10-Q

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 March 31, 2020

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	(I.R.S. Employer
Incorporation or Organization)	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, 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 Act). Yes [  ] No [X]

There were 8,506,666  shares of common stock, par value $0.0001, issued and outstanding as of May 6, 2020.

Lazydays Holdings, Inc.

Form 10-Q for the Quarter Ended March 31, 2020

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	27
Item 3 – Quantitative and Qualitative Disclosures about Market Risk	40
Item 4 – Controls and Procedures	40
PART II – OTHER INFORMATION
Item 1 – Legal Proceedings	40
Item 1A – Risk Factors	40
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3 – Defaults Upon Senior Securities	40
Item 4 – Mine Safety Disclosures	40
Item 5 – Other Information	40
Item 6 – Exhibits	41

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
	March 31,		December 31,
	2020		2019
	(Unaudited)
ASSETS
Current assets
Cash	$	43,269	$	31,458
Receivables, net of allowance for doubtful accounts of $374 and $382 at March 31, 2020 and December 31, 2019, respectively		16,473		16,025
Inventories		153,284		160,864
Income tax receivable		-		326
Prepaid expenses and other		3,045		2,999
Total current assets		216,071		211,672
Property and equipment, net		87,048		86,876
Operating lease assets		17,953		-
Goodwill		38,979		38,979
Intangible assets, net		67,807		68,854
Other assets		272		255
Total assets	$	428,130	$	406,636

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
	March 31,			December 31,
	2020			2019
	(Unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable, accrued expenses and other current liabilities	$	25,649		$	23,855
Income taxes payable		974			-
Floor plan notes payable, net of debt discount		133,425			143,949
Financing liability, current portion		982			936
Long-term debt, current portion		17,332			5,993
Operating lease liability, current portion		3,164			-
Total current liabilities		181,526			174,733
Long term liabilities
Financing liability, non-current portion, net of debt discount		68,158			63,557
Long term debt, non-current portion, net of debt discount		7,746			15,573
Operating lease liability, non-current portion		14,405			-
Deferred tax liability		16,450			16,450
Total liabilities		288,285			270,313
Commitments and Contingencies
Series A Convertible Preferred Stock; 600,000 shares, designated, issued, and outstanding as of March 31, 2020 and December 31, 2019; liquidation preference of $67,553 and $65,910 as of March 31, 2020 and December 31, 2019, respectively		62,537			60,893
Stockholders’ Equity
Preferred Stock, $0.0001 par value; 5,000,000 shares authorized;		-			-
Common stock, $0.0001 par value; 100,000,000 shares authorized; 8,506,666 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		-			-
Additional paid-in capital		78,222			79,186
Treasury Stock, at cost, 122,729 and 78,000 shares at March 31, 2020 and December 31, 2019, respectively		(459	)		(314	)
Accumulated deficit		(455	)		(3,442	)
Total stockholders’ equity		77,308			75,430
Total liabilities and stockholders’ equity	$	428,130		$	406,636

See the accompanying notes to the unaudited condensed consolidated financial statements

4

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

(Unaudited)

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Revenues
New and pre-owned vehicles	$	167,188		$	152,634
Other		23,666			20,423
Total revenues		190,854			173,057
Cost applicable to revenues (excluding depreciation and amortization shown below)
New and pre-owned vehicles (including adjustments to the
LIFO reserve of $195 and $247, respectively)		143,402			131,117
Other		5,979			4,993
Total cost applicable to revenue		149,381			136,110
Transaction costs		256			228
Depreciation and amortization		2,637			2,695
Stock-based compensation		680			1,514
Selling, general, and administrative expenses		31,116			26,452
Income from operations		6,784			6,058
Other income/expenses
Loss on sale of property and equipment		(2	)		(2	)
Interest expense		(2,495	)		(3,027	)
Total other expense		(2,497	)		(3,029	)
Income before income tax expense		4,287			3,029
Income tax expense		(1,300	)		(1,185	)
Net income	$	2,987		$	1,844
Dividends on Series A Convertible Preferred Stock		(1,644	)		(1,184	)
Net income (loss) attributable to common stock and participating securities	$	1,343		$	660
EPS:
Basic and diluted income per share	$	0.08		$	0.04
Weighted average shares outstanding - basic and diluted		9,757,036			9,695,234

See the accompanying notes to the unaudited condensed consolidated financial statements

5

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

JANUARY 1, 2020 THROUGH MARCH 31, 2020

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

(Unaudited)

	Common Stock				Treasury Stock					Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount			capital			deficit			Equity
Balance at January 1, 2020		8,506,666	$	-		78,000	$	(314	)	$	79,186		$	(3,442	)	$	75,430
Stock-based compensation		-		-							680			-			680
Repurchase of Treasury Stock		-		-		44,729		(145	)		-			-			(145	)
Dividends on Series A preferred stock		-		-		-		-			(1,644	)		-			(1,644	)
Net income		-		-		-		-						2,987			2,987
Balance at March 31, 2020		8,506,666	$	-		122,729	$	(459	)	$	78,222		$	(455	)	$	77,308

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 MARCH 31, 2019

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

(Unaudited)

	Common Stock				Treasury Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		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

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)

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Cash Flows From Operating Activities
Net income	$	2,987		$	1,844
Adjustments to reconcile net income to net cash provided by operating activities:
Stock based compensation		680			1,514
Bad debt expense		7			23
Depreciation and amortization of property and equipment		1,589			1,741
Amortization of intangible assets		1,048			954
Amortization of debt discount		43			132
Non-cash lease expense		(108	)		-
Loss/(gain) on sale of property and equipment		2			2
Changes in operating assets and liabilities:
Receivables		(455	)		(8,754	)
Inventories		7,580			24,276
Prepaid expenses and other		(46	)		117
Income tax receivable/payable		1,300			1,175
Other assets		(17	)		33
Accounts payable, accrued expenses and other current liabilities		1,793			5,847
Operating lease liability		(276	)		-
Total Adjustments		13,140			27,060
Net Cash Provided By Operating Activities		16,127			28,904
Cash Flows From Investing Activities
Proceeds from sales of property and equipment		4,932			20
Purchases of property and equipment		(1,774	)		(3,128	)
Net Cash Used In Investing Activities		3,158			(3,108	)
Cash Flows From Financing Activities
Net (repayments)/borrowings under M&T bank floor plan		(10,554	)		(19,878	)
Borrowings under long term debt with M&T bank		5,005			-
Repayment of long term debt with M&T bank		(725	)		(725	)
Proceeds from financing liability		-			1,519
Repayments of financing liability		(226	)		(175	)
Payment of dividends on Series A preferred stock		-			(1,210	)
Repurchase of Unit Purchase Options		-			(500	)
Repurchase of Treasury Stock		(145	)		-
Repayments of acquisition notes payable		(761	)		(370	)
Loan issuance costs		(68	)		-
Net Cash Used In Financing Activities		(7,474	)		(21,339	)
Net Increase In Cash		11,811			4,457
Cash - Beginning		31,458			26,603
Cash - Ending	$	43,269		$	31,060

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)

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest	$	2,592		$	2,877
Cash paid during the period for income taxes
net of refunds received	$	-		$	10
Non-Cash Investing and Financing Activities
Rental vehicles transferred to inventory, net	$	-		$	138
Fixed assets purchased with accounts payable	$	-		$	345
Accrued dividends on Series A Preferred Stock	$	1,644		$	1,184
Operating lease assets - ASC 842 adoption	$	(17,781	)	$	-
Operating lease liabilities - ASC 842 adoption	$	17,845		$	-

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. Lazydays RV also has a dedicated service center location near Houston, Texas which opened in February 2020. Through its subsidiaries, Lazydays RV sells and services new and pre-owned recreational vehicles, and sells related parts and accessories. 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, 2019 and 2018 and for the years then ended, included in the Annual Report on Form 10-K filed with the SEC on March 20, 2020. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Holdings, Lazydays RV and its wholly owned subsidiary LDRV Holdings Corp. LDRV Holdings Corp is the sole owner of Lazydays Land Holdings, LLC, Lazydays Tampa Land Holdings, LLC, Lazydays RV America, LLC, Lazydays RV Discount, LLC, Lazydays Mile Hi RV, LLC, LDRV of Tennessee LLC, Lazydays of Minneapolis LLC, Lazydays of Central Florida, LLC, Lone Star Acquisition LLC, Lone Star Diversified LLC, LDRV Acquisition Corp of Nashville LLC, and LDRV of Nashville LLC (collectively, the “Company”, “Lazydays” or “Successor”). All significant inter-company accounts and transactions have been eliminated in consolidation.

10

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.

Revenues are recognized when control of the promised goods or services is transferred to the customers at the expected amount the Company is entitled to for such goods and services. Taxes collected on revenue producing transactions are excluded from revenue in the condensed consolidated statements of income. The following table represents the Company’s disaggregation of revenue:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
New vehicle revenue	$	102,444	$	97,812
Preowned vehicle revenue		64,744		54,822
Parts, accessories, and related services		10,765		8,775
Finance and insurance revenue		11,272		9,715
Campground, rental, and other revenue		1,629		1,933
	$	190,854	$	173,057

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 income.

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 income. Campground revenue is also recognized over the time period of use of the campground.

11

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, less the additions to the charge-back allowance, which is included in other revenue as follows (unaudited):

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Gross finance and insurance revenues	$	12,583		$	10,678
Additions to charge-back allowance		(1,311	)		(963	)
Net Finance Revenue	$	11,272		$	9,715

The Company has an accrual for charge-backs which totaled $4,694 and $4,221 at March 31, 2020 and December 31, 2019, 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 three months ended March 31, 2020, $1,374 of contract liabilities as of December 31, 2019 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 $3,910 and $3,719 as of March 31, 2020 and December 31, 2019, respectively.

Cumulative Redeemable Convertible Preferred Stock

The Company’s Series A Preferred Stock (See Note 10 – Preferred Stock) is cumulative redeemable convertible preferred stock. Accordingly, it is classified as temporary equity and is shown net of issuance costs and the relative fair value of warrants issued in conjunction with the issuance of the Series A Preferred Stock. Unpaid preferred dividends are accumulated, compounded at each quarterly dividend date and presented within the carrying value of the Series A Preferred Stock until a dividend is declared by the 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 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of income based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite or derived service period. In accordance with ASC 718, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of income.

12

Earnings Per Share

The Company computes basic and diluted earnings/(loss) per share (“EPS”) by dividing net earnings/(loss) by the weighted average number of shares of common stock outstanding during the period.

The Company is required, in periods in which it has net income, to calculate EPS using the two-class method. The two-class method is required because the Company’s Series A Preferred Stock have the right to receive dividends or dividend equivalents should the Company declare dividends on its common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the common and preferred stockholders. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate basic EPS for each class of shares.

In periods in which the Company has a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the preferred stock does not participate in losses.

The following table summarizes net income attributable to common stockholders used in the calculation of basic and diluted income per common share:

(Dollars in thousands - except share and per share amounts)	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Distributed earnings allocated to common stock	$	-	$	-
Undistributed earnings allocated to common stock		799		409
Net earnings allocated to common stock		799		409
Net earnings allocated to participating securities		544		251
Net earnings allocated to common stock and participating securities	$	1,343	$	660
Weighted average shares outstanding for basic earnings per common share		9,757,036		9,695,234
Dilutive effect of warrants and options		-		-
Weighted average shares outstanding for diluted earnings per share computation		9,757,036		9,695,234
Basic income per common share	$	0.08	$	0.04
Diluted income per common share	$	0.08	$	0.04

For the three months ended March 31, 2020 and March 31, 2019, the denominator of the basic and dilutive EPS was calculated as follows:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Weighted average outstanding common shares		8,417,537		8,355,735
Weighted average shares held in escrow		-		-
Weighted average prefunded warrants		1,339,499		1,339,499
Weighted shares outstanding - basic and diluted		9,757,036		9,695,234

13

For the three months ended March 31, 2020 and March 31, 2019, the following common stock equivalent shares were excluded from the computation of the diluted income per share, since their inclusion would have been anti-dilutive:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Shares underlying Series A Convertible Preferred Stock		-		-
Shares underlying warrants		4,677,458		4,677,458
Stock options		3,798,818		3,823,421
Share equivalents excluded from EPS		8,476,276		8,500,879

As of March 31, 2020, the Company did not declare and pay the dividend. As a result, the Series A Convertible Preferred Stock was convertible into 6,713,367 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 $4,359 and $3,920 for the three months ended March 31, 2020 and March 31, 2019, 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.

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 three months ended March 31, 2020, four major manufacturers accounted for 28.8%, 23.7%, 18.4% and 17.1% of RV purchases.

During the three months ended March 31, 2019, four major manufacturers accounted for 43.6%, 19.0%, 16.4% and 11.0% 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.

14

Geographic Concentrations

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

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Florida		75	%		75	%
Colorado		11	%		10	%

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 March 31, 2020 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 any recognized or non-recognized subsequent events that would require disclosure in the condensed consolidated financial statements other than disclosed below.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and globally. The Company is monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance of this quarterly report on Form 10-Q, the impact could not be determined.

Due to the COVID-19 pandemic, the Company took a number of actions effective April 6, 2020 to adjust resources and costs to align with reduced demand caused by the pandemic. These actions include:

● Reduction of its workforce by 25%;

● Senior management will forgo 25% of their salary;

● Suspend 2020 annual pay increases;

● Suspend 401k match;

● Delay non-critical capital projects;

● Focus resources on core sales and service operations

In order to further mitigate the effects of the COVID-19 pandemic, the Company entered into the Fourth Amendment to the M&T credit agreement on April 16, 2020. Pursuant to the Fourth Amendment, the parties agreed to a suspension of scheduled principal payments on the term loans and mortgage loans (to the extent the permanent loan period has begun for the mortgage loans) for the period from April 15, 2020 through June 15, 2020. Interest on the outstanding principal balances of the term loans and mortgage loans will continue to accrue and be paid at the applicable interest rate during the deferment period. At the end of the deferment period, the borrowers will resume making all required payments of principal on the term loans and mortgage loans. All principal payments of the term loans and mortgage loans deferred during the deferment period will be due and payable on the term loan maturity date or the mortgage loan maturity date, as applicable. Additionally, all principal payments deferred during the deferment period will be due and payable (a) as described above or (b) if earlier, the date all outstanding amounts are otherwise due and payable under the terms of the credit documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the credit documents, demand for payment). In addition, the amendment includes a temporary suspension of scheduled curtailment payments required by the credit agreement for the period from April 1, 2020 through June 15, 2020. Amounts related to floor plan unused commitment fees and interest on the outstanding principal balance of the M&T Floor Plan Line of Credit (as defined below) will continue to accrue and be paid at the applicable rate and on the terms set forth in the credit agreement during the suspension period.

In response to continued economic uncertainty caused by the COVID-19 pandemic, subsidiaries of Lazydays Holdings, Inc. took the additional step of applying for loans (“PPP Loans”) under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) with M&T Bank (the “Lender”). On April 28, 2020, certain of the Company’s subsidiaries executed promissory notes (the “Notes”) in favor of the Lender for PPP Loans in an aggregate amount of $6,831,250. Pursuant to the Notes, such PPP Loans will bear interest at a rate of 1.0% per year and will mature on April 28, 2022. Commencing on November 28, 2020, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date. The PPP Loans are unsecured and are non-recourse obligations. The Notes provide for customary events of default, and the PPP Loans may be accelerated upon the occurrence of an event of default. All or a portion of the PPP Loans may be forgiven upon application to the Lender for payroll and certain other costs incurred during the 8-week period beginning on the date each PPP Loan is disbursed, in accordance with the requirements and limitations under the CARES Act. The amount of the PPP Loan eligible for forgiveness will be reduced if the Company terminates employees or reduces salaries during the 8-week period. While the Company’s subsidiaries intend to use the entire amount of the PPP Loans for qualifying expenses, no assurance can be provided that forgiveness of any portion of the PPP Loans will be obtained. Applications were submitted by other subsidiaries of the Company, which resulted in the execution of a promissory note on April 30, 2020 for $1,236,040 and on May 4, 2020 for $636,665. The interest rate on the notes is 1.0% per year and the notes mature on April 30, 2022 and May 4, 2022, respectively. Commencing on November 30, 2020 and December 4, 2020, respectively, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date.

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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 (“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.

Leases

Adoption of new lease standard

In February 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet, including leases classified as operating leases, and disclose qualitative and quantitative information about leasing arrangements. The FASB subsequently issued additional amendments to address issues arising from the implementation of the new lease standard. We adopted this standard as of January 1, 2020, using the modified-retrospective method. This approach provides a method for recording existing leases at adoption. We used the adoption date as our date of initial application, and thus comparative-period financial information is not presented for periods prior to the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed the Company to carry forward the historical lease classification.

Adoption of the new standard resulted in total operating lease liabilities of $17,800 and operating lease assets of $17,800 as of January 1, 2020. The standard did not materially impact our Condensed Consolidated Statements of Income and had no impact on our Condensed Consolidated Statements of Cash Flows. Our accounting policies under the new standard are described below. See Note 6, Leases.

Lease recognition

At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as either operating or financing.

Operating lease assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date and lease liability amounts are based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Because most of our leases do not provide information to determine an implicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments. Operating lease assets also include any lease payments made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with both lease and non-lease components, which are generally accounted for together as a single lease component.

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NOTE 3 – BUSINESS COMBINATION 

Acquisitions of Dealerships

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).

The Company accounted for the asset purchase agreement as a business combination using the purchase method of accounting as it was determined that Alliance constituted a business. As a result, the Company determined its preliminary allocation of the fair value of the assets acquired and the liabilities assumed for Alliance as follows:

	2019
Inventories	$	12,171
Accounts receivable and prepaid expenses		53
Property and equipment		77
Intangible assets		2,630
Total assets acquired		14,931
Accounts payable, accrued expenses and other current liabilities		243
Floor plan notes payable		11,434
Total liabilities assumed		11,677
Net assets acquired	$	3,254

		2019
Purchase Price:	$	2,568
Cash consideration paid		(107	)
Amounts due (from) to former owners
Note payable issued to former owners		3,045
	$	5,506

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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 Alliance. Goodwill associated with the transaction is detailed below:

	2019
Total consideration	$	5,506
Less net assets acquired		3,254
Goodwill	$	2,252

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 in 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 $14.0 million in revenue and $0.7 million in net income prior to income taxes during the period from January 1, 2020 to March 31, 2020 related to this acquisitions.

Pro Forma Information

The following unaudited pro forma financial information summarizes the combined results of operations for the Company as though the purchase of Alliance had been consummated on January 1, 2019.

	For the three months ended March 31,
	2020		2019
Revenue	$	190,854	$	186,076
Income before income taxes	$	4,287	$	3,729
Net income	$	2,987	$	2,397

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The Company adjusted the combined income of Lazydays RV with Alliance and adjusted net 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 income.

NOTE 4 – INVENTORIES

Inventories consist of the following:

	As of			As of
	March 31, 2020			December 31, 2019
	(Unaudited)
New recreational vehicles	$	121,357		$	124,096
Pre-owned recreational vehicles		31,828			36,639
Parts, accessories and other		4,009			3,848
		157,194			164,583
Less: excess of current cost over LIFO		(3,910	)		(3,719	)
	$	153,284		$	160,864

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

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

	As of		As of
	March 31,		December 31,
	2020		2019
	(Unaudited)
Accounts payable	$	10,024	$	11,231
Other accrued expenses		3,838		3,392
Customer deposits		3,161		2,267
Accrued compensation		3,640		2,388
Accrued charge-backs		4,694		4,221
Accrued interest		292		356
Total	$	25,649	$	23,855

NOTE 6 – LEASES

On January 1, 2019, we adopted a new accounting standard that amends the guidance for the accounting and reporting of leases. Certain required disclosures have been made on a prospective basis in accordance with the guidance of the standard. See Note 2, Significant Accounting Policies.

The Company leases property and equipment throughout the United States primarily under operating leases. Leases with lease terms of 12 months or less are expensed on a straight-line basis over the lease term and are not recorded in the Condensed Consolidated Balance Sheets.

Most leases include one or more options to renew, with renewal terms that can extend the lease term up to 20 years (some leases include multiple renewal periods). The exercise of lease renewal options is at our sole discretion. In addition, some of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements neither contain any residual value guarantees nor impose any significant restrictions or covenants.

The Company leases properties for its RV retail locations through nine operating leases. The Company also leases billboards and certain of its equipment through operating leases. The related right-of-use (“ROU”) assets for these operating leases are included in operating lease assets.

As of March 31, 2020, the weighted-average remaining lease term and weighted-average discount rate of operating leases was 5.8 years and 5.0%, respectively.

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Operating lease costs for the three month period ending March 31, 2020 was $0.9 million including variable lease costs, at March 31, 2020. There were no short term leases for the three months ended March 31, 2020.

Maturities of lease liabilities as of March 31, 2020 were as follows:

Maturity Date	Operating Leases
Remaining nine month ending December 31, 2020	$	3,081
2021		3,820
2022		3,450
2023		3,312
2024		2,557
Thereafter		4,116
Total lease payments		20,336
Less: Imputed Interest		2,767
Present value of lease liabilities	$	17,569

The following presents supplemental cash flow information related to leases during 2020:

	For the three months ended March 31, 2020
Cash paid for amounts included in the measurement of lease liability:
Operating cash flows for operating leases	$	878
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	633

On March 10, 2020, the Company entered into an agreement for the sale of land to LD Murfreesboro TN Landlord, LLC for $4.921 million. The Company has entered into a lease agreement with the buyer with lease payments to commence upon granting of a certificate of occupancy and completion of planned construction, the cost of which will be paid for by LD Murfreesboro TN Landlord, LLC. The commencement date of the lease will occur at the completion of construction.

NOTE 7 – 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.

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On March 15, 2018, the Company repaid $96,740 outstanding under the BOA floor plan notes payable and $8,820 outstanding under the BOA term loan with the proceeds of the M&T Facility.

On March 6, 2020, the Company entered into the Third Amendment and Joinder to Credit Agreement (“Third Amendment”) on the M&T Facility. Pursuant to the Third Amendment, Lone Star Land of Houston, LLC (the "Mortgage Loan Borrower") and Lone Star Diversified, LLC (“Diversified"), wholly owned subsidiaries of LDRV, became parties to the Credit Agreement and were identified as Additional Loan Parties. The existing borrowers and guarantors also requested that the lenders provide a mortgage loan credit facility in the aggregate principal amount of acquisition, construction, and permanent mortgage financing for a property acquired by the Mortgage Loan Borrower. The mortgage loans maximum borrowing amount is $6,136. The mortgage shall bear interest at (a) LIBOR plus an applicable margin of 2.25% or (b) the Base Rate plus a margin of 1.25%. The mortgage requires monthly payments of principal of $0.03 million and matures on March 15, 2021 when all remaining principal and accrued interest payments become due. As of March 31, 2020, the mortgage balance was $5,006 and the interest rate was 3.312%.

As of March 31, 2020, 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 March 31, 2020 and taking into account the effect of the Third Amendment to the Credit Agreement entered into on March 6, 2020, the maximum amount of cash dividends that the Company could make from legally available funds to its stockholders was limited to an aggregate of $9,886 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 March 31, 2020, the interest rate on the M&T Floor Plan Line of Credit was approximately 2.989%.

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

	As of March 31, 2020			As of December 31, 2019
	(Unaudited)
Floor plan notes payable, gross	$	133,577		$	144,133
Debt discount		(152	)		(184	)
Floor plan notes payable, net of debt discount	$	133,425		$	143,949

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.  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 March 31, 2020, there was $14,200 outstanding under the M&T Term Loan. As of March 31, 2020, the interest rate on the M&T Term Loan was approximately 3.25%.

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 three month period ended March 31, 2020, there were no outstanding borrowings under the M&T Revolver.

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NOTE 8 – INCOME TAXES

The Company recorded a provision for federal and state income taxes of $1,300 for the three months ended March 31, 2020 and $1,185 for the three months ended March 31, 2019 which represent effective tax rates of approximately 30% and 39%, 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 9 - 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 provides that the executive is to be granted an option to purchase shares of common stock of the Company (See Note 11 – 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 11- Stockholders’ Equity).

Note that due to the COVID-19 pandemic, as of April 6, 2020, senior management has opted to forgo 25% of their salary in order to reduce costs to align with decreased demand in sales and services. See discussion in Subsequent Event section above.

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.

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.

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NOTE 10 – PREFERRED STOCK

On March 15,2018, 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 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.

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.

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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. An analysis of its features determined 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, Derivatives and Hedging.

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 statement of income 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 wasn’t accreted during the three months ended March 31, 2020 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 $1,644 for the period from January 1, 2020 to March 31, 2020. The dividends were $2.74 per share of Series A Preferred Stock. 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 11 – 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 10 – Preferred Stock, for additional information associated with the Series A Preferred Stock.

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 March 31, 2020, there were 625,748 shares of common stock available to be issued under the Incentive Plan.

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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 months ended March 31, 2020, the Company recorded $38 of stock based compensation related to the ESPP.

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, 2020		4,677,458	$	11.50
Granted		-	$	-
Cancelled or Expired		-	$	-
Exercised		-	$	-
Warrants outstanding March 31, 2020		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, 2020		3,798,818	$	10.63
Granted		225,000	$	8.50
Cancelled or terminated		-	$	-
Exercised		-	$	-
Options outstanding at March 31, 2020		4,023,818	$	10.51		3.3	$	-
Options vested at March 31, 2020		97,554	$	8.08		3.6	$	-

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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 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 into 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.

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 $554 during the three month period ended March 31, 2020 and $1,470 during the three month period ended March 31, 2019, which is included in operating expenses in the condensed consolidated statements of income.

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 vest over three years with one-third vesting on each of the respective anniversary dates. On May 31, 2018, a 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 year ended December 31, 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 a 3.75 year expected life, a risk free rate of 1.70%-2.51%, an annual dividend yield of 0% and an annual volatility of 52%-55%.

During the three months ended March 31, 2020, stock options to purchase 225,000 shares of common stock were issued to employees. The options have an exercise price of $8.50. The options had a five year life and a four year vesting period. The fair value of the awards of $145 was determined using the Black-Scholes option pricing model based on the following range of assumptions:

	For the three months ended March 31, 2020
Risk free interest rate		0.43	%
Expected term (years)		3.75
Expected volatility		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 recorded for awards with service conditions was $88 from the three month period ended March 31, 2020 and $44 during the three month period ended March 31, 2019, which is included in operating expenses in the condensed consolidated statements of income.

As of March 31, 2020, total unrecorded compensation cost related to all non-vested awards was $1,682 which is expected to be amortized over a weighted average service period of approximately 2.09 years. The weighted average grant date fair value of awards issued during to the three months ended March 31, 2020 was $0.65 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 impact of the COVID-19 pandemic on the Company's business, results of operations and financial condition and the measures the Company has taken in response to the COVID-19 pandemic, 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;

● 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, Tiffin Motorhomes, Thor Industries, Inc., 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 procure 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.

● 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.

● Uncertainty relating to the LIBOR calculation process and potential phasing out of LIBOR may adversely affect the Company.

● 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.

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

● 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 stock repurchase program could increase the volatility of the price of the Company’s Common Stock.

● 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 COVID-19 pandemic and its associated impact has had a significant adverse impact, and may continue to have a significant impact on our business, results of operations and financial condition.

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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 20, 2020.

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.

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.”

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 and RV camping facilities. 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 the world’s largest RV dealership, 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 also has a dedicated Service Center location near Houston, Texas, which opened in February 2020. 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 availability to two on-site campgrounds with over 700 RV campsites and operated RV rental fleets in Colorado that were phased out in 2019. The Company employs over 700 people at its eight dealership and service locations. The Company’s dealership locations are staffed with knowledgeable local team members, providing customers access to extensive RV expertise. The Company believes its dealership and service 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, Tennessee and Texas) account for a significant portion of new RV units sold on an annual basis in the U.S. The Company’s dealerships and service centers 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 March 10, 2020, the Company entered into an agreement for the sale of land to LD Murfreesboro TN Landlord, LLC for approximately $5 million. The Company has entered a lease agreement with the buyer with lease payments to commence upon completion of planned construction expected to total $17 million including land, the cost of which will be paid for by LD Murfreesboro TN Landlord, LLC.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and globally. Although the impact of COVID-19 did not have a material adverse impact on the Company’s results of operations for the first quarter ended March 31, 2020, the Company began to see the impacts of COVID-19 on customer demand, the level of sales of new and pre-owned vehicles, the level of sales of parts, accessories and related services and the volume of service business in late March and continues to see declines in the second quarter of 2020. The Company is monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of the filing of this Form 10-Q, the impact could not be determined

Due to the COVID-19 pandemic, the Company took a number of actions effective April 6, 2020 to adjust resources and costs to align with reduced demand caused by the pandemic. These actions include:

● Reduction of its workforce by 25%;

● Senior management will forgo 25% of their salary;

● Suspension of 2020 annual pay increases;

● Suspension of 401k match;

● Delay non-critical capital projects;

● Focus resources on core sales and service operations

Due to the COVID-19 pandemic, the Company entered into the Fourth Amendment to the M&T credit agreement on April 16, 2020. Pursuant to the Fourth Amendment, the parties agreed to a suspension of scheduled principal payments on the term loans and mortgage loans (to the extent the permanent loan period has begun for the mortgage loans) for the period from April 15, 2020 through June 15, 2020. Interest on the outstanding principal balances of the term loans and mortgage loans will continue to accrue and be paid at the applicable interest rate during the deferment period. At the end of the deferment period, the borrowers will resume making all required payments of principal on the term loans and mortgage loans. All principal payments of the term loans and mortgage loans deferred during the deferment period will be due and payable on the term loan maturity date or the mortgage loan maturity date, as applicable. Additionally, all principal payments deferred during the deferment period will be due and payable (a) as described above or (b) if earlier, the date all outstanding amounts are otherwise due and payable under the terms of the credit documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the credit documents, demand for payment). In addition, the amendment includes a temporary suspension of scheduled curtailment payments required by the credit agreement for the period from April 1, 2020 through June 15, 2020. Amounts related to floor plan unused commitment fees and interest on the outstanding principal balance of the Floor Plan Line of Credit will continue to accrue and be paid at the applicable rate and on the terms set forth in the credit agreement during the suspension period.

In response to continued economic uncertainty caused by the COVID-19 pandemic, subsidiaries of Lazydays Holdings, Inc. took the additional step of applying for loans (“PPP Loans”) under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) with M&T Bank (the “Lender”). On April 28, 2020, certain of the Company’s subsidiaries executed promissory notes (the “Notes”) in favor of the Lender for PPP Loans in an aggregate amount of $6,831,250. Pursuant to the Notes, such PPP Loans will bear interest at a rate of 1.0% per year and will mature on April 28, 2022. Commencing on November 28, 2020, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date. The PPP Loans are unsecured and are non-recourse obligations. The Notes provide for customary events of default, and the PPP Loans may be accelerated upon the occurrence of an event of default. All or a portion of the PPP Loans may be forgiven upon application to the Lender for payroll and certain other costs incurred during the 8-week period beginning on the date each PPP Loan is disbursed, in accordance with the requirements and limitations under the CARES Act. The amount of the PPP Loan eligible for forgiveness will be reduced if the Company terminates employees or reduces salaries during the 8-week period. While the Company’s subsidiaries intend to use the entire amount of the PPP Loans for qualifying expenses, no assurance can be provided that forgiveness of any portion of the PPP Loans will be obtained. Applications were submitted by other subsidiaries of the Company, which resulted in the execution of a promissory note on April 30, 2020 for $1,236,040 and on May 4, 2020 for $636,665. The interest rate on the notes is 1.0% per year and the notes mature on April 30, 2022 and May 4, 2022, respectively. Commencing on November 30, 2020 and December 4, 2020, respectively, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date.

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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 other revenues. During the three months ended March 31, 2020 and 2019, the Company derived its revenues from these categories in the following percentages:

	For the Three Months Ended March 31,
	2020			2019
New vehicles		53.7	%		56.5	%
Pre-owned vehicles		33.9	%		31.7	%
Other		12.4	%		11.8	%
		100.0	%		100.0	%

New and pre-owned RV sales accounted for approximately 88% of total revenues in the three months ended March 31, 2020 and three months ended March 31, 2019. 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% of the cost of revenues for the three months ended March 31, 2020 and 2019. 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 March 31, 2020 and 2019, gross profit was $41.5 million and $36.9 million, respectively, and gross margin was 21.7% and 21.3%, 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 increases were driven by a slight shift to sales of pre-owned units which have a higher margin.

During the three months ended March 31, 2020 and 2019, gross margins were favorably 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 12.4% and 11.8%, respectively, of total revenues during the three months ended March 31, 2020 and 2019.

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 55% of total selling, general and administrative expenses.

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 March 31, 2020 and 2019, SG&A, excluding transaction costs, depreciation and amortization expense, and stock-based compensation as a percentage of gross profit was 75.0% and 71.6%, respectively. The Company’s operating expenses have also increased compared to prior periods in part due to additional stock-based compensation, legal, accounting, insurance and other expenses that the Company expects to incur as a result of being a public company, including compliance with the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the Sarbanes-Oxley Act and the related rules and regulations. In addition, as the Company executes its growth strategy, the Company may acquire intangible assets and property, plant, and equipment, the related depreciation and amortization expense may negatively impact our SG&A expenses as a percentage of gross margin.

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Adjusted EBITDA. Adjusted EBITDA is a not a U.S. Generally Accepted Accounting Principle (“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 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 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 income for the three months ended March 31, 2020 and 2019.

Summary Financial Data

(in thousands)

	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
Revenues
New and pre-owned vehicles	$	167,188		$	152,634
Other		23,666		$	20,423
Total revenue		190,854			173,057
Cost of revenues (excluding depreciation and amortization expense)
New and pre-owned vehicles		143,207		$	130,870
Adjustments to LIFO reserve		195		$	247
Other		5,979		$	4,993
Total cost of revenues (excluding depreciation and amortization)		149,381			136,110
Gross profit (excluding depreciation and amortization)		41,473			36,947
Transaction costs		256			228
Depreciation and amortization expense		2,637			2,695
Stock-based compensation expense		680			1,514
Selling, general, and administrative expenses		31,116			26,452
Income from operations		6,784			6,058
Other income/expenses
Loss on sale of property and equipment		(2	)		(2	)
Interest expense		(2,495	)		(3,027	)
Total other expense		(2,497	)		(3,029	)
Income before income tax expense		4,287			3,029
Income tax expense		(1,300	)		(1,185	)
Net income	$	2,987		$	1,844

34

Three Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019

Revenue

Revenue increased by approximately $17.8 million, or 10.3%, to $190.9 million from $173.1 million for the three months ended March 31, 2020 and 2019, respectively.

New and Pre-Owned Vehicles Revenue

Revenue from new and pre-owned vehicles sales increased by approximately $14.6 million, or 9.5%, to $167.2 million from $152.6 million for the three months ended March 31, 2020 and 2019, respectively.

Revenue from new vehicle sales increased by approximately $4.6 million, or 4.7%, to $102.4 million from $97.8 million for the three months ended March 31, 2020 and 2019, respectively. This increase was due to an increase in the number of new vehicle units sold from 1,216 to 1,367. This increase was offset by a decrease in the average selling price from $80,000 for the three months ended March 31, 2019 as compared to $74,400 for the three months ended March 31, 2020.

Revenue from pre-owned vehicle sales increased by approximately $9.9 million, or 18.1%, to $64.7 million from $54.8 million for the three months ended March 31, 2020 and 2019, respectively. This was due to an increase in the number of pre-owned vehicles sold from 758 to 1,049, excluding wholesale units sold. This increase was offset by a decrease in the average revenue per unit sold from approximately $65,400 per unit for the three months ended March 31, 2019 as compared to $59,000 for the three months ended March 31, 2020, respectively.

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 $3.3 million, or 16.1%, to $23.7 million from $20.4 million for the three months ended March 31, 2020 and 2019, respectively.

As a component of other revenue, sales of parts, accessories and related services increased by approximately $2.0 million, or 22.7%, to $10.8 million from $8.8 million due to increased volume.

Finance and insurance revenue increased by approximately $1.6 million, or 16.5%, to $11.3 million from $9.7 million for the three months ended March 31, 2020 as compared to March 31, 2019, respectively, primarily due to higher penetration rates and higher per unit revenue in our extended warranty products.

Campground and miscellaneous revenue, which includes RV rental revenue, decreased by approximately $0.3 million to $1.6 million for the three months ended March 31, 2020 as compared to $1.9 million for the three months ended March 31, 2019 due to the discontinuance of RV rentals in 2019.

Gross Profit (excluding depreciation and amortization)

Gross profit consists of gross revenues less cost of sales and services and excludes depreciation and amortization. Gross profit increased by approximately $4.6 million, or 12.5%, to $41.5 million from $36.9 million for the three months ended March 31, 2020 and 2019, respectively. This increase was attributable to growth in all lines of business.

New and Pre-Owned Vehicles Gross Profit

New and pre-owned vehicle gross profit increased $2.3 million, or 10.7%, to $23.8 million from $21.5 million for the three months ended March 31, 2020 and 2019, respectively. The increase is primarily attributable to the increase in units sold offset by the decrease in the average selling price of both new motorized and pre-owned motorized and towable vehicles.

Other Gross Profit

Other gross profit increased by $2.3 million, or 14.9% to $17.7 million from $15.4 million for the three months ended March 31, 2020 and 2019, respectively, due to increased finance and insurance revenues due to increased RV sales as well as higher penetration rates on the Company’s finance and insurance products.

35

Selling, General and Administrative Expenses

Selling, general, and administrative (“SG&A”) expenses, excluding transaction costs, stock-based compensation, and depreciation and amortization, increased $4.6 million, or 17.4%, to $31.1 million during the three months ended March 31, 2020, from $26.5 million during the three months ended March 31, 2019. The increase was related to overhead associated with The Villages dealership acquired August 2019, the new service center near Houston and increased performance wages which align with the increased unit sales and revenues for the period ending March 31, 2020. This increase was offset by a decrease in stock based compensation of $0.8 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 $0.5 million to $2.5 million from $3.0 million for the three months ended March 31, 2020 and 2019, respectively, due primarily to more favorable interest rates and the use of an interest reduction equity account.

Income Taxes

Income tax expense remained relatively flat at $1.3 million for both three month periods presented.

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 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 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.

36

Reconciliations from Net Income per the Condensed Consolidated Statements of Income to EBITDA and Adjusted EBITDA and Net income margin to EBITDA margin and Adjusted EBITDA margin for the three months ended March 31, 2020 and 2019 are shown in the tables below.

	Three Months Ended March 31,
	2020			2019
EBITDA
Net income	$	2,987		$	1,844
Interest expense, net		2,495			3,027
Depreciation and amortization of property and equipment		1,589			1,741
Amortization of intangible assets		1,048			954
Income tax expense		1,300			1,185
Subtotal EBITDA		9,419			8,751
Floor plan interest		(1,029	)		(1,469	)
LIFO adjustment		195			247
Transaction costs		256			228
Loss on sale of property and equipment		2			2
Severance costs/Other		-			157
Stock-based compensation		680			1,514
Adjusted EBITDA	$	9,523		$	9,430

	Three Months Ended March 31,
	2020			2019
EBITDA margin
Net income margin		1.6	%		1.1	%
Interest expense, net		1.3	%		1.7	%
Depreciation and amortization of property and equipment		0.8	%		1.0	%
Amortization of intangible assets		0.5	%		0.6	%
Income tax expense		0.7	%		0.7	%
Subtotal EBITDA margin		4.9	%		5.1	%
Floor plan interest		-0.5	%		-0.8	%
LIFO adjustment		0.1	%		0.1	%
Transaction costs		0.1	%		0.1	%
Loss on sale of property and equipment		0.0	%		0.0	%
Severance costs/Other		0.0	%		0.1	%
Stock-based compensation		0.4	%		0.9	%
Adjusted EBITDA		5.0	%		5.4	%

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

37

Liquidity and Capital Resources

Cash Flow Summary

($ in thousands)
	Three Months Ended March 31,
	2020			2019
Net income	$	2,987		$	1,844
Non cash adjustments		3,261			4,366
Changes in operating assets and liabilities		9,879			22,694
Net cash provided by operating activities		16,127			28,904
Net cash provided by (used in) investing activities		3,158			(3,108	)
Net cash used in financing activities		(7,474	)		(21,339	)
Net increase in cash	$	11,811		$	4,457

Net Cash from Operating Activities

The Company generated cash from operating activities of approximately $16.1 million during the three months ended March 31, 2020, compared to cash provided by operating activities of approximately $28.9 million for the three months ended March 31, 2019. Net income increased by approximately $1.1 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019. Adjustments for non-cash expenses, included in net income, decreased $1.0 million to $3.3 million for the three months ended March 31, 2020. During the three months ended March 31, 2020, there was approximately $9.9 million of cash changes in operating assets and liabilities as compared to $22.7 million of cash changes in operating assets and liabilities during the three months ended March 31, 2019. The fluctuations in assets and liabilities during the three months ended March 31, 2020 and March 31, 2019 were primarily due to the decrease in inventory of $7.6 million and $24.1 million, respectively, as the Company managed inventories down, particularly at the Tampa location.

Net Cash from Investing Activities

The Company generated cash from investing activities of approximately $3.2 million during the three months ended March 31, 2020, compared to cash used in investing activities of approximately $3.1 million for the three months ended March 31, 2019. Net cash provided by investing activities during the three months ended March 31, 2020 was primarily related to cash provided by the consummation of a sale leaseback in Nashville, Tennessee of $4.9 million offset by purchases of property and equipment of $1.8 million.

Net Cash from Financing Activities

The Company had cash used in financing activities of approximately $7.5 million during the three months ended March 31, 2020, compared to approximately $21.3 million for the three months ending March 31, 2019. Net cash used in financing activities during the three months ended March 31, 2020 was primarily related to net repayments on the M&T Floor Plan Line of Credit of $10.6 million and repayment of other debt of $1.7 million. These payments were offset by cash provided by the new M&T mortgage for the Houston service center of $5.0 million.

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. We believe, based on our current business plan, that our existing cash, funds available under the M&T Facility (defined below), funds received under the Paycheck Protection Program and cash flow from operations will be sufficient to fund necessary capital expenditures and operating cash requirements for at least the next twelve months. The Company further believes that its financial resources, along with managing discretionary expenses, will allow it to manage the anticipated impact of COVID-19 on the Company’s business operations for the foreseeable future which will include reduced sales and net income levels for the Company. We are reducing spending more broadly across the Company, focusing our resources on core sales and service operations and delaying non-critical capital projects. We have also reduced our workforce by 25%, senior management has agreed to forgo 25% of their salary, we have suspended 2020 annual pay increases and we have suspended 401k matches. To further protect our liquidity and cash position, we have negotiated with our lenders for the temporary suspension of scheduled principal and interest payments on our term and mortgage loans from April 15, 2020 through June 15, 2020 and for the temporary suspension of scheduled floorplan curtailment payments from April 1, 2020 through June 15, 2020. The challenges posed by COVID-19 on the Company’s business are evolving rapidly. Consequently, the Company will continue to evaluate its financial position in light of future developments, particularly those relating to COVID-19.

As of March 31, 2020, the Company had liquidity of approximately $43.3 million in cash and had working capital of approximately $34.5 million.

Capital expenditures include expenditures to extend the useful life of current facilities and expand operations. For the three months ended March 31, 2020 and March 31, 2019, the Company invested approximately $1.8 million and $3.1 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.

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M&T Credit Facility

On March 15, 2018, the Company replaced its existing debt agreements with Bank of America with a $200,000 Senior Secured Credit Facility (the “M&T Facility”). The M&T Facility includes a $175,000 M&T Floor Plan Line of Credit, a $20,000 M&T Term Loan, and a $5,000 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 $45,000 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 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 $242 plus accrued interest through the maturity date. 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 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 agreement).

On March 6, 2020, the Company entered into the Third Amendment and Joinder to Credit Agreement (“Third Amendment”) on the M&T Facility. Pursuant to the Third Amendment, the Mortgage Loan Borrower and Diversified, wholly owned subsidiaries of LDRV, became parties to the Credit Agreement and were identified as Additional Loan Parties. The Existing Borrowers and Guarantors also requested that the Lenders provide a mortgage loan credit facility in the aggregate principal amount of acquisition, construction, and permanent mortgage financing for a property acquired by the Mortgage Loan Borrower. The mortgage loans maximum borrowing amount is $6.136 million. The mortgage shall bear interest at (a) LIBOR plus an applicable margin of 2.25% or (b) the Base Rate plus a margin of 1.25%. The mortgage requires monthly payments of principal of $0.03 million and matures on March 15, 2021 when all remaining principal and accrued interest payments become due.

The 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 3.0% 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).

As of March 31, 2020, there was $133,600 outstanding under the M&T Floor Plan Line of Credit, $14,200 outstanding under the M&T Term Loan and $5,005 outstanding on the M&T Mortgage.

In order to further mitigate the effects of the COVID-19 pandemic, the Company entered into the Fourth Amendment to the M&T credit agreement on April 16, 2020. Pursuant to the Fourth Amendment, the parties agreed to a suspension of scheduled principal payments on the term loans and mortgage loans (to the extent the permanent loan period has begun for the mortgage loans) for the period from April 15, 2020 through June 15, 2020. Interest on the outstanding principal balances of the term loans and mortgage loans will continue to accrue and be paid at the applicable interest rate during the deferment period. At the end of the deferment period, the borrowers will resume making all required payments of principal on the term loans and mortgage loans. All principal payments of the term loans and mortgage loans deferred during the deferment period will be due and payable on the term loan maturity date or the mortgage loan maturity date, as applicable. Additionally, all principal payments deferred during the deferment period will be due and payable (a) as described above or (b) if earlier, the date all outstanding amounts are otherwise due and payable under the terms of the credit documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the credit documents, demand for payment). In addition, the amendment includes a temporary suspension of scheduled curtailment payments required by the credit agreement for the period from April 1, 2020 through June 15, 2020. Amounts related to floor plan unused commitment fees and interest on the outstanding principal balance of the M&T Floor Plan Line of Credit will continue to accrue and be paid at the applicable rate and on the terms set forth in the credit agreement during the suspension period.

Contractual and Commercial Commitments

During the three months ended March 31, 2020, the Company did not have any significant changes in its contractual and commercial commitments.

Off-Balance Sheet Arrangements

As of March 31, 2020, 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.

39

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 March 31, 2020, 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 three months ended March 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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, 2019 (the “2019 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 2019 Form 10-K. The information below updates, and should be read in conjunction with, the risk factors in our 2019 Form 10-K. We encourage you to read these risk factors in their entirety.

The COVID-19 pandemic has had a significant adverse impact, and is expected to continue to have a significant adverse impact, on our business, results of operations, and financial condition.

Beginning in mid-to-late March of 2020, the COVID-19 pandemic has led to severe disruptions in general economic activities as businesses and federal, state, and local governments take increasingly broad actions to mitigate the impact of the COVID-19 pandemic on public health, including a number of “shelter in place” or “stay at home” orders in the states in which we operate. Although we continue to conduct business and have modified our business practices to conform fully to government guidelines and best practices to ensure the health and safety of our customers, employees and the communities we serve, we have seen significant declines in new and pre-owned vehicle unit sales, sales of parts, accessories and related services, including finance and insurance revenues as well as campground and miscellaneous revenues, and our service business is currently operating below full capacity in all of our service locations. Our operations also depend on the continued health and productivity of our employees at our dealerships, service locations and corporate headquarters throughout this pandemic. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including the severity and duration of the COVID-19 pandemic, and further actions that may be taken by individuals, businesses and federal, state and local governments in response. We have enacted cost saving measures, including the reduction of our workforce by 25% and senior management agreeing to forego 25% of their salary, we are delaying non-critical capital projects and we are focusing our resources on core sales and service operations in response to the operational and financial impact of the COVID-19 pandemic. To further protect our liquidity and cash position, we have negotiated with our lenders for the temporary suspension of scheduled principal and interest payments on our term and mortgage loans from April 15, 2020 through June 15, 2020 and for the temporary suspension of scheduled floorplan curtailment payments from April 1, 2020 through June 15, 2020. We have also been approved for $8.7 million in loans under the Paycheck Protection Program. However, these measures may not be sufficient, and our liquidity could be negatively impacted if these conditions continue for a significant period of time. As a result, we may be required to pursue additional sources of financing to obtain working capital and meet our financial obligations. Our ability to obtain any additional financing on favorable terms, or at all, is not guaranteed and largely dependent upon evolving market conditions and other factors. Additionally, while we intend to pursue the forgiveness of the PPP Loans received in accordance with the requirements and limitations under the CARES Act, no assurance can be provided that forgiveness of any portion of the PPP Loans will be obtained. Even after the COVID-19 pandemic has subsided, we may continue to experience significant adverse effects to our business as a result of its global economic impact, including any economic recession or downturn and the impact of such a recession or downturn on unemployment levels, consumer confidence, levels of personal discretionary spending and credit availability.

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

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2020 – January 31, 2020		1,000	$	4.28		79,000	$	3,682
February 1, 2020 – February 29, 2020		12,405	$	4.22		91,405	$	3,630
March 1, 2020 – March 31, 2020		31,324	$	2.81		122,729	$	3,541

(1) On November 7, 2019, we announced that our Board of Directors authorized a stock repurchase program authorizing Us to repurchase up to $4.0 million of our shares of Common Stock. The program is effective through December 31, 2020.

Item 3 – Default Upon Senior Securities

None.

Item 4 – Mine Safety Disclosures

None.

Item 5 – Other Information

None.

40

Item 6. — Exhibits.

10.1	Third Amendment and Joinder to Credit Agreement, dated as of March 6, 2020, by and among the Existing Borrowers named therein, Lone Star Acquisition LLC, authorized to conduct business in the State of Texas as Lone Star Land of Houston, LLC, Lone Star Diversified, LLC, the Guarantors named therein, Manufacturers and Traders Trust Company and the lenders party to the credit agreement (filed as Exhibit 10.19 to the Form 10-K filed on March 20, 2020 and incorporated herein by reference).
10.2*	Fourth Amendment and Joinder to Credit Agreement, dated as of April 16, 2020, by and among the Borrowers named therein, the Guarantors named therein, Manufacturers and Traders Trust Company and the lenders party to the credit agreement
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.

41

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.
Dated May 8, 2020	/s/ WILLIAM P. MURNANE
	William P. Murnane
	Chief Executive Officer
	(Duly authorized officer and
	principal executive officer)
Dated May 8, 2020	/s/ NICHOLAS TOMASHOT
	Nicholas J. Tomashot
	Chief Financial Officer
	(Duly authorized officer and
	principal financial and accounting officer)

42

EX-10.2

Exhibit 10.2

FOURTH AMENDMENT
TO CREDIT AGREEMENT

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (“Amendment”) is dated to be effective as of the ___ day of April, 2020 (“Effective Date”), by and between: (a) MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, as Administrative Agent (“Administrative Agent”); (b) the undersigned lenders (the “Lenders”) which are parties to the “Credit Agreement” (as defined below); (c) LDRV HOLDINGS CORP., a Delaware corporation (“LDRV”), LAZYDAYS RV AMERICA, LLC, LAZYDAYS RV DISCOUNT, LLC, LAZYDA YS MILE HI RV, LLC, LAZYDAYS OF MINNEAPOLIS LLC, LDRV OF TENNESSEE LLC, LAZYDAYS OF CENTRAL FLORIDA, LLC, LONE STAR ACQUISITION LLC (authorized to do business in the State ofTexas as Lone Star Land of Houston, LLC), and LONE STAR DIVERSIFIED, LLC, each a Delaware limited liability company, a (each a “Borrower,” and collectively the “Borrowers”); and (d) LAZYDAYS HOLDINGS, INC., a Delaware corporation (“Pubco Guarantor”), LAZY DAYS’ R.V. CENTER, INC., a Delaware corporation (“Parent Guarantor”), and LAZYDAYS LAND HOLDINGS, LLC, a Delaware limited liability company (together with Pubco Guarantor, and Parent Guarantor, and each of the applicable Borrowers in its capacity as a Guarantor, collectively, the “Guarantors”). The Borrowers and the Guarantors are collectively referred to in this Amendment as the “Loan Parties.” The Administrative Agent and the Lenders are collectively referred to in this Amendment as the “Credit Parties.” The Loan Parties and the Credit Parties are collectively referred to as the “Parties.”

RECITALS

The Administrative Agent, the Lenders party thereto, and the Borrowers have entered into a Credit Agreement dated as of March 15, 2018 (“Original Credit Agreement”), as amended pursuant to the First Amendment to Credit Agreement dated as of June 30, 2018, the Second Amendment to Credit Agreement dated as of December 6, 2018, modified pursuant to the Joinder Agreement and Counterpart dated August 7, 2018 by Lazydays of Minneapolis LLC as an additional co-Borrower, pursuant to the Joinder Agreement and Counterpart dated as of December 6, 2018 by LDRV of Tennessee LLC, as an additional co-Borrower, and pursuant to the Joinder Agreement and Counterpart dated as of August 1, 2019 by Lazydays of Central Florida, LLC, as an additional co-Borrower, and amended and modified pursuant to the Third Amendment and Joinder to Credit Agreement dated March 6, 2020, (the Original Credit Agreement, as so amended and modified, collectively, the “Credit Agreement”), and the various other”CreditDocuments,”as such term is defined in the Credit Agreement. All terms used in this Amendment without definition shall have the respective meanings given such terms in the Credit Agreement.

Each of the Guarantors have executed and delivered to the Credit Parties a Guaranty Agreement dated as of March 15, 2018 or a Guaranty Agreement dated March 6, 2020 (collectively, the “Guaranty Agreements”) and various other Credit Documents in connection with the Credit Agreement.

The Loan Parties have requested certain accommodations under the Credit Agreement due to the disruption in their operations relating to the COVID-19 virus. The Administrative Agent and the Lenders have agreed to enter into this Amendment to provide the requested temporary relief, in each case on terms and conditions satisfactory to the Lenders as set forth herein.

NOW, THEREFORE, in consideration of the premises, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows.

AGREEMENT

Section 1. Acknowledgment and Reaffirmation of Obligations. Each of the Loan Parties acknowledges and affirms that: (a) the Credit Documents are the valid and binding obligation of each of them that is a signatory thereto; (b) the Credit Documents are enforceable in accordance with all stated terms; and (c) none of them has any defenses, claims of offset, or counterclaims against the enforcement of the Credit Documents in accordance with all stated terms.

Section 2. Amendment and Modification of Credit Agreement. The Credit Agreement is hereby amended and modified as follows:

Section 2.1. Additional Definitions. Section 1.0 I of the Credit Agreement is hereby amended to add the definitions set forth below:

“COVID-19 Governmental Financial Support Program” means, collectively, any government loan program (current or future) providing assistance with respect to COVID-19 economic disruption, including loans under the Paycheck Protection Program of the Coronavirus Aid Relief And Economic Security Act guaranteed by the U.S. Small Business Administration.

“COVID-19 Loan” means any loan borrowed by any Loan Party under any COVID-19 Governmental Financial Support Program.

“Deferment Period” means, with respect to the Term Loans and Mortgage Loans, the period commencing on April 15, 2020 through and including June 15, 2020.

“Fourth Amendment” means the Fourth Amendment to Amended and Restated Credit Agreement dated as of April _, 2020 by and among the Loan Parties, the Administrative Agent and the Lender.

Section 2.2. Temporary Suspension of Vehicle Curtailment Payments. Section 2.01.11 of the Credit Agreement is hereby amended by adding at the end thereof the following:

Notwithstanding the provisions of Sections 2.01.7, 2.01.8, and 2.01.9 above, the Lenders agree to suspend the scheduled curtailment payments ofrequired pursuant to Sections 2.01.7, 2.01.8, and 2.01.9 above for the period from April 1, 2020 through and including June 15, 2020 (the “Suspension Period”). After the Suspension Period, the Borrowers must timely resume making all required principal curtailment payments in accordance with the terms of the Credit Documents (including the payments set forth in Sections 2.01.7, 2.01.8, and 2.01.9 above above), and the scheduled curtailment payments shall be due and payable in accordance the Credit Documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the Credit Documents, demand for payment). For the avoidance of doubt, Floor Plan Unused Commitment Fees and interest on the outstanding principal balance of the Floor Plan Line of Credit will continue to accrue and be paid at the applicable rate and on terms set forth in the Credit Agreement during the Suspension Period.

Section 2.3. Principal Payment Deferral (Term Loans). Section 2.06.2 of the Credit Agreement is hereby amended to add at the end of the first paragraph the following additional paragraph:

Notwithstanding the payment terms set forth above in this Section, the Lenders agree to a suspension of scheduled principal payments required in this Section on the Term Loans during the Deferment Period. During the Deferment Period (including the Principal Payment Dates in April 2020, May 2020, and June 2020), the obligation of the applicable Borrowers to make regularly scheduled payments of principal due upon the Term Loans under the terms of the Credit Documents shall be temporarily suspended. For the avoidance of doubt, interest on the outstanding principal balances of the Term Loans will continue to accrue and be paid at the applicable interest rate under the Credit Documents during the Deferment Period. At the end of the Deferment Period, the Borrowers must resume making all required payments of principal on the Term Loans in accordance with the terms of the Credit Documents. All principal payments of the Term Loans deferred during the Deferment Period shall be due and payable on the Term Loan Maturity Date. In addition, all principal payments deferred during the Deferment Period shall be due and payable (a) as set forth above or (b) if earlier, the date all outstanding amounts are otherwise due and payable under the terms of the Credit Documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the Credit Documents, demand for payment). The Loan Parties acknowledge and agree that as a result of this temporary reduction of Term Loan payments, the outstanding balance due at the time of maturity of the Term Loans will be more than contemplated under the Credit Documents as they existed prior to the Fourth Amendment.

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Section 2.4. Addition of Section 2.06A {Mortgage Loans). Section 2.06A of the Credit Agreement is hereby amended by adding the following additional paragraph at the end of the Section numbered or intended to be numbered 2.06.IA (Payment):

Notwithstanding the payment terms set forth above in this Section, the Lenders agree to a suspension of any scheduled principal payments which are required in this Section on the Mortgage Loans during the Deferment Period, to the extent the Permanent Loan Period has begun. During the Deferment Period and to the extent the Permanent Loan Period has begun (including the Interest Payment Dates in April 2020, May 2020, and June 2020), the obligation of the applicable Borrowers to make regularly scheduled payments of principal (if any) due upon the Mortgage Loans under the terms of the Credit Documents shall be temporarily suspended. For the avoidance o(doubt. interest on the outstanding principal balances o(the Mortgage Loans will continue to accrue and be paid at the applicable interest rate under the Credit Documents during the Deferment Period. At the end of the Deferment Period, the Borrowers must resume making all required payments of principal on the Mortgage Loans which are due in accordance with the terms of this Section and the other the Credit Documents. All principal payments of the Mortgage Loans deferred during the Deferment Period shall be due and payable on the Mortgage Loan Maturity Date. In addition, all principal payments deferred during the Deferment Period shall be due and payable (a) as set forth aboveor(b) if earlier, the date all outstanding amounts are otherwise due and payable under the terms of the Credit Documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the Credit Documents, demand for payment). The Loan Parties acknowledge and agree that as a result of this temporary reduction of Mortgage Loan payments, the outstanding balance due at the time of maturity of the Mortgage Loans may be more than contemplated under the Credit Documents as they existed prior to the Fourth Amendment.

Section 2.5. Inventory Audits. Section 5.13 of the Credit Agreement is hereby amended to add at the end thereof the following additional sentence:

In the event that inventory and Collateral inspections are prohibited by any Governmental Authority in response to COVID- I9, all inventory and Collateral inspections shall be postponed until such time as the Administrative Agent or other third parties are permitted by Governmental Authorities to resume conducting such inspections.

Section 2.6. Amendment to Limitation on Indebtedness. Section 6.03 of the Credit Agreement is hereby amended to add, at the end thereof, the following clause (I): and (I) unsecured COVID-19 Loans; provided that no Loan Party that is not a borrower of a COVID-19 Loan shall be a guarantor or obligor of such COVID-19 Loan, and provided further that the aggregate principal amount of all COVID-19 Loans shall not exceed Nine Million Dollars ($9,000,000).

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Section 2.7. Limitations on Dividends and Distributions. Section 6.06 of the Credit Agreement is hereby amended by adding at the end thereof the following:

In addition to any covenants or similar restrictions in the Credit Documents, during both the Deferment Period and the Suspension Period pursuant to the Fourth Amendment, and provided no Default or Event ofDefault has occurred, none of the Loan Parties shall, directly or indirectly, (a) pay any dividends or make any distribution related to or on account of, or payment for purchase or cancellation of equity of any of the Loan Parties (including but not limited to any ordinary equity buyback activities of any of the Loan Parties), (b) increase the compensation and benefits of any shareholder, partner, owner, or principal of any Loan Party (collectively, “Owner Parties”, and each individually an “Owner Party”), and or any immediate family member of any Owner Party (collectively with the Owner Parties, the “Borrower Parties”, and each individually a “Borrower Party”), compared to the compensation and benefits paid to each such Borrower Party immediately preceding January 1, 2020, or (c) pay to or for the benefit of any Borrower Party or any entity related to or affiliated or under common control with any Loan Party or any Borrower Party, fees or other compensation other than in the ordinary course of both Loan Party’s and such person’s or entity’s businesses and in amounts commensurate with fees and charges that would be charged by unaffiliated third parties for substantially identical goods and/or services.

Section 3. Representations and Warranties. As an inducement to the Credit Parties to enter into this Amendment and to agree to the amendments and modifications set forth herein, each of the Loan Parties makes the following representations and warranties to the Credit Parties:

Section 3.1. Authority and Good Standing. Each of the Loan Parties: (a) is in good standing in the jurisdiction of its organization; (b) is duly licensed or qualified and in good standing in all jurisdictions where the property owned or leased by it or the nature of the business transacted by it makes such licensing or qualification necessary, and (c) has the power to enter into this Amendment and to perform all of its obligations hereunder. The execution, delivery, and performance of its obligations under this Amendment, the Credit Agreement, and the other Credit Documents have been authorized by all necessary organizational action of each of the Loan Parties.

Section 3.2. No Consent. No consent, approval, exemption, order or authorization of, or a registration or filing with any Governmental Authority or any other Person is required by any Law or any agreement (other than the Credit Documents) in connection with the execution and delivery of this Amendment and carrying out of the Credit Agreement and the Credit Documents, as amended.

Section 3.3. No Conflict. The execution and delivery of this Amendment by the Loan Parties and performance by the Loan Parties of their respective obligations under the Credit Agreement do not and will not (a) contravene the terms of any Loan Party’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, require any payment to be made under, or require any notice or consent (that has not been given or obtained) under (i) any contractual obligation to which such Loan Party is a party or affecting such Loan Party or the properties of such Loan Party or any of its Subsidiaries, (ii) any Organization Document of any Loan Party, or (iii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which any such Loan Party or its property is subject, or (c) violate any Law.

Section 3.4. Enforceability. This Amendment and each of the other Credit Documents to which each of the Loan Parties is a party have been duly executed and delivered by each Loan Party and constitute legal, valid and binding obligations of each of the Loan Parties enforceable in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights generally and general principles of equity.

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Section 3.5. Accuracy oflnformation. All information and data submitted by or on behalf of the Loan Parties in connection with this Amendment and the amendments and other transactions contemplated herein is true, accurate and complete in all material respects as of the date made and contains no knowingly false, incomplete or misleading statements.

Section 3.6. Pending Proceedings. There are no actions, suits, proceedings or investigations pending or, to the knowledge of any of the Loan Parties threatened, against any Loan Parties or any assets of any Loan Party, the adverse determination of which, individually or in the aggregate, could be reasonably expected to result in any Material Adverse Change. No judgments have been entered against any of the Loan Parties which would result in an Event of Default under Section 7.05 of the Credit Agreement.

Section 3.7. Events of Default. As of the Effective Date, no Defaults or Events of Default exist.

Section 4. Further Assurances. Each of the Loan Parties agrees to execute and deliver to the Administrative Agent such documents as may, from time to time, be reasonably requested by the Administrative Agent in order to amend and modify the Credit Agreement and the other Credit Documents as contemplated by this Amendment.

Section 5. No Novation: No Refinance: No Impairment of Security Interest. It is the intent ofeach of the Parties hereto that nothing contained in this Amendment shall be deemed to effect or accomplish or otherwise constitute a novation of any of the Loans or the Credit Documents or of any of the obligations owed by any of the Loan Parties to the Credit Parties or to be a refinance of any of the Obligations. This Amendment shall not release, limit or impair in any way the effectiveness and priority of the security interests, mortgages, pledges, assignments, and other Liens in the Collateral granted, described, and provided in the Credit Agreement and the other Credit Documents for the benefit of the Secured Parties as security for the Obligations, all of which security interests, mortgages, pledges, assignments, and other Liens shall continue unimpaired in full force and effect and are hereby ratified and confirmed.

Section 6. Limited Amendment. Except to the extent amended pursuant to Section 2 of this Amendment, all of the terms, covenants, conditions, and provisions of the Credit Agreement and the other Credit Documents shall remain in full force and effect and are hereby ratified and confirmed by each of the Loan Parties which is a party thereto. Nothing herein shall constitute a waiver of any provision of the Credit Agreement or any of the other Credit Documents, and each of the Loan Parties hereby ratifies and confirms all of the Credit Documents to which it is a party, after giving effect to the amendments set forth in Section 2 hereof. This Amendment shall not extend the terms of the Credit Documents or the Maturity Dates of any of the Loans or other Obligations. No failure or delay by any of the Credit Parties in the exercise or enforcement of any of their rights under the Credit Agreement or any other Credit Document shall be a waiver of such right or remedy nor shall a single or partial exercise or enforcement thereof preclude any other or further exercise or enforcement thereof or the exercise or enforcement of any other right or remedy. Any such consent or waiver must be specific and in writing to be binding upon the Credit Parties and no such consent or waiver shall constitute, unless specifically so expressed in writing by the Administrative Agent, a future consent to, or waiver of, performance or exact performance by the Loan Parties. No consent, amendment, or waiver shall constitute a course of dealing. On and after the Effective Date, this Amendment shall for all purposes constitute a Credit Document.

Section 7. Enforceability. This Amendment shall inure to the benefit of and be enforceable against each of the Parties and their respective successors and assigns.

Section 8. Reimbursement of Administrative Agent’s Expenses. The Borrowers agree to reimburse to the Administrative Agent promptly upon receipt of an invoice therefor, all Credit Party Expenses incurred by the Administrative Agent in connection with the negotiation and preparation of this Amendment, and all other expenses incurred by the Administrative Agent as of that date in connection with the consummation of the transactions and matters described herein.

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Section 9. Choice of Law: Consent to Jurisdiction: Agreement as To Venue. This Amendment shall be construed, performed and enforced and its validity and enforceability determined in accordance with the Laws of the State ofNew York (“Governing State”). Sections 10.20 (captioned “Jurisdiction”), 10.21 (captioned “Venue”), and 10.22 (captioned “Service of Process) of the Credit Agreement are incorporated herein by reference and each of the Loan Parties hereby agrees to all such terms.

Section 10. RELEASE. IN ORDER TO INDUCE THE ADMINISTRATIVE AGENT AND THE LENDERS TO ENTER INTO THIS AMENDMENT, EACH OF THE LOAN PARTIES FOREVER RELEASES AND DISCHARGES THE ADMINISTRATIVE AGENT AND THE LENDERS AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS (COLLECTIVELY, THE “RELEASED PARTIES”) FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, SUITS AND DAMAGES (INCLUDING CLAIMS FOR ATTORNEYS’ FEES AND COSTS), ARISING OUT OF A COMMISSION OR OMISSION OF THE ADMINISTRATIVE AGENT OR THE LENDERS EXISTING OR OCCURRING ON OR PRIOR TO THE EFFECTIVE DATE, WHICH ANY OF THE LOAN PARTIES, JOINTLY OR SEVERALLY, EVER HAD OR MAY NOW HAVE AGAINST ANY OF THE RELEASED PARTIES FOR ANY SUCH CLAIMS ARISING OUT OF OR RELATED IN ANY WAY TO THE OBLIGATIONS, THE CREDIT DOCUMENTS, THIS AMENDMENT, OR THE ADMINISTRATION THEREOF, WHETHER KNOWN OR UNKNOWN, INCLUDING BUT NOT LIMITED TO ANY AND ALL SUCH CLAIMS BASED UPON OR RELYING ON ANY ALLEGATIONS OR ASSERTIONS OF DURESS, ILLEGALITY, UNCONSCIONABILITY, BAD FAITH, BREACH OF CONTRACT, REGULATORY VIOLATIONS, NEGLIGENCE, MISCONDUCT, OR ANY OTHER TORT, CONTRACTOR REGULATORY CLAIM OF ANY KIND OR NATURE. THIS RELEASE IS INTENDED TO BE FINAL AND IRREVOCABLE AND IS NOT SUBJECT TO THE SATISFACTION OF ANY CONDITIONS OF ANY KIND.

Section 11. Counterparts and Delivery. This Amendment may be executed and delivered in counterparts, (and by different Parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Amendment electronically or via facsimile shall be just as effective as the delivery of a manually executed counterpart of this Amendment. Further, each person executing this letter agrees that the electronic signatures, whether pdf, scanned, digital, encrypted, captured or otherwise attached or imposed hereto, are intended to authenticate this Amendment and to have the same force and effect of manual signatures. By signing below, each person, in their individual capacity, executing this letter represents and warrants to and covenants to the Credit Parties that said signer is executing this Amendment on behalf of a Borrower or Guarantor and is duly authorized and empowered to do so and to bind such Borrower and/or Guarantor to the terms hereof.

Section 12. Waiver of Jury Trial. All Parties to this Amendment waive the right to a trial by jury in any action brought to enforce or construe this Amendment or which otherwise arises out of or relates to this Amendment or the transactions contemplated herein.

[Signatures Begin On The Following Page]

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Signature Page to Fourth Amendment to Credit Agreement:

IN WITNESS WHEREOF, the Parties have executed this Amendment with the specific intention of creating a document under seal to be effective as of the date first above written.

BORROWERS:

LDRV HOLDINGS CORP.,

a Delaware corporation

By:
Name:	N. J. TOMASHOT
Title:	CFO

LAZYDAYS RV AMERICA, LLC,

LAZYDAYS RV DISCOUNT, LLC,

LAZYDA YS MILE HI RV, LLC,

LAZYDA YS OF MINNEAPOLIS LLC,

LORY OF TENNESSEE LLC, and

LAZYDA YS OF CENTRAL FLORIDA, LLC,

LONE STAR ACQUISITION, LLC,

Authorized to do business in Texas under the name

LONE ST AR LAND OF HOUSTON, LLC,

LONE ST AR DIVERSIFIED , LLC,

Each a Delaware limited liability company

By:	LDRV Holdings Corp.,
	a Delaware corporation,
	its Manager

By:
Name:	N. J. TOMASHOT
Title:	CFO

EX-31.1

EXHIBIT 31.1

CERTIFICATION

PURSUANT TO RULE 13a-14 AND 15d-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, William P. Murnane, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Lazydays Holdings, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2020	/s/ WILLIAM P. MURNANE
	William P. Murnane
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

PURSUANT TO RULE 13a-14 AND 15d-14

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Nicholas Tomashot, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Lazydays Holdings, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 8, 2020	/s/ NICHOLAS TOMASHOT
	Nicholas J. Tomashot
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Lazydays Holdings, Inc. (the “Company”) for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William P. Murnane, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ WILLIAM P. MURNANE

William P. Murnane

Chief Executive Officer

Date: May 8, 2020

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Lazydays Holdings, Inc. (the “Company”) for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nicholas Tomashot, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1)	the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ NICHOLAS TOMASHOT

NICHOLAS J. TOMASHOT

Chief Financial Officer

Date: May 8, 2020

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Inventories (Tables)

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consist of the following:

	As of			As of
	March 31, 2020			December 31, 2019
	(Unaudited)
New recreational vehicles	$	121,357		$	124,096
Pre-owned recreational vehicles		31,828			36,639
Parts, accessories and other		4,009			3,848
		157,194			164,583
Less: excess of current cost over LIFO		(3,910	)		(3,719	)
	$	153,284		$	160,864

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Schedule of Warrants Activity

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, 2020		4,677,458	$	11.50
Granted		-	$	-
Cancelled or Expired		-	$	-
Exercised		-	$	-
Warrants outstanding March 31, 2020		4,677,458	$	11.50

Schedule of Stock Option Activity

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, 2020		3,798,818	$	10.63
Granted		225,000	$	8.50
Cancelled or terminated		-	$	-
Exercised		-	$	-
Options outstanding at March 31, 2020		4,023,818	$	10.51		3.3	$	-
Options vested at March 31, 2020		97,554	$	8.08		3.6	$	-

Schedule of Fair Value Assumptions of Awards

	For the three months ended March 31, 2020
Risk free interest rate		0.43	%
Expected term (years)		3.75
Expected volatility		55	%
Expected dividends		0.00	%

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Significant Accounting Policies

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the 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, 2019 and 2018 and for the years then ended, included in the Annual Report on Form 10-K filed with the SEC on March 20, 2020. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Holdings, Lazydays RV and its wholly owned subsidiary LDRV Holdings Corp. LDRV Holdings Corp is the sole owner of Lazydays Land Holdings, LLC, Lazydays Tampa Land Holdings, LLC, Lazydays RV America, LLC, Lazydays RV Discount, LLC, Lazydays Mile Hi RV, LLC, LDRV of Tennessee LLC, Lazydays of Minneapolis LLC, Lazydays of Central Florida, LLC, Lone Star Acquisition LLC, Lone Star Diversified LLC, LDRV Acquisition Corp of Nashville LLC, and LDRV of Nashville LLC (collectively, the “Company”, “Lazydays” or “Successor”). All significant inter-company accounts and transactions have been eliminated in consolidation.

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.

Revenues are recognized when control of the promised goods or services is transferred to the customers at the expected amount the Company is entitled to for such goods and services. Taxes collected on revenue producing transactions are excluded from revenue in the condensed consolidated statements of income. The following table represents the Company’s disaggregation of revenue:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
New vehicle revenue	$	102,444	$	97,812
Preowned vehicle revenue		64,744		54,822
Parts, accessories, and related services		10,765		8,775
Finance and insurance revenue		11,272		9,715
Campground, rental, and other revenue		1,629		1,933
	$	190,854	$	173,057

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 income.

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 income. Campground revenue is also recognized over the time period of use of the campground.

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, less the additions to the charge-back allowance, which is included in other revenue as follows (unaudited):

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Gross finance and insurance revenues	$	12,583		$	10,678
Additions to charge-back allowance		(1,311	)		(963	)
Net Finance Revenue	$	11,272		$	9,715

The Company has an accrual for charge-backs which totaled $4,694 and $4,221 at March 31, 2020 and December 31, 2019, 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 three months ended March 31, 2020, $1,374 of contract liabilities as of December 31, 2019 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 $3,910 and $3,719 as of March 31, 2020 and December 31, 2019, respectively.

Cumulative Redeemable Convertible Preferred Stock

The Company’s Series A Preferred Stock (See Note 10 – Preferred Stock) is cumulative redeemable convertible preferred stock. Accordingly, it is classified as temporary equity and is shown net of issuance costs and the relative fair value of warrants issued in conjunction with the issuance of the Series A Preferred Stock. Unpaid preferred dividends are accumulated, compounded at each quarterly dividend date and presented within the carrying value of the Series A Preferred Stock until a dividend is declared by the 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 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of income based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite or derived service period. In accordance with ASC 718, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of income.

Earnings Per Share

The Company computes basic and diluted earnings/(loss) per share (“EPS”) by dividing net earnings/(loss) by the weighted average number of shares of common stock outstanding during the period.

The Company is required, in periods in which it has net income, to calculate EPS using the two-class method. The two-class method is required because the Company’s Series A Preferred Stock have the right to receive dividends or dividend equivalents should the Company declare dividends on its common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the common and preferred stockholders. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate basic EPS for each class of shares.

In periods in which the Company has a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the preferred stock does not participate in losses.

The following table summarizes net income attributable to common stockholders used in the calculation of basic and diluted income per common share:

(Dollars in thousands - except share and per share amounts)	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Distributed earnings allocated to common stock	$	-	$	-
Undistributed earnings allocated to common stock		799		409
Net earnings allocated to common stock		799		409
Net earnings allocated to participating securities		544		251
Net earnings allocated to common stock and participating securities	$	1,343	$	660
Weighted average shares outstanding for basic earnings per common share		9,757,036		9,695,234
Dilutive effect of warrants and options		-		-
Weighted average shares outstanding for diluted earnings per share computation		9,757,036		9,695,234
Basic income per common share	$	0.08	$	0.04
Diluted income per common share	$	0.08	$	0.04

For the three months ended March 31, 2020 and March 31, 2019, the denominator of the basic and dilutive EPS was calculated as follows:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Weighted average outstanding common shares		8,417,537		8,355,735
Weighted average shares held in escrow		-		-
Weighted average prefunded warrants		1,339,499		1,339,499
Weighted shares outstanding - basic and diluted		9,757,036		9,695,234

For the three months ended March 31, 2020 and March 31, 2019, the following common stock equivalent shares were excluded from the computation of the diluted income per share, since their inclusion would have been anti-dilutive:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Shares underlying Series A Convertible Preferred Stock		-		-
Shares underlying warrants		4,677,458		4,677,458
Stock options		3,798,818		3,823,421
Share equivalents excluded from EPS		8,476,276		8,500,879

As of March 31, 2020, the Company did not declare and pay the dividend. As a result, the Series A Convertible Preferred Stock was convertible into 6,713,367 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 $4,359 and $3,920 for the three months ended March 31, 2020 and March 31, 2019, 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.

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 three months ended March 31, 2020, four major manufacturers accounted for 28.8%, 23.7%, 18.4% and 17.1% of RV purchases.

During the three months ended March 31, 2019, four major manufacturers accounted for 43.6%, 19.0%, 16.4% and 11.0% 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 the Florida locations and the Colorado locations, which generate greater than 10% of revenues, were as follows (unaudited):

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Florida		75	%		75	%
Colorado		11	%		10	%

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 March 31, 2020 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 any recognized or non-recognized subsequent events that would require disclosure in the condensed consolidated financial statements other than disclosed below.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and globally. The Company is monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance of this quarterly report on Form 10-Q, the impact could not be determined.

Due to the COVID-19 pandemic, the Company took a number of actions effective April 6, 2020 to adjust resources and costs to align with reduced demand caused by the pandemic. These actions include:

● Reduction of its workforce by 25%;

● Senior management will forgo 25% of their salary;

● Suspend 2020 annual pay increases;

● Suspend 401k match;

● Delay non-critical capital projects;

● Focus resources on core sales and service operations

In order to further mitigate the effects of the COVID-19 pandemic, the Company entered into the Fourth Amendment to the M&T credit agreement on April 16, 2020. Pursuant to the Fourth Amendment, the parties agreed to a suspension of scheduled principal payments on the term loans and mortgage loans (to the extent the permanent loan period has begun for the mortgage loans) for the period from April 15, 2020 through June 15, 2020. Interest on the outstanding principal balances of the term loans and mortgage loans will continue to accrue and be paid at the applicable interest rate during the deferment period. At the end of the deferment period, the borrowers will resume making all required payments of principal on the term loans and mortgage loans. All principal payments of the term loans and mortgage loans deferred during the deferment period will be due and payable on the term loan maturity date or the mortgage loan maturity date, as applicable. Additionally, all principal payments deferred during the deferment period will be due and payable (a) as described above or (b) if earlier, the date all outstanding amounts are otherwise due and payable under the terms of the credit documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the credit documents, demand for payment). In addition, the amendment includes a temporary suspension of scheduled curtailment payments required by the credit agreement for the period from April 1, 2020 through June 15, 2020. Amounts related to floor plan unused commitment fees and interest on the outstanding principal balance of the M&T Floor Plan Line of Credit (as defined below) will continue to accrue and be paid at the applicable rate and on the terms set forth in the credit agreement during the suspension period.

In response to continued economic uncertainty caused by the COVID-19 pandemic, subsidiaries of Lazydays Holdings, Inc. took the additional step of applying for loans (“PPP Loans”) under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) with M&T Bank (the “Lender”). On April 28, 2020, certain of the Company’s subsidiaries executed promissory notes (the “Notes”) in favor of the Lender for PPP Loans in an aggregate amount of $6,831,250. Pursuant to the Notes, such PPP Loans will bear interest at a rate of 1.0% per year and will mature on April 28, 2022. Commencing on November 28, 2020, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date. The PPP Loans are unsecured and are non-recourse obligations. The Notes provide for customary events of default, and the PPP Loans may be accelerated upon the occurrence of an event of default. All or a portion of the PPP Loans may be forgiven upon application to the Lender for payroll and certain other costs incurred during the 8-week period beginning on the date each PPP Loan is disbursed, in accordance with the requirements and limitations under the CARES Act. The amount of the PPP Loan eligible for forgiveness will be reduced if the Company terminates employees or reduces salaries during the 8-week period. While the Company’s subsidiaries intend to use the entire amount of the PPP Loans for qualifying expenses, no assurance can be provided that forgiveness of any portion of the PPP Loans will be obtained. Applications were submitted by other subsidiaries of the Company, which resulted in the execution of a promissory note on April 30, 2020 for $1,236,040 and on May 4, 2020 for $636,665. The interest rate on the notes is 1.0% per year and the notes mature on April 30, 2022 and May 4, 2022, respectively. Commencing on November 30, 2020 and December 4, 2020, respectively, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date.

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 (“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.

Leases

Adoption of new lease standard

In February 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet, including leases classified as operating leases, and disclose qualitative and quantitative information about leasing arrangements. The FASB subsequently issued additional amendments to address issues arising from the implementation of the new lease standard. We adopted this standard as of January 1, 2020, using the modified-retrospective method. This approach provides a method for recording existing leases at adoption. We used the adoption date as our date of initial application, and thus comparative-period financial information is not presented for periods prior to the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed the Company to carry forward the historical lease classification.

Adoption of the new standard resulted in total operating lease liabilities of $17,800 and operating lease assets of $17,800 as of January 1, 2020. The standard did not materially impact our Condensed Consolidated Statements of Income and had no impact on our Condensed Consolidated Statements of Cash Flows. Our accounting policies under the new standard are described below. See Note 6, Leases.

Lease recognition

At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as either operating or financing.

Operating lease assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date and lease liability amounts are based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Because most of our leases do not provide information to determine an implicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments. Operating lease assets also include any lease payments made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with both lease and non-lease components, which are generally accounted for together as a single lease component.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 06, 2020
Document And Entity Information
Entity Registrant Name	Lazydays Holdings, Inc.
Entity Central Index Key	0001721741
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity's Reporting Status Current	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		8,506,666
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020

XML

Condensed Consolidated Statements of Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Statement [Abstract]
Adjustments to LIFO reserve	$ 195	$ 247

XML

Income Taxes (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Provision for federal and state income taxes	$ 1,300	$ 1,185
Effective tax rates, percentage	30.00%	39.00%
Federal statutory rate, percentage	21.00%

XML

Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Leases [Abstract]
Remaining nine month ending December 31, 2020	$ 3,081
2021	3,820
2022	3,450
2023	3,312
2024	2,557
Thereafter	4,116
Total lease payments	20,336
Less: Imputed Interest	2,767
Present value of lease liabilities	$ 17,569

XML

Stockholders' Equity - Schedule of Stock Option Activity (Details)	3 Months Ended
	Mar. 31, 2020 USD ($) $ / shares shares
Equity [Abstract]
Shares of Common Stock Underlying Options, outstanding, January 1, 2019 | shares	3,798,818
Shares of Common Stock Underlying Options, Granted | shares	225,000
Shares of Common Stock Underlying Options, Cancelled or terminated | shares
Shares of Common Stock Underlying Options, Exercised | shares
Shares of Common Stock Underlying Options, outstanding, December 31, 2019 | shares	4,023,818
Shares of Common Stock Underlying Options, vested, December 31, 2019 | shares	97,554
Weighted Average Exercise Price outstanding, January 01, 2019 | $ / shares	$ 10.63
Weighted Average Exercise Price, Granted | $ / shares	8.50
Weighted Average Exercise Price, Cancelled or terminated | $ / shares
Weighted Average Exercise Price, Exercised | $ / shares
Weighted Average Exercise Price outstanding, December 31, 2019 | $ / shares	10.51
Weighted Average Exercise Price, vested, December 31, 2019 | $ / shares	$ 8.08
Weighted Average Remaining Contractual Life outstanding, December 31, 2019	3 years 3 months 19 days
Weighted Average Remaining Contractual Life, vested, December 31, 2019	3 years 7 months 6 days
Aggregate Intrinsic Value, outstanding, January 1, 2019 | $
Aggregate Intrinsic Value, vested, December 31, 2019 | $

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Business Combination - Schedule of Goodwill Associated with Merger (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Mar. 31, 2020
Goodwill	$ 38,979	$ 38,979
Acquisition of Dealership [Member]
Total consideration	5,506
Less net assets acquired	3,254
Goodwill	$ 2,252

XML

Significant Accounting Policies - Schedule of Geographic Concentration Risk Percentage (Details)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Florida [Member]
Statement Line Items [Line Items]
Concentration risk percentage	75.00%	75.00%
Colorado [Member]
Statement Line Items [Line Items]
Concentration risk percentage	11.00%	10.00%

XML

Business Combination

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Business Combination

NOTE 3 – BUSINESS COMBINATION 

Acquisitions of Dealerships

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).

The Company accounted for the asset purchase agreement as a business combination using the purchase method of accounting as it was determined that Alliance constituted a business. As a result, the Company determined its preliminary allocation of the fair value of the assets acquired and the liabilities assumed for Alliance as follows:

	2019
Inventories	$	12,171
Accounts receivable and prepaid expenses		53
Property and equipment		77
Intangible assets		2,630
Total assets acquired		14,931
Accounts payable, accrued expenses and other current liabilities		243
Floor plan notes payable		11,434
Total liabilities assumed		11,677
Net assets acquired	$	3,254

		2019
Purchase Price:	$	2,568
Cash consideration paid		(107	)
Amounts due (from) to former owners
Note payable issued to former owners		3,045
	$	5,506

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 Alliance. Goodwill associated with the transaction is detailed below:

	2019
Total consideration	$	5,506
Less net assets acquired		3,254
Goodwill	$	2,252

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 in 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 $14.0 million in revenue and $0.7 million in net income prior to income taxes during the period from January 1, 2020 to March 31, 2020 related to this acquisitions.

Pro Forma Information

The following unaudited pro forma financial information summarizes the combined results of operations for the Company as though the purchase of Alliance had been consummated on January 1, 2019.

	For the three months ended March 31,
	2020		2019
Revenue	$	190,854	$	186,076
Income before income taxes	$	4,287	$	3,729
Net income	$	2,987	$	2,397

The Company adjusted the combined income of Lazydays RV with Alliance and adjusted net 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 income.

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Debt

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Debt

NOTE 7 – 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.

On March 15, 2018, the Company repaid $96,740 outstanding under the BOA floor plan notes payable and $8,820 outstanding under the BOA term loan with the proceeds of the M&T Facility.

On March 6, 2020, the Company entered into the Third Amendment and Joinder to Credit Agreement (“Third Amendment”) on the M&T Facility. Pursuant to the Third Amendment, Lone Star Land of Houston, LLC (the "Mortgage Loan Borrower") and Lone Star Diversified, LLC (“Diversified"), wholly owned subsidiaries of LDRV, became parties to the Credit Agreement and were identified as Additional Loan Parties. The existing borrowers and guarantors also requested that the lenders provide a mortgage loan credit facility in the aggregate principal amount of acquisition, construction, and permanent mortgage financing for a property acquired by the Mortgage Loan Borrower. The mortgage loans maximum borrowing amount is $6,136. The mortgage shall bear interest at (a) LIBOR plus an applicable margin of 2.25% or (b) the Base Rate plus a margin of 1.25%. The mortgage requires monthly payments of principal of $0.03 million and matures on March 15, 2021 when all remaining principal and accrued interest payments become due. As of March 31, 2020, the mortgage balance was $5,006 and the interest rate was 3.312%.

As of March 31, 2020, 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 March 31, 2020 and taking into account the effect of the Third Amendment to the Credit Agreement entered into on March 6, 2020, the maximum amount of cash dividends that the Company could make from legally available funds to its stockholders was limited to an aggregate of $9,886 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 March 31, 2020, the interest rate on the M&T Floor Plan Line of Credit was approximately 2.989%.

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

	As of March 31, 2020			As of December 31, 2019
	(Unaudited)
Floor plan notes payable, gross	$	133,577		$	144,133
Debt discount		(152	)		(184	)
Floor plan notes payable, net of debt discount	$	133,425		$	143,949

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.  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 March 31, 2020, there was $14,200 outstanding under the M&T Term Loan. As of March 31, 2020, the interest rate on the M&T Term Loan was approximately 3.25%.

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 three month period ended March 31, 2020, there were no outstanding borrowings under the M&T Revolver.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Stockholders' Equity

NOTE 11 – 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 10 – Preferred Stock, for additional information associated with the Series A Preferred Stock.

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 March 31, 2020, 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 months ended March 31, 2020, the Company recorded $38 of stock based compensation related to the ESPP.

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, 2020		4,677,458	$	11.50
Granted		-	$	-
Cancelled or Expired		-	$	-
Exercised		-	$	-
Warrants outstanding March 31, 2020		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, 2020		3,798,818	$	10.63
Granted		225,000	$	8.50
Cancelled or terminated		-	$	-
Exercised		-	$	-
Options outstanding at March 31, 2020		4,023,818	$	10.51		3.3	$	-
Options vested at March 31, 2020		97,554	$	8.08		3.6	$	-

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 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 into 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.

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 $554 during the three month period ended March 31, 2020 and $1,470 during the three month period ended March 31, 2019, which is included in operating expenses in the condensed consolidated statements of income.

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 vest over three years with one-third vesting on each of the respective anniversary dates. On May 31, 2018, a 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 year ended December 31, 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 a 3.75 year expected life, a risk free rate of 1.70%-2.51%, an annual dividend yield of 0% and an annual volatility of 52%-55%.

During the three months ended March 31, 2020, stock options to purchase 225,000 shares of common stock were issued to employees. The options have an exercise price of $8.50. The options had a five year life and a four year vesting period. The fair value of the awards of $145 was determined using the Black-Scholes option pricing model based on the following range of assumptions:

	For the three months ended March 31, 2020
Risk free interest rate		0.43	%
Expected term (years)		3.75
Expected volatility		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 recorded for awards with service conditions was $88 from the three month period ended March 31, 2020 and $44 during the three month period ended March 31, 2019, which is included in operating expenses in the condensed consolidated statements of income.

As of March 31, 2020, total unrecorded compensation cost related to all non-vested awards was $1,682 which is expected to be amortized over a weighted average service period of approximately 2.09 years. The weighted average grant date fair value of awards issued during to the three months ended March 31, 2020 was $0.65 per share.

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Stockholders' Equity - Schedule of Fair Value Assumptions of Awards (Details)	3 Months Ended
	Mar. 31, 2020
Equity [Abstract]
Risk free interest rate	0.43%
Expected term (years)	3 years 9 months
Expected volatility	55.00%
Expected dividends	0.00%

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Business Combination - Schedule of Fair Value of Consideration Paid (Details) - Acquisition of Dealership [Member] $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Purchase Price:	$ 2,568
Cash consideration paid	(107)
Amounts due (from) former owners
Note payable issued to former owners	3,045
Total consideration	$ 5,506

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Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share equivalents excluded from EPS	8,476,276	8,500,879
Series A Convertible Preferred Stock [Member]
Share equivalents excluded from EPS
Warrants [Member]
Share equivalents excluded from EPS	4,677,458	4,677,458
Stock Options [Member]
Share equivalents excluded from EPS	3,798,818	3,823,421

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

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, 2019 and 2018 and for the years then ended, included in the Annual Report on Form 10-K filed with the SEC on March 20, 2020. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Holdings, Lazydays RV and its wholly owned subsidiary LDRV Holdings Corp. LDRV Holdings Corp is the sole owner of Lazydays Land Holdings, LLC, Lazydays Tampa Land Holdings, LLC, Lazydays RV America, LLC, Lazydays RV Discount, LLC, Lazydays Mile Hi RV, LLC, LDRV of Tennessee LLC, Lazydays of Minneapolis LLC, Lazydays of Central Florida, LLC, Lone Star Acquisition LLC, Lone Star Diversified LLC, LDRV Acquisition Corp of Nashville LLC, and LDRV of Nashville LLC (collectively, the “Company”, “Lazydays” or “Successor”). All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of Estimates in the Preparation of Financial Statements

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

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.

Revenues are recognized when control of the promised goods or services is transferred to the customers at the expected amount the Company is entitled to for such goods and services. Taxes collected on revenue producing transactions are excluded from revenue in the condensed consolidated statements of income. The following table represents the Company’s disaggregation of revenue:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
New vehicle revenue	$	102,444	$	97,812
Preowned vehicle revenue		64,744		54,822
Parts, accessories, and related services		10,765		8,775
Finance and insurance revenue		11,272		9,715
Campground, rental, and other revenue		1,629		1,933
	$	190,854	$	173,057

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 income.

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 income. Campground revenue is also recognized over the time period of use of the campground.

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, less the additions to the charge-back allowance, which is included in other revenue as follows (unaudited):

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Gross finance and insurance revenues	$	12,583		$	10,678
Additions to charge-back allowance		(1,311	)		(963	)
Net Finance Revenue	$	11,272		$	9,715

The Company has an accrual for charge-backs which totaled $4,694 and $4,221 at March 31, 2020 and December 31, 2019, 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 three months ended March 31, 2020, $1,374 of contract liabilities as of December 31, 2019 were recognized in revenue.

Inventories

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 $3,910 and $3,719 as of March 31, 2020 and December 31, 2019, respectively.

Cumulative Redeemable Convertible Preferred Stock

Cumulative Redeemable Convertible Preferred Stock

The Company’s Series A Preferred Stock (See Note 10 – Preferred Stock) is cumulative redeemable convertible preferred stock. Accordingly, it is classified as temporary equity and is shown net of issuance costs and the relative fair value of warrants issued in conjunction with the issuance of the Series A Preferred Stock. Unpaid preferred dividends are accumulated, compounded at each quarterly dividend date and presented within the carrying value of the Series A Preferred Stock until a dividend is declared by the board of directors.

Stock Based Compensation

Stock Based Compensation

The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation. ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of income based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite or derived service period. In accordance with ASC 718, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of income.

Earnings Per Share

Earnings Per Share

The Company computes basic and diluted earnings/(loss) per share (“EPS”) by dividing net earnings/(loss) by the weighted average number of shares of common stock outstanding during the period.

The Company is required, in periods in which it has net income, to calculate EPS using the two-class method. The two-class method is required because the Company’s Series A Preferred Stock have the right to receive dividends or dividend equivalents should the Company declare dividends on its common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the common and preferred stockholders. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate basic EPS for each class of shares.

In periods in which the Company has a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the preferred stock does not participate in losses.

The following table summarizes net income attributable to common stockholders used in the calculation of basic and diluted income per common share:

(Dollars in thousands - except share and per share amounts)	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Distributed earnings allocated to common stock	$	-	$	-
Undistributed earnings allocated to common stock		799		409
Net earnings allocated to common stock		799		409
Net earnings allocated to participating securities		544		251
Net earnings allocated to common stock and participating securities	$	1,343	$	660
Weighted average shares outstanding for basic earnings per common share		9,757,036		9,695,234
Dilutive effect of warrants and options		-		-
Weighted average shares outstanding for diluted earnings per share computation		9,757,036		9,695,234
Basic income per common share	$	0.08	$	0.04
Diluted income per common share	$	0.08	$	0.04

For the three months ended March 31, 2020 and March 31, 2019, the denominator of the basic and dilutive EPS was calculated as follows:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Weighted average outstanding common shares		8,417,537		8,355,735
Weighted average shares held in escrow		-		-
Weighted average prefunded warrants		1,339,499		1,339,499
Weighted shares outstanding - basic and diluted		9,757,036		9,695,234

For the three months ended March 31, 2020 and March 31, 2019, the following common stock equivalent shares were excluded from the computation of the diluted income per share, since their inclusion would have been anti-dilutive:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Shares underlying Series A Convertible Preferred Stock		-		-
Shares underlying warrants		4,677,458		4,677,458
Stock options		3,798,818		3,823,421
Share equivalents excluded from EPS		8,476,276		8,500,879

As of March 31, 2020, the Company did not declare and pay the dividend. As a result, the Series A Convertible Preferred Stock was convertible into 6,713,367 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 Costs

Advertising and promotion costs are charged to operations in the period incurred. Advertising and promotion costs totaled approximately $4,359 and $3,920 for the three months ended March 31, 2020 and March 31, 2019, respectively.

Income Taxes

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.

Seasonality

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

Vendor Concentrations

The Company purchases its new recreational vehicles and replacement parts from various manufacturers. During the three months ended March 31, 2020, four major manufacturers accounted for 28.8%, 23.7%, 18.4% and 17.1% of RV purchases.

During the three months ended March 31, 2019, four major manufacturers accounted for 43.6%, 19.0%, 16.4% and 11.0% 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

Geographic Concentrations

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

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Florida		75	%		75	%
Colorado		11	%		10	%

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

Subsequent Events

Management of the Company has analyzed the activities and transactions subsequent to March 31, 2020 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 any recognized or non-recognized subsequent events that would require disclosure in the condensed consolidated financial statements other than disclosed below.

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and globally. The Company is monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance of this quarterly report on Form 10-Q, the impact could not be determined.

Due to the COVID-19 pandemic, the Company took a number of actions effective April 6, 2020 to adjust resources and costs to align with reduced demand caused by the pandemic. These actions include:

● Reduction of its workforce by 25%;

● Senior management will forgo 25% of their salary;

● Suspend 2020 annual pay increases;

● Suspend 401k match;

● Delay non-critical capital projects;

● Focus resources on core sales and service operations

In order to further mitigate the effects of the COVID-19 pandemic, the Company entered into the Fourth Amendment to the M&T credit agreement on April 16, 2020. Pursuant to the Fourth Amendment, the parties agreed to a suspension of scheduled principal payments on the term loans and mortgage loans (to the extent the permanent loan period has begun for the mortgage loans) for the period from April 15, 2020 through June 15, 2020. Interest on the outstanding principal balances of the term loans and mortgage loans will continue to accrue and be paid at the applicable interest rate during the deferment period. At the end of the deferment period, the borrowers will resume making all required payments of principal on the term loans and mortgage loans. All principal payments of the term loans and mortgage loans deferred during the deferment period will be due and payable on the term loan maturity date or the mortgage loan maturity date, as applicable. Additionally, all principal payments deferred during the deferment period will be due and payable (a) as described above or (b) if earlier, the date all outstanding amounts are otherwise due and payable under the terms of the credit documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the credit documents, demand for payment). In addition, the amendment includes a temporary suspension of scheduled curtailment payments required by the credit agreement for the period from April 1, 2020 through June 15, 2020. Amounts related to floor plan unused commitment fees and interest on the outstanding principal balance of the M&T Floor Plan Line of Credit (as defined below) will continue to accrue and be paid at the applicable rate and on the terms set forth in the credit agreement during the suspension period.

In response to continued economic uncertainty caused by the COVID-19 pandemic, subsidiaries of Lazydays Holdings, Inc. took the additional step of applying for loans (“PPP Loans”) under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) with M&T Bank (the “Lender”). On April 28, 2020, certain of the Company’s subsidiaries executed promissory notes (the “Notes”) in favor of the Lender for PPP Loans in an aggregate amount of $6,831,250. Pursuant to the Notes, such PPP Loans will bear interest at a rate of 1.0% per year and will mature on April 28, 2022. Commencing on November 28, 2020, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date. The PPP Loans are unsecured and are non-recourse obligations. The Notes provide for customary events of default, and the PPP Loans may be accelerated upon the occurrence of an event of default. All or a portion of the PPP Loans may be forgiven upon application to the Lender for payroll and certain other costs incurred during the 8-week period beginning on the date each PPP Loan is disbursed, in accordance with the requirements and limitations under the CARES Act. The amount of the PPP Loan eligible for forgiveness will be reduced if the Company terminates employees or reduces salaries during the 8-week period. While the Company’s subsidiaries intend to use the entire amount of the PPP Loans for qualifying expenses, no assurance can be provided that forgiveness of any portion of the PPP Loans will be obtained. Applications were submitted by other subsidiaries of the Company, which resulted in the execution of a promissory note on April 30, 2020 for $1,236,040 and on May 4, 2020 for $636,665. The interest rate on the notes is 1.0% per year and the notes mature on April 30, 2022 and May 4, 2022, respectively. Commencing on November 30, 2020 and December 4, 2020, respectively, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date.

Reclassifications

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

Recently Issued Accounting Standards

The Company qualifies as an emerging growth company pursuant to the provision of the Jumpstart Our Business Startups (“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.

Leases

Leases

Adoption of new lease standard

In February 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet, including leases classified as operating leases, and disclose qualitative and quantitative information about leasing arrangements. The FASB subsequently issued additional amendments to address issues arising from the implementation of the new lease standard. We adopted this standard as of January 1, 2020, using the modified-retrospective method. This approach provides a method for recording existing leases at adoption. We used the adoption date as our date of initial application, and thus comparative-period financial information is not presented for periods prior to the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed the Company to carry forward the historical lease classification.

Adoption of the new standard resulted in total operating lease liabilities of $17,800 and operating lease assets of $17,800 as of January 1, 2020. The standard did not materially impact our Condensed Consolidated Statements of Income and had no impact on our Condensed Consolidated Statements of Cash Flows. Our accounting policies under the new standard are described below. See Note 6, Leases.

Lease recognition

At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as either operating or financing.

Operating lease assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date and lease liability amounts are based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Because most of our leases do not provide information to determine an implicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments. Operating lease assets also include any lease payments made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with both lease and non-lease components, which are generally accounted for together as a single lease component.

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Inventories

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Inventories

NOTE 4 – INVENTORIES

Inventories consist of the following:

	As of			As of
	March 31, 2020			December 31, 2019
	(Unaudited)
New recreational vehicles	$	121,357		$	124,096
Pre-owned recreational vehicles		31,828			36,639
Parts, accessories and other		4,009			3,848
		157,194			164,583
Less: excess of current cost over LIFO		(3,910	)		(3,719	)
	$	153,284		$	160,864

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Income Taxes

3 Months Ended

Mar. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 8 – INCOME TAXES

The Company recorded a provision for federal and state income taxes of $1,300 for the three months ended March 31, 2020 and $1,185 for the three months ended March 31, 2019 which represent effective tax rates of approximately 30% and 39%, 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.

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Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2020

Payables and Accruals [Abstract]

Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities

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

	As of		As of
	March 31,		December 31,
	2020		2019
	(Unaudited)
Accounts payable	$	10,024	$	11,231
Other accrued expenses		3,838		3,392
Customer deposits		3,161		2,267
Accrued compensation		3,640		2,388
Accrued charge-backs		4,694		4,221
Accrued interest		292		356
Total	$	25,649	$	23,855

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Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands				3 Months Ended		12 Months Ended
	May 04, 2020	Apr. 30, 2020	Apr. 28, 2020	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Jan. 02, 2020
Accrued charge-backs				$ 4,694		$ 4,221
Contract liabilities				1,374
LIFO inventory value exceeds				3,910		3,719
Advertising and promotion costs				$ 4,359		3,920
Reduction in workforce percentage				25.00%
Base salary percentage				25.00%
Operating lease liability				$ 17,569
Operating lease, right-of-use asset				$ 17,953
ASU 2016-02 (Topic 842) [Member]
Operating lease liability							$ 17,800
Operating lease, right-of-use asset							$ 17,800
Subsequent Event [Member]
Promissory notes aggregate amount	$ 636,665	$ 1,236,040	$ 6,831,250
Note bear interest rate, percent	1.00%	1.00%	1.00%
Note maturity date	May 04, 2022	Apr. 30, 2022	Apr. 28, 2022
Vendor 1 [Member]
Concentration risk, percentage				28.80%	43.60%
Vendor 2 [Member]
Concentration risk, percentage				23.70%	19.00%
Vendor 3 [Member]
Concentration risk, percentage				18.40%	16.40%
Vendor 4 [Member]
Concentration risk, percentage				17.10%	11.00%
Series A Convertible Preferred Stock [Member]
Convertible preferred stock converted into common stock				6,713,367

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues
New and pre-owned vehicles	$ 167,188	$ 152,634
Other	23,666	20,423
Total revenues	190,854	173,057
Cost applicable to revenues (excluding depreciation and amortization shown below)
New and pre-owned vehicles (including adjustments to the LIFO reserve of $195 and $247, respectively)	143,402	131,117
Other	5,979	4,993
Total cost applicable to revenue	149,381	136,110
Transaction costs	256	228
Depreciation and amortization	2,637	2,695
Stock-based compensation	680	1,514
Selling, general, and administrative expenses	31,116	26,452
Income from operations	6,784	6,058
Other income/expenses
Loss on sale of property and equipment	(2)	(2)
Interest expense	(2,495)	(3,027)
Total other expense	(2,497)	(3,029)
Income before income tax expense	4,287	3,029
Income tax expense	(1,300)	(1,185)
Net income	2,987	1,844
Dividends on Series A Convertible Preferred Stock	(1,644)	(1,184)
Net income (loss) attributable to common stock and participating securities	$ 1,343	$ 660
EPS:
Basic and diluted income per share	$ 0.08	$ 0.04
Weighted average shares outstanding - basic and diluted	9,757,036	9,695,234

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Business Organization and Nature of Operations

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Organization and Nature of Operations

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. Lazydays RV also has a dedicated service center location near Houston, Texas which opened in February 2020. Through its subsidiaries, Lazydays RV sells and services new and pre-owned recreational vehicles, and sells related parts and accessories. 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.

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Debt - Schedule of Floor Plan Notes Payable (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Floor plan notes payable, net of debt discount	$ 133,425	$ 143,949
Floor Plan Notes Payable [Member]
Floor plan notes payable, gross	133,577	144,133
Debt discount	(152)	(184)
Floor plan notes payable, net of debt discount	$ 133,425	$ 143,949

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Leases (Details Narrative) - USD ($) $ in Thousands		3 Months Ended
	Mar. 10, 2020	Mar. 31, 2020
Lease term		12 months
Weighted-average remaining lease term		5 years 9 months 18 days
Weighted-average discount rate of operating leases		5.00%
Operating lease costs		$ 878
Short term leases
LD Murfreesboro TN Landlord, LLC [Member]
Proceeds from sale of land	$ 4,921,000
Maximum [Member]
Lease renewal terms		20 years

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Stockholders' Equity - Schedule of Warrants Activity (Details)	3 Months Ended
	Mar. 31, 2020 $ / shares shares
Equity [Abstract]
Shares of Common Stock Underlying Warrants outstanding beginning balance | shares	4,677,458
Shares of Common Stock Underlying Warrants Granted | shares
Shares of Common Stock Underlying Warrants Cancelled or Expired | shares
Shares of Common Stock Underlying Warrants Exercised | shares
Shares of Common Stock Underlying Warrants outstanding ending balance | shares	4,677,458
Weighted Average Exercise Price beginning balance | $ / shares	$ 11.50
Weighted Average Exercise Price Granted | $ / shares
Weighted Average Exercise Price Cancelled or Expired | $ / shares
Weighted Average Exercise Price Exercised | $ / shares
Weighted Average Exercise Price ending balance | $ / shares	$ 11.50

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Leases

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

NOTE 6 – LEASES

On January 1, 2019, we adopted a new accounting standard that amends the guidance for the accounting and reporting of leases. Certain required disclosures have been made on a prospective basis in accordance with the guidance of the standard. See Note 2, Significant Accounting Policies.

The Company leases property and equipment throughout the United States primarily under operating leases. Leases with lease terms of 12 months or less are expensed on a straight-line basis over the lease term and are not recorded in the Condensed Consolidated Balance Sheets.

Most leases include one or more options to renew, with renewal terms that can extend the lease term up to 20 years (some leases include multiple renewal periods). The exercise of lease renewal options is at our sole discretion. In addition, some of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements neither contain any residual value guarantees nor impose any significant restrictions or covenants.

The Company leases properties for its RV retail locations through nine operating leases. The Company also leases billboards and certain of its equipment through operating leases. The related right-of-use (“ROU”) assets for these operating leases are included in operating lease assets.

As of March 31, 2020, the weighted-average remaining lease term and weighted-average discount rate of operating leases was 5.8 years and 5.0%, respectively.

Operating lease costs for the three month period ending March 31, 2020 was $0.9 million including variable lease costs, at March 31, 2020. There were no short term leases for the three months ended March 31, 2020.

Maturities of lease liabilities as of March 31, 2020 were as follows:

Maturity Date	Operating Leases
Remaining nine month ending December 31, 2020	$	3,081
2021		3,820
2022		3,450
2023		3,312
2024		2,557
Thereafter		4,116
Total lease payments		20,336
Less: Imputed Interest		2,767
Present value of lease liabilities	$	17,569

The following presents supplemental cash flow information related to leases during 2020:

	For the three months ended March 31, 2020
Cash paid for amounts included in the measurement of lease liability:
Operating cash flows for operating leases	$	878
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	633

On March 10, 2020, the Company entered into an agreement for the sale of land to LD Murfreesboro TN Landlord, LLC for $4.921 million. The Company has entered into a lease agreement with the buyer with lease payments to commence upon granting of a certificate of occupancy and completion of planned construction, the cost of which will be paid for by LD Murfreesboro TN Landlord, LLC. The commencement date of the lease will occur at the completion of construction.

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Preferred Stock

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Preferred Stock

NOTE 10 – PREFERRED STOCK

On March 15,2018, 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 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.

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. An analysis of its features determined 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, Derivatives and Hedging.

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 statement of income 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 wasn’t accreted during the three months ended March 31, 2020 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 $1,644 for the period from January 1, 2020 to March 31, 2020. The dividends were $2.74 per share of Series A Preferred Stock. 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.

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Business Combination - Schedule of Identifiable Intangible Assets Acquired (Details) - Acquisition of Dealership [Member] $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Customer Lists [Member]
Intangible Assets, Gross Asset Amount at Acquisition Date	$ 230
Intangible Assets, Weighted Average Amortization Period in Years	7 years
Dealer Agreements [Member]
Intangible Assets, Gross Asset Amount at Acquisition Date	$ 2,400
Intangible Assets, Weighted Average Amortization Period in Years	7 years

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Business Combination (Details Narrative) - USD ($) $ in Thousands		3 Months Ended
	Aug. 01, 2019	Mar. 31, 2020
Acquisition of Dealership [Member]
Revenue related to acquisitions		$ 14,000
Net loss prior to income taxes related to acquisitions		$ 700
Alliance Coach Inc. [Member]
Debt instrument, maturity date	Aug. 01, 2021
Monthly payments of principal and interest	$ 134
Debt instrument, interest rate	5.00%

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Significant Accounting Policies - Summary of Net Income (Loss) Attribute to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accounting Policies [Abstract]
Distributed earnings allocated to common stock
Undistributed earnings allocated to common stock	799	409
Net loss allocated to common stock	799	409
Net loss allocated to participating securities	544	251
Net loss allocated to common stock and participating securities	$ 1,343	$ 660
Weighted average shares outstanding for basic earnings per common share	9,757,036	9,695,234
Dilutive effect of warrants and options
Weighted average shares outstanding for diluted earnings per share computation	9,757,036	9,695,234
Basic loss per common share	$ 0.08	$ 0.04
Diluted loss per common share	$ 0.08	$ 0.04

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets
Cash	$ 43,269	$ 31,458
Receivables, net of allowance for doubtful accounts of $374 and $382 at March 31, 2020 and December 31, 2019, respectively	16,473	16,025
Inventories	153,284	160,864
Income tax receivable		326
Prepaid expenses and other	3,045	2,999
Total current assets	216,071	211,672
Property and equipment, net	87,048	86,876
Operating lease assets	17,953
Goodwill	38,979	38,979
Intangible assets, net	67,807	68,854
Other assets	272	255
Total assets	428,130	406,636
Current liabilities
Accounts payable, accrued expenses and other current liabilities	25,649	23,855
Income taxes payable	974
Floor plan notes payable, net of debt discount	133,425	143,949
Financing liability, current portion	982	936
Long-term debt, current portion	17,332	5,993
Operating lease liability, current portion	3,164
Total current liabilities	181,526	174,733
Long term liabilities
Financing liability, non-current portion, net of debt discount	68,158	63,557
Long term debt, non-current portion, net of debt discount	7,746	15,573
Operating lease liability, non-current portion	14,405
Deferred tax liability	16,450	16,450
Total liabilities	288,285	270,313
Commitments and Contingencies
Series A Convertible Preferred Stock; 600,000 shares, designated, issued, and outstanding as of March 31, 2020 and December 31, 2019; liquidation preference of $67,553 and $65,910 as of March 31, 2020 and December 31, 2019, respectively	62,537	60,893
Stockholders' Equity
Preferred Stock, $0.0001 par value; 5,000,000 shares authorized;
Common stock, $0.0001 par value; 100,000,000 shares authorized; 8,506,666 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively
Additional paid-in capital	78,222	79,186
Treasury Stock, at cost, 122,729 and 78,000 shares at March 31, 2020 and December 31, 2019, respectively	(459)	(314)
Accumulated deficit	(455)	(3,442)
Total stockholders' equity	77,308	75,430
Total liabilities and stockholders' equity	$ 428,130	$ 406,636

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Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2018			$ 80,606	$ (4,156)	$ 76,450
Balance, shares at Dec. 31, 2018	8,471,608
Repurchase of Unit Purchase Options			(500)		(500)
Stock-based compensation			1,514		1,514
Dividends on Series A preferred stock			(1,184)		(1,184)
Repurchase of Treasury Stock
Net income				1,844	1,844
Balance at Mar. 31, 2019			80,436	(2,312)	78,124
Balance, shares at Mar. 31, 2019	8,471,608
Balance at Dec. 31, 2019		$ (314)	79,186	(3,442)	75,430
Balance, shares at Dec. 31, 2019	8,506,666	78,000
Stock-based compensation			680		680
Dividends on Series A preferred stock			(1,644)		(1,644)
Repurchase of Treasury Stock		$ (145)			145
Repurchase of Treasury Stock, shares		44,729
Net income				2,987	2,987
Balance at Mar. 31, 2020		$ (459)	$ 78,222	$ (455)	$ 77,308
Balance, shares at Mar. 31, 2020		122,729

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Business Combinations (Tables)

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Schedule of Fair Value of Assets Acquired and Liabilities Assumed

As a result, the Company determined its preliminary allocation of the fair value of the assets acquired and the liabilities assumed for Alliance as follows:

	2019
Inventories	$	12,171
Accounts receivable and prepaid expenses		53
Property and equipment		77
Intangible assets		2,630
Total assets acquired		14,931
Accounts payable, accrued expenses and other current liabilities		243
Floor plan notes payable		11,434
Total liabilities assumed		11,677
Net assets acquired	$	3,254

Schedule of Fair Value of Consideration Paid

		2019
Purchase Price:	$	2,568
Cash consideration paid		(107	)
Amounts due (from) to former owners
Note payable issued to former owners		3,045
	$	5,506

Schedule of Goodwill Associated with Merger

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 Alliance. Goodwill associated with the transaction is detailed below:

	2019
Total consideration	$	5,506
Less net assets acquired		3,254
Goodwill	$	2,252

Schedule of Identifiable Intangible Assets Acquired

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 in 2019.

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

Schedule of Pro Forma Financial Information

The following unaudited pro forma financial information summarizes the combined results of operations for the Company as though the purchase of Alliance had been consummated on January 1, 2019.

	For the three months ended March 31,
	2020		2019
Revenue	$	190,854	$	186,076
Income before income taxes	$	4,287	$	3,729
Net income	$	2,987	$	2,397

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Debt (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule of Floor Plan Notes Payable

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

	As of March 31, 2020			As of December 31, 2019
	(Unaudited)
Floor plan notes payable, gross	$	133,577		$	144,133
Debt discount		(152	)		(184	)
Floor plan notes payable, net of debt discount	$	133,425		$	143,949

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Significant Accounting Policies - Schedule of Revenue Recognized of Finance and Insurance Revenues (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accounting Policies [Abstract]
Gross finance and insurance revenues	$ 12,583	$ 10,678
Additions to charge-back allowance	(1,311)	(963)
Net Finance Revenue	$ 11,272	$ 9,715

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Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended
	Apr. 06, 2020	May 31, 2018	Mar. 31, 2020
Chief Financial Officer [Member] | Employee Relocation [Member]
Relocation allowance		$ 100
Chief Financial Officer [Member] | Maximum [Member]
Percentage of target bonus on base salary		150.00%
Senior Management [Member] | Subsequent Event [Member]
Percentage of target bonus on base salary	25.00%
Non-Employee Members [Member]
Annual cash compensation			$ 50
Committee of Board of Directors [Member]
Annual cash compensation			5
Chairman of Any Committees [Member]
Annual cash compensation			10
Employment Agreement [Member] | Chief Executive Officer [Member]
Initial base salary			$ 540
Percentage of target bonus on base salary			100.00%
Employment Agreement [Member] | Chief Financial Officer [Member]
Initial base salary		$ 325
Percentage of target bonus on base salary		75.00%

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Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liability: Operating cash flows for operating leases	$ 878
ROU assets obtained in exchange for lease liabilities: Operating leases	$ 17,781

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Inventories, gross	$ 157,194	$ 164,583
Less: excess of current cost over LIFO	(3,910)	(3,719)
Inventories, net	153,284	160,864
New Recreational Vehicles [Member]
Inventories, gross	121,357	124,096
Pre-owned Recreational Vehicles [Member]
Inventories, gross	31,828	36,639
Parts, Accessories and Other [Member]
Inventories, gross	$ 4,009	$ 3,848

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 374	$ 382
Series A convertible preferred stock, shares designated	600,000	600,000
Series A convertible preferred stock, shares issued	600,000	600,000
Series A convertible preferred stock, shares outstanding	600,000	600,000
Series A convertible preferred stock, liquidation preference, value	$ 67,553	$ 65,910
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	8,506,666	8,506,666
Common stock, shares outstanding	8,506,666	8,506,666
Treasury stock, shares	122,729	78,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash Flows From Operating Activities
Net income	$ 2,987	$ 1,844
Adjustments to reconcile net income to net cash provided by operating activities:
Stock based compensation	680	1,514
Bad debt expense	7	23
Depreciation and amortization of property and equipment	1,589	1,741
Amortization of intangible assets	1,048	954
Amortization of debt discount	43	132
Non-cash lease expense	(108)
Loss/(gain) on sale of property and equipment	2	2
Changes in operating assets and liabilities:
Receivables	(455)	(8,754)
Inventories	7,580	24,276
Prepaid expenses and other	(46)	117
Income tax receivable/payable	1,300	1,175
Other assets	(17)	33
Accounts payable, accrued expenses and other current liabilities	1,793	5,847
Operating lease liability	(276)
Total Adjustments	13,140	27,060
Net Cash Provided By Operating Activities	16,127	28,904
Cash Flows From Investing Activities
Proceeds from sales of property and equipment	4,932	20
Purchases of property and equipment	(1,774)	(3,128)
Net Cash Used In Investing Activities	3,158	(3,108)
Cash Flows From Financing Activities
Net (repayments)/borrowings under M&T bank floor plan	(10,554)	(19,878)
Borrowings under long term debt with M&T bank	5,005
Repayment of long term debt with M&T bank	(725)	(725)
Proceeds from financing liability		1,519
Repayments of financing liability	(226)	(175)
Payment of dividends on Series A preferred stock		(1,210)
Repurchase of Unit Purchase Options		(500)
Repurchase of Treasury Stock	(145)
Repayments of acquisition notes payable	(761)	(370)
Loan issuance costs	(68)
Net Cash Used In Financing Activities	(7,474)	(21,339)
Net Increase In Cash	11,811	4,457
Cash - Beginning	31,458	26,603
Cash - Ending	43,269	31,060
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest	2,592	2,877
Cash paid during the period for income taxes net of refunds received		10
Non-Cash Investing and Financing Activities
Rental vehicles transferred to inventory, net		138
Fixed assets purchased with accounts payable		345
Accrued dividends on Series A Preferred Stock	1,644	1,184
Operating lease assets - ASC 842 adoption	(17,781)
Operating lease liabilities - ASC 842 adoption	$ 17,845

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Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue	$ 190,854	$ 173,057
New Vehicle Revenue [Member]
Revenue	102,444	97,812
Preowned Vehicle Revenue [Member]
Revenue	64,744	54,822
Parts, Accessories, and Related Services [Member]
Revenue	10,765	8,775
Finance and Insurance Revenue [Member]
Revenue	11,272	9,715
Campground, Rental, and Other Revenue [Member]
Revenue	$ 1,629	$ 1,933

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Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Schedule of Disaggregation of Revenue

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

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
New vehicle revenue	$	102,444	$	97,812
Preowned vehicle revenue		64,744		54,822
Parts, accessories, and related services		10,765		8,775
Finance and insurance revenue		11,272		9,715
Campground, rental, and other revenue		1,629		1,933
	$	190,854	$	173,057

Schedule of Revenue Recognized of Finance and Insurance Revenues

The Company recognized finance and insurance revenues, less the additions to the charge-back allowance, which is included in other revenue as follows (unaudited):

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Gross finance and insurance revenues	$	12,583		$	10,678
Additions to charge-back allowance		(1,311	)		(963	)
Net Finance Revenue	$	11,272		$	9,715

Summary of Net Income (Loss) Attribute to Common Stockholders

The following table summarizes net income attributable to common stockholders used in the calculation of basic and diluted income per common share:

(Dollars in thousands - except share and per share amounts)	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Distributed earnings allocated to common stock	$	-	$	-
Undistributed earnings allocated to common stock		799		409
Net earnings allocated to common stock		799		409
Net earnings allocated to participating securities		544		251
Net earnings allocated to common stock and participating securities	$	1,343	$	660
Weighted average shares outstanding for basic earnings per common share		9,757,036		9,695,234
Dilutive effect of warrants and options		-		-
Weighted average shares outstanding for diluted earnings per share computation		9,757,036		9,695,234
Basic income per common share	$	0.08	$	0.04
Diluted income per common share	$	0.08	$	0.04

Schedule of Denominator of Basic and Dilutive Earnings Per Share

For the three months ended March 31, 2020 and March 31, 2019, the denominator of the basic and dilutive EPS was calculated as follows:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Weighted average outstanding common shares		8,417,537		8,355,735
Weighted average shares held in escrow		-		-
Weighted average prefunded warrants		1,339,499		1,339,499
Weighted shares outstanding - basic and diluted		9,757,036		9,695,234

Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

For the three months ended March 31, 2020 and March 31, 2019, the following common stock equivalent shares were excluded from the computation of the diluted income per share, since their inclusion would have been anti-dilutive:

	For the three months ended March 31, 2020		For the three months ended March 31, 2019
Shares underlying Series A Convertible Preferred Stock		-		-
Shares underlying warrants		4,677,458		4,677,458
Stock options		3,798,818		3,823,421
Share equivalents excluded from EPS		8,476,276		8,500,879

Schedule of Geographic Concentration Risk Percentage

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

	For the three months ended March 31, 2020			For the three months ended March 31, 2019
Florida		75	%		75	%
Colorado		11	%		10	%

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Leases (Tables)

3 Months Ended

Mar. 31, 2020

Leases [Abstract]

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities as of March 31, 2020 were as follows:

Maturity Date	Operating Leases
Remaining nine month ending December 31, 2020	$	3,081
2021		3,820
2022		3,450
2023		3,312
2024		2,557
Thereafter		4,116
Total lease payments		20,336
Less: Imputed Interest		2,767
Present value of lease liabilities	$	17,569

Schedule of Supplemental Cash Flow Information Related to Leases

The following presents supplemental cash flow information related to leases during 2020:

	For the three months ended March 31, 2020
Cash paid for amounts included in the measurement of lease liability:
Operating cash flows for operating leases	$	878
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	633

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Debt (Details Narrative) - USD ($) $ in Thousands			3 Months Ended
	Mar. 06, 2020	Mar. 16, 2018	Mar. 31, 2020	Mar. 31, 2019
Repayments under long term debt with bank of America			$ 725	$ 725
Third Amendment [Member]
Line of credit maximum borrowing capacity	$ 6,136
Interest rate			3.312%
M&T Facility [Member]
Line of credit maximum borrowing capacity		$ 200,000
Line of credit facility, expiration date		Mar. 15, 2021
Maximum amount of cash dividends			$ 9,886
BOA Floor Plan [Member]
Repayments of lines of credit		$ 96,740
BOA Term Loan with M&T Facility [Member]
Repayments under long term debt with bank of America		8,820
M&T Floor Plan Line of Credit [Member]
Line of credit maximum borrowing capacity		$ 175,000
Line of credit rate description		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%.	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.
Interest rate			2.989%
Maximum draw down for rental units		$ 4,500
Line of credit commitments percentage		0.15%
M&T Floor Plan Line of Credit [Member] | Pre-owned Vehicle Inventory [Member]
Line of credit maximum borrowing capacity		$ 45,000
M&T Floor Plan Line of Credit [Member] | LIBOR [Member] | Minimum [Member]
Percentage of leverage ratio		2.00%
M&T Floor Plan Line of Credit [Member] | LIBOR [Member] | Maximum [Member]
Percentage of leverage ratio		2.30%
M&T Floor Plan Line of Credit [Member] | Base Rate [Member] | Minimum [Member]
Percentage of leverage ratio		1.00%
M&T Floor Plan Line of Credit [Member] | Base Rate [Member] | Maximum [Member]
Percentage of leverage ratio		1.30%
M&T Floor Plan Line of Credit [Member] | Third Amendment [Member]
Repayments of loan monthly installments	$ 30
Line of credit rate description	The mortgage shall bear interest at (a) LIBOR plus an applicable margin of 2.25% or (b) the Base Rate plus a margin of 1.25%.
Debt instrument maturity date	Mar. 15, 2021
Line of credit mortgage balance	$ 5,006
M&T Floor Plan Line of Credit [Member] | Third Amendment [Member] | LIBOR [Member]
Percentage of leverage ratio	2.25%
M&T Floor Plan Line of Credit [Member] | Third Amendment [Member] | Base Rate [Member]
Percentage of leverage ratio	1.25%
M&T Term Loan [Member]
Repayments of loan monthly installments		$ 242
Debt instrument maturity date		Mar. 15, 2021
Interest rate			3.25%
Term loan		$ 20,000
Outstanding letters of credit			$ 14,200
M&T Term Loan [Member] | LIBOR [Member] | Minimum [Member]
Percentage of leverage ratio		2.25%
M&T Term Loan [Member] | LIBOR [Member] | Maximum [Member]
Percentage of leverage ratio		3.00%
M&T Term Loan [Member] | Base Rate [Member] | Minimum [Member]
Percentage of leverage ratio		1.25%
M&T Term Loan [Member] | Base Rate [Member] | Maximum [Member]
Percentage of leverage ratio		2.00%
M&T Revolver [Member]
Line of credit maximum borrowing capacity		$ 5,000
M&T Revolver [Member] | Minimum [Member]
Line of credit commitments percentage		0.25%
M&T Revolver [Member] | Maximum [Member]
Line of credit commitments percentage		0.50%
M&T Revolver [Member] | LIBOR [Member] | Minimum [Member]
Percentage of leverage ratio		2.25%
M&T Revolver [Member] | LIBOR [Member] | Maximum [Member]
Percentage of leverage ratio		3.00%
M&T Revolver [Member] | Base Rate [Member] | Minimum [Member]
Percentage of leverage ratio		1.25%
M&T Revolver [Member] | Base Rate [Member] | Maximum [Member]
Percentage of leverage ratio		2.00%

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Accounts Payable, Accrued Expenses and Other Current Liabilities - Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Accounts payable	$ 10,024	$ 11,231
Other accrued expenses	3,838	3,392
Customer deposits	3,161	2,267
Accrued compensation	3,640	2,388
Accrued charge-backs	4,694	4,221
Accrued interest	292	356
Total	$ 25,649	$ 23,855

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Preferred Stock (Details Narrative) $ / shares in Units, $ in Thousands		3 Months Ended
	Mar. 15, 2018 USD ($) $ / shares shares	Mar. 31, 2020 USD ($) $ / shares
Preferred stock conversion price per share	$ 9.72
Market price per share on the date of issuance	$ 10.29
Beneficial conversion feature on series a convertible preferred stock | $	$ 3,392
Reduction in preferred stock | $	$ 2,035
Measurement Input, Expected Term [Member]
Fair value assumptions, measurement input, term	5 years
Measurement Input, Price Volatility [Member]
Fair value assumptions, measurement input, percentages	0.39
Measurement Input, Risk Free Interest Rate [Member]
Fair value assumptions, measurement input, percentages	0.0261
Measurement Input, Expected Dividend Rate [Member]
Fair value assumptions, measurement input, percentages	0.00
Common Stock [Member]
Warrant redemption price per share	$ 0.01
Common Stock [Member] | Exceeds Price Point [Member]
Common stock market price per share	$ 24.00
Placement Agent [Member]
Warrant term	5 years
Warrant to purchase common shares | shares	178,882
Warrant exercise price	$ 11.50
Aggregate offering costs | $	$ 2,981
Fair value of warrants | $	$ 632
Series A Preferred Stock [Member]
Preferred stock dividend rate percentage		10.00%
Weighted average price trading price after second anniversary force conversion	$ 25.00
Warrant term	5 years
Warrant to purchase common shares | shares	596,273
Warrant exercise price	$ 11.50
Dividend payment on preferred stock | $		$ 1,644
Preferred stock dividend price per shares		$ 2.74
Private Placement [Member]
Sale of stock consideration | $	$ 94,800
Private Placement [Member] | Series A Preferred Stock [Member]
Number of shares issued | shares	600,000
Number of shares issued, value | $	$ 60,000
Preferred stock conversion price per share	$ 10.0625
Preferred stock dividend rate percentage	8.00%
Issue price of preferred stock | $	$ 100
Dividend rate description	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.
Private Placement [Member] | Series A Preferred Stock [Member] | Maximum [Member]
Preferred stock dividend rate percentage	11.00%
Private Placement [Member] | Series A Preferred Stock [Member] | Board of Directors [Member]
Number of preferred stock owned | shares	500,000

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Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands								3 Months Ended		12 Months Ended
	May 20, 2019	Jun. 15, 2018	May 31, 2018	May 07, 2018	Mar. 23, 2018	Mar. 16, 2018	Mar. 15, 2018	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Common stock, shares authorized								100,000,000		100,000,000
Common stock, par value								$ 0.0001		$ 0.0001
Preferred stock, shares authorized								5,000,000		5,000,000
Preferred stock, par value								$ 0.0001		$ 0.0001
Stock based compensation								$ 680	$ 1,514
Number of shares options granted								225,000
Expected term								3 years 9 months
Expected risk-free rate								0.43%
Expected dividend yield								0.00%
Expected annual volatility								55.00%
Stock based compensation related to awards with market conditions								$ 554	1,470
Stock based compensation related to awards with service conditions								$ 88	$ 44
Non-Employee Directors [Member]
Fair value of the options issued					$ 350
Expected term					3 years 6 months
Expected risk-free rate					2.42%
Expected dividend yield					0.00%
Expected annual volatility					39.00%
Stock options vesting term					3 years
Granted stock options term					5 years
Stock option issued to purchase units					14,218
Employees [Member]
Number of shares options granted								225,000		505,000
Stock options exercise price per share								$ 8.50
Fair value of the options issued								$ 145		$ 957
Expected term										3 years 9 months
Expected dividend yield										0.00%
Stock options vesting term								4 years		4 years
Granted stock options term								5 years		5 years
Employees [Member] | Minimum [Member]
Stock options exercise price per share										$ 4.50
Expected risk-free rate										1.70%
Expected annual volatility										52.00%
Employees [Member] | Maximum [Member]
Stock options exercise price per share										$ 8.50
Expected risk-free rate										2.51%
Expected annual volatility										55.00%
Non-Redeemable Pre-funded Warrants [Member]
Number of warrant to purchase shares of common stock								1,339,499
Warrant exercise price								$ 0.01
Five Year Incentive Stock Options [Member]
Number of shares options granted						3,573,113
Stock options exercise price per share						$ 11.10
Fair value of the options issued				$ 2,357		$ 15,004
Expected term				5 years		5 years
Expected risk-free rate				2.74%		2.62%
Expected dividend yield				0.00%		0.00%
Expected annual volatility				54.70%		42.80%
Five Year Incentive Stock Options [Member] | Share-based Compensation Award, Tranche One [Member]
Stock option vesting percentage						30.00%
Stock option vested price per share						$ 13.125
Stock options vesting term				11 months 19 days		8 months 26 days
Five Year Incentive Stock Options [Member] | Share-based Compensation Award, Tranche Two [Member]
Stock option vesting percentage						30.00%
Stock option vested price per share						$ 17.50
Stock options vesting term				1 year 9 months		1 year 7 months 21 days
Five Year Incentive Stock Options [Member] | Share-based Compensation Award, Tranche Three [Member]
Stock option vesting percentage						30.00%
Stock option vested price per share						$ 21.875
Stock options vesting term				2 years 1 month 24 days		2 years 2 months 27 days
Five Year Incentive Stock Options [Member] | Share-based Compensation Award, Tranche Four [Member]
Stock option vesting percentage						10.00%
Stock option vested price per share						$ 35.00
Stock options vesting term				2 years 11 months 15 days		3 years 1 month 16 days
Five Year Incentive Stock Options [Member] | Non-Employee Directors [Member]
Stock options exercise price per share						$ 11.10
Number of options forfeited			15,123
Stock options vesting term						3 years
Granted stock options term						5 years
Stock option issued to purchase units						99,526
CEO Stock Options [Member]
Number of shares options granted						1,458,414
CFO Stock Options [Member]
Number of shares options granted				583,366		583,366
Former CFO Stock Options [Member]
Number of options forfeited		583,366
New Five Year Incentive Stock Options [Member] | Non-Employee Directors [Member]
Stock option issued to purchase units					15,123
Stock option issued to purchase units price per share					$ 10.40
Stock Options [Member]
Compensation cost unrecognized								$ 1,682
Weighted average service period								2 years 1 month 2 days
Weighted average grant date fair value of awards issued								$ 0.65
2018 Long-Term Incentive Equity Plan [Member]
Maximum percentage on options may be issued							13.00%
Options issuable under stock price trigger							$ 8.75
Number of common shares reserved for future issuance	600,000							625,748
2019 Employee Stock Purchase Plan [Member]
Number of common shares reserved for future issuance	900,000
Common stock purchase price, description	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.
Stock based compensation								$ 38
Increased Plan by Formula [Member] | 2018 Long-Term Incentive Equity Plan [Member]
Maximum percentage on options may be issued							18.00%

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Accounts Payable, Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 2020

Payables and Accruals [Abstract]

Accounts Payable, Accrued Expenses and Other Current Liabilities

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

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

	As of		As of
	March 31,		December 31,
	2020		2019
	(Unaudited)
Accounts payable	$	10,024	$	11,231
Other accrued expenses		3,838		3,392
Customer deposits		3,161		2,267
Accrued compensation		3,640		2,388
Accrued charge-backs		4,694		4,221
Accrued interest		292		356
Total	$	25,649	$	23,855

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 9 - 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 provides that the executive is to be granted an option to purchase shares of common stock of the Company (See Note 11 – 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 11- Stockholders’ Equity).

Note that due to the COVID-19 pandemic, as of April 6, 2020, senior management has opted to forgo 25% of their salary in order to reduce costs to align with decreased demand in sales and services. See discussion in Subsequent Event section above.

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.

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.

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Business Combination - Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Details) - Acquisition of Dealership [Member] $ in Thousands	Dec. 31, 2019 USD ($)
Inventories	$ 12,171
Accounts receivable and prepaid expenses	53
Property and equipment	77
Intangible assets	2,630
Total assets acquired	14,931
Accounts payable, accrued expenses and other current liabilities	243
Floor plan notes payable	11,434
Total liabilities assumed	11,677
Net assets acquired	$ 3,254

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Significant Accounting Policies - Schedule of Denominator of Basic and Dilutive Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Accounting Policies [Abstract]
Weighted average outstanding common shares	8,417,537	8,355,735
Weighted average shares held in escrow
Weighted average prefunded warrants	1,339,499	1,339,499
Weighted shares outstanding - basic and diluted	9,757,036	9,695,234

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Business Combination - Schedule of Pro Forma Financial Information (Details) - Acquisition of Dealership [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue	$ 190,854	$ 186,076
Income before income taxes	4,287	3,729
Net income	$ 2,987	$ 2,397