NextBoat Inc. has disclosed that its subsidiary, Off The Hook Yacht Sales NC, LLC, entered into a subordinated promissory note with BPC Management, LLC for up to $2.2 million in short-term bridge financing. The agreement, dated October 9, 2026, and reported on an 8-K filed October 13, 2026, provides working capital support to the yacht sales operation.
Under the terms of the note, BPC Management issued an initial advance of $1.0 million. The lender may optionally issue a second advance of up to $1.2 million by December 31, 2026, subject to at least three business days' notice. Off The Hook has the right to decline this second advance. Each advance carries a simple interest rate of 15.0% per annum and matures 90 days after the funding date. Extensions require the lender's written consent.
The company is required to pay a 2% origination fee on each advance, which is fully earned upon funding but payable at maturity. If an event of default occurs, past-due amounts accrue interest at the lesser of 20% per annum or the maximum rate permitted by law. Off The Hook may prepay any advance without penalty, aside from the origination fee.
A specific condition applies to the initial advance: until it is repaid in full with interest and fees, Off The Hook must remit 100% of the net equity proceeds from the sale of seven specified pre-owned boats in its inventory to BPC Management. These payments are made after satisfying amounts owed to Red Oak Inventory Finance, LLC, the subsidiary's floorplan lender. The second advance is not subject to this mandatory prepayment structure.
The note is subordinated to Off The Hook's obligations to Red Oak Inventory Finance and is unsecured by the assets of NextBoat or its subsidiary. However, security is provided through a corporate guaranty and a personal stock pledge. NextBoat Inc. entered into a guaranty agreement on October 9, 2026, unconditionally guaranteeing the subsidiary's payment obligations.
Because Jason Ruegg, NextBoat's President, Chairman, and controlling stockholder, personally guaranteed the note, the transaction is disclosed as a related-party transaction. Ruegg and his affiliate, Ruegg Capital Group, Inc., pledged shares of NextBoat common stock with an aggregate collateral value of not less than $5.0 million. Ruegg Capital must maintain this collateral value while the note is outstanding. If the value falls below $5.0 million, it must pledge additional shares or cash within three business days of notice; failure to do so constitutes an event of default.
Upon default, BPC Management may exercise voting rights on the pledged shares and foreclose upon them, which could result in a change of control for NextBoat. Ruegg received no consideration for entering into the guaranty and pledge agreement.