VRM 8-K
Vroom, Inc. (VRM)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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(State or other jurisdiction of incorporation or organization) |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
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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:
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Securities registered pursuant to Section 12(b) of the Act:
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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
On March 26, 2025, Vroom, Inc. (the “Company”) disclosed certain unaudited pro forma consolidated financial information and explanatory notes (the “Pro Forma Financial Information”) for the Company and its consolidated subsidiaries. The Pro Forma Financial Information is provided for informational purposes only and gives effect to (i) the Company's plan of reorganization, which became effective on January 14, 2025 (the “Effective Date”), as described in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2025, and (ii) our adoption of fresh start accounting on the Effective Date.
The Pro Forma Financial Information is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and incorporated into this Item 8.01 by reference. .
Item 9.01 Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
The following Pro Forma Financial Information, giving effect to the Company's plan of reorganization and adoption of fresh start accounting on the Effective Date, is attached as Exhibit 99.1 hereto and incorporated herein by reference:
•Unaudited pro forma consolidated balance sheet as of December 31, 2024
•Unaudited pro forma consolidated statement of operations for the year ended December 31, 2024
(d) Exhibits.
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Exhibit |
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Description |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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.
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VROOM, INC. |
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Date: March 26, 2025 |
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By: |
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/s/ Agnieszka Zakowicz |
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Agnieszka Zakowicz |
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Chief Financial Officer |
Exhibit 99.1
VROOM, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Introduction
The following unaudited pro forma consolidated financial information and explanatory notes (the “Pro Forma Financial Information”) for Vroom Inc. and its consolidated subsidiaries (collectively, “Vroom”, “the Company”, “we”, “us” and “our”) is provided for informational purposes only and gives effect to (i) our prepackaged plan of reorganization (as defined below), and as described in our Annual Report on Form 10-K for the year ended December 31, 2024, which became effective on January 14, 2025 (the “Effective Date”), and (ii) our adoption of fresh start accounting on the Effective Date. The historical data provided as of and for the year ended December 31, 2024 was derived from our audited consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. The foregoing historical financial statements have been prepared in accordance with U.S. GAAP. Our historical financial information was adjusted to give effect to events that are directly attributable to our prepackaged plan of reorganization becoming effective and our adoption of fresh start accounting. The unaudited Pro Forma Financial Information is presented for illustrative purposes only and is not necessarily indicative of the financial results that would have occurred if the prepackaged plan of reorganization had been consummated on the dates indicated; nor is it necessarily indicative of our financial positions or results of operations in the future.
The unaudited pro forma condensed financial information should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and any other financial information included elsewhere in the Company’s Registration Statement on Form S-1 (File No. 333-86032) filed with the Securities and Exchange Commission on March 21, 2025.
On November 12, 2024, we entered into a Restructuring Support Agreement (together with all exhibits and schedules thereto, the “RSA”) with creditors holding the overwhelming majority of the aggregate outstanding principal amount of the 0.75% unsecured Convertible Senior Notes due 2026 (the “Notes”) and the largest shareholder. The RSA contemplated a comprehensive restructuring of our debt obligations and capital structure to be implemented through a prepackaged plan of reorganization (the “Plan”) to be implemented through the filing of the Prepackaged Chapter 11 Case (as defined below).
On November 13, 2024, we commenced a voluntary proceeding (the “Prepackaged Chapter 11 Case”) under Chapter 11 of the United States Code, 11 U.S.C. §§ 101-1532, as amended from time to (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) under the name “In re Vroom, Inc.” Case No. 24-90571 (CML). None of Vroom, Inc.’s subsidiaries were debtors in the Chapter 11 proceedings.
On the Effective Date, the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective. We emerged from the Prepackaged Chapter 11 Case on January 14, 2025.
In connection with our emergence from bankruptcy and in accordance with Accounting Standards Codification ("ASC") Topic 852, "Reorganizations", we qualified for and adopted fresh start accounting on the Effective Date. We were required to adopt fresh start accounting because (i) the holders of existing voting shares of the Predecessor Company received less than 50% of the voting shares of the Successor Company, and (ii) the reorganization value of the assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims. References to “Successor” relate to the Company's financial position and results of operations after the Effective Date. References to “Predecessor” refer to the Company's financial position and results of operations on or before the Effective Date.
1
In accordance with ASC Topic 852, with the application of fresh start accounting, we will allocate the reorganization value to the Company's assets and liabilities. The reorganization value represents the fair value of the Successor Company's assets before considering liabilities. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the consolidated financial statements after January 14, 2025 will not be comparable with the consolidated financial statements as of or prior to that date.
Under fresh start accounting, the reorganized entity is considered a new reporting entity for financial reporting purposes. The unaudited pro forma consolidated balance sheet is presented as if we had emerged from bankruptcy on December 31, 2024. The unaudited pro forma consolidated statements of operations are presented as if we had emerged from bankruptcy on January 1, 2024. Had we actually adopted fresh start accounting on January 1, 2024 or December 31, 2024, the enterprise and reorganization values could have been materially different from the amounts described above and assumed herein.
The process of finalizing the fair value estimates of our assets and liabilities upon emergence for purposes of fresh start accounting is currently ongoing. Changes in the values of our assets and liabilities and changes in assumptions from those reflected in the Pro Forma Financial Information presented below could significantly impact the reported values of our assets and liabilities. Accordingly, the amounts shown are not final and are subject to changes and revisions, which may be material
Pro-Forma Financial Information
The Pro Forma Financial Information includes the following columns:
•Predecessor – Represents our historical consolidated balance sheet and statement of operations as of and for the year ended December 31, 2024.
•Reorganization Adjustments – Represents the effects of the transactions contemplated by the Plan and carried out by us upon our emergence from bankruptcy.
•Fresh Start Adjustments – Represents the fair value adjustments as a result of the adoption of fresh start accounting.
•Successor – Represents the consolidated balance sheet and statements of operations as if the emergence and fresh start accounting had taken place on the dates described above.
2
Unaudited Pro Forma Consolidated Balance Sheet
(in thousands)
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As of December 31, 2024 |
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Reorganization |
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Fresh Start |
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Predecessor |
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Adjustments |
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Notes |
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Adjustments |
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Notes |
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Successor |
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ASSETS |
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Cash and cash equivalents |
$ |
29,343 |
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$ |
(1,320 |
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1 |
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$ |
— |
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$ |
28,023 |
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Restricted cash |
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49,026 |
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— |
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— |
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49,026 |
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Finance receivables at fair value |
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503,848 |
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— |
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322,767 |
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8 |
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826,615 |
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Finance receivables held for sale, net |
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318,192 |
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— |
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(318,192 |
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8 |
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— |
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Interest receivable |
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14,067 |
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— |
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— |
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14,067 |
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Property and equipment, net |
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4,064 |
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— |
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(2,988 |
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9 |
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1,076 |
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Intangible assets, net |
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104,869 |
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— |
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(90,669 |
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10 |
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14,200 |
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Operating lease right-of-use assets |
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6,872 |
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— |
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4,193 |
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11 |
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11,065 |
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Other assets |
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35,472 |
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(2,091 |
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2 |
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(1,069 |
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12 |
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32,312 |
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Assets from discontinued operations |
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943 |
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— |
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— |
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943 |
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Total assets |
$ |
1,066,696 |
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$ |
(3,411 |
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$ |
(85,958 |
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$ |
977,327 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current Liabilities: |
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Warehouse credit facilities of consolidated VIEs |
$ |
359,912 |
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$ |
— |
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$ |
— |
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$ |
359,912 |
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Long-term debt |
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381,366 |
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— |
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4,085 |
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13 |
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385,451 |
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Operating lease liabilities |
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11,065 |
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— |
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— |
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11,065 |
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Other liabilities |
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49,699 |
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— |
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— |
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49,699 |
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Liabilities subject to compromise |
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291,577 |
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(291,577 |
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3 |
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— |
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— |
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Liabilities from discontinued operations |
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4,022 |
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— |
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— |
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4,022 |
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Total liabilities |
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1,097,641 |
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(291,577 |
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4,085 |
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810,149 |
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Stockholders’ (deficit) equity: |
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Predecessor common stock |
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2 |
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(2 |
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4 |
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— |
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— |
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Successor common stock |
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— |
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50 |
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5 |
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— |
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50 |
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Predecessor additional paid-in-capital |
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2,094,889 |
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(2,094,889 |
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6 |
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— |
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— |
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Successor warrants |
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— |
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2,825 |
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7 |
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— |
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2,825 |
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Successor paid-in-capital |
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— |
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164,303 |
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7 |
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— |
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164,303 |
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Accumulated deficit |
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(2,125,836 |
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2,215,879 |
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3,14 |
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(90,043 |
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14 |
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— |
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Total stockholders’ (deficit) equity |
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(30,945 |
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288,166 |
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(90,043 |
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167,178 |
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Total liabilities and stockholders’ equity |
$ |
1,066,696 |
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$ |
(3,411 |
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$ |
(85,958 |
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$ |
977,327 |
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3
Unaudited Pro Forma Consolidated Statement of Operations
(in thousands, except per share data)
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For the Year Ended December 31, 2024 |
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Reorganization |
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Fresh Start |
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Predecessor |
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Adjustments |
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Notes |
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Adjustments |
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Notes |
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Successor |
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Interest income |
$ |
201,833 |
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$ |
— |
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$ |
(18,990 |
) |
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c |
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$ |
182,843 |
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— |
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Interest expense: |
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— |
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Warehouse credit facility |
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29,276 |
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— |
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(1,324 |
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e |
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27,952 |
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Securitization debt |
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30,084 |
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— |
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(1,535 |
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f |
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28,549 |
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Total interest expense |
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59,360 |
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— |
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(2,859 |
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56,501 |
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Net interest income |
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142,473 |
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— |
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(16,131 |
) |
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126,342 |
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— |
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Realized and unrealized losses, net of recoveries |
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119,868 |
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— |
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(9,288 |
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c,d |
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110,580 |
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Net interest income after losses and recoveries |
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22,605 |
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— |
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(6,843 |
) |
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15,762 |
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— |
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Noninterest income: |
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— |
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Servicing income |
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6,501 |
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— |
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— |
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6,501 |
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Warranties and GAP income (loss), net |
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(2,610 |
) |
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— |
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— |
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(2,610 |
) |
CarStory revenue |
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11,610 |
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— |
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— |
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11,610 |
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Other income |
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10,850 |
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— |
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— |
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10,850 |
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Total noninterest income |
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26,351 |
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— |
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— |
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26,351 |
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— |
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Expenses: |
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— |
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Compensation and benefits |
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97,293 |
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— |
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— |
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97,293 |
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Professional fees |
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12,035 |
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— |
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2,423 |
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g |
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14,458 |
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Software and IT costs |
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15,083 |
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— |
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— |
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15,083 |
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Depreciation and amortization |
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29,086 |
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— |
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(25,272 |
) |
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h |
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3,814 |
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Interest expense on corporate debt |
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5,826 |
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(3,428 |
) |
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a |
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— |
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2,398 |
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Impairment charges |
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5,159 |
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— |
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— |
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5,159 |
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Other expenses |
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16,294 |
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— |
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(2,055 |
) |
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i |
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14,239 |
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Total expenses |
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180,776 |
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(3,428 |
) |
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|
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(24,904 |
) |
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152,444 |
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— |
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Loss from continuing operations before reorganization items and provision for income taxes |
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(131,820 |
) |
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3,428 |
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18,061 |
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(110,331 |
) |
Reorganization items, net |
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5,564 |
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(5,564 |
) |
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b |
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— |
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— |
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Loss from continuing operations before provision for income taxes |
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(137,384 |
) |
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|
8,992 |
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18,061 |
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(110,331 |
) |
Provision for income taxes from continuing operations |
|
856 |
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— |
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— |
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|
856 |
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Net loss from continuing operations |
$ |
(138,240 |
) |
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$ |
8,992 |
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$ |
18,061 |
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$ |
(111,187 |
) |
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Net loss per share attributable to common stockholders, continuing operations, basic and diluted |
$ |
(76.24 |
) |
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$ |
(21.53 |
) |
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Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted |
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1,813,168 |
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j |
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5,163,109 |
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4
Adjustments
Balance Sheet
Reorganization adjustments
Convertible note |
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$ |
290,488 |
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Accrued interest on convertible senior note |
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|
1,089 |
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Liabilities subject to compromise |
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|
291,577 |
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Issuance of 92.94% of Successor common shares to prepetition convertible note holders (1) |
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|
152,750 |
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Gain on settlement of liabilities subject to compromise |
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$ |
138,827 |
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(1) Note the total issuances of Successor equity in the amount of $167.2 million was issued to Predecessor note holders in the amount of $152.8 million and Predecessor equity holders in the amount of $14.4 million. The total issuance to the Predecessor equity holders of $14.4 million included warrants of $2.8 million and 7.06% of common shares totaling $11.6 million.
Fresh Start Adjustments
5
Adjustment to Predecessor common stock and additional paid-in-capital |
$ |
2,094,891 |
|
Gain on settlement of liabilities subject to compromise |
|
138,827 |
|
Warrants and common stock issued to Predecessor equity holders |
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(14,428 |
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Reorganization adjustment to total assets |
|
(3,411 |
) |
Cumulative impact to accumulated deficit |
$ |
2,215,879 |
|
Statement of Operations
Reorganization Adjustments
Write-off of debt issuance costs on liabilities subject to compromise |
|
$ |
2,438 |
|
Legal, professional and other, net |
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|
3,126 |
|
Total Reorganization items |
|
$ |
5,564 |
|
Fresh Start Adjustments
The following table reflects the impact of the Plan on historical weighted average shares outstanding:
6
Historical weighted average Predecessor common shares outstanding |
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1,813,168 |
|
Less: cancellation of Predecessor common shares |
|
(1,813,168 |
) |
Add: Issuance of Successor common stock |
|
5,163,109 |
|
Weighted average Successor common stock outstanding |
|
5,163,109 |
|
The following table represents the calculation of pro forma net loss per share (in thousands, except for per share data):
Net loss from continuing operations |
$ |
(111,187 |
) |
Weighted average Successor common stock outstanding |
|
5,163,109 |
|
Net loss per share attributable to common stockholders, continuing operations, basic and diluted |
$ |
(21.53 |
) |
7