Item 1.

Financial Statements.

RumbleOn, Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands, except per share amounts)


	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.

~~RUMBLEON, INC.~~

Table of Contents

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~RumbleOn, Inc.

~~(unaudited)~~Condensed Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

ASSETS

Balance at

September 30, 2017

December 31, 2016

Current assets:

Cash
$656,220
$1,350,580
Accounts Receivable
  320,575
  -
Vehicle Inventory
  1,244,658
  -
Prepaid expense
  123,513
  1,667
Other
  174,419
  -
Total current assets
  2,519,385
  1,352,247



Property and Equipment - Net of Accumulated Depreciation
  2,166,326
  -
Goodwill
  3,240,000
  -
Intangible Assets, net
  121,765
  45,515



Total assets
$8,047,476
$1,397,762



LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:


Accounts payable and accrued liabilities
$ 1,902,543
$ 219,101
Accrued interest payable
  17,998
  -
Current portion of long term debt
  1,510,274
  -
Other current liabilities
  -
  -
Total current liabilities
  3,430,815
  219,101



Long term liabilities:


Notes payable
  1,414,937
  1,282
Accrued interest payable - related party
  21,736

  5,508
Deferred tax liability
  -
  78,430
Total long-term liabilities
  1,436,673

  85,220



Total liabilities
  4,867,488

  304,321



Commitments and Contingencies





Stockholders' equity:


Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2017 and December 31, 2016
  -
  -
Common A stock, $0.001 par value, 1,000,000 shares authorized, 1,000,000 shares issued and outstanding as of September 30, 2017 and none outstanding at December 31, 2016
  1,000
  -
Common B stock, $0.001 par value, 99,000,000 shares authorized, 9,018,541 and 6,400,000 shares issued and outstanding as of September 30, 2017 and December 31, 2016
  9,019
  6,400
Additional paid in capital
  8,749,566
  1,534,015
Subscriptions receivable
  (1,000)
  (1,000)
Accumulated deficit
  (5,578,597)
  (445,974)
Total stockholders' equity
  3,179,988

  1,093,441



Total liabilities and stockholders' equity
$8,047,476
$1,397,762

(Unaudited)


	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.~~RumbleOn, Inc.

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~Condensed Consolidated Statement of Stockholders' Equity

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

(Unaudited)

Three-months ended
September 30,

Nine-months ended
September 30,

2017

2016

2017

2016

Revenue:
Used vehicle sales:

Consumer
$1,626,864
$ -
$1,626,864
$ -
Dealer
  1,745,948
  -
  1,745,948
  -
Auction
  171,560
  -
  253,500
  -
Other sales and revenue
  134,573
  -
  134,573
  -
Subscription and other fees
  27,197
  -
  100,668
  -
Total Revenue
  3,706,142
  -
  3,861,553
  -





Cost of Revenue
  3,478,124
  -
  3,627,455
  -
Selling, general and administrative
  2,326,043
  36,706
  4,690,216
  58,135
Depreciation and amortization
  129,277
  475
  302,697
  1,425
Total expenses
  5,933,444
  37,181
  8,620,368
  59,560





Operating loss
  (2,227,302)
  (37,181)
  (4,758,815)
  (59,560)





Interest expense
  90,201
  2,878
  373,808
  7,431





Net loss before provision for income taxes
  (2,317,503)
  (40,059)
  (5,132,623)
  (66,991)





Benefit for income taxes
  -
  -
  -
  -





Net loss
$(2,317,503)
$(40,059)
$(5,132,623)
$ (66,991)





Weighted average number of common shares outstanding – basic and fully diluted
  10,018,541
  5,500,000
  9,105,429
  5,500,000





Net loss per share – basic and fully diluted
$(0.23)
$(0.01)
$(0.56)
$(0.01)


	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
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
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


	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,
	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

~~RUMBLEON, INC.~~

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~OF STOCKHOLDERS' EQUITY~~

~~FOR THE NINE-MONTHS ENDED SEPTEMBER 30, 2017~~
(Dollars in thousands, except per share amounts)

(Unaudited)

~~(unaudited)~~NOTE 1 – DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Preferred Shares

Common A Shares

Common B Shares






Shares

Amount

Shares

Amount

Shares

Amount

Additional Paid in Capital

Subscriptions Receivable

Accumulated Deficit

Total Stockholders' Equity

Balance, December 31, 2016
  -
$-
  -
$-
  6,400,000
$6,400
$1,534,015
$(1,000)
$(445,974)
$1,093,441











Exchange of common stock
  -
  -
  1,000,000
  1,000
  (1,000,000)
  (1,000)
  -
  -
  -
  -











Issuance of common stock in connection with acquisition
  -
  -
  -
  -
  1,523,809
  1,524
  2,665,142
  -
  -
  2,666,666











Issuance of stock in private placements


  -
  -
  657,500
  658
  2,629,342
  -

  2,630,000











Issuance of common stock in connection with loan agreement
  -
  -
  -
  -
  1,161,920
  1,162
  1,348,878
  -
  -
  1,350,040











Issuance of common stock in connection with conversion of a Note Payable-related party, net of debt discount
  -
  -
  -
  -
  275,312
  275
  284,639
  -
  -
  284,914











Stock-based compensation
  -
  -
  -
  -
  -
  -
  287,550
  -
  -
  287,550











Net loss
  -
  -
  -
  -
  -
  -
  -
  -
  (5,132,623)
  (5,132,623)











Balance, September 30, 2017
  -
$-
  1,000,000
$1,000
  9,018,541
$9,019
$8,749,566
$(1,000)
$(5,578,597)
$3,179,988
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.

RumbleOn is 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.

~~See Notes~~We source high quality pre-owned inventory 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 experience, broad selection, and access to our specialized and experienced team members, including sales staff and technicians. Our network of convenient retail locations allows us to offer services throughout the vehicle life cycle.

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 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.

~~RUMBLEON, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(unaudited)~~

Nine-months ended
September 30,

2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss
$(5,132,623)
$(66,991)
Adjustments to reconcile net income


to net cash used in operating activities:


Depreciation and amortization
  302,697
  1,425
Amortization of debt discount
  91,877
  -
Interest expense on conversion of debt
  196,076
  -
Share based compensation expense
  287,550
  -
Changes in operating assets and liabilities:


Increase in prepaid expenses
  (121,846)
  (4,167)
Increase in inventory
  (1,244,658)

Increase in accounts receivable
  (320,575)
  -
Increase in other current assets
  (174,419)
  -
Increase in accounts payable and accrued liabilities
  1,683,442

  18,095
Increase in accrued interest payable - related party
  43,351

  (10,478)



Net cash used in operating activities
  (4,389,128)
  (62,116)



CASH FLOWS FROM INVESTING ACTIVITIES


Cash used for acquisitions
  (750,000)
  -
Technology development
  (435,097)
  -
Purchase of property and equipment
  (600,175)
  -



Net cash used in investing activities
  (1,785,272)
  -



CASH FLOWS FROM FINANCING ACTIVITIES


Proceeds from note payable
  2,167,000
  214,358

Repayments for note payable - related party
  -

  (158,000)
Proceeds from sale of common stock
  3,313,040
  7,000



Net cash provided by financing activities
  5,480,040
  63,358



NET CHANGE IN CASH
  (694,360)
  1,242



CASH AT BEGINNING OF PERIOD
  1,350,580
  3,713



CASH AT END OF PERIOD
$656,220
$4,955

~~See Notes~~Since the acquisitions of RideNow and Freedom Powersports, we have made a handful of smaller acquisitions. We plan to ~~Condensed Consolidated Financial Statements.~~

~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~NOTE 1 – BUSINESS DESCRIPTION~~

~~Organization~~

~~RumbleOn, Inc. (along with its consolidated subsidiaries,~~continue the ~~“Company”) was incorporated in October 2013 under the laws~~growth of ~~the State of Nevada, as Smart Server, Inc. (“Smart Server”). On February 13, 2017, the Company changed its name from Smart Server, Inc. to RumbleOn, Inc.~~

~~Nature of Operations~~

Smart Server was originally formed to engage in the business of designing and developing mobile application payment software for smart phones and tablet computers. After Smart Server ceased its technology development activities in 2014, it had no operations and nominal assets, meeting the definition of a “shell company” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and regulations thereunder.

In July 2016, Berrard Holdings Limited Partnership (“Berrard Holdings”) acquired 99.5% of the common stock of the Company from the principal stockholder. Shortly after the Berrard Holdings common stock purchase, the Company began exploring the development of a capital light e-commerce platform facilitating the ability of both consumers and dealers to Buy-Sell-Trade-Finance pre-owned recreation vehicles in one online location. The Company’s goal is for the platform to be widely recognized as the leading online solution for the sale, acquisition, and distribution of recreation vehicles by providing users with the most efficient, timely and transparent experience. The Company’s initial focus is the market for 601cc and larger on road motorcycles, particularly those concentrated in the “Harley-Davidson” brand. The Company will look to extend to other brands and additional vehicle types and products as the platform matures.

~~The Company’s business plan is currently driven by a technology platform it acquired on February 8, 2017 from NextGen Dealer Solutions, LLC (“NextGen”), which the Company owns and operates~~our powersports footprint through its wholly-owned subsidiary NextGen Pro, LLC (“NextGen Pro”). The NextGen platform provides vehicle appraisal, inventory management, customer relationship management and lead management, equity mining, and other key services necessary to drive the online marketplace. For additional information, see Note 3 - “Acquisitions.”

Serving both consumers and dealers, through our online platform, we make cash offers for the purchase of their vehicles and intend to provide them the flexibility to trade, list, or auction their vehicle through our website and mobile applications. In addition, we offer a large inventory of used vehicles for sale along with third-party financing and associated products. Our operations are designed to be scalable by working through an infrastructure and capital light model that is achievable by virtue of a synergistic relationship with dealer partners. We utilize dealer partners in the acquisition of motorcycles as well as to provide inspection, reconditioning and distribution services. Correspondingly, we earn fees and transaction income, and dealer partners will earn incremental revenue and enhance profitability through increased sales, leads, and fees from inspection, reconditioning and distribution programs.

~~NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

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 ~~generally accepted accounting principles~~of America (“U.S. GAAP”) for interim ~~financial~~ information and ~~in accordance~~ with the instructions toon Form 10-Q and Rule 10-01 of Regulation S-X ~~promulgated by~~pursuant to the rules and regulations of the Securities and Exchange Commission ~~(the “SEC”~~(“SEC”) ~~and therefore do not contain all of the information and footnotes required by GAAP and the SEC for annual financial statements.~~. The ~~Company’s~~ Condensed Consolidated Financial Statements ~~reflect~~include the accounts of RumbleOn, Inc. and its subsidiaries, which are all wholly owned, including all our acquisitions from the dates such businesses were 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, ~~(consisting only of normal recurring adjustments) management believes are~~except as otherwise noted, necessary for the fair presentation of the Company’s financial ~~condition,~~position and results of operations ~~and cash flows~~ for the periods presented. ~~Certain prior period amounts have been reclassified to conform to the current year’s presentation. Amounts and percentages may not total due to rounding.~~The ~~information at December 31, 2016 in the Company’s Condensed Consolidated Balance Sheets included in this quarterly report~~year-end condensed balance sheet data was derived from ~~the~~ audited financial statements. These Condensed Consolidated Balance Sheets included in the Company’s 2016 Annual Report on Form 10-K filed with the SEC on February 14, 2017. The Company’s 2016 Annual Report on Form 10-K, together with the information incorporated by reference into such report, is referred to in this quarterly report as the “2016 Annual Report.” This quarterly reportFinancial Statements should be read in conjunction with the ~~2016 Annual Report.~~consolidated financial statements and notes thereto included in our Current Report on Form 8-K filed on September 27, 2023. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results expected for the entire fiscal year. Intercompany accounts and material intercompany transactions have been eliminated.

~~Year-end~~

~~In October 2016, the Company changed its fiscal year-end from November 30 to December 31.~~5

Table of Contents

Use of Estimates

The preparation of ~~financial statements~~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 ~~affect~~have a material impact on the ~~reported amounts~~carrying value of certain assets and liabilities, ~~revenue and expenses, and related~~ 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. 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 outstanding balance of the Oaktree Credit Agreement. These actions include divesting of certain assets and 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 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 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 ~~accompanying notes. Estimates are used~~to comply with the amended financial covenants of Amendment No. 5. Management believes that its plans alleviate substantial doubt regarding the Company’s ability to continue as a going concern.

In the event the Company is not able to 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 in accordance with the terms of the Oaktree Credit Agreement, Oaktree would have the right to demand payment of the outstanding indebtedness and the Company would be required to satisfy the obligation or 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

Correction of an Immaterial Misstatement Related to Prior Periods

During the fourth quarter of 2022, the Company identified a misstatement in its accounting for ~~but not limited~~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 ~~inventory valuation, depreciable lives, carrying value~~gross profit, operating income (loss), or net income (loss). The misstatement impacted the unaudited Condensed Consolidated Statements of ~~intangible assets, sales returns, receivables valuation, restructuring-related liabilities, taxes,~~Operations for the periods ended March 31, 2022, June 30, 2022, and ~~contingencies. Actual results could differ materially from those estimates.~~September 30, 2022.

~~Earnings (Loss) Per Share~~

The Company ~~follows~~evaluated the misstatement and concluded that the impact was not material, either individually or in the aggregate, to its current or previously issued consolidated financial statements. The Company has corrected the Condensed Consolidated Statements of Operations by decreasing powersports revenue and cost of sales for the three months ended September 30, 2022 by $19,614 and for the nine months ended September 30, 2022 by $52,426.

Recent Pronouncements

Adoption of New Accounting Standards

On January 1, 2023, the Company adopted Accounting Standards Update ("ASU") 2016-13, Financial instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which amended the guidance on the impairment of financial instruments by requiring measurement and recognition of expected credit losses for financial assets held. The standard did not have a material impact on the Company's Condensed Consolidated Financial Statements for the nine months ended September 30, 2023.

In March 2020, the Financial Accounting Standards Board ~~(“FASB”~~("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 ~~Codification (“ASC”) Topic 260,~~ ~~Earnings~~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 intangible assets and other fair value adjustments with respect to certain assets acquired and liabilities assumed. The fair value of identifiable intangible assets is based on detailed valuations that use information and assumptions determined by management. Any excess of purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as any contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our Condensed Consolidated Statements of Operations.

Table of Contents

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, 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 and non-compete intangible asset amounts so determined represent the fair value at the date of acquisition and do not exceed the amount a third-party would pay for the assets.

NOTE 2 - ACQUISITIONS

Freedom Transaction

On February 18, 2022, RumbleOn acquired 100% of the equity interests of the Freedom Entities (the “Freedom Transaction”). The Freedom Entities own and operate powersports retail dealerships, including associated real estate, involving sales, financing, and parts and service of new and used motorcycles, 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 Freedom Transaction as a business combination. Under the terms of the agreement governing the Freedom Transaction, all outstanding equity interests of the Freedom Entities were acquired for total consideration of $97,237, consisting of $70,569 paid in cash, including certain transaction expenses paid on behalf of the Freedom Entities' equity holders, and the issuance of 1,048,718 shares of Class B Common Stock with a value of $26,511 on the date of the acquisition. On June 22, 2022, 2,446 shares of Class B Common Stock held in escrow were cancelled as part of the final purchase price adjustment.

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


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

Freedom Transaction Estimated Fair Value of Assets and Liabilities Assumed

The Company finalized its accounting for consideration transferred, assets acquired, and 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 revenue and expenses, and the applicable discount rates. These estimates were based on assumptions that the Company 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 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 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 represented the fair value at the date of acquisition, and did not exceed the amount a 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 unaudited pro forma financial information presents consolidated information of the

Table of Contents

Company as if the Freedom Transaction had been completed at January 1, 2021. The pro forma impact to our operating results for the nine months ended September 30, 2023 was not materially different from our reported results.


	Nine Months Ended September 30, 2022
Pro forma revenue	$	1,151,060
Pro forma net income (loss) from continuing operations	$	27,102
Earnings (loss) per share from continuing operations - basic	$	1.71
Earnings (loss) per share from continuing operations - diluted	$	1.70

Red Hills Powersports Acquisition

On March 3, 2023, the Company acquired Red Hills powersports, a single retail location representing 10 original equipment manufacturers ("OEMs") in Tallahassee, Florida, for total consideration approximating $3,300 in cash. This transaction was accounted for as a business combination and has been included in the Company's Powersports reporting segment. Pro forma results are not provided for this transaction as the acquisition was not material to our operations.

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	Classification	September 30, 2023		December 31, 2022
Assets:
Operating	Right-of-use assets	$	167,236	$	161,822
Total right-of-use assets		$	167,236	$	161,822

Liabilities:
Current:
Operating	Accounts payable and other current liabilities	$	24,723	$	24,075
Non-Current:
Operating	Operating lease liabilities	135,726		126,695
Total		$	160,449	$	150,770

Table of Contents

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


	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 and nine months ended September 30, 2023 and 2022:


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 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, 2023:


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,
	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, 2023 due in each year ending December 31:


Year	Operating Leases
Remainder of 2023	$	7,774
2024	30,318
2025	28,601
2026	26,927
2027	26,131
Thereafter	282,415
Total lease payments	402,166
Less: imputed interest	(241,717)
Present value of operating lease liabilities	$	160,449

NOTE 4 –GOODWILL AND INTANGIBLE ASSETS


	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, 2022 to September 30, 2023.


	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 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, 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, 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.

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 – SECURED DEBT

Senior secured debt consisted of the following as of September 30, 2023 and December 31, 2022:


	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

Floorplan notes payable as of September 30, 2023 and December 31, 2022:


	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

The Company has a term loan credit agreement (the “Oaktree Credit Agreement”) among the Company, as borrower, the lenders party thereto (the "Lenders"), and Oaktree, as administrative agent and collateral 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”). Loans under the Delayed Draw Term Loans Facility were subject to customary conditions precedent for facilities of this type including the need to meet certain financial tests and were available to be drawn up to March 1, 2023. Warrants that the 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 initial loan expired in April 2023.

Borrowings under the Oaktree Credit Agreement bear interest at a rate per annum equal, at the Company’s option, to either (a) SOFR (with a floor of 1.00%), plus an applicable margin of 8.25%, 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, 1.0% of such interest may be payable in kind. Interest expense for the three and nine months ended September 30, 2023 was $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 was $9,605 and $29,305, respectively, which included amortization of $1,152 and $4,388, respectively for the discount and debt issuance costs.

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 subsidiaries (the “Subsidiary Guarantors”), although certain assets of the Company and Subsidiary Guarantors are subject to a first-priority lien in favor of 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 Amendment No. 5, the 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 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 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 landlord. As a result, the 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 recorded for the proceeds from the sale. The Company incurred $1,787 in transaction costs related to the 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 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 ROF Consumer Finance Facility, and RumbleOn Finance is the borrower. All loans under this agreement are secured by certain collateral including the consumer finance loans purchased by the ROF Consumer Finance Facility.

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

As of 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 principal balance due under the ROF Consumer Finance Facility as of September 30, 2023. We intend to sell the loan portfolio held at RumbleOn Finance and pay off the outstanding balance during the fourth quarter of 2023. As of September 30, 2023, the outstanding balance due under the ROF Consumer Finance Facility was $14,606, which is included in the current portion of long-term debt and line of credit in the accompanying Condensed Consolidated Balance Sheets.

The loans receivable held by RumbleOn Finance, which are 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.

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. 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”). Floorplan notes payable - non-trade represents amounts borrowed to finance the purchase of specific new and used vehicle inventories with non-trade lenders. Changes in vehicle floorplan notes payable - trade are reported as operating cash flows and changes in floorplan notes payable - non-trade are reported as financing cash flows in the accompanying Consolidated Statements of Cash Flows.

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

The Company has a Floorplan Line with J.P. Morgan (the “J.P. Morgan Credit Line") that terminates October 25, 2024 and provides for an interest rate of 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 J.P. Morgan Credit Line are limited to $75,000 and the outstanding balance was $31,215. Interest expense on the J.P. Morgan Credit Line for the three and nine months ended September 30, 2023 was $474 and $1,282, respectively.

As of September 30, 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 RumbleOn Finance line of credit.

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 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 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 redemption price equal to 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 Notes.

The Notes rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the 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, 2023 and 2022 was as follows:

Table of Contents


	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

NOTE 7 –STOCK-BASED COMPENSATION

The Company has a shareholder-approved stock incentive plan (as amended, the “Plan”) allowing for the issuance of restricted stock units ("RSUs"), stock options, and other equity awards (collectively “Awards”). As of September 30, 2023, the number of shares authorized for issuance under the Plan was 3,291,461 shares of Class B Common Stock. RSUs and stock options awarded under the Plan are generally service/time-based and vest over a period of up to three years.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Restricted Stock Units	$	3,077	$	2,606	$	10,898	$	7,237
Stock Options	—		—		—		—
Total stock-based compensation	$	3,077	$	2,606	$	10,898	$	7,237

As of September 30, 2023, there were 820,916 unvested RSUs outstanding. The total unrecognized compensation expense related to outstanding equity awards was approximately $9,914, which the Company expects to recognize over a weighted-average period of approximately 19 months.

Pending Stock Option Grant to New Chief Executive Officer

In connection with Michael W. Kennedy's appointment as Chief Executive Officer, the 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 Company through each such vesting date. The award was granted as an inducement to Mr. Kennedy's entry into employment and 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 closing price of the Class B Common Stock on 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 Lenders to purchase up to 1,212,121 shares of Class B 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 Company has classified the warrants as equity in accordance with ASC 815. The fair value of the warrants is being amortized as interest expense over the term of the loan. The fair value of the warrants was determined at issuance using a Black-Scholes pricing model with the following estimates:

Table of Contents


	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 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 $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 the tax effect of non-deductible executive compensation, non-deductible interest expense, and discrete tax impacts of stock compensation vesting in the quarter.

The Company's provision for income taxes on continuing operations for the three months and nine months ended September 30, 2022 was $678 and $8,166, respectively, representing effective income tax rates of 15.4% and 23.3%, respectively. The difference between the federal income tax rate of 21.0% and the Company’s overall income tax rate for the three months and nine months ended September 30, 2022 was primarily due to income tax expense on non-deductible expenses, valuation allowance expense associated with state net operating losses, and state income taxes, 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 ~~common~~ share ~~(“EPS”) calculations are determined~~from continuing operations is calculated by dividing ~~net~~ income (loss) from continuing operations, net, by the ~~weighted average~~weighed-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per ~~common~~ share ~~calculations are determined by dividing net income (loss) by the weighted average number of common shares and~~from continuing operations is computed giving effect to all dilutive ~~common share equivalents outstanding. During periods when~~potential common stock equivalents ~~if any,~~outstanding for the period. Per share calculations pertaining to discontinued operations use the same number of shares as are ~~anti-dilutive they are not considered~~used in the ~~computation.~~calculations for continuing operations.

~~Revenue Recognition~~

~~Revenue is derived from two primary sources:(1)~~the Company’s online marketplace, which is our largest source of revenue and includes: (i) the sale of used vehicles through consumer, dealers and auction sales channels; (ii) online listing and sales fees; (iii) retail merchandise sales; (iv) vehicle financing; and (v) vehicle service contracts;and (2) subscription and other fees relating to the RumbleOn software solution, which includes: (i) a vehicle appraisal process; (ii) inventory management system; (iii) customer relationship and lead management program; and (iv) equity mining.

The Company recognizes revenue when all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement; (ii) the product or service has been provided to the customer; (iii) the amount to be paid by the customer is fixed or determinable; and (iv) the collection of the Company’s payment is probable.

~~Used Vehicle Sales~~

~~The Company sells used vehicles to consumers, dealers and at auctions. The source~~For purposes of these ~~vehicles is primarily from the Company’s Sell Us Your VehicleProgram and customers who trade-in their existing vehicles when making a used vehicle purchase.~~ ~~Revenue from used vehicle sales is recognized when the vehicle is delivered~~calculations, warrants to ~~a consumer, dealer or auction, a sales contract is signed,and the~~ purchase price has either been received or collectability has been established. We guarantee the vehicles we sell with a 3-day, money-back guarantee. Used vehicle sales revenue is recognized net of a reserve for returns, which is based on historical experience and trends.

~~Online Listing and Sales Fees~~

The Company charges a non-refundable fee for sellers to list their vehicle on the RumbleOn website. During the listing period, the Company manages all sales leads, handles all the documentation necessary to complete a sale, accepts a buyer’s trade and provides financing through third-party providers to the potential buyer, if necessary. Upon a successful sale, the seller pays a fee which is based on the difference between the actual retail sales price of the vehicle sold and the net proceeds agreed to be paid by RumbleOn to the seller when the listing agreement was signed. Revenue from non-refundable online listing fees is recognized once the listing agreement is signed, the vehicle is listed for sale and the listing fee has been received. Revenue for selling fees is recognized upon delivery of the vehicle to the customer, when the sales contract is signed, ~~and the purchase price has either been received or collectability has been established.~~

~~Retail Merchandise Sales~~

The Company recognizes sales revenue, net of sales taxes at the time it sells the merchandise or in the case of online sales when the merchandise is delivered to the customer and payment has been received.

~~Vehicle Financing~~

Consumers can pay for their vehicle using cash or the Company offers a range of finance options through unrelated third-parties such as banks or credit unions. These third-party providers generally pay the Company a~~fee either in a flat amount or in an amount equal to the difference between the interest rates charged to customers over the predetermined interest rates set by the financial institution.The Company may be charged back for commissions in the event a contract is prepaid, defaulted upon, or terminated.Revenue for these finance fees are recognized~~ ~~upon delivery of the vehicle to the customer, when the sales contract is signed, and the financing has been arranged.~~

~~Vehicle Service Contracts~~

At the time of vehicle sale, the Company provides customers, on behalf of unrelated third parties who are the primary obligors, a range of other related products and services, including extended protection plan (“EPP”) products and vehicle appearance protection. EPP products include extended service plans (“ESPs”) that are designed to cover unexpected expenses associated with mechanical breakdowns and guaranteed asset protection (“GAP”), which is intended to cover the unpaid balance on a vehicle loan in the event of a total loss of the vehicle or unrecovered theft. Vehicle appearance protection includes products aimed at maintaining vehicle appearance. ~~The Companyreceives commissions from the sale of these product and service contracts andhas no contractual liability to customers for claims under these products.~~ The EPPs and vehicle appearance protection currently offered to consumers provide coverage up to 60 months (subject to mileage limitations), while GAP covers the customer for the term of their finance contract.

~~Commission revenue is recognized at the time of sale,~~ net of a reserve for estimated contract cancellations. The reserve for cancellations is estimated based upon historical industry experience and recent trends and is reflected as a reduction of other sales revenue in the accompanying Consolidated Statements of Operations and a component of accounts payable and accrued liabilities in the accompanying Consolidated Balance Sheets. Our risk related to contract cancellations is limited to the revenue that we receive.

~~Subscription Fees~~

Subscription fees are generated from dealer partners, under a license arrangement that provides access to our software solution and ongoing support. Select and Appraisal Dealers pay a monthly subscription fee for access to and ongoing support for portions of the RumbleOn software solution which includes: (i) a vehicle appraisal process; (ii) inventory management system; (iii) customer relationship and lead management program; and (iv) equity mining. Dealers may also be charged an initial software installation and training fee. Dealers do not have the contractual right to take possession of the software and may cancel the license for these products and services by providing a 30-day notice. Installation and training do not have value to the user without the license and ongoing support and maintenance. Because the dealer partner has the right to cancel the license with 30 days’ notice, revenue for installation and training is recognized when complete, acceptance has occurred, and collectability of a determinable amount is probable. Revenue recognition of monthly subscription fees commences upon completion of installation, acceptance has occurred, and collectability of a determinable amount is probable.

~~Purchase Accounting for Business Combinations~~

The Company accounts for acquisitions by allocating the fair value of the consideration transferred to the fair value of the assets acquired and liabilities assumed on the date of the acquisition and any remaining difference is recorded as goodwill. Adjustments may be made to the preliminary purchase price allocation when facts and circumstances that existed on the date of the acquisition surface during the allocation period subsequent to the preliminary purchase price allocation, not to exceed one year from the date of acquisition. Contingent consideration is recorded at fair value based on the facts and circumstances on the date of the acquisition and any subsequent changes in the fair value are recorded through earnings each reporting period.

~~Goodwill~~

Goodwill is not amortized but rather tested for impairment at least annually. The Company tests goodwill for impairment annually during the fourth quarter of each year. Goodwill will also be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Impairment testing for goodwill is done at the reporting unit level. A reporting unit is an operating segment or one level below an operating segment (also known as a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available, and management regularly reviews the operating results of that component. The Company has concluded that currently it has one reporting unit.

Determining fair value includes the use of significant estimates and assumptions. Management utilizes an income approach, specifically the discounted cash flow analysis as a means for estimating fair value. This discounted cash flow analysis requires various assumptions including those about future cash flows, transactional and customer growth rates and discount rates. Expected cash flows are based on historical customer growth and the growth in transactions, including attrition, future strategic initiatives and continued long-term growth of the business. The discount rates used for the analysis reflect a weighted average cost of capital based on industry and capital structure adjusted for equity risk and size risk premiums. These estimates can be affected by factors such as customer and transaction growth, pricing, and economic conditions that can be difficult to predict.

~~Intangible Assets~~

Included in “Intangible Assets” on the Company’s Condensed Consolidated Balance Sheets are identifiable intangible assets including customer relationships, non-compete agreements, trademarks, trade names and internet domain names. The estimated fair value of these intangible assets at the time of acquisition are based upon various valuation techniques including replacement cost and discounted future cash flow projections. Trademarks, trade names and internet domain names are not amortized. Customer relationships are amortized on a straight-line basis over the expected average life of the acquired accounts, which are based upon several factors, including historical longevity of customers and contracts acquired and historical retention rates. Non-compete agreements are amortized on a straight-line basis over the term of the agreement, which will generally not exceed three years. The Company reviews the recoverability of these assets if events or circumstances indicate that the assets may be impaired and periodically reevaluates the estimated remaining lives of these assets.

Trademarks, trade names and internet domain names are considered to be indefinite lived intangible assets unless specific evidence exists that a shorter life is more appropriate. Indefinite lived intangible assets are tested for impairment, at a minimum, on an annual basis using an income approach or sooner whenever events or changes in circumstances indicate that an asset may be impaired.

~~Long-Lived Assets~~

Property and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used are measured by a comparison of the carrying amount of an asset to the future net cash flows expected to be generated by the asset. If such assets or asset groups are considered to be impaired, the impairment to be recognized will be measured by the amount by which the carrying amount of the assets or asset groups exceeds the related fair values. The Company also performs a periodic assessment of the useful lives assigned to the long-lived assets.

~~Technology Development Costs~~

~~Technology development costs are accounted for pursuant to ASC 350,~~ ~~Intangibles — Goodwill and Other.~~ Technology development costs include internally developed software and website applications that are used by the Company for its own internal use and to provide services to its customers, which include consumers, dealer partners and ancillary service providers. Under the terms of these customer arrangements the Company retains the revenue generating technology and hosts the applications on its servers and mobile applications. The customer does not have a contractual right to take possession of the software during the term of the arrangement and are not permitted to run the software itself or contract with another party unrelated to the entity to host the software. Technology development costs consist principally of (i) development activities including payroll and related expenses billed by a third-party contractor involved in application, content, production, maintenance, operation, and platform development for new and existing products and services, (ii) technology infrastructure expenses, and (iii) costs of Company employees devoted to the development and maintenance of software products. Technology and content costs for design, maintenance and post-implementation stages of internal-use software and general website development are expensed as incurred. For costs incurred to develop new website functionality as well as new software products and significant upgrades to existing internally used platforms or modules, capitalization begins during the application development stage and ends when the software is available for general use. Capitalized technology development is amortized on a straight-line basis over periods ranging from 3 to 7 years. The Company will perform periodic assessment of the useful lives assigned to capitalized software applications. Additionally, the Company from time-to-time may abandon additional development activities relating to specific software projects or applications and charge accumulated costs to technology development expense in the period such determination is made.

~~Vehicle Inventory~~

~~Vehicle inventory is accounted for pursuant to ASC 330,~~ ~~Inventory~~ and consists of the cost to acquire and recondition a used vehicle. Reconditioning costs are billed by third-party providers and includes parts, labor, and other repair expenses directly attributable to a specific vehicle. Transportation costs are expensed as incurred. Inventory is stated at the lower of cost or net realizable value. Vehicle inventory cost is determined by specific identification. Net realizable value is the estimated selling price less costs to complete, dispose and transport the vehicles. Selling prices are derived from historical data and trends, such as sales price and inventory turn times of similar vehicles, as well as independent market resources. Each reporting period, the Company recognizes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value through cost of sales in the accompanying Condensed Consolidated Statements of Operations.

~~Valuation Allowance for Accounts Receivable~~

The Company estimates the allowance for doubtful accounts for accounts receivable by considering a number of factors, including overall credit quality, age of outstanding balances, historical write-off experience and specific account analysis that projects the ultimate collectability of the outstanding balances. Ultimately, actual results could differ from these assumptions.

~~Cash and Cash Equivalents~~

The Company considers all cash accounts and all highly liquid short-term investments purchased with an original maturity of three months or less to be cash or cash equivalents. As of September 30, 2017 and 2016, the Company did not have any investments with maturities greater than three months.

~~Property and Equipment, Net~~

Property and equipment is stated at cost less accumulated depreciation and amortization and consists of capitalized technology development costs, furniture and equipment. Depreciation and amortization is recorded on a straight-line basis over the estimated useful life of the assets. Costs of significant additions, renewals and betterments, are capitalized and depreciated. Maintenance and repairs are charged to expense when incurred.

~~Fair Value of Financial Instruments~~

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, prepaid expenses and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

~~ASC Topic 820,~~ ~~Fair Value Measurement,~~ establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. Observable inputs are from sources independent of the Company, whereas unobservable inputs reflect the Company’s assumptions about the inputs market participants would use in pricing the asset or liability developed on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1: The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2: FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. Inputs other than quoted market prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, are Level 2 inputs.

Level 3: If inputs from Levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date.” Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

~~Beneficial Conversion Feature~~

From time to time, the Company may issue convertible notes that may have conversion prices that create an embedded beneficial conversion feature pursuant to the guidelines established by the ASC Topic 470-20, ~~Debt with Conversion and Other Options~~. The Beneficial Conversion Feature (“BCF”) of a convertible security is normally characterized as the convertible portion or feature of certain securities that provide a rate of conversion that is below market value or in-the-money when issued. The Company records a BCF related to the issuance of a convertible security when issued and also records the estimated fair value of any conversion feature issued with those securities. Beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingency is resolved.

The BCF of a convertible note is measured by allocating a portion of the note’s proceeds to the conversion feature, if applicable, and as a reduction of the carrying amount of the convertible note equal to the intrinsic value of the conversion feature, both of which are credited to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. The Company calculates the fair value of the conversion feature embedded in any convertible security using either a) the Black Scholes valuation model or b) a discount cash flow analysis tested for sensitivity to key Level 3 inputs using Monte Carlo simulation.

~~Cost of Revenue~~

Cost of vehicle sales includes the cost to acquire vehicles and the reconditioning and transportation costs associated with preparing the vehicles for resale. Vehicle acquisition costs are driven by the mix of vehicles the Company acquires, the source of those vehicles, and supply and demand dynamics in the vehicle market. Reconditioning costs are billed by third-party providers and include parts, labor, and other repair expenses directly attributable to specific vehicles. Transportation costs consist of costs incurred to transport the vehicles from the point of acquisition or delivery. Cost of sales also includes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value.

Cost of subscription and other fee revenue includes the (i) various data feeds from third parties; (ii) hosting of the customer facing website; (iii) commissions for new sales; and (iv) implementation and training of new and existing customers. These costs and expenses are charged to cost of revenue as incurred.

~~Selling, General and Administrative Expenses~~

Selling, general and administrative (“SG&A”) expenses primarily include compensation and benefits, advertising and marketing, professional fees, technology development expenses, rent and other occupancy costs, insurance, travel and other administrative expenses.

~~Advertising and Marketing Costs~~

Advertising and marketing costs are expensed as incurred and are included in selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations. Advertising and marketing expenses were $775,456 and $1,071,398, respectively for the three and nine-month periods ended September 30, 2017. There were no advertising and marketing costs incurred for the same periods in 2016.

~~Stock-Based Compensation~~

On January 9, 2017, the Company’s Board of Directors approved, subject to stockholder approval, the RumbleOn, Inc. 2017 Stock Incentive Plan (the “Plan”) under which restricted stock units (“RSUs”) and other equity awards may be granted to employees and non-employee members of the Board of Directors. On June 30, 2017, the Plan was approved by the Company's stockholders at the 2017 Annual Meeting of Stockholders. The Company estimates the fair value of awards granted under the Plan on the date of grant. The fair value of an RSU is based on the average of the high and low market prices of the Company’s Class B Common Stock on the date of grant and is recognized as an expense on a straight-line basis over its vesting period; to date, the Company has only issued RSUs that vest over a three-year period utilizing the following vesting schedule: (i) 20% on the first anniversary of the grant date; (ii) 30% on the second anniversary of the grant date; and (iii) 50% on the third anniversary of the grant date. During the nine-month period ended September 30, 2017, the Company granted 560,000 RSUs under the Plan to members of the Board of Directors, officers and employees. Compensation expense associated with RSU grants for the three and nine-month periods ended September 30, 2017 was $157,763 and $287,550, respectively and is included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

~~Income Taxes~~

~~The Company follows ASC Topic 740,~~ ~~Income Taxes,~~ for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods.

The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. ASC Topic 740 only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. As of September 30, 2017, the Company reviewed its tax positions and determined there were no outstanding, or retroactive tax positions with less than a fifty percent likelihood of being sustained upon examination by the taxing authorities, therefore this standard has not had a material effect on the Company.

~~The Company classifies tax-related penalties and net interest as income tax expense. As of September 30, 2017, no income tax expense has been incurred.~~

~~Recent Pronouncements~~

~~The Company has adopted Accounting Standards Update 2015-11 Inventory (Topic 330),~~ ~~Simplifying the Measurement of Inventory,~~ which requires inventory to be stated at the lower of cost or net realizable value. Vehicle inventory cost is determined by specific identification. Net realizable value is the estimated selling price less costs to complete, dispose and transport the vehicles. Selling prices are derived from historical data and trends, such as sales price and inventory turn times of similar vehicles, as well as independent, market resources. Each reporting period the Company recognizes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value through cost of revenue in the accompanying Condensed Consolidated Statements of Operations.

~~NOTE 3 – ACQUISITIONS~~

~~On February 8, 2017, the Company acquired substantially all of the assets of NextGen in exchange for $750,000 in cash, plus 1,523,809 unregistered~~1,212,121 shares of Class B Common Stock having an exercise price of ~~the Company, which were issued at a negotiated fair value of $1.75~~$12.00 per share and a subordinated secured promissory note issued by the Company in favor of NextGen in the amount of $1,333,334 (the “NextGen Note”). The NextGen Note matures on the third anniversary of the closing date (the “Maturity Date”).

~~The following table presents the~~warrants to purchase ~~price consideration as of September 30, 2017:~~

~~Issuance of shares~~	$~~2,666,666~~
~~Debt~~	~~1,333,334~~
~~Cash paid~~	~~750,000~~
	$~~4,750,000~~

~~Net tangible assets acquired:~~
~~Technology development~~	$~~1,400,000~~
~~Customer contracts~~	~~10,000~~
~~Non-compete agreements~~	~~100,000~~
~~Tangible assets acquired~~	~~1,510,000~~
~~Goodwill~~	~~3,240,000~~
~~Total purchase price~~	~~4,750,000~~
~~Less: Issuance of shares~~	~~(2,666,666~~)
~~Less: Debt issued~~	~~(1,333,334~~)

~~Cash paid~~	$~~750,000~~

~~Supplemental pro forma information~~

~~The results of operations of NextGen since the acquisition date are included in the accompanying Condensed Consolidated Financial Statements.~~

The following supplemental pro forma information presents the financial results as if the acquisition of NextGen was made as of January 1, 2017 for both the three and nine-month periods ended September 30, 2017 and on January 1, 2016 for both the three and nine-month periods ended September 30, 2016.

Pro forma adjustments for the nine-month period ended September 30, 2017 and 2016 primarily include adjustments to reflect additional depreciation and amortization of $29,866 and $48,788, respectively, related to technology development and identifiable intangible assets recorded as part of the acquisition, and interest expense related to the NextGen Note of $27,353 and $42,833, respectively.

Three-Months Ended
September 30,

Nine-Months Ended
September 30,

2017

2016

2017

2016

Pro forma revenue
$3,706,142
$45,606
$3,868,079
$100,006
Pro forma net loss
$(2,317,503)
$(567,401)
$(5,237,814)
$(1,625,690)
Loss per share - basic and fully diluted
$(0.23)
$(0.08)
$(0.58)
$(0.23)
Weighted-average common shares and common stock equivalents outstanding basic and fully diluted
  10,018,541
  7,023,809
  9,105,429
  7,023,809

~~NOTE 4 – PROPERTY AND EQUIPMENT, NET~~

~~The following table summarizes property and equipment, net of accumulated depreciation and amortization as of September 30, 2017 and December 31, 2016:~~

	~~September 30,~~ ~~2017~~	~~December 31,~~ ~~2016~~
~~Vehicles~~	$~~472,870~~	$-
~~Furniture and equipment~~	~~127,306~~	-
~~Technology development~~	~~1,835,097~~	-
~~Total property and equipment~~	~~2,435,273~~	-
~~Less: accumulated depreciation and amortization~~	~~268,947~~	-
~~Property and equipment, net~~	$~~2,166,326~~	$-

At September 30, 2017, capitalized technology development costs were $1,835,097, which includes $1,400,000 of software acquired in the NextGen transaction. For additional information, see Note 3 - “Acquisitions.” Total technology development costs incurred for the nine-month period ended September 30, 2017 were $713,766, of which $435,097 was capitalized and $278,669 was charged to expense in the accompanying Condensed Consolidated Statements of Operations. The amortization of capitalized technology development costs for the three and nine-month periods ended September 30, 2017 was $89,429 and $219,374, respectively. There were no technology development costs incurred and no amortization of capitalized development costs for the same periods in 2016. Depreciation expense on vehicles, furniture and equipment for the three and nine-month periods ended September 30, 2017 was $28,598 and $49,573, respectively. Depreciation on furniture and equipment for the three and nine-month periods ended September 30, 2016 was $475 and $1,425, respectively.

~~NOTE 5 – INTANGIBLE ASSETS, NET~~

~~Intangible assets, net consist of the following at September 30, 2017 and December 31, 2016:~~

	~~September 30,~~ ~~2017~~
~~Amortized Identifiable Intangible Assets:~~

~~Customer agreements~~
~~Balance at December 31, 2016~~	$-
~~Customers acquired~~	~~10,000~~
~~Amortization~~	~~(3,750~~)
~~Balance at September 30, 2017~~	$~~6,250~~

~~Non-compete agreements~~
~~Balance at December 31, 2016~~	$ -
~~Agreements~~	~~100,000~~
~~Amortization~~	~~(30,000~~)
~~Balance at September 30, 2017~~	$~~70,000~~

~~Unamortized Identifiable Intangible Assets:~~
~~Domain names~~
~~Balance at December 31, 2016~~	$~~45,515~~
~~Domain names acquired~~	-
~~Impairment or write down~~	-
~~Balance at September 30, 2017~~	$~~45,515~~

~~Intangible assets, net at September 30, 2017~~	$~~121,765~~

Amortization expense related to intangible assets for the three and nine-month periods ended September 30, 2017 was $11,250 and $33,750, respectively. The estimated future amortization expenses related to identifiable intangible assets is as follows:

Remainder through December 31, 2017
$11,250
2018
45,000
2019
20,000

$76,250

~~NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES~~

~~The following table summarizes accounts payable and other accrued liabilities as of September 30, 2017 and December 31, 2016:~~

September 30,
2017

December 31,
2016

Accounts payable
$1,539,572
$219,101
Sales taxes
  296
  -
Accrued compensation and benefits
  354,790
  -
Other
  7,885
  -
Total accounts payable and accrued liabilities
$1,902,543
$219,101

~~NOTE 7 – NOTES PAYABLE~~

~~Notes payable consisted of the following as of September 30, 2017 and December 31, 2016:~~

September 30,
2017

December 31,
2016

Notes payable-NextGen dated February 8, 2017. Interest is payable semi-annually at 6.5% through February 9, 2019 and 8.5% through maturity which is February 8, 2020.
$1,333,334
$-
Notes payable-private placement dated March 31, 2017. Interest is payable at maturity and accrues at 6.5% through March 31, 2019 and 8.5% through maturity which is March 31, 2020.
  667,000
  -
Convertible note payable-related party dated July 13, 2016. Interest rate of 6.0% which is accrued and paid at maturity. Note matures on July 26, 2026. Note is convertible into common stock, in whole at any time before maturity at the option of the holder at $.75 per share.
  -
  197,358
Senior Secured Promissory Notes dated September 5, 2017. Interest rate of 5.0% through December 31, 2017 and a rate of 10% through maturity which is accrued and paid at maturity. Note matures on September 5, 2018.
  1,650,000

Less: Debt discount
  (725,123)
  (196,076)

$ 2,925,211

$ 1,282

Current portion (net of $139,726 of debt discount)
  1,510,274

  -

Long-term portion
$ 1,414,937

$ 1,282

~~Convertible Note Payable-Related Party~~

On July 13, 2016, the Company entered into an unsecured convertible note (the “BHLP Note”) with Berrard Holdings, an entity owned and controlled by a current officer and director, Mr. Berrard, pursuant to which the Company was required to repay $191,858 on or before July 13, 2026 plus interest at 6% per annum. The BHLP Note was also convertible into common stock, in whole, at any time before maturity at the option of the holder at the greater of $0.06 per share or 50% of the price per share of the next qualified financing which is defined as $500,000 or greater. Effective August 31, 2016, the principal amount of the BHLP Note was amended to include an additional $5,500 loaned to the Company, on the same terms. On November 28, 2016, the Company completed its qualified financing at $1.50 per share which established the conversion price per share for the BHLP Note of $0.75 per share, resulting in the principal amount of the BHLP Note being convertible into 263,144 shares of Class B Common Stock. As such, November 28, 2016 became the “commitment date” for determining the value of the BHLP Note conversion feature. Because there had been no trading in the Company’s common stock since July 2014, other than the purchase by Berrard Holdings of 99.5% of the outstanding shares in a single transaction, the Company used the Monte Carlo simulation to determine the intrinsic value of the conversion feature of the BHLP Note, which resulted in a value in excess of the principal amount of the BHLP Note. Thus, the Company recorded a note discount of $197,358 with the corresponding amount as an addition to paid in capital. This note discount was amortized to interest expense until the scheduled maturity of the BHLP Note in July 2026 or until it was converted using the effective interest method. On March 31, 2017, the Company issued 275,3121,048 shares of Class B Common Stock ~~upon full conversion of the BHLP Note,~~ having an ~~aggregate principal amount, including accrued interest, of $206,484 and a conversion~~exercise price of $0.75 per share. In connection with the conversion of the BHLP Note, the remaining debt discount of $196,076 was charged to interest expense in the Condensed Consolidated Statements of Operations and the related deferred tax liability was credited to additional paid in capital in the Condensed Consolidated Balance Sheets.

~~Note Payable-NextGen~~

On February 8, 2017, in connection with the acquisition of NextGen, the Company issued a subordinated secured promissory note in favor of NextGen in the amount of $1,333,334. Interest accrues and will be paid semi-annually (i) at a rate of 6.5% annually from the closing date through the second anniversary of such date and (ii) at a rate of 8.5% annually from the second anniversary of the closing date through the Maturity Date. Upon the occurrence of any event of default, the outstanding balance under the NextGen Note shall become immediately due and payable upon election of the holder. The Company’s obligations under the NextGen Note are secured by substantially all the assets of NextGen Pro, pursuant to an Unconditional Guaranty Agreement (the “Guaranty Agreement”), by and among NextGen and NextGen Pro, and a related Security Agreement between the parties, each dated as of February 8, 2017. Under the terms of the Guaranty Agreement, NextGen Pro has agreed to guarantee the performance of all the Company’s obligations under the NextGen Note. Interest expense on the NextGen Notes$143.13 were considered common stock equivalents that were antidilutive for the ~~three and nine-month~~ periods ended September 30, ~~2017 was $21,370 and $54,849, respectively.~~

~~Notes Payable-Private Placement~~

~~On March 31, 2017, the Company completed funding of the second tranche of the 2016 Private Placement (as defined below). The investors~~2023. Warrants that expired earlier in 2023 were ~~issued 1,161,920 shares of Class B Common Stock of the Company and promissory notes (the “Private Placement Notes”)~~also antidilutive for all periods that they were outstanding. Unvested RSUs have been included in the ~~amount~~calculation of $667,000, in consideration of cancellation of loan agreements having an aggregate principal amount committed by the purchasers of $1,350,000. Under the terms of the Private Placement Notes, interest shall accrue on the outstanding and unpaid principal amounts until paid in full. The Private Placement Notes mature on March 31, 2020. Interest accrues at a rate of 6.5% annually from the closing date through the second anniversary of such date and at a rate of 8.5% annually from the second anniversary of the closing date through the maturity date. Upon the occurrence of any event of default, the outstanding balance under the Private Placement Notes shall become immediately due and payable upon election of the holders. Based on the relative fair values attributeddiluted earnings per share to the ~~Class B Common Stock and promissory~~extent the shares would be dilutive. Additionally, the Company’s senior unsecured convertible notes issued in the 2016 Private Placement, the Company recorded a debt discount on the promissory notes of $667,000 with the corresponding amounts as addition to paid in capital. The debt discount is amortized to interest expense until the scheduled maturity of the Private Placement Notes in March 2020 using the effective interest method. The effective interest rate at September 30, 2017 was 26.0%. Interest expense on the Private Placement Noteswere antidilutive for the ~~three and nine-month~~ periods ended September 30, ~~2017 was $94,885~~2023 and ~~$184,943, respectively, which included debt discount amortization of $41,979 and $81,603, respectively for the three and nine-month periods ended September 30, 2017.~~2022.

~~Notes Payable-Senior Secured Promissory Notes~~

On September 5, 2017, the Company executed Senior Secured Promissory Notes (the “Notes”) in favor of several investors, including certain executive officers and directors of the Company, in the aggregate principal amount of $1,650,000 (“Principal Amount”), which includes an aggregate original issue discount of $150,000. The proceeds to the Company from the Notes, net of original issuance discount, was $1,500,000. The Notes are secured by an interest in all the Company’s Collateral, as such term is defined in the Notes.~~The Notes mature on September 5, 2018 and bear interest at a rate equal to 5% per annum through December 31, 2017, and a rate of 10% per annum thereafter. Interest is payable monthly in arrears.~~ ~~Upon the occurrence of any event of default, the outstanding balance under the Notes shall become immediately due and payable upon election of the holders~~.The Principal Amount and any unpaid interest accrued thereon may be prepaid by the Company at any time prior to the maturity date without premium or penalty upon five days prior written notice to the noteholder. If the Company consummates in one or more transactions financing of any nature resulting in net proceeds available to the Company of $5,000,000 or more, then the noteholders may require the Company to prepay the Notes on thirty (30) days prior written notice to the Company. The original issue discount is amortized to interest expense until the scheduled maturity of the Notes in September 2018 using the effective interest method. The effective interest rate at September 30, 2017 was 10.0%. Interest expense on the Notes for the three and nine-month periods ended September 30, 2017 was $15,925 which included $10,274 of original issue discount amortization. ~~On October 23, 2017, the Company completed a public offering and used approximately~~ ~~$1,661,075~~ ~~of the net proceeds of the offering for the repayment of the Notes in the aggregate principal amount of $1,650,000, plus accrued interest, which resulted in the termination of the Notes.~~ ~~For additional information, see Note 15 “Subsequent Events.”~~

~~NOTE 8 – STOCKHOLDERS’ EQUITY~~

On November 28, 2016, the Company completed a private placement with certain purchasers, with respect to the sale of an aggregate of 900,000 shares of common stock of the Company at a purchase price of $1.50 per share for total consideration of $1,350,000 (the “2016 Private Placement”). In connection with the 2016 Private Placement, the Company also entered into loan agreements, pursuant to which the purchasers would loan to the Company their pro rata share of up to $1,350,000 in the aggregate upon the request of the Company at any time on or after January 31, 2017 and before November 1, 2020. On March 31, 2017, the Company completed the second tranche of the 2016 Private Placement. For additional information, see Note 7 - “Notes Payable.”

On January 9, 2017, the Company’s Board of Directors approved, subject to stockholder approval, the adoption of the Plan. On June 30, 2017, the Plan was approved by the Company’s stockholders at the 2017 Annual Meeting of Stockholders. The purposes of the Plan are to attract, retain, reward and motivate talented, motivated and loyal employees and other service providers (“Eligible Individuals”) by providing them with an opportunity to acquire or increase a proprietary interest in the Company and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such persons and the stockholders of the Company. The Plan will allow the Company to grant a variety of stock-based and cash-based awards to Eligible Individuals. Twelve percent (12%) of the Company’s issued and outstanding shares of Class B Common Stock from time to time are reserved for issuance under the Plan. As of September 30, 2017, 9,018,541 shares are issued and outstanding, resulting in up to 1,082,225 shares available for issuance under the Plan. As of September 30, 2017, the Company has granted 560,000 RSUs under the Plan to certain officers and employees of the Company. The aggregate fair value of the RSUs was $2,103,500. The RSUs vest over a three-year period as follows: (i) 20% on the first anniversary of the grant date; (ii) 30% on the second anniversary of the grant date; and (iii) 50% on the third anniversary of the grant date. The fair value of the grant is amortized over the period from the grant date through the vesting dates. Compensation expense recognized for these grants for the three and nine-month periods ended September 30, 2017 was $157,763 and $287,550, respectively. The Company has approximately $1,605,600 in unrecognized stock-based compensation, with an average remaining vesting period of three years.

On January 9, 2017, the Company’s Board of Directors and stockholders holding 6,375,000 of the Company’s issued and outstanding shares of common stock approved an amendment to the Company’s Articles of Incorporation (the “Certificate of Amendment”), to change the name of the Company to RumbleOn, Inc. and to create an additional class of common stock of the Company, which was effective on February 13, 2017 (the “Effective Date”).

Immediately before approving the Certificate of Amendment, the Company had authorized 100,000,000 shares of common stock, $0.001 par value (the “Authorized Common Stock”), including 6,400,000 issued and outstanding shares of common stock (the “Outstanding Common Stock, and together with the Authorized Common Stock, the “Common Stock”). Pursuant to the Certificate of Amendment, the Company designated 1,000,000 shares of Authorized Common Stock as Class A Common Stock (the “Class A Common Stock”), which Class A Common Stock ranks pari passu with all of the rights and privileges of the Common Stock, except that holders of the Class A Common Stock are entitled to ten votes per share of Class A Common Stock issued and outstanding, and all other shares of Common Stock, including all shares of Outstanding Common Stock shall be deemed Class B Common Stock (the “Class B Common Stock”), which Class B Common Stock is identical to the Class A Common Stock in all material respects, except that holders of the Class B Common Stock are entitled to one vote per share of Class B Common Stock issued and outstanding.

Also on January 9, 2017, the Company’s Board of Directors and stockholders holding 6,375,000 of the Company’s issued and outstanding shares of common stock approved the issuance to (i) Marshall Chesrown of 875,000 shares of Class A Common Stock in exchange for an equal number of shares of Class B Common Stock held by Mr. Chesrown, and (ii) Steven R. Berrard of 125,000 shares of Class A Common Stock in exchange for an equal number of shares of Class B Common Stock held by Mr. Berrard, effective at the time the Certificate of Amendment was filed with the Secretary of State of Nevada.

On the Effective Date, the Company filed the Certificate of Amendment with the Secretary of State of the State of Nevada changing the Company’s name to RumbleOn, Inc. and creating the Class A and Class B Common Stock. Also on the Effective Date, the Company issued an aggregate of 1,000,000 shares of Class A Common Stock to Messrs. Chesrown and Berrard in exchange for an aggregate of 1,000,000 shares of Class B Common Stock held by them. Also on the Effective Date, the Company amended its bylaws to reflect the name change to RumbleOn, Inc. and to reflect the Company’s primary place of business as Charlotte, North Carolina.

On March 31, 2017, the Company completed the sale of 620,000 shares of Class B Common Stock, par value $0.001, at a price of $4.00 per share for aggregate proceeds of $2,480,000 in the private placement (the “2017 Private Placement”). Officers and directors of the Company acquired 175,000 shares of Class B Common Stock in the 2017 Private Placement. In May 2017, the Company completed the sale of an additional 37,500 shares of Class B Common Stock in the 2017 Private Placement. Proceeds from the 2017 Private Placement were used to complete the launch of the Company’s website, ~~www.rumbleon.com, acquire vehicle inventory, continue development of the Company’s platform, and for working capital purposes.~~

On June 30, 2017, the Company filed a Registration Statement on Form S-1 (the “Registration Statement”) with the SEC covering the resale of 8,993,541 shares of Class B Common Stock issued in the NextGen acquisition and the 2017 Private Placement and other shares previously held by our stockholders, including our officers and directors. The SEC declared the Registration Statement effective on July 7, 2017. In connection with the filing of the Registration Statement, our officers and directors and certain stockholders entered into a lock-up agreement restricting, through December 31, 2017, the resale of an aggregate of 6,848,800 shares of our common stock held by them and subject to the Registration Statement.

~~NOTE 9 – SELLING, GENERAL AND ADMINISTRATIVE~~

~~The following table summarizes the detail of selling, general and administrative expense for the three and nine-month periods ended September 30, 2017 and 2016:~~

Three-months ended
September 30,

Nine-months ended
September 30,

2017

2016

2017

2016

Selling, general and administrative:

Compensation and related costs
$1,028,819
$-
$1,951,911
$-
Advertising and marketing
  752,017
  -
  1,060,195
  -
Professional fees
  192,041
  34,044
  724,486
  49,017
Technology development
  91,967
  -
  278,668
  -
General and administrative
  261,199
  2,662
  674,956
  9,118

$2,326,043
$36,706
$4,690,216
$58,135

NOTE 1011 – SUPPLEMENTAL CASH FLOW INFORMATION

The following table includes supplemental cash flow information, including ~~noncash~~non-cash investing and financing activity for the ~~nine-month periods~~nine months ended September 30, ~~2017~~2023 and ~~2016.~~2022:

Nine-Months Ended
September 30,

2017

2016

Cash paid for interest
$42,502
$-



Note payable issued on acquisition
$1,333,334
$-



Conversion of notes payable-related party
$206,484
$-



Issuance of shares for acquisition
$2,666,666
$-

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 11 – INCOME TAXES~~

In projecting the Company’s income tax expense for the year ended December 31, 2017, management has concluded it is not likely to recognize the benefit of its deferred tax asset, net of deferred tax liabilities, and as a result a full valuation allowance will be required. As such, no income tax benefit has been recorded for the three and nine-month periods ended September 30, 2017 or 2016.

~~NOTE 12 — LOSS PER SHARE~~

Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. The computation of diluted net loss per share for the three-month and nine-month periods ended September 30, 2017 did not include 560,000 of restricted stock units to purchase shares of Class B Common Stock as their inclusion would be antidilutive. There were no restricted stock units outstanding for the three and nine-month periods ended September 30, 2016.

NOTE 1312 – RELATED PARTY TRANSACTIONS

RideNow Leases

The Company has related party leases for 24 properties consisting of dealerships and offices in connection with the RideNow acquisition. Each 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 director of the Company until November 1, 2023, and William Coulter, a director of the Company, as the landlord. The initial aggregate base rent payment for all 24 leases was 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. Rent expense associated with these leases was $4,625 and $13,855 and $4,457 and $13,372, during the three and nine months ended September 30, 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 paid $2 and $6 to RideNow Management, LLLP, an entity owned equally by Messrs. Coulter and Tkach, during the three and nine months ended September 30, 2023 and 2022, respectively. In addition, the Company 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 three and nine months ended September 30, 2023 and 2022, respectively. These payments were made to cover certain proportionate costs of the Company, including health plan and IT contract expenses, that were shared among Coulter Management and the RideNow entities for a period of 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 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 initial term was thirty-six (36) months but 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 ~~December 31, 2015,~~the Board of Directors in September 2021, the Company ~~had loans~~is paying a death benefit to the estate of ~~$141,000 and accrued interest of $13,002 due to an entity that is owned and controlled by~~ a ~~family member of an officer~~former CFO and director of the ~~Company. Interest expense on~~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 ~~loans~~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-month period~~nine months ended September 30, ~~2016~~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 ~~$2,878 and $7,431, respectively. All convertible notes and related party notes outstanding as of July 13, 2016 were paid in full in July 2016.~~

~~As of December 31, 2016,~~employed by the Company ~~had~~until February 21, 2022. This family member received aggregate gross pay of approximately $0 and $81, for the ~~BHLP Note payable~~three and nine months ended September 30, 2022, respectively. No payments were made during 2023. The other family member received aggregate gross pay of ~~$197,358~~approximately $137 and ~~accrued interest~~$331, and $89 and $239 during the three and nine months ended September 30, 2023 and 2022, respectively, and cumulative grants of ~~$5,508 due to an entity that is owned and controlled by a current officer and director of the Company. On March 31, 2017, the Company issued 275,312~~restricted stock units representing 42,273 shares of Class B Common ~~Stock upon full conversion~~Stock.

Table of Contents

NOTE 13 - 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 two reportable segments for segment reporting: (1) powersports and (2) vehicle logistics. Our powersports segment consists principally of the ~~BHLP Note. The accrued interest is included in accrued interest under Long-term liabilities~~sale of new and used motorcycles and other powersports vehicles, service parts and accessories, together with the associated costs to source and service the vehicles, parts and accessories. Our vehicle logistics segment provides nationwide transportation brokerage services between dealerships and auctions.

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

Total assets by operating 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 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. ~~For additional information, see Note 7 - “Notes Payable.”~~

~~On March 31, 2017, the Company completed the sale of 620,000 shares of Class B Common Stock in the 2017 Private Placement. Officers~~Revenue and directors of the Company acquired 175,000 shares of Class B Common Stock in the 2017 Private Placement. In May 2017, the Company completed the sale of an additional 37,500 shares of Class B Common Stock in the 2017 Private Placement. For additional information, see Note 8 - “Stockholders’ Equity.”

~~A key component of the Company’s business model is to use dealer partners in the acquisition of motorcycles as well as utilize~~costs for these dealer partners to provide inspection, reconditioning and distribution services. Correspondingly, the Company will earn fees and transaction income, and the dealer partner may earn incremental revenue and enhance profitability through increased sales, leads, and fees from inspection, reconditioning and distribution programs. In connection with the development of the dealer program, the Company tested various aspects of the program by utilizing a dealership (the “Test Dealer”) to which Mr. Chesrown, the Company’s Chief Executive Officer has provided financing in the form of a $400,000 convertible promissory note. The note matures on May 1, 2019, interest is payable monthly at 5% per annum and can be converted into a 25% ownership interest in the Test Dealer at any time. The Test Dealer is expected to be named a Select Dealer by an agreement with the same material terms as the Company’s other Select Dealer agreements. Revenue generated by the Company from the Test Dealer for the three and nine-month periods ended September 30, 2017 was $924,069 and $946,824, respectively. Included in accounts receivable at September 30, 2017 is $264,464 owed to the Company by the Test Dealer.

In connection with the NextGen acquisition, the Company entered into a Consulting Agreement (the “Consulting Agreement”) with Kartik Kakarala, who formerly served as the Chief Executive Officer of NextGen and now serves as a director of the Company. Pursuant to the Consulting Agreement, Mr. Kakarala serves as a consultant to the Company. The Consulting Agreement may be cancelled by either party, effective upon delivery of a written notice to the other party. Mr. Kakarala’s compensation pursuant to the Consulting Agreement is $5,000 per month. For the three and nine-month periods ended September 30, 2017, the Company paid $15,000 and $35,000, respectively under the Consulting Agreement. These amounts are included in selling, general and administrative expensesintercompany freight services have been eliminated in the Condensed Consolidated Statements of Operations. ~~For additional information, see Note 3 - “Acquisitions.”~~

~~In connection with the NextGen acquisition, the Company entered into a Services Agreement (the “Services Agreement”) with Halcyon Consulting, LLC (“Halcyon”), to provide development~~(2)Revenue for Powersports has been adjusted by $19.6 million and support services to the Company. Mr. Kakarala currently serves as the Chief Executive Officer of Halcyon. Pursuant to the Services Agreement, the Company will pay Halcyon hourly fees for specific services, set forth in the Services Agreement, and such fees may increase on an annual basis, provided that the rates may not be higher than 110% of the immediately preceding year’s rates. The Company will reimburse Halcyon for any reasonable travel and pre-approved out-of-pocket expenses in connection with its services to the Company. For the three and nine-month periods ended September 30, 2017 the Company paid $221,400 and $678,766, respectively under the Services Agreement.

As of September 30, 2017, the Company had promissory notes of $370,556 and accrued interest of $12,076 due to an entity controlled by a director and to the director of the Company. The promissory notes were issued in connection with the completion of the 2016 Private Placement on March 31, 2017. Interest expense on the promissory notes for the three and nine-month periods ended September 30, 2017 was $29,392 and $63,416, respectively, which included debt discount amortization of $23,321 and $45,335,$52.4 million, respectively, for the three and ~~nine-month periods~~nine months ended September 30, ~~2017. The interest was charged~~2022. See "Correction of an Immaterial Misstatement Related to ~~interest expense~~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 ~~included~~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 ~~accrued interest under long-term~~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 ~~the~~our Condensed Consolidated Balance ~~Sheets.~~Sheets as of December 31, 2022.

OnDiscontinued operations for three and nine months ended September ~~5, 2017,~~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 ~~executed Senior Secured Promissory Notes (the “Notes”) in favor of several investors, including certain executive officers and directors~~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 ~~aggregate principal amount~~nine months ended September 30, 2023. This charge was classified as SG&A expenses. The fair value of ~~$1,650,000 (“Principal Amount”),~~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 ~~includes an aggregate original issue discount~~approximated $14,606 and is included in current portion of ~~$150,000. As~~long-term debt and line of credit in the accompanying Condensed Consolidated Balance Sheets as of September 30, ~~2017,~~2023. We anticipate the ~~Company had Notes of $1,214,144 and accrued interest of $4,144 due to certain executive officers and directors~~sale of the ~~Company. Interest expense on~~loan portfolio to be completed during the ~~Notes due to certain executive officers and directors for the three and nine-month periods ended September 30, 2017 was $11,678, which included $7,534~~fourth quarter of original issue discount amortization. On October 23, 2017, the Company completed a public offering and used $1,661,075 of the net proceeds of the offering for the repayment of the Notes in the aggregate principal amount of $1,650,000, plus accrued interest, which resulted in the termination of the Notes. For additional information, see Note 7 - “Notes Payable” and Note 15 “Subsequent Events.”2023.

~~NOTE 14 – COMMITMENTS AND CONTINGENCIES~~

The Company is subject to 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.

NOTE 15 – SUBSEQUENT ~~EVENTS~~EVENT

New Chief Executive Officer

~~On October 23, 2017,~~Michael W. Kennedy became Chief Executive Officer and director of the Company ~~completed~~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 ~~underwritten public offering~~accomplished Powersports industry veteran with over three decades of ~~2,910,000 shares of Class B common stock~~experience in strategy, commercial operations, financial management, and manufacturing at ~~a public offering price of $5.50 per share~~ ~~for net proceeds to the Company of approximately $14,500,000~~ ~~after deducting the underwriting discount and offering fees and expenses payable by the Company (the “Offering”)~~leading Powersports companies. See Note 7 - "Stock-Based Compensation". ~~The Company also granted the underwriters a 30-day option, which expires on November 19, 2017, to purchase up to an additional 436,500 shares of Class B common stock to cover over-allotments.~~

~~The Company~~ used $1,661,075 of the net proceeds of the Offering for the repayment of the Senior Secured Promissory Notes in the aggregate principal amount of $1,650,000, plus accrued interest, which resulted in the termination of the Senior Secured Promissory Notes. The Company intends to use the remaining net proceeds of the Offering for working capital and general corporate purposes, which may include purchases of additional inventory held for sale, increased spending on marketing and advertising and capital expenditures necessary to grow the business.

In connection with ~~the Offering, on October 23, 2017, the Company issued to the representatives~~Mr. Kennedy’s appointment as Chief Executive Officer and effective as of the ~~underwriters warrants to purchase 218,250 shares of Class B common stock, which is equal to 7.5%~~same date, Mr. Tkach resigned from his roles as Interim Chief Executive Officer and as a director of the ~~aggregate number~~Company. Upon his resignation, Mr. Tkach was appointed to serve as a Board observer.

Table of shares of Class B common stock sold in the Offering (the “Representatives’ Warrants”). The Representatives’ Warrants are exercisable at a per share price of $6.325, which is equal to 115% of the Offering price per share of the shares sold in the Offering. The Representatives’ Warrants are exercisable at any time and from time to time, in whole or in part, during the four-year period commencing one year from the effective date of the registration statement related to the Offering.Contents

~~Also, in connection with the Offering, on October 19, 2017, the Class B Common Stock uplisted from the OTCQB and began trading on The NASDAQ Capital Market under the symbol “RMBL.”~~

On November 2, 2017, the Company through its wholly-owned subsidiary RMBL Missouri, LLC (the “Borrower”), entered into a floor plan line of credit (the "Credit Line") with NextGear Capital, Inc. (the “Lender”) in the amount of $2,000,000, or such lesser sum which may be advanced to or on behalf of the Borrower from time to time, pursuant to that certain Demand Promissory Note and Loan and Security Agreement. Any advance under the Credit Line bears interest on a per annum basis from the date of the request of such advance (or date of the financed receivable, as applicable), based upon a 360-day year, and such interest shall be compounded daily until such outstanding advances are paid in full at a rate of interest set forth in schedules published by the Lender. As of November 2, 2017, the effective rate of interest is 6.5%. Advances and interest under the Credit Line are due and payable upon demand, but, in general, in no event later than 150 days from the date of request for the advance (or the date of purchase in the case of a universal funding agreement), or of the receivable, as applicable. Upon any event of default (including, without limitation, the Borrower’s obligation to pay upon demand any outstanding liabilities of the Credit Line), Lender may, at its option and without notice to the Borrower, exercise its right to demand immediate payment of all liabilities and other indebtedness and amounts owed to Lender and its affiliates by the Borrower and its affiliates. The Credit Line is secured by a grant of a security interest in the vehicle inventory and other assets of the Borrower and payment is guaranteed by the Company pursuant to a guaranty in favor of the Lender and its affiliates.

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.~~

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 2022 Form 10-K, 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.

~~This~~Forward-looking statements throughout this Quarterly Report on Form 10-Q contains forward-looking statements. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. The words “believes,” “anticipates,” “plans,” “expects,” “intends” and similar expressions identify some of the forward-looking statements. Forward-looking statements are not guarantees of future performance ~~or future results~~ and may involve risks and uncertainties ~~and assumptions. The factors discussed elsewhere in this Form 10-Q and in subsequent Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K, and Current Reports on Form 8-K~~that could ~~also~~ cause actual results to differ materially from those ~~indicated by~~projected. Refer to the ~~Company’s forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law.~~"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~~Overview

We operate a capital light disruptive e-commerce platform facilitating the ability of both consumers and dealers to Buy-Sell-Trade-Finance pre-owned motorcycle and other power sport and recreation vehicles (“power/recreation vehicles”) in one online location. Our goal is to transform the way motorcycles and other power/recreation vehicles are bought and sold by providing users with the most efficient, timely and transparent transaction experience. Our initial focusRumbleOn is the market for 601cc and larger on-road motorcycles. We will look to extend to additional power/recreation vehicle types and products as the platform matures, including ATVs, personal watercraft, snowmobiles, side-by-sides, boats, and both towable and motor coach RVs.

Serving both consumers and dealers, through our online platform, we make cash offers for the purchase of their vehicles and intend to provide them the flexibility to trade, list, or auction their vehicle through our website and mobile applications. In addition, we offerlargest powersports retailer in North America, offering a large inventory of used vehicles for sale along with third-party financing and associated products. Our operations are designed to be scalable by working through an infrastructure and capital light model that is achievable by virtue of a synergistic relationship with dealer partners. We utilize dealer partners in the acquisition of motorcycles as well as to provide inspection, reconditioning and distribution services. Correspondingly, we earn fees and transaction income, and dealer partners will earn incremental revenue and enhance profitability through increased sales, leads, and fees from inspection, reconditioning and distribution programs.

Our business model is driven by a technology platform we acquired in February 2017, through our acquisition of substantially all of the assets of NextGen. The acquired system provides integrated vehicle appraisal, inventory management, customer relationship and lead management, equity mining, and other key services necessary to drive the online marketplace. Over the past 16 years, the developers of the software have designed and built, for large multi-national clients, a number of dealer and, what we believe to be, high quality applications solutions.

Our business combines a comprehensive online buying and selling experience with a vertically-integrated supply chain that allows us to buy and sell vehicles to consumers and dealer partners transparently and efficiently at a value-oriented price. Using our website or mobile application, consumers and dealers can complete most phases of a used vehicle transaction. Our online buying and selling experience allows consumers to:

●

~~Sell us a vehicle.~~We address the lack of liquidity available in the market for a cash sale of a vehicle by dealers and consumers through our Sell Us Your Vehicle Program. Dealers and consumers can sell us a vehicle independent of a purchase. Using our free online or mobile appraisal tool, consumers and dealers can complete a short appraisal form and receive a haggle-free, guaranteed 3-day firm cash offer for their vehicle within minutes and, if accepted, receive payment in a few days or less. Our cash offer to buy is based on the use of extensive used retail and wholesale vehicle market data. When a consumer accepts our offer, we ship their vehicles to our closest dealer partner where the vehicle is inspected, reconditioned and stored pending sale. We believe buying used vehicles directly from consumers will be the primary driver of our source of supply for sale and a key to our ability to offer competitive pricing to buyers. By being one of the few sources for consumers to receive cash for their vehicle, we have a significant opportunity to buy product at a lower cost since dealer and auction markup is eliminated from these consumer purchases. In addition, we believe our willingness to appraise and purchase a customer’s vehicle, whether or not the customer is buying a vehicle from us, provides a competitive sourcing advantage for vehicles.

●

~~List a vehicle.~~The current market for listing motorcycles and other power sport vehicles is inefficient and ineffective in that a majority of the transactions are conducted through peer-to-peer transactions, which do not facilitate making cash offers, accepting trades or providing financing to the buyer. Our listing options and comprehensive transaction support addresses the shortcomings that currently exist in the market for listing a vehicle for sale while allowing dealers and consumers an opportunity to utilize a simple, efficient and effective process. Consumers who do no not accept our cash offer can pay a fee to list their vehicle on ~~RumbleOn.com~~ and other available listing sites. During the listing period, our cash offer is extended, and we manage all sales leads, handle all the documentation necessary to complete a sale and accept a buyer trade and provide a range of third-party finance options and vehicle service contracts to the buyer, if necessary. Upon the sale of a listed vehicle, we earn a fee separate and apart from the listing fee. Dealer partners do not pay a fee to list their vehicles.

●

~~Purchase a used vehicle.~~Our 100% online approach to retail and wholesale distribution addresses the many issues currently facing the retail and wholesale distribution marketplace for power/recreation vehicles, a marketplace we believe is primed for a disruptive change. We believe the issues facing the marketplace include: (i) heavy use of inefficient listing sites, (ii) a highly fragmented dealer network; (iii) a limitedwide selection of used vehicles for sale; (iv) negative consumer perception of the current buying experience; and (v) a massive consumer shift to online retail. We offer dealers and consumers a large selection of vehicles at a value-oriented price that can be purchased in a seamless transaction in minutes. In addition to a transparent buying experience, our no haggle pricing, coupled with an inspected, reconditioned and certified vehicle, backed by a fender-to-fender warranty and a 3-day money back guarantee, addresses consumer dissatisfaction with the current buying processes in the marketplace. As of October 31, 2017, including vehicles of our dealer partners, we have approximately ~~550~~ vehicles listed for sale on our website, where consumers can select and purchase a vehicle, including arranging financing, directly from their desktop or mobile device. Selling used vehicles to dealers and consumers is the key driver of our business.

●

~~Finance a purchase.~~Customers can pay for their vehicle using cash or we will provide a range of finance options from unrelated third parties such as banks or credit unions. Customers fill out a short online application form, and, if approved, apply the financing to their purchase in our online checkout process.

●

~~Protect a purchase.~~Customers have the option to protect their vehicle with unrelated third-party branded EPPs and vehicle appearance protection products as part of our online checkout process. EPPs include extended service plans which are designed to cover unexpected expenses associated with mechanical breakdowns and guaranteed asset protection, which is intended to cover the unpaid balance on a vehicle loan in the event of a total loss of the vehicle or unrecovered theft. Vehicle appearance protection includes products aimed at maintaining vehicle appearance.

To enable a seamless dealer and consumer experience, we are building a vertically-integrated used vehicle supply chain, supported by proprietary software systems and data which include the following attributes:

●

~~Vehicle sourcing and acquisition.~~We acquire a significant percentage of our used vehicle inventory directly from consumers and dealers through our Sell Us Your Vehicle Program. We also, to a lesser extent, acquire vehicles from auctions and directly from used vehicle suppliers, including franchise and independent dealers and finance and leasing companies. Using used retail and wholesale vehicle market data obtained from a variety of internal and external sources, we evaluate a significant number of vehicles daily to determine their fit with consumer demand, internal profitability targets and our existing inventory mix. The supply of used vehicles is influenced by a variety of factors, including: the total number of vehicles in operation; the rate of new vehicle sales, which in turn generate used vehicle trade-ins; and the number of used vehicles sold or remarketed through retail channels, wholesale transactions and at auctions. Based on the large number of vehicles remarketed each year, consumer acceptance of our online vehicle appraisal process, our experience and success in acquiring vehicles from auctions and other sources and the large size of the United States market relative to our needs, we believe that sources of used vehicles will continue to be sufficient to meet our current and future needs.

●

~~Inspection, reconditioning and logistics.~~ After acquiring a vehicle, we transport it to one of our dealer partners who is paid to perform an inspection and to recondition the vehicle to meet “RumbleOn Certified” standards. High quality photographs are then taken, the vehicle is listed for sale on Rumbleon.com and the dealer partner stores the vehicle pending delivery to the buyer. This process is supported by a custom used vehicle inventory management system, which tracks vehicles through each stage of the inspection, reconditioning and logistic process. The ability to leverage and provide a high margin source of incremental revenue to the existing network of dealer partners in return for providing inspection, reconditioning, logistics and distribution support reduces our need for any significant investment in retail or reconditioning facilities.

~~Our Strategy~~

Our strategy is to provide a complete online, direct, pre-owned motorcycle and power/recreation vehicle marketplace solution for both consumers and dealers, while providing dealers access to additional software solutions and services allowing them to earn incremental revenue and enhance profitability through increased sales leads, and fees earned from inspection, reconditioning and distribution programs. The recognition of the need for our solutions is the result of our management team gaining a clear understanding of the key drivers of complete supply chain solutions necessary to create a different and disruptive way to both acquire and distribute cars and trucks online from their deep experience in the automotive sector with disruptive businesses such as: AutoNation, Auto America, and Vroom. We believe that there is a significant opportunity to disrupt the pre-owned marketplace in recreational vehicles as it suffers from many of the same negative consumer sentiments and dealer practices that existed in the automotive sector prior to the advent of and the significant influx of new entrants with improved business models. In addition, the power/recreation vehicle segment lacks the significant competition that exists in the automotive sector due to its fragmented dealer network, relative size and the niche nature of its products. Management believes consumers prefer to purchase and sell through a well-designed online/mobile solution, with a broad selection of vehicles at highly competitive prices. We believe that our applications will provide appraisal, cash-offer, vehicle listing, financing options, and logistics/delivery solutions designed to provide an exceptional consumer experience. We intend to replicate and improve upon the positive attributes of the various “sell us your car” and other related programs that have proven successful in automotive retail for entities such as AutoNation, CarMax, Carvana, Vroom and others.

Our dealer strategy is focused on creating a synergistic relationship wherein dealers will have the ability to leverage the RumbleOn marketplace and dealer services offerings to drive increased revenue through the purchase or sale of vehicles via the online platform and the ability to earn fees from inspection, reconditioning and distribution programs. Dealer partners will have the ability to show the complete RumbleOn vehicle inventory on their website and will have access to preferred pricing on the acquisition of vehicles. Management believes that partners utilizing the platform will significantly enhance their existing online retail strategies. We have agreed to add dealers to our network and are in discussions with other dealers regarding joining the network. We believe that our operations, designed to be both capital and infrastructure light, will leverage the dealer network to provide inspection, reconditioning and distribution, thus minimizing the number of warehouse locations, reconditioning centers and logistics facilities we operate. We plan to primarily operate a centralized headquarter, call center, and limited number of strategically located warehouses as needed.

Our initial focus on pre-owned Harley-Davidson motorcycles provides a targeted, identifiable segment to establish the functionality of the platform and the RumbleOn brand. Harley-Davidson is a highly regarded and dominant brand (representing approximately 50% market share of new 601cc+ on-road motorcycles according to both Harley-Davidson public filings and the Motorcycle Industry Council) in the motorcycle market, with a base of over three million pre-owned motorcycles registered for use in the United States. According to Harley-Davidson, as disclosed in their 2017 investor meeting presentation, and management estimates, each year approximately 400,000 pre-owned Harley-Davidsons are sold, with Harley-Davidson dealers selling approximately 125,000 units, 250,000 units sold in private consumer and independent dealer transactions, and 25,000 sold via other means. Further, as Harley-Davidson discussed in its 2017 investor meeting presentation, their objective is to build two million new Harley-Davidson riders in the United States in the next 10 years, principally, we believe, via brand marketing and product development, estimated at $70 million in 2016, dealer hosted experiences and the Harley-Davidson Riding Academy. We believe such efforts will benefit us as, per Harley-Davidson’s 2017 investor meeting presentation, there are 2.4 million owners of non-Harley-Davidson motorcycles, and 15.0 million people who don’t currently own a motorcycle, who have an interest in Harley-Davidson and are planning to purchase a motorcycle within three years. Further, Harley-Davidson’s estimates that there are 7.8. million motorcycle license holders who do not currently own a motorcycle and that the sale of used Harley-Davidson motorcycles to young adults (ages 18-34) was three times the sale of new Harley-Davidson motorcycles to the same age group. These statistics support our contention that there is expected to be a growing market for used Harley-Davison transactions and a more informed buyer.

We believe that we may potentially enjoy a halo effect from Harley-Davidson’s advertising as not all young new buyers will purchase new motorcycles. Our extension into the “metric” brands (Honda, Yamaha, Kawasaki, Suzuki, etc.) essentially doubles the available market and is a natural extension as these vehicles are often sold or traded for Harley-Davidson vehicles. The metric market and dealer profile closely mirror that of the Harley-Davidson market although it is more highly fragmented. In addition, many of the metric dealers also retail ATVs, UTVs, snowmobiles and personal watercraft providing the next organic product extension leveraging existing dealer relationships.

~~Our Growth Strategy~~

We intend to transform the way recreational vehicles are bought and sold and thereby significantly grow our business and gain market share by targeting the large number of private consumer peer to peer transactions driven by listing only sites such as Craigslist. Management estimates the market for annual used motorcycle sales today at approximately 800,000 units sold, or approximately $7.5 billion of sales. Management believes approximately 50% or more of these transactions are completed on a peer to peer basis. We believe these transactions are highly inefficient and consumers view the process as cumbersome. Our online consumer direct sourcing strategy, wherein we make a cash offer to a consumer or dealer utilizing our website or mobile application allows us to deliver value pricing on our vehicles for sale. We believe our large-scale inventory of vehicles for sale, coupled with our online platform, transparent selling process, certified and reconditioned vehicles and ability to offer financing and ancillary products provides a unique customer experience as compared to current alternatives when purchasing a vehicle. We believe we can aggressively drive RumbleOn brand recognition and awareness at a relatively low expense by utilizing digital, social media and guerrilla marketing techniques, as there are few national competitors and consumers are very brand focused and loyal. For example, approximately 15 key motorcycle events, such as Daytona Bike Week and the Sturgis Bike Rally attract millions of attendees annually, many of whom are both motorcycle enthusiasts and Harley-Davidson consumers. We intend to have a significant presence at these events, with onsite advertising and sales facilities to build brand awareness. In addition, we anticipate engaging with or sponsoring motorcycle groups, providing us a targeted audience to which to market RumbleOn and showcase the ease with which they can buy, sell, or trade motorcycles. Once motorcycle enthusiasts have sampled our website, we believe the unique experience will be compelling and drive organic growth. Over time, management believes we will build a proprietary database of customers and their interests, which will facilitate customer retention and cross sell activities.

~~Our Market~~

We operate in a market with significant scale and breadth of products. The Motorcycle Industry Council estimates that in 2014, 9.2 million people owned 10.1 million motorcycles in the United States. 87% of these were on-highway models, our initial targeted segment. According to the Powersports Business 2016 Market Data Book, or the 2016 Market Datebook, used motorcycle registrations were 1.1 million units in 2015 with new unit sales of approximately 573,000 or approximately $7 billion in new vehicle sales. The owner demographic is favorable to the market outlook as millennials and baby boomers are maturing into the median ranges. The owner group is characterized by brand loyal riding enthusiasts. According to the Motorcycle Industry Council, in 2014 the median owner age was 47 years with a median income of $62,200 which is approximately 10% above the United States’ average. The dealer market is fragmented with an estimated 4,600 retail outlets authorized to sell new motorcycles, scooter, and all-terrain vehicles.

The ATV, UTV/side-by-side, snowmobile and personal watercraft vehicle, or PWC, markets, are a logical next extension for our platform, as there is significant overlap in the motorcycle dealer base with dealers of these products. According to data from Power Product Marketing and the 2016 Market Data Book, there were approximately 630,000 sales of ATV/UTV/Side-by-sides in 2015. There are approximately 1.2 million snowmobiles registered in the United States (another 600,000 in Canada) and in 2016, approximately 95,000 snowmobiles were sold in the United States and Canada. Lastly, according the National Marine Manufacturers Association and the Personal Watercraft Industry Association, in 2015 there were more than 54,000 new PWCs sold in the United States and there are currently approximately 1.2 million PWCs registered in the United States.

~~As we look to further extend the platform, the two largest adjacent segments are represented by the recreational boating and recreational vehicle (motor vehicle or trailer equipped with living space and amenities found in a home)~~ industries. According to the National Marine Manufacturers Association, there were approximately 15.7 million recreational boats in the United States in 2014, and there were approximately 940,000 sales of pre-owned boats in 2014. Correspondingly, the Recreational Vehicle Industry Association estimates that currently more than 8.9 million households own an RV and in 2017 there will be over 470,000 shipments of RVs from manufacturers to dealers.

~~Competition~~

~~We face competition in all our business segments. The United States used recreational vehicle marketplace is highly fragmented, and we face competition from franchised dealers, who sell both~~ new and used ~~vehicles; independent dealers; online~~motorcycles, all-terrain vehicles, utility terrain vehicles, personal watercraft, and ~~mobile sales platforms;~~other powersports products, including parts, apparel, accessories, and ~~private parties. We believe that the principal competitive factors in our industry are delivering an outstanding consumer experience, competitive sourcing~~aftermarket products from a wide range of vehicles, breadth and depth of product selection, and value pricing. Our competitors vary in size and breadth of their product offerings. We believe that our principal competitive advantages in used vehicle retailing will include our ability to provide a high degree of customer satisfaction with the buying experience by virtue of our low, no-haggle prices and our online platform including our website and mobile application and our ability to make a cash offer to purchase a vehicle or offer listing alternatives coupled with our customer-friendly sales process and our breadth of selection of the most popular makes and models available on our website. In addition,manufacturers. Additionally, we believe our willingness to appraise and purchase a customer’s vehicle, whether or not the customer is buying a vehicle from us, provides a competitive sourcing advantage for retail vehicles allowing us to offer value-oriented pricing. We believe the principal competitive factors for our ancillary products and services include an ability to 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 website, which allows us to purchase pre-owned units directly from consumers.

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	Soul E Bikes
Argo	Hurricane Boats	Specialized (bicycles)
Benelli	Indian Motorcycles	Speed/UTV
Blazer Boats	Karavan Trailers	SSR
BMW	Kawasaki	STACYC (electric)
Can-Am	Kayo	Suzuki
CF Moto	KTM	Tidewater Boats
Club Car	Lynx (Snowmobiles)	Timbersled (snow bikes)
Continental Trailers	MAGICTILT Trailers	Trailmaster (off-road/gocarts)
Crevalle Boats	Manitou	Triton Trailers
Cub Cadet	Manitou (pontoon boats)	Triumph
Ducati	Mercury (boat engines)	Vanderhall
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

Recent Developments

New Chief Executive Officer

Michael W. Kennedy became Chief Executive Officer and 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 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 ~~competitive prices delivered in an efficient manner~~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 (the "Rights Offering") to the ~~customer. We~~Company's existing shareholders whereby holders of record of our common stock will ~~compete with~~be granted a ~~variety~~dividend of entities in offering these products including banks, finance companies, insurance and warranty providers and extended vehicle service contract providers. We believe our competitive strengths in this categorysubscription 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 ~~include our ability~~have an over-subscription right to ~~deliver products in an efficient manner to customers utilizing our technology and our ability to partner with key participants in each category to offer a full suite~~purchase additional shares of ~~products~~Class B Common Stock that would otherwise remain unsubscribed for at ~~competitive prices. Lastly, additional competitors may enter~~ the ~~businesses in which we~~expiration date for the Rights Offering. No fractional shares of Class B Common Stock will ~~operate.~~

~~Seasonality~~

~~Historically, the industry has been seasonal with traffic and sales strongest~~be issued in the ~~spring~~Rights Offering. The subscription rights are not transferable, and ~~summer quarters which tracks closely~~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 ~~timing~~"Standby Purchase Agreement") that provides a binding commitment to purchase up to $100,000 of ~~regional riding seasons. Sales and traffic are typically slowest~~shares of Class B Common Stock in the ~~fall quarter but increase in February~~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 ~~March, coinciding with tax refund season.~~to fund the growth and development of the Company's business, including through possible acquisitions and other corporate purposes.

~~Key Operation Metrics~~

Table of Contents

~~As our business expands we will~~KEY OPERATING METRICS

We regularly review a number of key operating metrics to evaluate our ~~business,~~segments, measure our progress, and make ~~strategic~~operating decisions. Our key operating metrics reflect what we believe will be the ~~key~~primary drivers of our ~~growth,~~business, including increasing brand awareness, maximizing the opportunity to source ~~the purchase of low cost used~~ vehicles from consumers and dealers, ~~while~~and enhancing the selection and timing of vehicles we make available for sale to our customers.~~Our key operating metrics also demonstrate our ability~~

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 the Freedom Entities prior to ~~translate these drivers into sales and to monetize these retail sales through a variety~~the date of ~~product offerings.~~

Three-Months Ended
September 30,

Nine- Months Ended
September 30,

2017

2016

2017

2016

Units sold:

Consumer
  106
  -
  106
  -
Dealer
  165
  -
  175
  -
Auction
  42
  -
  42
  -

  313
  -
  323
  -
Number of Dealers
  3
  -
  3
  -
Average monthly unique users
  71,180
  -
  42,670
  -
Inventory units available on website
  588
  -
  588
  -
Average days to sale
  39
  -
  38
  -
Total average gross margin per unit$
$ 760
$-
$736
$-

~~Units Sold~~

We define units sold as the number of used vehicles sold to consumers, dealers and at auctions in each period, net of returns under our three-day return policy. We view units sold as a key measure of our growth for several reasons. First, units sold is the primary driver of our revenue and, indirectly, gross profit, since unit sales enable multiple complementary revenue streams, including financing, vehicle service contracts and trade-ins. Second, growth in units sold increases the base of available customers for referrals and repeat sales. Third, growth in units sold is an indicator of our ability to successfully scale our logistics, fulfillment, and customer service operations.

~~Number of Dealers~~

~~Our operations~~their acquisition are designed to be scalable by working through an infrastructure and capital light model that is achievable by virtue of a synergistic relationship with dealer partners who we refer to as either Select or Appraisal Dealers. We utilize these dealer partnersnot reflected in the ~~acquisition~~presentation below. Increases in line items within the powersports segment are partially the result of ~~motorcycles as well as~~the acquisitions and the reader should note that period-over-period dollar comparisons that incorporate the first quarter of 2022 (as opposed to provide inspection, reconditioning and distribution services. Correspondingly, we earn fees and transaction income, and dealer partners will earn incremental revenue and enhance profitability through increased sales, leads, and fees from inspection, reconditioning and distribution programs. We choose ~~Select or Appraisal Dealers based on their geographic location and abilities as a dealer. As Select and Appraisal Dealers~~per unit amounts) are added throughout the U.S. the cost and time associated with distribution programs will be significantly reduced as the pickup and delivery of motorcycles will become more localized thus lower shipping costs and reduce the average days to sale for vehicles.

~~Average Monthly Unique Users~~

We define a monthly unique user as an individual who has visited our website within a calendar month, based on data provided by Google Analytics. We calculate average monthly unique users as the sum of monthly unique users in a given period, dividedimpacted by the ~~number of months in that period. We view average monthly unique users as a key indicator~~introduction of the ~~strength of our brand, the effectiveness of our advertising and merchandising campaigns and consumer awareness.~~Freedom Powersports businesses (the “Acquisition Effect”).

Powersports Segment

~~Inventory Units Available on Website~~

~~We define inventory units available on Website as the number of vehicles listed for sale on our website~~ ~~on the last day of a~~ given reporting period. Until we reach an optimal pooled inventory level, we view inventory units available as a key measure of our growth. Growth in inventory units available increases the selection of vehicles available to consumers and dealers on a nationwide basis, which we believe will allow us to increase the number of vehicles we sell

~~Average Days to Sale~~

We define average days to sale as the average number of days between vehicle acquisition by us and delivery to a customer for all used units sold in a period. However, this metric does not include any used units that remain unsold at period end. We view average days to sale as a useful metric due to its impact on used vehicle average selling price. We anticipate that that average days to sale will increase in future periods until we reach an optimal pooled inventory level and fully scale our acquisition and sales channel processes.

~~Total Average Gross Margin per Unit~~

We define total average gross margin per unit as the aggregate gross margin in a given period divided by units sold in that period. Total gross margin per unit is driven by sales of used vehicles which, in many cases generates finance and vehicle service contracts revenue. We believe gross margin per unit is a key measure of our growth and long-term profitability.

~~COMPONENTS OF RESULTS OF OPERATIONS~~

Revenue

Revenue is ~~derived from two primary sources: (1) our online marketplace, which is our largest source~~comprised of ~~revenue~~vehicle sales, finance and ~~includes: (i) the sale of used~~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 ~~consumer, dealers~~retail and ~~auction sales channels; (ii) online listing~~wholesale channels. F&I and ~~sales fees; (iii)~~PSA revenue is almost exclusively earned through retail ~~merchandise sales; (iv) vehicle financing; and (v) vehicle service contracts; and (2) subscription and other fees.~~

~~See Note 2 – “Summary of Significant Accounting Policies – Revenue Recognition” for a further description of the Company’s revenue recognition.~~

~~Used Vehicle Sales~~

~~We sell used vehicles through consumer, dealers and auction sales~~ channels. These ~~multiple~~ sales channels provide us the opportunity to maximize profitability through increased sales volume and lower average days to sale by selling tothrough the channel where the opportunity is the greatest at any given time based on customer demand, market conditions or inventory ~~availability is the greatest at any given time.~~availability. The number of ~~used units~~vehicles sold to any given channel may vary from period to 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 ~~market conditions~~or meet our financial objectives. New inventory is ultimately controlled by our OEMs and ~~available inventory.~~

~~Used vehicle sales represent~~their willingness to allocate inventory to us and their ability to manufacture and distribute a sufficient number of vehicles given the ~~aggregate sales~~ongoing environment of ~~used vehicles~~manufacturing slowdowns, computer chip shortages, and logistic/transportation challenges (collectively, the “Demand/Supply Imbalances”). Subject to ~~consumers and dealers through our website and sales at auctions.~~ ~~We generate gross profit on used vehicle sales from~~ the ~~difference between the vehicle selling price and our cost of sales associated with acquiring the vehicle and preparing it for sale. We~~resulting Demand/Supply Imbalances, we expect ~~used~~pre-owned vehicle sales to increase as we begin to utilize a combination of brand building ~~as well as~~and direct response channels to efficiently source 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 ~~used~~pre-owned vehicle sales include the number of retail ~~units~~pre-owned vehicles sold and the average selling price of these vehicles. ~~At this stage of our development, changes in both retail units sold and in average selling price will drive changes in revenue.~~

Gross Profit

~~The number of used vehicles we sell depends~~Gross profit generated on our volume of website traffic, our inventory selection, the effectiveness of our branding and marketing efforts, the quality of our customer sales experience, our volume of referrals and repeat customers, the competitiveness of our pricing, competition and general economic conditions. On a quarterly basis, the number of used vehicles we sell is also affected by seasonality, with demand for used vehicles reaching the high point in the first half of each year, commensurate with the timing of tax refunds, and diminishing through the rest of the year, with the lowest relative level of used vehicle sales ~~expected to occur in the fourth calendar quarter.~~

Our average retail selling price depends on the mix of vehicles we acquire and hold in inventory, retail market prices in our markets, our average days to sale, and our pricing strategy. We may opportunistically choose to shift our inventory mix to higher or lower cost vehicles, or to opportunistically raise or lower our prices relative to market to take advantage of supply or demand imbalances, which could temporarily lead to average selling prices increasing or decreasing.

The number of vehicles sold at auctions are determined based on a number of factors including: (i) filling auction sales channel market demand opportunities to maximize sales and gross margin; (ii) a need to balance the Company’s overall inventory mix and quantity levels against days to sales targets; and (iii) a need to liquidate those units that do not meet the Company’s quality standards to list or be sold through Rumbleon.com.

~~Other Sales and Revenue~~

~~We generate other sales and revenue primarily through: (i) online listing and sales fees; (ii) retail merchandise sales; (iii) vehicle financing; and (iv) vehicle service contracts.~~

●

~~Online Listing and Sales Fees~~. We charge a non-refundable fee for sellers to list their vehicle on the RumbleOn website. During the listing period, we manage all sales leads, handles all the documentation necessary to complete a sale, accepts a buyer’s trade and provides financing through third-party providers to the potential buyer, if necessary. Upon a successful sale, the seller pays a fee based on the difference between the actual retail sales price of the vehicle sold and the net proceeds agreed to be paid by RumbleOn to the seller when the listing agreement was signed.

●

~~Retail Merchandise Sales.~~ ~~We sell branded and other merchandise and accessories.~~

●

~~Vehicle Financing.Customers can pay for their vehicle using cash or we offer a range of finance options through unrelated third-parties such as banks or credit unions. These third-party providers generally pay us a~~ fee either in a flat amount or in an amount equal to the difference between the interest rates charged to customers over the predetermined interest rates set by the financial institution. We may be charged back for commissions in the event a contract is prepaid, defaulted upon, or terminated.

●

~~Vehicle Service Contracts.~~ At the time of vehicle sale, we provide customers, on behalf of unrelated third parties who are the primary obligors, a range of other related products and services, including extended protection plan (“EPP”) products and vehicle appearance protection. EPP products include extended service plans (“ESPs”), which are designed to cover unexpected expenses associated with mechanical breakdowns and guaranteed asset protection (“GAP”), which is intended to cover the unpaid balance on a vehicle loan in the event of a total loss of the vehicle or unrecovered theft. Vehicle appearance protection includes products aimed at maintaining vehicle appearance. We ~~receive commissions from the sale of these product and service contracts and~~ ~~have no contractual liability to customers for claims under these products.~~ The EPPs and vehicle appearance protection currently offered to consumers provides coverage up to 60 months (subject to mileage limitations), while GAP covers the customer for the term of their finance contract. At that time commission revenue will be recognized at the time of sale, net of a reserve for estimated contract cancellations. The reserve for cancellations will be estimated based upon historical industry experience and recent trends and will be reflected as a reduction of other sales revenue in the accompanying Condensed Consolidated Statements of Operations and a component of accounts payable and accrued liabilities in the accompanying Condensed Consolidated Balance Sheets. Our risk related to contract cancellations is limited to the revenue that we receive.

~~Subscription and other fees~~

We generate subscription fees from dealer partners under a license arrangement that provides access to our software solution and ongoing support. Select or Appraisal Dealers pay a monthly subscription fee for access to and ongoing support for portions of the RumbleOn software solution, which includes: (i) a vehicle appraisal process; (ii) inventory management system; (iii) customer relationship and lead management program; and (iv) equity mining. Dealers may also be charged an initial software installation and training fee. Dealers do not have the contractual right to take possession of the software and may cancel the license for these products and services by providing a 30-day notice. Installation and training do not have value to the user without the license and ongoing support and maintenance.

~~Cost of Revenue~~

~~Cost of revenue is comprised of: (i) cost of vehicle sales and (ii) costs of subscription and other fees.~~

Cost of vehicle sales to consumers, dealers and auctions, includes the cost to acquire vehicles and the reconditioning and transportation costs associated with preparing the vehicles for resale. Vehicle acquisition costs are driven by the mix of vehicles we acquire, the source of those vehicles, and supply and demand dynamics in the vehicle market. Reconditioning costs are billed by third-party providers and include parts, labor, and other repair expenses directly attributable to specific vehicles. Transportation costs consisted of costs incurred to transport the vehicles from the point of acquisition or delivery. Cost of vehicle sales also includes any necessary adjustments to reflect vehicle inventory at the lower of cost or net realizable value.

Cost of subscription fee revenue includes the (i) various data feeds from third parties; (ii) hosting of the customer-facing website; (iii) commissions for new sales; and (iv) implementation and training of new and existing dealers.

~~Vehicle Gross Margin~~

~~Gross margin is generated on used vehicle sales from~~reflects the difference between the vehicle selling price and ~~our~~the cost of ~~sales~~revenue associated with acquiring the vehicle and preparing it for sale. Cost of revenue includes the vehicle acquisition cost, inbound transportation cost, and particularly for pre-owned vehicles, reconditioning costs. The aggregate ~~dollar~~ gross ~~margins achieved from~~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 ~~consumer, dealer and auction sales~~sale price. Vehicles sold through retail channels ~~are different. Units sold to consumers through our website~~ generally have the highest dollar gross ~~margin since~~profit per vehicle, given the ~~unit~~vehicle is sold directly to the consumer. ~~Vehicles~~Pre-owned vehicles sold through wholesale channels, including directly to other dealers ~~are sold at a price below the retail price offered~~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 ~~consumers, thus the dealer~~financing and ~~RumbleOn are sharing the gross margin. The dollar gross margin on units sold at auction are usually the lowest due to auction fees.~~accessories. Factors affecting gross ~~margin~~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 ~~acquire and hold in~~acquired such inventory, retail market prices, our average days to sale, and our pricing strategy. We may opportunistically choose to shift our inventory mix to higher or lower cost vehicles, or to opportunistically raise or lower our prices relative to market to take advantage of ~~supply or demand imbalances~~Demand/Supply Imbalances in our sales channels, which could temporarily lead to ~~average selling prices and~~ gross ~~margins~~profits increasing or decreasing in any given channel.

Table of Contents

Vehicles Sold

~~Selling, General~~We define vehicles sold as the number of vehicles sold through both wholesale and ~~Administrative Expense~~

~~Selling, general~~retail channels in each period. Vehicles sold is the primary driver of our revenue and, ~~administrative (“SG&A”) expenses include costs~~indirectly, gross profit. Vehicles sold also enables complementary revenue streams, such as financing. Vehicles sold increases our base of customers and ~~expenses for compensation~~improves brand awareness and ~~benefits, advertising~~repeat sales. Vehicles sold also provides the opportunity to ~~consumers and dealers, development and operating our product procurement and distribution system, managing~~successfully scale our logistics, ~~system, establishing~~fulfillment, and customer service operations.

Total Gross Profit per Powersports Vehicle

Total gross profit per vehicle is the aggregate gross profit of the powersports segment in a given period, divided by retail powersports vehicles sold in that period. The aggregate gross profit of the powersports segment includes gross profit generated from the sale of 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 ~~dealer partner arrangements,~~performance obligations and other corporate overhead expenses, including expenses associated with technology development, legal, accounting, finance, and business development. Selling, general and administrative expenses will increase substantiallystandards. Wholesale Express is considered the principal in the delivery transactions since it is primarily responsible for fulfilling the service.

Vehicles Transported

We define vehicles transported as ~~we continue to execute and aggressively expand our business through increased marketing spending and~~ the addition of management and support personnel to ensure we adequately develop and maintain operational, financial and management controls as well as our reporting systems and procedures. SG&A expenses exclude the costs of inspecting, reconditioning and transportationnumber of vehicles ~~which~~delivered from a point of origin to a designated destination under freight brokerage agreements with dealers, distributors, or private parties. Vehicles transported are ~~included~~the primary driver of revenue and in turn profitability in the vehicle logistics segment.

Total Gross Profit Per 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 ~~sales.~~third-party vehicles transported.

~~Depreciation and Amortization~~

~~Depreciation and amortization is comprised~~Table of the: (i) amortization of capitalized and acquired technology development; (ii) amortization of identifiable intangible assets; and (iii) depreciation of vehicle, furniture and equipment. Depreciation and amortization will continue to increase as continued investments are made in connection with the expansion and growth of the business.Contents

~~Interest Expense~~

Interest expense includes interest incurred on notes payable and other long-term debt, which was used to fund, startup costs and expenses, technology development, inventory, our transportation fleet, property and equipment and the acquisition of NexGen.

Results of Continuing Operations

~~The following table provides our results of operations for the three~~Three and ~~nine-month periods~~Nine Months ended September 30, ~~2017 and~~2023 Compared to September 30, ~~2016, respectively. This~~2022

Total Company Metrics (dollars in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023		2022		YoY Change		2023		2022		YoY Change
Financial Overview
Revenue
Powersports	$	235,132	$	271,877	$	(36,745)	$	738,136	$	806,382	$	(68,246)
PSA	59,727		62,216		(2,489)		184,205		182,268		1,937
Finance and insurance, net	29,288		31,569		(2,281)		89,658		95,830		(6,172)
Vehicle Logistics	13,964		15,002		(1,038)		43,227		42,870		357
Total revenue	$	338,111	$	380,664	$	(42,553)	$	1,055,226	$	1,127,350	$	(72,124)
Gross Profit
Powersports	$	32,344	$	50,246	$	(17,902)	$	104,045	$	158,491	$	(54,446)
PSA	26,974		29,142		(2,168)		84,663		85,795		(1,132)
Finance and insurance, net	29,288		31,569		(2,281)		89,658		95,830		(6,172)
Vehicle Logistics	3,339		3,486		(147)		10,281		9,138		1,143
Total Gross Profit	$	91,945	$	114,443	$	(22,498)	$	288,647	$	349,254	$	(60,607)

Total Operating Expenses	$	92,232	$	100,376	$	(8,144)	$	288,828	$	281,300	$	7,528
Operating Income (Loss)	$	(287)	$	14,067	$	(14,354)	$	(181)	$	67,954	$	(68,135)
Income (Loss) from Continuing Operations, net	$	(16,484)	$	3,715	$	(20,199)	$	(46,023)	$	26,944	$	(72,967)
Net Income (Loss)	$	(16,484)	$	3,039	$	(19,523)	$	(46,974)	$	26,213	$	(73,187)
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 ~~information should~~and capital structure items that we do not believe directly reflect our core operations and may not be ~~read~~indicative of our recurring operations, in ~~conjunction with~~part because they may vary widely across time and within our ~~unaudited Condensed Consolidated Financial Statements and notes included in Part I, Item 1~~industry independent of ~~this Quarterly Report on Form 10-Q.~~

For the three-months ended
September 30,

For the nine-months ended
September 30,

2017

2016

2017

2016

Revenue:
Used Vehicle Sales:

Consumer
$1,626,864
$ -
$1,626,864
$-
Dealer
  1,745,948
  -
  1,745,948
  -
Auction
  171,560
  -
  253,500
  -
Other sales and revenue
  134,573
  -
  134,573
  -
Subscription and other fees
  27,197
  -
  100,668
  -
Total Revenue
  3,706,142
  -
  3,861,553
  -





Cost of revenue
  3,478,124
  -
  3,627,455
  -
Selling, General and administrative
  2,326,043
  36,706
  4,690,216
  58,135
Depreciation and amortization
  129,277
  475
  302,697
  1,425
Total Expenses
  5,933,444
  37,181
  8,620,368
  59,560





Operating loss
  (2,227,302)
  (37,181)
  (4,758,815)
  (59,560)





Interest expense
  90,201
  2,878
  373,808
  7,431





Net loss before provision for income taxes
$(2,317,503)
$(40,059)
$(5,132,623)
$(66,991)





Benefit for income taxes
  -
  -
  -
  -





Net loss
$(2,317,503)
$(40,059)
$(5,132,623)
$(66,991)

~~Results~~the performance of ~~Operations~~our core operations. See the section titled “Adjusted EBITDA” for the ~~Three~~definition of Adjusted EBITDA and ~~Nine-month periods ended September 30, 2017~~a reconciliation of Net Income (Loss) to Adjusted EBITDA .

Table of Contents

Powersports Metrics (dollars in thousands except per unit)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023		2022		YoY Change		2023		2022		YoY Change
Revenue
New retail vehicles	$	159,573	$	165,373	$	(5,800)	$	501,513	$	491,187	$	10,326
Used vehicles:
Retail	68,736		100,781		(32,045)		215,562		299,809		(84,247)
Wholesale	6,823		5,724		1,099		21,061		15,386		5,675
Total used vehicles	75,559		106,505		(30,946)		236,623		315,195		(78,572)
Finance and insurance, net	29,288		31,569		(2,281)		89,658		95,830		(6,172)
Parts, service and accessories	59,727		62,216		(2,489)		184,205		182,268		1,937
Total revenue	$	324,147	$	365,663	$	(41,516)	$	1,011,999	$	1,084,480	$	(72,481)

Gross Profit
New retail vehicles	$	22,081	$	32,071	$	(9,990)	$	74,440	$	100,549	$	(26,109)
Used vehicles:
Retail	10,871		18,691		(7,820)		31,216		57,538		(26,322)
Wholesale	(607)		(588)		(19)		(1,610)		304		(1,914)
Total used vehicles	10,264		18,103		(7,839)		29,606		57,842		(28,236)
Finance and insurance	29,288		31,569		(2,281)		89,658		95,830		(6,172)
Parts, service and accessories	26,973		29,143		(2,170)		84,663		85,794		(1,131)
Total gross profit	$	88,606	$	110,886	$	(22,280)	$	278,367	$	340,015	$	(61,648)

Vehicle Unit Sales
New retail vehicles	10,851		9,973		878		34,413		31,016		3,397
Used vehicles:
Retail	5,619		7,508		(1,889)		17,537		22,228		(4,691)
Wholesale	1,103		912		191		3,121		2,619		502
Total used vehicles	6,722		8,420		(1,698)		20,658		24,847		(4,189)
Total vehicles sold	17,573		18,393		(820)		55,071		55,863		(792)

Revenue per vehicle
New retail vehicles	$	14,706	$	16,582	$	(1,876)	$	14,573	$	15,837	$	(1,264)
Used vehicles:
Retail	12,233		13,423		(1,190)		12,292		13,488		(1,196)
Wholesale	6,186		6,276		(90)		6,748		5,875		873
Total used vehicles	11,241		12,649		(1,408)		11,454		12,685		(1,231)
Finance and insurance, net	1,778		1,806		(28)		1,726		1,800		(74)
Parts, service and accessories	3,626		3,559		67		3,546		3,423		123
Total revenue per retail vehicle	$	19,267	$	20,590	$	(1,323)	$	19,075	$	20,079	$	(1,004)

Gross Profit per vehicle
New vehicles	$	2,035	$	3,216	$	(1,181)	$	2,163	$	3,242	$	(1,079)
Used vehicles	$	1,935	$	2,489	$	(554)	$	1,780	$	2,589	$	(809)
Finance and insurance, net	$	1,778	$	1,806	$	(28)	$	1,726	$	1,800	$	(74)
Parts, service and accessories	$	1,638	$	1,667	$	(29)	$	1,630	$	1,611	$	19
Total gross profit per vehicle (1)	$	5,380	$	6,343	$	(963)	$	5,358	$	6,386	$	(1,028)

(1) Calculated as total gross profit divided by new and ~~September 30, 2016~~used retail powersports units sold.

Table of Contents

Revenue

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

~~Online Marketplace~~

Total Powersports revenue for the three ~~and nine-month periods~~months ended September 30, ~~2017 increased~~2023 decreased 11.4% from the same period in 2022, primarily driven by ~~$3,706,142~~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 ~~$3,861,553, respectively as~~PSA revenue and reflects the sales volume approaching a more normalized level following the pandemic.

Total Powersports revenue for the nine months ended September 30, 2023 decreased 6.7% compared to the same ~~periods~~period in ~~2016.~~ ~~The increase in~~2022, primarily driven by lower revenue ~~was primarily due to an increase in~~from the ~~number~~sale of used vehicles sold ~~to consumers, dealers~~via retail channels and ~~at auctions. The increase~~lower F&I revenue, partially offset by higher revenue from the sale of new vehicles, as well as higher wholesale and PSA revenue. Both quantity and price per used vehicle sold via retail were lower than in ~~unit sales was driven by~~ the ~~launch of~~prior year. While we sold more new vehicles in the RumbleOn website, expanded inventory selection, enhanced social media, aggressive event marketing efforts, increased brand awareness and customer referrals. We anticipate that unit sales will continue to grow as we expand our units of available inventory, while continuing to ~~efficiently source and scale our addressable markets~~ of ~~consumers and dealers through brand building and direct response marketing.~~

~~Sales of used vehicles to consumers, dealers and auctions~~ ~~for the three and nine-month periods~~nine months ended September 30, ~~2017 increased by $3,544,372 and $3,626,312, respectively as~~2023 compared to the same ~~periods in 2016. This increase was driven by the sale of 313 and 323 used units to consumers, dealers and at auctions during the three and nine-month~~ period ~~ending September 30, 2017, respectively.~~ The average selling price of the used units sold for the three and nine-month periods ended September 30, 2017 was $11,324 and $11,227, respectively. The average selling price of used units sold will fluctuate from period to period as a result of changes in the ~~sales~~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 ~~to consumers, dealers and at auctions in any given period. There were no sales of used vehicles to consumers, dealers or auctions for the three and nine-month periods ended September 30, 2016.~~

~~Other sales and revenuefor the three and nine-month periods ended September 30, 2017 increased by $134,573 as compared to the same periods in 2016.~~This increase was primarily driven by the increase in retail units sold which led to an increase in loans originated and sold, and vehicle service contracts and retail merchandise sales. There were no online listing and sales fee revenue for the~~three and nine-month periods ended September 30, 2016.~~

~~Subscription and other fees~~

Subscription and other fee revenue for the three and nine-month periods ended September 30, 2017 increased by $27,197 and $100,668, respectively as compared to the same periods in 2016. There were no subscription or other fee revenue for the three and nine-month periods ended September 30, 2016.

~~Expenses~~

~~Cost of Revenue~~

Total cost of revenue for the three and nine-month periods ended September 30, 2017 increased by $3,478,124 and $3,627,455, respectively as compared to the same periods in 2016. This increase was driven by the: (i) sale of used units to consumers, dealers and at auctions; and (ii) sale of related products in connection with unit sales to consumers during the three and nine-month period ending September 30, 2017, respectively as compared to the same periods in 2016.

Cost of vehicle sales for the three and nine-month periods ended September 30, 2017 increased by $3,404,480 and 3,489,446, respectively as compared to the same periods in 2016. This increase was driven by the sale of 313 and 323 used units to consumers, dealers and at auctions during the three and nine-month period ending September 30, 2017, respectively as compared to the same periods in 2016. ~~The average cost of the used units sold for the three and nine-month periods ended September 30, 2017 was $10,769 and $10,696, respectively.~~

~~Cost of other sales and revenue for the three and nine-month periods ended September 30, 2017 increased by $53,754 as compared to the same periods in 2016.This increase was primarily driven by the increase in units sold to consumers which led to an increase in loans originated and sold, vehicle service contracts~~.

Cost of subscription and other fee revenue, included the (i) various data feeds from third parties; (ii) hosting of the customer facing website; (iii) commissions for new sales; and (iv) implementation and training of new and ~~existing dealers. These costs~~used vehicles sold was attributable to higher new vehicle inventory and expenses are charged to cost of revenue as incurred. Cost of subscription and other fee revenue for the three and nine-month periods ended September 30, 2017 increased by $19,890 and $84,255, respectively as compared to the same periods in 2016.

~~Selling, General and Administrative~~

For the three-months ended
September 30,

For the nine-months ended
September 30,

2017

2016

2017

2016

Selling, General and Administrative:

Compensation and related costs
$ 1,028,819
$ -
$ 1,951,911
$ -
Advertising and Marketing
  752,017
  -
  1,060,195
  -
Professional Fees
  192,041
  34,044
  724,486
  49,017
Technology Development
  91,967
  -
  278,668
  -
General and Administrative
  261,199
  2,662

  674,956
  9,118
Total Selling, General and Administrative
$2,326,043
$36,706
$4,690,216
$58,135

Selling, general and administrative expenses for the three and nine-month periods ended September 30, 2017 increased by $2,289,337 and $4,632,081, respectively as compared to the same periods in 2016. The increase is a result of the significant expansion of our businesses associated with the launch of our website and mobile application which resulted in: (i) an increase in expenses associated with advertising and marketing; (ii) increase headcount associated with the development and operating our product procurement and distribution system, managing our logistics system; (iii) continued investment in technology development; and (iv) other corporate overhead costs and expenses, including legal, accounting, finance, and business development.

Compensation and related costs, which includes all payroll and related costs, including benefits, payroll taxes, and stock-based compensation, for the three and nine-month periods ended September 30, 2017 increased by $1,028,819 and $1,951,911 as compared to the same periods in 2016. The increase was driven by the growth in headcount and related compensation and benefits at our Dallas operations center, and included new hires in our marketing, product and inventory management, accounting, finance, information technology, and administration departments. As our business continues to grow these expenses will increase as we add headcount in all areas of the business.

Advertising and marketing for the three and nine-month periods ended September 30, 2017 increased by $752,017 and $1,060,195 as compared to the same periods in 2016. The increase consists of cost associated with the launch of our website and mobile application, aggressive event marketing and further development of a multi-channel approach to consumers and dealers. We have begun to utilize a combination of brand building as well as direct response channels to efficiently source and scale our addressable markets. Our paid advertising efforts include advertisements through search engine marketing, inventory site listing, retargeting, organic referral, display, direct mail and branded pay-per-click channels. We believe our strong consumer and dealer focus ensures loyalty which will drive both high participation in the buy and selling process while increasing referrals. In addition to our paid channels, we intend to attract new customers through increased media spending and public relations efforts and further investing in our proprietary technology.

Professional fees consist primarily of legal and accounting fees and costs associated with: (i) financing activities; (ii) general corporate matters; (iii) the NextGen acquisition; (iv) the preparation of quarterly and annual financial statements; and (v) the filing of regulatory reports required of the Company for public reporting purposes. Professional fees for the three and nine-month periods ended September 30, 2017 increased by $157,997 and $675,469, respectively as compared to the same periods in 2016. This increase was primarily a result of legal, accounting and other professional fees and expenses incurred in connection with the: (i) NextGen acquisition; (ii) 2017 Private Placement; (iii) second tranche of 2016 Private Placement; (iv) Senior Secured Promissory Notes; (v) the Offering (as defined below); (vi) our Nasdaq listing; and (vii) various corporate matters resulting from the growth and expansion of the RumbleOn business plan. For additional information, see Note 3 - “Acquisitions,” Note 7 - “Notes Payable,” Note 8 - “Stockholders’ Equity,” and Note 15 - “Subsequent Events” in the accompanying Notes to the Condensed Consolidated Financial Statements.

Technology development costs consist principally of (i) development activities including payroll and related expenses billed by a third-party contractor involved in application, content, production, maintenance, operation, and platform development for new and existing products and services, (ii) technology infrastructure expenses, and (iii) costs of Company employees devoted to the development and maintenance of software products. Technology development expenses for the three and nine-month periods ended September 30, 2017 increased by $91,967 and $278,668, respectivelymore competitive macroeconomic conditions as compared to the same period in ~~2016.~~ 2022.

Gross Profit

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

Total ~~technology costs and expenses incurred~~Powersports gross profit for the three ~~and nine-month periods~~months ended September 30, 2017 were $236,400 and $713,766 of which $144,433 and $435,097, respectively were capitalized. For the three and nine-month periods ended September 30, 2017, a third-party contractor billed $221,400 and $678,766 respectively, of the total technology development costs. The amortization of capitalized technology development costs for the three and nine-month periods ended September 30, 2017 was $89,429 and $219,374, respectively. There were no technology development costs incurred and no amortization of capitalized development costs for the same periods in 2016. Technology development costs are accounted for pursuant to ASC 350, ~~Intangibles — Goodwill and Other.~~ Technology development costs include internally developed software and website applications that are used by the Company for its own internal use and to provide services to its customers, which include consumers, dealer partners and ancillary service providers. Under the terms of these customer arrangements the Company retains the revenue generating technology and hosts the applications on its servers and mobile applications. The customer does not have a contractual right to take possession of the software during the term of the arrangement and is not permitted to run the software itself or contract with another party unrelated to the entity to host the software. Technology development costs consist principally of (i) development activities including payroll and related expenses billed by a third-party contractor involved in application, content, production, maintenance, operation, and platform development for new and existing products and services, (ii) technology infrastructure expenses, and (iii) costs of Company employees devoted to the development and maintenance of software products. Technology and content costs for design, maintenance and post-implementation stages of internal-use software and general website development are expensed as incurred. For costs incurred to develop new website functionality as well as new software products and significant upgrades to existing internally used platforms or modules, capitalization begins during the application development stage and ends when the software is available for general use. Capitalized technology development is amortized on a straight-line basis over periods ranging from 3 to 7 years. The Company will perform periodic assessment of the useful lives assigned to capitalized software applications. Additionally, the Company from time-to-time may abandon additional development activities relating to specific software projects or applications and charge accumulated costs to technology development expense in the period such determination is made. We expect our technology development expenses to increase as we continue to upgrade and enhance our technology infrastructure, invest in our products, expand the functionality of our platform and provide new product offerings. We also expect technology development expenses to continue to be affected by variations in the amount of capitalized internally developed technology.

~~General and administrative expenses~~ ~~for the three and nine-month periods ended September 30, 2017 increased by $258,537 and $665,838 as compared to the same periods in 2016. The increase~~ ~~is a result of the cost and expenses associated with the continued progress made in the development of our business,~~ the establishment of our Dallas operations center and meeting the requirements of being a public company. General and administrative costs and expenses include: (i) insurance; (ii) advisor and various filing fees for equity transactions; (iii) office supplies and process application software; (iv) public and investor relations and (v) travel.

~~Depreciation and Amortization~~

Depreciation and amortization is comprised of the: (i) amortization of capitalized technology development; (ii) amortization of identifiable intangible assets; and (iii) depreciation of vehicle, furniture and equipment. Depreciation and amortization for the three and nine-month periods ended September 30, 2017 increased by $131,128 and $303,598, respectively,2023 decreased 20.1% as compared to the same period in ~~2016. The~~2022, primarily driven by a 15.2% decrease in gross profit per vehicle sold and a 4.5% decrease in total 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 ~~depreciation~~new vehicle units sold. F&I and ~~amortization is~~PSA gross profit was lower than in the same period in 2022, consistent with lower numbers of vehicles sold and impacted by our strategic initiative related to RumbleOn Finance.

Total Powersports gross profit for the nine months ended September 30, 2023 decreased by $61,648 from the same period in 2022, primarily driven by a ~~result~~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 the same period in 2022. Gross profit from new vehicles sold decreased 26.0%, primarily driven by a 33.3% decrease in gross profit per new vehicle sold, offset by a 11.0% increase in new vehicle units sold as compared to the 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 a 1.1% increase in PSA gross profit as compared to the same period in 2022.

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

Table of Contents

Vehicle Logistics Metrics (dollars in thousands except per unit)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023		2022		YoY Change		2023		2022		YoY Change
Revenue	$	13,963	$	15,002	$	(1,039)	$	43,226	$	42,870	$	356
Gross Profit	$	3,339	$	3,486	$	(147)	$	10,280	$	9,139	$	1,141
Vehicles transported	22,930		23,105		(175)		67,528		66,307		1,221
Revenue per vehicle transported	$	609	$	649	$	(40)	$	640	$	647	$	(7)
Gross Profit per vehicle transported	$	146	$	151	$	(5)	$	152	$	138	$	14

Revenue

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

Total Vehicle Logistics revenue for the three 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, 2023 increased in line with the ~~expansion~~increase in vehicles transported as compared to the same period in 2022.

Gross Profit

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

Total Vehicle Logistics gross profit for the three months ended September 30, 2023 decreased in line with the decrease in the number of vehicles transported as compared to the ~~business~~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-month periods~~nine months ended September 30, ~~2017 included: (i) capitalized technology acquisition and development costs~~2023 to the comparable periods in 2022.

Table of ~~$144,433 and $435,097, respectively; and (ii) the purchase of vehicles, furniture and equipment of $106,587 and $600,175, respectively. For~~Contents


	Three Months Ended September 30,				YoY		Nine Months Ended September 30,				YoY
	2023		2022		Change		2023		2022		Change
Advertising, marketing and selling	$	7,081	$	8,751	$	(1,670)	$	21,449	$	24,546	$	(3,097)
Compensation and related costs	48,926		55,477		(6,551)		157,033		158,965		(1,932)
Facilities	12,947		10,812		2,135		35,447		32,095		3,352
General and administrative	8,925		10,754		(1,829)		29,697		26,643		3,054
Professional fees	2,633		4,952		(2,319)		13,100		12,872		228
Stock based compensation	3,077		2,605		472		10,898		7,237		3,661
Technology development and software	1,368		471		897		3,933		2,070		1,863
Total SG&A expenses	$	84,957	$	93,822	$	(8,865)	$	271,557	$	264,428	$	7,129

SG&A expenses from continuing operations decreased for the three ~~and nine-month periods~~months ended September 30, ~~2017 amortization of: (i) capitalized~~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, 2023 increased compared to the same period in 2022. The increase was primarily driven by: (1) increased headcount as the Company deployed its growth initiatives; (2) investments in facilities and 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 Company focused expenditures on its most effective initiatives during the nine months ended September 30, 2023 as compared to the same period in 2022. In the case of technology and development, ~~was $89,429~~the Company is pursuing strategic technology projects focused on inventory management, infrastructure, and ~~$219,374, respectively; (ii) amortization of identifiable intangible was $11,250~~integration efforts which continued to progress during the nine months ended September 30, 2023.

Depreciation and ~~$33,750, respectively; and (iii) depreciation and amortization on vehicle, furniture and equipment was $28,598 and $49,573, respectively.~~ 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 ~~on furniture and equipment for the same periods in 2016 was $475 and $1,425, respectively.~~

~~Interest Expense~~

~~Interest expense consists of interest on the: (i) BHLP Note; (ii) NextGen Note; (iii) Private Placement Notes; and (iv)~~ ~~Senior Secured Promissory Notes. Interest~~ expense for the three and ~~nine-month periods~~nine months ended September 30, ~~2017~~2023 was higher than the comparable 2022 periods because it included a $2,610 impairment of the remaining capitalized costs of the Bidpath Software License as we terminated the related contract. The impact of the impairment was partially offset by 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 $87,323~~for the three and ~~$366,377, respectively, as compared to~~nine months ended September 30, 2023 from the ~~same~~comparable periods in ~~2016. The increase resulted from: (i)~~2022 primarily due to higher interest ~~on a~~rates and higher ~~level~~average borrowings. Interest expense consists primarily of ~~debt outstanding; (ii) the conversion of the BHLP Note; (iii)~~interest and the amortization of deferred financing costs for borrowings under the: (i) Oaktree Credit Agreement; (ii) various floorplan facilities; (iii) private placement notes; (iv) convertible senior notes; and (v) the ~~beneficial conversion feature~~ROF 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 our convertible senior notes issued on January 10, 2020 (the “New Notes”) and the ~~Private Placement Notes; and (iv)~~Warrants have a liability component that needs to be remeasured each reporting period with the ~~amortization~~change in value recorded in the Condensed Consolidated Statements of Operations.

The change in value of the ~~original issue discount on the~~ ~~Senior Secured Promissory Notes.~~ ~~The conversion of the BHLP Note resulted in a $196,076 charge to interest expense~~derivative liability for the ~~remaining balance of the beneficial conversion feature, net of deferred taxes~~three and nine months ended September 30, 2023 and 2022 were $0 and $39, 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, 2023 and December 31, 2022 was $26.

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. 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 as net income (loss) adjusted to add back interest expense, ~~for~~depreciation and amortization, income tax effects, changes in derivative liabilities and certain recoveries, charges and expenses, such as an insurance recovery, non-cash stock-based compensation costs, 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 ~~nine-month period~~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, ~~2017. Interest expense~~2023 and 2022, adjustments to Adjusted EBITDA were primarily comprised of:

•Income associated with the change in value of derivative liability as reported on the ~~Private Placement Notes~~Condensed Consolidated Statement of Operations,

•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 reduction of the RumbleOn Finance loan 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 one-time expenses incurred. For the three and ~~nine-month periods~~nine months ended September 30, ~~2017~~2023, the balance was ~~$94,855~~comprised of integration costs and ~~$183,943, respectively which included $41,979~~professional fees associated with acquisitions, and ~~$81,603~~a death benefit to the estate of ~~debt discount amortization for~~a former officer and director of the Company. For the three and ~~nine-month periods~~nine months ended September 30, ~~2017, respectively. Interest~~2022, the balance was primarily related to various integration costs and professional fees associated with the Freedom Powersports and RideNow acquisitions, technology implementation, and establishment of the RumbleOn Finance secured loan facility.

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

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

•Non-cash stock-based compensation expense, ~~on the NextGen Notes~~and

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

Table of Contents

The following tables reconcile Adjusted EBITDA to net income (loss) for the ~~three and nine-month~~ periods ~~ended September 30, 2017 was $21,370 and $54,849 respectively. Interest expense on the~~ ~~Senior Secured Promissory~~ Notes for the three and nine-month periods ended September 30, 2017 was $15,925 which included $10,274 of original issue discount amortization. For additional information, see Note 7 - “Notes Payable” in the accompanying Notes to the Condensed Consolidated Financial Statements.presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income (loss)	$	(16,484)	$	3,039	$	(46,974)	$	26,213
Income (loss) from discontinued operations, net	—		(676)		(951)		(731)
Income (loss) from continuing operations, net	$	(16,484)	$	3,715	$	(46,023)	$	26,944
Add back:
Interest expense	19,828		12,209		55,756		35,622
Income tax provision (benefit)	(3,556)		678		(9,706)		8,165
Depreciation and amortization	7,275		6,554		17,271		16,872
EBITDA	$	7,063	$	23,156	$	17,298	$	87,603
Adjustments:
Change in derivative liability	—		—		—		(39)
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	271		177		813		706
Litigation settlement expenses	9		—		88		—
Loss associated with RumbleOn Finance loan receivables	600		—		5,971		—
Other non-recurring costs	64		2,588		952		6,514
Personnel restructuring costs	1,768		—		6,493		—
PPP Loan forgiveness			(2,509)				(2,509)
Purchase accounting related	—		—		—		63
Stock based compensation	3,077		2,605		10,898		7,237
Transaction costs - acquisitions	—		100		34		1,503
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 floorplan lines of credit, and the monetization of our retail loan portfolio.

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 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 are reported as liabilities of 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 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 to raise net cash proceeds of not less than $100,000 from the issuance of common equity interests in the Company by December 1, 2023 (with a corresponding requirement to use certain of such equity proceeds to pay down the term loans under the Oaktree Credit Agreement), and (iv) an additional performance covenant was added requiring the Company to issue warrants, in a form to be agreed upon, to the Lenders. In connection with Amendment No. 5, the Company has agreed to pay a fee which may be 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 the next year. Further, Management believes that current working capital, results of operations of the Oaktree Credit Agreement, as amended by Amendment No. 5, and existing financing arrangements are sufficient to fund operations for at least one year from the date of the financial 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. 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.

Table of Contents

Cash Flows

The following table sets forth a summary of our cash flows for the ~~nine-month period~~nine months ended September 30, ~~2017~~2023 and ~~2016:~~2022:

Nine-months ended
September 30,

2017

2016

Net cash used in operating activities
$(4,389,128)
$(62,116)
Net cash used in investing activities
  (1,785,272)
  -
Net cash provided by financing activities
  5,480,040
  63,358
Net change in cash
$(694,360)
$1,242


	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

~~Net~~Our primary sources of operating cash flows result from the sale of vehicles and ancillary products. Our primary uses of cash in operating activities are purchases of inventory, cash used to fund operations, and personnel-related expenses. For the nine months ended September 30, 2023, net cash used in operating activities ~~increased $4,327,012~~was lower than in the comparable 2022 period due in part to ~~$4,389,128~~the following: (1) the wind down of RumbleOn Finance, our loan origination program in preparation for the ~~nine-month~~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, ~~ended September 30, 2017, as compared~~and (5) our ongoing initiatives to ~~the same period in 2016. The increase in net cash used is primarily due to a $5,065,632 increase in~~optimize our ~~net loss~~working capital, all of which were partially offset by ~~an increase in~~ the ~~net change operating assets~~impact from lower revenue and liabilities of $138,153 and a $876,775 increase in non-cash expense items. The increase in the net loss for the nine-month period ended September 30, 2017 was a result of the continued expansion and progress made on our business plan, including a significant increase in marketing and advertising spend in connection the launch of the Company’s website, ~~www.rumbleon.com, acquire vehicle inventory, continue development of the Company’s business and for working capital purposes.~~

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 ~~increased $1,785,272 for~~was lower in the ~~nine-month period~~nine months ended September 30, ~~2017, as~~2023 than in the comparable period in 2022 primarily due to the acquisition of Freedom Powersports, which occurred in the 2022 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 was lower in the nine months ended September 30, 2023, compared to the same period ~~in 2016. The increase in cash used for investment activities~~of 2022. This was primarily ~~for~~because we had issued new secured debt in 2022 to fund the purchase of ~~NextGen, $435,097 in costs incurred for technology development~~Freedom Powersports, and ~~the purchase of $600,175 of vehicles, furniture and equipment.~~

On February 8, 2017, the Company acquired substantially all of the assets of NextGen in exchange for $750,000 in cash, plus 1,523,809 unregistered shares of Class B Common Stock of the Company and a subordinated secured promissory note issued by the Company in favor of NextGenwe repaid more debt in the amount of $1,333,334. The NextGen Note matures on the third anniversary of the closing date. Interest accrues and will be paid semi-annually (i) at a rate of 6.5% annually from the closing date through the second anniversary of such date and (ii) at a rate of 8.5% annually from the second anniversary of the closing date through the Maturity Date. In connection with the closing of the acquisition, certain investors of the Company accelerated the funding of the second tranche of their investment totaling $1,350,000. The investors were issued 1,161,920 shares of Class B Common Stock and promissory notes in the amount of $667,000. For additional information, see “Financing Activities” in Management’s Discussion and Analysis and Note 7 - “Notes Payable” in the accompanying Notes to the Condensed Consolidated Financial Statements.

~~Financing Activities~~

~~Net cash provided by financing activities increased $5,416,681 to $5,480,040 for the nine-month period~~nine months ended September 30, ~~2017, compared with~~2023 than in the comparable 2022 period. Partially offsetting these reductions in net cash provided by ~~financing~~operating activities ~~of $63,358 for~~are the same period in 2016. This increase is primarily a result of the: (i) 2017 Private Placement of $2,630,000 in Class B Common Stock at a price of $4.00 per share; (ii) second tranche of the 2016 Private Placement of $683,040 in Class B Common Stock and $667,000 in promissory notes; and (iii) Senior Secured Promissory Notes proceeds ~~of $1,500,000. Proceeds~~received from the ~~2017 Private Placement,~~sale-leaseback transaction described in Note 3 - "Leases" included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q (which is being accounted for as a failed sale-leaseback transaction).

Critical Accounting Policies and Estimates

See Note 1 - "Description of Business and Significant Accounting Policies", included in Part I, Item 1, Financial Statements, of this Quarterly Report on Form 10-Q for accounting pronouncements and material changes to our critical accounting policies since December 31, 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 2022 Form 10-K and 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 ~~second tranche of the 2016 Private Placement and the Senior Secured Promissory Notes were used to complete the launch of the Company’s website,~~ ~~www.rumbleon.com, acquire vehicle inventory, continue development of the Company’s business and for working capital purposes.~~

On March 31, 2017, the Company completed funding of the second tranche of the 2016 Private Placement. The investors were issued 1,161,920 shares of Class B Common Stock of the Company and the Private Placement Notes in the amount of $667,000, in consideration of cancellation of loan agreements having an aggregate principal amount committed by the purchasers of $1,350,000. Under the termsmeaning of the Private ~~Placement Notes, interest shall accrue~~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 “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” and similar expressions. 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 outstanding and unpaid principal amount until paid in full. The Private Placement Notes mature on March 31, 2020. Interest accrues at a rate of 6.5% annually from the closing date through the second anniversary of such date and (ii) at a rate of 8.5% annually from the second anniversary of the closing date through the maturity date. Upon the occurrencecircumstances. We believe these judgments are reasonable, but forward-looking statements are not guarantees of any ~~event~~future events or financial results, and our actual results may differ materially due to a variety of ~~default,~~important factors, many of which are beyond our control. Factors that could cause or contribute to such differences include the ~~outstanding balance under~~following:

•our significant indebtedness and the ~~Private Placement Notes shall become immediately due~~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 ~~payable upon election~~demand for our products and services;

•consumers acceptance of our business model;

•our ability to acquire vehicles that satisfy consumer demand;

•the ~~holder. Based on~~results of investments made in the ~~relative fair values attributed~~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 ~~Class B Common Stock~~supply or prices of new or pre-owned vehicles;

•competitive pressures from existing and ~~promissory notes issued in the 2016 Private Placement the Company recorded a debt discount on the promissory notes~~new companies;

•climate change legislation or regulations restricting emission of ~~$667,000 with the corresponding amounts as addition~~greenhouse gases;

•any failure to ~~paid in capital. The debt discount will be amortized~~adequately protect personal information;

•any failure to ~~interest expense over the life of the notes using the effective interest method. For additional information, see Note 7 - “Notes Payable” in the accompanying Notes~~adequately protect our intellectual property;

•any failure to ~~the Condensed Consolidated Financial Statements.~~obtain or maintain adequate insurance coverage;

On July 13, 2016, the Company entered into the BHLP Note with Berrard Holdings, an entity owned and controlled by a current officer and director, Mr. Berrard, pursuant to which the Company was required to repay $191,858 on or before July 13, 2026 plus interest at 6% per annum. The BHLP Note was also convertible into common stock, in whole, at any time before maturity at the option of the holder at the greater of $0.06 per share or 50% of the price per share of the next qualified financing which is defined as $500,000 or greater. Effective August 31, 2016, the principal amount of the BHLP Note was amended to include an additional $5,000 loaned to the Company, on the same terms. On November 28, 2016, the Company completed its qualified financing at $1.50 per share which established the conversion price per share for the BHLP Note of $0.75 per share, resulting in the principal amount of the BHLP Note being convertible into 263,144 shares of Class B Common Stock. As such, November 28, 2016 became the “commitment date” for determining the value of the BHLP Note conversion feature. Because there had been one trade in January 2016 in the Company’s common stock since July 2014, other than the purchase by Berrard Holdings of 99.5% of the outstanding shares in a single transaction, the Company used the Monte Carlo simulation to determine the intrinsic value of the conversion feature of the BHLP Note, which resulted in a value in excess of the principal amount of the BHLP Note Thus, the Company recorded a note discount of $197,358 with the corresponding amount as an addition to paid in capital. This note discount is amortized to interest expense until the scheduled maturity of the BHLP Note in July 2026 or until it is converted using the effective interest method. The effective interest rate at March 31, 2017 was 7.4%. Interest expense on the BHLP Note for the three-month period ended March 31, 2017 was $2,920 and the amortization of the beneficial conversion feature was $3,558. On March 31, 2017, the Company issued 275,312 shares of Class B Common Stock upon full conversion of the BHLP Note, having an aggregate principal amount, including accrued interest, of $206,484 and a conversion price of $0.75 per share. In connection with the conversion of the BHLP Note, the remaining debt discount of $196,076 was charged to interest expense in the Condensed Consolidated Statements of Operations and the related deferred tax liability was credited to additional paid in capital in the Condensed Consolidated Balance Sheets. For additional information, see Note 7 - “Notes Payable” in the accompanying Notes to the Condensed Consolidated Financial Statements.

On September 5, 2017 the Company executed Senior Secured Promissory Notes (the “Notes”) in favor of several investors, including certain executive officers and directors of the Company, in the aggregate principal amount of $1,650,000 (“Principal Amount”), which includes an aggregate original issue discount of $150,000. The proceeds to the Company from the Notes, net of original issuance discount, was $1,500,000. The Notes are secured by an interest in all the Company’s Collateral, as such term is defined in the Notes.~~The Notes mature on September 15, 2018 and bear interest at a rate equal to 5% per annum through December 31, 2017, and a rate of 10% per annum thereafter. Interest is payable monthly in arrears.~~ ~~Upon the occurrence of any event of default, the outstanding balance under the Notes shall become immediately due and payable upon election of the holders~~.The Principal Amount and any unpaid interest accrued thereon may be prepaid by the Company at any time prior to the Maturity Date without premium or penalty upon five days prior written notice to the Noteholder. If the Company consummates in•adverse conditions affecting one or more transactions financing of any nature resulting in net proceeds available to the Company of $5,000,000 or more, then the Noteholders may require the Company to prepay the Notes on thirty (30) days prior written notice to the Company. ~~The original issue discount is amortized to interest expense until the scheduled maturity~~ of the Notes in September 2018 using the effective interest method. The effective interest rate at September 30, 2017 was 10.0%. Interest expense on the Notes for the three and nine-month periods ended September 30, 2017 was $15,925powersports manufacturers with which included $10,274 of original issue discount amortization. On October 23, 2017, the Company completed a public offering and used $1,661,075 of the net proceeds of the Offering for the repayment of the Noteswe hold franchises;

•any change or deterioration in the ~~aggregate principal amount~~relationship with the manufacturers of ~~$1,650,000, plus accrued interest, which resulted~~vehicles we sell;

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

•other factors discussed in ~~the termination~~Part I, Item 1A in our 2022 Form 10-K [and Part II, Item 1A of ~~the Notes~~this Quarterly Report on Form 10-Q]. ~~For additional information, see Note 8 - “Stockholders Equity” and Note 15 – “Subsequent Events” in the accompanying Notes to the Condensed Consolidated Financial Statements.~~

~~Investment in Growth~~

As of September 30, 2017, the Company had a total of $656,220 in available cash. Our cash requirements for the next twelve months are significant as we have begun to aggressively invest in the growth of our business and we expect this investment to continue. We plan to invest heavily in inventory, marketing, technology and infrastructure to support the growth of the business. These investments are expected to increase our negative cash flow from operations and operating losses at least in the near term, and there is no guarantee that we will be able to realize the return on our investments. Since inception, we have financed our cash flow requirements through debt and equity financing and on October 23, 2017, the Company completed a public offering of 2,910,000 shares of Class B common stock at a public offering price of $5.50 per share (the "Offering") and received approximately $14,500,000 in proceeds, net of underwriting discounts and commissions and offering expenses. The Company~~used $1,661,075 of the net proceeds of the Offering for the repayment of the Senior Secured Promissory Notes in the aggregate principal amount of $1,650,000 plus accrued interest~~and intend to use the remaining net proceeds of the Offering for working capital and general corporate purposes, which may include purchases of additional inventory held for sale, increased spending on marketing and advertising and capital expenditures necessary to grow the business. Also, on November 2, 2017, we entered into a floor plan line of credit through our subsidiary, RMBL Missouri, LLC, in the amount of $2,000,000. For additional information on the Offering and floor plan line of credit, see Note 15 – “Subsequent Events” in the accompanying Notes to the Condensed Consolidated Financial Statements.~~However,~~ our limited operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets. Such risks for us include an evolving business model, advancement of technology and the management of growth. To addressGiven these risks ~~we must, among other things, continue our development of relevant applications, stay abreast of changes in the marketplace, as well as implement~~ and ~~successfully execute our business and marketing strategy. There can be no assurance that we will be successful in addressing such risks, and the failure~~uncertainties, readers are cautioned not to ~~do so can have a material adverse effect~~place undue reliance on ~~our business prospects, financial condition and results of operations.~~

~~Critical Accounting Policies~~

The accompanying unaudited Condensed Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilitiesforward-looking statements. Forward-looking statements speak only as of the date ~~of the financial~~they are made, and we undertake no obligation to publicly update or revise or any forward-looking statements, and the reported amounts of revenue and expenses during the reporting period. We routinely evaluate our estimates based on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. During the nine-month period ended September 30, 2017, we did not experience any significant changes in estimates or judgments inherent in the preparation of our financial statements. A summary of our significant accounting policies is contained in Note 1 to our financial statements included in our 2016 Annual Report.

except as required by law.

~~Off-Balance Sheet Arrangements~~

As of September 30, 2017, 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.

~~Emerging Growth Company~~

We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing not to take advantage of the extended transition period for complying with new or revised accounting standards.

Item 3.

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

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

Table of Contents

Item 4.

Controls and Procedures.


Large accelerated filer	☐ o	Accelerated filer	☐ x
Non-accelerated filer	~~☐ (Do not check if a smaller reporting company)~~o	Smaller reporting company	☒ x
		Emerging growth company	☒ o

~~PART I - FINANCIAL INFORMATION~~
~~Item 1.~~ PART I			~~Financial Statements.~~FINANCIAL INFORMATION	1

Item 1.			Financial Statements	1
Item 2.			~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations	19 23
Item 3.			Quantitative and Qualitative ~~Disclosure~~Disclosures About Market ~~Risk.~~Risk	32 36
Item 4.			Controls and ~~Procedures.~~Procedures	32 37
~~PART II - OTHER INFORMATION~~
~~Item 1.~~ PART II			~~Legal Proceedings.~~OTHER INFORMATION	33
~~Item 1A.~~			~~Risk Factors.~~	33
Item 2.1.			~~Unregistered Sales of Equity Securities and Use of Proceeds.~~Legal Proceedings	33 39
Item 3.1A.			~~Defaults Upon Senior Securities.~~Risk Factors	33 39
Item 4.6.			~~Mine Safety Disclosures.~~Exhibits	33 40
~~Item 5.~~ SIGNATURES				~~Other Information.~~	33
~~Item 6.~~	~~Exhibits~~	33 41

☒
x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~For the quarterly period ended September 30, 2017~~


o		OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~For the transition period from ___________ to _____________~~

ASSETS	Balance at
	September 30, 2017	December 31, 2016
Current assets:
Cash	$656,220	$1,350,580
Accounts Receivable	320,575	-
Vehicle Inventory	1,244,658	-
Prepaid expense	123,513	1,667
Other	174,419	-
Total current assets	2,519,385	1,352,247

Property and Equipment - Net of Accumulated Depreciation	2,166,326	-
Goodwill	3,240,000	-
Intangible Assets, net	121,765	45,515

Total assets	$8,047,476	$1,397,762

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued liabilities	$ 1,902,543	$ 219,101
Accrued interest payable	17,998	-
Current portion of long term debt	1,510,274	-
Other current liabilities	-	-
Total current liabilities	3,430,815	219,101

Long term liabilities:
Notes payable	1,414,937	1,282
Accrued interest payable - related party	21,736	5,508
Deferred tax liability	-	78,430
Total long-term liabilities	1,436,673	85,220

Total liabilities	4,867,488	304,321

Commitments and Contingencies

Stockholders' equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2017 and December 31, 2016	-	-
Common A stock, $0.001 par value, 1,000,000 shares authorized, 1,000,000 shares issued and outstanding as of September 30, 2017 and none outstanding at December 31, 2016	1,000	-
Common B stock, $0.001 par value, 99,000,000 shares authorized, 9,018,541 and 6,400,000 shares issued and outstanding as of September 30, 2017 and December 31, 2016	9,019	6,400
Additional paid in capital	8,749,566	1,534,015
Subscriptions receivable	(1,000)	(1,000)
Accumulated deficit	(5,578,597)	(445,974)
Total stockholders' equity	3,179,988	1,093,441

Total liabilities and stockholders' equity	$8,047,476	$1,397,762

	Three-months ended September 30,		Nine-months ended September 30,
	2017	2016	2017	2016
Revenue: Used vehicle sales:
Consumer	$1,626,864	$ -	$1,626,864	$ -
Dealer	1,745,948	-	1,745,948	-
Auction	171,560	-	253,500	-
Other sales and revenue	134,573	-	134,573	-
Subscription and other fees	27,197	-	100,668	-
Total Revenue	3,706,142	-	3,861,553	-

Cost of Revenue	3,478,124	-	3,627,455	-
Selling, general and administrative	2,326,043	36,706	4,690,216	58,135
Depreciation and amortization	129,277	475	302,697	1,425
Total expenses	5,933,444	37,181	8,620,368	59,560

Operating loss	(2,227,302)	(37,181)	(4,758,815)	(59,560)

Interest expense	90,201	2,878	373,808	7,431

Net loss before provision for income taxes	(2,317,503)	(40,059)	(5,132,623)	(66,991)

Benefit for income taxes	-	-	-	-

Net loss	$(2,317,503)	$(40,059)	$(5,132,623)	$ (66,991)

Weighted average number of common shares outstanding – basic and fully diluted	10,018,541	5,500,000	9,105,429	5,500,000

Net loss per share – basic and fully diluted	$(0.23)	$(0.01)	$(0.56)	$(0.01)

	Preferred Shares		Common A Shares		Common B Shares
	Shares	Amount	Shares	Amount	Shares	Amount	Additional Paid in Capital	Subscriptions Receivable	Accumulated Deficit	Total Stockholders' Equity
Balance, December 31, 2016	-	$-	-	$-	6,400,000	$6,400	$1,534,015	$(1,000)	$(445,974)	$1,093,441

Exchange of common stock	-	-	1,000,000	1,000	(1,000,000)	(1,000)	-	-	-	-

Issuance of common stock in connection with acquisition	-	-	-	-	1,523,809	1,524	2,665,142	-	-	2,666,666

Issuance of stock in private placements			-	-	657,500	658	2,629,342	-		2,630,000

Issuance of common stock in connection with loan agreement	-	-	-	-	1,161,920	1,162	1,348,878	-	-	1,350,040

Issuance of common stock in connection with conversion of a Note Payable-related party, net of debt discount	-	-	-	-	275,312	275	284,639	-	-	284,914

Stock-based compensation	-	-	-	-	-	-	287,550	-	-	287,550

Net loss	-	-	-	-	-	-	-	-	(5,132,623)	(5,132,623)

Balance, September 30, 2017	-	$-	1,000,000	$1,000	9,018,541	$9,019	$8,749,566	$(1,000)	$(5,578,597)	$3,179,988

Remainder through December 31, 2017	$11,250
2018	45,000
2019	20,000
	$76,250

	September 30, 2017	December 31, 2016
Accounts payable	$1,539,572	$219,101
Sales taxes	296	-
Accrued compensation and benefits	354,790	-
Other	7,885	-
Total accounts payable and accrued liabilities	$1,902,543	$219,101

	September 30, 2017	December 31, 2016
Notes payable-NextGen dated February 8, 2017. Interest is payable semi-annually at 6.5% through February 9, 2019 and 8.5% through maturity which is February 8, 2020.	$1,333,334	$-
Notes payable-private placement dated March 31, 2017. Interest is payable at maturity and accrues at 6.5% through March 31, 2019 and 8.5% through maturity which is March 31, 2020.	667,000	-
Convertible note payable-related party dated July 13, 2016. Interest rate of 6.0% which is accrued and paid at maturity. Note matures on July 26, 2026. Note is convertible into common stock, in whole at any time before maturity at the option of the holder at $.75 per share.	-	197,358
Senior Secured Promissory Notes dated September 5, 2017. Interest rate of 5.0% through December 31, 2017 and a rate of 10% through maturity which is accrued and paid at maturity. Note matures on September 5, 2018.	1,650,000
Less: Debt discount	(725,123)	(196,076)
	$ 2,925,211	$ 1,282
Current portion (net of $139,726 of debt discount)	1,510,274	-
Long-term portion	$ 1,414,937	$ 1,282

	Three-Months Ended September 30,		Nine- Months Ended September 30,
	2017	2016	2017	2016
Units sold:
Consumer	106	-	106	-
Dealer	165	-	175	-
Auction	42	-	42	-
	313	-	323	-
Number of Dealers	3	-	3	-
Average monthly unique users	71,180	-	42,670	-
Inventory units available on website	588	-	588	-
Average days to sale	39	-	38	-
Total average gross margin per unit$	$ 760	$-	$736	$-

	For the three-months ended September 30,		For the nine-months ended September 30,
	2017	2016	2017	2016
Revenue: Used Vehicle Sales:
Consumer	$1,626,864	$ -	$1,626,864	$-
Dealer	1,745,948	-	1,745,948	-
Auction	171,560	-	253,500	-
Other sales and revenue	134,573	-	134,573	-
Subscription and other fees	27,197	-	100,668	-
Total Revenue	3,706,142	-	3,861,553	-

Cost of revenue	3,478,124	-	3,627,455	-
Selling, General and administrative	2,326,043	36,706	4,690,216	58,135
Depreciation and amortization	129,277	475	302,697	1,425
Total Expenses	5,933,444	37,181	8,620,368	59,560

Operating loss	(2,227,302)	(37,181)	(4,758,815)	(59,560)

Interest expense	90,201	2,878	373,808	7,431

Net loss before provision for income taxes	$(2,317,503)	$(40,059)	$(5,132,623)	$(66,991)

Benefit for income taxes	-	-	-	-

Net loss	$(2,317,503)	$(40,059)	$(5,132,623)	$(66,991)


Exhibit ~~No.~~Number						Description
~~10.1~~4.1						Form of ~~Senior Secured Promissory Note, dated September 5, 2017~~2023 Warrant. (incorporated by reference to Exhibit ~~10.1 in~~4.1 to the Company’s Current Report on Form 8-K filed ~~September 11, 2017)~~with the SEC on August 17, 2023).
~~10.2~~10.1 +						~~Amendment to Amended~~Separation Agreement, dated July 14, 2023, by and ~~Restated Stockholders’ Agreement of~~between RumbleOn, Inc.~~, dated September 29, 2017~~ and Michael Francis. (incorporated by reference to Exhibit 10.1 into the ~~Company’s~~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 ~~5, 2017)~~20, 2023).
~~31.1~~ 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*						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)*

	~~RumbleOn, INC.~~
					RUMBLEON, INC.

Date: November 9~~, 2017~~7, 2023			By:	/s/ ~~Marshall Chesrown~~Michael W. Kennedy
				~~Marshall Chesrown~~Michael W. Kennedy
				Chief Executive Officer (Principal Executive Officer)

Date: November 7, 2023			By:	/s/ Blake Lawson
~~Date: November 9, 2017~~			~~By:~~	~~/s/ Steven R. Berrard~~Blake Lawson
				~~Steven R. Berrard~~
		Chief Financial Officer
				(Principal Financial Officer and Principal Accounting Officer)

(214) 771-9952

~~(704) 448-5240~~

(~~Registrant’s~~Registrant's telephone number, including area code)

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