PROSPECTUS
Filed
pursuant to Rule 424(b)(3)
Registration No.
333-223425
8,993,541 Shares of Class B Common Stock
218,250 Shares of Class B Common Stock underlying
Representatives’ Warrants
The selling stockholders may offer and
sell from time to time up to an aggregate of 8,993,541 shares of
RumbleOn, Inc. (the “Company”) Class B Common Stock
(“Class B Common Stock”). Also, the Company is
registering the issuance of 218,250 shares of Class B Common Stock
underlying outstanding warrants issued to the representatives of
the underwriters (the “Representatives’
Warrants”) in the Company’s October 2017 public
offering (the “2017 Public Offering”).
The
shares of Class B Common Stock that may be offered and sold by the
selling stockholders include 6,268,644 shares of Class B Common
Stock held by executive officers, directors and certain
stockholders of the Company, which shares are subject to a
contractual lock-up that expires on April 21, 2018. Subject to
certain limitations, including sales volume limitations with
respect to shares held by our affiliates, following April 21, 2018,
substantially all of our outstanding shares of common stock will
become eligible for sale.
For information concerning the selling
stockholders and the manner in which they may offer and sell shares
of our Class B Common Stock, see “Selling Stockholders”
and “Plan of Distribution” in this
prospectus.
We are not selling any securities under this prospectus and we will
not receive any proceeds from the sale by the selling stockholders
of their shares of Class B Common Stock.
Our Class B Common Stock trades on the NASDAQ Capital Market
(“NASDAQ”) under the trading symbol "RMBL". On March
13, 2018, the last reported sales price of our Class B Common Stock
on the NASDAQ was $4.62 per share.
-------------------------------------
Investing in the shares involves risks. See “Risk
Factors,” beginning on page 4.
You should rely only on the information contained in this
prospectus. We have not authorized any dealer, salesperson or other
person to provide you with information concerning us, except for
the information contained in this prospectus. The information
contained in this prospectus is complete and accurate only as of
the date on the front cover page of this prospectus, regardless of
the time of delivery of this prospectus or the sale of any common
stock. This prospectus is not an offer to sell these securities and
we are not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is March 14, 2018
TABLE OF CONTENTS
Page
ABOUT THIS
PROSPECTUS
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ii
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PROSPECTUS
SUMMARY
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1
|
THE
OFFERING
|
3
|
RISK
FACTORS
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4
|
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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7
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USE OF
PROCEEDS
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9
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SELLING
STOCKHOLDERS
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10
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PLAN OF
DISTRIBUTION
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12
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INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE
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14
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WHERE YOU CAN FIND
MORE INFORMATION
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15
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LEGAL
MATTERS
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16
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EXPERTS
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17
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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.
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.,
operates a
capital light disruptive e-commerce platform facilitating the
ability of both consumers and dealers to Buy-Sell-Trade-Finance
pre-owned vehicles in one online location. Our goal is to transform
the way pre-owned vehicles are bought and sold by providing users
with the most efficient, timely and transparent transaction
experience. Our initial focus is the market for vin specific
pre-owned vehicles with an initial emphasis on motorcycles and
other powersports.
Serving both
consumers and dealers, through our online marketplace platform, we
make cash offers for the purchase of pre-owned vehicles. In
addition, we offer a large inventory of pre-owned vehicles for sale
along with third-party financing and associated products. Our
operations are designed to be scalable by working through an
infrastructure and capital light model that is achievable by virtue
of a synergistic relationship with our regional partners,
consisting of dealers and auctions. We utilize regional partners in
the acquisition of pre-owned vehicles as well as to provide
inspection, reconditioning and distribution services.
Correspondingly, we earn fees and transaction income, while our
regional partners earn incremental revenue and enhance
profitability through increased sales and fees from inspection,
reconditioning and distribution programs.
Our
business model is driven by a technology platform we acquired in
February 2017, through our acquisition of substantially all of the
assets of NextGen Dealer Solutions, LLC (“NextGen”).
The acquired system provides integrated vehicle appraisal,
inventory management, customer relationship and lead management,
equity mining, and other key services necessary to drive the online
marketplace. Over the past 16 years, the developers of the software
have designed and built, for large multi-national clients, a number
of dealer and, what we believe to be, high quality applications
solutions.
Our
business combines a comprehensive online buying and selling
experience with a vertically-integrated supply chain solution that
allows us to buy and sell high quality vehicles to and from
consumers and dealers transparently and efficiently at a
value-oriented price. Using our website or mobile application,
consumers and dealers can complete all phases of a pre-owned
vehicle transaction. Our online buying and selling experience
allows consumers to:
●
Sell us a
vehicle.
We address the lack of liquidity available in
the market for a cash sale of a vehicle by consumers and dealers
through our cash offer to buy program. Dealers and consumers can
sell us a vehicle independent of a purchase. Using our free and
simple appraisal tool, consumers and dealers can receive a
haggle-free, guaranteed 3-day firm cash offer for their pre-owned
vehicle within minutes and, if accepted, receive prompt payment.
Our cash offer to buy is based on the use of extensive pre-owned
retail and wholesale vehicle market data. When a consumer accepts
our offer, we ship their vehicles to our closest regional partner
where the vehicle is inspected, reconditioned and prepared for
pending sale. We believe buying pre-owned vehicles directly
from consumers is the primary driver of our source of supply for
sale and a key to our ability to offer competitive pricing to
buyers. By being one of the few online sources for consumers to
receive cash for their vehicle, we have a significant opportunity
to buy product at a lower cost since dealer and auction markup is
eliminated from these consumer purchases. In addition, we believe
our willingness to provide cash offers and purchase a
customer’s vehicle sight unseen, whether or not the customer
is buying a vehicle from us, provides a competitive sourcing
advantage for vehicles.
●
Purchase a pre-owned
vehicle.
Our 100% online marketplace approach to retail
consumer and dealer distribution addresses the many issues
currently facing the consumer and dealer distribution marketplace
for pre-owned vehicles, a marketplace we believe is primed for a
disruptive change. We believe the issues facing the marketplace
include: (i) heavy use of inefficient listing sites,
(ii) a highly fragmented dealer network; (iii) a limited
selection of high quality pre-owned vehicles for sale;
(iv) negative consumer perception of the current buying
experience; and (v) a massive consumer shift to online retail.
We offer consumers and dealers a large selection of pre-owned
vehicles at a value-oriented price that can be purchased in a
seamless transaction in minutes. In addition to a transparent
buying experience, our no haggle pricing, coupled with an
inspected, reconditioned and certified vehicle, backed by a
fender-to-fender warranty and a 3-day money back guarantee,
addresses consumer dissatisfaction with the current buying
processes in the marketplace. As of December 31, 2017, including
vehicles of our dealer partners, we have 751
pre-owned vehicles listed for sale on our website, where
consumers can select and purchase a vehicle, including arranging
financing, directly from their desktop or mobile device. Selling
pre-owned vehicles to consumers and dealers is the key driver of
o
|
●
Finance a
purchase.
Customers can pay for their vehicle using
cash or we will provide a range of finance options from unrelated
third parties such as banks or credit unions. Customers fill out a
short online application form, and, if approved, apply the
financing to their purchase.
●
Protect a
purchase.
Customers have the option to protect their
vehicle with unrelated third-party branded Extended Protection
Plans (“EPPs”) and vehicle appearance protection
products as part of our online checkout process. EPPs include
extended service plans which are designed to cover unexpected
expenses associated with mechanical breakdowns and guaranteed asset
protection, which is intended to cover the unpaid balance on a
vehicle loan in the event of a total loss of the vehicle or
unrecovered theft. Vehicle appearance protection includes products
aimed at maintaining vehicle appearance.
To enable a
seamless consumer and dealer experience, we are building a
vertically-integrated pre-owned vehicle supply chain marketplace,
supported by proprietary software systems and data which include
the following attributes:
●
Vehicle sourcing and
acquisition.
We acquire virtually all of our pre-owned
vehicle inventory directly from consumers and dealers. Using
pre-owned retail and wholesale vehicle market data obtained from a
variety of internal and external data sources, we evaluate a
significant number of vehicles daily to determine their fit with
consumer demand, internal profitability targets and our existing
inventory mix. The supply of pre-owned vehicles is influenced by a
variety of factors, including: the total number of vehicles in
operation; the rate of new vehicle sales, which in turn generate
pre-owned vehicles; and the number of pre-owned vehicles sold or
remarketed through our consumer and dealer channels. Based on the
large number of vehicles remarketed each year, consumer acceptance
of our cash offer to buy, and the large size of the United States
market relative to our needs, we believe that sources of pre-owned
vehicles will continue to be sufficient to meet our current and
future needs.
●
Inspection,
reconditioning and logistics.
After acquiring a
vehicle, we transport it to one of our closest regional partners
who are paid to perform an inspection and to recondition the
vehicle to meet “RumbleOn Certified” standards. High
quality photographs are then taken, the vehicle is listed for sale
on Rumbleon.com and the regional partner stores the vehicle pending
delivery to the buyer. This process is supported by a custom
pre-owned vehicle inventory management system, which tracks
vehicles through each stage of the inspection, reconditioning and
logistic process. The ability to leverage and provide a high margin
source of incremental revenue to the existing network of regional
partners in return for providing inspection, reconditioning,
logistics and distribution support reduces our need for any
significant investment in retail or reconditioning
facilities.
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 4521 Sharon Road, Suite 370, Charlotte, North Carolina
28211 and our telephone number is (704) 448-5240. 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.
You may also read and copy any materials we file with the SEC at
the SEC’s Public Reference Room at 100 F Street, NE,
Washington, DC 20549. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet website located at
www.sec.gov
that contains the information we file or furnish electronically
with the SEC.
|
THE
OFFERING
|
|
|
|
|
Class B Common
Stock outstanding prior to the offering:
|
|
11,928,541
shares
|
|
|
Class B Common
Stock to be issued upon exercise of the Representatives’
Warrants:
|
|
218,250
shares
|
|
|
Class B Common
Stock to be offered by the selling stockholders:
|
|
8,993,541
shares
(1)
|
|
|
Class B Common
Stock outstanding immediately following the offering:
|
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12,146,791
shares
(1)
|
|
|
Use of
proceeds:
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|
We will not receive
any proceeds from the sale of the shares of common stock by the
selling stockholders but will receive proceeds from the exercise of
the Representatives’ Warrants if the Representatives’
Warrants are exercised, which proceeds will be used for working
capital and other general corporate purposes. See “Use of
Proceeds.”
|
|
|
Risk
Factors:
|
|
See “Risk
Factors” beginning on page 4 of this prospectus for a
discussion of factors you should carefully consider before deciding
to invest in shares of our Class B Common Stock.
|
|
|
Stock
Symbol:
|
|
NASDAQ:
RMBL
|
(1)
|
The number of
shares of Class B Common Stock to be outstanding after this
offering is based on 11,928,541 shares of Class B Common Stock
outstanding as of March 13, 2018, and assumes the exercise of the
Representatives’ Warrants but excludes:
|
●
741,000
shares of Class B Common Stock underlying awards of restricted
stock units (“RSUs”);
●
690,424
shares of Class B Common Stock reserved for issuance under our 2017
Stock Incentive Plan.
RISK FACTORS
An investment in our common stock involves a high degree of risk.
Before deciding whether to invest in our common stock, you should
consider carefully the risks described below and discussed under
the section captioned “Risk Factors” in our most recent
Annual Report on Form 10-K, which is incorporated by reference in
this prospectus in its entirety, as well as any amendment or update
to our risk factors reflected in subsequent filings with the SEC,
together with other information in this prospectus and the
information and documents incorporated by reference that we have
authorized for use in connection with this offering. If any of
these risks actually occur, our business, financial condition,
results of operations or cash flows could be seriously harmed. This
could cause the trading price of our common stock to decline,
resulting in a loss of all or part of your investment.
Risks
Related to Ownership of our Common Stock
The trading price for our Class B
Common Stock may be volatile and could be subject to wide
fluctuations in per share price.
Our Class B Common
Stock is listed for trading on
The
NASDAQ Capital Market under
the trading symbol
“RMBL,” however historically there has been a limited
public market for our Class B Common Stock. The liquidity of any
market for the shares of our Class B Common Stock will depend on a
number of factors, including:
●
the number of
stockholders;
●
our operating
performance and financial condition;
●
the market for
similar securities;
●
the extent of
coverage of us by securities or industry analysts; and
●
the interest of
securities dealers in making a market in the shares of our common
stock.
The market price
for
our Class B Common Stock may be
highly volatile and could be subject to wide fluctuations. In
addition, the price of shares of our Class B Common Stock could
decline significantly if our future operating results fail to meet
or exceed the expectations of market analysts and investors and
actual or anticipated variations in our quarterly operating results
could negatively affect our share price.
Other factors may also contribute to volatility of the price of our
Class B Common Stock and could subject our Class B Common Stock to
wide fluctuations. These include, but are not limited
to:
●
developments in the financial markets and worldwide or regional
economies;
●
announcements of innovations or new products or services by us or
our competitors;
●
announcements by the government relating to regulations that govern
our industry;
●
significant sales of our Class B Common Stock or other securities
in the open market;
●
variations in interest rates;
●
changes in the market valuations of other comparable companies;
and
●
changes in accounting principles
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.
O
ur executive officers and directors as a group
beneficially own shares of our Class A Common Stock and Class B
Common Stock representing approximately 74.5% in aggregate of our
voting power, including
approximately 62.5
%
in aggregate voting power held by Messrs. Chesrown
and Berrard as the only holders of our 1,000,000 outstanding shares
of our Class A Common Stock, which has ten votes for each one share
outstanding. As a result, these stockholders have the ability to
determine all matters requiring stockholder approval. For example,
these stockholders are able to control elections of directors,
amendments of our organizational documents, approval of any merger,
sale of assets, or other major corporate transaction. This may
prevent or discourage unsolicited acquisition proposals or offers
for our common stock that you may believe are in your best interest
as a stockholder or to take other action that you may believe are
not in your best interest as a stockholder. This may also adversely
affect the market price of our Class B Common
Stock.
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.
The trading market
for our Class B Common Stock may be influenced by the research and
reports that industry or securities analysts publish about us or
our business. If any of the analysts who cover us issue an adverse
or misleading opinion regarding us, our business model, our
intellectual property or our stock performance, or if our operating
results fail to meet the expectations of analysts, our stock price
would likely decline. If one or more of these analysts cease
coverage of us or fail to publish reports on us regularly, we could
lose visibility in the financial markets, which in turn could cause
our stock price or trading volume to 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.
When the trading
price of our Class B Common Stock is $5.00 per share or lower, it
is deemed a penny stock, as defined in Rule 3a51-1 under the
Exchange Act, and subject to the penny stock rules of the Exchange
Act specified in rules 15g-1 through 15g-10. Those rules require
broker-dealers, before effecting transactions in any penny stock,
to:
●
deliver to the
customer, and obtain a written receipt for, a disclosure
document;
●
disclose certain
price information about the stock;
●
disclose the amount
of compensation received by the broker-dealer or any associated
person of the broker-dealer;
●
send monthly
statements to customers with market and price information about the
penny stock; and
●
in some
circumstances, approve the purchaser’s account under certain
standards and deliver written statements to the customer with
information specified in the rules.
Consequently, if
our Class B Common Stock is $5.00 per share price or lower, the
penny stock rules may restrict the ability or willingness of
broker-dealers to sell the Class B Common Stock and may affect the
ability of holders to sell their Class B Common Stock in the
secondary market and the price at which such holders can sell any
such securities. These additional procedures could also limit our
ability to raise additional capital in the future.
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.
Sales of a
substantial number of shares of our Class B Common Stock in the
public market or the perception that these sales might occur, could
depress the market price of our Class B Common Stock and could
impair our ability to raise capital through the sale of additional
equity securities. We are unable to predict the effect that sales
may have on the prevailing market price of our Class B Common
Stock.
On February 8,
2017, our executive officers, directors, and certain stockholders
entered into an Amended and Restated Stockholders Agreement (the
“Stockholders Agreement”), restricting the
stockholders’ ability to transfer shares of our common stock
through the earlier of (i) October 19, 2017, or (ii) the
date on which we receive at least $3,500,000 in proceeds of any
equity financing, subject to certain exceptions. Approximately 7.3
million shares of our Class B Common Stock were subject to these
restrictions. In addition to the Stockholders Agreement, our
executive officers, directors and certain stockholders entered into
lock-up agreements, which restricted the sale of our common stock
by such parties through December 31, 2017. Approximately 7.1
million shares of our Class B Common Stock were subject to
these lock-up agreements. In addition, approximately 6.3 million
shares of our Class B Common Stock are currently subject to a
contractual lock-up through April 21, 2018 with the underwriters of
the 2017 Public Offering. Subject to certain limitations, including
sales volume limitations with respect to shares held by our
affiliates, following April 21, 2018, substantially all of our
outstanding shares of common stock will become eligible
for sale. Sales of stock by the stockholders currently subject
to these lock-ups could have a material adverse effect on the
trading price of our common stock.
We do not currently or for the foreseeable future intend to pay
dividends on our common stock.
We have never
declared or paid any cash dividends on our common stock. We
currently do not intend to pay cash dividends in the foreseeable
future on the shares of common stock. We intend to reinvest any
earning in development and expansion of our business. As a result,
any return on your investment in our common stock will be limited
to the appreciation in the price of our common stock, if
any.
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.
We are an
“emerging growth company,” as defined in the Jumpstart
Our Business Startups Act of 2012 (“JOBS Act”), and we
may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are
not “emerging growth companies” including, but not
limited to, not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in
our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive
compensation and shareholder approval of any golden parachute
payments not previously approved. We cannot predict if investors
will find our common stock less attractive because we may rely on
these exemptions. If some investors find our common stock less
attractive as a result, there may be a less active trading market
for our common stock and our stock price may be more
volatile.
We will remain an
“emerging growth company” for up to five years,
although we will lose that status sooner if our revenue exceeds $1
billion, if we issue more than $1 billion in non-convertible debt
in a three-year period, or if the market value of our common stock
that is held by non-affiliates exceeds $700 million.
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.”
Many of the
exemptions available for emerging growth companies are also
available to smaller reporting companies like us that have less
than $75 million of worldwide common equity held by non-affiliates.
So, although we may no longer qualify as an emerging growth
company, we may still be subject to reduced reporting
requirements.
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.
Effective internal
controls over financial reporting are necessary for us to provide
reliable financial reports and, together with adequate disclosure
controls and procedures, are designed to prevent fraud. Any failure
to implement required new or improved controls, or difficulties
encountered in their implementation could cause us to fail to meet
our reporting obligations. In addition, any testing by us conducted
in connection with Section 404 of the Sarbanes-Oxley Act, or
any subsequent testing by our independent registered public
accounting firm, may reveal deficiencies in our internal controls
over financial reporting that are deemed to be material weaknesses
or that may require prospective or retroactive changes to our
financial statements or identify other areas for further attention
or improvement. Inferior internal controls could also cause
investors to lose confidence in our reported financial information,
which could have a negative effect on the trading price of our
common stock.
We are required to
disclose changes made in our internal controls and procedures on a
quarterly basis and our management will be required to assess the
effectiveness of these controls annually. However, for as long as
we are an “emerging growth company” under the JOBS Act,
our independent registered public accounting firm will not be
required to attest to the effectiveness of our internal controls
over financial reporting pursuant to Section 404. We could be
an “emerging growth company” for up to five years. An
independent assessment of the effectiveness of our internal
controls could detect problems that our management’s
assessment might not. Undetected material weaknesses in our
internal controls could lead to financial statement restatements
and require us to incur the expense of remediation.
Anti-takeover provisions may limit the ability of another party to
acquire us, which could cause our stock price to
decline.
Nevada law and our charter, bylaws, and other governing documents
contain provisions that could discourage, delay or prevent a third
party from acquiring us, even if doing so may be beneficial to our
stockholders, which could cause our stock price to decline. In
addition, these provisions could limit the price investors would be
willing to pay in the future for shares of our common
stock.
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 prospectus, 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 prospectus 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. 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 dealer
network;
●
We rely on Internet
search engines and social media 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 dealers as well as adversely affect the timeliness of such
information and may impair our ability to attract or retain
consumers and our dealers and to timely invoice all
parties;
●
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;
●
If we are unable to
provide a compelling recreation 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;
●
The growth of our
business relies significantly on our ability to increase the number
of dealers and regional auctions in our network such that we are
able to increase the number of transactions between our users,
dealers and auctions. 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/recreational vehicles may be adversely impacted by
increased supply of and/or declining prices for pre-owned
powersports and recreational vehicles and excess supply of new
powersports and recreational 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;
●
Results of
operations from quarter to quarter may be volatile as a result of
the impact of fluctuations in the fair value of our outstanding
warrants;
●
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;
●
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
●
as well as other
statements regarding our future operations, financial condition and
prospects, and business strategies.
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 prospectus,
and in particular, the risks discussed under the caption
“Risk Factors” and those discussed in other documents
we file with the Securities and Exchange Commission (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 common stock by the
selling stockholders but will receive proceeds from the exercise of
the Representatives’ Warrants if the Representatives’
Warrants are exercised, which proceeds will be used for working
capital and other general corporate purposes.
SELLING STOCKHOLDERS
The selling
stockholders may offer from time to time up to an aggregate of
8,993,541 shares of
RumbleOn, Inc. Class B Common Stock
. On February 8, 2017,
our executive officers, directors, and certain stockholders entered
into the Stockholders Agreement, restricting the
stockholders’ ability to transfer shares of our common stock
through the earlier of (i) October 19, 2017, or (ii) the
date on which we receive at least $3,500,000 in proceeds of any
equity financing, subject to certain exceptions. Approximately 7.3
million shares of our Class B Common Stock were subject to these
restrictions. In addition to the Stockholders Agreement, our
executive officers, directors and certain stockholders entered into
lock-up agreements, which restricted the sale of our common stock
by such parties through December 31, 2017. Approximately 7.1
million shares of our Class B Common Stock were subject to
these lock-up agreements. In addition, approximately 6.3 million
shares of our Class B Common Stock are currently subject to a
contractual lock-up through April 21, 2018 with the underwriters of
the 2017 Public Offering. Subject to certain limitations, including
sales volume limitations with respect to shares held by our
affiliates, following April 21, 2018, substantially all of our
outstanding shares of common stock will become eligible
for sale.
Except as otherwise
provided, the following table sets forth certain information with
respect to the beneficial ownership of our Class B Common Stock
including the names of the selling stockholders, the number of
shares of our Class B Common Stock owned beneficially by the
selling stockholders as of March 13, 2018 the number of shares of
Class B Common Stock being offered by each selling stockholder
hereby, and the number and percentage of shares of Class B Common
Stock that will be owned by each selling stockholder following the
completion of this offering. The table has been prepared based upon
a review of information furnished to us by or on behalf of the
selling stockholders.
Name of Selling
Stockholder
|
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
|
Beverly
Rath
|
50,000
|
50,000
|
--
|
--
|
Denmar Dixon
(1)
|
1,002,179
*
|
962,179
*
|
40,000
*
|
--
|
Cameron M.
Harris
|
25,000
|
25,000
|
--
|
--
|
Chris and Samantha
Carabell JTWROS
|
6,250
|
6,250
|
--
|
--
|
Dale
Owens
|
6,250
|
6,250
|
--
|
--
|
David Alan
Duncan
|
25,000
|
25,000
|
--
|
--
|
David
Aucamp
|
12,500
|
12,500
|
--
|
--
|
George
Kovacs
|
50,000
|
50,000
|
--
|
--
|
Heather J. Larsen
(2)
|
12,500
|
12,500
|
--
|
--
|
Jack
Lynn
|
15,000
|
15,000
|
--
|
--
|
James
Bird
|
10,000
|
10,000
|
--
|
--
|
James
Dillon
|
25,000
|
25,000
|
--
|
--
|
Jason and Anissa
Larsen JTWROS
|
6,250
|
6,250
|
--
|
--
|
Jay
Goodart
|
268,750
|
268,750
|
--
|
--
|
Jeff Cheek
(3)
|
262,500
|
262,500
|
--
|
--
|
Jeffrey Larson
(4)
|
21,250
|
21,250
|
--
|
--
|
Jon T.
Goodart
|
5,000
|
5,000
|
--
|
--
|
Kartik Kakarala
(5)
|
1,523,809
*
|
1,523,809
*
|
--
|
--
|
Kevin
Westfall
|
12,500
*
|
12,500
*
|
--
|
--
|
Klaire Odumody
Taylor
|
3,750
|
3,750
|
--
|
--
|
Lori Sue
Chesrown
|
458,204
|
458,204
|
--
|
--
|
Mango Mist,
Inc.
|
8,750
|
8,750
|
--
|
--
|
Marshall
Chesrown
|
1,742,156
*
|
1,737,656
*
|
4,500
*
|
--
|
Marvin
Neuman
|
25,000
|
25,000
|
--
|
--
|
Michael
Cook
|
8,750
|
8,750
|
--
|
--
|
Matthew Galliano
(6)
|
12,500
|
12,500
|
--
|
--
|
Pierce Family
Trust
|
37,500
*
|
37,500
*
|
--
|
--
|
Ralph
Wegis
|
891,537
|
891,537
|
--
|
--
|
Richard A. Gray
Jr.
|
25,000
*
|
25,000
*
|
--
|
--
|
Robert Thigpen,
Jr.
|
25,000
|
25,000
|
--
|
--
|
Shawn B.
Welch
|
25,000
|
25,000
|
--
|
--
|
Special Trust FBO
Daniel L. Grubb
|
12,500
|
12,500
|
--
|
--
|
Steven
Hatleman
|
3,750
|
3,750
|
--
|
--
|
Steven R. Berrard
(7)
|
1,970,000
*
|
1,970,000
*
|
--
|
--
|
The Just B
Irrevocable Trust
|
37,500
|
37,500
|
--
|
--
|
Tim
Duplantis
|
12,500
|
12,500
|
--
|
--
|
Tim J.
Setnicka
|
37,500
|
37,500
|
--
|
--
|
Tin Roof,
Inc.
|
8,750
|
8,750
|
--
|
--
|
Tom
Aucamp
|
287,656
|
287,656
|
--
|
--
|
Tom
Byrne
|
65,000
|
65,000
|
--
|
--
|
*
Represents shares
that are subject to a contractual lock-up restricting their resale
through April 21, 2018.
(1)
Shares are held by
Blue Flame Capital, LLC, an entity controlled by Mr. Dixon.
Excludes 28,000 shares held directly by Mr. Dixon, 250 shares held
by Mr. Dixon’s son and 7,750 shares held by Mr. Dixon's
spouse.
(2)
Shares are held by
Mainstar Trust, Custodian (“Mainstar”), for the benefit
of Ms. Larsen.
(3)
12,500 shares are
held by Mainstar for the benefit of Mr. Cheek.
(4)
Shares are held by
Fidelity Management Trust Company, for the benefit of Mr.
Larson.
(5)
Shares are held by
Halcyon Consulting, LLC, an entity controlled by Mr. Kakarala ad
his brother.
(6)
Shares are held by
Mainstar for the benefit of Mr. Galliano.
(7)
Shares are held by
Berrard Holdings Limited Partnership, an entity controlled by Mr.
Berrard.
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:
●
Marshall Chesrown
serves as Chair of the Company’s Board of Directors and as
Chief Executive Officer of the Company.
●
Steven R. Berrard
serves as a Director and as Chief Financial Officer and Secretary
of the Company.
●
Kartik Kakarala
serves as a Director of the Company.
●
Kevin Westfall
serves as a Director of the Company.
●
Mitch Pierce,
trustee of Pierce Family Trust, serves as a Director of the
Company.
●
Denmar Dixon, who
serves as a Director of the Company, is the founder of Blue Flame
Capital, LLC.
●
Richard Gray serves
as a Director of the Company.
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. 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)
purchases by a
broker or dealer as principal and resale by the broker or dealer
for its own account pursuant to this prospectus;
(c)
an exchange
distribution in accordance with the rules of any stock exchange on
which the securities are listed;
(d)
ordinary brokerage
transactions and transactions in which the broker solicits
purchases;
(e)
privately
negotiated transactions;
(g)
through the writing
of options on the securities, whether or not the options are listed
on an option exchange;
(h)
through the
distribution of the securities by any selling stockholder to its
partners, members or stockholders;
(i)
one or more
underwritten offerings on a firm commitment or best efforts basis;
or
(j)
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.
Representatives'
Warrants and Advisory Fees
Upon closing of the
2017 Public Offering on October 19, 2017, we issued the
Representatives’ Warrants to the representatives of the
underwriters, and their affiliates, as compensation warrants to
purchase a number of shares of Class B Common Stock equal to 7.5%
of the aggregate number of shares of Class B Common Stock sold in
the 2017 Public Offering, representing an aggregate of 218,250
shares of Class B Common Stock. The Representatives' Warrants are
exercisable at a per share exercise price equal to 115% of the
public offering price per share of the shares of Class B Common
Stock sold in the 2017 Public Offering, resulting in an exercise
price of $6.325 per share. The Representatives' Warrants are
exercisable at any time and from time to time, in whole or in part,
during the four-year period commencing one year from the effective
date of the registration statement related to the Public Offering,
which was October 18, 2017.
The
Representatives' Warrants and the shares of Class B Common Stock
underlying the Representatives' Warrants have been deemed
compensation by FINRA and are, therefore, subject to a 180-day
lock-up pursuant to FINRA Rule 5110(g)(1). The representative, or
permitted assignees under such rule, may not sell, transfer,
assign, pledge, or hypothecate the Representatives' Warrants or the
securities underlying the Representatives' Warrants, nor will the
representative engage in any hedging, short sale, derivative, put,
or call transaction that would result in the effective economic
disposition of the Representatives' Warrants or the underlying
shares of Class B Common Stock for a period of 180 days from the
effective date of the registration statement. Additionally, the
Representatives' Warrants may not be sold transferred, assigned,
pledged or hypothecated for a 180-day period following the
effective date of the registration statement except to any
underwriter and selected dealer participating in the offering and
their bona fide officers or partners. The Representatives' Warrants
provide for adjustment in the number and price of the
Representatives' Warrants and the shares of Class B Common Stock
underlying such Representatives' Warrants in the event of
recapitalization, merger, stock split or other structural
transaction, or a future financing undertaken by us.
Upon the closing of
the 2017 Public Offering, we have also agreed to pay Roth Capital
Partners, LLC as compensation a one-time advisory fee in the amount
of $150,000
.
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, 2017, filed on February 27, 2018;
●
The Current Report on Form 8–K filed on February 23, 2018;
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. 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.
4521 Sharon Road, Suite 370
Charlotte, North Carolina 28211
Attention: Investor Relations
Tel: (704) 448-5240
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. You
may read and copy (at prescribed rates) any such reports, proxy
statements and other information at the SEC’s Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on
the operation of the public reference room. Our SEC filings will
also be available to you on the SEC’s website at
http://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.
EXPERTS
The consolidated financial statements and schedule of RumbleOn,
Inc. (formerly Smart Server, Inc.) as of December 31, 2017 and
December 31, 2016 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.
8,993,541 Shares of Class B Common
Stock
218,250 Shares of Class B Common Stock
underlying Representatives' Warrants
PROSPECTUS
March 14, 2018
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