SEC Company Response from OFF THE HOOK YS INC. (NXB) (CIK 0002067767) (NXB) — Jul 7, 2025
OFF THE HOOK YS INC. (NXB) (CIK 0002067767)
Date: July 7, 2025 · CIK: 0002067767 · Accession: 0001641172-25-018052
AI Filing Summary & Sentiment
Reasoning
Referenced dates: June 11, 2025
Letter
Off The Hook YS Inc.
Jel Wade Dr.
Wilmington, NC 28401
July 7, 2025
Attn: Eiko Yaoita Pyles, Anne McConnell, Kristin Baldwin and Erin Purnell
U.S. Securities & Exchange Commission
F Street, N.E.
Washington, D.C. 20549
Re: OFF THE HOOK YS INC.
Draft Registration Statement on Form S-1 Submitted May 15, 2025
CIK No. 0002067767
OFF THE HOOK YS INC.
Ladies and Gentlemen:
By letter dated June 11, 2025, the staff (the “Staff,” “you” or “your”) of the U.S. Securities & Exchange Commission (the “Commission”) provided Off The Hook YS Inc. (the “Company,” “we,” “us” or “our”) with its comments to the Draft Registration Statement filed on May 15, 2025. We are in receipt of your letter and set forth below are the Company’s responses to the Staff’s comments. For your convenience, the comments are listed below, followed by the Company’s responses.
Draft Registration Statement on Form S-1 Cover Page
1. Please add the underwriter’s warrants disclosed on page 96 to the cover page and the fee table.
Response: We have added disclosure of the underwriter’s warrants to the cover page and in the fee table.
Prospectus Summary
Our Business Model, page 1
2. Please revise to expand your discussion of the operations of Azure Funding. For example:
● Describe the products and services offered. Where you note that Azure will bring “F&I” in house, define “F&I.” If F&I stands for finance and insurance, please discuss the insurance aspects of Azure’s business;
● If you work with any specific institutions in connection with providing financing or insurance, please discuss;
● Discuss competition as it specifically relates to Azure; and
● Provide an overview of the financing process, including diligence and approvals, and describe Azure’s customers.
Response: We have revised our discussion of the operations of Azure Funding as requested on pages 2, 6, and 51.
3. Please revise to define “CRM.”
Response: We have revised our discussion to define “CRM” on page 2.
4. Please add an organizational chart depicting each of your subsidiaries, including after the planned reorganization, and the ownership structure of such subsidiaries.
Response: We have added the organization chart on pages 8 and 54 as requested. Please note we have restructured our reorganization.
Our Competitive Advantage
Strategic AI Partnership, page 4
5. Please file the agreement with NextGen AI as an exhibit to the registration statement.
Response: In response to Staff’s comments, we have included the Master Services Agreement with NexGen AI in the exhibit index and will file it as an exhibit to the registration statement.
Summary Financial Data, page 12
6. We note the entities included in the combined financial statements elected to be taxed as Partnerships under the Internal Revenue Code, and similar codes in states in which the company is subject to taxation, and no provisions for income taxes were required or recorded in the combined financial statements. We also note after the offering the company will be subject to income taxes. Based on the above, please revise the summary financial data to also present pro forma income tax disclosures, including pro forma income tax expense calculated at statutory income tax rates, pro forma net income after taxes, and pro forma net income per share after taxes. Please consider presenting the pro forma income tax disclosures for all periods presented but, at least, for the latest fiscal year and current interim period. Please be advised that after the conversion to a taxable entity, any undistributed earnings or losses of the partnerships should be reclassified to paid-in capital, as if a distribution had been made to the owners with a subsequent contribution to equity within the new structure, and this reclassification should also be reflected in any pro forma disclosures, including as adjusted disclosures under Capitalization. Refer to SAB Topic 4:B. In addition, please address the potential impact of becoming a taxable entity on future results of operations and liquidity in MD&A.
Response: In response to the Staff’s comment, the Company has updated the Summary Statements of Operations Data table on page 12, statements of operations on pages F-3 and F-30 of the Amended Registration Statement to reflect the pro forma income tax calculation. Additionally, the Company has included disclosure on pages 43 and 48 of the MD&A discussing the potential impact of its anticipated status as a taxable entity. Page 37 was updated to reflect the reclassification of the undistributed losses.
Risk Factors
Risks Relating to Our Business
We rely on Floorplan Financing, page 19
7. We note your disclosure on page 4 that your current floorplan financing is personally guaranteed by your president, and that this arrangement imposes a natural cap on your ability to fully leverage available financing. Please expand your disclosure to discuss any risks associated with your current cap on financing. Disclose the amount of the cap and describe the process and steps necessary to reach your goal of $50 million in floorplan financing by 2026.
Response: We have expanded the discussion of risks associated with our floorplan financing as requested on page 19 under the section “Risk Factors – We rely on Floorplan Financing”.
Use of Proceeds, page 35
8. Please amend your Use of Proceeds section to comply with Instructions 4 and 6 to Item 504 of Regulation S-K or explain why you are not required to do so.
Response : We have revised our disclosure in the Use of Proceeds to comply with Instructions 4 and 6 to Item 504 of Regulation S-K.
Capitalization, page 36
9. Please address the following under Capitalization:
● On page 35 you imply you intend to use proceeds from the offering to pay working capital debt. If accurate, revise the introductory paragraph here to reflect that fact and ensure the related as adjusted amounts reflect your intent.
● Double-underline cash and cash equivalents so it is clear cash and cash equivalents are not part of total capitalization.
● Ensure total capitalization sums appropriately as total indebtedness plus total equity.
Response: In response to the Staff’s comment, the Company has revised the capitalization disclosure on pages 36 and 37 to include a description of its intention to use a portion of the proceeds from the offering to repay working capital debt. In addition, the Company has double-underlined “cash and cash equivalents” and revised the total capitalization amount in the “Capitalization” table on page 37 to reflect the sum of total indebtedness and total equity.
Business
Our Products and Services, page 50
10. We note your disclosure on page F-26 that the company “purchases substantially all of its new boats from Nortec and Yellowfin.” Please revise your disclosure in the Business section to discuss your relationship with these entities. Provide a narrative description of any contracts or arrangements and file any such agreements as exhibits to the registration statement. In addition, please expand your disclosure in Risk Factors under the heading “We face substantial supplier and inventory acquisition risks” to specifically discuss your purchasing relationships with these entities.
Response: We have revised the discussion on page 56 to include our relationship and contractual arrangements with Nortec and Yellowfin, and we have included the agreements as exhibits to the registration statement. We have also expanded the disclosure in Risk Factors under the heading “We face substantial supplier and inventory acquisition risks.” on page 21.
Environmental, Safety and Regulatory Matters, page 64
11. We note that you discuss your manufacturing operations in this section. Please revise here and throughout the prospectus to describe the extent to which you manufacture any of your products.
Response: We have removed the discussion about manufacturing operations, as we do not have any such operations.
Facilities, page 66
12. We note that you only list one location in this section but that your website lists other locations. Please provide disclosure responsive to Item 102 of Regulation S-K.
Response: We have provided the requested disclosure for other locations on page 70 in the section “Business – Facilities”.
Certain Relationships and Related Party Transactions, page 81
13. We note that you include a line item for a prepaid expense from a related party and an amount due from a related party on your Combined Balance Sheets on page F-3. We note also that you list related party transactions on page F-21 that are not identified or discussed in this section. Please add disclosure regarding these related party transactions to this section, or advise.
Response: In response to the Staff’s comment, the Company has revised the disclosure in section “Certain Relationships and Related Party Transactions” on page 86 to include all related party transactions, consistent with the disclosure provided on page F-3.
14. Please file the July 19, 2019 agreement with Dan and Diane Ruegg and the February 23, 2023 agreement with Tom Ruegg as exhibits to the registration statement.
Response: In response to Staff’s comments, we included the July 22, 2019 Loan Agreement with Dan and Diane Ruegg and the February 23, 2023 Loan Agreement with Tom Ruegg in the exhibit index and will file them as exhibits to the registration statement.
Principal Stockholders, page 82
15. We note that Jason Ruegg is 100% owner of Ruegg Capital Group. Therefore, please revise Jason Ruegg’s beneficial ownership to include the ownership of Ruegg Capital Group. In addition, please revise the table to include a row for each of the named executive officers and directors individually. Refer to Item 403 of Regulation S-K.
Response: In response to Staff’s comments, we have revised this table to conform to Item 403 of Regulation S-K.
Combined Financial Statements
Note 1. Nature of Business and Organization, page F-7
16. We note that you intend to account for the merger and consolidation of the entities included in the combined financial statements as common control transactions, as you believe the entities will be owned and controlled by the same ownership group before and after the transactions. Please identify who is included in the ownership group. Please also tell us the ownership interests of each of the 5 entities involved in these transactions prior to the merger and consolidation and the ownership interests of the company after the merger and consolidation. In addition, please more fully explain to us when and how the transactions with OTH Florida Acquisition Corp and Off The Hook Yacht YS Inc. will occur and your basis for presenting them in the combined financial statements.
Response: In response to the Staff’s comment, the Company has revised the disclosure in Note 1 to provide additional details regarding the ownership structure of each entity involved, as well as an expanded narrative describing the reorganization transaction. OTH Florida Acquisition Corp (“OTH Acquisition”) is wholly owned by Brian John, Off The Hook Yacht YS Inc. is wholly owned by Jason Ruegg, Off the Hook Yacht Sales NC, LLC, Azure Funding, LLC and OTH Simon Marine YF LLC are directly and indirectly controlled by Jason Ruegg. We have revised the combined financial statements, with the exclusion of OTH Acquisition, due to the absence of common ownership among the 5 entities.
17. We note as a result of a Stock Purchase Agreement entered on December 6,
2024, OTH Acquisition will purchase all the ownership interests of OTHYS, Azure, and Boat Center and stockholders of OTH Acquisition will receive as consideration a number of shares of common stock of OTH Acquisition representing 75% of the issued and outstanding shares of OTH Acquisition and a cash payment. Please clarify and more fully address the following:
● Identify who will hold the remaining 25% ownership interest in OTH Acquisition and clarify when and how that ownership interest was obtained.
● Disclose the amount of the cash payment and clarify who will pay it, who will receive it, and how it will be financed.
Response: In response to the Staff’s comment, we have restructured the reorganization and revised the combined financial statements. Please see pages 8, 40, and F-6.
Note 2. Basis of Presentation and Summary of Significant Accounting Policies Inventory, net, page F-9
18. We
Show Raw Text
CORRESP
1
filename1.htm
Off
The Hook YS Inc.
1701
Jel Wade Dr.
Wilmington,
NC 28401
July
7, 2025
Attn:
Eiko Yaoita Pyles, Anne McConnell, Kristin Baldwin and Erin Purnell
U.S.
Securities & Exchange Commission
100
F Street, N.E.
Washington,
D.C. 20549
Re:
OFF
THE HOOK YS INC.
Draft
Registration Statement on Form S-1 Submitted May 15, 2025
CIK
No. 0002067767
OFF
THE HOOK YS INC.
Ladies
and Gentlemen:
By
letter dated June 11, 2025, the staff (the “Staff,” “you” or “your”) of the
U.S. Securities & Exchange Commission (the “Commission”) provided Off The Hook YS Inc. (the “Company,”
“we,” “us” or “our”) with its comments to the Draft Registration Statement filed
on May 15, 2025. We are in receipt of your letter and set forth below are the Company’s responses to the Staff’s comments.
For your convenience, the comments are listed below, followed by the Company’s responses.
Draft
Registration Statement on Form S-1 Cover Page
1. Please
add the underwriter’s warrants disclosed on page 96 to the cover page and the fee table.
Response:
We have added disclosure of the underwriter’s warrants to the cover page and in the
fee table.
Prospectus
Summary
Our
Business Model, page 1
2. Please
revise to expand your discussion of the operations of Azure Funding. For example:
● Describe
the products and services offered. Where you note that Azure will bring “F&I”
in house, define “F&I.” If F&I stands for finance and insurance, please
discuss the insurance aspects of Azure’s business;
● If
you work with any specific institutions in connection with providing financing or insurance,
please discuss;
● Discuss
competition as it specifically relates to Azure; and
● Provide
an overview of the financing process, including diligence and approvals, and describe Azure’s
customers.
Response:
We have revised our discussion of the operations of Azure Funding as requested on pages 2, 6, and 51.
3. Please
revise to define “CRM.”
Response:
We have revised our discussion to define “CRM” on page 2.
4. Please
add an organizational chart depicting each of your subsidiaries, including after the planned
reorganization, and the ownership structure of such subsidiaries.
Response:
We have added the organization chart on pages 8 and 54 as requested. Please note we have restructured our reorganization.
Our
Competitive Advantage
Strategic AI Partnership, page 4
5.
Please file the agreement with NextGen AI as an exhibit to
the registration statement.
Response:
In response to Staff’s comments, we have included the Master Services Agreement with NexGen AI in the exhibit index and will file
it as an exhibit to the registration statement.
Summary
Financial Data, page 12
6. We
note the entities included in the combined financial statements elected to be taxed as Partnerships
under the Internal Revenue Code, and similar codes in states in which the company is subject
to taxation, and no provisions for income taxes were required or recorded in the combined
financial statements. We also note after the offering the company will be subject to income
taxes. Based on the above, please revise the summary financial data to also present pro forma
income tax disclosures, including pro forma income tax expense calculated at statutory income
tax rates, pro forma net income after taxes, and pro forma net income per share after taxes.
Please consider presenting the pro forma income tax disclosures for all periods presented
but, at least, for the latest fiscal year and current interim period. Please be advised that
after the conversion to a taxable entity, any undistributed earnings or losses of the partnerships
should be reclassified to paid-in capital, as if a distribution had been made to the owners
with a subsequent contribution to equity within the new structure, and this reclassification
should also be reflected in any pro forma disclosures, including as adjusted disclosures
under Capitalization. Refer to SAB Topic 4:B. In addition, please address
the potential impact of becoming a taxable entity on future results of operations and liquidity
in MD&A.
Response:
In response to the Staff’s comment, the Company has updated the Summary Statements of Operations Data table on page 12,
statements of operations on pages F-3 and F-30 of the Amended Registration Statement to reflect the pro forma income tax calculation.
Additionally, the Company has included disclosure on pages 43 and 48 of the MD&A discussing the potential impact of its anticipated
status as a taxable entity. Page 37 was updated to reflect the reclassification
of the undistributed losses.
Risk
Factors
Risks
Relating to Our Business
We
rely on Floorplan Financing, page 19
7. We
note your disclosure on page 4 that your current floorplan financing is personally guaranteed
by your president, and that this arrangement imposes a natural cap on your ability to fully
leverage available financing. Please expand your disclosure to discuss any risks associated
with your current cap on financing. Disclose the amount of the cap and describe the process
and steps necessary to reach your goal of $50 million in floorplan financing by 2026.
Response:
We have expanded the discussion of risks associated with our floorplan financing as requested on page 19 under the section “Risk
Factors – We rely on Floorplan Financing”.
Use
of Proceeds, page 35
8. Please
amend your Use of Proceeds section to comply with Instructions 4 and 6 to Item 504 of Regulation
S-K or explain why you are not required to do so.
Response :
We have revised our disclosure in the Use of Proceeds to comply with Instructions 4 and 6 to Item 504 of Regulation S-K.
Capitalization,
page 36
9. Please
address the following under Capitalization:
● On
page 35 you imply you intend to use proceeds from the offering to pay working capital debt.
If accurate, revise the introductory paragraph here to reflect that fact and ensure the related
as adjusted amounts reflect your intent.
● Double-underline
cash and cash equivalents so it is clear cash and cash equivalents are not part of total
capitalization.
● Ensure
total capitalization sums appropriately as total indebtedness plus total equity.
Response:
In response to the Staff’s comment, the Company has revised the capitalization disclosure on pages 36 and 37 to include a description of its intention to use a portion of the proceeds from the offering to repay
working capital debt. In addition, the Company has double-underlined “cash and cash equivalents” and revised the total capitalization
amount in the “Capitalization” table on page 37 to reflect the sum of total indebtedness and total equity.
Business
Our
Products and Services, page 50
10. We
note your disclosure on page F-26 that the company “purchases substantially all of
its new boats from Nortec and Yellowfin.” Please revise your disclosure in the Business
section to discuss your relationship with these entities. Provide a narrative description
of any contracts or arrangements and file any such agreements as exhibits to the registration
statement. In addition, please expand your disclosure in Risk Factors under the heading “We
face substantial supplier and inventory acquisition risks” to specifically discuss
your purchasing relationships with these entities.
Response:
We have revised the discussion on page 56 to include our relationship and contractual arrangements with Nortec and Yellowfin,
and we have included the agreements as exhibits to the registration statement. We have also expanded the disclosure in Risk Factors under
the heading “We face substantial supplier and inventory acquisition risks.” on page 21.
Environmental,
Safety and Regulatory Matters, page 64
11. We
note that you discuss your manufacturing operations in this section. Please revise here and
throughout the prospectus to describe the extent to which you manufacture any of your products.
Response:
We have removed the discussion about manufacturing operations, as we do not have any such operations.
Facilities,
page 66
12. We
note that you only list one location in this section but that your website lists other locations.
Please provide disclosure responsive to Item 102 of Regulation S-K.
Response:
We have provided the requested disclosure for other locations on page 70 in the section “Business – Facilities”.
Certain
Relationships and Related Party Transactions, page 81
13. We
note that you include a line item for a prepaid expense from a related party and an amount
due from a related party on your Combined Balance Sheets on page F-3. We note also that you
list related party transactions on page F-21 that are not identified or discussed in this
section. Please add disclosure regarding these related party transactions to this section,
or advise.
Response:
In response to the Staff’s comment, the Company has revised the disclosure in section “Certain Relationships and Related
Party Transactions” on page 86 to include all related party transactions, consistent with the disclosure provided on page
F-3.
14. Please
file the July 19, 2019 agreement with Dan and Diane Ruegg and the February 23, 2023 agreement
with Tom Ruegg as exhibits to the registration statement.
Response:
In response to Staff’s comments, we included the July 22, 2019 Loan Agreement with Dan and Diane Ruegg and the February 23,
2023 Loan Agreement with Tom Ruegg in the exhibit index and will file them as exhibits to the registration statement.
Principal
Stockholders, page 82
15. We
note that Jason Ruegg is 100% owner of Ruegg Capital Group. Therefore, please revise Jason
Ruegg’s beneficial ownership to include the ownership of Ruegg Capital Group. In addition,
please revise the table to include a row for each of the named executive officers and directors
individually. Refer to Item 403 of Regulation S-K.
Response:
In response to Staff’s comments, we have revised this table to conform to Item 403 of Regulation S-K.
Combined
Financial Statements
Note
1. Nature of Business and Organization, page F-7
16. We
note that you intend to account for the merger and consolidation of the entities included
in the combined financial statements as common control transactions, as you believe the entities
will be owned and controlled by the same ownership group before and after the transactions.
Please identify who is included in the ownership group. Please also tell us the ownership
interests of each of the 5 entities involved in these transactions prior to the merger and
consolidation and the ownership interests of the company after the merger and consolidation.
In addition, please more fully explain to us when and how the transactions with OTH Florida
Acquisition Corp and Off The Hook Yacht YS Inc. will occur and your basis for presenting
them in the combined financial statements.
Response:
In response to the Staff’s comment, the Company has revised the disclosure in Note 1 to provide additional details regarding
the ownership structure of each entity involved, as well as an expanded narrative describing the reorganization transaction. OTH
Florida Acquisition Corp (“OTH Acquisition”) is wholly owned by Brian John, Off The Hook Yacht YS Inc. is wholly owned by
Jason Ruegg, Off the Hook Yacht Sales NC, LLC, Azure Funding, LLC and OTH Simon Marine YF LLC are directly and indirectly controlled
by Jason Ruegg. We have revised the combined financial statements, with the exclusion of OTH Acquisition, due to the absence of common
ownership among the 5 entities.
17. We
note as a result of a Stock Purchase Agreement entered on December 6,
2024,
OTH Acquisition will purchase all the ownership interests of OTHYS, Azure, and Boat Center and stockholders of OTH Acquisition will receive
as consideration a number of shares of common stock of OTH Acquisition representing 75% of the issued and outstanding shares of OTH Acquisition
and a cash payment. Please clarify and more fully address the following:
● Identify
who will hold the remaining 25% ownership interest in OTH Acquisition and clarify when and
how that ownership interest was obtained.
● Disclose
the amount of the cash payment and clarify who will pay it, who will receive it, and how
it will be financed.
Response: In
response to the Staff’s comment, we have restructured the reorganization and revised the combined financial statements. Please see pages 8, 40, and F-6.
Note
2. Basis of Presentation and Summary of Significant Accounting Policies Inventory, net, page F-9
18. We