Discontinued Operations

12 Months Ended

Dec. 31, 2025

Discontinued Operations [Abstract]

DISCONTINUED OPERATIONS

NOTE 4—DISCONTINUED OPERATIONS

Asien’s Assignment for the Benefit of Creditors

As described in Note 1—Organization and Nature of Business, on February 26, 2024, Asien’s entered into the Assignment Agreement, pursuant to which Asien’s transferred ownership of all or substantially all of its right, title, and interest in, as well as custody and control of, its assets to SG Service Co., LLC in trust. The Company received no cash consideration related to the assignment. Following the assignment, the Company retained no financial interest in Asien’s.

The assignment of Asien’s represents a strategic shift and its results are reported as discontinued operations for the year ended December 31, 2024. The Company recognized a gain on disposition of Asien’s of $1,060,095, presented as a separate component of discontinued operations in the consolidated statements of operations for the year ended December 31, 2024.

The following table presents the major classes of line items constituting the results of discontinued operations of Asien’s in the consolidated statements of operations for the year ended December 31, 2024:

		Year Ended December 31, 2024
Revenues		$	870,952

Operating Expenses
Cost of revenues			744,706
Personnel			98,213
Depreciation and amortization			7,702
General and administrative			203,377
Professional fees			78,807
Total Operating Expenses			1,132,805

Loss from operations			(261,853	)

Interest expense			(724	)

Net loss from discontinued operations before income taxes			(262,577	)
Income tax provision			–
Net loss from discontinued operations		$	(262,577	)

Net loss attributable to noncontrolling interests from discontinued operations			13,129
Net loss from discontinued operations attributable to 1847 Holdings		$	(249,448	)

The following table presents the major classes of cash flow activities from discontinued operations of Asien’s in the consolidated statements of cash flows for the year ended December 31, 2024:

		Year Ended December 31, 2024
Cash flows from operating activities:
Net loss		$	(262,577	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			7,702
Changes in operating assets and liabilities:
Receivables			73,769
Inventory			213,399
Prepaid expenses and other current assets			108,686
Accounts payable and accrued expenses			320,362
Customer deposits			(474,803	)
Net cash used in operating activities from discontinued operations			(13,462	)

Cash flows from financing activities:
Repayments of notes payable			(4,836	)
Net cash used in financing activities from discontinued operations			(4,836	)
Net change in cash and cash equivalents from discontinued operations		$	(18,298	)

ICU Eyewear Foreclosure Sale

As described in Note 1—Organization and Nature of Business, ICU Eyewear was in default under the ICU Loan Agreement and, with the approval of the other ICU Parties, consented to a foreclosure by the ICU Lender and private sale of substantially all of its assets in an Article 9 sale process, pursuant to Section 9-610 of the Uniform Commercial Code as in effect in the State of New York and Section 9-610 of the Uniform Commercial Code as in effect in the State of California. On August 5, 2024, ICU Eyecare Solutions Inc., an entity that is not affiliated with the Company, was the successful bidder with a cash bid of $4,250,000. Pursuant to an agreement, dated August 5, 2024, and in consideration for such purchase price, the ICU Lender having foreclosed on its security interest in all of the assets of ICU Eyewear then conveyed all of its rights, title, and interest in all of such assets to ICU Eyecare Solutions Inc. The Company received no cash consideration related to the sale. Following the sale, the Company retained no financial interest in ICU Eyewear.

The foreclosure sale of ICU Eyewear’s assets represents a strategic shift and its results are reported as discontinued operations for the year ended December 31, 2024. The Company recognized a gain on disposition of ICU Eyewear’s assets of $4,516,735, presented as a separate component of discontinued operations in the consolidated statements of operations for the year ended December 31, 2024.

The following table presents the major classes of line items constituting the results of discontinued operations of ICU Eyewear in the consolidated statements of operations for the year ended December 31, 2024:

		Year Ended December 31, 2024
Revenues		$	8,212,395

Operating Expenses
Cost of revenues			5,658,551
Personnel			1,564,842
Depreciation and amortization			248,646
General and administrative			1,526,278
Professional fees			672,855
Impairment of goodwill and intangible assets			1,216,966
Total Operating Expenses			10,888,138

Loss from operations			(2,675,743	)

Other Income (Expense)
Other income			2,583
Interest expense			(911,437	)
Amortization of debt discounts			(683,029	)
Total Other Expense			(1,591,883	)

Net loss from discontinued operations before income taxes			(4,267,626	)
Income tax benefit			11,250
Net loss from discontinued operations		$	(4,256,376	)

The following table presents the major classes of cash flow activities from discontinued operations of ICU Eyewear in the consolidated statements of cash flows for the year ended December 31, 2024:

		Year Ended December 31, 2024
Cash flows from operating activities:
Net loss		$	(4,256,376	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Impairment of goodwill and intangible assets			1,216,966
Deferred taxes			(15,000	)
Depreciation and amortization			248,646
Amortization of debt discounts			683,029
Amortization of right-of-use assets			192,796
Changes in operating assets and liabilities:
Accounts receivable			481,202
Inventory			1,247,730
Prepaid expenses and other current assets			(14,895	)
Accounts payable and accrued expenses			857,085
Operating lease liabilities			(176,336	)
Net cash provided by operating activities from discontinued operations			464,847

Cash flows from financing activities:
Net repayments of revolving line of credit			(80,540	)
Net cash used in financing activities from discontinued operations			(80,540	)

Net change in cash and cash equivalents from discontinued operations		$	384,307

Sale of High Mountain

As described in Note 1—Organization and Nature of Business, on September 30, 2024, the Company entered into the Purchase Agreement with BFS and High Mountain, pursuant to which the Company sold substantially all of the assets of High Mountain to BFS for an aggregate cash only purchase price of $17,000,000, subject to certain pre-closing and post-closing adjustments. At closing, the purchase price was subject to a working capital adjustment and was also reduced by the amount of outstanding indebtedness repaid at closing or assumed by BFS, as well as certain transaction expenses. Additionally, the purchase price was reduced by $1,700,000, which may be used for certain post-closing payments (the “Holdback Amount”). During the year ended December 31, 2025, the Company recorded a $921,772 reduction to the Holdback Amount related to the resolution of post-closing working capital adjustments, with the offsetting impact of this adjustment recognized in discontinued operations. As of December 31, 2025, the balance of the Holdback Amount was $0.

The sale of High Mountain’s assets represents a strategic shift and its results are reported as discontinued operations for the year ended December 31, 2024. The Company recognized a gain on disposition of High Mountain’s assets of $3,990,034, presented as a separate component of discontinued operations in the consolidated statements of operations for the year ended December 31, 2024.

The following table presents the major classes of line items constituting the results of discontinued operations of High Mountain in the consolidated statements of operations for the year ended December 31, 2024:

		Year Ended December 31, 2024
Revenues		$	23,438,316

Operating Expenses
Cost of revenues			14,332,303
Personnel			4,957,525
Depreciation and amortization			445,328
General and administrative			3,148,502
Professional fees			108,439
Total Operating Expenses			22,992,097

Income from operations			446,219

Other Income (Expense)
Other income			1,505,275
Interest expense			(227,439	)
Amortization of debt discounts			(64,306	)
Loss on disposal of property and equipment			(13,815	)
Total Other Income			1,199,715

Net income from discontinued operations before income taxes			1,645,934
Income tax provision			(417,000	)
Net income from discontinued operations		$	1,228,934

Net income attributable to noncontrolling interests from discontinued operations			(92,170	)
Net income from discontinued operations attributable to 1847 Holdings		$	1,136,764

The following table presents the major classes of cash flow activities from discontinued operations High Mountain in the consolidated statements of cash flows for the year ended December 31, 2024:

		Year Ended December 31, 2024
Cash flows from operating activities:
Net income		$	1,228,934
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on disposal of property and equipment			13,815
Deferred taxes			(334,000	)
Depreciation and amortization			445,328
Amortization of debt discounts			64,306
Amortization of right-of-use assets			246,765
Changes in operating assets and liabilities:
Accounts receivable			289,761
Inventory			164,662
Prepaid expenses and other current assets			103,645
Accounts payable and accrued expenses			(259,014	)
Contract liabilities			(150,298	)
Operating lease liabilities			(243,685	)
Net cash provided by operating activities from discontinued operations			1,570,219

Cash flows from financing activities:
Repayments of notes payable and finance lease liabilities			(355,951	)
Repayments of convertible notes payable			(1,260,173	)
Net cash used in financing activities from discontinued operations			(1,616,124	)

Net change in cash and cash equivalents from discontinued operations		$	(45,905	)