Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events
3 Months Ended
Mar. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events

15. Subsequent Events


The Company has evaluated all event or transactions that occurred after March 31, 2023 through May 15, 2023, which is the date that the condensed consolidated financial statements were available to be issued. During this period, the only material subsequent events requiring recognition or disclosure are provided below.


On May 5, 2023, the Company and AquaSport Co. entered into an agreement with Ebbtide Corporation, a Tennessee corporation (“Ebbtide”), dated May 5, 2023 (the “Agreement”), providing the Company with the right to lease the AQUASPORT™ boat brand inclusive of its shuttered manufacturing facility. The potential asset purchase includes AquaSport’s trademarks, 150,000-square-foot manufacturing facility situated on 18.5 acres in White Bluff Tennessee, and related tooling, molds, and equipment to build five AquaSport models ranging in size from 21 to 25-foot boats (the “AquaSport Assets”).


Under the Agreement, the Company has the right to purchase the AquaSport Assets from Ebbtide for $3,100,000 during the five-year term of the Agreement (or extension period), less credit for a $300,000 security deposit paid by the Company and $16,000 a month for any rent paid under the Agreement by AquaSport Co. to Ebbtide. AquaSport Co. will lease the AquaSport Assets from Ebbtide under the Agreement at a monthly rent of $22,000 pending the Company’s acquisition of the AquaSport Assets. The lease is for a term of five years, commencing June 1, 2023, with one option to renew the lease for an additional five years. In the event AquaSport Co. commits three payment Events of Default (as defined in the Agreement) within any consecutive two-year period or commits any other material Event of Default that is not cured timely and remains uncured, Ebbtide may terminate the Company’s rights under the Agreement to acquire the AquaSport Assets. In addition, Ebbtide has the right to terminate the Agreement if an Event of Default occurs.


AquaSport’s obligations under the Agreement have been guaranteed by the Company.