UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~September~~June 30, ~~2022~~2023


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

For the transition period from to

Commission file number: 001-38248

2020_Rumble_On_Wordmark_RGB_Gray_Green white.jpg

RumbleOn, Inc.

(Exact name of registrant as specified in its charter)

Nevada

46-3951329

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

901 W Walnut Hill Lane

Irving Texas

75038

(Address of principal executive offices)

(Zip Code)


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

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class B Common Stock, $0.001 par value

RMBL

The Nasdaq Stock Market LLC

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


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

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. o

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, $0.001 par value, outstanding on ~~November~~August 8, ~~2022~~2023 was ~~16,143,685~~16,671,994 shares. In addition, 50,000 shares of Class A Common Stock, $0.001 par value, were outstanding on ~~November~~August 8, ~~2022.~~2023.

Table of Contents

QUARTERLY PERIOD ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023

Table of Contents to Report on Form 10-Q


PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3335
Item 4.	Controls and Procedures	3435

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	3537
Item 1A.	Risk Factors	3637
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3637
Item 3.	Defaults Upon Senior Securities	3637
Item 4.	Mine Safety Disclosures	3637
Item 5.	Other Information	3738
Item 6.	Exhibits	3738
SIGNATURES		3839

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

RumbleOn, Inc.

Condensed Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash	Cash	$	39,715	$	48,974	Cash	$	44,373	$	46,762
Restricted cash	Restricted cash	9,500		3,000		Restricted cash	12,776		10,000
Accounts receivable, net	Accounts receivable, net	35,394		40,166		Accounts receivable, net	37,402		28,040
Inventory	Inventory	323,832		201,666		Inventory	325,268		323,473
Prepaid expense and other current assets	Prepaid expense and other current assets	7,079		6,335		Prepaid expense and other current assets	7,336		7,422
Assets held for sale						Assets held for sale	24,883		33,662
Current assets of discontinued operations						Current assets of discontinued operations	272		11,377
Total current assets	Total current assets	415,520		300,141		Total current assets	452,310		460,736
Property and equipment, net	Property and equipment, net	77,091		21,417		Property and equipment, net	81,249		76,078
Right-of-use assets	Right-of-use assets	161,171		133,112		Right-of-use assets	170,733		161,822
Goodwill	Goodwill	266,059		260,922		Goodwill	23,897		21,142
Intangible assets, net	Intangible assets, net	352,880		302,066		Intangible assets, net	242,387		247,413
Deferred tax assets						Deferred tax assets	64,603		58,115
Assets of discontinued operations						Assets of discontinued operations	35		23
Other assets	Other assets	31,861		10,091		Other assets	1,645		1,881
Total assets	Total assets	$	1,304,582	$	1,027,749	Total assets	$	1,036,859	$	1,027,210
LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY					LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable and accrued liabilities		$	76,266	$	57,068
Accounts payable and other current liabilities						Accounts payable and other current liabilities	$	84,626	$	79,439
Vehicle floor plan note payable	Vehicle floor plan note payable	175,296		97,278		Vehicle floor plan note payable	246,438		220,176
Current portion of lease liabilities		23,324		20,249
Current portion of long-term, convertible debts, and notes payable		3,645		4,476
Current portion of long-term debt and line of credit						Current portion of long-term debt and line of credit	18,186		3,645
Current liabilities of discontinued operations						Current liabilities of discontinued operations	714		8,434
Total current liabilities	Total current liabilities	278,531		179,071		Total current liabilities	349,964		311,694
Long-term liabilities:	Long-term liabilities:					Long-term liabilities:
Senior secured note	Senior secured note	330,752		253,438		Senior secured note	322,763		317,494
Convertible debt, net	Convertible debt, net	31,185		29,242		Convertible debt, net	33,394		31,890
Line of credit and notes payable	Line of credit and notes payable	22,925		150		Line of credit and notes payable	586		25,000
Operating lease liabilities	Operating lease liabilities	126,941		114,687		Operating lease liabilities	138,282		126,695
Deferred tax liabilities		15,147		7,586
Other long-term liabilities	Other long-term liabilities	7,494		11,930		Other long-term liabilities	9,230		8,422
Total long-term liabilities	Total long-term liabilities	534,444		417,033		Total long-term liabilities	504,255		509,501
Total liabilities	Total liabilities	812,975		596,104		Total liabilities	854,219		821,195
Commitments and contingencies (Notes 2, 3, 5, 8, and 10)
Commitments and contingencies (Notes 2, 3, 5, 6, 9, and 11)						Commitments and contingencies (Notes 2, 3, 5, 6, 9, and 11)
Stockholders' equity:	Stockholders' equity:					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
Class A Common Stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022						Class A Common Stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022	—		—
Class B Common Stock, $0.001 par value, 100,000,000 shares authorized, 16,565,389 and 16,184,264 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively						Class B Common Stock, $0.001 par value, 100,000,000 shares authorized, 16,565,389 and 16,184,264 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	17		16
Additional paid-in capital	Additional paid-in capital	583,803		550,055		Additional paid-in capital	593,051		585,937
Accumulated deficit	Accumulated deficit	(87,893)		(114,106)		Accumulated deficit	(406,109)		(375,619)
Class B stock in treasury, at cost, 123,089 shares as of September 30, 2022 and December 31, 2021		(4,319)		(4,319)
Class B Common Stock in treasury, at cost, 123,089 shares as of June 30, 2023 and December 31, 2022						Class B Common Stock in treasury, at cost, 123,089 shares as of June 30, 2023 and December 31, 2022	(4,319)		(4,319)
Total stockholders' equity	Total stockholders' equity	491,607		431,645		Total stockholders' equity	182,640		206,015
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	1,304,582	$	1,027,749	Total liabilities and stockholders' equity	$	1,036,859	$	1,027,210

See Notes to the Condensed Consolidated Financial Statements.

Table of Contents

RumbleOn, Inc.

Condensed Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

(Unaudited)

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 June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Powersports vehicles	$	269,721	$	294,591	$	503,004	$	534,505
Parts, service and accessories	65,409		65,315		124,478		120,052
Finance and insurance, net	33,178		36,759		60,370		64,261
Vehicle logistics	14,423		15,517		29,263		27,868
Total revenue	382,731		412,182		717,115		746,686

Cost of revenue:
Powersports vehicles	230,263		232,747		431,303		426,258
Parts, service and accessories	34,998		33,945		66,788		63,400

Vehicle logistics	11,069		12,349		22,322		22,216
Total cost of revenue	276,330		279,041		520,413		511,874

Gross profit	106,401		133,141		196,702		234,812

Selling, general and administrative	100,313		96,233		186,600		170,605
Depreciation and amortization	5,269		5,862		9,996		10,319
Operating income	819		31,046		106		53,888

Other income (expense):
Interest expense	(18,326)		(12,751)		(35,928)		(23,413)
Other income	101		204		133		204
Change in derivative liability	—		—		—		39
Total other expense	(18,225)		(12,547)		(35,795)		(23,170)

Income (loss) from continuing operations before income taxes	(17,406)		18,499		(35,689)		30,718

Income taxes provision (benefit) from continuing operations	(4,573)		4,852		(6,150)		7,487

Income (loss) from continuing operations, net	(12,833)		13,647		(29,539)		23,231

Income (loss) from operations of discontinued operations	(878)		404		(1,100)		(294)
Income tax provision (benefit) from discontinued operations	(123)		18		(149)		(237)
Income (loss) from discontinued operations, net	(755)		386		(951)		(57)

Net income (loss)	$	(13,588)	$	14,033	$	(30,490)	$	23,174

Weighted average number of common shares outstanding - basic	16,462,079		16,059,288		16,343,758		15,778,461
Earnings (loss) per share - basic from continuing operations	$	(0.78)	$	0.85	$	(1.81)	$	1.47
Earnings (loss) per share - basic from discontinued operations	(0.05)		0.02		(0.06)		(0.01)
Weighted average number of common shares outstanding - diluted	16,462,079		16,095,862		16,343,758		15,841,346
Earnings (loss) per share - diluted from continuing operations	$	(0.78)	$	0.85	$	(1.81)	$	1.47
Earnings (loss) per share - diluted from discontinued operations	$	(0.05)	$	0.02	$	(0.06)	$	(0.01)

See Notes to the Condensed Consolidated Financial Statements.

Table of Contents

RumbleOn, Inc.

Condensed Consolidated Statement of Stockholders' Equity

(Dollars in thousands, except per share amounts)

(Unaudited)


	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 March 31, 2023	50,000	$	—	16,295,735	$	16	$	588,848	$	(392,521)	123,089	$	(4,319)	$	192,024
Issuance of common stock for restricted stock units	—	—		269,654	1		(1)		—		—	—		—
Stock-based compensation	—	—		—	—		4,910		—		—	—		4,910

Tax withholding related to vesting of restricted stock units and other	—	—		—	—		(706)		—		—	—		(706)
Net loss	—	—		—	—		—		(13,588)		—	—		(13,588)
Balance as of June 30, 2023	50,000	$	—	16,565,389	$	17	$	593,051	$	(406,109)	123,089	$	(4,319)	$	182,640

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 December 31, 2021 50,000 $ 0 14,882,022 $ 15 $ 550,055 $ (114,106) 123,089 $ (4,319) $ 431,645
Issuance of common stock for restricted stock units — — 206,896 — — — — — —
Issuance of common stock in acquisition — — 1,048,718 1 26,511 — — — 26,512
Stock-based compensation — — — — 7,237 — — — 7,237
Escrow shares cancelled in connection with Freedom acquisition — — (2,446) — — — — — —
Net income — — — — — 26,213 — — 26,213
Balance as of September 30, 2022 50,000 $ 0 16,135,190 $ 16 $ 583,803 $ (87,893) 123,089 $ (4,319) $ 491,607


	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 December 31, 2022	50,000	$	—	16,184,264	$	16	$	585,937	$	(375,619)	123,089	$	(4,319)		$	206,015
Issuance of common stock for restricted stock units	—	—		381,125	1		(1)		—		—	—		—	—
Stock-based compensation	—	—		—	—		7,821		—		—	—			7,821

Tax withholding related to vesting of restricted stock units and other	—	—		—	—		(706)		—		—	—			(706)
Net loss	—	—		—	—		—		(30,490)		—	—			(30,490)
Balance as of June 30, 2023	50,000	$	—	16,565,389	$	17	$	593,051	$	(406,109)	123,089	$	(4,319)		$	182,640

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, 2021 50,000 $ 0 3,343,062 $ 3 $ 148,181 $ (112,222) — $ — $ 35,962
Issuance of common stock for restricted stock units — — 775,187 1 (1) — — — —
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
Stock-based compensation — — — — 24,730 — — — 24,730
Issuance of warrant — — — — 19,700 — — — 19,700
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 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 March 31, 2022	50,000	$	—	15,930,740	$	16	$	578,444	$	(104,965)	123,089	$	(4,319)	$	469,176
Issuance of common stock for restricted stock units	—	—		12,572	—		—		—		—	—		—
Stock-based compensation	—	—		—	—		2,754		—		—	—		—
Escrow shares returned in connection with Freedom acquisition	—	—		(2,446)	—		—		—		2,446	—		—
Net income	—	—		—	—		—		14,033		—	—		14,033
Balance as of June 30, 2022	50,000	$	0	15,940,866	$	16	$	581,198	$	(90,932)	125,535	$	(4,319)	$	485,963


	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 December 31, 2021	50,000	$	0	14,882,022	$	15	$	550,055	$	(114,106)	123,089	$	(4,319)	$	431,645
Issuance of common stock for restricted stock units	—	—		12,572	—		—		—		—	—		—
Issuance of common stock in acquisition	—	—		1,048,718	1		26,511		—		—	—		26,512
Stock-based compensation	—	—		—	—		4,632		—		—	—		4,632
Escrow shares returned in connection with Freedom acquisition	—	—		(2,446)	—		—		—		2,446	—		—
Net income	—	—		—	—		—		23,174		—	—		23,174
Balance as of June 30, 2022	50,000	$	0	15,940,866	$	16	$	581,198	$	(90,932)	125,535	$	(4,319)	$	485,963

~~Table of Contents~~

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 December 31, 2020 50,000 $ 0 2,191,633 $ 2 $ 108,949 $ (104,381) — $ — $ 4,570
Issuance of common stock for restricted stock units — — 877,618 1 (1) — — — —
Issuance of common stock, net of issuance cost — — 6,102,027 6 191,234 — — — 191,240
Issuance of common stock in acquisition — — 5,833,333 6 200,952 — — — 200,958
Stock-based compensation — — — — 27,166 — — — 27,166
Issuance of warrant — — — — 19,700 — — — 19,700
Treasury stock purchases — — (123,089) — — 123,089 (4,319) (4,319)
Net loss — — — — — (30,385) — — (30,385)
Balance as of September 30, 2021 50,000 $ 0 14,881,522 $ 15 $ 548,000 $ (134,766) 123,089 (4,319) $ 408,930

~~See Notes to the Condensed Consolidated Financial Statements.~~

Table of Contents

RumbleOn, Inc.

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

Nine Months Ended September 30,
2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 26,213 $ (30,385)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization 16,923 2,948
Amortization of debt discount 3,936 2,284
Forgiveness of PPP loan (2,509) (572)
Stock based compensation expense 7,237 27,165
(Gain) loss from change in value of derivatives (39) 8,774
Deferred taxes 3,946 (10,969)
Changes in finance receivable related assets and liabilities:
Proceeds from ROF credit facility for the purchase of consumer finance loans 22,925 —
Originations of finance receivables, net of principal payments received (23,676) —
Changes in operating assets and liabilities, excluding impact of acquisitions:
Accounts receivable 5,964 (6,476)
Inventory (97,357) (33,343)
Prepaid expenses and other current assets (330) 486
Other assets (3,779) (3,452)
Other liabilities (2,471) 1,406
Accounts payable and accrued liabilities 8,927 16,306
Floor plan trade note borrowings 38,746 (3,951)
Net cash provided by (used in) operating activities 4,656 (29,779)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions, net of cash received (65,976) (365,946)
Purchase of property and equipment (4,334) (7,613)
Technology development (6,188) (1,266)
Net cash used in investing activities (76,498) (374,825)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from new secured debt 84,500 261,451
Repayments of debt and mortgage notes (34,235) —
Repayments of (proceeds from) issuance of notes (2,116) (7,974)
Increase in borrowings from non-trade floor plans 20,934 27,688
Net proceeds from sale of common stock — 191,240
Net cash provided by financing activities 69,083 472,405
NET CHANGE IN CASH (2,759) 67,801
Cash and restricted cash at beginning of period 51,974 3,516
Cash and restricted cash at end of period $ 49,215 $ 71,317


	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(30,490)	$	23,174
Loss from discontinued operations	(951)		(57)
Net income (loss) from continued operations	$	(29,539)	$	23,231
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities:
Depreciation and amortization	9,996		10,285
Amortization of debt discount	4,764		3,523
Stock based compensation expense	7,821		4,632
Gain from change in value of derivatives	—		(39)
Deferred taxes	(6,488)		4,023
Originations of loan receivables, net of principal payments received	2,623		(12,973)
Write-down of loan receivable assets	6,156		—
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(9,362)		3,052
Inventory	3,103		(26,820)
Prepaid expenses and other current assets	97		(511)
Other assets	213		(19,112)
Other liabilities	4,001		(3,807)
Accounts payable and accrued liabilities	1,377		15,329
Floor plan trade note borrowings	(1,056)		28,140
Net cash provided by (used in) operating activities of continuing operations	(6,294)		28,953
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions, net of cash received	(3,300)		(64,188)
Purchase of property and equipment	(6,004)		(1,464)
Technology development	(1,066)		(3,462)
Net cash used in investing activities of continuing operations	(10,370)		(69,114)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from new secured debt	—		84,500
Proceeds from ROF credit facility for the purchase of consumer finance loans	—		13,650
Repayment of debt and line of credit	(8,371)		(32,791)
Repayment of note payables	—		(2,091)
Increase in borrowings from non-trade floor plans	25,192		1,548
Net cash provided by financing activities of continuing operations	16,821		64,816
CASH FLOWS FROM DISCONTINUED OPERATIONS
Net cash provided by operating activities	3,667		7,371
Net cash used in financing activities	(5,254)		(6,318)
Net cash provided by (used in) discontinued operations	(1,587)		1,053
NET INCREASE (DECREASE) IN CASH	(1,430)		25,708
Cash and restricted cash at beginning of period	58,579		51,974
Cash and restricted cash at end of period	$	57,149	$	77,682

See Notes to the Condensed Consolidated Financial Statements.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

NOTE 1 –DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Unless the context requires otherwise, references in these financial statements to “RumbleOn,” the “Company,” “we,” “us,” and “our” refer to RumbleOn, Inc. and its consolidated subsidiaries.

~~Overview~~

RumbleOn ~~Inc. was incorporated~~is the nation's first and largest publicly traded, technology-enhanced dealership group platform in ~~October 2013 under~~ the ~~laws of the State of Nevada and is currently headquartered~~powersports industry. Headquartered in the Dallas ~~Metroplex. Through~~Metroplex, RumbleOn is revolutionizing the customer experience for outdoor enthusiasts across the country and providing more choices in making powersports vehicles accessible to more people in more places than ever before. We strive to build long-term value for our ~~network of more than 55 locations, we are~~customers, employees, and shareholders with the nation’s largest ~~Omnichannel marketplace platform in~~network of powersports ~~leveraging proprietary technology, a broad footprint of physical retail~~dealerships, service departments, and fulfillment ~~locations,~~centers operated by our highly-trained and knowledgeable team. We are transforming the powersports customer experience by giving consumers what they want - a ~~full line of manufacturer representation,~~wide selection, great value and quality, and an ~~experienced and innovative management team~~easy transaction. Every element of our business, from inventory procurement, to ~~transform~~fulfillment, to overall ease of transactions, has been built for a singular purpose – to create an unparalleled customer experience in the powersports ~~supply chain to better serve customers and create shareholder value.Our goal is simple – to be outdoor enthusiasts’ dealer~~industry regardless of ~~choice when making any powersports purchase or sale.We will achieve that by (i) offering customers the largest selection of new and used~~whether they are shopping our inventory ~~in-store,~~ online or ~~a seamless combination~~in-store.

Although our primary focus is on the customer experience and building market share in the powersports industry, during 2022 and 2023 we participated in the automotive industry through our wholly-owned wholesale distributor of ~~both, (ii) providing a fair price~~used automotive inventory, Wholesale, Inc. ("Wholesale Inc."), and ~~friction free online~~our exotics retailer AutoSport USA, Inc., which does business under the name Got Speed. In the third quarter of 2022, we announced we would be winding down our wholesale automotive business. The process of winding down this business was completed as of June 30, 2023, and we have reported the operations of this segment of our business as discontinued operations within the Condensed Consolidated Financial Statements. Our logistics services company, Wholesale Express, LLC ("Wholesale Express"), provides freight brokerage services facilitating transportation for ~~consumers looking to sell their powersports vehicle,~~dealers and ~~(iii) building a lasting relationship with our customers regarding parts, accessories and service.RumbleOn completed its business combinations with RideNow Powersports, the nation’s largest powersports retailer group with 42 retail locations, primarily across the Sunbelt (“RideNow”) on~~consumers.

On August 31, 2021 (the “RideNow Closing Date”)., RumbleOn, Inc. completed its business combination with RideNow Powersports ("RideNow"), the nation's largest powersports retailer group. On February 18, 2022 (the “Freedom Closing Date”), the Company completed its acquisition of Freedom Powersports, LLC (“Freedom Powersports”) and Freedom Powersports Real Estate, LLC (“Freedom Powersports - ~~RE”~~RE,” and together with Freedom Powersports, the ~~"Freedom Entities"~~“Freedom Entities”), a retailer group with 13 ~~retail~~ locations in Texas, Georgia, and ~~Alabama (refer~~Alabama.

Since the acquisitions of RideNow and Freedom Powersports, we have made a handful of smaller acquisitions. We plan to ~~Note 2 - Acquisitions).~~continue the growth of our powersports footprint through strategic acquisitions.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim information and with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Condensed Consolidated Financial Statements include the accounts of RumbleOn, Inc. and its subsidiaries, which are all wholly owned, including RideNow and the Freedom Entities from the respective dates these businesses were ~~respectively~~ acquired. In accordance with those rules and regulations, the Company has omitted certain information and notes required by U.S. GAAP for annual consolidated financial statements. In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements. These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 Form 10-K”). The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 are not necessarily indicative of the results expected for the entire fiscal year. All intercompany accounts and material intercompany transactions have been eliminated.

Use of Estimates

The preparation of these Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions. Certain accounting estimates involve significant judgments, assumptions, and

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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. In particular, ~~the continuing adverse impacts to~~current or future macro economic conditions, as well as the effect of economic conditions on 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. These conditions may include, but are not limited to, recession, inflation, interest rates, unemployment levels, the state of the housing market, gasoline prices, consumer credit availability, consumer credit delinquency and loss rates, personal discretionary spending levels, and consumer sentiment about the economy in general. These conditions and the economy in general could be affected by significant national or international

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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.

Liquidity and Management’s Plans

As described more completely in Note 5, the Company was not in compliance with certain financial covenants contained in various debt agreements at June 30, 2023, providing the lenders the ability to accelerate the outstanding loan balances to the Company if a compliance waiver or loan amendment is not obtained.

On August 9, 2023, the Company and Oaktree Fund Administration, LLC executed Amendment No. 5 (as defined in Note 5) to the Term Loan Credit Agreement, which provides the Company a covenant waiver as of June 30, 2023 and as of September 30, 2023, and more favorable financial covenants for each quarter through the second quarter of 2024. Amendment No. 5 also requires the Company to undertake certain actions in the coming months to generate additional liquidity that will be used to repay a portion of the outstanding balance of the Term Loan Credit Agreement. These actions include divesting of certain assets and completing a $100,000 rights offering, for which the Company has received binding commitments for up to $100,000 if the rights offering is not fully subscribed.

Management has initiated plans that will allow the Company to remain in compliance with all revised covenants under Amendment No. 5. The Company has classified certain assets as held for sale at June 30, 2023 and also executed a Standby Purchase Agreement on August 8, 2023 that provides binding commitments for up to $100,000 from certain existing shareholders if the rights offering is not fully subscribed. Management has considered these plans, including if they are within the control of the Company, in evaluating ASC 205-40, Presentation of Financial Statements. Management believes the above actions are sufficient to allow the Company to meet its obligations as they become due for a period of at least 12 months from the issuance of these financial statements and to comply with the amended financial covenants of Amendment No. 5. Management believes that it has alleviated any substantial doubt regarding the Company’s ability to continue as a going concern.

Correction of an Immaterial Misstatement Related to Prior Periods

During the quarter ended December 31, 2022, the Company identified a misstatement in its accounting for internal powersports revenue and internal powersports cost of sales, which were included in the consolidated statements of operations rather than being eliminated, which resulted in an overstatement of both revenue and cost of sales, with no impact to gross profit, operating income (loss), or net income (loss). The misstatement impacted the unaudited Condensed Consolidated Financial Statements for the three month periods ended March 31, 2022, June 30, 2022, and September 30, 2022.

The Company evaluated the misstatement and concluded that the impact was not material, either individually or in the aggregate, to its current or previously issued consolidated financial statements. The Company has corrected the Condensed Consolidated Financial Statements by decreasing powersports revenue and cost of sales for the three months ended June 30, 2022 by $18,094 and $18,094, respectively, and for the six months ended June 30, 2022 by $32,813 and $32,813, respectively.

Recent Pronouncements

Adoption of New Accounting Standards

In ~~December 2019,~~June 2016, the FASB issued ASU ~~2019-12,~~ ~~Income Taxes~~2016-13, Financial instruments - Credit Losses (Topic ~~740)~~326): ~~Simplifying the Accounting for Income Taxes~~ (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 for its fiscal year beginning January 1, 2021 and it did not have a material effectMeasurement of Credit Losses on ~~its consolidated financial statements.~~

~~In October 2021, the FASB issued ASU No. 2021-08,~~ ~~Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~Financial Instruments (“ASU ~~2021-08”~~2016-13”)~~. ASU 2021-08 requires~~, which amends the ~~company acquiring contract~~guidance on the impairment of financial instruments by requiring measurement and recognition of expected credit losses for financial assets ~~and contract liabilities obtained in a business combination to recognize and measure them in accordance with ASC 606,~~ ~~Revenue from Contracts with Customers~~. At the acquisition date, the company acquiring the business should record related revenue, as if it had originated the contract. Before the update such amounts were recognized by the acquiring company at fair value.held. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. ~~Early adoption is~~

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The Company adopted ASU 2016-13 on January 1, 2023. The standard did not have a material impact on the Company's Condensed Consolidated Financial Statements for the six months ended June 30, 2023.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This ASU provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848): Scope.” This ASU refines the scope of ASC 848 and clarifies some of its guidance as part of the Board's monitoring of global reference rate reform activities. The ASU permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, for computing variation margin settlements, and for calculating price alignment interest in connection with reference rate reform activities. In December 2022, the FASB issued ASU 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848." This ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted ~~including~~to apply the relief in ~~interim periods,~~Topic 848. These new standards were effective upon issuance and generally can be applied to applicable contract modifications. Our senior secured debt and most of our floorplan arrangements have transitioned from LIBOR to the use of SOFR or an alternative benchmark rate as of June 30, 2023.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for ~~any financial statements that have not yet been issued.~~Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606 instead of being recorded at fair value. The Company early adopted these requirements prospectively in the first quarter of 2022. ~~These accounting standards did not have a material impact on the Company’s financial statements during the nine months ended September 30, 2022.~~

Accounting for Business Combinations

Total consideration transferred for acquisitions is allocated to the tangible and intangible assets acquired and liabilities assumed, if any, based on their fair values at the dates of acquisition. This purchase price allocation process requires management to make significant estimates and assumptions with respect to ~~the acquisition date~~intangible assets and other fair ~~values of~~value adjustments with respect to certain assets acquired and liabilities assumed. The fair value of identifiable intangible assets is based on ~~third party~~detailed valuations that use information and assumptions determined by management. Any excess of purchase price over the fair value of the net ~~identifiable~~tangible and intangible assets acquired is allocated to goodwill. While we use our best estimates and assumptions to accurately ~~measure~~value assets acquired and liabilities assumed at the acquisition date ~~the initial amounts recorded~~as well as any contingent consideration, where applicable, our estimates are ~~provisional~~inherently uncertain and ~~may be~~ subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we ~~may~~ record adjustments to the ~~fair value of consideration transferred,~~ assets acquired and liabilities ~~assumed.~~assumed with the corresponding offset to goodwill. Upon conclusion of the measurement period or final determination of the ~~fair~~ values of ~~consideration transferred,~~ assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our Condensed Consolidated Statements of Operations.

On August 31, 2021, the Company completed its acquisition of RideNow. The Company finalized its accounting for consideration transferred, assets acquired, and liabilities assumed in the third quarter of 2022; all adjustments were recorded within the measurement period, that ended on August 31, 2022.

During the third quarter of 2022, the Company’s third-party valuation of certain assets and liabilities was completed. The Company recorded the following measurement period adjustments to finalize the purchase accounting for RideNow during the third quarter of 2022:

•~~Identified intangible assets consisting of franchise rights and non-compete agreements were increased by a total of $13,719 attributed to finalizing the valuation reports of such assets.~~

•~~Deferred taxes increased by $6,055.~~

~~The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $(7,664).~~

On February 18, 2022, the Company completed its acquisition of the Freedom Entities. Consideration transferred for acquired assets and liabilities assumed has been recorded on a provisional basis as of September 30, 2022. The Company recorded the following measurement period adjustments to the provisional purchase accounting for the Freedom Entities the during the third quarter of 2022:

•~~Inventory was decreased by $1,079.~~

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•~~Identified intangible assets consisting of franchise rights and non-compete agreements were decreased by a total of $17,825.~~

•~~Accounts payable, accrued expenses, and other current liabilities acquired increased by $1,404.~~

•~~Other minimal changes and refinements to identified assets.~~

~~The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $20,308.~~

We use 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. We base our assumptions on estimates of future cash flows, expected growth rates, ~~and expected retention rates.~~etc. We base the discount rates used to arrive at a present value as of the date of acquisition on the time value of money and certain industry-specific risk factors. We believe the estimated purchased franchise rights ~~non-competition agreements~~ and ~~other~~non-compete intangible asset amounts so determined represent the fair value at the date of ~~acquisition.~~acquisition and do not exceed the amount a third-party would pay for the assets.

Assets Held for Sale

We consider properties to be assets held for sale when (1) management commits to a plan to sell the property; (2) it is unlikely that the disposal plan will be significantly modified or discontinued; (3) the property is available for immediate sale in its present condition; (4) actions required to complete the sale of the property have been initiated; (5) sale of the property is probable and we expect the completed sale will occur within one year; and (6) the property is actively being marketed for sale at a price that is reasonable given our estimate of current market value. Upon designation of a property as an asset held for sale, we record the property’s value at the lower of its carrying amount or its estimated fair value, less estimated costs to sell, and we cease depreciation.

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NOTE 2 - ACQUISITIONS

~~RideNow~~Freedom Transaction

On November 8, 2021, RumbleOn entered into a Membership Interest Purchase Agreement to acquire 100% of the ~~RideNow~~equity interests of the Freedom Entities, and completed the acquisition on the Freedom Closing Date ~~RumbleOn completed its~~(the “Freedom Transaction”). 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 ~~with RideNow (“RideNow Transaction”)~~under ASC 805, Business Combinations. ~~Pursuant to~~Under the ~~Plan~~terms of ~~Merger and Equity~~the Membership Interest Purchase Agreement, as amended (the “RideNow Agreement”), on the RideNow Closing Date, there were both mergers and transfers of ownership interests comprising in aggregate the RideNow Transaction. For the mergers, five newly-created RumbleOn subsidiaries were merged with and into five RideNow entities (“Merged RideNow Entities”) with the Merged RideNow Entities, comprising approximately 30% of RideNow retail locations, continuing as the surviving corporations. For the transfers of ownership interest, the Company acquired all ~~the~~ outstanding equity interests of ~~21 entities comprising~~ the ~~remaining 70% of the RideNow’s retail locations (“Acquired RideNow~~Freedom Entities~~” and together with the Merged RideNow Entities, the “RideNow Entities”). As a result of the RideNow Transaction the Company obtained 100% of the voting equity interests of the RideNow Entities.~~

~~On the RideNow Closing Date, the RideNow equity holders received cash~~ were acquired for total consideration of ~~$400,400 and 5,833,333 shares~~$97,237, consisting of ~~RumbleOn’s Class B common stock, valued at $200,958 based on the closing price of the Company’s Class B common stock on the RideNow Closing Date. Additionally at closing, the Company~~$70,569 paid ~~$1,793 to satisfy~~in cash, including certain transaction expenses incurred by RideNow and effectively settled a $1,734 payable from RideNow to RumbleOn arising from vehicle sales from RumbleOn to RideNow in the ordinary course of business prior to the RideNow Closing. The Company also recorded a payable for amounts owed to RideNow equity holders. Cash paid ~~acquiree transaction expenses paid at closing, and elimination~~on behalf of the ~~preexisting payable from RumbleOn all approximate their fair value due to short-term nature~~Freedom Entities' equity holders, and issuance of ~~these items.~~

~~The cash consideration for the RideNow Transaction was funded from (i) the Company’s underwritten public offering of 5,053,029~~1,048,718 shares of Class B ~~common stock, which resulted in net proceeds~~Common Stock with a value of ~~approximately $154,443 (the “August 2021 Offering”), and (ii) net proceeds of approximately $261,000 pursuant to the Oaktree Credit Agreement entered into~~$26,511 on the ~~RideNow~~Freedom Closing ~~Date (as further described~~Date. On June 22, 2022, 2,446 shares of Class B Common Stock held in ~~Note 5 - Notes Payable and Lines~~escrow were cancelled as part of ~~Credit). The remaining funds received from these financing transactions were used for working capital purposes. Also see Note 12 – Subsequent Events.~~the final purchase price adjustment.

The following table summarizes the final components of consideration transferred by the Company for the ~~RideNow~~Freedom Transaction:


Cash	$	~~400,400~~70,569
Class B ~~common stock~~Common Stock	~~200,958~~26,511
Acquiree transaction expenses paid by the Company at closing	~~1,793~~
~~Elimination of preexisting payable from RideNow to RumbleOn~~	~~1,734~~157
Total purchase price consideration	$	~~604,885~~97,237

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~~RideNow~~Freedom Transaction Estimated Fair Value of Assets and Liabilities Assumed

On February 18, 2022, the Company completed its acquisition of the Freedom Entities. The Company finalized its accounting for consideration transferred, assets acquired, and liabilities assumed during the quarter ended March 31, 2023. All adjustments were recorded within the measurement period that ended on February 17, 2023. Total goodwill acquired as part of the Freedom Entities acquisition was $29,359.

All of ~~RideNow’s~~Freedom Entities' acquired assets and liabilities, including goodwill recognized as a result of the ~~RideNow~~Freedom Transaction, have been included in the Company’s Powersports reporting segment, as the ~~RideNow~~Freedom Entities 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~~revenue 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 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 the Freedom Entities, and as such, it remains subject to finalization. The Company is required to finalize the purchase price allocation 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 the Company’s Powersports reporting segment.

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~~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. 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 able to amortize, for tax purposes, $29,306 of goodwill.~~

The results of operations of the Freedom Entities from the Freedom Closing Date forward are included in the accompanying Condensed Consolidated Financial 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 $1,263 were incurred for the nine months ended September 30, 2022 and are included in Selling, General and Administrative expenses in the Condensed Consolidated Statement of Operations.

Pro Forma Information for Acquisitions

The Company has included the operating results of the Freedom Entities in its consolidated statements of operations since February 18, 2022. The following unaudited pro forma financial information presents consolidated information of the Company as if the ~~RideNow Transaction and~~ Freedom Transaction ~~were~~was completed at December 31, ~~2020.~~2021.

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


	Six Months Ended June 30,
	2023		2022
	(unaudited)
Pro forma revenue from continuing operations	$	717,115	$	770,396
Pro forma net income (loss) from continuing operations	$	(29,539)	$	23,387
Earnings (loss) per share from continuing operations - basic	$	(1.81)	$	1.48
Weighted average number of shares - basic	16,343,758		15,778,461
Earnings (loss) per share from continuing operations - fully diluted	$	(1.81)	$	1.48
Weighted average number of shares - fully diluted	16,343,758		15,841,346

Red Hills Powersports Acquisition

On March 3, 2023, the Company acquired Red Hills powersports, a single retail location representing 10 original equipment manufacturers ("OEMs") in Tallahassee, Florida, for total consideration approximating $3,300 in cash.

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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 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	Leases	Classification	September 30, 2022		December 31, 2021		Leases	Classification	June 30, 2023		December 31, 2022
Assets:	Assets:						Assets:
Operating	Operating	Right of use assets	$	161,171	$	133,112	Operating	Right-of-use assets	$	170,733	$	161,822
Finance		Property and equipment, net	—		3,240
Total right-of-use assets	Total right-of-use assets		$	161,171	$	136,352	Total right-of-use assets		$	170,733	$	161,822

Liabilities:	Liabilities:						Liabilities:
Current:	Current:						Current:
Operating	Operating	Current portion of lease liabilities	$	23,324	$	19,155	Operating	Accounts payable and other current liabilities	$	24,591	$	24,075
Finance		Current portion of lease liabilities	—		1,094
Non-Current:	Non-Current:						Non-Current:
Operating	Operating	Long-term portion of operating lease liabilities	126,941		114,687		Operating	Long-term portion of operating lease liabilities	138,282		126,695
Finance		Other long-term liabilities	—		2,869
Total lease liabilities	Total lease liabilities		$	150,265	$	137,805	Total lease liabilities		$	162,873	$	150,770

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%~~


	June 30, 2023	December 31, 2022
Weighted average lease term-operating leases	14.0 years	14.6 years
Weighted average discount rate-operating leases	14.0%	14.0%

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The following table provides information related to the lease costs of finance and operating leases for the three ~~months~~ and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021:~~2022:

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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Lease Expense	Income Statement Classification	Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Operating	Selling, general and administrative expenses	$	8,525	$	7,565	$	16,674	$	14,428
Finance:
Amortization of ROU assets	Depreciation and amortization expense	—		—		—		41
Interest on lease liabilities	Interest expense	—		—		—		124
Total lease costs		$	8,525	$	7,565	$	16,674	$	14,593

In connection with the acquisition of the RideNow ~~Transaction,~~companies on August 31, 2021 (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~~June 30, ~~2022:~~2023:

~~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~~


Leases	Balance Sheet Classification	June 30, 2023		December 31, 2022
Assets:
Right of use assets – related party		$	104,376	$	105,264
All other right-of-use assets		66,357		56,558
Total	Right-of-use assets	$	170,733	$	161,822

Liabilities:
Current:
Current portion of lease liabilities – related party		$	13,997	$	14,492
Current portion of lease liabilities – all other leases		10,594		9,583
Total	Accounts payable and other current liabilities	$	24,591	$	24,075
Non-Current:
Long-term portion of lease liabilities – related party		96,538		93,713
Long-term portion of lease liabilities – all other leases		41,744		32,982
Total	Operating lease liabilities	$	138,282	$	126,695
Total lease liabilities		$	162,873	$	150,770

Supplemental cash flow information related to operating leases for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 was as follows:


	~~Nine Months Ended September 30, 2022~~
~~Cash payments for operating leases~~	$	~~18,643~~
~~ROU assets obtained in exchange for new operating lease liabilities~~	$	~~15,912~~


	Six Months Ended June 30,
	2023		2022
Cash payments for operating leases	$	14,244	$	12,240
ROU assets obtained in exchange for new operating lease liabilities	$	14,383	$	15,103

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The following table summarizes the future minimum payments for operating leases at ~~September~~June 30, ~~2022~~2023 due in each year ending December 31:


Year	Year	Operating Leases		Year	Operating Leases
2022		$	6,726
2023	2023	27,125		2023	$	15,394
2024	2024	26,598		2024	30,314
2025	2025	25,012		2025	28,601
2026	2026	23,639		2026	26,927
2027				2027	26,131
Thereafter	Thereafter	290,066		Thereafter	282,415
Total lease payments	Total lease payments	399,166		Total lease payments	409,782
Less: imputed interest	Less: imputed interest	248,901		Less: imputed interest	(246,909)
Present value of operating lease liabilities	Present value of operating lease liabilities	$	150,265	Present value of operating lease liabilities	$	162,873

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

The carrying amount of goodwill, franchise rights, and other intangible assets as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022 is as follows:

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		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Goodwill	Goodwill	$	266,059	$	260,922	Goodwill	$	23,897	$	21,142

Other Intangible Assets
Other intangible assets						Other intangible assets
Franchise rights - indefinite life	Franchise rights - indefinite life	$	339,071	$	282,350	Franchise rights - indefinite life	$	236,678	$	236,723
Other intangibles - definite lived		23,750		22,175
Definite lived - non-compete agreements and other						Definite lived - non-compete agreements and other	23,795		23,750
		362,821		304,525			260,473		260,473
Less accumulated amortization		9,941		2,459
Less: accumulated amortization						Less: accumulated amortization	18,086		13,060
Intangible assets, net	Intangible assets, net	$	352,880	$	302,066	Intangible assets, net	$	242,387	$	247,413

The following summarizes the changes in the carrying amount of goodwill by reportable segment from December 31, ~~2021~~2022 to ~~September~~June 30, ~~2022.~~2023.
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


	Powersports		Vehicle Logistics		Total
Balance at December 31, 2022	$	20,294	$	848	$	21,142
Acquisition of store in Tallahassee, FL	2,600		—		2,600
Four Wheels purchase accounting adjustments	(106)		—		(106)
Freedom Powersports purchase accounting adjustments	261		—		261
Balance at June 30, 2023	$	23,049	$	848	$	23,897

In addition to annual impairment testing, the Company continuously monitors for events and circumstances that could indicate that it is more likely than not that its goodwill, indefinite lived intangible assets, finite lived intangible assets, and other long-lived assets are impaired or not recoverable (a triggering event), requiring an interim impairment test. During the quarter ended ~~September~~June 30, ~~2022,~~2023, 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 event had not occurred as of ~~September~~June 30, ~~2022.~~2023. 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~~Table of ~~2022, we changed the date of our annual impairment test for goodwill and indefinite-lived intangible assets from December 31~~Contentsst ~~to October 1~~st. 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


2023	$	2,886
2024	2,653
2025	99
Thereafter	—
	$	5,638

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NOTE 5 – NOTES PAYABLE AND LINES OF CREDIT

Notes payable consisted of the following as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021:~~2022:

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


	June 30, 2023		December 31, 2022
Term Loan Credit Agreement maturing on August 31, 2026. Amortization payments are required quarterly. Interest rate at June 30, 2023 was 13.41%.	$	344,431	$	346,066
ROF Consumer Finance Facility maturing on February 4, 2025. Interest rate at June 30, 2023 was 10.17%.	18,030		25,000
Notes payable for leasehold improvements and other	752		—
Total principal amount	363,213		371,066
Less: unamortized debt issuance costs	(21,668)		(28,572)
Total long-term debt	341,545		342,494
Less: Current portion of long-term debt	(18,186)		(3,645)
Long-term debt, net of current portion	$	323,359	$	338,849

Floor plan notes payable as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Floor plans notes payable - trade	Floor plans notes payable - trade	$	53,865	$	15,119	Floor plans notes payable - trade	$	74,331	$	75,387
Floor plans notes payable - non-trade	Floor plans notes payable - non-trade	121,431		82,159		Floor plans notes payable - non-trade	172,107		144,789
Floor plan notes payable	Floor plan notes payable	$	175,296	$	97,278	Floor plan notes payable	$	246,438	$	220,176

Term Loan Credit Agreement

On the RideNow Closing Date, the Company entered into a new ~~Term Loan Credit Agreement~~term loan credit agreement (the “Oaktree Credit Agreement”) among the Company, as borrower, the lenders party thereto (the "Lenders"), 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”). The proceeds from the Initial Term Loan Facility were used to consummate the RideNow Transaction 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~~were subject to customary conditions precedent for facilities of this type including the need to meet certain financial tests and ~~become~~became available six (6) months after the RideNow Closing Date and ~~are~~were unavailable to be drawn after the eighteen (18) month anniversary of the RideNow Closing ~~Date. The~~Date, which occurred on March 1, 2023. 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 warrants to purchase $40,000 of shares of Class B Common Stock to Oaktree Capital Management, L.P. and its lender affiliates (the “Warrants”).

On February 18, 2022, in conjunction with the Freedom Transaction, the Company drew down $84,500 against the Delayed Draw Term Loans Facility. During the fourth quarter of 2022, the Company made a voluntary principal repayment of $15,000 to the Oaktree Credit ~~Agreement also provides for incremental draws for up to an additional $100,000 in accordance with the terms set forth in~~Facility. As of June 30, 2023, the Oaktree Credit Agreement ~~which may be used~~does not provide for ~~acquisitions or working capital.~~ any available financing under the Delayed Draw Term Loans Facility.

The loan under the Oaktree Credit Agreement is reported on the balance sheet as senior secured debt, net of debt discount and debt issuance costs of ~~$26,669,~~$21,668, including the fair value of ~~stock warrants~~the Warrants of $10,950. Borrowings under the Oaktree Credit 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%, provided that Amendment No. 5 (as defined below) provides that an additional 0.50% of interest will accrue from the

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Amendment No 5 Effective Date (as defined below) through June 20, 2024 (which additional interest may be paid in cash or paid-in-kind). At the Company’s option, one percent (1.00%) of such interest may be payable in kind. The interest rate on ~~September~~June 30, ~~2022,~~2023, was ~~10.77%~~13.41%. Interest expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was $13,353 and ~~2021 were $9,605 and $29,305, and $2,666 and $2,666,~~$26,295, respectively, which included amortization of ~~$596~~$1,672 and ~~$4,388,~~$3,260, respectively, related to the discount and ~~$509~~debt issuance costs. Interest expense for the three and ~~$509,~~six months ended June 30, 2022 was $11,009 and $19,700, respectively, which included amortization of $1,960 and $3,236, respectively related to the discount and debt issuance costs. While the Oaktree Credit Agreement notes that Secured Overnight Financing Rate ("SOFR") may be selected as the alternative benchmark rate, this ~~has~~alternative benchmark had not been ~~determined~~selected as of ~~September~~June 30, ~~2022. As such,~~2023. The Company selected SOFR as the ~~Company cannot predict the effect of the 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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benchmark effective July 1, 2023.

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 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.

~~In connection with providing~~We provided customary representations and covenants under the ~~debt financing for the RideNow Transaction,~~Oaktree Credit Agreement which include financial covenants and ~~pursuant to the commitment letter executed on March 15, 2021,~~collateral performance covenants.

At June 30, 2023, the Company issued 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 “Warrant”). 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 changenot in fair value was reflected 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. 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 $10,950 deferred financing charge was reclassified as part of the debt discount related tocompliance with certain leverage ratio financial covenants under the Oaktree Credit Agreement. On August 9, 2023 (the "Amendment No. 5 Effective Date"), the Company, the Subsidiary Guarantors party thereto, the Administrative Agent, and the Lenders party thereto executed Amendment No. 5 to Term Loan Credit Agreement (the “Amendment No. 5”), pursuant to which, among other things: (i) all leverage ratio financial covenants under the Oaktree Credit Agreement were (a) eliminated and not tested for the for the quarters ending June 30, 2023 and September 30, 2023 and (b) made less restrictive for the quarters ending December 31, 2023, March 31, 2024, and June 30, 2024; (ii) additional performance covenants were added requiring the Company and its subsidiaries to use commercially reasonable best efforts to dispose of certain non-core real estate and monetize its consumer loan portfolios (with corresponding requirements to use such proceeds of such sales to pay down the term loans under the Oaktree Credit Agreement); (iii) an additional performance covenant was added requiring the Company raise net cash proceeds of not less than $100,000 from the issuance of common equity interests in the Company by December 1, 2023 (with a corresponding requirement to use certain of such equity proceeds to pay down the term loans under the Oaktree Credit Agreement), and (iv) an additional performance covenant was added requiring the Company to issue warrants, exercisable for an anticipated aggregate of 1,212,121 shares at an anticipated price of $12 per share, in a form to be agreed upon, to the Lender.In connection with Amendment No. 5, the Company agreed to pay a nominal fee which may be paid in cash or paid-in-kind.

The ~~recognition~~elimination of the ~~warrant liability and deferred financing charge~~June 30, 2023 leverage ratio financial covenants was made effective as of June 30, 2023, and the ~~reclassification~~Lenders agreed in Amendment No. 5 that no event of default exists or arises from such leverage ratio financial covenants as of such date.

Based on the amended terms of the ~~warrant liability~~Oaktree Credit Agreement, the Company believes that it will be in compliance with all covenants under the Oaktree Credit Agreement, as amended by Amendment No. 5, for the next one year period. As of June 30, 2023, the Company has classified obligations under the Oaktree Credit Agreement as non-current liabilities.

RumbleOn Finance Line of Credit

On February 4, 2022, RumbleOn Finance and ROF SPV I, LLC ("ROF"), an indirect subsidiary of RumbleOn, entered into a consumer finance facility ("ROF Consumer Finance Facility") primarily to ~~additional paid-in capital and~~provide up to $25,000 for the ~~reclassification~~underwriting of consumer loans underwritten by ROF. Credit Suisse AG, New York Branch (“Credit Suisse”) is the managing agent of the ~~deferred financing charge~~ROF Consumer Finance Facility, and RumbleOn Finance is the borrower. All loans under this agreement are secured by certain collateral including the consumer finance loans purchased by the ROF Consumer Finance Facility.

We provided customary representations and covenants under the related agreements which include financial covenants and collateral performance covenants. Loans sold to or in the ROF Consumer Finance Facility are subject to certain eligibility criteria, concentration limits and reserves.

As of June 30, 2023, RumbleOn Finance did not meet the interest rate spread requirement set forth in the ROF Consumer Finance Facility as a result of increased interest rates and limited growth of our consumer finance business. The lender has indicated no current intention to request early repayment of the principal balance due under the ROF Consumer Finance Facility as of June 30, 2023. We intend to sell the loan portfolio held at RumbleOn Finance and pay off the outstanding balance during the second half of 2023. As of June 30, 2023, the outstanding balance due under the ROF Consumer Finance

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Facility was $18,030, which is reflected in the current portion of long-term debt ~~discount are non-cash items.~~and line of credit in the accompanying Condensed Consolidated Balance Sheets.

The value of the loan receivable assets held by RumbleOn Finance, which approximated $24,883 net of allowance for loan losses, is included in assets held for sale in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2023.

Floor Plan Notes Payable

The Company relies on its floorplan vehicle financing credit lines (“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~~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-~~payable - trade are reported as operating cash flows and changes in floor plan notes ~~payable-non-trade~~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.~~October 26, 2022, the Company entered into a Floorplan Line with ~~AFC~~J.P. Morgan (the ~~“AFC~~“J.P. Morgan Credit Line”) ~~to replace an existing line~~. As of ~~credit. Advances~~June 30, 2023, advances under the ~~AFC~~J.P. Morgan Credit Line are limited to ~~$29,000 as of September 30, 2022.~~$75,000 and the outstanding balance was $27,104. Interest expense on the ~~Wholesale Floorplan Lines~~J.P. Morgan Credit Line for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was $421 and ~~2021 were $275 and $1,032, $325 and $969, respectively. The balance of the AFC Credit Line as of September 30, 2022 and 2021 was $20,508 and $28,336,~~$808, respectively.

~~Line~~As of ~~Credit - RumbleOn Finance~~

~~ROF SPV I, LLC (“ROF SPV”), an indirect subsidiary of~~June 30, 2023, the Company ~~entered into a $25,000 secured loan facility~~is in compliance with the covenant terms of its floor plan agreements.

NOTE 6 – CONVERTIBLE NOTES

As of June 30, 2023 and December 31, 2022, the outstanding convertible senior notes net of debt discount and issue costs are summarized as follows:


	June 30, 2023						December 31, 2022
	Principal Amount		Debt Discount		Carrying Amount		Principal Amount		Debt Discount		Carrying Amount
Convertible senior notes	$	38,750	$	(5,356)	$	33,394	$	38,750	$	(6,860)	$	31,890
Less: Current portion	—		—		—		—		—		—
Long-term portion	$	38,750	$	(5,356)	$	33,394	$	38,750	$	(6,860)	$	31,890

Convertible Senior Notes

The convertible senior notes (the "Notes") were issued on ~~February 4, 2022 primarily~~January 14, 2020 pursuant to ~~provide for~~an Indenture (the "Indenture"), by and between the ~~purchase~~Company and the trustee. The Indenture includes customary representations, warranties and covenants by ~~ROF SPV of consumer finance loans originated by RumbleOn Finance, LLC (“ROF”),~~ the ~~Company’s consumer finance subsidiary. Borrowings under the facility generally~~Company. The Notes bear interest at ~~a rate~~6.75% per annum, payable semiannually on January 1 and July 1 of each year, beginning on July 1, 2020. The Notes may bear additional interest under specified circumstances relating to the Company's failure to comply with its reporting obligations under the Indenture or if the Notes are not freely tradable as required by the Indenture. The Notes mature on January 1, 2025, unless earlier converted, redeemed or repurchased pursuant to their terms.

The initial conversion rate of the Notes is 25 shares of Class B Common Stock per $1 principal amount of 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 ~~lesser~~Indenture but will not be adjusted for any accrued and unpaid interest. In addition, upon the occurrence of ~~SOFR plus an applicable margin of 5%.~~

~~ROF SPV may prepay~~a "make-whole fundamental change", the full principal balance of the 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 loanCompany will, in certain circumstances, ~~where~~increase the conversion rate by a ~~loan portfolio is sold, so long~~number of additional shares for a holder that elects to convert the Notes in connection with such make-whole fundamental change. Before July 1, 2024, the Notes will be convertible only under circumstances as described in the Indenture. No adjustment to the conversion rate as a ~~1% fee is paid~~result of conversion or a make-whole fundamental change adjustment will result in a conversion rate greater than 62 shares per $1 in principal amount.

The Indenture contains a “blocker provision” which provides that no holder (other than the depository with respect to the ~~lenders. ROF SPV has drawn $22,925 on~~Notes) or beneficial owner of Notes shall have the ~~secured loan facility as of September 30, 2022.~~

~~PPP Loans~~

~~On May 1, 2020, the Company entered into loan agreements and related promissory notes (the “SBA Loan Documents”)~~right to receive ~~U.S. Small Business Administration Loans (the “SBA Loans”) pursuant~~shares of the Class B Common Stock upon conversion to ~~the Paycheck Protection~~

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~~Program (the “PPP”) established under~~ the ~~CARES Act,~~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 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 ~~aggregate~~Company or any significant subsidiary, occurs and is continuing, the trustee by notice to the Company, or the holders of at least 25% in principal amount of ~~$5,177 (the “Loan Proceeds”). The balance~~the outstanding Notes by notice to the Company and the Trustee, may declare 100% of the ~~PPP loans was forgiven~~principal of and accrued and unpaid interest, if any, on all the Notes then outstanding to be due and payable. The Notes also contain conversion features related to certain events, which include liquidation or dissolution, as well as fundamental changes to the structure or ownership of the Company.

The Notes were not redeemable by the ~~SBA during~~Company before the ~~quarter ended September 30, 2022.~~

~~Derivative Liability~~

~~In connection with~~January 14, 2023. The Company may redeem for cash all or any portion of the ~~convertible senior notes issued~~Notes, at its option, on or after 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~~14, 2023 if the last reported sale price of ~~$14.60,~~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 ~~estimated volatility~~including, the trading day immediately preceding the date on which the Company provides notice of ~~55.0%~~redemption at a redemption price equal to 100.0% of the principal amount of the notes to be redeemed, plus accrued and ~~risk-free rates over~~unpaid interest to, but excluding, the ~~entire 10-year yield curve.~~redemption date. No sinking fund is provided for the Notes.

The ~~change~~Notes rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 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 ~~derivative liability~~assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of current or future subsidiaries of the Company (including trade payables). Interest expense recognized with respect to the Notes for the three and ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 and 2021 were $0 and $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 liabilitywas as ~~of September 30, 2022 and December 31, 2021 was $26 and $66, respectively.~~follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Contractual interest expense	$	657	$	657	$	1,314	$	1,313
Amortization of debt discount	765		644		1,498		1,262
Total interest expense	$	1,422	$	1,301	$	2,812	$	2,575

NOTE 67 – ~~STOCKHOLDER~~STOCKHOLDER'S EQUITY

~~Share-Based~~Stock-Based Compensation

On June 30, 2017, the Company’s shareholders approved a Stock Incentive Plan (the “Plan”) allowing for the issuance of restricted stock units ("RSUs"), stock options, and other equity awards (collectively “Awards”). As of ~~September~~June 30, ~~2022,~~2023, the number of shares authorized for issuance under the Plan was 2,700,000 shares of Class B ~~common stock. In connection with,~~Common Stock. To date, most RSU and ~~on the same day as the closing~~Option awards are service/time based vested over a period of the RideNow Transaction, the Company accelerated the vesting of and waived any market-based vesting hurdles for all then outstanding RSU awards, and waived any market-based share price. This waiver was accounted for as a modification of the awards, with 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 theup to three ~~and nine months ended September 30, 2021.~~years.

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~~Common Stock on the date of the award, with the fair value expense on a straight line basis over the 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, the Company’s former Chief Financial Officer and director.

The following table reflects the stock-based compensation for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~September 30, 2021:~~2022:

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

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	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Restricted Stock Units	$	4,910	$	2,753	$	7,821	$	4,632
Stock Options	—		—		—		—
Total stock-based compensation	$	4,910	$	2,753	$	7,821	$	4,632

As of ~~September~~June 30, ~~2022,~~2023, there was ~~812,386~~951,600 RSUs outstanding. The total unrecognized compensation expense related to outstanding equity awards was approximately ~~$19,120,~~$13,346, which the Company expects to recognize over a weighted-average period of approximately 1522 months. Total unrecognized equity-based compensation expense will be adjusted for actual forfeitures.

Security Offering

As part of the Freedom Transaction, the Company issued to Freedom's security holders 1,048,718 shares of RumbleOn Class B ~~common stock~~Common Stock totaling ~~$26,511.~~

~~In connection with providing the debt financing for the RideNow Transaction, and pursuant to the commitment letter executed~~$26,511 on ~~March 15, 2021, the Company issued the Warrant to purchase $40,000 of~~February 18, 2022. On June 22, 2022, 2,446 shares of Class B ~~common stock. The initial warrant liability and deferred financing charge recognized was $10,950 with the warrant liability subject to remeasurement at each balance sheet date and any change~~Common Stock held in fair value recognized 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 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 Warrant was considered equity linked contracts indexed to RumbleOn’s stock and therefore met the equity classification guidance under ASC 815-40. As a result, the $19,700 was reclassified to additional paid-in-capital and the $10,950 deferred financing charge was reclassifiedescrow were cancelled as part of the ~~debt discount related to the Oaktree Credit Agreement.~~final purchase price adjustment.

NOTE 78 – SUPPLEMENTAL CASH FLOW INFORMATION

The following table includes supplemental cash flow information, including noncash investing and financing activity for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021:~~2022:

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 $ —


	Six Months Ended June 30,
	2023		2022
Cash paid for interest	$	31,125	$	21,775
Cash paid for taxes	$	893	$	4,875
Capital expenditures and technology development costs included in accounts payable and other current liabilities	$	309	$	1,500
Capital expenditures included in line of credit and notes payable	$	752	$	—
Fair value of 1,048,718 Class B Common Stock issued in the Freedom Transaction	$	—	$	26,511

The following table shows the cash and restricted cash reported within the accompanying Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Cash and cash equivalents		$	39,715	$	48,974
Cash						Cash	$	44,373	$	48,579
Restricted cash (1)	Restricted cash (1)	9,500		3,000		Restricted cash (1)	12,776		10,000
Total cash, cash equivalents, and restricted cash	Total cash, cash equivalents, and restricted cash	$	49,215	$	51,974	Total cash, cash equivalents, and restricted cash	$	57,149	$	58,579

(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.~~Consumer Finance Facility.

NOTE 89 – INCOME TAXES

The ~~Company’s effective tax rate~~Company's provision for (benefit from) income taxes on continuing operations for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~14.0%~~($4,573) and ~~22.8%~~($6,150), ~~respectively. The~~respectively, representing effective income tax ~~rate for the three~~rates of 26.3% and ~~nine months ended September 30, 2021 was 32.1% and 26.0%~~17.2%, respectively. The difference between the U.S. federal income tax rate of 21.0% and RumbleOn’s overall income tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was primarily due to the tax effect of non-deductible executive compensation, non-deductible interest expense, and discrete tax impacts of stock compensation vesting in the quarter.

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The Company's provision for (benefit from) income taxes on continuing operations for the three months and six months ended June 30, 2022 was $4,852 and $7,487, respectively, representing effective income tax ~~benefit from non-taxable PPP loan forgiveness, offset by income tax expense on non-deductible expenses~~rates of 26.2% and ~~state income taxes.~~

24.4%, respectively. 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 and six months ended ~~September~~June 30, ~~2021~~2022 was primarily due to income tax expense on non-deductible expenses, valuation allowance expense associated with state net operating losses, and state income taxes, offset by a benefit associated with the ~~release of~~change in the Company's ~~valuation allowance against its deferred~~effective state income tax ~~assets recorded during the quarter ended September 30, 2021.~~rate.

NOTE 9–10 – EARNINGS (LOSS) PER SHARE

The Company computes basic and diluted earnings (loss) per share attributable to common stockholders in conformity with the two-class method required for participating securities. Basic earnings (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighed-average number of shares of common stock outstanding during the period. Diluted earnings (loss) 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, warrants to purchase 1,212,121 shares of Class B ~~common stock~~Common Stock having an exercise price of $31.50 per share are considered common stock equivalents which are antidilutive ~~at September~~for the periods ended June 30, 2023 and 2022. Unvested RSUs have been included in the calculation of diluted earnings per share attributable to common stockholders to the extent the shares would be dilutive. Additionally, the Company’s senior unsecured convertible notes were antidilutive for the ~~period~~periods ended ~~September~~June 30, 2023 and 2022.

The weighted average number of shares outstanding ~~for the nine months ended September 30, 2022 were 50,000, 15,809,134 and 0, respectively~~ of Class A Common Stock and Class B Common Stock, giving effect to all potential dilutive common stock equivalents outstanding, were 50,000 and ~~Series B Preferred Stock.~~

16,343,758, and 50,000 and 15,841,346, for the six months ended June 30, 2023 and 2022, respectively.

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NOTE 1011 – RELATED PARTY TRANSACTIONS

Promissory Notes

In connection with the ~~acquisition of~~ RideNow Transaction, the Company assumed two promissory notes totaling principal and accrued interest of ~~$2,200~~$2,821 as of August 31, 2021 due to entities controlled by ~~former directors~~a director and an executive ~~officers~~officer of the Company. Amounts due under these two promissory notes have been paid in full as of ~~September~~June 30, ~~2022.~~

~~August 2021 Offering~~

~~Denmar Dixon, a director~~2023 and totaled $791 as of ~~the Company, purchased 13,636 shares of Class B common stock in the August 2021 Offering at the public price of $33.00 per share.~~June 30, 2022.

RideNow Leases

In connection with the RideNow Transaction, the Company entered into related party leases for 24 ~~properties.~~properties consisting of dealerships and offices. Each ~~such~~related party lease is with a wholly owned subsidiary of the Company as the tenant and an entity controlled by a ~~former~~ director and an executive officer of the Company, as the landlord. The initial aggregate base rent payment for all 24 leases iswas 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 fair value of~~Rent expense associated with the ~~right-of-use assets~~leases approximated $4,625 and ~~lease liabilities arising from~~$9,231, and $4,408 and $8,732, during the ~~RideNow leases~~three and six months ended June 30, 2023 and 2022, respectively, and are included in Selling, General and Administrative expenses in the Condensed Consolidated ~~Balance Sheet at September 30, 2022 and disclosed in Note 3 - Leases.~~

~~RideNow Reinsurance Products~~

The Company sells extended service contracts, prepaid maintenance, GAP insurance, theft protection and tire and wheel products on vehicles sold to customers. Affiliate reinsurance companies previously controlled by and owned primarily by former directors and executives officersStatement of the Company participated in the profits of these products sold through the RideNow locations. The total amount paid by the Company to these affiliated companies totaled approximately $139 during the nine months ended September 30, 2022. The related party relationship ended February 1, 2022.Operations.

Payments to RideNow Management LLLP

The Company made $2$3 and ~~$233~~$6 in payments to RideNow Management LLLP, an entity owned equally by ~~two former directors~~a director and an executive ~~officers~~officer during the three and ~~nine~~six months ended ~~September~~June 30, 2022. No payments were made during the six months ended June 30, 2023. These payments related to a contract existing at the time of the RideNow Transaction for Sophos Anti-Virus.

~~Beach Agreement~~

~~On December 31, 2021,~~In addition, the Company ~~acquired all the business assets~~paid off a loan to RideNow Management LLLP of ~~RNBeach, LLC (“Beach”) from former directors~~approximately $673 on June 27, 2022.

Payments to Coulter Management Group LLLP

The company made $5 and ~~executive officers~~$10, and $117 and $237 in payments to Coulter Management Group LLLP ("Coulter Management"), an entity owned by a director of the ~~Company.~~ T~~he total purchase price~~Company, during the three and six months ended June 30, 2023 and 2022. These payments were made to ~~acquire all~~cover certain proportionate costs of the ~~business assets~~Company, including health plan and IT contract expenses, that were shared among Coulter Management and the RideNow entities for a period of ~~Beach was approximately $5,528, and cash paid was approximately $5,368.~~time after the RideNow Transaction date.

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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 former 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.~~ services, all of which remain in development as of June 30, 2023.

The Company ~~has~~ made no cash payments ~~totaling $3,600~~ for the license during the ~~nine~~three and six months ended ~~September~~June 30, ~~2022.~~2023 and $1,080 and $2,160 during the three months and six months ended June 30, 2022, respectively. The Company also pays, on monthly basis since the agreement was signed, $30 for development of the ~~support and maintenance services.~~platform. The initial term is thirty-six (36) months but can be terminated by either party at any time by providing sixty (60) days' notice to the other party. On June 30, 2023, the Company notified Bidpath of its intent to terminate the contract.

Ready Team Grow, LLC

The Company paid $36 and $100, and $56 and $110 to Ready Team Grow, LLC for employee recruiting services during the three and six months ended June 30, 2023 and 2022. Ready Team Grow, LLC is an entity owned by the domestic partner of the Company’s former Chief Executive Officer.

Death Benefit to former Chief Financial Officer and Director

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 widow and children of the Company's former Chief Financial Officer and Director. Also, on September 30, 2021, the Audit Committee approved a gift of a death benefit to the widow and children of Mr. Berrard in an amount equal to (1) $1,338, 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. A total of $244 and $359, and $281 and $544 in cash payments were made under these awards during the three and six months ended June 30, 2023 and 2022, respectively.

Employment of Immediate Family Members

William Coulter, a director and former executive officer of the Company, has one immediate family member who was employed by the Company until August 30, 2022. This family member received aggregate gross pay of approximately $75 and $138 for the three and six months ended June 30, 2022, respectively. No payments were made during 2023.

Mark Tkach, an executive officer and director of the Company, has two immediate family members that are, or have been, employed by the Company between January 1, 2021, and the date hereof. One of these family members was employed by the Company until February 21, 2022. This family member received aggregate gross pay of approximately $0 and $81, for the three and six months ended June 30, 2022, respectively. No payments were made during 2023. The other family member has received aggregate gross pay of approximately $105 and $232, and $75 and $150 during the three and six months ended June 30, 2023 and 2022, respectively, and grants of restricted stock units with respect to 42,273 shares of Class B Common Stock.

NOTE 1112 - 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 ~~reporting units and three~~two reportable segments as defined in ~~generally accepted accounting principles~~U.S. GAAP for segment reporting: (1) ~~Powersports,~~powersports and (2) ~~Automotive,~~vehicle logistics. Our powersports segment consists of the distribution principally of new and ~~(3) Vehicle Logistics. Our Powersports segment offers~~used motorcycles ~~all-terrain vehicles, utility terrain vehicles, personal watercraft,~~ and other powersports ~~products, parts, apparel, and accessories, and related finance and insurance products.~~vehicles. Our ~~Automotive~~vehicle logistics segment ~~purchases vehicles from dealers or others and sells them through wholesale channels. Our Vehicle Logistics segment brokers~~provides nationwide ~~automotive~~ transportation brokerage services between dealerships and auctions.

Information about continuing operations by operating segment for the three and six months ended June 30, 2023 and 2022 were as follows:

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	Powersports		Vehicle Logistics		Eliminations (1)		Total - Continuing Operations
Three Months Ended June 30, 2023

Revenue	$	368,308	$	14,601	$	(178)	$	382,731
Operating income (loss)	$	(661)	$	1,480	$	—	$	819
Depreciation and amortization	$	5,258	$	11	$	—	$	5,269
Interest expense	$	(18,326)	$	—	$	—	$	(18,326)

Three Months Ended June 30, 2022

Revenue (2)	$	396,665	$	16,636	$	(1,119)	$	412,182
Operating income (loss)	$	29,820	$	1,281	$	(55)	$	31,046
Depreciation and amortization	$	5,852	$	10	$	—	$	5,862
Interest expense	$	(12,751)	$	—	$	—	$	(12,751)

Six Months Ended June 30, 2023
Revenue	$	687,852	$	29,600	$	(337)	$	717,115
Operating income (loss)	$	(2,804)	$	2,910	$	—	$	106
Depreciation and amortization	$	9,975	$	21	$	—	$	9,996
Interest expense	$	(35,928)	$	—	$	—	$	(35,928)
Change in derivative liability	$	—	$	—	$	—	$	—

Six Months Ended June 30, 2022
Revenue (2)	$	718,818	$	30,248	$	(2,380)	$	746,686
Operating income (loss)	$	51,588	$	2,348	$	(48)	$	53,888
Depreciation and amortization	$	10,299	$	20	$	—	$	10,319
Interest expense	$	(23,412)	$	(1)	$	—	$	(23,413)
Change in derivative liability	$	39	$	—	$	—	$	39

~~The following table summarizes revenue,~~Total assets by operating ~~income (loss), depreciation~~segment at June 30, 2023 and ~~amortization and interest expense which are the measure by which management allocates resources to its segments to each of our reportable 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)
2022 were as follows:


	Powersports		Vehicle Logistics		Eliminations (1)		Continuing Operations		Discontinued Operations		Total
Total assets at June 30, 2023	$	1,876,666	$	23,186	$	(863,300)	$	1,036,552	$	307	$	1,036,859
Total assets at June 30, 2022	$	2,028,815	$	18,672	$	(824,275)	$	1,223,212	$	48,345	$	1,271,557

(1)Intercompany investment balances ~~related~~primarily relate to the acquisitions of RideNow, Freedom Entities, Wholesale Inc. and 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.

(2)Amount for Powersports for 2022 have been adjusted by $18.1 million and $32.8 million, respectively for three and six months ended June 30, 2022. See "Correction of an Immaterial Misstatement Related to Prior Periods" in Note 1.

NOTE 13 - DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Discontinued Operations

In the fourth quarter of 2022, the Company announced plans to wind down its automotive business. As of June 30, 2023, the Company has completed all substantial activities pertaining to the wind down of its automotive business, which represents a strategic shift having a major effect on our operations and financial results.

We have classified all direct revenues, costs, and expenses related to commercial operations of the wholesale automotive business, within income (loss) from discontinued operations, net of tax, in the Condensed Consolidated Statements of Operations for all periods presented. We have not allocated any amounts for shared general and administrative operating support expenses to discontinued operations.

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While ASC 205-20 does not explicitly require assets and liabilities of a discontinued operation to be separately presented in prior periods when the disposal is other than by sale, we have presented related assets and liabilities as assets and liabilities of discontinued operations in our Condensed Consolidated Balance Sheets as of December 31, 2022.

The results of operations from discontinued operations for three and six months ended June 30, 2023 and June 30, 2022 have been reflected as discontinued operations in the Condensed Consolidated Statements of Operations and consist of the following:


	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Income (loss) from operations of discontinued Automotive segment	$	(878)	404		(1,100)		$	(294)
Income tax provision (benefit)	(123)		18		(149)		(237)
Income (loss) from discontinued operations	$	(755)	$	386	$	(951)	$	(57)

The following table presents the carrying amounts of the classes of assets and liabilities of discontinued

operations as of June 30, 2023 and December 31, 2022:


	June 30, 2023		December 31, 2022
Cash	$	—	$	1,816
Accounts receivable, net	272		1,311
Inventory	—		8,248
Prepaid expense and other current assets	—		2
Other assets	35		23
Total assets of discontinued operations	$	307	$	11,400

Accounts payable and accrued expenses	$	714	$	3,137
Vehicle floor plan payable	—		5,254
Accrued interest payable	—		43
Total liabilities of discontinued operations	$	714	$	8,434

Assets Held For Sale

The Company classifies its assets to be sold as held for sale in the period (i) it has approved and committed to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition; (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated; (iv) the sale of the asset is probable; (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The Company initially measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset until the date of sale.

In the second quarter of 2023, the board approved a plan to sell the loan portfolio held by RumbleOn Finance. The value of the loan receivable assets, which approximated $24,883 net of allowance for loan losses, is included in assets held for sale in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2023. We expect that anticipated proceeds from sale of the loan receivable assets will be used to pay down the RumbleOn Finance line of credit, which approximated $18,030 and is included in current portion of long-term debt and line of credit in the accompanying Condensed Consolidated Balance Sheet as of June 30, 2023. We anticipate the sale of the loan portfolio to completed during the second half of 2023.

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NOTE 1214 – SUBSEQUENT EVENTS

~~Used Powersports Inventory Financing~~Oaktree Credit ~~Facility with J.P. Morgan~~Agreement

On ~~October 26, 2022,~~August 9, 2023, the Company entered into ~~a $75,000 used powersports inventory financing credit facility~~an agreement to amend its term loan with ~~J.P. Morgan.~~Oaktree Capital. See Note 5.

~~Strategic Alternatives for Automotive Segment~~Stock Incentive Plan

~~On November 2, 2022,~~At the ~~Board~~Annual Shareholder Meeting which took place on July 14, 2023, the shareholders voted to increase the number of ~~Directors reached a decision~~Class B Common Stock shares available under theStock Incentive Plan referred to ~~explore strategic alternatives for~~inNote 7.Thecurrent amount of share available under the ~~Company's automotive segment. The Company intends to continue operating~~Stock Incentive Plan after the ~~automotive segment while the review~~increase is ~~ongoing, and does not have~~3,291,461 shares, an ~~estimate on the impact~~increase of ~~a potential transaction or divestiture on future results.~~591,461 shares.

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~~Global Settlement with Former RideNow Owners~~

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&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 ~~2021~~2022 Form 10-K, as well as our unaudited Condensed Consolidated Financial Statements and the accompanying notes included in Item 1 of this Quarterly Report on Form 10-Q. All dollars are reported in thousands except per share and per unit amounts.

Forward-looking statements throughout this Quarterly Report on Form 10-Q are not guarantees of future performance and may involve risks and uncertainties that could cause actual results to differ materially from those projected. Refer to the "Forward-Looking and Cautionary Statements" section below and in our 2022 Form 10-K for a discussion of these risks and uncertainties.

Overview

RumbleOn is the ~~nation’s~~nation's first ~~technology-based Omnichannel marketplace~~and largest publicly traded, technology-enhanced dealership group platform in ~~powersports, leveraging proprietary technology to transform~~ the powersports ~~supply chain~~industry. Headquartered in the Dallas Metroplex, RumbleOn is revolutionizing the customer experience for outdoor enthusiasts across the country and providing more choices in making powersports vehicles accessible to more people in more places than ever before. We strive to build long-term value for our customers, employees, and shareholders with the nation’s largest network of powersports dealerships, service departments, and fulfillment centers operated by our highly-trained and knowledgeable team. We are transforming the powersports customer experience by giving consumers what they want - a wide selection, great value and quality, and an easy transaction. Every element of our business, from ~~acquisition~~inventory procurement, to fulfillment, to overall ease of ~~supply through distribution of retail and wholesale. RumbleOn provides~~transactions, has been built for a singular purpose – to create an unparalleled ~~technology suite and ecommerce~~customer experience ~~broad footprint~~in the powersports industry regardless of physical locations, and full-line manufacturer representation to transform the entire customer experience. Our goal is to integrate the best of both the physical and the digital, while making the transition between the two seamless.whether they are shopping our inventory online or in-store.

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 ~~55+~~over 55 company-owned retail locations as of ~~September~~June 30, ~~2022,~~2023, primarily located in the Sunbelt. Deepening our presence in existing markets and expanding into new markets through strategic acquisitions helps ~~perpetuate~~fuel our ~~flywheel.~~growth. 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 from a wide range of manufacturers, including those listed below.

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RumbleOn’s Representative Brands
Alumacraft	~~Honda~~Huricane Boats	~~Sea-Doo~~Specialized (bicycles)
Argo	Indian Motorcycles	~~Slingshot~~Speed/UTV
Benelli	Karavan Trailers	SSR
Blazer Boats	Kawasaki	~~SSR~~STACYC (electric)
BMW	Kayo ~~Sports~~	Suzuki
Can-Am	KTM	~~Spyder~~Tidewater (Boats)
CF Moto	Lynx (Snowmobiles)	Timbersled (Snow)
Club Car	MAGICTILT Trailers	Trailmaster (off-road/gocarts)
Continental Trailers	Manitou	~~TideWater~~Triton Trailers
Crevalle Boats	Manitou (Boats)	Triumph
Cub Cadet	Mercury (Boats)	Vanderhall
Ducati	Polaris	~~Triumph~~Wellcraft (Boats)
Gas-Gas	Scarab	Yamaha
Hammerhead Off-Road	Sea-Doo	Yamaha Marine
Harley-Davidson	~~Ryker~~Segway Powersports	~~Vanderhall~~Zero Motorcycles
Hisun	~~Scarab~~Ski-Doo	~~Yamaha~~Zieman Trailers
Honda	Soul E Bikes

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

Recent Development

Oaktree Credit Agreement

On August 9, 2023 (the “Amendment No. 5 Effective Date”), the ~~brokerage of vehicle transportation~~Company, the Subsidiary Guarantors party thereto, the Administrative Agent and the ~~wholesale distribution automotive business.~~Lenders party thereto executed Amendment No. 5 to Term Loan Credit Agreement (the “Amendment No. 5”), pursuant to which, among other things, (i) all leverage ratio financial covenants under the Oaktree Credit Agreement were (a) eliminated and not tested for the for the quarters ending June 30, 2023 and September 30, 2023 and (b) made less restrictive for the quarters ending December 31, 2023, March 31, 2024, and June 30, 2024; (ii) additional performance covenants were added requiring the Company and its subsidiaries to use commercially reasonable best efforts to dispose of certain non-core real estate and monetize its consumer loan portfolios (with corresponding requirements to use such proceeds of such sales to pay down the term loans under the Oaktree Credit Agreement); (iii) an additional performance covenant was added requiring the Company to raise net cash proceeds of not less than $100,000 from the issuance of common equity interests in the Company by December 1, 2023 (with a corresponding requirement to use certain of such equity proceeds to pay down the term loans under the Oaktree Credit Agreement), and (iv) an additional performance covenant was added requiring the Company to issue warrants, in a form to be agreed upon, to the Lenders.In connection with Amendment No. 5, the Company has agreed to pay a nominal fee which may be paid in cash or paid-in-kind.

~~Outlook~~The elimination of the June 30, 2023 leverage ratio financial covenants was made effective as of June 30, 2023, and the Lenders agreed in Amendment No. 5 that no event of default exists or arises from such leverage ratio financial covenants as of such date. The foregoing description of Amendment No. 5 does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 5 [which is included as Exhibit 10.8 to this report and incorporated herein by reference].

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

2223

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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.

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.~~

During the first quarter of 2022, the Company completed its acquisition of the Freedom Entities, a retailer group with 13 retail locations in Texas, Georgia, and Alabama. Please note that results of ~~RideNow and~~ the Freedom Entities ~~before~~prior to the ~~respective acquisition dates~~Freedom Closing Date are not reflected in the presentation below. The 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 before the RideNow and Freedom transactions. As such all increasesIncreases in ~~these~~ line items within the powersports segment are ~~exclusively~~partially the result of the ~~acquisition's~~acquisitions and the reader should note that ~~most~~ period-over-period dollar comparisons that incorporate the first quarter of 2022 (as opposed to per unit amounts) are ~~materially~~ impacted by the introduction of the ~~new business~~Freedom Powersports businesses (the “Acquisition Effect”).

Powersports ~~and Automotive Segments~~Segment

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. F&I and PSA revenue is almost exclusively earned through retail channels. ~~Automotive sales are almost exclusively via wholesale channels, and therefore, contribute to a very small portion of F&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 ~~through~~to any given channel may vary from period to ~~period.~~period based on these factors.

A material part of our ability to sell vehicles is predicated on being able to have sufficient inventory, both new and used, to satisfy customer demand or meet our financial objectives. New inventory is ultimately controlled by our OEMs and their willingness to allocate inventory to us ~~as well as~~and their ability to manufacture and distribute a sufficient number of vehicles given the ~~current~~ongoing 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 resulting Demand/Supply Imbalances, ~~as discussed elsewhere in this MD&A,~~ we expect pre-owned vehicle sales to ~~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 marketsincrease as we ~~continue~~begin 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 ~~vehicles from~~and scale our addressable markets while expanding our suite of product offerings to 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-dealer auction market, generally have lower margins and do not include other ancillary gross profit attributable to financing and accessory.Factors affecting gross profit from period to period include the mix of new 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 Demand/Supply Imbalances in our sales channels, which could temporarily lead to 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.

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Total Gross Profit per ~~Unit~~Powersports Vehicle

Total gross profit per ~~unit~~vehicle is the aggregate gross profit of the ~~Company~~powersports segment in a given period, divided by retail ~~units~~powersports vehicles sold in that period. ~~This~~The aggregate gross profit of the powersports segment 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, revenue earned from the sale of F&I products including extended service contracts, maintenance programs, guaranteed auto protection, tire and wheel protection, and theft protection products, gross profit on the sale of PSA products, and gross profit generated from wholesale sales of vehicles.

Vehicle Logistics Segment

Revenue

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.

Vehicles ~~Delivered~~Transported

We define vehicles ~~delivered~~transported 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~~transported are the primary driver of revenue and in turn profitability in the vehicle logistics segment.

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Total Gross Profit Per ~~Unit~~Vehicle Transported

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.

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Results of Continuing Operations

Three and ~~Nine months~~Six-months ended ~~September~~June 30, ~~2022~~2023 Compared to ~~September~~June 30, ~~2021~~2022

Total Company Metrics (dollars in thousands except per unit)


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2022		2021		YoY Change		2022		2021		YoY Change			2023		2022		YoY Change		2023		2022		YoY Change
Financial Overview	Financial Overview													Financial Overview
Revenue	Revenue													Revenue
Powersports	Powersports	$	291,491	$	83,292	$	208,199	$	858,809	$	121,307	$	737,502	Powersports	$	269,721	$	294,591	$	(24,870)	$	503,004	$	534,505	$	(31,501)
Automotive		69,974		105,298		(35,324)		296,433		316,655		(20,222)
Parts, service, accessories		62,217		16,075		46,142		182,269		16,075		166,194
PSA														PSA	65,409		65,315		94		124,478		120,052		4,426
Finance and insurance, net	Finance and insurance, net	31,588		6,180		25,408		95,906		6,998		88,908		Finance and insurance, net	33,178		36,759		(3,581)		60,370		64,261		(3,891)
Vehicle Logistics	Vehicle Logistics	15,002		10,369		4,633		42,870		32,788		10,082		Vehicle Logistics	14,423		15,517		(1,094)		29,263		27,868		1,395
Total revenue	Total revenue	$	470,272	$	221,214	$	249,058	$	1,476,287	$	493,823	$	982,464	Total revenue	$	382,731	$	412,182	$	(29,451)	$	717,115	$	746,686	$	(29,571)
Gross Profit	Gross Profit													Gross Profit
Powersports	Powersports	$	50,246	$	14,997	$	35,249	$	158,491	$	24,114	$	134,377	Powersports	$	39,458	$	61,845	$	(22,387)	$	71,701	$	108,246	$	(36,545)
Automotive		1,883		6,525		(4,642)		10,190		22,905		(12,715)
PSA														PSA	30,411		31,370		(959)		57,690		56,652		1,038
Finance and insurance, net														Finance and insurance, net	33,178		36,759		(3,581)		60,370		64,261		(3,891)
Vehicle Logistics	Vehicle Logistics	3,486		2,455		1,031		9,139		6,829		2,310		Vehicle Logistics	3,354		3,168		186		6,941		5,652		1,289
Parts, service, accessories		29,143		7,230		21,913		85,794		7,230		78,564
Finance and insurance		31,588		6,180		25,408		95,906		6,998		88,908
Total Gross Profit	Total Gross Profit	$	116,346	$	37,387	$	78,959	$	359,520	$	68,076	$	291,444	Total Gross Profit	$	106,401	$	133,142	$	(26,741)	$	196,702	$	234,811	$	(38,109)

Total Operating Expenses	Total Operating Expenses	$	102,755	$	63,224	$	39,531	$	291,339	$	95,968	$	195,371	Total Operating Expenses	$	105,582	$	102,095	$	3,487	$	196,596	$	180,924	$	15,672
Operating Income (Loss)	Operating Income (Loss)	$	13,591	$	(22,702)	$	36,293	$	68,183	$	(24,757)	$	92,940	Operating Income (Loss)	$	819	$	31,046	$	(30,227)	$	106	$	53,888	$	(53,782)
Income (Loss) from Continuing Operations, net														Income (Loss) from Continuing Operations, net	$	(12,833)	$	13,647	$	(26,480)	$	(29,539)	$	23,231	$	(52,770)
Net Income (Loss)	Net Income (Loss)	$	3,039	$	(22,544)	$	25,583	$	26,213	$	(30,385)	$	56,598	Net Income (Loss)	$	(13,588)	$	14,033	$	(27,621)	$	(30,490)	$	23,174	$	(53,664)
Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	25,669	$	3,616	$	22,053	$	101,416	$	6,679	$	94,737	Adjusted EBITDA (1)	$	23,620	$	43,623	$	(20,003)	$	34,424	$	75,214	$	(40,790)

_________________________

(1) Adjusted EBITDA is a non-GAAP measure of operating performance that does not represent and should not be considered an alternative to net income (loss) or cash flow from operations, as determined by U.S. GAAP. We believe that Adjusted EBITDA is a useful measure to us and to our investors because it excludes certain financial and capital structure items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations, in part because they may vary widely across time and within our industry independent of the performance of our core operations. See the section titled “Adjusted EBITDA” for the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to Net Income (Loss).

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Powersports Metrics (dollars in thousands except per unit)


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,						Six Months Ended June 30,
		2022		2021		YoY Change		2022		2021		YoY Change			2023		2022		YoY Change		2023		2022		YoY Change
Revenue	Revenue													Revenue
New retail vehicles	New retail vehicles	$	177,560	$	42,943	$	134,617	$	523,817	$	42,943	$	480,874	New retail vehicles	$	185,590	$	173,224	$	12,366	$	341,940	$	325,814	$	16,126
Used vehicles:	Used vehicles:													Used vehicles:
Used retail vehicles		108,208		19,926		88,282		319,605		19,926		299,679
Used wholesale vehicles		5,724		20,423		(14,699)		15,387		58,438		(43,051)
Retail														Retail	76,577		117,496		(40,919)		146,826		199,028		(52,202)
Wholesale														Wholesale	7,554		3,871		3,683		14,238		9,663		4,575
Total used vehicles	Total used vehicles	113,932		40,349		73,583		334,992		78,364		256,628		Total used vehicles	84,131		121,367		(37,236)		161,064		208,691		(47,627)
Finance and insurance, net	Finance and insurance, net	31,653		6,180		25,473		95,971		6,998		88,973		Finance and insurance, net	33,178		36,759		(3,581)		60,370		64,261		(3,891)
Parts, service, accessories		62,216		16,075		46,141		182,268		16,075		166,193
Parts, service and accessories														Parts, service and accessories	65,409		65,315		94		124,478		120,052		4,426
Total revenue	Total revenue	$	385,361	$	105,547	$	279,814	$	1,137,048	$	144,380	$	992,668	Total revenue	$	368,308	$	396,665	$	(28,357)	$	687,852	$	718,818	$	(30,966)

Gross Profit	Gross Profit													Gross Profit
New retail vehicles	New retail vehicles	$	32,071	$	8,146	$	23,925	$	100,549	$	8,146	$	92,403	New retail vehicles	$	28,589	$	37,286	$	(8,697)	$	52,359	$	68,479	$	(16,120)
Used vehicles:	Used vehicles:													Used vehicles:
Used retail vehicles		18,691		3,139		15,552		57,538		3,139		54,399
Used wholesale vehicles		(588)		3,712		(4,300)		304		12,829		(12,525)
Retail														Retail	11,073		24,136		(13,063)		20,345		38,876		(18,531)
Wholesale														Wholesale	(203)		422		(625)		(1,003)		892		(1,895)
Total used vehicles	Total used vehicles	18,103		6,851		11,252		57,842		15,968		41,874		Total used vehicles	10,870		24,558		(13,688)		19,342		39,768		(20,426)
Finance and insurance	Finance and insurance	31,653		6,180		25,473		95,971		6,998		88,973		Finance and insurance	33,178		36,759		(3,581)		60,370		64,261		(3,891)
Parts, service, accessories		29,143		7,230		21,913		85,794		7,230		78,564
Parts, service and accessories														Parts, service and accessories	30,410		31,370		(960)		57,690		56,652		1,038
Total gross profit	Total gross profit	$	110,970	$	28,407	$	82,563	$	340,156	$	38,342	$	301,814	Total gross profit	$	103,047	$	129,973	$	(26,926)	$	189,761	$	229,160	$	(39,399)

Vehicle Unit Sales	Vehicle Unit Sales													Vehicle Unit Sales
New retail vehicles	New retail vehicles	9,973		2,485		7,488		31,016		2,485		28,531		New retail vehicles	13,126		11,366		1,760		23,562		21,043		2,519
Used vehicles:	Used vehicles:													Used vehicles:
Used retail vehicles		7,508		1,336		6,172		22,228		1,336		20,892
Used wholesale vehicles		912		1,669		(757)		2,619		5,086		(2,467)
Retail														Retail	6,137		8,619		(2,482)		11,918		14,720		(2,802)
Wholesale														Wholesale	1,014		728		286		2,018		1,707		311
Total used vehicles	Total used vehicles	8,420		3,005		5,415		24,847		6,422		18,425		Total used vehicles	7,151		9,347		(2,196)		13,936		16,427		(2,491)
Total vehicles sold	Total vehicles sold	18,393		5,490		12,903		55,863		8,907		46,956		Total vehicles sold	20,277		20,713		(436)		37,498		37,470		28

Revenue per vehicle	Revenue per vehicle													Revenue per vehicle
New retail vehicles	New retail vehicles	$	17,804	$	17,281	$	523	$	16,889	$	17,281	$	(392)	New retail vehicles	$	14,139	$	15,241	$	(1,102)	$	14,512	$	15,483	$	(971)
Used vehicles:	Used vehicles:													Used vehicles:
Used retail vehicles		14,412		14,915		(503)		14,378		14,915		(537)
Used wholesale vehicles		6,276		12,239		(5,963)		5,875		11,491		(5,616)
Retail														Retail	12,478		13,632		(1,154)		12,320		13,521		(1,201)
Wholesale														Wholesale	7,450		5,317		2,133		7,056		5,661		1,395
Total used vehicles	Total used vehicles	13,531		13,429		102		13,482		12,203		1,279		Total used vehicles	11,765		12,985		(1,220)		11,557		12,704		(1,147)
Finance and insurance, net	Finance and insurance, net	1,811		1,617		194		1,802		1,831		(29)		Finance and insurance, net	1,722		1,839		(117)		1,702		1,797		(95)
Parts, service, accessories		3,559		4,207		(648)		3,423		4,207		(784)
Parts, service and accessories														Parts, service and accessories	3,396		3,268		128		3,508		3,357		151
Total revenue per retail vehicle	Total revenue per retail vehicle	$	22,045	$	27,623	$	(5,578)	$	21,355	$	37,786	$	(16,431)	Total revenue per retail vehicle	$	18,728	$	19,654	$	(926)	$	18,986	$	19,829	$	(843)

Gross Profit per vehicle	Gross Profit per vehicle													Gross Profit per vehicle
New vehicles	New vehicles	$	3,216	$	3,278	$	(62)	$	3,242	$	3,278	$	(36)	New vehicles	$	2,178	$	3,280	$	(1,102)	$	2,222	$	3,254	$	(1,032)
Used vehicles	Used vehicles	$	2,150	$	2,280	$	(130)	$	2,328	$	2,487	$	(159)	Used vehicles	$	1,804	$	2,627	$	(823)	$	1,707	$	2,421	$	(714)
Finance and insurance, net	Finance and insurance, net	$	1,811	$	1,617	$	194	$	1,802	$	1,831	$	(29)	Finance and insurance, net	$	1,722	$	1,839	$	(117)	$	1,702	$	1,797	$	(95)
Parts, service, accessories		$	1,667	$	1,892	$	(225)	$	1,611	$	1,892	$	(281)
Total gross profit per retail vehicle (1)		$	4,681	$	5,542	$	(861)	$	4,777	$	8,142	$	(3,365)
Parts, service and accessories														Parts, service and accessories	$	1,579	$	1,570	$	9	$	1,626	$	1,584	$	42
Total gross profit per vehicle (1)														Total gross profit per vehicle (1)	$	5,349	$	6,504	$	(1,155)	$	5,348	$	6,408	$	(1,060)

(1) Calculated as total gross profit ~~attributable to powersports vehicles sold, inclusive of finance & insurance, net~~divided by new and ~~exclusive of parts, service, accessories, and merchandise divided by~~used retail powersports units sold.

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~~Revenue~~

~~Three and Nine months ended September 30, 2022 Compared to September 30, 2021~~.Total Powersports revenue increased by $279,814 and $992,668 to $385,361 and $1,137,048 for the three and nine months ended September 30, 2022 compared to $105,547 and $144,380 for the same periods in 2021. The Acquisition Effect specific to new and used vehicles, F&I and PSA revenue accounted for approximately $222,899, $25,473, and $46,141, respectively, of the increase for the three months ended September 30, 2022, and accounted for approximately $780,553, $88,973, and $166,193, respectively, of the increase for the nine months ended September 30, 2022. The increases in both periods were partially offset by decreases of $(14,699) and $(43,051) in wholesale powersports vehicle revenue for the three and nine months ended September 30, 2022 compared to the same periods in 2021, as the Company was now able to sell used vehicles via the more profitable RideNow and Freedom retail channels. The total number of vehicles sold increased by 12,903 and 46,956 to 18,393 and 55,863 for the three and nine months ended September 30, 2022, as compared to 5,490 and 8,907 for the same periods in 2021. Overall, the average revenue per retail vehicle sold was $22,045 and $21,355, respectively, for the three and nine months ended September 30, 2022. We believe this is a relatively high number given historical trends for these businesses and we attribute that to a combination of (i) product mix, with in demand vehicles like UTVs and side-by-sides commanding higher prices, supplemented by (ii) elevated pricing of both new and used vehicles given the Demand / Supply Imbalance. We anticipate that unit purchasing levels and sales will continue to grow as we increase penetration in existing markets, build out fulfillment centers and acquire new dealers.

~~Gross Profit~~

~~Three and Nine months ended September 30, 2022 Compared to September 30, 2021~~.Total Powersports gross profit increased by $82,563 and $301,814 to $110,970 and $340,156 for the three and nine months ended September 30, 2022 compared to $28,407 and $38,342 for the same periods in 2021. The increase in gross profit was primarily due to the Acquisition Effect which accounted for $86,863 and $314,339 of the 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.

Gross profit per retail vehicle sold decreased by $861 and $3,365 to $4,681 and $4,777 for the three and nine months ended September 30, 2022, as compared to $5,542 and $8,142 for the same periods in 2021. The decreases as compared to the same periods in 2021 are primarily attributable to the mix of vehicles sold through retail and wholesale channels, which was significantly skewed towards retail for the three and nine months ended September 30, 2022 as compared to wholesale channels during the same periods in 2021. Prior to the RideNow Transaction and Freedom Transaction, the Company primarily sold vehicles through wholesale channels. The RideNow Transaction occurred during the three months ended September 30, 2021 and the Freedom Transaction occurred during the first quarter of 2022, and as a result, the calculation of gross profit per retail vehicle sold reflects lower gross profit from wholesale channels and higher retail units sold for the three and nine months ended September 30, 2022 as compared to the same periods in 2021.

~~Automotive Metrics (dollars in thousands except per unit)~~

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 YoY
Change 2022 2021 YoY
Change
Revenue $ 69,974 $ 105,298 $ (35,324) $ 296,433 $ 316,655 $ (20,222)
Gross Profit (1)
$ 1,883 $ 6,525 $ (4,642) $ 10,052 $ 22,905 $ (12,853)
Vehicles sold 1,515 3,028 (1,513) 6,755 8,822 (2,067)
Revenue per vehicle $ 46,188 $ 34,775 $ 11,413 $ 43,884 $ 35,894 $ 7,990
Gross Profit per vehicle $ 1,243 $ 2,155 $ (912) $ 1,488 $ 2,596 $ (1,108)

~~(1)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 vehicle unit sales.~~

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Revenue

Three and ~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 Compared to ~~September~~June 30, ~~2021.~~2022

Total ~~Automotive~~Powersports revenue ~~decreased by $35,324 to $69,974~~ for the three months ended ~~September~~June 30, ~~2022~~2023 decreased by $28,357 to $368,308 as compared to ~~$105,298~~$396,665 for the same period in ~~2021,~~2022, primarily driven by a 2.1% decrease in total vehicles sold to 20,277, and a (4.7)% decrease in total revenue per retail vehicle sold to $18,728. Revenue from used vehicles decreased 30.7% to $84,131, primarily driven by a 23.5% decrease in used vehicle units sold and a 9.4% decrease in revenue per used vehicle sold, attributable to greater new vehicle inventory and more competitive macroeconomic conditions as compared to the same period in 2022. F&I revenue decreased 9.7% to $33,178, primarily driven by a 3.6% decrease in vehicles sold through retail channels, and a 6.4% decrease in F&I revenue per vehicle sold. The decreases were partially offset by a 7.1% increase in revenue from new retail vehicles to $185,590, primarily driven by a 15.5% increase in new vehicle units sold.

Total Powersports revenue for the six months ended June 30, 2023, decreased by ~~$(20,222)~~$30,966 to ~~$296,433 for the nine months ended September 30, 2022~~$687,852 as compared to ~~$316,655~~$718,818 for the same period in ~~2021. The~~2022, primarily driven by a 4.3% decrease in ~~automotive~~ revenue ~~was primarily due~~per retail vehicle sold to $18,986. Revenue from used vehicles decreased 17.3% to $161,064, driven by a 15.2% decrease in ~~vehicles~~used vehicle units sold ~~of 1,513~~ and ~~2,067~~a 9.0% decrease in revenue per used vehicle sold, attributable to greater new vehicle inventory and more competitive macroeconomic conditions as compared to the same ~~periods~~period in ~~2021; partially offset~~2022. F&I revenue decreased 6.1% to $60,370, driven primarily by ~~increases~~a 5.3% decrease in F&I revenue per vehicle ~~of $11,413~~sold, and ~~$7,990 for the three and nine months ended September 30, 2022. The Company made~~ a strategic decision to purchase fewer automotive units during the three and nine months ended September 30, 2022, due to concerns about the market and high wholesale costs as compared to historical levels.

~~Gross Profit~~

~~Three and Nine months ended September 30, 2022 Compared to September 30, 2021.~~ Total Automotive gross profit decreased by $4,642 and $12,853 to $1,883 and $10,052 for the three and nine months ended September 30, 2022 compared to $6,525 and $22,905 for the same periods in 2021. The decreases were attributable to decreased gross profit per vehicle of $912 and $1,108 to $1,243 and $1,488 for the three and nine months ended September 30, 2022 compared to $2,155 and $2,596 for the same periods in 2021 and a0.8% decrease in vehicles sold ~~of 1,513 and 2,067~~through retail channels. The decreases were partially offset by a 4.9% increase in revenue from new retail vehicles to $341,940, primarily driven by a 12.0% increase in new vehicle units sold, as well as a 3.7% increase in PSA revenue to $124,478, as compared to the same ~~periods~~period in ~~2021.~~

~~Vehicle Logistics Metrics (dollars in thousands except per unit)~~

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 YoY
Change 2022 2021 YoY
Change
Revenue (1)
$ 15,527 $ 11,597 $ 3,930 $ 45,774 $ 36,145 $ 9,629
Gross Profit $ 3,557 $ 2,455 $ 1,102 $ 9,377 $ 6,829 $ 2,548
Vehicles transported 23,992 20,284 3,708 71,295 62,693 8,602
Revenue per vehicle transported $ 647 $ 572 $ 75 $ 642 $ 577 $ 65
Gross Profit per vehicle transported $ 148 $ 121 $ 27 $ 132 $ 109 $ 23

~~(1)~~Before intercompany freight services provided to Wholesale of $524 and $2,904, and $1,228 and $3,357 respectively for the three and nine months ended September 30, 2022 and 2021 are eliminated in the Condensed Consolidated Financial Statements.

~~Revenue~~

~~Three and Nine months ended September 30, 2022 Compared to September 30, 2021.~~ Total Vehicle Logistics revenue increased by $3,930 and $9,629 to $15,527 and $45,774 for the three and nine months ended September 30, 2022 compared to $11,597 and $36,145 for the same periods in 2021.The increase in total revenue for the three and nine months ended September 30, 2022 resulted from increases of approximately 18.3% and 13.7% in the number of vehicles transported to 23,992 and 71,295 vehicles as compared to 20,284 and 62,693 vehicles for the same periods of 2021. Additionally, revenue per vehicle transported for the three and nine months ended September 30, 2022 increased by approximately 13.1% and 11.3% to $647 and $642 as compared to $572 and $577 for the same periods in 2021.2022.

Gross Profit

Three and ~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 Compared to ~~September~~June 30, ~~2021.~~2022

Total ~~Vehicle Logistics~~Powersports gross profit for the three months ended ~~September~~June 30, ~~2022 increased~~2023 decreased by ~~$1,102 and $2,548~~$26,926 to ~~$3,557 and $9,377, or $148 and $132 per vehicle transported,~~$103,047 as compared to ~~$2,455 and $6,829, or $121 and $109~~$129,973 for same period in 2022, primarily driven by a 17.7% decrease in gross profit per vehicle ~~transported, for the same periods~~sold to $5,349 and a 2.1% decrease in ~~2021. The increased~~total vehicles sold to 20,277. Gross profit from used vehicles decreased 55.7% to $10,870, primarily driven by a 23.5% decrease in used vehicles sold, and a 31.3% decrease in gross profit ~~was attributed to increases to the number of vehicles transported and revenue earned~~ per used vehicle ~~for the three and nine months ended September 30, 2022~~sold as market conditions were less favorable as compared to the same ~~periods~~period in ~~2021.~~2022. Gross profit from new vehicles decreased 23.3% to $28,589, driven by a 33.6% decrease in gross profit per new vehicle sold, and partially offset by a 15.5% increase in new vehicle units sold. F&I and PSA gross profit decreased 9.7% and 3.1% to $33,178 and $30,410, respectively, as compared to the same period in 2022.

Total Powersports gross profit for the six months ended June 30, 2023 decreased by $39,399 to $189,761 as compared to $229,160 for the same period in 2022, primarily driven by a 16.5% decrease in gross profit per vehicle sold to $5,348. Gross profit from used vehicles decreased 51.4%, primarily driven by a 29.5% decrease in gross profit per used vehicle sold, and a 15.2% decrease in used vehicles sold as compared to the same period in 2022. Gross profit from new vehicles decreased 23.5%, primarily driven by a 31.7% decrease in gross profit per new vehicle sold, offset by a 12.0% increase in new vehicle units sold as compared to the same period in 2022. F&I gross profit decreased 6.1%, primarily driven by a 5.3% decrease in F&I gross profit per vehicle sold. The overall decreases were partially offset by a 2.6% increase in PSA gross profit as compared to the same period in 2022.

Other contributing factors to the overall decrease in gross profit include a less favorable product mix of vehicle sales, with a greater skew towards new units sold, and softening demand which resulted in lower pricing during the three and six months ended June 30, 2023 as compared to the same period in 2022.

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Vehicle Logistics Metrics (dollars in thousands except per unit)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023		2022		YoY Change		2023		2022		YoY Change
Revenue	$	14,423	$	15,517	$	(1,094)	$	29,263	$	27,868	$	1,395
Gross Profit	$	3,354	$	3,168	$	186	$	6,941	$	5,652	$	1,289
Vehicles transported	20,990		23,503		(2,513)		44,598		43,202		1,396
Revenue per vehicle transported	$	687	$	660	$	27	$	656	$	645	$	11
Gross Profit per vehicle transported	$	160	$	135	$	25	$	156	$	131	$	25

Revenue

Three and Six months ended June 30, 2023 Compared to June 30, 2022

Total Vehicle Logistics revenue for the three months ended June 30, 2023 decreased 7.0% to $14,423, driven by a 10.7% decrease in vehicles transported to 20,990, and partially offset by a 4.1% increase in revenue per vehicle transported to $687, as compared to the same period in 2022.

Total Vehicle Logistics revenue for the six months ended June 30, 2023 increased 5.0% to $29,263, driven by a 3.2% increase in vehicles transported to 44,598, and a 1.7% increase in revenue per vehicle transported to $656, as compared to the same period in 2022.

Gross Profit

Three and Six months ended June 30, 2023 Compared to June 30, 2022

Total Vehicle Logistics gross profit for the three months ended June 30, 2023 increased 5.9% to $3,354, driven by an 18.5% increase in gross profit per vehicle transported to $160, and partially offset by a 10.7% decrease in vehicles transported to 20,990, as compared to the same period in 2022.

Total Vehicle Logistics gross profit for the six months ended June 30, 2023 increased 22.8% to $6,941, driven by a 19.0% increase in gross profit per vehicle transported to $156, as well as a 3.2% increase in vehicles transported to 44,598, as compared to the same period in 2022.

Selling, General and Administrative


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				YoY		Six Months Ended June 30,				YoY
		2022		2021		2022		2021			2023		2022		Change		2023		2022		Change
Advertising, marketing and selling	Advertising, marketing and selling	$	8,852	$	4,241	$	25,054	$	7,799	Advertising, marketing and selling	$	8,519	$	9,160	$	(641)	$	14,368	$	15,795	$	(1,427)
Compensation and related costs	Compensation and related costs	56,291		15,104		162,271		26,983		Compensation and related costs	57,135		58,589		(1,454)		108,107		103,487		4,620
Facilities	Facilities	11,645		3,399		33,469		4,774		Facilities	10,884		11,865		(981)		22,500		21,283		1,217
General and administrative	General and administrative	16,320		16,570		44,315		28,008		General and administrative	11,009		8,681		2,328		20,772		15,889		4,883
Professional fees										Professional fees	6,661		4,220		2,441		10,467		7,920		2,547
Stock based compensation	Stock based compensation	2,605		21,507		7,237		23,943		Stock based compensation	4,910		2,753		2,157		7,821		4,632		3,189
Technology development and software	Technology development and software	472		686		2,070		1,513		Technology development and software	1,195		965		230		2,565		1,599		966
Total SG&A expenses	Total SG&A expenses	$	96,185	$	61,507	$	274,416	$	93,020	Total SG&A expenses	$	100,313	$	96,233	$	4,080	$	186,600	$	170,605	$	15,995

Selling, general and administrative ("SG&A") expenses from continuing operations increased by ~~$34,678~~$4,080 and ~~$181,396,~~$15,995, respectively, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to the same ~~periods~~period in ~~2021. In each case, other than technology development~~2022. The overall increase was primarily driven by: (1) increased headcount as the Company deployed its growth initiatives; (2) investments in facilities and ~~software,~~technologies; (3) professional fees in connection with shareholder proposals for the ~~increases were the result~~annual meeting of the ~~Acquisition Effect, with over 2,000 additional employees,~~shareholder and reorganization of the Board of Directors; (4) executive separation costs; and (5) higher stock based compensation. The increases are partially offset by lower advertising, marketing, and selling costs as the Company focused expenditures on its most effective

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initiatives atduring the ~~store level, general~~three and ~~administrative costs associated with a larger team, and lease/facility expense related~~six months ended June 30, 2023 as compared to ~~55+ new locations from~~ the ~~RideNow Transaction and Freedom Transaction.~~same period in 2022. In the case of technology and development, in the ~~third quarter of 2021 we began~~Company is pursuing strategic technology projects focused on inventory management, infrastructure, and integration efforts which continued to progress during the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023.

In the first quarter of 2023, the Company identified approximately $15,000 of SG&A expenses primarily related to discontinued operations and insurance costs that we began to remove from the business. Actions to reduce SG&A expenses related to discontinued operations were mostly completed as of June 30, 2023. During the second quarter of 2023, the Company successfully executed its strategy to reduce annualized insurance costs by approximately $7,000, and took actions to reduce compensation and professional fees. These reductions were offset increased proxy legal fees and severance costs during the three months ended June 30, 2023, which are expected to be non-recurring SG&A expenses.

During the three months ended June 30, 2023, the Company began implementing a plan expected to further reduce annualized SG&A expenses by an additional $15,000. Since our Interim CEO started in late June 2023, we have identified an additional $12,000 in annualized cost savings, which would bring our total annualized SG&A expense reductions to approximately $42,000. We expect to see the full effects of these SG&A expense reductions in 2024, driven by additional headcount reductions, subleases of unused facilities, and cost restructuring at our dealerships.

Depreciation and Amortization

Depreciation and amortization ~~increased~~decreased by ~~$4,853~~$593 and ~~$13,975, respectively,~~$323 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, respectively, as compared to the same periods in ~~2021. Of the increase for the three months ended September 30,~~ 2022, ~~approximately $2,098 is associated with the various non-compete agreements~~primarily driven by lower amortization expense related to the RideNow Transaction, approximately $1,915 is associated with amortization of 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.~~

Of the increase for the nine months ended September 30, 2022, approximately $6,539 is associated with the various non-compete agreements related to the RideNow Transaction, approximately $3,198 is associated with depreciation resulting from the RideNow Transaction, approximately $2,258 is associated with amortization of capitalized software, approximately $1,546 is associated with depreciation resulting from the Freedom Transaction, and approximately $443 is associated with the various non-compete agreements resulting from the Freedom Transaction, partially offset by minimal increases and decreases across the Company.agreements.

Interest Expense

Interest expense increased by ~~$8,026~~$5,575 and ~~$28,952, respectively,~~$12,515 for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023, as compared to the same ~~periods~~period in ~~2021.~~2022. Interest expense consists of interest and deferred financing costs on the: (i) Oaktree Credit Agreement; (ii) various floorplan facilities; (iii) private placement notes; (iv) convertible senior notes; and (v) the ROF ~~credit facility.~~Consumer Finance Facility. The increase is primarily driven by higher interest rates and higher floorplan debt balances.

Derivative Liability

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~~our convertible senior notes issued on January 10, 2020 (the “New Notes”) and the ~~Warrant~~Warrants 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.

~~New Notes~~

In connection with the issuance of 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, estimated volatility of 55.0% and risk-free rates over the entire 10-year yield curve.

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The change in value of the derivative liability for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 were $0 and $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~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022 was ~~$26 and $66, respectively.~~both $26.

Oaktree Warrant

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 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~~Warrants liability and deferred financing charge recognized was $10,950. The ~~warrant~~Warrants 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~~Warrants was estimated using a Monte Carlo simulation based on a combination of level 1 and level 2 inputs. Upon closing of the RideNow Transaction, the ~~warrants~~Warrants were considered equity linked contracts indexed to the Company’s stock and therefore met the equity classification guidance. As a result, the interest expense for the six month period ended June 30, 2023 of $19,700 was reclassified to additional paid-in-capital. The $10,950 deferred financing charge related to the Warrants was reclassified as part of the debt discount related to the Oaktree Credit Agreement. The recognition of the ~~warrant~~Warrants liability and deferred financing charge, and the reclassification of the ~~warrant~~Warrants liability to additional paid-in capital, and the reclassification of the deferred financing charge to debt discount, are non-cash items. On July 25, 2023, this Warrant expired and was not exercised.

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Adjusted EBITDA

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.~~flows. 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.

We define Adjusted EBITDA ~~is defined~~ as net income (loss) adjusted to add back interest expense, depreciation and amortization, changes in derivative ~~liability~~and warrant liabilities and certain recoveries, charges and expenses, such as an insurance recovery, non-cash stock-based compensation costs, acquisition related costs, 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.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, adjustments to Adjusted EBITDA are primarily comprised of:

•~~Non-cash stock-based compensation expense recorded~~Income associated with the change in value of derivative liability as reported on the Condensed Consolidated Statement of Operations,

•~~Acquisition costs~~Charges related to the shareholder proposals for the annual meeting of shareholders and reorganization of our Board of Directors, which includes the reimbursement of advisor fees incurred by shareholders in connection with the proxy contest of $2,500,

•Lease expense associated with favorable related party leases in excess of contractual lease payments,

•Charges associated with litigation outside of our ongoing operations,

•Loss associated with the ~~RideNow Transaction~~fair value of the RumbleOn Finance loan receivables portfolio, which are anticipated to be sold during the second half of 2023,

•Other non-recurring costs, which include one-time expenses incurred. For the three and ~~Freedom Transaction, which primarily include~~six months ended June 30, 2023, the balance was comprised of integration costs and professional fees associated with acquisitions, and ~~third-party~~a death benefit to the estate of the Company's former Chief Financial Officer and director. For the three and six months ended June 30, 2022, the balance was primarily related to various integration costs and professional fees associated with the Freedom Powersports and RideNow acquisitions, technology implementation, and establishment of the RumbleOn Finance secured loan facility.

•Personnel restructuring costs, comprised of severance and charges associated with the separation of former executives, including the Company's former President and Chief Operating Officer, and former Chief Financial Officer,

•Purchase accounting adjustments, which represent one-time ~~expenses~~charges related to the Freedom Transaction and RideNow Transaction,

•~~Forgiveness~~Non-cash stock-based compensation expense as reported in the Condensed Consolidated Statement of ~~the PPP loan,~~Operations, and

•~~Other non-recurring~~Transaction costs which include items not indicative of our ongoing operating performance. For the three and nine months ended September 30, 2022, the balance was primarily comprised of integration costs and professional fees associated with the RideNow Transaction and Freedom Transaction, as well as other smaller acquisitions, which primarily include professional fees and the RideNow Transaction, technology implementation, legal matters, and establishment of the ROF secured loan facility. For the three and nine months ended September 30, 2021, the balance was primarily related to litigation expenses and a death benefit to the estate of the Company’s former Chief Financial Officer and director.third-party costs.

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The following tables reconcile Adjusted EBITDA to net income (loss) for the periods presented:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income (loss)	Net income (loss)	$	3,039	$	(22,544)	$	26,213	$	(30,385)	Net income (loss)	$	(13,588)	$	14,033	$	(30,490)	$	23,174
Income (loss) from discontinued operations, net										Income (loss) from discontinued operations, net	(755)		386		(951)		(57)
Income (loss) from continuing operations, net										Income (loss) from continuing operations, net	$	(12,833)	$	13,647	$	(29,539)	$	23,231
Add back:	Add back:									Add back:
Interest expense	Interest expense	12,603		4,577		37,059		8,107		Interest expense	18,326		12,751		35,928		23,413
Income tax provision (benefit)										Income tax provision (benefit)	(4,573)		4,852		(6,150)		7,487
Depreciation and amortization	Depreciation and amortization	6,570		1,717		16,923		2,948		Depreciation and amortization	5,269		5,862		9,996		10,319
Interest income and miscellaneous income		(38)		—		(287)		—
Income tax provision (benefit)		496		(10,681)		7,746		(10,681)
EBITDA	EBITDA	22,670		(26,931)		87,654		(30,011)		EBITDA	$	6,189	$	37,112	$	10,235	$	64,450
Adjustments:	Adjustments:									Adjustments:
Change in derivative liability										Change in derivative liability	—		—		—		(39)
Charges related to proxy contest and Board of Directors reorganization										Charges related to proxy contest and Board of Directors reorganization	4,729		—		4,729		—
Lease expense associated with favorable related party leases in excess of contractual lease payments										Lease expense associated with favorable related party leases in excess of contractual lease payments	271		—		542		—
Litigation settlement expenses										Litigation settlement expenses	—		—		79		—
Loss associated with RumbleOn Finance loan receivables										Loss associated with RumbleOn Finance loan receivables	3,342		—		5,371		—
Other non-recurring costs										Other non-recurring costs	334		2,479		888		4,176
Personnel restructuring costs										Personnel restructuring costs	3,833				4,725		—
Purchase accounting related										Purchase accounting related	—		592		—		592
Stock based compensation	Stock based compensation	2,605		24,730		7,237		26,457		Stock based compensation	4,910		2,753		7,821		4,632
Transaction costs - RideNow and Freedom		100		1,558		1,503		3,515
Purchase accounting related		177		—		769		—
PPP Loan forgiveness		(2,509)		(572)		(2,509)		(572)
Insurance proceeds		—		(3,135)		—		(3,135)
Other non-recurring costs		2,393		1,448		6,568		1,651
Costs attributable to store openings and closures		233		—		233		—
Change in derivative and warrant liabilities		—		6,518		(39)		8,774
Transaction costs - acquisitions										Transaction costs - acquisitions	12		687		34		1,403
Adjusted EBITDA	Adjusted EBITDA	$	25,669	$	3,616	$	101,416	$	6,679	Adjusted EBITDA	$	23,620	$	43,623	$	34,424	$	75,214

Liquidity and Capital Resources

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 2021, we completed two public offerings that provided net proceeds of $191,000 and ~~obtained~~we entered into the Oaktree Credit 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~~June 30, ~~2022,~~2023, the Oaktree Credit Agreement ~~provides~~does not provide for ~~up to $120,000, of which $35,500 is available, in additional financing that may be used for acquisitions and up to an additional $100,000 in~~any incremental financing ~~that may be used~~ for acquisitions or working capital purposes.

We had the following liquidity resources available as of June 30, 2023 and December 31, 2022:


	June 30, 2023		December 31, 2022
Cash	$	44,373	$	46,762
Availability under floorplan facilities (1)	45,344		50,651
Committed liquidity resources available	$	89,717	$	97,413

(1)Availability under floorplan facilities is the available amount we can borrow under our existing vehicle inventory floor plan credit facilities based on the pledgable value of vehicle inventory on our balance sheet as of June 30, 2023 and December 31, 2022. Availability under floorplan facilities is distinct from the maximum borrowing capacity of these facilities because it represents the current amount available to borrow, rather than amounts available to borrow for future inventory purchases.

At June 30, 2023, the Company was not in compliance with certain leverage ratio financial covenants under the Oaktree Credit Agreement. On the Amendment No. 5 Effective Date, the Company, the Subsidiary Guarantors party thereto, the Administrative Agent, and the Lenders parties thereto executed Amendment No. 5, pursuant to which, among other things, (i) all leverage ratio financial covenants under the Oaktree Credit Agreement were (a) eliminated and not tested for the quarters

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ending June 30, 2023 and September 30, 2023 and (b) made less restrictive for the quarters ending December 31, 2023, March 31, 2024, and June 30, 2024; (ii) additional performance covenants were added requiring Company and its subsidiaries to use commercially reasonable best efforts to dispose of certain non-core real estate and monetize its consumer loan portfolios (with corresponding requirements to use such proceeds of such sales to pay down the term loans under the Oaktree Credit Agreement; (iii) an additional performance covenant was added requiring the Company to raise net cash proceeds of not less than $100,000 from the issuance of common equity interests in the Company by December 1, 2023 (with a corresponding requirement to use certain of such equity proceeds to pay down the term loans under the Oaktree Credit Agreement), and (iv) an additional performance covenant was added requiring the Company to issue warrants, in a form to be agreed upon, to the Lenders. In connection with Amendment No. 5, the Company agreed to pay a nominal fee which may be paid in cash or paid-in-kind. The Company believes that it will be in compliance with all covenants under the Oaktree Credit Agreement, as amended by Amendment No. 5, for the next one year period.

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 our business and our

Management believes that current working capital, results of operations of the Oaktree Credit Agreement, as amended by Amendment No. 5, and existing financing arrangements are sufficient to fund operations for at least one year from the date of the financial ~~condition.~~statements herein.

~~Table~~Our primary cash requirements include payments related to our debt and lease obligations.As of ~~Contents~~

~~We had the following liquidity resources available as of September~~June 30, ~~2022~~2023, and December 31, ~~2021:~~

September 30, 2022 December 31, 2021
Cash $ 39,715 $ 48,974
Restricted cash (1)
9,500 3,000
Total cash and restricted cash 49,215 51,974
Availability under short-term revolving facilities 144,554 124,116
Committed liquidity resources available $ 193,769 $ 176,090


			~~(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.~~

~~As of September 30,~~ 2022, ~~and December 31, 2021,~~ excluding operating lease liabilities and the derivative liability, the outstanding principal amount of indebtedness was ~~$563,803~~$621,377 and ~~$384,585,~~$599,815, respectively, summarized in the table below. See Note 5 - Notes Payable and Lines of Credit and Note 67 - ~~Stockholders'~~Stockholder's Equity to our Condensed Consolidated Financial Statements included above. In addition, for information concerning our lease commitments, see Note 3 – Leases to our Condensed Consolidated Financial Statements included above.


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
Asset-Based Financing:	Asset-Based Financing:					Asset-Based Financing:
Inventory	Inventory	$	175,296	$	97,278	Inventory	$	246,438	$	225,431
Total asset-based financing	Total asset-based financing	175,296		97,278		Total asset-based financing	246,438		225,431

Term loan facility	Term loan facility	361,066		279,300		Term loan facility	344,431		346,066
Unsecured senior convertible notes	Unsecured senior convertible notes	38,750		39,006		Unsecured senior convertible notes	38,750		38,750
Line of credit		22,925		—
PPP and other loans		—		4,472
RumbleOn Finance secured loan facility						RumbleOn Finance secured loan facility	18,030		25,000
Note payable for leasehold improvements and other						Note payable for leasehold improvements and other	752		—
Total debt	Total debt	598,037		420,056		Total debt	648,401		635,247
Less: unamortized discount and debt issuance costs	Less: unamortized discount and debt issuance costs	(34,234)		(35,471)		Less: unamortized discount and debt issuance costs	(27,024)		(35,432)
Total debt, net	Total debt, net	$	563,803	$	384,585	Total debt, net	$	621,377	$	599,815

Cash Flows

The following table sets forth a summary of our cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021:~~2022:

Nine Months Ended September 30,
2022 2021
Net cash provided by (used in) operating activities $ 4,656 $ (29,779)
Net cash (used in) investing activities (76,498) (374,825)
Net cash provided by financing activities 69,083 472,405
Net (decrease) increase in cash $ (2,759) $ 67,801


	Six Months Ended June 30,
	2023		2022
Net cash provided by (used in) operating activities of continuing operations	$	(6,294)	$	28,953
Net cash used in investing activities of continuing operations	(10,370)		(69,114)
Net cash provided by financing activities of continuing operations	16,821		64,816
Net change in cash from continuing operations	$	157	$	24,655

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Operating Activities

Our primary sources of operating cash flows result from the sales of used vehicles and ancillary products. Our primary use of cash from operating activities are purchases of inventory, cash used to ~~acquire customers,~~fund operations, and personnel-related expenses. For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, net cash used in operating activities was $6,294, as compared to net cash provided by operating activities ~~was $4,656, an increase~~ of ~~$34,435 compared to net cash used in operating activities of $(29,779)~~$28,953 for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The ~~increase~~$35,247 decrease in our net cash provided by operating activities was primarily due to a ~~$56,598 increase~~$52,770 decrease in our net income from continuing operations, partially offset by a ~~$(888) decrease~~$15,421 increase in non-cash adjustments and a ~~$(21,277) decrease~~$2,100 increase in cash provided by other operating assets.

Investing Activities

Our primary ~~use~~uses of cash for investing activities ~~is for~~are business acquisitions, technology development to expand our ~~operations.~~operations, and capital investments for our stores. Net cash used in investing activities decreased ~~$(298,327)~~$58,744 to ~~$76,498~~$10,370 for the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, compared to ~~$374,825~~$69,114 for the same period in ~~2021.~~2022. The decrease in our net cash used in investing activities was primarily due to ~~a decrease~~the acquisition of ~~$(299,970) in outflows of $65,976 for~~Freedom Powersports, which occurred during the ~~Freedom Transaction for the nine~~six months ended ~~September~~June 30, ~~2022~~2022. ~~as compared to~~

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~~outflows of $365,946 for the~~ ~~nine months ended September 30, 2021~~ ~~for the RideNow Transaction.~~ In addition, there was a decrease of ~~$(3,280)~~$4,540 in outflows for the purchase of property and equipment, offset by an increase of ~~$4,922~~$2,396 in outflows for technology development for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared to the same period in ~~2021.~~2022.

Financing Activities

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 decreased ~~$(403,322)~~$47,995 to ~~$69,083~~$16,821 for the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, compared to ~~net cash provided by financing activities of $472,405~~$64,816 for the same period of ~~2021.~~2022. The decrease ~~in net cash provided by financing activities for the nine months ended September 30, 2022~~ is primarily attributable to a decrease of ~~$(191,240) in proceeds from the sale of common stock, a decrease of $(176,951)~~$84,500 in proceeds from the Oaktree Credit Agreement, which were utilized to purchase Freedom Powersports during the six months ended June 30, 2022, as well as a decrease of $13,650 in proceeds from the ROF Consumer Finance Facility, which were utilized to underwrite consumer loans during the six months ended June 30, 2022. The overall decrease was partially offset by an increase of ~~$(28,378) in cash outflows for repayments of debt and mortgage notes, and a decrease of $(6,754)~~$23,644 in non-trade floor plan borrowings for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared to the same period of ~~2021.~~

~~Global Settlement with Former RideNow Owners~~

Off-Balance Sheet Arrangements

As of ~~September~~June 30, ~~2022,~~2023, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material 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.

Critical Accounting Policies and Estimates

See 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, ~~2021.~~2022. There have been no other material changes to our critical accounting policies and use of estimates from those described under "Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our ~~2021~~2022 Form ~~10-K, other than the use of estimates for the Warrant and changing the date of the Company's annual impairment test for goodwill and indefinite-lived intangible assets from December 31~~st ~~to October 1~~st~~, as described in Note 4 – Intangible Assets and Goodwill.~~10-K.

Forward-Looking and Cautionary Statements

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 are any statements other than statements of historical fact. Forward-looking statements represent our current judgment about possible future events and generally can be identified by words such as ~~“anticipates,~~“anticipate,” ~~“believes,~~“believe,” ~~“estimates,~~“could,” ~~“expects,~~“estimate,” ~~“intends,~~“expect,” ~~“plans,~~“intend,” ~~“predicts,~~“may,” ~~“projects,~~“plan,” “predict,” “project,” “will, ~~be,” “will continue,” “will likely result,~~” and similar expressions. ~~Forward-looking~~In making forward-looking statements, we rely on assumptions and analysis based on our experience and perception of historical trends, current conditions and expected future developments as well as other factors we consider appropriate under the circumstances. We believe these judgments are ~~neither historical facts nor assurances of future performance. These~~reasonable, but forward-looking statements are ~~based on our current, reasonable expectations~~not guarantees of any future events or financial results, and ~~assumptions, which expectations and assumptions are subject to risks and uncertainties that could cause~~ our actual results tomay differ materially ~~from those reflected in the forward-looking statements.~~due to a variety of important factors, many of which are beyond our control. Factors that could cause or contribute to such differences include ~~those~~the following:

•our significant indebtedness and the covenants in our debt agreements;

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•increasing interest rates in connection with our debt agreements;

•our ability to acquire additional financing;

•the material weakness in our internal control over financial reporting;

•changes in general economic conditions and demand for our products and services;

•consumers acceptance of our business model;

•our ability to acquire vehicles that satisfy consumer demand;

•the results of investments made in the development, growth and expansion of our business;

•any diversion of management’s attention in connection with acquisitions;

•difficulties integrating acquired businesses;

•any inability to retain or attract qualified personnel;

•any inability to develop, maintain or market our brands;

•any inability to drive traffic to our website and mobile applications;

•any inability to grow our complementary product offerings;

•any failure of third parties to provide financing, extended protection products, or other products or services to our customers;

•any failure of third parties to provide certain operating or administrative functions for us;

•changes to the supply or prices of new or pre-owned vehicles;

•competitive pressures from existing and new companies;

•climate change legislation or regulations restricting emission of greenhouse gases;

•any failure to adequately protect personal information;

•any failure to adequately protect our intellectual property;

•any failure to obtain or maintain adequate insurance coverage;

•adverse conditions affecting one or more of the powersports manufacturers with which we hold franchises;

•any change or deterioration in the relationship with the manufacturers of vehicles we sell;

•any reduction or discontinuing of sales incentive, warranty, or other promotional programs by manufacturers; and

•other factors discussed in Part I, Item 1A in our ~~2021~~2022 Form 10-K ~~which was filed with the SEC on April 8, 2022 and~~[and Part II, Item 1A of this Quarterly Report on Form ~~10-Q.~~ 10-Q].

Given these risks and uncertainties, readers are cautioned not to place undue reliance on forward-looking statements. WeForward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise or any forward-looking statements, except as required by law.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

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, as amended (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 recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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~~June 30, ~~2022.~~2023. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of ~~September~~June 30, ~~2022,~~2023, based on the ongoing remediation

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of a material ~~weaknesses~~weakness identified in the ~~2021~~2022 Form 10-K. The material ~~weaknesses~~weakness existing in our internal control over financial reporting ~~relate~~relates to:

•~~Information technology general controls particularly as such controls~~Insufficient number of accounting resources to facilitate an effective control environment following the integration of the RideNow business and incorporation of the acquired business into the Company’s control environment. Consequently, the Company did not effectively operate process-level control activities related to ~~user access, program change management, and ineffective complementary user-organization controls, which limited management’s ability to rely on technology dependent controls relevant to~~ the ~~preparation~~elimination of ~~our financial statements.~~

•~~Controls over the period end close process, including the~~intercompany transactions, review and approval ~~process~~ of ~~journal entries, balance sheet account~~certain reconciliations, ~~segregation of duties conflicts, and consolidation of intercompany entries.~~

•~~Documentation and design of controls over the recording and reconciliation of inventory.~~

•~~Review of key assumptions and~~accounting estimates ~~related to purchase~~ accounting for ~~significant acquisitions.~~

•~~The control environment, risk assessment, control activities, information~~non-routine transactions, and communication, and monitoring components of the Company’s internal control framework such that internal control weaknesses were not detected, communicated, addressed with mitigating control activities, or remediated in a timely manner.management review controls.

As set forth below, management has taken and will continue to take steps to remediate the identified material ~~weaknesses.~~weakness. Notwithstanding ~~these~~the material ~~weaknesses,~~weakness, we have performed additional analyses and procedures to enable management to conclude that our consolidated financial statements included in this Form 10-Q fairly present in all material respects our financial condition and results of operations as of and for the periods presented.

Management’s Remediation Plan

In response to the material ~~weaknesses~~weakness discussed above, we plan to continue efforts already underway to remediate internal control over financial reporting, which include the ~~following matters that have been completed or are in process:~~following:

•~~In February 2022, we hired a new Chief Financial Officer.~~We are committed to hiring additional accounting resources with the required technical expertise and clearly defined roles & responsibilities.

•We ~~have engaged third-party resources~~are evaluating system enhancements to ~~support our internal control testing~~automate the consolidation and ~~remediation efforts and act as subject matter experts, and we intend to bring in additional resources to oversee remediation efforts.~~elimination of intercompany transactions.

•We ~~have hired a Head~~are enhancing the overall review and approval process relating to elimination of ~~Internal Audit, a senior level position reporting directly to the Audit Committee, to implement and oversee a newly established Internal Audit department.~~intercompany transactions.

•We ~~have hired a Vice President of Tax~~are enhancing the review and ~~Chief Technology Officer~~approval controls related to reconciling certain accruals and accounting estimates.

•We are in the process of ~~hiring other key accounting~~implementing proper governance and ~~financial~~ reporting ~~positions, including a Director~~over the execution of ~~Financial Reporting, to augment our accounting staff as needed. We believe~~ these ~~additional accounting personnel will enhance our compliance and oversight regarding internal control over financial reporting.~~

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•We have conducted a risk assessment over our internal control environment, including reviewing and prioritizing individual control deficiencies for remediation, including those which aggregated to the above material weaknesses.

•~~We have documented and in the process of executing~~ remediation action items, including ~~the~~ expansion of mitigating controls where appropriate.

•~~We are exploring tools to enhance and centralize general information technology components.~~

•~~We have implemented reporting to provide periodic updates to our Audit Committee on the status of the remediation activities.~~

Management and our Audit Committee will monitor these specific remedial measures and the effectiveness of our overall control environment. The material ~~weaknesses~~weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We can provide no assurance as to when ~~all~~the remediation of ~~these~~the material ~~weaknesses~~weakness will be completed to provide for an effective control environment.

Changes in Internal Control Over Financial Reporting

~~We are in the process of incorporating the controls and related procedures of the acquired RideNow Entities.~~ Other than incorporating the controls and procedures of ~~these~~the acquired Freedom entities and addressing the remediation actions described above, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended ~~September~~June 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

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 that require management to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

~~The Company is subject~~We are not a party to any material legal proceedings and claims which arise in the ordinary course of its business. Although occasional adverse decisions (or settlements) may occur, the Company believes that the final disposition of such matters will not have a material adverse effect on the Company's financial position, results of operations or cash flows. ~~As of September 30, 2022, we were not aware of any threatened or pending material litigation, except~~ as set forth ~~below.~~in Item 103 of Regulation S-K, other than ordinary routine litigation incidental to our business.

On 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,As previously disclosed, the Company is ~~entitled~~conducting an investigation of certain allegations surrounding Marshall Chesrown’s use of Company resources. The investigation is still ongoing and as of the date of this filing, the Company has made no determination as to ~~indemnification from Sellers for breach of a covenant.On March 29, 2022, Mr. Tkach delivered Sellers’~~what action to take in response to the ~~Direct Claim Notice, in which Sellers declined to accept~~allegations. On July 7, 2023, Mr. Chesrown provided the ~~Company’s claims.~~

~~On May 5, 2022,~~Board a letter of resignation (the “Resignation Letter”) describing Mr. ~~Tkach in his role as Sellers’ Representative delivered a Direct Claim Notice to~~Chesrown’s disagreement with several recent corporate governance, disclosure and other actions taken by the Company, ~~under~~ the ~~RideNow Agreement. In~~Board and certain of its members, and indicated his intent to pursue legal claims. The Company disagrees with the ~~Notice, Mr. Tkach stated that pursuant to~~characterization of the ~~indemnification provisions set forth~~allegations and assertions described in the RideNow Agreement, the Sellers are entitled to indemnification from the Company for breach of a representation. On June 3, 2022, the Company delivered its response to the Direct Claim Notice, in which the Company declined to accept the Sellers’ Claims.

On May 6, 2022, each Plaintiff provided RumbleOn notice to arrange for a mediation to resolve alleged disputes regarding the compensation and benefits to which the Plaintiffs are entitled under their respective employment agreements as a result of each Plaintiff’s resignation.

~~On May 8, 2022, an action was filed in the Court of Chancery~~Resignation Letter. As of the ~~State~~date of ~~Delaware~~this filing, there have been no release or other agreements with Mr. Chesrown, nor has a lawsuit been filed by Mr. Chesrown against the Company, ~~by the Plaintiffs related to the RideNow Transaction. The action asserts claims for breach of contract~~ and ~~seeks only declaratory and~~

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injunctive relief from the Court related to each parties’ respective rights under the RideNow Agreement regarding the Final Purchase Price Adjustment process described above. On May 31, 2022, RumbleOn removed the action to the United Stated District Court for the District of Delaware.

~~On May 19, 2022, certain indebtedness and net working capital amounts as of the RideNow Closing Date disputed between~~ the Company and ~~Sellers as part of the Final Purchase Price Adjustment stipulated by the RideNow Agreement were submitted by the parties~~Mr. Chesrown are proceeding to ~~a mutually agreed upon independent accounting firm.~~

~~On June 7, 2022, RumbleOn filed a counterclaim against Plaintiffs alleging a breach by Plaintiffs of the RideNow Agreement regarding related party transactions.~~

~~On June 24, 2022, Plaintiffs filed an amended complaint adding an additional claim for breach of certain representations in the RideNow Agreement.~~

On August 29, 2022, the independent accounting firm made a final determination of the disputed amounts as part of the Final Purchase Price Adjustment based on the definitions and other applicable provisions of the RideNow Agreement.

On September 7, 2022, Plaintiffs filed an action in the Court of Chancery of the State of Delaware against the Company for alleged breaches of their executive employment agreements and seeking injunctive relief and monetary damages.

On September 22, 2022, the United States District Court for the District of Delaware entered an order remanding the action related to the RideNow Transaction to the Court of Chancery of the State of Delaware.On October 3, 2022, the Court of Chancery of the State of Delaware entered an order consolidating the action relating to the executive employment agreements with the action related to the RideNow Transaction.

RumbleOn and Plaintiffs attended an in-person mediation in Dallas, Texas on October 7, 2022 where the parties explored resolution of the Final Purchase Price Adjustment and all claims and counterclaims pending at the time.

~~On October 25, 2022, Plaintiffs voluntarily dismissed Count I of their complaint relating to the executive employment agreements, which sought to require mediation between the parties.~~

On November 1, 2022, the Company filed an action in the Court of Chancery of the State of Delaware against Plaintiffs for confirmation of an award relating to the post-closing adjustment and for specific performance of the RideNow Agreement.

On November 8, 2022, the Company reached a comprehensive global and binding settlement agreement with former primary RideNow owners. The settlement agreement resolves all claims currently pending before the Delaware Chancery Court, releases certain potential and future claims between the parties, and results in no incremental consideration exchanging hands. Furthermore, although the former primary owners have expressed no current intention to sell, the agreement provides a mechanism for the orderly disposition of their shares.mediation.

Item1A. Risk Factors.

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~~2022 Form ~~10-K for the year ended December 31, 2021. There~~10-K. Except as disclosed below, there have been no material changes to the risk factors previously disclosed in our ~~2021~~2022 Form 10-K, the occurrence of any of which could have a material adverse effect on our actual results.

Restrictive covenants and certain obligations in our debt agreements, including our most recent Amendment No. 5 to the Oaktree Credit Agreement, could limit our growth initiatives and implementation of our business strategy. Any breach of those covenants could result in an event of default under our debt agreements, which could adversely impact our business, financial condition and results of operations.

Our debt agreements impose operating and financial restrictions on us. These restrictions limit our ability and that of our subsidiaries to, among other things: (i) incur additional indebtedness; (ii) make investments or loans; (iii) create liens; (iv) consummate mergers and similar fundamental changes; (v) make restricted payments; (vi) make investments in unrestricted subsidiaries; (vii) enter into transactions with affiliates; and (viii) use proceeds from asset sales.

We may be prevented from taking advantage of business opportunities that arise because of the limitations imposed on us by the restrictive covenants under our debt agreements. The restrictions contained in the covenants could: (i) limit our ability to plan for or react to market conditions, to meet capital needs, or otherwise to restrict our activities or business strategy; and (ii) adversely affect our ability to finance our operations, enter into acquisitions or divestitures to engage in other business activities that would be in our interest.

In addition, we are subject to certain covenants under the Oaktree Credit Agreement, as amended by Amendment No. 5, including, but not limited to, requirements to (i) consummate an issuance of common equity interests of the Company resulting in net cash proceeds of not less than $100,000 (the “Equity Contribution”) by December 1, 2023, (ii) use commercially reasonable best efforts to dispose of certain non-core real estate and monetize its consumer loan portfolios, and (iii) issue warrants, in a form to be agreed upon, to the Lenders, in each case, which may restrict our ability to undertake future activities. There is no guarantee that we will be able to meet such covenants, including that such Equity Offering will be successful or that we will be able to consummate dispositions of such non-core real estate assets and monetize our consumer loan portfolios, and issuing any common equity interests may result in substantial dilution to our current stockholders.

In the absence of a waiver from our lenders, a breach of any of these covenants, including the Equity Contribution covenant, or our inability to comply with the required financial covenants could result in a default under our debt agreements that, if not cured or waived, could result in acceleration of all indebtedness outstanding thereunder and cross-default rights under our other debt. In addition, in the event of an event of default under our credit facilities, the affected lenders could foreclose on the collateral securing such credit facility and require repayment of all borrowings outstanding thereunder. If the amounts outstanding under the credit facilities or any of our other indebtedness were to be accelerated, our assets may not be sufficient to repay in full the amounts owed to the lenders or to our other debt holders.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

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Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

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Item 5. Other Information.

~~None.~~The information under Part II, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments” is incorporated herein by reference into this item.

Item 6. Exhibits.


Exhibit Number						Description






~~31.1~~3.1						Amendment to Amended and Restated Bylaws of RumbleOn, Inc., dated May 9, 2023 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on May 10, 2023).
10.1+						Release Agreement, dated May 9, 2023, between RumbleOn, Inc. and Peter Levy. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 10, 2023).
10.2+						Proxy Term Sheet, dated June 15, 2023, by and among RumbleOn, Inc., William Coulter, and Mark Tkach. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 16, 2023).
10.3+						Employment Term Sheet, dated June 16, 2023, between RumbleOn, Inc. and Mark Tkach. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on June 16, 2023).
10.4+						Cooperation Agreement, dated as of June 30, 2023, by and among RumbleOn, Inc., William Coulter, and Mark Tkach. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 6, 2023).
10.5+						Separation Agreement, dated July 14, 2023, by and between RumbleOn, Inc. and Michael Francis. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 20, 2023).
10.6+						Special Advisor Agreement, dated July 14, 2023, by and between RumbleOn, Inc and Michael Francis (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on July 20, 2023).
10.7+						Employment Agreement, dated July 20, 2023, by and between RumbleOn, Inc. and Steven Pully. (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on July 26, 2023).
10.8*						Amendment No. 5 to the Term Loan Credit Agreement, dated August 9, 2023, by and among RumbleOn, Inc., the Subsidiary Guarantors party thereto, the lenders party thereto, and Oaktree Fund Administration, LLC, as administrative agent and collateral agent.*
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~~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~~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~~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~~101.INS*						XBRL Instance Document*
~~101.SCH~~101.SCH*						XBRL Taxonomy Extension Schema*
~~101.CAL~~101.CAL*						XBRL Taxonomy Extension Calculation Linkbase*
~~101.DEF~~101.DEF*						XBRL Taxonomy Extension Definition Linkbase*
~~101.LAB~~101.LAB*						XBRL Taxonomy Extension Label Linkbase*
~~101.PRE~~101.PRE*						XBRL Taxonomy Extension Presentation Linkbase*
~~104~~104*						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)*

* Filed herewith.

** Furnished herewith.

+ Management contract or compensatory plan or arrangement

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	RUMBLEON, INC.

Date: ~~November~~August 9, ~~2022~~2023	By:	/s/ ~~Marshall Chesrown~~Mark Tkach
		~~Marshall Chesrown~~Mark Tkach
		~~Chairman of the Board of Directors and~~Interim Chief Executive Officer (Principal Executive Officer)

Date: ~~November~~August 9, ~~2022~~2023	By:	/s/ ~~Narinder Sahai~~Blake Lawson
		~~Narinder Sahai~~Blake Lawson
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

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