NextBoat Inc.

Previous wording

We are a premier yacht and boat dealership specializing in the buying, selling, and wholesaling of yachts and boats. As one of the largest boat buyers and sellers in the industry, OTH has become a nationally recognized leader in the marine industry, offering a comprehensive suite of services that spans the entire boat value chain from purchasing, financing, servicing, to selling, disposing, asset recovery, and repossession of boats. The Company has eight physical locations strategically located across the United States and with brokers operating nationwide, that the Company believes that it provides unparalleled reach and accessibility to clients around the country, and believes that it is the largest used boat buyer and seller in the United States.

Current wording

We are a premier yacht and boat dealership specializing in the buying, selling, and wholesaling of yachts and boats. As one of the largest boat buyers and sellers in the industry, NextBoat Inc. has become a nationally recognized leader in the marine industry, offering a comprehensive suite of services that spans the entire boat value chain from purchasing, financing, servicing, to selling, disposing, asset recovery, and repossession of boats. The Company has eight physical locations strategically located across the United States and with brokers operating nationwide, that the Company believes that it provides unparalleled reach and accessibility to clients around the country, and believes that it is the largest used boat buyer and seller in the United States.

Previous wording

The Company has approximately 65 brokers, positioned throughout the United States, who specialize in navigating the pre-owned regional markets while maintaining a client-focused approach. By leveraging its nationwide broker network, advanced AI-enabled CRM technology, and synergistic portfolio of entities, the Company delivers exceptional value to clients.

Current wording

The Company has approximately 111 brokers, positioned throughout the United States, who specialize in navigating the pre-owned regional markets while maintaining a client-focused approach. By leveraging its nationwide broker network, advanced AI-enabled CRM technology, and synergistic portfolio of entities, the Company delivers exceptional value to clients.

Previous wording

In addition to our corporate website, we own webuyboats.com which provides lead generation services. Our proprietary lead-generation platform, www.webuyboats.com, serves as a national pipeline for high-quality pre-owned boat inventory. The site attracts private sellers and dealers looking to quickly liquidate trade-in boats and pre-owned vessels. These leads directly fuel the Company’s wholesale and brokerage operations, supporting our high volume, showroom-free model.

Current wording

In addition to our corporate website, we own and operate www.webuyboats.com, a proprietary lead-generation platform that sources pre-owned boat inventory from sellers on a national basis. The site attracts private sellers and dealers looking to quickly liquidate trade-in boats and pre-owned vessels. These leads directly fuel the Company’s wholesale and brokerage operations, supporting our high volume, showroom-free model.

Previous wording

During the first quarter of 2026, the Company entered into an agreement to acquire Bellhart Marine Group and its affiliated entities in order to expand the Company’s in-house marine service, refit, and maintenance capabilities. Management believes the acquisition would further support the Company’s vertically integrated operating model and enhance inventory reconditioning and service capacity. The transaction remains subject to customary closing conditions.

Current wording

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”). The acquisition was undertaken to obtain the assembled workforce of Apex Marine’s seasoned “new boat” brokerage team, as well as to realize expected synergies from combining operations, including expanded South Florida sales and service infrastructure and access to a broader international buyer network. On May 22, 2026, the Company completed the acquisition of 100% of the equity interests of Bellhart Marine Group and its affiliated entities in order to expand the Company’s in-house marine service, refit, and maintenance capabilities. Management believes the acquisition will further support the Company’s vertically integrated operating model and enhance inventory reconditioning and service capacity.

Previous wording

Off The Hook YS Inc. (“OTH”) is a Nevada holding company formed on January 3, 2025 with no independent operations. The Company conducts its business through its subsidiaries, which are engaged in the retail sale, brokerage, and servicing of new and pre-owned boats, yachts, and trailers, and in arranging related financing and insurance products.

Current wording

NextBoat Inc. (“NXB”) is a Nevada holding company formed on January 3, 2025 with no independent operations. The Company conducts its business through its subsidiaries, which are engaged in the retail sale, brokerage, and servicing of new and pre-owned boats, yachts, and trailers, and in arranging related financing and insurance products.

Previous wording

Overall, revenue increased by $2.6 million, or 9.6%, to $29.8 million for the three months ended March 31, 2026, from $27.2 million for the three months ended March 31, 2025. The revenue growth is mainly driven by a higher floor plan limit, which enabled us to sustain greater utilization throughout the period. Additionally, the brokers we recently hired for OTHYS and our new premier brokerage division, Autograph Yacht Group, contributed to our revenue growth. These two moves allowed us to increase the number of pre-owned boats sold and brokerage deals closed.

Current wording

Overall, revenue increased by $27.7 million, or 88.4%, to $59.1 million for the three months ended June 30, 2026, from $31.3 million for the three months ended June 30, 2025. The increase was primarily attributable to the contribution of the Apex Marine and Bellhart businesses acquired during the quarter, an increase in our floor plan limit that supported higher inventory utilization throughout the period, and the continued expansion of our broker network at OTHYS and our premier brokerage division, Autograph Yacht Group. These factors contributed to an increase in the number of pre-owned boats sold and brokerage deals closed.

Previous wording

Revenue from arranging financing products, including financing, insurance and extended warranty contracts, to customers through various third-party financial institutions and insurance companies decreased by approximately $0.3 million, or approximately 50.0%, to $0.3 million for the three months ended March 31, 2026, from $0.6 million for the three months ended March 31, 2025. This decrease can be attributed to fluctuations in our customer mix, with more high-end buyers using cash to purchase, compared to entry-level and lower ticket customers who typically are more finance dependent.

Current wording

Revenue from arranging financing products, including financing, insurance and extended warranty contracts, to customers through various third-party financial institutions and insurance companies increased by $0.3 million, or 48.8%, to $1.0 million for the three months ended June 30, 2026, from $0.6 million for the three months ended June 30, 2025. The increase reflects a higher volume of units delivered during the quarter and a greater proportion of finance-dependent buyers in the customer mix.

Previous wording

Selling, general, and administrative expenses consist primarily of lease expense, insurance, utilities, and other customary operating expenses. SG&A increased $0.9 million, or 225.0%, to $1.3 million for the three months ended March 31, 2026, compared to $0.4 million for the three months ended March 31, 2025. The increase was primarily attributable to the cost of additional leases executed in 2025, higher indirect marketing expenses associated with our attendance at two boat shows during the quarter, and higher insurance costs related to increased inventory levels under floorplan financing arrangements, each in line with the Company’s planned business expansion for 2026.

Current wording

Selling, general, and administrative expenses consist primarily of insurance, utilities, and other customary operating expenses. SG&A increased $1.0 million, or 259.7%, to $1.4 million for the three months ended June 30, 2026, compared to $0.4 million for the three months ended June 30, 2025. The increase was primarily attributable to the operating cost base of the Apex Marine and Bellhart businesses acquired during the quarter, higher indirect marketing expenses, and higher insurance costs related to increased inventory levels under floorplan financing arrangements, each in line with the Company’s planned business expansion for 2026.

Previous wording

Salaries and wages expense increased $2.2 million or 244.4%, to $3.1 million for the three months ended March 31, 2026, compared to $0.9 million for the three months ended March 31, 2025. Leading into and following our initial public offering, salaries and wages increased as we aligned our compensation with public-company market benchmarks, and enhanced retention packages to ensure we can attract, motivate, and retain the talent required to deliver long-term shareholder value. Further, the Company issued stock-based compensation to employees after the initial public offering which was $1.8 million for the three months ended March 31, 2026. These equity awards have several vesting conditions including service based and performance-based requirements and vest between one and five years.

Current wording

Salaries and wages expense increased $3.6 million, or 127.8%, to $6.5 million for the three months ended June 30, 2026, compared to $2.8 million for the three months ended June 30, 2025. Leading into and following our initial public offering, salaries and wages increased as we aligned our compensation with public-company market benchmarks and enhanced retention packages to ensure we can attract, motivate, and retain the talent required to deliver long-term shareholder value, and as we added the employee base of the businesses acquired during the quarter. Further, the Company recognized share-based compensation of $1.7 million for the three months ended June 30, 2026. These equity awards have several vesting conditions including service-based and performance-based requirements and vest between one and five years.

Previous wording

Adjusted EBITDA was a loss of $1.4 million for the three months ended March 31, 2026, compared to income of $0.3 million for the three months ended March 31, 2025. The decrease in Adjusted EBITDA resulted from an increase in operating expenses, primarily related to additional headcount and fees that were necessary in order to operate as a public company.

Current wording

Adjusted EBITDA was a loss of $0.5 million for the six months ended June 30, 2026, compared to income of $1.1 million for the six months ended June 30, 2025, a decrease of $1.7 million. The decrease resulted primarily from an increase in operating expenses, including additional headcount, share-based compensation and professional fees necessary to operate as a public company and to execute and integrate the acquisitions completed during the period.

Previous wording

As of March 31, 2026, the Company had $5.3 million in cash and working capital of $4.9 million, compared to $12.4 million in cash and working capital of $9.0 million as of December 31, 2025. Current liabilities were primarily comprised of floor plan notes payable of $40.0 million, which are repaid as inventory is sold, as well as accounts payable, customer deposits, and short-term obligations.

Current wording

As of June 30, 2026, the Company had $7.7 million in cash and working capital of $3.0 million, compared to $12.4 million in cash and working capital of $9.0 million as of December 31, 2025. Current liabilities were primarily comprised of floor plan notes payable of $51.6 million, which are repaid as inventory is sold, as well as accounts payable, customer deposits, lease liabilities and short-term obligations.

Previous wording

Working capital decreased by $4.1 million to $4.9 million as of March 31, 2026 from $9.0 million as of December 31, 2025. The decrease was primarily driven by a $7.1 million reduction in cash, partially offset by an increase in inventory of $20.3 million, which was financed by a $14.7 million increase in floor plan notes payable.

Current wording

Working capital decreased by $6.1 million to $3.0 million as of June 30, 2026 from $9.0 million as of December 31, 2025. The decrease was primarily driven by a $4.7 million reduction in cash and a $37.6 million increase in current liabilities, partially offset by a $34.4 million increase in inventory, which was financed largely by a $26.2 million increase in floor plan notes payable.

Previous wording

Historically, the OTH Companies were treated as a partnership for U.S. federal and certain state income tax purposes and, as such, was not subject to entity-level income taxes. Upon completion of the Reorganization, the OTH Companies, together with the Company, became subject to U.S. federal income tax and state income taxes in jurisdictions in which they operate. Income tax expenses for the three months ended March 31, 2026 was $0.2 million.

Current wording

Historically, the OTH Companies were treated as a partnership for U.S. federal and certain state income tax purposes and, as such, were not subject to entity-level income taxes. Upon completion of the Reorganization, the OTH Companies, together with the Company, became subject to U.S. federal income tax and state income taxes in the jurisdictions in which they operate. The Company recorded an income tax expenses of $1,150 for the six months ended June 30, 2026, compared to no income tax expense for the six months ended June 30, 2025.

Previous wording

Cash Flow Changes for the Three Months Ended March 31, 2026, and 2025

Current wording

Cash Flow Changes for the Six Months Ended June 30, 2026, and 2025

Previous wording

For the three months ended March 31, 2026, net cash flows used in operating activities totaled $20.9 million compared to a use of $5.4 million for the three months ended March 31, 2025. The increase in cash used in operating activities was primarily attributable to a $20.3 million increase in inventory, reflecting higher inventory purchases supported by increased floorplan financing capacity and proceeds from the Company’s initial public offering, as well as seasonal inventory build in advance of the spring and summer selling periods. This was partially offset by an increase in customer deposits of $0.8 million.

Current wording

For the six months ended June 30, 2026, net cash used in operating activities totaled $18.1 million compared to $0.2 million for the six months ended June 30, 2025. The increase in cash used in operating activities was primarily attributable to an $18.0 million increase in inventory, reflecting higher inventory purchases supported by increased floor plan financing capacity and proceeds from the Company’s initial public offering, as well as seasonal inventory build in advance of the spring and summer selling periods, together with the net loss for the period, a $1.1 million increase in accounts receivable and a $0.5 million increase in prepaid expenses. These uses were partially offset by non-cash share-based compensation and stock issued for services of $3.9 million, a $1.3 million increase in customer deposits and a $0.7 million increase in accounts payable.

Previous wording

Net cash used in operating activities amounted to $5.4 million for the three months ended March 31, 2025, mainly derived from an increase in inventory of $4.1 million and an increase in customer deposits of $0.9 million.

Current wording

Net cash used in operating activities amounted to $0.2 million for the six months ended June 30, 2025, mainly derived from an increase in inventory of $2.0 million, partially offset by net income of $0.8 million, an increase in customer deposits of $0.7 million and a decrease in other current assets of $0.5 million.

Previous wording

Net cash provided by financing activities amounted to $16.7 million for the three months ended March 31, 2026, mainly derived from the proceeds from floorplan notes payables of $30.5 million. This was offset by a net payment to floor plan notes payable of $15.9 million.

Current wording

Net cash provided by financing activities amounted to $0.6 million for the six months ended June 30, 2025, mainly derived from proceeds from floor plan notes of $39.6 million, mainly offset by payments to floor plan notes payable of $37.4 million and member distributions of $1.4 million.

Previous wording

The Company utilizes a floor plan financing facility to fund inventory purchases. Borrowings under this facility were $40.0 million as of March 31, 2026 and are repaid as inventory is sold. As such, repayment timing is dependent on inventory turnover and borrowing activity and is not included in the tabular presentation above. For details regarding borrowing availability, interest rates, and terms related to our floor plan notes payable, refer to Note 7.Notes Payable – Floor Plan of the Notes.

Current wording

The Company utilizes a floor plan financing facility to fund inventory purchases. Borrowings under this facility were $51.6 million as of June 30, 2026 and are repaid as inventory is sold. As such, repayment timing is dependent on inventory turnover and borrowing activity and is not included in the tabular presentation above. For details regarding borrowing availability, interest rates, and terms related to our floor plan notes payable, refer to Note 7.Notes Payable – Floor Plan of the Notes.

Previous wording

The preparation of our financial statements requires that we make estimates and judgments. We base these on historical experience and on other assumptions that we believe to be reasonable. Except as disclosed in Note 1.Description of Business, Basis of Presentation and Significant Accounting Policies, included in Item 1, Part I, Financial Statements of this Quarterly Report on Form 10-Q, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described inCritical Accounting Policies and Significant Judgments and Estimates, included in Part II, Item 7,Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 2.Basis of Presentation and Summary of Significant Accounting Policies, included in Part II, Item 8,Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

The preparation of our financial statements requires that we make estimates and judgments. We base these on historical experience and on other assumptions that we believe to be reasonable. Except as disclosed in Note 1. Description of Business, Basis of Presentation and Significant Accounting Policies, included in Item 1, Part I, Financial Statements of this Quarterly Report on Form 10-Q, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in Critical Accounting Policies and Significant Judgments and Estimates, included in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 2. Basis of Presentation and Summary of Significant Accounting Policies, included in Part II, Item 8, Financial Statements and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2025.