rate 0.47 % Dividend yield 0.0 % Term 4.5 years |
Schedule of stock-based compensation expense | Year Ended December 31, 2020 $ 398,908 2021 483,185 2022 462,024 2023 367,198 2024 136,741 2025 - Total stock-based compensation $ 1,848,056 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | December 31, December 31, Current Federal and State $ - $ - Deferred Federal and State 698,303 (698,303 ) Total provision (benefit) for income taxes $ 698,303 $ (698,303 ) |
Schedule of reconciliation of effective income tax rate | December 31, December 31, Federal tax $ (4,382,602 ) $ (1,229,797 ) State tax, net of Federal benefit (891,129 ) (250,059 ) Change in warrant value 537,535 - Write-off of acquisition and other receivables 238,540 - Other 108,439 71,971 Valuation allowance 5,087,396 709,582 Total income tax provision (benefit) $ 698,303 $ (698,303 ) Effective tax rate (3.3 )% 11.92 % |
Schedule of major components of deferred tax assets and liabilities | December 31, December 31, Deferred tax assets Inventory $ 107,398 $ 107,398 Accrued expenses 1,589,889 792,845 Interest limitation 319,698 191,886 Other 6,597 - Lease liability 398,820 505,591 Loss carryforward 3,791,146 339,287 Valuation allowance (5,796,978 ) (709,582 ) Total deferred tax assets $ 416,595 $ 1,227,425 Deferred tax liabilities Other - (94 ) Right of use assets (398,820 ) (505,591 ) Intangibles $ (17,775 ) $ (23,437 ) Total deferred tax liabilities $ (416,595 ) $ (529,122 ) Total net deferred income tax assets (liabilities) $ - $ 698,303 |
Schedule of income tax returns are open to examination by the Internal revenue service and various state jurisdictions | December 31, December 31, Net deferred tax asset (liability) $ 5,796,978 $ 1,407,885 Valuation allowance $ (5,796,978 ) $ (709,852 ) |
Organization and Nature of Bu_2
Organization and Nature of Business (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Organization and Nature of Business (Textual) | ||
Online sales, percentage | 95.00% | 95.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 05, 2019 | Dec. 31, 2019 | Dec. 31, 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 | |||
Successor [Member] | |||||
Appliance sales | $ 28,487,053 | $ 40,113,568 | |||
Furniture sales | 4,405,866 | 11,800,277 | |||
Other sales | 1,775,193 | 3,219,808 | |||
Total | $ 34,668,112 | $ 55,133,653 | |||
Predecessor [Member] | |||||
Appliance sales | $ 9,784,525 | ||||
Furniture sales | 2,456,085 | ||||
Other sales | 706,291 | ||||
Total | $ 12,946,901 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Machinery and equipment [Member] | ||
Vehicles | 5 years | 5 years |
Office equipment [Member] | ||
Vehicles | 5 years | 5 years |
Vehicles [Member] | ||
Vehicles | 5 years | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) | Aug. 04, 2020 | Mar. 19, 2021 | Jul. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Summary of Significant Accounting Policies (Textual) | |||||||
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. | ||||||
Income tax positions, description | 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. | ||||||
Incurred operating losses | $ 14,400,000 | ||||||
Cash flows from operations | $ 2,807,673 | $ 958,356 | 5,400,000 | ||||
Negative working capital | $ 17,500,000 | ||||||
Intangible assets estimated useful lives | 5 years | 5 years | |||||
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. | ||||||
Accrual sales tax liability | $ 5,915,910 | $ 5,804,100 | $ 2,910,200 | ||||
Potential sales tax liability | $ 82,000 | $ 11,000 | |||||
Net proceeds | $ 4,590,000 | ||||||
Sale of ODI percentage | 10.00% | ||||||
Share-based Payment Arrangement, Option [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Potentially dilutive securities | 555,000 | ||||||
Warrant Member | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Potentially dilutive securities | 55,560 | 250,000 | |||||
Initial Public Offering [Member] | |||||||
Summary of Significant Accounting Policies (Textual) | |||||||
Initial public offering, description | The Company completed an initial public offering of its common stock, pursuant to which the Company sold 1,111,200 shares of its common stock, at a purchase price of $9.00 per share, for total gross proceeds of $10,000,800 (the “IPO”). After deducting the underwriting commission and offering expenses, the Company received net proceeds of $8,602,166. The Company used a portion of the proceeds from the IPO to pay off certain debt as described below. |
Restatement of Financial Stat_3
Restatement of Financial Statements (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
ASSETS | |||||
Total Current Assets | $ 19,505,030 | $ 18,240,121 | $ 4,494,402 | ||
Goodwill | 4,725,689 | 4,725,689 | 4,603,953 | ||
TOTAL ASSETS | 29,312,248 | 26,216,930 | 13,906,863 | ||
Current Liabilities | |||||
Accounts payable and accrued expenses | 12,356,822 | 12,701,715 | 5,375,420 | ||
Total Current Liabilities | 39,306,778 | 35,694,976 | 14,125,228 | ||
TOTAL LIABILITIES | 44,656,219 | 39,532,699 | 17,985,080 | ||
Stockholders' Deficit | |||||
Additional paid-in capital | 14,874,341 | 13,409,328 | 1,079,179 | ||
Accumulated deficit | (30,218,923) | (26,725,708) | (5,157,871) | ||
Total Stockholders' Deficit | (15,343,971) | (13,315,769) | $ (6,285,237) | (4,078,217) | |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 29,312,248 | $ 26,216,930 | 13,906,863 | ||
As Filed [Member] | |||||
ASSETS | |||||
Total Current Assets | 4,494,402 | ||||
Goodwill | [1] | 4,976,016 | |||
TOTAL ASSETS | 14,278,926 | ||||
Current Liabilities | |||||
Accounts payable and accrued expenses | [2] | 2,465,220 | |||
Total Current Liabilities | 11,215,028 | ||||
TOTAL LIABILITIES | 15,074,880 | ||||
Stockholders' Deficit | |||||
Additional paid-in capital | [1] | 1,271,721 | |||
Accumulated deficit | [2] | (2,068,150) | |||
Non-controlling Interest | [1] | ||||
Total Stockholders' Deficit | (795,954) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 14,278,926 | ||||
Adjustments [Member] | |||||
ASSETS | |||||
Total Current Assets | |||||
Goodwill | (372,063) | ||||
TOTAL ASSETS | (372,063) | ||||
Current Liabilities | |||||
Accounts payable and accrued expenses | 2,910,200 | ||||
Total Current Liabilities | 2,910,200 | ||||
TOTAL LIABILITIES | 2,910,200 | ||||
Stockholders' Deficit | |||||
Additional paid-in capital | (192,542) | ||||
Accumulated deficit | (2,910,200) | ||||
Non-controlling Interest | (179,521) | ||||
Total Stockholders' Deficit | (3,282,263) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | (372,063) | ||||
As Restated [Member] | |||||
ASSETS | |||||
Total Current Assets | 4,494,402 | ||||
Goodwill | 4,603,953 | ||||
TOTAL ASSETS | 13,906,863 | ||||
Current Liabilities | |||||
Accounts payable and accrued expenses | 5,375,420 | ||||
Total Current Liabilities | 14,125,228 | ||||
TOTAL LIABILITIES | 17,985,080 | ||||
Stockholders' Deficit | |||||
Additional paid-in capital | 1,079,179 | ||||
Accumulated deficit | (5,157,871) | ||||
Total Stockholders' Deficit | (4,078,217) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 13,906,863 | ||||
[1] | The Company adjusted the fair value of ownership interests in Holdco that were transferred to seller and the value of liabilities assumed in the April 5, 2019 acquisition (see Note 10) resulting in a $372,063 reduction in Goodwill; a $192,542 reduction in Additional Paid in Capital, and $179,521 reduction in liabilities assumed, which was recognized as a general and administrative expense. | ||||
[2] | The Company determined that it should accrue a liability for potential 2019 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 $2,910,200, representing a potential liability for sales taxes and penalties of $2,808,000 and interest expense of $102,200. |
Restatement of Financial Stat_4
Restatement of Financial Statements (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |||
Gross profit | $ 2,628,457 | $ 1,566,008 | |||||
Operating Expenses | |||||||
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) | |||||
Total Other Income (Expense) | (212,529) | (453,687) | |||||
NET LOSS BEFORE INCOME TAXES | (3,493,215) | (2,642,020) | |||||
INCOME TAX BENEFIT (EXPENSE) | (435,000) | $ 698,303 | $ (698,303) | ||||
NET LOSS | $ (3,493,215) | $ (2,207,020) | |||||
LOSS PER COMMON SHARE – BASIC AND DILUTED | $ (0.57) | $ (0.44) | |||||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED | 6,111,200 | 5,000,000 | |||||
As Filed [Member] | |||||||
Gross profit | $ 1,566,008 | $ 6,071,983 | |||||
Operating Expenses | |||||||
General and administrative | 566,640 | 1,741,050 | [1] | ||||
Other operating expenses | [2] | ||||||
Total Operating Expenses | 2,881,141 | 7,789,221 | |||||
LOSS FROM OPERATIONS | (1,315,133) | (1,717,238) | |||||
Total Other Income (Expense) | (404,987) | (1,049,215) | |||||
NET LOSS BEFORE INCOME TAXES | (1,720,120) | (2,766,453) | |||||
INCOME TAX BENEFIT (EXPENSE) | 435,000 | 698,303 | |||||
NET LOSS | $ (1,285,120) | $ (1,285,120) | $ (2,068,150) | [1] | |||
LOSS PER COMMON SHARE – BASIC AND DILUTED | $ (0.26) | $ (0.41) | |||||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED | 5,000,000 | 5,000,000 | |||||
Adjustments [Member] | |||||||
Gross profit | |||||||
Operating Expenses | |||||||
General and administrative | 873,200 | 2,808,000 | |||||
Other operating expenses | 179,521 | ||||||
Total Operating Expenses | 873,200 | 2,987,521 | |||||
LOSS FROM OPERATIONS | (873,200) | (2,987,521) | |||||
Total Other Income (Expense) | (48,700) | (102,200) | |||||
NET LOSS BEFORE INCOME TAXES | (921,900) | (3,089,721) | |||||
INCOME TAX BENEFIT (EXPENSE) | |||||||
NET LOSS | (921,900) | (921,900) | (2,910,200) | ||||
As Restated [Member] | |||||||
Gross profit | 1,566,008 | 6,071,983 | |||||
Operating Expenses | |||||||
General and administrative | 1,439,840 | 4,728,571 | |||||
Total Operating Expenses | 3,754,341 | 10,776,742 | |||||
LOSS FROM OPERATIONS | (2,188,333) | (4,704,759) | |||||
Total Other Income (Expense) | (453,687) | (1,151,415) | |||||
NET LOSS BEFORE INCOME TAXES | (2,642,020) | (5,856,174) | |||||
INCOME TAX BENEFIT (EXPENSE) | 435,000 | 698,303 | |||||
NET LOSS | $ (2,207,020) | $ (2,207,020) | $ (5,157,871) | ||||
LOSS PER COMMON SHARE – BASIC AND DILUTED | $ (0.44) | $ (1.03) | |||||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED | 5,000,000 | 5,000,000 | |||||
[1] | The Company determined that it should accrue a liability for potential 2019 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 $2,910,200, representing a potential liability for sales taxes and penalties of $2,808,000 and interest expense of $102,200. | ||||||
[2] | The Company adjusted the fair value of ownership interests in Holdco that were transferred to seller and the value of liabilities assumed in the April 5, 2019 acquisition (see Note 10) resulting in a $372,063 reduction in Goodwill; a $192,542 reduction in Additional Paid in Capital, and $179,521 reduction in liabilities assumed, which was recognized as a general and administrative expense. |
Restatement of Financial Stat_5
Restatement of Financial Statements (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Apr. 05, 2019 | |
Net loss | $ (3,493,215) | $ (2,207,020) | |||
Common Stock | |||||
Beginning Balance, shares | 6,111,200 | 4,750,000 | 4,750,000 | 6,111,200 | |
Net loss | |||||
Ending Balance, shares | 6,111,200 | 4,750,000 | 4,750,000 | 6,111,200 | |
Additional Paid-in Capital | |||||
Net loss | |||||
Accumulated Deficit | |||||
Net loss | $ (3,493,215) | (2,207,020) | |||
As Filed | |||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co. | $ 979,523 | ||||
Beginning Balance | (795,954) | $ (795,954) | |||
Net loss | (1,285,120) | (2,068,150) | |||
Ending Balance | (2,081,074) | (795,954) | |||
As Filed | Common Stock | |||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co. | $ 475 | ||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co., shares | 4,750,000 | ||||
Beginning Balance | $ 475 | 475 | |||
Beginning Balance, shares | 4,750,000 | 4,750,000 | 4,750,000 | ||
Net loss | |||||
Ending Balance | $ 475 | $ 475 | |||
Ending Balance, shares | 4,750,000 | 4,750,000 | 4,750,000 | ||
As Filed | Additional Paid-in Capital | |||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co. | $ 979,048 | ||||
Beginning Balance | $ 1,272,195 | 1,272,195 | |||
Net loss | |||||
Ending Balance | 1,079,179 | 1,272,195 | |||
As Filed | Accumulated Deficit | |||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co. | |||||
Beginning Balance | (2,068,150) | (2,068,150) | |||
Net loss | (1,285,120) | (2,068,150) | |||
Ending Balance | (3,353,270) | (2,068,150) | |||
As Restated | |||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co. | 786,981 | ||||
Beginning Balance | (4,078,217) | (4,078,217) | |||
Net loss | (2,207,020) | (5,157,871) | |||
Ending Balance | (6,285,237) | (4,078,217) | |||
As Restated | Common Stock | |||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co. | $ 475 | ||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co., shares | 4,750,000 | ||||
Beginning Balance | $ 475 | 475 | |||
Beginning Balance, shares | 4,750,000 | 4,750,000 | |||
Net loss | |||||
Ending Balance | $ 475 | $ 475 | |||
Ending Balance, shares | 4,750,000 | 4,750,000 | |||
As Restated | Additional Paid-in Capital | |||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co. | $ 786,506 | ||||
Beginning Balance | $ 1,079,179 | 1,079,179 | |||
Net loss | |||||
Ending Balance | 1,079,179 | 1,079,179 | |||
As Restated | Accumulated Deficit | |||||
Capital contribution by Holdco for the acquisition of Goedeker Television Co. | |||||
Beginning Balance | (5,157,871) | $ (5,157,871) | |||
Net loss | (2,207,020) | (5,157,871) | |||
Ending Balance | $ (7,364,891) | $ (5,157,871) |
Restatement of Financial Stat_6
Restatement of Financial Statements (Details 3) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | |||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net loss | $ (3,493,215) | $ (2,207,020) | ||||
Prepaid expense | 109,124 | (14,687) | ||||
Accounts payable and accrued expenses | (344,893) | 1,442,264 | ||||
Net cash provided by (used in) operating activities | (2,807,673) | 958,356 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Net cash used in investing activities | (126,115) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Net cash provided by financing activities | 4,426,178 | (775,158) | ||||
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD | 934,729 | 471,308 | $ 471,308 | |||
CASH AND RESTRICTED CASH, END OF PERIOD | 1,309,374 | $ 471,308 | 934,729 | |||
As Filed [Member] | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net loss | (1,285,120) | (1,285,120) | (2,068,150) | [1] | ||
Prepaid expense | [2] | |||||
Accounts payable and accrued expenses | 520,364 | (1,464,657) | [1] | |||
Operating liabilities | [2] | |||||
Net cash provided by (used in) operating activities | 958,356 | (2,299,215) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Net cash used in investing activities | (2,200) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Net cash provided by financing activities | (775,158) | 2,772,723 | ||||
NET CHANGE IN CASH AND RESTRICTED CASH | 183,198 | 471,308 | ||||
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD | 64,470 | 64,470 | ||||
CASH AND RESTRICTED CASH, END OF PERIOD | 247,668 | 64,470 | ||||
Adjustments [Member] | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net loss | (921,900) | (921,900) | (2,910,200) | |||
Prepaid expense | (179,521) | |||||
Accounts payable and accrued expenses | 921,900 | 2,910,200 | ||||
Operating liabilities | 179,521 | |||||
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 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) | (5,157,871) | |||
Accounts payable and accrued expenses | 1,442,264 | |||||
Operating liabilities | 1,625,064 | |||||
Net cash provided by (used in) operating activities | 958,356 | (2,299,215) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
Net cash used in investing activities | (2,200) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
Net cash provided by financing activities | (775,158) | 2,772,723 | ||||
NET CHANGE IN CASH AND RESTRICTED CASH | 183,198 | 471,308 | ||||
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD | 64,470 | $ 64,470 | ||||
CASH AND RESTRICTED CASH, END OF PERIOD | $ 247,668 | $ 64,470 | ||||
[1] | The Company determined that it should accrue a liability for potential 2019 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 $2,910,200, representing a potential liability for sales taxes and penalties of $2,808,000 and interest expense of $102,200. | |||||
[2] | The Company adjusted the fair value of ownership interests in Holdco that were transferred to seller and the value of liabilities assumed in the April 5, 2019 acquisition (see Note 10) resulting in a $372,063 reduction in Goodwill; a $192,542 reduction in Additional Paid in Capital, and $179,521 reduction in liabilities assumed, which was recognized as a general and administrative expense. |
Restatement of Financial Stat_7
Restatement of Financial Statements (Details Textual ) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2019 | |
Restatement of Financial Statements (Textual) | ||
Accrued liability | $ 921,900 | $ 2,910,200 |
Sales taxes and penalties | 873,200 | 2,808,000 |
Interest expense | $ 48,700 | $ 102,200 |
Description of financial statements | The Company adjusted the fair value of ownership interests in Holdco that were transferred to seller and the value of liabilities assumed in the April 5, 2019 acquisition (see Note 10) resulting in a $372,063 reduction in Goodwill; a $192,542 reduction in Additional Paid in Capital, and $179,521 reduction in liabilities assumed, which was recognized as a general and administrative expense. |
Receivables (Details)
Receivables (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | |||
Vendor rebates receivable | $ 604,372 | $ 1,337,791 | $ 1,455,248 |
Credit cards in process of collection | 343,982 | 660,441 | |
Total receivables | $ 948,354 | $ 1,998,232 | $ 1,455,248 |
Merchandise Inventory (Details)
Merchandise Inventory (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Total merchandise inventory | $ 6,308,484 | $ 5,572,241 | $ 1,805,090 |
Allowance for inventory obsolescence | (425,000) | (425,000) | (425,000) |
Merchandise inventory, net | 5,883,484 | 5,147,241 | 1,380,090 |
Appliances [Member] | |||
Total merchandise inventory | 5,985,757 | 5,285,975 | 1,538,552 |
Furniture [Member] | |||
Total merchandise inventory | 249,008 | 194,852 | 184,755 |
Other [Member] | |||
Total merchandise inventory | $ 73,719 | $ 91,414 | $ 81,783 |
Vendor Deposits (Details)
Vendor Deposits (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Vendor Deposits (Textual) | |||
Vendor deposits | $ 742,926 | $ 547,648 | $ 294,960 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Total property and equipment | $ 457,749 | $ 331,633 | $ 218,486 |
Accumulated depreciation | (102,168) | (85,685) | (32,880) |
Property and equipment, net | 355,581 | 245,948 | 185,606 |
Equipment [Member] | |||
Total property and equipment | 69,336 | 69,336 | 7,376 |
Warehouse equipment [Member] | |||
Total property and equipment | 61,070 | 61,070 | 29,188 |
Furniture and fixtures [Member] | |||
Total property and equipment | 512 | 512 | 512 |
Transportation equipment [Member] | |||
Total property and equipment | 63,784 | 63,784 | 63,784 |
Leasehold improvements[Member] | |||
Total property and equipment | 136,931 | $ 136,931 | $ 117,626 |
Construction in Progress [Member] | |||
Total property and equipment | $ 126,116 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 05, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | |
Property and Equipment (Textual) | |||||
Depreciation expense | $ 16,483 | $ 10,959 | $ 10,000 | $ 33,000 | $ 53,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Customer relationships | $ 749,000 | $ 749,000 | $ 749,000 |
Marketing related - tradename | 1,368,000 | 1,368,000 | 1,368,000 |
Total intangible assets | 2,117,000 | 2,117,000 | |
Accumulated amortization | (840,912) | (735,063) | (238,156) |
Intangible assets, net | $ 1,276,088 | $ 1,381,937 | $ 1,878,844 |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 (remainder of year) | $ 317,547 | $ 423,396 |
2022 | 423,396 | 423,396 |
2023 | 423,396 | 423,396 |
2024 | 111,749 | 111,749 |
Total | $ 1,276,088 | $ 1,381,937 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 05, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | |
Intangible Assets (Textual) | |||||
Identifiable intangible assets | $ 2,117,000 | $ 2,117,000 | |||
Weighted average estimated useful life | 3 years | 3 years 3 months 19 days | |||
Amortization expense | $ 105,849 | $ 80,882 | $ 0 | $ 238,156 | $ 496,907 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | |||
Trade accounts payable | $ 5,267,392 | $ 5,975,486 | $ 1,644,216 |
Sales tax | 5,915,910 | 5,804,100 | 2,910,200 |
Accrued payroll liabilities | 510,388 | 492,573 | 192,305 |
Accrued interest | 10,000 | 10,000 | 253,678 |
Accrued liability for sales returns | 200,000 | 200,000 | 200,000 |
Other accrued liabilities | 453,132 | 219,556 | 175,021 |
Total accounts payable and accrued expenses | $ 12,356,822 | $ 12,701,715 | $ 5,375,420 |
Business Combination (Details)
Business Combination (Details) - Goedeker [Member] | Dec. 31, 2020USD ($) |
Purchase consideration at fair value (as restated): | |
Note payable, net of $462,102 debt discount and $215,500 of capitalized financing costs | $ 3,637,898 |
Cash to seller at closing | 478,000 |
Working capital adjustment | (809,000) |
Contingent note payable | 81,494 |
Fair value of ownership interest in Holdco transferred to seller | 786,981 |
Amount of consideration | 4,175,373 |
Assets acquired and liabilities assumed at fair value | |
Accounts receivable | 456,183 |
Inventories | 1,851,251 |
Other assets | 295,863 |
Property and equipment | 216,286 |
Customer related intangibles | 749,000 |
Marketing related intangibles - tradename | 1,368,000 |
Accounts payable and accrued expenses | (3,056,855) |
Customer deposits | (2,430,044) |
Net tangible assets acquired (liabilities assumed) | (550,316) |
Total net assets acquired (liabilities assumed) | (550,316) |
Consideration paid | 4,175,373 |
Goodwill | $ 4,725,689 |
Business Combination (Details T
Business Combination (Details Textual) - USD ($) | Jun. 02, 2020 | Apr. 05, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Mar. 31, 2020 |
Business Combination (Textual) | ||||||
Business acquisition purchase price in cash | $ 934,729 | $ 471,308 | $ 1,309,374 | $ 247,668 | ||
Write-off contingent liability | 32,246 | |||||
Balance of contingent liability | 49,248 | |||||
Net liabilities assumed | 550,316 | |||||
Goodwill | $ 4,725,689 | $ 4,603,953 | $ 4,725,689 | |||
Contingent consideration due, description | Management reviewed the contingent consideration due at December 31, 2020 and adjusted the balance to the present value of the amount it estimates will be due in April 2022. | |||||
Goedeker [Member] | ||||||
Business Combination (Textual) | ||||||
Business acquisition purchase price | $ 4,175,373 | |||||
Business acquisition purchase price in cash | 4,100,000 | |||||
Deemed fair value | $ 3,637,898 | |||||
Description of promissory note | (ii) up to $600,000 in earn out payments (as described below) with a deemed fair value of $81,494; (iii) a 22.5% ownership interest in Holdco transferred to the Stockholders with a deemed fair value of $786,981, (iv) cash of $478,000, and (v) net of a working capital adjustment of $809,000. | |||||
Business acquisition purchase price in cash description | The report issued by that CPA firm determined that Goedeker owed the Company $809,000, which Goedeker has not paid. On or about March 23, 2020, the Company submitted a claim for arbitration to the American Arbitration Association relating to Goedeker's failure to pay. The claim alleged, inter alia, breach of contract, fraud, indemnification and the breach of the covenant of good faith and fair dealing. The Company alleged damages in the amount of $809,000, plus attorneys' fees and costs. The $809,000 is included in other assets in the accompanying balance sheet as of December 31, 2019. | |||||
Goedeker Television [Member] | ||||||
Business Combination (Textual) | ||||||
Business acquisition purchase price payable earn out payments | $ 81,494 | |||||
Business acquisition purchase price in cash description | The Company entered into a settlement agreement with Goedeker, Steve Goedeker, Mike Goedeker and 1847 Holdings LLC, the Company’s indirect parent company at such time (“1847 Holdings”). The settlement agreement and the related transaction documents that are exhibits to the settlement agreement were all signed on June 2, 2020 only became effective upon the closing of the IPO on August 4, 2020. Pursuant to the settlement agreement, the parties entered into an amendment and restatement of the 9% subordinated promissory note described below (see Note 13). In addition, the parties agreed that the arbitration action described above would be settled effective upon the closing of the IPO and that each party to such arbitration action would release all claims that it has against the other parties to such action. As part of the settlement of the arbitration action, the Company agreed that the sellers will not have to pay the $809,000 working capital adjustment amount, which resulted in a loss on write-off of acquisition receivable during the year ended December 31, 2020. | Goedeker Business for any applicable period is less than $2,500,000 but greater than $1,500,000, the Company must pay a partial earn out payment to Goedeker in an amount equal to the product determined by multiplying (i) the EBITDA Achievement Percentage by (ii) the applicable earn out payment for such period, where the "Achievement Percentage" is the percentage determined by dividing (A) the amount of (i) the EBITDA of the Goedeker Business for the applicable period less (ii) $1,500,000, by (B) $1,000,000. For avoidance of doubt, no partial earn out payments shall be earned or paid to the extent the EBITDA of the Goedeker Business for any applicable period is equal or less than $1,500,000. For the trailing twelve (12) month period from the closing date, EBITDA for the Goedeker Business was ($2,825,000) so Goedeker is not entitled to an earn our payment for that period. | ||||
Earn out payments description | Goedeker is also entitled to receive the following earn out payments to the extent the Goedeker Business achieves the applicable EBITDA (as defined in the asset purchase agreement) targets: 1. An earn out payment of $200,000 if the EBITDA of the Goedeker Business for the trailing twelve (12) month period from the closing date is $2,500,000 or greater, which target was not met; 2. An earn out payment of $200,000 if the EBITDA of the Goedeker Business for the trailing twelve (12) month period from the first anniversary of closing date is $2,500,000 or greater, which target the Company does not expect to meet; and 3. An earn out payment of $200,000 if the EBITDA of the Goedeker Business for the trailing twelve (12) month period from the second anniversary of the closing date is $2,500,000 or greater. | |||||
Additional consideration description | The applicable earn out payment(s) (or portion thereof) shall be paid on the date that is three (3) years from the closing date, and shall accrue interest from the date on which it is determined Goedeker is entitled to such earn out payment (or portion thereof) at a rate equal to five percent (5%) per annum, computed on the basis of a 360 day year for the actual number of days elapsed. | |||||
Note payable, net of debt discount | $ 462,102 | |||||
Note payable, net of capitalized financing costs | 215,500 | |||||
Minimum [Member] | ||||||
Business Combination (Textual) | ||||||
Adjusted value of goodwill | 121,736 | |||||
Maximum [Member] | ||||||
Business Combination (Textual) | ||||||
Adjusted value of goodwill | $ 4,725,689 |
Lines of Credit (Details)
Lines of Credit (Details) - USD ($) | Aug. 04, 2020 | Apr. 05, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 24, 2019 |
Lines of Credit (Textual) | |||||
Unamortized debt discount | $ 338,873 | ||||
Line of credit | $ 571,997 | ||||
Burnley [Member] | |||||
Lines of Credit (Textual) | |||||
Loan and security agreement, description | (i) the borrowing base (as defined in the loan and security agreement) or (ii) $1,500,000 minus reserves established Burnley at any time in accordance with the loan and security agreement. | ||||
Borrowed amount | $ 744,000 | ||||
Line of credit principal amount | $ 32,350 | ||||
Issuance of revolving note | $ 1,500,000 | ||||
Payoff of principal amount | 118,194 | ||||
Interest of line of credit | 42 | ||||
Prepayment legal of other fees | $ 85,802 | ||||
Northpoint Commercial Finance LLC [Member] | |||||
Lines of Credit (Textual) | |||||
Line of credit outstanding | $ 1,000,000 | ||||
Line of credit | $ 678,993 | ||||
Interest rate | 7.99% |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2021 (remainder of year) | $ 499,517 | $ 663,339 |
2022 | 685,222 | 685,222 |
2023 | 707,826 | 707,826 |
2024 | 731,177 | 731,177 |
2025 | 496,064 | 496,064 |
Total | 3,119,806 | 3,283,628 |
Less: Loan costs | (92,994) | (98,259) |
Total | $ 3,026,812 | $ 3,185,369 |
Notes Payable (Details Textual)
Notes Payable (Details Textual) - USD ($) | Sep. 25, 2020 | Aug. 04, 2020 | Apr. 05, 2019 | Mar. 19, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 25, 2020 | Jun. 30, 2020 |
Notes Payable and Warrant Liability (Textual) | |||||||||
Term loan principal amount | $ 714,286 | ||||||||
Outstanding balance | $ 3,347,763 | ||||||||
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. | ||||||||
Derivative liability | $ 2,250,000 | ||||||||
Increase in estimated value of warrants | $ 122,344 | ||||||||
Warrant estimated charge | $ 2,127,656 | ||||||||
Balance of notes amount | $ 999,201 | ||||||||
Comprised of principal | 3,119,806 | ||||||||
Unamortized loan costs | 2,152,237 | ||||||||
Unamortized warrant value | 1,281,946 | ||||||||
Long-term liability | $ 3,119,806 | ||||||||
Notes payable maturity date | Dec. 19, 2021 | ||||||||
Net proceeds | $ 4,590,000 | ||||||||
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. | ||||||||
Gross proceeds not less | $ 10,000,000 | ||||||||
Interest rate | 10.00% | ||||||||
Unamortized original issue discount | $ 870,291 | ||||||||
Small Business Community Capital [Member] | |||||||||
Notes Payable and Warrant Liability (Textual) | |||||||||
Term loan principal amount | $ 1,500,000 | ||||||||
Securities purchase agreement, description | The Company used a portion of the proceeds from the IPO to repay the term note in full and the loan and security agreement was terminated. The total payoff amount was $1,122,412 consisting of principal of $1,066,640, interest of $11,773 and prepayment, legal, and other fees of $43,999. | Pursuant to which the Company issued to SBCC a term note in the principal amount of up to $1,500,000 and a ten-year warrant to purchase shares of the most senior capital stock of the Company equal to 5.0% of the outstanding equity securities of the Company on a fully-diluted basis for an aggregate price equal to $100. | |||||||
Arvest Loan [Member] | |||||||||
Notes Payable and Warrant Liability (Textual) | |||||||||
Term loan principal amount | $ 3,500,000 | ||||||||
Outstanding balance | 3,185,369 | ||||||||
Comprised of principal | 3,119,806 | ||||||||
Unamortized loan costs | $ 98,259 | ||||||||
Loan bears interest rate | 3.25% | ||||||||
Increase by interest rate | 6.00% | ||||||||
Long-term liability | $ 63,353 | ||||||||
Notes payable maturity date | Aug. 25, 2025 | Aug. 25, 2025 | |||||||
Payment of monthly loan amount | $ 63,353 | ||||||||
Initial Public Offering [Member] | |||||||||
Notes Payable and Warrant Liability (Textual) | |||||||||
Converted to stock | 250,000 |
Notes Payable, Related Parties
Notes Payable, Related Parties (Details) - USD ($) | Aug. 04, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 05, 2019 |
Notes Payable, Related Parties (Textual) | |||||
Principal amount | $ 714,286 | ||||
Notes payable maturity date | Dec. 19, 2021 | ||||
Net unamortized debt discount | $ 338,873 | ||||
Write-off of unamortized debt costs | 168,366 | ||||
Balance of notes amount | $ 3,300,444 | ||||
Loss on extinguishment of debt | 757,239 | ||||
Forbearance fee | $ 250,000 | ||||
Goedeker [Member] | |||||
Notes Payable, Related Parties (Textual) | |||||
Subordinated promissory note percentage | 9.00% | ||||
Principal amount | $ 4,100,000 | ||||
Goedeker [Member] | Initial Public Offering [Member] | |||||
Notes Payable, Related Parties (Textual) | |||||
Settlement agreement, description | (i) the principal amount of the existing note was increased by $250,000, (ii) upon the closing of the IPO, the Company agreed to make all payments of principal and interest due under the note through the date of the closing, and (iii) from and after the closing, the interest rate of the note was increased from 9% to 12%. In accordance with the terms of the amended and restated note, the Company used a portion of the proceeds from the IPO to pay $1,083,842 of the balance of the note representing a $696,204 reduction in the principal balance and interest accrued through August 4, 2020 of $387,638. |
Convertible Promissory Note (De
Convertible Promissory Note (Details) - USD ($) | Sep. 02, 2020 | Aug. 04, 2020 | May 11, 2020 | Apr. 05, 2019 | Jul. 24, 2020 | May 04, 2020 | Dec. 31, 2020 |
Convertible Promissory Note (Textual) | |||||||
Aggregate principal amount | $ 714,286 | ||||||
Additional purchase of note, description | The Company used a portion of the proceeds from the IPO to repay the note in full. The total payoff amount was $780,653, consisting of principal of $771,431 and interest of $9,222. | (i) 1847 Holdings issued to Leonite 50,000 common shares (valued at $137,500), (ii) 1847 Holdings issued to Leonite a five-year warrant to purchase 200,000 common shares at an exercise price of $1.25 per share (subject to adjustment), which may be exercised on a cashless basis, and (iii) Holdco issued to Leonite shares of common stock equal to a 7.5% non-dilutable interest in Holdco. As of December 31, 2019, the balance of the note was $584,943. As a result of this transaction, Leonite became a related party. | |||||
Secured convertible promissory note description | 1847 and Leonite entered into a first amendment to secured convertible promissory note, pursuant to which the parties agreed (i) to extend the maturity date of the note to October 5, 2020, (ii) that 1847's failure to repay the note on the original maturity date of April 5, 2020 shall not constitute and event of default under the note and (iii) to increase the principal amount of the note by $207,145, as a forbearance fee. The Company accounted for this transaction as a loss on extinguishment of debt. | The amendment, (i) 1847 Holdings issued to Leonite another five-year warrant to purchase 200,000 common shares at an exercise price of $1.25 per share (subject to adjustment), which may be exercised on a cashless basis and (ii) upon closing of 1847 Holdings' acquisition of Asien's Appliance, Inc., 1847 Holdings' wholly owned subsidiary 1847 Asien Inc. issued to Leonite shares of common stock equal to a 5% interest in 1847 Asien Inc. The Company accounted for the issuance of the 200,000 additional warrants as a $566,711 loss on debt restructuring and an increase in additional paid-in-capital, representing the estimated fair value of the 200,000 additional warrants for a five-year period. | |||||
Forbearance fee | $ 250,000 | ||||||
Purchase of warrant description | Pursuant to which the warrant was amended to allow for the exercise of the warrant for 180,000 common shares of 1847 Holdings in exchange for Leonite's surrender of the remaining 20,000 common shares underlying that warrant, as well as all 200,000 common shares underlying the second warrant issued to Leonite on May 11, 2020. On September 18, 2020, Leonite exercised the warrant in accordance with the foregoing for 180,000 common shares of 1847 Holdings. As a result, both warrants have terminated. | 1847 Holdings issued 50,000 common shares valued at $137,500 and a debt-discount related to the warrants valued at $292,673. In the second quarter of 2020, the $137,500 value of the shares was transferred from a liability to 1847 Holdings to additional paid-in-capital. The Company amortized $129,343 of financing costs related to the shares and warrants in the year ended December 31, 2020. | |||||
Outstanding balance | $ 50,000 | $ 100,000 | |||||
Shares of common stock | 50,000 | 100,000 | |||||
Transaction cost | $ 50,000 | $ 100,000 | |||||
Loss on conversion of debt | 50,000 | 175,000 | |||||
Increase in additional paid-in-capital | $ 100,000 | $ 275,000 | |||||
Loss on extinguishment of debt | $ 948,856 |
Operating Lease (Details)
Operating Lease (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | |||
Operating lease right-of-use asset | $ 3,404,860 | $ 1,578,235 | $ 2,000,755 |
Lease liability, current portion | 664,043 | 450,712 | |
Lease liability, long-term | 2,803,203 | 1,127,523 | |
Total operating lease liability | $ 3,467,246 | $ 1,578,235 | |
Weighted average remaining lease term (months) | 57 years | 39 months | |
Weighted average discount rate | 5.90% | 6.50% |
Operating Lease (Details 1)
Operating Lease (Details 1) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2021 (remainder of year) | $ 604,279 | $ 540,000 |
2022 | 923,945 | 540,000 |
2023 | 933,493 | 540,000 |
2024 | 538,041 | 135,000 |
2025 | 413,168 | |
Thereafter | 565,936 | |
Total lease payments | 3,978,862 | 1,755,000 |
Less imputed interest | (511,616) | (176,765) |
Total lease liability | $ 3,467,246 | $ 1,578,235 |
Operating Lease (Details Textua
Operating Lease (Details Textual) - USD ($) | Jan. 13, 2021 | Apr. 05, 2019 | Mar. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2020 |
Operating Lease (Textual) | |||||
Term of lease | 5 years | ||||
Interest rate on unpaid amount | 18.00% | ||||
Base rent per month | $ 45,000 | ||||
Right of use assets | $ 1,954,022 | $ 3,404,860 | $ 2,000,755 | ||
Accrued rent expense | 62,386 | ||||
Rent payments | $ 135,000 | $ 397,500 | $ 540,000 | ||
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 $31,465 per month until April 30, 2022 and then increases at approximately 2.5% per month every year. |
Related Parties (Details)
Related Parties (Details) - USD ($) | Apr. 05, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Parties (Textual) | |||||
Management fee | $ 62,500 | $ 62,500 | $ 250,000 | $ 183,790 | |
Service fee to manager | $ 62,500 | $ 62,500 | |||
Management Services Agreement [Member] | |||||
Related Parties (Textual) | |||||
Description of gross income | Expected to exceed, 9.5% of 1847 Holdings' gross income with respect to such fiscal year. | ||||
Description of offsetting management services agreement | 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. |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Option [Member] | |||
Number of Shares Outstanding, beginning balance | 555,000 | 555,000 | |
Number of Shares, Granted | 555,000 | ||
Number of Shares, Exercised | |||
Number of Shares, Forfeited / Cancelled / Expired | |||
Number of Shares Outstanding, ending balance | 555,000 | 555,000 | |
Number of Shares, Exercisable | 65,790 | ||
Weighted Average Exercise Price, Outstanding beginning balance | $ 9 | ||
Weighted Average Exercise Price, Granted | 9 | ||
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price Forfeited / Cancelled / Expired | |||
Weighted Average Exercise Price, Outstanding ending balance | $ 9 | 9 | |
Weighted Average Exercise Price, Exercisable | $ 9 | ||
Weighted Average Contractual Term in Years, Outstanding beginning balance | 9 years | ||
Weighted Average Contractual Term in Years, Granted | 10 years | ||
Weighted Average Contractual Term in Years, Exercised | |||
Weighted Average Contractual Term in Years, Forfeited / Cancelled / Expired | |||
Weighted Average Contractual Term in Years, Outstanding Ending balance | 8 years 9 months | 9 years | |
Weighted Average Contractual Term in Years, Exercisable | 8 years 9 months | 9 years | |
Underwriter Warrants [Member] | |||
Number of Shares Outstanding, beginning balance | 455,560 | 55,560 | |
Number of Shares, Granted | 400,000 | 55,560 | |
Number of Shares, Exercised | |||
Number of Shares, Forfeited / Cancelled / Expired | |||
Number of Shares Outstanding, ending balance | 455,560 | 55,560 | |
Weighted Average Exercise Price, Outstanding beginning balance | $ 11.25 | ||
Weighted Average Exercise Price, Granted | 12 | 11.25 | |
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price Forfeited / Cancelled / Expired | |||
Weighted Average Exercise Price, Outstanding ending balance | $ 11.91 | $ 11.25 | |
Weighted Average Contractual Term in Years, Outstanding beginning balance | 4 years 6 months | ||
Weighted Average Contractual Term in Years, Granted | 4 years | 5 years | |
Weighted Average Contractual Term in Years, Exercised | |||
Weighted Average Contractual Term in Years, Forfeited / Cancelled / Expired | |||
Weighted Average Contractual Term in Years, Outstanding Ending balance | 4 years 1 month 6 days | 4 years 6 months | |
Weighted Average Contractual Term in Years, Exercisable | 4 years 6 months |
Stockholders' Deficit (Details
Stockholders' Deficit (Details 1) | 12 Months Ended |
Dec. 31, 2020 | |
Underwriter Warrants [Member] | |
Volatility | 46.50% |
Risk-free interest rate | 0.47% |
Dividend yield | 0.00% |
Expected term | 4 years 6 months |
Stock Option [Member] | |
Volatility | 46.60% |
Risk-free interest rate | 0.47% |
Dividend yield | 0.00% |
Expected term | 6 years 2 months 30 days |
Stockholders' Deficit (Detail_2
Stockholders' Deficit (Details 2) | Dec. 31, 2020USD ($) |
Equity [Abstract] | |
Year Ended December 31, 2020 | $ 398,908 |
2021 | 483,185 |
2022 | 462,024 |
2023 | 367,198 |
2024 | 136,741 |
2025 | |
Total stock-based compensation | $ 1,848,056 |
Stockholders' Deficit (Detail_3
Stockholders' Deficit (Details Textual) - USD ($) | Aug. 04, 2020 | Jul. 30, 2020 | Apr. 05, 2019 | Mar. 19, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 10, 2019 |
Stockholders' Deficit (Textual) | ||||||||
Common stock ,authorized | 200,000,000 | 200,000,000 | 200,000,000 | |||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | |||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
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. | |||||||
Common stock, shares outstanding | 6,111,200 | 6,111,200 | 4,750,000 | |||||
Options issued to purchase of common stock | 555,000 | |||||||
Option expense | $ 124,575 | $ 398,908 | ||||||
Remaining compensation expense | $ 1,324,573 | $ 1,449,148 | ||||||
Common stock, shares issued | 6,111,200 | 6,111,200 | 4,750,000 | |||||
Shares issued during the period, shares | 1,111,200 | 1,848,056 | ||||||
Shares issued during the period | $ 10,000,800 | $ 555,000 | $ 1,848,056 | |||||
Underwriting commission and expenses | $ 8,602,166 | |||||||
Warrants [Member] | ||||||||
Stockholders' Deficit (Textual) | ||||||||
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 to SBCC a ten-year warrant to purchase shares of the most senior capital stock of the Company equal to 5.0% of the outstanding equity securities of the Company on a fully-diluted basis for an aggregate price equal to $100. SBCC exercised this warrant for the purchase of 250,000 shares of common stock on August 4, 2020. | 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). | |||||
Common Stock [Member] | ||||||||
Stockholders' Deficit (Textual) | ||||||||
Share price per share | $ 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies (Textual) | |
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 $1,500,000. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Current Federal and State | ||||
Deferred Federal and State | 698,303 | (698,303) | ||
Total provision (benefit) for income taxes | $ (435,000) | $ 698,303 | $ (698,303) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Federal tax | $ (4,382,602) | $ (1,229,797) | ||
State tax, net of Federal benefit | (891,129) | (250,059) | ||
Change in warrant value | 537,535 | |||
Write-off of acquisition and other receivables | 238,540 | |||
Other | 108,439 | 71,971 | ||
Valuation allowance | 5,087,396 | 5,087,396 | ||
Total income tax provision (benefit) | $ (435,000) | $ 698,303 | $ (698,303) | |
Effective tax rate | (3.30%) | 11.92% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets | ||
Inventory | $ 107,398 | $ 107,398 |
Accrued expenses | 1,589,889 | 792,845 |
Interest limitation | 319,698 | 191,886 |
Other | 6,597 | |
Lease liability | 398,820 | 505,591 |
Loss carryforward | 3,791,146 | 339,287 |
Valuation allowance | (5,796,978) | (709,582) |
Total deferred tax assets | 416,595 | 1,227,425 |
Deferred tax liabilities | ||
Other | (94) | |
Right of use assets | (398,820) | (505,591) |
Intangibles | (17,775) | (23,437) |
Total deferred tax liabilities | (416,595) | (529,122) |
Total net deferred income tax assets (liabilities) | $ 698,303 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net deferred tax asset (liability) | $ 5,796,978 | $ 1,407,885 |
Valuation allowance | $ (5,796,978) | $ (709,852) |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 15,002,557 | $ 1,593,680 |
Net change in the valuation allowance | $ 4,377,815 | $ 709,582 |
Expected rate of cumulative tax effect | 25.70% | 25.70% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Jan. 13, 2021 | Mar. 19, 2021 |
Subsequent Events (Textual) | ||
Purchase agreement, description | (i) in existence or committed on the closing date and which the Company has informed each Purchaser in writing prior to the closing date, (ii) in regard to transactions with unaffiliated third parties, made in the ordinary course of business, or (iii) in regard to transactions with unaffiliated third parties, not in excess of $50,000; or | |
Securities purchase agreement, description | The Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with two institutional investors (each, a "Purchaser" and together, the "Purchasers"), pursuant to which the Company issued to each Purchaser (i) a 10% OID senior secured promissory note in the principal amount of $2,750,000 (together, the "Notes") 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 (together, the "Warrants"), for a purchase price of $2,500,000 each, or $5,000,000 in the aggregate. After deducting a placement fee and other expenses, the Company received net proceeds of $4,590,000. | |
Bear interest | 10.00% | |
Maturity date | Dec. 19, 2021 | |
Total Gross proceeds | $ 10,000,000 | |
Note conversion price, description | 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 set forth in the Notes. | |
Lease agreement, description | 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 $20,976.79 per month, increasing to a base rent during the fifth year of $23,146.80 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. In the event of late payment, interest shall accrue on the unpaid amount at the rate equal to the greater of (i) two (2) percentage points in excess of the prime lending rate as established by U.S. Bank, N.A., or (ii) the default rate applicable to the first priority mortgage in effect at the time such default interest rate is imposed. | |
Percentage of common stock outstanding | 4.99% | |
Exceeds of common stock outstanding | 9.99% |