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RideNow Group, Inc. (NASDAQ:RDNW), currently valued at $133 million in market capitalization and showing signs of financial stress with an Altman Z-Score of 0.55, announced Thursday it entered into unsecured subordinated loan agreements totaling $10 million with Stone House Capital Management, LLC, Face Canyon LLC, and Mark Tkach. Each lender provided $3,333,334, as disclosed in a statement based on a Securities and Exchange Commission filing. According to InvestingPro data, the company is not profitable, with a net loss of $109.5 million in the last twelve months.
The proceeds from these loans were used to prepay outstanding principal under the company’s existing senior term loan credit agreement, as required by a recent amendment to that agreement. The $10 million prepayment forms part of a larger $20 million prepayment obligation.
The subordinated loans are evidenced by promissory notes that bear interest at 13% per year, payable semi-annually in arrears, with interest capitalized to the principal balance. The notes mature on August 31, 2028, unless repaid earlier. Payment on these notes is subordinated to the company’s obligations under its senior credit agreement.
If a lender participates in a specified equity offering, RideNow Group must use the net proceeds from that lender to prepay the corresponding subordinated note. The notes are guaranteed on a joint and several basis by the company’s subsidiaries that are also guarantors under the senior credit agreement.
In addition, RideNow Group amended and restated certain warrants originally issued on August 14, 2023, to lenders under its senior credit agreement. The exercise price of the amended warrants will be the lesser of $11.09 per share or 1.25 times the 30-day volume weighted average trading price of the company’s Class B Common Stock as of the 30th trading day after August 11, 2025. The expiration date of the warrants has been extended to August 10, 2030.
The company’s Class B Common Stock trades on The Nasdaq Stock Market under the symbol RDNW.
All information is based on a press release statement and details disclosed in the company’s SEC Form 8-K filing.
In other recent news, RumbleOn, Inc. reported its Q2 2025 earnings, which revealed a significant shortfall in expectations. The company posted an earnings per share (EPS) of -$0.85, a stark contrast to the anticipated $0.01, marking a surprise of -8600%. Revenue also fell short, totaling $299.9 million against an expected $307.29 million. Despite these disappointing figures, DA Davidson maintained a Neutral rating on the company, setting a price target of $3.00. The firm noted improvements in sales and EBITDA compared to previous quarters. RumbleOn’s results exceeded consensus expectations in these areas, indicating some positive momentum. These developments come as the company continues to navigate challenging market conditions. Investors are keeping a close watch on how RumbleOn manages its performance in the coming quarters.
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