8-K
RideNow Group, Inc. (RDNW)
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): March 15, 2021
RumbleOn, Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State or Other Jurisdiction
of Incorporation)
| 001-38248 | 46-3951329 |
|---|---|
| (Commission <br>File Number) | (I.R.S. Employer <br>Identification No.) |
| 901 W. Walnut Hill Lane | 75038 |
| Irving, Texas | (Zip Code) |
| (Address of Principal Executive Offices) |
(214) 771-9952
(Registrant’s Telephone Number, Including Area Code)
(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 of each class | Trading Symbol(s) | Name<br>of 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 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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 2.02 Results of Operations and Financial Condition.
On March 15, 2021, RumbleOn, Inc. (the “Company”) issued a press release reporting its results for the year ended December 31, 2020. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press<br>release, dated March 15, 2021 |
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:<br>March 15, 2021 | By: | /s/<br>Steven R. Berrard |
| Steven<br>R. Berrard | ||
| Chief<br>Financial Officer |
rmbl_ex991
Exhibit 99.1
RumbleOn Announces Full Year 2020 Financial Results
Grew Gross Profit Per Vehicle Sold by 100% Year-over-Year
Management to host a conference call today, March 15, 2021, at 8:30am ET
DALLAS - RumbleOn, Inc (NASDAQ: RMBL), an e-commerce company using innovative technology to aggregate and distribute pre-owned vehicles to and from both consumers and dealers, today announced financial results for the year ended December 31, 2020. Management is hosting an investor call to discuss results today, March 15, 2021 at 8:30am ET.
“Less than seven months after launching RumbleOn 3.0 its clear the newest generation of RumbleOn has been a great success,” said Marshall Chesrown, Chief Executive Officer. “RumbleOn 3.0 has increased overall listings on RumbleOn.com which has led to an improvement in gross profit on vehicles sold of more than 100% in 2020 as compared to 2019.”
Chesrown concluded, “The prescriptive steps we’ve taken to improve margins and expand our offering over the past year have quickly cemented RumbleOn as a Powersports leader in the United States.”
Full Year 2020 Financial Highlights
RumbleOn’s decision to focus on profitability in 2020, combined with the impact of COVID-19 has resulted in significantly reduced commercial activity and total inventory in the market. Despite these factors the Company's full year results demonstrate improvements in margin and EBITDA.
Unless otherwise noted, all comparisons are on a year-over-year basis for the twelve months ended December 31, 2020.
●
Total vehicle unit sales was 18,024, a decrease from 43,143 in 2019
●
Total revenue was $416.4 million, a decrease from $840.6 million in 2019
°
Powersports revenue was $46.7 million
°
Automotive revenue was $337.1 million
°
Transportation and vehicle logistics revenue was $31.8 million
●
Total gross profit was $31.6 million, or a total gross margin of 7.6%, an increase from 6.0% in 2019
°
Gross margin on vehicles sold (excluding the impairment loss on automotive inventory) was 9.6%, up from 5.4%. Gross profit per vehicle was $2,047 per vehicle, a 100.4% increase from 2019
°
Powersports gross profit per powersport vehicle sold was $1,478
°
Automotive gross profit per automotive vehicle sold was $2,282
●
Sales, General and Administrative Expenses was $53.7 million, a decrease from $86.6 million in 2019
°
Compensation expense was $25.7 million
°
Advertising and Marketing expense was $5.3 million
°
Professional fees were $3.2 million
°
Technology development expense was $1.4 million
°
General and Administrative expense was $18.1 million
●
Operating loss was $(18.6) million, an improvement from $(37.8) million in 2019
●
Net loss was $(25.0) million, an improvement from $(45.2) million in 2019
●
Adjusted EBITDA was $(5.8) million or (1.4)% of revenue, an improvement from $(26.4) million or (3.1)% of revenue in 2019
●
Net loss per basic and fully diluted Class B share was $(11.44), an improvement from $(40.53) in 2019
Adjusted EBITDA is a non-GAAP financial measure. Reconciliations of non-GAAP financial measures used in this release are provided in the attached financial tables.
Given the uncertainty of the ongoing impact and unprecedented conditions surrounding the COVID-19 pandemic, we cannot predict the overall effect to RumbleOn, our customers, regional business partners, and others that we work with.
Conference Call Details
RumbleOn’s management will host a conference call today, Monday, March 15, 2021 at 8:30 a.m. ET. A live and archived webcast can be accessed from RumbleOn's Investor Relations website at https://investors.rumbleon.com. To access the conference call telephonically, callers may dial (877) 407-9716, or (201) 493-6779 for callers outside of the United States and entering conference ID 13716962.
About RumbleOn
Founded in 2017, RumbleOn (NASDAQ: RMBL) is an e-commerce company using innovative technology to aggregate and distribute pre-owned automotive and powersport vehicles to and from both consumers and dealers, 100% online. RumbleOn is disrupting the pre-owned vehicle supply chain by providing dealers with technology solutions such as virtual inventory, and a 24/7 distribution platform, and consumers with an efficient, timely and transparent transaction experience, without leaving home. Whether buying, selling, trading or financing a vehicle, RumbleOn enables dealers and consumers to transact without geographic boundaries in a transparent, fast and friction free experience. For more information, please visit
http://www.rumbleon.com.
Non-GAAP Financial Measures
As required by the rules of the Securities and Exchange Commission ("SEC"), we provide reconciliations of the non-GAAP financial measures contained in this press release to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to this release. Non-GAAP financial measures for the three and twelve months ended December 31, 2020 used in this release include: 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 or loss 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.
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.
Forward-Looking Statements
This press release may contain "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as "expects," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the date of this press release and are advised to consider the factors listed under the heading "Forward-Looking Statements" and "Risk Factors" in the Company's SEC filings, as may be updated and amended from time to time. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Source: RumbleOn, Inc.
Investor Relations:
The Blueshirt Group
Dylan Solomon
Consolidated Balance Sheets
December 31, 2020 and 2019
(Unaudited)
| 2020 | 2019 | |
|---|---|---|
| ASSETS | ||
| Current<br>assets: | ||
| Cash | $1,466,831 | $49,660 |
| Restricted<br>cash | 2,049,056 | 6,676,622 |
| Accounts<br>receivable, net | 9,407,960 | 8,482,707 |
| Inventory | 21,360,441 | 57,381,281 |
| Prepaid expense and<br>other current assets | 3,446,225 | 1,210,474 |
| Total current<br>assets | 37,730,513 | 73,800,744 |
| Property and<br>equipment, net | 6,521,446 | 6,427,674 |
| Right-of-use<br>assets | 5,689,637 | 6,040,287 |
| Goodwill | 26,886,563 | 26,886,563 |
| Other<br>assets | 151,076 | 237,823 |
| Total<br>assets | $76,979,235 | $113,393,091 |
| LIABILITIES AND<br>STOCKHOLDERS'<br>EQUITY | ||
| Current<br>liabilities: | ||
| Accounts payable<br>and accrued liabilities | $12,707,448 | $12,421,094 |
| Accrued interest<br>payable | 1,485,854 | 749,305 |
| Current portion of<br>convertible debt, net | 562,502 | 1,363,590 |
| Current portion of<br>long-term debt | 20,688,651 | 59,160,970 |
| Total current<br>liabilities | 35,444,455 | 73,694,959 |
| Long -term<br>liabilities: | ||
| Notes<br>payable | 4,691,181 | 1,924,733 |
| Convertible debt,<br>net | 27,166,019 | 20,136,229 |
| Derivative<br>liabilities | 16,694 | 27,500 |
| Operating<br>lease liabilities and other long-term liabilities | 5,090,221 | 4,722,101 |
| Total long-term<br>liabilities | 36,526,615 | 26,810,563 |
| Total<br>liabilities | 71,408,570 | 100,505,522 |
| Stockholders'<br>equity: | ||
| Class B Preferred stock, $0.001 par value,<br>10,000,000 shares authorized, no shares issued and outstanding as of December 31,<br>2020 and 2019, respectively | - | - |
| Common A stock,<br>$0.001 par value, 50,000 shares authorized, 50,000 shares issued<br>and outstanding as of December 31, 2020 and 2019,<br>respectively | 50 | 50 |
| Common B stock, $0.001 par value, 4,950,000<br>shares authorized, 2,191,633 and 1,111,681 shares issued and outstanding as of<br>December 31, 2020 and 2019, respectively | 2,192 | 1,112 |
| Additional paid in<br>capital | 108,949,204 | 92,268,213 |
| Accumulated<br>deficit | (104,380,781) | (79,381,806) |
| Total<br>stockholders'<br>equity | 4,570,665 | 12,887,569 |
| Total liabilities<br>and stockholders'<br>equity | $76,979,235 | $113,393,091 |
Consolidated Statements of Operations
For the Years Ended December 31, 2020 and 2019
(Unaudited)
| 2020 | 2019 | |
|---|---|---|
| Revenue: | ||
| Pre-owned Vehicle<br>Sales: | ||
| Powersports | $46,653,668 | $101,008,976 |
| Automotive | 337,084,959 | 717,042,511 |
| Transportation and<br>vehicle logistics | 31,816,157 | 22,577,860 |
| Other | 872,459 | - |
| Total<br>revenue | 416,427,243 | 840,629,347 |
| Cost of<br>revenue: | ||
| Powersports | 40,060,571 | 88,673,515 |
| Automotive | 308,800,631 | 685,313,894 |
| Transportation and<br>vehicle logistics | 24,200,229 | 16,023,962 |
| Cost of revenue<br>before impairment loss | 373,061,431 | 790,011,371 |
| Impairment loss on<br>automotive inventory | 11,738,413 | - |
| Total cost of<br>revenue | 384,799,844 | 790,011,371 |
| Gross<br>profit | 31,627,399 | 50,617,976 |
| Selling, general<br>and administrative | 53,659,348 | 86,624,249 |
| Insurance recovery<br>proceeds | (5,615,268) | - |
| Depreciation and<br>amortization | 2,142,939 | 1,786,426 |
| Operating<br>loss | (18,559,620) | (37,792,699) |
| Interest<br>expense | (6,638,325) | (7,187,604) |
| Decrease in<br>derivative liability | 10,806 | 1,302,500 |
| Gain (loss) on<br>early extinguishment of debt | 188,164 | (1,499,250) |
| Net loss before<br>provision for income taxes | (24,998,975) | (45,177,053) |
| Benefit for income<br>taxes | - | - |
| Net<br>loss | $(24,998,975) | $(45,177,053) |
| Weighted average<br>number of common shares outstanding - basic and fully<br>diluted | 2,184,441 | 1,114,714 |
| Net loss per share<br>- basic and fully diluted | $(11.44) | $(40.53) |
Consolidated Statements of Cash Flows
For the Two Years Ended December 31, 2020 and 2019
(Unaudited)
| 2020 | 2019 | |
|---|---|---|
| CASH FLOWS FROM<br>OPERATING ACTIVITIES | ||
| Net<br>loss | $(24,998,975) | $(45,177,053) |
| Adjustments to<br>reconcile net loss to net cash used in operating<br>activities: | ||
| Depreciation and<br>amortization | 2,142,939 | 1,786,426 |
| Amortization of<br>debt discount | 2,027,046 | 1,664,000 |
| Bad debt<br>expense | 310,721 | 1,123,739 |
| Stock based<br>compensation expense | 2,978,236 | 3,836,518 |
| Impairment loss on<br>inventory | 11,738,413 | - |
| Impairment loss on<br>property and equipment | 177,626 | - |
| (Gain) from change<br>in value of derivative liability | (10,806) | (1,302,500) |
| Loss from<br>extinguishment of debt | (188,164) | 1,499,250 |
| Goodwill<br>impairment | - | 1,850,000 |
| Changes in<br>operating assets and liabilities: | ||
| Decrease (increase)<br>in accounts receivable | (1,235,974) | 2,037,023 |
| (Increase) decrease<br>in inventory | 24,282,427 | (2,327,754) |
| (Increase) in<br>prepaid expenses and other current assets | (2,235,751) | (113,529) |
| (Increase) decrease<br>in other assets | 86,747 | (135,645) |
| Increase in other<br>liabilities | 720,067 | - |
| (Decrease) increase<br>in accounts payable and accrued liabilities | 152,126 | (5,031,073) |
| Increase in accrued<br>interest payable | 1,196,549 | 543,268 |
| Net cash provided<br>by (used in) operating activities | 17,143,227 | (39,747,330) |
| CASH FLOWS FROM<br>INVESTING ACTIVITIES | ||
| Net cash used for<br>acquisitions | - | (835,000) |
| Proceeds from sales<br>of property and equipment | 38,436 | 169,268 |
| Technology<br>development | (2,145,055) | (3,085,743) |
| Purchase of<br>property and equipment | (174,786) | (119,748) |
| Net cash used in<br>investing activities | (2,281,405) | (3,871,223) |
| CASH FLOWS FROM<br>FINANCING ACTIVITIES | ||
| Proceeds from notes<br>payable and convertible debt | 8,272,375 | 27,455,537 |
| Repayments for<br>notes payable | (1,767,758) | (10,857,500) |
| Net proceeds from<br>(payments on) lines of credit | (40,533,759) | 2,788,469 |
| Proceeds from PPP<br>Loan | 5,176,845 | - |
| Proceeds from sale<br>of common stock | 10,780,080 | 15,173,427 |
| Net cash provided<br>by (used in) financing activities | (18,072,217) | 34,559,933 |
| NET CHANGE IN<br>CASH | (3,210,395) | (9,058,620) |
| CASH AND RESTRICTED<br>CASH AT BEGINNING OF PERIOD | 6,726,282 | 15,784,902 |
| CASH AND RESTRICTED<br>CASH AT END OF PERIOD | $3,515,887 | $6,726,282 |
Reconciliation of Non-GAAP Measures
RumbleOn, Inc.
Reconciliation of Adjusted EBITDA to Net Loss
(Unaudited)
| 2020 | 2019 | |
|---|---|---|
| Net<br>loss | $(24,998,975) | $(45,177,053) |
| Add<br>back: | ||
| Interest expense<br>(including debt extinguishment) | 6,450,161 | 8,686,854 |
| Depreciation and<br>amortization | 2,142,939 | 1,786,426 |
| EBITDA | (16,405,875) | (34,703,773) |
| Adjustments | ||
| Goodwill<br>impairment | 1,850,000 | |
| Impairment loss on<br>automotive inventory | 11,738,413 | - |
| Impairment loss on<br>plant & equipment | 177,626 | - |
| Insurance recovery<br>proceeds | (5,615,268) | - |
| Non-cash<br>stock-based compensation | 2,978,236 | 3,836,518 |
| Change in<br>derivative liability | (10,806) | (1,302,500) |
| Litigation<br>expenses | 1,295,717 | 61,446 |
| Severance | - | 1,079,438 |
| New business<br>development | - | 1,224,523 |
| Other Non-recurring<br>costs | 51,387 | 1,578,220 |
| Adjusted<br>EBITDA | $(5,790,570) | $(26,376,128) |