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 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 WW. Walnut Hill Lane, Suite 110A

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 ~~8, 2022~~3, 2023 was ~~16,143,685~~16,809,299 shares. In addition, 50,000 shares of Class A Common Stock, $0.001 par value, were outstanding on November ~~8, 2022.~~3, 2023.

Table of Contents

QUARTERLY PERIOD ENDED SEPTEMBER 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	2223
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3336
Item 4.	Controls and Procedures	3437

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	3539
Item 1A.	Risk Factors	36
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	36
~~Item 3.~~	~~Defaults Upon Senior Securities~~	36
~~Item 4.~~	~~Mine Safety Disclosures~~	36
~~Item 5.~~	~~Other Information~~	3739
Item 6.	Exhibits	3740
SIGNATURES		3841

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

RumbleOn, Inc.

Condensed Consolidated Balance Sheets

(~~Dollars~~dollars in thousands, except per share amounts)

~~(Unaudited)~~

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


	September 30, 2023		December 31, 2022
ASSETS	(Unaudited)
Current assets:
Cash	$	41,406	$	46,762
Restricted cash	18,046		10,000
Accounts receivable, net	33,679		28,040
Inventory	358,654		323,473
Prepaid expense and other current assets	5,654		7,422
Loans receivable held for sale	21,555		33,662
Current assets of discontinued operations	—		11,377
Total current assets	478,994		460,736
Property and equipment, net	78,608		76,078
Right-of-use assets	167,236		161,822
Goodwill	23,897		21,142
Intangible assets, net	240,457		247,413
Deferred tax assets	68,251		58,115
Other assets	1,574		1,881
Assets of discontinued operations	35		23
Total assets	$	1,059,052	$	1,027,210
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other current liabilities	$	81,830	$	79,439
Vehicle floorplan notes payable	287,135		220,176
Current portion of long-term debt and line of credit	14,893		3,645
Current liabilities of discontinued operations	513		8,434
Total current liabilities	384,371		311,694
Long-term liabilities:
Secured debt	271,671		317,494
Convertible debt, net	34,196		31,890
Financing obligation and notes payable	49,174		25,000
Operating lease liabilities	135,726		126,695
Other long-term liabilities	8,783		8,422
Total long-term liabilities	499,550		509,501
Total liabilities	883,921		821,195
Commitments and contingencies
Stockholders' equity:
Class A Common Stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding	—		—
Class B Common Stock, $0.001 par value, 100,000,000 shares authorized, 16,735,391 and 16,184,264 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	17		16
Additional paid-in capital	602,026		585,937
Accumulated deficit	(422,593)		(375,619)
Treasury stock, at cost	(4,319)		(4,319)
Total stockholders' equity	175,131		206,015
Total liabilities and stockholders' equity	$	1,059,052	$	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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
Powersports vehicles	$	235,132	$	271,877	$	738,136	$	806,382
Parts, service and accessories	59,727		62,216		184,205		182,268
Finance and insurance, net	29,288		31,569		89,658		95,830
Vehicle logistics	13,964		15,002		43,227		42,870
Total revenue	338,111		380,664		1,055,226		1,127,350
Cost of revenue:
Powersports vehicles	202,788		221,631		634,091		647,891
Parts, service and accessories	32,754		33,074		99,542		96,473

Vehicle logistics	10,624		11,516		32,946		33,732
Total cost of revenue	246,166		266,221		766,579		778,096
Gross profit	91,945		114,443		288,647		349,254
Selling, general and administrative	84,957		93,822		271,557		264,428
Depreciation and amortization	7,275		6,554		17,271		16,872
Operating income (loss)	(287)		14,067		(181)		67,954
Other income (expense):
Interest expense	(19,828)		(12,209)		(55,756)		(35,622)
Other income	75		26		208		230
PPP Loan forgiveness	—		2,509		—		2,509
Change in derivative liability	—		—		—		39
Total other expense	(19,753)		(9,674)		(55,548)		(32,844)
Income (loss) from continuing operations before income taxes	(20,040)		4,393		(55,729)		35,110
Income tax provision (benefit) for continuing operations	(3,556)		678		(9,706)		8,166
Income (loss) from continuing operations, net	(16,484)		3,715		(46,023)		26,944
Loss from discontinued operations	—		(858)		(1,100)		(1,151)
Income tax benefit for discontinued operations	—		(182)		(149)		(420)
Loss from discontinued operations, net	—		(676)		(951)		(731)
Net income (loss)	$	(16,484)	$	3,039	$	(46,974)	$	26,213
Basic shares	16,665,709		16,020,296		16,452,254		15,859,134
Earnings (loss) per share - basic from continuing operations	$	(0.99)	$	0.23	$	(2.80)	$	1.70
Earnings (loss) per share - basic from discontinued operations	$	—	$	(0.04)	$	(0.06)	$	(0.05)
Diluted shares	16,665,709		16,067,395		16,452,254		15,922,484
Earnings (loss) per share - diluted from continuing operations	$	(0.99)	$	0.23	$	(2.80)	$	1.69
Earnings (loss) per share - diluted from discontinued operations	$	—	$	(0.04)	$	(0.06)	$	(0.05)

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
June 30, 2023	50,000	$	—	16,565,389	$	17	$	593,051	$	(406,109)	123,089	$	(4,319)	$	182,640
Issuance of common stock for restricted stock units	—	—		170,002	—		—		—		—	—		—
Stock-based compensation	—	—		—	—		3,077		—		—	—		3,077
Tax withholding related to vesting of restricted stock units and other	—	—		—	—		(202)		—		—	—		(202)
Issuance of warrant	—	—		—	—		6,100		—		—	—		6,100
Net loss	—	—		—	—		—		(16,484)		—	—		(16,484)
September 30, 2023	50,000	$	—	16,735,391	$	17	$	602,026	$	(422,593)	123,089	$	(4,319)	$	175,131

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
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	—	—		551,127	1		—		—		—	—		1
Stock-based compensation	—	—		—	—		10,898		—		—	—		10,898
Tax withholding related to vesting of restricted stock units and other	—	—		—	—		(909)		—		—	—		(909)
Issuance of warrant	—	—		—	—		6,100		—		—	—		6,100
Net loss	—	—		—	—		—		(46,974)		—	—		(46,974)
September 30, 2023	50,000	$	—	16,735,391	$	17	$	602,026	$	(422,593)	123,089	$	(4,319)	$	175,131

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

~~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


	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
June 30, 2022	50,000	$	—	15,940,866	$	16	$	581,197	$	(90,932)	123,089	$	(4,319)	$	485,962
Issuance of common stock for restricted stock units	—	—		194,324	—		—		—		—	—		—
Stock-based compensation	—	—		—	—		2,606		—		—	—		2,606

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

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


	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
December 31, 2021	50,000	$	—	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 returned -Freedom acquisition	—	—		(2,446)	—		—		—		—	—		—
Net income	—	—		—	—		—		26,213		—	—		26,213
September 30, 2022	50,000	$	—	16,135,190	$	16	$	583,803	$	(87,893)	123,089	$	(4,319)	$	491,607

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


	Nine Months Ended September 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(46,974)	$	26,213
Loss from discontinued operations	(951)		(731)
Net income (loss) from continuing operations	$	(46,023)	$	26,944
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities of continuing operations:
Depreciation and amortization	17,271		16,872
Amortization of debt discount and issuance costs	7,324		3,936
Stock-based compensation expense	10,898		7,237
Forgiveness of PPP loan	—		(2,509)
Gain from change in value of derivatives	—		(39)
Deferred taxes	(10,136)		3,946
Originations of loan receivables, net of principal payments received	5,006		(23,676)
Valuation allowance charge for loan receivable held for sale	5,971		—
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(5,639)		1,239
Inventory	(29,983)		(93,133)
Prepaid expenses and other current assets	1,779		(494)
Other assets	177		(3,766)
Other liabilities	1,461		(2,813)
Accounts payable and accrued liabilities	3,729		(2,131)
Floorplan trade note payable	18,840		38,746
Net cash provided by (used in) operating activities of continuing operations	(19,325)		(29,641)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisitions, net of cash received	(3,300)		(65,976)
Purchases of property and equipment	(7,803)		(4,334)
Technology development	(1,758)		(6,188)
Net cash used in investing activities of continuing operations	(12,861)		(76,498)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from new secured debt	—		84,500
Proceeds from sale leaseback transaction	49,718		—
Proceeds from ROF credit facility for the purchase of consumer finance loans	—		22,925
Repayment of debt and line of credit	(59,048)		(34,082)
Payments for notes payable and finance leases	—		(2,116)
Net borrowings from non-trade floor financing plans	45,993		34,067
Debt issuance costs	(1,787)		—
Net cash provided by financing activities of continuing operations	34,876		105,294
CASH FLOWS FROM DISCONTINUED OPERATIONS
Net cash provided by operating activities	3,438		11,372
Net cash used in financing activities	(5,254)		(13,286)
Net cash used in discontinued operations	(1,816)		(1,914)
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH	874		(2,759)
Cash and restricted cash at beginning of period-continuing operations	56,762		49,458
Cash and restricted cash at beginning of period-discontinued operations	1,816		2,516
Cash and restricted cash at end of period, including discontinued operations	59,452		49,215
Less cash at end of period - discontinued operations	—		(602)
Cash and restricted cash at end of period	$	59,452	$	48,613

See Notes to the Condensed Consolidated Financial Statements.

Table of Contents

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts)

(Unaudited)

NOTE 1 ~~–DESCRIPTION~~– 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 in October 2013 under the laws of the State of Nevada and~~ is currently headquartered in the Dallas Metroplex. Through our network of more than 55 locations, we are the nation’s largest Omnichannel marketplace platform in powersports, leveraging proprietary technology, a broad footprint of physical retail and fulfillment locations, a full line of manufacturer representation, and an experienced and innovative management team to transform the powersports supply chain to better serve customers and create shareholder value.~~Our goal is simple – to be outdoor enthusiasts’ dealer of choice when making any powersports purchase or sale.We will achieve that by (i) offering customers~~ the largest powersports retailer in North America, offering a wide selection of new and used motorcycles, all-terrain vehicles, utility terrain vehicles, personal watercraft, and other powersports products, including parts, apparel, accessories, and aftermarket products from a wide range of manufacturers. Additionally, we offer a full suite of financing, parts, repair, and maintenance services, and our logistics services company, Wholesale Express, LLC ("Wholesale Express"), provides freight brokerage services facilitating transportation for dealers and consumers. As of September 30, 2023, we operated more than 55 retail locations representing 30 brands primarily in the Sun Belt.

We source high quality pre-owned inventory ~~in-store, online or~~via our proprietary cash offer website, which allows us to purchase pre-owned units directly from consumers.

We seek to provide customers with a seamless ~~combination~~experience, broad selection, and access to our specialized and experienced team members, including sales staff and technicians. Our network of ~~both, (ii) providing a fair price and friction free online process for consumers looking~~convenient retail locations allows us to ~~sell their powersports~~offer services throughout the vehicle ~~and (iii) building a lasting relationship~~life cycle.

Of our retail locations, 42 were acquired in 2021 in conjunction with ~~our customers regarding parts, accessories and service.RumbleOn completed its business combinations with~~the purchase of RideNow Powersports ~~the nation’s largest powersports retailer group with 42 retail locations, primarily across the Sunbelt (“RideNow”) on August 31, 2021 (the “RideNow Closing Date”~~("RideNow"). On February 18, 2022 ~~(the “Freedom Closing Date”),~~we completed the ~~Company completed its~~ acquisition of Freedom Powersports, LLC (“("Freedom ~~Powersports”~~Powersports") and Freedom Powersports Real Estate, LLC ~~(“Freedom Powersports - RE” and together~~(together with Freedom Powersports, the "Freedom Entities"). We are headquartered in the Dallas Metroplex and completed our initial public offering in 2017.

Through June 30, 2023, we participated in the automotive industry through our wholly owned wholesale distributor of used automotive inventory, Wholesale, Inc. ("Wholesale Inc."), and our exotics retailer AutoSport USA, Inc., which did business under the name Got Speed and was previously reported in the Automotive segment. We began to wind this business down beginning in the third quarter of 2022. The results of operations of this segment of our business are reported as discontinued operations within these Condensed Consolidated Financial Statements.

Since the acquisitions of RideNow and Freedom Powersports, we have made a ~~retailer group with 13 retail locations in Texas, Georgia, and Alabama (refer~~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~~all our acquisitions from the dates ~~these~~such 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~~consolidated financial statements and ~~Notes~~notes thereto included in ~~the Company’s Annual~~our Current Report on Form ~~10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).~~8-K filed on September 27, 2023. The results of operations for the three and nine months ended September 30, ~~2022~~2023 are not necessarily indicative of the results expected for the entire fiscal year. ~~All intercompany~~Intercompany accounts and material intercompany transactions have been eliminated.

Table of Contents

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 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~~Due to the inherent uncertainty involved with estimates, actual results may differ materially.

Liquidity and Management’s Plans

As described more completely in Note 5, the Company recently took steps to improve its liquidity and temporarily make certain debt covenants more favorable to the Company.

On August 9, 2023, the Company and Oaktree Fund Administration, LLC ("Oaktree") executed Amendment No. 5 to the Oaktree Credit Agreement (each as defined in Note 5), 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 to generate additional liquidity that will be used to repay a portion of the ~~nature~~outstanding balance of the ~~judgments~~Oaktree Credit Agreement. These actions include divesting of certain assets and ~~assumptions made~~completing a proposed $100,000 fully backstopped Rights Offering (as defined below).

The Company completed a sale-leaseback transaction pertaining to eight properties that is more fully discussed in Note 5. This transaction generated net cash proceeds of $48,237 that were used to reduce outstanding debt under the Oaktree Credit Agreement. In addition, the Company has classified RumbleOn Finance loans receivable, that we are actively marketing, as held for sale at September 30, 2023.

On August 9, 2023, we announced our intention to conduct a proposed $100,000 rights offering (the "Rights Offering") to the Company's existing shareholders whereby holders of record of our common stock will be granted a dividend of subscription rights to purchase a designated number of shares of Class B Common Stock at a price to be determined by ~~management, actual results could differ materially~~the Special Committee of the Board. If the Rights Offering is not fully subscribed for, any stockholders who exercise their basic subscription rights will have an over-subscription right to purchase additional shares of Class B Common Stock that would otherwise remain unsubscribed for at the expiration date for the Rights Offering. No fractional shares of Class B Common Stock will be issued in the Rights Offering. The subscription rights are not transferable, and there will be no public market for the subscription rights. The subscription period for the Rights Offering is expected to commence on or about November 13, 2023 and terminate approximately 16 calendar days thereafter, on November 28, 2023. The Company also entered into a Standby Purchase Agreement on August 8, 2023 (the "Standby Purchase Agreement") with Mark Tkach, William Coulter, and Stone House Capital Management, LLC, a Delaware limited liability company ("Stone House" and collectively, the "Standby Purchase Agreement") that provides a binding commitment to purchase up to $100,000 of shares of Class B Common Stock in the aggregate from the Standby Purchasers if the Rights Offering is not fully subscribed. The net proceeds of the Rights Offering are intended to be used to repay a portion of the debt under the Oaktree Credit Agreement and to fund the growth and development of the Company's business, including through possible acquisitions and other corporate purposes.

The Company monitors its working capital and determines what operating adjustments it needs to make in order to stay compliant with its various debt covenants. These adjustments can include a liquidation of inventory, expense reductions, and changes to capital expenditures. Management has considered these ~~judgments~~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 ~~estimates. In particular,~~to comply with the ~~continuing adverse impacts to macro economic conditions, as well as~~amended financial covenants of Amendment No. 5. Management believes that its plans alleviate substantial doubt regarding the Company’s ~~operations, may impact future estimates including, but~~ability to continue as a going concern.

In the event the Company is not ~~limited~~able to ~~inventory valuations, fair value measurements, asset impairment charges~~conduct the Rights Offering or otherwise fails to close the Rights Offering by December 1, 2023, absent extension or further agreement, the Company would not be in compliance with its covenants under the Oaktree Credit Agreement as amended. Under those circumstances, and ~~discount rate assumptions. These conditions include, but are not limited to, recession, inflation, interest rates, unemployment levels,~~in accordance with the ~~state~~terms of the ~~housing market, gasoline prices, consumer credit availability, consumer credit delinquency and loss rates, personal discretionary spending levels, and consumer sentiment about~~Oaktree Credit Agreement, Oaktree would have the ~~economy in general. These conditions~~right to demand payment of the outstanding indebtedness and the ~~economy in general could~~Company would be ~~affected by significant national~~required to satisfy the obligation or ~~international~~negotiate further amendments to the agreement. If this were to occur, the Company would likely seek new or additional sources of financing or seek additional capital through public offerings, either of which may or may not be possible at terms acceptable to the Company, or at all.

Table of Contents

~~events such as~~Correction of an Immaterial Misstatement Related to Prior Periods

During the fourth quarter of 2022, the Company identified a ~~global health crisis (like COVID-19)~~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), ~~acts~~or net income (loss). The misstatement impacted the unaudited Condensed Consolidated Statements of ~~terrorism,~~Operations for the 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 ~~acts~~in the aggregate, to its current or previously issued consolidated financial statements. The Company has corrected the Condensed Consolidated Statements of ~~war. If these economic conditions worsen or stagnate, it can have a material adverse effect on consumer demand as well as~~Operations by decreasing powersports revenue and cost of sales for the ~~availability of credit to finance powersports~~three months ended September 30, 2022 by $19,614 and ~~vehicle purchases, which could adversely impact our business and results of operations.~~for the nine months ended September 30, 2022 by $52,426.

Recent Pronouncements

Adoption of New Accounting Standards

~~In December 2019,~~On January 1, 2023, the ~~FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): 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 effect~~Accounting Standards Update ("ASU") 2016-13, Financial instruments - Credit Losses (Topic 326): Measurement 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 amended 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 permitted, including in interim periods, for any financial statements that have not yet been issued. The Company early adopted these requirements prospectively in the first quarter of 2022. These accounting standardsstandard did not have a material impact on the ~~Company’s financial statements during~~Company's Condensed Consolidated Financial Statements for the nine months ended September 30, ~~2022.~~2023.

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848), and in December 2022 subsequently issued ASU 2022-06, to temporarily ease the potential burden in accounting for reference rate reform. The standards provide optional expedients and exceptions for applying U.S. GAAP to existing contracts, hedging relationships, and other transactions affected by reference rate reform. The standards only apply 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. The standards were effective upon issuance and can generally be applied through December 31, 2024. Our senior secured debt and most of our floorplan arrangements transitioned from LIBOR to the use of the Secured Overnight Financing Rate ("SOFR") as an alternative benchmark rate effective July 1, 2023 under the Oaktree Credit Agreement, as amended. The Company adopted this guidance as of July 1, 2023, and the standard did not have a material impact on the Company's Condensed Consolidated Financial Statements for the nine months ended September 30, 2023.

Accounting Standards Not Yet Adopted

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity, which simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. This ASU requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. This ASU requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU will be effective for us in the first quarter of 2024, and permits the use of either the modified retrospective or fully retrospective method of transition. We are evaluating the timing and effects of our adoption of this ASU on our financial statements.

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.~~

Table of Contents

•~~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.

NOTE 2 - ACQUISITIONS

~~RideNow~~Freedom Transaction

On February 18, 2022, RumbleOn acquired 100% of the ~~RideNow Closing Date, RumbleOn completed its business combination with RideNow (“RideNow~~equity interests of the Freedom Entities (the “Freedom Transaction”). ~~Pursuant~~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, all-terrain vehicles ("ATVs"), utility task vehicles ("UTVs"), scooters, side-by-sides, sport bikes, cruisers, watercraft, and other powersports vehicles in Texas, Alabama, and Georgia. We completed this acquisition to increase our powersports footprint.

We accounted for the ~~Plan~~Freedom Transaction as a business combination. Under the terms of ~~Merger and Equity Purchase Agreement, as amended (the “RideNow Agreement”), on~~ the ~~RideNow Closing Date, there were both mergers and transfers of ownership interests comprising in aggregate~~agreement governing 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 acquiredFreedom Transaction, 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 the 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 Closing Date (as further described~~date of the acquisition. 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

~~Table of Contents~~

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

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

The Company finalized its ~~valuation of~~accounting for consideration transferred, assets acquired, ~~including intangible assets,~~ and ~~has recorded appropriate adjustments to the purchase price allocation~~liabilities assumed during the quarter ended March 31, 2023, in connection with the acquisition of the Freedom Entities. All such adjustments were recorded within the one-year 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~~believed to be reasonable. However, actual results may differ from these estimates. Total goodwill from the acquisition of the Freedom Entities acquisition was $29,359.

All of the assets and liabilities acquired through the acquisition of the Freedom Entities, including goodwill, have been included in the Company’s Powersports reporting segment, as the Freedom Entities business is entirely within the Company’s Powersports reporting segment.

The Company ~~uses~~used 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~~based 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~~represented the fair value at the date of acquisition, and dodid not exceed the amount a ~~third-party~~third party would pay for such assets.

Pro Forma Information for Acquisition (Unaudited)

The Company has included the operating results of the Freedom Entities in its consolidated statements of operations since February 18, 2022. The following ~~amounts represent the final determination~~unaudited pro forma financial information presents consolidated information 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~~

Table of Contents

~~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~~if 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.

had been completed at January 1, 2021. The ~~following table summarizes the provisional consideration transferred by the Company~~pro forma impact to our operating results for the ~~Freedom Transaction:~~

nine months ended September 30, 2023 was not materially different from our reported results.


	~~Cash~~Nine Months Ended September 30, 2022
Pro forma revenue	$	~~70,569~~1,151,060
~~Class B common stock~~	~~26,511~~
~~Acquiree transaction expenses paid by the Company at closing~~	~~157~~
~~Total provisional purchase price consideration~~Pro forma net income (loss) from continuing operations	$	~~97,237~~27,102
Earnings (loss) per share from continuing operations - basic	$	1.71
Earnings (loss) per share from continuing operations - diluted	$	1.70

~~The table below represents, as of September 30, 2022,~~

Red Hills Powersports Acquisition

On March 3, 2023, the ~~provisional determination of the fair value of the identifiable assets~~Company 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, recognizedRed Hills powersports, a single retail location representing 10 original equipment manufacturers ("OEMs") in Tallahassee, Florida, for total consideration approximating $3,300 in cash. This transaction was accounted for as a ~~result of the Freedom Transaction have~~business combination and has been included in the ~~Company’s~~Company's Powersports reporting segment. Pro forma results are not provided for this transaction as the acquisition was not material to our operations.

~~Table of Contents~~


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

The Company assumed notes payable and mortgage notes liabilities of $31,502 on the Freedom Closing Date. 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 following unaudited pro forma financial information presents consolidated information of the Company as if the RideNow Transaction and Freedom Transaction were completed at December 31, 2020.~~

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

~~Table of Contents~~

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.

On September 8, 2023, the Company sold eight properties to a third party for $49,958, which generated net cash proceeds of $48,237 after transaction fees, and concurrently entered into an agreement to lease the properties back from the buyer. The initial term of the lease is 15 years and contains five renewal option terms of five years each, which the Company has currently assumed will be exercised, for a total of 40 years. Due to the control over the locations maintained by the Company, this transaction will be accounted for using the failed sale-leaseback accounting model, with the land and buildings remaining on the Company's balance sheet and the treatment of the lease as a financing obligation. Annual rental expense is $3,747 collectively, with rent increasing annually by the lesser of two times the Consumer Price Index or 2% during the initial term and all option periods. See Note 5 for additional information.

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


Leases	Leases	Classification	September 30, 2022		December 31, 2021		Leases	Classification	September 30, 2023		December 31, 2022
Assets:	Assets:						Assets:
Operating	Operating	Right of use assets	$	161,171	$	133,112	Operating	Right-of-use assets	$	167,236	$	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		$	167,236	$	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	$	24,723	$	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	Operating lease liabilities	135,726		126,695
Finance		Other long-term liabilities	—		2,869
Total lease liabilities			$	150,265	$	137,805
Total							Total		$	160,449	$	150,770

Table of Contents

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%~~


	September 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%

The following table provides information related to the lease costs of finance and operating leases, including an immaterial amount of short-term lease expense, for the three ~~months~~ and nine months ended September 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

~~Table of Contents~~


Lease Expense	Income Statement Classification	Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Operating	Selling, general and administrative expenses	$	8,825	$	7,894	$	25,499	$	22,961
Finance:
Amortization of assets under lease	Depreciation and amortization expense	—		—		—		—
Interest on lease liabilities	Interest expense	—		—		—		—
Total lease costs		$	8,825	$	7,894	$	25,499	$	22,961

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 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	September 30, 2023		December 31, 2022
Assets:
Right of use assets – related party		$	108,527	$	105,264
All other right-of-use assets		58,709		56,558
Total	Right-of-use assets	$	167,236	$	161,822

Liabilities:
Current:
Current portion of lease liabilities – related party		$	14,120	$	14,492
Current portion of lease liabilities – other operating leases		10,603		9,583
Total	Accounts payable and other current liabilities	$	24,723	$	24,075
Non-Current:
Long-term portion of lease liabilities – related party		$	96,568	$	93,713
Long-term portion of lease liabilities – all other leases		39,158		32,982
Total	Operating lease liabilities	$	135,726	$	126,695
Total lease liabilities		$	160,449	$	150,770

Supplemental cash flow information related to operating leases for the nine months ended September 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~~


	Nine Months Ended September 30,
	2023		2022
Cash payments for operating leases	$	21,869	$	18,643
ROU assets obtained in exchange for new operating lease liabilities	$	14,383	$	15,912

Table of Contents

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


Year	Year	Operating Leases		Year	Operating Leases
2022		$	6,726
2023		27,125
Remainder of 2023				Remainder of 2023	$	7,774
2024	2024	26,598		2024	30,318
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	402,166
Less: imputed interest	Less: imputed interest	248,901		Less: imputed interest	(241,717)
Present value of operating lease liabilities	Present value of operating lease liabilities	$	150,265	Present value of operating lease liabilities	$	160,449

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

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

~~Table of Contents~~

September 30, 2022 December 31, 2021
Goodwill $ 266,059 $ 260,922
Other Intangible Assets
Franchise rights - indefinite life $ 339,071 $ 282,350
Other intangibles - definite lived 23,750 22,175
362,821 304,525
Less accumulated amortization 9,941 2,459
Intangible assets, net $ 352,880 $ 302,066


	September 30, 2023		December 31, 2022
Goodwill, gross	$	242,543	$	239,788
Accumulated impairment	(218,646)		(218,646)
Goodwill, net	$	23,897	$	21,142

Other intangible assets:
Franchise rights (indefinite-lived)	$	236,728	$	236,678
Non-compete agreements and other (definite-lived))	23,796		23,795
	260,524		260,473
Less: accumulated amortization	(20,067)		(13,060)
Intangible assets, net	$	240,457	$	247,413

The following summarizes the changes in the carrying amount of goodwill, net, by reportable segment from December 31, ~~2021~~2022 to September 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 Red Hills Powersports	2,600		—		2,600
Purchase accounting adjustments for prior year acquisitions	155		—		155
Balance at September 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 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 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 of 2022, we changed the date of our annual impairment test for goodwill and indefinite-lived intangible assets from December 31~~st ~~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

1411

Table of Contents

Estimated annual amortization expense related to our definite-lived intangible assets:


Remainder of 2023	$	909
2024	2,675
2025	99
Thereafter	—
Total	$	3,683

NOTE 5 – ~~NOTES PAYABLE AND LINES OF CREDIT~~SECURED DEBT

~~Notes payable~~Senior secured debt consisted of the following as of September 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


	September 30, 2023		December 31, 2022
Term Loan Credit Agreement maturing on August 31, 2026. Payments are required quarterly. Interest rate at September 30, 2023 was 13.75%.	$	297,680	$	346,066
Financing obligation	47,933
ROF Consumer Finance Facility maturing on February 4, 2025. Interest rate at September 30, 2023 was 10.42%.	14,606		25,000
Notes payable for leasehold improvements and other	1,528		—
Total principal amount	361,747		371,066
Less: unamortized debt issuance costs	(26,009)		(28,572)
Total secured debt	335,738		342,494
Less: Current portion of secured debt	(14,893)		(3,645)
Secured debt, net of current portion	$	320,845	$	338,849

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

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


	September 30, 2023		December 31, 2022
Floorplan notes payable - trade	$	94,227	$	75,387
Floorplan notes payable - non-trade	192,908		144,789
Floorplan notes payable	$	287,135	$	220,176

Term Loan Credit Agreement

~~On the RideNow Closing Date, the~~The Company ~~entered into~~has 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”).~~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~~were available ~~six (6) months after the RideNow Closing Date and are unavailable~~ to be drawn ~~after~~up to March 1, 2023. Warrants that the ~~eighteen (18) month anniversary~~Company had granted to purchase $40,000 of shares of Class B Common Stock to Oaktree Capital Management, L.P. and its lender affiliates in consideration of the ~~RideNow Closing Date. The Oaktree Credit Agreement also provides for incremental draws for up to an additional $100,000~~initial loan expired in accordance with the terms set forth in the Oaktree Credit Agreement, which may be used for acquisitions or working capital. The loan is reported on the balance sheet as senior secured debt, net of debt discount and debt issuance costs of $26,669, including the fair value of stock warrants of $10,950. April 2023.

Borrowings under the Oaktree Credit Agreement bear interest at a rate per annum equal, at the Company’s option, to either (a) ~~LIBOR~~SOFR (with a floor of 1.00%), plus an applicable margin of 8.25%, which replaced a LIBOR rate effective July 1, 2023 with the fourth amendment to the Oaktree Credit Agreement, 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 Amendment No. 5 Effective Date (as defined below) through June 30, 2024 (which additional interest may be paid in cash or paid in kind). At the Company’s option, ~~one percent (1.00%)~~1.0% of such interest may be payable in kind. ~~The interest rate on~~Interest expense for the three and nine months ended September 30, ~~2022,~~2023 was ~~10.77%.~~$13,587 and $39,882, respectively, which included amortization of $1,758 and $5,018, respectively, related to the discount and debt issuance costs. Interest expense for the three and nine months ended September 30, 2022 ~~and 2021 were~~was $9,605 and $29,305, ~~and $2,666 and $2,666,~~ respectively, which included amortization of ~~$596~~$1,152 and $4,388, ~~and $509 and $509,~~ respectively ~~related to~~for 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 not been determined as of September 30, 2022. As such, 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.

1512

Table of Contents

Obligations under the Oaktree Credit Agreement are secured by a first-priority lien on substantially all of the assets of the Company and its ~~wholly-owned~~wholly owned subsidiaries (the “Subsidiary Guarantors”), although certain assets of the Company and Subsidiary Guarantors are subject to a first-priority lien in favor of ~~floor plan~~floorplan 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.

At June 30, 2023, the Company was not in compliance 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, Oaktree, and the Lenders party thereto executed Amendment No. 5 to the Oaktree 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 ~~providing~~Amendment No. 5, the ~~debt financing~~Company agreed to pay a fee which may be paid in cash or paid in kind. The warrants were issued on August 14, 2023. See Note 8- "Common Stock Warrants" for additional information.

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 existed from such leverage ratio financial covenants as of such date.

Based on the amended terms of the 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 ~~RideNow Transaction,~~12-month period from the issuance of these financial statements. As of September 30, 2023, the Company has classified obligations under the Oaktree Credit Agreement as a non-current liability.

Financing Obligation

On September 8, 2023, certain subsidiaries of the Company (collectively, the "Tenant") and ~~pursuant~~a third party, as the landlord entered into a sale and leaseback transaction related to eight of the Company's properties, which generated net cash proceeds of $48,237. The transaction, however, did not transfer control of the properties to the commitment letter executed on March 15, 2021, 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 change 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.landlord. As a result, the ~~$19,700~~Company accounted for this transaction as a failed sale-leaseback transaction, in which the assets remain on the financial statements and a financing liability was ~~reclassified to additional paid-in-capital and~~recorded for the ~~$10,950 deferred financing charge was reclassified as part of~~proceeds from the ~~debt discount~~sale. The Company incurred $1,787 in transaction costs related to the ~~Oaktree Credit~~sale-leaseback, which are therefore considered debt issuance costs and will be amortized as interest expense over the expected life of the lease.

The resulting Lease Agreement is considered a triple net lease, which requires the Tenant to pay substantially all costs associated with the properties, and has a contractual term of 15 years, with five separate renewal options at the Company's option. The renewal terms are effective to all, but not less than all, of the property subject to the Lease Agreement. The ~~recognition~~Company has assumed an expected lease life of 40 years to include all renewals. The initial annual rent under the Lease Agreement is $3,747, and the lease provides for rent increasing annually by the lesser of two times the Consumer Price Index or 2% during the initial term and all option periods.

The Company imputed the interest rate on the lease based upon the contractual minimum payments and the proceeds from the sale. Based on this, the Company has determined the effective interest rate on the debt to be 7.4%. Any changes in payments due to the annual rental escalations will be recorded as interest expense as incurred.

Table of Contents

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 provide up to $25,000 for the underwriting of consumer loans underwritten by ROF. Credit Suisse AG, New York Branch (“Credit Suisse”) is the managing agent of the ~~warrant liability~~ROF Consumer Finance Facility, and ~~deferred financing charge~~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 ~~reclassification~~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 September 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 ~~warrant liability~~principal balance due under the ROF Consumer Finance Facility as of September 30, 2023. We intend to ~~additional paid-in capital~~sell the loan portfolio held at RumbleOn Finance and pay off the ~~reclassification~~outstanding balance during the fourth quarter of 2023. As of September 30, 2023, the ~~deferred financing charge to~~outstanding balance due under the ROF Consumer Finance Facility was $14,606, which is included in the current portion of long-term debt ~~discount~~and line of credit in the accompanying Condensed Consolidated Balance Sheets.

The loans receivable held by RumbleOn Finance, which are ~~non-cash items.~~recorded at the lower of cost or fair value and which approximated $21,555 are classified as loan receivable assets held for sale in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2023.

~~Floor Plan~~Floorplan 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~~Floorplan 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~~Floorplan 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~~floorplan notes ~~payable-~~payable - trade are reported as operating cash flows and changes in ~~floor plan~~floorplan 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~~floorplan notes payable borrowings. The inventory balance in its entirety also serves as collateral under the Oaktree Credit Agreement.

~~On August 31, 2021, Wholesale, Inc. entered into~~The Company has a Floorplan Line with ~~AFC~~J.P. Morgan (the ~~“AFC~~“J.P. Morgan Credit ~~Line”~~Line") ~~to replace~~that terminates October 25, 2024 and provides for an ~~existing line~~interest rate of ~~credit. Advances~~SOFR plus 2.0% based on the Company's fixed charged coverage ratio, as defined in the agreement that governs it. As of September 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 $31,215. Interest expense on the ~~Wholesale Floorplan Lines~~J.P. Morgan Credit Line for the three and nine months ended September 30, ~~2022~~2023 was $474 and ~~2021 were $275 and $1,032, $325 and $969,~~$1,282, respectively. ~~The balance of the AFC Credit Line as~~

As of September 30, ~~2022~~2023, the Company was in compliance with the covenant terms of its floorplan agreements.

Restricted Cash

Amounts included in restricted cash are primarily comprised of the deposits required under the Company's various Floorplan Lines and ~~2021 was $20,508 and $28,336, respectively.~~

~~Line of Credit -~~ RumbleOn Finance line of credit.

~~ROF SPV I, LLC (“ROF SPV”~~

Table of Contents

NOTE 6 – CONVERTIBLE NOTES

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


	September 30, 2023						December 31, 2022
	Principal Amount		Debt Discount and Issue Costs		Carrying Amount		Principal Amount		Debt Discount and Issue Costs		Carrying Amount
Convertible senior notes	$	38,750	$	(4,554)	$	34,196	$	38,750	$	(6,860)	$	31,890
Less: Current portion	—		—		—		—		—		—
Long-term portion	$	38,750	$	(4,554)	$	34,196	$	38,750	$	(6,860)	$	31,890

Convertible Senior Notes

The convertible senior notes (the "Notes") were issued on January 14, 2020 pursuant to an Indenture (the "Indenture"), by and between the Company and the trustee. The Indenture includes customary representations, warranties and covenants by the Company. The Notes bear interest at 6.75% per annum, payable semiannually on January 1 and July 1 of each year. 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 ~~indirect subsidiary~~initial conversion price of $40.00 per share. The conversion rate is subject to adjustment in certain events as set forth in the Indenture but will not be adjusted for any accrued and unpaid interest. In addition, upon the occurrence of a "make-whole fundamental change", the Company will, in certain circumstances, increase the conversion rate by a 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 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 Notes) or beneficial owner of Notes shall have the right to receive shares of the Class B Common Stock upon conversion to the extent that, following receipt of such shares, such holder or beneficial owner would be the beneficial owner of more than 4.99% of the outstanding shares of the Class B Common Stock.

The Notes are subject to events of default typical for this type of instrument. If an event of default, other than an event of default in connection with certain events of bankruptcy, insolvency or reorganization of the Company ~~entered into~~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 the outstanding Notes by notice to the Company and the Trustee, may declare 100% of the 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 Company may redeem for cash all or any portion of the Notes, at its option, if the last reported sale price of the Class B Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a ~~$25,000 secured loan facility on February 4, 2022 primarily~~redemption price equal to ~~provide~~100.0% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the ~~purchase by ROF SPV~~Notes.

The Notes rank senior in right of ~~consumer finance loans originated by RumbleOn Finance, LLC (“ROF”),~~payment to any of the Company’s ~~consumer finance subsidiary. Borrowings under the facility generally bear interest at a rate per annum equal~~indebtedness that is expressly subordinated in right of payment to the ~~lesser~~Notes; equal in right of ~~SOFR plus an applicable margin of 5%.~~

~~ROF SPV may prepay the full principal balance~~payment to any of the ~~loan and all other obligations and terminate~~Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the loan agreement at any time after 24 months following the closing date (the “Revolving Period”), so long as, ROF SPV provides 30 days written notice. Additionally, ROF SPV may prepay the loan in certain circumstances where a loan portfolio is sold, so long as a 1% fee is paidCompany’s secured indebtedness to the ~~lenders. ROF SPV has drawn $22,925 on~~extent of the ~~secured loan facility as~~value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of current or future subsidiaries of the Company (including trade payables). Interest expense recognized with respect to the Notes for the three and nine months ended September 30, ~~2022.~~

~~PPP Loans~~

~~On May 1, 2020, the Company entered into loan agreements~~2023 and ~~related promissory notes (the “SBA Loan Documents”) to receive U.S. Small Business Administration Loans (the “SBA Loans”) pursuant to the Paycheck Protection~~2022 was as follows:

1615

Table of Contents

Program (the “PPP”) established under the CARES Act, in the aggregate amount of $5,177 (the “Loan Proceeds”). The balance of the PPP loans was forgiven by the SBA during the quarter ended September 30, 2022.


	Three Months Ended September 30,				Nine Months Ended September 30
	2023		2022		2023		2022
Contractual interest expense	$	657	$	657	$	1,972	$	1,970
Total interest expense	799		672		2,296		1,934
	$	1,456	$	1,329	$	4,268	$	3,904

~~Derivative Liability~~

In connection with the convertible senior notes issued on January 10, 2020 (the “New Notes”), a derivative liability was recorded at issuance with an interest make-whole provision of $20,673 based on a lattice model using a stock price of $14.60, and estimated volatility of 55.0% and risk-free rates over the entire 10-year yield curve.

The change in value of the derivative liability for the three and nine months ended September 30, 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 liability as of September 30, 2022 and December 31, 2021 was $26 and $66, respectively.

NOTE 67 – ~~STOCKHOLDER EQUITY~~STOCK-BASED COMPENSATION

~~Share-Based Compensation~~

~~On June 30, 2017,~~The Company has a shareholder-approved stock incentive plan (as amended, 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 30, ~~2022,~~2023, the number of shares authorized for issuance under the Plan was ~~2,700,000~~3,291,461 shares of Class B ~~common stock. In connection with,~~Common Stock. RSUs and on the same day as the closing of the RideNow Transaction, the Company accelerated the vesting of and waived any market-based vesting hurdles for all then outstanding RSU 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 the three and nine months ended September 30, 2021.~~

~~The Company estimates the fair value of all awards granted~~options awarded under the Plan ~~on the date~~are generally service/time-based and vest over a period of grant. In the case of time or service based RSU awards, the fair value is based on the share price of the Class B common stock on the date of the award, 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 benefitup to ~~the estate of Mr. Steven R. Berrard, the Company’s former Chief Financial Officer and director.~~three years.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Restricted Stock Units	Restricted Stock Units	$	2,605	$	24,722	$	7,237	$	27,142	Restricted Stock Units	$	3,077	$	2,606	$	10,898	$	7,237
Stock Options	Stock Options	—		8		—		23		Stock Options	—		—		—		—
Total stock-based compensation	Total stock-based compensation	$	2,605	$	24,730	$	7,237	$	27,165	Total stock-based compensation	$	3,077	$	2,606	$	10,898	$	7,237

As of September 30, ~~2022,~~2023, there ~~was 812,386~~were 820,916 unvested RSUs outstanding. The total unrecognized compensation expense related to outstanding equity awards was approximately ~~$19,120,~~$9,914, which the Company expects to recognize over a weighted-average period of approximately 1519 months. ~~Total unrecognized equity-based compensation expense will be adjusted for actual forfeitures.~~

~~Security Offering~~

~~As part of the Freedom Transaction, the Company issued~~Pending Stock Option Grant to ~~Freedom's security holders 1,048,718 shares of RumbleOn Class B common stock totaling $26,511.~~New Chief Executive Officer

In connection with ~~providing~~Michael W. Kennedy's appointment as Chief Executive Officer, the ~~debt financing~~Company granted Mr. Kennedy an award of performance-based stock options to purchase 825,000 shares ("Options") of the Company's Class B Common Stock (the "Performance Option Award"), which will vest in installments over a maximum period of five years starting on the grant date, subject to meeting certain stock performance thresholds ranging from $12.00 to $40.00 for a period of 30 days and Mr. Kennedy's continued service with the ~~RideNow Transaction,~~Company through each such vesting date. The award was granted as an inducement to Mr. Kennedy's entry into employment and ~~pursuant~~was approved by the Compensation Committee of the Company's Board of Directors, in accordance with Nasdaq Listing Rule 5635(c)(4). The award was granted outside of the Plan, as amended. The Performance Option Award will be granted two trading days after the completion of the Rights Offering and the exercise price per share of the Options will be equal to the ~~commitment letter executed~~closing price of the Class B Common Stock on ~~March 15, 2021,~~the day before the grant, subject to the terms in Mr. Kennedy's employment agreement and award agreement .

NOTE 8 – COMMON STOCK WARRANTS

In connection with entering into Amendment No. 5, on August 14, 2023 the Company issued warrants to Oaktree and the ~~Warrant~~Lenders to purchase ~~$40,000 of~~up to 1,212,121 shares of Class B ~~common stock.~~ Common Stock at an exercise price of $12.00 per share. Such warrants are exercisable for up to five years following the date of issuance.

The ~~initial warrant liability and deferred financing charge recognized was $10,950~~Company has classified the warrants as equity in accordance with ~~the warrant liability subject to remeasurement at each balance sheet date and any change in fair value recognized in the Condensed Consolidated Statements of Operations.~~ASC 815. The fair value of the ~~Warrant~~warrants is being amortized as interest expense over the term of the loan. The fair value of the warrants was ~~estimated~~determined at issuance 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~~Black-Scholes pricing model with 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~~following estimates:

1716

Table of Contents

~~June 30, 2021, the~~


	August 14, 2023 Warrants Issued
Exercise price per share	$	12.00
Stock price on date of issuance	$	7.20
Fair value per share	$	5.01
Volatility	100		%
Expected term (years)	5
Risk-free interest rate	4.27		%
Dividend yield	—		%
Total fair value at issuance date	$	6,100

In addition, warrants issued in conjunction with a previous financing agreement to purchase 1,048 shares of the ~~warrant liability~~Company's Class B Common Stock at an exercise price of $143.13 per share expired on October 30, 2023.

NOTE 9 – INCOME TAXES

The Company's benefit from income taxes on continuing operations for the three months and nine months ended September 30, 2023 was ~~increased $2,224~~$3,556 and $9,706, respectively, representing effective income tax rates of 17.7% and 17.4%, respectively. The difference between the federal income tax rate of 21.0% and RumbleOn’s overall income tax rate for the three and nine months ended September 30, 2023 was primarily due to ~~$13,174. On August 31, 2021,~~ the ~~fair value~~tax effect of non-deductible executive compensation, non-deductible interest expense, and discrete tax impacts of stock compensation vesting in the ~~warrant liability~~quarter.

The Company's provision for income taxes on continuing operations for the three months and nine months ended September 30, 2022 was ~~increased $6,526 to $19,700. Upon closing~~$678 and $8,166, respectively, representing effective income tax rates of 15.4% and 23.3%, respectively. The difference between 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-capitalfederal income tax rate of 21.0% and the ~~$10,950 deferred financing charge~~Company’s overall income tax rate for the three months and nine months ended September 30, 2022 was ~~reclassified~~primarily due to income tax expense on non-deductible expenses, valuation allowance expense associated with state net operating losses, and state income taxes, partially offset by a benefit associated with the change in the Company's effective state income tax rate.

NOTE 10 – EARNINGS (LOSS) PER SHARE

The Company computes basic and diluted earnings (loss) per share in conformity with the two-class method required for participating securities. Basic earnings (loss) per share from continuing operations is calculated by dividing income (loss) from continuing operations, net, by the weighed-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share from continuing operations is computed giving effect to all dilutive potential common stock equivalents outstanding for the period. Per share calculations pertaining to discontinued operations use the same number of shares as ~~part~~are used in the calculations for continuing operations.

For purposes of these calculations, warrants to purchase 1,212,121 shares of Class B Common Stock having an exercise price of $12.00 per share and warrants to purchase 1,048 shares of Class B Common Stock having an exercise price of $143.13 were considered common stock equivalents that were antidilutive for the ~~debt discount related~~periods ended September 30, 2023. Warrants that expired earlier in 2023 were also antidilutive for all periods that they were outstanding. Unvested RSUs have been included in the calculation of diluted earnings per share to the ~~Oaktree Credit Agreement.~~extent the shares would be dilutive. Additionally, the Company’s senior unsecured convertible notes were antidilutive for the periods ended September 30, 2023 and 2022.

NOTE 711 – SUPPLEMENTAL CASH FLOW INFORMATION

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

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

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

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

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

~~NOTE 8 – INCOME TAXES~~

The Company’s effective tax rate for the three and nine months ended September 30, 2022 was 14.0% and 22.8%, respectively. The effective tax rate for the three and nine months ended September 30, 2021 was 32.1% and 26.0%, 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 months ended September 30, 2022 was primarily due to income tax benefit from non-taxable PPP loan forgiveness, offset by income tax expense on non-deductible expenses and state income taxes.

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

~~NOTE 9– EARNINGS PER SHARE~~

The Company computes basic and diluted earnings per share attributable to common stockholders in conformity with the two-class method required for participating securities. Basic earnings per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighed-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders is computed giving effect to all potential dilutive common stock equivalents outstanding for the period.

For purposes of this calculation, warrants to purchase 1,212,121 shares of Class B common stock having an exercise price of $31.50 per share are considered common stock equivalents which are antidilutive at September 30, 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 ended September 30, 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, Class B Common Stock, and Series B Preferred Stock.

1817

Table of Contents


	Nine Months Ended September 30,
	2023		2022
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	54,498	$	36,021
Cash paid for taxes	$	894	$	6,304
Non-cash Investing and Financing Activities:
Capital expenditures and technology development costs included in accounts payable and other current liabilities	$	87	$	1,500
Capital expenditures included in line of credit and notes payable	$	48,896	$	—
Fair value of warrants issued as financing costs	$	6,100	$	—
Fair value of Class B Common Stock issued for Freedom Transaction	$	—	$	26,511

NOTE 1012 – RELATED PARTY TRANSACTIONS

~~Promissory Notes~~

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

~~August 2021 Offering~~

~~Denmar Dixon, a director 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.~~

RideNow Leases

~~In connection with the RideNow Transaction, the~~The Company ~~entered into~~has related party leases for 24 ~~properties.~~properties consisting of dealerships and offices in connection with the RideNow acquisition. Each ~~such~~related party lease is with a wholly owned subsidiary of the Company as the tenant and an entity controlled by Mark Tkach, our former Interim Chief Executive Officer and a ~~former~~ director of the Company until November 1, 2023, and ~~executive officer~~William Coulter, a director 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 these leases was $4,625 and $13,855 and $4,457 and $13,372, during the ~~right-of-use assets~~three and ~~lease liabilities arising from the RideNow leases are included 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 officers 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.~~2023 and 2022, respectively, and is included in selling, general and administrative ("SG&A") expenses in the Condensed Consolidated Statement of Operations.

Payments to RideNow Management, LLLP

The Company ~~made~~paid $2 and ~~$233 in payments~~$6 to RideNow Management, LLLP, an entity owned equally by ~~two former directors~~Messrs. Coulter and ~~executive officers~~Tkach, during the three and nine months ended September 30, ~~2022.~~

~~Beach Agreement~~

~~On December 31, 2021,~~2023 and 2022, respectively. In addition, the Company ~~acquired all~~paid off a loan to RideNow Management LLLP of approximately $673 on June 27, 2022.

Payments to Coulter Management Group, LLLP

The Company paid $62 and $72, and $5 and $242 to Coulter Management Group, LLLP ("Coulter Management"), an entity owned by Mr. Coulter, during the ~~business assets of RNBeach, LLC (“Beach”) from former directors~~three and ~~executive officers~~nine months ended September 30, 2023 and 2022, respectively. These payments were made to cover certain proportionate costs of the ~~Company.~~ T~~he total purchase price to acquire all~~Company, including health plan and IT contract expenses, that were shared among Coulter Management and the ~~business assets~~RideNow entities for a period of ~~Beach was approximately $5,528, and cash paid was approximately $5,368.~~time after the RideNow Transaction date.

Bidpath Software License

On January 19, 2022, the Audit Committee approved, and the Company entered into two agreements with Bidpath Incorporated ("Bidpath"), a company owned by Adam Alexander, a former director of the Company, that ~~provides~~provided the Company with (i) a perpetual, non-exclusive license to the then-current source code, as well as all future source code, of foundational technology for our inventory management platform, and (ii) support and maintenance services. The Company has made cash payments totaling $3,600 for the license during the nine months ended September 30, 2022. The Company pays, on monthly basis since the agreement was signed, $30 for the support and maintenance services. The initial term iswas thirty-six (36) months but ~~can~~could 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. The contract was terminated effective August 31, 2023, and the Company recognized a $2,610 impairment for the remaining amount of capitalized costs.

The Company made no cash payments for the license during the three and nine months ended September 30, 2023 and $0 and $3,600 during the three months and nine months ended September 30, 2022, respectively. The Company also paid monthly platform development costs of $30 while the contract was in effect.

Table of Contents

Ready Team Grow, LLC

The Company paid $0 and $100, and $52 and $162 to Ready Team Grow, LLC for employee recruiting services during the three and nine months ended September 30, 2023 and 2022, respectively. Ready Team Grow, LLC is an entity owned by the domestic partner of the Company’s former Chief Executive Officer, Mr. Chesrown.

Death Benefit to a former Chief Financial Officer ("CFO") and Director

As approved by the Audit Committee of the Board of Directors in September 2021, the Company is paying a death benefit to the estate of a former CFO and director of the Company comprised of (1) $1,338, divided into 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 ("CEO") each quarter over the same period ending June 30, 2024, if and when paid to the CEO in accordance with the Company’s Executive Incentive Program. A total of $115 and $474, and $262 and $778 in cash payments were made under these awards during the three and nine months ended September 30, 2023 and 2022, respectively.

Employment of Immediate Family Members

Mr. Coulter had one immediate family member who was employed by the Company until August 30, 2022. This family member received aggregate gross pay of approximately $50 and $200 for the three and nine months ended September 30, 2022, respectively. No payments have been made in 2023.

Mr. Tkach has two immediate family members that were, or continue to be, employed by the Company. 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 nine months ended September 30, 2022, respectively. No payments were made during 2023. The other family member received aggregate gross pay of approximately $137 and $331, and $89 and $239 during the three and nine months ended September 30, 2023 and 2022, respectively, and cumulative grants of restricted stock units representing 42,273 shares of Class B Common Stock.

Table of Contents

NOTE 1113 - 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~~ for segment reporting: (1) ~~Powersports,~~powersports and (2) ~~Automotive,~~vehicle logistics. Our powersports segment consists principally of the sale of new and ~~(3) Vehicle Logistics. Our Powersports segment offers~~used motorcycles ~~all-terrain vehicles, utility terrain vehicles, personal watercraft,~~ and other powersports ~~products,~~vehicles, service parts ~~apparel,~~ and accessories, together with the associated costs to source and ~~related finance~~service the vehicles, parts and ~~insurance products.~~accessories. 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.

~~Table of Contents~~

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


	Powersports		Vehicle Logistics		Eliminations (1)		Total
Three Months Ended September 30, 2023

Revenue	$	324,147	$	14,005	$	(41)	$	338,111
Operating income (loss)	$	(1,702)	$	1,415	$	—	$	(287)
Depreciation and amortization	$	7,265	$	10	$	—	$	7,275
Interest expense	$	(19,828)	$	—	$	—	$	(19,828)

Three Months Ended September 30, 2022

Revenue (2)	$	365,726	$	15,527	$	(589)	$	380,664
Operating income (loss)	$	12,734	$	1,398	$	(65)	$	14,067
Depreciation and amortization	$	6,544	$	10	$	—	$	6,554
Interest expense	$	(12,209)	$	—	$	—	$	(12,209)

Nine Months Ended September 30, 2023
Revenue	$	1,011,999	$	43,605	$	(378)	$	1,055,226
Operating income (loss)	$	(4,506)	$	4,325	$	—	$	(181)
Depreciation and amortization	$	17,241	$	30	$	—	$	17,271
Interest expense	$	(55,756)	$	—	$	—	$	(55,756)
Change in derivative liability	$	—	$	—	$	—	$	—

Nine Months Ended September 30, 2022
Revenue (2)	$	1,084,480	$	45,774	$	(2,904)	$	1,127,350
Operating income (loss)	$	64,183	$	3,746	$	25	$	67,954
Depreciation and amortization	$	16,842	$	30	$	—	$	16,872
Interest expense	$	(35,621)	$	(1)	$	—	$	(35,622)
Change in derivative liability	$	39	$	—	$	—	$	39

~~The following table summarizes revenue,~~Total assets by operating ~~income (loss), depreciation 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)
segment at were as follows:


	Powersports		Vehicle Logistics		Eliminations (1)		Continuing Operations		Discontinued Operations		Total
Total assets at September 30, 2023	$	1,926,226	$	2,837	$	(870,046)	$	1,059,017	$	35	$	1,059,052
Total assets at December 31, 2022	$	1,872,201	$	3,857	$	(860,247)	$	1,015,811	$	11,399	$	1,027,210

(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)Revenue for Powersports has been adjusted by $19.6 million and $52.4 million, respectively, for the three and nine months ended September 30, 2022. See "Correction of an Immaterial Misstatement Related to Prior Periods" in Note 1.

Table of Contents

NOTE 14 - DISCONTINUED OPERATIONS AND LOAN RECEIVABLE ASSETS HELD FOR SALE

Discontinued Operations

In the fourth quarter of 2022, the Company announced plans to wind down its automotive business. As of September 30, 2023, the Company had 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.

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.

Discontinued operations for three and nine months ended September 30, 2023 and September 30, 2022 consisted of the following:


	Three-Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Income (loss) from operations of discontinued Automotive segment	$	—	$	(858)	$	(1,100)	$	(1,151)
Income tax provision (benefit)	—		(182)		(149)		(420)
Income (loss) from discontinued operations	$	—	$	(676)	$	(951)	$	(731)

The following were the carrying amounts of the assets and liabilities of discontinued operations:


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

Accounts payable and accrued expenses	$	513	$	3,137
Vehicle floorplan notes payable	—		5,254
Accrued interest payable	—		43
Total liabilities of discontinued operations	$	513	$	8,434

Table of Contents

Loans Receivable Held For Sale

As approved by our Board of Directors, the Company plans to sell the loan portfolio held by RumbleOn Finance. Upon the classification of the loans receivable as held for sale, the allowance for credit losses was reversed and a valuation allowance was recorded. To mark the loan receivable assets down to the lower of cost or fair value, the Company recorded a valuation allowance of $5,971 in the nine months ended September 30, 2023. This charge was classified as SG&A expenses. The fair value of the loan receivable assets is classified as loan receivable assets held for sale in the accompanying Condensed Consolidated Balance Sheets. 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 $14,606 and is included in current portion of long-term debt and line of credit in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2023. We anticipate the sale of the loan portfolio to be completed during the fourth quarter of 2023.

NOTE 1215 – SUBSEQUENT ~~EVENTS~~EVENT

~~Used Powersports Inventory Financing Credit Facility with J.P. Morgan~~New Chief Executive Officer

~~On October 26, 2022,~~Michael W. Kennedy became Chief Executive Officer and director of the Company ~~entered into~~effective as of November 1, 2023. Mr. Kennedy, age 56, previously served as the President and Chief Executive Officer of Vance & Hines, LLC from April 2019 until October 2023. Prior to that Mr. Kennedy served as Founder and Managing Partner of MWK Partner Advisors from December 2017 until March 2019. Mr. Kennedy is an accomplished Powersports industry veteran with over three decades of experience in strategy, commercial operations, financial management, and manufacturing at leading Powersports companies. See Note 7 - "Stock-Based Compensation".

In connection with Mr. Kennedy’s appointment as Chief Executive Officer and effective as of the same date, Mr. Tkach resigned from his roles as Interim Chief Executive Officer and as a ~~$75,000 used powersports inventory financing credit facility with J.P. Morgan.~~director of the Company. Upon his resignation, Mr. Tkach was appointed to serve as a Board observer.

~~Strategic Alternatives for Automotive Segment~~

On November 2, 2022, the Board of Directors reached a decision to explore strategic alternatives for the Company's automotive segment. The Company intends to continue operating the automotive segment while the review is ongoing, and does not have an estimate on the impact of a potential transaction or divestiture on future results.

~~Table of Contents~~

~~Global Settlement with Former RideNow Owners~~

2122

Table of Contents

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~~the consolidated financial statements and notes thereto included in our Current Report on Form 8-K filed on September 27, 2023, and 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 and Current Report on Form 8-K filed on September 27, 2023 for a discussion of these risks and uncertainties.

Overview

RumbleOn is the ~~nation’s first technology-based Omnichannel marketplace~~largest powersports retailer in ~~powersports, leveraging proprietary technology to transform the powersports supply chain from acquisition~~North America, offering a wide selection of supply through distribution of retail and wholesale. RumbleOn provides an unparalleled technology suite and ecommerce experience, broad footprint 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.

~~We buy and sell~~ new and used motorcycles, all-terrain vehicles, ~~through multiple company-owned websites~~utility terrain vehicles, personal watercraft, and ~~affiliate channels, as well as~~other powersports products, including parts, apparel, accessories, and aftermarket products from a wide range of manufacturers. Additionally, we offer a full suite of financing, parts, repair, and maintenance services, and our logistics services company, Wholesale Express, LLC ("Wholesale Express"), provides freight brokerage services facilitating transportation for dealers and consumers. As of September 30, 2023, we operated more than 55 retail locations representing 30 brands primarily in the Sun Belt.

We source high quality pre-owned inventory via our proprietary cash offer ~~tool~~website, which allows us to purchase pre-owned units directly from consumers.

We seek to provide customers with a seamless experience, broad selection, and access to our specialized and experienced team members, including sales staff and technicians. Our network of ~~55+ company-owned~~convenient retail locations as of September 30, 2022, primarily located in the Sunbelt. Deepening our presence in existing markets and expanding into new markets through strategic acquisitions helps perpetuate our flywheel. Our cash offer technology brings in high quality inventory, which attracts more riders and drives volume in used unit sales. This flywheel enablesallows us to ~~quickly and effectively gain market share.~~offer services throughout the vehicle life cycle. 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~~Of our retail locations, 42 were acquired in 2021 in conjunction with the purchase of RideNow Powersports ("RideNow"). On February 18, 2022 we completed the acquisition of Freedom Powersports, LLC ("Freedom Powersports") and Freedom Powersports Real Estate, LLC (together with Freedom Powersports, the "Freedom Entities"). We are headquartered in the Dallas Metroplex and completed our initial public offering in 2017.

Through June 30, 2023, we participated in the automotive industry through our wholly owned wholesale distributor of used automotive inventory, Wholesale, Inc. ("Wholesale Inc."), and our exotics retailer AutoSport USA, Inc., which did business under the name Got Speed. We began winding this business down in the third quarter of 2022. The results of operations of this segment of our business are reported as discontinued operations in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.

Since the acquisitions of RideNow and Freedom Powersports, we have made a handful of smaller acquisitions. We plan to continue to grow our powersports footprint through strategic acquisitions.

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.

Table of Contents


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

~~RumbleOn leverages technology~~Recent Developments

New Chief Executive Officer

Michael W. Kennedy became Chief Executive Officer and ~~data~~director of the Company effective as of November 1, 2023. Mr. Kennedy, age 56, previously served as the President and Chief Executive Officer of Vance & Hines, LLC from April 2019 until October 2023. Prior to ~~streamline~~that Mr. Kennedy served as Founder and Managing Partner of MWK Partner Advisors from December 2017 until March 2019. Mr. Kennedy is an accomplished Powersports industry veteran with over three decades of experience in strategy, commercial operations, ~~improve profitability,~~financial management, and ~~drive lifetime engagement by~~manufacturing at leading Powersports companies.

In connection with Mr. Kennedy’s appointment as Chief Executive Officer and effective as of the same date, Mark Tkach resigned from his roles as Interim Chief Executive Officer and as a director of the Company. Upon his resignation, Mr. Tkach was appointed to serve as a Board observer.

Rights Offering

On August 9, 2023, we announced our intention to conduct a proposed $100,000 rights 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(the "Rights Offering") to the ~~most comprehensive powersports vehicle offerings, including the ability to buy, sell, trade, and finance online, in store at any~~Company's existing shareholders whereby holders of record of our ~~bricks-and-mortar locations,~~common stock will be granted a dividend of subscription rights to purchase a designated number of shares of Class B Common Stock at a price to be determined by the Special Committee of the Board. If the Rights Offering is not fully subscribed for, any stockholders who exercise their basic subscription rights will have an over-subscription right to purchase additional shares of Class B Common Stock that would otherwise remain unsubscribed for at the expiration date for the Rights Offering. No fractional shares of Class B Common Stock will be issued in the Rights Offering. The subscription rights are not transferable, and there will be no public market for the subscription rights. The subscription period for the Rights Offering is expected to commence on or ~~both. RumbleOn offers financing solutions for consumers, trusted physical retail~~about November 13, 2023 and ~~service locations, online or in-store instant cash offers,~~terminate approximately 16 calendar days thereafter, on November 28, 2023. The Company also entered into a Standby Purchase Agreement on August 8, 2023 (the "Standby Purchase Agreement") with Mark Tkach, William Coulter, and ~~access~~Stone House Capital Management, LLC, a Delaware limited liability company ("Stone House" and collectively, the "Standby Purchase Agreement") that provides a binding commitment to ~~pre-owned inventory. We also offer apparel, parts, service,~~purchase up to $100,000 of shares of Class B Common Stock in the aggregate from the Standby Purchasers if the Rights Offering is not fully subscribed. The net proceeds of the Rights Offering are intended to be used to repay a portion of the debt under the Oaktree Credit Agreement and ~~accessories. In addition~~ to ~~our powersports operations, we operate in complementary businesses~~fund the growth and development of the Company's business, including ~~the brokerage of vehicle transportation~~through possible acquisitions and ~~the wholesale distribution automotive business.~~other corporate purposes.

~~Outlook~~

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

2224

Table of Contents

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~~date of their acquisition ~~dates~~ 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~~

~~Revenue~~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~~

~~Table of Contents~~

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”).~~costs. 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.~~accessories. 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.

Table of Contents

Vehicles Sold

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

Total Gross Profit per ~~Unit~~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.

~~Table of Contents~~

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~~third-party vehicles transported.

Table of Contents

Results of Continuing Operations

Three and Nine ~~months~~Months ended September 30, ~~2022~~2023 Compared to September 30, ~~2021~~2022

Total Company Metrics (dollars in ~~thousands except per unit)~~thousands)


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 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	$	235,132	$	271,877	$	(36,745)	$	738,136	$	806,382	$	(68,246)
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	59,727		62,216		(2,489)		184,205		182,268		1,937
Finance and insurance, net	Finance and insurance, net	31,588		6,180		25,408		95,906		6,998		88,908		Finance and insurance, net	29,288		31,569		(2,281)		89,658		95,830		(6,172)
Vehicle Logistics	Vehicle Logistics	15,002		10,369		4,633		42,870		32,788		10,082		Vehicle Logistics	13,964		15,002		(1,038)		43,227		42,870		357
Total revenue	Total revenue	$	470,272	$	221,214	$	249,058	$	1,476,287	$	493,823	$	982,464	Total revenue	$	338,111	$	380,664	$	(42,553)	$	1,055,226	$	1,127,350	$	(72,124)
Gross Profit	Gross Profit													Gross Profit
Powersports	Powersports	$	50,246	$	14,997	$	35,249	$	158,491	$	24,114	$	134,377	Powersports	$	32,344	$	50,246	$	(17,902)	$	104,045	$	158,491	$	(54,446)
Automotive		1,883		6,525		(4,642)		10,190		22,905		(12,715)
PSA														PSA	26,974		29,142		(2,168)		84,663		85,795		(1,132)
Finance and insurance, net														Finance and insurance, net	29,288		31,569		(2,281)		89,658		95,830		(6,172)
Vehicle Logistics	Vehicle Logistics	3,486		2,455		1,031		9,139		6,829		2,310		Vehicle Logistics	3,339		3,486		(147)		10,281		9,138		1,143
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	$	91,945	$	114,443	$	(22,498)	$	288,647	$	349,254	$	(60,607)

Total Operating Expenses	Total Operating Expenses	$	102,755	$	63,224	$	39,531	$	291,339	$	95,968	$	195,371	Total Operating Expenses	$	92,232	$	100,376	$	(8,144)	$	288,828	$	281,300	$	7,528
Operating Income (Loss)	Operating Income (Loss)	$	13,591	$	(22,702)	$	36,293	$	68,183	$	(24,757)	$	92,940	Operating Income (Loss)	$	(287)	$	14,067	$	(14,354)	$	(181)	$	67,954	$	(68,135)
Income (Loss) from Continuing Operations, net														Income (Loss) from Continuing Operations, net	$	(16,484)	$	3,715	$	(20,199)	$	(46,023)	$	26,944	$	(72,967)
Net Income (Loss)	Net Income (Loss)	$	3,039	$	(22,544)	$	25,583	$	26,213	$	(30,385)	$	56,598	Net Income (Loss)	$	(16,484)	$	3,039	$	(19,523)	$	(46,974)	$	26,213	$	(73,187)
Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	25,669	$	3,616	$	22,053	$	101,416	$	6,679	$	94,737	Adjusted EBITDA (1)	$	13,176	$	26,117	$	(12,941)	$	47,600	$	101,078	$	(53,478)

_________________________

(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) to Adjusted EBITDA .

2527

Table of Contents

Powersports Metrics (dollars in thousands except per unit)


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 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	$	159,573	$	165,373	$	(5,800)	$	501,513	$	491,187	$	10,326
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	68,736		100,781		(32,045)		215,562		299,809		(84,247)
Wholesale														Wholesale	6,823		5,724		1,099		21,061		15,386		5,675
Total used vehicles	Total used vehicles	113,932		40,349		73,583		334,992		78,364		256,628		Total used vehicles	75,559		106,505		(30,946)		236,623		315,195		(78,572)
Finance and insurance, net	Finance and insurance, net	31,653		6,180		25,473		95,971		6,998		88,973		Finance and insurance, net	29,288		31,569		(2,281)		89,658		95,830		(6,172)
Parts, service, accessories		62,216		16,075		46,141		182,268		16,075		166,193
Parts, service and accessories														Parts, service and accessories	59,727		62,216		(2,489)		184,205		182,268		1,937
Total revenue	Total revenue	$	385,361	$	105,547	$	279,814	$	1,137,048	$	144,380	$	992,668	Total revenue	$	324,147	$	365,663	$	(41,516)	$	1,011,999	$	1,084,480	$	(72,481)

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	$	22,081	$	32,071	$	(9,990)	$	74,440	$	100,549	$	(26,109)
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	10,871		18,691		(7,820)		31,216		57,538		(26,322)
Wholesale														Wholesale	(607)		(588)		(19)		(1,610)		304		(1,914)
Total used vehicles	Total used vehicles	18,103		6,851		11,252		57,842		15,968		41,874		Total used vehicles	10,264		18,103		(7,839)		29,606		57,842		(28,236)
Finance and insurance	Finance and insurance	31,653		6,180		25,473		95,971		6,998		88,973		Finance and insurance	29,288		31,569		(2,281)		89,658		95,830		(6,172)
Parts, service, accessories		29,143		7,230		21,913		85,794		7,230		78,564
Parts, service and accessories														Parts, service and accessories	26,973		29,143		(2,170)		84,663		85,794		(1,131)
Total gross profit	Total gross profit	$	110,970	$	28,407	$	82,563	$	340,156	$	38,342	$	301,814	Total gross profit	$	88,606	$	110,886	$	(22,280)	$	278,367	$	340,015	$	(61,648)

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	10,851		9,973		878		34,413		31,016		3,397
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	5,619		7,508		(1,889)		17,537		22,228		(4,691)
Wholesale														Wholesale	1,103		912		191		3,121		2,619		502
Total used vehicles	Total used vehicles	8,420		3,005		5,415		24,847		6,422		18,425		Total used vehicles	6,722		8,420		(1,698)		20,658		24,847		(4,189)
Total vehicles sold	Total vehicles sold	18,393		5,490		12,903		55,863		8,907		46,956		Total vehicles sold	17,573		18,393		(820)		55,071		55,863		(792)

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	$	14,706	$	16,582	$	(1,876)	$	14,573	$	15,837	$	(1,264)
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	12,233		13,423		(1,190)		12,292		13,488		(1,196)
Wholesale														Wholesale	6,186		6,276		(90)		6,748		5,875		873
Total used vehicles	Total used vehicles	13,531		13,429		102		13,482		12,203		1,279		Total used vehicles	11,241		12,649		(1,408)		11,454		12,685		(1,231)
Finance and insurance, net	Finance and insurance, net	1,811		1,617		194		1,802		1,831		(29)		Finance and insurance, net	1,778		1,806		(28)		1,726		1,800		(74)
Parts, service, accessories		3,559		4,207		(648)		3,423		4,207		(784)
Parts, service and accessories														Parts, service and accessories	3,626		3,559		67		3,546		3,423		123
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	$	19,267	$	20,590	$	(1,323)	$	19,075	$	20,079	$	(1,004)

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	$	2,035	$	3,216	$	(1,181)	$	2,163	$	3,242	$	(1,079)
Used vehicles	Used vehicles	$	2,150	$	2,280	$	(130)	$	2,328	$	2,487	$	(159)	Used vehicles	$	1,935	$	2,489	$	(554)	$	1,780	$	2,589	$	(809)
Finance and insurance, net	Finance and insurance, net	$	1,811	$	1,617	$	194	$	1,802	$	1,831	$	(29)	Finance and insurance, net	$	1,778	$	1,806	$	(28)	$	1,726	$	1,800	$	(74)
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	$	1,638	$	1,667	$	(29)	$	1,630	$	1,611	$	19
Total gross profit per vehicle (1)														Total gross profit per vehicle (1)	$	5,380	$	6,343	$	(963)	$	5,358	$	6,386	$	(1,028)

(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.

Table of Contents

Revenue

Three and Nine ~~months ended~~Months Ended September 30, ~~2022~~2023 Compared to September 30, ~~2021~~2022

.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, 2023 decreased 11.4% from the same period in 2022, primarily driven by a decline in the volume of used vehicles sold through retail as well as generally lower revenue per vehicle. The overall decline in retail sales contributed to a decline in F&I and ~~accounted for approximately $780,553, $88,973,~~PSA revenue and ~~$166,193, respectively, of~~reflects the ~~increase~~sales volume approaching a more normalized level following the pandemic.

Total Powersports revenue for the nine months ended September 30, ~~2022. The increases~~2023 decreased 6.7% compared to the same period in ~~both periods were~~2022, primarily driven by lower revenue from the sale of used vehicles sold via retail channels and lower F&I revenue, partially offset by ~~decreases~~higher revenue from the sale of ~~$(14,699)~~new vehicles, as well as higher wholesale and ~~$(43,051)~~PSA revenue. Both quantity and price per used vehicle sold via retail were lower than in ~~wholesale powersports vehicle revenue for~~ the ~~three and~~prior year. While we sold more new vehicles in the nine months ended September 30, ~~2022~~2023 compared to the same ~~periods~~period in ~~2021, as~~ the ~~Company was now able to sell~~prior year, the vehicles were sold at a lower average price that is more indicative of post-pandemic pricing than in the prior year. The mix of new and used vehicles ~~via~~sold was attributable to higher new vehicle inventory and more competitive macroeconomic conditions as compared to the ~~more profitable RideNow~~same period in 2022.

Gross Profit

Three and ~~Freedom retail channels. The~~Nine Months Ended September 30, 2023 Compared to September 30, 2022

Total Powersports gross profit for the three months ended September 30, 2023 decreased 20.1% as compared to the same period in 2022, primarily driven by a 15.2% decrease in gross profit per vehicle sold and a 4.5% decrease in total ~~number~~vehicles sold. Gross profit from used vehicles decreased 43.3%, primarily driven by lower volume and a 22.3% decrease in gross profit per used vehicle sold as market conditions were less favorable as compared to the same period in 2022. Gross profit from new vehicles decreased 31.1%, driven by a 36.7% decrease in gross profit per new vehicle sold partially offset by an increase in new vehicle units sold. F&I and PSA gross profit was lower than in the same period in 2022, consistent with lower numbers of vehicles sold ~~increased~~and impacted by ~~12,903 and 46,956~~our strategic initiative related to ~~18,393 and 55,863~~RumbleOn Finance.

Total Powersports gross profit for the ~~three and~~ nine months ended September 30, 2023 decreased by $61,648 from the same period in 2022, primarily driven by a 16.1% decrease in gross profit per vehicle sold. Gross profit from used vehicles decreased 48.8%, primarily driven by a 31.2% decrease in gross profit per used vehicle sold and a 16.9% decrease in used vehicles sold as compared to ~~5,490 and 8,907 for~~ the same ~~periods~~period in ~~2021. Overall, the average revenue per retail vehicle~~2022. Gross profit from new vehicles sold ~~was $22,045 and $21,355, respectively, for the three and nine months ended September 30, 2022. We believe this is~~decreased 26.0%, primarily driven by 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 increase33.3% decrease in gross profit ~~was primarily due~~per new vehicle sold, offset by a 11.0% increase in new vehicle units sold as compared 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,~~same period in 2022. F&I gross profit decreased 6.4%, primarily driven by a 4.1% decrease in F&I gross profit per vehicle sold. The overall decreases were partially offset by ~~lower~~a 1.1% increase in PSA gross profit as compared to the same period 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~~decrease in gross profit include a ~~more~~less favorable product mix of vehicle sales, with a greater skew towards new units sold, and ~~a strong~~softening demand which resulted in ~~elevated~~lower 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 decreases2023 as compared to the same ~~periods~~period 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)
2022.

~~(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.~~

2729

Table of Contents

~~Revenue~~

~~Three and Nine months ended September 30, 2022 Compared to September 30, 2021.~~ Total Automotive revenue decreased by $35,324 to $69,974 for the three months ended September 30, 2022 compared to $105,298 for the same period in 2021, and decreased by $(20,222) to $296,433 for the nine months ended September 30, 2022 compared to $316,655 for the same period in 2021. The decrease in automotive revenue was primarily due to a decrease in vehicles sold of 1,513 and 2,067 as compared to the same periods in 2021; partially offset by increases in revenue per vehicle of $11,413 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 a decrease in vehicles sold of 1,513 and 2,067 as compared to the same periods in 2021.

Vehicle Logistics Metrics (dollars in thousands except per unit)


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		YoY Change		2022		2021		YoY Change			2023		2022		YoY Change		2023		2022		YoY Change

Revenue (1)		$	15,527	$	11,597	$	3,930	$	45,774	$	36,145	$	9,629
Revenue														Revenue	$	13,963	$	15,002	$	(1,039)	$	43,226	$	42,870	$	356
Gross Profit	Gross Profit	$	3,557	$	2,455	$	1,102	$	9,377	$	6,829	$	2,548	Gross Profit	$	3,339	$	3,486	$	(147)	$	10,280	$	9,139	$	1,141
Vehicles transported	Vehicles transported	23,992		20,284		3,708		71,295		62,693		8,602		Vehicles transported	22,930		23,105		(175)		67,528		66,307		1,221
Revenue per vehicle transported	Revenue per vehicle transported	$	647	$	572	$	75	$	642	$	577	$	65	Revenue per vehicle transported	$	609	$	649	$	(40)	$	640	$	647	$	(7)
Gross Profit per vehicle transported	Gross Profit per vehicle transported	$	148	$	121	$	27	$	132	$	109	$	23	Gross Profit per vehicle transported	$	146	$	151	$	(5)	$	152	$	138	$	14

~~(1)Before intercompany freight services provided~~Revenue

Three and Nine Months Ended September 30, 2023 Compared to ~~Wholesale of $524 and $2,904, and $1,228 and $3,357 respectively~~September 30, 2022

Total Vehicle Logistics revenue for the three ~~and~~months ended September 30, 2023 decreased 6.9%, driven primarily by a 0.8% decrease in vehicles transported as compared to the same period in 2022.

Total Vehicle Logistics revenue for the nine months ended September 30, ~~2022 and 2021 are eliminated~~2023 increased in line with the ~~Condensed Consolidated Financial Statements.~~increase in vehicles transported as compared to the same period in 2022.

~~Revenue~~Gross Profit

Three and Nine ~~months ended~~Months Ended September 30, ~~2022~~2023 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.

~~Gross Profit~~

~~Three and Nine months ended September 30, 2022 Compared to September 30, 2021.~~Total Vehicle Logistics gross profit for the three months ended September 30, ~~2022 increased by $1,102 and $2,548 to $3,557 and $9,377, or $148 and $132 per vehicle transported, as compared to $2,455 and $6,829, or $121 and $109 per vehicle transported, for~~2023 decreased in line with the ~~same periods~~decrease in ~~2021. The increased gross profit was attributed to increases to~~ the number of vehicles transported ~~and revenue earned~~as compared to the same period in 2022.

Total Vehicle Logistics gross profit for the nine months ended September 30, 2023 increased 12.5%, driven by the increase in number of vehicles transported, as well as the 10.5% increase in gross profit per vehicle transported compared to the same period in 2022.

Selling, General and Administrative

Cost Savings Initiatives

In the first quarter of 2023, the Company identified approximately $15,000 of selling, general and administrative ("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 by 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.

During the second quarter of 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.

Three and Nine Months Ended September 30, 2023 Compared to September 30, 2022

The following table compares our SG&A expenses for the three and nine months ended September 30, ~~2022 as compared~~2023 to the ~~same~~comparable periods in ~~2021.~~2022.

2830

Table of Contents

~~Selling, General and Administrative~~


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				YoY		Nine Months Ended September 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	$	7,081	$	8,751	$	(1,670)	$	21,449	$	24,546	$	(3,097)
Compensation and related costs	Compensation and related costs	56,291		15,104		162,271		26,983		Compensation and related costs	48,926		55,477		(6,551)		157,033		158,965		(1,932)
Facilities	Facilities	11,645		3,399		33,469		4,774		Facilities	12,947		10,812		2,135		35,447		32,095		3,352
General and administrative	General and administrative	16,320		16,570		44,315		28,008		General and administrative	8,925		10,754		(1,829)		29,697		26,643		3,054
Professional fees										Professional fees	2,633		4,952		(2,319)		13,100		12,872		228
Stock based compensation	Stock based compensation	2,605		21,507		7,237		23,943		Stock based compensation	3,077		2,605		472		10,898		7,237		3,661
Technology development and software	Technology development and software	472		686		2,070		1,513		Technology development and software	1,368		471		897		3,933		2,070		1,863
Total SG&A expenses	Total SG&A expenses	$	96,185	$	61,507	$	274,416	$	93,020	Total SG&A expenses	$	84,957	$	93,822	$	(8,865)	$	271,557	$	264,428	$	7,129

~~Selling, general and administrative~~SG&A expenses ~~increased by $34,678 and $181,396, respectively,~~from continuing operations decreased for the three months ended September 30, 2023 compared to the same period in 2022 as we began to realize reductions from our cost savings initiatives discussed above. Partially offsetting savings from headcount reductions were costs for personnel hired to support our growth. Technology development and software increased primarily due to our strategic technology projects focused on inventory management, infrastructure, and integration efforts.

SG&A expenses for the nine months ended September 30, ~~2022~~2023 increased compared to the same ~~periods~~period in ~~2021. In each case, other than technology development~~2022. The increase was primarily driven by: (1) increased headcount as the Company deployed its growth initiatives; (2) investments in facilities and ~~software,~~technologies; (3) the valuation allowance charge in the nine months ended September 30, 2023 for the loan receivable assets that are being held for sale; (4) professional fees in connection with shareholder proposals for the annual meeting of the shareholder and reorganization of the Board of Directors; (5) executive separation costs; and (6) higher stock based compensation. The increases were partially offset by lower advertising, marketing, and selling costs as the ~~result of~~Company focused expenditures on its most effective initiatives during the ~~Acquisition Effect, with over 2,000 additional employees,~~ ~~marketing initiatives at~~nine months ended September 30, 2023 as compared to the ~~store level, general and administrative costs associated with a larger team, and lease/facility expense related 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 months ended September 30, ~~2022~~2023.

Depreciation and Amortization


	Three Months Ended September 30,				YoY		Nine Months Ended September 30,				YoY
	2023		2022		Change		2023		2022		Change
Depreciation and amortization	$	7,275	$	6,554	$	721	$	17,271	$	16,872	$	399

Depreciation and amortization ~~increased by $4,853 and $13,975, respectively,~~expense for the three and nine months ended September 30, 2023 was higher than the comparable 2022 ~~compared to~~periods because it included a $2,610 impairment of the ~~same periods in 2021. Of~~remaining capitalized costs of the ~~increase for~~Bidpath Software License as we terminated the ~~three months ended September 30, 2022, approximately $2,098 is associated with~~related contract. The impact of the various non-compete agreements 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,impairment was partially offset by ~~minimal increases and decreases across the Company.~~lower amortization expense related to certain non-compete agreements that became fully amortized.

Interest Expense


	Three Months Ended September 30,				YoY		Nine Months Ended September 30,				YoY
	2023		2022		Change		2023		2022		Change
Interest expense	$	19,828	$	12,209	$	7,619	$	55,756	$	35,622	$	20,134

Interest expense increased ~~by $8,026 and $28,952, respectively,~~ for the three and nine months ended September 30, ~~2022 compared to~~2023 from the ~~same~~comparable periods in ~~2021.~~2022 primarily due to higher interest rates and higher average borrowings. Interest expense consists primarily of interest and the amortization of deferred financing costs onfor borrowings under 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.

Table of Contents

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.

~~Table of Contents~~

The change in value of the derivative liability for the three and nine months ended September 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 both September 30, ~~2022~~2023 and December 31, ~~2021~~2022 was ~~$26 and $66, respectively.~~$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 Warrants to purchase $40,000 of shares of Class B common stock to Oaktree Capital Management, L.P. and its lender affiliates at an exercise price of $33.00 per share. The exercise price was adjusted during the third quarter to $31.50 and the expiration date was extended to July 25, 2023. The initial warrant liability and deferred financing charge recognized was $10,950. The warrant liability was subject to remeasurement at each balance sheet date and any change in fair value was recognized as a component of change in derivative liability in the Condensed Consolidated Statements of Operations. The fair value of the Warrant was estimated using a Monte Carlo simulation based on a combination of level 1 and level 2 inputs. Upon closing of the RideNow Transaction, the warrants were 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. The $10,950 deferred financing charge was reclassified as part of the debt discount related to the Oaktree Credit Agreement. The recognition of the warrant liability and deferred financing charge, and the reclassification of the warrant liability to additional paid-in capital, and the reclassification of the deferred financing charge to debt discount are non-cash items.

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, income tax effects, changes in derivative ~~liability~~liabilities and certain recoveries, charges and expenses, such as an insurance recovery, non-cash stock-based compensation costs, ~~acquisition related~~acquisition-related costs, litigation expenses, restructuring costs, 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 months ended September 30, ~~2022~~2023 and ~~2021,~~2022, adjustments to Adjusted EBITDA ~~are~~were 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,

•Impairment associated with the ~~RideNow Transaction and Freedom Transaction, which primarily include professional fees and third-party costs,~~

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

•~~Forgiveness~~reduction of the ~~PPP~~RumbleOn Finance loan ~~and~~receivables portfolio down to its fair value in preparation of its sale, which is anticipated to occur in the fourth quarter of 2023,

•Other non-recurring costs, which include ~~items not indicative~~one-time expenses incurred. For the three and nine months ended September 30, 2023, the balance was comprised of ~~our ongoing operating performance.~~integration costs and professional fees associated with acquisitions, and a death benefit to the estate of a former officer and director of the Company. For the three and nine months ended September 30, 2022, the balance was primarily ~~comprised of~~related to various integration costs and professional fees associated with the Freedom ~~Transaction~~Powersports and ~~the~~ RideNow ~~Transaction,~~acquisitions, technology implementation, ~~legal matters,~~ and establishment of the ~~ROF~~RumbleOn Finance secured loan facility. ~~For~~

•Personnel restructuring costs, comprised of severance and charges associated with the ~~three~~separation of former executives, including the Company's former President and ~~nine months ended September 30, 2021, the balance was primarily related to litigation expenses~~Chief Operating Officer, and ~~a death benefit to the estate of the Company’s~~ former Chief Financial Officer,

•Purchase accounting adjustments, which represent one-time charges related to acquisitions,

•Non-cash stock-based compensation expense, and ~~director.~~

•Transaction costs associated with acquisitions, which primarily include professional fees and third-party costs.

3032

Table of Contents

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 September 30,				Nine Months Ended September 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)	$	(16,484)	$	3,039	$	(46,974)	$	26,213
Income (loss) from discontinued operations, net										Income (loss) from discontinued operations, net	—		(676)		(951)		(731)
Income (loss) from continuing operations, net										Income (loss) from continuing operations, net	$	(16,484)	$	3,715	$	(46,023)	$	26,944
Add back:	Add back:									Add back:
Interest expense	Interest expense	12,603		4,577		37,059		8,107		Interest expense	19,828		12,209		55,756		35,622
Income tax provision (benefit)										Income tax provision (benefit)	(3,556)		678		(9,706)		8,165
Depreciation and amortization	Depreciation and amortization	6,570		1,717		16,923		2,948		Depreciation and amortization	7,275		6,554		17,271		16,872
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	$	7,063	$	23,156	$	17,298	$	87,603
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	324		—		5,053		—
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		177		813		706
Litigation settlement expenses										Litigation settlement expenses	9		—		88		—
Loss associated with RumbleOn Finance loan receivables										Loss associated with RumbleOn Finance loan receivables	600		—		5,971		—
Other non-recurring costs										Other non-recurring costs	64		2,588		952		6,514
Personnel restructuring costs										Personnel restructuring costs	1,768		—		6,493		—
PPP Loan forgiveness										PPP Loan forgiveness			(2,509)				(2,509)
Purchase accounting related										Purchase accounting related	—		—		—		63
Stock based compensation	Stock based compensation	2,605		24,730		7,237		26,457		Stock based compensation	3,077		2,605		10,898		7,237
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	—		100		34		1,503
Adjusted EBITDA	Adjusted EBITDA	$	25,669	$	3,616	$	101,416	$	6,679	Adjusted EBITDA	$	13,176	$	26,117	$	47,600	$	101,078

Liquidity and Capital Resources

Our primary sources of liquidity are available cash, amounts available under our ~~floor plan~~floorplan lines of credit, and the monetization of our retail loan portfolio. ~~In 2021,~~

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


	September 30, 2023		December 31, 2022
Cash	$	41,406	$	46,762
Availability under floorplan facilities (1)	32,181		50,651
Committed liquidity resources available	$	73,587	$	97,413

(1)Availability under floorplan facilities is the available amount we ~~completed two public offerings~~can borrow under our existing vehicle inventory floorplan credit facilities based on the pledgable value of vehicle inventory on our balance sheet as of September 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.

Table of Contents

Our primary cash requirements include payments related to our debt and lease obligations. Excluding operating lease liabilities and the derivative liability, the outstanding principal amount of indebtedness is summarized in the table below. See Note 3 - "Leases", Note 5 - "Secured Debt", and Note 7 - "Stock-based Compensation" to our Condensed Consolidated Financial Statements included in Part I, Item 1, Financial Statements of this Quarterly Report on Form 10-Q for more information related to our debt, equity and leases.


	September 30, 2023		December 31, 2022
Asset-Based Financing:
Inventory (floorplan notes)	$	287,135	$	220,176	(1)
Total asset-based financing	287,135		220,176		(1)

Term loan facility	297,680		346,066
Financing obligation	47,933		—
Unsecured senior convertible notes	38,750		38,750
RumbleOn Finance secured loan facility	14,606		25,000
Note payable for leasehold improvements and other	1,528		—
Total debt	687,632		629,992		(1)
Less: unamortized discount and debt issuance costs	(30,563)		(35,432)
Total debt, net	$	657,069	$	594,560	(1)

(1) Excludes floorplan notes of $5,254 for the Automotive segment that ~~provided net proceeds~~are reported as liabilities of ~~$191,000~~discontinued operations.

At June 30, 2023, the Company was not in compliance 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, Oaktree and ~~obtained~~the Lenders party thereto executed Amendment No. 5 to the Oaktree Credit Agreement (the “Amendment No. 5”), pursuant to which, initially provided net proceeds of $261,000 that was used to finance a portion of the cash consideration for the RideNow Transaction. On February 18, 2022, in conjunction the Freedom Transaction, the Company drew down $84,500 against the Oaktree Credit Agreement. As of September 30, 2022,among other things, (i) all leverage ratio financial covenants under the Oaktree Credit Agreement ~~provides~~were (a) eliminated and not tested for upthe 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 ~~$120,000,~~use commercially reasonable best efforts to dispose of ~~which $35,500 is available,~~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 ~~financing that~~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 fee which may be ~~used~~paid in cash or paid-in-kind. 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, included as Exhibit 10.5 attached hereto.

The Company believes that it will be in compliance with all covenants under the Oaktree Credit Agreement, as amended by Amendment No. 5, for ~~acquisitions and up to an additional $100,000 in incremental financing~~the next year. Further, Management believes that ~~may be used for acquisitions or~~current working capital, ~~purposes.~~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 statements included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q.

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 results of operations and financial condition.

3134

Table of Contents

~~We had the following liquidity resources available as of September 30, 2022 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 and $384,585, respectively, summarized in the table below. See Note 5 - Notes Payable and Lines of Credit and Note 6 - Stockholders' Equity to our Condensed Consolidated Financial Statements included above.
September 30, 2022 December 31, 2021
Asset-Based Financing:
Inventory $ 175,296 $ 97,278
Total asset-based financing 175,296 97,278
Term loan facility 361,066 279,300
Unsecured senior convertible notes 38,750 39,006
Line of credit 22,925 —
PPP and other loans — 4,472
Total debt 598,037 420,056
Less: unamortized discount and debt issuance costs (34,234) (35,471)
Total debt, net $ 563,803 $ 384,585
Cash Flows

The following table sets forth a summary of our cash flows for the nine months ended September 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


	Nine Months Ended September 30,
	2023		2022
Net cash provided by (used in) operating activities of continuing operations	$	(19,325)	$	(29,641)
Net cash used in investing activities of continuing operations	(12,861)		(76,498)
Net cash provided by financing activities of continuing operations	34,876		105,294
Net change in cash from continuing operations	$	2,690	$	(845)

Operating Activities

Our primary sources of operating cash flows result from the ~~sales~~sale of ~~used~~ vehicles and ancillary products. Our primary ~~use~~uses of cash ~~from~~in operating activities are purchases of inventory, cash used to ~~acquire customers,~~fund operations, and personnel-related expenses. For the nine months ended September 30, ~~2022, net cash provided by operating activities was $4,656, an increase of $34,435 compared to~~2023, net cash used in operating activities was lower than in the comparable 2022 period due in part to the following: (1) the wind down of ~~$(29,779)~~RumbleOn Finance, our loan origination program in preparation for the sell-off of its receivables as described in Note 14 – “Discontinued Operations and Assets Held For Sale” included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, (2) a more favorable impact from net changes in inventory, (3) the realized impact of management's cost reduction initiatives, (4) lower income taxes paid in the 2023 period, and (5) our ongoing initiatives to optimize our working capital, all of which were partially offset by the impact from lower revenue and higher interest payments.

Investing Activities

Our primary uses of cash for investing activities are business acquisitions, technology development to expand our operations, and capital investments for our stores. Net cash used in investing activities was lower in the nine months ended September 30, ~~2021. The increase~~2023 than in ~~our net cash provided by operating activities was~~the comparable period in 2022 primarily due to ~~a $56,598 increase~~the acquisition of Freedom Powersports, which occurred in ~~our net income, a $(888) decrease in non-cash adjustments, and a $(21,277) decrease in cash provided by other operating assets.~~

~~Investing Activities~~

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

~~Table of Contents~~

~~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) in outflows for the purchase of property and equipment, offset by an increase of $4,922 in outflows for technology development for the nine months ended September 30, 2022 as compared to the same period in 2021.period.

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) to $69,083 for~~was lower in the nine months ended September 30, ~~2022,~~2023, compared to ~~net cash provided by financing activities of $472,405 for~~ the same period of ~~2021. The decrease~~2022. This was primarily because we had issued new secured debt in ~~net cash provided by financing activities for~~2022 to fund the purchase of Freedom Powersports, and we repaid more debt in the nine months ended September 30, 2023 than in the comparable 2022 ~~is primarily attributable to a decrease of $(191,240)~~period. Partially offsetting these reductions in net cash provided by operating activities are the proceeds received from the ~~sale~~sale-leaseback transaction described in Note 3 - "Leases" included in Part I, Item 1, Financial Statements, of ~~common stock,~~this Quarterly Report on Form 10-Q (which is being accounted for as a decrease of $(176,951) in proceeds from the Oaktree Credit Agreement, an increase of $(28,378) in cash outflows for repayments of debt and mortgage notes, and a decrease of $(6,754) in non-trade floor plan borrowings for the nine months ended September 30, 2022 as compared to the same period of 2021.

~~Global Settlement with Former RideNow Owners~~

~~Off-Balance Sheet Arrangements~~

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

Critical Accounting Policies and Estimates

See Note 1 - ~~Description~~"Description of Business and Significant Accounting ~~Policies,~~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.~~our Current Report on Form 8-K filed on September 27, 2023.

Table of Contents

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;

•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.

3336

Table of Contents

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 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 30, ~~2022,~~2023, based on the ongoing remediation 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 have implemented and 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:~~

•~~In February 2022, we hired a new Chief Financial Officer.~~

•We have engaged third-party resources to support our internal control testing and remediation efforts and act as subject matter experts, and we intend to bring in additional resources to oversee remediation efforts.following:

•We have hired ~~a Head of Internal Audit, a senior level position reporting directly to~~an additional accounting resource with the ~~Audit Committee, to implement~~required technical expertise and ~~oversee a newly established Internal Audit department.~~clearly defined roles and responsibilities.

•We have ~~hired a Vice President~~evaluated system enhancements to automate the consolidation and elimination of Tax and Chief Technology Officer and are in the process of hiring other key accounting and financial reporting positions, including a Director 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.

~~Table of Contents~~

•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.intercompany transactions.

•We have ~~documented~~enhanced the overall review and inapproval process relating to elimination of intercompany transactions.

•We have enhanced the ~~process~~review and approval controls related to reconciling certain accruals and accounting estimates.

•We have implemented proper governance and reporting over the execution of ~~executing~~these 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 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

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.

Table of Contents

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 to indemnification from Sellers for breach~~conducting an investigation of ~~a covenant.On March 29, 2022, Mr. Tkach delivered Sellers’ response to the Direct Claim Notice, in which Sellers declined to accept the Company’s claims.~~

~~On May 5, 2022, Mr. Tkach in his role as Sellers’ Representative delivered a Direct Claim Notice to the~~certain allegations surrounding Marshall Chesrown’s use of Company under the RideNow Agreement. In the Notice, Mr. Tkach stated that pursuant to the indemnification provisions set forth 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~~resources. The investigation remains ongoing 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 of the State of Delaware against the Company by the Plaintiffs related to the RideNow Transaction. The action asserts claims for breach of contract and seeks only declaratory and

~~Table of Contents~~

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~~date of this filing, the Company has made no final determination as to what action to take. On July 7, 2023, Mr. Chesrown provided the Board a letter of resignation (the “Resignation Letter”) describing Mr. Chesrown’s disagreement with several recent corporate governance, disclosure and ~~Sellers as part~~other actions taken by the Company, the Board and certain of its members, and indicated his intent to pursue legal claims. The Company disagrees with the characterization of the ~~Final Purchase Price Adjustment stipulated by~~allegations and assertions described in the ~~RideNow Agreement were submitted by the parties to a mutually agreed upon independent accounting firm.~~

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

~~On June 24, 2022, Plaintiffs~~date of this filing, there has been no release or other agreement with Mr. Chesrown, nor has a lawsuit been 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~~by Mr. Chesrown against the Company. The Company ~~for alleged breaches of their executive employment agreements~~ and ~~seeking injunctive relief and monetary damages.~~

~~On September 22, 2022,~~Mr. Chesrown have conducted a pre-suit mediation, but did not resolve 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.matter.

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 and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the ~~year~~three months ended ~~December 31, 2021.~~June 30, 2023. There have been no material changes to the risk factors previously disclosed in our ~~2021~~2022 Form 10-K, except as described in and in in Part II, Item 1A of our Quarterly Report on Form 10-Q for the three months ended June 30, 2023, the occurrence of any of which could have a material adverse effect on our actual results.

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

~~None.~~

~~Item 3. Defaults Upon Senior Securities.~~

~~None.~~

~~Item 4. Mine Safety Disclosures.~~

~~Not Applicable.~~

3639

Table of Contents

~~Item 5. Other Information.~~

~~None.~~

Item 6. Exhibits.


Exhibit Number						Description
4.1




						Form of 2023 Warrant. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 17, 2023).
~~31.1~~10.1 +						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).
10.2 +						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).
10.3+						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).
10.4						Purchase Agreement, dated as of August 8, 2023, by and among the Company, Mark Tkach, William Coulter and Stone House Capital Management, LLC. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 11, 2023).
10.5						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.(incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form 10-Q filed on August 8, 2023).
10.6+						Employment Agreement, dated August 16, 2023, by and between RumbleOn, Inc. and Mark Tkach. (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on August 18, 2023).
10.7						Real Estate Purchase and Sale Contract, dated August 22, 2023 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 28, 2023).
10.8*						Unitary Master Lease Agreement dated September 8, 2023
10.9+						Executive Employment Agreement, dated October 19, 2023, between Michael Kennedy and RumbleOn, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 20, 2023).
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.

3740

Table of Contents

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 ~~9, 2022~~7, 2023	By:	/s/ ~~Marshall Chesrown~~Michael W. Kennedy
		~~Marshall Chesrown~~Michael W. Kennedy
		~~Chairman of the Board of Directors and~~ Chief Executive Officer (Principal Executive Officer)

Date: November ~~9, 2022~~7, 2023	By:	/s/ ~~Narinder Sahai~~Blake Lawson
		~~Narinder Sahai~~Blake Lawson
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

3841


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


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