#USA #Irving #RumbleOn #Rights Offering #NASDAQ RMBL

RumbleOn Launches $10 Million Rights Offering

RumbleOn, Inc. (NASDAQ: RMBL) has officially announced the commencement of a fully backstopped registered equity rights offering worth $10 million, targeting its existing shareholders. This strategic move, aimed at bolstering the company's liquidity, seeks to secure aggregate gross proceeds of $10 million, which will be utilized for general corporate purposes, including the repayment of convertible senior promissory notes due in January 2025.

Details of the Offering

The rights offering is structured to grant existing shareholders—those who held Class A and Class B common stocks as of the record date (November 25, 2024)—non-transferable subscription rights. These rights allow them to purchase up to 2,392,344 shares of Class B common stock at a price of $4.18 per share. By doing so, RumbleOn strives to raise the intended amount while enabling shareholders to participate in the company's growth.

Each eligible stockholder will receive one subscription right for every share they own, with the specific number of shares they can acquire determined by the rights they hold. However, shares will not be issued in fractions; thus, stockholders must own at least 15 shares of common stock to exercise their rights and purchase a complete additional share of Class B common stock.

Subscription Timeline

The subscription rights will expire at 5:00 PM Eastern Time on December 12, 2024. If stockholders fail to act in the designated timeframe, the rights become void with no value. Importantly, RumbleOn retains the option to extend this period at its discretion, a typical clause in such financial maneuvers to ensure maximum participation and flexibility.

Support and Standby Agreement

Additionally, on November 26, 2024, RumbleOn entered into a Support and Standby Purchase Agreement with Stone House Capital Management. This agreement stipulates that any shares from the rights offering not purchased by eligible stockholders will be acquired by this Standby Purchaser, providing a safety net to ensure that the company raises the full $10 million.

In parallel, other board members who are stockholders will also fully exercise their subscription rights, reinforcing a strong backing for this initiative.

Market Response and Future Outlook

RumbleOn's strategy comes at a time when it aims to streamline its financial obligations and cushion itself against market fluctuations, especially given the company's focus on expanding its Powersports dealership group, which is already the largest in the U.S. by reported revenue and major unit sales. By enhancing liquidity through this rights offering, RumbleOn positions itself to pursue growth opportunities, whilst addressing existing financial commitments.

Conclusion

The decision to initiate a $10 million rights offering underscores RumbleOn's proactive approach towards capital management. As the company navigates the complex landscape of the automotive industry and seeks to capitalize on growth potential, the move appears both timely and calculated. Shareholders are encouraged to review their options and participate in this offering to maintain their stake in the company's future successes.

For more detailed information regarding the rights offering, eligible stockholders may reach out to the designated subscription and information agent starting November 26, 2024.