Attached files
| file | filename |
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| EX-10.5 - INTELLECTUAL PROPERTY SECURITY AGREEMENT - RumbleOn, Inc. | rmbl_ex10-5.htm |
| EX-99.1 - PRESS RELEASE, DATED APRIL 30, 2018 - RumbleOn, Inc. | rmbl_ex99-1.htm |
| EX-10.4 - SUBORDINATION AGREEMENT - RumbleOn, Inc. | rmbl_ex10-4.htm |
| EX-10.3 - SUBORDINATION AGREEMENT - RumbleOn, Inc. | rmbl_ex10-3.htm |
| EX-10.2 - INTERCREDITOR AGREEMENT - RumbleOn, Inc. | rmbl_ex10-2.htm |
| EX-10.1 - LOAN AND SECURITY AGREEMENT - RumbleOn, Inc. | rmbl_ex10-1.htm |
| EX-4.1 - WARRANT, DATED APRIL 30, 2018 - RumbleOn, Inc. | rmbl_ex4-1.htm |
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): April 30, 2018
RumbleOn, Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State
or Other Jurisdiction
of
Incorporation)
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001-38248
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46-3951329
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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4521 Sharon Road, Suite 370
Charlotte, North Carolina
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28211
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(Address of Principal Executive Offices)
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(Zip Code)
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(704) 448-5240
(Registrant’s
Telephone Number, Including Area Code)
(Former Name or Former Address, If Changed Since Last
Report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
☐
Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2 (b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4 (c))
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2).
Emerging
growth company ☒
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☒
Item 1.01. Entry into Material Definitive Agreement.
The
information in Item 2.03 below is incorporated into this Item 1.01
by reference.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
On April 30, 2018 (the “Closing
Date”), RumbleOn, Inc., a Nevada corporation (the
“Company”), NextGen Pro, LLC, a Delaware limited
liability company (“NextGen Pro”), RMBL Missouri, LLC,
a Delaware limited liability company (“RMBL Missouri”)
and RMBL Texas, LLC, a Delaware limited liability company
(“RMBL Texas," and together with the Company, NextGen Pro,
and RMBL Missouri, each, a “Borrower”, and
collectively, “Borrowers”), entered into a Loan and Security Agreement (the
"Loan Agreement") with Hercules Capital, Inc. a Maryland
Corporation ("Hercules") and other financial institutions or
entities that may thereafter from time to time become parties
thereto (collectively, “Lender”) and Hercules in its
capacity as administrative agent and collateral agent for Lender
(in such capacity, “Agent”), pursuant to which Lender
may provide one or more term loans in an aggregate principal amount
of up to $20 million (the "Loan"). Under the terms of the Loan Agreement, $5.0
million will be funded at closing with the balance available in
three additional tranches over the term of the Loan Agreement,
subject to certain operating targets and otherwise as set forth in
the Loan Agreement. The Loan has an initial 36-month maturity and
initial 10.5% interest rate.
Under the Loan Agreement, on the Closing Date, the
Company issued to the Lender a warrant to purchase 81,818
(increasing to 109,091 if the fourth tranche is advanced) shares of
the Company’s Class B common stock at an exercise price of
$5.50 per share (the “Warrant”). The Warrant is
immediately exercisable and expires on April 30, 2023. The Company
agreed to file a registration statement registering the resale of
the shares underlying the Warrant no later than 90 days after
issuance. The warrants were
issued in reliance on the exemption from registration provided by
Section 4(a)(2) under the Securities Act of 1933, as amended, or
Regulation D thereunder, as a sale not involving any public
offering.
Advances under the Loan ("Advances")
will bear interest at a per annum rate equal to the greater
of either (i) the prime rate as reported in The Wall Street Journal
plus 5.75%, and (ii) 10.25%, based on a year consisting of 360 days,
with interest computed daily based on the actual number of days
elapsed. Advances under the Loan Agreement are due and payable on
May 1, 2021, unless Borrowers achieve certain performance
milestones, in which case Advances will be due and payable on
November 1, 2021.
Upon any event of default, the Agent may, at its option, exercise
its right to demand immediate payment of all liabilities and other
indebtedness and amounts owed to Lender by Borrowers.
The Loan is
secured by a grant of a security interest in all assets (the
“Collateral”) of the Borrowers, except that the
Collateral should not include (a) more than 65% of the presently
existing and later arising issued and outstanding shares of capital
stock owned by any Borrower of any foreign subsidiary which shares
entitle the holder thereof to vote for directors or any other
matter and (b) nonassignable licenses or contracts.
In
connection with the Loan Agreement, Borrowers and Agent each
entered into (i) a Subordination Agreement (the "Halcyon
Subordination Agreement"), effective April 30, 2018, with Halcyon
Consulting, LLC ("Halcyon"), and (ii) a Subordination Agreement
(the “Noteholder Subordination Agreement”), effective
April 30, 2018, with certain noteholders of the Company (the
“Note Holders”). In addition, the Borrowers have
acknowledged and approved an Intercreditor Agreement (the
“Intercreditor Agreement”), effective April 30, 2018,
by and between Agent and Ally Bank and Ally Financial Inc. (the
“Ally Parties”).
Under
the terms of the Halcyon Subordination Agreement, (i) all of each
Borrower’s indebtedness and obligations to Halcyon, whether
existing or arising in the future, is and shall be subordinated to
all of Borrowers’ indebtedness and obligations to Agent and
Lender, subject to the terms and conditions contained therein, and
(ii) all of Halcyon’s security interests, if any, in each
Borrower’s property is and shall be subordinated to all of
Agent’s security interests in Borrowers’ property,
subject to the terms and conditions contained therein.
Under
the terms of the Noteholder Subordination Agreement, (i) all of
each Borrower’s indebtedness and obligations to Note Holders,
whether existing or arising in the future, is and shall be
subordinated to all of Borrowers’ indebtedness and
obligations to Agent and Lender, subject to the terms and
conditions contained therein, and (ii) all of each Note
Holder’s security interests, if any, in each Borrower’s
property is and shall be subordinated to all of Agent’s
security interests in Borrowers’ property, subject to the
terms and conditions contained therein.
The
Intercreditor Agreement specifies the priority of, and the time and
method by which Hercules and the Ally Parties may enforce, their
respective security interests in the Collateral.
In
conjunction with the security interest granted under the Loan
Agreement, the Company’s obligations are further secured,
pursuant to the terms of an Intellectual Property Security
Agreement (the “Security Agreement”), dated as of the
Closing Date, among the Company, NextGen Pro and the Agent, by a
security interest in all now owned or hereafter acquired
intellectual property of the Company and NextGen Pro, except to the
extent such intellectual property cannot be assigned or the
creation of a security interest would be prohibited by applicable
law or contract.
The foregoing descriptions of the Loan,
the Loan Agreement, the Warrant, the Intercreditor Agreement, the
Noteholder Subordination Agreement, the Halcyon Subordination
Agreement and the Security Agreement are qualified in their entirety by
reference to the full text of the Warrant, Loan Agreement, the Intercreditor
Agreement, the
Halcyon Subordination Agreement, the Noteholder
Subordination Agreement, and the Intellectual Property Security
Agreement which are
attached to this report as Exhibits 4.1, 10.1, 10.2, 10.3, 10.4,
and 10.5 respectively and incorporated by reference into this
report.
The
Company filed a press release announcing the entry into the Loan on
April 30, 2018. A copy of the press release is attached to this
Report as Exhibit 99.1 and is incorporated by reference in this
Report.
Item 3.02.
Unregistered Sales of Equity Securities.
The
disclosure included in Item 2.03 above is incorporated into
this Item 3.02 by reference.
Item 9.01. Financial Statements and
Exhibits.
(d)
Exhibits
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Exhibit No.
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Description
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Warrant,
dated April 30, 2018.
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Loan and Security Agreement, by and among the Company,
NextGen Pro, LLC, RMBL Missouri, LLC, RMBL Texas, LLC, Lender and
Hercules Capital, Inc., dated April
30, 2018.
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Intercreditor Agreement, by and among Hercules Capital,
Inc., Ally Bank and Ally Financial, Inc. and agreed to by the
Company, NextGen Pro, LLC RMBL Missouri, LLC, and RMBL Texas, LLC,
dated April 30,
2018.
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Subordination
Agreement, by and among the Company, Halcyon Consulting, LLC,
NextGen Pro, LLC, RMBL Missouri, LLC, RMBL Texas, LLC, and Hercules
Capital, Inc., dated April 30,
2018.
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Subordination
Agreement, by and among the Company, Blue Flame Capital, LLC, Lori
Sue Chesrown, Ralph Wegis, NextGen Pro, LLC, RMBL Missouri, LLC,
RMBL Texas, LLC, and Hercules Capital, Inc., dated April 30, 2018.
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Intellectual
Property Security Agreement, by and among Hercules Capital, Inc.,
the Company and NextGen Pro, LLC, dated April 30, 2018.
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Press
Release, dated April 30, 2018.
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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RUMBLEON, INC.
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Date:
May 1, 2018
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By:
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/s/
Steven R.
Berrard
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Steven
R. Berrard
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Chief
Financial Officer
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