IRVING,
Texas, Nov. 26, 2024 /PRNewswire/ -- RumbleOn,
Inc. (NASDAQ: RMBL) (the "Company" or "RumbleOn") announced today
that it has commenced a $10.0 million
fully backstopped registered equity rights offering (the "Rights
Offering"), pursuant to which the Company is expected to receive
aggregate gross proceeds of $10.0
million, less expenses related to the Rights Offering. The
Company intends to use the proceeds from the Rights Offering for
general corporate purposes which may include repayment of the
Company's convertible senior 6.75% promissory notes due
January 1, 2025. The proceeds raised
will also satisfy, in part, the additional capital financing
obligations of the Company pursuant to a recent amendment to the
Company's credit agreement with Oaktree.
The Company is distributing at no charge to the holders of (i)
its Class A common stock, par value $0.001 per share (the "Class A common stock"),
and (ii) Class B common stock, par value $0.001 per share (the "Class B common stock" and,
together with the Class A common stock, the "common stock"), in
each case as of the close of business on November 25, 2024 (the "Record Date"),
non-transferable subscription rights (the "Subscription Rights") to
purchase up to 2,392,344 shares of Class B common stock at price of
$4.18 per share (the "Subscription
Price"). The aggregate subscription value of all shares of Class B
common stock available for purchase in the Rights Offering is
$10.0 million. Each holder of common
stock as of the Record Date (each, an "Eligible Stockholder") will
receive one Subscription Right for each share of the common stock
owned as of the Record Date. Each Subscription Right entitles the
holder to purchase 0.0677 shares of Class B common stock. The
Company will not issue any fractional shares of Class B common
stock in the Rights Offering. Instead, the Company will round down
the aggregate number of shares of Class B common stock the Eligible
Stockholders are entitled to receive to the nearest whole number.
Accordingly, as each Subscription Right represents the right to
purchase 0.0677 shares of Class B common stock, an Eligible
Stockholder must hold at least 15 shares of Class A common stock or
Class B common stock to receive sufficient Subscription Rights to
purchase at least one share of Class B common stock in the Rights
Offering. Eligible Stockholders will not be entitled to
exercise an over-subscription privilege to purchase additional
shares of Class B common stock that may remain unsubscribed as a
result of any unexercised Subscription Rights.
The Subscription Rights will expire and will have no value if
they are not exercised prior to 5:00 p.m.
Eastern Time, on the expiration time for the Rights Offering
(the "Expiration Time"), which is currently expected to be
5:00 p.m. Eastern time on December 12,
2024, unless the Company, in its sole discretion, extends
the period for exercising the Subscription Rights. Subject to the
terms and conditions of the Support and Standby Purchase Agreement
(defined below), the Company reserves the right to cancel,
terminate, amend, or extend the Rights Offering at any time prior
to the Expiration Time.
On November 26, 2024, the
Company entered into a support and standby purchase agreement (the
"Support and Standby Purchase Agreement") with Stone House Capital
Management, LLC, which is a holder of Class B common stock and is
managed by Mark Cohen, a member of
the board of directors of the Company (together with its
affiliates, the "Standby Purchaser"), and Mark Tkach and William
Coulter, each of whom is a holder of the Class B common
stock and a member of the board of directors of the Company
(collectively, the "Support Purchasers" and, together with the
Standby Purchaser, the "Investors"). The Support and Standby
Purchase Agreement provides, among other things, that (i) the
Standby Purchaser will purchase from the Company in a private
placement any shares of Class B common stock included in the Rights
Offering that are not subscribed for and purchased by Eligible
Stockholders (collectively, the "Backstop Securities") for the same
per share Subscription Price payable by the Eligible Stockholders
electing to exercise their Subscription Rights in the Rights
Offering; and (ii) each Support Purchaser will exercise all of his
respective Subscription Rights in full prior to the Expiration
Time.
Other Important Information
The Subscription Rights will not be listed for trading on any
stock exchange or market. Therefore, there will be no public market
for the Subscription Rights. However, the shares of Class B common
stock issued upon the exercise of the Subscription Rights will
remain listed on The Nasdaq Capital Market of the Nasdaq Stock
Market LLC under the symbol "RMBL."
The Company expects that Broadridge Corporate Issuer Solutions,
LLC, the subscription and information agent for the Rights
Offering, will distribute subscription documents for the Rights
Offering to Eligible Stockholders beginning on or about
November 26, 2024. Holders of shares
of common stock held in "street name" through a brokerage account,
bank or other nominee should contact their broker, bank or other
nominee for details regarding participation in the Rights Offering.
For any questions or further information about the Rights Offering,
please contact the information agent, at (888) 789-8409
(Toll-Free), or via email at shareholder@broadridge.com.
Neither the Company nor its board of directors has made or will
make any recommendation to holders regarding participation in the
Rights Offering. Holders should make an independent investment
decision about whether to participate in the Rights Offering based
on their own assessment of the Company's business and the Rights
Offering.
The offering of the Class B common stock pursuant to the Rights
Offering is being made pursuant to the Company's existing effective
shelf registration statement on Form S-3 (Reg. No. 333-281862) on
file with the Securities and Exchange Commission (the "SEC") and a
prospectus supplement (and the accompanying base prospectus) filed
with the SEC on the date hereof.
The information in this press release is not complete and is
subject to change. This press release shall not constitute an offer
to sell or a solicitation of an offer to buy any securities, nor
shall there be any offer, solicitation or sale of the securities in
any state or jurisdiction in which such offer, solicitation or sale
would be unlawful under the securities laws of such state or
jurisdiction. The Rights Offering will be made only by means of the
prospectus supplement (and the accompanying base prospectus) filed
with the SEC on the date hereof.
About RumbleOn
RumbleOn, Inc. (NASDAQ: RMBL), operates through two operating
segments: our Powersports dealership group and Wholesale Express,
LLC, an asset-light transportation services provider focused on the
automotive industry. Our Powersports group is the largest
powersports retail group in the United
States (as measured by reported revenue, major unit sales
and dealership locations), offering over 500 powersports franchises
representing 50 different brands of products. Our Powersports group
sells a wide selection of new and pre-owned products, including
parts, apparel, accessories, finance & insurance products and
services, and aftermarket products. We are the largest purchaser of
pre-owned powersports vehicles in the
United States and utilize RideNow's Cash Offer to acquire
vehicles directly from consumers.
For more information on RumbleOn, please visit rumbleon.com.
Cautionary Note on Forward-Looking Statements
The Company's press release contains statements that constitute
"forward-looking statements" within the meaning of The Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements include, but are not limited to, those regarding the
Company's plans to launch a Rights Offering, the anticipated final
terms, timing and completion of the proposed Rights Offering, and
the use of proceeds from the proposed Rights Offering.
Forward-looking statements generally can be identified by words
such as "anticipates," "believes," "continues," "could,"
"estimates," "expects," "intends," "hopes," "may," "plan,"
"possible," "potential," "predicts," "projects," "should,"
"targets," "would" and similar expressions, although not all
forward-looking statements contain these identifying words. Such
statements are subject to numerous important factors, risks and
uncertainties that may cause actual events or results to differ
materially from current expectations and beliefs, including, but
not limited to, risks and uncertainties related to: whether the
proposed transactions will be completed in a timely manner, or at
all; the risk that all of the closing conditions for the proposed
Rights Offering are not satisfied; the occurrence of any event,
change or other circumstance that could cause the Company not to
proceed with the Rights Offering; the determination of the final
terms of the proposed Rights Offering; the satisfaction of
customary closing conditions related to the proposed Rights
Offering; risks related to the diversion of management's attention
from RumbleOn's ongoing business operations; the impact of general
economic, industry or political conditions in the United States or internationally, as well
as the other risk factors set forth under the caption "Risk
Factors" in the registration statement, as amended, and in
RumbleOn's Annual Report for the year ended December 31, 2023 and Quarterly Reports on Form
10-Q for the quarters ended March 30,
2024, June 30, 2024 and
September 30, 2024 and in any other
subsequent filings made with the SEC by RumbleOn. There can be no
assurance that RumbleOn will be able to complete the proposed
Rights Offering on the anticipated terms, or at all. Any
forward-looking statements contained in this press release speak
only as of the date hereof, and RumbleOn specifically disclaims any
obligation to update any forward-looking statement, whether as a
result of new information, future events or otherwise, except as
required by law.
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SOURCE RumbleOn
