| Item 7.01. |
Regulation FD Disclosure. |
As previously disclosed (i) on November 13, 2024, Vroom, Inc. (the “Company”, and in the context of the Prepackaged Chapter 11 Case, the “Debtor”) commenced a voluntary proceeding (the “Prepackaged Chapter 11 Case”) under Chapter 11 of the United States Code, 11 U.S.C. §§ 101-1532, as amended, in the United States Bankruptcy Court (the “Court”) for the Southern District of under the name “In re Vroom, Inc.” and (ii) on November 21, 2024, the Company received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that Nasdaq had determined to delist the Company’s common stock, par value $0.001 per share (the “Common Stock”), with trading of the Common Stock formally suspended at the opening of business on December 2, 2024.
In connection with the Prepackaged Chapter 11 Case and upon the recommendation of the Board of Directors of the Company, the Company intends to seek approval from the Court to amend (the “Charter Amendment”) its Amended and Restated Certificate of Incorporation to, among other changes to the Company’s existing Amended and Restated Certificate of Incorporation, effect an automatic conversion of the Common Stock at a ratio of 1-for-5, to become effective upon the filing of the Charter Amendment at the conclusion of the Prepackaged Chapter 11 Case (the “Bankruptcy Emergence Issuance Adjustment”). No stockholder approval is required to effect the Charter Amendment. As a result of the Bankruptcy Emergence Issuance Adjustment, every 5 shares of the Company’s Common Stock issued and outstanding as of immediately prior to the effectiveness of the Bankruptcy Emergence Issuance Adjustment will be automatically reclassified into one validly issued, fully-paid and non-assessable new share of Common Stock, subject to the treatment of fractional shares as described below, without any action on the part of the holders.
The Company is implementing the Bankruptcy Emergence Issuance Adjustment with the primary objective of facilitating compliance with Nasdaq’s ongoing listing requirements. This strategic move is designed to adjust the Company’s stock price and share count to meet Nasdaq’s minimum bid price and other listing criteria. By implementing this strategic measure, the Company aims to ensure ongoing liquidity for shareholders following the completion of its Prepackaged Chapter 11 Case.
No fractional shares will be issued in connection with the Bankruptcy Emergence Issuance Adjustment. Stockholders who would otherwise be entitled to receive fractional shares as a result of the Bankruptcy Emergence Issuance Adjustment will automatically be entitled to receive such number of shares as adjusted by rounding any fractional share of Common Stock to the nearest whole share (up or down), with half shares or less being rounded down.
Proportional adjustments will also be made to the number of shares of Common Stock awarded and available for issuance under the Company’s equity incentive plans, as well as the exercise price and the number of shares issuable upon the exercise or conversion of the Company’s outstanding stock options, restricted stock units and other equity securities under the Company’s equity incentive plans.
Additionally, as a result of the Bankruptcy Emergence Issuance Adjustment, the new warrants to purchase shares of Common Stock to be issued in connection with the Prepackaged Chapter 11 Case pursuant to section 1145 of the Bankruptcy Code will be adjusted such that the new warrants: (a) will be for the purchase of an aggregate of 361,649 shares of Common Stock (1,808,243 shares prior to the adjustment) and (b) have an exercise price equal to $60.95 ($12.19 prior to the adjustment), which in each case gives effect to the Bankruptcy Emergence Issuance Adjustment.