RUM Group Inc. current report, 15 May 2023

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Rumble Inc. Form 8-K Summary

Business Context and Reporting Period

Rumble Inc. filed this Current Report on May 19, 2023, regarding events occurring on May 15, 2023. The registrant identified in the filing is Rumble Inc., a Delaware corporation, trading under the symbols RUM and RUMBW on Nasdaq. The filing reports the completed acquisition of CallIn Corp. through a two-step merger transaction.

Transaction and Key Financial Terms

  • Rumble acquired CallIn Corp., which became a wholly owned subsidiary through the First Merger and Second Merger.
  • The transaction closed concurrently with execution of the merger agreement on May 15, 2023.
  • Upfront consideration consisted of 1,000,000 shares of Rumble Class A common stock, subject to customary adjustments for indebtedness, unpaid transaction expenses and working capital.
  • Former CallIn securityholders may receive up to an additional 1,500,000 shares of Class A common stock upon achievement of four separate milestones, with 375,000 shares payable for each milestone.
  • The filing does not provide revenue, profit, cash flow, margin, debt, liquidity or other operating results for Rumble or CallIn.

Material Changes and Management Commentary

  • The acquisition adds CallIn as a wholly owned subsidiary and may result in the issuance of up to 2,500,000 total Rumble Class A shares, including contingent consideration.
  • Rumble is required to appoint David Sacks to its board of directors promptly, and no later than 30 days after the 2023 annual meeting of stockholders, to serve until the next annual meeting.
  • The company issued a press release announcing the merger agreement; the press release was filed as Exhibit 99.1.

Outlook, Risks and Unusual Items

  • Contingent share payments depend on the achievement of four specified milestones. The filing text does not describe the milestones or their probability of achievement.
  • The upfront share consideration is subject to post-closing adjustments, so the final value of the consideration may differ from the initial amount.
  • The filing includes customary warnings that forward-looking statements are subject to risks and uncertainties described in Rumble’s 2022 Form 10-K and other SEC filings.
  • The SEC staff granted Rumble a waiver from filing CallIn financial statements under Regulation S-X Rule 3-05 and related pro forma information. Accordingly, the filing does not include those financial statements or pro forma results.

Investor Verification Items

  • Verify the final number and fair value of shares issued as upfront consideration after closing adjustments.
  • Review the four contingent consideration milestones, vesting or issuance conditions and any resulting dilution.
  • Assess the strategic and financial contribution of CallIn using subsequent disclosures, since acquisition financial statements and pro forma information were waived.
  • Confirm the timing and completion of David Sacks’s board appointment.
  • Review Rumble’s 2022 Form 10-K and subsequent filings for acquisition-related risks, integration costs, liquidity effects and additional disclosures.