Filed Pursuant to Rule 424(b)(3)
Registration No. 333-227156

PROSPECTUS SUPPLEMENT NO. 1

(To Prospectus Dated October 8, 2019)

Lazydays Holdings, Inc.

1,900,000 shares of Common Stock

This prospectus supplement (this “Supplement No. 1”) is part of the prospectus of Lazydays Holdings, Inc. (the “Company”), dated October 8, 2019 (the “Prospectus”). This Supplement No. 1 supplements, modifies or supersedes certain information contained in the Prospectus. Any statement in the Prospectus that is modified or superseded is not deemed to constitute a part of the Prospectus, except as modified or superseded by this Supplement No. 1. Except to the extent that the information in this Supplement No. 1 modifies or supersedes the information contained in the Prospectus, this Supplement No. 1 should be read, and will be delivered, with the Prospectus. This Prospectus Supplement No. 1 is not complete without, and may not be utilized except in connection with, the Prospectus.

The purpose of this Supplement No. 1 is to update and supplement the information in the Prospectus with the information contained in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, as filed with the Securities and Exchange Commission (“SEC”) on November 8, 2019, which is attached hereto.

Investing in our securities involves risks that are described in the “Risk Factors” section beginning on page 2 of the Prospectus.

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

The date of this prospectus supplement is November 8, 2019.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2019
	or
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ___________ to ___________
	Commission file number	001-38424

Lazydays Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	82-4183498
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
6130 Lazy Days Blvd., Seffner, FL	33584
(Address of principal executive offices)	(Zip Code)

813-246-4999

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	LAZY	NASDAQ Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 [X]
	Emerging growth company [X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

There were 8,471,608 shares of common stock, par value $0.0001, issued and outstanding as of November 7, 2019.

Lazydays Holdings, Inc.

Form 10-Q for the Quarter Ended September 30, 2019

Table of Contents

	Page
PART I – FINANCIAL INFORMATION
Item 1 –Financial Statements	3
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3 – Quantitative and Qualitative Disclosures about Market Risk	46
Item 4 – Controls and Procedures	46
PART II – OTHER INFORMATION
Item 1 – Legal Proceedings	47
Item 1A – Risk Factors	47
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3 – Defaults Upon Senior Securities	47
Item 4 – Mine Safety Disclosures	47
Item 5 – Other Information	47
Item 6 – Exhibits	48

2

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands except for share and per share data)

	As of		As of
	September 30,		December 31,
	2019		2018
	(Unaudited)
ASSETS
Current assets
Cash	$	33,531	$	26,603
Receivables, net of allowance for doubtful accounts of $435 and $687 at September 30, 2019 and December 31, 2018, respectively		21,399		16,967
Inventories		126,217		167,378
Income tax receivable		-		2,630
Prepaid expenses and other		2,957		3,166
Total current assets		184,104		216,744
Property and equipment, net		81,273		78,043
Goodwill		39,049		36,762
Intangible assets, net		69,900		70,189
Other assets		296		358
Total assets	$	374,622	$	402,096

See the accompanying notes to the unaudited condensed consolidated financial statements

3

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED

(Dollar amounts in thousands except for share and per share data)

	As of			As of
	September 30,			December 31,
	2019			2018
	(Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable, accrued expenses and other current liabilities	$	24,223		$	22,599
Income taxes payable		535			-
Dividends payable		-			1,210
Floor plan notes payable, net of debt discount		107,331			143,469
Financing liability, current portion		887			714
Long-term debt, current portion		5,955			4,408
Total current liabilities		138,931			172,400
Long term liabilities
Financing liability, non-current portion, net of debt discount		63,808			60,533
Long term debt, non-current portion, net of debt discount		17,105			19,013
Deferred tax liability		18,717			18,717
Total liabilities		238,561			270,663
Commitments and Contingencies
Series A Convertible Preferred Stock; 600,000 shares, designated, issued, and outstanding as of September 30, 2019 and December 31, 2018; liquidation preference of $64,290 and $61,210 as of September 30, 2019 and December 31, 2018, respectively		59,273			54,983
Stockholders’ Equity
Preferred Stock, $0.0001 par value; 5,000,000 shares authorized;		-			-
Common stock, $0.0001 par value; 100,000,000 shares authorized; 8,471,608 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		-			-
Additional paid-in capital		79,728			80,606
Accumulated deficit		(2,940	)		(4,156	)
Total stockholders’ equity		76,788			76,450
Total liabilities and stockholders’ equity	$	374,622		$	402,096

See the accompanying notes to the unaudited condensed consolidated financial statements

4

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollar amounts in thousands except for share and per share data)

(Unaudited)

	Three Months						Nine Months
	Successor						Successor						Predecessor
	July 1, 2019 to			July 1, 2018 to			January 1, 2019 to			March 15, 2018 to			January 1, 2018 to
	September 30,			September 30,			September 30,			September 30,			March 14,
	2019			2018			2019			2018			2018
Revenues
New and pre-owned vehicles	$	138,861		$	125,348		$	440,541		$	308,876		$	119,111
Other		19,541			17,035			59,464			39,526			14,828
Total revenues		158,402			142,383			500,005			348,402			133,939
Cost applicable to revenues (excluding depreciation and amortization shown below)
New and pre-owned vehicles (including adjustments to the LIFO reserve of $910, $884, $1,516, $884, and $148, respectively)		123,017			108,333			382,510			264,345			101,830
Other		4,841			3,776			14,526			8,353			3,047
Total cost applicable to revenue		127,858			112,109			397,036			272,698			104,877
Transaction costs		193			243			508			3,300			438
Depreciation and amortization		2,732			2,532			8,067			5,624			1,212
Stock-based compensation		1,286			2,857			3,912			5,986			140
Selling, general, and administrative expenses		25,570			23,793			77,173			52,878			22,200
Income from operations		763			849			13,309			7,916			5,072
Other income/expenses
Gain/(loss) on sale of property and equipment		13			(9	)		11			1			1
Interest expense		(2,321	)		(2,428	)		(7,879	)		(5,346	)		(2,019	)
Total other expense		(2,308	)		(2,437	)		(7,868	)		(5,345	)		(2,018	)
(Loss) income before income tax expense		(1,545	)		(1,588	)		5,441			2,571			3,054
Income tax expense		(941	)		(1,141	)		(4,225	)		(2,766	)		(718	)
Net (loss) income	$	(2,486	)	$	(2,729	)	$	1,216		$	(195	)	$	2,336
Dividends on Series A Convertible Preferred Stock		(1,581	)		(1,210	)		(4,290	)		(2,635	)
Deemed dividend on Series A Convertible Preferred Stock		-			-			-			(3,392	)
Net loss attributable to common stock and participating securities	$	(4,067	)	$	(3,939	)	$	(3,074	)	$	(6,222	)
Succesor EPS:
Basic and diluted loss per share	$	(0.41	)	$	(0.41	)	$	(0.31	)	$	(0.64	)
Weighted average shares outstanding - basic and diluted		9,811,107			9,668,250			9,772,907			9,668,250

See the accompanying notes to the unaudited condensed consolidated financial statements

5

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

(PREDECESSOR)

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

JANUARY 1, 2018 THROUGH MARCH 14, 2018

(Dollar amounts in thousands except for share and per share data)

(Unaudited)

	Preferred Stock				Common Stock				Treasury Stock					Additional Paid-In		Retained
	Shares		Amount		Shares		Amount		Shares		Amount			Capital		Earnings		Total
Balance at January 1, 2018		-	$	-		3,333,166	$	3		165	$	(11	)	$	49,756	$	1,085	$	50,833
Net income		-		-		-		-		-		-			-		2,336		2,336
Stock-based compensation		-		-		-		-		-		-			140		-		140
Balance at March 14, 2018		-	$	-		3,333,166	$	3		165	$	(11	)	$	49,896	$	3,421	$	53,309

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

(SUCCESSOR)

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

MARCH 15, 2018 THROUGH SEPTEMBER 30, 2018

(Unaudited)

	Common Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		capital			deficit			Equity
Balance at March 15, 2018		1,872,428	$	-	$	6,139		$	(1,536	)	$	4,603
Conversion of Andina rights into shares of Lazydays Holdings, Inc.		615,436		-		-			-			-
Reclassification shares of Andina common stock subject to redemption		472,571		-		4,910			-			4,910
Issuance of common stock and warrants in PIPE transaction, net		2,653,984		-		32,718			-			32,718
Issuance of shares in acquisition of Lazy Days’ R.V. Center, Inc.		2,857,189		-		29,400						29,400
Beneficial conversion feature of Series A convertible preferred stock		-		-		3,392			-			3,392
Deemed dividend related to immediate accretion of beneficial conversion		-		-		(3,392	)		-			(3,392	)
Issuance of warrants issued to Series A preferred stockholders and placement agent		-		-		2,666			-			2,666
Stock-based compensation		-		-		485			-			485
Dividends on Series A preferred stock						(210	)		-			(210	)
Net income		-		-		-			691			691
Balance at March 31, 2018		8,471,608	$	-	$	76,108		$	(845	)	$	75,263
Stock-based compensation		-		-		2,644			-			2,644
Dividends on Series A preferred stock		-		-		(218	)		(997	)		(1,215	)
Net income		-		-		-			1,842			1,842
Balance at June 30, 2018		8,471,608	$	-	$	78,534		$	-		$	78,534
Stock-based compensation		-		-		2,857			-			2,857
Dividends on Series A preferred stock		-		-		(2,208	)		998			(1,210	)
Net loss		-		-		-			(2,729	)		(2,729	)
Balance at September 30, 2018		8,471,608	$	-	$	79,183		$	(1,731	)	$	77,452

See the accompanying notes to the unaudited condensed consolidated financial statements

6

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

JANUARY 1, 2019 THROUGH SEPTEMBER 30, 2019

(Dollar amounts in thousands except for share and per share data)

(Unaudited)

	Common Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		capital			deficit			Equity
Balance at January 1, 2019		8,471,608	$	-	$	80,606		$	(4,156	)	$	76,450
Repurchase of Unit Purchase Options		-		-		(500	)		-			(500	)
Stock-based compensation		-		-		1,514			-			1,514
Dividends on Series A preferred stock		-		-		(1,184	)		-			(1,184	)
Net income		-		-		-			1,844			1,844
Balance at March 31, 2019		8,471,608	$	-	$	80,436		$	(2,312	)	$	78,124
Stock-based compensation		-		-		1,112			-			1,112
Dividends on Series A preferred stock		-		-		(1,525	)		-			(1,525	)
Net income		-		-		-			1,858			1,858
Balance at June 30, 2019		8,471,608	$	-	$	80,023		$	(454	)	$	79,569
Stock-based compensation		-		-		1,286			-			1,286
Dividends on Series A preferred stock		-		-		(1,581	)		-			(1,581	)
Net loss		-		-		-			(2,486	)		(2,486	)
Balance at September 30, 2019		8,471,608	$	-	$	79,728		$	(2,940	)	$	76,788

See the accompanying notes to the unaudited condensed consolidated financial statements

7

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

(Unaudited)

	Successor						Predecessor
	January 1, 2019 to			March 15, 2018 to			January 1, 2018 to
	September 30, 2019			September 30, 2018			March 14, 2018
Cash Flows From Operating Activities
Net income (loss)	$	1,216		$	(195	)	$	2,336
Adjustments to reconcile net income to net cash provided by operating activities:
Stock based compensation		3,912			5,986			140
Bad debt expense		255			403			-
Depreciation and amortization of property and equipment		5,144			3,870			1,058
Amortization of intangible assets		2,923			1,754			154
Amortization of debt discount		215			500			136
Gain on sale of property and equipment		(11	)		(1	)		(1	)
Deferred income taxes		-			-			630
Changes in operating assets and liabilities:
Receivables		(4,661	)		(6,482	)		5,143
Inventories		54,010			6,529			1,435
Prepaid expenses and other		226			(770	)		44
Income tax receivable/payable		3,165			(962	)		(3,573	)
Other assets		62			(75	)		18
Accounts payable, accrued expenses and other current liabilities		300			(2,857	)		2,463
Total Adjustments		65,540			7,895			7,647
Net Cash Provided By Operating Activities		66,756			7,700			9,983
Cash Flows From Investing Activities
Cash paid for acquisitions		(2,568	)		(92,478	)		-
Cash acquired in the purchase of Lazy Days’ R.V. Center, Inc.		-			9,188			-
Proceeds from sales of property and equipment		37			41			-
Purchases of property and equipment		(7,907	)		(1,431	)		(694	)
Net Cash Used In Investing Activities		(10,438	)		(84,680	)		(694	)
Cash Flows From Financing Activities
Net (repayments)/borrowings under M&T bank floor plan		(47,769	)		98,222			-
Repayment of Bank of America floor plan		-			(96,740	)		-
Net repayments under floor plan with Bank of America		-			-			(12,272	)
Repayments under long term debt with Bank of America		-			(8,820	)		(310	)
Borrowings under long term debt with M&T bank		-			20,000			-
Repayment of long term debt with M&T bank		(2,175	)		(1,455	)		-
Net proceeds from the issuance of Series A preferred stock and warrants		-			57,650			-
Net proceeds from the issuance of common stock and warrants		-			32,719			-
Proceeds from financing liability		3,972			5,350			-
Repayments of financing liability		(527	)		(285	)		(144	)
Payment of dividends on Series A preferred stock		(1,210	)		(1,425	)		-
Repurchase of Unit Purchase Options		(500	)		-			-
Repayments of notes payable to Andina related parties		-			(761	)		-
Repayments of acquisition notes payable		(1,181	)		(52	)		-
Payment of contingent liability - RV America acquisition		-			-			(667	)
Loan issuance costs		-			(693	)		-
Net Cash (Used In) Provided by Financing Activities		(49,390	)		103,710			(13,393	)
Net Increase (Decrease) In Cash		6,928			26,730			(4,104	)
Cash - Beginning		26,603			10,671			13,292
Cash - Ending	$	33,531		$	37,401		$	9,188

See the accompanying notes to the unaudited condensed consolidated financial statements

8

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

(Dollar amounts in thousands)

(Unaudited)

	Successor				Predecessor
	January 1, 2019 to		March 15, 2018 to		January 1, 2018 to
	September 30, 2019		September 30, 2018		March 14, 2018
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest	$	7,805	$	5,048	$	2,182
Cash paid during the period for income taxes net of refunds received	$	1,061	$	3,728	$	3,587
Non-Cash Investing and Financing Activities
Rental vehicles transferred to inventory, net	$	678	$	114	$	89
Conversion of Andina redeemable common stock to common stock of Lazydays Holdings, Inc.	$	-	$	4,910	$	-
Fixed assets purchased with accounts payable	$	1,093	$	-	$	-
Rental equipment purchased under floor plan	$	-	$	-	$	2,911
Accrued dividends on Series A Preferred Stock	$	4,290	$	1,210	$	-
Beneficial conversion feature on Series A Preferred Stock	$	-	$	3,392	$	-
Warrants issued to Series A Preferred stockholders and investment bank	$	-	$	2,660	$	-
Common stock issued to former stock holders of Lazy Days’ R.V. Center, Inc.	$	-	$	29,400	$	-
Notes payable incurred in acquisitions	$	3,045	$	1,755	$	-
Net assets acquired in acquistions	$	5,613	$	7,961	$	-
Net assets acquired in the acquisition of Lazy Days’ R.V. Center, Inc.	$	-	$	106,391	$	-

See the accompanying notes to the unaudited condensed consolidated financial statements

9

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except share, per share, and unit amounts)

(unaudited)

NOTE 1 – BUSINESS ORGANIZATION AND NATURE OF OPERATIONS

Lazydays Holdings, Inc. (the “Company” or “Holdings”), a Delaware corporation, was originally formed on October 24, 2017, as a wholly owned subsidiary of Andina Acquisition Corp. II (“Andina”), an exempted company incorporated in the Cayman Islands on July 1, 2015 for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more business targets. On October 27, 2017, a merger agreement was entered into by and among Andina, Andina II Holdco Corp. (“Holdco”), a Delaware corporation and wholly-owned subsidiary of Andina, Andina II Merger Sub Inc., a Delaware corporation, and a wholly-owned subsidiary of Holdco (“Merger Sub”), Lazy Days’ R.V. Center, Inc. (and its subsidiaries), a Delaware corporation (“Lazydays RV”), and solely for certain purposes set forth in the merger agreement, A. Lorne Weil (the “Merger Agreement”). The Merger Agreement provided for a business combination transaction by means of (i) the merger of Andina with and into Holdco, with Holdco surviving, changing its name to Lazydays Holdings, Inc. and becoming a new public company (the “Redomestication Merger”) and (ii) the merger of Lazydays RV with and into Merger Sub with Lazydays RV surviving and becoming a direct wholly-owned subsidiary of Holdings (the “Transaction Merger” and together with the Redomestication Merger, the “Mergers”). On March 15, 2018, the Mergers were consummated.

Lazydays RV has subsidiaries that operate recreational vehicle (“RV”) dealerships in seven locations including two in the state of Florida, two in the state of Colorado, one in the state of Arizona, one in the state of Tennessee and one in the state of Minnesota. Through its subsidiaries, Lazydays RV sells and services new and pre-owned recreational vehicles, sells related parts and accessories, and rents recreational vehicles. It also offers to its customers such ancillary services as extended service contracts, overnight campground and restaurant facilities. The Company also arranges financing for vehicle sales through third-party financing sources.

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 Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. For additional information, these condensed consolidated financial statements should be read in conjunction with Lazydays Holdings, Inc.’s and Lazy Days’ R.V. Center, Inc.’s consolidated financial statements and notes as of December 31, 2018 and 2017 and for the years then ended, included in the Annual Report on Form 10-K filed with the SEC on March 22, 2019. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Principles of Consolidation

Successor

The condensed consolidated financial statements in the period from March 15, 2018 to September 30, 2018 and January 1, 2019 to September 30, 2019 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, and Lone Star Diversified LLC (collectively, the “Company”, “Lazydays” or “Successor”). All significant inter-company accounts and transactions have been eliminated in consolidation.

10

Predecessor

The condensed consolidated financial statements in the periods from January 1, 2018 to March 14, 2018 include the accounts of Lazydays RV and its wholly owned subsidiary LDRV Holdings Corp. LDRV Holdings Corp was the sole owner of Lazydays Arizona, LLC, Lazydays Land Holdings, LLC, Lazydays Tampa Land Holdings, LLC, Lazydays RV America, LLC, Lazydays RV Discount, LLC, and Lazydays Mile Hi RV, LLC (collectively, the “Predecessor”). All significant inter-company accounts and transactions have been eliminated in consolidation.

Predecessor and Successor Periods

As a result of the Mergers, Holdings is the acquirer for accounting purposes and Lazy Days’ R.V. Center, Inc. is the acquiree and the accounting predecessor. The financial statement presentation distinguishes the results into two distinct periods, the period up to March 14, 2018 (the “Predecessor Period”), the day immediately prior to March 15, 2018 (the “Acquisition Date”) and the period including and after that date (the “Successor Period”). The Mergers were accounted for as a business combination using the acquisition method of accounting and the Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired.

As a result of the application of the acquisition method of accounting as of the effective time of the Transaction Merger, the accompanying condensed consolidated financial statements include a black line division which indicates that the Predecessor and Successor reporting entities shown are presented on a different basis and are, therefore, not directly comparable.

The historical financial information of Andina (which was a special purpose acquisition company) prior to the business combination has not been reflected in the Predecessor financial statements as these historical amounts have been considered immaterial. Accordingly, no other activity in the Company was reported in the Predecessor Period other than the activity of Lazydays RV.

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.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued accounting standard updates which clarified principles for recognizing revenue arising from contracts with customers (Accounting Standards Codification (“ASC”) 606 (“ASC 606”) which superseded existing accounting guidance for revenue recognition. The core principle of the revenue standard is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance applies a five-step model for revenue measurement and recognition and also requires increased disclosures including the nature, amount, timing, and uncertainty of revenue and cash flows related to contracts with clients.

The Company adopted the new revenue recognition standard at the beginning of the first quarter of fiscal 2019 using the modified retrospective method of adoption and applied the guidance to those contracts that were not completed as of December 31, 2018. Based on the evaluation, the Company did not identify customer contracts which will require different recognition under the new guidance.

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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 operations. The following table represents the Company’s disaggregation of revenue:

	Three Months				Nine Months
	Successor		Successor		Successor				Predecessor
	July 1, 2019 to September 30, 2019		July 1, 2018 to September 30, 2018		January 1, 2019 to September 30, 2019		March 15, 2018 to September 30, 2018		January 1, 2018 to March 14, 2018
New vehicles revenue	$	86,814	$	79,769	$	278,860	$	193,697	$	73,831
Preowned vehicle revenue		52,047		45,579		161,681		115,179		45,280
Parts, accessories, and related services		8,813		7,153		26,319		17,097		6,121
Finance and insurance revenue		9,253		8,138		28,505		18,794		6,861
Campground, rental, and other revenue		1,475		1,744		4,640		3,635		1,846
	$	158,402	$	142,383	$	500,005	$	348,402	$	133,939

Revenue from the sale of vehicle contracts 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 operations.

Revenue from the rental of vehicles is recognized pro rata over the period of the rental agreement. The rental agreements are generally short-term in nature. Revenue from rentals is included in other revenue in the accompanying condensed consolidated statements of operations. Campground revenue is also recognized over the time period of use of the campground.

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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 the contracts by the 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 chargebacks 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, net of chargebacks, which is included in other revenue as follows (unaudited):

	Three Months						Nine Months
	Successor			Successor			Successor						Predecessor
	July 1, 2019 to September 30, 2019			July 1, 2018 to September 30, 2018			January 1, 2019 to September 30, 2019			March 15, 2018 to September 30, 2018			January 1, 2018 to March 14, 2018
Gross finance and insurance revenues	$	10,395		$	8,945		$	32,082		$	20,522		$	7,483
Chargebacks		(1,142	)		(807	)		(3,577	)		(1,728	)		(622	)
Net Finance Revenue	$	9,253		$	8,138		$	28,505		$	18,794		$	6,861

The Company has an accrual for charge-backs which totaled $4,256 and $3,252 at September 30, 2019 and December 31, 2018, respectively, and is included in “Accounts payable, accrued expenses, and other current liabilities” in the accompanying condensed consolidated balance sheets.

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 Successor Period from January 1, 2019 to September 30, 2019, $2,042 of contract liabilities as of December 31, 2018 were recognized in revenue.

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 used vehicles at the time of the trade-in. Retail parts, accessories, and other inventories primarily consist of retail travel and leisure specialty merchandise. The current replacement costs of LIFO inventories exceeded their recorded values by $2,791 and $1,275 as of September 30, 2019 and December 31, 2018, respectively.

Cumulative Redeemable Convertible Preferred Stock

The Company’s Series A Preferred Stock (See Note 9 – 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 board of directors.

Stock Based Compensation

The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation (“ASC 718”). ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations 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 expense or benefit in the condensed consolidated statements of operations.

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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 loss attributable to common stockholders used in the calculation of basic and diluted loss per common share:

	Successor
(Dollars in thousands - except per share and per share amounts)	July 1, 2019 to September 30, 2019			July 1, 2018 to September 30, 2018			January 1, 2019 to September 30, 2019			March 15, 2018 to September 30, 2018
Distributed earnings allocated to common stock	$	-		$	-		$	-		$	-
Undistributed loss allocated to common stock		(4,067	)		(3,939	)		(3,074	)		(6,222	)
Net loss allocated to common stock		(4,067	)		(3,939	)		(3,074	)		(6,222	)
Net earnings allocated to participating securities		-			-			-			-
Net loss allocated to common stock and participating securities	$	(4,067	)	$	(3,939	)	$	(3,074	)	$	(6,222	)
Weighted average shares outstanding for basic earnings per common share		9,811,107			9,668,250			9,772,907			9,668,250
Dilutive effect of warrants and options		-			-			-			-
Weighted average shares outstanding for diluted earnings per common share		9,811,107			9,668,250			9,772,907			9,668,250
Basic loss per common share	$	(0.41	)	$	(0.41	)	$	(0.31	)	$	(0.64	)
Diluted loss per common share	$	(0.41	)	$	(0.41	)	$	(0.31	)	$	(0.64	)

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During the Successor Periods, the denominator of the basic and dilutive EPS was calculated as follows:

	July 1, 2019 to September 30, 2019		July 1, 2018 to September 30, 2018			January 1, 2019 to September 30, 2019		March 15, 2018 to September 30, 2018
Weighted average outstanding common shares		8,471,608		8,471,608			8,433,408		8,471,608
Weighted average shares held in escrow		-		(142,857	)		-		(142,857	)
Weighted average prefunded warrants		1,339,499		1,339,499			1,339,499		1,339,499
Weighted shares outstanding - basic and diluted		9,811,107		9,668,250			9,772,907		9,668,250

For the Successor Periods, the following common stock equivalent shares were excluded from the computation of the diluted loss per share, since their inclusion would have been anti-dilutive:

	July 1, 2019 to September 30, 2019		July 1, 2018 to September 30, 2018		January 1, 2019 to September 30, 2019		March 15, 2018 to September 30, 2018
Shares underlying Series A Convertible Preferred Stock		6,231,950		5,962,733		5,962,733		5,962,733
Shares underlying warrants		4,677,458		4,677,458		4,677,458		4,677,458
Stock options		3,677,580		3,658,421		3,677,580		3,658,421
Shares issuable under the Employee Stock Purchase Plan		30,077		-		30,077		-
Shares underlying unit purchase options		-		657,142		-		657,142
Share equivalents excluded from EPS		14,617,065		14,955,754		14,347,848		14,955,754

As of September 30, 2019, the Company did not declare and pay the dividend. As a result, the Series A Convertible Preferred Stock was convertible into 6,389,025 shares of common stock. Upon conversion the Company has the option to pay accrued dividends in cash or allow conversion into common stock.

Advertising Costs

Advertising and promotion costs are charged to operations in the period incurred. Advertising and promotion costs totaled approximately $2,656 and $2,643 for the three months ended September 30, 2019 and 2018 (Successor Periods), respectively.

Advertising and promotion charges were $9,946, $5,699, and $2,624 for the nine months ended September 30, 2019 (Successor Period), the period from March 15, 2018 to September 30, 2018 (Successor Period), and the period from January 1, 2018 to March 14, 2018 (Predecessor Period), respectively.

Income Taxes

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the 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 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.

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Seasonality

The Company’s combined operations generally experience modestly higher vehicle sales in the first half of each year during the winter months at the Company’s largest location in Tampa, Florida.

Vendor Concentrations

The Company purchases its new recreational vehicles and replacement parts from various manufacturers. During the Successor Period from July 1, 2019 to September 30, 2019, five major manufacturers accounted for 30.5%, 21.1%, 18.4%, 16.9%, and 10.9% of RV purchases. During the Successor Period from January 1, 2019 to September 30, 2019, four major manufacturers accounted for 35.7%, 19.4%, 18.7% and 14.8% of RV purchases.

During the Successor Period from July 1, 2018 to September 30, 2018, four major manufacturers accounted for 29.9%, 24.9%, 21.5%, and 16.1% of RV purchases. During the Successor Period from March 15, 2018 to September 30, 2018, four major manufacturers accounted for 29.2%, 28.8%, 17.4%, and 15.8% of RV purchases. During the Predecessor Period from January 1, 2018 to March 14, 2018, four major manufacturers accounted for 36.1%, 21.4%, 18.2%, and 16.1% of RV purchases.

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 terms.

Geographic Concentrations

The percent of revenues generated by customers of the Florida locations and the Colorado locations, which generate greater than 10% of revenues, were as follows (unaudited):

	Three Months						Nine Months
	Successor			Successor			Successor						Predecessor
	July 1, 2019 to September 30, 2019			July 1, 2018 to September 30, 2018			January 1, 2019 to September 30, 2019			March 15, 2018 to September 30, 2018			January 1, 2018 to March 14, 2018
Florida		62	%		64	%		67	%		70	%		81	%
Colorado		19	%		25	%		15	%		21	%		11	%

These geographic concentrations increase the exposure to adverse developments related to competition, as well as economic, demographic, weather and other changes in these regions.

Subsequent Events

Management of the Company has analyzed the activities and transactions subsequent to September 30, 2019 through the date these condensed consolidated financial statements were issued to determine the need for any adjustments to or disclosures within the financial statements. The Company did not identify subsequent events that would require disclosure in the condensed consolidated financial statements.

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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

The Company qualifies as an emerging growth company pursuant to the provision of the Jumpstart Our Business Startups Act (“JOBS Act”). Section 107 of the JOBS Act provides that an emerging growth company can delay the adoption of certain new accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of the extended transition period provided by the JOBS Act for complying with new or revised accounting standards.

In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases. ASU 2016-02 will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. As the Company qualifies as an emerging growth company, this standard will be effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating ASU 2016-02 and its impact on its consolidated financial statements and disclosures.

NOTE 3 – BUSINESS COMBINATION

Lazy Days’ R.V. Center, Inc.

On March 15, 2018, the Company consummated the Mergers. Under the Merger Agreement, upon consummation of the Redomestication Merger, (i) each ordinary share of Andina was exchanged for one share of common stock of Holdings (“Holdings Shares”), except that holders of ordinary shares of Andina sold in its initial public offering (“public shares”) were entitled to elect instead to receive a pro rata portion of Andina’s trust account, as provided in Andina’s charter documents, (ii) each Andina initial public offering (“IPO”) right (4,310,000 at March 15, 2018 prior to the Mergers) entitled the holder to receive one-seventh of a Holdings Share and (iii) each Andina warrant (4,310,000 at March 15, 2018) entitled the holder to purchase one-half of one Holdings Share at a price of $11.50 per whole share. Upon consummation of the Transaction Merger, the Lazydays RV’s stockholders received their pro rata portion of: (i) 2,857,189 Holdings Shares; and (ii) $86,741 in cash, subject to adjustments based on the Predecessor’s finalization of working capital and debt as of closing and also subject to any such Holdings Shares and cash that was issued and paid to the Predecessor’s option holders and participants under the transaction incentive plan (the “Transaction Incentive Plan”). During the year ended December 31, 2018, the Company received $563 as a result of the settlement of the working capital adjustment and the amount was reflected as an adjustment to goodwill.

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The Company accounted for the Mergers as a business combination using the purchase method of accounting. As a result, the Company determined its allocation of the fair value of the assets acquired and the liabilities assumed of the Predecessor as follows:

Cash	$	9,188
Receivables		14,768
Inventories		124,354
Prepaid expenses and other		4,754
Property and equipment		73,642
Intangible assets		68,200
Other assets		200
Total assets acquired		295,106
Accounts payable, accrued expenses and other current liabilities		26,988
Floor plan notes payable		95,663
Financing liability		56,000
Deferred tax liability		20,491
Long-term debt		8,781
Total liabilities assumed		207,923
Net assets acquired	$	87,183

The fair value of the consideration paid was as follows:

Purchase Price:
Cash consideration paid	$	86,178
Common stock issued to former stockholders, option holders, and bonus receipients of Lazy Days’ R.V. Center, Inc.		29,400
	$	115,578

The common stock was valued at $10.29 per share, the closing price of Andina’s common stock on the date of the Mergers.

Goodwill represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed from the Predecessor. Goodwill associated with the Mergers is detailed below:

	As of March 15, 2018
Total consideration	$	115,578
Less net assets acquired		87,183
Goodwill	$	28,395

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The following table summarizes the Company’s allocation of the purchase price to the identifiable intangible assets acquired as of the date of the closing of the Mergers.

	Gross Asset Amount at Acquisition Date		Weighted Average Amortization Period in Years
Trade Names, Service Marks and Domain Names	$	30,100		Indefinite
Customer Lists	$	9,100		12 years
Dealer Agreements	$	29,000		12 Years

Trade names and trademarks are indefinite-lived assets and are not subject to amortization. The value of trade names, trademarks, and customer relationships was determined utilizing the relief from royalty method. The Company determined the fair value of the manufacturer relationships utilizing a discounted cash flow model.

Direct transaction related costs consist of costs incurred in connection with the Merger Agreement. These costs totaled $2,730 for the period from March 15, 2018 to March 31, 2018 which primarily consisted of the business combination expenses of Andina that were contingent upon the completion of the Mergers. These costs total $381 for the period from January 1, 2018 to March 14, 2018.

Acquisitions of Dealerships

On August 7, 2018, the Company consummated its asset purchase agreement with Shorewood RV Center (“Shorewood”). The Company simultaneously entered into a real estate purchase agreement with the owners of Shorewood for the land and building at the Shorewood location. The purchase price consisted of cash and a note payable to the seller of Shorewood, subject to a final working capital adjustment. The note payable is a three year note which matures on August 7, 2021, which requires monthly payments of $52 in principal and interest. The note bears interest at 4.75% per year. As part of the acquisition, the Company acquired the inventory of Shorewood and has added the inventory to the M&T Floor Plan Line of Credit (as defined below). The Company entered into a sales arrangement with a third party for the assets purchased in the real estate purchase agreement and simultaneously leased the property back from the third party.

On December 6, 2018, the Company consummated its asset purchase agreement with Tennessee Sales and Service, LLC (“Tennessee RV”). The purchase price consisted of cash and a note payable to the seller of Tennessee RV. The note payable is a four year note which matures on December 6, 2022, which requires monthly payments of $94 in principal and interest. The note bears interest at 5.0% per year. As part of the acquisition, the Company acquired the inventory of Tennessee RV and has added the inventory to the M&T Floor Plan Line of Credit.

On August 1, 2019, the Company consummated its asset purchase agreement with Alliance Coach Inc. (“Alliance”). The purchase price consisted of cash and a note payable to the seller of Alliance. The note payable is a two year note which matures on August 1, 2021, which requires monthly payments of $134 in principal and interest. The note bears interest at 5.0% per year. As part of the acquisition, the Company acquired the inventory of Alliance and has added the inventory to the M&T Floor Plan Line of Credit (as defined below).

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The Company accounted for the asset purchase agreements as business combinations using the purchase method of accounting as it was determined that Shorewood RV, Tennessee RV and Alliance constituted businesses. As a result, the Company determined its preliminary allocation of the fair value of the assets acquired and the liabilities assumed as follows for these dealerships:

	2019		2018
Inventories	$	12,171	$	23,530
Accounts receivable and prepaid expenses		53		378
Property and equipment		77		6,175
Intangible assets		2,630		4,610
Total assets acquired		14,931		34,693
Accounts payable, accrued expenses and other current liabilities		206		719
Floor plan notes payable		11,434		21,163
Total liabilities assumed		11,640		21,882
Net assets acquired	$	3,291	$	12,811

	2019		2018
Purchase Price:
Cash consideration paid	$	2,568	$	15,300
Amounts due from former owners		-		24
Note payable issued to former owners		3,045		5,820
	$	5,613	$	21,144

The fair value of consideration paid was as follows:

	2019		2018
Purchase Price:
Cash consideration paid	$	2,568	$	15,300
Amounts due from former owners		-		24
Note payable issued to former owners		3,045		5,820
	$	5,613	$	21,144

Goodwill represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed from the Shorewood, Tennessee RV, and Alliance acquisitions. Goodwill associated with the transactions is detailed below:

	2019		2018
Total consideration	$	5,613	$	21,144
Less net assets acquired		3,291		12,811
Goodwill	$	2,322	$	8,333

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The following table summarizes the Company’s preliminary allocation of the purchase price to the identifiable intangible assets acquired as of the date of the closing during 2018.

	Gross Asset Amount at Acquisition Date		Weighted Average Amortization Period in Years
Customer Lists	$	210		7-8 years
Dealer Agreements	$	4,400		7-8 years

The following table summarizes the Company’s preliminary allocation of the purchase price to the identifiable intangible assets acquired as of the date of the closing during 2019.

	Gross Asset Amount at Acquisition Date		Weighted Average Amortization Period in Years
Customer Lists	$	230		7 years
Dealer Agreements	$	2,400		7 years

The Company recorded approximately $66.4 million in revenue and $3.4 million in net income prior to income taxes during the period from January 1, 2019 to September 30, 2019 related to these acquisitions. The Company recorded approximately $30.2 million in revenue and $1.8 million in net income prior to income taxes during the period from July 1, 2019 to September 30, 2019.

Pro Forma Information

The following unaudited pro forma financial information summarizes the combined results of operations for the Company as though the Mergers and the purchase of Shorewood, Tennessee RV, and Alliance had been consummated on January 1, 2018.

	For the three months ended September 30,						For the nine months ended September 30,
	2019			2018			2019		2018
Revenue	$	161,481		$	170,920		$	532,038	$	574,751
(Loss) Income before income taxes	$	(1,415	)	$	(163	)	$	5,385	$	11,697
Net (loss) income	$	(2,383	)	$	(1,603	)	$	1,172	$	6,938

The Company adjusted the combined income of Lazydays RV with Andina, Shorewood, Tennessee RV, and Alliance and adjusted net (loss) income to eliminate business combination expenses as well as the incremental depreciation and amortization associated with the preliminary purchase price allocation to determine pro forma net (loss) income.

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NOTE 4 – INVENTORIES

Inventories consist of the following:

	Successor
	As of			As of
	September 30, 2019			December 31, 2018
	(Unaudited)
New recreational vehicles	$	88,668		$	129,361
Pre-owned recreational vehicles		36,350			34,905
Parts, accessories and other		3,990			4,387
		129,008			168,653
Less: excess of current cost over LIFO		(2,791	)		(1,275	)
	$	126,217		$	167,378

NOTE 5 – ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accounts payable, accrued expenses and other current liabilities consist of the following:

	Successor
	As of		As of
	September 30, 2019		December 31, 2018
	(Unaudited)
Accounts payable	$	10,433	$	10,642
Other accrued expenses		2,983		3,577
Customer deposits		2,813		2,511
Accrued compensation		3,428		2,164
Accrued charge-backs		4,256		3,252
Accrued interest		310		453
Total	$	24,223	$	22,599

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NOTE 6 – DEBT

M&T Financing Agreement

On March 15, 2018, the Company terminated and replaced the Bank of America (“BOA”) credit facility with a $200,000 Senior Secured Credit Facility with M&T Bank (the “M&T Facility”). The M&T Facility includes a Floor Plan Facility (the “M&T Floor Plan Line of Credit”), a Term Loan (the “M&T Term Loan”), and a Revolving Credit Facility (the “M&T Revolver”). The M&T Facility will mature on March 15, 2021. The M&T Facility requires the Company to meet certain financial and other covenants and is secured by substantially all the assets of the Company. The costs of the M&T Facility were recorded as a debt discount.

As of September 30, 2019, the payment of dividends by the Company (other than from proceeds of revolving loans) was permitted under the M&T Facility, so long as at the time of payment of any such dividend, no event of default existed under the M&T Facility, or would result from the payment of such dividend, and so long as any such dividend was permitted under the M&T Facility. As of September 30, 2019, the maximum amount of cash dividends that the Company could make from legally available funds to its stockholders was limited to an aggregate of $3,828 pursuant to a trailing twelve month calculation as defined in the M&T Facility.

Floor Plan Line of Credit

The $175,000 M&T Floor Plan Line of Credit may be used to finance new vehicle inventory, but only $45,000 may be used to finance pre-owned vehicle inventory and $4,500 may be used to finance rental units. Principal becomes due upon the sale of the related vehicle. The M&T Floor Plan Line of Credit shall accrue interest at either (a) the fluctuating 30-day LIBOR rate plus an applicable margin which ranges from 2.00% to 2.30% based upon the Company’s total leverage ratio (as defined in the M&T Facility) or (b) the Base Rate plus an applicable margin ranging from 1.00% to 1.30% based upon the Company’s total leverage ratio (as defined in the M&T Facility). The Base Rate is defined in the M&T Facility as the highest of M&T’s prime rate, the Federal Funds rate plus 0.50% or one-month LIBOR plus 1.00%. In addition, the Company will be charged for unused commitments at a rate of 0.15%. As of September 30, 2019, the interest rate on the M&T Floor Plan Line of Credit was approximately 4.04%.

The M&T Floor Plan Line of Credit consists of the following:

	Successor
	As of September 30, 2019			As of December 31, 2018
	(Unaudited)
Floor plan notes payable, gross	$	107,550		$	143,885
Debt discount		(219	)		(416	)
Floor plan notes payable, net of debt discount	$	107,331		$	143,469

Term Loan

The $20,000 M&T Term Loan will be repaid in equal monthly principal installments of $242 plus accrued interest through the maturity date of March 15, 2021. At the maturity date, the Company will pay a principal balloon payment of $11,300 plus any accrued interest. The M&T Term Loan shall bear interest at (a) LIBOR plus an applicable margin of 2.25% to 3.00% based on the total leverage ratio (as defined in the M&T Facility) or (b) the Base Rate plus a margin of 1.25% to 2.00% based on the total leverage ratio (as defined in the M&T Facility). As of September 30, 2019, there was $15,650 outstanding under the M&T Term Loan. As of September 30, 2019, the interest rate on the M&T Term Loan was approximately 4.56%.

Revolver

The $5,000 M&T Revolver allows the Company to draw up to $5,000. The M&T Revolver shall bear interest at (a) 30-day LIBOR plus an applicable margin of 2.25% to 3.00% based on the total leverage ratio (as defined in the M&T Facility) or (b) the Base Rate plus a margin of 1.25% to 2.00% based on the total leverage ratio (as defined in the M&T Facility). The M&T Revolver is also subject to unused commitment fees at rates varying from 0.25% to 0.50% based on the total leverage ratio (as defined in the M&T Facility). During the Successor period ended September 30, 2019, there were no outstanding borrowings under the M&T Revolver.

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NOTE 7 – INCOME TAXES

The Company recorded a provision for federal and state income taxes of $941 and $1,141 for the three month Successor Periods ended September 30, 2019 and 2018, respectively, which represent effective tax rates of approximately (61%) and (72%) respectively. The Company recorded a provision for federal and state income taxes of $4,225 for the Successor Period from January 1, 2019 to September 30, 2019, $2,766 for the Successor Period from March 15, 2018 to September 30, 2018, and $718 for the Predecessor period from January 1, 2018 to March 14, 2018 which represent effective tax rates of approximately 77%, 108%, and 24%, respectively.

The Company’s effective tax rates differ from the federal statutory rate of 21% primarily due to local and state income tax rates, net of the federal tax effect as well as the non-deductibility of stock-based compensation expense and certain transaction costs.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Employment Agreements

The Company entered into an employment agreement with the Chief Executive Officer (“CEO”) of the Company effective as of the consummation of the Mergers. The employment agreement with the CEO provides for an initial base salary of $540 subject to annual discretionary increases. In addition, the executive is eligible to participate in any employee benefit plans adopted by the Company from time to time and is eligible to receive an annual cash bonus based on the achievement of performance objectives. The CEO’s target bonus is 100% of his base salary. The employment agreement also provided that the executive was to be granted an option to purchase shares of common stock of the Company which was granted in March of 2018 (See Note 10 – Stockholders’ Equity).

The employment agreement provides that if the executive is terminated for any reason, he is entitled to receive any accrued benefits, including any earned but unpaid portion of base salary through the date of termination, subject to withholding and other appropriate deductions. In addition, in the event the executive resigns for good reason or is terminated without cause (all as defined in the employment agreement) prior to January 1, 2022, subject to entering into a release, the Company will pay the executive severance equal to two times the base salary and average bonus for the CEO.

During May 2018, the Company entered into an offer letter with the Chief Financial Officer (the “CFO”) of the Company. The offer letter provides for an initial base salary of $325 per year subject to annual discretionary increases. In addition, the executive is eligible to participate in any employee benefit plans adopted by the Company from time to time and is eligible to receive an annual cash bonus based on the achievement of performance objectives. The CFO’s target bonus is 75% of his annual base salary (with a potential to earn a maximum of up to 150% of his target bonus). He was also provided with a relocation allowance of $100 which the CFO will be required to repay if he resigns from the Company or is terminated by the Company for cause within two years of his start date. If he is terminated without cause, he will receive twelve months of his base salary as severance. If he is terminated following a change in control, he is also eligible to receive a pro-rated bonus, if the board of directors determines that the performance objectives have been met. He also was granted an option to purchase shares of common stock of the Company (See Note 10- Stockholders’ Equity).

Director Compensation

The Company’s non-employee members of the board of directors will receive annual cash compensation of $50 for serving on the board of directors, $5 for serving on a committee of the board of directors (other than the Chairman of each of the committees) and $10 for serving as the Chairman of any of the committees of the board of directors.

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Legal Proceedings

The Company is a party to multiple legal proceedings that arise in the ordinary course of business. The Company has certain insurance coverage and rights of indemnification. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows. However, the results of these matters cannot be predicted with certainty and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s business, results of operations, financial condition, and/or cash flows.

NOTE 9 – PREFERRED STOCK

Simultaneous with the closing of the Mergers, the Company consummated a private placement with institutional investors for the sale of convertible preferred stock, common stock, and warrants for an aggregate purchase price of $94,800 (the “PIPE Investment”). At the closing, the Company issued an aggregate of 600,000 shares of Series A Preferred Stock for gross proceeds of $60,000. The investors in the PIPE Investment were granted certain registration rights as set forth in the securities purchase agreements. The holders of the Series A Preferred Stock include 500,000 shares owned by funds managed by a member of the Company’s board of directors.

The Series A Preferred Stock ranks senior to all outstanding stock of the Company. Holders of the Series A Preferred Stock are entitled to vote on an as-converted basis together with the holders of the common stock, and not as a separate class, at any annual or special meeting of stockholders. Each share of Series A Preferred Stock is convertible at the holder’s election at any time, at an initial conversion price of $10.0625 per share, subject to adjustment (as applicable, the “Conversion Price”). Upon any conversion of the Series A Preferred Stock, the Company will be required to pay each holder converting shares of Series A Preferred Stock all accrued and unpaid dividends, in either cash or shares of common stock, at the Company’s option. The Conversion Price will be subject to adjustment for stock dividends, forward and reverse splits, combinations and similar events, as well as for certain dilutive issuances.

Dividends on the Series A Preferred Stock accrue at an initial rate of 8% per annum (the “Dividend Rate”), compounded quarterly, on each $100 (which represents a per share amount) of Series A Preferred Stock (the “Issue Price”) and are payable quarterly in arrears. Accrued and unpaid dividends, until paid in full in cash, will accrue at the then applicable Dividend Rate plus 2%. The Dividend Rate will be increased to 11% per annum, compounded quarterly, in the event that the Company’s senior indebtedness less unrestricted cash during any trailing twelve-month period ending at the end of any fiscal quarter is greater than 2.25 times earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Dividend Rate will be reset to 8% at the end of the first fiscal quarter when the Company’s senior indebtedness less unrestricted cash during the trailing twelve-month period ending at the end of such quarter is less than 2.25 times EBITDA.

If, at any time following the second anniversary of the issuance of the Series A Preferred Stock, the volume weighted average price of the Company’s common stock equals or exceeds $25.00 per share (as adjusted for stock dividends, splits, combinations and similar events) for a period of thirty consecutive trading days, the Company may elect to force the conversion of any or all of the outstanding Series A Preferred Stock at the Conversion Price then in effect. From and after the eighth anniversary of the issuance of the Series A Preferred Stock, the Company may elect to redeem all, but not less than all, of the outstanding Series A Preferred Stock in cash at the Issue Price plus all accrued and unpaid dividends. From and after the ninth anniversary of the issuance of the Series A Preferred Stock, each holder of Series A Preferred Stock has the right to require the Company to redeem all of the holder’s outstanding shares of Series A Preferred Stock in cash at the Issue Price plus all accrued and unpaid dividends.

In the event of any liquidation, merger, sale, dissolution or winding up of the Company, holders of the Series A Preferred Stock will have the right to (i) payment in cash of the Issue Price plus all accrued and unpaid dividends, or (ii) convert the shares of Series A Preferred Stock into common stock and participate on an as-converted basis with the holders of common stock.

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So long as the Series A Preferred Stock is outstanding, the holders thereof, by the vote or written consent of the holders of a majority in voting power of the outstanding Series A Preferred Stock, shall have the right to designate two members to the board of directors.

In addition, five-year warrants to purchase 596,273 shares of common stock at an exercise price of $11.50 per share were issued in conjunction with the issuance of the Series A Preferred Stock. The warrants may be exercised for cash or, at the option of the holder, on a “cashless basis” pursuant to the exemption provided by Section 3(a)(9) of the Securities Act. The warrants may be called for redemption in whole and not in part, at a price of $0.01 per share of common stock, if the last reported sales price of the Company’s common stock equals or exceeds $24.00 per share for any 20 trading days within a 30-day trading period ending on the third business day prior to the notice of redemption to warrant holders, if there is a current registration statement in effect with respect to the shares underlying the warrants.

The Series A Preferred Stock, while convertible into common stock, is also redeemable at the holder’s option and, as a result, is classified as temporary equity in the condensed consolidated balance sheets. Based on an analysis of its features, a determination was made that the Series A Preferred Stock was more akin to equity. While the embedded conversion option (“ECO”) was subject to an anti-dilution price adjustment, since the ECO was clearly and closely related to the equity host, it was not required to be bifurcated and it was not accounted for as a derivative liability under ASC 815.

After factoring in the relative fair value of the warrants issued in conjunction with the Series A Preferred Stock, the effective conversion price is $9.72 per share, compared to the market price of $10.29 per share on the date of issuance. As a result, a $3,392 beneficial conversion feature was recorded as a deemed dividend in the condensed consolidated statements of operations because the Series A Preferred Stock is immediately convertible, with a credit to additional paid-in capital. The relative fair value of the warrants issued with the Series A Preferred Stock of $2,035 was recorded as a reduction to the carrying amount of the preferred stock in the condensed consolidated balance sheet. In addition, aggregate offering costs of $2,981 consisting of cash and the value of five-year warrants to purchase 178,882 shares of common stock at an exercise price of $11.50 per share issued to the placement agent were recorded as a reduction to the carrying amount of the preferred stock. The $632 value of the warrants was determined utilizing the Black-Scholes option pricing model using a term of 5 years, a volatility of 39%, a risk-free interest rate of 2.61%, and a 0% rate of dividends.

The discount associated with the Series A Preferred Stock was not accreted during the Successor Period because redemption was not currently deemed to be probable.

The Company’s board of directors did not declare a dividend payment on the Series A Preferred Stock of $4,290 for the period from January 1, 2019 to September 30, 2019. The accrued dividends were $7.15 per share of Series A Preferred Stock for the period from January 1, 2019 to September 30, 2019. As a result, the amount was added to the carrying amount of the Series A Preferred Stock and the dividend rate is currently at 10% until such dividends are paid.

NOTE 10 – STOCKHOLDERS’ EQUITY

Authorized Capital

The Company is authorized to issue 100,000,000 shares of common stock, $0.0001 par value, and 5,000,000 shares of preferred stock, $0.0001 par value. The holders of the Company’s common stock are entitled to one vote per share. The holders of Series A Preferred Stock are entitled to the number of votes equal to the number of shares of common stock into which the holder’s shares are convertible. These holders of Series A Preferred Stock also participate in dividends if they are declared by the board of directors. See Note 9 – Preferred Stock, for additional information associated with the Series A Preferred Stock.

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2018 Long-Term Incentive Equity Plan

On March 15, 2018, the Company adopted the 2018 Long-Term Incentive Equity Plan (the “2018 Plan”). The 2018 Plan reserves up to 13% of the shares of common stock outstanding on a fully diluted basis. The 2018 Plan is administered by the Compensation Committee of the board of directors, and provides for awards of options, stock appreciation rights, restricted stock, restricted stock units, warrants or other securities which may be convertible, exercisable or exchangeable for or into common stock. Due to the fact that the fair market value per share immediately following the closing of the Mergers was greater than $8.75 per share, the number of shares authorized for awards under the 2018 Plan was increased by a formula (as defined in the 2018 Plan) not to exceed 18% of shares of common stock then outstanding on a fully diluted basis. On May 20, 2019, the Company’s stockholders approved the adoption of the Lazydays Holdings, Inc. Amended and Restated 2018 Long Term Incentive Plan (the “Incentive Plan”). The Incentive Plan amends and restates the previously adopted 2018 Plan in order to replenish the pool of shares of common stock available under the Incentive Plan by adding an additional 600,000 shares of common stock and making certain changes in light of the Tax Cuts and Jobs Act and its impact on Section 162(m) of the Internal Revenue Code of 1986, as amended. As of September 30, 2019, there were 625,748 shares of common stock available to be issued under the Incentive Plan.

2019 Employee Stock Purchase Plan

On May 20, 2019, the Company’s stockholders approved the 2019 Employee Stock Purchase Plan (the “ESPP”). The ESPP reserved 900,000 shares of common stock for purchase by participants in the ESPP. Participants in the plan may purchase shares of common stock at a purchase price which will not be less than the lesser of 85% of the fair market value per share of the common on the first day of the purchase period or the last day of the purchase period. The initial offering and purchase period under the ESPP commenced on July 7, 2019 with the first purchase date to be December 2, 2019. During the three and nine months ended September 30, 2019, the Company recorded $24 of stock based compensation related to the ESPP.

Unit Purchase Options

On November 24, 2015, Andina sold options to purchase an aggregate of 400,000 units (collectively, the “Unit Purchase Options”) to an investment bank and its designees for $100. The Unit Purchase Options were exercisable at $10.00 per unit as a result of the Mergers described in Note 3 – Business Combination and they were set to expire on November 24, 2020. The Unit Purchase Options represented the right to purchase an aggregate of 457,142 shares of common stock (which included 57,142 shares of common stock issuable for the rights included in the units, as well as warrants to purchase 200,000 shares of common stock for $11.50 per share). The Unit Purchase Options granted to the holders “demand” and “piggy back” registration rights for periods of five and seven years, respectively, with respect to the securities directly and indirectly issuable upon exercise of the Unit Purchase Options. The Unit Purchase Options were exercisable for cash or on a “cashless” basis, at the holder’s option, such that the holder could have used the appreciated value of the Unit Purchase Options (the difference between the exercise price of the Unit Purchase Option and the market price of the Unit Purchase Options and the underlying shares of common stock) to exercise the Unit Purchase Options without the payment of any cash. The Company had no obligation to net cash settle the exercise of the Unit Purchase Options or the underlying rights or warrants. During January 2019, the Company exchanged $500 for all of the Unit Purchase Options, and as a result, the Unit Purchase Options and any obligation to issue any underlying securities were cancelled.

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Warrants

The Company had the following activity related to shares of common stock underlying warrants:

	Shares Underlying Warrants		Weighted Average Exercise Price
Warrants outstanding January 1, 2019		4,677,458	$	11.50
Granted		-		-
Cancelled or Expired		-		-
Exercised		-		-
Warrants outstanding September 30, 2019		4,677,458	$	11.50

The table above excludes perpetual non-redeemable prefunded warrants to purchase 1,339,499 shares of common stock with an exercise price of $0.01 per share.

Stock Options

Stock option activity is summarized below:

	Shares Underlying Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Options outstanding at January 1, 2019		3,658,421		$	11.10
Granted		505,000			7.55
Cancelled or terminated		(364,603	)		11.10
Exercised		-			-
Options outstanding at September 30, 2019		3,798,818		$	10.63		3.7	$	7
Options vested at September 30, 2019		28,152		$	11.10		3.5	$	-

Awards with Market Conditions

On March 16, 2018, the Company granted five-year incentive stock options to purchase 3,573,113 shares of common stock at an exercise price of $11.10 per share to employees pursuant to the 2018 Plan, including 1,458,414 shares of common stock underlying the CEO’s stock options and 583,366 shares of common stock underlying the former CFO’s stock options. A set percentage of the stock options shall vest upon the volume weighted average price (“VWAP”) of the common stock, as defined in the option agreements, being equal to or greater than a specified price per share for at least thirty (30) out of thirty-five (35) consecutive trading days, as follows and are exercisable only to the extent that they are vested: 30% of the options shall vest upon the VWAP exceeding $13.125 per share; an additional 30% of the options shall vest upon the VWAP exceeding $17.50 per share; an additional 30% of the options shall vest upon the VWAP exceeding $21.875 per share; and an additional 10% of the options shall vest upon the VWAP exceeding $35.00 per share; provided that the option holder remains continuously employed by the Company (and/or any of its subsidiaries) from the grant date through (and including) the relevant date of vesting. On May 7, 2018, the Company hired a new CFO who received a stock option award exercisable for 583,366 shares of common stock underlying options under the same terms as the former CFO. On June 15, 2018, the former CFO forfeited her existing 583,366 options.

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The fair value of the awards issued on March 16, 2018 of $15,004 was determined using a Monte Carlo simulation based on a 5-year term, a risk-free rate of 2.62%, an annual dividend yield of 0%, and an annual volatility of 42.8%. The expense is being recognized over the derived service period of each vesting tranche which was determined to be 0.74 years, 1.64 years, 2.24 years, and 3.13 years.

The fair value of the awards issued on May 7, 2018 of $2,357 was determined using a Monte Carlo simulation based on a 5- year term, a risk-free rate of 2.74%, an annual volatility of 54.70%, and an annual dividend yield of 0%. The expense is being recognized over the derived service period of each vesting tranche which was determined to be 0.97 years, 1.75 years, 2.15 years, and 2.96 years.

The expense recorded for awards with market conditions was $1,201 and $2,832 during the three month Successor Periods ended September 30, 2019 and 2018, respectively. The expense recorded for awards with market conditions was $3,730 during the nine months ended September 30, 2019 and $5,935 during the Successor Period from March 15, 2018 to September 30, 2018, which is included in operating expenses in the condensed consolidated statements of operations.

Awards with Service Conditions

On March 16, 2018, the Company granted five-year stock options to purchase an aggregate of 99,526 shares of common stock at an exercise price of $11.10 per share to the non-employee directors of the Company, pursuant to the 2018 Plan. These options vest over three years with one-third vesting on each of the respective anniversary dates.

On March 23, 2018, stock options to purchase 14,218 shares of common stock that had been issued to one non-employee director were canceled, while new five-year options to purchase 15,123 shares of common stock at an exercise price of $10.40 per share were issued to certain investment funds pursuant to an arrangement between the same non-employee director and the investment adviser to the funds. The new options were scheduled to vest over three years with one-third vesting on each of the respective anniversary dates. On May 31, 2018, the same non-employee director resigned and options to purchase 15,123 shares of common stock were forfeited.

The $350 fair value of these awards was determined using the Black-Scholes option pricing model based on a 3.5 year expected life, a risk-free rate of 2.42%, an annual dividend yield of 0%, and an annual volatility of 39%. The expense is being recognized over the three-year vesting period. The expected life was determined using the simplified method as the awards were determined to be plain-vanilla options.

During the nine months ended September 30, 2019, stock options to purchase 505,000 shares of common stock were issued to employees. The options have exercise prices ranging from $4.50 to $8.50. The options had a five year life and a four year vesting period. The fair value of the awards of $957 was determined using the Black-Scholes option pricing model based on the following range of assumptions:

	For the period from January 1, 2019 to September 30, 2019
Risk free interest rate		1.70%-2.51	%
Expected term (years)		3.75
Expected volatility		52%-55	%
Expected dividends		0.00	%

The expected life was determined using the simplified method as the awards were determined to be plain-vanilla options.

The expense for awards with service conditions was $61 and $25 during the three month Successor Periods ended September 30, 2019 and 2018, respectively. The expense recorded for awards with service conditions was $158 during the Successor Period from January 1, 2019 to September 30, 2019 and $53 during the Successor Period from March 15, 2018 to September 30, 2018, which is included in operating expenses in the condensed consolidated statements of operations.

As of September 30, 2019, total unrecorded compensation cost related to all non-vested awards was $3,089 which is expected to be amortized over a weighted average service period of approximately 1.67 years. The weighted average grant date fair value of awards issued during January 1, 2019 to September 30, 2019 was $1.89 per share.

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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

Certain statements in this Quarterly Report on Form 10-Q (including but not limited to this Item 2 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations”) constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are “forward-looking” statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” or “continue” or the negative of such words or variations of such words and similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements and the Company can give no assurance that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, or “cautionary statements,” include, but are not limited to:

● The Company’s business is affected by the availability of financing to it and its customers;

● Fuel shortages, or high prices for fuel, could have a negative effect on the Company’s business;

● The Company’s success will depend to a significant extent on the well being, as well as the continued popularity and reputation for quality, of the Company’s manufacturers, particularly, Thor Industries, Inc., Tiffin Motorhomes, Winnebago Industries, Inc., and Forest River, Inc.

● Any change, non-renewal, unfavorable renegotiation or termination of the Company’s supply arrangements for any reason could have a material adverse effect on product availability and cost and the Company’s financial performance.

● The Company’s business is impacted by general economic conditions in its markets, and ongoing economic and financial uncertainties may cause a decline in consumer spending that may adversely affect its business, financial condition and results of operations.

● The Company depends on its ability to attract and retain customers.

● Competition in the market for services, protection plans and products targeting the RV lifestyle or RV enthusiast could reduce the Company’s revenues and profitability.

● The Company’s expansion into new, unfamiliar markets presents increased risks that may prevent it from being profitable in these new markets. Delays in acquiring or opening new retail locations could have a material adverse effect on the Company’s business, financial condition and results of operations.

● Unforeseen expenses, difficulties, and delays encountered in connection with expansion through acquisitions could inhibit the Company’s growth and negatively impact its profitability.

● Failure to maintain the strength and value of the Company’s brands could have a material adverse effect on the Company’s business, financial condition and results of operations.

● The Company’s failure to successfully order and manage its inventory to reflect consumer demand in a volatile market and anticipate changing consumer preferences and buying trends could have a material adverse effect on the Company’s business, financial condition and results of operations.

● The Company’s same store sales may fluctuate and may not be a meaningful indicator of future performance.

● The cyclical nature of the Company’s business has caused its sales and results of operations to fluctuate. These fluctuations may continue in the future, which could result in operating losses during downturns or as a result of changes in general economic conditions, including tariffs.

● The Company’s business is seasonal, and this leads to fluctuations in sales and revenues.

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● The Company’s business may be adversely affected by unfavorable conditions in its local markets, even if those conditions are not prominent nationally.

● The Company may not be able to satisfy its debt obligations upon the occurrence of a change in control under its credit facility.

● The Company’s ability to operate and expand its business and to respond to changing business and economic conditions will depend on the availability of adequate capital.

● The documentation governing the Company’s credit facility contains restrictive covenants that may impair the Company’s ability to access sufficient capital and operate its business.

● Natural disasters, whether or not caused by climate change, unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt business and result in lower sales and otherwise adversely affect the Company’s financial performance.

● The Company depends on its relationships with third party providers of services, protection plans, products and resources and a disruption of these relationships or of these providers’ operations could have an adverse effect on the Company’s business and results of operations.

● A portion of the Company’s revenue is from financing, insurance and extended service contracts, which depend on third party lenders and insurance companies. The Company cannot ensure these third parties will continue to provide RV financing and other products.

● If the Company is unable to retain senior executives and attract and retain other qualified employees, the Company’s business might be adversely affected.

● The Company’s business depends on its ability to meet its labor needs.

● The Company primarily leases its retail locations. If the Company is unable to maintain those leases or locate alternative sites for retail locations in its target markets and on terms that are acceptable to it, the Company’s revenues and profitability could be adversely affected.

● The Company’s business is subject to numerous federal, state and local regulations.

● Regulations applicable to the sale of extended service contracts could materially impact the Company’s business and results of operations.

● If state dealer laws are repealed or weakened, the Company’s dealerships will be more susceptible to termination, non-renewal or renegotiation of dealer agreements.

● The Company’s failure to comply with certain environmental regulations could adversely affect the Company’s business, financial condition and results of operations.

● Climate change legislation or regulations restricting emission of “greenhouse gases” could result in increased operating costs and reduced demand for the RVs the Company sells.

● The Company may be unable to enforce its intellectual property rights and/or the Company may be accused of infringing the intellectual property rights of third parties which could have a material adverse effect on the Company’s business, financial condition and results of operations.

● If the Company is unable to maintain or upgrade its information technology systems or if the Company is unable to convert to alternative systems in an efficient and timely manner, the Company’s operations may be disrupted or become less efficient.

● Any disruptions to the Company’s information technology systems or breaches of the Company’s network security could interrupt its operations, compromise its reputation, expose it to litigation, government enforcement actions and costly response measures and could have a material adverse effect on the Company’s business, financial condition and results of operations.

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● Increases in the minimum wage or overall wage levels could adversely affect the Company’s financial results.

● The Company may be subject to product liability claims if people or property are harmed by the products the Company sells and may be adversely impacted by manufacturer safety recalls.

● The Company may be named in litigation, which may result in substantial costs and reputational harm and divert management’s attention and resources.

● The Company’s risk management policies and procedures may not be fully effective in achieving their purposes.

● The Company could incur asset impairment charges for goodwill, intangible assets or other long-lived assets.

● Future resales of the shares of common stock of the Company issued to the stockholders and the investors in the PIPE Investment may cause the market price of the Company’s securities to drop significantly, even if the Company’s business is doing well.

● Nasdaq may delist the Company’s common stock from its exchange, which could limit investors’ ability to make transactions in the Company’s common stock and subject the Company to additional trading restrictions.

● The Company’s outstanding convertible preferred stock, warrants and options may have an adverse effect on the market price of its common stock.

● The Company is an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make the Company’s common stock less attractive to investors.

● Stockholders may become diluted as a result of the issuance of options under existing or future incentive plans or the issuance of common stock as a result of acquisitions or otherwise.

● The price of the Company’s common stock may be volatile for a variety of reasons.

● The conversion of the Series A Preferred Stock into Company common stock may dilute the value for the other holders of Company common stock.

● The holders of Series A Preferred Stock own a large portion of the voting power of the Company common stock and have the right to nominate two members to the Company’s board of directors. As a result, these holders may influence the composition of the board of directors of the Company and future actions taken by the board of directors of the Company.

● The holders of the Series A Preferred Stock have certain rights that may not allow the Company to take certain actions.

● The Company’s ability to implement its stock repurchase program, the timing and amount of any future stock repurchases and the possibility that the repurchase program may be suspended or discontinued.

● The Company’s amended and restated certificate of incorporation provides to the fullest extent permitted by law that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between the Company and its stockholders, which could limit the Company’s stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with the Company or the Company’s directors, officers or employees.

The following discussion and analysis of the Company’s financial condition and results of operations should be read together with the Company’s financial statements and related notes included in Part I, Item 1 of this Form 10-Q, as well as the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 22, 2019.

The amounts set forth below are in thousands unless otherwise indicated except for unit (including the average selling price per unit), share, and per share data.

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Business Overview

Overview

Andina Acquisition Corp. II (“Andina”) was originally formed for the purpose of effecting a business combination with one or more businesses or entities. On March 15, 2018, the initial business combination was consummated. As a result, the business of Lazy Days’ R.V. Center, Inc. and its subsidiaries became the Company’s business. Accordingly, Lazydays Holdings, Inc. is now a holding company operating through our direct and indirect subsidiaries.

Company History

Andina was formed as an exempted company incorporated in the Cayman Islands on July 1, 2015 for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more target businesses.

From the consummation of the initial public offering (“IPO”) of Andina until October 27, 2017, Andina was searching for a suitable target business to acquire. On October 27, 2017, a merger agreement was entered into by and among Andina, Andina II Holdco Corp., a Delaware corporation and wholly owned subsidiary of Andina (“Holdco”), Andina II Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Holdco (“Merger Sub”), Lazy Days’ R.V. Center, Inc. (“Lazydays RV”) and solely for certain purposes set forth in the merger agreement, A. Lorne Weil (the “Merger Agreement”). The Merger Agreement provided for a business combination transaction by means of (i) the merger of Andina with and into Holdco, with Holdco surviving and becoming a new public company (the “Redomestication Merger”) and (ii) the merger of Lazy Days’ R.V. Center, Inc. with and into Merger Sub with Lazy Days’ R.V. Center, Inc. surviving and becoming a direct wholly owned subsidiary of Holdco (the “Transaction Merger” and together with the Redomestication Merger, the “Mergers”). On March 15, 2018, Holdco held an extraordinary general meeting of the shareholders, at which the Andina shareholders approved the Mergers and other related proposals. On the same date, the Mergers were closed. In connection with the Mergers, the business of Lazy Days’ R.V. Center, Inc. and its subsidiaries became the business of Holdco. As a result of the Mergers, the Company’s stockholders and the shareholders of Andina became stockholders of Holdco and the Company changed the name of Holdco to “Lazydays Holdings, Inc.”

For the purposes of this Management Discussion and Analysis of Financial Condition and Results of Operations, the Company combined the results of Lazy Days’ R.V. Center, Inc. (the “Predecessor”) for the period from January 1, 2018 to March 14, 2018 with the results of Lazydays Holdings, Inc. (the “Successor”) for the period from March 15, 2018 to September 30, 2018.

Our Business

The Company operates recreational vehicle (“RV”) dealerships and offers a comprehensive portfolio of products and services for RV owners and outdoor enthusiasts. The Company generates revenue by providing RV owners and outdoor enthusiasts a full spectrum of products: RV sales, RV repair and services, financing and insurance products, third-party protection plans, after-market parts and accessories, RV rentals and RV camping. The Company provides these offerings through its Lazydays branded dealerships. Lazydays is known nationally as The RV Authority® , a registered trademark that has been consistently used by the Company in its marketing and branding communications since 2013. In this Quarterly Report on Form 10-Q, the Company refers to Lazydays Holdings, Inc. as “Lazydays,” the “Company,” “Holdco,” “we,” “us,” “our,” and similar words.

The Company believes, based on industry research and management’s estimates, it operates one of the world’s largest RV dealerships, measured in terms of on-site inventory, located on 126 acres outside Tampa, Florida. The Company also has dealerships located at The Villages, Florida; Tucson, Arizona; Minneapolis, Minnesota; Knoxville, Tennessee; and Loveland and Denver, Colorado. Lazydays offers one of the largest selections of leading RV brands in the nation featuring more than 3,000 new and pre-owned RVs. The Company has more than 400 service bays across all locations and has RV parts and accessories stores at all locations. Lazydays also has RV rental fleets in Colorado and availability to two on-site campgrounds with over 700 RV campsites. The Company welcomes over 500,000 visitors to its dealership locations annually, and employs over 800 people at its seven facilities. The Company’s dealership locations are staffed with knowledgeable local team members, providing customers access to extensive RV expertise. The Company believes its dealership locations are strategically located in key RV markets. Based on information collected by the Company from reports prepared by Statistical Surveys, these key RV markets (Florida, Colorado, Arizona, Minnesota and Tennessee) account for a significant portion of new RV units sold on an annual basis in the U.S. The Company’s dealerships in these key markets attract customers from all states, except Hawaii.

The Company attracts new customers primarily through Lazydays dealership locations as well as digital and traditional marketing efforts. Once the Company acquires customers, those customers become part of the Company’s customer database where the Company leverages customer relationship management (“CRM”) tools and analytics to actively engage, market and sell its products and services.

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Recent Developments

On August 1, 2019, the Company consummated its asset purchase agreement with Alliance Coach Inc., a business located near Ocala, Florida. Simultaneous with the execution of the asset purchase agreement, the Company executed a lease with the former owner of Alliance Coach Inc. The purchase price consists of cash and a note payable to the seller of Alliance Coach Inc. In addition, the Company has acquired the inventory of Alliance Coach Inc. and has added the inventory to the M&T Floor Plan Line of Credit.

On September 16, 2019, the Company announced that it plans to open its first dedicated service center in the Houston, Texas metro area. The facility is currently under construction. The Company anticipates commencing operations in the first quarter of 2020.

On November 6, 2019, the Board of Directors of Lazydays authorized the repurchase of up to $4.0 million of the Company’s common stock through December 31, 2020. Repurchases may be made at management’s discretion from time to time on the open market, through privately negotiated transactions or a trading plan in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended, and pursuant to applicable Securities and Exchange Commission requirements. The repurchase program may be suspended for periods or discontinued at any time.

How The Company Generates Revenue

The Company derives its revenues from sales of new units, sales of pre-owned units, and other revenue. Other revenue consists of RV parts, service and repairs, commissions earned on sales of third-party financing and insurance products, visitor fees at the Tampa campground and food facilities, and miscellaneous revenues. During the three and nine months ended September 30, 2019 and 2018, the Company derived its revenues from these categories in the following percentages:

	Successor			Successor			Successor			Combined Successor and Predecessor
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
New vehicles		54.8	%		56.0	%		55.8	%		55.5	%
Pre-owned vehicles		32.9	%		32.0	%		32.3	%		33.3	%
Other		12.3	%		12.0	%		11.9	%		11.2	%
		100.0	%		100.0	%		100.0	%		100.0	%

New and pre-owned RV sales accounted for approximately 88% of total revenues in the three and nine months ended September 30, 2019. New and pre-owned RV sales accounted for approximately 88% and 89% of total revenues in the three and nine months ended September 30, 2018. These revenue contributions have remained relatively consistent.

Key Performance Indicators

Gross Profit and Gross Margins (excluding depreciation and amortization). Gross profit is total revenue less total costs applicable to revenue excluding depreciation and amortization. The vast majority of the cost applicable to revenues is related to the cost of vehicles. New and pre-owned vehicles have accounted for 96% to 97% of the cost of revenues for the three and nine months ended September 30, 2019 and 2018. Gross margin is gross profit as a percentage of revenue.

The Company’s gross profit is variable in nature and generally follows changes in revenue. For the three months ended September 30, 2019 and 2018, gross profit was $30.5 million and $30.3 million, respectively, and gross margin was 19.3% and 21.3%, respectively. For the nine months ended September 30, 2019 and 2018, gross profit was $103.0 million and $104.8 million, respectively, and gross margin was 20.6% and 21.7% respectively. Last-in, first-out (“LIFO”) adjustments did not have a material impact on the variance in the Company’s gross margin during the periods presented. The margin decreases were driven by reduced per vehicle margins due to competitive pricing in the industry during the recent quarter.

During the three and nine months ended September 30, 2019 and 2018, gross margins were somewhat impacted by other revenue, including finance and insurance revenues and parts, service, and accessories revenue. The Company’s margins on these lines of business typically carry higher gross margin percentages than new and pre-owned vehicle sales. These combined other revenues were 12.3% and 12.0%, respectively, of total revenues during the three months ended September 30, 2019 and 2018. These combined other revenues were 11.9% and 11.2%, respectively, of total revenues during the nine months ended September 30, 2019 and 2018.

SG&A as a percentage of Gross Profit. Selling, general and administrative (“SG&A”) expenses as a percentage of gross profit allows the Company to monitor its expense control over a period of time. SG&A consists primarily of wage-related expenses, selling expenses related to commissions and advertising, lease expenses and corporate overhead expenses. Historically, salaries, commissions and benefits represent the largest component of the Company’s total selling, general and administrative expense and averages approximately 52% to 53% of total selling, general and administrative expenses.

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The Company calculates SG&A expenses as a percentage of gross profit by dividing SG&A expenses for the period by total gross profit. For the three months ended September 30, 2019 and 2018, SG&A, excluding transaction costs, depreciation and amortization expense, and stock-based compensation as a percentage of gross profit was 83.7% and 78.6%, respectively. For the nine months ended September 30, 2019 and 2018, the percentage was 74.9% and 71.7%, respectively. These increases are driven by the decreased gross margins discussed above. In addition, as the Company executes its growth strategy, the Company may acquire intangible assets and property, plant, and equipment, and the related depreciation and amortization expense may negatively impact our SG&A expenses as a percentage of gross margin.

Adjusted EBITDA. Adjusted EBITDA is not a U.S. Generally Accepted Accounting Principles (“GAAP”) financial measure, but it is one of the primary non-GAAP measures management uses to evaluate the financial performance of the business. Adjusted EBITDA is also frequently used by analysts, investors, and other interested parties to evaluate companies in the recreational vehicle industry. The Company uses Adjusted EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance as follows:

● as a measurement of operating performance to assist in comparing the operating performance of the Company’s business on a consistent basis, and remove the impact of items not directly resulting from the Company’s core operations;

● for planning purposes, including the preparation of the Company’s internal annual operating budget and financial projections;

● to evaluate the performance and effectiveness of the Company’s operational strategies; and

● to evaluate the Company’s capacity to fund capital expenditures and expand the business.

The Company defines Adjusted EBITDA as net (loss) income excluding depreciation and amortization of property and equipment, non-floor plan interest expense, amortization of intangible assets, income tax expense, stock-based compensation, transaction costs and other supplemental adjustments which for the periods presented includes LIFO adjustments, severance costs and other one time charges, and loss or gain on sale of property and equipment. The Company believes Adjusted EBITDA, when considered along with other performance measures, is a useful measure as it reflects certain operating drivers of the business, such as sales growth, operating costs, selling and administrative expense and other operating income and expense. The Company believes Adjusted EBITDA can provide a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of financial performance and prospects for the future. While Adjusted EBITDA is not a recognized measure under GAAP, management uses this financial measure to evaluate and forecast business performance. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations, or a measure comparable to net (loss) income as it does not take into account certain requirements such as non-recurring gains and losses which are not deemed to be a normal part of the underlying business activities.

The Company’s use of Adjusted EBITDA may not be comparable to other companies within the industry. The Company compensates for these limitations by using Adjusted EBITDA as only one of several measures for evaluating business performance. In addition, capital expenditures, which impact depreciation and amortization, interest expense, and income tax expense, are reviewed separately by management. The Company’s measure of Adjusted EBITDA is not necessarily comparable to similarly titled captions of other companies due to different methods of calculation. For a reconciliation of Adjusted EBITDA to net (loss) income, a reconciliation of Adjusted EBITDA Margin to net (loss) income margin, and a further discussion of how the Company utilizes these non-GAAP financial measures, see “Non-GAAP Financial Measures” below.

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Results of Operations

Three Months

The following table sets forth information comparing the components of net loss for the three months ended September 30, 2019 and 2018.

Summary Financial Data

(in thousands)

	Successor			Successor
	Three Months Ended September 30, 2019			Three Months Ended September 30, 2018
Revenues
New and pre-owned vehicles	$	138,861		$	125,348
Other		19,541			17,035
Total revenue		158,402			142,383
Cost of revenues (excluding depreciation and amortization expense)
New and pre-owned vehicles		122,107			107,449
Adjustments to LIFO reserve		910			884
Other		4,841			3,776
Total cost of revenues (excluding depreciation and amortization)		127,858			112,109
Gross profit (excluding depreciation and amortization)		30,544			30,274
Transaction costs		193			243
Depreciation and amortization expense		2,732			2,532
Stock-based compensation expense		1,286			2,857
Selling, general, and administrative expenses		25,570			23,793
Income from operations		763			849
Other income/expenses
Gain (loss) on sale of property and equipment		13			(9	)
Interest expense		(2,321	)		(2,428	)
Total other expense		(2,308	)		(2,437	)
Loss before income tax expense		(1,545	)		(1,588	)
Income tax expense		(941	)		(1,141	)
Net loss	$	(2,486	)	$	(2,729	)

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Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 2018

Revenue

Revenue increased by approximately $16.0 million, or 11.3%, to $158.4 million from $142.4 million for the three months ended September 30, 2019 and 2018, respectively.

New and Pre-Owned Vehicles Revenue

Revenue from new and pre-owned vehicles sales increased by approximately $13.6 million, or 10.8%, to $138.9 million from $125.3 million for the three months ended September 30, 2019 and 2018, respectively.

Revenue from new vehicle sales increased by approximately $7.0 million, or 8.8%, to $86.8 million from $79.8 million for the three months ended September 30, 2019 and 2018, respectively. This was due to an increase in the number of new vehicle units sold from 1,078 to 1,248 which was driven by the acquisitions of three new dealerships since August 2018. This increase was offset by a decrease in the average selling price from $73,500 for the three months ended September 30, 2018 as compared to $69,100 for the three months ended September 30, 2019.

Revenue from pre-owned vehicle sales increased by approximately $6.4 million, or 14.2%, to $52.0 million from $45.6 million for the three months ended September 30, 2019 and 2018, respectively. The increase was primarily driven by an increase in wholesale revenue by approximately $4.0 million. The revenue increase from wholesale sales was offset by a decrease in the number of pre-owned vehicles sold from 722 to 687, excluding wholesale units sold. After excluding the effect of wholesale sales, the average selling price per unit sold increased from approximately $60,000 per unit for the three months ended September 30, 2018 as compared to $65,500 for the three months ended September 30, 2019.

Other Revenue

Other revenue consists of sales of parts, accessories, and related services. It also consists of finance and insurance revenues as well as campground and miscellaneous revenues. Other revenue increased by approximately $2.5 million, or 14.7%, to $19.5 million from $17.0 million for the three months ended September 30, 2019 and 2018, respectively.

As a component of other revenue, sales of parts, accessories and related services increased by approximately $1.6 million, or 23.2%, to $8.8 million from $7.2 million, primarily due to the Company’s new locations in Tennessee, Minnesota, and The Villages, Florida.

Finance and insurance revenue increased by approximately $1.2 million, or 13.7%, to $9.3 million from $8.1 million for the three months ended September 30, 2019 as compared to September 30, 2018, respectively, due to finance and insurance revenue at the Company’s new locations in Tennessee, Minnesota, and The Villages, Florida. In addition, the Company has had improved penetration rates and per unit revenue on its finance and insurance products.

Campground and miscellaneous revenue, which includes RV rental, campground, restaurant, and consignment revenue, decreased by approximately $0.2 million to $1.5 million for the three months ended September 30, 2019 as compared to $1.7 million for the three months ended September 30, 2018.

Gross Profit (excluding depreciation and amortization)

Gross profit consists of gross revenues less cost of revenues and excludes depreciation and amortization. Gross profit increased by approximately $0.2 million, or 0.9%, to $30.5 million from $30.3 million for the three months ended September 30, 2019 and 2018, respectively. Gross margins declined due to decreased new and pre-owned vehicle gross profit per unit which declined due to competitive pricing in the industry. Additionally, wholesale sales, which have approximately breakeven margins, increased by $4.0 million.

New and Pre-Owned Vehicles Gross Profit

New and pre-owned vehicle gross profit decreased $1.2 million, or 6.9%, to $15.8 million from $17.0 million for the three months ended September 30, 2019 and 2018, respectively. The decrease is primarily attributable to the decreased gross margin on new vehicles from pricing competition.

Other Gross Profit

Other gross profit increased by $1.4 million, or 10.9% to $14.7 million from $13.3 million for the three months ended September 30, 2019 and 2018, respectively, due to increased finance and insurance revenue from the Company’s new locations in Tennessee, Minnesota, and The Villages, Florida as well as increased penetration rates on the Company’s finance and insurance products.

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Selling, General and Administrative Expenses

SG&A expenses, excluding transaction costs, stock-based compensation, and depreciation and amortization, increased $1.8 million, or 7.5%, to $25.6 million during the three months ended September 30, 2019, from $23.8 million during the three months ended September 30, 2018. The increase in SG&A expenses was related to overhead associated with new locations acquired since August 2018. Stock-based compensation, a non-cash expense, decreased by $1.6 million as a result of the graded vesting of the awards with market conditions which were issued to members of management in 2018, with the majority of the expense being recorded in the early portion of the derived service period.

Interest Expense

Interest expense decreased by approximately $0.1 million to $2.3 million from $2.4 million for the three months ended September 30, 2019 and 2018, respectively, due to the decrease in floor plan interest from reduced inventory levels.

Income Taxes

Income tax expense decreased $0.2 million for the three months ended September 30, 2019 as compared to the three months ended September 30, 2018. The difference between the statutory rates and the estimated effective tax rate for the year relate to permanent differences in non-cash, non tax deductible stock-based compensation. The effective tax rate is also subject to the timing of changes in market conditions which impact the Company’s calculation of the estimated effective tax rate.

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Nine Months

The following table sets forth information comparing the components of net income for the nine months ended September 30, 2019 and 2018.

Summary Financial Data

(in thousands)

	Successor			Combined Successor and Predecessor
	Nine Months Ended September 30, 2019			Nine Months Ended September 30, 2018
Revenues
New and pre-owned vehicles	$	440,541		$	427,987
Other		59,464			54,354
Total revenue		500,005			482,341
Cost of revenues (excluding depreciation and amortization expense)
New and pre-owned vehicles		380,994			365,143
Adjustments to LIFO reserve		1,516			1,032
Other		14,526			11,400
Total cost of revenues (excluding depreciation and amortization)		397,036			377,575
Gross profit (excluding depreciation and amortization)		102,969			104,766
Transaction costs		508			3,738
Depreciation and amortization expense		8,067			6,836
Stock-based compensation expense		3,912			6,126
Selling, general, and administrative expenses		77,173			75,078
Income from operations		13,309			12,988
Other income/expenses
Gain on sale of property and equipment		11			2
Interest expense		(7,879	)		(7,365	)
Total other expense		(7,868	)		(7,363	)
Income before income tax expense		5,441			5,625
Income tax expense		(4,225	)		(3,484	)
Net income	$	1,216		$	2,141

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Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018

Revenue

Revenue increased by approximately $17.7 million, or 3.7%, to $500.0 million from $482.3 million for the nine months ended September 30, 2019 and 2018, respectively.

New and Pre-Owned Vehicles Revenue

Revenue from new and pre-owned vehicles sales increased by approximately $12.5 million, or 2.9%, to $440.5 million from $428.0 million for the nine months ended September 30, 2019 and 2018, respectively.

Revenue from new vehicle sales increased by approximately $11.4 million, or 4.2%, to $278.9 million from $267.5 million for the nine months ended September 30, 2019 and 2018, respectively. The increase was due to the increase in the number of new vehicle units sold from 3,534 to 3,774 which was supported by the acquisitions of the Company’s dealerships in Tennessee, Minnesota and The Villlages, Florida which were acquired after August 2018. This increase was partially offset by a decrease in the average selling price from $75,300 for the nine months ended September 30, 2018 as compared to $73,400 for the nine months ended September 30, 2019.

Revenue from pre-owned vehicle sales increased by approximately $1.2 million, or 0.8%, to $161.7 million from $160.5 million for the nine months ended September 30, 2019 and 2018, respectively. There was a decrease in the number of pre-owned vehicles excluding wholesale units sold, from 2,429 to 2,223. The decrease in unit volume was offset by an increase in the average selling price from approximately $62,900 per unit for the nine months ended September 30, 2018 as compared to $64,500 for the nine months ended September 30, 2019. Wholesale revenue increased $6.6 million.

Other Revenue

Other revenue consists of sales of parts, accessories, and related services. It also consists of finance and insurance revenues as well as campground and miscellaneous revenues. Other revenue increased by approximately $5.1 million, or 9.4%, to $59.5 million from $54.4 million for the nine months ended September 30, 2019 and 2018, respectively.

As a component of other revenue, sales of parts, accessories and related services increased by approximately $3.1 million, or 13.4%, to $26.3 million from $23.2 million for the nine months ended September 30, 2019 and 2018 due to the Company’s new locations in Tennessee, Minnesota, and The Villages, Florida.

Finance and insurance revenue increased by approximately $2.8 million, or 11.1%, to $28.5 million from $25.7 million for the nine months ended September 30, 2019 as compared to September 30, 2018, respectively, due to finance and insurance revenue at the Company’s new locations in Tennessee, Minnesota, and The Villages, Florida. In addition, the Company has had improved penetration rates and per unit revenue on its finance and insurance products.

Campground and miscellaneous revenue, which includes RV rental revenue, decreased by approximately $0.9 million to $4.6 million for the nine months ended September 30, 2019 as compared to $5.5 million for the nine months ended September 30, 2018 due to decreased rental revenue as the Company has eliminated this revenue stream at the Tampa location.

Gross Profit (excluding depreciation and amortization)

Gross profit consists of gross revenues less cost of revenues and excludes depreciation and amortization. Gross profit decreased by approximately $1.8 million, or 1.7%, to $103.0 million from $104.8 million for the nine months ended September 30, 2019 and 2018, respectively. The decrease in gross profit was due to increased wholesale sales as a percentage of the Company’s sales mix, decreased gross profit on new units due to competitive pricing, and decreased pre-owned motorized vehicle unit sales.

New and Pre-Owned Vehicles Gross Profit

New and pre-owned vehicle gross profit decreased by approximately $3.8 million, or 6.1%, to $58.0 million from $61.8 million for the nine months ended September 30, 2019 and 2018, respectively. The decrease in gross profit was due to increased wholesale sales as a percentage of the Company’s sales mix, decreased gross margin on new units due to competitive pricing in the industry, and decreased pre-owned motorized vehicle unit sales.

Other Gross Profit

Other gross profit increased by $1.9 million, or 4.6% to $44.9 million from $43.0 million for the nine months ended September 30, 2019 and 2018, respectively, due to increased finance and insurance revenue resulting from acquisitions as well as increased penetration rates on the Company’s finance and insurance products.

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Selling, General and Administrative Expenses

SG&A expenses, excluding transaction costs, stock-based compensation, and depreciation and amortization, increased $2.1 million, or 2.8%, to $77.2 million during the nine months ended September 30, 2019, from $75.1 million during the nine months ended September 30, 2018 due to overhead costs at the new locations. In addition, there was a decrease in non-cash expenses including stock-based compensation of $2.2 million primarily attributable to the graded vesting of awards with market conditions issued to management on March 16, 2018 and May 7, 2018 where the expense recognition is more significant in the early portion of the derived service period. There was also a $1.2 million increase in depreciation amortization expense primarily as a result of the valuation of fixed assets and intangibles assets associated with the acquisition of Lazy Days’ R.V. Center, Inc. by Andina. Transaction costs decreased $3.2 million due to the fees incurred upon acquisition of Lazy Days’ R.V. Center, Inc. by Andina during the nine months ended September 30, 2018.

Interest Expense

Interest expense increased by approximately $0.5 million to $7.9 million from $7.4 million for the nine months ended September 30, 2019 and 2018, respectively, due to the increase in the average floor plan balance from the acquisitions as well as the interest associated with the Minnesota, Tennessee, and The Villages, Florida acquisition notes payable.

Income Taxes

Income tax expense increased by $0.7 million for the nine months ended September 30, 2019 as compared to the nine months ended September 30, 2018. The difference between the statutory rates and the estimated effective tax rate for the year relates to permanent differences in non-cash, non tax deductible stock-based compensation. The effective tax rate is also subject to the timing of changes in market conditions which impact the Company’s calculation of the estimated effective tax rate.

Non-Gaap Financial Measures

The Company uses certain non-GAAP financial measures, such as EBITDA and Adjusted EBITDA, to enable it to analyze its performance and financial condition, as described in “Key Performance Indicators”, above. The Company utilizes these financial measures to manage the business on a day-to-day basis and believes that they are relevant measures of performance. The Company believes that these supplemental measures are commonly used in the industry to measure performance. The Company believes these non-GAAP measures provide expanded insight to measure revenue and cost performance, in addition to the standard GAAP-based financial measures.

The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. You should read this discussion and analysis of the Company’s financial condition and results of operations together with the consolidated financial statements of the Company and the related notes thereto also included herein.

EBITDA is defined as net (loss) income excluding depreciation and amortization of property and equipment, interest expense, net, amortization of intangible assets, and income tax expense.

Adjusted EBITDA is defined as net (loss) income excluding depreciation and amortization of property and equipment, non-floor plan interest expense, amortization of intangible assets, income tax expense, stock-based compensation, transaction costs and other supplemental adjustments which for the periods presented includes LIFO adjustments, severance costs and other one time charges, and gain or loss on sale of property and equipment.

Reconciliations from Net (Loss) Income per the Condensed Consolidated Statements of Operations to EBITDA and Adjusted EBITDA and Net (loss) income margin to EBITDA margin and Adjusted EBITDA margin for the three and nine months ended September 30, 2019 and 2018 are shown in the tables below.

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	Successor			Successor
	Three Months Ended September 30,
	2019			2018
EBITDA and Adjusted EBITDA
Net loss	$	(2,486	)	$	(2,729	)
Interest expense, net		2,321			2,428
Depreciation and amortization of property and equipment		1,716			1,704
Amortization of intangible assets		1,016			828
Income tax expense		941			1,141
Subtotal EBITDA		3,508			3,372
Floor plan interest		(874	)		(1,066	)
LIFO adjustment		910			884
Transaction costs		193			243
(Gain)/loss on sale of property and equipment		(13	)		9
Severance costs/Other		262			-
Stock-based compensation		1,286			2,857
Adjusted EBITDA	$	5,272		$	6,299

	Successor			Successor
	Three Months Ended September 30,
	2019			2018
EBITDA margin and Adjusted EBITDA margin
Net loss margin		-1.6	%		-1.9	%
Interest expense, net		1.5	%		1.7	%
Depreciation and amortization of property and equipment		1.1	%		1.2	%
Amortization of intangible assets		0.6	%		0.6	%
Income tax expense		0.6	%		0.8	%
Subtotal EBITDA margin		2.2	%		2.4	%
Floor plan interest		-0.6	%		-0.7	%
LIFO adjustment		0.6	%		0.6	%
Transaction costs		0.1	%		0.2	%
(Gain)/loss on sale of property and equipment		0.0	%		0.0	%
Severance costs/Other		0.2	%		0.0	%
Stock-based compensation		0.8	%		2.0	%
Adjusted EBITDA margin		3.3	%		4.4	%

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	Successor			Combined Successor and Predecessor
	Nine Months Ended September 30,
	2019			2018
EBITDA and Adjusted EBITDA
Net income	$	1,216		$	2,141
Interest expense, net		7,879			7,365
Depreciation and amortization of property and equipment		5,144			4,928
Amortization of intangible assets		2,923			1,908
Income tax expense		4,225			3,484
Subtotal EBITDA		21,387			19,826
Floor plan interest		(3,392	)		(3,050	)
LIFO adjustment		1,516			1,032
Transaction costs		508			3,738
Gain on sale of property and equipment		(11	)		(2	)
Severance costs/Other		691			79
Stock-based compensation		3,912			6,126
Adjusted EBITDA	$	24,611		$	27,749

	Successor			Combined Successor and Predecessor
	Nine Months Ended September 30,
	2019			2018
EBITDA margin and Adjusted EBITDA margin
Net income margin		0.2	%		0.4	%
Interest expense, net		1.6	%		1.5	%
Depreciation and amortization of property and equipment		1.0	%		1.0	%
Amortization of intangible assets		0.6	%		0.4	%
Income tax expense		0.8	%		0.7	%
Subtotal EBITDA margin		4.3	%		4.1	%
Floor plan interest		-0.7	%		-0.6	%
LIFO adjustment		0.3	%		0.2	%
Transaction costs		0.1	%		0.8	%
Gain on sale of property and equipment		0.0	%		0.0	%
Severance costs/Other		0.1	%		0.0	%
Stock-based compensation		0.8	%		1.3	%
Adjusted EBITDA margin		4.9	%		5.8	%

Note: Figures in the table may not recalculate exactly due to rounding.

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Liquidity and Capital Resources

Cash Flow Summary

($ in thousands)	Successor			Combined Successor and Predecessor
	Nine Months Ended September 30,
	2019			2018
Net income	$	1,216		$	2,141
Non cash adjustments		12,438			14,629
Changes in operating assets and liabilities		53,102			913
Net cash provided by operating activities		66,756			17,683
Net cash used in investing activities		(10,438	)		(85,374	)
Net cash (used in) provided by financing activities		(49,390	)		90,317
Net increase in cash	$	6,928		$	22,626

Net Cash from Operating Activities

The Company generated cash from operating activities of approximately $66.8 million during the nine months ended September 30, 2019, compared to cash provided by operating activities of approximately $17.7 million for the nine months ended September 30, 2018. Net income decreased by approximately $0.9 million for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018. Adjustments for non-cash expenses, included in net income, decreased $2.2 million to $12.4 million for the nine months ended September 30, 2019. During the nine months ended September 30, 2019, there was approximately $53.1 million of cash generated by changes in operating assets and liabilities as compared to $0.9 million of cash generated by changes in operating assets and liabilities during the nine months ended September 30, 2018. The fluctuations in assets and liabilities during the nine months ended September 30, 2019 were primarily due to the decrease in inventory, excluding the impact of the Alliance acquisition and other non-cash adjustments of $54.0 million, as the Company managed inventories down from highs as of December 31, 2018.

Net Cash from Investing Activities

The Company used cash in investing activities of approximately $10.4 million during the nine months ended September 30, 2019, compared to approximately $85.4 million for the nine months ended September 30, 2018. The Company used net cash of approximately $83.2 million for the acquisition of Lazy Days’ R.V. Center, Inc. and Shorewood RV Center during the nine months ended September 30, 2018. During the nine months ended September 30, 2019, the cash used in investing activities primarily consisted of costs of the development of the dedicated service center near Houston, Texas, the development of the new service center adjacent to the Minnesota dealership, and the acquisition of Alliance Coach Inc.

Net Cash from Financing Activities

The Company used cash in financing activities of approximately $49.4 million during the nine months ended September 30, 2019, compared to net cash provided by financing activities of approximately $90.3 million for the nine months ended September 30, 2018. Net cash used in financing activities during the nine months ended September 30, 2019 was primarily related to net repayments on the M&T Floor Plan Line of Credit of $47.8 million. During the nine months ended September 30, 2018, the Company raised net proceeds of $90.4 million through the PIPE Investment through the issuance of common stock, Series A Convertible Preferred Stock, and warrants. During the nine months ended September 30, 2018, the Company also received net proceeds of approximately $20.0 million from the proceeds of a new term loan with M&T Bank which was offset by the repayment of approximately $8.8 million of long term debt with Bank of America. The Company also repaid $96.7 million in floor plan notes payable to Bank of America and received net proceeds of $98.2 million from the new floor plan loan with M&T Bank. The Company also made net repayments to Bank of America of $12.3 million during the Predecessor Period prior to the Merger. As a result, during the nine months ended September 30, 2018, the Company incurred a net total of $10.8 million in floor plan repayments.

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Funding Needs and Sources

The Company has historically satisfied its liquidity needs through cash from operations and various borrowing arrangements. Cash requirements consist principally of scheduled payments of principal and interest on outstanding indebtedness (including indebtedness under its existing floor plan credit facility), the acquisition of inventory, capital expenditures, salary and sales commissions and lease expenses.

As of September 30, 2019, the Company had liquidity of approximately $33.5 million in cash and had working capital of approximately $45.2 million.

Capital expenditures include expenditures to extend the useful life of current facilities and expand operations. For the nine months ended September 30, 2019 and 2018, the Company invested approximately $7.9 million and $2.1 million in capital expenditures, respectively.

The Company maintains sizable inventory in order to meet the expectations of its customers and believes that it will continue to require working capital consistent with past experience. Historically, the Company has funded its operations with internally generated cash flow and borrowings. Changes in working capital are driven primarily by levels of business activity. The Company maintains a floor plan credit facility to finance its vehicle inventory. At times, the Company has made repayments on its existing floor plan credit facility using excess cash flow from operations.

M&T Credit Facility

On March 15, 2018, the Company replaced its existing debt agreements with Bank of America with a $200.0 million Senior Secured Credit Facility (the “M&T Facility”). The M&T Facility includes a $175.0 million M&T Floor Plan Line of Credit, a $20.0 million M&T Term Loan, and a $5.0 million M&T Revolver. The M&T Facility will mature on March 15, 2021. The M&T Facility requires the Company to meet certain financial covenants and is secured by substantially all of the assets of the Company.

The M&T Floor Plan Line of Credit may be used to finance new vehicle inventory, but only $45.0 million may be used to finance pre-owned vehicle inventory and $4.5 million may be used to finance rental units. Principal becomes due upon the sale of the respective vehicle. The M&T Floor Plan Line of Credit shall accrue interest at either (a) the fluctuating 30-day LIBOR rate plus an applicable margin which ranges from 2.00% to 2.30% based upon the Company’s total leverage ratio (as defined in the M&T Facility) or (b) the Base Rate plus an applicable margin ranging from 1.00% to 1.30% based upon the Company’s total leverage ratio (as defined in the M&T Facility). The Base Rate is defined in the agreement as the highest of M&T’s prime rate, the Federal Funds rate plus 0.50% or one-month LIBOR plus 1.00%. In addition, the Company will be charged for unused commitments at a rate of 0.15%.

The M&T Term Loan will be repaid in equal monthly principal installments of $0.242 million plus accrued interest through the maturity date. At the maturity date, the Company will pay a principal balloon payment of $11.3 million plus any accrued interest. The M&T Term Loan shall bear interest at (a) LIBOR plus an applicable margin of 2.25% to 3.00% based on the total leverage ratio (as defined in the agreement) or (b) the Base Rate plus a margin of 1.25% to 2.00% based on the total leverage ratio (as defined in the M&T Facility).

The M&T Revolver allows the Company to draw up to $5.0 million. The M&T Revolver shall bear interest at (a) 30-day LIBOR plus an applicable margin of 2.25% to 3.0% based on the total leverage ratio (as defined in the M&T Facility) or (b) the Base Rate plus a margin of 1.25% to 2.00% based on the total leverage ratio (as defined in the M&T Facility). The M&T Revolver is also subject to the unused commitment fees at rates varying from 0.25% to 0.50% based on the total leverage ratio (as defined in the M&T Facility).

As of September 30, 2019, there was $107.6 million outstanding under the M&T Floor Plan Line of Credit and $15.7 million outstanding under the M&T Term Loan.

Contractual and Commercial Commitments

During the nine months ended September 30, 2019, the Company did not have any significant changes in its contractual and commercial commitments other than the following:

On August 1, 2019, the Company consummated its asset purchase agreement with Alliance. The purchase price consisted of cash and a note payable to the seller of Alliance. The note payable is a two year note which matures on August 1, 2021, which requires monthly payments of $134 in principal and interest. The note bears interest at 5.0% per year.

The Company entered into a lease agreement for the Alliance properties with an initial base rent of $636 per annum for five years with the option of five extension periods of five years. The Company also assumed a lease with a base rent of $84 per annum which expires in June 2022.

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Off-Balance Sheet Arrangements

As of September 30, 2019, there were no off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K.

Inflation

Although the Company cannot accurately anticipate the effect of inflation on its operations, it believes that inflation has not had, and is not likely in the foreseeable future to have, a material impact on the results of operations.

Cyclicality

Unit sales of RV vehicles historically have been cyclical, fluctuating with general economic cycles. During economic downturns, the RV retailing industry tends to experience similar periods of decline and recession as the general economy. The Company believes that the industry is influenced by general economic conditions and particularly by consumer confidence, the level of personal discretionary spending, fuel prices, interest rates and credit availability.

Seasonality and Effects of Weather

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 our largest location in Tampa, Florida.

The Company’s largest RV dealership is located near Tampa, Florida, which is in close proximity to the Gulf of Mexico. A severe weather event, such as a hurricane, could cause severe damage to property and inventory and decrease the traffic to our dealerships. Although the Company believes that it has adequate insurance coverage, if the Company were to experience a catastrophic loss, the Company may exceed its policy limits, and/or may have difficulty obtaining similar insurance coverage in the future.

Critical Accounting Policies and Estimates

The Company prepares its condensed consolidated financial statements in accordance with GAAP, and in doing so, it has to make estimates, assumptions and judgments affecting the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. The Company bases its estimates, assumptions and judgments on historical experience and on various other factors it believes to be reasonable under the circumstances. Different assumptions and judgments would change estimates used in the preparation of the condensed consolidated financial statements, which, in turn, could change the results from those reported. The Company evaluates its critical accounting estimates, assumptions and judgments on an ongoing basis.

Please refer to Note 2 of the accompanying unaudited condensed consolidated financial statements for the update to the Company’s revenue recognition policies as a result of the adoption of ASC 606. There have been no other material changes in the Company’s critical accounting policies from those previously reported and disclosed in its Annual Report on Form 10-K.

Item 3. — Quantitative and Qualitative Disclosures About Market Risk.

Information requested by this Item is not applicable as the Company has elected scaled disclosure requirements available to smaller reporting companies with respect to this Item.

Item 4. — Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company conducted an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2019, the disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

There were no changes in internal controls over financial reporting during the quarter ended September 30, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

46

PART II – OTHER INFORMATION

Item 1 – Legal Proceedings

The Company is a party to multiple legal proceedings that arise in the ordinary course of its business. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its business, results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s business, results of operations, financial condition and/or cash flows.

Item 1A – Risk Factors

Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”) includes a detailed discussion of the risk factors that could materially affect our business, financial condition or future prospects. Set forth below is an additional risk factor that is a material change to our risk factors previously disclosed in the 2018 Form 10-K. The information below updates, and should be read in conjunction with, the risk factors in our 2018 Form 10-K. We encourage you to read these risk factors in their entirety.

The Company’s amended and restated certificate of incorporation provides to the fullest extent permitted by law that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between the Company and its stockholders, which could limit the Company’s stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with the Company or the Company’s directors, officers or employees.

The Company’s amended and restated certificate of incorporation provides to the fullest extent permitted by law that unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of the Company, any action asserting a claim of breach of a fiduciary duty owed by any of the Company’s directors, officers or other employees to the Company or the Company’s stockholders, any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”), or any action asserting a claim governed by the internal affairs doctrine. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or the Company’s directors, officers or other employees, which may discourage such lawsuits against the Company or the Company’s directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in the Company’s amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions. The exclusive forum provision in the Company’s amended and restated certificate of incorporation does not apply to actions arising under the federal securities laws and will not preclude or contract the scope of exclusive federal or concurrent jurisdiction for actions brought under the federal securities laws including the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, or the respective rules and regulations promulgated thereunder.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3 – Default Upon Senior Securities

None.

Item 4 – Mine Safety Disclosures

None.

Item 5 – Other Information

None.

47

Item 6. — Exhibits.

31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended
32.1**	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)
32.2**	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)
101 INS*	XBRL Instance Document
101 SCH*	XBRL Taxonomy Extension Schema Document
101 CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101 DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101 LAB*	XBRL Extension Label Linkbase Document
101 PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** Furnished herewith.

Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act or the Exchange Act, except as otherwise stated in any such filing.

48

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Lazydays Holdings, Inc.
November 8, 2019	/s/ WILLIAM P. MURNANE
Date	William P. Murnane
	Chief Executive Officer
	(Duly authorized officer and
	principal executive officer)
November 8, 2019	/s/ NICHOLAS TOMASHOT
Date	Nicholas Tomashot
	Chief Financial Officer
	(Duly authorized officer and
	principal financial and accounting officer)

49