As filed with
the Securities and Exchange Commission on January 14,
2019
Registration No.
333-228483
UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Amendment No. 2
to
FORM
S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
RumbleOn, Inc.
(Exact name of registrant as
specified in its charter)
Nevada
(State or other jurisdiction of
incorporation or organization)
46-3951329
(I.R.S. Employer Identification
Number)
1350 Lakeshore Drive, Suite
160
Coppell, Texas
75019
(469)
250-1185
(Address, including zip code, and
telephone number, including area code, of registrant’s
principal executive offices)
Marshall
Chesrown
Chairman and Chief Executive
Officer
RumbleOn, Inc.
1350 Lakeshore Drive, Suite
160
Coppell, Texas
75019
(469)
250-1185
(Name, address,
including zip code, and telephone number, including area code, of
agent for service)
With a copy to:
Michael Francis,
Esq.
Christina C. Russo,
Esq.
Akerman LLP
350 East Las Olas Boulevard, Suite
1600
Fort Lauderdale, Florida
33301
(954) 463-2700
Approximate date of
commencement of proposed sale to the public
: From time to
time after the effective date of this registration statement, as
determined by the selling stockholders.
If the only securities being
registered on this Form are being offered pursuant to dividend or
interest reinvestment plans, please check the following box:
☐
If any of the securities being
registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box:
☒
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under
the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering.
☐
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. ☐
If this Form is a registration
statement pursuant to General Instruction I.D. or a post-effective
amendment thereto that shall become effective upon filing with the
Commission pursuant to Rule 462(e) under the Securities Act, check
the following box: ☐
If this Form is a post-effective
amendment to a registration statement filed pursuant to General
Instruction I.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the
Securities Act, check the following box:
☐
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated
filer,” “accelerated filer,” “smaller
reporting company” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
Large
accelerated
filer
|
☐
|
Accelerated
filer
|
☐
|
Non-accelerated
filer
|
☒
|
Smaller
reporting
company
|
☒
|
|
|
Emerging growth
company
|
☒
|
|
|
|
|
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section
7(a)(2)(B) of the Securities Act.
☒
This registration statement should
hereinafter become effective in accordance with the provisions of
Section 8(a) of the Securities Act of 1933, as
amended.
The information in this prospectus is not complete and may be
changed. The selling stockholders may not sell these securities
until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED JANUARY
14
,
2019
PRELIMINARY PROSPECTUS
3,030,000 Shares of Class B Common Stock
20,950 Shares of Class B Common Stock underlying
Warrant
1,317,329
Shares of Class B Common Stock underlying Series B Preferred
Stock
The
selling stockholders may offer and sell from time to time up to an
aggregate of 4,368,279 shares of RumbleOn, Inc. (the
“
Company
”
) Class B Common Stock (
“
Class B Common Stock
”
), including (i) up to 3,030,000
shares of Class B Common Stock, (ii) up to 20,950 shares of Class B
Common Stock underlying an outstanding warrant issued to Hercules
Capital, Inc. (the “Warrant”), and (iii) up to
1,317,329 shares
of Class B Common Stock underlying outstanding Series B Non-Voting
Convertible Preferred Stock ("Series B Preferred
Stock")
issued in connection with the Wholesale Merger
(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 January
11,
2019, the last reported
sales price of our Class B Common Stock on the NASDAQ was
$5.80 per share.
-------------------------------------
Investing in the shares of Class B Common Stock involves risks. See
“Risk Factors,” beginning on page 4 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
TABLE OF CONTENTS
|
Page
|
ABOUT THIS PROSPECTUS
|
ii
|
PROSPECTUS SUMMARY
|
1
|
THE OFFERING
|
3
|
RISK FACTORS
|
4
|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
|
5
|
USE OF PROCEEDS
|
8
|
SELLING STOCKHOLDERS
|
9
|
PLAN OF DISTRIBUTION
|
11
|
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
|
13
|
WHERE YOU CAN FIND MORE INFORMATION
|
14
|
LEGAL MATTERS
|
15
|
EXPERTS
|
16
|
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 VIN-specific pre-owned vehicles
are bought and sold by providing users with the most efficient,
timely and transparent transaction experience. Our initial emphasis
has been motorcycles and other powersports, however, our platform
is able to accommodate any VIN-specific vehicle including
motorcycles, ATVs, boats, RVs, cars and trucks.
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 including dealers and auctions. We utilize
regional partners to provide inspection, reconditioning and
distribution services. These regional partners earn incremental
revenue and enhance profitability through fees from inspection,
reconditioning and distribution programs.
Our
business model is driven by our proprietary technology platform.
Our initial platform was acquired in February 2017, through our
acquisition of substantially all of the assets of NextGen Dealer
Solutions, LLC. Since that time, we have expanded the functionality
of that platform through a significant number of high-quality
technology development projects and initiatives. Included in these
new technology development projects and initiatives were modules or
significant upgrades to the existing platforms for: (i)
Retail online auction;
(ii)
Native App in IOS and
Android; (iii)
new
architecture on website design and functionality; (iv)
RumbleOn Marketplace; (v)
redesigned cash offer tool;
(vi)
deal-jacket tracking
tool; (vii) inventory tracking tool; (viii) CRM and multiple
third-party integrations; (ix) new analytics and machine learning
initiatives; and (x) IT monitoring infrastructure.
Recent Developments
Acquisitions
On
October 26, 2018, we entered into an Agreement and Plan of Merger
(as amended, the “Merger Agreement”) by and among the
Company, the Company’s newly-formed acquisition subsidiary
RMBL Tennessee, LLC, a Delaware limited liability company
(“Merger Sub”), Wholesale Holdings, Inc., a Tennessee
corporation (“Holdings”), Wholesale, LLC, a Tennessee
limited liability company (“Wholesale”), Steven
Brewster and Janelle Brewster (each a “Stockholder”,
and together the “Stockholders”), Steven Brewster, a
Tennessee resident, as the representative of each Stockholder (the
“Representative”), and, for the limited purposes of
Section 5.8 of the Merger Agreement, Marshall Chesrown and Steven
R. Berrard, providing for the merger (the “Wholesale
Merger”) of Holdings with and into Merger Sub, with Merger
Sub surviving the Wholesale Merger as a wholly-owned subsidiary of
the Company. On October 29, 2018, we entered into an Amendment to
the Merger Agreement making a technical correction to the
definition of “Parent Consideration Shares” contained
in the Merger Agreement.
Also,
on October 26, 2018, we entered into a Membership Interest Purchase
Agreement (the “Purchase Agreement”), by and among the
Company, Steven Brewster and Justin Becker (together the
“Express Sellers”), and Steven Brewster as
representative of the Express Sellers, pursuant to which we
acquired all of the membership interests (the “Express
Acquisition”) in Wholesale Express, LLC, a Tennessee limited
liability company (“Wholesale Express”).
Wholesale Inc. is one of the largest independent
distributors of pre-owned
vehicles
in the United States and Wholesale Express, LLC is a related
logistics company. The Wholesale Merger and the Express Acquisition
(collectively, the “Acquisitions”) were both completed
on October 30, 2018. As consideration for the Express Acquisition,
we paid cash consideration of $4,000,000, subject to certain
customary post-closing adjustments. As consideration for the
Wholesale Merger, we (i) paid cash consideration of $12,000,000,
subject to certain customary post-closing adjustments, and (ii)
issued to the Stockholders 1,317,329 shares (the “Stock
Consideration”) of our Series B Non-Voting Convertible
Preferred Stock, par value $0.001 (the "Series B Preferred
Stock").
Shares of
Series B Preferred Stock rank
pari passu
with the Company’s
Class B Common Stock, except that holders of Series B Preferred
Stock shall not be entitled to vote on any matters presented to the
stockholders of the Company. Each share of Series B Preferred Stock
is convertible on a one-for-one basis into shares of the
Company’s Class B Common Stock. The Series B Preferred Stock
will automatically convert into the Company’s Class B Common
Stock 21 days after the mailing of a definitive information
statement of the type contemplated by and in accordance with
Regulation 14C of the Securities Exchange Act of 1934, as amended
(“the Exchange Act”), to the Company’s
stockholders, without any further action on the part of the Company
or any holder. In connection with the Wholesale Merger, on October
30, 2018, stockholders of the Company holding a majority of the
voting power of the Company’s common stock approved the
conversion of the Series B Preferred Stock into an equal number of
shares of the Company’s Class B Common Stock. A definitive
information statement describing the Acquisitions and the
conversion of the Series B Preferred Stock will be mailed to
non-consenting stockholders of the Company in accordance with
Regulation 14C of the Exchange Act. The 1,317,329 shares of Class B
Common Stock underlying the Series B Preferred Stock offered by the
selling stockholders represent the shares of Class B Common Stock
underlying the Series B Preferred Stock issued as Stock
Consideration in the Wholesale Merger.
|
|
|
Financing
On
October 30, 2018, the Company, NextGen Pro, LLC, (“NextGen
Pro”), RMBL Missouri, LLC, (“RMBL Missouri”),
RMBL Texas, LLC (“RMBL Texas”, and together with the
Company, NextGen Pro, and RMBL Missouri, each, an
“Existing Borrower”, and collectively, the
“Existing Borrowers”), Merger Sub, Wholesale, Wholesale
Express, RMBL Express, LLC (“RMBL Express”, and
together with Merger Sub, Wholesale and Wholesale Express, the
“New Borrowers”; together with the Existing Borrowers,
the “Borrowers”), Hercules Capital, Inc.,
(“Hercules”), in its capacity as lender (in such
capacity, “Lender”), and Hercules, in its capacity as
administrative agent and collateral agent for Lender (in such
capacities, “Agent”), entered into the First Amendment
and Waiver to Loan and Security Agreement (the
“Amendment”), amending that certain Loan and Security
Agreement, dated as of April 30, 2018 (the “Loan
Agreement”; as amended by the Amendment, the “Amended
Loan Agreement”), by and among the Existing Borrowers, Lender
and Agent. Under the terms of the Amendment, $5,000,000 (less
certain fees and expenses) was funded by Lender to the Borrowers in
connection with the Wholesale Merger (the “Tranche II
Advance”). The Tranche II Advance has a maturity date of
October 1, 2021 and an initial interest rate of 11.00%. Pursuant to
the Amendment, we issued to Hercules a warrant to purchase 20,950
shares of Class B Common Stock at an exercise price of $7.16 per
share. The warrant is immediately exercisable and expires on
October 30, 2023. The 20,950 shares of Class B Common Stock
underlying the Warrant offered by the selling stockholders
represent the shares of Class B Common Stock underlying the Warrant
issued pursuant to the Amendment.
Also,
on October 30, 2018, Wholesale, as borrower, entered into a
floorplan vehicle financing credit line (the “NextGear Credit
Line”) with NextGear Capital, Inc. (“NextGear”).
The available credit under the NextGear Credit Line is initially
$63,000,000, will decrease to $55,000,000 after February 28, 2019
and will decrease to zero dollars after October 31, 2019. Advances
under the NextGear Credit Line will bear interest at an initial per
annum rate of 5.25%, based upon a 360-day year, and compounded
daily, and the per annum interest rate will vary based on a base
rate, plus the contract rate, which is currently negative 2.00%,
until the outstanding liabilities to NextGear are paid in
full.
Private Placement
On
October 30, 2018, we completed the private placement of an
aggregate of 3,030,000 shares of our Class B Common Stock (the
“Private Placement”), at a price of $7.10 per
share for non-affiliates of the Company, and, with respect to
directors participating in the Private Placement, at a price of
$8.10 per share. The gross proceeds for the Private Placement were
approximately $21.6 million. National Securities Corporation, a
wholly owned subsidiary of National Holdings Corporation, and
Craig-Hallum Capital Group (together the “Placement
Agents”) served as the placement agents for the Private
Placement. We paid the Placement Agents a fee of 6.5% of the gross
proceeds in the Private Placement. Net proceeds from the Private
Placement and $5,000,000 funded under the Tranche II Advance were
used to partially fund the cash consideration of the Acquisitions
and the balance will be used for working capital purposes. The
3,030,000 shares of Class B Common Stock offered by the selling
stockholders represents the shares of Class B Common Stock issued
in the Private Placement.
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.
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:
|
|
17,493,291
shares
|
|
|
|
Class B Common Stock to be issued upon exercise of the
Warrant:
|
|
20,950
shares
|
|
|
|
Class B Common Stock to be issued upon conversion of the Series B
Preferred Stock:
|
|
1,317,329
shares
|
|
|
|
Class B
Common Stock to be offered by the selling
stockholders:
|
|
4,368,279
shares
|
|
|
|
Class B
Common Stock outstanding immediately following the
offering:
|
|
18,831,570
shares
(1)
|
|
|
|
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 Warrant if the Warrant is 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 our Class B Common Stock outstanding
excludes:
●
1,510,333
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
”
);
●
288,115
shares of Class B Common Stock reserved for issuance under the 2017
Stock Incentive Plan; and
●
300,068 shares of
Class B Common Stock underlying outstanding warrants.
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 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;
●
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 brokerage 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;
●
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
warrant;
●
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 Acquisitions,
which could have a material adverse effect on our business,
financial condition and results of operations;
●
We may be unable to
successfully integrate the business of Wholesale and Wholesale
Express (the “Wholesale Entities”) 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 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 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 Warrant if the Warrant is 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 18,831,570
shares of Class B Common Stock issued and outstanding as of the
conclusion of the offering, calculated on the basis of (i)
17,493,291 shares of Class B Common Stock issued and
outstanding as of January 11, 2019 prior
to the offering, (ii) assuming the exercise and sale by the selling
stockholders of the 20,950 shares of Class B Common Stock
underlying the Warrant and (iii) assuming the conversion and sale
by the selling stockholders of the 1,317,329 shares of Class B
Common Stock underlying the Series B Preferred Stock. 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
|
683
Capital Partners, LP
|
275,000
|
275,000
|
-
|
-
|
Blackwell
Partners LLC - Series A
|
189,616
|
189,616
|
-
|
-
|
Blue Flame Capital, LLC
(1)
|
1,052,829
*
|
30,000
*
|
1,022,829
*
|
5.4
%
|
Burguete
Investment Partnership, L.P.
|
80,000
|
80,000
|
-
|
-
|
Columbus
Capital Partners, L.P.
|
174,800
|
174,800
|
-
|
-
|
Columbus
Capital QP Partners, L.P.
|
64,000
|
64,000
|
-
|
-
|
Cuttyhunk
Master Portfolio
|
2,383
|
2,383
|
-
|
-
|
Hercules Capital, Inc.
(2)
|
20,950
|
20,950
|
-
|
-
|
Joseph
Reece
|
30,000
*
|
10,000
*
|
20,000
*
|
**
|
Keane
Microcap Fund
|
20,000
|
20,000
|
-
|
-
|
Nantahala
Capital Partners II Limited Partnership
|
174,564
|
174,564
|
-
|
-
|
Nantahala
Capital Partners Limited Partnership
|
81,991
|
81,991
|
-
|
-
|
Nantahala
Capital Partners SI, LP
|
630,780
|
630,780
|
-
|
-
|
Pinnacle
Family Office Investments, LP
|
270,000
|
270,000
|
-
|
-
|
Potrero
Capital Research Partners II, LP
|
62,710
|
62,710
|
-
|
-
|
Potrero
Capital Research Partners, LP
|
32,290
|
32,290
|
-
|
-
|
Ricky
Solomon
|
10,000
|
10,000
|
-
|
-
|
Rovida
West Coast Investments Limited
|
461,200
|
461,200
|
-
|
-
|
Saker
Partners LP
|
70,000
|
70,000
|
-
|
-
|
Silver
Creek CS SAV, L.L.C.
|
73,049
|
73,049
|
-
|
-
|
Steven
Brewster and Janelle Brewster, as joint tenants with right of
survivorship
(3)
|
1,317,329
|
1,317,329
|
-
|
-
|
TEC
Opportunities Fund I LP
|
20,000
|
20,000
|
-
|
-
|
Tonga
Partners L.P.
|
9,655
|
9,655
|
-
|
-
|
Trellus
Partners LLC
|
65,000
|
65,000
|
-
|
-
|
Trellus
Small Cap Opportunity Fund, LP
|
30,000
|
30,000
|
-
|
-
|
Tristan
Offshore Fund, Ltd.
|
5,914
|
5,914
|
-
|
-
|
Tristan
Partners L.P.
|
12,048
|
12,048
|
-
|
-
|
Verbier
Investments
|
40,000
|
40,000
|
-
|
-
|
Verbier
SP Partnership, L.P.
|
40,000
|
40,000
|
-
|
-
|
Verition
Multi-Strategy Master Fund Ltd
|
95,000
|
95,000
|
-
|
-
|
*
Represents
shares that are subject to a contractual lock-up restricting their
resale through January 28, 2019.
**
Less than one
percent.
(1)
Excludes 82,189
shares of Class B Common Stock held directly by its Managing
Director, Denmar Dixon, 290 shares of Class B Common Stock held by
Mr. Dixon’s son and 7,750 shares of Class B Common Stock held
by Mr. Dixon's spouse.
(2)
Represents shares
of Class B Common Stock underlying the Warrant, as described
below.
(3)
Represents shares
of Class B Common Stock underlying the Series B Preferred Stock, 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:
●
Blue
Flame Capital, LLC is an entity controlled by Denmar Dixon, who
serves as a Director of the Company.
●
Joseph
Reece serves as a Director of the Company.
●
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
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 (the “Warrant
Price”). The 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
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 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 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 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 Warrant.
Under
the terms of the Amendment, the Tranche II Advance was funded by
Lender to the Borrowers in connection with the Closing Date. The
Tranche II Advance has a maturity date of October 1, 2021 and an
initial interest rate of 11.00%.
Advances will bear
interest at a per annum rate
equal to the greater of either (i) the prime
rate as reported in The Wall Street Journal plus 5.75% or (ii)
10.25%,
based on a year
consisting of 360 days, with interest computed daily based on the
actual number of days elapsed. The Tranche II Advance, and any
future amounts that may be advanced under the Amended Loan
Agreement, will be due and payable on October 1,
2021.
Upon any event of default, the Agent may, at its option, exercise
its right to demand immediate payment of all liabilities and other
indebtedness and amounts owed to Lender by Borrowers. Conditions
for an event of default remain unchanged by the
Amendment.
●
On
October
26, 2018, we
entered into the Merger Agreement by and among the Company, Merger
Sub, Holdings, Wholesale, the Stockholders, the Representative,
and, for the limited purposes of Section 5.8 of the Merger
Agreement, Marshall Chesrown and Steven R. Berrard, providing for
the Wholesale Merger. On October 29, 2018, we entered into an
Amendment to the Merger Agreement making a technical correction to
the definition of “Parent Consideration Shares”
contained in the Merger Agreement. Also, on October 26, 2018,
we entered into the Purchase Agreement, by and among the Company,
the Express Sellers, and Steven Brewster as representative of the
Express Sellers, pursuant to which we acquired all of the
membership interests in Wholesale Express. The Acquisitions were
both completed on October 30, 2018.
As
consideration for the Express Acquisition, we paid cash
consideration of $4,000,000, subject to certain customary
post-closing adjustments.
As
consideration for the Wholesale Merger, we (i) paid cash
consideration of $12,000,000, subject to certain customary
post-closing adjustments, and (ii) issued 1,317,329 shares of
Series B Preferred Stock to Steven Brewster and Janelle Brewster,
as joint tenants with right of survivorship. For additional
information regarding the Acquisitions and the Series B Preferred
Stock, see Recent Developments – Acquisitions
above.
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 Warrant if the Warrant is
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, 2017, filed on February 27, 2018, as
amended on Form 10-K/A, filed with the SEC on March 30,
2018;
●
Our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2018, filed
with the SEC on April 30, 2018;
●
Our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2018, filed with
the SEC on July 27, 2018;
●
Our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2018, filed
with the SEC on November 14, 2018;
●
The Current Reports
on Form 8
–
K filed on
February 23, 2018, May 1, 2018, June 28, 2018, July 17, 2018,
July
18,
2018, July 20, 2018, October 11,
2018, October 31, 2018 and January 14, 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
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, Fort Lauderdale,
Florida.
EXPERTS
The
consolidated financial statements and schedule of RumbleOn, 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.
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
|
$
3,323.48
|
Legal fees and
expenses
|
$
10,000.00
|
Accounting fees and
expenses
|
$
1,000.00
|
Miscellaneous
expenses
|
$
5,000.00
|
Total
|
$
19,323.48
|
_________________
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.
Exhibit Number
|
|
Exhibit Description
|
|
|
Agreement and Plan
of Merger, dated October 26, 2018, by and among RumbleOn, Inc.,
RMBL Tennessee, LLC, Wholesale Holdings, Inc., Steven Brewster and
Janet Brewster, Wholesale, LLC, and Steven Brewster as
representative, and for limited purposes, Marshall Chesrown and
Steven R. Berrard (Incorporated by reference to Exhibit 2.1 in the
Company’s Current Report on Form 8-K, filed on October 31,
2018).***
|
|
|
Amendment to the
Agreement and Plan of Merger, dated October 29, 2018, by and among
RumbleOn, Inc., RMBL Tennessee, LLC, Wholesale Holdings, Inc.,
Steven Brewster and Janet Brewster, Wholesale, LLC, and Steven
Brewster as representative (Incorporated by reference to Exhibit
2.2 in the Company’s Current Report on Form 8-K, filed on
October 31, 2018).
|
|
|
Membership Interest
Purchase Agreement, dated October 26, 2018, by and among RumbleOn,
Inc. Steven Brewster, Justin Becker, and Steven Brewster as
representative (Incorporated by reference to Exhibit 2.3 in the
Company’s Current Report on Form 8-K, filed on October 31,
2018).***
|
|
|
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).
|
|
|
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).
|
|
|
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).
|
|
|
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).
|
|
|
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).
|
|
|
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).
|
5.1
|
|
Opinion
of Akerman LLP**
|
|
|
Form of
Securities Purchase Agreement, dated October 25, 2018 (Incorporated
by reference to Exhibit 10.6 in the Company’s Current Report
on Form 8-K, filed on October 31, 2018).
|
|
|
Registration Rights Agreement,
dated October 30, 2018, by and among RumbleOn, Inc., Steven
Brewster and Janelle Brewster, and Steven Brewster as
representative (Incorporated by reference to Exhibit 10.1 in the
Company’s Current Report on Form 8-K, filed on October 31,
2018).
|
|
|
Consent
of Scharf Pera & Co., PLLC*
|
23.2
|
|
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).
|
23.3
|
|
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).
|
23.4
|
|
Consent
of Akerman LLP (included with Exhibit
5.1)**
|
24.1
|
|
Power
of Attorney (included with signature page on this Form
S-3)**
|
*
|
|
Filed
herewith
|
**
|
|
Previously
filed.
|
***
|
|
Schedules and similar attachments to the Agreement and Plan of
Merger and the Membership Interest Purchase Agreement, both dated
as of October 26, 2018, have been omitted pursuant to Item
601(b)(2) of Regulation S-K. The registrant hereby undertakes to
furnish on a supplemental basis a copy of any omitted schedules and
similar attachments to the Securities and Exchange Commission upon
request.
|
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 14th day of
January, 2019.
|
RUMBLEON,
INC.
|
|
|
|
|
|
|
By:
|
/s/ Marshall
Chesrown
|
|
|
|
Marshall
Chesrown
|
|
|
|
Chief Executive
Officer and Chairman
|
|
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
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Marshall
Chesrown
|
|
Chief
Executive Officer and Chairman
|
|
January
14, 2019
|
Marshall Chesrown
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
/s/ Steven R.
Berrard
|
|
Chief
Financial Officer and Director
|
|
|
Steven
R. Berrard
|
|
(Principal
Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
January 14,
2019
|
Denmar
Dixon
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
January 14,
2019
|
Richard
A. Gray, Jr.
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
January 14,
2019
|
Kartik
Kakarala
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
January 14,
2019
|
Joseph
Reece
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
January 14,
2019
|
Kevin
Westfall
|
|
|
|
|
|
|
|
|
|
* By:
|
/s/ Steven R.
Berrard
|
|
|
|
|
|
Steven R.
Berrard
|
|
|
|
|
|
Attorney
In-Fact
|
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