Business Context and Reporting Period
This Form 8-K was filed by RumbleOn, Inc. (not Ridenow Group, Inc.) on February 23, 2018, reporting events occurring on February 16, 2018. The Company is an emerging growth company incorporated in Nevada, operating an online vehicle marketplace. The filing primarily addresses the termination of a prior credit facility and the establishment of a new inventory financing arrangement.
Key Financial Metrics and Obligations
- New Credit Facility: Entered into an Inventory Financing and Security Agreement with Ally Bank and Ally Financial, Inc. for up to $25 million.
- Liquidity Requirement: The Company must maintain 10.0% of the advance amount as restricted cash.
- Interest Terms: Interest rates are designated by the Lender and calculated using a 365/360 simple interest method.
- Repayment Terms: Advances are due when the financed vehicle is sold, leased, or otherwise disposed of. Interest is payable upon demand, generally no later than 60 days from the request.
- Collateral: The facility is secured by vehicle inventory and other assets of the subsidiary (RMBL Missouri, LLC), with a corporate guaranty and general security agreement from RumbleOn, Inc.
- Financial Performance: The filing text does not provide specific values for revenue, profit, cash flow, margins, or total debt outstanding.
Material Changes Versus Prior Period
- Termination of Prior Facility: On February 20, 2018, the Company terminated its floor plan line of credit with NextGear Capital, Inc. (dated November 2, 2017). At the time of termination, there was no indebtedness outstanding under the NextGear Facility.
- Replacement Financing: The new $25 million facility with Ally Bank replaces the terminated NextGear arrangement to support the Company's floorplan vehicle financing program.
Guidance, Risks, and Contingencies
- Default Provisions: Upon any event of default, the Lender may demand immediate payment of all liabilities without notice to the Borrower.
- Guaranty Structure: The Company has provided a corporate guaranty, making it directly liable for the subsidiary's obligations under the Credit Facility.
- Management Commentary: The Company issued a press release on February 21, 2018, announcing the entry into the Credit Facility. No specific forward-looking guidance on revenue or earnings was included in this filing.
Key Facts for Investor Verification
- Verify the actual utilization of the $25 million Ally Bank facility and the amount of restricted cash currently held.
- Confirm the specific interest rate applied to advances under the new facility, as the filing states it is designated by the Lender.
- Review the full text of the attached exhibits (10.1 through 10.4) for detailed covenants and default triggers not summarized in the 8-K.
- Monitor the Company's ability to maintain the 10% restricted cash requirement as advances are drawn.