Business Context and Reporting Period
This Form 8-K Current Report was filed by RumbleON, Inc. (formerly Ridenow Group, Inc.) on April 4, 2017, covering events that occurred on March 31, 2017. The company is a Nevada corporation focused on launching a vehicle marketplace platform.
Key Financial Metrics and Capital Activities
The filing details three distinct capital-raising and debt restructuring events on March 31, 2017:
- Private Placement Proceeds: The company sold 620,000 shares of Class B common stock at $4.00 per share, raising aggregate proceeds of $2.48 million.
- Debt Restructuring: The company funded the second tranche of a November 2016 private placement. This involved issuing 1,161,920 shares and a new promissory note with a principal amount of $667,000. This transaction cancelled prior loan agreements with an aggregate principal commitment of $1.35 million.
- Debt Conversion: The company issued 275,312 shares upon the conversion of a promissory note held by Berrard Holdings Limited Partnership. The converted amount included principal and accrued interest totaling $206,484 at a conversion price of $0.75 per share.
The filing text does not provide clear values for revenue, net profit, operating cash flow, gross margins, or total liquidity positions outside of the specific transaction proceeds mentioned above.
Material Changes and Use of Proceeds
There are no comparative financial metrics provided in this filing to assess material changes in revenue or profitability versus prior periods. The primary material change is the increase in equity capital and the restructuring of debt obligations. Proceeds from the $2.48 million private placement are designated for:
- Completing the launch of the rumbleON.com website.
- Acquiring vehicle inventory.
- Continuing platform development.
- General working capital purposes.
Guidance, Outlook, and Risks
Management intends to file a Registration Statement on Form S-1 during the second quarter of 2017 to cover the resale of the shares issued in the private placement. The shares were issued in reliance on the Section 4(a)(2) exemption or Regulation D under the Securities Act of 1933. The filing does not contain specific forward-looking guidance on revenue targets or detailed risk factors beyond the standard disclosure of unregistered securities sales.
Investor Verification Checklist
- Verify the filing of the Form S-1 Registration Statement in Q2 2017 for the resale of the 620,000 shares.
- Confirm the terms of the new $667,000 promissory note issued to replace the $1.35 million in prior loan commitments.
- Review the utilization of the $2.48 million in proceeds against the stated goals of website launch and inventory acquisition.
- Monitor the dilution impact from the issuance of approximately 2.06 million shares across the three transactions described.