Core Viewpoint - RumbleOn, Inc. is rebranding as RideNow Group, Inc. with a new ticker symbol RDNW, which is part of a broader strategy to align corporate identity with customer recognition and enhance operational efficiency [1][2]. Company Changes - The company will relocate its headquarters from Irving, Texas to Chandler, Arizona, consolidating leadership and support functions to reinforce a unified corporate approach [2]. - The rebranding includes the rollout of a new business framework called the RideNow Way, which focuses on three core pillars: Entrepreneurial Spirit, Customer Experience, and Operational Excellence [3]. Operational Strategy - The RideNow Way aims to guide dealership leaders and staff in delivering a consistent and exceptional customer experience across all locations [3][4]. - The company emphasizes a culture of performance and aims to simplify its structure to create a platform for long-term success [5]. Business Overview - RideNow Group operates through two segments: a powersports dealership group and a vehicle transportation services entity, Wholesale Express, LLC [6]. - The company claims to be the largest powersports retail group in the United States, offering a wide range of products and services, including new and pre-owned vehicles, parts, and financing options [6].

Financial Data and Key Metrics Changes - The company generated approximately $300 million in revenue and adjusted EBITDA of $17.2 million in Q2 2025, with adjusted EBITDA up by $1 million compared to the same quarter last year despite an 11% decline in revenue [11] - Total adjusted SG&A expenses were $64.9 million, representing 77.4% of gross profit, down from $70.8 million and 78.8% of gross profit in the same quarter last year, indicating an 8.3% reduction [11] Business Line Data and Key Metrics Changes - The power sports group sold 17,117 total major units, down 3.3% year-over-year, with new unit sales down 11.5% and pre-owned unit sales up 10.2% [12] - Revenue from parts, services, and accessories was $52.4 million, a 7.9% decline, while gross profit was $24.9 million, down 5% [13] - Financing and insurance teams generated $27.2 million in gross profit, reflecting an 8.4% decline compared to the previous year [13] Market Data and Key Metrics Changes - Revenue from the powersports dealership group was $298.6 million, down 7.2% year-over-year, while gross profit was $83.7 million, down 3.6% [14] - Wholesale Express revenue was $1.3 million, a significant decline of 91.4% compared to the same quarter last year, with gross profit decreasing by 93.5% to $200,000 [15] Company Strategy and Development Direction - The company is rebranding to Ride Now Group Inc., with a focus on simplifying operations and aligning corporate and store functions to enhance customer service [8] - A term loan amendment extended maturity by 13 months to September 30, 2027, providing necessary runway for business improvement initiatives [10][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current pricing environment, indicating that the industry appears to have bottomed out and is beginning to show signs of recovery [21][22] - The company is focused on rebuilding the Wholesale Express sales force and exploring new B2C opportunities, indicating a strategic shift in operations [25][26] Other Important Information - The company ended the quarter with $59.8 million in total cash and $185.1 million in non-vehicle net debt, with total available liquidity of $185.7 million [15] - Cash flow from operating activities was $4 million for the first half of 2025, a significant decrease from $29 million in the same period of 2024 [15] Q&A Session Summary Question: Current pricing environment for new and pre-owned vehicles - Management noted that the industry seems to have stabilized, with signs of an upward trajectory in pricing for both new and pre-owned vehicles [21][22] Question: Update on Wholesale Express and rebuilding the sales force - Management indicated a reset approach, focusing on relationship-driven business and exploring new B2C opportunities, while acknowledging challenges in finding the right brokers [25][26]

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, revealing a **$32.2 million** net loss for Q2 2025, primarily due to a **$34.0 million** impairment charge, and a shift to a **$4.7 million** stockholders' deficit Condensed Consolidated Balance Sheet Highlights | Account | June 30, 2025 ($M) | December 31, 2024 ($M) | | :--- | :--- | :--- | | **Total Assets** | **$712.3** | **$755.2** | | Cash | $44.7 | $85.3 | | Inventory, net | $274.9 | $240.6 | | Franchise rights and other intangible assets | $127.8 | $161.9 | | **Total Liabilities** | **$717.0** | **$718.5** | | Vehicle floor plan notes payable | $240.2 | $209.9 | | Long-term debt, net of current maturities | $218.0 | $212.0 | | **Total Stockholders' Equity (Deficit)** | **($4.7)** | **$36.7** | Condensed Consolidated Statement of Operations Highlights (Q2) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | | :--- | :--- | :--- | | Total Revenue | $299.9 | $336.8 | | Gross Profit | $83.9 | $89.9 | | Impairment of franchise rights | $34.0 | $0.0 | | Operating Income (Loss) | ($18.8) | $15.4 | | Net Loss | ($32.2) | ($0.7) | | Net Loss Per Share | ($0.85) | ($0.02) | Condensed Consolidated Statement of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 ($M) | 2024 ($M) | | :--- | :--- | :--- | | Net cash provided by operating activities | $4.0 | $29.2 | | Net cash used in investing activities | ($2.9) | ($1.4) | | Net cash used in financing activities | ($38.0) | ($33.7) | | **Net Change in Cash and Restricted Cash** | **($36.9)** | **($5.9)** | - The company operates through powersports dealership and vehicle transportation services segments, and will change its name to **RideNow Group, Inc.** (ticker **RDNW**) effective August 13, 2025[17](index=17&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) - A **$34.0 million** impairment charge on franchise rights was recorded in Q2 2025, driven by economic uncertainty and depressed stock price, significantly contributing to the quarterly operating loss[33](index=33&type=chunk)[34](index=34&type=chunk) - Post-quarter, on August 10, 2025, the Term Loan Credit Agreement was amended, extending maturity to September 2027, and **$10.0 million** in subordinated loans were secured from related parties to prepay senior debt[40](index=40&type=chunk)[59](index=59&type=chunk)[77](index=77&type=chunk) - The company is subject to an SEC investigation initiated in June 2024 concerning former CEO's resource use and related-party transactions, and is defending a lawsuit from the former CEO seeking over **$57.5 million** in damages[71](index=71&type=chunk)[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q2 and H1 2025 financial performance, noting an **11.0%** revenue decline, a **$32.2 million** net loss driven by impairment, and recent debt restructuring for flexibility Overall Results of Operations (Q2) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $299.9 | $336.8 | (11.0)% | | Total Gross Profit | $83.9 | $89.9 | (6.7)% | | SG&A Expenses | $66.7 | $71.4 | (6.6)% | | Impairment of franchise rights | $34.0 | $0.0 | NM | | Operating Income (Loss) | ($18.8) | $15.4 | (222.1)% | | Net Loss | ($32.2) | ($0.7) | NM | - The Vehicle Transportation Services segment's revenue plummeted **91.4%** year-over-year in Q2 2025, primarily due to the departure of key employees, including most brokers, early in the year[99](index=99&type=chunk) - Powersports segment revenue decreased by **$23.0 million** in Q2 2025, driven by lower new retail unit sales volume, partially offset by increased pre-owned retail vehicle volume[96](index=96&type=chunk) - In August 2025, the company extended its term loan maturity to September 2027 and secured **$10.0 million** in new subordinated loans to prepay **$20.0 million** of senior debt, projected to reduce annual cash interest payments by **$3.4 million**[83](index=83&type=chunk)[84](index=84&type=chunk)[112](index=112&type=chunk) Liquidity Resources | Resource | June 30, 2025 ($M) | Dec 31, 2024 ($M) | | :--- | :--- | :--- | | Cash | $44.7 | $85.3 | | Restricted cash | $15.1 | $11.4 | | Availability under powersports inventory financing | $125.9 | $146.2 | | **Committed liquidity resources available** | **$185.7** | **$242.9** | [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable as the company qualifies as a smaller reporting company - As a smaller reporting company, RumbleOn, Inc. is not required to provide disclosures under this item[121](index=121&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of June 30, 2025, due to a material weakness in IT system user access and segregation of duties, with remediation underway - The CEO and Interim CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025[123](index=123&type=chunk) - Ineffectiveness stems from a material weakness in user access and segregation of duties within IT systems supporting financial reporting processes[123](index=123&type=chunk)[124](index=124&type=chunk) - Management's remediation plan includes enhancing system access review processes and improving governance and reporting over these controls[126](index=126&type=chunk)[129](index=129&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company faces an SEC investigation regarding former CEO's resource use and related-party transactions, alongside a **$57.5 million** lawsuit from the former CEO for wrongful termination - On June 28, 2024, the company received an SEC subpoena for an investigation covering January 1, 2021, onwards, related to the former CEO, related-party transactions, and disclosures[132](index=132&type=chunk) - The former CEO, Marshall Chesrown, is suing the company in Delaware Superior Court, seeking **$7.5 million** in termination compensation and **$50.0 million** in general and reputational damages[134](index=134&type=chunk) - The company cannot predict the outcome or timing of the SEC investigation or the litigation with its former CEO, but intends to vigorously defend the claims[133](index=133&type=chunk)[135](index=135&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K - No material changes to the risk factors previously disclosed in the company's 2024 10-K have occurred[136](index=136&type=chunk) [Other Information](index=33&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[137](index=137&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Form 10-Q, including name change, executive agreements, stock plan amendments, and debt restructuring documents - Key exhibits filed include: - Certificate of Amendment for the name change to **RideNow Group, Inc.** - Amendment No. 10 to the Term Loan Credit Agreement - Form of Commitment Letter for the subordinated loans - Certifications by the Principal Executive Officer and Principal Financial Officer[138](index=138&type=chunk)

[AMENDMENT NO. 10 TO TERM LOAN CREDIT AGREEMENT](index=1&type=section&id=AMENDMENT%20NO.%2010%20TO%20TERM%20LOAN%20CREDIT%20AGREEMENT) [Preliminary Statements](index=1&type=section&id=PRELIMINARY%20STATEMENTS) This section introduces Amendment No. 10 to the Term Loan Credit Agreement, identifying parties and the Borrower's requested amendments - Amendment No. 10, dated **August 10, 2025**, is between **Rumbleon, Inc.** (Borrower), Subsidiary Guarantors, **Oaktree Fund Administration, LLC** (Agent), and Lenders[2](index=2&type=chunk) - It amends the Term Loan Credit Agreement dated August 31, 2021, which had already been amended **nine times** previously[4](index=4&type=chunk) - The Borrower requested amendments to certain provisions of the Existing Credit Agreement, and Lenders agreed[5](index=5&type=chunk) [Section 1. Definitions](index=1&type=section&id=Section%201.%20Definitions) Capitalized terms in Amendment No. 10, if undefined, retain meanings from the Existing Credit Agreement as modified - Capitalized terms not defined in this Amendment retain their meanings from the Existing Credit Agreement, as amended[6](index=6&type=chunk) [Section 2. Amendments to Existing Credit Agreement](index=1&type=section&id=Section%202.%20Amendments%20to%20Existing%20Credit%20Agreement) This section details specific changes to the Existing Credit Agreement, including textual modifications and new Exhibits - The Existing Credit Agreement is amended by deleting stricken text and adding double-underlined text as detailed in Exhibit A[7](index=7&type=chunk) - New Exhibits N and O are added to the Existing Credit Agreement as Exhibit B and Exhibit C, respectively[8](index=8&type=chunk) [Section 3. Conditions of Effectiveness](index=2&type=section&id=Section%203.%20Conditions%20of%20Effectiveness) Section 2's effectiveness requires execution, fee payment, Q4 2024 financials, a **$10,000,000** capital raise commitment, and a solvency certificate - Effectiveness of Section 2 is conditional on the "Tenth Amendment Effective Date" when specific conditions are met[9](index=9&type=chunk) - Conditions include execution of the Amendment by all parties, payment of all required fees and expenses by **August 10, 2025**[9](index=9&type=chunk)[10](index=10&type=chunk) - Loan Parties must deliver quarterly financial statements for the fiscal quarter ending **December 31, 2024**[11](index=11&type=chunk) - Administrative Agent must receive a commitment letter for a capital raise of at least **$10,000,000** through common equity or subordinated debt[12](index=12&type=chunk) - A Responsible Officer of the Borrower must certify the solvency of the Borrower and its Subsidiaries, consolidated, before and after the transactions[13](index=13&type=chunk) [Section 4. Post-Closing Covenants](index=2&type=section&id=Section%204.%20Post-Closing%20Covenant) Borrower must fulfill post-closing covenants by **August 26, 2025**, including capital raise, loan repayment, and lease/warrant amendments - Borrower must consummate the Tenth Amendment Capital Raise Transactions and receive at least **$10,000,000** by **August 26, 2025**[15](index=15&type=chunk) - Borrower must repay an aggregate of not less than **$20,000,000** of loans by **August 26, 2025**, with at least **$10,000,000** from the capital raise[16](index=16&type=chunk)[17](index=17&type=chunk) - Lease agreements must be extended to **August 31, 2034**, and the Floor Plan Facility Agreement's "Commitment Termination Date" extended to **September 30, 2029**, by **August 26, 2025**[18](index=18&type=chunk) - Warrant Agreements must be amended by **August 26, 2025**, to reset the strike price at a **25%** premium to the 30-day post-announcement VWAP of Class B Common Stock and extend the term to **five years** from the Tenth Amendment Effective Date[19](index=19&type=chunk) - Failure to comply with these covenants constitutes an immediate Event of Default[14](index=14&type=chunk) [Section 5. Representations and Warranties](index=3&type=section&id=Section%205.%20Representations%20and%20Warranties) Borrower warrants due authorization, legal compliance, no continuing default, and accuracy of Credit Agreement representations - Borrower represents that the Amendment's execution and performance are duly authorized and do not violate organizational documents, material contractual obligations, or applicable law[20](index=20&type=chunk) - The Amendment constitutes a legal, valid, and binding obligation of the Borrower[21](index=21&type=chunk) - After the Tenth Amendment Effective Date, no Default or Event of Default has occurred and is continuing[22](index=22&type=chunk) - Representations and warranties in Article V of the Credit Agreement are true and correct in all material respects as of the Tenth Amendment Effective Date[23](index=23&type=chunk) [Section 6. Reference to and Effect on the Existing Credit Agreement and the Loan Documents](index=4&type=section&id=Section%206.%20Reference%20to%20and%20Effect%20on%20the%20Existing%20Credit%20Agreement%20and%20the%20Loan%20Documents) Amendment No. 10 ratifies existing Loan Documents, constitutes a Loan Document itself, and is not a novation - This Amendment does not limit, impair, or waive rights under the Existing Credit Agreement or other Loan Documents, which are ratified and affirmed[25](index=25&type=chunk) - The Collateral Documents continue to secure all Loan Party obligations[25](index=25&type=chunk) - This Amendment constitutes a Loan Document from the Tenth Amendment Effective Date[26](index=26&type=chunk) - The amendment is not a novation, and no Default or Event of Default exists after the Tenth Amendment Effective Date[25](index=25&type=chunk) [Section 7. Execution in Counterparts](index=4&type=section&id=Section%207.%20Execution%20in%20Counterparts) The Amendment may be executed in multiple counterparts, with electronic delivery of signatures being effective - The Amendment may be executed in counterparts, and electronic signatures (e.g., .pdf) are effective[27](index=27&type=chunk) [Section 8. Notices](index=4&type=section&id=Section%208.%20Notices) All communications and notices for this Amendment must follow procedures in Section 10.02 of the Credit Agreement - Notices and communications are governed by Section 10.02 of the Credit Agreement[28](index=28&type=chunk) [Section 9. Severability](index=4&type=section&id=Section%209.%20Severability) Invalid Amendment provisions do not affect others; parties will negotiate replacements for similar economic effect - If any provision is illegal, invalid, or unenforceable, the rest of the Amendment remains valid, and parties will negotiate replacements[29](index=29&type=chunk) [Section 10. Successors](index=5&type=section&id=Section%2010.%20Successors) This Amendment's provisions bind and benefit parties and their permitted successors and assigns per Section 10.07 of the Credit Agreement - Provisions are binding on and benefit parties and their permitted successors and assigns[30](index=30&type=chunk) [Section 11. Governing Law, Jurisdiction, Service of Process; Waiver of Right to Trial by Jury](index=5&type=section&id=Section%2011.%20Governing%20Law,%20Jurisdiction,%20Service%20of%20Process;%20Waiver%20of%20Right%20to%20Trial%20by%20Jury) Sections 10.14 and 10.15 of the Credit Agreement, covering governing law, jurisdiction, and jury trial waiver, are incorporated - Sections 10.14 and 10.15 of the Credit Agreement (governing law, jurisdiction, service of process, jury trial waiver) are incorporated by reference[31](index=31&type=chunk) [Section 12. Required Lenders](index=5&type=section&id=Section%2012.%20Required%20Lenders) The Agent notifies the Borrower that Lenders party to this Amendment represent all Lenders under the Existing Credit Agreement - The Lenders party to this Amendment represent all Lenders under the Existing Credit Agreement[31](index=31&type=chunk) [Section 13. Change of Name and Address for Notices](index=5&type=section&id=Section%2013.%20Change%20of%20Name%20and%20Address%20for%20Notices) Borrower notifies of name change to **RideNow Group, Inc.**, symbol to **RDNW**, and new notice address, effective **August 13, 2025** - Borrower intends to change its name to "**RideNow Group, Inc.**" and its Nasdaq trading symbol to "**RDNW**", effective **August 13, 2025**[32](index=32&type=chunk) - A new address and telephone number for notices are designated, effective **August 13, 2025**[32](index=32&type=chunk) [TERM LOAN CREDIT AGREEMENT (AS AMENDED)](index=56&type=section&id=TERM%20LOAN%20CREDIT%20AGREEMENT) [Table of Contents](index=57&type=section&id=Table%20of%20Contents) This section provides the Term Loan Credit Agreement's table of contents, outlining its structure and guiding detailed provisions - The Table of Contents lists Articles I through X, covering definitions, commitments, taxes, conditions, representations, covenants, events of default, administrative agent roles, and miscellaneous provisions[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) - It also details various schedules (e.g., Collateral Documents, Guarantors, Litigation) and exhibits (e.g., Committed Loan Notice, Term Note, Compliance Certificate, Cash Flow Projection)[100](index=100&type=chunk)[101](index=101&type=chunk) [ARTICLE I - Definitions and Accounting Terms](index=64&type=section&id=ARTICLE%20I%20Definitions%20and%20Accounting%20Terms) This article establishes foundational terminology and accounting principles for the Credit Agreement, defining terms and setting rules for consistent application - Defines key terms such as "Adjusted Term SOFR," "Administrative Agent," "Affiliate," "Applicable Rate," "Benchmark Replacement," "Consolidated EBITDA," "Consolidated Total Net Debt," "Event of Default," "Loan Parties," "Material Adverse Effect," "Permitted Liens," "Required Lenders," and "Term Loans"[113](index=113&type=chunk)[114](index=114&type=chunk)[117](index=117&type=chunk)[124](index=124&type=chunk)[137](index=137&type=chunk)[182](index=182&type=chunk)[193](index=193&type=chunk)[215](index=215&type=chunk)[307](index=307&type=chunk)[346](index=346&type=chunk)[371](index=371&type=chunk)[420](index=420&type=chunk) - Establishes accounting principles (GAAP or IFRS election), rounding rules for financial ratios, and guidelines for currency conversions[448](index=448&type=chunk)[450](index=450&type=chunk)[452](index=452&type=chunk)[456](index=456&type=chunk)[457](index=457&type=chunk)[458](index=458&type=chunk) Applicable Rate Changes (on and after Tenth Amendment Effective Date) | Loan Type | Rate (Prior to Tenth Amendment) | Rate (On and after Tenth Amendment) | | :---------- | :------------------------------ | :---------------------------------- | | SOFR Loans | **8.25%** | **7.75%** | | Base Rate Loans | **7.25%** | **6.75%** | Floor Rate Changes (on and after Tenth Amendment Effective Date) | Period | Floor Rate | | :----- | :--------- | | Prior to Tenth Amendment Effective Date | **1.00%** | | On and after Tenth Amendment Effective Date | **3.00%** | [ARTICLE II - The Commitments and Credit Extensions](index=127&type=section&id=ARTICLE%20II%20The%20Commitments%20and%20Credit%20Extensions) This article details loan issuance, interest rates, prepayments, commitment termination, and defaulting lenders, ensuring clarity on funding and repayment - Initial Term Loans are a single borrowing, not reborrowable. Delayed Draw Term Loans can be made up to **five times**, also not reborrowable, and become part of the Initial Term Loans upon funding[464](index=464&type=chunk)[465](index=465&type=chunk) - Optional prepayments of any Class of Term Loans are permitted without premium or penalty (except as per Section 2.03(e)), with specific notice requirements[473](index=473&type=chunk)[474](index=474&type=chunk) - Mandatory prepayments are required for Excess Cash Flow (**50%** if > **$2.5M**), Net Cash Proceeds from asset Dispositions/Casualty Events (**100%** if > **$250K** single or **$1M** aggregate), and Net Cash Proceeds from certain Indebtedness/Equity Issuances[476](index=476&type=chunk)[478](index=478&type=chunk)[486](index=486&type=chunk) - A Call Premium (Make-Whole Amount or Repayment Fee) is applicable for certain prepayments or accelerations, with rates varying based on the timing relative to the Make-Whole Expiry Date[502](index=502&type=chunk)[503](index=503&type=chunk) - Unused Delayed Draw Term Commitments terminate on the earlier of **18 months** after Closing Date or specific termination events[505](index=505&type=chunk) [ARTICLE III - Taxes, Increased Costs Protection and Illegality](index=145&type=section&id=ARTICLE%20III%20Taxes,%20Increased%20Costs%20Protection%20and%20Illegality) This article addresses tax implications, increased costs, and legal changes, outlining Borrower indemnification, Lender compensation, and benchmark rate replacement - Borrower indemnifies Agents and Lenders for "Indemnified Taxes" and "Other Taxes," ensuring net payments are received[539](index=539&type=chunk)[540](index=540&type=chunk) - Lenders can request additional compensation for increased costs or reduced returns due to changes in law affecting loans or capital adequacy[552](index=552&type=chunk)[553](index=553&type=chunk) - If a benchmark rate (e.g., Term SOFR) becomes unavailable or unlawful, the Administrative Agent and Borrower may amend the agreement to replace it with a "Benchmark Replacement" and make "Conforming Changes"[569](index=569&type=chunk)[571](index=571&type=chunk) [ARTICLE IV - Conditions Precedent to Credit Extensions](index=155&type=section&id=ARTICLE%20IV%20Conditions%20Precedent%20to%20Credit%20Extensions) This article specifies mandatory conditions for credit extensions, including Loan Document execution, fee payment, acquisition, financial statements, and accurate representations - Conditions for the Closing Date include executed Loan Documents, payment of fees, consummation of the Equity Contribution (**$170M** minimum) and Acquisition, delivery of audited/unaudited financial statements, and true/correct Specified Acquisition Agreement Representations and Specified Representations[577](index=577&type=chunk)[578](index=578&type=chunk)[579](index=579&type=chunk)[580](index=580&type=chunk)[582](index=582&type=chunk)[583](index=583&type=chunk) - Conditions for subsequent Delayed Draw Term Loans include true/correct representations and warranties (Specified Representations for Permitted Acquisitions), no Default (no Event of Default for Permitted Acquisitions), receipt of a Credit Extension Request, Consolidated Total Net Leverage Ratio not exceeding **2.50:1.00** (Pro Forma Basis), and use of proceeds for Permitted Acquisitions/investments[586](index=586&type=chunk)[588](index=588&type=chunk)[589](index=589&type=chunk)[590](index=590&type=chunk) [ARTICLE V - Representations and Warranties](index=158&type=section&id=ARTICLE%20V%20Representations%20and%20Warranties) This article contains comprehensive representations and warranties by the Borrower regarding legal, financial, and operational standing, including solvency and loan proceeds - Borrower warrants its legal existence, power, and authority, and compliance with all applicable laws (including USA PATRIOT Act and anti-money laundering laws)[596](index=596&type=chunk) - Financial statements are presented fairly in all material respects, and no Material Adverse Effect has occurred since the most recent audited financial statement[600](index=600&type=chunk)[601](index=601&type=chunk) - Borrower and its Subsidiaries are Solvent on a consolidated basis after giving effect to the Transaction[617](index=617&type=chunk) - Proceeds of Initial Term Loans are for Transactions and upfront fees; Incremental Facility proceeds for working capital, acquisitions, investments, and general corporate purposes; Delayed Draw Term Loans for Permitted Acquisitions and earn-outs[619](index=619&type=chunk)[620](index=620&type=chunk) - No Covered Entity or Covered Entity Controlling Person is a Sanctioned Person, and proceeds will not be used in violation of Anti-Terrorism Laws or FCPA[621](index=621&type=chunk)[622](index=622&type=chunk) [ARTICLE VI - Affirmative Covenants](index=164&type=section&id=ARTICLE%20VI%20Affirmative%20Covenants) This article outlines the Borrower's ongoing positive obligations, including financial reporting, legal compliance, security interests, loan proceeds, and critical milestones - Borrower must deliver audited annual financial statements (within **120 days**) and unaudited quarterly financial statements (within **60 days**), along with Compliance Certificates and management's discussion and analysis[626](index=626&type=chunk)[627](index=627&type=chunk)[631](index=631&type=chunk) - Monthly cash reports and Cash Flow Projections (with variance reports) are required, commencing after the Tenth Amendment Effective Date[629](index=629&type=chunk)[630](index=630&type=chunk) - Borrower must ensure the Collateral and Guarantee Requirement is satisfied, including pledging Equity Interests and granting perfected Liens on assets[645](index=645&type=chunk)[646](index=646&type=chunk) - Borrower must use commercially reasonable best efforts to dispose of "Specified Property" by **December 31, 2023**, and use Net Cash Proceeds to prepay loans[665](index=665&type=chunk) - Borrower must consummate a Rights Offering by **December 1, 2023**, to raise at least **$100,000,000** and use Net Cash Proceeds to prepay loans[666](index=666&type=chunk) - Borrower must deliver a "no outs" commitment letter for a capital raise of at least **$30,000,000** by **December 1, 2024**, with specific equity and floor plan financing components[671](index=671&type=chunk)[672](index=672&type=chunk) - Refinancing Commitment Milestones require commencing a refinancing process and receiving a bona fide offer by **September 30, 2026**, and full repayment of outstanding Loans by **November 30, 2026**[675](index=675&type=chunk) [ARTICLE VII - Negative Covenants](index=176&type=section&id=ARTICLE%20VII%20Negative%20Covenants) This article imposes strict limitations on the Borrower, restricting Liens, Investments, Indebtedness, corporate changes, asset dispositions, and restricted payments - Prohibits Liens except for permitted categories, including those under Loan Documents, existing Liens, tax Liens, purchase money Liens, and Liens securing Floor Plan Financings[677](index=677&type=chunk)[678](index=678&type=chunk)[679](index=679&type=chunk)[680](index=680&type=chunk)[681](index=681&type=chunk) - Restricts Investments to specified categories, including Cash Equivalents, intercompany investments, Permitted Acquisitions (subject to conditions), and limited other investments[682](index=682&type=chunk)[683](index=683&type=chunk)[684](index=684&type=chunk)[685](index=685&type=chunk)[686](index=686&type=chunk) - Limits Indebtedness to specific types, such as Loan Document Indebtedness, Permitted Refinancings, certain Guarantee Obligations, Floor Plan Financings, and the Convertible Notes (with specific conditions)[688](index=688&type=chunk)[689](index=689&type=chunk)[690](index=690&type=chunk)[691](index=691&type=chunk)[692](index=692&type=chunk) - Restricts fundamental changes (mergers, liquidations) and dispositions of assets, with exceptions for intercompany transactions, Permitted Acquisitions, and the 2023 Specified Property Disposition[696](index=696&type=chunk)[697](index=697&type=chunk)[698](index=698&type=chunk) - Limits Restricted Payments (dividends, share repurchases) to specific exceptions, including payments to the Borrower/Restricted Subsidiaries, equity issuances, and limited repurchases for employees[699](index=699&type=chunk)[700](index=700&type=chunk)[701](index=701&type=chunk) - Prohibits transactions with Affiliates unless on arm's-length terms or specifically permitted[702](index=702&type=chunk) - Restricts prepayments of "Specified Debt" (including Convertible Notes) with exceptions for Permitted Refinancings and limited other prepayments based on leverage ratios[704](index=704&type=chunk) Maximum Consolidated Total Net Leverage Ratio | Four Fiscal Quarters Ending | Maximum Consolidated Total Net Leverage Ratio | | :-------------------------- | :------------------------------------------ | | December 31, 2023 | **5.50 to 1.00** |\ | March 31, 2024 | **5.00 to 1.00** |\ | June 30, 2024 | **5.50 to 1.00** |\ | September 30, 2024 | **5.50 to 1.00** |\ | December 31, 2024 | **9.50 to 1.00** |\ | March 31, 2025 | **9.50 to 1.00** |\ | June 30, 2025 | **7.00 to 1.00** |\ | September 30, 2025 | **6.75 to 1.00** |\ | December 31, 2025 | **6.50 to 1.00** |\ | March 31, 2026 | **6.50 to 1.00** |\ | June 30, 2026 | **6.25 to 1.00** |\ | September 30, 2026 | **6.00 to 1.00** |\ | December 31, 2026 | **5.75 to 1.00** |\ | March 31, 2027 | **5.50 to 1.00** |\ | June 30, 2027 | **5.25 to 1.00** | Maximum Consolidated Senior Secured Net Leverage Ratio | Four Fiscal Quarters Ending | Maximum Consolidated Senior Secured Net Leverage Ratio | | :-------------------------- | :--------------------------------------------------- | | December 31, 2023 | **5.50 to 1.00** |\ | March 31, 2024 | **5.00 to 1.00** |\ | June 30, 2024 | **5.00 to 1.00** |\ | September 30, 2024 | **5.00 to 1.00** |\ | December 31, 2024 | **9.00 to 1.00** |\ | March 31, 2025 | **9.00 to 1.00** |\ | June 30, 2025 | **6.75 to 1.00** |\ | September 30, 2025 | **6.50 to 1.00** |\ | December 31, 2025 | **6.25 to 1.00** |\ | March 31, 2026 | **6.25 to 1.00** |\ | June 30, 2026 | **6.00 to 1.00** |\ | September 30, 2026 | **5.75 to 1.00** |\ | December 31, 2026 | **5.50 to 1.00** |\ | March 31, 2027 | **5.25 to 1.00** |\ | June 30, 2027 | **5.00 to 1.00** | Minimum Liquidity Requirements (On and after Tenth Amendment Effective Date) | Calendar Months Ending | Minimum Liquidity | | :--------------------- | :---------------- | | August 31, 2025 - November 30, 2025 | **$20,000,000** | | December 31, 2025 - February 28, 2026 | **$20,000,000** | | March 31, 2026 - May 31, 2026 | **$22,000,000** | | June 30, 2026 - August 31, 2026 | **$24,000,000** | | September 30, 2026 - November 30, 2026 | **$26,000,000** | | December 31, 2026 - February 28, 2027 | **$28,000,000** | | March 31, 2027 - August 31, 2027 | **$30,000,000** | - Prohibits engaging in any other form of consumer warehouse lending outside of the existing Consumer Warehouse Facility[719](index=719&type=chunk) [ARTICLE VIII - Events of Default and Remedies](index=197&type=section&id=ARTICLE%20VIII%20Events%20of%20Default%20and%20Remedies) This article defines events of default, specifies remedies for Agents and Lenders, including loan acceleration, and outlines a "Cure Right" for financial defaults - Events of Default include failure to pay principal (when due) or interest/other amounts (within **5 Business Days**), breach of specific covenants (e.g., financial statements, capital raise, Article VII), incorrect representations, cross-default on Indebtedness > $Threshold Amount, insolvency proceedings, inability to pay debts, judgments > $Threshold Amount, invalidity of Collateral Documents, Change of Control, ERISA Events, and failure to meet Refinancing Commitment Milestones[721](index=721&type=chunk)[722](index=722&type=chunk)[723](index=723&type=chunk)[724](index=724&type=chunk)[725](index=725&type=chunk) - Upon an Event of Default, the Administrative Agent (at Required Lenders' request) can terminate commitments, accelerate all outstanding loans and other obligations (including Call Premium)[726](index=726&type=chunk) - A "Specified Event of Default" (including bankruptcy/insolvency) automatically triggers the Call Premium, which is deemed liquidated damages[727](index=727&type=chunk)[728](index=728&type=chunk) - Borrower has a "Cure Right" for Financial Covenant Defaults by making a Specified Cure Equity Contribution or receiving Specified Cure Debt Proceeds within a "Cure Period," which increases Consolidated EBITDA or Liquidity for recalculation[734](index=734&type=chunk)[735](index=735&type=chunk) - Limitations on Cure Right: at least **two fiscal quarters** without exercise in any four consecutive quarters, not more than **four times** during the agreement term, and specific rules for applying cure amounts to leverage vs. liquidity[738](index=738&type=chunk) [ARTICLE IX - Administrative Agent and Other Agents](index=203&type=section&id=ARTICLE%20IX%20Administrative%20Agent%20and%20Other%20Agents) This article defines the roles, responsibilities, and protections for the Administrative Agent and Collateral Agent, covering appointment, liability, and erroneous payments - Lenders irrevocably appoint and authorize the Administrative Agent to act on their behalf under Loan Documents, including as collateral agent for Liens on Collateral[741](index=741&type=chunk)[742](index=742&type=chunk) - Agents are not liable for actions taken or omitted (except for gross negligence/willful misconduct) and can rely on information and advice[745](index=745&type=chunk)[746](index=746&type=chunk) - Lenders indemnify Agent-Related Persons for Indemnified Liabilities (unless due to gross negligence/willful misconduct)[751](index=751&type=chunk) - The Administrative Agent may resign, with a successor appointed by Required Lenders (with Borrower's consent outside of Event of Default)[753](index=753&type=chunk) - Collateral Liens are automatically released upon full payment of Obligations, transfer of property, or release of a Guarantor under permitted conditions[759](index=759&type=chunk) - Provisions for handling "Erroneous Payments" ensure such payments remain the property of the Administrative Agent and do not discharge Borrower's obligations, with mechanisms for recovery and subrogation[769](index=769&type=chunk)[770](index=770&type=chunk)[772](index=772&type=chunk)[773](index=773&type=chunk) [ARTICLE X - Miscellaneous](index=213&type=section&id=ARTICLE%20X%20Miscellaneous) This article contains general provisions governing the Credit Agreement, including amendments, waivers, notices, indemnification, assignments, governing law, and fiduciary responsibility - Amendments or waivers generally require written consent of Required Lenders and the Borrower, with specific actions requiring consent of all affected Lenders (e.g., extending maturity, reducing principal/interest)[778](index=778&type=chunk)[779](index=779&type=chunk) - Borrower indemnifies Indemnitees for losses, liabilities, damages, claims, and expenses related to the Loan Documents and transactions, with exceptions for gross negligence, bad faith, or willful misconduct[796](index=796&type=chunk) - Lenders can assign rights to "Eligible Assignees" or sell "Participations," subject to conditions, including restrictions on assignments to natural persons or "Specified Competitors"[800](index=800&type=chunk)[801](index=801&type=chunk)[807](index=807&type=chunk) - Governing law is **New York State**, with specific carve-outs for **Delaware law** regarding the Acquisition Agreement. Parties waive the right to trial by jury[821](index=821&type=chunk)[824](index=824&type=chunk) - Borrower acknowledges that the Administrative Agent and Lenders act solely as principals and have no advisory or fiduciary responsibility[832](index=832&type=chunk)

Core Insights - The company is undergoing a rebranding initiative, changing its name to RideNow Group, Inc., relocating its corporate headquarters back to Phoenix, AZ, and changing its ticker symbol from "RMBL" to "RDNW" effective August 13, 2025 [6][10][12] - The second quarter of 2025 showed a decline in revenue and net loss compared to the same period in 2024, but there were improvements in adjusted EBITDA and SG&A expenses [4][6][19] Financial Performance - Revenue for Q2 2025 was $299.9 million, down 11.0% from $336.8 million in Q2 2024 [4][6] - Gross profit decreased to $83.9 million, a decline of 6.7% year-over-year [4][6] - Selling, general, and administrative (SG&A) expenses were reduced to $66.7 million, down 6.6% from $71.4 million in the previous year [4][6] - The company reported a net loss of $32.2 million, compared to a net loss of $0.7 million in Q2 2024 [4][6] - Adjusted EBITDA increased to $17.2 million, up 6.2% from $16.2 million in Q2 2024 [4][6] Segment Performance - In the Powersports segment, unit retail sales of new powersports vehicles decreased by 11.5% to 10,618 units, while pre-owned powersports sales increased by 10.2% to 5,283 units [7][8] - Revenue from the Powersports segment was $298.6 million, down 7.2% from $321.6 million in the previous year [7][8] - The Vehicle Transportation Services segment saw a significant decline, with revenue dropping to $1.3 million, down 91.4% from $15.2 million in Q2 2024 [8] Balance Sheet and Liquidity - As of June 30, 2025, the company had $44.7 million in unrestricted cash and $185.1 million in non-vehicle net debt [9][17] - Total available liquidity was $185.7 million, which includes cash and availability under credit facilities [9] - The company executed a term loan amendment to extend the maturity of its term loan to September 30, 2027, with a reduction in interest rates [10][19] Strategic Initiatives - The company is focused on a "back to our roots" strategy aimed at improving operational execution and driving growth [3] - The successful closing of a term loan amendment provides operational flexibility to execute its strategic initiatives [3][10]

Company Overview - RumbleOn, Inc. operates through two segments: a powersports dealership group and vehicle transportation services via Wholesale Express, LLC [3] - The powersports business, under the RideNow brand, is the largest in the U.S., offering a variety of new and pre-owned powersports vehicles and related products [3] - RumbleOn is a significant purchaser of pre-owned powersports vehicles, utilizing proprietary technology for direct consumer acquisitions [3] - The Express business provides asset-light transportation brokerage services for automobile transport primarily among dealerships and auctions in the U.S. [3] Upcoming Financial Results - RumbleOn will release its Second Quarter 2025 operational and financial results after market close on August 11, 2025 [1] - A conference call and webcast to discuss these results is scheduled for the same day at 3:30 p.m. Central Time (4:30 p.m. Eastern Time) [2][4] - The call will be hosted by Mike Quartieri, the Chief Executive Officer and Interim Chief Financial Officer [2]

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) RumbleOn, Inc. reported a Q1 2025 net loss of $9.7 million, an improvement from the prior year, with total assets decreasing to $738.9 million and negative operating cash flow of $6.9 million [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $738.9 million by March 31, 2025, primarily due to reduced cash, while total stockholders' equity declined to $26.9 million Condensed Consolidated Balance Sheets (in millions) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $358.3 | $371.4 | | **Total assets** | $738.9 | $755.2 | | **Total current liabilities** | $315.6 | $324.4 | | **Total liabilities** | $712.0 | $718.5 | | **Total stockholders' equity** | $26.9 | $36.7 | | **Total liabilities and stockholders' equity** | $738.9 | $755.2 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenue decreased by **20.5%** to **$244.7 million** in Q1 2025, yet net loss narrowed to **$9.7 million** due to reduced operating expenses Q1 2025 vs Q1 2024 Statement of Operations (in millions) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total revenue** | $244.7 | $307.8 | | **Gross profit** | $67.2 | $82.6 | | **Operating income (loss)** | $3.8 | $5.2 | | **Net loss** | $(9.7) | $(10.3) | | **Net loss per share - basic and diluted** | $(0.26) | $(0.29) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities used **$6.9 million** in cash in Q1 2025, a reversal from the prior year, leading to a **$40.5 million** decrease in total cash and restricted cash Q1 2025 vs Q1 2024 Cash Flows (in millions) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $(6.9) | $17.0 | | **Net cash used in investing activities** | $(0.5) | $(0.7) | | **Net cash used in financing activities** | $(33.1) | $(29.9) | | **Net change in cash and restricted cash** | $(40.5) | $(13.6) | | **Cash and restricted cash at end of period** | $56.2 | $63.4 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail business segments, accounting policies, inventory, debt, related-party transactions, and significant legal contingencies including an SEC investigation and a former CEO lawsuit - The company operates through two segments: a powersports dealership group with **55** locations and a vehicle transportation services entity, Wholesale Express, LLC[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Total long-term debt principal decreased from **$267.4 million** to **$229.3 million**, primarily due to the repayment of **$38.8 million** in **6.75%** convertible senior notes in January 2025[34](index=34&type=chunk)[38](index=38&type=chunk) - The company is subject to an SEC investigation initiated in June 2024 concerning related-party transactions, former CEO conduct, and disclosures, and is also being sued by the former CEO for **$57.5 million** in damages[59](index=59&type=chunk)[61](index=61&type=chunk) - The company has significant related-party transactions, including a **$16.0 million** floor plan facility and **27** property leases with entities controlled by board members William Coulter and Mark Tkach[48](index=48&type=chunk)[49](index=49&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue declined **20.5%** due to lower vehicle sales and transportation service issues, but reduced SG&A expenses helped narrow the net loss, despite decreased liquidity [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Q1 2025 total revenue decreased to **$244.7 million**, driven by a **20.5%** drop in Powersports vehicle sales and a **61.5%** decline in transportation services, partially offset by reduced SG&A expenses Consolidated Results of Operations (in millions) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $244.7 | $307.8 | $(63.1) | | **Total Gross Profit** | $67.2 | $82.6 | $(15.4) | | **SG&A expenses** | $61.1 | $73.9 | $(12.8) | | **Operating Income (Loss)** | $3.8 | $5.2 | $(1.4) | | **Net loss** | $(9.7) | $(10.3) | $0.6 | - Powersports segment total vehicles sold decreased by **3,399** units (**20.5%**) year-over-year, driving the segment's revenue decline, though total gross profit per retail vehicle increased to **$5,365** from **$5,099**[76](index=76&type=chunk)[77](index=77&type=chunk) - The Vehicle Transportation Services segment's results were significantly impacted by the departure of several employees, including most brokers, early in 2025, causing vehicles transported to drop from **24,637** to **8,625**[79](index=79&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) Total cash and restricted cash decreased by **$40.5 million** to **$56.2 million**, and committed liquidity resources fell to **$171.4 million**, though management believes resources are sufficient for the next year Liquidity Resources (in millions) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $41.1 | $85.3 | | Restricted cash | $15.1 | $11.4 | | **Total cash and restricted cash** | **$56.2** | **$96.7** | | Availability under powersports inventory financing | $115.2 | $146.2 | | **Committed liquidity resources available** | **$171.4** | **$242.9** | - Net cash used in operating activities was **$6.9 million**, a **$23.9 million** negative swing from the prior year, primarily due to building up inventory for seasonal demand[89](index=89&type=chunk)[90](index=90&type=chunk) - In January 2025, the company repaid its **6.75%** convertible senior notes at maturity, which was a primary use of cash in financing activities[93](index=93&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable as the company is classified as a smaller reporting company - The company is a smaller reporting company and is therefore not required to provide these disclosures[97](index=97&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025, due to a material weakness in IT system access and segregation of duties - As of March 31, 2025, the CEO and Interim CFO concluded that the company's disclosure controls and procedures were not effective[99](index=99&type=chunk) - The ineffectiveness is due to a material weakness related to user access and segregation of duties in IT systems that support financial reporting processes like revenue, inventory, and purchasing[100](index=100&type=chunk) - Management is implementing a remediation plan which includes enhancing processes for reviewing and provisioning access to key financial systems and ensuring appropriate segregation of duties[102](index=102&type=chunk)[105](index=105&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company faces an SEC subpoena regarding related-party transactions and a lawsuit from its former CEO seeking **$57.5 million** in damages - On June 28, 2024, the company received a subpoena from the SEC requesting documents related to the former CEO's use of company resources, related-party transactions, and disclosures regarding its RideNow Cash Offer tool[108](index=108&type=chunk) - Former CEO Marshall Chesrown filed a lawsuit against the company seeking **$7.5 million** in termination compensation and **$50.0 million** in general and reputational damages[110](index=110&type=chunk) [Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 10-K - There have been no material changes to the risk factors previously disclosed in the company's 2024 10-K[111](index=111&type=chunk) [Other Information](index=27&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[112](index=112&type=chunk) [Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including employment and separation agreements for key executives and SOX certifications - The exhibits filed include employment agreements for CEO Michael Quartieri and Cameron Tkach, and separation agreements for Michael Kennedy, Tiffany Kice, and Brandy Treadway[113](index=113&type=chunk)

Financial Data and Key Metrics Changes - The company generated $244.7 million of adjusted EBITDA in Q1 2025, down slightly compared to the same quarter last year despite a 20.5% decline in revenue [10][11] - Total adjusted SG&A expenses were $57.5 million, representing 85.6% of gross profit, down from $72.6 million or 87.9% of gross profit in the same quarter last year [11] - Cash outflows from operating activities were $6.9 million for Q1 2025, compared to cash inflows of $17 million for the same period in 2024 [15] Business Line Data and Key Metrics Changes - The Powersports Group sold 13,186 total major units, down 20.5% year over year, with new unit sales down 23.7% and pre-owned unit sales down 13.9% [12] - Gross margins for new units improved to 13.5% from 12.5% year over year, while pre-owned gross margins were 16.3%, down from 19.5% [12] - Revenue from the powersports dealership group was $239.2 million, down 18.5% year over year, primarily due to lower major unit volume [14] Market Data and Key Metrics Changes - The asset light vehicle transportation services segment saw revenue decline by 61.5% year over year, with gross profit decreasing 68.6% to $1.1 million [14] - The overall decline in unit sales during the quarter impacted revenue and gross profit across various segments [13] Company Strategy and Development Direction - The company is focused on improving operational discipline and customer service, aiming for long-term financial success despite current challenges [9] - New key management additions are expected to strengthen the company's market position and support strategic goals [7][8] - The company is actively evaluating opportunities to optimize its capital structure and lower its cost of capital [16] Management Comments on Operating Environment and Future Outlook - The management expressed confidence in the company's turnaround efforts and the potential for long-term growth despite current market challenges [5][9] - The evolving tariff landscape presents both risks and opportunities, particularly in the powersports business [8] - Management anticipates that inventory levels by year-end will be similar to 2024, potentially slightly higher due to inflation [23] Other Important Information - The company has engaged an investment banker to explore refinancing options for its debt [16] - The management team is focused on filling skill gaps and empowering leaders to align with the company's vision [6] Q&A Session Summary Question: How aggressive does the company want to be with the cash offer tool for pre-owned inventory? - The company can be aggressive with the cash offer tool, but it depends on the quality of the inventory available [19] Question: What are the expectations for year-end inventory levels? - The company expects inventory levels at year-end to be about where they ended in 2024, possibly slightly higher due to inflation [23] Question: What is the general message from OEM partners regarding tariffs? - OEMs are currently absorbing tariff costs, and there is hope for a return to a normal operating environment soon [26][28]

Financial Data and Key Metrics Changes - The company generated $244.7 million of adjusted EBITDA in Q1 2025, down slightly compared to the same quarter last year despite a 20.5% decline in revenue [11][12] - Total adjusted SG&A expenses were $57.5 million, representing 85.6% of gross profit, down from $72.6 million or 87.9% of gross profit in the same quarter last year [12] - Cash outflows from operating activities were $6.9 million for Q1 2025, compared to cash inflows of $17 million for the same period in 2024 [17] Business Line Data and Key Metrics Changes - The Powersports Group sold 13,186 total major units, down 20.5% year over year, with new unit sales down 23.7% and pre-owned unit sales down 13.9% [13] - Gross margins for new units improved to 13.5% from 12.5% year over year, while pre-owned gross margins were 16.3%, down from 19.5% [13] - Revenue from the powersports dealership group was $239.2 million, down 18.5% year over year, primarily due to lower major unit volume [16] Market Data and Key Metrics Changes - The asset light vehicle transportation services segment, Wholesale Express, saw revenue decline by 61.5% year over year, with gross profit decreasing 68.6% to $1.1 million [16] - The overall decline in unit sales during the quarter impacted revenue and gross profit across various segments [14][15] Company Strategy and Development Direction - The company is focused on improving operational discipline and customer service amidst a challenging macroeconomic environment [10] - New key management additions aim to strengthen market position and drive long-term growth [8] - The company is actively evaluating opportunities to optimize capital structure and lower cost of capital [18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges due to tariffs and a difficult consumer backdrop but expressed confidence in the company's strategic initiatives [9][10] - The company expects 2025 results from the Wholesale Express segment to decline significantly from 2024 but believes it is better positioned for sustainable long-term growth [11] Other Important Information - The company ended the quarter with $56.2 million in total cash and $188.2 million in non-vehicle net debt [17] - Total available liquidity was $171.4 million as of March 31, 2025 [17] Q&A Session Summary Question: How aggressive does the company want to be with the cash offer tool for pre-owned inventory? - The company can be aggressive with the cash offer tool, but it depends on the quality of the inventory available [20][21] Question: What are the expectations for year-end inventory levels? - The company expects inventory levels at year-end to be about where they ended in 2024, possibly slightly higher due to inflation [23][24] Question: What is the message from OEM partners regarding tariffs? - OEM partners are currently absorbing tariff costs, and there is hope that the situation will stabilize in the near future [27][28][30]

Financial Data and Key Metrics Changes - The company generated $244.7 million of adjusted EBITDA in Q1 2025, down slightly compared to the same quarter last year despite a 20.5% decline in revenue [9][10] - Total adjusted SG&A expenses were $57.5 million, representing 85.6% of gross profit, down from $72.6 million or 87.9% of gross profit in the same quarter last year [10] - Cash outflows from operating activities were $6.9 million for Q1 2025, compared to cash inflows of $17 million for the same period in 2024 [14] Business Line Data and Key Metrics Changes - The Powersports Group sold 13,186 total major units, down 20.5% year over year, with new unit sales down 23.7% and pre-owned unit sales down 13.9% [11] - Gross margins for new units improved to 13.5% from 12.5% year over year, while pre-owned gross margins were 16.3%, down from 19.5% due to an elevated margin in the previous year [11] - Revenue from the powersports dealership group was $239.2 million, down 18.5% year over year, primarily due to lower major unit volume [13] Market Data and Key Metrics Changes - The asset-light vehicle transportation services segment, Wholesale Express, saw revenue decline by 61.5% year over year, with gross profit decreasing 68.6% to $1.1 million [14] - The overall decline in unit sales during the quarter impacted revenue and gross profit across various segments [12] Company Strategy and Development Direction - The company is focused on improving operational discipline and customer service, aiming for long-term financial success despite current challenges [8] - New key management additions are expected to strengthen the company's market position and align with strategic growth goals [6][7] - The company is actively evaluating opportunities to optimize its capital structure and lower its cost of capital [15] Management's Comments on Operating Environment and Future Outlook - The operating environment remains challenging due to tariffs and shifting consumer preferences, but the company is seeing robust demand in the pre-owned segment [7][8] - Management expressed confidence in the actions taken to position the company for long-term success, despite a difficult macroeconomic backdrop [4][8] Other Important Information - The company is engaged in a comprehensive search for a new CFO to lead future growth [6] - The company has fully repaid $38.8 million of convertible notes due on January 2 [14] Q&A Session Summary Question: How aggressive does the company want to be with the cash offer tool for pre-owned inventory? - The company can be aggressive with the cash offer tool, but it depends on the quality of the inventory available [17][18] Question: What are the expectations for inventory levels by year-end? - The company expects inventory levels to be about where they ended in 2024, possibly a little higher due to inflation [20][22] Question: What is the message from OEM partners regarding tariffs? - OEMs are currently absorbing tariff costs, and there is hope for a return to normal operating conditions soon [25][26]