S-1 1 fs12021_1847goedekerinc.htm REGISTRATION STATEMENT

As filed with the Securities and Exchange Commission on May 3, 2021

Registration No. 333-          

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________

FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

_______________________

1847 GOEDEKER INC.
(Exact name of registrant as specified in its charter)

_______________________

Delaware

 

5700

 

83-3713938

(State or other jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

_______________________

13850 Manchester Rd.
Ballwin, MO 63011
888
-768-1710
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

_______________________

Douglas T. Moore
Chief Executive Officer
13850 Manchester Rd.
Ballwin, MO 63011
888
-768-1710
(Names, address, including zip code, and telephone number, including area code, of agent for service)

_______________________

Copies to:

Louis A. Bevilacqua, Esq.
Bevilacqua PLLC
1050 Connecticut Avenue, NW
Suite 500
Washington, DC 20036
(202) 869-0888

 

James W. McLaughlin, Esq.
Murtha Cullina LLP
One Century Tower
265 Church Street
New Haven, CT 06510
(203) 772-7790

 

Marc D. Jaffe, Esq.
Erika Weinberg, Esq.
Latham & Watkins, LLP
885 Third Avenue
New York, NY 10022
(212) 906-1200

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

     

Accelerated filer

 

   
   

Non-accelerated filer

 

     

Smaller reporting company

 

   
               

Emerging growth company

 

   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for comply with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. 

 

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CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered

 

Proposed
maximum
aggregate
offering price
(1)

 

Amount of
registration fee

Common Stock, par value $0.0001 per share(2)

 

$

235,750,000

 

$

25,720.33

____________

(1)      Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)      Includes shares that may be purchased by the underwriters pursuant to their over-allotment option.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

 

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS

 

SUBJECT TO COMPLETION

 

DATED MAY 3, 2021

$205,000,000

1847 Goedeker Inc.
Common Stock

_______________________

We are offering $205,000,000 of our common stock, par value $0.0001 per share, in connection with our simultaneous acquisition of all of the issued and outstanding capital stock or other equity securities of 1 Stop Electronics Center, Inc., Gold Coast Appliances, Inc., Superior Deals Inc., Joe’s Appliances LLC and YF Logistics LLC (commonly known as Appliances Connection) as described in more detail in this prospectus.

Our common stock trades on the NYSE American under the symbol “GOED.” On April 28, 2021, the last reported sale price for our common stock was $7.38 per share. In connection with this offering, we intend to apply for the listing of our common stock on the New York Stock Exchange, or the NYSE.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and are subject to reduced public company reporting requirements.

Investing in our securities involves risks that are described in the “Risk Factors” section beginning on page 23 of this prospectus.

 

Per Share

 

Total

Public offering price

 

$

   

$

 

Underwriting discounts and commissions(1)

 

$

   

$

 

Proceeds, before expenses, to us

 

$

   

$

____________

(1)      See “Underwriting” beginning on page 113 for additional information regarding underwriting compensation.

The underwriters may also exercise their option to purchase up to an additional $30,750,000 of common stock from us at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus solely to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Certain of our existing stockholders and certain of our officers, directors, employees and related persons, have indicated an interest in purchasing an aggregate of approximately $            in shares of our common stock in this offering at the public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters may determine to sell more, fewer or no shares in this offering to these persons, and any of these persons may determine to purchase more, fewer or no shares in this offering. The underwriters will receive the same underwriting discount on any shares purchased by these persons as they will on any other shares sold to the public in this offering.

The shares of common stock will be ready for delivery on or about                       , 2021.

 

BofA Securities

 

ThinkEquity

       

a division of Fordham Financial Management, Inc.

The date of this prospectus is           , 2021

 

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TABLE OF CONTENTS

 

Page

Prospectus Summary

 

1

Risk Factors

 

23

Cautionary Statement Regarding Forward-Looking Statements

 

44

Use of Proceeds

 

46

Dividend Policy

 

47

Capitalization

 

48

Dilution

 

49

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

51

Corporate History and Structure

 

72

Proposed Acquisition of Appliances Connection

 

73

Business

 

77

Management

 

90

Executive Compensation

 

97

Current Relationships and Related Party Transactions

 

102

Principal Stockholders

 

105

Description of Capital Stock

 

106

Shares Eligible For Future Sale

 

108

Material United States Federal Income Tax Considerations For Non-United States Holders of Our Common Stock

 

109

Underwriting

 

113

Legal Matters

 

120

Experts

 

120

Interests of Named Experts and Counsel

 

120

Where You Can Find More Information

 

120

Financial Statements

 

F-1

Please read this prospectus carefully. It describes our business, financial condition, results of operations and prospects, among other things. We are responsible for the information contained in this prospectus and in any free-writing prospectus we have authorized. Neither we nor the underwriters have authorized anyone to provide you with different information, and neither we nor the underwriters take responsibility for any other information others may give you. Neither we nor the underwriters are making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. You should not assume that the information contained in this prospectus is accurate as of any date other than its date.

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PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in our common stock. You should carefully read the entire prospectus, including “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Some of the statements in this prospectus are forward-looking statements. See the section titled “Cautionary Statement Regarding Forward-Looking Statements.”

In this prospectus, “we,” “us,” “our,” “our company” and “Goedeker” and similar references refer to 1847 Goedeker Inc. and references to “the combined company” are references to Goedeker after the consummation of its acquisition of Appliances Connection.

Our Company

Overview

Our company operates a technology-driven e-commerce platform for appliances and furniture, offering a combination of selection, service and value we believe to be unmatched in the $22.9 billion United States household major appliance industry. Since our founding in 1951, we have evolved from a local brick and mortar operation serving the St. Louis metro area to a nationwide omni-channel retailer offering over 141,000 stock-keeping units, or SKUs, across all major appliance brands with competitive pricing. Our relentless focus on customer experience encompasses our easy to navigate websites, highly trained call center representatives and sophisticated fulfillment ecosystem.

Our customers span a wide range of demographics, style and budget, which we attract with our efficient digital marketing capabilities and match with our broad product selection. We have invested considerably in our scalable logistics infrastructure, purpose built for the unique demands of the appliance market and see it as a competitive advantage, strengthening as we grow. Our tightly-integrated vendor relationships and order management tools allow us to offer our vast selection of products while holding limited inventory, contributing to strong and improving operating metrics.

On October 20, 2020, we entered into a securities purchase agreement to acquire Appliances Connection, a leading retailer of household appliances based in Brooklyn, New York. We expect the closing of the proposed acquisition to occur simultaneously with the closing of this offering. We intend to enter into a senior secured credit facility involving a term loan in the expected principal amount of $60 million, which we intend to use to pay a portion of the purchase price to acquire Appliances Connection. The proceeds of this offering will be used to pay the remainder of the purchase price and related acquisition fees and expenses. On a pro forma basis, the combined company had total sales of $368 million for the year ended December 31, 2020. See “— Proposed Acquisition of Appliances Connection” below.

The Large and Growing United States Appliance Market

The United States household major appliances market is highly fragmented with big box retailers, online retailers, and thousands of local and regional retailers competing for share in what has historically been a high touch sale process. According to Statista, revenue in the United States household major appliances market (excluding small appliances) is projected to reach $22.9 billion in 2021 and is expected to grow at an annual growth rate of 1.68% from 2021 to 2025.

According to the United States Census Bureau, there are approximately 100 million households in the United States with annual incomes between $25,000 and $250,000 and approximately 193 million individuals between the ages of 20 and 64 in the United States, many of whom are accustomed to purchasing goods online. As younger generations age, start new families and move into new homes, we expect online sales of household appliances to increase. In addition, we believe the online household appliances market will further grow as older generations of consumers become increasingly comfortable purchasing online, particularly if the process is easy and efficient.

When shopping for appliances their homes, consumers bring their own unique combination of style and budget, requiring vast selection to garner broad appeal.  Brick and mortar retailers must balance selection with the challenges of high inventory carrying costs, complex vendor requirements and limited showroom and storage space. As a result, consumers are faced with a decision between shopping in multiple stores, or settling for what is available. Just

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as e-commerce has changed the landscape of other retail sectors, we believe an easy-to-browse, online shopping experience with massive selection and excellent customer service has the potential to change the way people buy household appliances.

Logistics, fulfillment and customer service for household appliances are challenging given the myriad vendors and product specifications, and the cumbersome size and weight of items. Household appliances often have a low dollar value to weight ratio compared to other categories of retail, therefore requiring a logistics network that is optimized for items with those characteristics. Many consumers also seek first-rate customer service so they are not burdened with managing delivery, shipping and return logistics on their own. However, we believe big box retailers that serve the mass market for home goods are often unable or unwilling to provide this level of service.

Our Solution — Key Benefits for Our Customers

The combined company will offer broad selection and choice. We believe that the combined company will offer the largest online selection of household appliances, with over 51,000 household appliance SKUs. The combined company’s easy to use websites make it easy for customers to discover products, styles and price points that appeal to them. Convenience and value are central to our offering. The combined company will offer a one-stop shop for consumers in the appliance category, with competitive pricing reflecting the many vendors on its platform and a differentiated and robust merchandising experience.

The combined company will offer consumers an engaging shopping journey through the combination of its technology-rich platform and its experienced customer support personnel, available via chat, email, text and phone. Superior customer service will be a core part of the experience that the combined company will offer shoppers. The combined company’s customer service organization will help consumers navigate its sites, answer questions and complete orders, staffed with specialists focused on specific product classes. This team will help the combined company build trust with consumers, enhance its reputation and drive sales.

Competitive Strengths

We believe that the combined company will be a leading e-commerce appliance retailer due to its following key strengths:

•        Name and reputation.    We believe that the combined company will enjoy a long-standing (50+ years) reputation with vendors and customers for its focus on offering a full line of appliances and other home furnishings with competitive pricing and superior customer service.

•        Product selection and pricing.    We believe that the combined company’s broad product selection and attractive pricing model will create a sustainable competitive advantage. The combined company will strive to offer consumers the broadest choice in the market and review pricing by other retailers on a daily basis to ensure its product offerings are competitively priced. Goedeker and Appliances Connection have negotiated attractive terms with their respective vendor partners, allowing them to pass through savings and selection to customers.

•        Website ease of use.    The combined company’s purpose-built technology platform will be designed to provide consumers with a compelling user experience as they browse, research and purchase its products. The combined company will use personalization, based on past browsing and shopping patterns, to create a more engaging consumer experience.

•        Best in class customer service and marketing technology.    We believe that the investments that Goedeker and Appliances Connection have made in their respective call center tools and shopping platforms, combined with digital marketing optimization, will allow the combined company to offer an unmatched customer journey.

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•        Logistics technology and efficiency.    The combined company’s proprietary technology will eliminate manual steps and reduce order processing time, allowing it to provide faster services to customers.

Our Growth Strategies

Our mission is to change the way consumers buy appliances and, in doing so, become the leading online retailer of home appliances. The strategies of the combined company to achieve this mission, while increasing value for our shareholders, will include:

•        Grow our brand.    Increasing brand awareness and growing favorable brand equity among consumers is central to the growth, of the combined company following the proposed acquisition. The combined company plans to drive brand awareness through a combination of sophisticated, multi-layered marketing programs and word-of-mouth referrals. The combined company will continue to invest in marketing initiatives to efficiently attract consumers.

•        Expand in the commercial market.    To date, Goedeker and Appliances Connection have directed all marketing efforts toward the consumer. With remodels and new home construction, there is opportunity to market to home builders, real estate developers, contractors and interior designers who are making or influencing the purchasing decision for many consumers. We believe that the combined company’s low price business model will be received well by this market, creating substantial revenue opportunities and more repeat business. Evidence of unmet demand and market need is ongoing with large commercial sales occurring organically each week through Goedeker and Appliances Connection’s websites and contact centers.

•        Drive continued operational excellence.    Goedeker and Appliances Connection are committed to improving productivity and profitability through several operational initiatives designed to grow revenue and expand margins. Some of the key initiatives for operational excellence for the combined company include:

•        Logistics and shipping optimization.    The combined company will implement a series of initiatives with key vendors to increase shipping speed to customers, cut costs and increase margins. The combined company plans to pick up product from manufacturers’ warehouses and selectively use inventory buys to reduce costs. With access to vendor warehouse operations, we expect to take advantage of buying opportunities and capture time-sensitive customers more frequently. The combined company will also explore options to use a showroom, warehousing and cross dock model in other key markets.

•        Optimize price.    The combined company will continue building a data-based understanding of price elasticity dynamics, promotional strategies and other price management tools to drive optimized pricing for our products.

•        Drive marketing efficiencies.    As the combined company continues to grow and scale, we believe that the combined company will continue to improve the efficiency of its marketing investments. We believe that with larger budgets and deeper experience, the combined company will benefit from lower media rates and increased data that will improve its customer targeting capabilities.

•        Opportunistically pursue strategic acquisitions. The combined company may continue to expand its business through opportunistic acquisitions that allow it to enhance its customer offering, build its multi-brand portfolio, enter new geographies or enhance its operational infrastructure.

Our Products and Services

Appliances

The appliance category will be the largest revenue source of the combined company. Goedeker and Appliances Connection have a long history of selling these products and serving the distinct needs of consumers looking to replace or add to their home appliances. The combined company will offer over 51,000 appliance SKUs from all mainline original equipment manufacturers, including Bosch, Whirlpool, GE, Maytag, LG, Samsung, Sharp, Frigidaire and

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Kitchen Aid, among others, as well as from luxury brands like Viking, Miele, Thermador, Sub-Zero, Wolf, Forte and Ilve. The combined company will sell all major home appliances, including refrigerators, ranges, ovens, dishwashers, microwaves, freezers, washers and dryers.

Furniture

The combined company will offer over 247,700 furniture SKUs from over 240 furniture vendors and will sell a full line of furniture for every room in the home. The combined company will utilize sophisticated websites that include organization of product by type and characteristics that make for a complete shopping experience in a complicated product category.

Other Products

The combined company will also offer a broad assortment of products in the décor, bed & bath, lighting, outdoor living and electronics categories. It will also sell fitness equipment, plumbing fixtures, air conditioners, fireplaces, fans, dehumidifiers, humidifiers, air purifiers, televisions and commercial appliances for our builder and business clients. While these are not individually high-volume categories, they complement the appliance and furniture categories to produce a one-stop home goods offering for customers.

Installation and Other Services

The combined company will offer installation and removal services within the continental United States. A full-service install involves hooking up the appliance, testing it to ensure proper operation, and removing packing materials from customer’s home, office or other delivery location. The combined company will primarily fulfill such installation services internally through YF Logistics and utilize third-party logistics service provider partners to provide these services to delivery points in remote areas within the continental United States where YF Logistics may not be available.

The combined company will also have outside business partners such as Scavolini, a leader in kitchen cabinetry and design, and an in-house design team trained by the experts at Scavolini that will help customers remodel and reinvent their kitchens, living rooms, bathrooms and laundry rooms.

Our Corporate History

Goedeker was incorporated in the State of Delaware on January 10, 2019 for the sole purpose of acquiring substantially all of the assets of Goedeker Television Co., or Goedeker Television. On April 5, 2019, Goedeker acquired substantially all of the assets of Goedeker Television. As a result of this transaction, Goedeker acquired the former business of Goedeker Television, which was established in 1951, and continues to operate this business. All discussions in this prospectus regarding our business prior to the acquisition of Goedeker Television reflect the business of Goedeker Television, our predecessor company. Prior to our acquisition of substantially all of the assets of Goedeker Television, we had no operations other than operations relating to our incorporation and organization.

On October 20, 2020, we formed Appliances Connection Inc., or ACI, as our wholly owned subsidiary in the State of Delaware for the sole purpose of completing the proposed acquisition described below. As of the date of this prospectus, we do not have any other subsidiaries.

Proposed Acquisition of Appliances Connection

On October 20, 2020, we entered into a securities purchase agreement, which was amended on December 8, 2020 and April 6, 2021 (we refer to this agreement, as amended, as the purchase agreement), to acquire the following five household appliances companies through ACI: (1) 1 Stop Electronics Center, Inc., or 1 Stop, a New York corporation; (2) Gold Coast Appliances, Inc., or Gold Coast, a New York corporation; (3) Superior Deals Inc., or Superior Deals, a New York corporation; (4) Joe’s Appliances LLC, or Joe’s Appliances, a New York limited liability company; and (5) YF Logistics LLC, or YF Logistics, a New Jersey limited liability company (we collectively refer to these companies as Appliances Connection).

Pursuant to the purchase agreement, ACI agreed to acquire all of the issued and outstanding capital stock or other equity securities of Appliances Connection for an aggregate purchase price of $222,000,000, subject to adjustment. The purchase price consists of (i) $180,000,000 in cash, (ii) 2,333,333 shares of our common stock having a stated

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value that is equal to $21,000,000 and (iii) a number of shares of our common stock that is equal to (A) $21,000,000 divided by (B) the average of the closing price of our shares of 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 acquisition. We refer to this proposed acquisition of Appliances Connection in this prospectus as the proposed acquisition.

We have entered into a non-binding engagement letter with a commercial bank for the provision of a senior secured credit facility involving a term loan in the expected principal amount of $60 million, which will be used to pay a portion of the cash portion of the purchase price to acquire Appliances Connection. We intend to use all of the proceeds of the term loan to pay a portion of the purchase price, and the proceeds of this offering will be used to pay the remainder of the purchase price and related acquisition fees and expenses.

See “Proposed Acquisition of Appliances Connection” for more information regarding the terms of the proposed acquisition.

The purchase agreement contains a number of conditions that must be fulfilled to complete the proposed acquisition. There can be no assurance that the conditions to the closing will be satisfied or that the proposed acquisition will be completed. In that event, any investment in our common stock in this offering will represent an investment in Goedeker’s historical business only. See “Risk Factors — Risks Related to the Proposed Acquisition.”

About Appliances Connection

Headquartered in Brooklyn, New York and founded in 1998, Appliances Connection is one of the leading retailers of household appliances with a 200,000 square foot warehouse in Hamilton, New Jersey and a 23,000 square foot showroom in Brooklyn, New York. In addition to selling appliances, it also sells furniture, fitness equipment, plumbing fixtures, televisions, outdoor appliances, and patio furniture, as well as commercial appliances for builder and business clients. It also provides appliance installation services and old appliance removal services. Appliances Connection serves retail customers, builders, architects, interior designers, restaurants, schools and other large corporations. It ships to 48 states in the Continental United States and offers nearly 300,000 products, from luxury brands like Viking, Miele, Thermador, Sub-Zero, Wolf, Forte, Ilve, and Bosch, to household favorites like GE, LG, Frigidaire and Whirlpool.

1 Stop, founded in 2000, specializes in the sale of appliances and consumer electronics, including laundry, refrigeration, and air conditioning appliances, ranges, dishwashers, plumbing fixtures, televisions and video monitors, home and office furniture, as well as home décor, fireplaces, generators and small appliances. 1 Stop operates out of its Brooklyn, New York showroom as well as through its website 1stopcamera.com.

Gold Coast, which has been in business since 2015, is primarily engaged in the retail sale of outdoor, cooking, air conditioning, refrigeration and laundry appliances and operates out of its Brooklyn, New York showroom as well as online at goldcoastappliances.com.

Joe’s Appliance, which was formed in 2018, is also primarily engaged in retail sale offerings of a comprehensive suite of major appliances, including outdoor, cooking, air conditioning, refrigeration and laundry appliances, and appliance services. Joe’s Appliances operates out if it’s Brooklyn, New York store location as well as online at its website, joesappliances.com.

Superior Deals is in the electrical appliances, television and radio sets industry, while also providing a full line of appliance accessories including power cords, hoses, connections, brackets, and water and air filters. Superior Deals has been in business since 2000, primarily serving customers in the New York metro area, as well as nationally through Appliances Connection’s retail website www.appliancesconnection.com.

YF Logistics, formed in 2014, is a full-service logistics company that fulfills customer orders for 1 Stop, Gold Coast, Superior Deals and Joe’s Appliances, utilizing its own in-house logistics team to ship, install, and service appliances and other products across the continental United States from its 200,000 square foot warehouse located in Hamilton, New Jersey.

Appliances Connection has built powerful home-grown logistics technology that can help reduce cycle time and efficiencies for the combined company’s operations. Appliances Connection will bring the relationships, network, and technology necessary to continue economies of scale for the entire business of the combined company throughout the United States e-commerce market. We intend to leverage Appliances Connection’s powerful platform to increase speed, reduce costs and increase margins across our entire business.

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Impact of COVID-19 Pandemic

Starting in late 2019, a novel strain of the coronavirus, or COVID-19, began to rapidly spread around the world and every state in the United States. Most states and cities have at various times instituted quarantines, restrictions on travel, “stay at home” rules, social distancing measures and restrictions on the types of businesses that could continue to operate, as well as guidance in response to the pandemic and the need to contain it. Pursuant to restrictions in Missouri, Goedeker’s showroom was closed from April through June of 2020, but its call center and warehouse continued to operate. Appliances Connection’s retail facilities and warehouse were deemed essential businesses that were not subject to restrictions in New York and New Jersey, so they remained open and continued to operate. Since over 95% of Goedeker’s sales are completed online and its call center and warehouse and distribution operations continued to operate, and Appliances Connection continued to operate, the restrictions put in place in response to the pandemic have not had a materially negative impact on either company’s operations. However, the situation surrounding COVID-19 remains fluid, and either company may be required to close or limit service offerings in its retail facilities or warehouses in response to guidance from applicable government and public health officials, which could adversely affect the combined company’s operations and revenues.

In addition, Goedeker and Appliances Connection are dependent upon suppliers to provide them with all of the products that they sell. The pandemic has impacted and may continue to impact suppliers and manufacturers of certain products. As a result, both companies have faced and may continue to face delays or difficulty sourcing certain products, which could negatively affect their respective business and financial results. Even if Goedeker and Appliances Connection are able to find alternate sources for such products, they may cost more, which could adversely impact their profitability and financial condition.

The global deterioration in economic conditions, which may have an adverse impact on discretionary consumer spending, could also impact the businesses of Goedeker and Appliances Connection. For instance, consumer spending may be negatively impacted by general macroeconomic conditions, including a rise in unemployment, and decreased consumer confidence resulting from the pandemic. Changing consumer behaviors as a result of the pandemic may also have a material impact on revenue.

Furthermore, the spread of COVID-19 has adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The pandemic has resulted, and may continue to result, in a significant disruption of global financial markets, which may reduce the ability of the combined company to access capital in the future, which could negatively affect its liquidity.

If the COVID-19 pandemic does not continue to slow and the spread of COVID-19 is not contained, the combined company’s business operations could be further delayed or interrupted. We expect that government and health authorities may announce new or extend existing restrictions, which could require the combined company to make further adjustments to its operations in order to comply with any such restrictions. The combined company may also experience limitations in employee resources. In addition, combined company’s operations could be disrupted if any of its employees were suspected of having COVID-19, which could require quarantine of some or all such employees or closure of facilities for disinfection. The duration of any business disruption cannot be reasonably estimated at this time but may materially affect the combined company’s ability to operate its business and result in additional costs.

The extent to which the pandemic may impact the results of the combined company will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this prospectus, including new information that may emerge concerning the severity of the pandemic and steps taken to contain the pandemic or treat its impact, among others. Nevertheless, the pandemic and the current financial, economic and capital markets environment, and future developments in the global supply chain and other areas present material uncertainty and risk with respect to the performance, financial condition, results of operations and cash flows of both companies. See also “Risk Factors” for more information.

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Implications of Being an Emerging Growth Company

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

•        have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act;

•        comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

•        submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

•        disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering, (ii) the last day of the first fiscal year in which our total annual gross revenues are $1.07 billion or more, (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

Corporate Information

Our principal executive offices are located at 13850 Manchester Rd., Ballwin, MO 63011, and our telephone number is 888-768-1710. We maintain a website at www.goedekers.com. Information available on our website is not incorporated by reference in and is not deemed a part of this prospectus.

Appliances Connection’s executive offices are located at 1870 Bath Avenue, Brooklyn, NY 11214, and its telephone number is 800-299-9470. It maintains a website at www.appliancesconnection.com. Information available on the website is not incorporated by reference in and is not deemed a part of this prospectus.

Stock Split

On July 30, 2020, we completed a 4,750-for-1 forward stock split of our outstanding common stock. As a result of this stock split, our issued and outstanding common stock was increased from 1,000 shares to 4,750,000 shares. Accordingly, all share and per share information contained in this prospectus has been restated to retroactively show the effect of this stock split.

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Table of Contents

The Offering

Common stock offered by us:

 

$205,000,000 of our common stock (or $235,750,000 if the underwriters exercise the over-allotment option in full).

Common stock to be outstanding after this offering(1):

 


33,888,978 shares of common stock (or 38,055,644 shares if the underwriters exercise the over-allotment option in full).

Over-allotment option:

 

We have granted to the underwriters a 30-day option to purchase from us up to an additional 15% of the shares of common stock sold in the offering ($30,750,000 of common stock) at the public offering price, less the underwriting discounts and commissions.

Use of proceeds:

 

We expect to receive net proceeds of approximately $190.2 million from this offering (or $218.7 million if the underwriters exercise their option to purchase additional shares of common stock in full), based on an assumed public offering price of $7.38 per share, the last reported sale price of our common stock on NYSE American on April 28, 2021, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use the net proceeds from this offering to pay part of the cash portion of the purchase price for the proposed acquisition and related acquisition fees and expenses. Any remaining proceeds will be used working capital and general corporate purposes. See “Use of Proceeds.”

Dividend policy:

 

We have not paid or declared dividends on our common stock. See “Dividend Policy” for more information.

Risk factors:

 

Investing in our common stock involves a high degree of risk. As an investor, you should be able to bear a complete loss of your investment. You should carefully consider the information set forth in the “Risk Factors” section beginning on page 23.

Lock-up:

 

We and all of our directors, officers and stockholders holding 5% or more of our outstanding common stock have agreed with the underwriters, subject to certain exceptions, not to sell, transfer or dispose of, directly or indirectly, any of our common stock or securities convertible into or exercisable or exchangeable for our common stock for a period of 90 days from the date of this prospectus. See “Underwriting” for more information.

Trading symbol and market:

 

Our common stock is traded on NYSE American under the symbol “GOED.” In connection with this offering, we intend to apply for the listing of our common stock on the NYSE.

The number of shares of common stock outstanding immediately following this offering is based on 6,111,200 shares outstanding as of April 28, 2021 and excludes:

•        555,000 shares of common stock issuable upon exercise of outstanding options at an exercise price of $9.00 per share;

•        up to 445,000 additional shares of common stock that are reserved for issuance under our 2020 Equity Incentive Plan;

•        455,560 shares of common stock issuable upon exercise of outstanding warrants at a weighted average exercise price of $11.91 per share; and

•        shares of common stock to be issued in connection with the proposed acquisition.

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Table of Contents

Summary of Risk Factors

An investment in our common stock involves a high degree of risk. You should carefully consider the risks summarized below. These risks are discussed more fully in the “Risk Factors” section immediately following this Prospectus Summary. These risks include, but are not limited to, the following:

•        The proposed acquisition is subject to a number of conditions, and may not close at all, in which case an investment in our common stock in this offering will represent an investment in Goedeker’s historical business only.

•        If the benefits of the proposed acquisition do not meet the expectations of investors, stockholders or financial analysts, the market price of our common stock may decline.

•        Failure or delay to complete the proposed acquisition could negatively impact our business, financial condition, results of operations or stock price.

•        The integration of Appliances Connection with Goedeker may not be as successful as anticipated.

•        We have incurred and expect to continue to incur substantial transaction-related costs in connection with the proposed acquisition.

•        Our future results following proposed acquisition may differ materially from the unaudited pro forma financial information included in this prospectus.

•        As a result of the proposed acquisition, our company may have undisclosed liabilities and any such liabilities could harm our revenues, business, prospects, financial condition and results of operations.

•        The COVID-19 pandemic may cause a material adverse effect on our business.

•        If we fail to acquire new customers or retain existing customers, or fail to do so in a cost-effective manner, we may not be able to achieve profitability.

•        Our success depends in part on our ability to increase our net revenue per active customer. If our efforts to increase customer loyalty and repeat purchasing as well as maintain high levels of customer engagement are not successful, our growth prospects and revenue will be materially adversely affected.

•        Our business depends on our ability to build and maintain strong brands. We may not be able to maintain and enhance our brands if we receive unfavorable customer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, results of operations and growth prospects.

•        Our efforts to expand our business into new brands, products, services, technologies, and geographic regions will subject us to additional business, legal, financial, and competitive risks and may not be successful.

•        Risks associated with the suppliers from whom our products are sourced could materially adversely affect our financial performance as well as our reputation and brand.

•        Our ability to obtain continued financing is critical to the growth of our business. We will need additional financing to fund operations, which additional financing may not be available on reasonable terms or at all.

•        Our third-party loans contain certain terms that could materially adversely affect our financial condition.

•        Our business is highly competitive. Competition presents an ongoing threat to the success of our business.

•        We depend on our relationships with third parties, and changes in our relationships with these parties could adversely impact our revenue and profits.

•        Uncertainties in economic conditions and their impact on consumer spending patterns, particularly in the home goods segment, could adversely impact our operating results.

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•        Government regulation of the internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.

•        We may not be able to satisfy listing requirements of the NYSE or maintain a listing of our common stock on the NYSE or NYSE American.

•        The market price, trading volume and marketability of our common stock may, from time to time, be significantly affected by numerous factors beyond our control, which may materially adversely affect the market price of your common stock, the marketability of your common stock and our ability to raise capital through future equity financings.

•        An active, liquid trading market for our common stock may not be sustained, which may make it difficult for you to sell the common stock you purchase.

•        We have not paid in the past and do not expect to declare or pay dividends in the foreseeable future.

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Table of Contents

Summary Financial Information

The following tables summarize certain financial data for Goedeker and Appliances Connection and should be read in conjunction with their respective financial statements and related notes contained elsewhere in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The following summary financial data for Goedeker as of December 31, 2020 and 2019, for the year ended December 31, 2020, for the period from January 1, 2019 through April 5, 2019 (Predecessor) and for the period from April 6, 2019 through December 31, 2019 (Successor) are derived from the audited consolidated financial statements of Goedeker and the unaudited pro forma combined financial statements included elsewhere in this prospectus. The following summary financial data for Appliances Connection as of December 31, 2020 and 2019 and for the years then ended are derived from the audited combined financial statements of Appliances Connection included elsewhere in this prospectus.

All financial statements included in this prospectus are prepared and presented in accordance with generally accepted accounting principles in the United States, or GAAP. The summary financial information is only a summary and should be read in conjunction with the historical financial statements and related notes contained elsewhere herein. The financial statements contained elsewhere fully represent financial condition and operations of Goedeker and Appliances Connection; however, they are not indicative of future performance.

Goedeker

 

Successor

 

Predecessor

Statements of Operations Data

 

Year Ended December 31, 2020
(Pro Forma)

 

Year Ended December 31, 2020
(Actual)

 

Period from April 6,
2019
through December 31,
2019
(As Restated)

 

Period from
January 1,
2019
through
April 5,
2019

Products sales, net

 

$

367,742,181

 

 

$

55,133,653

 

 

$

34,668,112

 

 

$

12,946,901

 

Cost of goods sold

 

 

295,257,938

 

 

 

47,878,541

 

 

 

28,596,129

 

 

 

11,004,842

 

Gross profit

 

 

72,484,243

 

 

 

7,255,112

 

 

 

6,071,983

 

 

 

1,942,059

 

Total operating expenses

 

 

67,509,472

 

 

 

21,687,639

 

 

 

10,776,742

 

 

 

2,418,331

 

Net income (loss) from operations

 

 

4,974,771

 

 

 

(14,432,527

)

 

 

(4,704,759

)

 

 

(476,272

)

Total other income (expense)

 

 

(10,631,815

)

 

 

(6,437,007

)

 

 

(1,151,415

)

 

 

31,007

 

Net loss before income taxes

 

 

(5,657,044

)

 

 

(20,869,534

)

 

 

(5,856,174

)

 

 

(445,265

)

Income tax benefit (expense)

 

 

(698,303

)

 

 

(698,303

)

 

 

698,303

 

 

 

 

Net loss

 

$

(6,355,347

)

 

$

(21,567,837

)

 

$

(5,157,871

)

 

$

(445,265

)

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA(1)

 

$

14,394,924

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA Margin(1)

 

 

3.91

%

 

 

 

 

 

 

 

 

 

____________

(1)      See “— Non-GAAP Financial Measures below” for a full reconciliation.

 

Successor

Balance Sheet Data

 

As of
December 31,
2020
(Pro Forma)

 

As of
December 31,
2020
(Actual)

 

As of
December 31,
2019
(As Restated)

Cash and cash equivalents

 

$

42,830,663

 

$

934,729

 

 

$

471,308

 

Restricted cash

 

 

5,791,818

 

 

8,977,187

 

 

 

 

Total current assets

 

 

88,464,745

 

 

18,240,121

 

 

 

4,494,402

 

Total assets

 

 

345,481,001

 

 

26,216,930

 

 

 

13,906,863

 

Total current liabilities

 

 

72,072,026

 

 

35,694,976

 

 

 

14,125,228

 

Total liabilities

 

 

131,670,085

 

 

39,532,699

 

 

 

17,985,080

 

Total stockholders’ equity (deficit)

 

 

213,810,915

 

 

(13,315,769

)

 

 

(4,078,217

)

Total liabilities and stockholders’ equity (deficit)

 

$

345,481,001

 

$

26,216,930

 

 

$

13,906,863

 

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Table of Contents

Appliances Connection

 

Years Ended December 31,

Statements of Operations Data

 

2020

 

2019

Net sales

 

$

312,608,528

 

$

219,333,461

Cost of sales

 

 

247,379,397

 

 

176,771,632

Gross profit

 

 

65,229,131

 

 

42,561,829

Total operating expenses

 

 

45,821,833

 

 

33,055,976

Income from operations

 

 

19,407,298

 

 

9,505,853

Total other income (expense)

 

 

672,441

 

 

1,632,743

Net income

 

$

20,079,739

 

$

11,138,596

 

As of December 31,

Balance Sheet Data

 

2020

 

2019

Cash and cash equivalents

 

$

14,842,912

 

$

5,912,043

Total current assets

 

 

78,190,386

 

 

53,514,272

Total assets

 

 

84,979,244

 

 

61,195,270

Total current liabilities

 

 

32,040,390

 

 

20,181,242

Total liabilities

 

 

38,872,755

 

 

25,530,704

Owners’ capital

 

 

46,106,489

 

 

35,664,566

Total liabilities and owners’ equity

 

$

84,979,244

 

$

61,195,270

Financial Information for First Quarter of 2021

We have not yet completed our closing procedures for the first quarter of 2021. Presented below are estimated projections. These ranges are based on the information available to us at the time. Except for order information, we have provided ranges, rather than specific amounts, because these results are preliminary estimates. As such, our actual results may vary from the estimated projections and will not be finalized until after we close this offering and complete our normal quarter end accounting procedures. These results reflect management’s best estimate of the impact of events during the quarter.

These estimates should not be viewed as a substitute for our financial statements prepared in accordance with GAAP. Accordingly, you should not place undue reliance on these projections. These projections should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections and the audited consolidated financial statements of Goedeker and audited combined financial statements of Appliances Connection, including the notes thereto, included herein.

Management expects significant improvements in orders and revenue for the combined company (on a pro forma basis) for the first quarter 2021.

The combined company’s orders for the three months ended March 31, 2021 were $199.3 million, which when compared to the combined company’s orders for the three months ended March 31, 2020 of $97.2 million is an increase of 105.0%. Order information is available immediately, so we have not provided estimated ranges for this information.

Similarly, we expect that the combined company’s revenues for the three months ended March 31, 2021 will be between $110.0 million and $122.0 million, an increase of between 67.0% and 85.2% when compared against the combined company’s revenues of $65.9 million for the three months ended March 31, 2020. The expected revenues reflect a fill rate of between 55.2% and 61.2% for the combined company for three months ended March 31, 2021 compared to a fill rate of 67.8% for the three months ended March 31, 2020 and 85.0% for the year ended December 31, 2019. Vendor supply was constrained throughout the quarter and led to fill rates below the same time period a year ago. Fill rate refers to the percentage of the combined company’s customer demand that is met by immediately available inventory, without backorders, items being out of stock or cancelled orders.

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We expect that the combined company’s gross profit for the three months ended March 31, 2021 will be between $21.0 million and $24.0 million.

We expect that the combined company’s operating income, excluding non-recurring expenses, for the three months ended March 31, 2021 will be between $5.2 million and $5.8. In computing operating income for the three months ended March 31, 2021, we excluded $695,000 of non-recurring expenses directly related to the acquisition and the reaudit of 2019.

The following table sets forth the high and low range of orders, fill rate, revenue, gross profit and operating income that we expect for the three months ended March 31, 2021.

 

Goedeker

 

Appliances Connection

 

Combined Company

   

Low End of Range

 

High End of Range

 

Low End of Range

 

High End of Range

 

Low End of Range

 

High End of Range

Orders

 

$

30,700,000

 

 

$

30,700,000

 

 

$

168,600,000

 

 

$

168,600,000

 

 

$

199,300,000

 

 

$

199,300,000

 

Fill rate

 

 

40.7

%

 

 

44.6

%

 

 

58.2

%

 

 

64.2

%

 

 

55.2

%

 

 

61.2

%

Revenue

 

$

12,500,000

 

 

$

13,700,000

 

 

$

97,500,000

 

 

$

108,300,000

 

 

$

110,000,000

 

 

$

122,000,000

 

Gross profit

 

$

1,100,000

 

 

$

1,200,000

 

 

$

19,900,000

 

 

$

22,800,000

 

 

$

21,000,000

 

 

$

24,000,000

 

Operating income (loss)

 

$

(4,400,000

)

 

$

(4,100,000

)

 

$

9,600,000

 

 

$

9,900,000

 

 

$

5,200,000

 

 

$

5,800,000

 

In making these estimates, we considered a number of factors, including:

•        our manufacturers’ availability to produce product in a COVID-19 environment;

•        the timing of our manufacturers’ return to normal production levels;

•        our expectation that the level of order cancellations will be reduced as the result of our increased working capital from this offering, which reduction may be somewhat offset by delivery delays due to reduced product availability from manufacturers as the result of COVID-19-related issues;

•        the change in gross margin as we move to vendors who have availability; and

•        the change in marketing expenses that drive traffic to our website.

Quarterly Revenue Information

The following table sets forth 2020 revenue information and estimated 2021 Q1 revenue information by quarter for Goedeker, Appliances Connection and the combined company (on a pro forma basis). Appliances Connection has not historically prepared quarterly financial statements. Management has prepared the following information from their sales records and believe they present a reasonable estimate of results for the periods shown.

(all amounts, other than percentages, in millions of U.S. dollars)

 

Goedeker

 

Appliances
Connection

 

Combined
Company

 

% of
Total
For Year

March 31, 2020

 

$

9.6

 

$

56.2

 

$

65.8

 

17.9

%

June 30, 2020

 

 

15.3

 

 

76.2

 

 

91.5

 

24.9

%

September 30, 2020

 

 

13.5

 

 

88.7

 

 

102.2

 

27.8

%

December 31, 2020

 

 

16.7

 

 

91.5

 

 

108.2

 

29.4

%

Year Ended December 31, 2020

 

$

55.1

 

$

312.6

 

$

367.7

 

100.0

%

March 31, 2021

 

$

13.0

 

$

103.0

 

$

116.0

   

 

As the chart illustrates, revenue for the combined company grew rapidly during the year ended 2020, a trend which continued into the first quarter of 2021.

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Non-GAAP Financial Measures

We believe the non-GAAP financial measures presented in this prospectus will help investors understand the financial condition and operating results of the combined company and assess our future prospects. We believe these non-GAAP financial measures, each of which is discussed in greater detail below, are important supplemental measures because they exclude unusual or non-recurring items as well as non-cash items that are unrelated to or may not be indicative of our ongoing operating results. Further, when read in conjunction with GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as a tool to help make financial, operational and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry by providing more comparable measures that are less affected by factors such as capital structure.

We recognize that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to compensate for these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with GAAP. Readers should review the reconciliations below and should not rely on any single financial measure to evaluate our business.

The non-GAAP financial measures used in this prospectus include Adjusted EBITDA and Adjusted EBITDA Margin. We define Adjusted EBITDA as net loss before income taxes, depreciation and amortization, financing costs, interest expense, sales tax accrual and one-time non-operational events. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenue. Adjusted EBITDA and Adjusted EBITDA Margin are not measures calculated in accordance with GAAP, and they should not be considered an alternative to any financial measures that were calculated under U.S. GAAP. Adjusted EBITDA and Adjusted EBITDA Margin are used to facilitate a comparison of the ordinary, ongoing and customary course of the operations of the combined company on a consistent basis from period to period and provide an additional understanding of factors and trends affecting the business of the combined company. Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similarly titled non-GAAP measures used by other companies as other companies may have calculated the measures differently.

The reconciliation of Adjusted EBITDA to net loss for the combined company (on a pro forma basis) is provided below:

 

Year Ended December 31, 2020

Net loss

 

$

(6,355,347

)

Income tax expense

 

 

698,303

 

Depreciation and amortization

 

 

1,332,485

 

Financing costs

 

 

762,911

 

Interest expense

 

 

5,424,521

 

Sales tax accrual

 

 

7,700,378

 

One-time non-operational events:

 

 

 

 

Loss on extinguishment of debt

 

 

1,756,095

 

Write-off of acquisition receivable

 

 

809,000

 

Adjustment in value of contingency

 

 

138,922

 

Change on fair value of warrant liability

 

 

2,127,656

 

Adjusted EBITDA

 

$

14,394,924

 

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Unaudited Pro Forma Combined Financial Information

The unaudited pro forma combined financial information presented below sets forth the financial position and results of operations of Goedeker after giving effect to the proposed acquisition and this offering. The following unaudited pro forma combined financial statements give effect to the proposed acquisition and related transactions and were prepared in accordance with the regulations of the Securities and Exchange Commission, or the SEC.

The pro forma financial information is presented for informational purposes only and is not necessarily indicative of what the combined company’s financial position actually would have been had the proposed acquisition been completed on the dates indicated or what the combined company’s results of operations actually would have been had the proposed acquisition been completed as of the beginning of the periods indicated. In addition, the combined pro forma financial statements do not purport to project the future financial position or operating results of the combined company. The pro forma combined financial statements include adjustments for events that are (1) directly attributable to the proposed acquisition, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the combined results.

It should be noted that there have been no material transactions between Goedeker and Appliances Connection prior to and during the periods presented in the unaudited pro forma combined financial statements. In addition, these statements do not reflect any cost or growth synergies that the combined company may achieve as a result of the proposed acquisition, or the costs to combine the operations of Goedeker and Appliances Connection.

The pro forma financial information has been derived from and should be read in conjunction with the following:

(a)     The consolidated financial statements and related notes of Goedeker for the year ended December 31, 2020, for the period from January 1, 2019 through April 5, 2019 (Predecessor) and for the period from April 6, 2019 through December 31, 2019 (Successor) (which are included elsewhere in this prospectus); and

(b)    The combined financial statements and related notes of Appliances Connection for the years ended December 31, 2020 and 2019 (which are included elsewhere in this prospectus).

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1847 GOEDEKER INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2020

 

Goedeker

 

Appliances Connection

 

Pro Forma Adjustments

 

Notes

 

Pro Forma Combined

ASSETS

 

 

   

 

   

 

 

 

     

 

 

Current Assets

 

 

   

 

   

 

 

 

     

 

 

Cash and cash equivalents

 

$

934,729

 

$

14,842,912

 

$

190,150,000

 

 

(a)

 

$

42,830,663

   

 

   

 

   

 

(180,000,000

)

 

(b)

 

 

 
   

 

   

 

   

 

56,450,000

 

 

(c)

 

 

 
   

 

   

 

   

 

(12,680,161

)

 

(d)

 

 

 
   

 

   

 

   

 

(26,866,817

)

 

(e)

 

 

 

Restricted cash

 

 

8,977,187

 

 

 

 

(3,185,369

)

 

(f)

 

 

5,791,818

Receivables

 

 

1,998,232

 

 

19,392,582

 

 

 

     

 

21,390,814

Vendor deposits

 

 

547,648

 

 

31,733,415

 

 

(31,733,415

)

 

(g)

 

 

547,648

Merchandise inventory, net

 

 

5,147,241

 

 

12,004,038

 

 

 

     

 

17,151,279

Prepaid expenses and other current assets

 

 

635,084

 

 

217,439

 

 

(100,000

)

 

(d)

 

 

752,523

Total Current Assets

 

 

18,240,121

 

 

78,190,386

 

 

(7,965,762

)

     

 

88,464,745

Property and equipment, net

 

 

245,948

 

 

1,997,822

 

 

 

     

 

2,243,770

Operating lease right-of-use assets

 

 

1,578,235

 

 

4,646,508

 

 

 

     

 

6,224,743

Goodwill

 

 

4,725,689

 

 

 

 

242,250,589

 

 

(h)

 

 

246,976,278

Intangible assets, net

 

 

1,381,937

 

 

 

 

 

     

 

1,381,937

Other long-term assets

 

 

45,000

 

 

144,528

 

 

 

     

 

189,528

TOTAL ASSETS

 

$

26,216,930

 

$

84,979,244

 

$

234,284,827

 

     

$

345,481,001

   

 

   

 

   

 

 

 

     

 

 

LIABILITIES, OWNERS’ EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

   

 

   

 

 

 

     

 

 

Current Liabilities

 

 

   

 

   

 

 

 

     

 

 

Accounts payable and accrued expenses

 

$

12,701,715

 

$

21,179,975

 

$

 

     

$

33,881,690

Customer deposits

 

 

21,879,210

 

 

8,853,214