RumbleOn Inc

Condensed Consolidated Balance Sheets

($ in millions, except per share amounts)

Condensed Consolidated Statements of Operations

($ in millions, except per share amounts)

Consolidated Statements of Stockholders' Equity

($ in millions)

Condensed Consolidated Statements of Cash Flows

($ in millions)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 –DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

RumbleOn, Inc. operates throughtwo operating segments: a powersports dealership group and a vehicle transportation services entity, Wholesale Express, LLC (“Express”). The Company was incorporated in 2013 and has grown primarily through acquisitions. The Company is headquartered in the Dallas Metroplex and completed its initial public offering in 2017. Unless the context requires otherwise, references in these financial statements to “RumbleOn,” the “Company,” “we,” “us,” “our,” and “us” refer to RumbleOn, Inc. and its consolidated subsidiaries.

We offer a wide selection of new and pre-owned motorcycles, all-terrain vehicles (“ATV”), utility terrain or side-by-side vehicles (“SXS”), personal watercraft (“PWC”), snowmobiles, and other powersports products, including parts, apparel, accessories, finance & insurance products and services (“F&I”), and aftermarket products from a wide range of manufacturers. Additionally, we offer a full suite of repair and maintenance services. After closing our Sturgis, South Dakota dealership, we operated 55 locations as of March 31, 2025, primarily in the Sunbelt region. We source high quality pre-owned inventory directly from consumers via our proprietary RideNow Cash Offer technology.

Express provides asset-light brokerage services facilitating automobile transportation primarily between and among dealerships and auctions throughout the United States.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company and its wholly owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim information and with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for smaller reporting companies. In accordance with those rules and regulations, the Company has omitted certain information and notes required by GAAP for annual consolidated financial statements. In the opinion of management, these condensed consolidated financial statements contain all normal, recurring adjustments necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The year-end balance sheet data was derived from audited financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 10-K”). The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results expected for the entire fiscal year. Intercompany accounts and material intercompany transactions have been eliminated.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year's presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. These estimates are based on management's best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates.

Disaggregated Revenue

Accounts Receivable

(1) Primarily amounts due from manufacturers for holdbacks, rebates, co-op advertising, warranty and supplies returns

Immaterial Correction of Statement of Cash Flows for the Three Months Ended March 31, 2024

Certain amounts have been adjusted on the accompanying condensed consolidated statement of cash flows for the three months ended March 31, 2024 compared to amounts reported in the Company’s Form 10-Q for the quarterly period ended March 31, 2024. Certain trade floor plan notes payable were inadvertently classified as non-trade floor plan notes payable, which impacted operating and financing cash flows. In addition, other immaterial errors impacting debt proceeds and the purchase of property and equipment were corrected. Such adjustments were properly reflected in subsequent filings for 2024.

Management evaluated the materiality of the above items based on an analysis of quantitative and qualitative factors and concluded they were not material to the three months ended March 31, 2024, individually or in the aggregate.

The following table reflects the correction on all affected line items of our previously reported condensed consolidated statement of cash flows:

Recent Pronouncements Not Yet Adopted

Improvements to Income Tax Disclosures

Issued in December 2023, ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, focuses on the rate reconciliation and income taxes paid. This ASU requires disclosure, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, the ASU requires disclosure of income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The new standard is effective for the Company for 2025, with early adoption permitted. Amendments in this ASU may be applied prospectively for the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may be applied retrospectively by providing the revised disclosures for all periods presented. We expect this ASU to only impact our disclosures with no impacts to our results of operations, cash flows, and financial condition.

Disaggregation of Income Statement Expenses

Issued in November 2024, ASU 2024-03, Disaggregation of income Statement Expenses (Subtopic 220-40), requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. While early adoption is permitted, we do not plan to adopt this standard early. This ASU will likely result in additional disclosures being included in our consolidated financial statements once adopted. We are currently evaluating the provisions of this ASU.

NOTE 2 –INVENTORY AND VEHICLE FLOOR PLAN NOTES PAYABLE

Floor plan notes payable as of March 31, 2025 and December 31, 2024 were as follows:

Floor plan notes payable - trade reflects amounts borrowed to finance the purchase of specific new and, to a lesser extent, pre-owned vehicle inventory with corresponding manufacturers' captive finance subsidiaries (“trade lenders”). Floor plan notes payable-non-trade represents amounts borrowed to finance the purchase of specific new and pre-owned vehicle inventories with non-trade lenders. Changes in vehicle floor plan notes payable-trade are reported as operating cash flows and changes in floor plan notes payable-non-trade are reported as financing cash flows in the accompanying Condensed Consolidated Statements of Cash Flows.

New inventory costs are generally reduced by manufacturer holdbacks, incentives, floor plan assistance, and non-reimbursement-based manufacturer advertising rebates, while the related vehicle floor plan payables are reflective of the gross cost of the vehicle. The vehicle floor plan payables may be higher than the inventory cost due to the timing of the sale of a vehicle and payment of the related liability. Vehicle floor plan facilities are due on demand, but in the case of new vehicle inventories, are generally paid within a few business days after the related vehicles are sold.

New vehicle floor plan facilities generally utilize Secured Overnight Financing Rate (“SOFR”)-based interest rates, which ranged between 8.0% and 16.7% as of March 31, 2025. Pre-owned vehicle floor plan facilities utilize prime or SOFR-based interest rates, which ranged between 8.5% and 9.3% as of March 31, 2025. The aggregate capacity to finance our inventory under the new and pre-owned vehicle floor plan facilities was $356.1 million as of March 31, 2025.

Inventory serves as collateral under floor plan notes payable borrowings. The inventory balance in its entirety also serves as collateral under the Oaktree Credit Facility. Refer to Note 3 for further detail.

NOTE 3 –LONG-TERM DEBT

Long-term debt consisted of the following as of March 31, 2025 and December 31, 2024:

Term Loan Credit Agreement

The Company has a term loan credit agreement (as amended, the “Credit Agreement”) among the Company, as borrower, the lenders party thereto, and Oaktree Fund Administration, LLC (“Oaktree”), as administrative agent and collateral agent. Borrowings under the Credit Agreement bear interest at a rate per annum equal, at the Company’s option, to either (a) SOFR with a floor of 1.00%, plus an applicable margin of 8.25%, or (b) a fluctuating adjusted base rate in effect from time to time, plus an applicable margin of 7.25%. At the Company’s option, up to 1.00% of interest may be paid in kind. The interest rate on March 31, 2025 was 12.80%.

Obligations under the Credit Agreement are secured by a first-priority lien on substantially all of the assets of the Company and its wholly owned subsidiaries (the “Subsidiary Guarantors”), although certain assets of the Company and Subsidiary Guarantors are subject to a first-priority lien in favor of floor plan lenders, and such liens and priority are subject to certain other exceptions. The Subsidiary Guarantors also guarantee the obligations of the Company under the Credit Agreement.

The Company is subject to certain leverage ratio financial covenants and liquidity covenants under the Credit Agreement. The Company was in compliance with all financial and non-financial covenants with the Credit Agreement at March 31, 2025.

6.75% Convertible Senior Notes

The 6.75% convertible senior notes (the “Notes”) were outstanding pursuant to an Indenture (the “Indenture”), by and between the Company and Wilmington Trust, the National Association as the Trustee and collateral agent for the Trustee and the holders of the Notes. The Indenture included customary representations, warranties and covenants by the Company and customary closing conditions. The Notes matured on January 1, 2025 and were repaid on January 2, 2025, as permitted.

Other Interest Expense

(1) Includes the amortization of debt discount and issuance costs of $2.5 million in 2025 and $2.2 million in 2024.

(2) Finance lease obligation is reported in other long-term liabilities in the consolidated balance sheets.

NOTE 4 –SELLING, GENERAL AND ADMINISTRATIVE COSTS

(1) Amount in 2025 includes executive termination costs of $0.9 million.

(2) Amount in 2025 includes the reversal of expense for stock options forfeited by our former Chief Executive Officer (“CEO”).

NOTE 5 – STOCK-BASED COMPENSATION

(1) Amount in 2025 is the reversal of expense for stock options forfeited by our former CEO.

In accordance with his Employment Agreement effective as of January 13, 2025 (the “effective date”), Michael Quartieri, our new CEO, was granted 400,000 restricted stock units that vest in three substantially equal installments on each of the first, second and third anniversary dates of the effective date subject to his employment and other standard conditions included in the grant. The $1.9 million grant-date fair value of this award is being recognized as stock-based compensation expense over the vesting period.

NOTE 6 –INCOME TAXES

The Company recognized tax expense of $0.1 million for the three months ended March 31, 2025, representing an effective income tax rate of (1.0)%. The Company recognized a tax benefit of $0.3 million for the three months ended March 31, 2024, representing an effective tax rate of 2.8%. The difference between the U.S. federal income tax rate of 21.0% and the Company's overall income tax rate in both periods was primarily due to state income tax and a change in the valuation allowance for federal and state tax purposes.

NOTE 7 –LOSS PER SHARE

The following common stock equivalents were outstanding as of March 31, and they were excluded from the calculations of loss per share because they were anti-dilutive or because their market condition had not been met:

NOTE 8 –SUPPLEMENTAL CASH FLOW INFORMATION

The following table includes supplemental cash flow information, including non-cash investing and financing activity for the three months ended March 31, 2025 and 2024:

Of the cash paid for interest,$2.4 million and$4.0 million in thethree months ended March 31, 2025 and 2024, respectively, related to floor plan payables to finance inventory.

The following shows cash and restricted cash for the Statements of Cash Flows:

NOTE 9 –RELATED-PARTY TRANSACTIONS

Pre-Owned Inventory Floor Plan Line

In December 2024, the Company entered into a floor plan facility agreement with related parties William Coulter (“Coulter”), Mark Tkach (“Tkach”), and Ridenow Management LLLP, an entity controlled by Coulter and/or Tkach that provides up to $16.0 million of revolving availability that bears interest based on SOFR plus 5.0%. Coulter and Tkach are holders of the Company’s Class B common stock, members of the Board of Directors and former executive officers of the Company. As of March 31, 2025, the amount owed by the Company to the related parties under this facility was$7.3 million.

Leases

As of March 31, 2025, the Company had 27 leases of properties consisting primarily of dealerships and offices from related parties. Each related-party lease is with a wholly owned subsidiary of the Company as the tenant and an entity controlled by Coulter and/or Tkach, as the landlord. Most of these leases commenced a 20-year term on September 1, 2021, with base rent increasing 2% annually. Two of the leases were entered into in 2024, one with a 20-year term containing a purchase option and the other with a 10-year term. Rent expense associated with the related-party operating leases was$4.8 million and$4.7 million for the three months ended March 31, 2025 and 2024, respectively, and is included in selling, general and administrative expenses on the consolidated statements of operations.

The following table provides the amounts for related party leases that are included on the balance sheets:

(1) Included in accounts payable and other current liabilities.

Employment of Immediate Family Members

Mr. Tkach hastwo immediate family members that are employed by the Company: one as an executive vice president andone as a commissioned sales representative. The executive vice president received aggregate gross pay, including grants of restricted stock, of $0.2 million for the three months ended March 31, 2025, and $0.1 million for the three months ended March 31, 2024. All compensation-related decisions for the executive vice president are approved by the compensation committee of the Company’s board of directors. In addition, compensation-related decisions for the commissioned sales representative were made in a manner that is consistent with internal practices and policies.

NOTE 10 -SEGMENT INFORMATION

Business segments are components of an enterprise about which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) to assess operating performance and allocate resources. Our CODM is our Chairman and CEO. Our operations are organized by management into operating segments by line of business. The CODM evaluates performance and allocates resources based on the segment operating income (loss) of the operating segments, which excludes impairment charges, amortization and depreciation that are included in operating income (loss) on the consolidated statement of operations and includes floor plan interest expense, which is not included in operating income (loss) on the consolidated statement of operations. The CODM uses segment operating income in the annual budget and forecasting process, and considers budget-to-actual variances on a periodic basis.

We havetwo reportable segments: (1) powersports dealership group and (2) vehicle transportation services. The powersports dealership group segment is primarily comprised of powersports dealerships that sell new and pre-owned powersports vehicles; parts, service and accessories; and finance and inventory products for powersports vehicles sold. The vehicle transportation services segment provides nationwide transportation brokerage services between dealerships and auctions. Revenue is all from external customers.

The powersports dealership group segment is significantly larger and requires more investment than our vehicle transportation services segment. The operating income of the powersports segment includes certain operating overhead and corporate costs. Assets are not used for purposes of assessing performance or allocating resources and, as a result, such information has not been presented.

(1) Other operating expenses represent general and administrative expenses, advertising, professional fees and stock-based compensation expenses. The detail for these expenses on a consolidated basis is in Note 4 and is primarily attributable to the Powersports Dealership Group.

NOTE 11 –COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, the Company is involved in various claims and legal actions that arise in the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, as of March 31, 2025, the Company does not believe that the ultimate resolution of any legal actions, either individually or in the aggregate, will have a material adverse effect on its financial position, results of operations, liquidity, and capital resources.

Future litigation may be necessary to defend the Company by determining the scope, enforceability and validity of third-party proprietary rights or to establish its own proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

SEC Investigation

On June 28, 2024, the Company received a subpoena from the SEC requesting documents created during or relating to the period from January 1, 2021 through the date of the subpoena. The subpoena covers documents relating to, among other matters, the Company’s previously disclosed internal investigation into the use of Company resources by former Chairman and CEO Marshall Chesrown; the Company’s review, consideration and approval, and the underlying terms of, related party transactions; employment, compensation, reimbursement and severance arrangements; and disclosures and communications to customers and investors regarding the company’s RideNow Cash Offer tool and certain of its technology. The Company is continuing to produce requested documents and information.

The Company cannot predict the ultimate outcome or timing of the SEC investigation, what, if any, actions may be taken by the SEC or the effect that such actions may have on the business, prospects, operating results and financial condition of the Company.

Delaware Litigation

As previously disclosed, the Company began an investigation of certain allegations surrounding Marshall Chesrown’s use of Company resources in 2023. On June 11, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as CEO (the “CEO Resignation Letter”) and on July 7, 2023, Mr. Chesrown delivered a resignation letter to the Board in his capacity as a member of the Board of Directors (the “Board Resignation Letter” and together with the CEO Resignation Letter, the “Resignation Letters”). In the CEO Resignation Letter, Mr. Chesrown indicated that he was resigning for “good reason” under his employment agreement and described his disagreement with several recent corporate governance, disclosure and other actions taken by the Company, the Board and certain of its members. In the Board Resignation Letter, Mr. Chesrown further detailed his disagreement with actions taken by the Company, the Board and certain of its members and indicated his intent to pursue legal claims. The Company disagrees with the characterization of the allegations and assertions described in the Resignation Letters. The Company and Mr. Chesrown conducted a pre-suit mediation in October 2023, as required in his employment agreement, but did not resolve the matter. On March 13, 2024, Mr. Chesrown filed suit against the Company in Delaware Superior Court for the claims asserted in his Resignation Letters. Mr. Chesrown is seeking a declaratory judgment that he resigned with good reason, termination compensation damages in the amount of $7.5 million, general and reputational damages in the amount of $50.0 million, punitive damages, attorney's fees and litigation costs. The parties are now engaged in the initial stages of discovery. The subject matter of the litigation overlaps with the investigation begun by the Company in 2023. As of the date of this filing, the Company has not decided what further actions, if any, may be taken with regard to the investigation allegations. We intend to defend the litigation claims vigorously; however, we can provide no assurance regarding the outcome of this matter.

Letters of Credit

We issue letters of credit to secure the Company’s various financial obligations, including floor plan financing arrangements and insurance policy deductibles and other claims. The total amount of outstanding letters of credit as of March 31, 2025 was $8.0 million. We do not believe that it is probable that any of the letters of credit will be drawn upon.