Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 12, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | 1847 GOEDEKER INC. | |
Trading Symbol | GOED | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 106,387,332 | |
Amendment Flag | false | |
Entity Central Index Key | 0001810140 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39418 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-3713938 | |
Entity Address, Address Line One | 3817 Millstone Parkway | |
Entity Address, City or Town | St. Charles | |
Entity Address, Country | MO | |
Entity Address, Postal Zip Code | 63301 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes | |
City Area Code | 888 | |
Local Phone Number | 768-1710 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 27,175 | $ 935 |
Restricted cash | 8,011 | 8,977 |
Receivables | 24,018 | 1,998 |
Vendor deposits | 12,134 | 548 |
Merchandise inventory, net | 37,779 | 5,147 |
Prepaid expenses and other current assets | 6,058 | 635 |
Total Current Assets | 115,175 | 18,240 |
Property and equipment, net | 2,520 | 246 |
Operating lease right-of-use assets, net | 12,319 | 1,578 |
Goodwill | 183,768 | 4,726 |
Intangible assets, net | 47,858 | 1,382 |
Other long-term assets | 344 | 45 |
TOTAL ASSETS | 361,984 | 26,217 |
Current Liabilities | ||
Accounts payable and accrued expenses | 68,013 | 12,702 |
Customer deposits | 18,382 | 21,879 |
Current portion of notes payable, net | 6,425 | 663 |
Current portion finance lease liability | 41 | |
Current portion of operating lease liabilities | 2,127 | 451 |
Contingent note payable | 188 | |
Total Current Liabilities | 95,176 | 35,695 |
Notes payable, net of current portion | 49,940 | 2,522 |
Finance lease liability, net of current portion | 153 | |
Operating lease liabilities, net of current portion | 11,628 | 1,128 |
Deferred income taxes payable, net | 3,042 | |
Contingent note payable | 188 | |
TOTAL LIABILITIES | 159,939 | 39,533 |
Stockholders’ Equity (Deficit) | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized; none issued and outstanding as of September 30, 2021 or December 31, 2020 | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized; 106,387,332 and 6,111,200 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 11 | 1 |
Additional paid-in capital | 224,904 | 13,409 |
Accumulated deficit | (22,870) | (26,726) |
Total Stockholders’ Equity (Deficit) | 202,045 | (13,316) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ 361,984 | $ 26,217 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 106,387,332 | 6,111,200 |
Common stock, shares outstanding | 106,387,332 | 6,111,200 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Product sales, net | $ 141,867 | $ 13,435 | $ 219,637 | $ 38,397 |
Cost of goods sold | 110,495 | 11,265 | 172,581 | 32,061 |
Gross profit | 31,372 | 2,170 | 47,056 | 6,336 |
Operating Expenses | ||||
Personnel | 8,547 | 2,162 | 15,300 | 4,514 |
Advertising | 3,715 | 1,433 | 7,730 | 2,991 |
Bank and credit card fees | 4,918 | 575 | 7,546 | 1,274 |
Depreciation and amortization | 3,610 | 93 | 3,908 | 277 |
Acquisition expenses | 62 | 865 | ||
Loss on abandonment of right of use asset | 1,437 | |||
General and administrative | 4,018 | 1,451 | 8,311 | 4,400 |
Total Operating Expenses | 24,870 | 5,714 | 45,097 | 13,456 |
INCOME (LOSS) FROM OPERATIONS | 6,502 | (3,544) | 1,959 | (7,120) |
Other Income (Expense) | ||||
Interest income | 34 | 1 | 57 | 2 |
Financing costs | (200) | (488) | (280) | (758) |
Interest expense | (899) | (229) | (2,070) | (787) |
Loss on extinguishment of debt | (807) | (1,748) | (1,756) | |
Write-off of acquisition receivable | (809) | |||
Change in fair value of warrant liability | (2,128) | |||
Other income (expense) | 8 | 2 | 19 | 7 |
Total Other Income (Expense) | (1,057) | (1,521) | (4,022) | (6,229) |
NET INCOME (LOSS) BEFORE INCOME TAXES | 5,445 | (5,065) | (2,063) | (13,349) |
INCOME TAX (EXPENSE) BENEFIT | (2,129) | 838 | 5,919 | 1,962 |
NET INCOME (LOSS) | $ 3,316 | $ (4,227) | $ 3,856 | $ (11,387) |
NET INCOME (LOSS) PER COMMON SHARE (in Dollars per share) | $ 0.03 | $ (0.74) | $ 0.08 | $ (2.17) |
DILUTED NET INCOME (LOSS) PER COMMON SHARE (in Dollars per share) | $ 0.03 | $ (0.74) | $ 0.06 | $ (2.17) |
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – | ||||
BASIC (in Shares) | 106,387,331 | 5,736,774 | 50,047,045 | 5,247,384 |
DILUTED (in Dollars per share) | $ 131,787,293 | $ 5,736,774 | $ 61,816,085 | $ 5,247,384 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 1,079 | $ (5,158) | $ (4,079) | |
Balance (in Shares) at Dec. 31, 2019 | 4,750 | |||
Net loss | (2,207) | (2,207) | ||
Balance at Mar. 31, 2020 | 1,079 | (7,365) | (6,286) | |
Balance (in Shares) at Mar. 31, 2020 | 4,750 | |||
Issuance of warrants in connection with notes payable | 567 | 567 | ||
Forgiveness of related party debt | 138 | 138 | ||
Issuance of 1847 Holdings shares in connection with conversion of notes payable | 275 | 275 | ||
Net loss | (4,952) | (4,952) | ||
Balance at Jun. 30, 2020 | 2,059 | (12,317) | (10,258) | |
Balance (in Shares) at Jun. 30, 2020 | 4,750 | |||
Issuance of common stock for cash | 8,602 | 8,602 | ||
Issuance of common stock for cash (in Shares) | 1,111 | |||
Issuance of common stock in connection with exercise of warrant | 2,250 | 2,250 | ||
Issuance of common stock in connection with exercise of warrant (in Shares) | 250 | |||
Issuance of options | 281 | 281 | ||
Issuance of 1847 Holdings shares in connection with conversion of notes payable | 100 | 100 | ||
Net loss | (4,227) | (4,227) | ||
Balance at Sep. 30, 2020 | $ 1 | 13,292 | (16,544) | (3,252) |
Balance (in Shares) at Sep. 30, 2020 | 6,111 | |||
Balance at Dec. 31, 2020 | $ 1 | 13,409 | (26,726) | (13,316) |
Balance (in Shares) at Dec. 31, 2020 | 6,111 | |||
Stock-based compensation expense | 125 | 125 | ||
Issuance of warrants in connection with notes payable | 1,340 | 1,340 | ||
Net loss | (3,493) | (3,493) | ||
Balance at Mar. 31, 2021 | $ 1 | 14,874 | (30,219) | (15,344) |
Balance (in Shares) at Mar. 31, 2021 | 6,111 | |||
Issuance of common stock in connection with acquisition | $ 1 | 12,263 | 12,264 | |
Issuance of common stock in connection with acquisition (in Shares) | 5,896 | |||
Issuance of common stock in connection with public offering | $ 9 | 194,588 | 194,597 | |
Issuance of common stock in connection with public offering (in Shares) | 93,111 | |||
Issuance of stock grants | 555 | 555 | ||
Issuance of stock grants (in Shares) | 217 | |||
Exercise of warrants | 2,338 | 2,338 | ||
Exercise of warrants (in Shares) | 1,039 | |||
Stock-based compensation expense | 125 | 125 | ||
Net loss | 4,033 | 4,033 | ||
Balance at Jun. 30, 2021 | $ 11 | 224,743 | (26,186) | 198,568 |
Balance (in Shares) at Jun. 30, 2021 | 106,374 | |||
Exercise of warrants | 29 | 29 | ||
Exercise of warrants (in Shares) | 13 | |||
Stock-based compensation expense | 132 | 132 | ||
Net loss | 3,316 | 3,316 | ||
Balance at Sep. 30, 2021 | $ 11 | $ 224,904 | $ (22,870) | $ 202,045 |
Balance (in Shares) at Sep. 30, 2021 | 106,387 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 3,856 | $ (11,387) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 3,908 | 277 |
Amortization of debt discount | 854 | 677 |
Stock-based compensation expense | 936 | 281 |
Loss on extinguishment of debt | 1,748 | 1,756 |
Loss on abandonment of right of use asset | 1,437 | |
Write-off of acquisition receivable | 809 | |
Change in fair value of warrant liability | 2,128 | |
Deferred tax expense | (6,464) | (1,962) |
Non-cash lease expense | 845 | 314 |
Changes in operating assets and liabilities: | ||
Receivables | (2,616) | 521 |
Vendor deposits | (1,586) | (253) |
Merchandise inventory | (11,665) | (1,707) |
Prepaid expenses and other assets | (3,709) | (989) |
Accounts payable and accrued expenses | 11,796 | 4,306 |
Customer deposits | (16,891) | 12,926 |
Operating lease liabilities | (765) | (314) |
Net cash provided by (used in) provided by operating activities | (18,316) | 7,383 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (693) | (51) |
Cash paid to sellers in acquisition of Appliances Connection, net of cash acquired | (201,515) | |
Cash paid to seller in acquisition of Appliance Gallery | (1,420) | |
Net cash used in investing activities | (203,628) | (51) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from equity offering | 194,598 | 8,602 |
Cash received from warrant exercise | 2,368 | |
Proceeds from term note payable, net | 55,217 | 643 |
Repayment on notes payable | (4,944) | (2,047) |
Payments on convertible notes payable | (771) | |
Payments on finance leases | (21) | |
Net payments on lines of credit | (1,339) | |
Cash paid for financing costs | (105) | |
Net cash provided by financing activities | 247,218 | 4,983 |
NET CHANGE IN CASH AND RESTRICTED CASH | 25,274 | 12,315 |
CASH AND RESTRICTED CASH, BEGINNING OF PERIOD | 9,912 | 64 |
CASH AND RESTRICTED CASH, END OF PERIOD | 35,186 | 12,379 |
Cash, cash equivalents, and restricted cash consist of the following: | ||
Cash and cash equivalents | 27,175 | 3,467 |
Restricted cash | 8,011 | 8,912 |
Cash and cash equivalents and restricted cash total | 35,186 | 12,379 |
Cash, cash equivalents, and restricted cash consist of the following | ||
Cash and cash equivalents | 935 | 64 |
Restricted cash | 8,977 | |
Cash and cash equivalents and restricted cash total | 9,912 | 64 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 1,623 | 820 |
Cash paid for taxes | 2,480 | |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Right of use assets acquired and liabilities assumed | 11,108 | |
Debt discount on notes payable from OID | 2,310 | |
Debt discount, warrants on short-term note payable | 1,340 | |
Stock issued in the acquisition of Appliances Connection | 12,264 | |
Debt paid off through issuance of new note | 5,616 | |
Due to Seller (consideration) settled by vendor deposits | 5,000 | |
Conversion of debt through issuance of 1847 Holdings common shares | 375 | |
Exercise of warrant liability through issuance of 1847 Holdings non-controlling interest | 119 | |
Derecognition of related party debt | 138 | |
Adjustment to fair value of goodwill based on final purchase price allocation | 122 | |
Conversion of warrant liability into common stock | 2,250 | |
Issuance of note payable to repay Seller note | $ 3,500 |
Organization and Nature of Busi
Organization and Nature of Business | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS | NOTE 1—ORGANIZATION AND NATURE OF BUSINESS 1847 Goedeker Inc. (“1847 Goedeker”) 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, 1847 Goedeker did not have any operations other than operations relating to its incorporation and organization. On April 5, 2019, 1847 Goedeker 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, 1847 Goedeker acquired the former business of Goedeker and continues to operate this business. On October 20, 2020, 1847 Goedeker formed Appliances Connection Inc. (“ACI”) as a wholly owned subsidiary in the State of Delaware. On June 2, 2021, ACI acquired all of the issued and outstanding capital stock or other equity securities of 1 Stop Electronics Center, Inc., a New York corporation (“1 Stop”), Gold Coast Appliances, Inc., a New York corporation (“Gold Coast”), Superior Deals Inc., a New York corporation (“Superior Deals”), Joe’s Appliances LLC, a New York limited liability company (“Joe’s Appliances”) and YF Logistics LLC, a New Jersey limited liability company (“YF Logistics,” and collectively with 1 Stop, Gold Coast, Superior Deals, and Joe’s Appliances, “Appliances Connection”). See Note 9. On July 6, 2021, 1847 Goedeker formed AC Gallery Inc. (“AC Gallery”) as a wholly owned subsidiary in the State of Delaware. On July 29, 2021, AC Gallery acquired substantially all the assets and assumed substantially all the liabilities of Appliance Gallery, Inc., a retail appliance store in Largo, FL (“Appliance Gallery”). As a result of this transaction, AC Gallery acquired the former business of Appliance Gallery and continues to operate this business. See Note 9. 1847 Goedeker and its consolidated subsidiaries (collectively, the “Company”) operate an industry leading e-commerce destination for appliances, furniture, and home goods. Through its June 2021 acquisition of Appliances Connection, the Company created one of the largest pure-play online retailers of household appliances in the United States. With warehouse fulfillment centers in the Northeast and Midwest, as well as showrooms in Brooklyn, New York, St. Louis, Missouri, and Largo, Florida the Company offers one-stop shopping for national and global brands. The Company carries many household name-brands, including Bosch, Cafe, Frigidaire Pro, Whirlpool, LG, and Samsung, and also carries many major luxury appliance brands such as Miele, Thermador, La Cornue, Dacor, Ilve, Jenn-Air and Viking, among others. The Company also sells furniture, fitness equipment, plumbing fixtures, televisions, outdoor appliances, and patio furniture, as well as commercial appliances for builder and business clients. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements of the Company 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 nine months ended September 30, 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 1847 Goedeker and its consolidated subsidiaries, ACI, 1 Stop, Gold Coast, Superior Deals, Joe’s Appliances, YF Logistics and AC Gallery. 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. 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 September 30, 2021, restricted cash includes approximately $0.2 million to secure vendor letters of credit and $7.8 million withheld by credit card processors as security for the Company’s customer refund claims and credit card chargebacks. 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’s performance obligation is to deliver the customer’s order. Each customer order generally contains only one performance obligation based on the merchandise sale to be delivered, at which time revenue is recognized. 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 trucks 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 (homeowners), builders and designers. 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 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Appliance sales $ 130,837 $ 8,992 $ 197,416 $ 28,327 Furniture sales 5,880 3,555 14,393 7,605 Other sales 5,150 888 7,828 2,465 Total $ 141,867 $ 13,435 $ 219,637 $ 38,397 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. Receivables Receivables consists of customer’s balance payments for which the Company extends credit to certain homebuilders and designers based on prior business relationship, and vendor rebate receivables. Vendor rebates receivable represent amounts due from manufactures from whom the Company purchases products. Rebates receivable are stated at the amount that management expects to collect from manufacturers (vendors). 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 its trade receivables from customers and bad debt expense has been historically immaterial to the condensed consolidated financial statements. Uncollectible balances are expensed in the period it is determined to be uncollectible. The Company had no significant concentrations of receivables balances as of September 30, 2021 and December 31, 2020. 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) Furniture and fixtures 7 Machinery and equipment 5-7 Office equipment 5-7 Transportation equipment 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 and nine months ended September 30, 2021 and 2020. Intangible Assets As of September 30, 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. 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. Impairments for the nine months ended September 30, 2021 were $1.4 million due to an abandonment of certain right of use assets. There were no impairments for the nine months ended September 30, 2020. Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles (including right of use assets) 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. There were no impairments for the nine months ended September 30, 2021 and 2020. Lease Liabilities Lease liabilities and their corresponding right of use 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 right of use asset for impairment whenever events or changes in circumstances indicate that the carrying amount of the right of use asset may not be recoverable. When such events occur, the Company compares the carrying amount of the right of use asset to the undiscounted expected future cash flows related to the right of use 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 right of use asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the right of use 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 customer 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. In the second quarter of 2021, the Company acquired Appliances Connection. Appliances Connection has a history of profitable operations. As such, the Company determined that it was more likely than not that it would have profitable operations in the future and therefore be able to realize the deferred tax assets and accordingly reversed the allowance for deferred tax assets at June 30, 2021. 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 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 and nine months ended September 30, 2021, the potentially dilutive securities were warrants for the purchase of 92,514,423 shares of common stock and options for the purchase of 705,000 shares of common stock. At September 30, 2020 there were warrants for the purchase of 55,560 shares of common stock and options for the purchase of 483,158 shares of common stock. These potentially dilutive securities were excluded from diluted loss per share. For the three and nine months ended September 30, 2021, 25,413,437 and 11,773,834 of shares from the above option and warrants were included in the dilutive earnings per share, respectively. Reclassifications Certain accounts have been reclassified to conform with classifications adopted in the period ended September 30, 2021. Such reclassifications had no effect on net earnings or financial position. Impact of COVID-19 In December 2019, a novel strain of coronavirus (“COVID-19”) emerged in China. On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The extent of the COVID-19 pandemic’s continued effect on the Company’s operational and financial performance and those of third parties on which the Company relies will depend on future developments, including the effectiveness of vaccines and other treatments for COVID-19, and other new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company does not yet know the full extent of potential impacts on its business and financing. However, these effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which the Company relies. 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 unaudited condensed 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. For the nine months ended September 30, 2021, the Company had operating profit of $2.0 million, $18.3 million of cash flow used in operations, and working capital of $20.0 million. Additionally, the Company had $27.2 million of unrestricted cash at September 30, 2021. On June 2, 2021, the Company completed the acquisition of Appliances Connection. Appliances Connection has historically been profitable; however, less than 4 months of their operations are included in results for the nine months ended September 30, 2021. 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 at least one year from the date of the filing of these unaudited condensed consolidated financial statements. 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. Recent Accounting Pronouncements Recently Adopted 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. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
RECEIVABLES | NOTE 3—RECEIVABLES At September 30, 2021 and December 31, 2020, receivables consisted of the following (in thousands): September 30, December 31, 2020 Trade receivables from customers $ 12,551 $ - Vendor rebates receivable 7,499 1,338 Credit cards in process of collection 135 660 Other receivables 3,833 - Total receivables $ 24,018 $ 1,998 |
Merchandise Inventory
Merchandise Inventory | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
MERCHANDISE INVENTORY | NOTE 4—MERCHANDISE INVENTORY At September 30, 2021 and December 31, 2020, the inventory balances are composed of the following (in thousands): September 30, December 31, 2020 Appliances $ 34,317 $ 5,286 Furniture 1,903 195 Other 1,984 91 Total merchandise inventory 38,204 5,572 Allowance for inventory obsolescence (425 ) (425 ) Merchandise inventory, net $ 37,779 $ 5,147 |
Vendor Deposits
Vendor Deposits | 9 Months Ended |
Sep. 30, 2021 | |
Vendor Deposits Disclosure [Abstract] | |
VENDOR DEPOSITS | NOTE 5—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. Vendor deposits as of September 30, 2021 and December 31, 2020 were $12.1 million and $0.5 million, respectively. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6—PROPERTY AND EQUIPMENT Property and equipment consist of the following at September 30, 2021 and December 31, 2020 (in thousands): September 30, December 31, 2020 Equipment $ 88 $ 69 Warehouse equipment 374 61 Furniture and fixtures 8 1 Transportation equipment 1,418 64 Leasehold improvements 216 137 Construction in progress 693 - Total property and equipment 2,797 332 Accumulated depreciation (277 ) (86 ) Property and equipment, net $ 2,520 $ 246 Depreciation expense for the nine months ended September 30, 2021 and 2020 was $0.2 million and $0.03 million, respectively. All property and equipment are pledged to secure the Loans described below (See Note 10). On June 30, 2021, the Company closed its old warehouse and retail showroom in anticipation of relocating to a new facility. Accordingly, the Company wrote the remaining right of use asset and related leasehold improvements as of that date. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 7—INTANGIBLE ASSETS AND GOODWILL The following provides a breakdown of identifiable intangible assets as of September 30, 2021 and December 31, 2020 (in thousands): September 30, December 31, 2020 Customer relationships $ 26,549 $ 749 Marketing related - tradename 25,704 1,368 Total intangible assets 52,253 2,117 Accumulated amortization (4,395 ) (735 ) Intangible assets, net $ 47,858 $ 1,382 In connection with the acquisition of Goedeker, the Company identified intangible assets of $2.1 million, representing trade names and customer relationships. For the Appliances Connection acquisition, the Company preliminarily identified intangible assets of trade names and customer relationships. These assets are being amortized on a straight-line basis over their weighted average estimated useful life of 5.0 years. Amortization expense for the three months ended September 30, 2021 and 2020 was $3.4 million and $0.08 million, respectively. For the nine months ended September 30, 2021 and 2020, amortization expense was $3.7 million and $0.2 million, respectively. At September 30, 2021, estimated annual amortization expense for each of the next five years is as follows (in thousands): 2021 (remainder of year) $ 2,613 2022 10,451 2023 10,451 2024 10,139 2025 10,027 Thereafter 4,177 Total $ 47,858 Following is a summary of goodwill (in thousands): Balance December 31, 2020 $ 4,726 Preliminary goodwill from acquisition of Appliances Connection 177,875 Preliminary goodwill from acquisition of Appliances Gallery 1,167 Balance September 30, 2021 $ 183,768 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 8—ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following is schedule of accounts payable and accrued expenses at September 30, 2021 and December 31, 2020 (in thousands): September 30, December 31, Trade accounts payable $ 37,845 $ 5,975 Sales tax 23,836 5,804 Accrued payroll liabilities 1,527 493 Accrued interest 210 10 Accrued liability for sales returns 200 200 Other accrued liabilities 4,395 220 Total accounts payable and accrued expenses $ 68,013 $ 12,702 |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 9—BUSINESS COMBINATIONS Appliances Connection On October 20, 2020, the Company entered into a securities purchase agreement, which was amended on December 8, 2020 and April 6, 2021 (as amended, the “AC Purchase Agreement”), with ACI, Appliances Connection and the sellers set forth on Exhibit A thereto (the “Sellers”), pursuant to which ACI agreed to acquire all of the issued and outstanding capital stock or other equity securities of Appliances Connection from the Sellers (the “AC Acquisition”). The AC Acquisition was completed on June 2, 2021. The aggregate purchase price is $222.0 million (subject to adjustment), consisting of (i) $180.0 million in cash (subject to adjustment), (ii) 2,333,333 shares of the Company’s common stock having a stated value that is equal to $21.0 million and (iii) 3,562,640 shares of the Company’s common stock, which is equal to (A) $21.0 million divided by (B) the average of the closing price of the Company’s common stock (as reported on NYSE American) for the 20 trading days immediately preceding the 3rd trading day prior to the closing date of the AC Acquisition. The purchase price was subject to a closing net working capital adjustment provision and a post-closing net working capital adjustment provision. As a result of these adjustments, the cash portion of the purchase price paid was $212.6 million. The Company accounted for the AC Acquisition using the acquisition method of accounting in accordance with FASB ASC Topic 805 “Business Combinations”. In accordance with ASC 805, the Company used its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The fair value of the purchase consideration issued to Appliances Connection was allocated to the net tangible assets acquired. The Company accounted for the AC 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 preliminary fair value of the net assets to be acquired is $ . The excess of the aggregate estimated fair value of the net tangible assets, $ , has been allocated to provisional goodwill. The table below represents the estimated preliminary purchase price allocation to the net assets acquired, as well as the associated estimated useful lives of the acquired intangible assets. Provisional purchase consideration at preliminary fair value (in thousands): Cash consideration $ 180,000 Share issuance 12,264 Working capital adjustment paid to sellers 27,597 Working capital adjustment due to sellers 5,000 Amount of consideration $ 224,861 Assets acquired and liabilities assumed at preliminary fair value Cash $ 5,897 Accounts receivable 19,403 Inventories 20,484 Vendor deposits 15,000 Other assets 2,194 Property and equipment 1,891 Right of use operating lease assets 1,834 Customer relationships 25,800 Marketing related - tradename 24,336 Accounts payable and accrued expenses (43,633 ) Customer deposits (13,138 ) Finance lease obligation (215 ) Net deferred tax liabilities (9,506 ) Operating lease liability (1,834 ) Notes payable (1,527 ) Total net assets acquired $ 46,986 Consideration paid 224,861 Preliminary goodwill $ 177,875 Appliance Gallery On July 6, 2021, AC Gallery entered into an asset purchase agreement, which was amended on July 21, 2021 and July 29, 2021 (as amended, the “Gallery Purchase Agreement”), with Appliance Gallery, pursuant to which AC Gallery agreed to acquire substantially all the assets and assumed substantially all the liabilities of Appliance Gallery (the “Gallery Acquisition”). The Gallery Acquisition was completed on July 29, 2021. Pursuant to the Gallery Purchase Agreement, the total purchase price is $1.7 million in cash, subject to certain adjustments at closing. As a result of these adjustments, the purchase price paid at closing was $1.4 million. The Company accounted for the Gallery Acquisition using the acquisition method of accounting in accordance with FASB ASC Topic 805 “Business Combinations”. In accordance with ASC 805, the Company used its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The fair value of the purchase consideration issued to Appliances Gallery was allocated to the net tangible assets acquired. The Company accounted for the Gallery 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 preliminary fair value of the net assets to be acquired was $0.3 million. The excess of the aggregate estimated fair value of the net tangible assets, plus $0.02 million of seller expenses paid by the Company, of $1.2 million has been allocated to provisional goodwill. The table below represents the estimated preliminary purchase price allocation to the net assets acquired, as well as the associated estimated useful lives of the acquired intangible assets. Provisional purchase consideration at fair value (in thousands): Cash consideration $ 1,420 Amount of consideration $ 1,420 Assets acquired and liabilities assumed at preliminary fair value Inventory 483 Prepaid assets 6 Property and equipment 19 Customer deposits (255 ) Net tangible assets acquired $ 253 Total net assets acquired $ 253 Consideration paid 1,420 Preliminary goodwill $ 1,167 Pro forma The following unaudited proforma results of operations are presented for information purposes only. The unaudited proforma results of operations are not intended to present actual results that would have been attained had the AC Acquisition been completed as of January 1, 2020, or to project potential operating results as of any future date or for any future periods. Appliances Connection revenue and net income in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021 was $129.3 million and $15.1 million and $177.1 million and $20.0 million, respectively. Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands, except share and per share data) Product sales, net $ 141,867 $ 102,201 $ 404,953 $ 260,443 Net income (loss) $ 3,946 $ (657 ) $ 31,128 $ (3,196 ) Amortization of intangibles included in net income (loss) (b) $ 2,507 $ 2,507 $ 7,520 $ 7,520 Basic earnings per share $ 0.04 $ (0.01 ) $ 0.31 $ (0.03 ) Diluted earnings per share (a) $ 0.03 $ (0.01 ) $ 0.31 $ (0.03 ) Basic number of shares 106,387,331 105,335,084 105,335,084 105,335,084 Diluted number of shares 131,787,293 105,335,084 105,335,084 105,335,084 (a) Assumes shares outstanding at offering were outstanding for all periods and that warrant price is equal to the offering price resulting in no diluted shares. (b) Represents amortization of the identified intangible assets acquired in the Appliances Connection acquisition. (c) Appliance Gallery pro forma is not included in the table above as it was determined to be immaterial. The Company believes that as a result of the Appliances Connection acquisition, it acquired identified intangible assets which will reduce goodwill. The nature and amount of intangible assets acquired will be determined by a valuation report, but the amount of any intangible assets will create an additional deferred tax liability increasing the amount of goodwill as there is no tax basis in goodwill or intangible assets. The Company estimates that goodwill will increase by approximately $9.5 million for the tax effect of net assets acquired. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 10—NOTES PAYABLE Credit Facilities On June 2, 2021, the Company and ACI, as borrowers, entered into a credit and guaranty agreement (the “Credit Agreement”) with Appliances Connection and certain other subsidiaries of the Company party thereto from time to time as guarantors (the “Guarantors”), the financial institutions party thereto from time to time (“Lenders”), and Manufacturers and Traders Trust Company, as sole lead arranger, sole book runner, administrative agent and collateral agent (“M&T), pursuant to which the Lenders have agreed to make available to the Company and ACI senior secured credit facilities in the aggregate initial amount of $70.0 million, including (i) a $60.0 million term loan (the “Term Loan”) and (ii) a $10.0 million revolving credit facility (the “Revolving Loan”), which revolving credit facility includes a $2.0 million swingline subfacility (the “Swing Line Loan” and together with the Term Loan and the Revolving Loan, the “Loans”) and a $2.0 million letter of credit subfacility, in each case, on the terms and conditions contained in the Credit Agreement. On June 2, 2021, the Company borrowed the entire amount of the Term Loan and issued term loan notes to the Lenders in the aggregate principal amount of $60.0 million. As of September 30, 2021, the Company has not made any loans under the Revolving Loan. As of September 30, 2021, the outstanding balance of the Term Loan is $55.0 million, comprised of principal of $58.5 million, net of unamortized loan costs of $3.5 million. Loan costs before amortization included $3.5 million of lender and placement agent fees and $0.3 million of legal other fees. The Company classified $6.0 million as a current liability and the balance as a long-term liability. Each of the Loans matures on June 2, 2026. The Loans will bear interest on the unpaid principal amount thereof as follows: (i) if it is a Loan bearing interest at a rate determined by the Base Rate (as defined in the Credit Agreement), then at the Base Rate plus the Applicable Margin (as defined in the Credit Agreement) for such Loan; (ii) if it is a Loan bearing interest at a rate determined by the LIBOR Rate (as defined in the Credit Agreement), then at the LIBOR Rate plus the Applicable Margin for such Loan; and (iii) if it is a Swing Line Loan, then at the rate applicable to Loans bearing interest at a rate determined by the Base Rate. The Term Loan initially bears interest at the LIBOR Rate plus Applicable Margin (3.9%), with an initial interest period of six months. The Company may elect to continue or convert the existing interest rate benchmark for the Term Loan from LIBOR Rate to Base Rate, and may elect the interest rate benchmark for future Revolving Loans as either LIBOR Rate or Base Rate (and, with respect to any Loan made at the LIBOR Rate, may also select the interest period applicable to any such Loan), by notifying M&T and Lenders from time to time in accordance with the provisions of the Credit Agreement. Notwithstanding the foregoing, following an event of default, the Loans will bear interest at a rate that is 2% per annum higher than the interest rate then in effect for the applicable Loan. The Company must repay the principal amount of the Term Loan in quarterly installments of $1.5 million each, payable on the last business day of each March, June, September and December, commencing on September 30, 2021. The remaining unpaid principal amount of the Term Loan must be repaid on the maturity date, unless payment is sooner required by the Credit Agreement. Mandatory repayments of amounts borrowed under the Revolving Loan facility are required only if the amount borrowed at any time exceeds the commitment amount. Amounts borrowed under Revolving Loans may be repaid and reborrowed at any time until the maturity date. The Company may voluntarily prepay the Loans from time to time in accordance with the provisions of the Credit Agreement, and will be required to prepay the Loans under certain limited circumstances as set forth in the Credit Agreement, including upon receipt of cash proceeds in connection with certain specified asset sales, receipt of insurance or condemnation proceeds or other cash proceeds received other than in the ordinary course of business or upon receipt of cash proceeds from the incurrence of indebtedness that is not permitted under the Credit Agreement, all as more specifically set forth in the Credit Agreement. Under the Credit Agreement, the Company is required to pay certain fees to M&T, including a commitment fee of up to 0.5% per annum with respect to the unused portion of the Lenders’ revolving loan commitments, determined as set forth in the Credit Agreement, and certain fees in connection with the issuance of any letters of credit under the Credit Agreement. The Credit Agreement contains customary representations, warranties, affirmative and negative financial and other covenants, including leverage ratio and fixed charge coverage ratios, and events of default for loans of this type. The Loans are guaranteed by the Guarantors and are secured by a first priority security interest in substantially all of the assets of the Company, ACI and the Guarantors. Maturities of the Term Loan are as follows (in thousands): For the years ended December 31, Amount 2021 (remainder of year) $ 1,500 2022 6,000 2023 6,000 2024 6,000 2025 6,000 Thereafter 33,000 Total 58,500 Less: Loan costs (3,501 ) Total $ 54,999 Amount classified as a current liability $ 6,000 Amount classified as long-term liability $ 48,999 Northpoint Loan On June 3, 2021, the Company entered into a loan and security agreement with Northpoint Commercial Finance LLC (“Northpoint”), pursuant to which Northpoint may from time to time advance funds for the acquisition, financing and/or refinancing by the Company of inventory purchased from Samsung Electronics America, Inc. and/or affiliates and for such other purposes as are acceptable Northpoint. The loan and security agreement provides that Northpoint may establish a credit limit and may adjust such credit limit from time to time; provided that such credit limit does not constitute a commitment or committed line of credit Northpoint. As of September 30, 2021, such credit limit is $1.0 million and the Company has not borrowed any funds. The applicable per annum interest rates for a loan, including any default rates, will be determined at the time of the loan. The loan and security agreement contains customary events of default and is secured by a security interest in all of the Company’s inventory (i) that is manufactured, distributed, or sold by Samsung Electronics America, Inc. and/or its affiliates and/or (ii) that bears any trade names, trademarks, or logos of Samsung Electronics America, Inc. and/or its affiliates; all returns, repossessions, exchanges, substitutions, replacements, attachments, parts, accessories and accessions of any of the foregoing; all price protection payments, discounts, rebates, credits, factory holdbacks and incentive payments related to any of the foregoing; supporting obligations to any of the foregoing; and products and proceeds in whatever form of any of the foregoing. 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 $3.5 million. As of December 31, 2020, the outstanding balance of this loan is $3.2 million, comprised of principal of $3.3 million, net of unamortized loan costs of $0.1 million. On May 10, 2021, the Company repaid this loan by transferring principal and accrued interest from the restricted cash account. 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 $2.8 million 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 $2.5 million each, or $5.0 million in the aggregate, the relative fair value of which is $1.3 million and was recorded as debt discount. After deducting a placement fee and other expenses, the Company received net proceeds of $4.6 million. The original issue discount and warrant expense were amortized as interest expense. On June 2, 2021, the Company repaid these notes in full from the proceeds of the Term Loan. At the time of repayment, the Company wrote off the balance of the debt discount, $1.7 million, as a loss on early extinguishment of debt. Vehicle Loans The Company has financed purchases of transportation vehicles with notes payable which are secured by the vehicles purchased. These notes have five-year terms and interest rates ranging from 3.59% to 5.74%. As of September 30, 2021, the outstanding balance of these notes is $1.4 million. Following is a summary of payments due for the succeeding five years (in thousands): For the years ended December 31, Amount 2021 (remainder of year) $ 124 2022 397 2023 364 2024 312 2025 169 Total $ 1,366 Amount classified as a current liability $ 425 Amount classified as a long-term liability $ 941 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
ASU 2016-02 Transition [Abstract] | |
LEASES | NOTE 11—LEASES Financing Leases The Company has three finance leases for the acquisition of forklifts. At September 30, 2021, the total amount due on these leases was $0.2 million. The Following is a summary of payments due on financing leases for the succeeding five years (in thousands): For the years ended December 31, Amount 2021 (remainder of year) $ 26 2022 66 2023 53 2024 36 2025 and thereafter 49 Total payments 230 Less: amount representing interest (36 ) Present value of minimum lease payments $ 194 Operating Leases On April 5, 2019, the Company entered into a lease agreement with S.H.J., L.L.C for its prior principal office in Ballwin, Missouri. 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. The lease contains customary events of default. On January 13, 2021, the Company entered into a lease agreement with Westgate 200, LLC, which was amended on March 31, 2021, for its new principal office and showroom in St. Charles, Missouri. The lease terminates on April 30, 2027, with two (2) options to renew for additional five (5) year periods. The base rent is $20,977 per month until September 30, 2021, and increases to $31,465 per month until April 30, 2022, after which time the base rent increases at approximately 2.5% per year thereafter. The Company must also pay its 43.4% 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. In connection with the new lease, the Company recorded a right of use asset and liability of $2.0 million representing the initial present value of future lease payments. On June 2, 2021, 1 Stop entered into a new lease agreement with 1870 Bath Ave. LLC, a related party, for the premises located at 1870 Bath Avenue, Brooklyn, NY. The lease is for a term of ten (10) years and provides for a base rent of $74,263 per month during the first year with annual increases to $96,896 during the last year of the term. 1 Stop is also responsible for all property taxes, insurance costs and the utilities used on the premises. The lease contains customary events of default. This lease replaces the prior lease entered into between the parties on September 1, 2018. The initial right of use asset and liability associated with this lease is $8.4 million. On June 2, 2021, Joe’s Appliances entered into a new lease agreement with 812 5th Ave Realty LLC, a related party, for the premises located at 7812 5th Avenue, Brooklyn, NY. The lease is for a term of ten (10) years and provides for a base rent of $6,365 per month during the first year with annual increases to $8,305 during the last year of the term. Joe’s Appliances is also responsible for all property taxes, insurance costs and the utilities used on the premises. The lease contains customary events of default. This lease replaces the prior lease entered into between the parties on September 1, 2018. The initial right of use asset and liability associated with this lease is $0.7 million. On May 31, 2019, YF Logistics entered into a sublease agreement with Dynamic Marketing, Inc. (“DMI”) for its warehouse space in Hamilton, NJ. The initial term of the sublease was for a period commencing on June 1, 2019 and terminating on April 30, 2020, with automatic renewals for successive one year terms until the earlier of (i) termination by either upon thirty (30) days’ prior written notice or (ii) April 30, 2024. The sublease provides for a base rent equal to 71.43% of the base rent paid by DMI under its lease for the premises, plus 71.43% of any taxes, operating expenses, additional charges or any other amounts due by DMI, for a total of $56,250 per month. The initial right of use asset and liability associated with this lease is $3.0 million. On July 29, 2021, AC Gallery entered into a lease agreement with Tom’s Flooring, LLC for the showroom and warehouse located in Largo, Florida. The lease is for a term of four (4) months commencing on September 1, 2021 and ending on December 31, 2021 and provides for a case rent of $6,500 per month. AC Gallery must also pay its one-third (1/3) pro rata portion of the common area maintenance charges, utilities and sales taxes. The lease contains customary events of default. The lease is short term and therefore not recorded as a right of use asset and liability. During the three and nine months ended September 30, 2021, the Company had rent expense of $0.6 million and $0.1 million, respectively. During the three and nine months ended September 30, 2020, the Company had rent expense of $0.1 million and $0.4 million, respectively. Supplemental balance sheet information related to leases at September 30, 2021 was as follows (in thousands): Operating lease right-of-use assets $ 12,319 Lease liabilities, current portion $ 2,127 Lease liabilities, long-term 11,628 Total operating lease liabilities $ 13,755 Weighted average remaining lease term (months) 91 Weighted average discount rate 4.4 % Maturities of the lease liabilities for each of the next five years is as follows (in thousands): 2021 (remainder of year) $ 559 2022 2,581 2023 2,620 2024 1,805 2025 1,487 Thereafter 7,065 Total lease payments 16,117 Less imputed interest (2,362 ) Total lease liability $ 13,755 On June 30, 2021, the Company closed an old warehouse and retail showroom in anticipation of relocating to a new facility. Accordingly, the Company wrote-off $1.4 million representing the remaining right of use asset and related leasehold improvements as of that date. On September 9, 2021, the Company entered into a warehouse agreement for a new warehouse in Somerset, NJ. The warehouse agreement is for a term of 26 months commencing on October 1, 2021 and ending November 29, 2023, unless the master lease for the premises is terminated earlier. The monthly storage fee is $136,274 for the first year, $140,274 for the second year, and $144,573 for the last two months. The Company also paid a security deposit of $272,549. The right of use asset and liability associated with this operating lease are $3.5 million. |
Supplier Concentration
Supplier Concentration | 9 Months Ended |
Sep. 30, 2021 | |
Supplier Concentration [Abstract] | |
SUPPLIER CONCENTRATION | NOTE 12—SUPPLIER CONCENTRATION Significant customers and suppliers are those that account for greater than ten percent of the Company’s revenues and purchases. For the three and nine months ended September 30, 2021, the Company purchased a substantial portion of finished goods from DMI, 79% and 66%, respectively. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 13—RELATED PARTIES Management Services Agreement On April 5, 2019, the Company entered into a management services agreement with 1847 Partners LLC (the “Manager”), a company owned and controlled by Ellery W. Roberts, the Company’s chairman and prior significant stockholder, which was amended effective 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 under certain circumstances specified in the management services agreement, the quarterly fee may be reduced if similar fees payable to the Manager by subsidiaries of the Company’s former parent company, 1847 Holdings LLC, exceed a threshold amount. 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 the Company in connection with performing services under the management services agreement. The Company did not pay any expenses for the three and nine months ended September 30, 2021 and 2020. The Company expensed management fees of $0.06 million for the three months ended September 30, 2021 and 2020 and $0.2 million for the nine months ended September 30, 2021 and 2020. DMI The Company is a member of DMI, an appliance purchasing cooperative. DMI purchases consumer electronics and appliances at wholesale prices from various vendors, and then makes such products available to its members, including the Company, who sell such products to end consumers. DMI’s purchasing group arrangement provides its members, including the Company, with leverage and purchasing power with appliance vendors, and increases the Company’s ability to compete with competitors, including big box appliance and electronics retailers. The Company owns an approximate 5% interest in DMI. Additionally, Albert Fouerti, the Company’s Chief Executive Officer, director and a former significant stockholder of Appliances Connection prior to the Acquisition, is on the board of DMI. As such, DMI is deemed to be a related party. At September 30, 2021, vendor rebate deposits due from DMI were $3.7 million. During the three and nine months ended September 30, 2021, total purchases from DMI, net of holdbacks, were $63.4 million and $91.4 million respectively. At September 30, 2021, deposits at DMI totaled $12.1 million. Lease Agreements As described above, 1 Stop, Joe’s Appliances and Gold Coast have entered into lease agreements with 1870 Bath Ave. LLC, 812 5th Ave Realty LLC and 54 Glen Cove Realty, LLC, respectively. Each of these entities is owned by Albert Fouerti and Elie Fouerti (the vice president of 1 Stop, Joe’s Appliances and Gold Coast and former significant stockholder of each prior to the Acquisition). In addition, YF Logistics has entered into a sublease agreement with DMI. The total rent expense under these related party leases was $0.6 million for the period of June 2, 2021 to September 30, 2021. |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ EQUITY (DEFICIT) | NOTE 14—STOCKHOLDERS’ EQUITY (DEFICIT) As of September 30, 2021, 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 September 30, 2021 and December 31, 2020, the Company had 106,387,332 and 6,111,200 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. On May 27, 2021, the Company entered into an underwriting agreement with ThinkEquity, a division of Fordham Financial Management, Inc. (the “Underwriter”), relating to a public offering of units, each unit consisting of one share of common stock and a warrant to purchase one share of common stock. Under the underwriting agreement, the Company agreed to sell 91,111,111 units to the Underwriter, at a purchase price per unit of $2.0925 (the offering price to the public of $2.25 per unit minus the Underwriter’s discount), and also agreed to grant to the Underwriter a 30-day option to purchase up to 2,000,000 additional shares of common stock, at a purchase price of $2.0832 per share, and/or warrants to purchase up to 2,000,000 additional shares of common stock, at a purchase price of $0.0093 per warrant, in any combination thereof, solely to cover over-allotments, if any. The Underwriter exercised its option to purchase 2,000,000 additional warrants on May 28, 2021 and exercised its option to purchase 2,000,000 additional shares on June 3, 2021. The shares of common stock and warrants contained in the units were immediately separable and were issued separately. On June 2, 2021, the Company sold 91,111,111 shares of common stock and warrants to purchase 93,111,111 shares of common stock to the Underwriter for total gross proceeds of $205.0 million. After deducting the underwriting commission and expenses, the Company received net proceeds of approximately $194.6 million. The Company used the proceeds of the offering to fund a portion of the purchase price for the Acquisition. On June 7, 2021, the Company sold 2,000,000 shares of common stock to the Underwriter for total gross proceeds of $4.5 million. After deducting the underwriting commission and expenses, the Company received net proceeds of approximately $4.2 million. During June 2021, 1,039,148 shares of common stock were issued as a result of the exercise of 1,039,148 warrants with proceeds of $2.3 million. During the three months ended September 30, 2021, 13,100 shares of common stock were issued as a result of the exercise of warrants with proceeds of $0.03 million. On June 2, 2021, the Company issued 5,895,973 shares of common stock to the Sellers in connection with the Acquisition (See Note 9). On June 3, 2021, the Company granted restricted stock awards under the Plan described below to certain directors and officers of the Company for an aggregate of On August 4, 2020, the Company sold 1,111,200 shares of common stock for total gross proceeds of $10.0 million. After deducting the underwriting commission and expenses, the Company received net proceeds of $8.6 million. On August 4, 2020, the Company issued 250,000 shares of common stock to Small Business Community Capital II, L.P. upon conversion of a warrant. Equity Incentive Plan Effective as of July 30, 2020, the Company established the 1847 Goedeker Inc. 2020 Equity Incentive Plan (the “Plan”) and reserved 555,000 shares of common stock for issuance under the Plan. The Plan was approved by the Company’s board of directors and stockholders on April 21, 2020. 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. 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. On July 28, 2021, the Company issued an option for the purchase of 150,000 shares of common stock with a total fair value of $0.3 million. As of September 30, 2021, no shares of common stock available for issuance under the Plan. During the third and fourth quarters of 2020, the Company issued options for the purchase of 555,000 shares of common stock with a total fair value of $1.8 million. The Company recorded stock option expense related to these options of $0.1 million and $0.9 million for the three and nine months ended September 30, 2021, respectively, and $0.3 million for the three and nine months ended September 30, 2020. The remaining compensation expense of $1.0 million will be recognized over the remaining vesting period of 24 months. During the nine months ended September 30, 2021, the Company issued 216,800 shares of restricted stock to directors and officers valued at $0.6 million. 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. The following assumptions were used to calculate stock-based compensation expense for options granted during the three and nine-months ended September 30, 2021: Volatility 77.65 % Risk-free interest rate 1.00 % Dividend yield 0.00 % Expected term 6.25 Years The following table presents activity relating to stock options for the nine months ended September 30, 2021: Shares Weighted Weighted Outstanding at January 1, 2021 555,000 $ 9.00 9 Granted 150,000 3.10 10 Exercised - - - Forfeited / Cancelled / Expired (131,579 ) - - Outstanding at September 30, 2021 573,421 $ 7.74 8.85 Exercisable at September 30, 2021 204,540 $ 9.00 8.85 As of September 30, 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 Warrants On April 5, 2019, the Company issued to 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. exercised this warrant for the purchase of 250,000 shares of common stock on August 4, 2020. On August 4, 2020, the Company issued . These warrants are exercisable at any time and from time to time, in whole or in part, January 26, 2021 an exercise price of $11.25 per share (subject to customary adjustments), . On March 19, 2021, the Company issued four-year warrants to purchase an aggregate of 400,000 shares of common stock to two investors. These warrants are exercisable at any time and from time to time, in whole or in part at an exercise price of $12.00 per share (subject to customary adjustments), . On June 2, 2021, the Company issued warrants to purchase 93,111,111 shares of common stock in the public offering. These warrants are exercisable immediately and expire five years from the date of issuance. The warrants have an exercise price of $2.25 per share, subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock or upon any distributions of assets, including cash, stock or other property to stockholders, and may also be exercised on a cashless basis if at any time during the term of the warrants the issuance of common stock upon exercise of the warrants is not covered by an effective registration statement. The following table presents activity relating to the warrants for the nine months ended September 30, 2021: Shares Weighted Weighted Outstanding at January 1, 2021 55,560 $ 11.25 5.00 Granted 93,511,111 25.29 5.00 Exercised (1,052,248 ) 2.25 - Cancelled / Expired - - - Outstanding at September 30, 2021 92,514,423 $ 2.30 4.67 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15—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 $0.2 million 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 $2.5 million or greater, and may be entitled to receive a partial earn out payment if the EBITDA of the Goedeker Business is less than $2.5 million but greater than $1.5 million. 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. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements of the Company 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 nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2020. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of 1847 Goedeker and its consolidated subsidiaries, ACI, 1 Stop, Gold Coast, Superior Deals, Joe’s Appliances, YF Logistics and AC Gallery. 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. |
Use of Estimates | Use of Estimates The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and equivalents include: (1) currency on hand, (2) demand deposits with banks or financial institutions, (3) other kinds of accounts that have the general characteristics of demand deposits, and (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The majority of payments due from financial institutions for the settlement of credit card and debit card transactions process within two business days and are, therefore, classified as cash and cash equivalents. Other payment methods that take more time to settle are classified as receivables. At September 30, 2021, restricted cash includes approximately $0.2 million to secure vendor letters of credit and $7.8 million withheld by credit card processors as security for the Company’s customer refund claims and credit card chargebacks. 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’s performance obligation is to deliver the customer’s order. Each customer order generally contains only one performance obligation based on the merchandise sale to be delivered, at which time revenue is recognized. 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 trucks 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 (homeowners), builders and designers. 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 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Appliance sales $ 130,837 $ 8,992 $ 197,416 $ 28,327 Furniture sales 5,880 3,555 14,393 7,605 Other sales 5,150 888 7,828 2,465 Total $ 141,867 $ 13,435 $ 219,637 $ 38,397 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. |
Receivables | Receivables Receivables consists of customer’s balance payments for which the Company extends credit to certain homebuilders and designers based on prior business relationship, and vendor rebate receivables. Vendor rebates receivable represent amounts due from manufactures from whom the Company purchases products. Rebates receivable are stated at the amount that management expects to collect from manufacturers (vendors). 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. |
Merchandise Inventory | Merchandise Inventory Inventory consists of finished products acquired for resale and is valued at the lower-of-cost-or-market with cost determined on an average item basis. The Company periodically evaluates the value of items in inventory and provides write-downs to inventory based on its estimate of market conditions. |
Property and Equipment | Property and Equipment Property and equipment is stated at the historical cost. Maintenance and repairs of property and equipment are charged to operations as incurred. Leasehold improvements are amortized over the lesser of the base term of the lease or estimated life of the leasehold improvements. Depreciation is computed using the straight-line method over estimated useful lives as follows: Category Useful Life (Years) Furniture and fixtures 7 Machinery and equipment 5-7 Office equipment 5-7 Transportation equipment 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 and nine months ended September 30, 2021 and 2020. |
Intangible Assets | Intangible Assets As of September 30, 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. 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. Impairments for the nine months ended September 30, 2021 were $1.4 million due to an abandonment of certain right of use assets. There were no impairments for the nine months ended September 30, 2020. |
Long-Lived Assets | Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles (including right of use assets) 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. There were no impairments for the nine months ended September 30, 2021 and 2020. |
Lease Liabilities | Lease Liabilities Lease liabilities and their corresponding right of use 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 right of use asset for impairment whenever events or changes in circumstances indicate that the carrying amount of the right of use asset may not be recoverable. When such events occur, the Company compares the carrying amount of the right of use asset to the undiscounted expected future cash flows related to the right of use 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 right of use asset. If a readily determinable market price does not exist, fair value is estimated using discounted expected cash flows attributable to the right of use asset. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Cash, restricted cash, receivables, inventory, and prepaid expenses approximate fair value, due to their short-term nature. The fair value hierarchy is defined in the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. |
Customer Deposits | Customer Deposits Customer deposits represent the amount collected from customers when an order is placed. The deposits are transferred to revenue when the order ships to the customer or returned to customer if the order is subsequently cancelled. |
Income Taxes | Income Taxes Under the Company’s accounting policies, the Company initially recognizes a tax position in its unaudited condensed consolidated financial statements when it becomes more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax positions that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authorities assuming full knowledge of the position and all relevant facts. Although the Company believes its provisions for unrecognized tax positions are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which the Company has reflected in its income tax provisions and accruals. The tax law is subject to varied interpretations, and the Company has taken positions related to certain matters where the law is subject to interpretation. Such differences could have a material impact on the Company’s income tax provisions and operating results in the period(s) in which the Company makes such determination. In the second quarter of 2021, the Company acquired Appliances Connection. Appliances Connection has a history of profitable operations. As such, the Company determined that it was more likely than not that it would have profitable operations in the future and therefore be able to realize the deferred tax assets and accordingly reversed the allowance for deferred tax assets at June 30, 2021. |
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 |
Income (Loss) Per Share | 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 and nine months ended September 30, 2021, the potentially dilutive securities were warrants for the purchase of 92,514,423 shares of common stock and options for the purchase of 705,000 shares of common stock. At September 30, 2020 there were warrants for the purchase of 55,560 shares of common stock and options for the purchase of 483,158 shares of common stock. These potentially dilutive securities were excluded from diluted loss per share. For the three and nine months ended September 30, 2021, 25,413,437 and 11,773,834 of shares from the above option and warrants were included in the dilutive earnings per share, respectively. |
Reclassifications | Reclassifications Certain accounts have been reclassified to conform with classifications adopted in the period ended September 30, 2021. Such reclassifications had no effect on net earnings or financial position. |
Impact of COVID-19 | Impact of COVID-19 In December 2019, a novel strain of coronavirus (“COVID-19”) emerged in China. On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. The extent of the COVID-19 pandemic’s continued effect on the Company’s operational and financial performance and those of third parties on which the Company relies will depend on future developments, including the effectiveness of vaccines and other treatments for COVID-19, and other new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company does not yet know the full extent of potential impacts on its business and financing. However, these effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which the Company relies. |
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 unaudited condensed 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. For the nine months ended September 30, 2021, the Company had operating profit of $2.0 million, $18.3 million of cash flow used in operations, and working capital of $20.0 million. Additionally, the Company had $27.2 million of unrestricted cash at September 30, 2021. On June 2, 2021, the Company completed the acquisition of Appliances Connection. Appliances Connection has historically been profitable; however, less than 4 months of their operations are included in results for the nine months ended September 30, 2021. 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 at least one year from the date of the filing of these unaudited condensed consolidated financial statements. 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Not Yet Adopted In June 2016, the FASB issued ASU 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments The Company currently believes that all other issued and not yet effective accounting standards are not relevant to the Company’s unaudited condensed consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of disaggregated revenue | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Appliance sales $ 130,837 $ 8,992 $ 197,416 $ 28,327 Furniture sales 5,880 3,555 14,393 7,605 Other sales 5,150 888 7,828 2,465 Total $ 141,867 $ 13,435 $ 219,637 $ 38,397 |
Schedule of property and equipment estimated useful life | Category Useful Life (Years) Furniture and fixtures 7 Machinery and equipment 5-7 Office equipment 5-7 Transportation equipment 5 |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Schedule of receivables | September 30, December 31, 2020 Trade receivables from customers $ 12,551 $ - Vendor rebates receivable 7,499 1,338 Credit cards in process of collection 135 660 Other receivables 3,833 - Total receivables $ 24,018 $ 1,998 |
Merchandise Inventory (Tables)
Merchandise Inventory (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory balances | September 30, December 31, 2020 Appliances $ 34,317 $ 5,286 Furniture 1,903 195 Other 1,984 91 Total merchandise inventory 38,204 5,572 Allowance for inventory obsolescence (425 ) (425 ) Merchandise inventory, net $ 37,779 $ 5,147 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, December 31, 2020 Equipment $ 88 $ 69 Warehouse equipment 374 61 Furniture and fixtures 8 1 Transportation equipment 1,418 64 Leasehold improvements 216 137 Construction in progress 693 - Total property and equipment 2,797 332 Accumulated depreciation (277 ) (86 ) Property and equipment, net $ 2,520 $ 246 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | September 30, December 31, 2020 Customer relationships $ 26,549 $ 749 Marketing related - tradename 25,704 1,368 Total intangible assets 52,253 2,117 Accumulated amortization (4,395 ) (735 ) Intangible assets, net $ 47,858 $ 1,382 |
Schedule of annual amortization expense | 2021 (remainder of year) $ 2,613 2022 10,451 2023 10,451 2024 10,139 2025 10,027 Thereafter 4,177 Total $ 47,858 |
Schedule of goodwill | Balance December 31, 2020 $ 4,726 Preliminary goodwill from acquisition of Appliances Connection 177,875 Preliminary goodwill from acquisition of Appliances Gallery 1,167 Balance September 30, 2021 $ 183,768 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable and accrued expenses | September 30, December 31, Trade accounts payable $ 37,845 $ 5,975 Sales tax 23,836 5,804 Accrued payroll liabilities 1,527 493 Accrued interest 210 10 Accrued liability for sales returns 200 200 Other accrued liabilities 4,395 220 Total accounts payable and accrued expenses $ 68,013 $ 12,702 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of preliminary analysis for the Goedeker asset purchase | Provisional purchase consideration at preliminary fair value (in thousands): Cash consideration $ 180,000 Share issuance 12,264 Working capital adjustment paid to sellers 27,597 Working capital adjustment due to sellers 5,000 Amount of consideration $ 224,861 Assets acquired and liabilities assumed at preliminary fair value Cash $ 5,897 Accounts receivable 19,403 Inventories 20,484 Vendor deposits 15,000 Other assets 2,194 Property and equipment 1,891 Right of use operating lease assets 1,834 Customer relationships 25,800 Marketing related - tradename 24,336 Accounts payable and accrued expenses (43,633 ) Customer deposits (13,138 ) Finance lease obligation (215 ) Net deferred tax liabilities (9,506 ) Operating lease liability (1,834 ) Notes payable (1,527 ) Total net assets acquired $ 46,986 Consideration paid 224,861 Preliminary goodwill $ 177,875 Provisional purchase consideration at fair value (in thousands): Cash consideration $ 1,420 Amount of consideration $ 1,420 Assets acquired and liabilities assumed at preliminary fair value Inventory 483 Prepaid assets 6 Property and equipment 19 Customer deposits (255 ) Net tangible assets acquired $ 253 Total net assets acquired $ 253 Consideration paid 1,420 Preliminary goodwill $ 1,167 |
Schedule of consolidated statement of operations | Three Months Ended Nine Months Ended 2021 2020 2021 2020 (in thousands, except share and per share data) Product sales, net $ 141,867 $ 102,201 $ 404,953 $ 260,443 Net income (loss) $ 3,946 $ (657 ) $ 31,128 $ (3,196 ) Amortization of intangibles included in net income (loss) (b) $ 2,507 $ 2,507 $ 7,520 $ 7,520 Basic earnings per share $ 0.04 $ (0.01 ) $ 0.31 $ (0.03 ) Diluted earnings per share (a) $ 0.03 $ (0.01 ) $ 0.31 $ (0.03 ) Basic number of shares 106,387,331 105,335,084 105,335,084 105,335,084 Diluted number of shares 131,787,293 105,335,084 105,335,084 105,335,084 (a) Assumes shares outstanding at offering were outstanding for all periods and that warrant price is equal to the offering price resulting in no diluted shares. (b) Represents amortization of the identified intangible assets acquired in the Appliances Connection acquisition. (c) Appliance Gallery pro forma is not included in the table above as it was determined to be immaterial. |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of maturities of term loan | For the years ended December 31, Amount 2021 (remainder of year) $ 1,500 2022 6,000 2023 6,000 2024 6,000 2025 6,000 Thereafter 33,000 Total 58,500 Less: Loan costs (3,501 ) Total $ 54,999 Amount classified as a current liability $ 6,000 Amount classified as long-term liability $ 48,999 |
Schedule of payments due for succeeding five years | For the years ended December 31, Amount 2021 (remainder of year) $ 124 2022 397 2023 364 2024 312 2025 169 Total $ 1,366 Amount classified as a current liability $ 425 Amount classified as a long-term liability $ 941 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
ASU 2016-02 Transition [Abstract] | |
Schedule of financing leases liability | For the years ended December 31, Amount 2021 (remainder of year) $ 26 2022 66 2023 53 2024 36 2025 and thereafter 49 Total payments 230 Less: amount representing interest (36 ) Present value of minimum lease payments $ 194 |
Schedule of supplemental balance sheet information related to leases | Operating lease right-of-use assets $ 12,319 Lease liabilities, current portion $ 2,127 Lease liabilities, long-term 11,628 Total operating lease liabilities $ 13,755 Weighted average remaining lease term (months) 91 Weighted average discount rate 4.4 % |
Schedule of financing leases liability | 2021 (remainder of year) $ 559 2022 2,581 2023 2,620 2024 1,805 2025 1,487 Thereafter 7,065 Total lease payments 16,117 Less imputed interest (2,362 ) Total lease liability $ 13,755 |
Stockholders_ Equity (Deficit)
Stockholders’ Equity (Deficit) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of assumptions were used to calculate stock-based compensation expense | Volatility 77.65 % Risk-free interest rate 1.00 % Dividend yield 0.00 % Expected term 6.25 Years |
Schedule of activity relating to stock options | Shares Weighted Weighted Outstanding at January 1, 2021 555,000 $ 9.00 9 Granted 150,000 3.10 10 Exercised - - - Forfeited / Cancelled / Expired (131,579 ) - - Outstanding at September 30, 2021 573,421 $ 7.74 8.85 Exercisable at September 30, 2021 204,540 $ 9.00 8.85 |
Schedule of activity relating to warrants | Shares Weighted Weighted Outstanding at January 1, 2021 55,560 $ 11.25 5.00 Granted 93,511,111 25.29 5.00 Exercised (1,052,248 ) 2.25 - Cancelled / Expired - - - Outstanding at September 30, 2021 92,514,423 $ 2.30 4.67 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Restricted cash | $ 0.2 | $ 0.2 | |
Withheld by credit card processors | $ 7.8 | $ 7.8 | |
Estimated useful lives | 5 years | ||
Impairments | $ 1.4 | ||
Tax percentage | 50.00% | 50.00% | |
Accounts payable and accrued expenses | $ 18.2 | $ 18.2 | $ 5.8 |
Sales tax liability connection transaction | 11 | ||
Accrued interest | $ 1 | $ 1 | |
Shares from option (in Shares) | 25,413,437 | ||
Shares from warrants (in Shares) | 11,773,834 | ||
Operating profit | $ 2 | ||
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | (18.3) | ||
Working capital | $ 20 | 20 | |
lease hold improvements | $ 27.2 | $ 27.2 | |
Options [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Purchase of common stock (in Shares) | 483,158 | ||
Warrants [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Purchase of common stock (in Shares) | 55,560 | ||
Warrants [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Potentially dilutive securities (in Shares) | 92,514,423 | ||
Options [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Potentially dilutive securities (in Shares) | 705,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of disaggregated revenue - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of disaggregated revenue [Abstract] | ||||
Appliance sales | $ 130,837 | $ 8,992 | $ 197,416 | $ 28,327 |
Furniture sales | 5,880 | 3,555 | 14,393 | 7,605 |
Other sales | 5,150 | 888 | 7,828 | 2,465 |
Total | $ 141,867 | $ 13,435 | $ 219,637 | $ 38,397 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life | 9 Months Ended |
Sep. 30, 2021 | |
Furniture and Fixtures [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life [Line Items] | |
Useful Life | 7 years |
Transportation Equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life [Line Items] | |
Useful Life | 5 years |
Minimum [Member] | Machinery and Equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life [Line Items] | |
Useful Life | 5 years |
Minimum [Member] | Office Equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life [Line Items] | |
Useful Life | 5 years |
Maximum [Member] | Machinery and Equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life [Line Items] | |
Useful Life | 7 years |
Maximum [Member] | Office Equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of property and equipment estimated useful life [Line Items] | |
Useful Life | 7 years |
Receivables (Details) - Schedul
Receivables (Details) - Schedule of receivables - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of receivables [Abstract] | ||
Trade receivables from customers | $ 12,551 | |
Vendor rebates receivable | 7,499 | 1,338 |
Credit cards in process of collection | 135 | 660 |
Other receivables | 3,833 | |
Total receivables | $ 24,018 | $ 1,998 |
Merchandise Inventory (Details)
Merchandise Inventory (Details) - Schedule of inventory balances - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory [Line Items] | ||
Total merchandise inventory | $ 38,204 | $ 5,572 |
Allowance for inventory obsolescence | (425) | (425) |
Merchandise inventory, net | 37,779 | 5,147 |
Appliances [Member] | ||
Inventory [Line Items] | ||
Total merchandise inventory | 34,317 | 5,286 |
Furniture [Member] | ||
Inventory [Line Items] | ||
Total merchandise inventory | 1,903 | 195 |
Other [Member] | ||
Inventory [Line Items] | ||
Total merchandise inventory | $ 1,984 | $ 91 |
Vendor Deposits (Details)
Vendor Deposits (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Vendor Deposits Disclosure [Abstract] | ||
Vendor deposits | $ 12.1 | $ 0.5 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 200 | $ 30 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 2,797 | $ 332 |
Accumulated depreciation | (277) | (86) |
Property and equipment, net | 2,520 | 246 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 88 | 69 |
Warehouse equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 374 | 61 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 8 | 1 |
Transportation equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,418 | 64 |
Leasehold improvements[Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 216 | 137 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 693 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Identifiable intangible assets | $ 2,100 | $ 2,100 | ||
Weighted average estimated useful life | 5 years | |||
Amortization expense | $ 3,400 | $ 80 | $ 3,700 | $ 200 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details) - Schedule of intangible assets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of intangible assets [Abstract] | ||
Customer relationships | $ 26,549 | $ 749 |
Marketing related - tradename | 25,704 | 1,368 |
Total intangible assets | 52,253 | 2,117 |
Accumulated amortization | (4,395) | (735) |
Intangible assets, net | $ 47,858 | $ 1,382 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details) - Schedule of annual amortization expense $ in Thousands | Sep. 30, 2021USD ($) |
Schedule of annual amortization expense [Abstract] | |
2021 (remainder of year) | $ 2,613 |
2022 | 10,451 |
2023 | 10,451 |
2024 | 10,139 |
2025 | 10,027 |
Thereafter | 4,177 |
Total | $ 47,858 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill (Details) - Schedule of goodwill $ in Thousands | Sep. 30, 2021USD ($) |
Schedule of goodwill [Abstract] | |
Balance December 31, 2020 | $ 4,726 |
Preliminary goodwill from acquisition of Appliances Connection | 177,875 |
Preliminary goodwill from acquisition of Appliances Gallery | 1,167 |
Balance September 30, 2021 | $ 183,768 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of accounts payable and accrued expenses [Abstract] | ||
Trade accounts payable | $ 37,845 | $ 5,975 |
Sales tax | 23,836 | 5,804 |
Accrued payroll liabilities | 1,527 | 493 |
Accrued interest | 210 | 10 |
Accrued liability for sales returns | 200 | 200 |
Other accrued liabilities | 4,395 | 220 |
Total accounts payable and accrued expenses | $ 68,013 | $ 12,702 |
Business Combinations (Details)
Business Combinations (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | |
Business Combinations [Abstract] | ||
Common stock, description | The aggregate purchase price is $222.0 million (subject to adjustment), consisting of (i) $180.0 million in cash (subject to adjustment), (ii) 2,333,333 shares of the Company’s common stock having a stated value that is equal to $21.0 million and (iii) 3,562,640 shares of the Company’s common stock, which is equal to (A) $21.0 million divided by (B) the average of the closing price of the Company’s common stock (as reported on NYSE American) for the 20 trading days immediately preceding the 3rd trading day prior to the closing date of the AC Acquisition. | |
Cash portion of the purchase price | $ 212,600 | $ 212,600 |
Fair value of net assets | 47,000 | 47,000 |
Fair value of net tangible assets | 177,900 | $ 177,900 |
Purchase agreement, description | Pursuant to the Gallery Purchase Agreement, the total purchase price is $1.7 million in cash, subject to certain adjustments at closing. As a result of these adjustments, the purchase price paid at closing was $1.4 million. | |
Fair value of assets acquired | $ 300 | |
Fair value of the net tangible assets | 20 | 20 |
Provisional goodwill | 1,200 | |
Revenue | 129,300 | 15,100 |
Net income | 177,100 | 20,000 |
Tax effect of net assets acquired | $ 9,500 | $ 9,500 |
Business Combinations (Detail_2
Business Combinations (Details) - Schedule of preliminary analysis for the Goedeker asset purchase $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Schedule of preliminary analysis for the Goedeker asset purchase [Abstract] | |
Cash consideration | $ 180,000 |
Share issuance | 12,264 |
Working capital adjustment paid to sellers | 27,597 |
Working capital adjustment due to sellers | 5,000 |
Amount of consideration | 224,861 |
Assets acquired and liabilities assumed at preliminary fair value | |
Cash | 5,897 |
Accounts receivable | 19,403 |
Inventories | 20,484 |
Vendor deposits | 15,000 |
Other assets | 2,194 |
Property and equipment | 1,891 |
Right of use operating lease assets | 1,834 |
Customer relationships | 25,800 |
Marketing related - tradename | 24,336 |
Accounts payable and accrued expenses | (43,633) |
Customer deposits | (13,138) |
Finance lease obligation | (215) |
Net deferred tax liabilities | (9,506) |
Operating lease liability | (1,834) |
Notes payable | (1,527) |
Total net assets acquired | 46,986 |
Consideration paid | 224,861 |
Preliminary goodwill | 177,875 |
Cash consideration | 1,420 |
Amount of consideration | 1,420 |
Assets acquired and liabilities assumed at preliminary fair value | |
Inventory | 483 |
Prepaid assets | 6 |
Property and equipment | 19 |
Customer deposits | (255) |
Net tangible assets acquired | 253 |
Total net assets acquired | 253 |
Consideration paid | 1,420 |
Preliminary goodwill | $ 1,167 |
Business Combinations (Detail_3
Business Combinations (Details) - Schedule of consolidated statement of operations - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||||
Schedule of consolidated statement of operations [Abstract] | |||||||
Product sales, net | $ 141,867 | $ 102,201 | $ 404,953 | $ 260,443 | |||
Net income (loss) | 3,946 | (657) | 31,128 | (3,196) | |||
Amortization of intangibles included in net income (loss) | $ 2,507 | [1] | $ 2,507 | [1] | $ 7,520 | [1] | $ 7,520 |
Basic earnings per share (in Dollars per share) | $ 0.04 | $ (0.01) | $ 0.31 | $ (0.03) | |||
Diluted earnings per share (in Dollars per share) | $ 0.03 | [2] | $ (0.01) | [2] | $ 0.31 | [2] | $ (0.03) |
Basic number of shares (in Shares) | 106,387,331 | 105,335,084 | 105,335,084 | 105,335,084 | |||
Diluted number of shares (in Shares) | 131,787,293 | 105,335,084 | 105,335,084 | 105,335,084 | |||
[1] | Represents amortization of the identified intangible assets acquired in the Appliances Connection acquisition. | ||||||
[2] | Assumes shares outstanding at offering were outstanding for all periods and that warrant price is equal to the offering price resulting in no diluted shares. |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Millions | Jun. 02, 2021 | Mar. 19, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Aug. 25, 2020 |
Notes Payable (Details) [Line Items] | |||||
Credit facilities, description | pursuant to which the Lenders have agreed to make available to the Company and ACI senior secured credit facilities in the aggregate initial amount of $70.0 million, including (i) a $60.0 million term loan (the “Term Loan”) and (ii) a $10.0 million revolving credit facility (the “Revolving Loan”), which revolving credit facility includes a $2.0 million swingline subfacility (the “Swing Line Loan” and together with the Term Loan and the Revolving Loan, the “Loans”) and a $2.0 million letter of credit subfacility, in each case, on the terms and conditions contained in the Credit Agreement. On June 2, 2021, the Company borrowed the entire amount of the Term Loan and issued term loan notes to the Lenders in the aggregate principal amount of $60.0 million. As of September 30, 2021, the Company has not made any loans under the Revolving Loan. As of September 30, 2021, the outstanding balance of the Term Loan is $55.0 million, comprised of principal of $58.5 million, net of unamortized loan costs of $3.5 million. Loan costs before amortization included $3.5 million of lender and placement agent fees and $0.3 million of legal other fees. The Company classified $6.0 million as a current liability and the balance as a long-term liability. | ||||
Interest rate | 3.90% | ||||
Interest rate per annum | 2.00% | ||||
Term loan quarterly installments | The Company must repay the principal amount of the Term Loan in quarterly installments of $1.5 million each, payable on the last business day of each March, June, September and December, commencing on September 30, 2021. | ||||
Commitment fee percentage per annum | 0.50% | ||||
Credit limit | $ 1 | ||||
Principal amount | $ 3.5 | ||||
Outstanding balance | $ 3.2 | ||||
Comprised of principal | 3.3 | ||||
Unamortized loan costs | $ 0.1 | ||||
Securities purchase agreement, description | 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 $2.8 million 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 $2.5 million each, or $5.0 million in the aggregate, the relative fair value of which is $1.3 million and was recorded as debt discount. After deducting a placement fee and other expenses, the Company received net proceeds of $4.6 million. The original issue discount and warrant expense were amortized as interest expense. On June 2, 2021, the Company repaid these notes in full from the proceeds of the Term Loan. At the time of repayment, the Company wrote off the balance of the debt discount, $1.7 million, as a loss on early extinguishment of debt. | ||||
Outstanding balance of notes | $ 1.4 | ||||
Minimum [Member] | |||||
Notes Payable (Details) [Line Items] | |||||
Interest rates | 3.59% | ||||
Maximum [Member] | |||||
Notes Payable (Details) [Line Items] | |||||
Interest rates | 5.74% |
Notes Payable (Details) - Sched
Notes Payable (Details) - Schedule of maturities of term loan $ in Thousands | Dec. 31, 2020USD ($) |
Schedule of maturities of term loan [Abstract] | |
2021 (remainder of year) | $ 1,500 |
2022 | 6,000 |
2023 | 6,000 |
2024 | 6,000 |
2025 | 6,000 |
Thereafter | 33,000 |
Total | 58,500 |
Less: Loan costs | (3,501) |
Total | 54,999 |
Amount classified as a current liability | 6,000 |
Amount classified as long-term liability | $ 48,999 |
Notes Payable (Details) - Sch_2
Notes Payable (Details) - Schedule of payments due for succeeding five years $ in Thousands | Dec. 31, 2021USD ($) |
Schedule of payments due for succeeding five years [Abstract] | |
2021 (remainder of year) | $ 124 |
2022 | 397 |
2023 | 364 |
2024 | 312 |
2025 | 169 |
Total | 1,366 |
Amount classified as a current liability | 425 |
Amount classified as a long-term liability | $ 941 |
Leases (Details)
Leases (Details) - USD ($) | Jul. 29, 2021 | Jun. 02, 2021 | Jan. 13, 2021 | Apr. 05, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 |
Leases (Details) [Line Items] | ||||||||||
Finance lease payment due | $ 200,000 | $ 200,000 | ||||||||
Term of lease | 5 years | 26 months | 26 months | |||||||
Base rent Increases | $ 74,263 | $ 45,000 | ||||||||
Lease agreement, description | The Company must also pay its 43.4% 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. | |||||||||
Right of use assets | $ 2,000,000 | $ 2,000,000 | ||||||||
Base rent Increases | 96,896 | |||||||||
Operating lease right of use asset | $ 8,400,000 | |||||||||
Operating lease right of use asset | $ 12,319,000 | $ 12,319,000 | $ 1,578,000 | |||||||
Percentage of base rent | 71.43% | 71.43% | ||||||||
Percentage of taxes Paid | 71.43% | 71.43% | ||||||||
Total amont | $ 56,250 | $ 56,250 | ||||||||
Right of asset and liability | 3,000,000 | 3,000,000 | ||||||||
Lease agreement term, description | AC Gallery entered into a lease agreement with Tom’s Flooring, LLC for the showroom and warehouse located in Largo, Florida. The lease is for a term of four (4) months commencing on September 1, 2021 and ending on December 31, 2021 and provides for a case rent of $6,500 per month. AC Gallery must also pay its one-third (1/3) pro rata portion of the common area maintenance charges, utilities and sales taxes. | |||||||||
Rent expense | 600,000 | $ 100,000 | 100,000 | $ 400,000 | ||||||
Remaining right of use asset and related leasehold improvements | $ 1,400,000 | |||||||||
Storage fee first year | 136,274 | |||||||||
Storage fee second year | 140,274 | |||||||||
Storage fee last two months | 144,573 | |||||||||
Lease Deposit Liability | $ 272,549 | 272,549 | ||||||||
Operating Lease, Payments, Use | $ 3,500,000 | |||||||||
LLC [Member] | ||||||||||
Leases (Details) [Line Items] | ||||||||||
Term of lease | 10 years | |||||||||
Base rent Increases | $ 6,365 | |||||||||
Lease agreement, description | the Company entered into a lease agreement with Westgate 200, LLC, which was amended on March 31, 2021, for its new principal office and showroom in St. Charles, Missouri. The lease terminates on April 30, 2027, with two (2) options to renew for additional five (5) year periods. The base rent is $20,977 per month until September 30, 2021, and increases to $31,465 per month until April 30, 2022, after which time the base rent increases at approximately 2.5% per year thereafter. | |||||||||
Base rent Increases | 8,305 | |||||||||
Operating lease right of use asset | $ 700,000 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of financing leases liability $ in Thousands | Sep. 30, 2021USD ($) |
Schedule of financing leases liability [Abstract] | |
2021 (remainder of year) | $ 26 |
2022 | 66 |
2023 | 53 |
2024 | 36 |
2025 and thereafter | 49 |
Total payments | 230 |
Less: amount representing interest | (36) |
Present value of minimum lease payments | $ 194 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of supplemental balance sheet information related to leases - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of supplemental balance sheet information related to leases [Abstract] | ||
Operating lease right-of-use assets | $ 12,319 | $ 1,578 |
Lease liabilities, current portion | 2,127 | 451 |
Lease liabilities, long-term | 11,628 | $ 1,128 |
Total operating lease liabilities | $ 13,755 | |
Weighted average remaining lease term (months) | 91 years | |
Weighted average discount rate | 4.40% |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of maturities of the lease liability $ in Thousands | Sep. 30, 2021USD ($) |
Schedule of maturities of the lease liability [Abstract] | |
2021 (remainder of year) | $ 559 |
2022 | 2,581 |
2023 | 2,620 |
2024 | 1,805 |
2025 | 1,487 |
Thereafter | 7,065 |
Total lease payments | 16,117 |
Less imputed interest | (2,362) |
Total lease liability | $ 13,755 |
Supplier Concentration (Details
Supplier Concentration (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Supplier Concentration (Details) [Line Items] | ||
Percentage of revenues and purchases | 79.00% | 66.00% |
Revenue Benchmark [Member] | ||
Supplier Concentration (Details) [Line Items] | ||
Percentage of revenues and purchases | 10.00% |
Related Parties (Details)
Related Parties (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Related Party Transactions [Abstract] | ||||
Service fee to manager | $ 62,500 | |||
Management fees | $ 60,000 | 200,000 | ||
Equity interest rate | 5.00% | |||
Vendor rebate deposits | 3,700,000 | $ 3,700,000 | 3,700,000 | |
DMI holdbacks | $ 63,400,000 | 91,400,000 | ||
Deposits at DMI totaled | $ 12,100,000 | |||
Rent expense | $ 600,000 |
Stockholders_ Equity (Deficit_2
Stockholders’ Equity (Deficit) (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 07, 2021 | Jun. 03, 2021 | Jun. 02, 2021 | Aug. 04, 2020 | Apr. 05, 2019 | Jul. 28, 2021 | Jun. 30, 2021 | May 27, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jul. 30, 2021 | Apr. 09, 2021 | Mar. 19, 2021 | Dec. 31, 2020 |
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||||||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||
Common stock, shares issued | 106,387,332 | 106,387,332 | 6,111,200 | ||||||||||||||
Underwriting agreement, description | Under the underwriting agreement, the Company agreed to sell 91,111,111 units to the Underwriter, at a purchase price per unit of $2.0925 (the offering price to the public of $2.25 per unit minus the Underwriter’s discount), and also agreed to grant to the Underwriter a 30-day option to purchase up to 2,000,000 additional shares of common stock, at a purchase price of $2.0832 per share, and/or warrants to purchase up to 2,000,000 additional shares of common stock, at a purchase price of $0.0093 per warrant, in any combination thereof, solely to cover over-allotments, if any. The Underwriter exercised its option to purchase 2,000,000 additional warrants on May 28, 2021 and exercised its option to purchase 2,000,000 additional shares on June 3, 2021. | ||||||||||||||||
Shares of common stock sold | 91,111,111 | ||||||||||||||||
Warrants to purchase shares of common stock | 93,111,111 | ||||||||||||||||
Gross proceeds (in Dollars) | $ 205,000 | ||||||||||||||||
Net proceeds (in Dollars) | $ 194,600 | ||||||||||||||||
Shares of common stock connections with acquisitions | 5,895,973 | ||||||||||||||||
Net Proceeds (in Dollars) | $ 8,600 | ||||||||||||||||
Shares of common stock remain available for issuance | 150,000 | ||||||||||||||||
Common stock of fair value (in Dollars) | $ 300 | ||||||||||||||||
Purchase of shares of common stock | 555,000 | ||||||||||||||||
Common stock fair value (in Dollars) | $ 1,800 | ||||||||||||||||
Stock option expense (in Dollars) | $ 100 | $ 300 | $ 900 | ||||||||||||||
Remaining compensation expense (in Dollars) | $ 1,000 | $ 1,000 | |||||||||||||||
Remaining vesting period | 24 months | ||||||||||||||||
Restricted stock, shares issued | 216,800 | ||||||||||||||||
Restricted stock to directors and officers (in Dollars) | $ 600 | ||||||||||||||||
Warrants, description | the Company issued to Small Business Community Capital II, L.P. 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. Small Business Community Capital II, L.P. exercised this warrant for the purchase of 250,000 shares of common stock on August 4, 2020. | ||||||||||||||||
Underwriter [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Shares of common stock sold | 2,000,000 | ||||||||||||||||
Gross proceeds (in Dollars) | $ 4,500 | ||||||||||||||||
Net proceeds (in Dollars) | $ 4,200 | ||||||||||||||||
Affiliated Entity [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Purchase shares of common stock | 55,560 | ||||||||||||||||
Exercise price per share (in Dollars per share) | $ 11.25 | ||||||||||||||||
Investor [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Purchase shares of common stock | 400,000 | ||||||||||||||||
Exercise price per share (in Dollars per share) | $ 12 | ||||||||||||||||
IPO [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Purchase shares of common stock | 93,111,111 | ||||||||||||||||
Exercise price per share (in Dollars per share) | $ 2.25 | ||||||||||||||||
Directors and Officers [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Aggregate shares of common stock | 216,800 | ||||||||||||||||
Aggregate shares of common stock, value (in Dollars) | $ 600 | ||||||||||||||||
Minimum [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Reserved shares of common stock for issuance | 555,000 | ||||||||||||||||
Maximum [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Reserved shares of common stock for issuance | 1,000,000 | ||||||||||||||||
2020 Equity Incentive Plan [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Reserved shares of common stock for issuance | 555,000 | ||||||||||||||||
Common Stock [Member] | |||||||||||||||||
Stockholders’ Equity (Deficit) (Details) [Line Items] | |||||||||||||||||
Shares of common stock issued | 1,039,148 | 250,000 | 13,100 | 13,100 | |||||||||||||
Exercise of warrant | 1,039,148 | ||||||||||||||||
Proceeds from warrants exercises (in Dollars) | $ 2,300 | $ 30 | |||||||||||||||
Shares of common stock connections with acquisitions | 5,896 | ||||||||||||||||
Common stock shares issued | 1,111,200 | ||||||||||||||||
Gross proceeds (in Dollars) | $ 10,000 |
Stockholders_ Equity (Deficit_3
Stockholders’ Equity (Deficit) (Details) - Schedule of assumptions were used to calculate stock-based compensation expense | 9 Months Ended |
Sep. 30, 2021 | |
Schedule of assumptions were used to calculate stock-based compensation expense [Abstract] | |
Volatility | 77.65% |
Risk-free interest rate | 1.00% |
Dividend yield | 0.00% |
Expected term | 6 years 3 months |
Stockholders_ Equity (Deficit_4
Stockholders’ Equity (Deficit) (Details) - Schedule of activity relating to stock options | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Schedule of activity relating to stock options [Abstract] | |
Outstanding beginning balance, Shares | shares | 555,000 |
Outstanding beginning balance, Weighted Average Exercise Price | $ / shares | $ 9 |
Outstanding beginning balance, Weighted Average Contractual Term in Years | 9 years |
Outstanding ending balance, Shares | shares | 573,421 |
Outstanding ending balance, Weighted Average Exercise Price | $ / shares | $ 7.74 |
Outstanding ending balance, Weighted Average Contractual Term in Years | 8 years 10 months 6 days |
Exercisable, Shares | shares | 204,540 |
Exercisable, Weighted Average Exercise Price | $ / shares | $ 9 |
Exercisable, Weighted Average Contractual Term in Years | 8 years 10 months 6 days |
Granted, Shares | shares | 150,000 |
Granted, Weighted Average Exercise Price | $ / shares | $ 3.1 |
Granted,Weighted Average Contractual Term in Years | 10 years |
Exercised, Shares | shares | |
Exercised, Weighted Average Exercise Price | $ / shares | |
Forfeited / Cancelled / Expired, Shares | shares | (131,579) |
Forfeited / Cancelled / Expired, Weighted Average Exercise Price | $ / shares |
Stockholders_ Equity (Deficit_5
Stockholders’ Equity (Deficit) (Details) - Schedule of activity relating to warrants | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Schedule of activity relating to warrants [Abstract] | |
Outstanding beginning balance, Shares | 55,560 |
Outstanding beginning balance, Weighted Average Exercise Price (in Dollars per share) | $ / shares | $ 11.25 |
Outstanding beginning balance, Weighted Average Contractual Term in Years | 5 years |
Outstanding ending balance, Shares | 92,514,423 |
Outstanding ending balance, Weighted Average Exercise Price (in Dollars per share) | $ / shares | $ 2.3 |
Outstanding ending balance, Weighted Average Contractual Term in Years | 4 years 8 months 1 day |
Granted, Shares | 93,511,111 |
Granted, Weighted Average Exercise Price (in Dollars per share) | $ / shares | $ 25.29 |
Granted, Weighted Average Contractual Term in Years | 5 years |
Exercised, Shares | (1,052,248) |
Exercised, Weighted Average Exercise Price (in Dollars per share) | $ / shares | $ 2.25 |
Exercised,Weighted Average Contractual Term in Years | |
Cancelled / Expired, Shares | |
Cancelled / Expired, Weighted Average Exercise Price (in Dollars per share) | $ / shares | |
Cancelled / Expired, Weighted Average Contractual Term in Years |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Asset purchase agreement, description | Pursuant to the asset purchase agreement, Goedeker entitled to receive an earn out payment of $0.2 million 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 $2.5 million or greater, and may be entitled to receive a partial earn out payment if the EBITDA of the Goedeker Business is less than $2.5 million but greater than $1.5 million. |