| GOODWILL |
NOTE
4. GOODWILL
Goodwill
is an asset representing operational synergies and future economic benefits arising from other assets acquired in a business acquisition
that are not individually identified and separately recognized.
SCHEDULE
OF GOODWILL
| | |
June 30, 2026 | | |
December 31, 2025 | |
| Boat Center, Inc (1) | |
$ | 570,000 | | |
$ | 570,000 | |
| Apex Marine (2) | |
| 4,080,429 | | |
| - | |
| Bellhart (3) | |
| 849,366 | | |
| - | |
| Total | |
$ | 5,499,795 | | |
$ | 570,000 | |
| (1) | On
July 22, 2022, the Company acquired 100% of the outstanding shares of Boat Center, Inc. for
total consideration of approximately $0.6 million. The excess of the purchase price over
the fair value of the net assets acquired was recorded as goodwill. The Company did not recognize
any separately identifiable intangible assets as the amounts were not material. |
| (2) | On
May 1, 2026, the Company completed the acquisition of 100%
of the equity interests of Apex Marine, LLC, Apex Marine Sales, LLC, and Apex Marine Stuart, LLC (collectively, “Apex
Marine”), a premier South Florida marine service, storage, and sales organization with four operating facilities. The total
consideration transferred was approximately $6,149,350,
consisting of (i) $1,200,000
in cash, (ii) 679,008
shares of the Company’s common stock valued at $1,833,333,
(iii) two promissory notes with aggregate principal amounts of approximately $2,966,667,
and (iv) reimbursement of a deposit of $149,350. |
| (3) | On
May 22, 2026, the Company completed the acquisition of 100% of the equity interests of Bellhart
Marine Group, LLC, along with its affiliated entities Bellhart Marine Services, LLC, Specialized
Mechanical Services, LLC, and Specialized Mechanical Services, Inc. (collectively, “Bellhart”),
a marine service, refit, and mechanical services platform. The aggregate purchase price was
$750,000 in cash plus the assumption of specified seller liabilities of $170,000, for total
consideration transferred of $920,000. |
The
Apex Marine acquisition represented an acquisition of a business and was accounted for using the acquisition method, whereby all of the
assets acquired and liabilities assumed were recognized at their fair value on the acquisition date, with any excess of the purchase
price over the estimated fair value recorded as goodwill. The goodwill is primarily attributable to the assembled workforce of Apex Marine’s seasoned “new boat” brokerage team, as well as expected synergies from combining operations, including expanded
South Florida sales and service infrastructure and access to a broader international buyer network. Due to the existence of cumulative
losses, no deferred taxes are recorded for the acquisition transaction. All of the goodwill is expected to be deductible for income tax
purposes over a 15 year period.
The
following table sets forth the preliminary allocation of the Consideration.
SCHEDULE
OF PRELIMINARY ALLOCATION OF CONSIDERATION AND FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
| Consideration | |
| |
| Cash paid | |
| 1,200,000 | |
| Common stock issued (679,008 shares × $2.70/share) | |
| 1,833,333 | |
| Note 1 | |
| 2,466,667 | |
| Note 2 | |
| 500,000 | |
| Note | |
| 500,000 | |
| Reimbursement of Deposit | |
| 149,350 | |
| Assumed liability | |
| - | |
| TOTAL CONSIDERATION TRANSFERRED | |
| 6,149,350 | |
| FAIR VALUE OF ASSETS ACQUIRED | |
As of May 1, 2026 | |
| Cash and cash equivalents | |
$ | 60,338 | |
| Inventory | |
| 15,214,097 | |
| Prepaid expenses | |
| 165,770 | |
| Other non-current assets | |
| 43,126 | |
| Right-of-use assets | |
| 1,645,164 | |
| Property, plant & equipment, net | |
| 262,708 | |
| Amount attributable to assets acquired | |
| 17,391,203 | |
| | |
| | |
| FAIR VALUE OF LIABILITIES ASSUMED | |
| | |
| Accounts payable | |
| | |
| Accrued liabilities | |
| 395,645 | |
| Customer deposits | |
| 331,583 | |
| Lease liabilities | |
| 1,754,409 | |
| Floor plan notes payable | |
| 12,792,593 | |
| Debt | |
| 48,052 | |
| | |
| | |
| Amount attributable to liabilities assumed | |
| 15,322,282 | |
| | |
| | |
| Net identifiable assets acquired | |
| 2,068,921 | |
| | |
| | |
| GOODWILL | |
| | |
| Total consideration transferred | |
| 6,149,350 | |
| Less: net identifiable assets acquired | |
| (2,068,921 | ) |
| Goodwill recognized | |
$ | 4,080,429 | |
| (3) | On
May 22, 2026, the Company completed the acquisition of 100%
of the equity interests of Bellhart Marine Group, LLC, along with its affiliated entities Bellhart Marine Services, LLC, Specialized
Mechanical Services, LLC, and Specialized Mechanical Services, Inc. (collectively, “Bellhart”), a marine service, refit,
and mechanical services platform. The aggregate purchase price was $750,000
in cash plus the assumption of specified seller liabilities
of $170,000,
for total consideration transferred of $920,000. |
The
Bellhart acquisition represented an acquisition of a business and was accounted for using the acquisition method, whereby all of the
assets acquired and liabilities assumed were recognized at their fair value on the acquisition date, with any excess of the purchase
price over the estimated fair value recorded as goodwill. The goodwill is primarily attributable to the expected synergies from integrating
Bellhart’s service operations, including the enhanced ability to efficiently source, recondition, and remarket inventory, supporting
faster transaction cycles and improved capital efficiency, as well as the value of Bellhart’s assembled workforce. Goodwill attributable
to the acquisition of Bellhart Marine Group, LLC, Bellhart Marine Services, LLC, and Specialized Mechanical Services, LLC is expected
to be deductible for income tax purposes ratably over a 15-year period pursuant to Section 197 of the Internal Revenue Code. Goodwill
attributable to the acquisition of Specialized Mechanical Services, Inc. is not expected to be deductible for income tax purposes, as
the transaction was not treated as an asset acquisition for federal income tax purposes and no election under Section 338(h)(10) or Section
336(e) of the Internal Revenue Code was made with respect to this entity.
The
following table sets forth the preliminary allocation of the Consideration.
SCHEDULE
OF PRELIMINARY ALLOCATION OF CONSIDERATION AND FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
| | |
| | |
| Cash | |
| 750,000 | |
| Assumed liability | |
| 170,000 | |
| TOTAL CONSIDERATION TRANSFERRED | |
| 920,000 | |
| | |
| | |
| FAIR VALUE OF ASSETS ACQUIRED | |
| | |
| Cash and cash equivalents | |
| 294,962 | |
| Inventory | |
| 1,193,777 | |
| Property, plant and equipment, net | |
| 213,073 | |
| Right-of-use assets | |
| 662,496 | |
| Amount attributable to assets acquired | |
| 2,364,308 | |
| | |
| | |
| FAIR VALUE OF LIABILITIES ASSUMED | |
| | |
| Accounts payable | |
| 1,296,293 | |
| Long-term debt | |
| 303,385 | |
| Lease liabilities | |
| 693,996 | |
| Amount attributable to assume liabilities | |
| 2,293,674 | |
| | |
| | |
| Net identifiable assets acquired | |
| 70,634 | |
| | |
| | |
| GOODWILL | |
| | |
| Total consideration transferred | |
| 920,000 | |
| Less: net identifiable assets acquired | |
| (70,634 | ) |
| Goodwill recognized | |
| 849,366 | |
(4) | Supplemental Unaudited Pro forma Results of Operations: |
SCHEDULE
OF SUPPLEMENTAL UNAUDITED PRO FORMA RESULTS OF OPERATIONS
| | |
For
the Six Months Ended
June 30, 2026 | |
|
For the Six Months Ended
June 30, 2025 |
|
| | |
(Unaudited) | |
|
(Unaudited) |
|
| Revenues | |
$ | 100,899,861 | |
|
$ |
79,981,400 |
|
| (Loss) income from operations | |
| (4,916,497 | ) |
|
|
1,631,898 |
|
| Net (loss) income attributed to NextBoat Inc. | |
| (7,242,296 | ) |
|
|
198,451 |
|
| Basic and diluted weighted average common shares outstanding | |
| 25,073,624 | |
|
|
20,679,008 |
|
| Pro forma basic and diluted net (loss) income per common share | |
$ | (0.29 | ) |
|
$ |
0.01 |
|
Pro
forma financial information is presented as if the operations of the acquisitions had been included in the consolidated results of the
Company since January 1, 2025 and gives effect to transactions that are directly attributable to the acquisitions, including adjustments
to:
| a) | Include
an adjustment to interest expense of $49,333 and $74,000
related to the promissory notes issued at closing for the six months ended June 30, 2026 and 2025, respectively. |
| b) | Include
the common stock issued on January 1, 2025, in connection with the Apex acquisition. |
| c) | No
pro forma income tax adjustment has been recorded. The combined entity generated a pre-tax
loss in each pro forma period presented, and Apex Marine was historically a pass-through
limited liability company that was not subject to entity-level income tax for United States
federal income tax purposes. Following the acquisition, Apex Marine’s results would have
been included in NextBoat’s consolidated income tax return. Given NextBoat’s history of cumulative
losses and the full valuation allowance maintained against its deferred tax assets, no income
tax benefit has been recognized in the pro forma financial information. The blended statutory
rate of 26.5% that would otherwise apply to the combined company is not necessarily indicative
of its effective income tax rate. |
| d) | No
pro forma adjustments have been recorded in respect of the Bellhart Acquisition, as no such
adjustments were material. |
|