RideNow Group, Inc 10-Q for FY2025 Q2
RideNow Group, Inc. (RDNW)
10-Q
2025-08-11
For: 2025-06-30
View Original
Added on
April 12, 2026
About this 10-Q
RideNow Group, Inc filed this 10-Q on August 11, 2025, covering the quarter ended June 30, 2025 (FY2025 Q2).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $299.9M
- down 11.0% from $336.8M a year earlier
- Net loss
- $32.2M
- compared with a net loss of $700K a year earlier
- Diluted EPS
- -$0.85
- compared with -$0.02 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2025
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number: 001-38248
(Exact name of registrant as specified in its charter) | ||||||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
( | ||
| (Registrant's telephone number, including area code) | ||
| (Former name, former address and former fiscal year, if changed since last report) | ||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "a smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | x | |||||||||
| Non-accelerated filer | o | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
The number of shares of Class B Common Stock, $0.001 par value, outstanding on August 1, 2025 was 38,002,422 shares. In addition, 50,000 shares of Class A Common Stock, $0.001 par value, were outstanding on August 1, 2025.
RumbleOn, Inc.
QUARTERLY PERIOD ENDED JUNE 30, 2025
Table of Contents to Report on Form 10-Q
| FINANCIAL INFORMATION | ||||||||
| Financial Statements (Unaudited) | ||||||||
| Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||
| Quantitative and Qualitative Disclosures About Market Risk | ||||||||
| Controls and Procedures | ||||||||
| OTHER INFORMATION | ||||||||
| Legal Proceedings | ||||||||
| Risk Factors | ||||||||
| Other Information | ||||||||
| Exhibits | ||||||||
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
RumbleOn, Inc.
Condensed Consolidated Balance Sheets
($ in millions, except per share amounts)
| June 30, 2025 | December 31, 2024 | ||||||||||
| ASSETS | (Unaudited) | ||||||||||
| Current assets: | |||||||||||
| Cash | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventory, net | |||||||||||
| Prepaid expense and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Right-of-use assets | |||||||||||
| Franchise rights and other intangible assets | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and other current liabilities | $ | $ | |||||||||
| Vehicle floor plan notes payable | |||||||||||
| Current portion of long-term debt | |||||||||||
| Total current liabilities | |||||||||||
| Long-term liabilities: | |||||||||||
| Long-term debt, net of current maturities | |||||||||||
| Operating lease liabilities | |||||||||||
| Other long-term liabilities, including finance lease obligation | |||||||||||
| Total long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' equity (deficit): | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
Class B common stock in treasury, at cost, | ( | ( | |||||||||
| Total stockholders' equity (deficit) | ( | ||||||||||
| Total liabilities and stockholders' equity (deficit) | $ | $ | |||||||||
See accompanying notes to the unaudited consolidated financial statements.
1
RumbleOn, Inc.
Condensed Consolidated Statements of Operations
($ in millions, except per share amounts)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Powersports vehicles | $ | $ | $ | $ | |||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Finance and insurance, net | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Powersports vehicles | |||||||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Impairment of franchise rights | |||||||||||||||||||||||
| Operating income (loss) | ( | ( | |||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Floor plan interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Other interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Total other expense | ( | ( | ( | ( | |||||||||||||||||||
| Loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Income tax expense (benefit) | ( | ( | |||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted average shares - basic and diluted | |||||||||||||||||||||||
| Net loss per share - basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
See accompanying notes to the consolidated financial statements.
2
RumbleOn, Inc.
Consolidated Statements of Stockholders' Equity (Deficit)
($ in millions)
(Unaudited)
| Common Shares | Additional Paid-in Capital | Accumulated Deficit | Treasury Shares | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| March 31, 2025 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Common Shares | Additional Paid-in Capital | Accumulated Deficit | Treasury Shares | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| December 31, 2024 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Common Shares | Additional Paid-in Capital | Accumulated Deficit | Treasury Shares | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| March 31, 2024 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| June 30, 2024 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Common Shares | Additional Paid-in Capital | Accumulated Deficit | Treasury Shares | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
| Class A | Class B | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| December 31, 2023 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| June 30, 2024 | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
See accompanying notes to the consolidated financial statements.
3
RumbleOn, Inc.
Condensed Consolidated Statements of Cash Flows
($ in millions)
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of debt issuance costs | |||||||||||
| Stock-based compensation | |||||||||||
| Impairment of franchise rights | |||||||||||
| Deferred taxes | ( | ||||||||||
| Interest paid-in-kind capitalized to debt principal | |||||||||||
| Gain on lease termination | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | |||||||||||
| Inventory | ( | ( | |||||||||
| Prepaid expenses and other assets | |||||||||||
| Other liabilities | |||||||||||
| Accounts payable and accrued liabilities | |||||||||||
| Floor plan trade note borrowings | |||||||||||
| Net cash provided by operating activities | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Purchase of property and equipment | ( | ( | |||||||||
| Technology development | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Repayments of debt | ( | ( | |||||||||
| Net increase in borrowings from non-trade floor plans | |||||||||||
| Other | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| NET CHANGE IN CASH AND RESTRICTED CASH | ( | ( | |||||||||
| Cash and restricted cash at beginning of period | |||||||||||
| Cash and restricted cash at end of period | $ | $ | |||||||||
See accompanying notes to the consolidated financial statements.
4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 –DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Description of Business
RumbleOn, Inc. operates through two
We offer a wide selection of new and pre-owned motorcycles, all-terrain vehicles (“ATV”), utility terrain or side-by-side vehicles (“SXS”), personal watercraft (“PWC”), snowmobiles, and other powersports products, including parts, apparel, accessories, finance & insurance products and services (“F&I”), and aftermarket products from a wide range of manufacturers. Additionally, we offer a full suite of repair and maintenance services. We operated 55 locations as of June 30, 2025, primarily in the Sunbelt region. We source high quality pre-owned inventory directly from consumers via our proprietary RideNow Cash Offer technology.
Express provides asset-light brokerage services facilitating automobile transportation primarily between and among dealerships and auctions throughout the United States.
On August 11, 2025, we announced that the Company’s Board of Directors approved the Company’s name change to “RideNow Group, Inc.” and the Company’s Class B Common Stock ticker symbol change to “RDNW”, each scheduled to be effective as of August 13, 2025. The Company’s Class B Common Stock will continue to be listed on The NASDAQ Stock Market.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company and its wholly owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for smaller reporting companies. In accordance with those rules and regulations, the Company has omitted certain information and notes required by GAAP for annual consolidated financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal, recurring adjustments necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The year-end balance sheet data was derived from audited financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 10-K”). The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results expected for the entire fiscal year. Intercompany accounts and material intercompany transactions have been eliminated.
Reclassifications
Use of Estimates
5
Disaggregated Revenue
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| New retail vehicles | $ | $ | $ | $ | |||||||||||||||||||
| Pre-owned retail vehicles | |||||||||||||||||||||||
| Wholesale vehicles | |||||||||||||||||||||||
| Total powersports vehicles | |||||||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Finance and insurance, net | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
| Timing of revenue recognition: | |||||||||||||||||||||||
| Point in time | $ | $ | |||||||||||||||||||||
| Over time | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Accounts Receivable
| ($ in millions) | June 30, 2025 | December 31, 2024 | |||||||||
| Contracts in transit | $ | $ | |||||||||
| Trade receivables | |||||||||||
Factory receivables(1) | |||||||||||
| Less: allowance for doubtful accounts | |||||||||||
| Accounts receivable, net | $ | $ | |||||||||
(1) Primarily amounts due from manufacturers for holdbacks, rebates, co-op advertising, warranty and supplies returns.
Recent Pronouncements Not Yet Adopted
Improvements to Income Tax Disclosures
Issued in December 2023, ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, focuses on the rate reconciliation and income taxes paid. This ASU requires disclosure, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, the ASU requires disclosure of income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The new standard is effective for the Company for 2025, with early adoption permitted. Amendments in this ASU may be applied prospectively for the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods or may be applied retrospectively by providing the revised disclosures for all periods presented. We expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition.
6
Disaggregation of Income Statement Expenses
Issued in November 2024, ASU 2024-03, Disaggregation of income Statement Expenses (Subtopic 220-40), requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. While early adoption is permitted, we do not plan to adopt this standard early. This ASU will likely result in additional disclosures being included in our consolidated financial statements once adopted. We are currently evaluating the provisions of this ASU.
NOTE 2 – INVENTORY AND VEHICLE FLOOR PLAN NOTES PAYABLE
| ($ in millions) | June 30, 2025 | December 31, 2024 | |||||||||
| New powersports vehicles | $ | $ | |||||||||
| Pre-owned powersports vehicles | |||||||||||
| Parts, accessories and other | |||||||||||
| Inventory | $ | $ | |||||||||
Floor plan notes payable as of June 30, 2025 and December 31, 2024 were as follows:
| ($ in millions) | June 30, 2025 | December 31, 2024 | |||||||||
| Floor plans notes payable - trade | $ | $ | |||||||||
| Floor plans notes payable - non-trade | |||||||||||
| Floor plan notes payable | $ | $ | |||||||||
Floor plan notes payable - trade reflects amounts borrowed to finance the purchase of specific new and, to a lesser extent, pre-owned vehicle inventory with corresponding manufacturers' captive finance subsidiaries (“trade lenders”). Floor plan notes payable-non-trade represents amounts borrowed to finance the purchase of specific new and pre-owned vehicle inventories with non-trade lenders. Changes in vehicle floor plan notes payable-trade are reported as operating cash flows and changes in floor plan notes payable-non-trade are reported as financing cash flows in the accompanying Condensed Consolidated Statements of Cash Flows.
New inventory costs are generally reduced by manufacturer holdbacks, incentives, floor plan assistance, and non-reimbursement-based manufacturer advertising rebates, while the related vehicle floor plan payables are reflective of the gross cost of the vehicle. The vehicle floor plan payables may be higher than the inventory cost due to the timing of the sale of a vehicle and payment of the related liability. Vehicle floor plan facilities are due on demand, but in the case of new vehicle inventories, are generally paid within a few business days after the related vehicles are sold.
New vehicle floor plan facilities generally utilize Secured Overnight Financing Rate (“SOFR”)-based interest rates, which ranged between 8.0 % and 19.5 % as of June 30, 2025. Pre-owned vehicle floor plan facilities utilize prime or SOFR-based interest rates, which ranged between 8.0 % and 10.8 % as of June 30, 2025. The aggregate capacity to finance our inventory under the new and pre-owned vehicle floor plan facilities was $366.1 million as of June 30, 2025.
Inventory serves as collateral under floor plan notes payable borrowings. The inventory balance in its entirety also serves as collateral under the Credit Agreement. Refer to Note 4 for further detail.
7
NOTE 3 –FRANCHISE RIGHTS AND OTHER INTANGIBLE ASSETS
The carrying amount of franchise rights and other intangible assets was as follows:
| ($ in millions) | June 30, 2025 | December 31, 2024 | |||||||||
| Indefinite-lived intangible assets: | |||||||||||
Franchise rights(1) | $ | $ | |||||||||
Goodwill(2) | |||||||||||
| Total indefinite-lived intangible assets | |||||||||||
| Definite-lived intangible assets, net | $ | $ | |||||||||
| Intangible assets, net | $ | $ | |||||||||
(1) Attributed to the Company's powersports reporting unit and powersports reportable segment. Gross amount of $343.0 216.0 million as of June 30, 2025 and $182.0 million as of December 31, 2024.
(2) Balance was attributed to the Company's vehicle transportation services reporting unit. Goodwill of $241.7 million attributed to the powersports reporting unit was fully impaired as of December 31, 2023.
Interim Impairment Test
For the quarter ended June 30, 2025, management determined that a triggering event had occurred resulting from the prolonged economic uncertainty and our sustained depressed stock price through the last day of the second quarter of 2025. We elected to bypass the qualitative test, and we performed a quantitative interim impairment test for our franchise rights and goodwill.
The fair value of franchise rights was determined using an excess earnings method. This analysis incorporates estimates and forward-looking projections, such as future revenue growth rates, corresponding gross margin, return on debt-free working capital contributory asset returns, and the discount rate. Based on the interim impairment test, the carrying value of the franchise rights exceeded their fair value, and an impairment charge of $34.0 million was recorded to impairment of franchise rights on the condensed consolidated statement of operations.
The Company also tested its goodwill for impairment and determined that the fair value of its vehicle transportation reporting unit exceeded its carrying value as of June 30, 2025, so no impairment of goodwill was recorded.
NOTE 4 – LONG-TERM DEBT
Long-term debt consisted of the following as of June 30, 2025 and December 31, 2024:
| ($ in millions) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Term loan credit agreement | $ | $ | ||||||||||||
| Fleet notes and other | ||||||||||||||
| Total principal amount | ||||||||||||||
| Less: unamortized debt issuance costs | ( | ( | ||||||||||||
| Total long-term debt | ||||||||||||||
| Less: current portion of long-term debt | ( | ( | ||||||||||||
| Long-term debt, net of current portion | $ | $ | ||||||||||||
8
Term Loan Credit Agreement
The Company has a term loan credit agreement (as amended, the “Credit Agreement”) among the Company, as borrower, the lenders party thereto, and Oaktree Fund Administration, LLC (“Oaktree”), as administrative agent and collateral agent. Borrowings under the Credit Agreement bear interest at a rate per annum equal, at the Company’s option, to either (a) SOFR with a floor of 1.00 %, plus an applicable margin of 8.25 %, or (b)
a fluctuating adjusted base rate in effect from time to time, plus an applicable margin of 7.25 %. At the Company’s option, up to 1.0 % of interest may be paid in kind. The interest rate on June 30, 2025 was 12.8 %. The Company was in compliance with all financial and non-financial covenants with the Credit Agreement at June 30, 2025.
Obligations under the Credit Agreement are secured by a first-priority lien on substantially all of the assets of the Company and its wholly owned subsidiaries (the “Subsidiary Guarantors”), although certain assets of the Company and Subsidiary Guarantors are subject to a first-priority lien in favor of floor plan lenders, and such liens and priority are subject to certain other exceptions. The Subsidiary Guarantors also guarantee the obligations of the Company under the Credit Agreement.
Amendment No. 10 to the Credit Agreement
On August 10, 2025, the parties to the Credit Agreement executed Amendment No. 10 to the Credit Agreement (“Amendment No. 10”), which, among other things: (i) extended the maturity date of the Credit Agreement from August 31, 2026 to September 30, 2027; (ii) requires the Company to prepay $20.0 million of the borrowings under the Credit Agreement (“Senior Loans”) using the proceeds of the Subordinated Loans, as defined in Note 10, and other funds; (iii) reduced the interest rate applicable to the Senior Loans by 0.50 % per annum; (iv) added certain reporting covenants; (v) added milestones requiring the Company to commence a refinancing process prior to September 30, 2026 and complete the refinancing on or prior to November 30, 2026, and provided that failure to achieve such milestones will be an event of default under the Credit Agreement unless, prior to such milestone dates the Company (a) reduces the outstanding principal amount of the Senior Loans to the lesser of (1) $150 million and (2) 3.25 x Consolidated EBITDA or (b) both (1) forms a special committee of the Company’s board of directors (the “Board”) to negotiate and recommend to the Board for approval any strategic alternatives, including any recapitalization, refinancing, any transaction resulting in a change of control or a sale of all or substantially all assets of the Company and its subsidiaries and (2) engages an investment banker or financial advisor acceptable to the Administrative Agent to evaluate and execute the strategic alternatives of the Company, and (vi) modified the financial maintenance covenants in the Credit Agreement.
After giving effect to Amendment No. 10, borrowings under the Credit Agreement will bear interest at a rate per annum equal, at the Company’s option, to either (a) SOFR (with a floor of 3.0 %), plus an applicable margin of 7.75 % per annum or (b) a fluctuating adjusted base rate in effect from time to time, plus an applicable margin of 6.75 % per annum. In connection with Amendment No. 10, the Company will pay a customary exit fee.
Under Amendment No. 10, the Company has also agreed to, on or before August 26, 2025, amend and restate the warrants, dated August 14, 2023, between the Company and each applicable Lender to (i) reset the strike price at a 25 % premium to the 30-day post-announcement volume weighted average trading price of the Company Class B Common Stock and (ii) extend the term of such warrants to five years from the effective date of Amendment No. 10.
See Note 10 for a summary of the new Subordinated Loans.
The 6.75 % convertible senior notes (the “Notes”) were outstanding pursuant to an Indenture (the “Indenture”), by and between the Company and Wilmington Trust, the National Association as the Trustee and collateral agent for the Trustee and the holders of the Notes. The Indenture included customary representations, warranties and covenants by the Company and customary closing conditions. The Notes matured on January 1, 2025 and were repaid on January 2, 2025, as permitted.
9
Other Interest Expense
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Interest expense on: | |||||||||||||||||||||||
Term loan(1) | $ | $ | $ | $ | |||||||||||||||||||
Finance lease obligation(2) | |||||||||||||||||||||||
| Other, net | ( | ( | ( | ( | |||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
(1) Includes the amortization of debt discount and issuance costs of $2.4 million and $4.9 million for the three and six months ended June 30, 2025, respectively, and $2.2 million and $4.4 million for the three and six months ended June 30, 2024, respectively.
(2) Finance lease obligation is reported in other long-term liabilities on the consolidated balance sheets.
NOTE 5 – SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Compensation and related costs | $ | $ | $ | $ | |||||||||||||||||||
| Facilities | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Professional fees | |||||||||||||||||||||||
| Advertising, marketing and selling | |||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||
| Technology development and software | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
NOTE 6 – STOCK-BASED COMPENSATION
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Restricted Stock Units | $ | $ | $ | $ | |||||||||||||||||||
Stock Options(1) | ( | ||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
(1) Amount in the six months ended June 30, 2025 is the reversal of expense for stock options forfeited by our former CEO.
On June 4, 2025, the Company’s stockholders approved a proposal to increase the number of shares available for grant under the Company’s 2017 Stock Incentive Plan by 2,500,000 shares.
During the six months ended June 30, 2025, the Company granted a total of 1,664,272 restricted stock units that vest based on time (predominantly on a pro rata basis over three years ) and 729,856 restricted stock units that vest if and when the Company’s Class B Common Stock price reaches and sustains target prices ranging from $11 to $23 per share for a 20 -day trading period within three years . The fair value of the restricted stock with vesting dependent on stock price targets was estimated using a Monte Carlo model.
NOTE 7 – INCOME TAXES
10
NOTE 8 – LOSS PER SHARE
The following common stock equivalents were outstanding as of June 30, and they were excluded from the calculations of loss per share because they were anti-dilutive or because their market condition had not been met:
| (Shares in millions) | 2025 | 2024 | ||||||||||||
| Unvested restricted stock units | ||||||||||||||
| Warrants to purchase Class B Common Stock | ||||||||||||||
Shares issuable in connection with | ||||||||||||||
| Performance stock options | ||||||||||||||
NOTE 9 – SUPPLEMENTAL CASH FLOW INFORMATION
The following table includes supplemental cash flow information, including non-cash investing and financing activity for the six months ended June 30, 2025 and 2024:
| Six Months Ended June 30, | |||||||||||
| ($ in millions) | 2025 | 2024 | |||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for (refunds from) taxes, net | ( | ||||||||||
| Cash payments for operating leases | |||||||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | |||||||||||
| Capital expenditures included in debt | |||||||||||
Of the cash paid for interest, $5.2 million and $8.3 million in the six months ended June 30, 2025 and 2024, respectively, related to floor plan payables to finance inventory.
The following shows cash and restricted cash for the Statements of Cash Flows:
| ($ in millions) | June 30, 2025 | December 31, 2024 | June 30, 2024 | ||||||||||||||
| Cash | $ | $ | $ | ||||||||||||||
| Restricted cash | |||||||||||||||||
| Total cash and restricted cash | |||||||||||||||||
NOTE 10 – RELATED-PARTY TRANSACTIONS
Pre-Owned Inventory Floor Plan Line
In December 2024, the Company entered into a floor plan facility agreement with related parties William Coulter (“Coulter”), Mark Tkach (“Tkach”), and Ridenow Management LLLP, an entity controlled by Coulter and/or Tkach that provides up to $16.0 million of revolving availability that bears interest based on SOFR plus 5.0 %. Coulter and Tkach are holders of the Company’s Class B common stock, members of the Board of Directors and former executive officers of the Company. As of June 30, 2025, the amount owed by the Company to the related parties under this facility was $7.1 million.
Leases
As of June 30, 2025, the Company had 27 leases of properties consisting primarily of dealerships and offices from related parties. Each related-party lease is with a wholly owned subsidiary of the Company as the tenant and an entity controlled by Coulter and/or Tkach, as the landlord. Most of these leases commenced a 20-year term on September 1, 2021, with base rent increasing 2 % annually. Two of the leases were entered into in 2024, one with a 20-year term containing a purchase option and the other with a 10-year term. Rent expense associated with the related-party operating leases was $4.8 million and $4.8 million for the three months ended June 30, 2025 and 2024, respectively, and $9.7 million and $9.5 million for the six months ended June 30, 2025 and 2024, respectively, and is included in selling, general and administrative expenses on the consolidated statements of operations.
11
The following table provides the amounts for related party leases that are included on the balance sheets:
| ($ in millions) | June 30, 2025 | December 31, 2024 | |||||||||
| Right-of-use assets | $ | $ | |||||||||
Current portion of operating lease liabilities(1) | |||||||||||
| Long-term portion of operating lease liabilities | |||||||||||
(1) Included in accounts payable and other current liabilities.
Employment of Immediate Family Members
Mr. Tkach has two immediate family members that are employed by the Company: one as an executive vice president and one as a commissioned sales representative. The executive vice president received aggregate gross pay, including grants of restricted stock, of $0.2 million and $0.3 million for the three and six months ended June 30, 2025, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2024, respectively. The commissioned sales representative received gross pay of $0.1 million and $0.2 million for the three and six months ended June 30, 2025, respectively, while 2024 amounts for the three and six months ended June 30, 2024 were below the $120,000
Subordinated Loans Commitment Letters with Related Parties
NOTE 11 - SEGMENT INFORMATION
Business segments are components of an enterprise about which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) to assess operating performance and allocate resources. Our CODM is our Chairman, Chief Executive Officer, and Interim Chief Financial Officer. Our operations are organized by management into operating segments by line of business. The CODM evaluates performance and allocates resources based on the segment operating income (loss) of the operating segments, which excludes impairment charges, amortization and depreciation that are included in operating income (loss) on the consolidated statement of operations and includes floor plan interest expense, which is not included in operating income (loss) on the consolidated statement of operations. The CODM uses segment operating income in the annual budget and forecasting process, and considers budget-to-actual variances on a periodic basis.
We have two reportable segments: (1) powersports dealership group and (2) vehicle transportation services. The powersports dealership group segment is primarily comprised of powersports dealerships that sell new and pre-owned powersports vehicles; parts, service and accessories; and finance and inventory products for powersports vehicles sold. The vehicle transportation services segment provides nationwide transportation brokerage services between dealerships and auctions. Revenue is all from external customers.
The powersports dealership group segment is significantly larger and requires more investment than our vehicle transportation services segment. The operating income of the powersports segment includes certain operating overhead and corporate costs. Assets are not used for purposes of assessing performance or allocating resources and, as a result, such information has not been presented.
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| ($ in millions) | Powersports Dealership Group | Vehicle Transportation Services | Unallocated and Adjustments | Total | |||||||||||||||||||
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Powersports vehicles | $ | $ | $ | $ | |||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Finance and insurance, net | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Powersports vehicles | |||||||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Compensation and related costs | |||||||||||||||||||||||
| Facilities | |||||||||||||||||||||||
Other operating expenses(1) | |||||||||||||||||||||||
| Impairment of franchise rights | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Floor plan interest expense | ( | ||||||||||||||||||||||
| Operating income (loss) | ( | ( | ( | ||||||||||||||||||||
| Floor plan interest expense | |||||||||||||||||||||||
| Other interest expense | |||||||||||||||||||||||
| Other non-operating expense (income) | ( | ||||||||||||||||||||||
| Loss before income taxes | $ | ( | |||||||||||||||||||||
(1) Other operating expenses represent general and administrative expenses, advertising, professional fees and stock-based compensation expenses. The detail for these expenses on a consolidated basis is in Note 5 and is primarily attributable to the Powersports Dealership Group.
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| ($ in millions) | Powersports Dealership Group | Vehicle Transportation Services | Unallocated and Adjustments | Total | |||||||||||||||||||
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Powersports vehicles | $ | $ | $ | $ | |||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Finance and insurance, net | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of revenue: | — | ||||||||||||||||||||||
| Powersports vehicles | |||||||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Compensation and related costs | |||||||||||||||||||||||
| Facilities | |||||||||||||||||||||||
Other operating expenses(1) | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Floor plan interest expense | ( | ||||||||||||||||||||||
| Operating income (loss) | |||||||||||||||||||||||
| Floor plan interest expense | |||||||||||||||||||||||
| Other interest expense | |||||||||||||||||||||||
| Other non-operating expense (income) | |||||||||||||||||||||||
| Loss before income taxes | $ | ( | |||||||||||||||||||||
(1) Other operating expenses represent general and administrative expenses, advertising, professional fees and stock-based compensation expenses. The detail for these expenses on a consolidated basis is in Note 5 and is primarily attributable to the Powersports Dealership Group.
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| ($ in millions) | Powersports Dealership Group | Vehicle Transportation Services | Unallocated and Adjustments | Total | |||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Powersports vehicles | $ | $ | $ | $ | |||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Finance and insurance, net | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Powersports vehicles | |||||||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Compensation and related costs | |||||||||||||||||||||||
| Facilities | |||||||||||||||||||||||
Other operating expenses(1) | |||||||||||||||||||||||
| Impairment of franchise rights | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Floor plan interest expense | ( | ||||||||||||||||||||||
| Operating income (loss) | ( | ( | ( | ||||||||||||||||||||
| Floor plan interest expense | |||||||||||||||||||||||
| Other interest expense | |||||||||||||||||||||||
| Other non-operating expense (income) | ( | ||||||||||||||||||||||
| Loss before income taxes | $ | ( | |||||||||||||||||||||
(1) Other operating expenses represent general and administrative expenses, advertising, professional fees and stock-based compensation expenses. The detail for these expenses on a consolidated basis is in Note 5 and is primarily attributable to the Powersports Dealership Group.
15
| ($ in millions) | Powersports Dealership Group | Vehicle Transportation Services | Unallocated and Adjustments | Total | |||||||||||||||||||
| Six Months Ended June 30, 2024 | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Powersports vehicles | $ | $ | $ | $ | |||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Finance and insurance, net | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of revenue: | — | ||||||||||||||||||||||
| Powersports vehicles | |||||||||||||||||||||||
| Parts, service and accessories | |||||||||||||||||||||||
| Vehicle transportation services | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Compensation and related costs | |||||||||||||||||||||||
| Facilities | |||||||||||||||||||||||
Other operating expenses(1) | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Floor plan interest expense | ( | ||||||||||||||||||||||
| Operating income (loss) | |||||||||||||||||||||||
| Floor plan interest expense | |||||||||||||||||||||||
| Other interest expense | |||||||||||||||||||||||
| Other non-operating expense (income) | ( | ||||||||||||||||||||||
| Loss before income taxes | $ | ( | |||||||||||||||||||||
(1) Other operating expenses represent general and administrative expenses, advertising, professional fees and stock-based compensation expenses. The detail for these expenses on a consolidated basis is in Note 5 and is primarily attributable to the Powersports Dealership Group.
NOTE 12 – COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, the Company is involved in various claims and legal actions that arise in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, as of June 30, 2025, the Company does not believe that the ultimate resolution of any legal actions, either individually or in the aggregate, will have a material adverse effect on its financial position, results of operations, liquidity, and capital resources.
Future litigation may be necessary to defend the Company by determining the scope, enforceability and validity of third-party proprietary rights or to establish its own proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.
SEC Investigation
On June 28, 2024, the Company received a subpoena from the SEC requesting documents created during or relating to the period from January 1, 2021 through the date of the subpoena. The subpoena covers documents relating to, among other matters, the Company’s previously disclosed internal investigation into the use of Company resources by former Chairman and CEO Marshall Chesrown; the Company’s review, consideration and approval, and the underlying terms of, related party transactions; employment, compensation, reimbursement and severance arrangements; and disclosures and communications to customers and investors regarding the company’s RideNow Cash Offer tool and certain of its technology. The Company intends to continue responding to any information requests and otherwise cooperate with the SEC’s inquiry.
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The Company cannot predict the ultimate outcome or timing of the SEC investigation, what, if any, actions may be taken by the SEC or the effect that such actions may have on the business, prospects, operating results and financial condition of the Company.
Delaware Litigation
As previously disclosed, the Company began an investigation of certain allegations surrounding Marshall Chesrown’s use of Company resources in 2023. On June 11, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as CEO (the “CEO Resignation Letter”) and on July 7, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as a member of the Board of Directors (the “Board Resignation Letter” and together with the CEO Resignation Letter, the “Resignation Letters”). In the CEO Resignation Letter, Mr. Chesrown indicated that he was resigning for “good reason” under his employment agreement and described his disagreement with several recent corporate governance, disclosure and other actions taken by the Company, the Board and certain of its members. In the Board Resignation Letter, Mr. Chesrown further detailed his disagreement with actions taken by the Company, the Board and certain of its members and indicated his intent to pursue legal claims. The Company disagrees with the characterization of the allegations and assertions described in the Resignation Letters. The Company and Mr. Chesrown conducted a pre-suit mediation in October 2023, as required in his employment agreement, but did not resolve the matter. On March 13, 2024, Mr. Chesrown filed suit against the Company in Delaware Superior Court for the claims asserted in his Resignation Letters. Mr. Chesrown is seeking a declaratory judgment that he resigned with good reason, termination compensation damages in the amount of $7.5 million, general and reputational damages in the amount of $50.0 million, punitive damages, attorney's fees and litigation costs. The parties are now engaged in the initial stages of discovery. The subject matter of the litigation overlaps with the investigation begun by the Company in 2023. As of the date of this filing, the Company has not decided what further actions, if any, may be taken with regard to the investigation allegations.
The Company intends to defend the litigation claims vigorously; however, we can provide no assurance regarding the outcome of this matter.
Letters of Credit
NOTE 13 – SUBSEQUENT EVENTS
Subordinated Loans Commitment Letters with Related Parties
As discussed further in Note 10, on August 10, 2025, the Company entered into commitment letters with related parties, where the Commitment Parties agreed to make an aggregated total of $10.0 million of subordinated loans to the Company.
Amendment No. 10 to Credit Agreement
As discussed further in Note 4, on August 10, 2025, the Company entered into Amendment No. 10 to the Credit Agreement.
17
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements and the related notes and the MD&A included in our 2024 10-K, as well as our unaudited condensed consolidated financial statements and the accompanying notes included in Item 1 of this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements. See “Forward-Looking and Cautionary Statements” for a discussion of the uncertainties and risks associated with these statements. Terms not defined in this MD&A have the meanings ascribed to them in the condensed consolidated financial statements and related footnotes. Unless otherwise noted, comparisons are of results for the quarter ended June 30, 2025, or second quarter, to the quarter ended June 30, 2024 and the six months ended June 30, 2025, or first half, to the six months ended June 30, 2024.
Overview
RumbleOn, Inc. operates primarily through two operating segments: a powersports dealership group and Wholesale Express, LLC (“Express”), a vehicle transportation services provider. We were incorporated in 2013. We have grown primarily through acquisitions.
On August 11, 2025, the Company announced that its Board of Directors approved the Company’s name change to “RideNow Group, Inc.” and the Company’s Class B Common Stock ticker symbol change to “RDNW”, each scheduled to be effective as of August 13, 2025. The Company’s Class B Common Stock will continue to be listed on The NASDAQ Stock Market.
Powersports Segment
We believe our powersports business is the largest powersports retail group in the United States offering a wide selection of new and pre-owned motorcycles, all-terrain vehicles (“ATV”), utility terrain or side-by-side vehicles (“SXS”), personal watercraft (“PWC”), snowmobiles, and other powersports products. We also offer parts, apparel, accessories, finance & insurance products and services (“F&I”), and aftermarket products from a wide range of manufacturers. Additionally, we offer a full suite of repair and maintenance services. As of June 30, 2025, we operated 55 retail dealerships located predominantly in the Sunbelt region. We source high quality pre-owned inventory online via our proprietary Cash Offer technology, which allows us to purchase pre-owned units directly from consumers.
Vehicle Transportation Services Segment
Express provides transportation brokerage services facilitating automobile transportation primarily between and among dealerships and auctions through an asset-light business model.
Recent Developments
As of June 30, 2025, the Company was in compliance with all of the financial covenants under its Credit Agreement (as defined in Note 4) but determined it needed to extend the due date of its Credit Agreement from August 31, 2026 to September 30, 2027 to increase its financial flexibility and allow time for refinancing the debt. The Company entered into the following agreements to meet these objectives:
Subordinated Loans Commitment Letters with Related Parties
On August 10, 2025, the Company entered into separate commitment letters (collectively, the “Commitment Letters”) with each of Stone House Capital Management, LLC, Mark Tkach and Bill Coulter (collectively, the “Commitment Parties”), pursuant to which each Commitment Party has committed to make $3.3 million of subordinated loans to the Company (collectively, the “Subordinated Loans”). The aggregate gross proceeds of the Subordinated Loans, or approximately $10.0 million, shall be used by the Company to prepay outstanding principal amounts owed under the Credit Agreement (as defined below). The Subordinated Loans will bear interest at a rate per annum of 13.0% per annum, payable semi-annually in-kind by increasing the principal amount of the Subordinated Loans. The Subordinated Loans will mature thirty-six months after the date of funding. The Subordinated Loans will be contractually subordinated in right of payment to the loans outstanding under the Company’s Credit Agreement (the “Senior Loans”). See Note 10 for more detail.
18
Tenth Amendment to Term Loan Credit Agreement
On August 10, 2025, the parties to the Credit Agreement executed Amendment No. 10 to the Credit Agreement (“Amendment No. 10”), which, among other things: (i) extended the maturity date of the Credit Agreement from August 31, 2026 to September 30, 2027; (ii) requires the Company to prepay $20.0 million of the Senior Loans using the proceeds of the Subordinated Loans and other funds; (iii) reduced the interest rate a by 0.50% per annum; (iv) added certain reporting covenants; (v) added milestones requiring the Company to commence a refinancing process prior to September 30, 2026 and complete the refinancing on or prior to November 30, 2026, and provided that failure to achieve such milestones will be an event of default under the Credit Agreement unless, prior to such milestone dates the Company (a) reduces the outstanding principal amount of the Loans to the lesser of (1) $150.0 million and (2) 3.25x Consolidated EBITDA or (b) both (1) forms a special committee of the Board to negotiate and recommend to the Board for approval any strategic alternatives, including any recapitalization, refinancing, any transaction resulting in a change of control or a sale of all or substantially all assets of the Company and its subsidiaries and (2) engages an investment banker or financial advisor acceptable to the Administrative Agent to evaluate and execute the strategic alternatives of the Company, and (vi) modified the financial maintenance covenants in the Credit Agreement. See Note 4 for more detail.
Key Operating Metrics
We regularly review a number of key operating metrics such as revenue, volume and gross profit measures, to evaluate our segments, measure our progress, and make operating decisions. Key factors impacting our operating results include increasing brand awareness, maximizing the opportunity to source vehicles from consumers and dealers, and enhancing the selection and timing of vehicles we make available for sale to our customers.
Powersports Segment
Revenue
Revenue is comprised of powersports vehicle sales, finance and insurance products bundled with retail vehicle sales (“F&I”), and parts, service and accessories/merchandise (“PSA”). We sell both new and pre-owned powersports vehicles through retail and wholesale channels. F&I and PSA revenue is earned through retail channels. Retail channels provide the opportunity to maximize profitability by increased sales volume and lower average days to sale and are impacted by customer demand, market conditions and inventory availability. The wholesale channel provides the opportunity to move excess inventory or inventory that does not meet our needs for retail. The number of vehicles sold varies from period to period due to these factors. Factors primarily affecting pre-owned vehicle sales include inventory levels and the availability of inventory, as well as the number of retail pre-owned vehicles sold and the average selling price of these vehicles.
Gross Profit
Gross profit generated on vehicle sales reflects the difference between the vehicle selling price and the cost of revenue associated with acquiring the vehicle and preparing it for sale. Cost of revenue includes the vehicle acquisition cost, inbound transportation cost, and particularly for pre-owned vehicles, reconditioning costs. The aggregate gross profit and gross profit per vehicle vary across vehicle type, make, model, etc. as well as through retail and wholesale channels, and with regard to gross profit per vehicle, are not necessarily correlated with the sale price. Vehicles sold through retail channels generally have the highest dollar gross profit per vehicle given the vehicle is sold directly to the consumer. Pre-owned vehicles sold through wholesale channels generally have lower margins and do not enable any other ancillary gross profit attributable to financing and accessories. Factors affecting gross profit from period to period include the mix of new versus pre-owned vehicles sold, the distribution channel through which they are sold, the sources from which we acquired such inventory, retail market prices, our average days to sale, and our pricing strategy. We may opportunistically choose to shift our inventory mix to higher or lower cost vehicles, or to opportunistically raise or lower our prices relative to market to take advantage of demand/supply imbalances in our sales channels, which could temporarily lead to gross profits increasing or decreasing in any given channel.
19
Vehicles Sold
We define vehicles sold as the number of vehicles sold through retail and wholesale channels in each period. Vehicles sold is the primary driver of our revenue and gross profit. Vehicles sold also impacts complementary revenue streams, such as F&I and PSA. Vehicles sold increases our base of customers and improves brand awareness, which can lead to future sales.
Total Gross Profit Per Unit
Total gross profit per unit is the aggregate gross profit of the powersports segment in a given period, divided by retail powersports units sold in that period. The aggregate gross profit of the powersports segment includes gross profit generated from the sale of new and pre-owned vehicles; any income related to loans originated to finance the vehicle; revenue earned from the sale of F&I products including extended service contracts, maintenance programs, guaranteed auto protection, tire and wheel protection, and theft protection; gross profit on the sale of parts, service and accessories/merchandise; and gross profit generated from wholesale sales of vehicles.
Vehicle Transportation Services Segment
Revenue
Revenue is derived from freight brokerage agreements with dealers, distributors, or private party individuals to transport vehicles from a point of origin to a designated destination. The freight brokerage agreements are fulfilled by independent third-party transporters who must meet our performance obligations and standards. Express is considered the principal in the delivery transactions since it is primarily responsible for fulfilling the service.
Vehicles Delivered
We define vehicles delivered as the number of vehicles delivered from a point of origin to a designated destination under freight brokerage agreements with dealers, distributors, or private parties. Vehicles delivered are the primary driver of revenue and, in turn, profitability in the vehicle transportation services segment.
Total Gross Profit Per Unit
Total gross profit per vehicle transported represents the difference between the price received from non-affiliated customers and our cost to contract an independent third-party transporter divided by the number of third-party vehicles transported.
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Results of Operations
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | YoY Change | % Change | 2025 | 2024 | YoY Change | % Change | |||||||||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||||||||
| Powersports vehicles | $ | 219.0 | $ | 235.0 | $ | (16.0) | (6.8) | % | $ | 391.0 | $ | 449.8 | $ | (58.8) | (13.1) | % | |||||||||||||||||||||||||||||||
| PSA | 52.4 | 56.9 | (4.5) | (7.9) | % | 98.5 | 109.8 | (11.3) | (10.3) | % | |||||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 27.2 | 29.7 | (2.5) | (8.4) | % | 48.3 | 55.5 | (7.2) | (13.0) | % | |||||||||||||||||||||||||||||||||||||
| Vehicle transportation services | 1.3 | 15.2 | (13.9) | (91.4) | % | 6.8 | 29.5 | (22.7) | (76.9) | % | |||||||||||||||||||||||||||||||||||||
| Total Revenue | 299.9 | 336.8 | (36.9) | (11.0) | % | 544.6 | 644.6 | (100.0) | (15.5) | % | |||||||||||||||||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||||||||||||||||||||
| Powersports | 31.6 | 30.9 | 0.7 | 2.3 | % | 55.8 | 60.6 | (4.8) | (7.9) | % | |||||||||||||||||||||||||||||||||||||
| PSA | 24.9 | 26.2 | (1.3) | (5.0) | % | 45.7 | 49.8 | (4.1) | (8.2) | % | |||||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 27.2 | 29.7 | (2.5) | (8.4) | % | 48.3 | 55.5 | (7.2) | (13.0) | % | |||||||||||||||||||||||||||||||||||||
| Vehicle transportation services | 0.2 | 3.1 | (2.9) | (93.5) | % | 1.3 | 6.6 | (5.3) | (80.3) | % | |||||||||||||||||||||||||||||||||||||
Total Gross Profit | 83.9 | 89.9 | (6.0) | (6.7) | % | 151.1 | 172.5 | (21.4) | (12.4) | % | |||||||||||||||||||||||||||||||||||||
| SG&A expenses | 66.7 | 71.4 | (4.7) | (6.6) | % | 127.8 | 145.3 | (17.5) | (12.0) | % | |||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 2.0 | 3.1 | (1.1) | (35.5) | % | 4.3 | 6.6 | (2.3) | (34.8) | % | |||||||||||||||||||||||||||||||||||||
| Impairment of franchise rights | 34.0 | — | 34.0 | NM | 34.0 | — | 34.0 | NM | |||||||||||||||||||||||||||||||||||||||
| Operating Income (Loss) | (18.8) | 15.4 | (34.2) | (222.1) | % | (15.0) | 20.6 | (35.6) | (172.8) | % | |||||||||||||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||||||||||||||
| Floor plan interest expense | (2.6) | (4.3) | 1.7 | (39.5) | % | (5.4) | (8.3) | 2.9 | (34.9) | % | |||||||||||||||||||||||||||||||||||||
| Other interest expense | (10.9) | (11.9) | 1.0 | (8.4) | % | (21.7) | (24.0) | 2.3 | (9.6) | % | |||||||||||||||||||||||||||||||||||||
| Other income | 0.2 | — | 0.2 | NM | 0.4 | 0.3 | 0.1 | 33.3 | % | ||||||||||||||||||||||||||||||||||||||
Total other expense | (13.3) | (16.2) | 2.9 | (17.9) | % | (26.7) | (32.0) | 5.3 | (16.6) | % | |||||||||||||||||||||||||||||||||||||
| Loss before income taxes | (32.1) | (0.8) | (31.3) | NM | (41.7) | (11.4) | (30.3) | (265.8) | % | ||||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 0.1 | (0.1) | 0.2 | (200.0) | % | $ | 0.2 | (0.4) | 0.6 | (150.0) | % | ||||||||||||||||||||||||||||||||||||
| Net loss | $ | (32.2) | $ | (0.7) | $ | (31.5) | NM | $ | (41.9) | $ | (11.0) | $ | (30.9) | (280.9) | % | ||||||||||||||||||||||||||||||||
NM= not meaningful.
21
Powersports Segment
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||
| ($ in millions except per vehicle) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||||||||
| New retail vehicles | $ | 154.8 | $ | 175.8 | $ | (21.0) | $ | 274.9 | $ | 330.8 | $ | (55.9) | |||||||||||||||||||||||||||||
| Pre-owned retail vehicles | 59.2 | 54.1 | 5.1 | 107.3 | 108.1 | (0.8) | |||||||||||||||||||||||||||||||||||
| Total retail vehicles | 214.0 | 229.9 | (15.9) | 382.2 | 438.9 | (56.7) | |||||||||||||||||||||||||||||||||||
| Wholesale vehicles | 5.0 | 5.1 | (0.1) | 8.8 | 10.9 | (2.1) | |||||||||||||||||||||||||||||||||||
| Parts, service, accessories | 52.4 | 56.9 | (4.5) | 98.5 | 109.8 | (11.3) | |||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 27.2 | 29.7 | (2.5) | 48.3 | 55.5 | (7.2) | |||||||||||||||||||||||||||||||||||
| Total revenue | $ | 298.6 | $ | 321.6 | $ | (23.0) | $ | 537.8 | $ | 615.1 | $ | (77.3) | |||||||||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||||||||||||||
| New retail vehicles | $ | 20.5 | $ | 21.6 | $ | (1.1) | $ | 36.8 | $ | 40.8 | $ | (4.0) | |||||||||||||||||||||||||||||
| Pre-owned retail vehicles | 11.1 | 9.2 | 1.9 | 18.9 | 19.7 | (0.8) | |||||||||||||||||||||||||||||||||||
| Total retail vehicles | 31.6 | 30.8 | 0.8 | 55.7 | 60.5 | (4.8) | |||||||||||||||||||||||||||||||||||
| Wholesale vehicles | — | 0.1 | (0.1) | 0.1 | 0.1 | — | |||||||||||||||||||||||||||||||||||
| Parts, service, accessories | 24.9 | 26.2 | (1.3) | 45.7 | 49.8 | (4.1) | |||||||||||||||||||||||||||||||||||
| Finance and insurance | 27.2 | 29.7 | (2.5) | 48.3 | 55.5 | (7.2) | |||||||||||||||||||||||||||||||||||
| Total gross profit | $ | 83.7 | $ | 86.8 | $ | (3.1) | $ | 149.8 | $ | 165.9 | $ | (16.1) | |||||||||||||||||||||||||||||
| Vehicle Unit Sales | |||||||||||||||||||||||||||||||||||||||||
| New retail vehicles | 10,618 | 12,004 | (1,386) | 18,631 | 22,507 | (3,876) | |||||||||||||||||||||||||||||||||||
| Pre-owned retail vehicles | 5,283 | 4,796 | 487 | 9,590 | 9,801 | (211) | |||||||||||||||||||||||||||||||||||
| Total retail vehicles | 15,901 | 16,800 | (899) | 28,221 | 32,308 | (4,087) | |||||||||||||||||||||||||||||||||||
| Wholesale vehicles | 1,216 | 907 | 309 | 2,082 | 1,984 | 98 | |||||||||||||||||||||||||||||||||||
| Total vehicles sold | 17,117 | 17,707 | (590) | 30,303 | 34,292 | (3,989) | |||||||||||||||||||||||||||||||||||
| Revenue per vehicle | |||||||||||||||||||||||||||||||||||||||||
| New retail vehicles | $ | 14,579 | $ | 14,645 | $ | (66) | $ | 14,755 | $ | 14,698 | $ | 57 | |||||||||||||||||||||||||||||
| Pre-owned retail vehicles | 11,206 | 11,280 | (74) | 11,189 | 11,029 | 160 | |||||||||||||||||||||||||||||||||||
| Wholesale vehicles | 4,112 | 5,623 | (1,511) | 4,227 | 5,494 | (1,267) | |||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 1,711 | 1,768 | (57) | 1,711 | 1,718 | (7) | |||||||||||||||||||||||||||||||||||
| Parts, service, accessories | 3,295 | 3,387 | (92) | 3,490 | 3,399 | 91 | |||||||||||||||||||||||||||||||||||
| Total revenue per retail vehicle | $ | 18,464 | $ | 18,839 | $ | (375) | $ | 18,745 | $ | 18,701 | $ | 44 | |||||||||||||||||||||||||||||
| Gross Profit per retail vehicle | |||||||||||||||||||||||||||||||||||||||||
| New vehicles | $ | 1,931 | $ | 1,799 | $ | 132 | $ | 1,975 | $ | 1,813 | $ | 162 | |||||||||||||||||||||||||||||
| Pre-owned vehicles | 2,101 | 1,918 | 183 | 1,971 | 2,010 | (39) | |||||||||||||||||||||||||||||||||||
| Finance and insurance, net | 1,711 | 1,768 | (57) | 1,711 | 1,718 | (7) | |||||||||||||||||||||||||||||||||||
| Parts, service, accessories | 1,566 | 1,560 | 6 | 1,619 | 1,541 | 78 | |||||||||||||||||||||||||||||||||||
Total gross profit per retail vehicle(1) | 5,264 | 5,167 | 97 | 5,308 | 5,135 | 173 | |||||||||||||||||||||||||||||||||||
(1) Calculated as total gross profit divided by new and pre-owned retail powersports units sold.
22
Revenue
Total powersports revenue for the quarter decreased $23.0 million compared to the same period in 2024 primarily due to lower volume of new retail units sold. The impact on revenue from the lower volume of new retail units was partially offset by an increase in the volume of pre-owned retail vehicles in addition to increases in average revenue per new and pre-owned retail vehicle sold. The lower volume in retail sales of new vehicles contributed to a decline in F&I and PSA revenue for the quarter.
Total powersports revenue for the first half decreased $77.3 million compared to the first half last year primarily due to a lower volume of retail units sold, which also led to F&I and PSA declines, partially offset by increases in the revenue per vehicle for new and pre-owned retail vehicles sold and PSA.
Gross Profit
Total powersports gross profit decreased $3.1 million for the quarter and $16.1 million for the first half primarily due to lower total retail sales volumes. For the quarter, the impact from the increase in sales of pre-owned vehicles, as well as higher gross profit per new and pre-owned vehicles sold partially offset the impact from the lower sales of new retail powersports vehicles. For the first half, the impact on gross profit from the overall lower volume was partially offset by higher per-vehicle gross profit for new retail vehicles and PSA.
Vehicle Transportation Services Segment
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||||||
Revenue ($ in millions) | $ | 1.3 | $ | 15.2 | $ | (13.9) | $ | 6.8 | $ | 29.5 | $ | (22.7) | ||||||||||||||||||||||||||
Gross Profit ($ in millions) | $ | 0.2 | $ | 3.1 | $ | (2.9) | $ | 1.3 | $ | 6.6 | $ | (5.3) | ||||||||||||||||||||||||||
| Vehicles transported | 1,993 | 23,334 | (21,341) | 10,618 | 47,971 | (37,353) | ||||||||||||||||||||||||||||||||
| Revenue per vehicle transported | $ | 652 | $ | 651 | $ | 1 | $ | 640 | $ | 615 | $ | 25 | ||||||||||||||||||||||||||
| Gross Profit per vehicle transported | $ | 100 | $ | 133 | $ | (33) | $ | 122 | $ | 138 | $ | (16) | ||||||||||||||||||||||||||
Our vehicle transportation services segment results were impacted by the departure of several employees, including almost all brokers, early in 2025. While we have hired and continue to hire additional employees, including brokers, we expect this segment’s volume in 2025 to be substantially lower than its 2024 volume. Total vehicle transportation services revenue and gross profit decreased for the second quarter and first half of 2025 compared to the prior year comparable periods due to lower volume of vehicles transported.
Selling, General and Administrative Expenses
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||
| Compensation and related costs | $ | 39.1 | $ | 43.2 | $ | (4.1) | $ | 73.1 | $ | 85.2 | $ | (12.1) | |||||||||||||||||||||||
| Facilities | 11.3 | 10.5 | 0.8 | 22.5 | 21.9 | 0.6 | |||||||||||||||||||||||||||||
| General and administrative | 8.0 | 8.2 | (0.2) | 15.1 | 17.6 | (2.5) | |||||||||||||||||||||||||||||
| Advertising, marketing and selling | 4.0 | 5.9 | (1.9) | 7.8 | 11.8 | (4.0) | |||||||||||||||||||||||||||||
| Professional fees | 3.3 | 1.9 | 1.4 | 8.0 | 5.2 | 2.8 | |||||||||||||||||||||||||||||
| Stock-based compensation | 0.6 | 1.4 | (0.8) | 0.5 | 2.8 | (2.3) | |||||||||||||||||||||||||||||
| Technology and software | 0.4 | 0.3 | 0.1 | 0.8 | 0.8 | — | |||||||||||||||||||||||||||||
| Total SG&A expenses | $ | 66.7 | $ | 71.4 | $ | (4.7) | $ | 127.8 | $ | 145.3 | $ | (17.5) | |||||||||||||||||||||||
| Total SG&A as a % of gross profit | 79.5% | 79.4% | 10 bps | 84.6% | 84.2% | 40 bps | |||||||||||||||||||||||||||||
Selling, general and administrative expenses (“SG&A”) were lower for the quarter and first half of 2025 compared to the prior year primarily due to our cost savings initiatives, partially offset by higher professional fees and facilities costs. Compensation and related costs comprised the majority of the savings.
23
In all periods presented, SG&A included certain charges and credits that we view as being outside of our normal, ongoing operations. For the quarter, SG&A included $1.6 million compared to $0.4 million in the prior year quarter of such charges, primarily representing legal costs for the matters discussed in Note 11. SG&A for the first half of 2025 included $1.1 million of management transition costs and $3.8 million of legal costs, including costs for the matters discussed in Note 11. SG&A for the first half of 2024 included a total of $1.3 million of charges for legal costs for the matters discussed in Note 11 and the cost to terminate a contract. Stock compensation expense for the quarter and first half of 2025 was lower than the prior year comparable periods partly due to the Company’s annual equity grant being made in June in 2025, while it was made in March in 2024. In addition, stock compensation expense for the first half of 2025 included the $0.7 million reversal of expense due to the forfeiture of our former Chief Executive Officer’s equity awards.
Depreciation and Amortization
| Three Months Ended June 30, | Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | Change | 2025 | 2023 | Change | |||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 2.0 | $ | 3.1 | $ | (1.1) | $ | 4.3 | $ | 6.6 | $ | (2.3) | |||||||||||||||||||||||
Depreciation and amortization decreased primarily due to certain intangible assets becoming fully amortized.
Impairment of Franchise Rights
Management determined that an impairment triggering event had occurred resulting from the prolonged economic uncertainty and our sustained depressed stock price through the June 30, 2025. As a result of the interim quantitative impairment test we performed, we recorded a $34.0 million charge to impairment of franchise rights on the condensed consolidated statement of operations in the quarter to reduce franchise rights to fair value. There was no such impairment charge during the comparable period last year.
The fair value of franchise rights was determined using an excess earnings method. This analysis incorporates estimates and forward-looking projections, such as future revenue growth rates, corresponding gross margin, return on debt-free working capital contributory asset returns, and the discount rate. The use of different assumptions would likely lead to a different fair value, and changes to these assumptions in the future, such as an increase to the discount rate, could result in future impairment charges.
Floor Plan Interest Expense
| Three Months Ended June 30, | Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||
| Floor plan interest expense | $ | 2.6 | $ | 4.3 | $ | (1.7) | $ | 5.4 | $ | 8.3 | $ | (2.9) | |||||||||||||||||||||||
Floor plan interest expense was lower in the quarter and first half of 2025 primarily because average inventory levels were lower compared to the prior year comparable periods. We have floor plan agreements with both manufacturer-affiliated finance companies and with related and non-related third parties for most new and certain pre-owned vehicles. The interest rates on these floor plan notes payable commitments vary by lender and are variable rates. See Notes 2 and 10 for more information.
24
Other Interest Expense
| Three Months Ended June 30, | Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||
| Other interest expense | $ | 10.9 | $ | 11.9 | $ | (1.0) | $ | 21.7 | $ | 24.0 | $ | (2.3) | |||||||||||||||||||||||
Other interest expense consists primarily of interest on the term loan facility, finance lease obligation, and the 6.75% convertible senior notes. See Note 4 for interest expense by debt instrument. Other interest expense decreased for the quarter and six months due primarily to the 6.75% convertible senior notes being paid off at the beginning of 2025, as well as lower average borrowings and a lower interest rate on the term loan in 2025 compared to 2024. Amortization of debt discount and issuance costs of $2.4 million and $4.9 million for the three and six months ended June 30, 2025, respectively, and $2.2 million and $4.4 million for the three and six months ended June 30, 2024, respectively, were included in other interest expense.
See Notes 4 and 10 for new and modified debt agreements entered into in August 2025 that will impact future interest expense, including the timing of paying such interest.
Liquidity and Capital Resources
Our primary sources of liquidity are available cash and amounts available under our floor plan lines of credit.
Our financial statements reflect estimates and assumptions made by management that affect the carrying values of the Company’s assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially from these judgments and estimates, which could have a material impact on the carrying values of the Company’s assets and liabilities and the results of operations.
We had the following liquidity resources available as of June 30, 2025 and December 31, 2024:
| ($ in millions) | June 30, 2025 | December 31, 2024 | ||||||||||||
| Cash | $ | 44.7 | $ | 85.3 | ||||||||||
Restricted cash(1) | 15.1 | 11.4 | ||||||||||||
| Total cash and restricted cash | 59.8 | 96.7 | ||||||||||||
| Availability under powersports inventory financing credit facilities | 125.9 | 146.2 | ||||||||||||
| Committed liquidity resources available | $ | 185.7 | $ | 242.9 | ||||||||||
(1) Amounts included in restricted cash are primarily comprised of the deposits required under the Company's various floor plan lines of credit.
Our future liquidity and capital requirements will depend upon numerous factors, including our results of operations, the timing and magnitude of capital expenditures or strategic initiatives, and other business and risk factors described under “Risk Factors” in our 2024 10-K. We believe that current cash balances plus cash generated from operations will be sufficient to meet both the operating and capital requirements of our ordinary business operations through at least the next twelve months; however, there can be no assurance that we will not require additional financing within this time frame.
As discussed in “Recent Developments” and Note 4, in August 2025 the Company entered into an agreement to amend and extend its term loan agreement. In addition, as discussed in “Recent Developments” and Note 10, the Company entered into Commitment Letters with related parties, pursuant to which the Commitment Parties have agreed to make a total of $10.0 million of subordinated loans to the Company that will be used, in addition to existing cash balances to prepay $20.0 million of the principal due under the term loan facility in accordance with Amendment No. 10. As a result of the prepayment and interest rate reduction pursuant to Amendment No. 10, the Company expects cash payments for interest expense to be $3.4 million lower per year on an annualized basis for the duration of the term loan facility.
25
Our outstanding principal amount of indebtedness is summarized in the table below:
(1) Excludes finance lease obligations, which are included in other long-term liabilities.
| ($ in millions) | June 30, 2025 | December 31, 2024 | |||||||||
Asset-based Short-Term Financing: | |||||||||||
| Floor plan notes (financing for inventory) | $ | 240.2 | $ | 209.9 | |||||||
| Long-Term Debt: | |||||||||||
| Term loan facility | 228.5 | 227.1 | |||||||||
| 6.75% convertible senior notes | — | 38.8 | |||||||||
| Fleet notes and other | 1.3 | 1.5 | |||||||||
| Principal amount of long-term debt | 229.8 | 267.4 | |||||||||
| Less: unamortized debt issuance costs | (11.4) | (16.3) | |||||||||
| Total long-term debt, including current maturities | 218.4 | 251.1 | |||||||||
Total debt(1) | $ | 458.6 | $ | 461.0 | |||||||
The following table summarizes our cash flows:
| Six Months Ended June 30, | |||||||||||||||||
| ($ in millions) | 2025 | 2024 | Change | ||||||||||||||
Net cash provided by operating activities | $ | 4.0 | $ | 29.2 | $ | (25.2) | |||||||||||
Net cash used in investing activities | (2.9) | (1.4) | (1.5) | ||||||||||||||
Net cash used in financing activities | (38.0) | (33.7) | (4.3) | ||||||||||||||
Net change in cash | $ | (36.9) | $ | (5.9) | $ | (31.0) | |||||||||||
Operating Activities
Our primary sources of operating cash flows result from the sales of powersports vehicles and ancillary products. Our primary use of cash from operating activities are purchases of inventory, parts and merchandise; marketing costs; interest payments on trade floor plans, long-term debt, and finance lease obligations; rental costs for facilities; and personnel-related expenses. Operating cash flows for the six months ended June 30, 2025 were $25.2 million lower than for the comparable period in the prior year, which benefited from the settlement of a $15.4 million loan portfolio transaction.
Investing Activities
| Six Months Ended June 30, | |||||||||||||||||
| ($ in millions) | 2025 | 2024 | Change | ||||||||||||||
Purchase of property and equipment | $ | (2.9) | $ | (1.0) | $ | (1.9) | |||||||||||
Technology development | — | (0.4) | 0.4 | ||||||||||||||
Cash used in investing activities | $ | (2.9) | $ | (1.4) | $ | (1.5) | |||||||||||
Our investing activities support and expand our operations.
26
Financing Activities
| Six Months Ended June 30, | |||||||||||||||||
| ($ in millions) | 2025 | 2024 | Change | ||||||||||||||
Repayments of debt | $ | (39.0) | $ | (35.5) | $ | (3.5) | |||||||||||
Net increase in non-trade floor plan borrowings | 1.8 | 2.1 | (0.3) | ||||||||||||||
| Other financing | (0.8) | (0.3) | (0.5) | ||||||||||||||
Net cash used in financing activities | $ | (38.0) | $ | (33.7) | $ | (4.3) | |||||||||||
Cash flows from financing activities primarily relate to our short and long-term debt activity. In January 2025, we repaid our 6.75% convertible senior notes at their maturity date. See Notes 4 and 10 for new and modified debt agreements entered into in August 2025.
Critical Accounting Policies and Estimates
See Note 1 - Description of Business and Significant Accounting Policies, included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for accounting pronouncements and material changes to our critical accounting policies since December 31, 2024. There have been no other material changes to our critical accounting policies and use of estimates from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 10-K.
Forward-Looking and Cautionary Statements
This Quarterly Report on Form 10-Q, as well as information included in oral statements or other written statements made or to be made by us, contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are neither historical facts nor assurances of future performance. These forward-looking statements are based on our current, reasonable expectations and assumptions, which expectations and assumptions are subject to risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include those discussed in our 2024 10-K and this Quarterly Report on Form 10-Q. Given these risks and uncertainties, readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to publicly update or revise or any forward-looking statements, except as required by law.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
This item is not applicable as we are currently considered a smaller reporting company.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management, with the participation of our Chief Executive Officer and Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2025. Based on this evaluation, our Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2025, based on the ongoing remediation of material weakness identified in the 2024 10-K. The material weakness existing in our internal control over financial reporting relates to user access and segregation of duties
27
related to certain information technology systems that support the Company’s financial reporting processes including revenue, inventory, purchasing and related expenditures, resulting in ineffective journal entry and other manual controls.
As set forth below, management has taken and will continue to take steps to remediate the identified material weakness. Notwithstanding the material weakness, we have performed additional analyses and procedures to enable management to conclude that our consolidated financial statements included in this Form 10-Q fairly present in all material respects our financial condition and results of operations as of and for the periods presented.
Management’s Remediation Plan
In response to the material weakness discussed above, we plan to continue efforts already underway to remediate internal control over financial reporting, which include the following:
•We are enhancing our processes around reviewing and provisioning access to key financial systems and ensuring appropriate segregation of duties;
•We continue to enhance governance and reporting over the execution of these remediation action items, including expansion of mitigating controls where appropriate.
Management and our Audit Committee will monitor these specific remedial measures and the effectiveness of our overall control environment. A material weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We can provide no assurance as to when the remediation of this material weakness will be completed to provide for an effective control environment.
Changes in Internal Control Over Financial Reporting
Other than described above, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints that require management to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are not a party to any material legal proceedings as set forth in Item 103 of Regulation S-K, other than ordinary routine litigation incidental to our business and as set forth below.
SEC Investigation
On June 28, 2024, the Company received a subpoena from the SEC requesting documents created during or relating to the period from January 1, 2021 through the date of the subpoena. The subpoena covers documents relating to, among other matters, the Company’s previously disclosed internal investigation into the use of Company resources by former Chairman and CEO Marshall Chesrown; the Company’s review, consideration and approval, and the underlying terms of, related party transactions; employment, compensation, reimbursement and severance arrangements; and disclosures and communications to customers and investors regarding the company’s RideNow Cash Offer tool and certain of its technology. The Company intends to continue responding to any information requests and otherwise cooperate with the SEC’s inquiry.
The Company cannot predict the ultimate outcome or timing of the SEC investigation, what, if any, actions may be taken by the SEC or the effect that such actions may have on the business, prospects, operating results and financial condition of the Company.
Delaware Litigation
As previously disclosed, the Company began an investigation of certain allegations surrounding Marshall Chesrown’s use of Company resources in 2023. On June 11, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as CEO (the “CEO Resignation Letter”) and on July 7, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as a member of the Board of Directors (the “Board Resignation Letter” and together with the CEO Resignation Letter, the “Resignation Letters”). In the CEO Resignation Letter, Mr. Chesrown indicated that he was resigning for “good reason” under his employment agreement and described his disagreement with several recent corporate governance, disclosure and other actions taken by the Company, the Board and certain of its members. In the Board Resignation Letter, Mr. Chesrown further detailed his disagreement with actions taken by the Company, the Board and certain of its members and indicated his intent to pursue legal claims. The Company disagrees with the characterization of the allegations and assertions described in the Resignation Letters. The Company and Mr. Chesrown conducted a pre-suit mediation in October 2023, as required in his employment agreement, but did not resolve the matter. On March 13, 2024, Mr. Chesrown filed suit against the Company in Delaware Superior Court for the claims asserted in his Resignation Letters. Mr. Chesrown is seeking a declaratory judgment that he resigned with good reason, termination compensation damages in the amount of $7.5 million, general and reputational damages in the amount of $50.0 million, punitive damages, attorney's fees and litigation costs. The parties are now engaged in the initial stages of discovery. The subject matter of the litigation overlaps with the investigation begun by the Company in 2023. As of the date of this filing, the Company has not decided what further actions, if any, may be taken with regard to the investigation allegations.
The Company intends to defend the litigation claims vigorously; however, we can provide no assurance regarding the outcome of this matter.
Item 1A. Risk Factors.
Our business, financial condition, operating results, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our 2024 10-K. There have been no material changes to the risk factors previously disclosed in our 2024 10-K, the occurrence of any of which could have a material adverse effect on our actual results.
Item 5. Other Information.
Trading Arrangements
During the three months ended June 30, 2025, no director or officer of the Company adopted terminated
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Item 6. Exhibits.
| Exhibit Number | Description | |||||||
| # | ||||||||
| # | ||||||||
| # | ||||||||
Amendment No. 10 to the Term Loan Credit Agreement, dated August 10, 2025, by and among RumbleOn, Inc., the Subsidiary Guarantors party thereto, the Lenders party thereto, and Oaktree Fund Administration, LLC, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on August 11, 2025). | ||||||||
| 101.INS | Inline XBRL Instance Document* | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema* | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase* | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase* | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase* | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase* | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)* | |||||||
* Filed herewith.
** Furnished herewith.
# Management Compensatory Plan
30
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| RumbleOn, Inc. | ||||||||
| Date: August 11, 2025 | By: | /s/ Michael Quartieri | ||||||
| Michael Quartieri Chairman, Chief Executive Officer, and Interim Chief Financial Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | ||||||||
31
Exhibit 31.1
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER AND INTERIM CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Quartieri, certify that:
(1)I have reviewed this Quarterly Report on Form 10-Q of RumbleOn, Inc.;
(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4)I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5)I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | August 11, 2025 | By: | /s/ Michael Quartieri | ||||||||
| Michael Quartieri | |||||||||||
| Chairman, Chief Executive Officer, and Interim Chief Financial Officer | |||||||||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q for the period ended June 30, 2025, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Quartieri, Chairman, Chief Executive Officer and Interim Chief Financial Officer of RumbleOn, Inc. (the "Company"), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| August 11, 2025 | By: | /s/ Michael Quartieri | ||||||
| Michael Quartieri | ||||||||
| Chairman, Chief Executive Officer, and Interim Chief Financial Officer | ||||||||