Case 3: Materiality and Liabilities Testing - Gabriela Aguiar LLC Audit Case (Due in 24h)

Gabriela Aguiar LLC Board of Directors Meeting Minutes

June 15, 2024 (M-id-Year Meeting)

Present: Gabriela Aguiar (CEO), Kevin Arce, Elie Bassil, John Blasi, Connor Cizek, Stephanie

Clemente, Colby Collins, Chestina Conduah

1. Call to Order The meeting was called to order at 10:00 AM by Gabriela Aguiar, CEO.

2. Approval of Previous Minutes The minutes of the previous meeting were approved

unanimously.

3. Financial Update a. CFO presented Q2 financial results, noting a 15% increase in revenue

compared to the same period last year. b. Discussion of the ongoing impact of last year's

hurricane on operations and sales.

o Sales in the affected region are down by 20% but showing signs of recovery.

o The insurance claim process is ongoing, with the potential for litigation discussed.

4. Legal Update a. General Counsel provided an update on the insurance claim dispute.

o The insurance company has denied full coverage, citing policy limitations.

o The Board authorized the pursuit of legal action if necessary. b. Discussion of

potential legal fees:

o Estimated $2-3 million in legal fees if litigation proceeds.

o The Board approved a budget of up to $3.5 million for legal expenses related to

this matter.

5. Expansion Plans a. Proposal to expand production capacity in response to increasing

demand. b. The Board approved exploring options for additional manufacturing space.

6. Other Business: None.

7. Adjournment The meeting was adjourned at 12:30 PM.

Gabriela Aguiar LLC Board of Directors Meeting Minutes

December 20, 2024 (Year-End Meeting)

Present: Gabriela Aguiar (CEO), Kevin Arce, Elie Bassil, John Blasi, Connor Cizek, Stephanie

Clemente, Colby Collins, Chestina Conduah

1. Call to Order The meeting was called to order at 9:30 AM by Gabriela Aguiar, CEO.

2. Approval of Previous Minutes The minutes of the previous meeting were approved

unanimously.

3. Financial Review a. CFO presented preliminary year-end financial results.

o Annual revenue is projected to be up 10% despite the hurricane's impact.

o Profit margins are slightly down due to increased costs and legal expenses.

o Discussion of 2025 budget and financial projections.

4. Hurricane Impact and Insurance Litigation Update a. General Counsel provided an update

on the insurance litigation.

o A case was filed against the insurance company for breach of contract.

o Legal fees to date: $2.8 million, expected to increase in 2025. b. The Board

discussed the impact on cash flow and authorized a new line of credit.

o The Approved new line of credit for $44 million, effective January 7, 2025.

5. Debt Restructuring a. CFO presented a plan to consolidate existing debt.

o Proposal to take out a new loan of $15 million and roll the existing $12 million

line of credit into it.

o The Board approved the plan to be effective January 2, 2025.

6. Executive Compensation and Bonuses: Compensation Committee presented

recommendations for executive bonuses. The Board approved the following bonuses for

themselves:

o CEO (Gabriela Aguiar): $500,000

o Other Board Members: $150,000 each

o Discussion on linking future bonuses more closely to company performance and

resolution of the insurance litigation.

7. 2025 Strategic Planning

o a. Discussion of expansion plans and potential new product lines.

o b. The Board approved the budget for R&D in eco-friendly yacht technologies.

8. Other Business a. Brief discussion on potential capital leases for new equipment.

o The decision was made to continue with the current policy of not using capital

leases.

9. Adjournment The meeting was adjourned at 1:00 PM.