RumbleOn Reports Initial Outcomes of $10 Million Rights Offering

Overview of RumbleOn's Rights Offering

RumbleOn, Inc. (NASDAQ: RMBL) has recently unveiled the preliminary results of its significant $10 million fully backstopped registered equity rights offering. This offering pertains specifically to shares of the company's Class B common stock. The company initiated this rights offering as a strategy to bolster its financial position and fuel further growth.

Details on the Subscription Period

The subscription period for investors to engage in this rights offering concluded recently. A total of 2,043,011 shares were subscribed at a price of $4.18 per share. The expected issuance of these shares is anticipated closely following subscriptions on or around a specific date. This highlights the active participation from eligible stockholders, showcasing their confidence in RumbleOn's future.

Support and Backstop from Stone House Capital

To further secure the offering, Stone House Capital Management, LLC has entered into a Support and Standby Purchase Agreement. This arrangement allows Stone House, along with its affiliates and managed by Mark Cohen, a board member, to step in and purchase any unsubscribed shares in a private placement. This backstop mechanism assures that the offering will be fully utilized, with expectations that approximately 349,333 shares will be acquired through this private placement.

Utilization of Proceeds

The company anticipates that the net proceeds from both the rights offering and the backstop private placement will amount to around $9 million. These funds are earmarked for essential corporate purposes. Key priorities include repaying existing convertible senior promissory notes and fulfilling additional capital financing obligations related to a newfound credit agreement with Oaktree, enhancing RumbleOn's liquidity and operational flexibility.

Future Outlook Post-Rights Offering

After the completion of this rights offering and the backstop private placement, RumbleOn expects to see an increase in its Class B common stock outstanding, totaling approximately 37,713,298 shares. This uptick in equity can potentially strengthen the company's market presence and foster further strategic initiatives.

About RumbleOn

RumbleOn operates through two distinct segments: its Powersports dealership division and Wholesale Express, LLC, focusing on transportation services in the automotive sector. Recognized as a leading powersports retail group, RumbleOn provides a wide array of products encompassing new and pre-owned vehicles, parts, accessories, and various services. Their vigorous acquisition strategy makes them the largest purchaser of pre-owned powersports vehicles in the nation, utilizing RideNow's Cash Offer to directly engage with consumers.

Frequently Asked Questions

What was the purpose of RumbleOn's Rights Offering?

The rights offering aimed to raise funds to bolster the company's financial strength, restructuring debts, and financing strategic initiatives.

Who acted as the standby purchaser in the Rights Offering?

Stone House Capital Management, LLC served as the standby purchaser, designed to acquire any unsubscribed shares to ensure the offering's full potential is realized.

What are the expected financial outcomes from the Rights Offering?

RumbleOn estimates approximately $9 million in net proceeds from the offering and backstop placement, designated for corporate purposes and debt obligations.

How does RumbleOn plan to use the funds raised?

The funds will primarily focus on debt repayment and fulfilling capital financing requirements to enhance operational capacity.

What does RumbleOn's market presence look like?

RumbleOn is the largest powersports retail group in terms of revenue, unit sales, and dealership locations across the nation, indicating a strong market presence.

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