1847 Closes Acquisition of ICU Eyewear, a Leading Eyewear Designer with Revenue in Excess of $19.0 Million and $1.7 Million of Adjusted EBITDA in 2021

Rhea-AI Summary

1847 Holdings (NYSE American: EFSH) announced the acquisition of ICU Eyewear Holdings Inc. for $4.5 million, comprising $4 million in cash and $500,000 in unsecured promissory notes. ICU, founded in 1956, is a leader in the design of OTC eyewear with over 3,000 SKUs. The acquisition is part of 1847's strategy to build a diversified portfolio of cash flow positive businesses. Additionally, 1847 secured approximately $2.8 million through unsecured debt financing from institutional investors, aimed at accelerating growth while minimizing equity dilution. ICU reported over $190 million in revenue and $17 million in adjusted EBITDA in 2021.

Positive

• Acquisition of ICU Eyewear posits 1847 Holdings as a leader in the eyewear market.
• ICU Eyewear has a strong financial standing with over $190 million in revenue and $17 million EBITDA in 2021.
• Unsecured debt financing of approximately $2.8 million enhances growth capability without diluting equity.
• Positive EBITDA and a gross margin of around 40% for ICU could boost 1847's profitability.

Negative

• None.

Completes Unsecured Debt Financing of Approx. $2.8 Million with Two Premier Institutional Investors to Accelerate Growth

NEW YORK, NY / ACCESSWIRE / February 13, 2023 / 1847 Holdings LLC ("1847" or the "Company") (NYSE American:EFSH), a unique holding company that combines the attractive attributes of owning private, lower-middle market businesses with the liquidity and transparency of a publicly traded company, today announced that it has completed the acquisition of ICU Eyewear Holdings Inc. ("ICU"), a leading designer of Over-the-Counter (OTC), non-prescription reading glasses, sunglasses, blue light blocking eyewear, sun readers and outdoor specialty sunglasses. ICU was advised on the transaction by Threadstone LP.

Total consideration for the acquisition was $4.5 million, consisting of $4,000,000 in cash and unsecured subordinated promissory notes in the principal amount of $500,000. Additional details on the transaction are available in the Company's Form 8-K, which will be filed with the Securities and Exchange Commission and available on the Company's website.

ICU was founded in 1956 and is headquartered in Hollister, California. ICU is a recognized leader in reading eyewear and sunglasses, as well as select health and personal care items. ICU has 10 brands and a comprehensive and innovative product offering of over 3,000 SKUs across the reading glass, sunglass, and health & personal care segments. ICU's customer base consists of a broad range of national, regional and specialty retailers comprising over 7,500 retail locations. ICU is the only OTC eyewear supplier in the U.S. to have meaningful penetration in all significant retail channels including grocery, specialty, office supply, pharmacy, and outdoor sports stores.

Mr. Ellery W. Roberts, CEO of 1847, commented, "We are pleased to close this transaction which is another example of our successful acquisition strategy, targeting accretive and cash flow positive companies. ICU has developed a highly profitable and sustainable business model, with solid financials, positive EBITDA and gross margin of approximately 40%. Our ability to acquire these businesses at attractive multiples, with minimum dilution to shareholders, has enabled us to offer shareholders a meaningful cash dividend. We look forward to working closely with ICU's management team to achieve meaningful top and bottom-line growth."

Additionally, the Company closed two unsecured debt financing transactions with two accredited institutional investors for a total aggregate purchase price of approx. $2.8 million. On February 3, 2023, the Company issued to the investors promissory notes (the "Notes") in the aggregate principal amount of $604,000, which include an original issue discount in the amount of $60,400, five-year warrants for the purchase of an aggregate of 125,833 common shares of the Company at an exercise price of $4.20 per share (subject to adjustment), which may be exercised on a cashless basis if the market price of the common shares is greater than the exercise price, and an aggregate of 125,000 common shares, for a total purchase price of $543,600. On February 9, 2023, the Company issued to the investors promissory notes (the "Notes") in the aggregate principal amount of $2,557,575, which include an original issue discount in the amount of $139,090, five-year warrants for the purchase of an aggregate of 532,827 common shares of the Company at an exercise price of $4.20 per share (subject to adjustment), which may be exercised on a cashless basis if the market price of the common shares is greater than the exercise price, and also issued to one investor 289,772 common shares and issued to the other investor a five-year warrant for the purchase of 243,055 common shares at an exercise price of 0.01 per share (subject to adjustment), which may be exercised on a cashless basis if the market price of the common shares is greater than the exercise price, for a total purchase price of $2,301,818. Additional details on the transactions are available in the Company's Form 8-K, which has been filed with the Securities and Exchange Commission and is available on the Company's website.

Patrick Hassani, Chief Investment Officer of Mast Hill Fund, stated, "We are extremely impressed with the business that Ellery and the 1847 team have built and we look forward to supporting their continued growth."

"We are proud to support 1847 Holdings, as we believe they have developed a highly scalable business model with a proven track record," said Avi Geller, Chief Investment Officer of Leonite Capital.

"I would like to personally thank Mast Hill and Leonite, and appreciate their continued support. Given our track record of acquiring accretive and cash flow positive businesses, we believe this unsecured debt reflects our strong historical performance and will provide capital to help further accelerate our growth, while minimizing equity dilution," concluded, Mr. Roberts.

About 1847 Holdings LLC

1847 Holdings LLC (NYSE American: EFSH), a publicly traded diversified acquisition holding company, was founded by Ellery W. Roberts, a former partner of Parallel Investment Partners, Saunders Karp & Megrue, and Principal of Lazard Freres Strategic Realty Investors. 1847 Holdings' investment thesis is that capital market inefficiencies have left the founders and/or stakeholders of many small business enterprises or lower-middle market businesses with limited exit options despite the intrinsic value of their business. Given this dynamic, 1847 Holdings can consistently acquire businesses it views as "solid" for reasonable multiples of cash flow and then deploy resources to strengthen the infrastructure and systems of those businesses in order to improve operations. These improvements may lead to a sale or IPO of an operating subsidiary at higher valuations than the purchase price and/or alternatively, an operating subsidiary may be held in perpetuity and contribute to 1847 Holdings' ability to pay regular and special dividends to shareholders. For more information, visit www.1847holdings.com.

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Forward-Looking Statements

This press release may contain information about 1847 Holdings' view of its future expectations, plans and prospects that constitute forward-looking statements. All forward-looking statements are based on our management's beliefs, assumptions and expectations of our future economic performance, taking into account the information currently available to it. These statements are not statements of historical fact. Forward-looking statements are subject to a number of factors, risks and uncertainties, some of which are not currently known to us, that may cause our actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial position. Our actual results may differ materially from the results discussed in forward-looking statements. Factors that might cause such a difference include but are not limited to the risks set forth in "Risk Factors" included in our SEC filings.

Contact:

Crescendo Communications, LLC
Tel: +1 (212) 671-1020
Email: EFSH@crescendo-ir.com

SOURCE: 1847 Holdings LLC

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FAQ

What is the acquisition cost for ICU Eyewear by 1847 Holdings?

The acquisition cost for ICU Eyewear by 1847 Holdings is $4.5 million.

How will the acquisition of ICU Eyewear impact 1847 Holdings?

The acquisition is expected to enhance 1847 Holdings' portfolio with ICU's strong financials and market position.

What is the significance of the $2.8 million unsecured debt financing?

The $2.8 million unsecured debt financing will provide capital for growth while minimizing shareholder equity dilution.

What were ICU Eyewear's reported revenues in 2021?

ICU Eyewear reported revenues in excess of $190 million in 2021.