☒ ~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐ ~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒x Yes ☐o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒x Yes ☐o No

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 definitions of ~~“large~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "a smaller reporting company,”" and ~~“emerging~~"emerging growth ~~company”~~company" in Rule 12b-2 of the Exchange Act.

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 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐o Yes ☒x No

The number of shares of Class B ~~common stock,~~Common Stock, $0.001 par value, outstanding on November ~~12, 2021~~8, 2022 was ~~14,882,022~~ 16,143,685shares. In addition,50,000shares of Class A ~~common stock,~~Common Stock, $0.001 par value, were outstanding on November ~~12, 2021.~~

The cash consideration for the RideNow Transaction was funded from (i) the Company’s underwritten public offering of 5,053,029 shares of Class B common stock, which resulted in net proceeds of approximately ~~$154,438~~$154,443 (the “August 2021 Offering”), and (ii) net proceeds of approximately ~~$261,451~~$261,000 pursuant to the Oaktree Credit ~~Facility~~Agreement entered into on the RideNow Closing Date (as further described in Note ~~9, the “Oaktree Credit Agreement”)~~5 - Notes Payable and Lines of Credit). The remaining funds received from these financing transactions were used for working capital purposes.

Also see Note 12 – Subsequent Events.

The following table summarizes the final components of consideration ~~paid in cash and equity securities~~transferred by the Company for the ~~acquisitions:~~

RideNow Transaction:

Cash, net of cash acquired $ 365,946
Fair value of Class B common stock issued 200,958
Total estimated purchase price consideration¹ $ 566,904


¹Cash	$	~~The~~400,400
Class B common stock	200,958
Acquiree transaction expenses paid by the Company at closing	1,793
Elimination of preexisting payable from RideNow to RumbleOn	1,734
Total purchase price consideration is subject to a net working capital and debt adjustments. These adjustments are currently under review by management. The amount of these adjustments could not be reasonably estimated as of September 30, 2021, and therefore, no adjustment amount has been reflected in the current estimated purchase price consideration reflected above.	$	604,885

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RideNow Estimated Fair Value of Assets and Liabilities Assumed

All ofRideNow’s acquired assets and liabilities, including goodwill recognized as a result of the RideNow Transaction,have been included in the Company’sPowersports reporting segment, as the RideNow business is entirely within the Company’s Powersports segment.

The Company finalized its valuation of assets acquired, including intangible assets, and has recorded appropriate adjustments to the purchase price allocation during the measurement period. The preparation of the valuation required the use of significant assumptions and estimates. Critical estimates included, but were not limited to, future expected cash flows, including projected revenues and expenses, and the applicable discount rates. These estimates were based on assumptions that the Company believes to be reasonable. However, actual results may differ from these estimates.

The Company uses the income approach to determine the fair value of certain identifiable intangible assets including franchise rights. This approach determines fair value by estimating after-tax cash flows attributable to these assets over their respective useful lives and then discounting these after-tax cash flows back to a present value. The Company bases its assumptions on estimates of future cash flows, expected growth rates, retention factors, etc. Discount rates used to arrive at a present value as of the date of acquisition are based on the time value of money and certain industry-specific risk factors. The Company believes the estimated purchased franchise rights and non-compete agreements amounts so determined represent the fair value at the date of acquisition, and do not exceed the amount a third-party would pay for such assets.

The following amounts represent the ~~preliminary~~final determination of the fair value of the identifiable assets acquired and liabilities assumed as a result of the RideNow Transaction.


Estimated fair value of assets:
Cash	$	34,436
Contracts in transit	10,878
Accounts receivable	10,142
Inventory	127,080
Prepaid expenses	1,785
Right-of-use assets	22,912
Right-of-use assets - related parties	124,243
Property & equipment	18,707
Franchise rights	296,542
Other intangible assets, net	21,558
Other assets	92
Total assets acquired	$	668,375
Estimated fair value of liabilities assumed:
Accounts payable, accrued expenses and other current liabilities	$	39,883
Notes payable - floor plan	47,161
Lease liabilities	22,912
Lease liabilities - related parties	106,966
Notes payable	4,382
Notes payable - related parties	2,167
Deferred tax liabilities	41,484
Other long-term liabilities	6,210
Total liabilities assumed	271,165
Total net assets acquired	397,210
Goodwill	207,675
Total purchase price consideration	$	604,885

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The Company assumed two promissory notes with aggregate principal and accrued interest of $2,200 as of the RideNow Closing Date due to entities controlled by former directors and executive officers of the Company. Amounts due under these notes have been paid in full as of September 30, 2022.

The Company expects it will be able to amortize, for tax purposes, $105,000 of goodwill.

Freedom Transaction

On November 8, 2021, RumbleOn entered into a Membership Interest Purchase Agreement to acquire 100% of the equity interests of the Freedom Entities, and completed the acquisition (the “Freedom Transaction”) on the Freedom Closing Date. The Freedom Entities own and operate powersports retail dealerships, including associated real estate, involving sales, financing, and parts and service of new and used motorcycles, ATVs, UTVs, scooters, side-by-sides, sport bikes, cruisers, watercraft, and other powersports vehicles.

We accounted for the Freedom Transaction as a business combination under ASC 805, Business Combinations. Under the terms of the Membership Interest Purchase Agreement, all outstanding equity interests of the Freedom Entities were acquired for total provisional consideration of $97,237, consisting of $70,726 paid in cash, including certain transaction expenses paid on behalf of the Freedom Entities' equity holders, and issuance of 1,048,718 shares of Class B common stock with a value of $26,511 on the Freedom Closing Date. On June 22, 2022, 2,446 shares of Class B common stock held in escrow were cancelled as part of the final purchase price adjustment.

The following table summarizes the provisional consideration transferred by the Company for the Freedom Transaction:


Cash	$	70,569
Class B common stock	26,511
Acquiree transaction expenses paid by the Company at closing	157
Total provisional purchase price consideration	$	97,237

The table below represents, as of September 30, 2022, the provisional determination of the fair value of the identifiable assets acquired and liabilities assumed from ~~RideNow. RideNow~~the Freedom Entities, and as such, it remains subject to finalization. The Company is included in the Powersports reporting segment, including goodwill, as the RideNow business is entirely within the Company’s Powersports segment. As of September 30, 2021, we have performed an initial valuation of the amounts below; however, our assessment of these amounts remains open for completion. We expectrequired to finalize the purchase price allocation ~~process~~no later than February 18, 2023, and until such time, there may be material changes to the provisional values below, including changes to: (1) inventories and deferred revenues; (2) property and equipment; (3) right-of-use assets and lease liabilities; (4) deferred tax liabilities, net; (5) allocations to intangible assets as well as goodwill; and (6) other assets and liabilities. All acquired assets and liabilities, including provisional goodwill, recognized as a result of the Freedom Transaction have been included in ~~2022 as we complete our review~~the Company’s Powersports reporting segment.

Table of ~~valuations. We are required to finalize our purchase price allocations within one year after~~Contents


Estimated fair value of assets:
Cash	$	6,381
Contracts in transit	1,170
Accounts receivable	1,089
Inventory	24,809
Prepaid expenses	214
Property & equipment	50,228
Right-of-use assets	2,876
Other intangible assets	2,167
Franchise rights	39,661
Other assets	79
Total assets acquired	$	128,674
Estimated fair value of liabilities assumed:
Accounts payable, accrued expenses and other current liabilities	$	5,407
Notes payable - floor plan	18,337
Lease liabilities	2,002
Deferred revenues	3,495
Mortgage notes	26,809
Notes payable	4,693
Total liabilities assumed	60,743
Total net assets acquired	67,931
Goodwill	29,306
Total provisional purchase price consideration	$	97,237

The Company assumed notes payable and mortgage notes liabilities of $31,502 on the Freedom Closing Date. ~~Any potential adjustments made could~~The outstanding balance of these liabilities were repaid in the first quarter of 2022 and are reflected as cash outflows from financing activities in the Condensed Consolidated Statements of Cash Flows. The Company funded the cash portion of the Freedom Transaction, transaction expenses, notes payable, and mortgage note repayments through an $84,500 draw on the Oaktree Credit Agreement (as defined below) and use of approximately $14,253 of available cash resources.

The Company expects it will be ~~material in relation~~able to ~~the preliminary values presented below.~~

amortize, for tax purposes, $29,306 of goodwill.

Estimated fair value of assets:
Contracts in transit $ 10,878
Accounts receivable 15,356
Inventory 116,752
Prepaid expenses 1,785
Right-of-use assets 92,715
Property & equipment 45,801
Franchise rights 282,000
Other intangible assets, net 22,129
Other Assets 119
Total assets acquired 587,535

Estimated fair value of liabilities assumed:
Accounts payable, accrued expenses and other current liabilities 41,616
Notes payable - floor plan 45,626
Lease liabilities 126,302
Deferred tax liability 30,548
Notes payable 6,549
Other long-term liabilities 6,210
Total liabilities assumed 256,851

Total net assets acquired 330,684

Goodwill 236,220

Total consideration $ 566,904

The results of operations of ~~RideNow~~the Freedom Entities from the Freedom Closing Date forward are included in the accompanying Condensed Consolidated Financial ~~Statements.~~Statements and include revenues of $159,645 and pre-tax earnings of $19,896 for the nine months ended September 30, 2022. Acquisition related costs of ~~$1,558 and $3,515~~$1,263 were incurred ~~during~~for the ~~three and nine-months~~nine months ended September 30, ~~2021, respectively,~~2022 and are included in Selling, General and Administrative expenses in the Condensed Consolidated Statements of Operations. In addition, the Company elected to accelerate the vesting of restricted stock units (“RSUs”) and grant other stock awards in connection with the RideNow Transaction. The total value of these awards is $23,943 and is reported as stock-based compensation and other issuances in the Condensed Consolidated Statement of Operations.

~~Supplemental~~ Pro Forma Information

for Acquisitions

The following ~~supplemental~~unaudited pro forma financial information presents consolidated information of the ~~financial results~~Company as if the RideNow Transaction ~~was~~and Freedom Transaction were completed at December 31, 2020.


	Nine Months Ended September 30,
		2022		2021
		(unaudited)
Pro forma revenue		$	1,501,117	$	1,319,726
Pro forma net income		$	26,416	$	31,530
Earnings per share-basic		$	1.67	$	1.99
Weighted average number of shares-basic		15,859,162		15,859,162
Earnings per share diluted		$	1.66	$	1.98
Weighted average number of shares diluted		15,922,513		15,922,513

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NOTE 3 – LEASES

Lease Commitments

We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of ~~January 1, 2020~~the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our capitalized financing and right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. To determine the discount rate to use in determining the present value of the lease payments, we use the rate implicit in the lease if determinable, otherwise we use our incremental borrowing rate.

The following table reflects the balance sheet presentation of our lease assets and liabilities:


Leases	Classification	September 30, 2022		December 31, 2021
Assets:
Operating	Right of use assets	$	161,171	$	133,112
Finance	Property and equipment, net	—		3,240
Total right-of-use assets		$	161,171	$	136,352

Liabilities:
Current:
Operating	Current portion of lease liabilities	$	23,324	$	19,155
Finance	Current portion of lease liabilities	—		1,094
Non-Current:
Operating	Long-term portion of operating lease liabilities	126,941		114,687
Finance	Other long-term liabilities	—		2,869
Total lease liabilities		$	150,265	$	137,805

The weighted-average remaining lease term and discount rate for the Company's operating and financing leases are as follows:


			September 30, 2022
Weighted average lease term-operating leases			14.8 years

Weighted average discount rate-operating leases			14.0%

The following table provides information related to the lease costs of finance and operating leases for three months and ~~nine-months~~nine months ended September 30, ~~2021~~2022 and 2021:


Lease Expense	Income Statement Classification	Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Operating	Selling, general and administrative expenses	$	7,894	$	2,364	$	22,961	$	3,544

Finance:
Amortization of ROU assets	Depreciation and amortization expense	—		170		—		170
Interest on lease liabilities	Interest expense	—		511		—		511
Total lease costs		$	7,894	$	3,045	$	22,961	$	4,225

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In connection with the RideNow Transaction, the Company entered into related party leases for 24 properties. The following table provides information related to the portion of lease assets and liabilities which are attributable to related party leases at September 30, ~~2020. Pro forma net income~~2022:


Leases	Classification	September 30, 2022
Assets:
Operating	Right of use assets – related party	$	104,368
Operating	All other right of use assets	56,803
Total right-of-use assets		$	161,171

Liabilities:
Current:
Operating	Current portion of lease liabilities – related party	$	14,465
Operating	Current portion of lease liabilities – all other leases	8,859
Total current liabilities		$	23,324
Non-Current:
Operating	Long-term portion of lease liabilities – related party	92,848
Operating	Long-term portion of lease liabilities – all other leases	34,093
Total non-current liabilities		$	126,941
Total lease liabilities		$	150,265

Supplemental cash flow information related to operating leases for the ~~three and nine-months~~nine months ended September 30, ~~2021, includes the tax benefit of $10,681 reported in the Condensed Consolidated Statements of Operations.~~

2022 was as follows:

Three-Months Ended
September 30, Nine-Months Ended
September 30,
2021 2020 2021 2020
Pro forma total revenue $ 384,724 $ 337,001 $ 1,148,597 $ 1,015,260
Pro forma net income $ (6,045 ) $ 9,703 $ 50,524 $ 11,102
Net income per share-basic $ (0.45 ) $ 0.81 $ 3.91 $ 0.93
Weighted average number of shares-basic 13,305,416 11,960,127 12,915,495 11,886,326
Net income per share-fully diluted $ (0.45 ) $ 0.81 $ 3.86 $ 0.93
Weighted average number of shares-fully diluted 13,305,416 11,960,127 13,083,502 11,886,326

~~Pro forma adjustments for the three and nine-months ended September 30, 2021, primarily include:~~

Three-Months Ended
September 30, Nine-Months Ended
September 30,
2021 2020 2021 2020
Stock compensation and other administrative costs $ 179 $ 275 $ 745 $ 758
Depreciation and amortization $ 1,229 $ 1,844 $ 4,918 $ 5,532
Interest expense and amortization of debt discount $ 5,563 $ 8,319 $ 22,345 $ 25,185
Income tax provision $ (5,575 ) $ 3,234 $ 13,281 $ 3,701

~~NOTE 4 – ACCOUNTS RECEIVABLE, NET~~

~~Accounts receivable, net consists of the following as of September 30, 2021 and December 31, 2020:~~

September 30,
2021 December 31,
2020
Contracts in transit $ 9,218 $ —
Trade receivables 24,701 8,859
Factory receivables¹ 3,637 —
Finance receivables² 4,972 2,118
42,528 10,977
Less: allowance for doubtful accounts 411 1,569
$ 42,117 $ 9,408

~~Factory receivables represent amounts due primarily from manufacturer for holdbacks, rebates, co-op advertising, warranty and supplier returns.~~

	²Nine Months Ended September 30, 2022
Cash payments for operating leases	~~Finance receivables originated~~$	18,643
ROU assets obtained in ~~connection with the Company’s vehicle sales are held~~exchange for ~~sale and are subsequently sold.~~new operating lease liabilities	$	15,912

~~NOTE 5 – INVENTORY~~

~~Inventory consists of the following as of September 30, 2021 and December 31, 2020:~~

September 30,
2021 December 31,
2020
New Vehicles $ 53,975 $ —
Pre-owned vehicles:
Powersport vehicles 67,843 1,870
Automobiles and trucks 27,185 19,490
Parts, accessories and other 22,452 —
$ 171,455 $ 21,360

~~Floor plan notes payable as of September 30, 2021 and December 31, 2020 were as follows:~~

September 30,
2021 December 31,
2020
Floor plan notes payable - trade $ 21,350 $ —
Floor plan notes payable - non-trade 65,825 17,812
Floor plan notes payable $ 87,175 $ 17,812

Floor plan notes payable-trade reflects amounts borrowed to finance the purchase of specific new and, to a lesser extent, used vehicle inventory with corresponding manufacturers’ captive finance subsidiaries (“trade lenders”). Floor plan payable-non-trade represents amounts borrowed to finance the purchase of specific new and used vehicle inventories with non-trade lenders. Changes in floor plan notes payable-trade are reported as operating cash flows and changes in floor plan payable-non-trade are reported as financing cash flows in the accompanying Combined 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, as shown in the above table, will generally also 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 several business days after the related vehicles are sold. Vehicle floor plan facilities are primarily collateralized by vehicle inventories and related receivables.

New vehicle floor plan facilities generally utilize LIBOR or ADB (Average Daily Balance)-based interest rates, which generally ranged between 5.0% and 7.0% as of September 30, 2021. Used vehicle floor plan facilities generally utilize prime, LIBOR or ADB-based interest rates, which ranged between 4.75% and 8.0% as of September 30, 2021. The aggregate capacity to finance our inventory under the new and used vehicle floor plan facilities was $217,717 as of September 30, 2021.

~~NOTE 6 – PROPERTY AND EQUIPMENT, NET~~

The following table summarizes ~~property and equipment, net of accumulated depreciation and amortization as of~~the future minimum payments for operating leases at September 30, ~~2021, and~~2022 due in each year ending December ~~31, 2020:~~

31:


Year	Operating Leases
2022	$	6,726
2023	27,125
2024	26,598
2025	25,012
2026	23,639
Thereafter	290,066
Total lease payments	399,166
Less: imputed interest	248,901
Present value of operating lease liabilities	$	150,265

September 30,
2021 December 31,
2020
Buildings and improvements $ 40,908 $ —
Leasehold Improvements 6,689 321
Equipment 4,832 —
Furniture and fixtures 297 191
Technology development 12,274 11,008
Vehicles 1,418 241
Total property and equipment 66,418 11,761
Less: accumulated depreciation and amortization 7,489 5,240
Total $ 58,929 $ 6,521

~~Amortization and depreciation on Property and Equipment is determined on a straight-line basis over the estimated useful lives ranging from three to five years.~~

As of September 30, 2021, capitalized technology development costs were $12,066 and capitalized software costs were $208. Total technology development costs incurred for the three and nine-months ended September 30, 2021 was $1,008 and $2,706, respectively, of which $360 and $1,266, respectively was capitalized and $648 and $1,441, respectively, was charged to expense in the accompanying Condensed Consolidated Statements of Operations. Depreciation expense for the three and nine-months ended September 30, 2021 was $689 and $1,920, respectively, which included the amortization of capitalized technology development costs of $592 and $1,710, respectively. Total technology development costs incurred for the three and nine-months ended-months ended September 30, 2020 was $1,164 and $2,635, respectively, of which $984 and $1,598, respectively, was capitalized and $180 and $1,037 respectively, was charged to expense in the accompanying Condensed Consolidated Statements of Operations. Depreciation expense for the three and nine-months ended-month periods ended September 30, 2020 was $536 and $1,568, respectively, which included the amortization of capitalized technology development costs of $477 and $1,367, respectively.

NOTE ~~7 – INTANGIBLE~~4 –INTANGIBLE ASSETS AND GOODWILL

The ~~following is a summary of the~~ carrying ~~amounts~~amount of goodwill, franchise rights, and other intangible assets as of September 30, ~~2021~~2022 and December 31, ~~2020.~~

2021 is as follows:

September 30,
2021 December 31,
2020
Goodwill $ 263,107 $ 26,887

Other Intangible Assets
Franchise rights - indefinite life $ 282,000 $ —
Other intangibles 22,175 46
304,175 46
Less accumulated amortization 615 —
Intangible assets, net $ 303,560 $ 46

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	September 30, 2022		December 31, 2021
Goodwill	$	266,059	$	260,922

Other Intangible Assets
Franchise rights - indefinite life	$	339,071	$	282,350
Other intangibles - definite lived	23,750		22,175
	362,821		304,525
Less accumulated amortization	9,941		2,459
Intangible assets, net	$	352,880	$	302,066

The following summarizes the changes in the carrying amount of goodwill by reportable segment from December 31, 2021 to September 30, 2022.


	Powersports		Automotive		Vehicle Logistics		Total
Balance at December 31, 2021	$	234,035	$	26,039	$	848	$	260,922
RideNow purchase price adjustments	(24,193)		—		—		(24,193)
Freedom Powersports Transaction	29,330		—		—		29,330
Balance at September 30, 2022	$	239,172	$	26,039	$	848	$	266,059

In addition to annual impairment testing, the Company ~~evaluates~~continuously monitors for events and circumstances that could indicate that it is more likely than not that its goodwill, indefinite lived intangible assets, ~~for~~finite lived intangible assets, and other long-lived assets are impaired or not recoverable (a triggering event), requiring an interim impairment ~~at least annually, or when~~test. During the quarter ended September 30, 2022, the Company considered a number of factors including, but not limited to, current macroeconomic conditions such as inflation, economic growth, and interest rate movements, industry and market considerations, stock price performance (including performance relative to peers), and overall financial performance of the Company. Based on the analysis of relevant events and circumstances, the Company concluded a triggering ~~events occur. No triggering events were noted~~event had not occurred as of September 30, ~~2021.~~

2022. The Company will continue to monitor both macroeconomic and company-specific events and circumstances in future periods and if a triggering event is identified prior to the Company’s fourth quarter annual impairment test, management will complete an interim impairment test at that time.

During the fourth quarter of 2022, we changed the date of our annual impairment test for goodwill and indefinite-lived intangible assets from December 31st to October 1st. This voluntary change was made to better align the timing of the assessment with the Company’s planning and forecasting process that now incorporates the operations of the Freedom Entities and RideNow that were acquired in 2022 and 2021, respectively, and to give the Company additional time to complete the annual assessment in advance of year-end reporting. We believe this change in accounting principle measurement date is preferable under the circumstances. The Company has commenced its annual impairment process as of October 1, 2022, which includes engaging a third party valuation specialist to assist in determining the fair value of the Company’s reporting units. The Company’s annual impairment analysis as of October 1 is incomplete at this time, and management expects to finalize this assessment in the fourth quarter.

Estimated annual amortization expense related to other intangibles:


2022	$	2,341
2023	7,908
2024	3,436
2025	99
Thereafter	—
	$	13,784

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NOTE 85 – ~~ACCOUNTS~~NOTES PAYABLE AND ~~ACCRUED LIABILITIES~~

LINES OF CREDIT

~~The following table summarizes accounts payable and other accrued liabilities as of September 30, 2021 and December 31, 2020:~~

September 30,
2021 December 31,
2020
Accounts Payable $ 8,165 $ 8,168
Accrued Interest 2,977 1,486
Operating lease liability-current portion 7,435 1,630
Financing lease liability-current portion 345 —
Accrued Payroll 22,674 1,080
Customer deposits 5,449 —
State and local taxes 6,591 856
Professional fees 6,969 112
Other accrued expenses 12,779 861
Total $ 73,384 $ 14,193

~~NOTE 9 – NOTES PAYABLE~~

Notes payable consisted of the following as of September 30, ~~2021~~2022 and December 31, ~~2020:~~

2021:

September 30,
2021 December 31,
2020
Term Loan Credit Agreement dated August 31, 2021. Amortization payments are required quarterly commencing in the quarter ending December 31, 2021. The Initial Loan Term Facility matures on August 31, 2026. The interest rate as of September 30, 2021 was 9.25%. $ 252,777 $ —
Term Loan Credit Agreement-NextGen dated February 8, 2017. Interest payable semi-annually at 6.5% through February 9, 2019 and 8.5% through February 10, 2020 and 10.0% thereafter through maturity, which was January 31, 2021. — 833
Notes payable-private placement dated March 31, 2017. Interest payable semi-annually at 8.5% through September 30, 2020 and 10.0% thereafter through maturity, which was June 30, 2021 — 669
Line of Credit- RumbleOn Finance. Line of credit secured by the loans and other assets of RumbleOn Finance, LLC. Interest rate as of September 30, 2021 was 7.25%. Principal and interest is payable on demand. — 889
Unsecured note payable to P&D Motorcycles in the original amount of $1,724 with interest rate of 4% through maturity which is July 1, 2022.

1,073

—

Unsecured notes payable to RideNow Management, LLLP, a related party through equal ownership by two directors; monthly principal payments ranging from $7 to $13; interest accruing at rates ranging from LIBOR+.6% to LIBOR+1.3%.

1,033

—

Notes payable-PPP Loans dated May 1, 2020. Payments of principal and interest at 1% were deferred until September 1, 2021, at which time the Company will make equal payments of principal and interest through maturity, which is April 1, 2025. 4,612 5,177
Total notes payable and lines of credit 259,495 7,568
Less: Current portion 6,151 2,877
Long-term debt, net of current portion $ 253,344 $ 4,691


	September 30, 2022		December 31, 2021
Term Loan Credit Agreement maturing on August 31, 2026. Amortization payments are required quarterly. The interest rate at September 30, 2022 was 10.77%.	$	334,397	$	253,438
RumbleOn Finance line of credit dated February 4, 2022 and maturing on February 4, 2025. Interest rate at September 30, 2022 was 8.09%.	22,925		—
PPP Loans maturing on April 1, 2025. Balance was forgiven during the quarter ended September 30, 2022.	—		2,534
Unsecured note payable to P&D Motorcycles.	—		1,031
Unsecured notes payable to RideNow Management, LLLP, a related party through equal ownership by former two directors of the Company.	—		907
Total notes payable and lines of credit	357,322		257,910
Less: Current portion	3,645		4,322
Long-term portion	$	353,677	$	253,588

Floor plan notes payable as of September 30, 2022 and December 31, 2021:


	September 30, 2022		December 31, 2021
Floor plans notes payable - trade	$	53,865	$	15,119
Floor plans notes payable - non-trade	121,431		82,159
Floor plan notes payable	$	175,296	$	97,278

Term Loan Credit Agreement

On the RideNow Closing Date, the Company entered into ~~the Oaktree~~a new Term Loan Credit Agreement (the “Oaktree Credit Agreement”) among the Company, as borrower, the lenders party thereto, and Oaktree Fund Administration, LLC, as administrative agent and collateral agent (the “Administrative Agent”). The Oaktree Credit Agreement provides for secured credit facilities in the form of a $280,000 principal amount of initial term loans (the “Initial Term Loan Facility”) and a $120,000 in aggregate principal amount of delayed draw term loans (the “Delayed Draw Term Loans ~~Facility,” and together with the Initial Term Loan Facility, the “Oaktree Credit~~ Facility”). The proceeds from the Initial Term Loan Facility ~~together with cash on hand, and the proceeds from the August 2021 Offering~~ were used to ~~(i)~~ consummate the RideNow Transaction ~~and (ii) pay fees, expenses and other items related to the consummation of the RideNow Transaction, the August 2021 Offering~~ and to provide for working capital. The proceeds from the Delayed Draw Term Loans Facility, if drawn, will be used to finance acquisitions permitted by the Oaktree Credit Agreement and similar investments or “earn-outs” entered into in connection with acquisitions and to pay fees and expenses relating thereto. Loans under the Delayed Draw Term Loans Facility are subject to customary conditions precedent for facilities of this type including the need to meet certain financial tests and become available six (6) months after the RideNow Closing Date and are unavailable to be drawn after the eighteen (18) month anniversary of the RideNow Closing Date. The Oaktree Credit ~~Facility~~Agreement also provides for incremental draws for up to an additional $100,000 in accordance with the terms set forth in the Oaktree Credit Agreement, which may be used for acquisitions or working capital.

The loan is reported on the balance sheet as senior secured debt, ~~and was recorded~~ net of debt discount of $27,223. The debt discount includes the warrant for $10,950 that was previously recorded as a deferred finance charge. See Note 11-Stockholders’ Equity for a more detailed discussion of the warrant. The debt discount also includes fees incurrent in from our investment bankers and ~~other~~ debt issuance ~~expenses.~~costs of $26,669, including the fair value of stock warrants of $10,950. Borrowings under the Oaktree Credit ~~Facility~~Agreement bear interest at a rate per annum equal, at the Company’s option, to either (a) LIBOR (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, one percent (1.00%) of such interest may be payable in kind. The interest rate ~~as of~~on September 30, ~~2021~~2022, was ~~9.25%~~10.77%. Interest expense for the three and ~~nine-months~~nine months ended September 30, 2022 and 2021 ~~was~~were $9,605 and $29,305, and $2,666 and $2,666, respectively, which included ~~debt~~ amortization of ~~$509.~~

~~The Oaktree Credit Agreement contains affirmative~~$596 and ~~negative covenants customary for facilities of its type which, among other things, generally limit (with certain exceptions including those for permitted acquisitions~~$4,388, and floor plan financing): mergers, amalgamations or consolidations; the incurrence of additional indebtedness (including guarantees); the incurrence of additional liens; the sale, license, lease, transfer or other disposition of assets; certain investments; transactions with affiliates; payments of certain indebtedness;$509 and other activities customarily restricted in such agreements. Beginning in the first full calendar quarter after the Closing Date, the Credit Agreement requires that (i) Consolidated Total Net Leverage Ratio not be greater than 4.25 to 1.00; (ii) Consolidated Senior Secured Net Leverage Ratio not be greater than 3.75 to 1.00, and (iii) its Liquidity not be less than $25,000 (each term as defined in the Oaktree Credit Agreement).

~~On the last business day of each calendar quarter, beginning with the first full fiscal quarter ending after the Closing Date (or with regard~~$509, respectively, related to the Delayed Draw Term Loans Facility, beginning with the first full fiscal quarter ending after the applicable funding dates), the Company is required to make amortization payments in an aggregate principal amount equal to 0.25% of the aggregate principal amount of the Initial Term Loan Facility (or with regard to the Delayed Draw Term Loans Facility funded on the applicable funding date). Borrowings under the Oaktree Credit Facility mature five (5) years after the Closing Date.

The Company is permitted to make voluntary prepayments of the loans and is obligated to make mandatory prepayments with regard to excess cash flow and out of the proceeds of certain asset sales and other recovery eventsdiscount and debt and certain equity issuances. Optional prepayments, mandatory prepayments out of the proceeds of debt and certain equity issuances, or an acceleration of the loans following an event of default will subject the Company to payment of certain fees, as defined inissuance costs. While the Oaktree Credit Agreement ifnotes that Secured Overnight Financing Rate ("SOFR") may be selected as the alternative benchmark rate, this has not been determined as of September 30, 2022. As such, ~~acceleration occurs on or before~~ the ~~thirty-six (36) month anniversary~~Company cannot predict the effect of the ~~Closing Date.~~

discontinuance of LIBOR or the establishment and use of alternative rates or benchmarks on interest expense as of September 30, 2022.

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Obligations under the Oaktree Credit Agreement are secured by a first-priority lien on substantially all of the assets of the Company and its ~~wholly owned~~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 Oaktree Credit Agreement.

The Oaktree Credit Agreement contains customary events of default for facilities of this type. If an event of default under the Oaktree Credit Agreement occurs and is continuing, the commitments to make available the Delayed Draw Term Loan Facility may be terminated and the principal amount outstanding under the Oaktree Credit Agreement, together with all accrued and unpaid interest and other amounts owed thereunder, may be declared immediately due and payable.

~~Oaktree Warrant~~

In connection with providing the debt financing for the RideNow Transaction, and pursuant to the ~~Commitment Letter~~commitment letter executed on March 15, 2021, the Company issued ~~warrants~~a warrant to purchase $40,000 of shares at an exercise price of $33.00 per share of Class B common stock to Oaktree Capital Management, L.P. and its lender affiliates (the ~~“Oaktree Warrants”~~“Warrant”). ~~In connection with the August 2021 Offering, the~~The exercise price was adjusted during the third quarter to $31.50 and the expiration date was extended to July 25, 2023. The initial Warrant liability and deferred financing charge recognized was $10,950. The Warrant liability was subject to remeasurement at each balance sheet date and any change in fair value was reflected in the Condensed Consolidated Statements of Operations. The fair value of the ~~Warrants~~Warrant was ~~set at $33.00 per share~~estimated using a Monte Carlo simulation based on a combination of level 1 and level 2 inputs. For the three months ended June 30, 2021, the fair value of the warrant liability was increased $2,224 to $13,174. On August 31, 2021, the fair value of the warrant liability was increased $6,526 to $19,700. Upon closing of the RideNow Transaction, the Warrant was considered equity linked contracts indexed to the Company’s stock and therefore met the equity classification guidance. As a result, the $19,700 was reclassified to additional paid-in-capital and the ~~aggregate number~~$10,950 deferred financing charge was reclassified as part of ~~shares of Class B common stock underlying~~the debt discount related to the Oaktree ~~Warrants was set at 1,212,121.~~Credit Agreement. The ~~Oaktree Warrants are immediately exercisable on the Closing Date and expire eighteen (18) months after the Closing.~~

~~Line of Credit- RumbleOn Finance Facility~~

~~On June 23, 2020, RumbleOn Finance, LLC, a wholly owned subsidiary~~recognition of the warrant liability and deferred financing charge and the reclassification of the warrant liability to additional paid-in capital and the reclassification of the deferred financing charge to debt discount are non-cash items.

Floor Plan Notes Payable

The Company relies on its floorplan vehicle financing credit lines (“~~RumbleOn Finance”~~Floorplan Lines”), to finance new and used vehicle inventory at its retail locations and for the wholesale segment. Floor plan notes payable - trade reflects amounts borrowed to finance the purchase of specific new and, to a lesser extent, used 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 used 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 Consolidated Statements of Cash Flows.

Inventory serves as collateral under floor plan notes payable borrowings. The inventory balance in its entirety also serves as collateral under the Oaktree Credit Agreement.

On August 31, 2021, Wholesale, Inc. entered into a ~~loan agreement providing for up~~Floorplan Line with AFC (the “AFC Credit Line”) to ~~$2,500 in proceeds (the “ROF Facility”) with CL Rider Finance, L.P. (“CL Rider”). In connection with~~replace an existing line of credit. Advances under the ~~ROF Facility, RumbleOn Finance pledged its assets~~AFC Credit Line are limited to ~~CL Rider to secure the ROF Facility and executed a promissory note in favor~~$29,000 as of ~~the CL Rider pursuant to which the ROF Facility will accrue interest at an initial rate not lower than 7% per annum. The ROF Facility is payable on demand by CL Rider.~~September 30, 2022. Interest expense on the ~~ROF Facility for the for the three and nine-months ended September 30, 2021 was $0 and $71, respectively.~~

~~Notes Payable~~

~~NextGen~~

On February 8, 2017, in connection with the acquisition of NextGen, the Company issued a subordinated secured promissory note in favor of NextGen (which note was subsequently assigned to Halcyon in February 2018) in the amount of $1,333. Halcyon was affiliated with Kartik Kakarala, a former director of the Company. Interest accrues and will be paid semi-annually (i) at a rate of 6.5% annually from the closing date through the second anniversary of such date; (ii) at a rate of 8.5% annually from the second anniversary of the closing date through February 10, 2020; and (iii) 10.0% thereafter through the maturity date. The Company’s obligations under the NextGen Note are secured by substantially all the assets of NextGen Pro LLC (“NetGen Pro”), pursuant to an Unconditional Guaranty Agreement (the “Guaranty Agreement”), by and among NextGen and NextGen Pro, and a related Security Agreement between the parties, each dated as of February 8, 2017. As discussed below, the note was exchanged for a new note in January 2020, which extended the maturity date of the note until January 31, 2021. Interest expense on the NextGen Note for the three and nine-months ended September 30, 2021 was $0 and $7, respectively. Interest expenses on the NextGen Note for the three and nine-months ended September 30, 2020, was $21 and $66, respectively.

~~Private Placement~~

On March 31, 2017, the Company completed funding of the second tranche of the 2016 Private Placement. The investors were issued 58,096 shares of Class B common stock of the Company and promissory notes (the “Private Placement Notes”) in the amount of $667, in consideration of cancellation of loan agreements having an aggregate principal amount committed by the purchasers of $1,350. The Private Placement Notes matured on January 31, 2021. Interest accrued at a rate of 6.5% annually from the closing date through the second anniversary of such date; at a rate of 8.5% annually from the second anniversary of the closing date through March 31, 2020; and at a rate of 10% thereafter through the Maturity Date. Based on the relative fair values attributed to the Class B common stock and promissory notes issued in the 2016 Private Placement, the Company recorded a debt discount on the promissory notes of $667 with the corresponding amounts recorded as an addition to paid-in capital. The debt discount was fully amortized to interest expense at the scheduled maturity of the Private Placement Notes in January 2021 using the effective interest method. The effective interest rate at June 30, 2021 was 26.0%. Interest expense on the Private Placement Notes was $0 and $18, respectivelyWholesale Floorplan Lines for the three and nine months ended September 30, ~~2021. Interest expense for~~2022 and 2021 were $275 and $1,032, $325 and $969, respectively. The balance of the ~~three and nine-months ended~~AFC Credit Line as of September 30, ~~2020~~2022 and 2021 was ~~$17~~$20,508 and ~~$125, respectively, which included debt discount amortization~~$28,336, respectively.

Line of $0 and $76, respectively. On January 31, 2021, a payment of $371 was made on the Private Placement Note and the remaining balance of $297 was extended through June 30, 2021. The Private Placement Notes were paid in full on July 1, 2021.

Credit - RumbleOn Finance

~~Exchange of Notes Payable~~

Certain of the Company’s investors extended the maturity of currently outstanding promissory notes, and exchanged such notes for new notes (the “New Investor Notes”), pursuant to that certain Note Exchange Agreement, dated January 14, 2020 (the “Investor Note Exchange Agreement”), by and between the Company and each investor thereto, including Halcyon, such New Investor Note for an aggregate principal amount of $833 (after taking account of a $500 pay down of the previously outstanding Halcyon note), Blue Flame Capital,ROF SPV I, LLC (“~~Blue Flame”~~ROF SPV”), an ~~entity affiliated with Denmar Dixon, a director~~indirect subsidiary of the Company, ~~such New Investor Note~~entered into a $25,000 secured loan facility on February 4, 2022 primarily to provide for the purchase by ROF SPV of consumer finance loans originated by RumbleOn Finance, LLC (“ROF”), the Company’s consumer finance subsidiary. Borrowings under the facility generally bear interest at a rate per annum equal to the lesser of SOFR plus an ~~aggregate~~applicable margin of 5%.

ROF SPV may prepay the full principal amount of $99, and Mr. Dixon, individually, such New Investor Note for an aggregate principal amount of $273. The Halcyon and Blue Flame outstanding principal plus accrued interest were paid in full on January 31, 2021. The remaining outstanding principal plus accrued interestbalance of the ~~New Investor Notes was~~loan and all other obligations and terminate the loan agreement at any time after 24 months following the closing date (the “Revolving Period”), so long as, ROF SPV provides 30 days written notice. Additionally, ROF SPV may prepay the loan in certain circumstances where a loan portfolio is sold, so long as a 1% fee is paid ~~in full on July 1, 2021.~~

~~Bridge Loan~~

~~On March 12, 2021, in anticipation of~~to the RideNow Transaction, the Company and its subsidiary, NextGen Pro, executed a secured promissory note with BRF Finance Co., LLC (“BRF Finance”), an affiliate of B. Riley Securities, Inc., pursuant to which BRF Finance loaned the Company $2,500 (the “Bridge Loan”). The Bridge Loan matureslenders. ROF SPV has drawn $22,925 on the ~~earlier~~secured loan facility as of September 30, 2021 or upon the issuance of debt or equity above a threshold. The Bridge Loan plus accrued interest at 12% was paid in full on the Closing Date. Interest expense on the Bridge Loan for the three and nine-months ended September 30, 2021, was $53 and $147, respectively.

2022.

PPP Loans

On May 1, 2020, the Company ~~and its wholly owned subsidiaries Wholesale and Wholesale Express (together, the “Subsidiaries,” and with the Company, the “Borrowers”), each~~ entered into loan agreements and related promissory notes (the “SBA Loan Documents”) to receive U.S. Small Business Administration Loans (the “SBA Loans”) pursuant to the Paycheck Protection

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Program (the “PPP”) established under the CARES Act, in the aggregate amount of $5,177 (the “Loan Proceeds”). Pursuant to the terms of the SBA Loan Documents, the Borrowers can apply for and receive forgiveness for all, or a portion of the loans granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for certain permissible purposes as set forth in the PPP, including, but not limited to, payroll costs, mortgage interest, rent or utility costs (collectively, “Qualifying Expenses”), and on the maintenance of employee and compensation levels during a certain time period following the funding of the PPP Loans. In July, 2021, we applied to obtain forgiveness of the PPP Loans and received approval for the forgiveness totaling $564 in September, 2021. The balance of the PPP loans ~~of $4,612 is still under review~~was forgiven by the SBA ~~and~~during the ~~Company can provide no assurance that it will obtain forgiveness of this remaining balance in whole or in part. As of~~quarter ended September 30, ~~2021, payments~~2022.

Derivative Liability

In connection with the convertible senior notes issued on ~~this remaining loan balance commenced September 1, 2021~~January 10, 2020 (the “New Notes”), a derivative liability was recorded at issuance with an interest make-whole provision of $20,673 based on a lattice model using a stock price of $14.60, and estimated volatility of 55.0% and risk-free rates over the ~~loans mature on April 25, 2025.~~

entire 10-year yield curve.

~~Interest expense on~~The change in value of the ~~PPP Notes~~derivative liability for the three and ~~nine-months~~nine months ended September 30, 2022 and 2021 ~~was $13~~were $0 and $39, ~~respectively. Interest expense on the PPP Notes for the three~~ and ~~nine-months ended September 30, 2020 was $12~~$(6,518) and ~~$19 respectively.~~

~~NOTE 10 – CONVERTIBLE NOTES~~

~~As of September 30, 2021, the outstanding convertible promissory notes net of debt discount and issue costs are summarized as follows:~~

September 30, 2021 December 31, 2020
Principal
Amount Debt
Discount Carrying
Amount Principal
Amount Debt
Discount Carrying
Amount
Convertible senior notes $ 38,750 $ 10,102 $ 28,648 $ 38,750 $ 11,737 $ 27,013

$1,536 unsecured note
448 169 279 1,024 308 716
Total convertible notes 39,198 10,271 28,927 39,774 12,045 27,729
Less: Current portion 448 169 279 768 205 563
Convertible debt, net of current portion $ 38,750 $ 10,102 $ 28,648 $ 39,006 $ 11,840 $ 27,166

~~Convertible Senior Notes~~

On May 9, 2019, the Company entered into a purchase agreement (the “Old Notes Purchase Agreement”) with JMP Securities LLC (“JMP Securities”) to issue and sell $30,000 in aggregate principal amount of its 6.75% Convertible Senior Notes due 2024 (the “Old Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) (the “2019 Note Offering”). On January 10, 2020, the Company entered into a Note Exchange and Subscription Agreement, as amended by a Joinder Agreement (together, the “New Note Purchase Agreement”)$(8,774), with the investors in the 2019 Note Offering, pursuant to which the Company agreed to complete (i) a note exchange pursuant to which $30,000 of the Old Notes would be cancelled in exchange for a new series of 6.75% Convertible Senior Notes due 2025 (the “New Notes,” and together with the Old Notes, the “Public Notes”) and (ii) the issuance of additional New Notes in a private placement (the “2020 Note Offering”). On January 14, 2020, the Company closed the 2020 Note Offering. The proceeds for the 2020 Note Offering after deducting for payment of accrued interest on the Old Notes and offering-related expenses were approximately $8,272.

The New Notes were issued pursuant to an Indenture (the “New Indenture”), by and between the Company and the Trustee. The New Notes bear interest at 6.75% per annum, payable semiannually on January 1 and July 1, beginning on July 1, 2020. The New Notes may bear additional interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the New Indenture or if the New Notes are not freely tradable as required by the New Indenture. The New Notes mature on January 1, 2025, unless earlier converted, redeemed, or repurchased pursuant to their terms.

The initial conversion rate of the New Notes is 25 shares of Class B common stock per $1 principal amount of New Notes, which is equal to an initial conversion price of $40.00 per share. The conversion rate is subject to adjustment in certain events as set forth in the New Indenture but will not be adjusted for any accrued and unpaid interest. In addition, upon the occurrence of a “make-whole fundamental change” (as defined in the New Indenture), the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its New Notes in connection with such make-whole fundamental change. Before July 1, 2024, the New Notes will be convertible only under circumstances as described in the New Indenture. No adjustment to the conversion rate as a result of conversion or a make-whole fundamental change adjustment will result in a conversion rate greater than 62.0 shares per $1 in principal amount.

The New Indenture contains a “blocker provision” which provides that no holder (other than the depository with respect to the notes) or beneficial owner of a New Note shall have the right to receive shares of the Class B common stock upon conversion to the extent that, following receipt of such shares, such holder or beneficial owner would be the beneficial owner of more than 4.99% of the outstanding shares of the Class B common stock.

The New Notes are not redeemable by the Company before January 14, 2023. The Company may redeem for cash all or any portion of the New Notes, at its option, on or after January 14, 2023 if the last reported sale price of the Class B common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the New Notes.

The New Notes rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the New Notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of current or future subsidiaries of the Company (including trade payables).

The New Notes are subject to events of default typical for this type of instrument. If an event of default, other than an event of default in connection with certain events of bankruptcy, insolvency or reorganization of the Company or any significant subsidiary, occursrespectively, and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding New Notes by notice to the Company and the Trustee, may declare 100% of the principal and accrued and unpaid interest, if any, on all the New Notes then outstanding to be due and payable.

~~As of September 30, 2021, the conditions allowing holders of the New Notes to convert have not been met and therefore the New Notes are not yet convertible.~~

The Company accounted for the exchange of the Old Notes and the issuance of the New Notes in accordance with the conversion guidance in ASC 470-20 “Debt – Debt with Conversion and Other Option” (ASC 470-20) and determined that the exchange of the Old Notes for the New Notes required derecognition of the Old Notes given that the difference in the fair value of the embedded conversion feature of the New Notes relative to the Old Notes was in excess of 10 percent of the Old Notes conversion feature fair value. In derecognizing the Old Notes, the Company recognized a gain of $188 equal to difference between the fair value of the Old Notes liability immediately prior to extinguishment and the carrying amount of the liability component of the Old Notes, including any unamortized debt issuance costs. The remaining consideration of $2,593 was allocated to the reacquisition of the equity component and recognized as a reduction of stockholder’s equity.

~~The New Notes were accounted for in accordance with FASB ASC 470,~~ ~~Debt~~ ~~and ASC 815,~~ ~~Derivatives and Hedging~~, which required bifurcation of the liability and equity components. The Company determined the carrying amount of the liability component was $25,280 and represents the present value of the New Notes cash flows using an implied discount rate of 18.7%, which is a yield applicable to similar debt instruments that do not have the conversion feature. After allocation of the initial proceeds to the liability components, the remaining amount was allocated to the equity component and recorded as additional paid in capital. The Company recorded $13,529, in total debt discount related to the New Notes which included $60 of debt issuance costs. The Company allocates transaction costs related to the issuance of the New Notes to the liability and equity components using the same proportions as the initial carrying value of the New Notes. The $60 of transaction costs attributable to the debt component are being amortized to interest expense using the effective interest method over the term of the New Notes. Transaction costs attributable to the equity component were $41 and are netted with the equity component of the New Notes in stockholders’ equity. The equity component is not remeasured as long as it continues to meet the conditions for equity classification The Company further valued a derivative liability in connection with the interest make-whole provision at $11 on the issuance date based on a lattice model. This amount was recorded as a debt discount and is amortized to interest expense over the term of the New Notes using the effective interest rate. The derivative liability is remeasured at each reporting date with an increase in value of $7 and $25 being recorded in change in derivative liability in the Condensed Consolidated Statement of ~~Operations for the three and nine-months ended September 30, 2021, respectively.~~Operations. The value of the derivative liability as of September 30, 2022 and December 31, 2021 was ~~$41.~~

$26 and $66, respectively.

~~The interest expense recognized with respect to the Convertible Notes was as follows:~~

Three-Months Ended
September 30, Nine-Months Ended
September 30,
2021 2020 2021 2020
Contractual interest expense $ 654 $ 654 $ 1,308 $ 1,912
Amortization of debt discount 569 479 2,290 1,367
Total interest expense $ 1,223 $ 1,133 $ 3,598 $ 3,279

~~Convertible Notes-Autosport USA~~

On February 3, 2019, in connection with the Autosport Acquisition, the Company issued a (i) $500 Promissory Note and (ii) a $1,536 Convertible Note in favor of the seller. The $500 Promissory Note was repaid in full in 2020. The $1,536 Convertible Note matures on January 31, 2022 and accrues interest at a rate of 6.5% per annum. Any interest and principal due under the Convertible Note is convertible into shares of the Company’s Class B common stock at a conversion price of $115.00 per share, (i) at the Seller’s option, or (ii) at the Buyer’s option, on any day that (a) any portion of the principal of the Convertible Note remains unpaid and (b) the weighted average trading price of the Company’s Class B common stock on Nasdaq for the twenty (20) consecutive trading days preceding such day has exceeded $140.00 per share. The maximum number of shares issuable pursuant to the Convertible Note is 2,449 shares of the Company’s Class B common stock. Interest expense on the Convertible Note for the three and nine-months ended September 30, 2021 was $51 which included $37 of debt discount amortization as compared to interest expense of $52 which included $20 of debt discount amortization for the same periods of 2020.

NOTE 116 –STOCKHOLDER EQUITY

Share-Based Compensation

On June 30, 2017, the Company’s shareholders approved a Stock Incentive Plan ~~(as amended, the~~(the “Plan”) allowing for the issuance of ~~RSUs,~~restricted stock ~~options (“Options”~~units ("RSUs"), ~~Performance Units,~~stock options, and other equity awards (collectively “Awards”). As of September 30, ~~2021,~~2022, the number of shares authorized for issuance under the Plan was 2,700,000 shares of Class B common stock. ~~To date, most~~In connection with, and on the same day as the closing of the RideNow Transaction, the Company accelerated the vesting of and waived any market-based vesting hurdles for all then outstanding RSU ~~and Option awards are service/time based vested over a period of up to three years. The Company has also granted performance-based~~ awards, and ~~market condition-based~~waived any market-based share price. This waiver was accounted for as a modification of the awards, with ~~vesting schedules that are typically dependent on achieving a particular objective within thirty-six months.~~

the fair value of the respective awards remeasured as of RideNow Closing Date. The cost of the acceleration of these RSU awards and other stock issuances of $23,943 was included in the Condensed Consolidated Statement of Operations during the three and nine months ended September 30, 2021.

The Company estimates the fair value of all awards granted under the Plan on the date of grant. In the case of time or service based RSU awards, the fair value is based on the share price of the Class B common stock on the date of the ~~award. Performance Awards use the share prices of the Class B common stock but the Company, both at grant and each subsequent quarter, considers whether to apply a discount to~~award, with the fair value ~~in situations where~~expense on a straight line basis over the Company believes there is risk that the relevant performance metrics may not be met. Options are calculated using the Black-Scholes option valuation model while market-condition based awards are estimated using a Monte Carlo simulation model as these awards are tied to a market condition. Both the Black-Scholes and Monte-Carlo simulations utilize multiple input variables to determine the probability of the Company’s Class B stock price being at certain prices over certain time periods, resulting in an implied value to the holder.

In connection with the closing of the RideNow Transaction, the Company accelerated all the outstanding RSU awards for all participants and waived certain market-based share price hurdles for all market-based awards. This waiver was accounted for as a modification of the awards. The fair value of the awards was remeasured as of effective date of the waiver, and the change in fair value was fully expensed given the concurrent delivery of such shares. In addition, in connection with the execution of the executive employment agreements entered into with each Messrs. Chesrown, Coulter, Levy, and Tkach, (the “Executive Employment Agreements”), Messrs. Coulter and Tkach were granted service-based RSUs and market based awards were granted to each of Messrs. Chesrown, Coulter, Tkach, and Levy. The cost of the acceleration of these RSU awards and other stock issuances of $23,943 has been reported in the Condensed Consolidated Statement of Operations for the three and nine-months ended September 30, 2021 as stock-based compensation and other issuances.

vesting period. On September 30, 2021, the Company's Audit Committee approved the issuance of 154,731 shares of the Company’s Class B common stock as a gift of a death benefit to the estate of Mr. Steven R. Berrard, ~~or as instructed by the estate of Mr. Berrard. Mr. Berrard was one of~~ the Company’s founders. Also, on August 30, 2021, the Audit Committee approved a gift of a death benefit to the estate of Mr. Berrard, or as instructed by the estate of Mr. Berrard, in an amount equal to (1) $1,500, which shall be paid in equal weekly installments beginning October 1, 2021former Chief Financial Officer and ending June 30, 2024 and (2) the cash bonus paid to the Company’s Chief Executive Officer each quarter over the same period ending June 30, 2024, if and when paid to the Chief Executive Officer in accordance with the Company’s Executive Incentive Program. The Company accrued the liability for approximately $1,300 during the three-months ended September 30, 2021.

director.

We generally expense the grant-date fair value of all awards on a straight-line basis over the vesting period. However, the acceleration of awards as described above resulted in the awards being expensed in the three-months ended September 30, 2021. The following table reflects the stock-based compensation for the three and ~~nine-months~~nine months ended September 30, ~~2021~~2022 and September 30, ~~2020.~~

2021:

Three-Months Ended
September 30, Nine-Months Ended
September 30,
2021 2020 2021 2020
Restricted Stock Units $ 24,722 $ 847 $ 27,142 $ 2,379
Options 8 15 23 46
Total stock-based compensation $ 24,730 $ 862 $ 27,165 $ 2,425


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Restricted Stock Units	$	2,605	$	24,722	$	7,237	$	27,142
Stock Options	—		8		—		23
Total stock-based compensation	$	2,605	$	24,730	$	7,237	$	27,165

As of September 30, ~~2021,~~2022, there ~~are 2,551 Options and 524,578~~was 812,386 RSUs outstanding. The total unrecognized compensation expense related to outstanding equity awards was approximately ~~$2,955,~~$19,120, which the Company expects to recognize over a weighted-average period of approximately 3515 months.

Total unrecognized equity-based compensation expense will be adjusted for actual forfeitures.

~~January 2020~~Security Offering

~~On January 14, 2020,~~As part of the Freedom Transaction, the Company ~~closed its public offering~~issued to Freedom's security holders 1,048,718 shares of ~~1,035,000~~RumbleOn Class B common stock totaling $26,511.

In connection with providing the debt financing for the RideNow Transaction, and pursuant to the commitment letter executed on March 15, 2021, the Company issued the Warrant to purchase $40,000 of shares of Class B common stock at a price to the public of $11.40 per share (“2020 Public Offering”), which included the full exercise of the underwriter’s option to purchase an additional 135,000 shares from RumbleOn. The Company raised approximately $10,780 in net proceeds for working capital and general corporate purposes.

~~Reverse Stock Split~~

On May 18, 2020, the Company filed a Certificate of Change to the Company’s Articles of Incorporation with the Secretary of State of the State of Nevada to effect a one-for-twenty reverse stock split of its issued and outstanding Class A common stock and Class B common stock (the “Reverse Stock Split”). The Reverse Stock Split was effective at 12:01 a.m., Eastern Time, on May 20, 2020. No fractional shares were issued as a result of the Reverse Stock Split. There was a 7,131 fractional share adjustment as a result of rounding up to the nearest whole share in connection with the Reverse Stock Split. The authorized preferred stock of the Company was not impacted by the Reverse Stock Split. The Company has retrospectively adjusted the per share and share amounts included in this Quarterly Report on Form 10-Q for the Reverse Stock Split.

~~April 2021 Offering~~

On April 8, 2021, the Company closed its public offering of 1,048,998 shares of Class B common stock at a price to the public of $38.00 per share (the “April 2021 Offering”). The Company raised approximately $36,797 in net proceeds for working capital and general corporate purposes.

~~August 2021 Offering~~

On August 31, 2021, the Company closed its the August 2021 Offering of 5,053,029 shares of Class B common stock at a price to the public of $33.00 per share, which included the full exercise of the underwriter’s option to purchase an additional 659,090 shares from RumbleOn. The Company raised approximately $154,443 in net proceeds for the RideNow Transaction and for working capital.

~~Warrant~~

At inception of the Commitment Letter, the Company accounted for the Oaktree Warrant as a liability with the initial offset as a deferred financing charge as the Oaktree Warrant was issued in lieu of a commitment fee connected to the debt financing of the RideNow Transaction.stock. The initial warrant liability and deferred financing charge recognized was ~~$10,950. The~~$10,950 with the warrant liability ~~was~~ subject to remeasurement at each balance sheet date and any change in fair value ~~was~~ recognized ~~as a component of change in derivative liability~~ in the Condensed Consolidated Statements of Operations. The fair value of the Warrant was estimated using a Monte Carlo simulation based on a combination of level 1 and level 2 inputs. There was no gain or loss recorded related to the Warrant liability during the ~~three-months~~three months ended March 31, 2021 as there was no significant changes in the fair value between March ~~12,~~15, 2021 and March 31, 2021. For the three months ended

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June 30, 2021, the fair value of the warrant liability was increased $2,224 to $13,174. On August 31, 2021, the fair value of the warrant liability was increased $6,526 to $19,700. Upon closing of the RideNow Transaction, the ~~Oaktree Under ASC 815-40, warrants were~~Warrant was considered equity linked contracts indexed to RumbleOn’s stock and therefore met the equity classification ~~guidance.~~guidance under ASC 815-40. As a result, the $19,700 was reclassified to additional ~~paid-in-capital. The~~paid-in-capital and the $10,950 deferred financing charge was reclassified as part of the debt discount related to the Oaktree Credit Agreement. The recognition of the warrant liability and deferred financing charge and the reclassification of the warrant liability to additional paid-in-capital and the reclassification of the deferred financing charge to debt discount are non-cash items.

~~NOTE 12 – SELLING, GENERAL AND ADMINISTRATIVE~~

~~The following table summarizes the detail of selling, general and administrative expense for the three and nine-months ended September 30, 2021 and September 30, 2020:~~

Three-Months Ended
September 30, Nine-Months Ended
September 30,
2021 2020 2021 2020
Compensation and related costs $ 12,669 $ 7,169 $ 26,983 $ 20,496
Advertising and marketing 4,241 840 7,799 4,330
Technology development and software 686 180 1,513 1,037
Facilities cost 3,576 751 4,774 1,718
General and administrative 16,392 4,339 28,008 14,929
$ 37,564 $ 13,279 $ 69,077 $ 42,510

~~NOTE 13 – LOSS CONTINGENCIES AND INSURANCE RECOVERIES~~

On March 3, 2020, a severe tornado struck the greater Nashville area (the “Nashville Tornado”) causing significant damage to the Company’s facilities including property and equipment and other contents and inventory held for sale. The Company maintains insurance coverage for damage to its facilities and inventory, as well as business interruption insurance. The loss was comprised of three components: (1) inventory loss, assessed by the insurance carrier at approximately $13,000; (2) building and personal property loss, primarily impacting our leased facilities, assessed by the insurance carrier at $2,783; and (3) loss of business income, for which the company has coverage in the amount of $6,000.

All three components of the Company’s loss claim have been submitted to its insurers. The Company’s inventory claim is subject to a dispute with the carrier as to the applicable policy limits applicable to the loss; however, the insurer has paid $5,615 in July 2020 and $3,135 in July 2021. Therefore, the total payments received thus far against the final settlement are $8,750. The insurer has agreed to pay $2,778 on the building and personal property loss, reflecting limits of $2,783, net of a $5 deductible. The insurer has made an interim payment on the building and personal property loss of $2,270 to the landlord. The loss of business income claim is ongoing and remains in the process of negotiation, however, the insurer has advanced $250 against the final settlement. The Company believes there will be a recovery of all three loss components, however no assurance can be given regarding the amounts, if any, that will be ultimately recovered or when any such recoveries will be made.

As a result of the damage caused by the Nashville Tornado, the Company concluded that the utility of the inventory damaged by the storm was impaired as a result of physical damage sustained. Whether the impairment is caused by physical destruction or an adverse change in the utility of the inventory, entities should assess whether an inventory impairment or write-off is required in accordance with ASC 330-10-35-1 through 35-11, which address adjustments of inventory balances to the lower of cost or market and requires that when there is evidence that the utility of goods will be less than cost, the difference is recognized as a loss of the current period. For the nine-months ended September 30, 2020, the Company recorded an impairment loss on inventory of $11,738 comprised of $4,454 for vehicles that were a total loss and $7,285 in loss in value for vehicles partially damaged and subject to repair. The impairment loss is reported in cost of revenue in the September 30, 2020 Condensed Consolidated statements of operations. Additionally, $178 of the net book value of the property and equipment destroyed by the Nashville Tornado was expensed.

NOTE 147 – SUPPLEMENTAL CASH FLOW INFORMATION

The following table includes supplemental cash flow information, including noncash investing and financing activity for the ~~nine-months~~nine months ended September 30, ~~2021~~2022 and ~~2020:~~

2021:

Nine-Months Ended
September 30,
2021 2020
Cash paid for interest $ 3,553 $ 3,615


	Nine Months Ended September 30,
	2022		2021
Cash paid for interest	$	36,021	$	3,553
Fair value of 1,048,718 Class B common stock issued in the Freedom Transaction	$	26,511	$	—

The following table ~~provides a reconciliation of~~shows the cash and restricted cash reported within the accompanying Condensed Consolidated ~~balance sheets that sum to the total of the same amounts shown in the accompanying Condensed Consolidated statements of cash flows~~Balance Sheets as of September 30, ~~2021~~2022 and December 31, ~~2020:~~

2021:

September 30,
2021 December 31,
2020
Cash $ 68,268 $ 1,467
Restricted cash (1) 3,049 2,049
Total cash, and restricted cash
$ 71,317 $ 3,516


	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	39,715	$	48,974
Restricted cash (1)	9,500		3,000
Total cash, cash equivalents, and restricted cash	$	49,215	$	51,974

~~(1)~~

~~Amounts included in restricted cash represent the deposits required under the Company’s debt financings.~~

(1)Amounts included in restricted cash are primarily comprised of the deposits required under the Company's various floor plan lines of credit and ROF line of credit.

NOTE 158 – INCOME TAXES

~~In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the Covid-19 pandemic.~~ The ~~Company does not expect the provisions of the legislation to have a significant impact on the~~Company’s effective tax rate ~~or income tax payable and deferred income tax positions of the Company.~~

As of December 31, 2020, the Company provided a full valuation allowance on the net deferred tax assets of $23,744. On a quarterly basis, management assesses the recovery of its deferred tax assets by considering whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result of the RideNow Transaction, management anticipates that the Company will have taxable income in 2022 and future years, and undertook an in-depth IRS Code Section 382 Ownership Change Analysis to determine what limitations exist on the utilization of Federal and state net operating loss carryforwards. Based on this analysis, management has concluded that a valuation allowance of $12,000 should be provided as of September 30, 2021.

~~The components of the income tax provision from continuing operations~~ for the three and ~~nine-months~~nine months ended September 30, 2022 was 14.0% and 22.8%, respectively. The effective tax rate for the three and nine months ended September 30, 2021 was 32.1% and ~~September 30, 2020 are as follows:~~

Three-Months Ended
September 30, Nine-Months Ended
September 30,
2021 2020 2021 2020
Current
Federal $ — $ — $ — $ —
State 288 — 288 —
Total current income tax benefit 288 — 288 —

Deferred
Federal (10,756 ) — (10,756 ) —
State (213 ) — (213 ) —
Total deferred income tax benefit (10,969 ) — (10,969 ) —

Income tax benefit $ (10,681 ) $ — $ (10,681 ) $ —

~~A reconciliation of~~26.0%, respectively. The difference between the ~~statutory~~ U.S. ~~Federal~~federal income tax rate ~~to the Company~~’~~s effective~~of 21.0% and RumbleOn’s overall income tax rate for the ~~nine-months~~three and nine months ended September 30, 2022 was primarily due to income tax benefit from non-taxable PPP loan forgiveness, offset by income tax expense on non-deductible expenses and state income taxes.

The difference between the U.S. federal income tax rate of 21.0% and the Company’s overall income tax rate for the three months ended September 30, 2021 ~~and~~was primarily due to the ~~year~~release of the Company's valuation allowance against its deferred tax assets recorded during the quarter ended ~~December 31, 2020 is set forth below.~~

September 30,
2021 December 31,
2020
U.S. Federal statutory rate 21.0 % 21.0 %
State and local, net of Federal benefit 3.3 % 5.0 %
Permanent & other differences (16.3 )% (1.4 )%
Valuation allowance
18.0
% (24.6 )%
Effective tax rate 26.0 % — %

September 30, 2021.

NOTE 9– EARNINGS PER SHARE

~~Deferred income taxes reflected on~~The Company computes basic and diluted earnings per share attributable to common stockholders in conformity with the ~~balance sheet as of September 30, 2021 and December 31, 2020, reflect~~two-class method required for participating securities. Basic earnings per share attributable to common stockholders is calculated by dividing the net ~~tax effect of temporary differences between amounts recorded for financial reporting purposes and amounts used for tax purposes. These differences are summarized below.~~

September 30,
2021 December 31,
2020
Deferred tax assets
Net operating loss carryforward $ 26,449 $ 21,495
Business interest carryforward 2,586 1,651
Stock-based compensation 11 518
Accounts receivable allowance 118 362
Lease liabilities 22,987 1,569
Inventory reserve 5 27
Basis difference in goodwill 965 352
Accrued liabilities 116 123
Property and equipment — 373
Total deferred tax assets 53,237 26,470

Deferred tax liabilities
Basis difference in property and equipment 6,609 —
Franchise rights 28,048 —
Other intangible assets 2,200 —
Right-of-use assets 22,790 1,478
Debt issuance costs amortization 1,169 1,248
Total deferred tax liabilities 60,816 2,726

Net deferred tax asset (liability) before valuation allowance (7,579 ) 23,744

Valuation allowance (12,000 ) (23,744 )
Net deferred income tax liabilities $ (19,579 ) $ —

~~NOTE 16 – LOSS PER SHARE~~

~~Basic earnings (loss) per share is computed by dividing net~~ income ~~(loss)~~attributable to common stockholders by the ~~weighted average~~weighed-average number of shares of common ~~shares~~stock outstanding during the period. Diluted ~~earnings per share is computed by dividing net income by the weighted average common shares and common share equivalents outstanding during the period. The diluted~~ earnings per share attributable to common stockholders is computed giving effect to all potential dilutive common stock equivalents outstanding for the period.

For purposes of this calculation, ~~524,578 of RSUs, 2,551 of stock options, 1,212,121 of Oaktree Warrants~~warrants to purchase 1,212,121 shares of Class B common stock ~~16,531~~having an exercise price of ~~other warrants and 982,107 shares of Class B common stock issuable in connection with convertible debt~~$31.50 per share are considered common stock equivalents ~~but~~which are antidilutive at September 30, 2022. Unvested RSUs have been ~~excluded from~~included in the calculation of diluted ~~net loss~~earnings per share attributable to common stockholders asto the ~~effect is antidilutive.~~

extent the shares would be dilutive. Additionally, the Company’s senior unsecured convertible notes were antidilutive for the period ended September 30, 2022.

The Company applies the two-class method of calculating earnings per share, but as the rights of the Series B Non-Voting Convertible Preferred Stock and Class A and Class B common stock are identical, except in respect of voting, basic and diluted earnings per share are the same for all classes. Weightedweighted average number of shares outstanding ~~of Class A common stock, Class B common stock, and Series B Preferred~~ for the ~~three and~~ nine months ended September 30, ~~2021~~2022 were 50,000, ~~6,889,708~~15,809,134 and 0, respectively of Class A Common Stock, Class B Common Stock, and ~~50,000, 4,128,932 and 0, respectively.~~

Series B Preferred Stock.

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NOTE 1710 – RELATED PARTY TRANSACTIONS

Promissory Notes

AsIn connection with the acquisition of ~~December 31, 2020,~~RideNow, the Company ~~had~~assumed two promissory notes ~~of $371~~totaling principal and accrued interest of $9$2,200 as of August 31, 2021 due to ~~Blue Flame Capital, LLC (“Blue Flame”), an entity~~entities controlled by ~~a Denmar Dixon, a director~~former directors and executive officers of the Company. ~~The~~Amounts due under these two promissory notes ~~were issued in connection with the completion of the 2016 Private Placement on March 31, 2017 and exchanged in January 2020 for New Investor Notes. The Blue Flame Notes plus accrued interest were~~have been paid in full ~~on January 31, 2021. Interest expense on the promissory notes for the three and nine-months ended~~as of September 30, 2021, and 2020 was $3 and $92, respectively, which included debt discount amortization of $0 and $42, respectively. The interest was charged to interest expense in the Condensed Consolidated Statements of Operations.

2022.

August 2021 Offering

~~On August 31, 2021, we completed the August 2021 Offering.~~ Denmar Dixon, a director of the Company, purchased ~~an aggregate of~~ 13,636 shares of Class B common stock in the August 2021 Offering at the public price of $33.00 per share.

RideNow Leases

In connection with the RideNow Transaction, the Company entered into related party leases for 24 ~~properties consisting of dealerships and offices.~~properties. Each ~~related party~~such lease is with a wholly owned subsidiary of the Company as the tenant and an entity controlled by ~~William Coulter and/or Mark Tkach, each~~ a former director and executive officer of the Company, as the landlord. The initial aggregate base rent payment for all 24 leases is approximately $1,229 per month, and each lease commenced a new 20-year term on September 1, 2021, with each lease containing annual 2% increases on base rent. The ~~Company is still~~fair value of the right-of-use assets and lease liabilities arising from the RideNow leases are included in the ~~process of finalizing its purchase price allocation~~Condensed Consolidated Balance Sheet at September 30, 2022 and ~~related fair values of assets and liabilities, including the RideNow leases.~~

disclosed in Note 3 - Leases.

RideNow Reinsurance Products

~~Each of the operating entities owned by the~~The Company ~~that own retail powersport stores which sell motorcycles and various off-road vehicles also sell~~sells extended service contracts, prepaid maintenance, ~~“GAP~~GAP insurance,” theft protection and tire and wheel products on ~~their vehicles. These products~~vehicles sold to ~~customers of these stores are offered by RPM One (“RPM”), which is an after-market third-party provider of these products commonly used in the industry.~~customers. Affiliate reinsurance companies previously controlled by and owned primarily by ~~William Coulter and/or Mark Tkach participate~~former directors and executives officers of the Company participated in the ~~underwriting~~ profits of these ~~RPM products. The sales representatives employed by these operating companies are incentivized to offer the~~ products sold ~~by RPM.~~through the RideNow locations. The total amount ~~generated~~paid by these affiliate companies attributable to the ownership interests of Mr. Coulter and Mr. Tkach was approximately $7,000 in 2019 and approximately $8,400 in 2020. The Audit Committee of the Board of Directors (the “Board”) of the Company ~~(the “Audit Committee”) is in~~to these affiliated companies totaled approximately $139 during the ~~process of reviewing the terms and rates of these entities.~~

nine months ended September 30, 2022. The related party relationship ended February 1, 2022.

~~Notes Payable~~Payments to RideNow Management, LLLP

The Company ~~has notes payable~~made $2 and $233 in payments to RideNow Management, LLLP, aan entity owned equally by two former directors ~~of $1,033.~~

~~NOTE 18 – COMMITMENTS AND CONTINGENCIES~~

~~Lease Commitments~~

~~We determine whether an arrangement is a lease at inception~~ and whether such leases are operating or financing leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our capitalized financing and right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. To determine the discount rate to use in determining the present value of the lease payments, we use the rate implicit in the lease if determinable, otherwise we use our incremental borrowing rate.

~~The following table reflects the balance sheet presentation of our lease assets and liabilities:~~

Leases
Classification September 30,
2021 December 31,
2020
Assets:
Operating Right of use assets $ 92,944 $ 5,690
Finance Property and equipment, net 40,738
—

Total right-of-use assets
$ 133,682 $ 5,690
Liabilities:
Current
Operating Accounts payable and accrued liabilities $ 7,435 $ 1,630
Finance Accounts payable and accrued liabilities 345 —

Non-Current
Operating Long-term portion of operating lease liabilities 85,965 4,370
Finance Long-term portion of financing lease liabilities 40,591 —

Total lease liabilities $ 134,336 $ 6,000

~~Operating lease expense is recognized on a straight-line basis over the lease term. Total operating lease expenses for~~executive officers during the three and ~~nine-months~~nine months ended September 30, 2022.

Beach Agreement

On December 31, 2021, the Company acquired all the business assets of RNBeach, LLC (“Beach”) from former directors and ~~2020 are provided in~~executive officers of the ~~table below.~~

Company. The total purchase price to acquire all the business assets of Beach was approximately $5,528, and cash paid was approximately $5,368.

Bidpath Software License

On January 19, 2022, the Audit Committee approved, and the Company entered into two agreements with Bidpath Incorporated, a company owned by Adam Alexander, a director of the Company that provides the Company with (i) a perpetual, non-exclusive license to the then-current source code, as well as all future source code, of foundational technology for our inventory management platform, and (ii) support and maintenance services. The ~~weighted-average remaining lease term and discount rate~~Company has made cash payments totaling $3,600 for the ~~Company’s operating and financing leases are as follows:~~

	September 30, 2021
~~Weighted average lease term-operating leases~~		~~9.0 years~~
~~Weighted average lease term-finance leases~~		~~20.0 years~~
~~Weighted average discount rate-operating leases~~		~~9.5~~	%
~~Weighted average discount rate-finance leases~~		~~15.0~~	%

~~The following table provides information related to~~license during the ~~lease costs of finance and operating leases for three and nine-month periods~~nine months ended September 30, ~~2021 and September 30, 2020:~~

Three-Months Ended
September 30, Nine-Months Ended
September 30,
2021 2020 2021 2020
Operating lease cost $ 2,364 $ 763 $ 3,544 $ 1,627

Finance lease costs:
Amortization of ROU assets 170 — 170 —
Interest on lease liabilities 511 — 511 —
Total lease cost $ 3,045 $ 763 $ 4,225 $ 1,627

~~Supplemental cash flow information related to operating leases~~2022. The Company pays, on monthly basis since the agreement was signed, $30 for the ~~nine-months ended September 30, 2021,~~support and maintenance services. The initial term is ~~set forth below:~~

thirty-six (36) months but can be terminated by either party at any time by providing sixty (60) days' notice to the other party.

	September 30, 2021

~~Cash payments for operating leases~~	$	~~487~~

~~The following table summarizes the future minimum payments for operating and financing leases as of September 30, 2021, due in each year ending December 31,~~

Leases
Operating
Leases Financing
Leases
2021 $ 4,434 $ 1,452
2022 17,710 5,848
2023 16,868 5,965
2024 16,090 6,085
2025 14,023 6,206
Thereafter 181,073 115,277
Total lease payments 250,198 140,833
Less imputed interest (156,798 ) (99,897 )
Present value of lease liabilities $ 93,400 $ 40,936

~~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 September 30, 2021 and December 31, 2020, 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.

NOTE ~~19 –~~11 - SEGMENT REPORTING

Business segments are defined as components of an enterprise about which discrete financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. ~~Our operations are organized by management into operating segments by line of business.~~ We have determined that we have 3reporting units and three reportable segments as defined in generally accepted accounting principles for segment reporting: (1) ~~powersports,~~Powersports, (2) ~~automotive~~Automotive, and (3) ~~vehicle logistics~~Vehicle Logistics. Our Powersports segment offers motorcycles, all-terrain vehicles, utility terrain vehicles, personal watercraft, and ~~transportation.~~other powersports products, parts, apparel, and accessories, and related finance and insurance products. Our ~~powersports~~Automotive segment ~~consists of the sale of new~~purchases vehicles from dealers or others and ~~used powersports vehicles principally through retail and, to a lesser extent,~~sells them through wholesale ~~distribution~~ channels. Our ~~automotive~~Vehicle Logistics segment ~~consist of the distribution of pre-owned cars and trucks through wholesale distribution channels. Our vehicle logistics and transportation service segment provide~~brokers nationwide automotive transportation services between dealerships and auctions. ~~Our vehicle logistics and transportation service reportable segment has been determined to represent one operating segment and reporting unit.~~

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The following table summarizes ~~financial measures~~revenue, operating income (loss), depreciation and amortization and interest expense which are the measure by which management allocates resources to its segments into each of our reportable ~~segments~~segments.
Powersports Automotive Vehicle Logistics
Eliminations(1)
Total
Three Months Ended September 30, 2022
Total assets $ 2,104,086 $ 41,144 $ 19,277 $ (859,925) $ 1,304,582
Revenue $ 385,341 $ 69,994 $ 15,526 $ (589) $ 470,272
Operating income (loss) $ 12,734 $ (476) $ 1,398 $ (65) $ 13,591
Depreciation and amortization $ 6,543 $ 17 $ 10 $ — $ 6,570
Interest expense $ (12,209) $ (394) $ — $ — $ (12,603)
Three Months Ended September 30, 2021
Total assets $ 1,189,868 $ 443,084 $ 14,210 $ (635,310) $ 1,011,852
Revenue $ 105,547 $ 105,298 $ 11,597 $ (1,228) $ 221,214
Operating income (loss) $ (27,524) $ 3,835 $ 987 $ — $ (22,702)
Depreciation and amortization $ 1,684 $ 23 $ 10 $ — $ 1,717
Interest expense $ (4,073) $ (503) $ (1) $ — $ (4,577)
Change in derivative liability $ (6,518) $ — $ — $ — $ (6,518)
Nine Months Ended September 30, 2022
Total assets $ 2,104,086 $ 41,144 $ 19,277 $ (859,925) $ 1,304,582
Revenue $ 1,136,972 $ 296,510 $ 45,774 $ (2,969) $ 1,476,287
Operating income $ 64,322 $ 90 $ 3,746 $ 25 $ 68,183
Depreciation and amortization $ 16,842 $ 51 $ 30 $ — $ 16,923
Interest expense $ (35,621) $ (1,437) $ (1) $ — $ (37,059)
Change in derivative liability $ 39 $ — $ — $ — $ 39
Nine Months Ended September 30, 2021
Total assets $ 1,189,868 $ 443,084 $ 14,210 $ (635,310) $ 1,011,852
Revenue $ 144,380 $ 316,655 $ 36,145 $ (3,357) $ 493,823
Operating income (loss) $ (35,604) $ 8,234 $ 2,613 $ — $ (24,757)
Depreciation and amortization $ 2,855 $ 76 $ 17 $ — $ 2,948
Interest expense $ (6,651) $ (1,451) $ (5) $ — $ (8,107)
Change in derivative liability $ (8,774) $ — $ — $ — $ (8,774)

(1)Intercompany investment balances related to the acquisitions of RideNow, Freedom Entities, Wholesale, Inc. and Wholesale Express, and receivables and other ~~key metrics.~~

balances related intercompany freight services of Wholesale Express are eliminated in the Condensed Consolidated Balance Sheets. Revenue and costs for these intercompany freight services have been eliminated in the Condensed Consolidated Statements of Operations.

Powersports Automotive Vehicle
Logistics
and
Transportation Eliminations⁽¹⁾ Total
Three-Months Ended September 30, 2021
Total assets $ 1,189,868 $ 443,084 $ 14,210 $ (635,310 ) $ 1,011,852
Revenue 105,547 105,298 11,597 (1,228 ) 221,214
Operating income (loss) (27,524 ) 3,835 987 — (22,702 )
Depreciation and amortization 1,684 23 10 — 1,717
Interest expense (4,073 ) (503 ) (1 ) — (4,577 )
Change in derivative liability (6,518 ) — — — (6,518 )

Three-Months Ended September 30, 2020
Total assets 48,784 41,284 10,518 (26,871 ) 73,715
Revenue 7,502 99,315 11,415 (975 ) 117,257
Operating income (loss) (4,028 ) 6,246 771 — 2,989
Depreciation and amortization 506 28 2 — 536
Interest expense (1,196 ) (292 ) — — (1,488 )
Change in derivative liability (14 ) — — — (14 )

Nine-Months Ended September 30, 2021
Total assets 1,189,868 443,084 14,210 (635,310 ) 1,011,852
Revenue 144,380 316,655 36,145 (3,357 ) 493,823
Operating income (loss) (35,604 ) 8,234 2,613 — (24,757 )
Depreciation and amortization 2,855 76 17 — 2,948
Interest expense (6,651 ) (1,451 ) (5 ) — (8,107 )
Change in derivative liability (8,774 ) — — — (8,774 )

Nine-Months Ended September 30, 2020
Total assets 48,784 41,284 10,518 (26,871 ) 73,715
Revenue 39,314 281,242 28,657 (3,465 ) 345,748
Operating income (loss) (15,733 ) (935 ) 2,153 — (14,515 )
Depreciation and amortization 1,450 111 6 — 1,567
Interest expense (3,581 ) (1,605 ) (1 ) — (5,187 )
Change in derivative liability 7 — — — 7
Gain on early extinguishment of debt 188 — — — 188

~~(1)~~

Intercompany investment balances related to the acquisitions of RideNow, Wholesale and Wholesale Express, LLC (“Wholesale Express”) and receivables and other balances related to intercompany freight services of Wholesale Express are eliminated in the Condensed Consolidated Balance Sheets. Revenue and costs for these intercompany freight services have been eliminated in the Condensed Consolidated Statements of Operations.

NOTE 2012 – SUBSEQUENT EVENTS

Used Powersports Inventory Financing Credit Facility with J.P. Morgan

On ~~November 8, 2021,~~October 26, 2022, the Company entered into a ~~Membership Interest Purchase Agreement (the “Freedom Agreement”)~~$75,000 used powersports inventory financing credit facility with J.P. Morgan.

Strategic Alternatives for Automotive Segment

On November 2, 2022, the ~~Sellers (as defined in~~Board of Directors reached a decision to explore strategic alternatives for the ~~Freedom Agreement), Freedom Powersports Real Estate LLC (“FPS-RE”),~~Company's automotive segment. The Company intends to continue operating the automotive segment while the review is ongoing, and ~~Trinity Private Equity Group, LLC, as~~does not have an estimate on the ~~representative~~impact of ~~the Sellers.~~

a potential transaction or divestiture on future results.

~~The Agreement provides that~~

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Global Settlement with Former RideNow Owners

On November 8, 2022, the Company ~~will acquire 100% of~~reached a comprehensive global and binding settlement agreement with former primary RideNow owners. The settlement agreement resolves all claims currently pending before the equity in the Acquired Companies (as defined in the Freedom Agreement) in exchange for proceeds, net of approximately $27,780 in mortgage debt at FPS-RE to be assumed or refinanced by RumbleOn, of approximately $100,000 (the “Net Proceeds”) through a combination of cash (the “Cash Consideration”)Delaware Chancery Court, releases certain potential and up to 30% of the Net Proceeds in shares of the Company’s Class B common stock (the “Share Consideration”) to be valued at the 10-day VWAP (as defined in the Agreement) before closing. Ten percent (10%) of the Cash Consideration and ten percent (10%) of the Share Consideration and an additional $500 will be escrowed at the closing and will be released to Sellers in accordance with to the terms of the Freedom Agreement. The Company does not anticipate raising additional equity capital to finance the Cash Consideration.

Each of the Company and the Sellers has provided customary representations, warranties, and covenants in the Agreement. The completion of the transaction is subject to various closing conditions, including the receipt of all manufacturer consents to the transaction.

Both the Company and the Sellers’ Representative have the right to terminate the Freedom Agreement if the closing of the transaction does not occur on or before January 31, 2022, subject to rights offuture claims between the parties, ~~to extend the termination date for up to three (3) consecutive periods~~and results in no incremental consideration exchanging hands.

Table of ~~thirty (30) days, as set forth in the Agreement.~~

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Item 2. ~~MANAGEMENT’S~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF ~~OPERATIONS~~.

OPERATIONS.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“("MD~~&A”~~&A") is provided as a supplement to, and should be read in conjunction with, our audited consolidated financial statements, the accompanying notes, and the MD&A included in our ~~most recent Annual Report on~~2021 Form 10-K, as well as our unaudited Condensed Consolidated Financial Statements and the accompanying notes included in ~~Part I,~~ Item 1 of this Quarterly Report on ~~Form 10-Q ( this “Form 10-Q”).~~

Unless differences among reportable segments are material to an understanding of our business taken as a whole, we present the discussion in this MD&A on a consolidated basis. Terms not defined in this MD&A have the meanings ascribed to them in the Condensed Consolidated Financial Statements included in this Form 10-Q. All dollars are reported in thousands except per share ~~amounts~~ and per unit amounts.

Overview

~~Organization~~

RumbleOn was incorporated in October 2013 under the laws of the State of Nevada as SmartServer, Inc. In 2016, following the acquisition of SmartServer by RumbleOn founders Marshall Chesrown and Steven Berrard, we changed our name to RumbleOn, Inc. Since that time, we have grown our business through organic development and strategic acquisitions into the first and only true omnichannel powersports retailer. Headquartered in the Dallas Metroplex, RumbleOn is revolutionizing the customer experience for outdoor enthusiasts across the country and making powersport vehicles accessible to more people, in more places than ever before.

~~Overview~~

RumbleOn is the nation’s first technology-based ~~omnichannel~~Omnichannel marketplace in powersports, leveraging proprietary technology to transform the powersports supply chain from acquisition of supply through distribution of retail and wholesale. RumbleOn provides an unparalleled technology suite and ecommerce experience, ~~national~~broad footprint of physical locations, and ~~full line~~full-line manufacturer representation to transform the entire customer experience. Our goal is to integrate the best of both the physical and the digital, ~~and make~~while making the transition between the two seamless.

We buy and sell new and used vehicles through multiple company-owned websites and affiliate channels, as well as via our proprietary cash offer tool and network of ~~more than 40~~55+ company-owned retail ~~distribution~~ locations as of September 30, 2022, primarily located in the Sunbelt. Deepening our presence in existing markets and expanding into new markets through strategic acquisitions helps perpetuate our flywheel. Our cash offer technology brings in high quality inventory, which attracts more riders and drives volume in used unit sales. This flywheel enables us to quickly and effectively gain market share. As a result of our growth to date, RumbleOn enjoys a leading, first-mover position in the highly fragmented $100 billion+ powersports market.

RumbleOn’s powersports business offers motorcycles, all-terrain vehicles, utility terrain vehicles, personal watercraft, and all other powersports products, parts, apparel, and ~~accessories. Facilitating our platform, RumbleOn’s retail distribution locations represent all major~~accessories from a wide range of manufacturers, ~~(“OEMs”), including the OEMs and their representative brands,~~ including those listed below.


RumbleOn’s ~~OEMs and~~ Representative Brands
~~BMW Motorrad USA~~Alumacraft		Honda	~~Polaris~~Sea-Doo
~~Bombardier Recreational Products~~Argo		Indian	~~Scarab~~Slingshot
~~Can-Am~~Benelli		Kawasaki	~~Sea-Doo~~SSR
~~Ducati~~BMW		Kayo Sports	~~Ski-Doo~~Suzuki
~~Harley-Davidson~~Can-Am		KTM	~~Slingshot~~Spyder
~~Honda~~CF Moto		Manitou	~~Speed UTV~~TideWater
~~Indian~~Ducati		Polaris	~~SSR Motorsports~~Triumph
~~Kawasaki~~Harley-Davidson		Ryker	~~Suzuki~~Vanderhall
~~Kayo Sports~~Hisun		Scarab	~~Timbersled~~Yamaha
~~KTM~~			~~Triumph~~
~~Manitou~~	~~Yamaha~~

RumbleOn leverages technology and data to streamline operations, improve profitability, and drive lifetime engagement by offering a best-in-class customer experience with unmatched ~~omnichannel~~Omnichannel capabilities. Our ~~omnichannel~~Omnichannel platform offers consumers the fastest, easiest, and most transparent transactions available in powersports. RumbleOn customers have access to the most comprehensive powersports vehicle ~~offering,~~offerings, including the ability to buy, sell, trade, and finance online, in store at any of our bricks-and-mortar locations, or both. RumbleOn offers financing solutions for ~~consumers;~~consumers, trusted physical retail and service ~~locations;~~locations, online or in-store instant cash offers, and access to pre-owned ~~inventory;~~inventory. We also offer apparel, parts, service, and ~~accessories; vehicle transportation and logistics; and virtual inventory listings from third-party partner dealers through our dealer platform.~~accessories. In addition to our powersports operations, we ~~also~~ operate in complementary businesses including the brokerage of vehicle transportation and the wholesale distribution automotive business.

Outlook

We continue to optimize and broaden the selection of new and used powersports vehicles we make available to our customers. Expanding our inventory selection enhances the customer experience by ensuring each visitor, either online or in-store, finds a vehicle that matches his or her preferences. Optimizing our new inventory significantly depends on the allocations

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of our manufacturers ("OEM"). Optimizing our used inventory selection depends on our ability to source and acquire a sufficient number of appropriate used vehicles, including acquiring more vehicles directly from our customers.

We continue to implement a fulfillment system designed to optimize inventory replenishment and make the right powersports units available in the right quantities at the right locations for the right price. This centralization of inventory will launch company-wide access to all company-owned inventory rather than only the inventory available at one particular location. This access will increase the probability that our customers can find their desired powersports unit on our platform, thereby enhancing the customer experience while eliminating geographic boundaries. With digital inventory integration and over 60 individual websites that share content, RumbleOn will be top-of-mind for powersports searches. All of the technology infrastructure required is under development and will continue through 2022 and beyond.

We will continue to make significant investments in improving and adding to our online customer offering. We believe that the complexity of the traditional powersports retail transaction provides substantial opportunity for technology investment and that our leadership and continued growth will enable us to responsibly invest in further enhancing the customer experience.

From our founding, we have been laying the groundwork to offer a friction-free and fully integrated customer experience both online and in-store. We are building the technology engine to enable this integration, while methodically expanding our retail footprint. We will continue to roll out our new and innovative technology throughout 2022 and beyond, to not only reduce costs and optimize vehicles available, but also to better serve customers and build long term shareholder value.

In order to truly maximize the customer experience, we are investing to build the technology engine across the organization. Our Cash Offer Tool is supplying proprietary data on hundreds of thousands of unique Vehicle Identification Number (VIN) inputs, in addition to actual retail sales and transaction data from RideNow and Freedom Powersports' databases. Marrying this data creates a data-driven "market maker" that does not exist in the industry today. Integrating real-time pricing and sales data from in-store transactions will also enable us to further optimize offers and pricing.

Beyond innovative technology and inventory integration, our 55+ retail locations will augment the online experience to offer a simple, friction-free customer experience. A key component to transforming the customer experience to support our growth strategy is enhancing the in-store experience and we are strategically expanding our retail footprint.

Going forward we plan to accelerate our growth via strategic acquisitions of well-run dealerships, continued expansion of our fulfillment center network, and the development of value-added ancillary product and service offerings (both physical and online) that provide our customers the opportunity to engage with our brands wherever and however they like.

~~Outlook~~

The onset of the Covid-19 pandemic in 2020 and associated impacts on economic activity had adverse effects on our results of operations and financial condition during the nine months ended September 30, 2021 and September 30, 2020. The rebound of our business began during the six-month period ended December 31, 2020 with our gross profit per vehicle rising as dealers saw higher industry-wide market prices and margins. These trends, exacerbated by significantly lower new vehicle production due to manufacturing slowdowns, computer chip shortages, and logistic/transportation impacts continued through September 30, 2021 and we expect these conditions to continue through the fourth quarter of 2021 (collectively, the reduced production, increase in gross margin per vehicle, supply chain mechanics, and related items, referred to in this Form 10-Q as “Demand/Supply Imbalances”). The effect of these Demand/Supply Imbalances required that we adjust our inventory management to align with market conditions, resulting in lower levels of inventory and lower unit sales during the period. As the impact of Covid-19 and Demand/Supply Imbalances abate over time, we anticipate that inventory purchasing levels and revenue will increase as we increase penetration in existing markets and add new dealers. Additionally, we expect industry-wide increased gross margin per vehicle to return to historical levels. We must note, however, that we can provide no assurance as to how quickly the adverse impacts of Covid-19 and the Demand/Supply Imbalances on these market trends will abate or what impact this may have on our business, operation, or financial results.

KEY OPERATING METRICS

We regularly review a number of key operating metrics to evaluate our segments, measure our progress, and make operating decisions. Our key operating metrics reflect what we believe will be the primary drivers of our business, including increasing brand awareness, maximizing the opportunity to source vehicles from consumers and dealers, and enhancing the selection and timing of vehicles we make available for sale to our customers. Our key operating metrics also enhance management’s ability to translate this information into sales through multiple sales channels. ~~The Key Operations Metrics table below includes the results of the RideNow Entities exclusively for the month of September 2021.~~ Please note that ~~RideNow’s July~~results of RideNow and ~~August results~~the Freedom Entities before to the respective acquisition dates are not reflected in the presentation below. The ~~RideNow Entities~~acquired entities have certain lines of business, including new vehicle sales, material finance and insurance revenue, and parts and service revenue, that RumbleOn did not have ~~prior to~~before the RideNow ~~Transaction.~~and Freedom transactions. As such all increases in these line items are ~~primarily~~exclusively the result of the ~~RideNow Transaction~~acquisition's and the reader should note that most period-over-period ~~metrics and results of operations~~dollar comparisons (as opposed to per unit amounts) ~~reflect~~are materially impacted by the ~~impact~~introduction of the ~~RideNow Transaction~~new business (the “Acquisition Effect”).

Powersports and Automotive Segments

Revenue

~~Revenue~~

Revenue is comprised of vehicle sales, finance and insurance products bundled with retail vehicle sales (“F&I”), and parts, service and accessories/merchandise (“PSA”).We sell both new and pre-owned vehicles through retail and wholesale ~~channels; automotive~~channels. F&I and PSA revenue is almost exclusively earned through retail channels. Automotive sales are almost exclusively via wholesale channels, and therefore, ~~represent~~contribute to a very small portion of ~~the~~ F~~&I.~~&I revenue. These sales channels provide us the opportunity to maximize profitability through increased sales volume and lower average days to sale by selling through the channel where the opportunity is the greatest at any given time based on customer demand, market conditions, or inventory availability. The number of vehicles sold tothrough any given channel may vary from period to period. New inventory is ultimately controlled by our OEMs and their willingness to allocate inventory to us as well as their ability to manufacture and distribute a sufficient number of vehicles given the current environment of manufacturing slowdowns, computer chip shortages, and logistic/transportation challenges (collectively, the “Demand/Supply Imbalances”). Used inventory is acquired directly from consumers via our online Cash Offer Tool or consumer trade-in transactions. Subject to the ~~lingering impact of Covid-19 and the resulting~~ Demand/Supply Imbalances, as discussed elsewhere in this MD&A, we expect pre-owned vehicle sales to ~~increase~~remain elevated, both in units and in revenue per

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vehicle, over the next several quarters as manufacturers remain impacted by production and supply chain challenges. Given our proven ability to source used vehicle supply via our Cash Offer Tool, we expect to efficiently source and scale our addressable markets as we ~~begin~~continue to utilize a combination of brand building and direct response channels. We are comfortable in this market given our proven ability to use the internet and other channels to efficiently source ~~and scale our addressable markets while expanding our suite of product offerings to~~vehicles from consumers who may wish to trade-in or to sell us their vehicle independent of a retail sale. Factors primarily affecting pre-owned vehicle sales include the number of retail pre-owned vehicles sold and the average selling price of these vehicles.

Gross Profit

Gross profit generated on vehicle sales reflects the difference between the vehicle selling price and the cost of revenue associated with acquiring the vehicle and preparing it for sale. Cost of revenue includes the vehicle acquisition cost, inbound transportation cost, floorplan financing fees, and particularly for pre-owned vehicles, reconditioning costs (collectively, we refer to reconditioning and transportation costs as “Recon and Transport”).The aggregate gross profit and gross profit per vehicle vary across vehicle type, make, model, etc. as well as through retail and wholesale channels, and with regard to gross profit per vehicle, are not necessarily correlated with the sale price. Vehicles sold through retail channels generally have the highest dollar gross profit per vehicle given the vehicle is sold directly to the consumer.Pre-owned vehicles soldthrough wholesale channels, including directly to other dealers or through auction channels, ~~including via our dealer-to-deal auction market,~~ generally have lower margins and ~~don’t~~do not include other ancillary gross profit attributable to financing and ~~accessories.~~ accessory.Factors affecting gross profit from period to period include the mix of new ~~compared to~~versus used vehicles sold, the distribution channel through which they are sold, the sources from which we acquired such inventory, retail market prices, our average days to sale, OEM pricing changes, and our pricing strategy. We may opportunistically choose to shift our inventory mix to higher or lower cost vehicles, or to opportunistically raise or lower our prices relative to market to take advantage of ~~supply or demand imbalances~~Demand/Supply Imbalances in our sales channels, which could temporarily lead to ~~average selling prices and~~ gross profits increasing or decreasing in any given channel.

Vehicles Sold

We define vehicles sold as the number of vehicles sold through both wholesale and retail channels in each period, net of returns. Vehicles sold is the primary driver of our revenue and, indirectly, gross profit. Vehicles sold also enables complementary revenue streams, such as financing. Vehicles sold increases our base of customers and improves brand awareness and repeat sales. Vehicles sold also provides the opportunity to successfully scale our logistics, fulfillment, and customer service operations.

Total Gross Profit per Unit

Total gross profit per unit is the aggregate gross profit of the Company in a given period, divided by retail units sold in that ~~period including~~period. This includes gross profit generated from the sale of the new and used vehicles, income related to the origination of loans originated to finance the vehicle, ~~commissions on sales~~revenue earned from the sale of ~~variable~~F&I products including extended service contracts, ~~revenue from~~maintenance programs, guaranteed ~~asset~~auto protection, ~~waiver coverage,~~tire and wheel protection, and theft protection products, gross profit on the sale of ~~parts, accessories and merchandise,~~PSA products, and gross profit generated from wholesale sales of vehicles.

Vehicle Logistics ~~and Transportation Services~~ Segment

Revenue is derived from freight brokerage agreements with dealers, distributors, or private party individuals to transport vehicles from a point of origin to a designated destination. The freight brokerage agreements are fulfilled by independent third-party transporters who must meet our performance obligations and standards. Wholesale Express is considered the principal in the delivery transactions since it is primarily responsible for fulfilling the service. ~~In the normal course of operations, Wholesale Express also provides transportation services to Wholesale.~~

We define vehicles delivered as the number of vehicles delivered from a point of origin to a designated destination under freight brokerage agreements with dealers, distributors, or private parties. Vehicles delivered are the primary driver of revenue and in turn profitability in the vehicle logistics ~~and transportation services~~ segment.

Total gross profit per vehicle transported represents the difference between the price received from non-affiliated customers and our cost to contract an independent third-party transporter divided by the number of third party vehicles transported.

~~Three-Months Ended~~Three and Nine months ended September 30, ~~2021~~2022 Compared to September 30, ~~2020.~~2021

~~Nine-Months Ended~~Three and Nine months ended September 30, ~~2021~~2022 Compared to September 30, ~~2020.~~2021.Total ~~powersports revenue, including F&I and PSA,~~Powersports gross profit increased by ~~$105,066~~$82,563 and $301,814 to ~~$144,380~~$110,970 and $340,156 for the ~~nine-months~~three and nine months ended September 30, ~~2021~~2022 compared to ~~$39,314~~$28,407 and $38,342 for the same ~~period of 2020.~~periods in 2021. The Acquisition Effect specific to new vehicles, F&I, and PSA revenue accounted for approximately $65,000 of the increase, with the balance attributable to a 1,999 increase in the number of used vehicles sold coupled with a 39.7% increase in the revenue per used unit sold from $8,737 to $12,203. The total number of vehicles sold increased by 4,484 to 8,907 for the nine-months ended September 30, 2021. Exclusive of F&I and PSA, revenue per new unit was $17,281. In addition to the Acquisition Effect, the Demand/Supply Imbalances contributed to the increase in the number of used vehicles sold as well as the increase in the average selling price of such units.

~~Three-Months Ended September 30, 2021 Compared to September 30, 2020~~. Powersports vehicles gross profit, including F&I and PSA, increased by $26,512 to $28,407 for the three-months ended September 30, 2021 compared to $1,895 for the same period of 2020. The increase in gross profit was primarily due to 4,743 unit increase in the total vehicles sold in 2021 compared to 2020 and the Acquisition Effect specific to new vehicles, F&I, and PSA which accounted for $21,357 of the increase and supplemented a 0.4% increase in gross profit per used vehicle. Total used vehicle gross profit, exclusive of F&I and PSA, increased by $5,155 based on a 2,258 increase in the number of used vehicles sold.

~~Nine-Months Ended September 30, 2021 Compared to September 30, 2020.~~ ~~Powersports gross profit, including F&I and PSA, increased by $32,722 to $38,342 during the nine-months ended September 30, 2021 compared to $5,620 for the same period of 2020. This~~ increase in gross profit was primarily due to the Acquisition Effect ~~specific to new vehicles, F&I, and PSA~~ which accounted for ~~$21,702~~$86,863 and $314,339 of the ~~increase.~~

~~Three-Months Ended~~increase for the three and nine months ended September 30, 2022, partially offset by lower gross profit in the Company’s legacy direct to consumer and wholesale business of $(4,300) and $(12,525) for the three and nine months ended September 30, 2022. Other contributing factors to the overall increase in gross profit include a more favorable product mix of vehicle sales, and a strong demand which resulted in elevated pricing during the three and nine months ended September 30, 2022. Retail vehicle sales accounted for approximately $39,477 and $146,802 of the increase, PSA accounted for approximately $21,913 and $78,564 of the increase, and F&I accounted for approximately $25,473 and $88,973 of the increase during the three and nine months ended September 30, 2022.

~~Nine-Months Ended September 30, 2021 Compared to September 30, 2020.~~ Automotive vehicle gross profit, excluding the benefit of the 2020 impairment accounting relating to the Nashville Tornado, profit increased by $10,446 to $22,905 for the nine-months ended September 30, 2021. The increase was attributable to the continued impact of the Demand/Supply imbalances. On a comparable basis, the gross profit per vehicle sold has increased from $1,137 to $2,596.

~~Three-Months Ended September 30, 2021 Compared to September 30, 2020.~~ ~~Total revenue, inclusive of~~Before intercompany freight services provided to Wholesale of $524 and $2,904, and $1,228 ~~which is~~and $3,357 respectively for the three and nine months ended September 30, 2022 and 2021 are eliminated in the Condensed Consolidated Financial ~~Statements, increased by $182 to $11,597 for the three-months~~Statements.

Selling, general and administrative expenses increased by ~~$24,285~~$34,678 and ~~$26,567,~~$181,396, respectively, for the three and ~~nine-months~~nine months ended September 30, ~~2021~~2022 compared to the same periods in ~~2020.~~2021. In each case, other than technology development and software, the increases were the result of the Acquisition Effect, with over ~~1,800~~2,000 additional employees, marketing initiatives at the store level, general and administrative costs associated with a larger team, and lease/facility expense related to ~~40+~~55+ new locations from the RideNow ~~acquisition.~~Transaction and Freedom Transaction. In the case of technology and development, in the third quarter of 2021 we began ~~some~~ strategic technology projects focused on inventory management, infrastructure, and integration ~~efforts. Notwithstanding~~efforts which continued to progress during the ~~preceding, both the Nashville Tornado~~three and ~~the nationwide economic slowdown of Covid-19 late in the first quarter of 2020 lasting until the spring of 2021, resulted in artificially lower costs incurred in 2020.~~nine months ended September 30, 2022

Depreciation and amortization increased by ~~$1,181~~$4,853 and ~~$1,381,~~$13,975, respectively, for the three and ~~nine-months~~nine months ended September 30, ~~2021,~~2022, compared to the same periods ~~of 2020.~~in 2021. Of the increase ~~in both periods, $170~~for the three months ended September 30, 2022, approximately $2,098 is associated with the various non-compete agreements related to the RideNow Transaction, approximately $1,915 is associated with amortization of ~~right-of-use assets~~capitalized software, approximately $658 is associated with depreciation resulting from the Freedom Transaction, and approximately $181 is associated with the various non-compete agreements related to the Freedom Transaction.

Interest expense increased by ~~$3,089~~$8,026 and ~~$2,920,~~$28,952, respectively, for the three and ~~nine-months~~nine months ended September 30, ~~2021~~2022 compared to the same periods in 2021. Interest expense consists of ~~2020. In each such period, the primary driver of such increase is an increase of $125 of floor plan~~ interest and ~~the interest expense of $2,666 for the~~deferred financing costs on the: (i) Oaktree Credit ~~Facility, which included debt amortization of $509.~~

~~Loss Contingencies~~Agreement; (ii) various floorplan facilities; (iii) private placement notes; (iv) convertible senior notes; and ~~Insurance Recoveries~~

~~On March 3, 2020,~~(v) the Nashville Tornado caused significant damage to the Company’s facilities including contents and inventory held for sale. The Company maintains insurance coverage for damage to its facilities and inventory, as well as business interruption insurance. The loss was comprised of three components: (1) inventory loss, assessed by the insurance carrier at approximately $13,000; (2) building and personal property loss, primarily impacting our leased facilities, assessed by the insurance carrier at $2,783; and (3) loss of business income, for which the company has coverage in the amount of $6,000.

All three components of the Company’s loss claim have been submitted to its insurers. The Company’s inventory claim is subject to a dispute with the carrier as to the policy limits applicable to the loss; however, the insurer advanced $5,615 in July 2020 and $3,134 in July 2021. Therefore, the total payments received thus far against the final settlement are $8,750. The insurer has agreed to pay $2,778 on the building and personal property loss, reflecting limits of $2,783 net of a $5 deductible. The insurer has made interim payments on the building and personal property loss of $2,626. The loss of business income claim is ongoing and remains in the process of negotiation, however, the insurer has advanced $250 against the final settlement. The Company believes there will be a recovery of all three loss components, however no assurance can be given regarding the amounts, if any, that will be ultimately recovered or when any such recoveries will be made.

As a result of the damage caused by the Nashville Tornado the Company concluded that the utility of the inventory damaged by the storm was impaired as a result of physical damage sustained. Whether the impairment is caused by physical destruction or an adverse change in the utility of the inventory, entities should assess whether an inventory impairment or write-off is required in accordance with ASC 330-10-35-1 through 35-11, which address adjustments of inventory balances to the lower of cost or market and requires that when there is evidence that the utility of goods will be less than cost, the difference is recognized as a loss of the current period. For the nine-months ended September 30, 2020, the Company recorded an impairment loss on inventory of $11,738 comprised of $4,454 for vehicles that were a total loss and $7,285 in loss in value for vehicles partially damaged and subject to repair. The impairment loss is reported in cost of revenue in the September 30, 2020, Condensed Consolidated Statements of Operations. Additionally, $178 of the net book value of the property and equipment destroyed by the Nashville Tornado was expensed.

In connection with our various financings, we undertake an analysis of each financial instrument to determine the appropriate accounting treatment, including which, if any, require bifurcation into liability and equity components. We have determined that each of the ~~New Notes~~convertible senior notes issued on January 10, 2020 (the “New Notes”) and the Warrant have a liability component that needs to be remeasured each reporting period with the change in value recorded in the Condensed Consolidated Statements of Operations.

In connection with the issuance of the New Notes, a derivative liability was recorded at issuance with an interest make-whole provision of ~~$21~~$20,673 based on a lattice model using a stock price of $14.60, ~~and~~ estimated volatility of 55.0% and risk-free rates over the entire 10-year yield curve.

The change in value of the derivative liability for the three and ~~nine-months~~nine months ended September 30, 2022 and 2021 ~~was $6,518~~were $0 and ~~$8,774,~~$39, and $(6,518) and $(8,774), respectively, and is included in change in derivative liability in the Condensed Consolidated Statement of Operations. The value of the derivative liability as of September 30, ~~2021~~2022 and December ~~31,2020~~31, 2021 was ~~$41~~$26 and ~~$17,~~$66, respectively.

~~At inception of the Commitment Letter, the Company accounted for the Oaktree Warrant as a liability~~In connection with ~~the initial offset as a deferred financing charge as the Oaktree Warrant was issued in lieu of a commitment fee connected to~~providing the debt financing offor the RideNow ~~Transaction.~~Transaction, and pursuant to the commitment letter executed on March 15, 2021, the Company issued Warrants to purchase $40,000 of shares of Class B common stock to Oaktree Capital Management, L.P. and its lender affiliates at an exercise price of $33.00 per share. The exercise price was adjusted during the third quarter to $31.50 and the expiration date was extended to July 25, 2023. The initial warrant liability and deferred financing charge recognized was $10,950. The warrant liability was subject to remeasurement at each balance sheet date and any change in fair value was recognized as a component of change in derivative liability in the Condensed Consolidated Statements of Operations. The fair value of the Warrant was estimated using a Monte Carlo simulation based on a combination of level 1 and level 2 inputs. There was no gain or loss recorded related to the Warrant liability during the three-months ended March 31, 2021 as there was no significant changes in the fair value between March 12, 2021 and March 31, 2021. For the three months ended June 30, 2021, the fair value of the warrant liability was increased $2,224 to $13,174. On August 31, 2021, the fair value of the warrant liability was increased $6,526 to $19,700. Upon closing of the RideNow Transaction, the ~~Oaktree Warrants~~warrants were considered equity linked contracts indexed to ~~RumbleOn’s~~the Company’s stock and therefore met the equity classification guidance. As a result, the $19,700 was reclassified to additional paid-in-capital. The $10,950 deferred financing charge was reclassified as part of the debt discount related to the ~~Term Loan~~Oaktree Credit Agreement. The recognition of the warrant liability and deferred financing charge, and the reclassification of the warrant liability to additional paid-in capital, and the reclassification of the deferred financing charge to debt discount are non-cash items.

In connection with the closing of the RideNow Transaction and the execution of the Executive Employment Agreements, the Company accelerated the vesting of and/or waived certain market-based share price hurdles for all then outstanding RSUs for all participants, which resulted in excess of $22,000 of incremental shares based compensation for both the three and nine-month periods ending on September 30, 2021.

Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flows or as a measure of liquidity. Non-GAAP financial measures are not necessarily calculated the same way by different companies and should not be considered a substitute for or superior to U.S. GAAP.

Adjusted EBITDA is defined as net income (loss) adjusted to add back interest expense, ~~(including debt extinguishment),~~ depreciation and amortization, changes in derivative ~~liabilities~~liability and certain recoveries, charges and expenses, such as an insurance recovery, non-cash stock-based compensation costs, acquisition related costs, ~~PPP loan forgiveness,~~litigation expenses, and other non-recurring costs, as these recoveries, charges and expenses are not considered a part of our core business operations and are not an indicator of ongoing, future company performance.

Adjusted EBITDA is one of the primary metrics used by management to evaluate the financial performance of our business. We present Adjusted EBITDA because we believe it is frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. Further, we believe it is helpful in highlighting trends in our operating results, because it excludes, among other things, certain results of decisions that are outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure and capital investments.

Our primary sources of liquidity are available cash, amounts available under our floor plan lines of credit, and monetization of our retail loan portfolio. In ~~addition,~~2021, we completed two public offerings that provided net proceeds of $191,000 and obtained the Oaktree Credit ~~Facility~~Agreement, which initially provided net proceeds of $261,000 that was used to finance a portion of the cash consideration for the RideNow Transaction. On February 18, 2022, in conjunction the Freedom Transaction, the Company drew down $84,500 against the Oaktree Credit Agreement. As of September 30, 2022, the Oaktree Credit Agreement provides for up to $120,000, of which $35,500 is available, in additional financing ~~beginning six-months after the Closing Date~~ that may be used for acquisitions and up to an additional $100,000 in incremental financing that may be used for acquisitions ~~and~~or working capital purposes, under the terms set forth in such agreement. As previously disclosed, we took certain measures in response to the COVID-19 pandemic that included, rationalizing costs and expenses and adjusting inventory levels to align with sales trends. During the nine-months ended September 30, 2021, we completed two public offerings that provided net proceeds of $191,240 and obtained the Oaktree Credit Facility and initially provided net proceeds of $261,451 that was used to finance a portion of the cash consideration for the RideNow Transaction. Given these activities, and the acquisition of RideNow, we believe we have appropriate liquidity, access to capital and financial resources to support our operations and continue to expand our business.

Our financial statements reflect estimates and assumptions made by management that affect the carrying values of the Company’s assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Certain accounting estimates involve significant judgments, assumptions and estimates by management that have a material impact on the carrying value of certain assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenue and expenses during the reporting period, which management considers to be critical accounting estimates. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially from these judgments and estimates, which could have a material impact on the carrying values of the Company’s assets and liabilities and the results of operations. In particular, the continuing adverse impacts to macro economic conditions, as well as the Company’s operations, may impact future estimates including, but not limited to inventory valuations, fair value measurements, asset impairment charges and discount rate assumptions. Macro economic conditions and the economy in general could be affected by significant national or international events such as a global health crisis (like COVID-19), acts of terrorism, or acts of war.If these economic conditions worsen or stagnate, it can have a material adverse effect on consumer demand as well as the availability of credit to finance powersports and vehicle purchases, which could adversely impact our business and results of operations. We will continue to evaluate the nature and extent of macro-economic conditions and the resulting Demand/Supply Imbalances which impact to our business and our results of operations and financial ~~condition as conditions evolve as a result~~condition.

We had the following liquidity resources available as of September 30, ~~2021~~2022 and December 31, ~~2020:~~

As of September 30, ~~2021~~2022, and December 31, ~~2020,~~2021, excluding operating lease liabilities and the derivative liability, the outstanding principal amount of indebtedness was ~~$373,492~~$563,803 and ~~$53,109,~~$384,585, respectively, summarized in the table below. See ~~“Note 9 —~~Note 5 - Notes Payable~~” “Note 10 –Convertible Notes,”~~ and ~~“Note 11 – Stockholders Equity”~~Lines of Credit and Note 6 - Stockholders' Equity to our Condensed Consolidated ~~financial statements~~Financial Statements included above.

The following table sets forth a summary of our cash flows for the ~~nine-months~~nine months ended September 30, ~~2021~~2022 and ~~September 30, 2020:~~

Our primary sources of operating cash flows result from the sales of used vehicles and ancillary ~~products and floor plan borrowings for our inventory purchases.~~products. Our primary use of cash from operating activities are purchases of inventory, cash used to acquire customers, and personnel-related expenses. For the ~~nine-months~~nine months ended September 30, ~~2021,~~2022, net cash provided by operating activities was $4,656, an increase of $34,435 compared to net cash used in operating activities ~~was $29,779, an~~of $(29,779) for the nine months ended September 30, 2021. The increase ~~of $55,977~~ in ~~cash used in operating activities compared to~~our net cash provided by operating activities ~~of $26,198 for the nine-months ended September 30, 2020. This increase~~ was ~~principally~~primarily due to ~~the~~a $56,598 increase in ~~inventory of $33,343~~our net income, a $(888) decrease in ~~2021 compared to~~non-cash adjustments, and a $(21,277) decrease ~~of $34,219~~ in ~~inventory in 2020.~~

~~Net cash used in investing activities increased $373,052 to $374,825 for the nine-months ended September 30, 2021 compared to $1,773 for the same period in 2020.~~ Our primary use of cash for investing activities is for technology development to expand our operations. Net cash used in investing activities decreased $(298,327) to $76,498 for the ~~nine-months~~nine months ended September 30, ~~2021 was~~2022, compared to $374,825 for the ~~$365,946~~same period in 2021. The decrease in our net cash used in investing activities was primarily due to a decrease of $(299,970) in outflows of $65,976 for the Freedom Transaction for the nine months ended September 30, 2022 as compared to

Cash flows from financing activities primarily relate to our short and long-term debt activity and proceeds from equity issuances which have been used to provide working capital and for general corporate purposes, including paying down our short-term revolving facilities. Cash provided by financing activities ~~was $472,405~~decreased $(403,322) to $69,083 for the ~~nine-months~~nine months ended September 30, ~~2021,~~2022, compared to net cash ~~used in~~provided by financing activities of ~~$22,193. For~~$472,405 for the ~~nine-months~~same period of 2021. The decrease in net cash provided by financing activities for the nine months ended September 30, ~~2021, the increase~~2022 is primarily attributable to a decrease of ~~$494,598~~$(191,240) in cash provided from financing activities was primarily due to the net proceeds of $36,796 received in connection with the April 2021 Offering, and the $261,451 and $154,438 in new senior secured debt and proceeds from the ~~August 2021 Offering, respectively that were obtained to finance~~sale of common stock, a decrease of $(176,951) in proceeds from the Oaktree Credit Agreement, an increase of $(28,378) in cash ~~consideration~~outflows for repayments of debt and mortgage notes, and a decrease of $(6,754) in non-trade floor plan borrowings for the nine months ended September 30, 2022 as compared to the same period of 2021.

As of September 30, ~~2021,~~2022, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

On September 30, 2021, the Audit Committee approved the issuance of 154,731 shares of the Company’s Class B common stock as a gift of a death benefit to the estate of Mr. Berrard, or as instructed by the estate of Mr. Berrard. Also, on August 30, 2021, the Audit Committee approved a gift of a death benefit to the estate of Mr. Berrard, or as instructed by the estate of Mr. Berrard, in an amount equal to (1) $1,500, which shall be paid in equal weekly installments beginning October 1, 2021 and ending June 30, 2024 and (2) the cash bonus paid to the Company’s Chief Executive Officer each quarter over the same period ending June 30, 2024, if and when paid to the Chief Executive Officer in accordance with the Company’s Executive Incentive Program. The Company accrued the liability for such amounts during the three-months ended September 30, 2021.

See ~~“Note~~Note 1 —- Description of Business and Significant Accounting Policies,” included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for accounting pronouncements and material changes to our critical accounting policies since December 31, ~~2020.~~2021. There have been no other material changes to our critical accounting policies and use of estimates from those described under ~~“Management’s~~"Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in ~~the 2020~~our 2021 Form 10-K, other than the use of estimates for the ~~Oaktree~~ Warrant and changing the date of the Company's annual impairment test for goodwill and indefinite-lived intangible assets from December 31st to October 1st, as described ~~above.~~

This Quarterly Report on Form 10-Q, as well as information included in oral statements or other written statements made or to be made by us, contain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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. Forward-looking statements are neither historical facts nor assurances of future performance. These forward-looking statements are based on our current, reasonable expectations and assumptions, which expectations and assumptions are subject to risks and uncertainties that 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 ~~but are not limited to,~~ those discussed in our ~~Annual Report on~~2021 Form 10-K, ~~for the year ended December 31, 2020,~~ which was filed with the SEC on ~~March 31, 2021,~~April 8, 2022 and ~~the risks discussed under the caption “Risk Factors” included in our definitive Proxy Statement~~this Quarterly Report on ~~Schedule 14A filed with the SEC on July 1, 2021, and this~~ Form 10-Q. Given these risks and uncertainties, readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to publicly update or revise or any forward-looking statements, except as required by law.

Item 3. Quantitative and Qualitative ~~Disclosure~~Disclosures About Market ~~Risk~~.

This item is not applicable as we are currently considered a smaller reporting company.

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the ~~Securities~~ Exchange Act ~~of 1934 (the “Exchange Act”)~~ is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, ~~2021.~~2022. Based on this evaluation, ~~of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act),~~ our Chief Executive Officer and Chief Financial Officer concluded that ~~the Company’s~~our disclosure controls and procedures were not effective as of September 30, ~~2021.~~

On August 31, 2021, the Company completed the RideNow Transaction. In accordance with the general guidance issued by the staff of the SEC, the RideNow Entities will be excluded from the scope of management’s report on internal control over financial reporting for the year ending December 31, 2021. As part of the ongoing integration of the RideNow Entities, weWe are in the process of incorporating the controls and related procedures of the acquired RideNow Entities. Other than incorporating the ~~RideNow Entities’~~ controls and procedures of these acquired entities and addressing the remediation actions described above, there were no changes in our internal control over financial reporting (as defined in ~~Rules~~Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have performed additional analyses and other procedures to enable management to conclude that our condensed consolidated financial statements included in this report fairly, in all material respects, our financial condition and results of operations as of and for the three and nine-months ended September 30, 2021.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints ~~and~~ that require management ~~is required~~ to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

On ~~July~~February 28, 2022, the Company delivered a Direct Claim Notice to Mark Tkach in his role as Sellers’ Representative under the RideNow Agreement. In the Direct Claim Notice, the Company stated that pursuant to the indemnification provisions set forth in the RideNow Agreement, the Company is entitled to indemnification from Sellers for breach of a covenant.On March 29, ~~2021, William Miller (the “Plaintiff”)~~2022, Mr. Tkach delivered Sellers’ response to the Direct Claim Notice, in which Sellers declined to accept the Company’s claims.

Our business, financial condition, operating results, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our 2021 Form 10-K for the year ended December 31, 2021. There have been no material changes to the ~~Risk Factors~~risk factors previously disclosed in our ~~Annual Report on~~2021 Form 10-K, ~~for~~ the year ended December 31, 2020, except for the risks relating to the RideNow Transaction, which are discussed in our definitive Proxy Statement on Schedule 14A filed with the SEC on July 1, 2021, and as set forth below.

~~The Covid-19 pandemic and associated impacts on economic activity may have material adverse effects on our business, results~~occurrence of ~~operations, financial condition, and cash flows.~~

~~The onset~~any of the Covid-19 pandemic in 2020 and associated impacts on economic activity, including lower new vehicle production due to manufacturing slowdowns, computer chip shortages, and logistic/transportation challenges, had adverse effects on our results of operations and financial condition during the nine months ended September 30, 2021 and September 30, 2020. We expect these conditions to continue through the fourth quarter of 2021. The effect of these Demand/Supply Imbalances required that we adjust our inventory management to align with market conditions, resulting in lower levels of inventory and lower unit sales during the period. The Covid-19 pandemic and associated impacts on economic activity may have material adverse effects on our business, results of operations, financial condition, and cash flows, and we can provide no assurance as to the duration of the adverse impacts of Covid-19 and the Demand/Supply Imbalances on our business, operation, or financial results.

~~RumbleOn may experience difficulties integrating RideNow’s businesses.~~

Achieving the anticipated benefits of the RideNow Transaction will depend in significant part upon RumbleOn integrating the RideNow Entities’ businesses, operations, processes, and systems in an efficient and effective manner. The actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration may not be realized. The companies may not be able to accomplish the integration process smoothly, successfully, or on a timely basis. The necessity of coordinating geographically separated organizations, systems of controls, and facilities and addressing possible differences in business backgrounds, corporate cultures, and management philosophies may increase the difficulties of integration. The companies operate numerous systems and controls, including those involving management information, accounting and finance, legal and regulatory compliance, inventory intake and control, sales, billing, employee benefits, and payroll. The integration of operations following the RideNow Transaction requires the dedication of significant management and external resources, which may temporarily distract management’s attention from the day-to-day business of the combined company and be costly. Employee uncertainty and lack of focus during the integration process may also disrupt the business and results of the combined company. Any inability of management to successfully and timely integrate the companies could have a material adverse effect on the business and results of operations of the combined company.

The RideNow Entities were not subject to Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) regulations and, therefore, they may lack the internal controls of a public company, which could ultimately affect our ability to ensure compliance with the requirements of Section 404 of the Sarbanes-Oxley Act.

The RideNow Entities were not previously subject to Sarbanes-Oxley Act regulations and accordingly were not required to establish and maintain an internal control infrastructure meeting the standards promulgated under the Sarbanes-Oxley Act. Our assessment of our internal control over financial reporting as of September 30, 2021 did not include the internal control structure of the RideNow Entities, which were acquired during our quarterly period ended September 30, 2021.

Although our management will continue to review and evaluate the effectiveness of our internal control over financial reporting in light of the RideNow Transaction, we cannot provide any assurance that there will be no significant deficiencies or material weaknesses in the internal control environment of the RideNow Entities. Any significant deficiencies or material weaknesses in the internal control environment of the RideNow Entities may cause significant deficiencies or material weaknesses in our internal control over financial reporting, which could have a material adverse effect on our ~~business and our ability to comply with Section 404 of the Sarbanes-Oxley Act.~~

If we are unable to maintain effective internal control over financial reporting, 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.

We are in the process of integrating our internal control over financial reporting and our other control environments with those of the RideNow Entities. In the course of integration, we may encounter difficulties and unanticipated issues combining our respective accounting systems due to the complexity of our financial reporting processes. We may also identify errors or misstatements that could require accounting adjustments. If we are unable to integrate and maintain effective internal control over financial reporting of the combined company, timely or at all, 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 reports and the market price of our securities may decline.

As of September 30, 2021, the Audit Committee approved the issuance of 154,731 shares of the Company’s Class B common stock as a gift of a death benefit to the estate of Steven R. Berrard, the Company’s former Chief Financial Officer and a director, or as instructed by the estate of Mr. Berrard. These shares were issued in lieu of restricted stock units that Mr. Berrard would have received in connection with the consummation of the RideNow Transaction and in recognition of Mr. Berrard’s significant contributions to the RideNow Transaction. These shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.


Large accelerated filer	☐o	Accelerated filer	☐x
Non-accelerated filer	☒o	Smaller reporting company	☒x
		Emerging growth company	☐o


PART I -	FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2. ~~Management’s~~	Management's Discussion and Analysis of Financial Condition and Results of Operations	3122
Item 3.	Quantitative and Qualitative ~~Disclosure~~Disclosures About Market Risk	4333
Item 4.	Controls and Procedures	4334

PART II -	OTHER INFORMATION

Item 1.	Legal Proceedings	4435
Item 1A.	Risk Factors	4436
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45 36
Item 3.	Defaults Upon Senior Securities	45 36
Item 4.	Mine Safety Disclosures	45 36
Item 5.	Other Information	4537
Item 6. ~~Exhibits~~	46Exhibits	37
SIGNATURES		4738


	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash	$	39,715	$	48,974
Restricted cash	9,500		3,000
Accounts receivable, net	35,394		40,166
Inventory	323,832		201,666
Prepaid expense and other current assets	7,079		6,335
Total current assets	415,520		300,141
Property and equipment, net	77,091		21,417
Right-of-use assets	161,171		133,112
Goodwill	266,059		260,922
Intangible assets, net	352,880		302,066
Other assets	31,861		10,091
Total assets	$	1,304,582	$	1,027,749
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	76,266	$	57,068
Vehicle floor plan note payable	175,296		97,278
Current portion of lease liabilities	23,324		20,249
Current portion of long-term, convertible debts, and notes payable	3,645		4,476
Total current liabilities	278,531		179,071
Long-term liabilities:
Senior secured note	330,752		253,438
Convertible debt, net	31,185		29,242
Line of credit and notes payable	22,925		150
Operating lease liabilities	126,941		114,687
Deferred tax liabilities	15,147		7,586
Other long-term liabilities	7,494		11,930
Total long-term liabilities	534,444		417,033
Total liabilities	812,975		596,104
Commitments and contingencies (Notes 2, 3, 5, 8, and 10)
Stockholders' equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding as of September 30, 2022 and December 31, 2021	—		—
Common A stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021	0		0
Common B stock, $0.001 par value, 100,000,000 shares authorized, 16,135,190 and 14,882,022 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	16		15
Additional paid-in capital	583,803		550,055
Accumulated deficit	(87,893)		(114,106)
Class B stock in treasury, at cost, 123,089 shares as of September 30, 2022 and December 31, 2021	(4,319)		(4,319)
Total stockholders' equity	491,607		431,645
Total liabilities and stockholders' equity	$	1,304,582	$	1,027,749


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenue:
Vehicles sales
Powersports	$	291,491	$	83,292	$	858,809	$	121,307
Automotive	69,974		105,298		296,433		316,655
Parts, service and accessories	62,217		16,075		182,269		16,075
Finance and insurance, net	31,588		6,180		95,906		6,998
Vehicle logistics	15,002		10,369		42,870		32,788
Total revenue	470,272		221,214		1,476,287		493,823

Cost of revenue:
Powersports	241,246		68,295		700,317		97,193
Automotive	68,091		98,773		286,243		293,751
Parts, service and accessories	33,073		8,845		96,473		8,845

Vehicle logistics	11,516		7,914		33,732		25,958
Total cost of revenue	353,926		183,827		1,116,765		425,747

Gross profit	116,346		37,387		359,522		68,076

Selling, general and administrative	96,185		61,507		274,416		93,020
Insurance recovery	—		(3,135)		—		(3,135)
Depreciation and amortization	6,570		1,717		16,923		2,948

Operating income (loss)	13,591		(22,702)		68,183		(24,757)

Interest expense	(12,603)		(4,577)		(37,059)		(8,107)
Other income (expense)	38		—		287		—
Change in derivative liability	—		(6,518)		39		(8,774)
PPP loan forgiveness	2,509		572		2,509		572

Income (loss) before provision for income taxes	3,535		(33,225)		33,959		(41,066)

Income tax provision (benefit)	496		(10,681)		7,746		(10,681)
Net income (loss)	$	3,039	$	(22,544)	$	26,213	$	(30,385)

Weighted average number of common shares outstanding - basic	16,020,296		6,939,708		15,859,134		4,178,932
Earnings (loss) per share - basic	$	0.19	$	(3.25)	$	1.65	$	(7.27)
Weighted average number of common shares outstanding - diluted	16,067,395		6,939,708		15,922,484		4,178,932
Earnings (loss) per share - diluted	$	0.19	$	(3.25)	$	1.65	$	(7.27)

	Three-Months Ended September 30						Nine-Months Ended September 30
	2021			2020			2021			2020
Revenue:
Vehicles Sales
Powersports	$	83,292		$	7,303		$	121,307		$	38,642
Automotive		105,298			99,315			316,655			281,242
Finance and insurance, net		6,180			199			6,998			672
Parts, service and accessories		16,075			—			16,075			—
Transportation and vehicle logistics		10,369			10,440			32,788			25,192
Total revenue		221,214			117,257			493,823			345,748
Cost of revenue
Powersports		68,295			5,606			97,193			33,692
Automotive		98,773			86,473			293,751			257,046
Parts, service and accessories		8,845			—			8,845			—
Transportation and vehicle logistics		7,914			8,374			25,958			19,325
Cost of revenue before impairment loss		183,827			100,453			425,747			310,063
Impairment loss on automotive inventory		—			—			—			11,738
Total cost of revenue		183,827			100,453			425,747			321,801
Gross profit		37,387			16,804			68,076			23,947
Selling, general and administrative		37,564			13,279			69,077			42,510
Stock-based compensation and other issuances		23,943			—			23,943			—
Insurance recovery		(3,135	)		—			(3,135	)		(5,615	)
Depreciation and amortization		1,717			536			2,948			1,567
Operating income (loss)		(22,702	)		2,989			(24,757	)		(14,515	)
Interest expense		(4,577	)		(1,488	)		(8,107	)		(5,187	)
Forgiveness of PPP loan		572			—			572			—
Change in derivative liability		(6,518	)		(14	)		(8,774	)		7
Gain on early extinguishment of debt		—			—			—			188
Income (Loss) before benefit for income taxes		(33,225	)		1,487			(41,066	)		(19,507	)
Benefit for income taxes		10,681			—			10,681			—
Net income (loss)	$	(22,544	)	$	1,487		$	(30,385	)	$	(19,507	)
Weighted average number of common shares outstanding - basic and fully diluted		6,939,708			2,234,838			4,178,932			2,165,167
Net income (loss) per share - basic and fully diluted	$	(3.25	)	$	0.67		$	(7.27	)	$	(9.01	)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(214) 771-9952
(Registrant's telephone number, including area code)

	September 30, 2021			December 31, 2020
ASSETS
Current assets:
Cash	$	68,268		$	1,467
Restricted cash		3,049			2,049
Accounts receivable, net		42,117			9,408
Inventory		171,455			21,360
Prepaid expense and other current assets		4,745			3,446
Total current assets		289,634			37,730
Property and equipment, net		58,929			6,521
Right-of-use assets		92,944			5,690
Goodwill		263,107			26,887
Intangible assets, net		303,560			46
Other assets		3,678			105
Total assets	$	1,011,852		$	76,979
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	73,384		$	14,193
Floor plan notes payable		87,175			17,812
Current portion of convertible debt		279			563
Current portion of long-term debt		6,151			2,877
Total current liabilities		166,989			35,445
Long-term liabilities:
Senior secured debt		252,777			—
Convertible debt, net		28,648			27,166
Derivative liabilities		41			17
Notes payable		567			4,691
Long-term portion of operating lease liabilities		85,965			4,370
Long-term portion of financing lease liabilities		40,591			—
Deferred tax liabilities		19,579			—
Other long-term liabilities		7,765			720
Total long-term liabilities		435,933			36,964
Total liabilities		602,922			72,409
Commitments and contingencies (Notes 9, 10, 13, 18)
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 0 and 0 shares issued and outstanding as of September 30, 2021 and December 31, 2020		—			—
Class A common stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020		0.05			0.05
Class B common stock, $0.001 par value, 100,000,000 shares authorized, 14,881,522 and 2,191,633 shares issued and outstanding as of September 30, 2021 and December 31, 2020		15			2
Additional paid-in capital		548,000			108,949
Accumulated deficit		(134,766	)		(104,381	)
Class B common stock in treasury, at cost 123,089 and 0 shares as of September 30, 2021 and December 31, 2020		(4,319	)		—
Total stockholders’ equity		408,930			4,570
Total liabilities and stockholders’ equity	$	1,011,852		$	76,979

	Class A Common Shares			Class B Common Shares					Additional Paid in			Accumulated		Class B Common Shares in Treasury					Total Stockholders’
	Shares		Amount	Shares			Amount		Capital			Deficit		Shares		Amount			Equity
Balance, as of December 31, 2020	50,000	$	0.05	2,191,633		$	2	$	108,949		$	(104,381	)	—	$	—		$	4,570
Issuance of common stock for restricted stock units	—		—	94,771			—		—			—		—		—			—
Stock-based compensation	—		—	—			—		1,734			—		—		—			1,734
Net loss	—		—	—			—		—			(4,451	)	—		—			(4,451	)
Balance as of March 31, 2021	50,000		0.05	2,286,404			2		110,683			(108,832	)	—		—			1,853
Issuance of common stock, net of issuance cost	—		—	1,048,998			1		36,796			—		—		—			36,797
Issuance of common stock for restricted stock units	—		—	7,660			—		—			—		—		—			—
Stock-based compensation	—		—	—			—		702			—		—		—			702
Net loss	—		—	—			—		—			(3,390	)	—		—			(3,390	)
Balance as of June 30, 2021	50,000		0.05	3,343,062			3		148,181			(112,222	)	—		—			35,962

Issuance of common stock, net of issuance cost	—		—	5,053,029			5		154,438			—		—		—			154,443
Issuance of common stock in acquisition	—		—	5,833,333			6		200,952			—		—		—			200,958
Issuance of common stock for restricted stock units	—		—	775,187			1		(1	)		—		—		—			—
Issuance of warrant	—		—	—			—		19,700			—		—		—			19,700
Stock-based compensation	—		—	—			—		24,730			—		—		—			24,730
Treasury stock purchases	—		—	(123,089	)		—		—			—		123,089		(4,319	)		(4,319	)
Net loss	—		—	—			—		—			(22,544	)	—		—			(22,544	)
Balance as of September 30, 2021	50,000	$	0.05	14,881,522		$	15	$	548,000		$	(134,766	)	123,089	$	(4,319	)	$	408,930


	Class A Common Shares			Class B Common Shares			Additional Paid in Capital		Accumulated Deficit		Class B Common Shares in Treasury			Total Stockholders' Equity
	Shares	Amount		Shares	Amount						Shares	Amount
Balance as of June 30, 2022	50,000	$	0	15,940,866	$	16	$	581,197	$	(90,932)	123,089	$	(4,319)	$	485,962
Issuance of common stock for restricted stock units	—	—		194,324	—		—		—		—	—		—

Stock-based compensation	—	—		—	—		2,606		—		—	—		2,606

Net income	—	—		—	—		—		3,039		—	—		3,039
Balance as of September 30, 2022	50,000	$	0	16,135,190	$	16	$	583,803	$	(87,893)	123,089	$	(4,319)	$	491,607

	Nine Months Ended September 30
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(30,385	)	$	(19,507	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		2,948			1,568
Amortization of debt discounts		2,284			1,499
Forgiveness of PPP loan		(572	)		—
Share based compensation		27,165			2,425
Impairment loss on inventory		—			11,738
Impairment loss on property and equipment		—			178
Loss (gain) from change in value of derivatives		8,774			(7	)
Gain on early extinguishment of debt		—			(188	)
Deferred taxes		(10,969	)		—
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses and other current assets		486			(1,296	)
(Increase) decrease in inventory		(33,343	)		34,219
(Increase) in accounts receivable		(6,476	)		(2,860	)
(Increase) decrease in other assets		(3,452	)		63
Increase (decrease) in accounts payable and accrued liabilities		16,306			(1,634	)
Increase in other liabilities		1,406			—
Decrease in floor plan trade note borrowings		(3,951	)		—
Net cash (used in) provided by operating activities		(29,779	)		26,198
CASH FLOWS FROM INVESTING ACTIVITIES
Cash used for acquisition, net of cash received		(365,946	)		—
Purchase of property and equipment		(7,613	)		(175	)
Technology development		(1,266	)		(1,598	)
Net cash used in investing activities		(374,825	)		(1,773	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from senior secured debt		261,451			8,272
(Repayments of) proceeds from notes payable		(7,974	)		789
Increase (decrease) in borrowings from non-trade floor plans		27,688			(47,211	)
Net proceeds from PPP loan		—			5,177
Net proceeds from sale of common stock		191,240			10,780
Net cash provided by (used in) financing activities		472,405			(22,193	)
NET INCREASE IN CASH		67,801			2,232
CASH AND RESTRICTED CASH AT BEGINNING OF PERIOD		3,516			6,726
CASH AND RESTRICTED CASH AT END OF PERIOD	$	71,317		$	8,958

	Three-Months Ended September 30,				Nine-Months Ended September 30,
	2021		2020		2021		2020
Revenue
New vehicles	$	42,943	$	—	$	42,943	$	—
Used vehicles
Powersports		40,349		7,303		78,364		38,642
Automotive		105,298		99,315		316,655		281,242
Total used vehicles		145,647		106,618		395,019		319,884
Total new and used vehicles		188,590		106,618		437,962		319,884

Parts, service and accessories		16,075		—		16,075		—
Finance and insurance, net		6,180		199		6,998		672
Transportation and vehicle logistics		10,369		10,440		32,788		25,192
Total revenue	$	221,214	$	117,257	$	493,823	$	345,748

Timing of revenue recognition
Goods and services transferred at a point in time	$	210,920	$	117,257	$	483,529	$	345,748
Good and services transferred over time		10,294		—		10,294		—
Total revenue	$	221,214	$	117,257	$	493,823	$	345,748

Cash, net of cash acquired	$	365,946
Fair value of Class B common stock issued		200,958
Total estimated purchase price consideration¹	$	566,904

	September 30, 2021		December 31, 2020
Floor plan notes payable - trade	$	21,350	$	—
Floor plan notes payable - non-trade		65,825		17,812
Floor plan notes payable	$	87,175	$	17,812

	September 30, 2021		December 31, 2020
Buildings and improvements	$	40,908	$	—
Leasehold Improvements		6,689		321
Equipment		4,832		—
Furniture and fixtures		297		191
Technology development		12,274		11,008
Vehicles		1,418		241
Total property and equipment		66,418		11,761
Less: accumulated depreciation and amortization		7,489		5,240
Total	$	58,929	$	6,521

	September 30, 2021		December 31, 2020
Accounts Payable	$	8,165	$	8,168
Accrued Interest		2,977		1,486
Operating lease liability-current portion		7,435		1,630
Financing lease liability-current portion		345		—
Accrued Payroll		22,674		1,080
Customer deposits		5,449		—
State and local taxes		6,591		856
Professional fees		6,969		112
Other accrued expenses		12,779		861
Total	$	73,384	$	14,193

	September 30, 2021		December 31, 2020
Term Loan Credit Agreement dated August 31, 2021. Amortization payments are required quarterly commencing in the quarter ending December 31, 2021. The Initial Loan Term Facility matures on August 31, 2026. The interest rate as of September 30, 2021 was 9.25%.	$	252,777	$	—
Term Loan Credit Agreement-NextGen dated February 8, 2017. Interest payable semi-annually at 6.5% through February 9, 2019 and 8.5% through February 10, 2020 and 10.0% thereafter through maturity, which was January 31, 2021.		—		833
Notes payable-private placement dated March 31, 2017. Interest payable semi-annually at 8.5% through September 30, 2020 and 10.0% thereafter through maturity, which was June 30, 2021		—		669
Line of Credit- RumbleOn Finance. Line of credit secured by the loans and other assets of RumbleOn Finance, LLC. Interest rate as of September 30, 2021 was 7.25%. Principal and interest is payable on demand.		—		889
Unsecured note payable to P&D Motorcycles in the original amount of $1,724 with interest rate of 4% through maturity which is July 1, 2022.		1,073		—
Unsecured notes payable to RideNow Management, LLLP, a related party through equal ownership by two directors; monthly principal payments ranging from $7 to $13; interest accruing at rates ranging from LIBOR+.6% to LIBOR+1.3%.		1,033		—
Notes payable-PPP Loans dated May 1, 2020. Payments of principal and interest at 1% were deferred until September 1, 2021, at which time the Company will make equal payments of principal and interest through maturity, which is April 1, 2025.		4,612		5,177
Total notes payable and lines of credit		259,495		7,568
Less: Current portion		6,151		2,877
Long-term debt, net of current portion	$	253,344	$	4,691

	September 30, 2021						December 31, 2020
	Principal Amount		Debt Discount		Carrying Amount		Principal Amount		Debt Discount		Carrying Amount
Convertible senior notes	$	38,750	$	10,102	$	28,648	$	38,750	$	11,737	$	27,013

$1,536 unsecured note		448		169		279		1,024		308		716
Total convertible notes		39,198		10,271		28,927		39,774		12,045		27,729
Less: Current portion		448		169		279		768		205		563
Convertible debt, net of current portion	$	38,750	$	10,102	$	28,648	$	39,006	$	11,840	$	27,166

	Nine-Months Ended September 30,
	2021		2020
Cash paid for interest	$	3,553	$	3,615

	September 30, 2021			December 31, 2020
U.S. Federal statutory rate		21.0	%		21.0	%
State and local, net of Federal benefit		3.3	%		5.0	%
Permanent & other differences		(16.3	)%		(1.4	)%
Valuation allowance		18.0	%		(24.6	)%
Effective tax rate		26.0	%		—	%

	September 30, 2021			December 31, 2020
Deferred tax assets
Net operating loss carryforward	$	26,449		$	21,495
Business interest carryforward		2,586			1,651
Stock-based compensation		11			518
Accounts receivable allowance		118			362
Lease liabilities		22,987			1,569
Inventory reserve		5			27
Basis difference in goodwill		965			352
Accrued liabilities		116			123
Property and equipment		—			373
Total deferred tax assets		53,237			26,470

Deferred tax liabilities
Basis difference in property and equipment		6,609			—
Franchise rights		28,048			—
Other intangible assets		2,200			—
Right-of-use assets		22,790			1,478
Debt issuance costs amortization		1,169			1,248
Total deferred tax liabilities		60,816			2,726

Net deferred tax asset (liability) before valuation allowance		(7,579	)		23,744

Valuation allowance		(12,000	)		(23,744	)
Net deferred income tax liabilities	$	(19,579	)	$	—

Leases	Operating Leases			Financing Leases
2021	$	4,434		$	1,452
2022		17,710			5,848
2023		16,868			5,965
2024		16,090			6,085
2025		14,023			6,206
Thereafter		181,073			115,277
Total lease payments		250,198			140,833
Less imputed interest		(156,798	)		(99,897	)
Present value of lease liabilities	$	93,400		$	40,936

	Powersports			Automotive			Vehicle Logistics and Transportation			Eliminations⁽¹⁾			Total
Three-Months Ended September 30, 2021
Total assets	$	1,189,868		$	443,084		$	14,210		$	(635,310	)	$	1,011,852
Revenue		105,547			105,298			11,597			(1,228	)		221,214
Operating income (loss)		(27,524	)		3,835			987			—			(22,702	)
Depreciation and amortization		1,684			23			10			—			1,717
Interest expense		(4,073	)		(503	)		(1	)		—			(4,577	)
Change in derivative liability		(6,518	)		—			—			—			(6,518	)

Three-Months Ended September 30, 2020
Total assets		48,784			41,284			10,518			(26,871	)		73,715
Revenue		7,502			99,315			11,415			(975	)		117,257
Operating income (loss)		(4,028	)		6,246			771			—			2,989
Depreciation and amortization		506			28			2			—			536
Interest expense		(1,196	)		(292	)		—			—			(1,488	)
Change in derivative liability		(14	)		—			—			—			(14	)

Nine-Months Ended September 30, 2021
Total assets		1,189,868			443,084			14,210			(635,310	)		1,011,852
Revenue		144,380			316,655			36,145			(3,357	)		493,823
Operating income (loss)		(35,604	)		8,234			2,613			—			(24,757	)
Depreciation and amortization		2,855			76			17			—			2,948
Interest expense		(6,651	)		(1,451	)		(5	)		—			(8,107	)
Change in derivative liability		(8,774	)		—			—			—			(8,774	)

Nine-Months Ended September 30, 2020
Total assets		48,784			41,284			10,518			(26,871	)		73,715
Revenue		39,314			281,242			28,657			(3,465	)		345,748
Operating income (loss)		(15,733	)		(935	)		2,153			—			(14,515	)
Depreciation and amortization		1,450			111			6			—			1,567
Interest expense		(3,581	)		(1,605	)		(1	)		—			(5,187	)
Change in derivative liability		7			—			—			—			7
Gain on early extinguishment of debt		188			—			—			—			188

			RumbleOn Metrics (on a GAAP Basis)
				Three-Months Ended					Nine-Months Ended
				Sept 2021			Sept 2020		Sept 2021			Sept 2020

Powersports	Revenue	New retail vehicles	$	42,943		$	0	$	42,943		$	0
		Used vehicles
		Retail		19,926			311		19,926		$	4,243
		Wholesale		20,423			6,992		58,438			34,399
		Total used vehicle revenue		40,349			7,303		78,364			38,642
		Finance and insurance, net		6,180			199		6,998			672
		Parts and service and other		16,075			0		16,075			0
		Total Revenue	$	105,547		$	7,502	$	144,380		$	39,314

	Gross Profit	New retail vehicles	$	8,146		$	0	$	8,146		$	0
		Used vehicles
		Retail		3,139			76		3,139			407
		Wholesale		3,712			1,620		12,829			4,541
		Total used vehicle gross profit		6,851			1,696		15,968			4,948
		Finance and insurance, net		6,180			199		6,998			672
		Parts and service and other		7,230			0		7,230			0
		Total gross profit	$	28,407		$	1,895	$	38,342		$	5,620

	Vehicle Sales	New retail vehicles		2,485			0		2,485			0
		Used vehicles
		Retail		1,336			30		1,336			455
		Wholesale		1,669			717		5,086			3,968
		Total used vehicles		3,005			747		6,422			4,423
		Total vehicles sold		5,490			747		8,907			4,423

	Revenue per vehicle	New retail vehicles	$	17,281		$	0	$	17,281		$	0
		Used vehicles
		Retail	$	14,915		$	10,365	$	14,915		$	9,325
		Wholesale	$	12,239		$	9,752	$	11,491		$	8,669
		Used vehicle	$	13,429		$	9,777	$	12,203		$	8,737
		Finance and insurance, net	$	1,617		$	6,619	$	1,831		$	1,478
		Parts and service and other	$	4,207		$	0	$	4,207		$	0
		Total Revenue per vehicle	$	27,623		$	250,057	$	37,786		$	86,405

	Gross Profit per vehicle	New retail vehicles	$	3,278		$	N/A	$	3,278		$	N/A
		Used vehicle	$	2,280		$	2,271	$	2,487		$	1,119


		Finance and insurance	$	1,617		$	6,619	$	1,831		$	1,478
		Parts and service	$	1,892		$	0	$	1,892		$	0
		Total Gross Profit²	$	5,542		$	63,178	$	8,142		$	12,353

Automotive		Revenue	$	105,298		$	99,315	$	316,655		$	281,242
		Gross Profit³	$	6,525		$	12,842	$	22,905		$	12,459
		Vehicles sold		3,028			3,516		8,822			10,954
		Revenue per vehicle	$	34,775		$	28,247	$	35,894		$	25,675
		Gross Profit per vehicle	$	2,155		$	3,652	$	2,596		$	1,137

Transportation		Revenue	$	11,597		$	11,415	$	36,145		$	28,657
		Gross Profit	$	2,455		$	2,067	$	6,829		$	5,867
		Vehicles transported		20,284			21,238		62,693			61,456
		Revenue per vehicle transported	$	572		$	537	$	577		$	466
		Gross Profit per vehicle transported	$	121		$	97	$	109		$	95

Total Company	Financial Overview	Revenue
		Powersports	$	89,472		$	7,502	$	128,305		$	39,314
		Automotive		105,298			99,315		316,655			281,242
		Transportation and logistics		11,597			11,415		36,145			28,657
		Parts and service and other		16,075			0		16,075			0
		Total revenue	$	222,442		$	118,232	$	497,180		$	349,213
		Gross Profit
		Powersports	$	21,176		$	1,895	$	31,112		$	5,621
		Automotive	$	6,525		$	12,842	$	22,905		$	12,459
		Transportation and logistics	$	2,455		$	2,067	$	6,829		$	5,867
		Parts and service and other	$	7,230			0	$	7,230			0
		Total Gross Profit	$	37,387		$	16,804	$	68,076		$	23,947
		Effects of the Nashville Tornado		—			7,879		—			(1,215	)

		Gross Profit as reported in the Consolidated Statements of Operations³		337,387			16,804		68,076			23,947

		Total SG&A	$	37,564		$	13,279	$	69,077		$	42,510

		Net Income (Loss) before Income Tax	$	(33,227	)	$	1,487	$	(41,066	)	$	(19,507	)

		Adjusted EBITDA	$	3,616		$	4,720	$	6,679		$	(3,142	)

	Unit Metrics	Vehicles Sold
		Retail		3,821			30		3,821			455
		Wholesale		4,697			4,233		13,908			14,922
		Total Vehicles Sold		8,518			4,263		17,729			15,377
		Revenue per Unit Sold
		Retail	$	18,071		$	16,984	$	18,285		$	10,803
		Wholesale	$	26,768		$	25,114	$	26,970		$	21,191
		Other	$	3,249		$	2,678	$	2,946		$	1,864
		Total Revenue	$	26,116		$	27,734	$	28,044		$	22,747
		Gross Profit per Unit
		Retail	$	4,571		$	9,163	$	4,785		$	2,373
		Wholesale³	$	2,179		$	1,555	$	2,569		$	1,221
		Other	$	1,137		$	485	$	3,679		$	382
		Total Gross Profit	$	4,389		$	2,094	$	3,840		$	1,636

~~(2)~~	~~Total Gross profit per vehicle retailed is calculated by dividing the sum of new vehicle, used vehicle, and finance, and insurance gross profit by total retail vehicle unit sales.~~
~~(3)~~	~~Automotive gross profit included an inventory reserve adjustment on $7,879 related to the Nashville Tornado.~~


			(1)			Amounts included in restricted cash ~~represent~~are primarily comprised of the deposits required under the ~~Company’s short-term revolving facilities.~~Company's various floor plan lines of credit and ROF line of credit.


	September 30, 2022		December 31, 2021
Asset-Based Financing:
Inventory	$	175,296	$	97,278
Total asset-based financing	175,296		97,278

Term loan facility	361,066		279,300
Unsecured senior convertible notes	38,750		39,006
Line of credit	22,925		—
PPP and other loans	—		4,472
Total debt	598,037		420,056
Less: unamortized discount and debt issuance costs	(34,234)		(35,471)
Total debt, net	$	563,803	$	384,585

~~Exhibit No.~~	~~Description~~
~~2.1~~Exhibit Number		Second Amendment to Plan of Merger and Equity Purchase Agreement, dated July 20, 2021 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 27, 2021).Description
~~3.1~~		Amendment to the Amended Bylaws of RumbleOn, Inc., dated August 31, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2021).
~~3.2~~		~~Certificate of Amendment (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2021).~~
~~4.1~~		~~Form of Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2021).~~
~~10.1~~		First Amendment to Warrant to Purchase Class B Common Stock, dated July 15, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 16, 2021).
~~10.2~~		~~Fourth Amendment to RumbleOn, Inc. 2017 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 4, 2021).~~
~~10.3~~		~~Credit Agreement, dated August 31, 2021 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2021).~~
~~10.4~~ 31.1		~~First Supplemental Indenture, dated August 31, 2021 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2021).~~
~~10.5+~~	Executive Employment Agreement, dated August 31, 2021, between Marshall Chesrown and RumbleOn, Inc. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2021).
~~10.6+~~	Executive Employment Agreement, dated August 31, 2021, between William Coulter and RumbleOn, Inc. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2021).
~~10.7+~~	Executive Employment Agreement, dated August 31, 2021, between Mark Tkach and RumbleOn, Inc. (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2021).
~~10.8+~~	Executive Employment Agreement, dated August 31, 2021, between Peter Levy and RumbleOn, Inc. (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2021).
~~10.9+~~	Executive Employment Agreement, dated August 31, 2021, between Beverley Rath and RumbleOn, Inc. (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on September 7, 2021).
~~31.1~~	Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2		Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1		Certifications of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2		Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101.INS		~~Inline~~ XBRL Instance Document.Document
101.SCH		~~Inline~~ XBRL Taxonomy Extension Schema Document.Schema
101.CAL		~~Inline~~ XBRL Taxonomy Extension Calculation Linkbase Document.Linkbase
101.DEF		~~Inline~~ XBRL Taxonomy Extension Definition Linkbase Document.Linkbase
101.LAB		~~Inline~~ XBRL Taxonomy Extension Label Linkbase Document.Linkbase
101.PRE		~~Inline~~ XBRL Taxonomy Extension Presentation Linkbase Document.Linkbase
104		Cover Page Interactive Data File (formatted as ~~Inline~~inline XBRL and contained in Exhibit 101).*


		RUMBLEON, INC.

Date: November ~~15, 2021~~9, 2022		By:	/s/ Marshall Chesrown
			Marshall Chesrown
			Chairman of the Board of Directors and Chief Executive Officer
	(Principal Executive Officer)

Date: November ~~15, 2021~~9, 2022		By:	/s/ ~~Beverley Rath~~Narinder Sahai
			~~Beverley Rath~~Narinder Sahai
			~~Interim~~ Chief Financial Officer ~~and Controller~~
			(Principal Financial Officer and Principal Accounting Officer)