ABOUT
THIS PROSPECTUS
This prospectus is
part of a registration statement on Form S-3 that we filed with the
Securities and Exchange Commission, or the SEC, using a
“shelf” registration process for the delayed offering
and sale of securities pursuant to Rule 415 under the Securities
Act of 1933, as amended (the “Securities Act”). Under
the shelf process, the selling stockholders may, from time to time,
sell the offered securities described in this prospectus in one or
more offerings. Additionally, under the shelf process, in certain
circumstances, we may provide a prospectus supplement that will
contain specific information about the terms of a particular
offering by one or more of the selling stockholders. We may also
provide a prospectus supplement to add information to, or update or
change information contained in, this prospectus.
This prospectus
does not contain all of the information set forth in the
registration statement, portions of which we have omitted as
permitted by the rules and regulations of the SEC. Statements
contained in this prospectus as to the contents of any contract or
other document are not necessarily complete. You should refer to
the copy of each contract or document filed as an exhibit to the
registration statement for a complete description.
You should rely
only on the information contained in or incorporated by reference
into this prospectus and any applicable prospectus supplements.
Such documents contain important information you should consider
when making your investment decision. We have not authorized anyone
to provide you with different or additional information. The
selling stockholders are offering to sell and seeking offers to buy
shares of our Class B Common Stock only in jurisdictions in which
offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus or any sale
of Class B Common Stock.
Unless the context
otherwise requires, all references to “RumbleOn,”
“RMBL,” the “Company,”
“registrant,” “we,” “us,”
“our” and similar names refer to RumbleOn, Inc.,
formerly Smart Server, Inc., and its consolidated
subsidiaries.
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PROSPECTUS
SUMMARY
This summary does not contain all of the information that is
important to you. You should read the entire prospectus carefully,
including the “Risk Factors” section and the
consolidated financial statements and related notes included in
this prospectus or incorporated by reference into this prospectus,
before making an investment decision.
Overview
RumbleOn, Inc. is a
technology driven, motor vehicle dealer and e-commerce platform
provider disrupting the vehicle supply chain using innovative
technology that aggregates, processes and distributes inventory in
a faster and more cost-efficient manner.
We operate an
infrastructure-light platform that facilitates the ability of all
participants in the supply chain, including RumbleOn, other dealers
and consumers to Buy-Sell-Trade-Finance-Transport preowned
vehicles. Our goal is to transform the way VIN-specific pre-owned
vehicles are bought and sold by providing users with the most
comprehensive, efficient, timely and transparent transaction
experiences. While our initial customer facing emphasis through
most of 2018 was on motorcycles and other powersports, we continue
to enhance our platform to accommodate nearly any VIN-specific
vehicle including motorcycles, ATVs, boats, RVs, cars and trucks,
and via our acquisitions of Wholesale, Inc. in October 2018 and
Autosport USA, Inc. in February 2019 we are making a concerted
effort to grow our cars and light truck categories.
Recent Developments
Acquisition of Autosport
On
February 3, 2019 (the “Closing Date”), the Company
completed the acquisition (the “Acquisition”) of all of
the equity interests of Autosport USA, Inc.
(“Autosport”), an independent pre-owned vehicle
distributor, pursuant to a Stock Purchase Agreement, dated February
1, 2019 (the “Stock Purchase Agreement”), by and among
RMBL Express, LLC (the “Buyer”), a wholly owned
subsidiary of Company, Scott Bennie (the “Seller”) and
Autosport. Aggregate consideration for the Acquisition consisted of
(i) a closing cash payment of $600,000, plus (ii) a fifteen-month
$500,000 promissory note (the “Promissory Note”) in
favor of the Seller, plus (iii) a three-year $1,536,000 convertible
promissory note (the “Convertible Note”) in favor of
the Seller, plus (iv) contingent earn-out payments payable in the
form of cash and/or the Company’s Class B Common Stock for up
to an additional $787,500 if Autosport achieves certain performance
thresholds. The number of shares of the Company's Class B Common
Stock issuable pursuant to these earn-out payments is currently
estimated to be 150,000 (the “Earn-Out Shares”).In
connection with the Acquisition, the Buyer also paid outstanding
debt of Autosport of $235,000 and assumed additional debt of
$257,933 pursuant to a promissory note payable to Seller (the
"Second Convertible Note").
The
Promissory Note has a term of fifteen months and will accrue
interest at a simple rate of 5% per annum. Interest under the
Promissory Note is payable upon maturity. Any interest and
principal due under the Promissory Note is convertible, at the
Buyer’s option into shares of the Company’s Class B
Common Stock at a conversion price equal to the weighted average
trading price of the Company’s Class B Common Stock on the
Nasdaq Stock Exchange for the twenty (20) consecutive trading days
preceding the conversion date. The number of shares of the
Company’s Class B Common Stock issuable pursuant to the
Promissory Note is currently estimated to be 78,370 (the
"Promissory Note Shares").
The
Convertible Note has a term of three years and will accrue interest
at a rate of 6.5% per annum. Interest under the Convertible Note is
payable monthly for the first 12 months, and thereafter monthly
payments of amortized principal and interest will be due. Any
interest and principal due under the Convertible Note is
convertible into shares of the Company’s Class B Common Stock
at a conversion price of $5.75 per share, (i) at the Seller’s
option, or (ii) at the Buyer’s option, on any day that (a)
any portion of the principal of the Convertible Note remains unpaid
and (b) the weighted average trading price of the Company’s
Class B Common Stock on Nasdaq for the twenty (20) consecutive
trading days preceding such day has exceeded $7.00 per share. The
maximum number of shares issuable pursuant to the Convertible Note
is 319,221 shares of the Company’s Class B Common Stock. The
number of shares of the Company’s Class B Common Stock
issuable pursuant to the Convertible Note is currently estimated to
be 267,130 (the "Convertible Note Shares").
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The
Second Convertible Note has a term of one year and will accrue
interest at a simple rate of 5% per annum. Monthly payments of
amortized principal and interest will be due under the Second
Convertible Note. Any interest and principal due under the Second
Convertible Note is convertible into shares of the Company’s
Class B Common Stock at a conversion price of $5.75 per share, (i)
at the Seller’s option, or (ii) at the Buyer’s option,
on any day that (a) any portion of the principal of the Second
Convertible Note remains unpaid and (b) the weighted average
trading price of the Company’s Class B Common Stock on Nasdaq
for the twenty (20) consecutive trading days preceding such day has
exceeded $7.00 per share. The maximum number of shares issuable
pursuant to the Second Convertible Note is 47,101 shares of the
Company’s Class B Common Stock. The number of shares of the
Company’s Class B Common Stock issuable pursuant to the
Second Convertible Note is currently estimated to be 44,858 (the
"Second Convertible Note Shares," together with the Promissory Note
Shares and the Convertible Note Shares, the "Autosport Note
Shares").
February 2019 Public Offering
On February 11,
2019, the Company completed an underwritten public offering of
1,276,500 shares of its Class B Common Stock at a price of $5.55
per share for net proceeds to the Company of approximately $6.5
million. The completed offering included 166,500 shares of Class B
Common Stock issued upon the underwriter's exercise in full of its
over-allotment option. The Company intends to use the net proceeds
from the offering for working capital and general corporate
purposes, which may include purchases of additional inventory held
for sale, increased spending on marketing and advertising and
capital expenditures necessary to grow the business.
In connection with
the February 2019 offering, the exercise price of the warrant,
dated October 30, 2018, issued to Hercules Capital, Inc. (the
"October 2018 Warrant") was adjusted to $5.55 and the number of
shares of Class B Common Stock underlying the October 2018 Warrant
was adjusted to 27,026. The October 2018 Warrant is immediately
exercisable and expires on October 30, 2023.
Notes Offering
On May 9, 2019, the
Company entered into a purchase agreement (the "Purchase
Agreement") with JMP Securities LLC (“JMP Securities”)
to issue and sell $30.0 million in aggregate principal amount of
its 6.75% Convertible Senior Notes due 2024 (the
“Notes”) in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act
of 1933, as amended (the "Note Offering").
The Company paid JMP Securities a fee
of 7% of the gross proceeds in the Note Offering. The net
proceeds for the Note Offering were approximately $27.3
million.
The Notes were issued
on
May 14, 2019 pursuant to an Indenture (the
“Indenture”), by and between the Company and Wilmington
Trust, National Association, as trustee (the
“Trustee”). The Purchase Agreement includes customary
representations, warranties and covenants by the Company and
customary closing conditions. Under the terms of the Purchase
Agreement, the Company has agreed to indemnify JMP Securities
against certain liabilities. The Notes will bear interest at 6.75%
per annum, payable semiannually on May 1 and November 1 of each
year, beginning on November 1, 2019. The Notes may bear additional
interest under specified circumstances relating to the
Company’s failure to comply with its reporting obligations
under the Indenture or if the Notes are not freely tradeable as
required by the Indenture. The Notes will mature on May 1, 2024,
unless earlier converted, redeemed or repurchased pursuant to their
terms.
The initial
conversion rate of the Notes is 173.9130 shares of Class B Common
Stock, par value $0.001 per share (the “Class B Common
Stock”), per $1,000 principal amount of the Notes, subject to
adjustment (which is equivalent to an initial conversion price of
approximately $5.75 per share, subject to adjustment). The
conversion rate will be subject to adjustment in some events but
will not be adjusted for any accrued and unpaid interest. In
addition, upon the occurrence of a make-whole fundamental change
(as defined in the Indenture), the Company will, in certain
circumstances, increase the conversion rate by a number of
additional shares for a holder that elects to convert its Notes in
connection with such make-whole fundamental change.
The Notes are not redeemable by the
Company prior to the May 6, 2022.
The
Company
may redeem for
cash all or any portion of the Notes, at its option, on or after
May 6, 2022 if the last reported sale price of our Class B Common
Stock has been at least 150% of the conversion price then in effect
for at least 20 trading days (whether or not consecutive),
including the trading day immediately preceding the date on which
we provide notice of redemption, during any 30 consecutive trading
day period ending on, and including, the trading day immediately
preceding the date on which we provide notice of redemption at a
redemption price equal to 100% of the principal amount of the notes
to be redeemed, plus accrued and unpaid interest to, but excluding,
the redemption date. No sinking fund is provided for the
notes.
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In connection with
the Note Offering, the Company entered into a registration rights
agreement with JMP Securities, pursuant to which the Company has
agreed to file with the SEC an automatic shelf registration
statement, if the Company is eligible to do so and has not already
done so, and, if the Company is not eligible for an automatic shelf
registration statement, then in lieu of the foregoing the Company
shall file a shelf registration statement for the registration of,
and the sale on a continuous or delayed basis by the holders of,
all of the Notes pursuant to Rule 415 or any similar rule
that may be adopted by the Commission, and use its commercially
reasonable efforts to cause the shelf registration statement to
become or be declared effective under the Securities Act on the day
that is 120 days after the May 9, 2019.
Class B Common Stock Offering
On May 9, 2019, the
Company also entered into a Securities Purchase Agreement (the
“Securities Purchase Agreement”) with certain
accredited investors (the “Investors”) pursuant to
which the Company agreed to sell in a private placement (the
“Private Placement”) an aggregate of 1,900,000 shares
of its Class B Common Stock (the “Private Placement
Shares”), at a purchase price of $5.00 per share. JMP
Securities served as the placement agent for the Private Placement.
The Company paid JMP Securities a fee of 7% of the gross proceeds
in the Private Placement. The net proceeds for the Private
Placement were approximately $8.8 million.
Pursuant to the
Securities Purchase Agreement, the Company has agreed to file with
the SEC a registration statement with respect to the resale of the
Private Placement Shares purchased by the Investors under the
Securities Purchase Agreement no later than 30 days after the
Placement Date, and to have such registration statement declared
effective by the SEC no later than (i) 90 days after the Placement
Date in the event the SEC does not review such registration
statement, or, if earlier, five business days after a determination
by the SEC that it will not review such registration statement, or
(ii) 180 days after the Placement Date in the event the SEC does
review such registration statement. In the event the Company does
not file such registration statement or does not cause such
registration statement to become effective by the applicable
deadline or after such registration statement becomes effective it
is suspended or ceases to be effective, then the Company will be
required to make certain payments as liquidated damages to the
Investors under the Securities Purchase Agreement.
The Private
Placement Shares were issued in reliance on the exemption from
registration provided by Rule 506 of Regulation D of the Securities
Act of 1933, as amended, as a sale not involving any public
offering. The Private Placement and Note Offering are collectively
referred to in this report as the Offerings.
This prospectus
includes the Private Placement Shares to be offered by the selling
stockholders.
In connection with
the Private Placement, the exercise price of the warrant, dated
April 30, 2018, issued to Hercules Capital, Inc. (the "April 2018
Warrant") was adjusted to $5.4648 and the number of shares of Class
B Common Stock underlying the April 2018 Warrant was adjusted to
82,342. The April 2018 Warrant is immediately exercisable and
expires on April 30, 2023. Also in connection with the
Private Placement, the exercise price of the October 2018 Warrant
was further adjusted to $5.00 and the number of shares of Class B
Common Stock underlying October 2018 Warrant was adjusted to
29,999.
Corporate Information
We were incorporated as a development stage
company in the State of Nevada as Smart Server, Inc. in October
2013. In February 2017, we changed our name to RumbleOn, Inc. Our
principal executive offices are located at 1350 Lakeshore Drive,
Suite 160, Coppell, Texas 75019 and our telephone number is (469)
250-1185. Our Internet website is
www.rumbleon.com
.
Our Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and
amendments to reports filed or furnished pursuant to Sections 13(a)
and 15(d) of the Exchange Act are available, free of charge, under
the Investor Relations tab of our website as soon as reasonably
practicable after we electronically file such material with, or
furnish it to, the SEC. The information on our website, however, is
not, and should not be, considered part of this prospectus, is not
incorporated by reference into this prospectus, and should not be
relied upon in connection with making any investment decision with
respect to our securities. The SEC also maintains an Internet
website located at
www.sec.
gov
that contains the information we file
or furnish electronically with the SEC.
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THE
OFFERING
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Class B Common
Stock outstanding prior to the offering:
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21,987,120
shares
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Class B Common
Stock to be issued upon exercise of the Warrants:
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9,573
shares
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Class B Common
Stock to be issued as Earn-out Shares:
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150,000
shares
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Class B Common
Stock to be issued upon conversion of the Autosport
Notes:
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390,358
shares
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Class B Common
Stock to be offered by the selling stockholders:
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2,449,931
shares
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Class B Common
Stock outstanding immediately following the offering:
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24,437,051
shares
(1)
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Use of
proceeds:
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We will not receive
any proceeds from the sale of the shares of Class B Common Stock by
the selling stockholders but will receive proceeds from the
exercise of the Warrants if the Warrants are exercised, which
proceeds will be used for working capital and other general
corporate purposes. See “Use of Proceeds.”
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Risk
Factors:
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See “Risk
Factors” beginning on page
5
of this prospectus for a discussion of
factors you should carefully consider before deciding to invest in
shares of our Class B Common Stock.
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Stock
Symbol:
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(1)
The
number of shares of our Class B Common Stock outstanding
excludes:
●
5,217,390
shares of Class B Common Stock underlying the
Notes;
●
1,521,816 shares of
Class B Common Stock underlying outstanding restricted stock units
granted under the RumbleOn, Inc. 2017 Stock Incentive Plan, as
amended (the “2017 Stock Incentive Plan”);
●
279,184 shares of
Class B Common Stock reserved for issuance under the 2017 Stock
Incentive Plan; and
●
321,018 shares of
Class B Common Stock underlying outstanding warrants.
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RISK
FACTORS
Investing in our
securities involves significant risks. Before making an investment
decision, you should consider carefully the risks, uncertainties
and other factors described under "Risk Factors" in our most recent
Annual Report on Form 10-K, as supplemented and updated by
subsequent quarterly reports on Form 10-Q and current reports on
Form 8-K that we have filed or will file with the SEC, and in other
documents which are incorporated by reference into this
prospectus.
If any of these
risks were to occur, our business, affairs, prospects, assets,
financial condition, results of operations and cash flow could be
materially and adversely affected. If this occurs, the market or
trading price of our securities could decline, and you could lose
all or part of your investment. In addition, please read
“Cautionary Statement Regarding Forward-Looking
Statements” in this prospectus, where we describe additional
uncertainties associated with our business and the forward-looking
statements included or incorporated by reference into this
prospectus.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Our business,
financial condition, results of operations, cash flows and
prospects, and the prevailing market price and performance of our
securities, may be adversely affected by a number of factors,
including the matters discussed below. Certain statements and
information set forth in this registration statement, as well as
other written or oral statements made from time to time by us or by
our authorized executive officers on our behalf, constitute
“forward-looking statements” within the meaning of the
Federal Private Securities Litigation Reform Act of 1995. We intend
for our forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and we set forth this
statement and these risk factors in order to comply with such safe
harbor provisions. You should note that our forward-looking
statements speak only as of the date of this registration statement
or when made and we undertake no duty or obligation to update or
revise our forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by law.
Although we believe that the expectations, plans, intentions and
projections reflected in our forward-looking statements are
reasonable, such statements are subject to risks, uncertainties and
other factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. The risks, uncertainties and other
factors that our stockholders and prospective investors should
consider include the following:
●
We have a limited
operating history and we cannot assure you we will achieve or
maintain profitability;
●
Our annual and
quarterly operating results may fluctuate significantly or may fall
below the expectations of investors or securities analysts, each of
which may cause our stock price to fluctuate or
decline;
●
The initial
development and progress of our business to date may not be
indicative of our future growth prospects and, if we continue to
grow rapidly, we may not be able to manage our growth
effectively;
●
We may require
additional capital to pursue our business objectives and respond to
business opportunities, challenges or unforeseen circumstances. If
capital is not available on terms acceptable to us or at all, we
may not be able to develop and grow our business as anticipated and
our business, operating results and financial condition may be
harmed;
●
The success of our
business relies heavily on our marketing and branding efforts,
especially with respect to the RumbleOn website and our branded
mobile applications, and these efforts may not be
successful;
●
The failure to
develop and maintain our brand could harm our ability to grow
unique visitor traffic and to expand our regional partner
network;
●
We rely on Internet
search engines to drive traffic to our website, and if we fail to
appear prominently in the search results, our traffic would
decline, and our business would be adversely affected;
●
A significant
disruption in service on our website or of our mobile applications
could damage our reputation and result in a loss of consumers,
which could harm our business, brand, operating results, and
financial condition;
●
We may be unable to
maintain or grow relationships with information data providers or
may experience interruptions in the data feeds they provide, which
may limit the information that we are able to provide to our users
and regional partners as well as adversely affect the timeliness of
such information and may impair our ability to attract or retain
consumers and our regional partners and to timely invoice all
parties;
●
If we are unable to
provide a compelling vehicle buying experience to our users, the
number of transactions between our users, RumbleOn and dealers will
decline, and our revenue and results of operations will suffer
harm;
●
If key industry
participants, including powersports and recreation vehicle dealers
and regional auctions, perceive us in a negative light or our
relationships with them suffer harm, our ability to operate and
grow our business and our financial performance may be
damaged;
●
The growth of our
business relies significantly on our ability to increase the number
of regional partners in our network such that we are able to
increase the number of transactions between our users and regional
partners. Failure to do so would limit our growth;
●
Our ability to grow
our complementary product offerings may be limited, which could
negatively impact our development, growth, revenue and financial
performance;
●
We rely on
third-party financing providers to finance a portion of our
customers' vehicle purchases;
●
Our sales of
powersports/recreation vehicles may be adversely impacted by
increased supply of and/or declining prices for pre-owned vehicles
and excess supply of new vehicles;
●
We rely on a number
of third parties to perform certain operating and administrative
functions for the Company;
●
We participate in a
highly competitive market, and pressure from existing and new
companies may adversely affect our business and operating
results;
●
Seasonality or
weather trends may cause fluctuations in our unique visitors,
revenue and operating results;
●
We collect,
process, store, share, disclose and use personal information and
other data, and our actual or perceived failure to protect such
information and data could damage our reputation and brand and harm
our business and operating results;
●
Failure to
adequately protect our intellectual property could harm our
business and operating results;
●
We may in the
future be subject to intellectual property disputes, which are
costly to defend and could harm our business and operating
results;
●
We operate in a
highly regulated industry and are subject to a wide range of
federal, state and local laws and regulations. Failure to comply
with these laws and regulations could have a material adverse
effect on our business, results of operations and financial
condition;
●
We provide
transportation services and rely on external logistics to transport
vehicles. Thus, we are subject to business risks and costs
associated with the transportation industry. Many of these risks
and costs are out of our control, and any of them could have a
material adverse effect on our business, financial condition and
results of operations;
●
We depend on key
personnel to operate our business, and if we are unable to retain,
attract and integrate qualified personnel, our ability to develop
and successfully grow our business could be harmed;
●
We may acquire
other companies or technologies, which could divert our
management's attention, result in additional dilution to our
stockholders and otherwise disrupt our operations and harm our
operating results;
●
We may be unable to
realize the anticipated synergies related to the acquisition of the
Wholesale Entities(as defined below) (the "Acquisitions), which
could have a material adverse effect on our business, financial
condition and results of operations;
●
We may be unable to
successfully integrate Wholesale, Inc.'s and Wholesale Express,
LLC's (together, the "Wholesale Entities") business and realize the
anticipated benefits of the Acquisitions;
●
Our business
relationships, those of the Wholesale Entities or the combined
company may be subject to disruption due to uncertainty associated
with the Acquisitions;
●
If we are unable to
maintain effective internal control over financial reporting for
the combined companies, we may fail to prevent or detect material
misstatements in our financial statements, in which case investors
may lose confidence in the accuracy and completeness of our
financial statements;
●
The Wholesale
Entities may have liabilities that are not known, probable or
estimable at this time;
●
As a result of the
Acquisitions, we and the Wholesale Entities may be unable to retain
key employees;
●
The trading price
for our Class B Common Stock may be volatile and could be subject
to wide fluctuations in per share price;
●
Our principal
stockholders and management own a significant percentage of our
stock and an even greater percentage of the Company's voting power
and will be able to exert significant control over matters subject
to stockholder approval;
●
If securities or
industry analysts do not publish research or reports about our
business, or if they issue an adverse or misleading opinion
regarding our stock, our stock price and trading volume could
decline;
●
Because our Class B
Common Stock may be deemed a low-priced "penny" stock, an
investment in our Class B Common Stock should be considered high
risk and subject to marketability restrictions;
●
A significant
portion of our total outstanding shares of Class B Common Stock is
restricted from immediate resale but may be sold into the market in
the near future. This could cause the market price of our Class B
Common Stock to drop significantly, even if our business is doing
well;
●
We do not currently
or for the foreseeable future intend to pay dividends on our common
stock;
●
We are an "emerging
growth company" under the JOBS Act of 2012, and we cannot be
certain if the reduced disclosure requirements applicable to
emerging growth companies will make our common stock less
attractive to investors;
●
Even if we no
longer qualify as an "emerging growth company," we may still be
subject to reduced reporting requirements so long as we are
considered a "smaller reporting company";
●
If we fail to
maintain an effective system of internal control over financial
reporting, we may not be able to accurately report our financial
results or prevent fraud. As a result, stockholders could lose
confidence in our financial and other public reporting, which would
harm our business and the trading price of our common
stock;
●
Anti-takeover
provisions may limit the ability of another party to acquire us,
which could cause our stock price to decline; and
●
other
risks and uncertainties detailed in this report;
Forward-looking
statements may appear throughout this prospectus, including without
limitation, the following sections: “Risk Factors” and
“Overview”. Forward-looking statements generally can be
identified by words such as “anticipates,”
“believes,” “estimates,”
“expects,” “intends,” “plans,”
“predicts,” “projects,” “will
be,” “will continue,” “will likely
result,” and similar expressions. These forward-looking
statements are based on current expectations and assumptions that
are subject to risks and uncertainties, which could cause our
actual results to differ materially from those reflected in the
forward-looking statements. Factors that could cause or contribute
to such differences include, those discussed in this Registration
Statement on Form S-3, and in particular, the risks discussed under
the caption “Risk Factors” and those discussed in other
documents we file with the SEC. We undertake no obligation to
revise or publicly release the results of any revision to these
forward-looking statements, except as required by law. Given these
risks and uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements.
USE
OF PROCEEDS
We
will not receive any proceeds from the sale of the shares of Class
B Common Stock by the selling stockholders but will receive
proceeds from the exercise of the Warrants if the Warrants are
exercised, which proceeds will be used for working capital and
other general corporate purposes.
SELLING
STOCKHOLDERS
The
following table provides information about the selling
stockholders, listing how many shares of our Class B Common Stock
the selling stockholders own on the date of this prospectus, how
many shares may be offered by this prospectus, and the number and
percentage of outstanding shares the selling stockholders will own
after the offering, assuming all shares covered by this prospectus
are sold. The information concerning beneficial ownership has been
provided by the selling stockholders. Information concerning the
selling stockholders may change from time to time, and any changed
information will be set forth if and when required in prospectus
supplements or other appropriate forms permitted to be used by the
SEC.
We
do not know when or in what amounts the selling stockholders may
offer shares for sale. The selling stockholders may choose not to
sell any or all of the shares offered by this prospectus. Because
the selling stockholders may offer all or some of the shares, and
because there are currently no agreements, arrangements or
understandings with respect to the sale of any of the shares, we
cannot accurately report the number of the shares that will be held
by the selling stockholders after completion of the offering.
However, for purposes of this table, we have assumed that, after
completion of the offering, all of the shares covered by this
prospectus will be sold by the selling stockholders.
The number of shares outstanding, and the
percentage of beneficial ownership, post-offering are based on
24,437,051
shares of Class B
Common Stock issued and outstanding as of the conclusion of the
offering, calculated on the basis of (i) 21,987,120 shares of
Class B Common Stock issued and outstanding as of May 23, 2019
prior to the offering, (ii) assuming the exercise and sale by the
selling stockholders of the 9,573 shares of Class B Common Stock
underlying the Warrants, (iii) assuming the conversion and sale by
the selling stockholders of the 390,358 shares of Class B Common
Stock underlying the Autosport Notes and (iv) assuming the issuance
of the 150,000 Earn-out Shares. For the purposes of the following
table, the number of shares of Class B Common Stock beneficially
owned has been determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934 (the “Exchange Act”),
and such information is not necessarily indicative of beneficial
ownership for any other purpose. Under Rule 13d-3, beneficial
ownership includes any shares as to which the selling stockholders
have sole or shared voting power or investment power and also any
shares which each selling shareholder, respectively, has the right
to acquire within 60 days of the date of this prospectus through
the exercise of any stock option, warrant or other
rights.
|
Name
of Selling Stockholders
|
Shares
of Class B Common Stock Owned Before the Offering
|
Shares
of Class B
Common
Stock to be Offered
for
the Selling Stockholder’s
Account
|
Shares
of Class B Common Stock Owned by the Selling Stockholder after the
Offering
|
Percent
of Class B Common Stock to be Owned by the Selling Stockholder
after the Offering
|
|
Beja,
Andrew
|
4,532
|
4,532
|
-
|
*
|
|
Bennie, Scott
.
(1)
|
540,358
|
540,358
|
-
|
*
|
|
BIV-Granahan
|
9,376
|
9,376
|
-
|
*
|
|
Black,
Archie
|
6,116
|
6,116
|
-
|
*
|
|
Chilton
Trust Select Equity Fund, LP
|
25,810
|
25,810
|
-
|
*
|
|
Chrispus
Holdings III LLC
|
917
|
917
|
-
|
*
|
|
European
Organization for Nuclear Research (CERN)
|
239,700
|
239,700
|
-
|
*
|
|
GIM
Small Cap Advantage Strategy
|
674,700
|
674,700
|
-
|
*
|
|
Granahan
US Focused Growth Fund UCITS
|
425,800
|
425,800
|
-
|
*
|
|
GSD
Revocable Trust 2011
|
7,082
|
7,082
|
-
|
*
|
|
Guava
Plum Ltd.
|
8,326
|
8,326
|
-
|
*
|
|
Hardacre
Holdings II LLC
|
1,184
|
1,184
|
-
|
*
|
|
Hazard
Family Foundation
|
749
|
749
|
-
|
*
|
|
Hazard
Limited Partnership
|
6,504
|
6,504
|
-
|
*
|
|
Hercules Capital, Inc
.
(2)
|
9,573
|
9,573
|
-
|
*
|
|
Hoehl
Family Foundation
|
4,387
|
4,387
|
-
|
*
|
|
IRIS,
Inc.
|
261,500
|
261,500
|
-
|
*
|
|
Momentum
Global Investment Management, Ltd
|
115,050
|
115,050
|
-
|
*
|
|
National
Insurance Board, Barbados
|
10,667
|
10,667
|
-
|
*
|
|
USAA
Small Cap Stock Fund
|
97,600
|
97,600
|
-
|
*
|
*
Less than one percent.
(1)
Represents shares of Class B Common Stock underlying Autosport
Notes and the Earn-out Shares, as described below.
(2)
Represents shares of Class B Common Stock underlying the Warrant,
as described below.
None
of the selling stockholders has, or within the past three years has
had, any position, office or material relationship with us or any
of our predecessors or affiliates, except as follows:
●
On
April 30, 2018, the Company, Existing Borrowers, Lender and Agent,
entered into the Loan and Security Agreement pursuant to
which Hercules may provide one or more term loans in an aggregate
principal amount of up to $15 million (the "Loan"). Under the terms
of the Loan Agreement, $5.0 million was funded at closing with the
balance available in two additional tranches over the term of the
Loan Agreement, subject to certain operating targets and otherwise
as set forth in the Loan Agreement. On May 14, 2019, the Company
made a payment to Hercules of $11,134,696, representing the
principal, accrued and unpaid interest, fees, costs and expenses
outstanding under the Loan and Security Agreement. Upon the
payment, all outstanding indebtedness and obligations of the
Company owed to Hercules under the Loan and Security Agreement were
paid in full, and the Loan and Security Agreement has been
terminated.
Under
the Loan Agreement, on April 30, 2018, the Company issued Hercules
the April 2018 Warrant to purchase 81,818 (increasing to 109,091 if
a fourth tranche in the principal amount of up to $5.0 million is
advanced at the parties agreement) shares of the Company’s
Class B Common Stock at an exercise price of $5.50 per share. In
connection with the Private Placement, the exercise price of the
warrant, dated April 30, 2018, issued to Hercules Capital, Inc.
(the "April 2018 Warrant") was adjusted to $5.4648 and the number
of shares of Class B Common Stock underlying the April 2018 Warrant
was adjusted to 82,342. The April 2018 Warrant is immediately
exercisable and expires on April 30, 2023.
If at any time
before April 30, 2019, the Company made a New Issuance (as defined
below) for no consideration or for a consideration per share less
than the warrant price in effect immediately before the New
Issuance or the consideration for an issuance is later adjusted
downward with certain exceptions as set forth in the April 2018
Warrant, then the warrant price would have been reduced to an
amount equal to the lower consideration price or adjusted exercise
price or conversion price (the “New Issuance
Price”). If at any time after April 30, 2019, the
Company makes a Dilutive Issuance (as defined below), then the
warrant price will be reduced to the amount computed using the
following formula: A*[(C+D)/B]. For purposes of this
formula, (i) A represents the warrant price in effect immediately
before the Dilutive Issuance, (ii) B represents the number of
shares of common stock outstanding immediately after the New
Issuance (on a fully-diluted basis), (iii) C represents the number
of shares of common stock outstanding immediately before the New
Issuance (on a fully-diluted basis), and (iv) D represents the
number of shares of common stock that would be issuable for total
consideration to be received for the New Issuance if the purchaser
paid the warrant price in effect immediately prior to the New
Issuance. New Issuance shall mean (A) any issuance or sale by
the Company of any class of shares of the Company (including the
issuance or sale of any shares owned or held by or for the account
of the Company) other than certain excluded securities as set forth
in the April 2018 Warrant, (B) any issuance or sale by the Company
of any options, rights or warrants to subscribe for any class of
shares of the Company other than certain excluded securities as set
forth in the April 2018 Warrant, or (C) the issuance or sale of any
securities convertible into or exchangeable for any class of shares
of the Company other than certain excluded securities as set forth
in the April 2018 Warrant.
●
On
October 30, 2018 (the “Closing Date”), the Company,
Borrowers, Lender, and Agent, entered into the Amendment, amending
the Loan and Security Agreement, by and among the Existing
Borrowers, Lender and Agent. On May 14, 2019, the Company made a
payment to Hercules of $11,134,696, representing the principal,
accrued and unpaid interest, fees, costs and expenses outstanding
under the Loan and Security Agreement. Upon the payment, all
outstanding indebtedness and obligations of the Company owed to
Hercules under the Loan and Security Agreement were paid in full,
and the Loan and Security Agreement has been
terminated.
On the Closing Date, the Company issued to Lender
the warrant to purchase 20,950 shares of the Company’s Class
B Common Stock at an exercise price of $7.16 per share. In
connection with the February 2019 offering, the exercise price of
the October 2018 Warrant was adjusted to $5.55 and the number of
shares of Class B Common Stock underlying the October 2018 Warrant
was adjusted to 27,026.
In connection with the Private
Placement, the exercise price of the October 2018 Warrant was
further adjusted to $5.00 and the number of shares of Class B
Common Stock underlying October 2018 Warrant was adjusted to
29,999.
The October 2018 Warrant is
immediately exercisable and expires on October 30,
2023.
If at any time
before October 30, 2019, the Company makes a New Issuance (as
defined below) for no consideration or for a consideration per
share less than the warrant price in effect immediately before the
New Issuance (a “Dilutive Issuance”) or the
consideration for an issuance is later adjusted downward with
certain exceptions as set forth in the October 2018 Warrant, then
the warrant price will be reduced to an amount equal to the lower
consideration price or adjusted exercise price or conversion price
(the “New Issuance Price”). If at any time after
October 30, 2019, the Company makes a Dilutive Issuance, then the
warrant price will be reduced to the amount computed using the
following formula: A*[(C+D)/B]. For purposes of this formula, (i) A
represents the warrant price in effect immediately before the
Dilutive Issuance, (ii) B represents the number of shares of common
stock outstanding immediately after the New Issuance (on a
fully-diluted basis), (iii) C represents the number of shares of
common stock outstanding immediately before the New Issuance (on a
fully-diluted basis), and (iv) D represents the number of shares of
common stock that wouldbe issuable for total consideration to be
received for the New Issuance if the purchaser paid the warrant
price in effect immediately prior to the New Issuance. New Issuance
shall mean (A) any issuance or sale by the Company of any class of
shares of the Company (including the issuance or sale of any shares
owned or held by or for the account of the Company) other than
certain excluded securities as set forth in the October 2018
Warrant, (B) any issuance or sale by the Company of any options,
rights or warrants to subscribe for any class of shares of the
Company other than certain excluded securities as set forth in the
October 2018 Warrant, or (C) the issuance or sale of any securities
convertible into or exchangeable for any class of shares of the
Company other than certain excluded securities as set forth in the
October 2018 Warrant.
●
As
discussed in the Recent Developments section of this prospectus,
Scott Bennie was the Seller in the Acquisition of
Autosport.
PLAN
OF DISTRIBUTION
Selling Stockholders
We are registering
the shares of Class B Common Stock to permit the resale of these
shares of Class B Common Stock by the holders of the Class B Common
Stock from time to time after the date of this prospectus. We will
not receive any of the proceeds from the sale by the selling
stockholders of the shares of Class B Common Stock but will receive
proceeds from the exercise of the Warrants if the Warrants are
exercised, which proceeds will be used for working capital and
other general corporate purposes. We will bear all fees and
expenses incident to our obligation to register the shares of Class
B Common Stock.
The selling
stockholders, or their pledgees, donees, transferees, or any of
their successors in interest selling shares received from a named
selling stockholder as a gift, partnership distribution or other
non-sale-related transfer after the date of this prospectus (all of
whom may be selling stockholders), may sell the securities from
time to time on any stock exchange or automated interdealer
quotation system on which the securities are listed, in the
over-the-counter market, in privately negotiated transactions or
otherwise, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to prevailing
market prices or at prices otherwise negotiated. The selling
stockholders may sell the securities by one or more of the
following methods, without limitation:
(a)
block
trades in which the broker or dealer so engaged will attempt to
sell the securities as agent but may position and resell a portion
of the block as principal to facilitate the
transaction;
(b)
underwritten
transactions;
(c)
purchases
by a broker or dealer as principal and resale by the broker or
dealer for its own account pursuant to this
prospectus;
(d)
an
exchange distribution in accordance with the rules of any stock
exchange on which the securities are listed;
(e)
ordinary
brokerage transactions and transactions in which the broker
solicits purchases;
(f)
privately
negotiated transactions;
(h)
through
the writing of options on the securities, whether or not the
options are listed on an option exchange;
(i)
through
the distribution of the securities by any selling stockholder to
its partners, members or stockholders;
(j)
one
or more underwritten offerings on a firm commitment or best efforts
basis; or
(k)
any
combination of any of these methods of sale.
The selling
stockholders may also transfer the securities by gift. We do not
know of any arrangements by the selling stockholders for the sale
of any of the securities. The selling stockholders may engage
brokers and dealers, and any brokers or dealers may arrange for
other brokers or dealers to participate in effecting sales of the
securities. These brokers, dealers or underwriters may act as
principals, or as an agent of a selling stockholder. Broker-dealers
may agree with a selling stockholder to sell a specified number of
the securities at a stipulated price per security. If the
broker-dealer is unable to sell securities acting as agent for a
selling stockholder, it may purchase as principal any unsold
securities at the stipulated price. Broker-dealers who acquire
securities as principals may thereafter resell the securities from
time to time in transactions in any stock exchange or automated
interdealer quotation system on which the securities are then
listed, at prices and on terms then prevailing at the time of sale,
at prices related to the then-current market price or in negotiated
transactions. Broker-dealers may use block transactions and sales
to and through broker-dealers, including transactions of the nature
described above. The selling stockholders may also sell the
securities in accordance with Rule 144 under the Securities Act of
1933, as amended, rather than pursuant to this prospectus,
regardless of whether the securities are covered by this
prospectus.
From time to time,
one or more of the selling stockholders may pledge, hypothecate or
grant a security interest in some or all of the securities owned by
them. The pledgees, secured parties or persons to whom the
securities have been hypothecated will, upon foreclosure in the
event of default, be deemed to be selling stockholders. The number
of a selling stockholder’s securities offered under this
prospectus will decrease as and when it takes such actions. The
plan of distribution for that selling stockholder’s
securities will otherwise remain unchanged. In addition, a selling
stockholder may, from time to time, sell the securities short, and,
in those instances, this prospectus may be delivered in connection
with the short sales and the securities offered under this
prospectus may be used to cover short sales.
To the extent
required under the Securities Act of 1933, the aggregate amount of
selling stockholders’ securities being offered and the terms
of the offering, the names of any agents, brokers, dealers or
underwriters and any applicable commission with respect to a
particular offer will be set forth in an accompanying prospectus
supplement. Any underwriters, dealers, brokers or agents
participating in the distribution of the securities may receive
compensation in the form of underwriting discounts, concessions,
commissions or fees from a selling stockholder and/or purchasers of
selling stockholders’ securities of securities, for whom they
may act (which compensation as to a particular broker-dealer might
be in excess of customary commissions).
The selling
stockholders and any underwriters, brokers, dealers or agents that
participate in the distribution of the securities may be deemed to
be “underwriters” within the meaning of the Securities
Act of 1933, and any discounts, concessions, commissions or fees
received by them and any profit on the resale of the securities
sold by them may be deemed to be underwriting discounts and
commissions.
We have entered
into registration rights agreements for the benefit of the selling
stockholders to register the shares of Class B Common Stock under
applicable federal and state securities laws under specific
circumstances and at specific times. The registration rights
agreements provide for indemnification of the selling stockholders
against specific liabilities in connection with the offer and sale
of the shares of Class B Common Stock, including liabilities under
the Securities Act of 1933.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” information
into this prospectus, which means that we can disclose important
information about us by referring to another document filed
separately with the SEC. The information incorporated by reference
is considered to be a part of this prospectus. This prospectus
incorporates by reference the documents and reports listed below
other than portions of these documents that are furnished under
Item 2.02 or Item 7.01 of a Current Report on Form
8–K:
●
The Annual Report
on Form 10–K for the fiscal year ended December 31, 2018,
filed on April 1, 2019, 2019;
●
Our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2019, filed
with the SEC on May 15, 2019;
●
The Current Reports
on Form 8–K filed on January 14, 2019 (Form 8-K/A), January
28, 2019, February 4, 2019, February 6, 2019, February 7, 2019,
February 11, 2019, May 9, 2019, May 10, 2019, May 15, 2019 and May
22, 2019; and
●
The description of
the Company’s common stock contained in the Company’s
Registration Statement on Form 8-A, filed with the SEC on October
18, 2017.
In
addition, all documents subsequently filed by us pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, shall be
deemed to be incorporated by reference in this prospectus and to be
a part hereof from the date of filing of such documents. In
addition, all reports and other documents filed by us pursuant to
the Exchange Act after the date of the initial registration
statement and prior to effectiveness of the registration statement
shall be deemed to be incorporated by reference into this
prospectus. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this prospectus to the
extent that a statement contained herein or in any subsequently
filed document that also is or is deemed to be incorporated by
reference herein, as the case may be, modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this prospectus.
We
will provide, without charge, to any person, including any
beneficial owner, to whom a copy of this prospectus is delivered,
upon oral or written request of such person, a copy of any or all
of the documents that have been incorporated by reference in this
prospectus but not delivered with the prospectus, including any
exhibits to such documents that are specifically incorporated by
reference in those documents.
Please
make your request by writing or telephoning us at the following
address or telephone number:
RumbleOn,
Inc.
1350
Lakeshore Drive, Suite 160
Coppell,
Texas 75019
Attention:
Investor Relations
Tel:
(469) 250-1185
WHERE
YOU CAN FIND MORE INFORMATION
We are currently subject to the information
requirements of the Exchange Act and in accordance therewith file
periodic reports, proxy statements and other information with the
Securities and Exchange Commission. Our SEC filings will also be
available to you on the SEC’s website at
htt
p://www.sec.gov
.
We have filed with the SEC a
registration statement on Form S–3 under the Securities Act
for the shares of Class B Common Stock being offered by the selling
stockholders. This prospectus does not contain all of the
information in the registration statement and the exhibits and
schedules that were filed with the registration statement. For
further information with respect to us and our common stock, we
refer you to the registration statement and the exhibits that were
filed with the registration statement. Anyone may obtain the
registration statement and its exhibits and schedules from the SEC
as described above.
LEGAL
MATTERS
The
validity of the shares of Class B Common Stock offered through this
prospectus has been passed on by Akerman LLP, Fort Lauderdale,
Florida.
EXPERTS
The
consolidated financial statements and schedule of RumbleOn, Inc. as
of December 31, 2018 and December 31, 2017 and for the years then
ended incorporated by reference in this prospectus have been so
incorporated in reliance on the report of Scharf Pera & Co.,
PLLC, an independent registered public accounting firm,
incorporated herein by reference, given on the authority of said
firm as experts in auditing and accounting.
The
combined financial statements of Wholesale, Inc., which comprise
the combined balance sheets as of December 31, 2017, 2016, and 2015
and the related combined statements of income, stockholder’s
equity, and cash flows for the years then ended, and the related
notes to the combined financial statements incorporated by
reference in this prospectus have been so incorporated in reliance
on the report of Henderson, Hutcherson & McCullough, PLLC, an
independent registered public accounting firm, incorporated herein
by reference, given on the authority of said firm as experts in
auditing and accounting.
The
financial statements of Wholesale Express, LLC, which comprise the
balance sheets as of December 31, 2017 and 2016, and the related
statements of income and member’s equity, and cash flows for
the years then ended, and the related notes to the financial
statements incorporated by reference in this prospectus have been
so incorporated in reliance on the report of Henderson, Hutcherson
& McCullough, PLLC, an independent registered public accounting
firm, incorporated herein by reference, given on the authority of
said firm as experts in auditing and accounting.
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