PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED MAY 20,
2019
PRELIMINARY PROSPECTUS
2,050,000 Shares of Class B Common Stock
9,573 Shares of Class B Common Stock underlying
Warrants
390,358 Shares of Class B Common Stock underlying the Autosport
Notes
The selling stockholders may offer and sell from time to time up to
an aggregate of 2,449,931 shares of RumbleOn, Inc. (the
“Company”) Class B Common Stock (“Class B Common
Stock”), including (i) up to 1,900,000 shares of Class B
Common Stock that are outstanding, (ii) up to 150,000 shares of
Class B Common Stock that are issuable pursuant to the earnout
provisions of the Stock Purchase Agreement for the Autosport
acquisition (as described in this prospectus), (iii) up to 9,573
shares of Class B Common Stock underlying an outstanding warrants
issued to Hercules Capital, Inc. (524 shares are exercisable at
$5.4648 per share and 9,049 shares are exercisable at $5.00 per
share) (the “Warrants”), and (iv) up to 390,358 shares
of Class B Common Stock underlying three convertible promissory
notes issued in connection with the Autosport acquisition (the
"Autosport Notes") (described in this prospectus). 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 May 17, 2019, the last reported sales price of our Class B
Common Stock on the NASDAQ was $4.94 per share.
---------------------------
Investing in the shares of Class B Common Stock involves risks. See
“Risk Factors,” beginning on page 5 and in any
documents we file with the Securities and Exchange Commission that
are incorporated by reference into this prospectus.
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 Class B
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
, 2019
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 17, 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, 2018;
●
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 and May 15, 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.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item
14.
Other Expenses of Issuance and
Distribution.
SEC registration
fee
|
$
1,463.88
|
Legal fees and
expenses
|
$
20,000
|
Accounting fees and
expenses
|
$
5,000
|
Miscellaneous
expenses
|
$
1,500
|
Total
|
$
27,963.88
|
_________________
All amounts are estimates, other than the SEC’s registration
fee.
We
are paying all expenses of the offering listed above. No portion of
these expenses will be borne by the selling stockholders. The
selling stockholders, however, will pay all underwriting discounts
and selling commissions, if any.
Item 15.
Indemnification of Directors and Officers.
No
director of RumbleOn will have personal liability to us or any of
our stockholders for monetary damages for breach of fiduciary duty
as a director involving any act or omission of any such director
since provisions have been made in our Articles of Incorporation
limiting such liability. The foregoing provisions shall not
eliminate or limit the liability of a director for:
●
any breach of the
director’s duty of loyalty to us or our
stockholders;
●
acts or omissions
not in good faith or, which involve intentional misconduct or a
knowing violation of law;
●
the payment of
dividends in violation of Section 78.300 of the Nevada Revised
Statutes; or
●
for any transaction
from which the director derived an improper personal
benefit.
We
are a corporation organized under the laws of the State of Nevada.
Section 78.138 of the Nevada Revised Statutes (“NRS”)
provides that, unless the corporation’s articles of
incorporation provide otherwise, a director or officer will not be
individually liable unless it is proven that (i) the
director’s or officer’s acts or omissions constituted a
breach of his or her fiduciary duties, and (ii) such breach
involved intentional misconduct, fraud, or a knowing violation of
the law.
Section
78.7502 of the NRS permits a company to indemnify its directors and
officers against expenses, judgments, fines, and amounts paid in
settlement actually and reasonably incurred in connection with a
threatened, pending, or completed action, suit, or proceeding, if
the officer or director (i) is not liable pursuant to NRS 78.138,
or (ii) acted in good faith and in a manner the officer or director
reasonably believed to be in or not opposed to the best interests
of the corporation and, if a criminal action or proceeding, had no
reasonable cause to believe the conduct of the officer or director
was unlawful. Section 78.7502 of the NRS requires a corporation to
indemnify a director or officer that has been successful on the
merits or otherwise in defense of any action or suit. Section
78.7502 of the NRS precludes indemnification by the corporation if
the officer or director has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals, to be liable to the
corporation or for amounts paid in settlement to the corporation,
unless and only to the extent that the court determines that in
view of all the circumstances, the person is fairly and reasonably
entitled to indemnity for such expenses and requires a corporation
to indemnify its officers and directors if they have been
successful on the merits or otherwise in defense of any claim,
issue, or matter resulting from their service as a director or
officer.
Section
78.751 of the NRS permits a Nevada company to indemnify its
officers and directors against expenses incurred by them in
defending a civil or criminal action, suit, or proceeding as they
are incurred and in advance of final disposition thereof, upon
determination by the stockholders, the disinterested board members,
or by independent legal counsel. If so provided in the
corporation’s articles of incorporation, bylaws, or other
agreement, Section 78.751 of the NRS requires a corporation to
advance expenses as incurred upon receipt of an undertaking by or
on behalf of the officer or director to repay the amount if it is
ultimately determined by a court of competent jurisdiction that
such officer or director is not entitled to be indemnified by the
company. Section 78.751 of the NRS further permits the company to
grant its directors and officers additional rights of
indemnification under its articles of incorporation, bylaws, or
other agreement.
Section
78.752 of the NRS provides that a Nevada company may purchase and
maintain insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee, or agent
of the company, or is or was serving at the request of the company
as a director, officer, employee, or agent of another company,
partnership, joint venture, trust, or other enterprise, for any
liability asserted against him and liability and expenses incurred
by him in his capacity as a director, officer, employee, or agent,
or arising out of his status as such, whether or not the company
has the authority to indemnify him against such liability and
expenses.
Article
VI of our amended Bylaws provide for indemnification of our
directors, officers, and employees in most cases for any liability
suffered by them or arising out of their activities as directors,
officers, and employees if they were not engaged in willful
misfeasance or malfeasance in the performance of his or her duties;
provided that in the event of a settlement the indemnification will
apply only when the Board of Directors approves such settlement and
reimbursement as being for our best interests. Our Bylaws,
therefore, limit the liability of directors to the maximum extent
permitted by Nevada law (Section 78.751).
Our
officers and directors are accountable to us as fiduciaries, which
means they are required to exercise good faith and fairness in all
dealings affecting RumbleOn. In the event a stockholder believes
the officers or directors have violated their fiduciary duties, the
stockholder may, subject to applicable rules of civil procedure, be
able to bring a class action or derivative suit to enforce the
stockholder’s rights, including rights under certain federal
and state securities laws and regulations to recover damages from
and require an accounting by management. Stockholders who have
suffered losses in connection with the purchase or sale of their
interest in RumbleOn in connection with such sale or purchase,
including the misapplication by any such officer or director of
proceeds from a sale of securities may be able to recover such
losses from us.
At
present, there is no pending litigation or proceeding involving any
of our directors or officers in which indemnification or
advancement is sought. We are not aware of any threatened
litigation that may result in claims for advancement or
indemnification.
We
have been advised that in the opinion of the SEC, insofar as
indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and other persons
pursuant to the foregoing provisions, or otherwise, such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. In the event a claim
for indemnification against such liabilities (other than payment of
expenses incurred or paid by a director or officer in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or other person in connection with the
securities being registered, we will, unless in the opinion of our
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of
whether such indemnification is against public policy as expressed
in the Securities Act and will be governed by the final
adjudication of such issue.
Item 16.
Exhibits.
Exhibit Number
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Exhibit Description
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Articles
of Incorporation filed on October 24, 2013 (Incorporated by
reference to Exhibit 3(i)(a) in the Company’s Registration
Statement on Form S-1/A, filed on March 20,
2014).
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Certificate
of Amendment to Articles of Incorporation, filed on February 13,
2017 (Incorporated by reference to Exhibit 3.3 in the
Company’s Annual Report on Form 10-K, filed on February 14,
2017).
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Certificate
of Amendment to Articles of Incorporation, filed on June 25, 2018.
(Incorporated by reference to Exhibit 3.1 in the Company’s
Current Report on Form 8-K, filed on June 28,
2018).
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Certificate of Designation for the
Series B Preferred Stock (Incorporated by reference to Exhibit
3.1 in the Company’s Current Report on Form 8-K, filed on
October 31, 2018).
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By-Laws, as Amended (Incorporated
by reference to Exhibit 3.2 in the Company’s Annual Report on
Form 10-K, filed on February 14, 2017).
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Warrant, dated April 30, 2018
(Incorporated by reference to Exhibit 4.1 in the Company's Current
Report on Form 8-K, filed on May 1,
2018).
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Warrant to Purchase Class B Common
Stock, dated October 30, 2018 (Incorporated by reference to Exhibit
4.1 in the Company’s Current Report on Form 8-K, filed on
October 31, 2018).
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Opinion
of Akerman LLP*
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Form of
Securities Purchase Agreement, dated May 9, 2019 (Incorporated by
reference to Exhibit 10.2 in the Company’s Current Report on
Form 8-K, filed on May 9, 2019).
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Consent
of Scharf Pera & Co., PLLC*
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Consent
of Henderson, Hutcherson & McCullough, PLLC. (Incorporated by
reference to Exhibit 23.1 in the Company’s Current Report on
Form 8-K/A, filed on January 14, 2019).
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Consent
of Henderson, Hutcherson & McCullough, PLLC. (Incorporated by
reference to Exhibit 23.2 in the Company’s Current Report on
Form 8-K/A, filed on January 14, 2019).
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23.4
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Consent
of Akerman LLP (included with Exhibit 5.1)*
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24.1
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Power
of Attorney (included with signature page on this Form
S-3)*
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* Filed
herewith
Item 17.
Undertakings.
The undersigned registrant hereby undertakes:
(a)(1)
To
file, during any period in which offers or sales are being made, a
post–effective amendment to this registration
statement:
(i)
To
include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii)
To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in the volume and price represent no
more than 20 percent change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee”
table in the effective registration statement;
(iii)
To
include any material information with respect to the plan of
distribution not previously disclosed in this registration
statement or any material change to such information in the
registration statement;
Provided, however, that:
paragraphs
(a)(1)(i), (a)(1)(ii), and (a)(1)(iii) of this section do not apply
if the registration statement is on Form S-3 or Form F-3 and the
information required to be included in a post–effective
amendment by those paragraphs is contained in reports filed with or
furnished to the Commission by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement, or is
contained in a form of prospectus filed pursuant to Rule 424(b)
that is part of the registration statement.
(2)
That, for the purpose of determining any liability
under the Securities Act of 1933, each such post–effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the
initial
bona fide
offering thereof.
(3)
To
remove from registration by means of a post–effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(4)
That,
for the purpose of determining liability under the Securities Act
of 1933 to any purchaser, each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other
than prospectuses filed in reliance on Rule 430A, shall be deemed
to be part of and included in the registration statement as of the
date it is first used after effectiveness. Provided, however, that
no statement made in a registration statement or prospectus that is
part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such
document immediately prior to such date of first use.
(b)
That,
for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant’s annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit
plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to
be the initial
bona fide
offering thereof.
(c)
Insofar
as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer,
or controlling person of the registrant in the successful defense
of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Coppell,
State of Texas, on this 20th day of May, 2019.
|
RUMBLEON, INC.
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By:
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/s/
Marshall
Chesrown
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Marshall
Chesrown
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Chief
Executive Officer and Chairman
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KNOW
ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Marshall Chesrown and Steven R.
Berrard and each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to
sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite
and necessary to be done, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in
the capacities and on the dates indicated.
Signature
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Title
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Date
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/s/
Marshall
Chesrown
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Chief Executive Officer and Chairman
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May 20, 2019
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Marshall Chesrown
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(Principal
Executive Officer)
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/s/
Steven
R. Berrard
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Chief Financial Officer and Director
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May 20, 2019
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Steven R. Berrard
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(Principal
Financial Officer and Principal Accounting Officer)
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/s/
Denmar
Dixon
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Director
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May 20, 2019
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Denmar Dixon
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/s/
Richard
A. Gray, Jr.
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Director
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May 20, 2019
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Richard A. Gray, Jr.
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/s/
Kartik
Kakarala
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Director
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May 20, 2019
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Kartik Kakarala
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/s/
Joseph
Reece
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Director
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May 20, 2019
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Joseph Reece
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/s/
Kevin
Westfall
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Director
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May 20, 2019
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Kevin Westfall
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