~~Operating Activities~~

(1)

Net cash used in operating activities increased $4,327,012 to $4,389,128 for the nine-month period ended September 30, 2017, as compared to the same period in 2016. The increase in net cash used is primarily due to a $5,065,632 increase in our net loss offset by an increase in the net change operating assets 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.~~

~~Investing Activities~~

Net cash used in investing activities increased $1,785,272 for the nine-month period ended September 30, 2017, as compared to the same period in 2016. The increase in cash used for investment activities was primarily for the purchase of NextGen, $435,097 in costs incurred for technology development 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 NextGen 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% annuallyImpairment Loss resulting 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.Nashville Tornado.

~~Financing Activities~~

Net cash provided by financing activities increased $5,416,681 to $5,480,040 for the nine-month period ended September 30, 2017, compared with net cash provided by financing activities of $63,358 for 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 from the 2017 Private Placement, 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 terms of the Private Placement Notes, interest shall accrue on 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 occurrence of any event of default, the outstanding balance under the Private Placement Notes shall become immediately due and payable upon election of the holder. Based on the relative fair values attributed to the Class B Common Stock and promissory notes issued in the 2016 Private Placement the Company recorded a debt discount on the promissory notes of $667,000 with the corresponding amounts as addition to paid in capital. The debt discount will be amortized 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 to the Condensed Consolidated Financial Statements.

Seasonality

~~On July 13, 2016,~~

Absent the ~~Company entered into~~impact of COVID-19, the ~~BHLP Note with Berrard Holdings, an entity owned~~volume of vehicles sold or transported will generally fluctuate from quarter-to-quarter. This seasonality is caused by several factors including weather, the timing of pre-owned vehicles available for sale from selling consumers, the availability and ~~controlled by a current officer~~quality of vehicles, holidays, 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 optionseasonality 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~~retail market for pre-owned vehicles. As a result, revenue and operating expenses related to volume will fluctuate accordingly on a quarterly basis. The fourth calendar quarter typically experiences lower used vehicle auction accessibility as ~~$500,000 or greater. Effective August 31, 2016, the principal amount of the BHLP Note was amended to include an~~well as 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 $197,358costs associated 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 $2,920holidays 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 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 $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 8 - “Stockholders Equity” and Note 15 – “Subsequent Events” in the accompanying Notes to the Condensed Consolidated Financial Statements.~~

winter weather.

Investment in Growth

As a result 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~~COVID-19 pandemic we have ~~begun~~temporarily reduced discretionary growth expenditures, however, as the impact of COVID-19 abates over time, and unit sales return to ~~aggressively invest~~or exceed levels experienced in ~~the growth~~January and February of ~~our business and~~2020, we ~~expect this~~will take a measured approach to resuming investment ~~to continue. We plan to invest heavily~~ in inventory, marketing, technology and infrastructure to support the growth of the business. These anticipated investments ~~are expected to~~may 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 o~~n 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, including the impact of COVID-19, expenses and difficulties frequently encountered by companies that are early 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 address 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 to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

Liquidity

We have incurred losses and negative cash flow from operations since inception through June 30, 2020 and expect to incur additional losses and negative cash flow in the future. As we continue to expand our business, build our brand name and awareness, and continue technology and software development efforts, we may need access to additional capital, including through debt and equity financing. Historically, we have raised additional capital to fund our expansion through equity issuances or debt instruments; refer to Note 8 — Notes Payable and Lines of Credit, Note 9 — Convertible Notes, and Note 11 — Stockholder Equity. Also, we have historically funded vehicle inventory purchases through our Line of Credit-Floor Plans. Due to the impact of COVID-19 on the economy, we have a strong focus on preserving liquidity. Our primary liquidity sources are available cash and cash equivalents, amounts available under the NextGear Credit Line (as defined below), proceeds from the Paycheck Protection Program loan, monetization of our retail loan portfolio, insurance recoveries and through rationalizing costs and expenses, including a workforce reduction. Although we have experienced a decrease in revenue as a result of the impact of the COVID-19 pandemic, as of August 13, 2020, the Company has approximately $11,100,000 of cash of which $5,500,000 is restricted, approximately $31,000,000 of remaining availability under the NextGear Credit Line. The Company expects to receive recovery of its insured losses, however no assurance can be given regarding the amounts, if any, that will be ultimately recovered or when such amounts, if any, will be recovered.

The worldwide spread of the COVID-19 outbreak has resulted in a global slowdown of economic activity which decreased demand for a broad variety of goods and services, while also disrupting sales channels, marketing activities and supply chains for an unknown period of time until the outbreak is contained. This is impacting the Company's business and the powersport, automotive and transportation industries as a whole. The Company has positioned its business today to be lean and flexible in this period of lower demand and higher uncertainty with the goal of preparing the Company for a strong recovery as the crisis is contained. The Company believes its online business model allows it to quickly respond to market demand or changes in the businesses it operates as the COVID-19 pandemic continues.

The Company's condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which assumes the continuity of operations, the realization of assets and the satisfaction of liabilities as they come due in the normal course of business. Although the Company believes that it will be able to generate sufficient liquidity from the measures described above, its current circumstances including uncertainties due to COVID-19 pandemic raise substantial doubt about the Company's ability to operate as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Key Operation Metrics - Powersports and Automotive Segments

We regularly review a number of metrics, to evaluate our vehicle distribution business, measure our progress, and make strategic decisions. Our key operating metrics reflect what we believe will be the key drivers of our business, including increasing brand awareness, maximizing the opportunity to source the purchase of low cost pre-owned vehicles from consumers and dealers while enhancing the selection of vehicles we make available to our customers. Our key operating metrics also demonstrate our ability to translate these drivers into sales and to monetize these retail sales through a variety of product offerings.

	Three Months Ended June 30,		Six Months Ended June 30,
Powersports:	2020	2019	2020	2019
Vehicles sold	859	3,982	3,676	7,280
Average days to sale	70	28	52	32
Total vehicle revenue	$8,199,396	$30,305,687	$31,338,476	$57,234,846
Gross Profit	$670,586	$4,168,228	$3,596,849	$7,147,831

	Three Months Ended June 30,		Six Months Ended June 30,
Automotive(1) :	2020	2019	2020	2019
Vehicles sold	2,835	9,946	7,438	18,751
Average days to sale	65	18	44	22
Total vehicle revenue	$68,294,841	$233,856,329	$181,927,108	$424,763,517
Gross Profit	$5,801,826	$9,860,070	$12,150,793	$19,272,146

_________________________

(1)

Excludes the Impairment Loss resulting from the Nashville Tornado and other insignificant indirect costs.

Vehicles Sold

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

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 pre-owned vehicles sold in a period. However, this metric does not include any pre-owned vehicles that remain unsold at period end. We view average days to sale as a useful metric due to its impact on pre-owned vehicle average selling price.

Revenue

Revenue is primarily comprised of pre-owned vehicle sales. We sell pre-owned vehicles through consumer and dealer 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 to the channel where the opportunity is the greatest at any given time based on customer demand, market conditions or inventory availability. The number of pre-owned vehicles sold to any given channel may vary from period to period based on customer demand, market conditions and available inventory. Subject to the impact of COVID-19 on our results, as discussed elsewhere in this MD&A, we expect pre-owned vehicle sales to increase as we begin to utilize a combination of brand building as well as direct response channels to efficiently source and scale our addressable markets while expanding our suite of product offerings to consumers and dealers who may wish to trade-in or to sell us their vehicle independent of a retail or wholesale sale. Factors primarily affecting pre-owned vehicle sales include the number of retail pre-owned vehicles sold and the average selling price of these vehicles.

Gross Profit

Gross profit is generated on pre-owned vehicle sales from the difference between the vehicle selling price and our cost of revenue associated with acquiring the vehicle and preparing it for sale. The aggregate dollar gross profit achieved from the consumer and dealer sales channels are different. Pre-owned vehicles sold to consumers through our website generally have the highest dollar gross profit since the vehicle is sold directly to the consumer. Pre-owned vehicles sold to dealers through our website are sold at a price below the retail price offered to consumers, thus the dealer and RumbleOn are sharing the gross profit. Pre-owned vehicles sold to dealers through auctions are sold at market. Factors affecting gross profit from period to period include the mix of pre-owned vehicles we acquire and hold in 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 in our sales channels, which could temporarily lead to average selling prices and gross profits increasing or decreasing in any given channel.

Key Operations Metrics – Powersports

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Key Operation Metrics:
Vehicles sold	859	3,982	3,676	7,280

Total Powersports Revenue	$8,199,396	$30,305,687	$31,338,476	$57,234,846
Gross Profit	$670,586	$4,168,228	$3,596,849	$7,147,831
Gross Profit per vehicle	$781	$1,047	$978	$982
Gross Margin	8.2%	13.8%	11.5%	12.5%
Average selling price	$9,545	$7,611	$8,525	$7,862

Consumer:
Vehicles sold	145	298	425	581

Total Consumer Revenue	$1,458,767	$2,778,099	$4,115,647	$4,925,121
Gross Profit	$213,407	$751,338	$859,819	$1,223,375
Gross Profit per vehicle	$1,472	$2,521	$2,023	$2,106
Gross Margin	14.6%	27.0%	20.9%	24.8%
Average selling price	$10,060	$9,322	$9,684	$8,477

Dealer:
Vehicles sold	714	3,684	3,251	6,699

Total Dealer Revenue	$6,740,629	$27,527,588	$27,222,829	$52,309,725
Gross Profit	$457,179	$3,416,890	$2,737,030	$5,924,456
Gross Profit per vehicle	$640	927	$842	$884
Gross Margin	6.8%	12.4%	10.1%	11.3%
Average selling price	$9,441	$7,472	$8,374	$7,809

Key Operations Metrics – Automotive(1)

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019(2)
Key Operation Metrics:
Vehicles sold	2,835	9,946	7,438	18,751

Total Automotive Revenue	$68,294,841	$233,856,329	$181,927,108	$424,763,517
Gross Profit	$5,801,826	$9,860,070	$12,150,793	$19,272,146
Gross Profit per vehicle	$2,046	$991	$1,634	$1,028
Gross Margin	8.5%	4.2%	6.7%	4.5%
Average selling price	$24,090	$23,513	$24,459	$22,653

Consumer:
Vehicles sold	297	649	943	1,512

Total Consumer Revenue	$8,477,654	$17,987,229	$26,062,391	$39,552,353
Gross Profit	$1,138,835	$2,343,625	$3,247,556	$4,587,195
Gross Profit per vehicle	$3,834	$3,611	$3,444	$3,034
Gross Margin	13.4%	13.0%	12.5%	11.6%
Average selling price	$28,544	$27,715	$27,638	$26,159

Dealer:
Vehicles sold	2,538	9,297	6,495	17,239

Total Dealer Revenue	$59,817,187	$215,869,100	$155,864,717	$385,211,164
Gross Profit	$4,662,991	$7,516,445	$8,903,237	$14,684,951
Gross Profit per vehicle	$1,837	808	$1,371	$852
Gross Margin	7.8%	3.5%	5.7%	3.8%
Average selling price	$23,569	$23,219	$23,998	$22,345

~~Critical Accounting Policies~~_______________________

(1)

Excludes the impairment loss resulting from the Nashville Tornado.

(2)

Inclusive only from the Autosport Acquisition Date.

Key Operation Metrics - Vehicle Logistics and Transportation Services Segment

We regularly review a number of metrics, to evaluate our vehicle logistics and transportation business, measure our progress, and make strategic decisions. Our key operating metrics reflect what we believe will be the key drivers of our business, including increasing brand awareness, and maximizing the opportunity to drive increased transportation and logistics unit volume. Our key operating metrics also demonstrate our ability to translate these drivers into revenue and profitability.

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Revenue	$8,251,605	$8,829,632	$17,241,786	$17,005,642

Vehicles Delivered	19,191	21,536	40,076	42,007

Gross Profit	$1,800,766	$1,589,214	$3,800,299	$3,188,604

Gross Profit Per Vehicle Delivered	$94	$74	$95	$76

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 transaction price is based on the consideration specified in the customer's contract. The freight brokerage agreements are fulfilled by independent third-party transporters who are obligated to meet our performance obligations and standards. Generally, customers are billed either upon shipment of the vehicle or on a monthly basis, and remit payment according to approved payment terms. Revenue is recognized as risks and rewards of transportation of the vehicle is transferred to the owner during delivery. Wholesale Express is considered the principal in the delivery transactions since it is primarily responsible for fulfilling the service. As a result, revenue is recorded gross. In the normal course of operations, Wholesale Express also provides transportation services to Wholesale.

Vehicles Delivered

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

Gross Profit

Gross profit is generated on the difference between the price received from a customer under a freight brokerage agreement for the transport of a vehicle from a point of origin to a designated destination minus our cost to contract an independent third-party transporter to fulfill our obligation under the freight brokerage agreement with the customer. We define gross profit per vehicle delivered as the aggregate gross profit in a given period divided by the number of pre-owned vehicles delivered in that period.

RESULTS OF OPERATIONS

The ~~accompanying~~following tables provide our results of operations for the three-months ended June 30, 2020 and 2019 for powersports, automotive and vehicle logistics and transportation services segments, including key financial information relating to these segments. Our powersports and automotive segments consists of the distribution of powersports and automotive vehicles and our vehicle logistics and transportation services segment provides nationwide automotive transportation services primarily between dealerships and auctions. Each of these segments are further described below. This financial information should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and Notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q. In this Management's Discussion and Analysis of Financial Condition and Results of Operations, no comparable information is discussed with respect to Autosport for periods before the Autosport Acquisition Date.

	For the Three-Months ended June 30,		For the Six-Months endedJune 30,
	2020	2019	2020	2019
Revenue:
Pre-owned Vehicle Sales:
Powersports	$8,199,396	$30,305,687	$31,338,476	$57,234,846
Automotive (1)	68,294,841	233,856,329	181,927,108	424,763,517
Total revenue from vehicle sales	76,494,237	264,162,016	213,265,584	481,998,363
Transportation	7,663,500	6,017,888	14,751,091	11,359,300
Other	183,556	-	473,879	-
Total Revenue	84,341,293	270,179,904	228,490,554	493,357,663

Cost of Revenue:
Powersports	7,528,810	26,137,459	28,085,447	50,087,015
Automotive (1)	62,493,015	223,996,259	170,572,680	405,491,371
Transportation	5,862,734	4,428,674	10,950,792	8,170,696
Total cost of revenue before impairment loss	75,884,559	254,562,392	209,608,919	463,749,082
Impairment Loss on automotive inventory	-	-	11,738,413	-
Total Cost of Revenue	75,884,559	254,562,392	221,347,332	463,749,082

Gross Profit	8,456,734	15,617,512	7,143,222	29,608,581

Selling, General and Administrative	11,174,288	25,007,565	29,230,714	45,447,581

Insurance recovery	(5,615,268)	-	(5,615,268)	-

Depreciation and Amortization	508,322	427,438	1,031,317	809,663

Operating income (loss)	2,389,392	(9,817,491)	(17,503,541)	(16,648,663)

Interest expense	(1,482,408)	(1,874,858)	(3,699,166)	(3,319,991)
Decrease in derivative liability	137,488	190,000	20,673	190,000
Loss on early extinguishment of debt	-	(1,499,250)	188,164	(1,499,250)

Net income (loss) before provision for income taxes	1,044,472	(13,001,599)	(20,993,870)	(21,277,904)

Benefit for income taxes	-	-	-	-

Net income (loss)	$1,044,472	$(13,001,599)	$(20,993,870)	$(21,277,904)

_______________________

(1)

Inclusive only from the Autosport Acquisition Date.

The following table provides our results of operations for the three and six-months ended June 30, 2020 and 2019, including key financial information relating to our business and operations. This financial information should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and Notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q. In this Management's Discussion and Analysis of Financial Condition and Results of Operations, no comparable information is discussed with respect to Autosport for periods before the Autosport Acquisition Date.

	For the Three-Months ended June 30, 2020
	Powersports	Automotive(1)	Vehicle Logistics and Transportation Services	Other	Elimination	Total	2019
Revenue:
Pre-owned vehicle sales:
Powersports	$8,199,396	$-	$-	$-	$-	$8,199,396	$30,305,687
Automotive	-	68,294,841	-	-	-	68,294,841	233,856,329
Transportation and vehicle logistics	-	-	8,251,605	-	(588,105)	7,663,500	6,017,888
Other	-	-	-	183,556	-	183,556	-
Total revenue	8,199,396	68,294,841	8,251,605	183,556	(588,105)	84,341,293	270,179,904

Cost of revenue:
Powersports	7,528,810	-	-	-	-	7,528,810	26,137,459
Automotive	-	62,493,015	-	-	-	62,493,015	223,996,259
Transportation	-	-	6,450,839	-	(588,105)	5,862,734	4,428,674
Total cost of revenue	7,528,810	62,493,015	6,450,839	-	(588,105)	75,884,559	254,562,392

Gross profit	$670,586	$5,801,826	$1,800,766	$183,556	$-	$8,456,734	$15,617,512

_______________________

(1)

Intercompany freight services from Wholesale Express are ~~prepared in conformity with accounting principles generally accepted~~eliminated in the ~~United States.~~condensed consolidated financial statements.

	For the Six-Months ended June 30, 2020
	Powersports	Automotive(3)	Vehicle Logistics and Transportation Services	Other	Elimination(2)	Total	2019
Revenue:
Pre-owned vehicle sales:
Powersports	$31,338,476	$-	$-	$-	$-	$31,338,476	$57,234,846
Automotive	-	181,927,108	-	-	-	181,927,108	424,763,517
Transportation and vehicle logistics	-	-	17,241,786	-	(2,490,695)	14,751,091	11,359,300
Other	-	-	-	473,879	-	473,879	-
Total revenue	31,338,476	181,927,108	17,241,786	473,879	(2,490,695)	228,490,554	493,357,663

Cost of revenue:
Powersports	28,085,447	-	-	-	-	28,085,447	50,087,015
Automotive	-	170,572,680	-	-	-	170,572,680	405,491,371
Transportation	-	-	13,441,487	-	(2,490,695)	10,950,792	8,170,696
Cost of revenue before impairment loss	28,085,447	170,572,680	13,441,487	-	(2,490,695)	209,608,919	463,749,082
Impairment loss	-	11,738,413	-	-	-	11,738,413	-
Total cost of revenue	28,085,447	182,311,093	13,441,487	-	(2,490,695)	221,347,332	463,749,082

Gross profit (loss)	$3,253,029	$(383,985)	$3,800,299	$473,879	$-	$7,143,222	$29,608,581

_______________________

(1)

Intercompany freight services from Wholesale Express are eliminated in the condensed consolidated financial statements.

(2)

Inclusive only from the Autosport Acquisition Date.

Powersports

The following table provides the results of operations for the three-month and six-month periods ended June 30, 2020 and 2019 for our powersports business segment, including key financial information relating to the powersports business. This financial information should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and Notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

	For the Three-Months Ended June 30,		For the Six-Months Ended June 30,
	2020	2019	2020	2019
Powersports

Vehicle revenue:
Consumer	$1,458,767	$2,778,099	$4,115,647	$4,925,121
Dealer	6,740,629	27,527,588	27,222,829	52,309,725
Total vehicle revenue	$8,199,396	$30,305,687	$31,338,476	$57,234,846

Vehicle gross profit:
Consumer	$213,407	$751,338	$514,125	$1,223,375
Dealer	457,179	3,416,890	2,738,904	5,924,456
Total vehicle gross profit	$670,586	$4,168,228	$3,253,029	$7,147,831

Vehicles sold:
Consumer	145	298	425	581
Dealer	714	3,684	3,251	6,699
Total vehicles sold	859	3,982	3,676	7,280

Gross profit per vehicle:
Consumer	$1,472	$2,521	$1,210	$2,106
Dealer	$640	$927	$842	$884
Total	$781	$1,047	$885	$982

Gross margin per vehicle:
Consumer	14.6%	27.0%	12.5%	24.8%
Dealer	6.8%	12.4%	10.1%	11.3%
Total	8.2%	13.8%	10.4%	12.5%

Average vehicle selling price:
Consumer	$10,060	$9,322	$9,684	$8,477
Dealer	$9,441	$7,472	$8,374	$7,809
Total	$9,545	$7,611	$8,525	$7,862

Powersports Vehicle Revenue

Three-Months Ended June 30, 2020 Versus 2019.

Total powersports vehicle revenue decreased by $22,106,291 to $8,199,396 for the three-months ended June 30, 2020 compared to $30,305,687 for the same period of 2019. The decline in powersports revenue was primarily due to the decrease in the number of pre-owned vehicles sold to 859 for the three-months ended June 30, 2020 compared to 3,982 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $9,545 for the three-months ended June 30, 2020 from $7,611 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit for the three-months ended June 30, 2020 resulted from: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of powersport vehicles; and (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Total powersports vehicle revenue from the sale to consumers decreased by $1,319,332 to $1,458,767 for the three-months ended June 30, 2020 compared to $2,778,099 for the same period of 2019. The decline in powersports revenue was primarily due to the decrease in the number of pre-owned vehicles sold to 145 for the three-months ended June 30, 2020 compared to 298 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $10,060 for the three-months ended June 30, 2020 from $9,322 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit for the three-months ended June 30, 2020 resulted from: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of powersport vehicles; and (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Total powersports vehicle revenue from the sale to dealers decreased by $20,786,959 to $6,740,629 for the three-months ended June 30, 2020 compared to $27,527,588 for the same period of 2019. The decline in powersports revenue was primarily due to the decrease in the number of pre-owned vehicles sold to 714 for the three-months ended June 30, 2020 compared to 3,684 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $9,441 for the three-months ended June 30, 2020 from $7,472 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit for the three-months ended June 30, 2020 resulted from: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of powersport vehicles; and (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Six-Months Ended June 30, 2020 Versus 2019.

Total powersports vehicle revenue decreased by $25,896,370 to $31,338,476 for the six-months ended June 30, 2020 compared to $57,234,846 for the same period of 2019. The decline in powersports revenue was primarily due to the decrease in the number of pre-owned vehicles sold to 3,676 for the three-months ended June 30, 2020 compared to 7,280 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $8,525 for the three-months ended June 30, 2020 from $7,862 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of powersport vehicles; (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iii) a reduction in per vehicle advertising expenditures. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Total powersports vehicle revenue from the sale to consumers decreased by $809,474 to $4,115,647 for the six-months ended June 30, 2020 compared to $4,925,121 for the same period of 2019. The decline in powersports revenue was primarily due to the decrease in the number of pre-owned vehicles sold to 425 for the three-months ended June 30, 2020 compared to 581 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $9,684 for the three-months ended June 30, 2020 from $8,477 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of powersport vehicles; (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iii) a reduction in per vehicle advertising expenditures. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Total powersports vehicle revenue from the sale to dealers decreased by $25,086,896 to $27,222,829 for the six-months ended June 30, 2020 compared to $52,309,725 for the same period of 2019. The decline in powersports revenue was primarily due to the decrease in the number of pre-owned vehicles sold to 3,251 for the three-months ended June 30, 2020 compared to 6,699 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $8,374 for the three-months ended June 30, 2020 from $7,809 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of powersport vehicles; (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iii) a reduction in per vehicle advertising expenditures. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Powersports Cost of Revenue

Three-Months Ended June 30, 2020 Versus 2019.

Powersport cost of vehicle revenue decreased by $18,608,649 to $7,528,810 for the three-month period ended June 30, 2020 as compared to the same period in 2019. For the three-month period ended June 30, 2020, the cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to consumers and dealers of $7,014,907 from the sale of 859 pre-owned vehicles at an average acquisition cost of $8,166; and (ii) aggregate reconditioning and transportation costs of $513,903. For the three-month period ended June 30, 2019, the cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to consumers and dealers of $25,107,231 from the sale of 3,982 pre-owned vehicles at an average acquisition cost of $6,305; and (ii) aggregate reconditioning and transportation costs of $1,030,228. The decrease in cost of revenue for the three-month period ended June 30, 2020 as compared to the same period in 2019 was a result of the purchase and sale of fewer powersport units due to: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in purchases and sales of powersports vehicles; (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iii) a reduction in per vehicle advertising expenditures.

Powersport cost of vehicle revenue from sale to consumers decreased by $781,401 to $1,245,360 for the three-month period ended June 30, 2020 as compared to the same period in 2019. For the three-month period ended June 30, 2020, the cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to consumers of $1,092,038 from the sale of 145 pre-owned vehicles at an average acquisition cost of $7,531; and (ii) aggregate reconditioning and transportation costs of $153,322. For the three-month period ended June 30, 2019, the cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to consumers of $1,915,059 from the sale of 298 pre-owned vehicles at an average acquisition cost of $6,426; and (ii) aggregate reconditioning and transportation costs of $111,701. The decrease in cost of revenue for the three-month period ended June 30, 2020 as compared to the same period in 2019 was a result of the purchase and sale of fewer powersport units due to: (i) the adverse impact of the COVID 19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in purchases and sales of powersports vehicles; (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iii) a reduction in per vehicle advertising expenditures.

Powersport cost of vehicle revenue from sale to dealers decreased by $17,827,248 to $6,283,450 for the three-month period ended June 30, 2020 as compared to the same period in 2019 consisted of: (i) the acquisition cost of vehicles sold to dealers of $5,922,869 from the sale of 714 pre-owned vehicles at an average acquisition cost of $8,295; and (ii) aggregate reconditioning and transportation costs of $360,581. For the three-month period ended June 30, 2019, the cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to consumers and dealers of $23,192,173 from the sale of 3,684 pre-owned vehicles at an average acquisition cost of $6,295; and (ii) aggregate reconditioning and transportation costs of $918,525 The decrease in cost of revenue for the three-month period ended June 30, 2020 as compared to the same period in 2019 was a result of the purchase and sale of fewer powersport units due to: (i) the adverse impact of the COVID 19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in purchases and sales of powersports vehicles; (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iii) a reduction in per vehicle advertising expenditures.

Six-Months Ended June 30, 2020 Versus 2019.

Powersport cost of vehicle revenue decreased by $22,001,568 to $28,085,447 for the six-month period ended June 30, 2020 as compared to the same period in 2019 and consisted of: (i) the acquisition cost of vehicles sold to consumers and dealers of $26,256,776 from the sale of 3,676 pre-owned vehicles at an average acquisition cost of $7,143; and (ii) aggregate reconditioning and transportation costs of $1,484,851;and (iii) other cost of sales of $343,820 not attributed to a specific vehicle sold during the six-months ended June 30, 2020. For the six-month period ended June 30, 2019, cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to consumers and dealers of $48,208,634 from the sale of 7,280 pre-owned vehicles at an average acquisition cost of $6,622; and (ii) aggregate reconditioning and transportation costs of $1,878,381. The decrease in cost of revenue for the three-month period ended June 30, 2020 as compared to the same period in 2019 was a result of the purchase and sale of fewer powersport units due to: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in purchases and sales of powersports vehicles; (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iii) a reduction in per vehicle advertising expenditures.

Powersport cost of vehicle revenue from the sale to consumers decreased by $445,918 to $3,255,828 for the six-month period ended June 30, 2020 as compared to the same period in 2019 and consisted of: (i) the acquisition cost of vehicles sold to consumers of $2,965,115 from the sale of 425 pre-owned vehicles at an average acquisition cost of $6,977; and (ii) aggregate reconditioning and transportation costs of $290,712. For the six-month period ended June 30, 2019, cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to consumers of $3,438,730 from the sale of 581 pre-owned vehicles at an average acquisition cost of $5,919; and (ii) aggregate reconditioning and transportation costs of $263,016. The decrease in cost of revenue for the three-month period ended June 30, 2020 as compared to the same period in 2019 was a result of the purchase and sale of fewer powersport units due to: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in purchases and sales of powersports vehicles; (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iii) a reduction in per vehicle advertising expenditures.

Powersport cost of vehicle revenue from the sale to dealers decreased by $21,899,470 to $24,485,799 for the six-month period ended June 30, 2020 as compared to the same period in 2019 and consisted of: (i) the acquisition cost of vehicles sold to dealers of $23,291,660 from the sale of 3,251 pre-owned vehicles at an average acquisition cost of $7,164; and (ii) aggregate reconditioning and transportation costs of $1,194,139. For the six-month period ended June 30, 2019, cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to dealers of $44,769,904 from the sale of 6,699 pre-owned vehicles at an average acquisition cost of $6,683; and (ii) aggregate reconditioning and transportation costs of $1,615,365. The decrease in cost of revenue for the three-month period ended June 30, 2020 as compared to the same period in 2019 was a result of the purchase and sale of fewer powersport units due to: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in purchases and sales of powersports vehicles; (ii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iii) a reduction in per vehicle advertising expenditures.

Powersports Gross Profit

Three-Months Ended June 30, 2020 Versus 2019.

Powersport vehicle gross profit decreased by $3,497,642 to $670,586 for the three-month period ended June 30, 2020 compared to $4,168,228 for the same period in 2019. The decrease was primarily due to a decrease in the number of vehicles sold and a decrease in gross profit per unit sold to $781 or a gross margin of 8.2% compared to $1,047, or a gross margin of 13.8% for the same period in 2019. The decrease in: (i) gross profit; (ii) gross profit per unit; and (iii) gross margin per unit for the three months ended June 30, 2020 as compared to the same period of 2019 was a result of the negative impact of COVID-19 resulting from sheltering-in-place and significantly reduced commercial activity.

Six-Months Ended June 30, 2020 Versus 2019.

Powersport vehicle gross profit decreased by $3,894,802 to $3,253,029 for the six-month period ended June 30, 2020 compared to $7,147,831 for the same period in 2019. The decrease was primarily due to a decrease in the number of vehicles sold and a decrease in gross profit per unit sold to $885 or a gross margin of 10.4% compared to $982, or a gross margin of 12.5% for the same period in 2019. The decrease in: (i) gross profit; (ii) gross profit per unit; and (iii) gross margin per unit for the three months ended June 30, 2020 as compared to the same period of 2019 was a result of the negative impact of COVID-19 resulting from sheltering-in-place and significantly reduced commercial activity.

Automotive

The following table provides the results of operations for the three-month and six-month periods ended June 30, 2020 and 2019 for the automotive segment, including key financial information relating to the automotive business. We entered the automotive distribution business in connection with the acquisitions of Wholesale and Autosport. This financial information should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and Notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q. In this Management's Discussion and Analysis of Financial Condition and Results of Operations, no comparable information is discussed with respect to Autosport for periods before the Autosport Acquisition Date.

	For the Three-Months Ended June 30,		For the Six-Months Ended June 30,
	2020	2019	2020	2019(1)
Automotive

Vehicle revenue:
Consumer	$8,477,654	$17,987,229	$26,062,391	$39,552,353
Dealer	59,817,187	215,869,100	155,864,717	385,211,164
Total vehicle revenue	$68,294,841	$233,856,329	$181,927,108	$424,763,517

Vehicle Gross Profit(2):
Consumer	$1,138,835	$2,343,625	$2,409,471	$4,587,195
Dealer	4,662,991	7,516,445	8,944,957	14,684,951
Total vehicle gross profit	$5,801,826	$9,860,070	$11,354,428	$19,272,146

Vehicles sold:
Consumer	297	649	943	1,512
Dealer	2,538	9,297	6,495	17,239
Total vehicles sold	2,835	9,946	7,438	18,751

Gross profit per vehicle:
Consumer	$3,834	$3,611	$2,555	$3,034
Dealer	$1,837	$808	$1,377	$852
Total	$2,046	$991	$1,527	$1,028

Gross margin per vehicle:
Consumer	13.4%	13.0%	9.2%	11.6%
Dealer	7.8%	3.5%	5.7%	3.8%
Total	8.5%	4.2%	6.2%	4.5%

Average vehicle selling price:
Consumer	��$28,544	$27,715	$27,638	$26,159
Dealer	$23,569	$23,219	$23,998	$22,345
Total	$24,090	$23,513	$24,459	$22,653

_________________________

(1)

Inclusive only from the Autosport Acquisition Date.

(2)

Excluding the Impairment Loss resulting from the Nashville Tornado.

Automotive Revenue

Three-Months Ended June 30, 2020 Versus 2019.

Total automotive revenue decreased by $165,561,488 to $68,294,841 for the three-months ended June 30, 2020 compared to $233,856,329 for the same period of 2019. The decline in automotive revenue was primarily due to the decrease in the number of vehicles sold to 2,835 for the three-months ended June 30, 2020 compared to 9,946 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $24,090 for the six-months ended June 30, 2020 from $23,513 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in unit sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; (iv) a reduction in per vehicle advertising expenditures; and (v) a shift in inventory mix available for sale resulting in higher average sales prices. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Total automotive revenue from the sale to consumers decreased by $9,509,575 to $8,477,654 for the three-months ended June 30, 2020 compared to $17,987,229 for the same period of 2019. The decline in consumer revenue was primarily due to the decrease in the number of vehicles sold to 297 for the three-months ended June 30, 2020 compared to 649 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $28,544 for the three-months ended June 30, 2020 from $27,715 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in unit sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; (iv) a reduction in per vehicle advertising expenditures; and (v) a shift in inventory mix available for sale resulting in higher average sales prices. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Total automotive revenue from the sale to dealers decreased by $156,051,913 to $59,817,187 for the three-months ended June 30, 2020 compared to $215,869,100 for the same period of 2019. The decline in dealer revenue was primarily due to the decrease in the number of vehicles sold to 2,538 for the three-months ended June 30, 2020 compared to 9,297 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $23,569 for the three-months ended June 30, 2020 from $23,219 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in unit sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; (iv) a reduction in per vehicle advertising expenditures; and (v) a shift in inventory mix available for sale resulting in higher average sales prices. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Six-Months Ended June 30, 2020 Versus 2019.

Total automotive revenue decreased by $242,836,409 to $181,927,108 for the six-months ended June 30, 2020 compared to $424,763,517 for the same period of 2019. The decline in automotive revenue was primarily due to the decrease in the number of vehicles sold to 7,438 for the three-months ended June 30, 2020 compared to 18,751 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $24,459 for the three-months ended June 30, 2020 from $22,653 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in unit sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; (iv) a reduction in per vehicle advertising expenditure; and (v) a shift in inventory mix available for sale resulting in higher average sales prices. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Total automotive revenue from the sale to consumers decreased by $13,489,962 to $26,062,391 for the six-months ended June 30, 2020 compared to $39,552,353 for the same period of 2019. The decline in consumer revenue was primarily due to the decrease in the number of vehicles sold to 943 for the three-months ended June 30, 2020 compared to 1,512 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $27,638 for the six-months ended June 30, 2020 from $26,159 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in unit sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; (iv) a reduction in per vehicle advertising expenditure; and (v) a shift in inventory mix available for sale resulting in higher average sales prices. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Total automotive revenue from the sale to dealers decreased by $229,346,447 to $155,864,717 for the six-months ended June 30, 2020 compared to $385,211,164 for the same period of 2019. The decline in dealer revenue was primarily due to the decrease in the number of vehicles sold to 6,495 for the six-months ended June 30, 2020 compared to 17,239 for the same period of 2019, which was partially offset by an increase in the average selling price per vehicle to $23,998 for the six-months ended June 30, 2020 from $22,345 for the same period of 2019. The decrease in vehicles sold and increase in average selling price per unit was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in unit sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; (iv) a reduction in per vehicle advertising expenditures; and (v) a shift in inventory mix available for sale resulting in higher average sales prices. As the impact of COVID-19 abates over time, we anticipate that unit purchasing levels and sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Automotive Cost of Revenue

Three-Months Ended June 30, 2020 Versus 2019.

Total automotive cost of vehicle revenue decreased by $161,503,244 to $62,493,015 for the three-months ended June 30, 2020 compared to $223,996,259 for the same period of 2019. The decrease was primarily due to a decrease in vehicles sold for the three-month period ended June 30, 2020 compared to the same period of 2019. The decrease in vehicles sold was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iv) a reduction in per vehicle advertising expenditures. Total automotive cost of vehicle revenue for the three-month period ended June 30, 2020 consisted of: (i) the acquisition cost of vehicles sold to consumers and dealers of $60,851,585 from the sale of 2,835 pre-owned vehicles at an average acquisition cost of $21,464; and (ii) aggregate reconditioning and transportation costs of $1,641,431. For the three-month period ended June 30, 2019, the $223,996,259 cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to consumers and dealers of $220,336,594 from the sale of 9,946 pre-owned vehicles to consumers and dealers that had an average acquisition cost of $22,153; and (ii) aggregate reconditioning and transportation costs of $3,659,665.

The cost of vehicle revenue from sales to consumers decreased by $8,304,784 to $7,338,820 for the three-month period ended June 30, 2020 compared to $15,643,604 for the same period of 2019. The decrease was primarily due to a decrease in vehicles sold for the three-month period ended June 30, 2020 compared to the same period of 2019. The decrease in vehicles sold was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iv) a reduction in per vehicle advertising expenditures. Total cost of vehicle revenue for units sold to consumers for the three-months ended June 30, 2020 consisted of: (i) the acquisition cost of vehicles sold to consumers of $7,084,025 from the sale of 297 pre-owned vehicles at an average acquisition cost of $23,852; and (ii) aggregate reconditioning and transportation costs of $254,794. For the three-month period ended June 30, 2019 the $15,643,604 cost of vehicle revenue sold to consumers consisted of: (i) the acquisition cost of vehicles sold to consumers of $15,282,671 from the sale of 649 pre-owned vehicles to consumers that had an average acquisition cost of $23,548; and (ii) aggregate reconditioning and transportation costs of $360,933.

The cost of vehicle revenue from sales to dealers decreased by $153,198,459 to $55,154,196 for the three-month period ended June 30, 2020 compared to $208,352,655 for the same period of 2019. The decrease was primarily due to a decrease in vehicles sold for the three-month period ended June 30, 2020 compared to the same period of 2019. The decrease in vehicles sold was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iv) a reduction in per vehicle advertising expenditures. Total cost of vehicle revenue sold to dealers for the three-months ended June 30, 2020 consisted of: (i) the acquisition cost of vehicles sold to dealers of $53,767,559 from the sale of 2,538 pre-owned vehicles at an average acquisition cost of $21,185; and (ii) aggregate reconditioning and transportation costs of $1,386,636. For the three-month period ended June 30, 2019 the $208,352,655 cost of vehicle revenue for units sold to dealers consisted of: (i) the acquisition cost of vehicles sold to dealers of $205,053,923 from the sale of 9,297 pre-owned vehicles to dealers that had an average acquisition cost of $22,056; and (ii) aggregate reconditioning and transportation costs of $3,298,732.

Six-Months Ended June 30, 2020 Versus 2019.

Total automotive cost of vehicle revenue decreased by $234,918,691 to $170,572,680 for the six-months ended June 30, 2020 compared to $405,491,371 for the same period of 2019. The decrease was primarily due to a decrease in vehicles sold for the six-month period ended June 30, 2020 compared to the same period of 2019. The decrease in vehicles sold was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity resulting from the negative impact on our sales channels from COVID-19; (iii) a reduction in vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iv) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (v) a reduction in per vehicle advertising expenditures. Total automotive cost of vehicle revenue for the six-month period ended June 30, 2020 consisted of: (i) the net acquisition cost of vehicles sold to consumers and dealers of $165,823,320 from the sale of 7,438 pre-owned vehicles at an average net acquisition cost of $22,294; (ii) aggregate reconditioning and transportation costs of $3,952,995; (iii) impairment loss on inventory of $11,738,413 comprised of $4,453,775 for vehicles that were a total loss and $7,284,638 for loss in value of vehicles partially damaged and subject to repair; and (iv) other cost of sales of $796,365 not attributed to a specific vehicle sold during the six-months ended June 30, 2020, which primarily consists of the write down of $878,542 of vehicle inventory to the lower of cost or net realizable value resulting from the negative impact on our sales channels from COVID-19 and related effects of sheltering-in-place and significantly reduced commercial activity. For the six-month period ended June 30, 2019, the $405,491,371 cost of vehicle revenue consisted of: (i) the acquisition cost of vehicles sold to consumers and dealers of $398,329,342 from the sale of 18,751 pre-owned vehicles to consumers and dealers that had an average acquisition cost of $21,243; and (ii) aggregate reconditioning and transportation costs of $7,162,029.

The cost of vehicle revenue from sales to consumers decreased by $12,150,324 to $22,814,834 for the six-month period ended June 30, 2020 compared to $34,965,158 for the same period of 2019. The decrease was primarily due to a decrease in vehicles sold for the three-period ended June 30, 2020 compared to the same period of 2019. The decrease in vehicles sold was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity; (ii) a reduction in vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iv) a reduction in per vehicle advertising expenditures. Total cost of vehicle revenue for units sold to consumers for the six-months ended June 30, 2020 primarily consisted of: (i) the acquisition cost of vehicles sold to consumers of $22,118,417 from the sale of 943 pre-owned vehicles at an average acquisition cost of $23,455; and (ii) aggregate reconditioning and transportation costs of $696,417. For the six-month period ended June 30, 2019 the $34,965,158 cost of vehicle revenue sold to consumers consisted of: (i) the acquisition cost of vehicles sold to consumers of $34,146,982 from the sale of 1,512 pre-owned vehicles to consumers that had an average acquisition cost of $21,243; and (ii) aggregate reconditioning and transportation costs of $818,176.

The cost of vehicle revenue from sales to dealers decreased by $223,564,733 to $146,961,480 for the six-month period ended June 30, 2020 compared to $370,526,213 for the same period of 2019. The decrease was primarily due to a decrease in vehicles sold for the six-month period ended June 30, 2020 compared to the same period of 2019. The decrease in vehicles sold was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a net realizable value adjustments to reflect: (1) impairment loss on inventory for vehicles that were a total loss and for loss in value of vehicles partially damaged and subject to repair; and (2) the write down of vehicle inventory to the lower of cost or net realizable value resulting from the negative impact on our sales channels from COVID-19; (iii) a reduction in vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iv) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (v) a reduction in per vehicle advertising expenditures. Total cost of vehicle revenue sold to dealers for the six-months ended June 30, 2020 primarily consisted of: (i) the net acquisition cost of vehicles sold to dealers of $143,704,903 from the sale of 6,495 pre-owned vehicles at an average acquisition cost of $22,125; and (ii) aggregate reconditioning and transportation costs of $3,256,577. For the six-month period ended June 30, 2019 the $370,526,213 cost of vehicle revenue for units sold to dealers consisted of: (i) the acquisition cost of vehicles sold to consumers of $364,182,360 from the sale of 17,239 pre-owned vehicles to dealers that had an average acquisition cost of $21,125; and (ii) aggregate reconditioning and transportation costs of $6,343,853.

Automotive Gross Profit

Three-Months Ended June 30, 2020 Versus 2019.

Total automotive vehicle gross profit decreased by $4,058,244 to $5,801,826 for the three-month period ended June 30, 2020 compared to $9,860,070 for the same period in 2019. The decrease was primarily due to a decrease in the number of vehicles sold partially offset by: (i) an increase in gross profit per unit sold to $2,046, or a gross margin of 8.5% compared to $991, or a gross margin of 4.2% for the same period in 2019. The decrease in gross profit and the increase in: (i) gross profit per unit; and (ii) gross margin per unit for the three-months ended June 30, 2020 as compared to the same period of 2019 was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iv) a reduction in per vehicle advertising expenditures.

Six-Months Ended June 30, 2020 Versus 2019.

Total automotive vehicle gross profit decreased by $7,917,718 to $11,354,428 for the six-month period ended June 30, 2020 compared to $19,272,146 for the same period in 2019. The decrease was primarily due to a decrease in the number of vehicles sold partially offset by: (i) an increase in gross profit per unit sold to $1,527 or a gross margin of 6.2% compared to $1,028, or a gross margin of 4.5% for the same period in 2019; and (ii) an the impairment loss on inventory as discussed above. The decrease in gross profit and the increase in: (i) gross profit per unit; and (ii) gross margin per unit for the three-months ended June 30, 2020 as compared to the same period of 2019 was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iv) a reduction in per vehicle advertising expenditures.

Vehicle Logistics and Transportation Services Segment.

The following table provides our results of operations for the three-month and six-month periods ended June 30, 2020 and 2019 for our vehicle logistics and transportation services segment, including key financial information relating to this segment. The financial information below is before the elimination of intercompany freight services from Wholesale Express and should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and Notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

	For the Three-Months Ended June 30,		For the Six-Months Ended June 30,
	2020	2019	2020	2019
Vehicle Logistics and Transportation Services

Total revenue	$8,251,605	$8,829,632	$17,241,786	$17,005,642

Cost of revenue	6,450,839	7,240,418	13,441,487	13,817,038

Gross profit	1,800,766	1,589,214	3,800,299	3,188,604

Selling, general and administrative	1,074,203	1,154,665	2,414,801	2,205,815

Depreciation and Amortization	1851	1,851	3,703	3,703

Operating income	724,712	432,698	1,381,795	979,086

Interest Expense	-	148	296	148

Net Income before income tax	$724,095	$432,550	$1,381,499	$978,938

Vehicles delivered	19,191	21,536	40,076	42,007

Revenue per delivery	$430	$410	$430	$405

Gross profit per delivery	$94	$74	$95	$76

Gross margin per delivery	21.9%	18.0%	22.1%	18.8%

Vehicle Logistics and Transportation Services Revenue

Three-Months Ended June 30, 2020 Versus 2019.

Total revenue decreased by $578,027 to $8,251,605 for the three-months ended June 30, 2020 compared to $8,829,632 for the same period of 2019. The decrease in total revenue for the three-month period ended June 30, 2020 resulted from the transport of 19,191 vehicles at an average revenue per vehicle delivered of $430 compared to revenue from the transport of 21,536 vehicles at an average revenue per vehicle delivered of $410 for the same period of 2019. The decrease in vehicles transported and increase in average revenue per vehicle delivered was a result of: (i) our more disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; (ii) the negative impact beginning in March 2020 of COVID-19 resulting from sheltering-in-place and significantly reduced commercial activity; and (iii) increased emphasis on sales through implementation of sales performance improvement plans. Following COVID-19, we anticipate that unit sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

In the normal course of operations, the Company utilizes transportation services of Wholesale Express. For the three-months ended June 30, 2020 and 2019 intercompany freight services provided by Express to the Company were $588,105 and $2,811,744, respectively and was eliminated in the condensed consolidated financial statements.

Six-Months Ended June 30, 2020 Versus 2019.

Total revenue increased by $236,144 to $17,241,786 for the six-months ended June 30, 2020 compared to $17,005,642 for the same period of 2019. The increase in total revenue for the six-month period ended June 30, 2020 resulted from the transport of 40,076 vehicles at an average revenue per vehicle delivered of $430 compared to revenue from the transport of 42,007 vehicles at an average revenue per vehicle delivered of $405 for the same period of 2019. The decrease in vehicles transported and increase in average revenue per vehicle delivered was a result of: (i) our more disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; (ii) the negative impact beginning in March 2020 of COVID-19 resulting from sheltering-in-place and significantly reduced commercial activity; and (iii) increased emphasis on sales through implementation of sales performance improvement plans. Following COVID-19, we anticipate that unit sales will return to or exceed levels experienced in January and February of 2020 as we increase penetration in existing markets and launch new markets, however we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

In the normal course of operations, the Company utilizes transportation services of Wholesale Express. For the six-months ended June 30, 2020 and 2019 intercompany freight services provided by Express to the Company were $2,490,695 and $5,646,342, respectively and was eliminated in the condensed consolidated financial statements.

Vehicle Logistics and Transportation Services Cost of Revenue

Three-Months Ended June 30, 2020 Versus 2019.

Total cost of revenue decreased by $789,579 to $6,450,839 for the three-months ended June 30, 2020 compared to $7,240,418 for the same period of 2019. The decrease in total cost of revenue for the three-month period ended June 30, 2020 resulted from the reduction in the number of vehicles transported to 19,191 vehicles at an average cost per vehicle delivered of $336 compared to the 21,536 vehicles transported at an average cost per vehicle delivered of $336 for the same period of 2019. The decrease in vehicles transported was principally due to the negative impact beginning in March 2020 of COVID-19 resulting from sheltering-in-place and significantly reduced commercial activity; and additional costs and expenses associated providing expanding logistic and transportation services to new markets.

Included in cost of revenue for the three months ended June 30, 2020 and 2019 was freight services purchases by the Company from Wholesale Express of $588,105 and $2,811,744, respectively that was eliminated in the condensed consolidated financial statements.

Six-Months Ended June 30, 2020 Versus 2019.

Total cost of revenue decreased by $375,551 to $13,441,487 for the six-months ended June 30, 2020 compared to $13,817,038 for the same period of 2019. The decrease in total cost of revenue for the six-month period ended June 30, 2020 resulted from reduction in the number of vehicles transported to 40,076 vehicles at an average cost per vehicle delivered of $335 compared to 42,007 vehicles transported at an average cost per vehicle delivered of $329 for the same period of 2019. The decrease in vehicles transported and increase in cost per vehicle delivered was a result of: (i) our more disciplined approach to sales volume as we take prescriptive steps to accelerate profitability; (ii) the negative impact beginning in March 2020 of COVID-19 resulting from sheltering-in-place and significantly reduced commercial activity; and (iii) additional costs and expenses associated providing expanding logistic and transportation services to new markets.

Included in cost of revenue for the three months ended June 30, 2020 and 2019 was freight services purchases by the Company from Wholesale Express of $2,490,695 and $5,646,342, respectively and was eliminated in the condensed consolidated financial statements.

Vehicle Logistics and Transport Services Gross Profit

Three-Months Ended June 30, 2020 Versus 2019.

Total gross profit for the three-months ended June 30, 2020 was $1,800,766 or $94 per unit transported as compared to $1,589,214 or $74 unit for the same period in 2019. All amounts related to transport services provided by Wholesale Express to the Company have been eliminated upon consolidation.

Six-Months Ended June 30, 2020 Versus 2019.

Total gross profit for the six-months ended June 30, 2020 was $3,800,299 or $95 per unit transported as compared to $3,188,604 or $76 unit for the same period in 2019. All amounts related to transport services provided by Wholesale Express to the Company have been eliminated upon consolidation.

Selling, General and Administrative

	For the Three-Months Ended June 30,		For the Six- Months Ended June 30,
	2020	2019	2020	2019
Selling general and administrative:
Compensation and related costs	$5,146,791	$9,163,530	$13,326,891	$16,217,793
Advertising and marketing	541,922	5,960,110	3,490,077	11,451,682
Professional fees	1,075,831	639,773	1,918,534	1,290,217
Technology development	235,014	538,580	857,159	1,031,293
General and administrative	4,174,730	8,705,572	9,638,053	15,456,596
	$11,174,288	$25,007,565	$29,230,714	$45,447,581

Selling, general and administrative expenses decreased by $13,833,277 and $16,216,867, respectively, for the three-month and six-month periods ended June 30, 2020, as compared to the same periods of 2019. The decrease was a result of: (i) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability, which resulted in the sale of fewer vehicles and a corresponding reduction in related selling expenses, sales related compensation, and marketing spend for the three-month and six-month periods ended June 30, 2020; (ii) a reduction in automotive vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; and (iii) a reduction in staffing levels and adjusted purchasing levels to align with demand and market conditions and a deferral of discretionary growth expenditures such as travel, facilities, information technology investments due to the adverse impact of COVID-19, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity.

Compensation and related costs decreased by $4,016,739 and $2,890,902, respectively, for the three-month and six-month periods ended June 30, 2020, as compared to the same periods of 2019. The decrease is primarily due to a reduction in headcount associated with our response to the impact of COVID-19 on our business, in early April 2020 we significantly reduced our staffing in an effort to position our business to be lean and flexible in this period of lower demand and higher uncertainty with the goal of preparing the Company for a strong recovery as the crisis is contained. As the impact of COVID-19 abates over time, and unit sales return to or exceed levels experienced in January and February of 2020 we will take a measured approach to increasing our headcount, which will result in an increase in sales related and marketing compensation in absolute dollar terms but a decrease in these expenses as a percentage of total revenue. However, we can provide no assurance as to when and how quickly COVID-19 impacts will abate. The company had 165 employees at June 30, 2020 as compared to 291 employees on June 30, 2019.

Advertising and marketing decreased by $5,418,188 and $7,961,605, respectively, for the three-month and six-month periods ended June 30, 2020, as compared to the same periods of 2019. The decrease was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in unit sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; and (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; (iv) reduction in per vehicle advertising expenditures. As the impact of COVID-19 abates over time, and unit sales return to or exceed levels experienced in January and February of 2020 we will take a measured approach to increasing our marketing spend, which will result in an increase in marketing expenses in absolute dollar terms but a decrease in marketing expense as a percentage of total revenue. However, we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Professional fees increased by $436,058 and $628,317, respectively, for the three-month and six-month periods ended June 30, 2020, as compared to the same periods of 2019. The increase was primarily a result of professional fees and costs incurred in connection with our insurance claims and other matters attributed to the Nashville Tornado, and legal, accounting and other professional fees and expenses incurred in connection with the activities associated with the expansion of the business. Fees and expenses were incurred for: (i) equity financings; (ii) debt financings; (iii) general corporate matters; (iv) the preparation of quarterly and annual financial statements; and (v) the preparation and filing of regulatory reports required of the Company for public reporting purposes. For additional information, see Note 4 - "Acquisitions," Note 8 - "Notes Payable and Lines of Credit," Note 9 - "Convertible Notes," and Note 11 - "Stockholders' Equity," in the accompanying Notes to the Condensed Consolidated Financial Statements.

Technology development expenses decreased $303,566 and $174,134, respectively, for the three-month and six-month periods ended June 30, 2020, as compared to the same periods of 2019. The decrease was a result of the negative impact of COVID-19 resulting from sheltering-in-place and significantly reduced commercial activity, resulting in a temporary reduction in discretionary growth expenditures on information technology spending. Total technology costs and expenses incurred for three-month and six-month periods ended June 30, 2020 were $554,551 and $1,465,761, respectively, of which $323,737 and $614,113, respectively, was capitalized. Total technology costs and expenses incurred for the three-month and six-month periods ended June 30, 2019 were $1,578,320 and $2,950,863, respectively, of which $1,039,740 and $1,919,569, respectively, was capitalized. The amortization of capitalized technology development costs for the three-month and six-month periods ended June 30, 2020 were $451,634 and $889,576, respectively, as compared to $340,286 and $632,032, respectively for the same period of 2019. In response to the impact of COVID-19 on our business in early April 2020 we temporarily reduced discretionary growth expenditures which included information technology investments. As the impact of COVID-19 abates over time, and unit sales return to or exceed levels experienced in January and February of 2020 we will take a measured approach to increasing our technology development expenses 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. However, we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

General and administrative expenses decreased by $4,530,842 and $5,818,543, respectively, for the three-month and six-month periods ended June 30, 2020, as compared to the same periods of 2019. The decrease was primarily a result of the sale of fewer vehicle sales for the three-month and six month periods ended June 30, 2020 as compared to the same periods of 2019, which resulted in a reduction of $3,393,671 and $4,147,578, respectively, in auction and floor plan fees for the three-month and six-month periods ended June 30, 2020 as compared to the same periods of 2019. The decrease in vehicle sales was primarily a result of our continued approach to taking prescriptive steps to accelerate profitability, the impact of the ongoing COVID-19 pandemic, and the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado. In addition, travel and other related business expenses, including office supplies decreased $1,169,794 and $1,884,556, respectively, and rent and lease expense decreased $19,818 for the three-months ended June 30, 2020 and increased $212,890 for the six-months ended June 30, 2020 as compared to the same periods of 2019. As the impact of COVID-19 abates over time, and unit sales return to or exceed levels experienced in January and February of 2020 we will take a measured approach to increasing general and administrative spending, which will result in an increase in in general and administrative expenses in absolute dollar terms but decrease as a percentage of total revenue. However, we can provide no assurance as to when and how quickly COVID-19 impacts will abate.

Depreciation and Amortization

Depreciation and amortization increased by $80,884 and $221,654, respectively, for the three-month and six-month periods ended June 30, 2020, as compared to the same periods of 2019. The increase in depreciation and amortization is a result of the cumulative investments made in connection with the expansion and growth of the business which for the three-month and six-month periods ended June 30, 2020 included capitalized technology acquisition and development costs of $323,737 and $614,113, respectively. For the three-month and six-month periods ended June 30, 2020, amortization of capitalized technology development was $451,634 and $889,576, respectively, as compared to $340,286 and $632,032, respectively, for the same periods of 2019. Depreciation and amortization on vehicle, furniture, equipment and leasehold improvements was $56,688 and $141,740, respectively, as compared to $87,152 and $177,631, respectively, for the same periods of 2019.

Interest Expense

Interest expense decreased by $392,450 for the three-month period ended June 30, 2020 as compared to the same period of 2019 and increased $379,174 for the six-month period ended June 30, 2020 as compared to the same period of 2019. Interest expense consists of interest on the: (i) Hercules Loan; (ii) Private Placement Notes; (iii) the subordinated secured promissory note issued to NextGen (the "NextGen Note"); (iv) the Credit Facility and the NextGear Credit Line (each as defined below) (together, the "Line of Credit-Floor Plans"); (v) Notes; and (vi) the notes issued in connection with the Autosport Acquisition (the "Convertible Notes-Autosport"). The decrease for the three-month period ended June 30, 2020 as compared to the same period of 2019 was a result of a reduction in outstanding indebtedness under the NextGear and Ally floor plan lines of credit resulting from the decrease in the number of vehicles sold to 3,694 for the three-months ended June 30, 2020 compared to 13,928 for the same period of 2019. The decrease in vehicles sold was a result of: (i) the adverse impact of the COVID-19 pandemic, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity, including a decrease in unit purchases and sales of automotive vehicles; (ii) a reduction in unit sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado; (iii) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability; and (iv) a reduction in per vehicle advertising expenditures. The increase in interest expense for the six-month period ended June 30, 2020 as compared to the same period of 2019 was a result of: (i) interest on a higher level of debt outstanding; (ii) the amortization of the beneficial conversion feature on the Private Placement Notes; (iii) the amortization of the debt issuance costs on Notes and Convertible Notes-Autosport; and (iv) amortization of transaction costs on the Notes. Interest expense on the Private Placement Notes for the three-month and six-month periods ended June 30, 2020 were $16,684 and $108,576, including $0 and $75,601, respectively, compared to interest expense of $77,008 and $150,336, respectively, which included $62,874 and $122,222, respectively, of debt discount amortization for the same periods of 2019. Interest expense on the NextGen Note for three-month and six-month periods ended June 30, 2020 were $22,387 and $45,119, respectively, as compared to $21,607 and $43,927, respectively, for the same periods of 2019. Interest expense on the Line of Credit-Floor Plans for the three-month and six-month periods ended June 30, 2020 were $510,873 and $1,288,425, respectively, as compared to $960,531 and $1,803,491, respectively, for the same periods of 2019. For the three-month and six-month periods ended June 30, 2020, interest expense on convertible senior notes was $878,919 and $2,146,495, respectively, and included $225,013 and $888,136, respectively, of debt discount amortization. For the three-month and six-month periods ended June 30, 2020, interest expense on the Convertible Notes-Autosport USA was $42,300 and $93,860, respectively, and included $13,740 and $33,433, respectively, of debt discount amortization as compared to interest expense for the three-month and six months periods ended June 30, 2019 of $56,351 and $96,096, including $20,420 and $29,619, respectively of debt discount amortization. There was no interest expense on the Hercules loan for the three-month and six-month periods ended June 30, 2020. Interest expense on the Hercules Loan for the three-month and six-month periods ended June 30, 2019 was $274,975 and $758,466, respectively and included $140,600 and $343,841, respectively of debt issuance cost amortization. On May 14, 2019, the Company made a payment to Hercules Capital Inc. ("Hercules") of $11,134,695, representing the principal, accrued and unpaid interest, fees, costs and expenses outstanding under its Loan and Security Agreement (the "Loan Agreement") with Hercules. In accordance with the guidance in ASC 470-50, Debt, the Company accounted for the extinguishment of the Hercules Loan Agreement as an extinguishment and recognized a loss on early extinguishment of debt of $1,499,250 for the year ended December 31, 2019 in the Consolidated Statements of Operations included in the Company's Form 10-K for the year ended December 31, 2019.

Loss Contingencies and Insurance Recoveries

On March 3, 2020, a severe tornado struck the greater Nashville area causing significant damage to the Company's facilities including contents and inventory held for sale. The Company maintains insurance coverage for damage to its facilities and inventory, as well as business interruption insurance. The Company continues in the process of reviewing damages and coverages with its insurance carriers. The loss comprises three components: (1) inventory loss, currently assessed by the insurance carrier at approximately $13,000,000; (2) building and personal property loss, primarily impacting our leased facilities, currently assessed by the insurance carrier at $3,369,087; and (3) loss of business income, for which the company has coverage in the amount of $6,000,000. All three components of the Company's loss claim have been submitted to its insurers. The Company's inventory claim is subject to a dispute with the carrier as to the policy limits applicable to the loss however, the insurer has advanced $5,615,268 against the final settlement. The building insurer has agreed the total building and personal property loss is valued at $3,801,203. The insurer has agreed to pay $2,778,000 on the building and personal property loss, reflecting limits of $2,783,000 net of a $5,000 deductible. The insurer has made an interim payment on the building and personal property loss of $2,269,507 to the landlord. The loss of business income claim is ongoing and remains in the process of negotiation, however, the insurer has advanced $250,000 against the final settlement. The Company believes there will be a recovery of all three loss components, however no assurance can be given regarding the amounts, if any, that will be ultimately recovered.

As a result of the damage caused by the tornado the Company has concluded that the utility of the inventory damaged by the storm is impaired as a result of physical damage sustained. Whether the impairment is caused by physical destruction or an adverse change in the utility of the inventory, entities should assess whether an inventory impairment or write-off is required in accordance with ASC 330-10-35-1 through 35-11, which address adjustments of inventory balances to the lower of cost or market and requires that when there is evidence that the utility of goods will be less than cost, the difference is recognized as a loss of the current period. For the six-months ended June 30, 2020 the Company recorded an impairment loss on inventory of $11,738,413 comprised of $4,453,775 for vehicles that are ~~required~~a total loss and $7,284,638 in loss in value for vehicle partially damaged and subject to ~~make~~repair. The impairment loss is reported in cost of revenue in the June 30, 2020 condensed consolidated statements of operations. The Company has not recorded any recoveries that are expected to be received from the insurance carrier since the final amount and timing of the recovery has not been determined. Any such recovery would be reported as a separate component of income from continuing operations in the period in which such recovery is recognizable or when any such recoveries will be made.

Derivative Liability

In connection with the issuance of the Old Notes, a derivative liability was recorded at issuance with an interest make-whole provision of $1,330,000. The derivative liability is remeasured at each reporting date with any change in value being recorded in the Statement of Operations; as of December 31, 2019, the derivative liability was valued at $27,500. On January 14, 2020, the Company completed the 2020 Note Offering whereby the $30,000,000 of Old Notes were cancelled and exchanged for $30,000,000 New Notes. Also, in the 2020 Note Offering, the Company sold an additional $8,750,000 of New Notes yielding the Company net proceeds of $8,272,375. Pursuant to ASC 470 the Company accounted for the exchange as a note extinguishment where the remaining $27,500 liability was written off and the Company recorded a new Make Whole Derivative Liability of $137,488 as calculated under the Lattice Model. The lattice model used using a "with-and-without method," where the value of the convertible senior notes including the embedded derivative, is defined as the "with", and the value of the convertible senior notes excluding the embedded derivative, is defined as the "without"; the inputs used include a range of prices around the Company's stock price on the date of valuation ($0.73 on January 14, 2020 and $0.23 on March 31, 2020), as well as the Note conversion rate, maturity date, U.S. Treasury risk-free interest rates over the entire 10-year yield curve, and estimated stock price volatility (55% on January 14, 2020 and 95% on March 31, 2020). The derivative liability is remeasured at each reporting date with the change in value of recorded in the Statements of Operations. The change in value of the derivative liability for the three-months ended June 30, 2020 was $137,488. The value of the derivative liability as of June 30, 2020 is $0.

Adjusted EBITDA

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

Adjusted EBITDA is defined as net loss adjusted to add back interest expense including debt extinguishment and depreciation and amortization, and certain ~~estimates, judgments~~charges and ~~assumptions that~~expenses, such as non-cash compensation costs, acquisition related costs, derivative income, financing activities, litigation expenses, severance, new business development costs, technology implementation costs and expenses, and facility closure and lease termination costs, as these charges and expenses are not considered a part of our core business operations and are not an indicator of ongoing, future company performance.

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

The following tables reconcile Adjusted EBITDA to net loss for the ~~reported amounts~~periods presented:

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Net income (loss)	$1,044,472	(13,001,599)	$(20,993,870)	$(21,277,904)
Add back:
Interest expense (including debt extinguishment)	1,482,408	3,374,108	3,511,002	4,819,242
Depreciation and amortization	508,322	427,438	1,031,317	809,663
EBITDA	3,035,202	(9,200,053)	(16,451,551)	(15,648,999)
Adjustments
Impairment loss on automotive inventory	-	-	11,738,413	-
Insurance recovery proceeds	(5,615,268)	-	(5,615,268)	-
Non-cash-stock-based compensation	716,391	956,991	1,562,761	1,646,112
Acquisition related costs	-	208,252	-	378,208
Change in derivative liability	(137,488)	(190,000)	(20,673)	(190,000)
New business development	-	478,543	-	747,043
Litigation expenses	607,387	37,000	746,847	61,446
Other non-reoccurring costs	51,387	770,492	-	1,392,927
Adjusted EBITDA	$(1,342,389)	$(6,938,775)	$(8,039,471)	$(11,613,263)

Liquidity and Capital Resources

We generate cash from the sale of used retail vehicles, the sale of wholesale vehicles, and providing vehicle logistics and transportation services for used vehicles. We generate additional cash flows through our financing activities including our short-term revolving inventory floor plan facilities, the issuance of long-term notes, and new issuances of equity. Historically, cash generated from financing activities has funded growth and expansion and strategic initiatives and we expect this to continue in the future.

Our ability to service our debt and fund working capital, capital expenditures, and business development efforts will depend on our ability to generate cash from operating and financing activities, which is subject to our future operating performance, as well as to general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control. Our future capital requirements will depend on many factors, including our rate of revenue growth, our expansion of our various lines of business and the timing and extent of our spending to support our technology and software development efforts.

We had the following liquidity resources available as of June 30, 2020 and December 31, 2019:

	June 30, 2020	December 31, 2019
Cash and cash equivalents	$3,061,091	$49,660
Restricted cash (1)	5,533,832	6,676,622
Total cash, cash equivalents, and restricted cash	8,594,923	6,726,282
Availability under short-term revolving facilities	18,015,755	35,839,030
Committed liquidity resources available	$26,610,678	$42,565,312

_________________________

(1)

Amounts included in restricted cash represent the deposits required under the Company's short-term revolving facilities.

On January 14, 2020, the Company closed a public offering at a public price of $11.40 per share (the "2020 Public Offering"). On January 16, 2020, the Company received notice of the Underwriters' intent to exercise the over-allotment option in full (the "Over-allotment Exercise"). On January 17, 2020, the Company closed the Over-allotment Exercise. The Over-allotment Exercise increased the aggregate number of shares sold in the 2020 Public Offering to 1,035,000. Including the Over-allotment Exercise, proceeds from the 2020 Public Offering, after deducting the 8.0% underwriter's commission and $75,000 for underwriter expenses, were $10,780,080.

Also on January 10, 2020, the Company entered into a Note Exchange and Subscription Agreement, as amended by the Joinder Agreement, with the investors in the 2019 Note Offering (as defined below), pursuant to which the Company agreed to complete (i) a note exchange pursuant to which $30,000,000 of the Old Notes (as defined below) would be cancelled in exchange for a new series of 6.75% Convertible Senior Notes due 2025 (the "New Notes"), and (ii) the issuance of additional New Notes in a private placement in reliance on the exemption from registration provided by Rule 506 of Regulation D of the Securities Act as a sale not involving any public offering. On January 14, 2020, the Company closed the 2020 Note Offering. The proceeds for the 2020 Note Offering, after deducting for the payment of accrued interest and offering-related expenses, but exclusive of company costs were $8,272,375.

As of June 30, 2020, and December 31, 2019, excluding operating lease liabilities and the derivative liability, the outstanding principal amount of indebtedness was $70,996,244 and $82,585,522, respectively, summarized in the table below. See Note 8 — Notes Payable and Lines of Credit, Note 9 –Convertible Notes, and Note 11 – Stockholders' Equity to our condensed consolidated financial statements included above.

Asset-Based Financing:	June 30, 2020	December 31, 2019
Inventory	$36,984,245	$59,160,970
Convertible senior notes	39,583,334	31,333,334
Senior unsecured notes	7,357,081	2,568,843
Total debt	83,924,660	93,063,147
Less: unamortized discount and debt issuance costs	(12,928,416)	(10,477,625)
Total debt, net	$$70,996,244	$82,585,522

The following table sets forth a summary of our cash flows for the six-months ended June 30, 2020 and 2019:

	Six-Months Ended June 30,
	2020	2019
Net cash provided by (used in) operating activities	$577,859	$(33,495,051)
Net cash used in investing activities	(788,899)	(2,713,949)
Net cash provided by financing activities	2,079,681	39,657,642
Net increase in cash	$1,868,641	$3,448,642

Operating Activities

Our primary sources of operating cash flows result from the sales of used vehicles and ancillary products. Our primary uses of cash from operating activities are purchases of inventory, cash used to acquire customers, and personnel-related expenses. For the six-months ended June 30, 2020, net cash provided by operating activities was $577,859, an increase of $34,072,910 compared to net cash used in operating activities of $33,495,051 for the six- months ended June 30, 2019. The increase in our net cash provided by operating activities was primarily due to a $12,200,073 decrease in our net loss, excluding the impairment losses on inventory and fixed assets of $11,738,413 and $177,626, respectively that were incurred due to the Nashville tornado, as well as $21,872,837 of changes in operating assets and liabilities during each period, primarily vehicle inventory, accounts receivable and accounts payable. The change in net income was a result of: (i) our continued disciplined approach to sales volume as we took prescriptive steps to accelerate profitability, which resulted in the sale of fewer vehicles and a corresponding reduction in related selling expenses, sales related compensation, and marketing spend for the six-month periods ended June 30, 2020; (ii) a reduction in automotive vehicle sales resulting from the significant damage to the Company's operating facilities and inventory held for sale in Nashville as a result of the ~~date~~March 3, 2020 tornado; and (iii) a reduction in staffing levels, adjusted purchasing levels to align with demand and market conditions and a deferral of discretionary growth expenditures such as travel, facilities, information technology investments due to the adverse impact of COVID-19, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity.

Investing Activities

Our primary use of cash for investing activities is for technology development to expand our operations. Cash used in investing activities was $788,900 and $2,713,949 during the six-months ended June 30, 2020 and 2019, respectively, a decrease of $1,925,049. The decrease primarily relates to a reduction in technology spending and no acquisition activities during the six-month period ended June 30, 2020 as compared to the same period in 2019. The decrease in technology spending was a result of a reduction in staffing levels, adjusted purchasing and a deferral of discretionary growth expenditures such as information technology investments due to the adverse impact of COVID-19, including sheltering-in-place and social distancing policies, resulting in significantly reduced commercial activity.

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 $2,079,681 for the six-months ended June 30, 2020 as compared to net cash provided by financing activities of $39,657,642 for the same period of 2019. The $37,577,961 decrease in cash provided by financing activities was a result of receiving net proceeds from debt and equity issuances of $50,792,337 and an $11,134,695 repayment of the ~~financial statements and the reported amounts of revenue and expenses~~Hercules debt during the ~~reporting period. We routinely evaluate our estimates based on historical experience~~six months ended June 30, 2019 as compared proceeds from debt and ~~on various other assumptions that management believes are reasonable under~~equity issuances of $24,229,300 and $22,149,619 in repayments of notes payable and lines of credit for the ~~circumstances. Actual results may differ from these estimates under different assumptions or conditions. During the nine-month~~same 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.2020.

Off-Balance Sheet Arrangements

As of ~~September~~June 30, ~~2017,~~2020, 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~~Critical Accounting Policies and Estimates

Refer to 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, 2019. 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 most recent Annual Report on Form 10-K.

Forward-Looking and Cautionary Statements

This Quarterly Report on Form 10-Q, as well as information included in oral statements or other written statements made or to be made by us, contain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, and other future conditions. Forward-looking statements can be identified by words such as "anticipate," "believe," "envision," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," "ongoing," "contemplate," and other similar expressions, although not all forward-looking statements contain these identifying words. Examples of forward-looking statements include, among others, statements we make regarding:

●

We have a limited operating history and we cannot assure you we will achieve or maintain profitability;

●

Our annual and quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline;

●

The initial development and progress of our business to date may not be indicative of our future growth prospects and, if we continue to grow rapidly, we may not be able to manage our growth effectively;

●

There is substantial doubt about our ability to continue as a going concern;

●

We may require additional capital to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances. If capital is not available on terms acceptable to us or at all, we may not be able to develop and grow our business as anticipated and our business, operating results and financial condition may be harmed;

●

We may fail to maintain our listing on The Nasdaq Stock Market;

●

The success of our business relies heavily on our marketing and branding efforts, especially with respect to the RumbleOn website and our branded mobile applications, and these efforts may not be successful;

●

The failure to develop and maintain our brand could harm our ability to grow unique visitor traffic and to expand our regional partner network;

●

We rely on Internet search engines to drive traffic to our website, and if we fail to appear prominently in the search results, our traffic would decline, and our business would be adversely affected;

●

A significant disruption in service on our website or of our mobile applications could damage our reputation and result in a loss of consumers, which could harm our business, brand, operating results, and financial condition;

●

We may be unable to maintain or grow relationships with information data providers or may experience interruptions in the data feeds they provide, which may limit the information that we are able to provide to our users and regional partners as well as adversely affect the timeliness of such information and may impair our ability to attract or retain consumers and our regional partners and to timely invoice all parties;

●

If we are unable to provide a compelling vehicle buying experience to our users, the number of transactions between our users, RumbleOn and dealers will decline, and our revenue and results of operations will suffer harm;

●

If key industry participants, including powersports and recreation vehicle dealers and regional auctions, perceive us in a negative light or our relationships with them suffer harm, our ability to operate and grow our business and our financial performance may be damaged;

●

The growth of our business relies significantly on our ability to increase the number of regional partners in our network such that we are able to increase the number of transactions between our users and regional partners. Failure to do so would limit our growth;

●

Our ability to grow our complementary product offerings may be limited, which could negatively impact our development, growth, revenue and financial performance;

●

We rely on third-party financing providers to finance a portion of our customers' vehicle purchases;

●

Our sales of powersports/recreation vehicles may be adversely impacted by increased supply of and/or declining prices for pre-owned vehicles and excess supply of new vehicles;

●

We rely on a number of third parties to perform certain operating and administrative functions for the Company;

●

We participate in a highly competitive market, and pressure from existing and new companies may adversely affect our business and operating results;

●

Seasonality or weather trends may cause fluctuations in our unique visitors, revenue and operating results;

●

We collect, process, store, share, disclose and use personal information and other data, and our actual or perceived failure to protect such information and data could damage our reputation and brand and harm our business and operating results;

●

Failure to adequately protect our intellectual property could harm our business and operating results;

●

We may in the future be subject to intellectual property disputes, which are costly to defend and could harm our business and operating results;

●

We operate in a highly regulated industry and are subject to a wide range of federal, state and local laws and regulations. Failure to comply with these laws and regulations could have a material adverse effect on our business, results of operations and financial condition;

●

We provide transportation services and rely on external logistics to transport vehicles. Thus, we are subject to business risks and costs associated with the transportation industry. Many of these risks and costs are out of our control, and any of them could have a material adverse effect on our business, financial condition and results of operations;

●

We depend on key personnel to operate our business, and if we are unable to retain, attract and integrate qualified personnel, our ability to develop and successfully grow our business could be harmed;

●

We may acquire other companies or technologies, which could divert our management's attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating results;

●

The recent outbreak of COVID-19 will likely have a significant negative impact on our business, sales, results of operations, financial condition, and liquidity;

●

We may be unable to realize the anticipated synergies related to the Acquisitions, which could have a material adverse effect on our business, financial condition and results of operations;

●

We may be unable to successfully integrate the Wholesale Entities' business and realize the anticipated benefits of the Acquisitions;

●

Our business relationships, those of the Wholesale Entities or the combined company may be subject to disruption due to uncertainty associated with the Acquisitions;

●

If we are unable to maintain effective internal control over financial reporting for the combined companies, we may fail to prevent or detect material misstatements in our financial statements, in which case investors may lose confidence in the accuracy and completeness of our financial statements;

●

The Wholesale Entities may have liabilities that are not known, probable or estimable at this time;

●

As a result of the Acquisitions, we and the Wholesale Entities may be unable to retain key employees;

●

The trading price for our Class B Common Stock may be volatile and could be subject to wide fluctuations in per share price;

●

Our principal stockholders and management own a significant percentage of our stock and an even greater percentage of the Company's voting power and will be able to exert significant control over matters subject to stockholder approval;

●

If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline;

●

Because our Class B Common Stock may be deemed a low-priced "penny" stock, an investment in our Class B Common Stock should be considered high risk and subject to marketability restrictions;

●

We do not currently or for the foreseeable future intend to pay dividends on our common stock;

●

We are subject to reduced reporting requirements so long as we are considered a "smaller reporting company" and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors;

●

If we fail to maintain an ~~“emerging growth company” under~~effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the ~~federal~~trading price of our common stock;

●

Anti-takeover provisions may limit the ability of another party to acquire us, which could cause our stock price to decline;

●

Although the Notes are referred to as convertible senior Notes, the Notes are effectively subordinated to any of our future secured debt and structurally subordinated to any liabilities of our subsidiaries;

●

The Notes are our obligations only and a substantial portion of our operations are conducted through, and a substantial portion of our consolidated assets are held by, our subsidiaries;

●

Operating our business requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay the Notes and any other debt;

●

Recent and future regulatory actions and other events may adversely affect the trading price and liquidity of the Notes;

●

The trading price for our Class B Common Stock may be volatile and could be subject to wide fluctuations in per share price which could adversely impact the trading price of the Notes;

●

We may incur substantially more debt in the future or take other actions which would intensify the risks discussed in these risk factors;

●

We may not have the ability to raise the funds necessary to settle the Notes in cash on a conversion, to repurchase the Notes on a fundamental change, or to repay the Notes at maturity. In addition, the terms of our future debt may contain limitations on our ability to pay cash on conversion or repurchase of the Notes;

●

Redemption may adversely affect the return on the Notes;

●

The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results;

●

Conversion of the Notes may dilute the ownership interest of our stockholders or may otherwise depress the market price of our Class B Common Stock;

●

Future sales of our Class B Common Stock or equity-linked securities ~~laws~~in the public market could lower the market price for our Class B Common Stock and adversely impact the trading price of the Notes;

●

Holders of Notes are not entitled to any rights with respect to our Class B Common Stock, but they will be subject to ~~reduced public company reporting requirements. In addition, Section 107~~all changes made with respect to them to the extent our conversion obligation includes shares 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.our Class B Common Stock;

~~Item~~●

The conditional conversion feature of the Notes could result in holders receiving less than the value of our Class B Common Stock into which the Notes would otherwise be convertible;

●

On conversion of the Notes, holders may receive less valuable consideration than expected because the value of our Class B Common Stock may decline after holders exercise their conversion rights but before we settle our conversion obligation;

●

The increase in the conversion rate for Notes converted in connection with a make-whole fundamental change or a notice of redemption may not adequately compensate holders for any lost value of their Notes as a result of such transaction or redemption;

●

The conversion rate of the Notes may not be adjusted for dilutive events;

●

Some significant restructuring transactions may not constitute a fundamental change, in which case we would not be obligated to offer to repurchase the Notes;

●

Certain provisions in the indenture governing the Notes may delay or make it more expensive for a third party to acquire us;

●

Holders of Notes are not entitled to receive any shares of our Class B Common Stock otherwise deliverable upon conversion of the Notes to the extent that such receipt would cause such holders to become, directly or indirectly, a beneficial owner of shares of our Class B Common Stock in excess of 4.99% of the total number of the shares of our Class B Common Stock then issued and outstanding;

●

We cannot assure you that an active trading market will develop for the Notes;

●

Any adverse rating of the Notes may cause their trading price to fall; and

●

Other statements regarding our future operations, financial condition and prospects, and business strategies.

Item 3.

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

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

~~Item~~Item 4.

Controls and ~~Procedures.~~Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~September~~June 30, ~~2017.~~2020. We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the ~~SEC’s~~SEC's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), the ~~Company’s~~Company's Chief Executive Officer and Chief Financial Officer concluded that the ~~Company’s~~Company's disclosure controls and procedures were effective as of ~~September~~June 30, ~~2017.~~2020.

Changes in Internal Control Over Financial Reporting

~~Since the acquisition of NextGen, the Company is evaluating its internal control over financial reporting; however, there~~There were no changes in our internal control over financial reporting that occurred during ~~our most recent fiscal~~the quarter ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal control over financial reporting despite the fact that most of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the potential impact of COVID-19 on our internal control to minimize the impact on their design and operating effectiveness.

Limitations on Effectiveness of Controls and Procedures

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

PART II - OTHER INFORMATION

~~Item~~Item 1.

Legal Proceedings.

We are not a party to any material legal proceedings.

~~Item~~Item 1A.

Risk Factors.

Our business, financial condition, operating results, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our Annual Report on 10-K for the year ended December 31, ~~2016,~~2019, filed on ~~February 14, 2017,~~May 29, 2020, the occurrence of any one of which could have a material adverse effect on our actual results.

There have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2019.

~~Item~~Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

None.

~~Item~~Item 3.

Defaults Upon Senior Securities.

None.

~~Item~~Item 4.

Mine Safety Disclosures.

Not applicable.

~~Item~~Item 5.

Other Information.

None.

~~Item~~Item 6.

~~Exhibits~~Exhibits.

Exhibit No.		Description
3.1		Certificate of Change. (Incorporated by reference to Exhibit 3.1 in the Company's Current Report on Form 8-K, filed on May 19, 2020).
10.1		~~Form of Senior Secured Promissory Note,~~COVID-19 Stimulus Customer Agreement, dated ~~September 5, 2017 (incorporated~~May 1, 2020, by and between Wood & Huston Bank and RumbleOn, Inc. (Incorporated by reference to Exhibit 10.1 in the ~~Company’s Current Report on Form 8-K, filed September 11, 2017).~~
~~10.2~~		~~Amendment to Amended and Restated Stockholders’ Agreement of RumbleOn, Inc., dated September 29, 2017 (incorporated by reference to Exhibit 10.1 in the Company’s~~Company's Current Report on Form 8-K, filed on ~~October 5, 2017)~~May 7, 2020).
~~31.1~~ 10.2		COVID-19 Stimulus Customer Agreement, dated May 1, 2020, by and between Wood & Huston Bank and Wholesale, Inc. (Incorporated by reference to Exhibit 10.2 in the Company's Current Report on Form 8-K, filed on May 7, 2020).
10.3		COVID-19 Stimulus Customer Agreement, dated May 1, 2020, by and between Wood & Huston Bank and Wholesale Express, LLC (Incorporated by reference to Exhibit 10.3 in the Company's Current Report on Form 8-K, filed on May 7, 2020).
10.4		Paycheck Protection Program Note, dated May 1, 2020, executed by RumbleOn, Inc. (Incorporated by reference to Exhibit 10.4 in the Company's Current Report on Form 8-K, filed on May 7, 2020).
10.5		Paycheck Protection Program Note, dated May 1, 2020, executed by Wholesale Inc. (Incorporated by reference to Exhibit 10.5 in the Company's Current Report on Form 8-K, filed on May 7, 2020).
10.6		Paycheck Protection Program Note, dated May 1, 2020, executed by Wholesale Express, LLC. (Incorporated by reference to Exhibit 10.6 in the Company's Current Report on Form 8-K, filed on May 7, 2020).
31.1		Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2		Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1		Certifications of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2		Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101.INS		XBRL Instance Document*
101.SCH		XBRL Taxonomy Extension Schema*
101.CAL		XBRL Taxonomy Extension Calculation Linkbase*
101.DEF		XBRL Taxonomy Extension Definition Linkbase*
101.LAB		XBRL Taxonomy Extension Label Linkbase*
101.PRE		XBRL Taxonomy Extension Presentation Linkbase*

_________________________

Filed ~~herewith~~herewith.

Furnished herewith.

~~SIGNATURES~~

SIGNATURES

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

	~~RumbleOn,~~RUMBLEON, INC.

Date: ~~November 9, 2017~~ August 14, 2020	By:	/s/ Marshall Chesrown
		Marshall Chesrown
		Chief Executive Officer (Principal Executive Officer)


Date: ~~November 9, 2017~~ August 14, 2020	By:	/s/ Steven R. Berrard
		Steven R. Berrard
		Chief Financial Officer and Secretary (Principal Financial Officer and Principal Accounting Officer)

3449

Nevada		46-3951329
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~4521 Sharon Road, Suite 370~~901 W. Walnut Hill Lane ~~Charlotte, North Carolina~~Irving TX		~~28211~~75038
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class B Common Stock, $0.001 par value		RMBL		The NASDAQ Capital Market

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

PART I - FINANCIAL INFORMATION
	Page

Item 1.	Financial ~~Statements.~~Statements	1

Item 2.	~~Management’s~~ Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.~~Operations	1921

Item 3.	Quantitative and Qualitative Disclosure About Market ~~Risk.~~Risk	3246

Item 4.	Controls and ~~Procedures.~~Procedures	3246

PART II - OTHER INFORMATION
~~Item 1.~~	~~Legal Proceedings.~~	33
Item ~~1A.~~1. Legal Proceedings	~~Risk Factors.~~	3347

Item 1A. Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of ~~Proceeds.~~Proceeds	3347

Item 3.	Defaults Upon Senior ~~Securities.~~Securities	3347

Item 4.	Mine Safety ~~Disclosures.~~Disclosures	3347
~~Item 5.~~	~~Other Information.~~	33
Item 5. Other Information	47

Item 6. Exhibits	~~Exhibits~~47
	33
SIGNATURES	48

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

		(469) 250-1185
	~~(704) 448-5240~~
(~~Registrant’s~~Registrant's telephone number, including area code)

	As of June 30, 2020	As of December 31, 2019
ASSETS

Current assets:
Cash	$3,061,091	$49,660
Restricted cash	5,533,832	6,676,622
Accounts receivable, net	14,796,028	8,482,707
Inventory	31,488,211	57,381,281
Prepaid expense and other current assets	1,131,320	1,210,474
Total current assets	56,010,482	73,800,744

Property and equipment, net	5,973,660	6,427,674
Right-of-use assets	3,560,045	6,040,287
Goodwill	26,886,563	26,886,563
Other assets	70,637	237,823
Total assets	$92,501,387	$113,393,091

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and other accrued liabilities	$9,255,126	$12,421,094
Accrued interest payable	1,619,105	749,305
Current portion of convertible debt	999,061	1,363,590
Current portion of long-term debt	40,815,937	59,160,970
Total current liabilities	52,689,229	73,694,959

Long-term liabilities:
Note payable	2,847,662	1,924,733
Convertible Debt	26,333,584	20,136,229
Derivative liabilities	-	27,500
Other long-term liabilities	3,470,617	4,722,101
Total long-term liabilities	32,651,863	26,810,563

Total liabilities	85,341,092	100,505,522

Commitments and contingencies (Notes 4, 7, 8, 9, 13, 18)

Stockholders' equity:
Class B Preferred stock, $0.001 par value, 10,000,000 shares authorized, 0 and 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019	-	-
Common A stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of June 30, 2020 and December 31, 2019	50	50
Common B stock, $0.001 par value, 4,950,000 shares authorized, 2,179,907 and 1,111,681 shares issued and outstanding as of June 30, 2020 and December 31, 2019	2,180	1,112
Additional paid in capital	107,533,741	92,268,213
Accumulated deficit	(100,375,676)	(79,381,806)
Total stockholders' equity	7,160,295	12,887,569

Total liabilities and stockholders' equity	$92,501,387	$113,393,091

	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)

	Three-Months Ended June 30,		Six-Months Ended June 30,
	2020	2019	2020	2019
Revenue:
Pre-owned vehicle sales:
Powersports	$8,199,396	$30,305,687	$31,338,476	$57,234,846
Automotive	68,294,841	233,856,329	181,927,108	424,763,517
Transportation and vehicle logistics	7,663,500	6,017,888	14,751,091	11,359,300
Other	183,556	-	473,879	-
Total revenue	84,341,293	270,179,904	228,490,554	493,357,663

Cost of revenue
Powersports	7,528,810	26,137,459	28,085,447	50,087,015
Automotive	62,493,015	223,996,259	170,572,680	405,491,371
Transportation	5,862,734	4,428,674	10,950,792	8,170,696
Cost of revenue before impairment loss	75,884,559	254,562,392	209,608,919	463,749,082
Impairment loss on automotive inventory	-	-	11,738,413	-
Total cost of revenue	75,884,559	254,562,392	221,347,332	463,749,082

Gross profit	8,456,734	15,617,512	7,143,222	29,608,581

Selling, general and administrative	11,174,288	25,007,565	29,230,714	45,447,581

Insurance recovery proceeds	(5,615,268)	-	(5,615,268)	-

Depreciation and amortization	508,322	427,438	1,031,317	809,663

Operating income (loss)	2,389,392	(9,817,491)	(17,503,541)	(16,648,663)

Interest expense	(1,482,408)	(1,874,858)	(3,699,166)	(3,319,991)

Change in derivative liability	137,488	190,000	20,673	190,000

Loss on early extinguishment of debt	-	(1,499,250)	188,164	(1,499,250)
Income (loss) before provision for income taxes	1,044,472	(13,001,599)	(20,993,870)	(21,277,904)

Benefit for income taxes	-	-	-	-

Net income (loss)	$1,044,472	$(13,001,559)	$(20,993,870)	$(21,277,904)

Weighted average number of common shares outstanding - basic and fully diluted	2,214,241	1,111,809	2,130,332	1,068,257

Net income (loss) per share - basic and fully diluted	$0.47	$(11.69)	$(9.85)	$(19.92)

	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

	Preferred Shares		Class A Common Shares		Class B Common Shares		Additional Paid in	Accumulated	Total Stockholders'
	Shares	Amount	Shares	Amount	Shares	Amount	Capital	Deficit	Equity
Balance as of March 31, 2020	-	$-	50,000	$50	2,151,166	$2,151	$106,817,379	$(101,420,148)	$5,399,432
Issuance of common stock, net of issuance cost	-	-	-	-	-	-	-	-	-
Issuance of common stock for restricted stock units	-	-	-	-	21,610	22	(22)	-	-
Convertible note exchange	-	-	-	-	-	-	-	-	-
Stock-based compensation	-	-	-	-	-	-	716,391	-	716,391
Adjust for fractional shares in reverse stock split	-	-	-	-	7,131	7	(7)	-	-
Net income	-	-	-	-	-	-	-	1,044,472	1,044,472
Balance as of June 30, 2020	-	$-	50,000	$50	2,179,907	$2,180	$107,533,741	$(100,375,676)	$7,160,295

	June 30, 2020	December 31, 2019
Trade	$10,039,627	$9,369,733
Insurance	5,615,268	-
Finance	94,412	147,893
Other	8,813	-
	15,758,120	9,517,626
Less: allowance for doubtful accounts	(962,092)	(1,034,919)
	$14,796,028	$8,482,707

	June 30, 2020	December 31, 2019
Pre-owned vehicles:
Powersport vehicles	$1,771,970	$10,365,050
Automobiles and trucks	35,619,173	47,599,433
	37,391,143	57,964,483
Less: Reserve	(5,902,932)	(583,202)
	$31,488,211	$57,381,281

~~Issuance of shares~~Purchase price consideration:
Cash	$~~2,666,666~~
~~Debt~~	~~1,333,334~~
~~Cash paid~~	~~750,000~~
	$~~4,750,000~~835,000

~~Net tangible assets acquired:~~
~~Technology development~~$1,536,000 convertible note	$~~1,400,000~~1,536,000
~~Customer contracts~~$500,000 promissory note	~~10,000~~500,000
~~Non-compete agreements~~$257,933 Promissory note	~~100,000~~
~~Tangible assets acquired~~	~~1,510,000~~
~~Goodwill~~	~~3,240,000~~257,933
Total purchase price consideration	~~4,750,000~~$3,128,933
~~Less: Issuance of shares~~	~~(2,666,666~~)
~~Less: Debt issued~~	~~(1,333,334~~)

~~Cash paid~~Estimated fair value of assets:
Accounts receivable	$~~750,000~~3,177,660
Inventory	2,862,004
	6,039,664

Estimated fair value of accounts payable and other	5,875,009

Excess of assets over liabilities	164,655

Goodwill	2,964,278

Total net assets acquired	$3,128,933

	Three-Months Ended June 30, 2019	Six-Months Ended June 30, 2019
Unaudited
Pro forma revenue	$270,179,904	$499,676,272
Pro forma net loss	$(13,001,599)	$(21,314,928)
Loss per share - basic and fully diluted	$(11.69)	$(19.64)
Weighted-average common shares and common stock equivalents outstanding basic and fully diluted	1,111,809	1,085,183

	~~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~~	$-

	~~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~~

	June 30, 2020	December 31, 2019
Goodwill	$26,886,563	$26,886,563

Indefinite lived intangible asset	$45,515	$45,515

	Principal Amount	Debt Discount	Carrying Amount
Convertible senior notes	$38,750,000	(12,716,699)	$26,033,301
Convertible notes-Autosport:
$1,536,000 unsecured note	1,133,061	(211,717)	921,344
$500,000 unsecured note	378,000	-	378,000
	40,261,061	(12,928,416)	27,332,645
Less: Current portion	(1,146,000)	146,939	(999,061)
Long-term portion	$39,115,061	$(12,781,477)	$26,333,584

	June 30, 2020	December 31, 2019
Vehicles	$316,764	$158,327
Furniture and equipment	191,047	448,074
Technology development and software	9,477,361	8,863,247
Leasehold improvements	180,617	246,135
Total property and equipment	10,165,789	9,715,783
Less: accumulated depreciation and amortization	(4,192,129)	(3,288,109)
Total	$5,973,660	$6,427,674

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

	Six-Months Ended June 30, 2020
Contractual interest expense	$1,258,359
Amortization of debt discounts	888,136
Total	$2,146,495

	June 30,
	2020	2019
Cash and cash equivalents	$3,061,091	$49,660
Restricted cash (1)	5,533,832	6,676,622
Total cash, cash equivalents, and restricted cash	$8,594,923	$6,726,282

	June 30, 2020
Weighted-average remaining lease term	3.6 Years
Weighted-average discount rate	7.0%

2020	$653,560
2021	1,134,025
2022	1,088,215
2023	472,108
2024	310,200
Thereafter	568,700
Total lease payments	4,226,808
Less imputed interest	(578,099)
Present value of lease liabilities	$3,648,709

	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)

	For the Three-months Ended June 30, 2020				For the Three-months Ended June 30, 2019
	Revenue	Revenue %	Gross Profit	GP %	Revenue	Revenue %	Gross Profit	GP %
Segment
Powersports	$8,199,396	9.7%	$670,586	8.2%	$30,305,687	11.2%	$4,168,228	13.8%
Automotive	68,294,841	81.0%	5,801,826	8.5%	233,856,329	86.6%	9,860,070	4.2%
Transportation	7,663,500	9.1%	1,800,766	23.5%	6,017,888	2.2%	1,589,214	26.4%
Other	183,556	0.2%	183,556	100.0%	-	-	-	-
	$84,341,293	100.0%	$8,456,734	10.0%	$270,179,904	100.0%	$15,617,512	5.8%

	For the Six-months Ended June 30, 2020				For the Six-months Ended June 30, 2019
	Revenue	Revenue %	Gross Profit	GP %	Revenue	Revenue %	Gross Profit	GP %
Segment
Powersports	$31,338,476	13.7%	$3,253,029	10.4%	$57,234,846	11.6%	$7,147,831	12.5%
Automotive	181,927,108	79.6%	11,354,428	6.2%	424,763,517	86.1%	19,272,146	4.5%
Transportation	14,751,091	6.5%	3,800,299	25.8%	11,359,300	2.3%	3,188,604	28.1%
Other	473,879	0.2%	473,879	100.0%	-	-	-	-
	228,490,554	100.0%	18,881,635	8.3%	493,357,663	100.0%	29,608,581	6.0%
Impairment loss (1)	-	-	(11,738,413)	(5.2)%	-	-	-	-
	$228,490,554	100.0%	$7,143,222	3.1%	$493,357,663	100.0%	$29,608,581	6.0%