Business Context and Reporting Period
This Form 8-K, dated August 8, 2023, reports on RumbleOn, Inc. (RMBL), a Nevada corporation. The filing details the entry into a Material Definitive Agreement regarding a proposed capital raise. The document does not contain financial results for a specific reporting period.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. The primary financial figure disclosed is the proposed aggregate subscription price of approximately $100.0 million for the Rights Offering.
Material Changes and Transaction Details
- Standby Purchase Agreement: RumbleOn entered into an agreement with Mark Tkach, William Coulter, and Stone House Capital Management, LLC (collectively, the "Standby Purchasers").
- Proposed Rights Offering: The Company plans to distribute non-transferable rights to existing shareholders to purchase Class B common stock. The total target raise is approximately $100.0 million.
- Subscription Price: The per-share price has not been determined but will not exceed $6.15 per share. It will be set to reflect a discount from recent trading prices to encourage broad participation.
- Backstop Private Placement: Standby Purchasers have committed to buy any unsubscribed shares within two business days after the Rights Offering closes. The allocation of unsubscribed shares is: Tkach (25%), Coulter (25%), and Stone House (50%).
- Board Representation: Stone House Capital Management, LLC has the right to designate one nominee to the Board of Directors within 60 days of the agreement date.
Guidance, Outlook, and Risks
The filing contains forward-looking statements regarding the anticipated completion of the Rights Offering and Backstop Private Placement. No specific financial guidance or management commentary on operational performance is provided.
- Conditions Precedent: The offering cannot commence until a registration statement is filed with the SEC and declared effective.
- Termination Rights: The agreement may be terminated by the Standby Purchasers if the Rights Offering is not consummated by December 1, 2023.
- Risks: Risks include the failure to satisfy closing conditions, market conditions, and the diversion of management attention from ongoing operations. There is no assurance the transactions will be completed.
Investor Verification Checklist
- Verify the final Subscription Price and the record date for the Rights Offering once announced.
- Confirm the effectiveness of the SEC registration statement required to launch the offering.
- Monitor the December 1, 2023, deadline for the consummation of the Rights Offering to avoid termination of the Standby Purchase Agreement.
- Review the full text of the Purchase Agreement (Exhibit 10.1) for specific covenants and termination clauses.
- Assess the impact of the potential dilution from the issuance of up to $100.0 million in new shares.