- Spinning out GOED had a huge tax implication for EFSH shareholders. Your cost basis will only be about 10% of the value that gets spun out you so you will.
- be paying taxes on 90% of that value.
- also, the insiders and friendly hands holders will probably want to sell the stock putting pressure on a very illiquid name.
- I would not be surprised, speculating, to see the CEO and others selling EFSH in the open market because they understand all of the above.
The aggregate purchase price for the Business being acquired is $6,200,000 consisting of: (i) $1,500,000 in cash (the “Cash Portion”), subject to adjustment; (II) the issuance of a promissory note in the principal amount of $4,100,000; and (III) up to $600,000 in Earn Out Payments (as defined below). As additional consideration, the Buyer agreed to issue to each of the Stockholders a number of shares of its common stock equal to 11.25% of the issued and outstanding stock of the Buyer as of the closing date (22.50% in the aggregate).
the balance sheet has $38mm in Debt and a negative net worth = zero book value.
|December 31, 2019|
|Accounts receivable, net||3,848,990||2,453,455|
|Prepaid expenses and other current assets||1,154,862||1,123,486|
|TOTAL CURRENT ASSETS||13,452,502||5,726,093|
|Property and equipment, net||2,930,772||3,367,427|
|Operating lease right of use assets||2,326,865||2,565,835|
|Intangible assets, net||1,728,411||1,893,577|
|Deferred tax asset||1,802,256||635,503|
|LIABILITIES AND SHAREHOLDERS’ DEFICIT|
|Accounts payable and accrued expenses||$||7,311,489||$||4,017,630|
|Floor plan payable||-||10,581|
|Current portion of operating lease liability||441,336||485,773|
|Advances, related party||184,678||181,333|
|Lines of credit||456,105||1,250,930|
|Note payable – related party||119,400||119,400|
|Notes payable – current portion||5,030,487||5,367,539|
|Convertible promissory note – current portion||821,431||584,943|
|Current portion of financing lease liability||388,023||358,584|
|TOTAL CURRENT LIABILITIES||29,844,931||16,663,353|
|Operating lease liability – long term, net of current portion||1,885,529||2,080,062|
|Notes payable – long term, net of current portion||4,972,230||3,256,469|
|Contingent note payable||49,248||49,248|
|Accrued expenses – long term, related party||1,132,884||905,780|
|Financing lease liability, net of current portion||90,021||275,874|
|1847 HOLDINGS SHAREHOLDERS’ DEFICIT|
|Allocation shares, 1,000 shares issued and outstanding||1,000||1,000|
|Common Shares, 500,000,000 shares authorized, 3,780,625 and 3,165,625 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively||3,780||3,165|
|Additional paid-in capital||2,638,496||442,014|
|TOTAL 1847 HOLDINGS SHAREHOLDERS’ DEFICIT||(6,673,766||)||(3,955,864||)|
|TOTAL SHAREHOLDERS’ DEFICIT||(8,605,518||)||(3,998,794||)|
|TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT||$||29,369,325||$||19,231,992|
The accompanying notes are an integral part of these consolidated fin
The remaining business have very little value. A Iowa based manner hauler generating about $1mm per year in EBITDA and another retail appliance store with about the same level of EBITDA.
Other GOED, the company has not created any value. At $6 a share for EFSH one is over paying after taxes and then the unknown of what one will get for GOED and also EFSH after the spin. Everyone will be running out the door of EFSH and GOED at the same time!
Analyst's Disclosure: I/we have no positions in any stocks mentioned, but may initiate a short position in EFSH-OLD over the next 72 hours.
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