RumbleOn Announces Final Results of $10.0 Million Fully Backstopped Registered Rights Offering
Rhea-AI Summary
RumbleOn (NASDAQ: RMBL) has completed its $10.0 million fully backstopped registered rights offering of Class B common stock. The offering resulted in subscriptions for 2,043,011 shares (approximately 85% of offered shares) at $4.18 per share. Stone House Capital Management will purchase the remaining 349,333 unsubscribed shares in a Backstop Private Placement for approximately $1.5 million.
The company expects net proceeds of approximately $9.0 million, which will be used for general corporate purposes, including potential repayment of 6.75% convertible senior promissory notes due January 2025. The proceeds will also partially satisfy additional capital financing obligations under a recent Oaktree credit agreement amendment. Following the completion of both transactions, RumbleOn expects to have approximately 37,713,298 shares of Class B common stock outstanding.
Positive
- Secured $9.0 million in net proceeds through rights offering and backstop placement
- Achieved 85% subscription rate in rights offering
- Obtained full backstop commitment from Stone House Capital Management
Negative
- Rights offering was not fully subscribed by existing shareholders
- Proceeds partially allocated to debt repayment rather than growth initiatives
- Additional capital financing obligations required under Oaktree credit agreement
News Market Reaction – RMBL
In the trading session that priced this news, RMBL declined 10.66%, reflecting a significant negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
As previously disclosed, Stone House Capital Management, LLC (the "Standby Purchaser") has agreed to purchase from the Company in a private placement (the "Backstop Private Placement") any shares of Class B common stock offered but not subscribed for in the Rights Offering at the Subscription Price. Because the Rights Offering was not fully subscribed, the Standby Purchaser is expected to purchase 349,333 unsubscribed shares of Class B common stock (which includes 116,555 shares that the Standby Purchaser was otherwise entitled to subscribe for in the Rights Offering) for an aggregate amount of approximately
The Backstop Private Placement is expected to close on December 19, 2024.
The Company estimates the net proceeds of the Rights Offering and the Backstop Private Placement to be approximately
Following the completion of the Rights Offering and the Backstop Private Placement, the Company expects to have approximately 37,713,298 shares of its Class B common stock outstanding.
Other Important Information
The offering of the Class B common stock pursuant to the Rights Offering was made pursuant to the Company's existing effective shelf registration statement on Form S-3 (Reg. No. 333-281862) on file with the Securities and Exchange Commission (the "SEC") and a prospectus supplement (and the accompanying base prospectus) filed with the SEC on November 26, 2024.
The information in this press release is not complete and is subject to change. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any offer, solicitation or sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of such state or jurisdiction. The Rights Offering was made only by means of the prospectus supplement (and the accompanying base prospectus) filed with the SEC on November 26, 2024.
About RumbleOn
RumbleOn, Inc. (NASDAQ: RMBL), operates through two operating segments: our Powersports dealership group and Wholesale Express, LLC, an asset-light transportation services provider focused on the automotive industry. Our Powersports group is the largest powersports retail group in
For more information on RumbleOn, please visit rumbleon.com.
Cautionary Note on Forward-Looking Statements
The Company's press release contains statements that constitute "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, those regarding the closing of the Rights Offering and the Backstop Private Placement, the anticipated delivery of shares of Class B common stock, and the use of proceeds from the Rights Offering. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "continues," "could," "estimates," "expects," "intends," "hopes," "may," "plan," "possible," "potential," "predicts," "projects," "should," "targets," "would" and similar expressions, although not all forward-looking statements contain these identifying words. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual events or results to differ materially from current expectations and beliefs, including, but not limited to, risks and uncertainties related to: the occurrence of any event, change or other circumstance that could impact the expected timing, completion or other terms of the Rights Offering; risks related to the diversion of management's attention from RumbleOn's ongoing business operations; the impact of general economic, industry or political conditions in
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SOURCE RumbleOn