RumbleOn (RMBL) Announces Planned $100M Fully Backstopped Rights Offering

RumbleOn, Inc. (NASDAQ: RMBL) today announced that it plans to make a $100 million rights offering to holders of the company’s Class A common stock and Class B common stock (and certain holders of warrants issued by the Company entitled to receive the same).

Pursuant to the terms of the fully backstopped rights offering, the Company intends to issue, for no consideration, subscription rights that will entitle eligible holders as of the applicable record date to purchase their pro rata portion of $100 million of Class B common stock.

The Company has entered into a purchase agreement with certain existing stockholders (the “Backstop Purchasers”) to backstop the $100 million rights offering in full. The purchase agreement commits the Backstop Purchasers to purchase in a private placement (the “Backstop Private Placement”) any and all shares of Class B common stock that remain unsubscribed for in the rights offering on the same terms as the proposed rights offering. Pursuant to the terms of the purchase agreement, the Backstop Private Placement is expected to close shortly after the expiration of the rights offering subscription period.

The Backstop Purchasers’ obligation to purchase the securities pursuant to the purchase agreement and to fulfill their backstop commitment and the Company’s obligation to issue the securities in the Backstop Private Placement are subject to certain customary closing conditions, including completion of the proposed rights offering. The rights offering and the Backstop Private Placement are expected to close in the fourth quarter of 2023.

The Company plans to file a registration statement with the U.S. Securities and Exchange Commission (the “SEC”) relating to the rights offering as promptly as reasonably practicable. The Company is working on developing the terms of the rights offering and has not yet set the subscription ratio or subscription price. In addition, no record date has been set. Additional information about the proposed rights offering will be provided in the registration statement, once filed with the SEC.

The Company is planning to conduct the rights offering to enable it to comply with a covenant in its recently amended credit agreement. It is expected that the net proceeds of the rights offering will be used to repay debt under its amended credit facility with the remainder being available to fund the growth and development of its business, including for possible acquisitions.

The securities to be offered in the proposed rights offering and proposed Backstop Private Placement have not yet been registered under the Securities Act of 1933, as amended (the “Securities Act”). The securities to be offered in the proposed rights offering may not be offered or sold nor may offers to buy be accepted prior to the time the registration statement relating to the rights offering has been filed with the SEC and has become effective.

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