| SIGNIFICANT ACCOUNTING POLICIES | NOTE
2 – SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting
principles in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange
Commission (the “SEC”). Accordingly, these condensed consolidated financial statements do not include all of the information
and footnotes required by GAAP for complete financial statements. For additional information, these condensed consolidated financial
statements should be read in conjunction with Lazydays Holdings, Inc.’s consolidated financial statements and notes as of December
31, 2020 and 2019 included in the Annual Report on Form 10-K/A filed with the SEC on June 25, 2021. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Principles
of Consolidation The
condensed consolidated financial statements include the accounts of Holdings, Lazydays RV and its wholly owned subsidiary LDRV Holdings
Corp. LDRV Holdings Corp is the sole owner of Lazydays Land Holdings, LLC, Lazydays Tampa Land Holdings, LLC, Lazydays RV America, LLC,
Lazydays RV Discount, LLC, Lazydays Mile Hi RV, LLC, LDRV of Tennessee LLC, Lazydays of Minneapolis LLC, Lazydays of Central Florida,
LLC, Lone Star Acquisition LLC, Lone Star Diversified LLC, LDRV Acquisition Group of Nashville LLC, LDRV of Nashville LLC, Lazydays RV
of Phoenix, LLC, Lazydays RV of Elkhart, LLC, Lazydays Land of Elkhart, LLC, Lazydays Service of Elkhart, LLC, Lazydays RV of Chicagoland,
LLC and Lazydays Land of Chicagoland, LLC (collectively, the “Company”, “Lazydays” or “Successor”).
All significant inter-company accounts and transactions have been eliminated in consolidation. Restatement
of Previously Reported Financial Statements The
notes included herein should be read in conjunction with the Company’s restated audited consolidated financial statements included
in the 2020 Form 10-K/A. As previously disclosed in the 2020 Form 10-K/A, the Company restated its previously issued consolidated financial
statements for the years ended December 31, 2020, 2019 and 2018 to make the necessary accounting adjustments related to warrant accounting.
The Company has restated herein its condensed consolidated financial statements for the three and six months ended June 30, 2020 and related amounts
within the accompanying footnotes to the condensed consolidated financial statements. Restated net income for the three months ended
June 30, 2020 is $ 5.3 2.8 8.1 8.7 2.4 11.1 The
tables below set forth the unaudited condensed consolidated balance sheet as of June 30, 2020 originally reported, adjustments and the
restated balances, and the condensed consolidated statement of income for the three and six months ended June 30, 2020 originally
reported, adjustments, and the restated balances and the condensed consolidated statement of cash flow amounts for the six months ended
June 30, 2020 originally reported, adjustments, and the restated balances. SCHEDULE OF ORIGINALLY REPORTED, ADJUSTMENTS, AND RESTATED BALANCES
Previous Adjustment Restated
June 30, 2020 (unaudited)
As Previously Reported Restatement Adjustments As Restated
Total Assets $ 414,722 $ - $ 414,722
Liabilities and Stockholder’ Equity
Total current liabilities $ 149,211 $ - 149,211
Financing liability, non-current portion, net of debt discount 71,403 - 71,403
Long term debt, non-current portion, net of debt discount 15,679 - 15,679
Operating lease liability, non-current portion 13,616 - 13,616
Deferred tax liability 16,450 - 16,450
Warrant liabilities - 3,093 3,093
Total liabilities 266,359 3,093 269,452
Commitments and Contingencies
Series A Convertible Preferred Stock; 600,000 60,000 64,221 - 64,221
Stockholders’ Equity
Preferred Stock, $ 0.0001 5,000,000 - - -
Common stock, $ 0.0001 100,000,000 8,548,524 8,407,225 - - -
Additional paid-in capital 78,712 (8,991 ) 69,721
Treasury Stock, at cost, 141,299 (499 ) - (499 )
Retained earnings 5,929 5,898 11,827
Total stockholders’ equity 84,142 (3,093 ) 81,049
Total liabilities and stockholders’ equity $ 414,722 $ - $ 414,722
As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated
Three months ended June 30, 2020 (Unaudited) Six months ended June 30, 2020 (Unaudited)
As Previously Reported Restatement Adjustments As Restated As Previously Reported Restatement Adjustments As Restated
Income from Operations $ 12,628 $ - $ 12,628 $ 19,412 $ - $ 19,412
Other income/expenses
Loss on sale of property and equipment (6 ) - (6 ) (8 ) - (8 )
Interest expense (2,018 ) - (2,018 ) (4,513 ) - (4,513 )
Change in fair value of warrant liabilities - (2,758 ) (2,758 ) - (2,346 ) (2,346 )
Total other expense (2,024 ) (2,758 ) (4,782 ) (4,521 ) (2,346 ) (6,867 )
Income before income tax expense 10,604 (2,758 ) 7,846 14,891 (2,346 ) 12,545
Income tax expense (2,536 ) - (2,536 ) (3,836 ) - (3,836 )
Net income $ 8,068 $ (2,758 ) $ 5,310 $ 11,055 $ (2,346 ) $ 8,709
Dividends of Series A Convertible Preferred Stock (1,684 ) - (1,684 ) (3,328 ) - (3,328 )
Net income attributable to common stock and participating securities $ 6,384 $ (2,758 ) $ 3,626 $ 7,727 $ (2,346 ) $ 5,381
EPS:
Basic and diluted income per share $ 0.39 $ (0.14 ) $ 0.25 $ 0.48 $ (0.10 ) $ 0.38
Weighted average shares outstanding basic and diluted 9,715,677 9,715,677 9,715,677 9,736,133 9,736,133 9,736,133
As
Previously Reported Restatement
As
Restated
Six Months Ended June 30, 2020
As Previously Reported Restatement As Restated
Net Income $ 11,055 $ (2,346 ) $ 8,709
Adjustments to reconcile net income to net cash provided by operating activities: 72,555 72,555
Change in fair value of warrant liabilities - 2,346 2,346
Net cash provided by operating activities 83,610 - 83,610
Net cash used in investing activities (765 ) - (765 )
Net cash used in financing activities (52,253 ) - (52,253 )
Net change in cash and cash equivalents 30,592 - 30,592
Cash - Beginning 31,458 - 31,458
Cash - Ending $ 62,050 $ - $ 62,050 Use
of Estimates in the Preparation of Financial Statements The
preparation of 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 condensed consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant estimates include the assumptions used in the valuation of the net assets acquired in business combinations, goodwill and
other intangible assets, provision for charge-backs, inventory write-downs, allowance for doubtful accounts and stock-based compensation
and fair value of warrant liabilities. Revenue
Recognition The
core principle of revenue recognition is that an entity recognizes revenue to depict the transfer of promised 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. The
Company applies a five-step model for revenue measurement and recognition. Revenues
are recognized when control of the promised goods or services is transferred to the customers at the expected amount the Company is entitled
to for such goods and services. Taxes collected on revenue producing transactions are excluded from revenue in the condensed consolidated
statements of income. The following table represents the Company’s disaggregation of revenue: SCHEDULE OF DISAGGREGATION OF REVENUE
Three months ended Six months ended
June
30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
New vehicle revenue $ 201,560 $ 129,398 $ 368,971 $ 231,842
Preowned vehicle revenue 88,653 62,107 166,123 126,851
Parts, accessories, and related services 12,077 9,165 22,338 19,930
Finance and insurance revenue 19,738 12,763 34,346 24,035
Campground and other revenue 763 528 2,006 2,157
Total $ 322,791 $ 213,961 $ 593,784 $ 404,815 Revenue
from the sale of vehicles is recognized at a point in time on delivery, transfer of title and completion of financing arrangements. Revenue
from the sale of parts, accessories and related service is recognized as services and parts are delivered or as a customer approves elements
of the completion of service. Revenue from the sale of parts, accessories and related service is recognized in other revenue in the accompanying
condensed consolidated statements of income. The
Company receives commissions from the sale of insurance and vehicle service contracts to customers. In addition, the Company arranges
financing for customers through various financial institutions and receives commissions. The Company may be charged back (“charge-backs”)
for financing fees, insurance or vehicle service contract commissions in the event of early termination of some contracts by its customers.
The revenues from financing fees and commissions are recorded at the time of the sale of the vehicles and an allowance for future charge-backs
is established based on historical operating results and the termination provision of the applicable contracts. The estimates for future
charge-backs require judgment by management, and as a result there is an element of risk associated with these revenue streams. The Company
recognized finance and insurance revenues, less the additions to the charge-back allowance, which is included in other revenue as follows
(unaudited): SCHEDULE OF REVENUE RECOGNIZED OF FINANCE AND INSURANCE REVENUES
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Three months ended Six months ended
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Gross finance and insurance revenues $ 21,866 $ 13,917 $ 37,921 $ 26,500
Additions to charge-back allowance (2,128 ) (1,154 ) (3,575 ) (2,465 )
Net Finance Revenue $ 19,738 $ 12,763 $ 34,346 $ 24,035 The
Company has an accrual for charge-backs, which totaled $ 7,028 5,553 Deposits
on vehicles received in advance are accounted for as a liability and recognized into revenue upon completion of each respective transaction.
These contract liabilities are included in Note 5 – Accounts Payable, Accrued Expenses, and Other Current Liabilities as customer
deposits. During the six months ended June 30, 2021, $ 4,361 Inventories Vehicle
and parts inventories are recorded at the lower of cost or net realizable value, with cost determined by the last-in, first-out (“LIFO”)
method. Cost includes purchase costs, reconditioning costs, dealer-installed accessories and freight. For vehicles accepted in trades,
the cost is the fair value of such pre-owned vehicles at the time of the trade-in. Other inventory includes parts and accessories as
well as retail travel and leisure specialty merchandise. The current replacement costs of LIFO inventories exceeded their recorded values
by $ 5,691 3,627 Cumulative
Redeemable Convertible Preferred Stock The
Company’s Series A Preferred Stock (See Note 10 – Preferred Stock) is cumulative redeemable convertible preferred stock.
Accordingly, it is classified as temporary equity and is shown net of issuance costs and the relative fair value of warrants issued in
conjunction with the issuance of the Series A Preferred Stock. Unpaid preferred dividends are accumulated, compounded at each quarterly
dividend date and presented within the carrying value of the Series A Preferred Stock until a dividend is declared by the Company’s
board of directors (the “Board”). Stock
Based Compensation The
Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation. ASC 718 requires
all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of income based
on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair
value of the award, and are recognized as expense over the employee’s requisite or derived service period. In accordance with ASC
718, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All
excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income
tax expenses or benefits in the condensed consolidated statements of income. Earnings
Per Share The
Company computes basic and diluted earnings/(loss) per share (“EPS”) by dividing net earnings/(loss) by the weighted average
number of shares of common stock outstanding during the period. The
Company is required, in periods in which it has net income, to calculate EPS using the two-class method. The two-class method is required
because the Company’s Series A Preferred Stock have the right to receive dividends or dividend equivalents should the Company declare
dividends on its common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the common and
preferred stockholders. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate
basic EPS for each class of shares. In
periods in which the Company has a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders
by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the preferred
stock does not participate in losses. The
following table summarizes net income attributable to common stockholders used in the calculation of basic and diluted income (loss)
per common share: SUMMARY OF NET INCOME (LOSS) ATTRIBUTE TO COMMON STOCKHOLDERS
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Three months ended Six months ended
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
(Dollars in thousands - except share and per share amounts) (Restated) (Restated)
Distributed earning allocated to common stock $ - $ - $ - $ -
Undistributed earnings allocated to common stock 18,506 2,473 24,345 3,741
Net earnings allocated to common stock 18,506 2,473 24,345 3,741
Net earnings allocated to participating securities 5,606 1,153 7,427 1,640
Net earnings allocated to common stock and participating securities $ 24,112 $ 3,626 $ 31,772 $ 5,381
Weighted average shares outstanding for basic earning per common share 10,677,495 8,376,178 10,637,060 8,396,634
Dilutive effect of warrants and options 300,357 1,339,499 300,357 1,339,499
Weighted average shares outstanding for diluted earnings per share computation 10,977,852 9,715,677 10,937,417 9,736,133
Basic income per common share $ 1.69 $ 0.25 $ 2.23 $ 0.38
Diluted income per common share $ 1.21 $ 0.25 $ 1.63 $ 0.38 During
the three and six months ended June 30, 2021 and 2020, respectively, the denominator of the basic EPS was calculated as follow: SCHEDULE OF DENOMINATOR OF BASIC EARNINGS PER SHARE
June 30,2021 June 30, 2020 June 30,2021 June 30, 2020
Three months ended Six months ended
June 30,2021 June 30, 2020 June 30,2021 June 30, 2020
Weighted average outstanding common shares 10,677,495 8,376,178 10,637,060 8,396,634
Weighted average prefunded warrants 300,357 1,339,499 300,357 1,339,499
Weighted shares outstanding - basic $ 10,977,852 $ 9,715,677 $ 10,937,417 $ 9,736,133 During
the three and six months ended June 30, 2021 and 2020, respectively, the denominator of the dilutive EPS was calculated as follows: SCHEDULE OF DENOMINATOR OF DILUTIVE EARNINGS PER SHARE
June 30,2021 June 30, 2020 June 30,2021 June 30, 2020
Three months ended Six months ended
June 30,2021 June 30, 2020 June 30,2021 June 30, 2020
Weighted average outstanding common shares 10,677,495 8,376,178 10,637,060 8,396,634
Weighted average prefunded warrants 300,357 1,339,499 300,357 1,339,499
Weighted average warrants 1,730,719 - 1,730,719 -
Weighted average options 2,125,161 - 2,125,161 -
Weighted average convertible preferred stock 6,081,689 6,147,975 6,199,354 6,293,466
Weighted shares outstanding - basic and diluted 20,915,421 15,863,652 20,992,651 16,029,599 The
following common stock equivalent shares were excluded from the computation of the diluted income per share, since their inclusion would
have been anti-dilutive: SCHEDULE OF ANTI-DILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE
Three months ended Six months ended
June 30,2021 June 30, 2020 June 30,2021 June 30, 2020
Shares underlying Series A Convertible Preferred Stock - - - -
Shares underlying warrants - 4,677,458 - 4,677,458
Stock options - 3,993,759 - 3,993,759
Share equivalents excluded from EPS - 8,671,217 - 8,671,217 As
of June 30, 2021, the Company had declared dividends of $ 1,197 5,962,733 Prior
Period Financial Statement Correction of an Immaterial Misstatement During
the fourth quarter of 2020, the Company identified adjustments required to correct earnings per share for the first three quarters of
2020. The errors discovered resulted in an understatement in earning per share of $ 0.06 0.07 Based
on an analysis of “Accounting Changes and Error Corrections” (“ASC 250”), Staff Accounting Bulletin 99 –
“Materiality” (“SAB 99”) and Staff Accounting Bulletin 108 – “Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”), the Company determined
that these errors were immaterial to the previously issued condensed consolidated financial statements, and as such, no restatement was
necessary. Correcting prior period financial statements for immaterial errors would not require previously filed reports to be amended.
Such correction may be made the next time the registrant files the prior period financial statements. Accordingly, the misstatements
are being corrected prospectively in this Form 10-Q for the quarter ended June 30, 2021. Advertising
Costs Advertising
and promotion costs are charged to operations in the period incurred. Advertising and promotion costs totaled approximately $ 5,201 2,862 9,613 7,221 Income
Taxes The
Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in
the condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences
are expected to reverse. The Company estimates the degree to which tax assets and credit carry forwards will result in a benefit based
on expected profitability by tax jurisdiction. In
its interim condensed consolidated financial statements, the Company follows the guidance in ASC 270, “Interim Reporting”
and ASC 740 “Income Taxes”, whereby the Company utilizes the expected annual effective tax rate in determining its income
tax provisions for the interim periods. Seasonality The
Company’s operations generally experience modestly higher volumes of vehicle sales in the first half of each year due in part to
consumer buying trends and the hospitable warm climate during the winter months at the Company’s Florida and Arizona locations.
In addition, the northern locations in Colorado, Tennessee, Minnesota and Indiana generally experience moderately higher vehicle sales
during the spring months. Vendor
Concentrations The
Company purchases its new RVs and replacement parts from various manufacturers. During the three months ended June 30, 2021, three major
manufacturers accounted for 40.9% 28.4% 25.6% 44.4% 28.4% 22.4% During
the three months ended June 30, 2020, four major manufacturers accounted for 35.0% 22.5% 21.5% 16.9% 31.5% 21.2% 20.2% 19.0% The
Company is subject to dealer agreements with each manufacturer. The manufacturer is entitled to terminate the dealer agreement if the
Company is in material breach of the agreement’s terms. Geographic
Concentrations The
percent of revenues generated by the Florida locations, Colorado locations, Arizona locations and Tennessee locations, which generate
greater than 10% of revenues, were as follows (unaudited): SCHEDULE OF GEOGRAPHIC CONCENTRATION RISK PERCENTAGE
Three months ended Six months ended
June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Florida 46 % 61 % 51 % 68 %
Colorado 13 % 17 % 12 % 14 %
Arizona 13 % <10 % 12 % <10 %
Tennessee 16 % <10 % 14 % <10 % These
geographic concentrations increase the exposure to adverse developments related to competition, as well as economic, demographic and
weather. Impact
of COVID-19 In
March 2020, the World Health Organization declared the outbreak of the novel coronavirus (“COVID-19”) pandemic, which continues
to spread throughout the United States and globally. Beginning in mid-to-late March of 2020, the COVID-19 pandemic led to severe disruptions
in general economic activity as businesses and federal, state and local governments took increasingly broad actions to mitigate the impact
of the COVID-19 pandemic on public health, including through “shelter in place” or “stay at home” orders in the
states in which we operate. As we modified our business practices to conform to government guidelines and best practices to ensure the
health and safety of our customers, employees and the communities we serve, we saw significant early declines in new and pre-owned vehicle
unit sales, sales of parts, accessories and related services, including finance and insurance revenues as well as campground and miscellaneous
revenues. We
took a number of actions in April 2020 to adjust resources and costs to align with reduced demand caused by the COVID-19 pandemic. These
actions included:
● Reduction
of our workforce by 25%
● Temporary
reduction of senior management salaries (April 2020 through May 2020);
● Suspension
of 2020 annual pay increases;
● Temporary
suspension of 401k match (April 2020 through May 2020);
● Delay
of non-critical capital projects; and
● Focus
of resources on core sales and service operations. As
described under Note 7 - Debt below, to further protect our liquidity and cash position, we negotiated with our lenders for the temporary
suspension of scheduled principal and interest payments on our term and mortgage loans from April 15, 2020 through June 15, 2020 and
for the temporary suspension of scheduled floorplan curtailment payments from April 1, 2020 through June 15, 2020. We also received $ 8,704 6,626 The
improvement in sales beginning in May 2020 likely relates, at least in part, to an increase in consumer demand as consumers seek outdoor
travel and leisure activities that permit appropriate social distancing. However, we can provide no assurances that such growth in sales
will continue at the same rate that occurred between May 2020 and June 2021, or at all, over any time period, and sales may ultimately
decline. Furthermore, our improved sales and cost savings measures to date may not be sufficient to offset any later impacts of the COVID-19
pandemic, including the Delta variant, and our liquidity could be negatively impacted, if prior sales trends from May 2020 through June
30, 2021 are reversed, which may occur, for example, if consumer preferences shift toward cruise line, air travel and hotel industries. Our
operations also depend on the continued health and productivity of our employees at our dealerships service locations and corporate headquarters
throughout the COVID-19 pandemic. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations and
financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including the severity and
duration of the COVID-19 pandemic, the efficacy and availability of vaccines, and further actions that may be taken by individuals, businesses
and federal, state and local governments in response. Even after the COVID-19 pandemic has subsided, the Company may experience significant
adverse effects to its business as a result of its global economic impact, including any economic recession or downturn and the impact
of such a recession or downturn on unemployment levels, consumer confidence, levels of personal discretionary spending and credit availability. Reclassifications Certain
amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect
on the previously reported net income. Recently
Issued Accounting Standards In
March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). This standard, effective
for reporting periods through December 31, 2022, provides accounting relief for contract modifications that replace an interest rate
impacted by reference rate reform (e.g., London Interbank Offered Rate (“LIBOR”)) with a new alternative reference rate.
The guidance is applicable to investment securities, receivables, loans, debt, leases, derivatives and hedge accounting elections and
other contractual arrangements. The new standard provides temporary optional expedients and exceptions to current GAAP guidance on contract
modifications and hedge accounting. Specifically, a modification to transition to an alternative reference rate is treated as an event
that does not require contract remeasurement or reassessment of a previous accounting treatment. The standard is generally effective
for all contract modifications made and hedging relationships evaluated through December 31, 2022, as a result of reference rate reform.
The Company is currently evaluating the impact that this new standard will have on our condensed consolidated financial statements. Recently
Adopted Accounting Pronouncements In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”). This standard
requires the use of a forward-looking expected loss impairment model for trade and other receivables, held-to-maturity debt securities,
loans and other instruments. This standard also requires impairments and recoveries for available-for-sale debt securities to be recorded
through an allowance account and revises certain disclosure requirements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements,
which provides guidance on accounting for credit losses on accrued interest receivable balances and guidance on including recoveries
when estimating the allowance. In May 2019, the FASB issued ASU 2019-05, Targeted Transition Relief, which allows entities with an option
to elect fair value for certain instruments upon adoption of Topic 326. The standard is effective for the Company for fiscal years, and
interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted ASU 2016-13 on January 1, 2021 and
the adoption did not materially impact its condensed consolidated financial statements. Lease
recognition At
the inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification
as either operating or financing. Operating
lease assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make
lease payments under the lease. Lease recognition occurs at the commencement date and lease liability amounts are based on the present
value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably
certain that we will exercise that option. Because most of our leases do not provide information to determine an implicit interest rate,
we use our incremental borrowing rate in determining the present value of lease payments. Operating lease assets also include any lease
payments made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line
basis over the lease term. We have lease agreements with both lease and non-lease components, which are generally accounted for together
as a single lease component. Subsequent
Events Management
of the Company has analyzed the activities and transactions subsequent to June 30, 2021 through the date these condensed consolidated
financial statements were issued to determine the need for any adjustments to or disclosures within the condensed consolidated financial
statements. The Company did not identify any recognized or non-recognized subsequent events that would require disclosure in the condensed
consolidated financial statements other than the following item. On
July 14, 2021, the Company executed an amended and restated credit agreement with M&T, as a Lender, Administrative Agent, Swingline
Lender, and Issuing Bank, and other financial institutions as Lender parties. The credit agreement evidences an approximately $ 369.1 327 11.3 25 5.8 On August 3, 2021, the Company completed its acquisition of BYRV, Inc.
(“BYRV”) located in Portland, Oregon and BYRV Washington, Inc. (“BYRV Washington”) located in Woodland, Washington
in one transaction (“BYRV”). The purchase price for the transaction consists of the following, in each case subject to adjustment
in accordance with the terms of the purchase agreement: (a) a cash payment, subject to a working capital adjustment and an inventory adjustment
and (b) the assumption of BYRV’s floorplan debt, which was paid off and added to the Company’s current floorplan. |
