Business Context and Reporting Period
This Form 8-K was filed by RumbleOn, Inc. (formerly Ridenow Group, Inc.) on May 25, 2019. The report details compensatory arrangements approved by the Compensation Committee for the Chairman and CEO, Marshall Chesrown, and the CFO, Steven Berrard, as well as non-employee directors.
Key Financial Metrics
The filing does not provide specific financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity for the reporting period. The document focuses exclusively on executive and director compensation adjustments.
Material Changes
The primary material change reported is the approval of significant increases in executive compensation, retroactive to January 1, 2019:
- Base Salary Increase: Annual base salaries for Messrs. Chesrown and Berrard increased from $240,000 to $360,000.
- Discretionary Bonuses: Up to $500,000 approved for each executive, contingent on specific performance milestones including revenue targets, unit sales, and gross margins.
- Equity Grants: Up to 400,000 Restricted Stock Units (RSUs) granted to each executive, with vesting tied to operating income, revenue, and stock price targets.
- Director Compensation: Non-employee directors approved to receive 35,000 RSUs upon re-election.
Guidance, Outlook, and Risks
While the filing does not contain formal forward-looking guidance, the compensation structure implies management targets for the fiscal year ending December 31, 2019, and beyond:
- Revenue Target: $900 million for the year ending December 31, 2019.
- Sales Target: Sale of 50,000 units with an average gross margin of $650 per unit by December 31, 2019.
- Stock Price Targets: RSU vesting is contingent on the Class B Common Stock trading at $10.00 and $15.00 per share for 30 consecutive days by September 30, 2020.
- Operational Milestone: Launch of the Company's finance business.
- Employment Status: Executives remain employed on an at-will basis with no formal employment agreements.
Investor Verification Checklist
- Verify the Company's progress toward the $900 million revenue target for 2019.
- Confirm the status of the finance business launch mentioned as a bonus trigger.
- Monitor the stock price performance relative to the $10.00 and $15.00 vesting thresholds for the 2020 RSU grants.
- Review upcoming quarterly reports to assess if the 50,000 unit sales target with $650 gross margin is achievable.
- Check for any subsequent filings regarding the actual payout of the immediate $100,000 bonus portion.