8-K - RDNW - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 4, 2021

RumbleOn, Inc.

(Exact name of registrant as specified in its charter)

Nevada<br><br><br>(State or other jurisdiction<br><br><br>of incorporation)	001-38248<br><br><br>(Commission<br><br><br>File Number)	46-3951329<br><br><br>(I.R.S. Employer<br><br><br>Identification No.)
901 W. Walnut Hill Lane		75038
Irving, Texas		(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code (214) 771-9952

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Securities registered pursuant to Section 12(b) of the Act:

Title<br>of each class	Trading<br>Symbol(s)	Name of<br>each exchange on which registered
Common<br>Stock, $0.001 par value	RMBL	The<br>Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 8.01.	Other Events.

RumbleOn, Inc. (the “Company” or “RumbleOn”) is filing this Current Report on Form 8-K to disclose (i) the unaudited condensed combined financial statements of RideNow Group and Affiliates for the three and six months ended June 30, 2021 and June 30, 2020, (ii) Management’s Discussion and Analysis for the RideNow Group and Affiliates for the three and six months ended June 30, 2021 compared to the three and six months ended June 30, 2020 and (iii) the unaudited pro forma condensed combined financial statements (and related notes) of RumbleOn as of June 30, 2021 and for the six months ended June 30, 2021 and the twelve months ended December 31, 2020. The unaudited pro forma condensed combined financial statements are based on the Company’s unaudited condensed consolidated financial statements and RideNow Group and Affiliates’s unaudited condensed combined financial statements as adjusted to give effect to the Company’s acquisition of RideNow and the related financing transactions. The unaudited pro forma condensed combined balance sheet as of June 30, 2021 gives effect to these transactions as if they occurred on June 30, 2021. The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2021 and the twelve months ended December 31, 2020 give effect to these transactions as if they occurred on January 1, 2020. Items (i) - (iii) referenced above are filed as Exhibits 99.1, 99.2, and 99.3 to this Current Report on Form 8-K, and incorporated herein by reference.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Unaudited condensed combined financial statements of RideNow Group<br>and Affiliates for the three and six months ended June 30, 2021 and<br>2020.
99.2	Management’s Discussion and Analysis of Financial Condition<br>and Results of Operations for the three and six months ended June<br>30, 2021 and 2020.
99.3	Unaudited pro forma condensed combined financial statements of<br>RumbleOn, Inc. as of June 30, 2021 and for the six months ended<br>June 30, 2021 and the twelve months ended December 31,<br>2020.

Forward Looking Statements

Certain statements made in this report are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “target,” “believe,” “expect,” “will,” “shall,” “may,” “anticipate,” “estimate,” “would,” “positioned,” “future,” “forecast,” “intend,” “plan,” “project,” “outlook”, and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Examples of forward-looking statements include, among others, statements made in this report regarding the proposed business combination of RumbleOn and RideNow (the “Transaction”), including the benefits of the Transaction, revenue opportunities, anticipated future financial and operating performance, and results, including estimates for growth, and the expected timing of the Transaction. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current beliefs, expectations, and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of RumbleOn’s control. Actual results and outcomes may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause actual results and outcomes to differ materially from those indicated in the forward-looking statements include, among others, the following: (1) the occurrence of any event, change, or other circumstances that could give rise to the termination of the Transaction; (2) the failure to obtain debt and equity financing required to complete the Transaction; (3) failure to obtain the OEM approvals; (4) the inability to complete the Transaction, including due to failure to obtain approval of certain regulatory approvals, or satisfy other conditions to closing in the Agreement; (5) the impact of COVID-19 pandemic on RumbleOn’s business and/or the ability of the parties to complete the Transaction; (6) the risk that the Transaction disrupts current plans and operations as a result of the announcement and consummation of the Transaction; (7) the ability to recognize the anticipated benefits of the proposed business combination, which may be affected by, among other things, competition, the ability of management to integrate the combined company’s business and operation, and the ability of the parties to retain its key employees; (8) costs related to the Transaction; (9) changes in applicable laws or regulations; (10) risks relating to the uncertainty of the pro forma financial information with respect to the combined company; and (11) other risks and uncertainties indicated from time to time in the preliminary and definitive proxy statements to be filed with the SEC relating to the Transaction, including those under “Risk Factors” therein, and in RumbleOn’s other filings with the SEC. RumbleOn cautions that the foregoing list of factors is not exclusive. RumbleOn cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. RumbleOn does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in their expectations or any change in events, conditions, or circumstances on which any such statement is based, whether as a result of new information, future events, or otherwise, except as may be required by applicable law. Neither RumbleOn nor RideNow gives any assurance that after the Transaction the combined company will achieve its expectations.

SIGNATURES

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 hereunto duly authorized.

	RUMBLEON, INC.
Date: August 4, 2021	By:	/s/ Marshall Chesrown
		Marshall Chesrown
		Chief Executive Officer

rmbl_ex991

Exhibit 99.1

RIDENOW GROUP AND AFFILIATES

CONDENSED COMBINED FINANCIAL STATEMENTS

JUNE 30, 2021

RideNow Group and Affiliates

Table of Contents

Condensed Combined Balance Sheets	F-1
Condensed Combined Statements of Operations	F-2
Condensed Combined Statements of Owners’ Equity	F-3
Condensed Combined Statements of Cash Flows	F-4
Notes to Condensed Combined Financial Statements	F-5

RideNow Group and Affiliates

Condensed Combined Balance Sheets

(Unaudited)

	As<br>of June 30, 2021	As<br>of December 31, 2020
ASSETS
Current<br>assets:
Cash and cash<br>equivalents	$5,830,482	$3,905,686
Contracts in<br>transit	10,149,513	10,736,791
Accounts<br>receivable, net	16,028,725	10,023,174
Accounts receivable<br>– related parties	72,071,921	84,535,861
Inventories,<br>net	101,214,125	109,749,521
Prepaid<br>expenses	1,864,297	1,625,109
Total current<br>assets	207,159,063	220,576,142
Right-of-use<br>assets	73,921,130	71,280,471
Property and<br>equipment, net of accumulated depreciation	22,936,755	23,705,230
Goodwill	55,294,222	55,294,222
Note receivable<br>– related party	1,026,605	1,264,425
Other non-current<br>assets	259,615	288,758
Total<br>assets	$360,597,390	$372,409,248
LIABILITIES AND<br>STOCKHOLDERS' EQUITY
Current<br>liabilities:
Accounts payable<br>and accrued liabilities	$43,002,834	$36,806,476
Accounts payable<br>– related parties	40,130,446	27,615,211
Floor plan notes<br>payable	44,753,947	68,533,679
Revolving line of<br>credit	6,000,000	-
Current portion of<br>operating lease liabilities	17,459,193	15,755,805
Current portion of<br>financing lease liabilities	3,984,945	4,059,496
Current portion of<br>notes payable – related parties	1,159,322	504,000
Current portion of<br>note payable – other	5,684,640	8,093,444
Total current<br>liabilities	162,175,327	161,368,111
Long-term<br>liabilities:
Notes payable<br>– related parties	-	6,907,322
Long-term portion<br>of operating lease liabilities	58,345,599	57,473,929
Long-term portion<br>of financing lease liabilities	14,323,137	14,550,947
Note payable- PPP<br>loans	-	16,923,759
Note payable<br>– other	-	985,052
Other long-term<br>liabilities	6,497,347	4,779,112
Total long-term<br>liabilities	79,166,083	101,620,121
Total<br>liabilities	241,341,410	262,988,232
Owners’<br>equity	119,255,980	109,421,016
Total liabilities<br>and owners' equity	$360,597,390	$372,409,248

See accompanying Notes to Condensed Combined Financial Statements

F-1

RideNow Group and Affiliates

Condensed Combined Statements of Operations

(Unaudited)

	Three-Months<br>Ended June 30,		Six-Months<br>Ended June 30,
	2021	2020	2021	2020
Revenue:
New<br>vehicles	$142,731,660	$163,624,341	$285,957,987	$255,370,861
Used<br>vehicles	56,344,912	41,552,540	95,333,182	80,489,256
Service, parts and<br>others	47,480,825	40,534,371	91,009,927	76,748,115
Finance and<br>insurance, net	21,633,640	22,271,089	41,065,839	36,046,990
Total<br>revenue	268,191,037	267,982,341	513,366,935	448,655,222
Cost of<br>revenue
New<br>vehicles	112,811,489	136,783,464	228,166,682	217,211,790
Used<br>vehicles	45,642,378	34,936,296	77,388,609	69,082,545
Service, parts and<br>others	24,705,698	22,146,629	48,182,298	41,794,184
Total cost of<br>sales	183,159,565	193,866,389	353,737,589	328,088,519
Gross<br>profit	85,031,472	74,115,952	159,629,346	120,566,703
Selling, general<br>and administrative	48,570,799	39,604,867	91,682,133	75,094,774
Depreciation and<br>amortization	903,494	948,129	1,717,001	1,384,768
Operating<br>income	35,557,179	33,562,956	66,230,212	44,087,161
Other Income<br>(Expense)
Floor plan interest<br>expense	(373,860)	(547,006)	(865,775)	(1,794,333)
Interest expense<br>– other	(84,028)	(318,462)	(299,726)	(670,926)
Interest<br>income	87,215	201,847	251,022	471,793
Miscellaneous<br>income	19,340,670	255,759	19,909,539	656,053
Total other income<br>(expense)	18,969,997	(407,862)	18,995,060	(1,337,413)
Net<br>income	$54,527,176	$33,155,094	$85,225,272	$42,749,748

See accompanying Notes to Condensed Combined Financial Statements

F-2

RideNow Group and Affiliates

Condensed Combined Statements of Owners’ Equity

(Unaudited)

	Owner’s<br>Equity
Balance<br>at March 31, 2021	$126,542,174
Contributions	-
Distributions	(61,813,370)
Net<br>income	54,527,176
Balance<br>at June 30, 2021	$119,255,980
Balance<br>at December 31, 2020	$109,421,016
Contributions	-
Distributions	(75,390,308)
Net<br>income	85,225,272
Balance<br>at June 30, 2021	$119,255,980
Balance<br>at March 31, 2020	$84,945,856
Contributions	-
Distributions	(26,061,859)
Net<br>income	33,155,094
Balance<br>at June 30, 2020	$92,039,091
Balance<br>at December 31, 2019	$77,762,608
Contributions	-
Distributions	(28,473,265)
Net<br>income	42,749,748
Balance<br>at June 30, 2020	$92,039,091

See accompanying Notes to Condensed Combined Financial Statements

F-3

RideNow Group and Affiliates

Condensed Combined Statements of Cash Flows

(Unaudited)

	Six<br>Months Ended June 30,
	2021	2020
CASH FLOWS FROM<br>OPERATING ACTIVITIES
Net<br>income	$85,225,272	$42,749,748
Adjustments to<br>reconcile net loss to net cash provided by operating<br>activities:
Depreciation and<br>amortization	1,727,001	1,394,768
Provision for<br>allowance for doubtful accounts	204,147	57,654
PPP loans<br>forgiven	(19,039,229)	-
Changes in<br>operating assets and liabilities:
Contracts in<br>transit	587,278	(3,378,258)
Accounts<br>receivable	(6,209,698)	(1,048,144)
Accounts receivable<br>– related parties	12,463,941	(31,566,574)
Inventories	8,535,396	78,811,123
Prepaid<br>expenses	(239,188)	(194,776)
Other<br>assets	19,143	884,207
Floor plan notes,<br>net	(23,779,732)	(61,994,442)
Accounts<br>payable	6,130,757	(2,569,063)
Payables to related<br>parties	12,515,235	5,481,256
Accrued<br>liabilities	1,718,232	(1,397,647)
Net cash provided<br>by operating activities	79,858,555	27,229,852
CASH FLOWS FROM<br>INVESTING ACTIVITIES
Purchases of<br>property and equipment	(948,526)	(2,982,882)
Proceeds from sale<br>of property and equipment	31,634	-
Net cash (used in)<br>investing activities	(916,892)	(2,982,882)
CASH FLOWS FROM<br>FINANCING ACTIVITIES
Payments received<br>on notes receivables	237,820	-
Payments on<br>borrowings from related party	(6,252,000)	(4,376,271)
Proceeds from<br>(payments of) revolving line of credit	6,000,000	(17,958,961)
Payments of<br>borrowings from bank	(585,000)	(585,000)
(Payments)<br>borrowing on other notes payable	(693,385)	5,156,429
Proceeds from PPP<br>loans	-	19,039,229
Net change in<br>finance lease liabilities	(302,361)	2,359,037
Distributions to<br>owners	(75,421,942)	(28,473,265)
Net cash (used in)<br>financing activities	(77,016,868)	(24,838,802)
NET CHANGE IN CASH<br>AND CASH EQUIVALENTS	1,924,797	(591,832)
CASH AND CASH<br>EQUIVALENTS AT BEGINNING OF PERIOD	3,905,686	4,980,718
CASH AND CASH<br>EQUIVALENTS AT END OF PERIOD	$5,830,482	$4,388,886

See accompanying Notes to Condensed Combined Financial Statements

F-4

RideNow Group and Affiliates

Notes to Condensed Combined Financial Statements

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

RideNow Group and Affiliates, a non-legal entity, (“RideNow” or “The Group” or the “Company”) is a collection of franchised dealerships operating in the powersports industry. The Group is engaged in the sale of new and used motorcycles, all-terrain vehicles, personal watercraft, other powersports vehicles, and related products and services, including repair and maintenance services, parts and accessories, riding gear, and apparel. As of December 31, 2020, RideNow owned and operated more than 43 retail dealerships in the United States, predominately in the Sunbelt region. The core brands sold by RideNow are Harley-Davidson, Honda, Yamaha, Kawasaki, Suzuki, Bombardier, Polaris, BMW, Ducati and Triumph, which are sold through franchise dealer agreements.

Basis of Presentation

The Condensed Combined Financial Statements include the accounts of the following affiliated companies: CMG Powersports Inc., America’s Powersports, Inc., Woods Fun Center, LLC, San Diego House of Motorcycles, LLC, APS of Oklahoma, LLC, APS of Georgetown, LLC, APS of Ohio, LLC, APS of Texas, LLC, C&W Motors, Inc., BJ Motorsports, LLC, Coyote Motorsports - Allen, LTD, Coyote Motorsports - Garland, LTD, East Valley Motorcycles, LLC, Glendale Motorcycles, LLC, JJB Properties, LLC, Metro Motorcycle, Inc., RideNow Carolina, LLC, RideNow, LLC, Ride USA, LLC, Top Cat Enterprises, LLC, Tucson Motorcycle, Inc., Tucson Motorsports, Inc., YSA Motorsports, LLC, RN Tri-Cities, LLC, ECHD Motorcycles, LLC, IOT Motorcycles, LLC, RideNow 6 Garland, LLC, RideNow Gainesville, LLC, RNKC, LLC, RNMC Daytona, LLC, TC Motorcycles, LLC, Ride Now 5 Allen, LLC, RHND Ocala, LLC and Bayou Motorcycles, LLC.

These condensed combined financial statements were prepared on a combined basis using the accrual method of accounting. All transactions and accounts between and among the combined entities have been eliminated.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements. RideNow bases its estimates and judgments on historical experience and other assumptions that management believes are reasonable. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ materially from these estimates. RideNow periodically evaluates estimates and assumptions used in the preparation of the financial statements and make changes on a prospective basis when adjustments are necessary. The critical accounting estimates made in the accompanying Condensed Combined Financial Statements include certain assumptions related to goodwill and other intangible assets. Other significant accounting estimates include certain assumptions related to long-lived assets, assets held for sale, accruals for chargebacks against revenue recognized from the sale of finance and insurance products, certain legal proceedings, and estimated tax liabilities. Actual results could differ from those estimates.

Revenue from Contracts with Customers

RideNow adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU, collectively referred to as Accounting Standards Codification (ASC) Topic 606, which (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope. RideNow’s goods and services that fall within the scope of Topic 606 are recognized as revenue when promised goods or services are transferred to customers in amounts that reflect the consideration to which RideNow expects to be entitled in exchange for those goods or services.

F-5

Accounting for Leases

The accounting standard update originally required the use of a modified retrospective approach reflecting the application of the standard to the leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements with the option to elect certain practical expedients. A subsequent amendment to the standard provides an additional and optional transition method that allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. RideNow adopted this accounting standard effective January 1, 2018, using the optional transition method with no restatement of comparative periods.

RideNow elected certain practical expedients available under the transition guidance within the new standard, which among other things, allowed it to carry forward the historical lease classification of RideNow’s existing leases. RideNow did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to RideNow. The new standard also provides practical expedients for an entity’s ongoing accounting. RideNow elected the short- term lease recognition exemption for all leases that qualify. As a result, for those leases that qualify, RideNow will not recognize ROU assets or lease liabilities, and RideNow did not recognize ROU asset or lease liabilities for existing short-term leases of those assets in transition. RideNow also elected the practical expedient to not separate lease and non-lease components of leases for the majority of RideNow classes of underlying assets.

NOTE 2 – REVENUE FROM CONTRACTS WITH CUSTOMERS

New and Used Recreational Vehicles

RideNow sells new and used recreational vehicles. The transaction price for a recreational vehicle sale is determined with the customer at the time of sale. Customers often trade in their own recreational vehicle to apply toward the purchase of a retail new or used recreational vehicle. The “trade-in” recreational vehicle is a type of noncash consideration measured at fair value, based on external and internal market data for a specific recreational vehicle, and applied as payment of the contract price for the purchased recreational vehicle.

When RideNow sells a new or used recreational vehicle, transfer of control typically occurs at a point in time upon delivery of the vehicle to the customer, which is generally at the time of sale, as the customer is able to direct the use of, and obtain substantially all benefits from the recreational vehicle at such time. RideNow does not directly finance its customer’s purchases or provide leasing. In many cases, RideNow arranges third- party financing for the retail sale or lease of recreational vehicles to customers in exchange for a fee paid to RideNow by a third-party financial institution. RideNow receives payment directly from the customer at the time of sale or from a third-party financial institution (referred to as contracts-in-transit) within a short period of time following the sale. RideNow establishes provisions, which are not significant, for estimated returns and warranties on the basis of both historical information and current trends.

F-6

Parts and Service

RideNow sells parts and vehicle services related to customer-paid repairs and maintenance, repairs and maintenance under manufacturer warranties and extended service contracts, and collision-related repairs. RideNow also sells parts through wholesale and retail counter channels.

Each repair and maintenance service is a single performance obligation that includes both the parts and labor associated with the vehicle service. Payment for each vehicle service work is typically due upon completion of the service, which is generally completed within a short period from contract inception. The transaction price for repair and maintenance services is based on the parts used, the number of labor hours applied, and standardized hourly labor rates. The performance obligation for repair and maintenance service are satisfied over time and create an asset with no alternative use and with an enforceable right to payment for performance completed to date. Revenue is recognized over time based on a direct measurement of labor hours, parts and accessories that are allocated to open service and repair orders at the end of each reporting period. As a practical expedient, the time value of money is not considered since repair and maintenance service contracts have a duration of one year or less. The transaction price for wholesale and retail counter parts sales is determined at the time of sale based on the quantity and price of each product purchased. Payment is typically due at time of sale, or within a short period following the sale. RideNow establishes provisions, which are not significant, for estimated parts returns based on historical information and current trends. Delivery method of wholesale and retail counter parts vary.

RideNow generally considers control of wholesale and retail counter parts to transfer when the products are shipped, which typically occurs the same day as or within a few days of sale. RideNow also offers customer loyalty points for parts and services for select franchises. RideNow satisfies its performance obligations and recognizes revenue when the loyalty points are redeemed. Amounts deferred related to the customer loyalty programs are insignificant.

Finance and Insurance

RideNow sells and receives commissions on the following types of finance and insurance products: extended service contracts, maintenance programs, guaranteed auto protection, tire and wheel protection, and theft protection products, among others. RideNow offers products that are sold and administered by independent third parties, including the vehicle manufacturers’ captive finance subsidiaries.

Pursuant to the arrangements with these third-party providers, RideNow sells the products on a commission basis. For the majority of finance and insurance product sales, RideNow’s performance obligation is to arrange for the provision of goods and services by another party. RideNow’s performance obligation is satisfied when this arrangement is made, which is when the finance and insurance product is delivered to the end customer, generally at the time of the vehicle sale. As agent, RideNow recognizes revenue in the amount of any fee or commission to which it expects to be entitled, which is the net amount of consideration that it retains after paying the third-party provider the consideration received in exchange for the goods or services to be fulfilled by that party.

RideNow’s customers are concentrated in the Sunbelt region. There are no significant judgements or estimates required in determining the satisfaction of the performance obligations or the transaction price allocated to the performance obligations. As revenue are recognized at a point-in-time, costs to obtain the customer (i.e. commissions) do not require capitalization.

Disaggregation of Revenue

The significant majority of RideNow’s revenue is from contracts with customers. In the following tables, revenue is disaggregated by major lines of goods and services and timing of transfer of goods and services. We have determined that these categories depict how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors.

F-7

Revenue from contracts with customers consists of the following:

	Three-Months<br>Ended June 30,		Six-Months Ended<br>June 30,
	2021	2020	2021	2020
Revenue:
New<br>vehicle	$142,731,660	$163,624,341	$285,957,987	$255,370,861
Used<br>vehicle	56,344,912	41,552,540	95,333,182	80,489,256
New and used<br>vehicle	199,076,572	205,176,881	381,291,169	335,860,117
Service, parts and<br>others	47,480,825	40,534,371	91,009,927	76,748,115
Finance and<br>insurance, net	21,633,640	22,271,089	41,065,839	36,046,990
Total<br>revenue	268,191,037	267,982,341	513,366,935	448,655,222
Timing of revenue recognition:
Goods and services<br>transferred at a point in time	238,333,876	243,143,335	456,535,306	400,066,090
Goods and services<br>transferred over time	29,857,161	24,839,006	56,831,629	48,589,132
Total<br>revenue	$268,191,037	$267,982,341	$513,366,935	$448,655,222

NOTE 3 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following as of June 30, 2021 and December 31, 2020.

	June<br>30, 2021	December<br>31, 2020
Trade<br>receivables	$4,323,424	$3,145,226
Factory<br>receivables	5,300,553	6,624,129
Other<br>receivables	6,828,126	720,861
Total accounts<br>receivables	16,452,103	10,490,216
Less: Allowance for<br>doubtful accounts	(423,378)	(467,042)
Accounts<br>receivables, net	$16,028,725	$10,023,174

NOTE 4 – INVENTORIES AND VEHICLE FLOOR PLAN NOTES PAYABLE

Inventories consisted of the following as of June 30, 2021 and December 31, 2020.

	June<br>30, 2021	December<br>31, 2020
New<br>vehicles	$42,073,801	$67,416,505
Used<br>vehicles	36,304,982	22,225,209
Parts, accessories<br>and other	22,835,342	20,107,807
Total<br>cost	$101,214,125	$109,749,521

The components of vehicle Floor Plan notes payable at June 30, 2021 and December 31, 2020.

	June<br>30, 2021	December<br>31, 2020
Vehicle Floor Plan<br>notes payable – trade	$17,070,794	$18,516,327
Vehicle Floor<br>Plan notes payable – non-trade	27,683,153	50,017,352
Vehicle Floor Plan<br>notes payable	$44,753,947	$68,533,679

Vehicle Floor Plan notes payable - trade reflects amounts borrowed to finance the purchase of specific new and, to a lesser extent, used vehicle inventories with the corresponding manufacturers’ captive finance subsidiaries (“trade lenders”). Vehicle Floor Plan notes payable-non-trade represents amounts borrowed to finance the purchase of specific new and, to a lesser extent, used vehicle inventories with non-trade lenders, as well as amounts borrowed under RideNow’s secured used vehicle Floor Plan facilities. Changes in vehicle Floor Plan notes payable- trade are reported as operating cash flows and changes in vehicle Floor Plan payable-non-trade are reported as financing cash flows in the accompanying Condensed Combined Statements of Cash Flows.

F-8

RideNow’s 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 notes payable, as shown in the above table, will generally also 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 several business days after the related vehicles are sold. Vehicle Floor Plan facilities are primarily collateralized by vehicle inventories and related receivables.

NOTE 5 – PROPERTY AND EQUIPMENT, NET

The following table summarizes property and equipment, net of accumulated depreciation and amortization as of June 30, 2021 and December 31, 2020.

	June<br>30, 2021	December<br>31, 2020
Equipment	$4,186,122	$4,231,451
Furniture and<br>fixtures	19,516,679	19,307,497
Buildings	11,750,692	13,522,538
Vehicles	4,322,238	4,191,156
Leasehold<br>improvements	10,307,053	10,296,570
Construction in<br>progress	244,686	26,183
Total property and<br>equipment	50,327,470	51,575,395
Less: Accumulated<br>depreciation	27,390,715	27,870,165
Property and<br>equipment, net	$22,936,755	$23,705,230

Depreciation and amortization expense for the three and six-month periods ending June 30, 2021, were $903,494 and $1,717,001, respectively. Depreciation and amortization expense for the three and six-month periods ending June 30, 2020, were $948,129 and $1,627,293, respectively.

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS, NET

RideNow’s acquisitions have resulted in the recording of goodwill and other intangible assets. Goodwill is an asset representing operational synergies, franchise rights and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Other intangible assets represent non-compete agreements entered into with sellers from the acquired businesses and are not significant to the condensed combined financial statements.

The changes in goodwill for the three months ended June 30, 2021 and the year ended December 31, 2020 are as follows:

	Goodwill
Balance at December<br>31, 2020	$55,294,222
Acquisitions	-
Balance at June 30,<br>2021	$55,294,222

F-9

NOTE 7 - LINE OF CREDIT

RideNow has a $19,000,000 revolving line of credit established at a bank. RideNow participates in the line of credit with certain affiliates. Interest is payable monthly at the lesser of the prime rate (3.25% and 3.25% at June 30, 2021 and December 31, 2020, respectively) or LIBOR plus 2.75% (2.90% and 2.98% at June 30, 2021 and December 31, 2020, respectively). The line of credit is secured by substantially all of the assets of the participating affiliates. The line of credit has been amended and renewed multiple times under similar terms since its inception and has a maturity date of January 15, 2022. The outstanding balance on the line of credit was $6,000,000- and $0 at June 30, 2021 and December 31, 2020, respectively. On July 28, 2021, RideNow paid off the remaining $6,000,000 on its revolving line of credit and terminated this credit facility with the bank. This move was done to facilitate the closing of the RumbleOn transaction scheduled for the third quarter 2021.

NOTE 8 – NOTES PAYABLE

The following consist of a note payable to a bank and other third-parties as of June 30, 2021 and December 31, 2020:

	June<br>30,<br><br><br>2021	December<br>31,<br><br><br>2020
Northern Trust Bank<br>term loan agreement that requires monthly principal payments of<br>approximately $190,500 and accrues interest at the one-month LIBOR<br>plus 2.0%. This loan is guaranteed by the owners of CMG<br>Powersports, Inc. and matures January 1, 2022.	$4,571,429	$5,714,286
Unsecured note<br>payable to P&D Motorcycles in the original amount of $1,724,000<br>with an interest rate of 4% and note payable matures on July 1,<br>2022	1,113,211	1,248,740
PPP Loans dated<br>April 6, 2020. Payments of principal and interest were deferred<br>until August 6, 2021. Effective June 22, 2021, all PPP Loans were<br>forgiven by the SBA.	-	19,039,229
Total notes<br>payable	$5,684,640	26,002,255
Less: Current<br>portion	$5,684,640	8,093,444
Long-term<br>maturities of notes payable	$-	$17,908,811

The future maturities of long-term note payables to other as of June 30, 2021:

2021	$5,684,641
2022	-
Total of long-term<br>notes payable - other	$5,684,641

Note Payable to Northern Trust Bank

RideNow is a collective borrower to a $16,000,000 term loan agreement with Northern Trust Bank held by CMG Powersports, Inc. The term loan agreement requires monthly principal payments of approximately $190,500 and accrues interest at the one-month LIBOR plus 2.0%. This loan is guaranteed by the owners of CMG Powersports, Inc. The term loan includes required covenants to be met. Management believes RideNow is in compliance with these covenants as of June 30, 2021 and December 31, 2020. For the three months ended June 30, 2021, and 2020 interest expense was $41,060 and $60,012, respectively and for the six months ended June 30, 2021, and 2020 interest expense was $92,356 and $124,751, respectively.

Note Payable to P&D Motorcycles

On June 28, 2017 TC Motorcycles, LLC “DBA–RideNow Powersports Jacksonville” (the buyer) entered into a promissory note with P&D Motorcycles (the seller) as part of an acquisition. The original principal sum was $1,724,000 accruing interest at 4% including 59 monthly payments of $17,454 with final balloon payment due July 1, 2022. For the three months ended June 30, 2021 and 2020 interest expense was $11,775 and $13,543 respectively, and for the six months ended June 30, 2021 and 2020 interest expense was $23,432 and $26,832 respectively.

F-10

PPP Loan

On April 6, 2020, RideNow entered into loan agreements and related promissory notes (the “SBA Loan Documents”) to receive U.S. Small Business Administration Loans (the “SBA Loans”) pursuant to the Paycheck Protection Program (the “PPP”) established under the CARES Act, in the aggregate amount of $19,039,229 (the “Loan Proceeds”). The Companies received the Loan Proceeds on April 6, 2020, and under the SBA Loan Documents, the SBA Loans had an initial maturity date of April 5, 2022 and an annual interest rate of 0.98%. As of June 22, 2021, all RideNow PPP loans were forgiven which extinguished this $19,039,229 loan and increased other income. Additionally, all accrued interest of $143,631 was removed and credited against interest expense. The SBA requires that businesses maintain all relevant information and keep good records for an audit or other review as there is a six-year (6) statute of limitations at play from the time that the loan is forgiven (or repaid in full).

NOTE 9 – RELATED PARTY TRANSACTIONS

Due from (to) related parties consist of the following balances as of June 30, 2021 and December 31, 2020.

	June<br>30, 2021	December<br>31, 2020
Accounts<br>receivable-related parties	$72,071,921	$84,535,861
Notes receivable<br>– related parties	1,026,605	1,264,425
Total balances due<br>from related parties	$73,098,526	$85,800,286
	June<br>30, 2021	December<br>31, 2020
---	---	---
Accounts payable<br>– related parties	$40,130,446	$27,615,211
Notes payable<br>– related parties	1,159,322	7,411,322
Total balances due<br>to related parties	$41,289,768	$35,026,533

Accounts Receivable and Payables

Receivables Due from Related Parties

	June<br>30, 2021	December<br>31, 2020
Cash sweep<br>receivables	$72,071,921	$84,478,128
Other receivables<br>due from related parties	-	57,733
Total receivables<br>due from related parties	$72,071,921	$84,535,861

Cash Sweep Account Receivables/Payables

F-11

	June<br>30, 2021	December<br>31, 2020
Cash Sweep<br>Accounts:	$72,071,919	$84,478,128
Related party<br>payable	(39,367,501)	(27,956,598)
Net Cash Sweep<br>Account Balance	$32,704,418	$56,521,530

Payables Due to Related Parties

	June<br>30, 2021	December<br>31, 2020
Cash sweep<br>payables	$39,367,501	$27,956,598
Other payables due<br>to related parties	762,945	(341,387)
Total payables due<br>to related parties	$40,130,446	$27,615,211

Notes payable – Related Parties

The following table summarizes the notes payable to related parties as of June 30, 2021 and December 31, 2020:

	June<br>30, 2021	December<br>31, 2020
Various unsecured<br>notes payable to Steele IV, LLLP, a related party through common<br>ownership; monthly principal payments range from $10,000 to<br>$20,000; interest accruing at rates ranging from LIBOR + 1.3% to<br>LIBOR + 2.0%	$-	$3,000,000
Various unsecured<br>notes payable to RideNow Management, LLLP, a related party through<br>common ownership; monthly principal payments ranging from $7,000 to<br>$13,500; interest accruing at rates ranging from LIBOR + 0.6% to<br>LIBOR + 1.3%.	1,159,322	1,411,322
Various unsecured<br>notes payable to Denex, LLLP, a related party through common<br>ownership; monthly principal payments ranging from $10,000 to<br>$20,000 interest accruing at rates ranging from LIBOR + 0.5% to<br>LIBOR + 2.0%.	-	3,000,000
Total notes<br>payable	$1,159,322	7,411,322
Less: Current<br>maturities	$1,159,322	504,000
Long-term<br>maturities due to related party	$-	$6,907,322

Related Party Leases

Included in the leases are leases for twenty-five (25) locations which are owned by the owners of RideNow or their affiliates. Lease expense charged to operations in connection with these related party leases was $10,126,669 and $8,715,266 for the six months ended June 30, 2021 and December 31, 2020, respectively.

Shared Services

RideNow receives administrative support from RideNow Management, LLLP and Coulter Management Group, LLLP, which are related parties due to common ownership. Total administrative services received from these entities and charged to operations were $160,000 and $210,000 for the six-months ended June 30, 2021 and 2020, respectively.

F-12

NOTE 10 – SUPPLEMENTAL CASH FLOW INFORMATION

The following table includes supplemental cash flow information, including noncash investing and financing activity for the six-months ended June 30,

	Six-Months<br>Ended June 30,
	2021	2020
Cash paid for<br>interest	$1,165,501	$2,465,259
Non-cash<br>activities	$-	$-

NOTE 11 - RETIREMENT PLAN

RideNow maintains a 401(k) plan (the Plan) covering substantially all employees who are over the age of 21 and meet specified service requirements. Participants may voluntarily contribute to the Plan, not to exceed the maximum limits imposed by the Internal Revenue Service regulations. Contributions to the Plan are made by the participants to their individual accounts through payroll withholding. Additionally, RideNow provides a matching contribution of 25% up to the first 6% of participants’ annual earnings with a maximum of $2,000 annually. RideNow’s contribution to the Plan are made annually and were $563,624 for the three and six month periods ending June 30, 2021, respectively. RideNow’s contribution to the Plan was $495,297 for the three and six month periods ending June 30, 2020, respectively.

NOTE 12 – CONTINGENCIES

From time-to-time, RideNow is contingently liable in respect to lawsuits and claims incidental to the ordinary course of its operations. Management has determined that the outcome of any such matters will not have a material effect on the Combined Financial Statements. No provision has been made in the accompanying Condensed Combined Financial Statements for losses, if any, that might result from the ultimate outcome of such matters.

Coronavirus Pandemic (COVID-19)

Subsequent to year-end, the World Health Organization declared the spread of Coronavirus Disease (COVID-19) a worldwide pandemic. The COVID-19 pandemic is having significant effects on global markets, supply chains, businesses, and communities. Specific to RideNow, COVID-19 may impact various parts of its 2020 operations and financial results. Management believes RideNow is taking appropriate actions to mitigate the negative impact. However, the full impact of COVID-19 is unknown and cannot be reasonably estimated at June 30, 2021.

NOTE 13 – BUSINESS AND CREDIT CONCENTRATIONS

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash on deposit with financial institutions. At times, amounts invested with financial institutions exceed Federal Deposit Insurance Corporation insurance limits. Concentrations of credit risk with respect to receivables are limited primarily to receivables from powersports manufacturers or distributors which RideNow holds franchises, totaling approximately $5,300,553 and $6,624,129 at June 30, 2021 and December 31, 2020, respectively.

RideNow is subject to a concentration of risk in the event of financial distress or other adverse events related to any of the manufacturers whose franchised dealerships are included in RideNow’s brand portfolio. RideNow purchases new vehicle inventory from various powersports manufacturers at the prevailing prices available to all franchised dealerships. In addition, RideNow finances a substantial portion of its new vehicle inventory with manufacturer-affiliated finance companies. RideNow’s results of operations could be adversely affected by the manufacturers’ inability to supply RideNow dealerships with an adequate supply of new vehicle inventory and related floor plan financing. RideNow also has concentrations of risk related to the geographic markets in which RideNow dealerships operate. Changes in overall economic, retail powersports or regulatory environments in one or more of these markets could adversely impact the results of RideNow’s operations.

F-13

Concentrations of credit risk with respect to non-manufacturer trade receivables are limited due to the wide variety of customers and markets in which RideNow’s products are sold as well as their dispersion across many different geographic areas in the United States. Consequently, at June 30, 2021, RideNow does not consider itself to have any significant non-manufacturer concentrations of credit risk.

NOTE 14 – FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of judgment, and therefore cannot be determined with precision.

Accounting standards define fair value as the price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value and also establishes the following three levels of inputs that may be used to measure fair value:

Level 1 Quoted prices in active markets for identical assets or liabilities

Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following methods and assumptions were used by us in estimating fair value disclosures for financial instruments:

●

Cash and cash equivalents, receivables, other current assets, vehicle Floor Plan payable, accounts payable, other current liabilities, and variable rate debt: The amounts reported in the accompanying Condensed Combined Balance Sheets approximate fair value due to their short-term nature or the existence of variable interest rates that approximate prevailing market rates.

●

Fixed rate long-term debt: RideNow’s fixed rate long-term debt consists primarily of amounts outstanding under its senior unsecured notes. The amounts reported in the accompanying Combined Balance Sheets approximate fair value due to its senior unsecured notes using quoted prices for the identical liability (Level 1).

Nonfinancial assets such as goodwill, other intangible assets, and long-lived assets held and used are measured at fair value when there is an indicator of impairment and recorded at fair value only when impairment is recognized or for a business combination. The fair values less costs to sell of long-lived assets or disposal groups held for sale are assessed each reporting period they remain classified as held for sale. Subsequent changes in the held for sale long-lived asset’s or disposal group’s fair value less cost to sell (increase or decrease) are reported as an adjustment to its carrying amount, except that the adjusted carrying amount cannot exceed the carrying amount of the long-lived asset or disposal group at the time it was initially classified as held for sale.

NOTE 15 – SEGMENT INFORMATION

As of June 30, 2021, and December 31, 2020, RideNow had two operating segments: (1) Harley-Davidson motor sports dealerships and (2) Metric motor sports dealerships (representing all Non-Harley-Davidson motor sports dealerships). RideNow’s Harley-Davidson dealership segment is comprised of retail franchises that sell new and used motorcycles and related accessories, riding gear and apparel, replacement parts, equipment repair and maintenance services, and also arrange for the delivery of finance and insurance products through third party providers. RideNow’s Metric dealerships segment is comprised of retail franchises that sell new and used motorcycles (non-Harley-Davidson) and other motor sports equipment, including all-terrain vehicles, utility terrain vehicles, boats, personal watercraft, snowmobiles and scooters from manufacturers such as Honda, Yamaha, Kawasaki, Suzuki, Bombardier, Polaris, BMW, Ducati and Triumph. Additionally, dealerships in RideNow’s Metric segment sell related products and services, including repair and maintenance services and also arrange for the delivery of finance and insurance products through third party providers.

F-14

RideNow has determined that the operating segments also represent the reportable segments. The reportable segments identified above are the business activities of RideNow for which discrete financial information is available and for which operating results are regularly reviewed by the chief operating decision maker to assess operating performance and allocate resources. RideNow’s chief operating decision maker is comprised of its two owners, who are also RideNow’s (1) Chairman of the Board and (2) Chief Executive Officer.

The following tables provide reportable segment revenue, gross profit, Floor Plan interest expense, segment income and inventories:

	For<br>the Three Months Ended<br><br><br>June<br>30, 2021
	Harley<br>Davidson Dealerships	Metric<br>Dealerships	Total<br>Segments
Revenue	$75,393,766	$192,797,271	$268,191,037
Gross<br>Profit	$24,418,507	$60,612,121	$85,031,472
Gross profit<br>%	32.4%	31.4%	31.7%
Floor Plan interest<br>expense	$(127,633)	$(246,227)	$(373,860)
Segment<br>income%	(0.2%)	(0.1%)	(0.1%)
Segment income<br>(1)	$12,324,242	$33,257,400	$45,581,642
Segment income<br>%	16.3%	17.2%	17.0%
Inventories	$30,770,221	$70,443,904	$101,214,125
	For<br>the Three Months Ended<br><br><br>June<br>30, 2020
---	---	---	---
	Harley<br>Davidson Dealerships	Metric<br>Dealerships	Total<br>Segments
Revenue	$59,364,748	$208,617,593	$267,982,341
Gross<br>Profit	$17,887,949	$56,244,290	$74,132,239
Gross profit<br>%	27.6%	23.4%	24.7%
Floor Plan interest<br>expense	$(254,769)	$(292,237)	$(547,006)
Segment<br>income%	(0.4%)	(0.1%)	(0.2%)
Segment income<br>(1)	$5,195,393	$24,256,956	$29,452,349
Segment income<br>%	5.3%	4.5%	4.7%
Inventories	$32,812,988	$105,366,484	$138,179,472

F-15

	For<br>the Six Months Ended<br><br><br>June<br>30, 2021
	Harley<br>Davidson Dealerships	Metric<br>Dealerships	Total<br>Segments
Revenue	$131,601,035	$381,765,900	$513,366,935
Gross<br>Profit	$41,695,435	$117,932,399	$159,629,346
Gross profit<br>%	31.7%	30.9%	31.1%
Floor Plan interest<br>expense	$(291,745)	$(574,030)	$(865,775)
Segment<br>income%	(0.2%)	(0.2%)	(0.2%)
Segment income<br>(1)	$16,626,598	$57,551,760	$74,178,358
Segment income<br>%	12.6%	15.1%	14.4%
Inventories	$30,770,221	$70,443,904	$101,214,125
	For<br>the Six Months Ended<br><br><br>June<br>30, 2020
---	---	---	---
	Harley<br>Davidson Dealerships	Metric<br>Dealerships	Total<br>Segments
Revenue	$114,490,471	$334,164,751	$448,655,222
Gross<br>Profit	$32,171,634	$88,433,303	$120,604,937
Gross profit<br>%	27.6%	23.4%	24.7%
Floor Plan interest<br>expense	$(535,573)	$(1,258,759)	$(1,794,332)
Segment<br>income%	(0.5%)	(0.4%)	(0.4%)
Segment income<br>(1)	$7,125,274	$31,910,508	$39,035,782
Segment income<br>%	5.3%	4.5%	4.7%
Inventories	$32,812,988	$105,366,484	$138,179,472

_____________________

(1)

Segment income represents income for each reportable segment and is defined as income from operations less Floor Plan interest expense, which is the measure by which management allocates resources to its segments.

The following is a reconciliation of the total of the reportable segments’ segment income to the combined net income:

	Three-Months<br>Ended June 30,		Six-Months<br>Ended June 30,
	2021	2020	2021	2020
Reportable segment<br>income	$45,581,642	$29,452,349	$74,178,358	$39,035,782
Corporate operating<br>income/expense	(11,799)	63,633	(42,347)	(85,352)
Other interest<br>expense	(7,153)	(74,366)	(61,076)	(150,465)
Interest<br>income	7,742	20,306	15,830	53,283
Miscellaneous<br>income	8,956,744	3,693,172	11,134,507	3,896,500
Combined net<br>income	$54,527,176	$33,155,094	$85,225,272	$42,749,748

F-16

The following tables provide revenue by products and services:

	For<br>the Three Months Ended<br><br><br>June<br>30, 2021
	Harley<br>Davidson Dealerships	Metric<br>Dealerships	Total<br>Segments
New<br>vehicles	$25,433,262	$117,298,398	$142,731,660
Used<br>vehicles	27,575,982	28,768,930	56,344,912
Service, parts and<br>other	17,101,707	30,379,119	47,480,826
Finance and<br>insurance income	5,282,815	16,350,824	21,633,639
	$75,393,766	$192,797,271	$268,191,037
	For<br>the Three Months Ended<br><br><br>June<br>30, 2020
---	---	---	---
	Harley<br>Davidson Dealerships	Metric<br>Dealerships	Total<br>Segments
New<br>vehicles	$17,701,733	$145,922,609	$163,624,342
Used<br>vehicles	23,906,858	17,645,683	41,552,541
Service, parts and<br>other	13,489,909	27,044,461	40,534,370
Finance and<br>insurance income	4,266,248	18,004,840	22,271,088
	$59,364,748	$208,617,593	$267,982,341
	For<br>the Six Months Ended<br><br><br>June<br>30, 2021
---	---	---	---
	Harley<br>Davidson Dealerships	Metric<br>Dealerships	Total<br>Segments
New<br>vehicles	$46,818,053	$239,139,935	$285,957,988
Used<br>vehicles	45,048,530	50,284,653	95,333,183
Service, parts and<br>other	30,687,305	60,322,622	91,009,927
Finance and<br>insurance income	9,047,147	32,018,690	41,065,837
	$131,601,035	$381,765,900	$513,366,935
	For<br>the Six Months Ended<br><br><br>June<br>30, 2020
---	---	---	---
	Harley<br>Davidson Dealerships	Metric<br>Dealerships	Total<br>Segments
New<br>vehicles	$34,476,136	$220,894,725	$255,370,861
Used<br>vehicles	45,694,613	34,794,643	80,489,256
Service, parts and<br>other	26,605,290	50,142,825	76,748,115
Finance and<br>insurance income	7,714,432	28,332,558	36,046,990
	$114,490,471	$334,164,751	$448,655,222

NOTE 16 – BUSINESS COMBINATION

RideNow Transaction

On March 12, 2021, RumbleOn, Inc. announced a definitive agreement to combine with RideNow Group to create the only omnichannel customer experience in powersports and the largest publicly traded powersports dealership platform (the “RideNow Transaction”). Under the terms of the definitive agreement, RumbleOn will combine with up to 46 entities operating under the RideNow brand for a total consideration of up to $575.4 million, consisting of $400.4 million of cash and approximately 5.8 million shares of RumbleOn Class B Common Stock. RumbleOn will finance the cash consideration through a combination of up to $280.0 million of debt and the remainder through the issuance of new equity. RumbleOn has entered into a commitment letter with Oaktree Capital Management, L.P. (“Oaktree”) to provide for the debt financing, subject to certain conditions (the “Oaktree Financing”). The number of shares to be issued to RideNow is subject to increase as described in the definitive agreement. The RideNow Transaction is subject to successful completion of the debt and equity financing, RumbleOn stockholder approval, manufacturer approval, other federal and state regulatory approvals, and other customary closing conditions as described in the definitive agreement. We expect to close the RideNow Transaction during the third quarter of 2021.

F-17

rmbl_ex992

Exhibit 99.2

Management Discussion and Analysis of Financial Condition and Results of Operations

for the Quarterly Periods ended June 30, 2021 and June 30, 2020

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) of the RideNow Group is provided as a supplement to, and should be read in conjunction with, the unaudited Combined Financial Statements and Notes thereto for the three and six- months ended June 30, 2021 and 2020, which are included in this report.

Overview

RideNow Group and Affiliates, a non-legal entity, (“RideNow” or “The Group” or the “Company”) is a collection of franchised dealerships operating in the powersports industry. The Group is engaged in the sale of new and used motorcycles, all-terrain vehicles, personal watercraft, other powersports vehicles, and related products and services, including repair and maintenance services, parts and accessories, riding gear, and apparel. As of June 30, 2021, RideNow owned and operated more than 43 retail dealerships in the United States, predominately in the Sunbelt region. The core brands sold by RideNow are Harley-Davidson, Honda, Yamaha, Kawasaki, Suzuki, Bombardier, Polaris, BMW, Ducati and Triumph, which are sold through franchise dealer agreements.

On June 30, 2021, and December 31, 2020 RideNow had two operating segments: (1) Harley-Davidson motor sports dealerships and (2) Metric motor sports dealerships (representing all Non-Harley-Davidson motor sports dealerships). RideNow’s Harley-Davidson dealership segment is comprised of retail franchises that sell new and used motorcycles and related accessories, riding gear and apparel, replacement parts, equipment repair and maintenance services, and also arrange for the delivery of finance and insurance products through third party providers. RideNow’s Metric dealerships segment is comprised of retail franchises that sell new and used motorcycles (non-Harley-Davidson) and other motor sports equipment, including all-terrain vehicles, utility terrain vehicles, boats, personal watercraft, snowmobiles and scooters from manufacturers such as Honda, Yamaha, Kawasaki, Suzuki, Bombardier, Polaris, BMW, Ducati and Triumph. Additionally, dealerships in RideNow’s Metric segment sell related products and services, including repair and maintenance services and also arrange for the delivery of finance and insurance products through third party providers. RideNow has determined that the operating segments also represent the reportable segments. The reportable segments identified above are the business activities of RideNow for which discrete financial information is available and for which operating results are regularly reviewed by the chief operating decision maker to assess operating performance and allocate resources. RideNow’s chief operating decision maker is comprised of its two owners, who are also RideNow’s (1) Chairman of the Board and (2) Chief Executive Officer.

The following table summarizes the percentages of the Group’s revenue and gross profit attributable to new and used vehicle sales:


	2021		2020		2021		2020
New Vehicles Sales
Percent<br>of total sales	53.2	%	61.1	%	55.7	%	56.9	%
Percent<br>of gross profit	35.2	%	36.2	%	36.2	%	31.6	%
Used Vehicle Sales
Percent<br>of total sales	21.0	%	15.5	%	18.6	%	17.9	%
Percent<br>of gross profit	12.6	%	8.9	%	11.2	%	9.5	%

Acquisition by RumbleOn

On March 12, 2021, RumbleOn, Inc. announced a definitive agreement to combine with the RideNow Group to create the only omnichannel customer experience in powersports and the largest publicly traded powersports dealership platform (the “RideNow Transactions”). Under the terms of the definitive agreement, RumbleOn will combine with up to 43 entities operating under the RideNow brand for a total consideration of up to $575.4 million, consisting of $400.4 million of cash and approximately 5.8 million shares of RumbleOn Class B Common Stock. RumbleOn will finance the cash consideration through a combination of up to $280.0 million of debt and the remainder through the issuance of new equity. RumbleOn has entered into a commitment letter with Oaktree Capital Management, L.P. (“Oaktree”) to provide for the debt financing, subject to certain conditions (the “Oaktree Financing”). The number of shares to be issued to RideNow is subject to increase as described in the definitive agreement. The RideNow Transaction is subject to successful completion of the debt and equity financing, RumbleOn stockholder approval, manufacturer approval, other federal and state regulatory approvals, and other customary closing conditions as described in the definitive agreement. We expect to close the RideNow Transaction during the third quarter of 2021.

COVID-19 Update

In March 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic. The rapid spread of COVID-19 resulted in governmental authorities implementing numerous measures to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, shutdowns and vaccines. We initially took aggressive action in response to the Pandemic, furloughing nearly 45% of our workforce. However, we quickly rebounded as we found the Pandemic was creating great demand as people, weary of staying at home found riding an off-road vehicle in the wide-open, socially distant spaces of tracks and trails to be appealing. While the manufacturers curtailed or shut down operations for a time, and our supply of new vehicles declined, our off-road vehicle demand increased significantly. For the quarter ended June 30, 2020, our vehicles sold, revenue and gross profit were up 57.1%, 49.8% and 58.1%, respectively compared to the quarter ending March 31, 2020. This trend continued throughout the remainder of 2020 and the first half of 2021, and we believe demonstrates that we have been successful in navigating the impact of COVID-19 on our business to date and that our business model makes us well-positioned to meet expected customer demand during the current COVID-19 pandemic. We will continue to evaluate the nature and extent of the impact to our business and our results of operations and financial condition as circumstances evolve surrounding the COVID-19 pandemic.

Results of Operations

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our combined financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenue and expenses and related disclosures of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions, impacting our reported results of operations and financial condition.

Certain accounting policies involve significant judgments and assumptions by management, which have a material impact on the carrying value of assets and liabilities and the recognition of income and expenses. Management considers these accounting policies to be critical accounting policies. The estimates and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. The significant accounting policies and estimates which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below. Refer to Note 1 — Summary of Significant Accounting Policies of the unaudited Combined Financial Statements included in this report, for more detailed information regarding our critical accounting policies.

Revenue Recognition

Revenue consists of the sales of new and used recreational vehicles, commissions from related finance and insurance products, sales of parts and services, and sale of other products. RideNow adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU, collectively referred to as Accounting Standards Codification (ASC) Topic 606, which (i) creates a single framework for recognizing revenue from contracts with customers that fall within its scope. RideNow’s goods and services that fall within the scope of Topic 606 are recognized as revenue when promised goods or services are transferred to customers in amounts that reflect the consideration to which RideNow expects to be entitled in exchange for those goods or services.

RideNow adopted the accounting standard effective January 1, 2018, using the modified retrospective approach applied only to contracts not completed as of the date of adoption, with no restatement of comparative periods recorded an increase to retained earnings of approximately $737,000.

Valuation of Inventory

Inventories, consisting of new vehicles, are stated at the lower of cost or net realizable value on a specific identification basis. Parts and accessories inventories are stated at the weighted average cost. Used vehicles and other inventories are stated at the lower of cost or wholesale net realizable values on a specific identification basis, as determined by management.

Accounting for Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update (ASC Topic 842) that amends the accounting guidance on leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The FASB also subsequently issued amendments to the standard, including providing an additional and optional transition method to adopt the new standard, described below, as well as certain practical expedients related to land easements and lessor accounting. The accounting standard update originally required the use of a modified retrospective approach reflecting the application of the standard to the leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements with the option to elect certain practical expedients. A subsequent amendment to the standard provides an additional and optional transition method that allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. RideNow adopted this accounting standard effective January 1, 2018, using the optional transition method with no restatement of comparative periods.

Goodwill

RideNow acquisitions have resulted in the recording of goodwill and other intangible assets. Goodwill is an asset representing operational synergies, franchise rights and future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Other intangible assets represent non-compete agreements entered into with sellers from acquired businesses.

RideNow does not amortize goodwill. Goodwill is tested for impairment annually or more frequently when events or changes in circumstances indicate that impairment may have occurred. RideNow elected to perform a quantitative goodwill impairment test for its reporting units as of December 31, 2020 and 2019, and no goodwill impairment charges resulted from the testing.

Other intangible assets identified include non-compete agreements which are intangible assets with definite lives and are carried at the acquired fair values less accumulated amortization. The non-compete agreements are amortized over the estimate useful lives.

Key Operating Metrics

We regularly review a number of metrics, to evaluate our business, measure our progress, and make strategic decisions. Our key operating metrics reflect what we believe will be the key drivers of our business, including increasing brand awareness, maximizing the opportunity to source the purchase of low-cost pre-owned vehicles from consumers and dealers while enhancing the selection of vehicles we make available to our customers. Our key operating metrics also demonstrate our ability to translate these drivers into sales and to monetize these retail sales through a variety of product offerings.

Metric Segment (Non-Harley Dealerships)

	Three-Months<br>Ended June 30,		Six-Months<br>Ended June 30,
	2021	2020	2021	2020
New Vehicles
Vehicles<br>sold	8,242	10,533	16,390	16,088
Day’s sales<br>of inventory	42	82	47	36
Total new vehicle<br>revenue	117,298,398	145,922,609	239,139,935	220,894,725
Gross profit per<br>unit	2,831	2,161	2,825	1,922
Used Vehicles
Vehicles<br>sold	2,271	1,796	4,043	3,571
Day’s sales<br>of inventory	61	66	73	21
Total used vehicle<br>revenue	28,768,930	17,645,683	50,284,653	34,794,643
Gross profit per<br>vehicle	2,452	1,472	2,419	1,468

Harley-Davidson Segment

	Three-Months<br>Ended June 30,		Six-Months<br>Ended June 30,
	2021	2020	2021	2020
New Vehicles
Vehicles<br>sold	973	688	1,853	1,379
Day’s sales<br>of inventory	48	128	40	51
Total new vehicle<br>revenue	25,433,262	17,701,733	46,818,053	34,476,136
Gross profit per<br>unit	6,722	5,335	6,030	5,035
Used Vehicles
Vehicles<br>sold	1,594	1,468	2,688	2,658
Day’s sales<br>of inventory	54	62	65	23
Total used vehicle<br>revenue	27,575,982	23,906,858	45,048,530	45,694,613
Gross profit per<br>vehicle	3,698	3,115	3,435	2,753

Vehicles Sold

We define vehicles sold as the number of new and used retail vehicles sold to consumers in each period. We view vehicles sold as a key measure for several reasons. First, vehicles sold is the primary driver of our revenue and, indirectly, gross profit, since vehicle sales enable multiple complementary revenue streams, including financing, vehicle service contracts, additional parts and accessories and trade-ins. Second, vehicles sold increases the base of available customers for referrals and repeat sales. Third, vehicles sold is an indicator of our ability to retain and capture market share from our competitors.

Days Sales of Inventory

We define Day’s Sales of Inventory (DSI) as the average time in days that it takes to turn our vehicle inventory. In other words, this metric represents how many days our current stock of inventory will last. We view days sales of inventory as a useful metric due to its impact on vehicle average gross profit per unit and flooring costs. It also helps with forecasting, open-to-buy procurement strategies and simply understanding if we have enough inventory to meet the demand.

Total Vehicle Revenue

Total vehicle revenue is comprised of new and used vehicle sales. We sell vehicles primarily direct to consumer onsite at our dealerships (bricks and mortar) as well as online. Factors primarily affecting total vehicle sales are availability of inventory from OEMs as well as availability of consumer finance. The effects of COVID-19 accelerated vehicle sales in 2020 and we expect that to continue through 2021 dependent upon available inventory and consumer finance.

Gross Profit Per Unit

Gross profit is generated on new and used vehicle sales from the difference between the vehicle selling price and our cost associated with acquiring the vehicle and preparation for sale.

Components of Results of Operations

Revenue from Contracts with Customers

New and Used Recreational Vehicles

When RideNow sells a new or used recreational vehicle, transfer of control typically occurs at a point in time upon delivery of the vehicle to the customer, which is generally at the time of sale, as the customer is able to direct the use of and obtain substantially all benefits from the recreational vehicle at such time. RideNow does not directly finance its customer’s purchases or provide leasing. In many cases, RideNow arranges third- party financing for the retail sale or lease of recreational vehicles to customers in exchange for a fee paid to RideNow by a third-party financial institution. RideNow receives payment directly from the customer at the time of sale or from a third-party financial institution (referred to as contracts-in-transit) within a short period of time following the sale. RideNow establishes provisions, which are not significant, for estimated returns and warranties on the basis of both historical information and current trends.

Parts and Service

Finance and Insurance

RideNow’s customers are concentrated in the Sunbelt region. There are no significant judgements or estimates required in determining the satisfaction of the performance obligations or the transaction priced at a point-in-time, costs to obtain the customer (i.e. commissions) do not require capitalization.

Cost of Sales

Cost of sales includes the cost to acquire, recondition, and transport recreational vehicles associated with preparing them for resale. Vehicle acquisition costs are driven by the mix of vehicles we acquire, the source of those vehicles, and supply-and-demand dynamics in the wholesale vehicle market. Reconditioning costs consist of direct costs, including parts, labor, and third-party repair expenses directly attributable to specific vehicles. Transportation costs consist of costs incurred to transport the vehicles from the point of acquisition. Cost of sales also includes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value.

Gross Profit

Vehicle gross profit is the vehicle sales price minus our cost of sales associated with the vehicles sold.

Used Vehicle Gross Profit.

Gross Profit from Sales of Service, Parts and Other Revenue represents the sales price for those products and services minus the labor and material costs associated with those sales.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include costs and expenses for compensation and benefits, advertising and marketing, rent and other facility expenses and other corporate overhead expenses, including expenses associated with information technology, insurance, legal, accounting, finance, and business development. Selling, general and administrative expenses also include the transportation cost associated with selling vehicles but exclude the cost of reconditioning, inspecting, and similar costs which are included in cost of revenue. Subject to the impact of the COVID-19 pandemic and our efforts to preserve liquidity as described elsewhere in this MD&A, we expect selling, general and administrative expenses will continue to increase in future periods as we execute and aggressively expand our business through increased marketing spending and the addition of management and support personnel to ensure we adequately develop and maintain operational, financial and management controls as well as our reporting systems and procedures, but we anticipate selling, general and administrative expenses will decline as a percentage of revenue.

Interest Expense

Interest expense includes interest incurred on floor plan financing and notes payable.

Other (Income) Expense

Other (income) expense includes miscellaneous income for interest earned, cash discounts earned, vending income, cash-back incentives, cash over and short, gains and losses on capital asset disposals and other non-operating additions and deductions from income.

Seasonality

The volume of vehicles sold will generally fluctuate from quarter-to-quarter. This seasonality is caused by several factors including weather, the timing of vehicles available for sale from the OEM’s or selling consumers, the quality of vehicles, temperature, and weather in the state where the dealership is located. Warmer weather locations typically experience less seasonality than colder weather locations when it comes to motorcycle sales. As a result, revenue and operating expenses related to volume will fluctuate accordingly on a quarterly basis. The fourth calendar quarter typically experiences lower sales as well as additional costs associated with the holidays and winter weather.

Results of Operations

The following table provides the results of operations for the three and six months ended June 30, 2021 and 2020, including key financial information relating to our business and operations. The financial information should be read in conjunction with our Condensed Combined Financial Statements for the three and six months ended June 30, 2021 and 2020, which are included in this report.

	Three-Months<br>Ended June 30,		Six-Months<br>Ended June 30,
	2021	2020	2021	2020
Revenue:
New<br>vehicles	$142,731,660	$163,624,341	$285,957,987	$255,370,861
Used<br>vehicles	56,344,912	41,552,540	95,333,182	80,489,256
Service, parts and<br>others	47,480,825	40,534,371	91,009,927	76,748,115
Finance and<br>insurance, net	21,633,640	22,271,089	41,065,839	36,046,990
Total<br>revenue	268,191,037	267,982,341	513,366,935	448,655,222
Cost of<br>Sales
New<br>vehicles	112,811,489	136,783,464	228,166,682	217,211,790
Used<br>vehicles	45,642,378	34,936,296	77,388,609	69,082,545
Service, parts and<br>others	24,705,698	22,146,629	48,182,298	41,794,184
Total cost of<br>sales	183,159,565	193,866,389	353,737,589	328,088,519
Gross<br>profit	85,031,472	74,115,952	159,629,346	120,566,703
Selling, general<br>and administrative expenses	48,570,799	39,604,867	91,682,133	75,094,774
Depreciation and<br>amortization expenses	903,494	948,129	1,717,001	1,384,768
Operating<br>income	35,557,179	33,562,956	66,230,212	44,087,161
Other Income<br>(Expense)
Floor plan<br>interest	(373,860)	(547,006)	(865,775)	(1,794,333)
Interest<br>expense-other	(84,028)	(318,462)	(299,726)	(670,926)
Interest<br>income	87,215	201,847	251,022	471,793
Miscellaneous<br>income	19,340,670	255,759	19,909,539	656,053
Total other income<br>(expense)	18,969,997	(407,862)	18,995,060	(1,337,413)
Net<br>Income	$54,527,176	$33,155,094	$85,225,272	$42,749,748

Revenue and Gross Profit

Metric Segment

	Three-Months<br>Ended June 30,		Six-Months<br>Ended June 30,
	2021	2020	2021	2020
Vehicles<br>sold:
New<br>vehicles	8,242	10,533	16,390	16,088
Used<br>vehicles	2,271	1,796	4,043	3,571
Total vehicles<br>sold	10,513	12,329	20,433	19,659
Revenue
New<br>vehicles	117,298,398	145,922,608	239,139,934	220,894,725
Used<br>Vehicles	28,768,930	17,645,683	50,284,653	34,794,643
Service, parts and<br>others	30,379,119	27,044,461	60,322,622	50,142,825
Finance and<br>insurance	16,350,825	18,004,841	32,018,691	28,332,558
Total<br>revenue	192,797,272	208,617,593	381,765,900	334,164,751
Gross<br>profit
New<br>vehicles	23,839,785	23,260,790	47,377,353	31,811,475
Used<br>Vehicles	5,568,369	2,644,446	9,781,588	5,241,546
Service, parts and<br>others	14,853,142	12,334,213	28,754,767	23,047,724
Finance and<br>insurance	16,350,825	18,004,841	32,018,691	28,332,558
Total gross<br>profit	$60,612,121	$56,244,290	$117,932,399	$88,433,303

Harley-Davidson Segment

	Three-Months<br>Ended June 30,		Six-Months<br>Ended June 30,
	2021	2020	2021	2020
Vehicles<br>sold:
New<br>vehicles	973	688	1,853	1,379
Used<br>vehicles	1,594	1,468	2,688	2,658
Total vehicles<br>sold	2,567	2,156	4,541	4,037
Revenue
New<br>vehicles	25,433,262	17,701,733	46,818,053	34,476,136
Used<br>Vehicles	27,575,982	23,906,858	45,048,530	45,694,613
Service, parts and<br>others	17,101,707	13,489,909	30,687,305	26,605,290
Finance and<br>insurance	5,282,815	4,266,248	9,047,147	7,714,432
Total<br>revenue	75,393,766	59,364,748	131,601,035	114,490,471
Gross<br>profit
New<br>vehicles	6,079,541	3,596,375	10,412,440	6,385,831
Used<br>Vehicles	5,134,165	3,971,798	8,162,986	6,165,164
Service, parts and<br>others	7,921,986	6,053,528	14,072,862	11,906,207
Finance and<br>insurance	5,282,815	4,266,248	9,047,147	7,714,432
Total gross<br>profit	$24,418,507	$17,887,949	$41,695,435	$32,171,634

Revenue

Three Months Ended June 30, 2021 Versus 2020

Total revenue increased $208,696 to $268,191,037 compared to $267,982,341 in 2020. The increase was primarily due to an increase of $14,792,372 in used vehicle sales plus and increase of $6,946,454 in sales of service, parts and other income, offset by a decrease of $20,892,681 and $637,449 of new vehicle sales and finance and insurance income, respectively.

Total new vehicle sales decreased $20,892,681 to $142,731,660 compared to $163,624,341 in 2020. $31,070,934 of this decrease resulted from a decrease of 2,006 in the number of new vehicles sold to 9,215 compared to 11,221 for 2020. This decrease was partially offset by an increase of $10,178,252 due to an in increase in the average selling prices per vehicle to $15,489 compared to $14,582 for 2020. Substantially all new vehicle categories were down in the second quarter of 2021 compared to 2020 with only the on-road motorcycle segment increasing year-over-year due to the increase in new Harley-Davidson motorcycle sales which were up $7.7 million.

Total used vehicle sales increased $14,792,372 to $56,344,912 compared to $41,552,540 in 2020. This increase was due to an increase in the number of used vehicles sold of 601 to 3,865 compared to 3,264 in 2020 and an increase in the average selling price per vehicle to $14,578 compared to 12,731 in 2020. The increase in price is attributable to the increase in demand along with the lack of available product which has driven prices higher in 2021.

Total service, parts and other income increased $6,946,454 to $47,480,825 compared to $40,534,371 in 2020. Parts, accessories, and apparel sales increased $4,186,884 to $32,797,789 compared to $28,610,905 in 2020. Service revenue increased $2,759,570 to $14,683,036 compared to $11,293,466 in 2020. This was primarily due to the significant increase in units sold in 2020 over the prior years. Parts and service sales lag vehicle sales and in this regard are the positive biproduct of strong vehicle sales from prior periods.

Total finance and insurance income decreased $637,449 to $21,633,640 compared to $22,271,089 in 2020. This was primarily due to the decrease of 2,006 new vehicles sold. However, per unit finance and insurance income increased $116 from $1,538 to $1,654. This increase resulted primarily from an increase of sales of the new battery protection product of $1,247,401.

Metric Segment (Non-Harley-Davidson) total revenue decreased 15,820,322 to $192,797,271 compared to $208,617,593 in 2020. The decrease was primarily attributable to the decrease in the number of vehicles sold which were down 1,816 to 10,513 compared to 12,329 in 2020. Total new vehicle sales decreased by 2,291 while used vehicle sales increased. This decrease was partially offset by an increase in the average selling price per vehicle to $18,339 compared to $16,921 in 2020. This decrease in revenue included $28,624,211 from the sale of new vehicles while used vehicle sales increased $11,123,247. Sales of service, parts and other income increased $3,334,658 and sale of finance and insurance products decreased $1,654,016 due to the decrease in units sold of 1,816 which equates to opportunities or swings at the customer.

Harley-Davidson total revenue increased $16,029,018 to $75,393,766 compared to $59,364,748 in 2020. The increase was primarily attributable to an increase in the number of vehicles sold to 2,567 compared to 2,156 in 2020 and the increase in average selling price per vehicle to $29,370 from $27,535 in 2020. The increase in average selling price was due to lower supply and strong demand for Harley-Davidson products which drove higher selling prices. Sales of service, parts and other income increased $3,611,798 and sales of finance and insurance products increased $1,016,567 due to volume with 411 more vehicles sold or opportunities to sell finance and insurance products.

Six Months Ended June 30, 2021 Versus 2020

Total revenue increased $64,711,713 to $513,366,935 compared to $448,655,222 in 2020. All segments are up over the prior year with the increases from largest to smallest being $30,587,126 new vehicles, $14,843,926 used vehicles, $14,261,812 sales of service, parts and other income, and $5,018,849 finance and insurance.

Total new vehicle sales increased $30,587,126 to $285,957,987 compared to $255,370,861 in 2020 due to the number of new vehicles sold being up 776 over the prior year. The increase was entirely due to new motorcycle sales which were up $32,314,816 led by Harley-Davidson which was up $12,341,917 over 2020. We got off to a slow start in 2020 with COVID-19 concern which is another factor in the year-over-year change in the comparative six-month improvements for 2021.

Total used vehicle sales increased $14,843,926 to $95,333,182 compared to $80,489,256 in 2020. This increase was due to an increase in the number of used vehicles sold of 502 to 6,731 compared to 6,229 in 2020. Used motorcycles led the year-over-year increase as new product is still in short supply and RideNow was able to take advantage of the RumbleOn source for used motorcycles.

Total service, parts and other income increased $14,261,812 to $91,009,927 compared to $76,748,115 in 2020. Parts, accessories, and apparel sales increased $9,746,803 to $63,538,689 compared to $53,791,895 in 2020. Service revenue increased $4,515,009 to $27,471,229 compared to $22,956,220 in 2020. This was primarily due to the 1,278, increase in vehicles sold in 2021.

Total finance and insurance income increased $5,018,849 to $41,065,839 compared to $36,046,990 in 2020. This was primarily due to the net increase of 1,278 vehicles sold in 2021. This increase resulted primarily from a new product offering called “Battery for Life” which added $2,008,431 of incremental revenue to the finance and insurance (F&I) department. Additionally, F&I benefitted from increases of sales of extended maintenance and service contracts of $694,827, of documentation fees $603,386, prepaid maintenance of $1,565,032 and finance income of $346,861.

Metric Segment (Non-Harley-Davidson) total revenue increased $47,601,150 to $381,765,901 compared to $334,164,751 in 2020. The increase was primarily attributable to the increase in the number of vehicles sold to 20,433 compared to 19,659 in 2020. Total new vehicle sales increased by $18,245,210 while used vehicle sales increased by $15,490,010. Additionally, the average selling price per new vehicle increased to $14,591 compared to $13,730 in 2020 and the average selling price per used vehicle increased to $12,437 from $9,744 in 2020. Sales of service, parts and other income increased $10,179,797 and sale of finance and insurance products increased $3,686,133 due to the increase in total vehicles sold.

Harley-Davidson total revenue increased $17,110,564 to $131,601,035 compared to $114,490,471 in 2020. The increase was primarily attributable to an increase in the number of vehicles sold to 4,541 compared to 4,037 in 2020 with new vehicles sold being the key contributor to the increase. New vehicle revenue increased $12,341,917 while the average selling price increased to $25,266 from $25,001. Sales of service, parts and other income increased $4,082,015 and sales of finance and insurance products increased $1,332,715.

Gross Profit

Three Months Ended June 30, 2021 Versus 2020

Total gross profit increased $10,915,520 to $85,031,472 compared to $74,115,952 in 2020. The increase was primarily due to an increase in gross profit of $3,062,161 and $4,086,290 from new and used vehicle sales, respectively, plus an increase of $4,387,387 in sales of service and parts which was partially offset by a decrease of $637,449 in finance and insurance income resulting from a 1,405 decrease in total vehicles sold. The increase in gross profit was primarily attributable to 4.6% increase in new gross margin and 3.1% increase in used gross margin compared to 2020 which propelled total gross margin to 31.7% compared to 27.7% in 2020.

The gross profit on new vehicle sales increased $3,062,161 to $29,919,326 compared to $26,857,165 in 2020. $9,582,734 of this increase resulted from an increase of 4.6% in gross profit while the offsetting decrease of $6,513,482 was attributable to the decrease in new vehicles sold to 9,215 compared to 11,221 for 2020. A change in the vehicle mix sold, as on-road motorcycles accounted for 40% versus 33% of new vehicle sales in 2021 compared to 2020 and the gross margin on these sales were 20.0% in 2021 compared to 15.0% in 2020.

The gross profit on used vehicle sales increased $4,086,290 to $10,702,534 compared to $6,616,244 in 2020. $2,421,888 of this increase was attributable to an increase in the gross margin on vehicles sold to 19.0% compared to 15.9% for 2020 as well as an increase of $1,664,169 due to an increase in the number of used vehicles sold of 601 to 3,865 compared to 3,264 in 2020. The increase in gross margin was due to an increase in the average selling price per vehicle of $1,847 to $14,578 compared to $12,731 in 2020.

Total gross profit on service, parts and other income increased $4,387,387 to $22,775,128 compared to $18,387,741 in 2020. This was primarily due to the increase in vehicles sold from prior periods which impacts future service and parts demand. The average gross margin on service and parts combined income was 48.0% compared to 45.4% in 2020.

Total finance and insurance gross profit decreased $637,449 to $21,633,640 compared to $22,271,089 in 2020. This was entirely due to the 1,405 decrease in vehicles sold in 2021 as the finance and insurance gross profit per vehicle sold increased to $1,654 in 2021 versus $1,538 in 2020.

Metric Segment (Non-Harley-Davidson) total gross profit increased $4,367,831 to $60,612,121 compared to $56,244,290 in 2020. This increase was primarily attributable to used vehicles which increased $2,923,923 and parts, accessories and service which increased $2,518,929. The used vehicle average selling price increased from $9,825 to $12,668 due to strong demand and limited supply. The overall gross margin from sales by the Metric Segment increased to 31.4% compared to 27.0% in 2020.

Harley-Davidson Segment total gross profit increased $6,530,558 to $24,418,507 compared to $17,887,949 in 2020. The increase was attributable to all segments with new vehicle gross profit increasing $2,483,166, used vehicle increasing $1,162,367, parts, accessories and service increasing $1,868,458 and finance and insurance increasing $1,016,567. The increase in vehicle gross profit was due to increased selling prices contributing $1,458,468 as well as an increase in volume contributing $2,186,526. The overall gross margin increased to 32.4% compared to 30.1% in 2020.

Six Months Ended June 30, 2021 Versus 2020

Total gross profit increased $39,062,643 to $159,629,346 compared to $120,566,703 in 2020. The increase was primarily due to an increase in gross profit of $19,592,487 and $6,537,864 from new and used vehicle sales, respectively, plus an increase of $7,873,698 in sales of service, parts and other income and an increase of $5,018,848 in finance and insurance income. The increase was primarily attributable to an increase of 1,278 in the number of new and used vehicles that were sold to 24,974 compared to 23,696 in 2020 and an increase in the total gross margin to 31.1% compared to 26.9% in 2020.

The gross profit on new vehicle sales increased $19,592,487 to $57,789,793 compared to $38,197,306 in 2020. $2,458,368 of this increase resulted from an increase of 776 in vehicles sold to 18,243 compared to 17,467 for 2020. The balance of the increase of $17,135,127 was primarily attributable to the increase in the gross margin to 20.2% compared to 15.0% in 2020. This increase resulted from an increase in the average selling price per vehicle of $1,055 to $15,675 compared to $14,620 in 2020 and a change in the vehicle mix sold. On-road vehicle sales accounted for 40.5% of new vehicle sales in 2021 compared to 32.7% in 2020 and the gross margin on these sales were 18.5% in 2021 compared to 14.7% in 2020.

The gross profit on used vehicle sales increased $6,537,864 to $17,944,574 compared to $11,406,710 in 2020. $5,201,215 of this increase was attributable to an increase in the gross margin on vehicles sold to 18.8% compared to 14.2% for 2020 with the remainder $1,336,649 due to an increase in the number of used vehicles sold of 502 to 6,731 compared to 6,229 in 2020. The increase in gross margin was due to an increase in the average selling price per vehicle of $1,241 to $14,163 compared to $12,922 in 2020 which took gross profit from 14.2% in 2020 to 18.8% in 2021. Supply and demand are the reasons for the increasing used vehicle profit margin. There is currently more demand than supply which is driving up selling prices and gross profit margin.

Total gross profit on service, parts and other income increased $7,873,698 to $42,827,629 compared to $34,953,931 in 2020. This was primarily due to the 1,278, increase in vehicles sold in 2021 plus the prior year growth in vehicles sold which provide opportunities for parts and service revenue later. The average gross margin on service income was 76.6% compared to 77.3% in 2020 and the average gross margin on parts and accessories was 32.3% compared to 30.2% in 2020.

Total finance and insurance gross profit increased $5,018,848 to $41,065,838 compared to $36,046,990 in 2020. This was primarily due to the 1,278, increase in vehicles sold in 2021. This increase resulted from an increase of sales of extended maintenance and service contracts of $694,230, documentation fees of $603,386 and prepaid maintenance of $1,565,032. Additionally, a new product offering called ‘Battery for Life’ generated $2,008,431 of incremental gross profit.

Metric Segment (Non-Harley-Davidson) total gross profit increased $29,499,096 to $117,932,399 compared to $88,433,303 in 2020. All segments were up year over year with largest increase coming from new and used vehicle sales which were up a combined $20,105,920 over 2020. $18,100,453 of this increase was attributable to the increase in gross margin on new and used vehicle sales to 19.7% compared to 14.5% in 2020. While the remainder $2,005,467 was due to the increase of 774 vehicles sold to 20,433 compared to 19,659 in 2020. The overall gross margin from sales by the Metric Segment increased to 30.9% compared to 26.5% in 2020.

Harley-Davidson Segment total gross profit increased $9,523,801 to $41,695,435 compared to $32,171,634 in 2020. The increase was attributable to all segments which includes new vehicles $4,026,609, used vehicle $1,997,822, parts, accessories, and service $2,166,655 and finance and insurance $1,332,715. Year-to-date 504 more vehicles have been sold than prior year which is the primary driver in these gross profit increases. Additionally, the overall gross margin increased to 31.7% compared to 28.1% in 2020.

Selling, General and Administrative Expenses

	Three-Months<br>Ended June 30,		Six-Months<br>Ended June 30,
	2021	2020	2021	2020
Compensation and<br>related costs	$33,214,948	$26,732,555	$62,135,592	$49,326,640
Advertising and<br>marketing	1,849,514	1,365,132	3,616,140	2,827,276
Other selling<br>expenses	2,060,785	1,521,936	3,715,702	2,966,120
Professional<br>fees	653,998	405,353	1,101,726	767,883
Facility<br>expenses	7,503,709	7,145,793	14,832,556	14,112,042
General and<br>administrative expenses	3,287,845	2,434,098	6,280,417	5,094,813
	$48,570,799	$39,604,867	$91,682,133	$75,094,774

Three Months Ended June 30, 2021 Versus 2020

Selling, general and administrative expenses increased by $8,965,932 to $48,570,798 (18.1% of total revenue) compared to $39,604,869 (14.8% of total revenue) in 2020. The increase primarily resulted from an increase of $6,482,393 in compensation and related costs. The increase in compensation and related costs includes an increase in sales commissions of $2,616,021 due to the increased sales in 2021 compared to 2020. A small portion of the increase was also due to a reduction in workforce that occurred towards the end of March 2020 due to the COVID-19 pandemic. In the third week of March 2020, we furloughed 284 of our staff. We quickly brought everyone back that would come back which equaled 250 employees in May as we learned the COVID-19 pandemic was increasing the demand for our vehicles. The increase in advertising, marketing and other selling expenses was directly attributable to the increase in sales. During the three months ended June 30, 2021 we purchased additional online and digital marketing with increases in SEO/SEM and paid search. The increase in facilities expenses was primarily related to an increase in warehouse space in order to handle the growing UTV (side by side) market as these vehicles are the size of automobiles. The increase in general and administrative expenses is primarily due to company vehicle and freight expenses of $203,034 due to an increase in mail order and delivery brought on by the COVID-19 pandemic. Overall, total selling, general and administrative expenses for 2021 are 57.1% of total gross profit compared to 53.4% of total gross profit in 2020.

Six Months Ended June 30, 2021 Versus 2020

Selling, general and administrative expenses increased by $16,587,359 to $91,682,133 (17.9% of total revenue) compared to $75,094,774 (of total revenue) in 2020. The increase primarily resulted from an increase of $12,808,951 in compensation and related costs. The increase in compensation and related costs includes an increase in sales commissions of $6,565,046 due to the increased sales in 2021 compared to 2020. A small portion of the increase was also due to a reduction in workforce that occurred towards the end of March 2020 due to the COVID-19 pandemic. In the third week of March 2020, we furloughed 284 of our staff. We quickly brought everyone back that would come back which equaled 250 employees in May as we learned the COVID-19 pandemic was increasing the demand for our vehicles. The increase in advertising, marketing and other selling expenses was directly attributable to the increase in sales. During the six months ended June 30, 2021 we purchased additional online and digital marketing with increases in SEO/SEM and paid search. The increase in facilities expenses was primarily related to an increase in warehouse space in order to handle the growing UTV (side by side) market as these vehicles are the size of automobiles. The increase in general and administrative expenses is primarily due to an increase in costs related to our technology platform of $327,114 and delivery and freight of $225,702 brought on by an increase in mail order delivery. Bad debt expense also increased $148,235 as we reserved for some aged receivables and cleaned up the balance sheet. Overall, total selling, general and administrative expenses for 2021 are 57.4% of total gross profit compared to 62.3% of total gross profit in 2020.

Depreciation and Amortization

Year-to-date Depreciation and Amortization increased $332,233 to $1,717,001 in 2021 (0.33% of total revenue) compared to $1,384,768 in 2020 (0.31% of total revenue) in 2020

Interest Expense

Year-to-date Floor plan interest expense decreased $928,558 to $865,775 in 2021 compared to $1,794,333 in 2020 due to significantly lower new inventory as demand outpaced supply in the first two quarters of 2021 compared to 2020. New inventory value and days’ supply are the leading indicators for floorplan interest expense. New inventory was down $40,812,874 from $82,886,675 to $42,073,801 and days’ supply (DSI) was down to 42 days versus 82 in the prior year.

Liquidity and Capital Resources

	June<br>30,<br><br><br>2020	December<br>31,<br><br><br>2020
Cash and Cash<br>Equivalents	$5,830,482	$3,905,686
Cash sweep account<br>balance (1)	32,704,418	56,521,530
Availability under<br>short-term revolving line of credit	13,000,000	19,000,000
Availability under<br>floor plan notes	210,105,053	186,325,321
	$261,639,953	$265,752,537

_____________________

(1)

Our capital allocation strategy focuses on growing long-term value for our owners and shareholders. We invest capital in our business to maintain and upgrade existing facilities as well as other strategic and technology initiatives. We also deploy capital opportunistically to complete acquisitions and improve facilities of newly acquired dealerships. For the six months ended June 30, 2021 and 2020 the following table summarizes our capital expenditures:

	Three-Months<br>Ended June 30,		Six-Months<br>Ended June 30,
	2021	2020	2021	2020
Purchases of<br>property and equipment	$600,599	$2,764,596	$948,526	$2,982,882
Proceeds from sale<br>of property and equipment	(30,124)	-	31,634	-
	$630,723	$2,764,596	$916,892	$2,982,882

As of June 30, 2021, and December 31, 2020, excluding lease liabilities, the outstanding principal amount of indebtedness was $57,597,910 and $101,947,256, respectively, and are summarized in the table below. See Notes to our Condensed Combined Financial Statements as of June 30, 2021 included in this report and Notes to our audited Combined Financial Statements as of December 31, 2020, which were included in RumbleOn’s Form 8-K that was filed on April 8, 2021.

	June<br>30,<br><br><br>2020	December<br>31,<br><br><br>2020
Asset-Based<br>Financing:
Floor plan notes<br>payable	$44,753,947	$68,533,679
Revolving line of<br>credit	6,000,000	-
Total asset-based<br>lending	50,753,947	68,533,679
Notes<br>payable-related parties	1,159,322	7,411,322
Notes payable-PPP<br>loans	-	19,039,229
Notes<br>payable-other	5,684,641	9,087,496
	$57,597,910	$101,947,256

The following table sets for a summary of our cash flows for the six months ended June 30, 2021, and 2020:

	June<br>30,<br><br><br>2021	June<br>30,<br><br><br>2020
Net cash provided<br>by operating activities	$79,858,557	$27,229,852
Net cash (used in)<br>investing activities	(916,892)	(2,982,882)
Net cash (used in)<br>financing activities	(77,016,868)	(24,838,802)
Net increase<br>(decrease) in cash	$1,924,797	$(591,832)

Operating Activities

Our primary sources of operating cash flows result from the sales of new and used vehicles and ancillary products and services and our floor plans. Our primary uses of cash from operating activities are purchases of inventory, personnel-related expenses, selling expenses, facility costs and other administrative expenses. For the six months ended June 30, 2021, and June 30, 2020, the net cash provided by operating activities was $79,858,557 and $27,229,852 respectively. In 2021 the principal reasons for the increase in cash from operating activities aside from the increased net profit was the decrease in accounts receivable-related parties of $12,463,940 and an increase in accounts payable-related parties of $12,515,235.

Investing Activities

Net cash used in investing activities consists primarily of cash used in capital additions. For the six months ended June 30, 2021, cash used in investing activities decreased $2,065,990 to $916,892 compared to $2,982,882 for the six months ended June 30, 2020, due to a reduction in capital expenditures.

Financing Activities

Cash flows from financing activities primarily relate to our short and long-term borrowing activity and contributions/distributions to or from the owners. For the six months ended June 30, 2021 and 2020 cash used in financing activities was $77,016,868 and $24,838,802, this change was primarily due to shareholder distributions. In addition, for the six months ended June 30, 2021, there were borrowings under the Company’s revolving line of credit of $6,000,000. That line of credit was completely paid down during the six months ended June 30, 2020.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flows or as a measure of liquidity. Non-GAAP financial measures are not necessarily calculated the same way by different companies and should not be considered a substitute for or superior to U.S. GAAP.

Adjusted EBITDA is defined as net income adjusted to add back interest expense and depreciation and amortization, and certain charges and expenses, such as non-cash compensation costs, acquisition related costs, financing activities, litigation expenses, severance, new business development costs, technology implementation costs and expenses, and facility closure and lease termination costs, as these charges and expenses are not considered a part of our core business operations and are not an indicator of ongoing, future company performance.

Adjusted EBITDA is one of the primary metrics used by management to evaluate the financial performance of our business. We present Adjusted EBITDA because we believe it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further, we believe it is helpful in highlighting trends in our operating results, because it excludes, among other things, certain results of decisions that are outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure and capital investments.

The following tables reconcile Adjusted EBITDA to net loss for the periods presented:

	Three-Months Ended<br><br><br>June 30,		Six-Months Ended<br><br><br>June 30,
	2021	2020	2021	2020
Net<br>Income	$54,527,176	$33,155,094	$85,225,272	$42,749,748
Add<br>back:
Interest<br>expense	457,888	865,468	1,165,501	2,465,259
Depreciation and<br>amortization	903,494	948,129	1,717,001	1,384,768
Interest income and<br>miscellaneous income	(388,656)	(457,606)	(1,121,332)	(1,127,846)
EBITDA	55,499,902	34,511,085	86,986,442	45,471,929
Adjustments:
PPP loan<br>forgiveness	(19,039,229)	-	(19,039,229)	-
Adjusted<br>EBITDA	$36,460,673	$34,511,085	$67,947,213	$45,471,929

rmbl_ex993

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On March 12, 2021, RumbleOn, Inc. (“RumbleOn” or the “Company) entered into a Plan of Merger and Equity Purchase Agreement, as amended on June 17, 2021 and July 20, 2021 (the “RideNow Agreements”), to acquire RideNow Group and Affiliates, a non-legal entity, (“RideNow” or “The Group”). RideNow is a collection of franchised dealerships operating in the powersports industry. Collectively, the Group is referred to as the Acquired Companies in the Agreement. The Group is engaged in the sale of new and used motorcycles, all- terrain vehicles, personal watercraft, other powersports vehicles, and related products and services, including repair and maintenance services, parts and accessories, riding gear, and apparel. As of June 30, 2021, RideNow owned and operated 43 retail dealerships in the United States, predominately in the Sunbelt region. The core brands sold by RideNow are Harley-Davidson, Honda, Yamaha, Kawasaki, Suzuki, Bombardier, Polaris, BMW, Ducati and Triumph, which are sold through franchise dealer agreements.

The RideNow Agreement provides that the Company will acquire the Acquired Companies in exchange for (i) $400,400,000 in cash plus or minus any adjustments for net working capital and closing indebtedness, and (ii) shares of the Company’s Class B Common Stock having a value of $175,000,000 (the “Closing Payment Shares”), valued equally, on a per share basis, based upon the lowest value of (A) $30.00; (B) the VWAP of the Company’s Class B Common Stock for the twenty (20) trading days immediately preceding the closing of the RideNow Transaction (the “Closing”), and (C) the value on a per share basis paid for the Class B Common Stock or any shares underlying securities convertible into or exercisable for Class B Common Stock by any person which purchases Class B Common Stock or any shares underlying securities convertible into or exercisable for Class B Common Stock from the Company from the date of the RideNow Agreement until the Closing not including purchases of Class B Common Stock underlying currently outstanding options, warrants, convertible notes, or other derivative securities. Ten percent (10%) of the Closing Payment Shares will be escrowed at Closing and will be released pursuant to the terms of the RideNow Agreement. The Company will finance the cash consideration through a combination of approximately $280,000,000 of debt provided by the Initial Lender (as defined below) and through the issuance of new equity for the remainder thereof.

The following unaudited pro forma condensed combined financial statements are based on the Company’s historical consolidated financial statements and RideNow’s historical combined financial statements as adjusted to give effect to the Company’s acquisition of RideNow and the related financing transactions. The unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2021, gives effect to these transactions as if they occurred on June 30, 2021. The unaudited Pro Forma Condensed Combined Statements of Operations for the six months ended June 30, 2021, and the twelve months ended December 31, 2020, give effect to these transactions as if they occurred on January 1, 2020.

The unaudited pro forma condensed combined financial statements should be read together with the Company’s audited historical financial statements, which are included in the Company’s most recent Annual Report on Form 10-K, and quarterly report on Form 10-Q, and RideNow’s audited historical financial statements, which were included in RumbleOn’s Form 8-K that was filed on April 8, 2021, and its quarterly financial statements, which is included in this Form 8-K being filed on August 4, 2021.

The unaudited pro forma combined financial information is provided for informational purpose only and is not intended to represent or be indicative of the consolidated results of operations or financial position that the Company would have reported had the RideNow transaction closed on the dates indicated and should not be taken as representative of our future consolidated results of operations or financial position.

The pro forma adjustments related to the RideNow Agreement are described in the notes to the unaudited pro forma combined financial information and principally include the following:

●

Pro forma adjustment to eliminate the RideNow assets, liabilities and owners’ equity not acquired.

●

Pro forma adjustment to record the equity and debt financing obtained in connection with the RideNow merger.

●

Proforma adjustment to record the merger of the Company and RideNow.

●

Proforma adjustments to record the estimated interest expense and other expenses resulting from the merger.

●

Proforma adjustment to record the estimated tax provision on the consolidated income before tax, as adjusted for the above pro forma adjustments.

The adjustments to fair value and the other estimates reflected in the accompanying unaudited pro forma condensed consolidated financial statements may be materially different from those reflected in the combined company’s consolidated financial statements subsequent to the merger. In addition, the unaudited pro forma condensed combined financial statements do not purport to project the future financial position or results of operations of the combined companies. Reclassifications and adjustments may be required if changes to RideNow’s financial presentation are needed to conform RideNow’s accounting policies to the accounting policies of RumbleOn.

These unaudited pro forma condensed combined financial statements do not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the RideNow Agreement. These financial statements also do not include any integration costs the companies may incur related to the Transactions as part of combining the operations of the companies.

PF-1

RumbleOn Inc. and Subsidiaries

Pro Forma Condensed Combined Balance Sheet

as of June 30, 2021

(Unaudited)

	RumbleOn	Ride<br>Now	Pro<br>Forma Adjustments	Pro<br>Forma Combined
ASSETS
Current<br>assets:
Cash and cash<br>equivalents	$24,972,223	$5,830,482	5,322,753	$36,125,458
Restricted<br>cash	3,049,056	-	-	3,049,056
Accounts<br>receivable, net	26,955,051	98,250,159	(72,071,921)	53,133,289
Inventory	19,675,990	101,214,125	(1,623,727)	119,266,388
Other current<br>assets	4,058,905	1,864,297	-	5,923,202
Total current<br>assets	78,711,225	207,159,063	(68,372,895)	217,497,393
Property and<br>equipment - net	6,295,683	22,936,755	-	29,232,438
Right of use<br>assets	5,007,605	73,921,130	-	78,928,735
Other indefinite<br>lived intangible assets	-	-	194,531,319	194,531,319
Goodwill	26,886,563	55,284,223	325,716,991	407,887,777
Deferred finance<br>charge	10,950,000	-	(10,950,000)	0
Other<br>assets	221,712	1,296,219	(1,026,605)	491,326
Total<br>assets	$128,072,788	$360,597,390	439,898,810	$928,568,988
LIABILITIES AND<br>STOCKHOLDERS’ EQUITY
Current<br>liabilities:
Accounts payable<br>and accrued liabilities	$12,678,577	$83,133,280	(37,539,803)	$58,272,054
Lease<br>liabilities-current portion	1,750,127	21,444,138	-	23,194,265
Notes payable-floor<br>plan	21,857,234	44,753,947	-	66,611,181
Current portion of<br>long-term debt	5,809,030	12,843,963	(8,516,667)	10,136,326
Total current<br>liabilities	42,094,968	162,175,328	(46,056,470)	158,213,826
Long term<br>liabilities:			-
Long-term<br>debt	4,691,181	-	249,825,000	254,516,181
Warrant<br>liability	13,174,216	-	(13,174,216)	0
Convertible debt,<br>net	28,079,484	-	-	28,079,484
Derivative<br>liabilities	48,800	-	-	48,800
Lease liabilities-<br>long-term portion	3,519,475	72,668,736	-	76,188,211
Other long-term<br>liabilities	502,817	6,497,346	-	7,000,163
Total long-term<br>liabilities	50,015,973	79,166,082	236,650,784	365,832,839
Total<br>liabilities	92,110,941	241,341,410	190,594,314	524,046,665
Stockholders’<br>equity:
Class B Preferred<br>stock	-	-	-	0
Class A<br>stock	50	-	-	50
Class B<br>Stock	3,343	-	10,154	13,497
Owners’<br>equity		119,255,980	(119,255,980)	0
Additional paid in<br>capital	148,180,750	-	383,889,833	532,070,583
Accumulated<br>deficit	(112,222,296)	-	(15,339,511)	(127,561,807)
Total<br>stockholders’ equity	35,961,847	119,255,980	249,304,496	404,522,323
Total liabilities<br>and stockholders’ equity	$128,072,788	$360,597,390	439,898,810	$928,568,988

All values are in US Dollars.

See Accompanying Notes to Pro Forma Financial Statements.

PF-2

RumbleOn Inc. and Subsidiaries

Pro Forma Condensed Combined Statement of Operations

For the Six Months Ended June 30, 2021

(Unaudited)

	RumbleOn	Pro<br>Forma Adjustments	Pro<br>Forma Combined
Revenue:
Vehicle<br>sales
Powersports	38,833,577	(25,275,968)	$394,848,778
Automotive	211,357,422	-	211,357,422
Transportation and<br>vehicle logistics	22,418,633	-	22,418,633
Parts and other<br>revenue	-	-	132,075,766
Total<br>Revenue	272,609,632	(25,275,968)	760,700,599
Cost of<br>revenue
Powersports	28,897,883	(23,652,241)	310,800,933
Automotive	194,977,530	-	194,977,530
Transportation and<br>vehicle logistics	18,044,506	-	18,044,506
Other cost of sales<br>and revenue		-	48,182,298
Total cost of<br>revenue	241,919,919	(23,652,241)	572,005,267
Gross<br>profit	30,689,713	(1,623,727)	188,695,332
Selling, general<br>and administrative	31,514,495	0	125,322,878
Depreciation and<br>amortization	1,231,066		2,948,067
Operating income<br>(loss)	(2,055,848)	(3,749,977)	60,424,387
Interest<br>expense	(3,529,345)	(15,175,066)	(19,869,912)
		0	0
Increase in<br>derivative liability	(2,256,322)	0	(2,256,322)
Other<br>income	0	-	20,160,561
Net income (loss)<br>before provision for income taxes	(7,841,515)	(18,925,043)	58,458,714
Income tax<br>expense	0	(14,614,679)	(14,614,679)
Net income<br>(loss)	(7,841,515)	(33,539,722)	$43,844,035
Weighted average<br>number of common shares outstanding – basic	2775,665		10,783,800
Net income (loss)<br>per share – basic	(2.83)		$4.07
Weighted average<br>number of common shares outstanding – basic and fully<br>diluted	2,775,665		11,234,351
Net income (loss)<br>per share – fully diluted	(2.83)		$3.90

All values are in US Dollars.

See Accompanying Notes to Pro Forma Financial Statements.

PF-3

RumbleOn Inc. and Subsidiaries

Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2020

(Unaudited)

	RumbleOn	Pro<br>Forma Adjustments	Pro<br>Forma Combined
Revenue:
Vehicle<br>sales
Powersports	46,653,668	-	$708,802,902
Automotive	337,084,959	-	337,084,959
Transportation and<br>vehicle logistics	31,816,157	-	31,816,157
Parts and other<br>revenue	872,459	-	237,613,623
Total<br>Revenue	416,427,243	-	1,315,317,641
Cost of<br>revenue
Powersports	40,060,571	-	591,712,669
Automotive	308,800,631	-	308,800,631
Transportation and<br>vehicle logistics	24,200,229	-	24,200,229
Other cost of sales<br>and revenue		-	91,017,529
Cost of revenue<br>before impairment loss	373,061,431	-	1,015,731,058
Impairment loss on<br>automotive inventory	11,738,413	-	11,738,413
Total cost of<br>revenue	384,799,844	-	1,027,469,471
Gross<br>profit	31,627,399	-	287,848,170
Selling, general<br>and administrative	53,659,348	2,835,000	211,014,388
Insurance recovery<br>proceeds	(5,615,268)	-	(5,615,268)
Depreciation and<br>amortization	2,142,939	-	6,230,853
Operating income<br>(loss)	(18,559,620)	(835,000)	76, 218,197
Interest<br>expense	(6,638,325)	(30,673,844)	(44,268,978)
Other<br>income	198,970	-	2,166,038
Net income (loss)<br>before provision for income taxes	(24,998,975)	(33,508,844)	34,115,257
Income tax<br>expense	-	(8,528,814)	(8,528,814)
Net income<br>(loss)	(24,998,975)	(42,037,658)	$25,586,443
Weighted average<br>number of common shares outstanding – basic	2,184,441		10,231,415
Net income (loss)<br>per share – basic	(11.44)		$2.54
Weighted average<br>number of common shares outstanding – basic and fully<br>diluted	2,184,441		10,371,409
Net income (loss)<br>per share – fully diluted	(11.44)		$2.51

All values are in US Dollars.

See Accompanying Notes to Pro Forma Financial Statements.

PF-4

RumbleOn Inc. and Subsidiaries

Notes to Unaudited Pro Forma

Condensed Combined Financial Statements

Note 1 – Basis of Presentation

The audited historical consolidated financial statements have been adjusted in the pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results following the business combination.

The business combination was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. As the acquirer for accounting purposes, the Company has estimated the fair value of RideNow’s assets acquired and liabilities assumed and conformed the accounting policies of RideNow to its own accounting policies.

The unaudited Pro Forma Condensed Combined Financial Statements are based on our historical consolidated financial statements and RideNow’s historical combined financial statements as adjusted to give effect to the Company’s acquisition of RideNow and the related financing transactions. The unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2021, gives effect to these transactions as if they occurred on June 30, 2021. The Unaudited Pro Forma Condensed Combined Statements of Operations for the Year Ended December 31, 2020, and the Six Months Ended June 30, 2021, give effect to these transactions as if they occurred on January 1, 2020.

The allocation of the purchase price used in the unaudited pro forma financial statements is based upon a preliminary valuation by management. The final estimate of the fair values of the assets and liabilities will be determined with the assistance of a third-party valuation firm. The Company’s preliminary estimates and assumptions are subject to materially change upon the finalization of internal studies and third-party valuations of assets, including investments, property and equipment, intangible assets including goodwill, and certain liabilities.

The Unaudited Pro Forma Condensed Combined Financial Statements are provided for informational purpose only and are not necessarily indicative of what the combined company’s financial position and results of operations would have actually been had the Transactions been completed on the dates used to prepare these pro forma financial statements. The adjustments to fair value and the other estimates reflected in the accompanying unaudited pro forma condensed combined financial statements may be materially different from those reflected in the combined company’s consolidated financial statements subsequent to the Transactions. In addition, the unaudited pro forma condensed combined financial statements do not purport to project the future financial position or results of operations of the combined companies. Reclassifications and adjustments may be required if changes to RumbleOn’s financial presentation are needed to conform RumbleOn’s accounting policies to the accounting policies of the RideNow.

These unaudited pro forma condensed combined financial statements do not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the Transactions. These financial statements also do not include any integration costs the companies may incur related to the Transactions as part of combining the operations of the companies.

Note 2 – Summary of Significant Accounting Policies

The unaudited pro forma condensed combined financial statements have been prepared in a manner consistent with the accounting policies adopted by the Company. The accounting policies followed for financial reporting on a pro forma basis are the same as those disclosed in the 2020 Annual Report on Form 10-K and for RideNow, the accounting policies followed for financial reporting on a pro forma basis are the same as those disclosed in the audited financial statements included in RumbleOn’s Form 8-K filed on April 8, 2021. The unaudited pro forma condensed combined financial statements do not assume any differences in accounting policies among the Company and RideNow. The Company is reviewing the accounting policies of RideNow to ensure conformity of such accounting policies to those of the Company and, as a result of that review, the Company may identify differences among the accounting policies of the two companies, that when confirmed, could have a material impact on the consolidated financial statements. However, at this time, the Company is not aware of any difference that would have a material impact on the unaudited pro forma condensed combined financial statements.

PF-5

RumbleOn and RideNow have recorded leases in accordance with ASC 842. In the pro forma combined balance sheet these leases are reported as a single amount for short-term and long-term lease liabilities. The following table provides the segregation of these leases between operating leases and financing leases for the historical financial statements for RumbleOn and RideNow.

	As<br>of June 30, 2021
	RumbleOn	RideNow
Lease liabilities<br>– current portion
Operating<br>leases	$1,750,127	$17,459,193
Financing<br>leases		3,984,945
Total lease<br>liabilities – current portion	$1,750,127	$21,444,138
Lease liabilities<br>– long-term portion
Operating<br>leases	$3,519,475	$58,345,599
Financing<br>leases		14,323,137
Total lease<br>liabilities – long-term portion	$3,519,475	$72,668,736

RideNow has notes receivable due from a related party, which is included in other assets in the pro forma combined balance sheet. In addition, RideNow has certain payables due to related parties that are included in the current and long-term portions of long-term debt in the pro forma combined balance sheet. The following table is provided to segregate these amounts before being combined in the accompanying Pro Forma Condensed Combined Balance Sheet as of June 30, 2021.

	As<br>of June 30, 2021
	RumbleOn	RideNow
Other<br>assets
Notes receivable<br>– related party	$-	$1,026,605
Other non-current<br>assets	221,712	269,614
Total other<br>assets	$221,712	$1,296,219
Current portion of<br>long-term debt
Payables to related<br>parties	$	$40,130,446
Notes<br>payable-related parties	-	1,159,322
Notes payable<br>– other	5,809,030	5,684,641
Total current<br>portion of long-term debt	$5,809,030	$46,974,409
Long-term<br>debt
Notes payable<br>– related parties	$-	$-
Notes payable<br>– PPP Loans	-	-
Notes payable<br>– other	4,691,181	-
	4,691,181	$-

RideNow Sweep Account

RideNow is a participant in a Cash Sweep Account arrangement with a bank and its affiliates. The Cash Sweep Account combines the cash balances of all the participating affiliates and invests excess cash on a daily basis. Interest is paid to each participant based on the average cash balance in the Cash Sweep account over the course of the year. Any participant that develops an overdraft cash balance is charged interest. For the year ended December 31, 2020 and the six months ended June 30, 2021, the Cash Sweep Account was earning interest at 0.85% and 1.3%, respectively, and for overdraft balances, the interest charged was 3.25% and 3.00%, respectively. In the unaudited financial statements as of June 30, 2021, members of the Group with positive sweep balances reported those balances as related party receivables, whereas members of the Group with negative sweep balances reported those balances as related party payables. The following table provides a summary of these balances as of June 30, 2021:

PF-6

Cash Sweep<br>Accounts:	As<br>of June 30, 2021
Related party<br>receivable	$72,071,921
Related party<br>payable	(39,367,501)
Net Cash Sweep<br>Account Balance	$32,704,420

For purposes of the Unaudited Condensed Combined Balance Sheet as of June 30,2021, the proforma adjustment below to record the preliminary allocation of the purchase price includes a reclassification of these related party balances to cash as a management contemplates those balances in the sweep account on the date of closing will be transferred to a Company account.

Note 3 – Financing Transactions

Senior Secured Term Loan

The Company is financing $280,000,000 of the cash consideration pursuant to the RideNow Agreement by the issuance of a new Senior Secured Term Loan. At the option of the Company, the interest rate on the new loan will be (a) Adjusted LIBOR (as defined in the Commitment Letter) plus 8.25%, of which (i) Adjusted LIBOR plus 7.25% shall be paid in cash and (ii) 1.00% shall be payable in kind or (b) ABR (as defined in the Commitment Letter) plus 7.25%, of which (i) ABR plus 6.25% shall be paid in cash and (ii) 1.00% shall be payable in kind. The Credit Facility shall mature on the fifth anniversary of the Closing date of the RideNow Transaction (subject to extension with the consent of only the extending lender). For purposes of these pro forma condensed combined financial statements, we have used an interest rate of 8.45%.

RMBL Transaction Equity Raise

To finance in part the cash consideration, the Company has committed to raise at least $135,000,000 in new equity. To estimate the fair value of this equity, a per share price of $40.50 was used which results in the issuance of 3,333,333 shares. This price represents the per share price of the Company’s stock as of the close of business on July 30, 2021.

Transaction Costs

For purposes of these pro forma financial statements, the Company has estimated that the total transaction costs for these financing transactions will be $19,225,000 for the debt financing and $9,450,000 for the equity raise. In addition, as discussed below, the Company has issued a warrant to Oaktree for which we have estimated a preliminary value of $22,100,000. Legal and other professional fees and expenses are estimated to be approximately $4,790,000, are non-recurring, and have not been recorded as a pro forma adjustment to the Pro Forma Condensed Combined Statement of Operations.

Warrant

In connection with the Commitment Letter, in lieu of a commitment fee, the Company has agreed to issue to Oaktree a warrant to purchase a number of shares of Class B Common Stock at an exercise price per share to be determined either at Closing or at termination of the Commitment Letter (“Warrant”). If issued at Closing, the Warrant will be for that number of shares equal to $40,000,000 divided by the lowest price per share at which equity is issued in connection with financing the RideNow Transaction, which price shall also be the exercise price. If issued in connection with a termination of the Commitment Letter, the Warrant will be issued to purchase that number of shares equal to five percent (5%) of the Company’s fully diluted market capitalization at the close of business on the day after a termination of the Commitment Letter is publicly announced divided by the weighted average price of the Company’s Class B Common Stock for the five days immediately preceding such date, which price shall also be the exercise price. The Warrant is immediately exercisable upon the Closing and expires eighteen (18) months after the Closing or termination of the Commitment Letter.

PF-7

Using the stock price of $40.50 as of August 2, 2021, the number of warrants issued is 987,654. The preliminary fair value of the warrant has been estimated to be $22,100,000. As of March 12, 2021, the Company had estimated the fair value of the warrant to be $10,950,000 and recorded a deferred finance charge and warrant liability for this amount. This deferred charge has been reclassified and it is reflected in the accompanying pro forma combined financial statements as debt discount. The preliminary estimated fair value was determined using a Monte Carlo simulation based on level 1 and level 3 inputs. As of June 30, 2021, the Company increased the fair value of the warrant liability to $13,174,216. For purposes of these pro forma financial statements, the difference between the estimated fair value of $22,100,000 and the $13,174,216 of $8,925,784 has been recorded as an adjustment to accumulated deficit in the Condensed Combined Balance sheet as of June 30, 2021. No adjustment has been reflected in the Pro Forma Condensed Combined Statement of Operations for the six months ended June 30, 2021, because the transaction is not a recurring cost that would have a continuing impact on the combined results following the business combination.

Note 4 - Purchase Price Allocation

On March 12, 2021, the Company entered into a Plan of Merger and Equity Purchase Agreement, as amended on June 17, 2021 (the “RideNow Agreement”) to acquire RideNow Group and Affiliates, a non-legal entity, (“RideNow” or “The Group”). RideNow is a collection of franchised dealerships operating in the powersports industry. Collectively, the Group are referred to as the Acquired Companies in the Agreement. The Group is engaged in the sale of new and used motorcycles, all- terrain vehicles, personal watercraft, other powersports vehicles, and related products and services, including repair and maintenance services, parts and accessories, riding gear, and apparel. As of June 30, 2021, RideNow owned and operated more than 43 retail dealerships in the United States, predominately in the Sunbelt region. The core brands sold by RideNow are Harley-Davidson, Honda, Yamaha, Kawasaki, Suzuki, Bombardier, Polaris, BMW, Ducati and Triumph, which are sold through franchise dealer agreements.

The RideNow Agreement provides that the Company will acquire the Acquired Companies in exchange for (i) $400,400,000 in cash plus or minus any adjustments for net working capital and closing indebtedness, and (ii) shares of the Company’s Class B Common Stock having a value of $175,000,000 (the “Closing Payment Shares”), valued equally, on a per share basis, based upon the lowest value of (A) $30.00; (B) the VWAP of the Company’s Class B Common Stock for the twenty (20) trading days immediately preceding the Closing, and (C) the value on a per share basis paid for the Class B Common Stock or any shares underlying securities convertible into or exercisable for Class B Common Stock by any person which purchases Class B Common Stock or any shares underlying securities convertible into or exercisable for Class B Common Stock from the Company from the date of the RideNow Agreement until the Closing not including purchases of Class B Common Stock underlying currently outstanding options, warrants, convertible notes, or other derivative securities. Ten percent (10%) of the Closing Payment Shares will be escrowed at Closing and will be released pursuant to the terms of the RideNow Agreement. The Company will finance the cash consideration through a combination of approximately $280,000,000 of debt provided by the Initial Lender (as defined below) and through the issuance of new equity for the remainder thereof.

PF-8

The following table summarizes the preliminary allocation of the purchase price based on the estimated fair value of the acquired assets and assumed liabilities as of June 30, 2021:

Purchase price<br>consideration
Cash	$400,400,000
Class B stock<br>(5,833,333 x $40.50 per share)	236,249,987
Total purchase<br>price consideration	$636,649,987
Estimated fair<br>value of assets:
Cash	$38,534,902
Contracts in<br>transit	10,149,513
Accounts<br>receivable	16,028,725
Inventory	101,214,125
Prepaid<br>expenses	1,864,297
Right-of-use<br>assets	73,921,130
Property &<br>equipment	22,936,755
Other<br>Assets	269,614
	264,919,061
Estimated fair<br>value of liabilities assumed:
Accounts payable,<br>accrued expenses and other current liabilities	45,593,477
Notes payable -<br>floor plan	44,753,947
Lease<br>liabilities	94,112,874
Long-term<br>debt	6,843,963
Other long-term<br>liabilities	6,497,346
	197,801,607
Net tangible<br>assets	61,117,454
Intangible<br>assets	194,531,319
Goodwill	381,001,214
Total<br>consideration	$636,649,987

This preliminary purchase price allocation has been used to prepare pro forma adjustments in the pro forma balance sheet and statement of operations. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. For purposes of the pro forma condensed combined financial statements, for inventory, property and equipment, leases and other assets and liabilities the Company used the carrying value as reported its historical financial statement as reported in its Form 10-Q as of June 30, 2021, and as reported in the historical Combined Financial Statements for RideNow as of June 30, 2021, that have been included in this report. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. The final allocation may include (1) changes in fair values of property, plant and equipment, (2) changes in allocations to intangible assets such as trade names, technology, franchise rights and customer relationships as well as goodwill and (3) other changes to assets and liabilities.

In accordance with the RideNow Agreement, as discussed above, the purchase price includes a $400,400,000 in cash plus $175,000,000 in stock. For purposes of these pro forma combined financial statements, the number of shares to be issued was determined based on a price of $30.00 per share as required under the RideNow Agreement which results in the issuance of 5,833,333 shares of the Company’s Class B Stock. The fair value of the shares issued was determined based on a per share price of $40.50, which is the price of the RumbleOn stock as of the close of business on June 21, 2021. The following table reflects the impact of a 10% increase or decrease in the per share price on the estimated fair value of the purchase price and goodwill:

	Purchase<br>Price	Estimate Goodwill
s presented in the<br>pro forma combined results	$636,649,987	$381,001,214
10% increase in<br>common stock price	$660,274,985	$404,626,212
10% decrease in<br>common stock price	$613,024,988	$357,376,215

PF-9

Note 5 - Pro Forma Adjustments

The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:

This adjustment records the net increase in cash resulting from the merger as follows:

Net proceeds from<br>issuance of debt	$260,775,000
Net proceeds from<br>issuance of Class B stock	125,550,000
Total net proceeds<br>from financing transactions	386,325,000
Less cash<br>consideration paid to Sellers	(400,400,000)
Net cash received<br>from sweep account on the Closing Date(1)	26,704,420
Repayment of Bridge<br>Loan (including accrued interest)	(2,516,667)
Legal and other<br>professional fees and expenses	(4,790,000)
Net increase in<br>cash	$5,322,753

____________________

(1) Amount is positive

This adjustment records the reclassification of the positive cash balances from the sweep account.

As part of the preliminary valuation analysis, the Company identified Franchise Rights as a separately identifiable intangible asset. The fair value of this intangible asset $194,531,319 was determined primarily using the “income approach,” which requires a forecast of the expected future cash flows. Since all the information required to perform a detail valuation analysis of RideNow’s intangible assets could not be obtained as of the date of this filing, for purposes of these unaudited pro forma condensed combined financial statements, the Company used certain assumptions based on publicly available transactions data for the industry. Based on our research and discussions with RideNow management we have concluded that the Franchise Rights intangible asset has an indefinite life and therefore we have not made any adjustment in the pro forma condensed combined statement of operations for amortization.

In addition, this adjustment reflects the recognition of goodwill of $381,001,214, less the removal of $55,294,223 of goodwill reflected on the historical balance sheet of RideNow as of June 30, 2021.

This adjustment reflects the elimination of notes receivable related party that are expected to be paid off prior to closing.

This adjustment includes the payable for the Net Working Capital adjustment of $1,827,698, less the reclassification of the negative cash balances of $39,367,501 from the sweep account.

As described in Note 3 above, this adjustment records the elimination of the current portion of long-term debt of $6,000,000 and records the new debt, less debt discount and less elimination long-term debt as follows:

Balance of new<br>Senior Term Loan	$280,000,000
Less debt discount<br>and deferred financing fees	(30,175,000)
Net adjustment to<br>long-term debt	$249,825,000

This adjustment records the net proceeds received from the equity raised to finance payment of the cash consideration of $125,550,000 plus this issuance of warrants with a fair value of $22,100,000 plus the issuance of 5,833,333 shares of Class B Common Stock to the sellers as the equity portion of the purchase consideration, valued at $236,249,987 based on a per share price of $40.50 which was the per share price of the Company’s stock as of the close of business on August 2, 2021. This entry also records the reclassification of the deferred finance charge on the balance sheet of RumbleOn to Debt Discount and reclassifies the warrant liability to equity. As discussed in Note 3 above, the Company has estimated transaction costs for legal and other professional fees and expenses of $4,790,000. These costs have not been recorded as a pro forma adjustment to the in the Pro Forma Condensed Combined Statements of Operations. However, they have been reflected as an adjustment to the accumulated deficit in the Pro Forma Condensed Combined Balance Sheet. In addition, an adjustment has been to the accumulated deficit for the change in the fair value of the warrant as described in Note 3 above for 8,925,995.

PF-10

This adjustment eliminates RideNow’s Owners’ Equity as reported in the audited historical financial statements.

This adjustment eliminates the intercompany sales for vehicles sold to RideNow by the Company.

Pursuant to the RideNow Agreement, the Company is adopting an Equity Incentive Plan and as disclosed in a Schedule to the RideNow Agreement is rewarding 278,334 of restrictive stock units (RSUs) to employees of RideNow. Based on the stock price of $40.50 per share, these units have a fair value of $11,272,527. The pro forma adjustment recognizes 20% ($2,254,505) of these awards being recognized as share-based compensation in the Unaudited Condensed Combined Statement of Operations for the year ended December 31, 2020, and one half of the 30% vesting ($1,690,879) during the six months ended June 30, 2021. This estimate used the same vesting schedule used by the Company as disclosed in its financial statements for the six months ended June 30, 2021, as reported on Form 10-Q.

This pro forma adjustment records the estimated interest expense as follows:

	6-Months<br>Ended June 30,<br><br><br>2021	12-Months<br>Ended December 31, 2020
Contract interest<br>on the new Senior Term Loan	$12,296,889	$24,591,031
Amortization of<br>debt discount (Note 1)	2,518,177	5,362,813
Amortization of<br>deferred financing costs (Note 1)	360,000	720,000
Total interest<br>expense adjustment	$15,175,066	$30,673,844

____________________

Note (1) Amortization of debt discounts is assumed using an effective interest method using an interest rate of 10.5%. Deferred finance costs are amortized on a straight-line basis over the term of the loan (five years).

This pro forma adjustment reflects the estimated tax provision that may be required based on an estimated blended federal and state statutory tax rate of 25%.

	6-Months<br>Ended June 30,<br><br><br>2021	12-Months<br>Ended December 31, 2021
Income before<br>tax	$58,458,714	$34,115,257
Effective tax<br>rate	25%	25%
Provision for<br>taxes	$14,614,679	$8,528,814

Note 6 – Combined Adjusted EBITDA Before Pro Forma Adjustments

Combined Adjusted EBITDA Before Pro Forma Adjustments is defined as net income adjusted to add back interest expense including debt extinguishment and depreciation and amortization, and certain charges and expenses, such as goodwill impairment, impairment loss on automotive inventory, impairment loss on plant & equipment, insurance recovery proceeds, non-cash stock-based compensation, change in derivative liability, litigation expenses, severance, new business development and other non-recurring costs, as these charges and expenses are not considered a part of our core business operations and are not an indicator of ongoing, future company performance.

PF-11

The following tables reconcile Combined Adjusted EBITDA Before Pro Forma Adjustments to net income based on the Company’s historical financial statements for the six months ended June 30, 2021 and the year ended December 31, 2020 and RideNow’s historical financial statements for the six months ended June, 2021 and the year ended December 31, 2020.

	For<br>the Six Months Ended<br><br><br>June<br>30, 2021			For<br>the Twelve Months Ended<br><br><br>December<br>31, 2020
	RumbleOn	RideNow	Combined<br>(Before Pro Forma Adjustments)	RumbleOn	RideNow	Combined<br>(Before Pro Forma Adjustments)
Net<br>income (loss)	$(7,841,515)	$85,225,272	$77,383,757	$(24,998,975)	$92,623,076	$67,624,101
Add<br>back:
Interest expense<br>(including debt extinguishment)	3,529,345	1,165,501	4,694,846	6,450,161	6,956,809	13,406,970
Depreciation and<br>amortization	1,231,066	1,717,001	2,948,067	2,142,939	4,087,914	6,230,853
Interest income and<br>miscellaneous income	-	(1,121,332)	(1,121,332)	-	(1,967,068)	(1,967,068)
Increase (decrease)<br>in derivative liability	2,256,322		2,256,322	(10,806)	-	(10,806)
EBITDA	(824,762)	86,986,442	86,161,660	(16,416,681)	101,700,731	85,284,050
Adjustments
Impairment loss on<br>automotive inventory	-	-	-	11,738,413	-	11,738,413
Impairment loss on<br>plant & equipment	-	-	-	177,626	-	177,626
Insurance recovery<br>proceeds	-	-	-	(5,615,268)	-	(5,615,268)
Non-cash<br>stock-based compensation	1,727,491	-	1,727,491	2,978,236	-	2,978,236
Acquisition costs<br>associated with the RideNow Agreement	1,956,701	-	1,956,701	-	-	-
Litigation<br>expenses	169,648	-	169,648	1,295,717	-	1,295,717
Other Non-recurring<br>costs	32,985	-	32,985	51,387	-	51,387
PPP loan<br>forgiveness	-	(19,039,229)	(19,039,229)	-	-	-
Adjusted<br>EBITDA	$3,062,043	$67,947,213	$71,009,256	$(5,790,570)	$101,700,731	$95,910,161

PF-12