RumbleOn, Inc. (NASDAQ: RMBL) (the "Company" or "RumbleOn") just announced the results of its $100.0 million rights offering. The subscription period of the Rights Offering expired at 5:00 P.M. Eastern Time, on December 5, 2023. The Rights Offering resulted in subscriptions for approximately 81.1% of the shares offered at an exercise price of $5.50 per share. The shares of Class B common stock subscribed for are expected to be issued to participating stockholders on or about December 8, 2023.
"The proceeds from the Rights Offering will both lower our debt levels and also give us the ability to proactively grow our business," claims CEO Mike Kennedy. "This is a significant accomplishment for the Company. It is an exciting time for me to lead RumbleOn."
Steve Pully, Executive Chairman of the Company, added, "I want to thank all of the stockholders that participated in the Rights Offering, and especially the Standby Purchasers, Mark Tkach, William Coulter, and Stone House Capital Management, LLC. The successful Rights Offering is a transformative transaction for RumbleOn."
As previously disclosed, the Company entered into an agreement with Mark Tkach, William Coulter and Stone House Partners (collectively, the "Standby Purchasers") to backstop the Rights Offering through a private placement of shares in the event that the Rights Offering was not fully subscribed. Because the Rights Offering was not fully subscribed, the Standby Purchasers will purchase the unsubscribed shares for an aggregate amount of $18,938,090.
The net proceeds to be received by the Company in the Rights Offering and the Backstop Private Placement is expected to be approximately $98.4 million. The Company will use $50 million of the net proceeds to prepay a portion of the Company's outstanding debt under its Term Loan Credit Agreement, dated as of August 31, 2021 with Oaktree Fund Administration, LLC. The remaining proceeds will be available to fund the growth and development of the Company's business, including for possible acquisitions and other corporate purposes.
Following the completion of the Rights Offering and the Backstop Private Placement, the Company expects to have approximately 35,015,190 million shares of its Class B common stock outstanding.