EX-99.1 2 vrm-ex99_1.htm EX-99.1 EX-99.1

 

Exhibit 99.1

 

VROOM, INC.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

 

Introduction

 

The following unaudited pro forma consolidated financial information and explanatory notes (the “Pro Forma Financial Information”) for Vroom Inc. and its consolidated subsidiaries (collectively, “Vroom”, “the Company”, “we”, “us” and “our”) is provided for informational purposes only and gives effect to (i) our prepackaged plan of reorganization (as defined below), and as described in our Annual Report on Form 10-K for the year ended December 31, 2024, which became effective on January 14, 2025 (the “Effective Date”), and (ii) our adoption of fresh start accounting on the Effective Date. The historical data provided as of and for the year ended December 31, 2024 was derived from our audited consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. The foregoing historical financial statements have been prepared in accordance with U.S. GAAP. Our historical financial information was adjusted to give effect to events that are directly attributable to our prepackaged plan of reorganization becoming effective and our adoption of fresh start accounting. The unaudited Pro Forma Financial Information is presented for illustrative purposes only and is not necessarily indicative of the financial results that would have occurred if the prepackaged plan of reorganization had been consummated on the dates indicated; nor is it necessarily indicative of our financial positions or results of operations in the future.

The unaudited pro forma condensed financial information should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and any other financial information included elsewhere in the Company’s Registration Statement on Form S-1 (File No. 333-86032) filed with the Securities and Exchange Commission on March 21, 2025.

 

On November 12, 2024, we entered into a Restructuring Support Agreement (together with all exhibits and schedules thereto, the “RSA”) with creditors holding the overwhelming majority of the aggregate outstanding principal amount of the 0.75% unsecured Convertible Senior Notes due 2026 (the “Notes”) and the largest shareholder. The RSA contemplated a comprehensive restructuring of our debt obligations and capital structure to be implemented through a prepackaged plan of reorganization (the “Plan”) to be implemented through the filing of the Prepackaged Chapter 11 Case (as defined below).

On November 13, 2024, we 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 from time to (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) under the name “In re Vroom, Inc.” Case No. 24-90571 (CML). None of Vroom, Inc.’s subsidiaries were debtors in the Chapter 11 proceedings.



On the Effective Date, the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective. We emerged from the Prepackaged Chapter 11 Case on January 14, 2025.

In connection with our emergence from bankruptcy and in accordance with Accounting Standards Codification ("ASC") Topic 852, "Reorganizations", we qualified for and adopted fresh start accounting on the Effective Date. We were required to adopt fresh start accounting because (i) the holders of existing voting shares of the Predecessor Company received less than 50% of the voting shares of the Successor Company, and (ii) the reorganization value of the assets immediately prior to confirmation of the Plan was less than the post-petition liabilities and allowed claims. References to “Successor” relate to the Company's financial position and results of operations after the Effective Date. References to “Predecessor” refer to the Company's financial position and results of operations on or before the Effective Date.

 



1

 

In accordance with ASC Topic 852, with the application of fresh start accounting, we will allocate the reorganization value to the Company's assets and liabilities. The reorganization value represents the fair value of the Successor Company's assets before considering liabilities. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the consolidated financial statements after January 14, 2025 will not be comparable with the consolidated financial statements as of or prior to that date.

 

Under fresh start accounting, the reorganized entity is considered a new reporting entity for financial reporting purposes. The unaudited pro forma consolidated balance sheet is presented as if we had emerged from bankruptcy on December 31, 2024. The unaudited pro forma consolidated statements of operations are presented as if we had emerged from bankruptcy on January 1, 2024. Had we actually adopted fresh start accounting on January 1, 2024 or December 31, 2024, the enterprise and reorganization values could have been materially different from the amounts described above and assumed herein.
 

The process of finalizing the fair value estimates of our assets and liabilities upon emergence for purposes of fresh start accounting is currently ongoing. Changes in the values of our assets and liabilities and changes in assumptions from those reflected in the Pro Forma Financial Information presented below could significantly impact the reported values of our assets and liabilities. Accordingly, the amounts shown are not final and are subject to changes and revisions, which may be material

 

Pro-Forma Financial Information
 

The Pro Forma Financial Information includes the following columns:
 

•Predecessor – Represents our historical consolidated balance sheet and statement of operations as of and for the year ended December 31, 2024.
 

•Reorganization Adjustments – Represents the effects of the transactions contemplated by the Plan and carried out by us upon our emergence from bankruptcy.

 

•Fresh Start Adjustments – Represents the fair value adjustments as a result of the adoption of fresh start accounting.
 

•Successor – Represents the consolidated balance sheet and statements of operations as if the emergence and fresh start accounting had taken place on the dates described above.

 

 

2

 

Unaudited Pro Forma Consolidated Balance Sheet

(in thousands)

 

As of December 31, 2024

 

 

 

 

 

Reorganization

 

 

 

 

Fresh Start

 

 

 

 

 

 

 

Predecessor

 

 

Adjustments

 

 

Notes

 

Adjustments

 

 

Notes

 

Successor

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

29,343

 

 

$

(1,320

)

 

1

 

$

—

 

 

 

 

$

28,023

 

Restricted cash

 

49,026

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

49,026

 

Finance receivables at fair value

 

503,848

 

 

 

—

 

 

 

 

 

322,767

 

 

8

 

 

826,615

 

Finance receivables held for sale, net

 

318,192

 

 

 

—

 

 

 

 

 

(318,192

)

 

8

 

 

—

 

Interest receivable

 

14,067

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

14,067

 

Property and equipment, net

 

4,064

 

 

 

—

 

 

 

 

 

(2,988

)

 

9

 

 

1,076

 

Intangible assets, net

 

104,869

 

 

 

—

 

 

 

 

 

(90,669

)

 

10

 

 

14,200

 

Operating lease right-of-use assets

 

6,872

 

 

 

—

 

 

 

 

 

4,193

 

 

11

 

 

11,065

 

Other assets

 

35,472

 

 

 

(2,091

)

 

2

 

 

(1,069

)

 

12

 

 

32,312

 

Assets from discontinued operations

 

943

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

943

 

Total assets

$

1,066,696

 

 

$

(3,411

)

 

 

 

$

(85,958

)

 

 

 

$

977,327

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warehouse credit facilities of consolidated VIEs

$

359,912

 

 

$

—

 

 

 

 

$

—

 

 

 

 

$

359,912

 

Long-term debt

 

381,366

 

 

 

—

 

 

 

 

 

4,085

 

 

13

 

 

385,451

 

Operating lease liabilities

 

11,065

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

11,065

 

Other liabilities

 

49,699

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

49,699

 

Liabilities subject to compromise

 

291,577

 

 

 

(291,577

)

 

3

 

 

—

 

 

 

 

 

—

 

Liabilities from discontinued operations

 

4,022

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

4,022

 

Total liabilities

 

1,097,641

 

 

 

(291,577

)

 

 

 

 

4,085

 

 

 

 

 

810,149

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ (deficit) equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Predecessor common stock

 

2

 

 

 

(2

)

 

4

 

 

—

 

 

 

 

 

—

 

Successor common stock

 

—

 

 

 

50

 

 

5

 

 

—

 

 

 

 

 

50

 

Predecessor additional paid-in-capital

 

2,094,889

 

 

 

(2,094,889

)

 

6

 

 

—

 

 

 

 

 

—

 

Successor warrants

 

—

 

 

 

2,825

 

 

7

 

 

—

 

 

 

 

 

2,825

 

Successor paid-in-capital

 

—

 

 

 

164,303

 

 

7

 

 

—

 

 

 

 

 

164,303

 

Accumulated deficit

 

(2,125,836

)

 

 

2,215,879

 

 

3,14

 

 

(90,043

)

 

14

 

 

—

 

Total stockholders’ (deficit) equity

 

(30,945

)

 

 

288,166

 

 

 

 

 

(90,043

)

 

 

 

 

167,178

 

Total liabilities and stockholders’ equity

$

1,066,696

 

 

$

(3,411

)

 

 

 

$

(85,958

)

 

 

 

$

977,327

 

 

3

 

Unaudited Pro Forma Consolidated Statement of Operations

(in thousands, except per share data)

 

 

For the Year Ended December 31, 2024

 

 

 

 

 

Reorganization

 

 

 

 

Fresh Start

 

 

 

 

 

 

 

Predecessor

 

 

Adjustments

 

 

Notes

 

Adjustments

 

 

Notes

 

Successor

 

Interest income

$

201,833

 

 

$

—

 

 

 

 

$

(18,990

)

 

c

 

$

182,843

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

Warehouse credit facility

 

29,276

 

 

 

—

 

 

 

 

 

(1,324

)

 

e

 

 

27,952

 

Securitization debt

 

30,084

 

 

 

—

 

 

 

 

 

(1,535

)

 

f

 

 

28,549

 

Total interest expense

 

59,360

 

 

 

—

 

 

 

 

 

(2,859

)

 

 

 

 

56,501

 

Net interest income

 

142,473

 

 

 

—

 

 

 

 

 

(16,131

)

 

 

 

 

126,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

Realized and unrealized losses, net of recoveries

 

119,868

 

 

 

—

 

 

 

 

 

(9,288

)

 

c,d

 

 

110,580

 

Net interest income after losses and recoveries

 

22,605

 

 

 

—

 

 

 

 

 

(6,843

)

 

 

 

 

15,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

Servicing income

 

6,501

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

6,501

 

Warranties and GAP income (loss), net

 

(2,610

)

 

 

—

 

 

 

 

 

—

 

 

 

 

 

(2,610

)

CarStory revenue

 

11,610

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

11,610

 

Other income

 

10,850

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

10,850

 

Total noninterest income

 

26,351

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

26,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

Compensation and benefits

 

97,293

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

97,293

 

Professional fees

 

12,035

 

 

 

—

 

 

 

 

 

2,423

 

 

g

 

 

14,458

 

Software and IT costs

 

15,083

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

15,083

 

Depreciation and amortization

 

29,086

 

 

 

—

 

 

 

 

 

(25,272

)

 

h

 

 

3,814

 

Interest expense on corporate debt

 

5,826

 

 

 

(3,428

)

 

a

 

 

—

 

 

 

 

 

2,398

 

Impairment charges

 

5,159

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

5,159

 

Other expenses

 

16,294

 

 

 

—

 

 

 

 

 

(2,055

)

 

i

 

 

14,239

 

Total expenses

 

180,776

 

 

 

(3,428

)

 

 

 

 

(24,904

)

 

 

 

 

152,444

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

Loss from continuing operations before reorganization items and provision for income taxes

 

(131,820

)

 

 

3,428

 

 

 

 

 

18,061

 

 

 

 

 

(110,331

)

Reorganization items, net

 

5,564

 

 

 

(5,564

)

 

b

 

 

—

 

 

 

 

 

—

 

Loss from continuing operations before provision for income taxes

 

(137,384

)

 

 

8,992

 

 

 

 

 

18,061

 

 

 

 

 

(110,331

)

Provision for income taxes from continuing operations

 

856

 

 

 

—

 

 

 

 

 

—

 

 

 

 

 

856

 

Net loss from continuing operations

$

(138,240

)

 

$

8,992

 

 

 

 

$

18,061

 

 

 

 

$

(111,187

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders, continuing operations, basic and diluted

$

(76.24

)

 

 

 

 

 

 

 

 

 

 

 

$

(21.53

)

Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted

 

1,813,168

 

 

 

 

 

 

 

 

 

 

j

 

 

5,163,109

 

 

4

 

Adjustments

 

Balance Sheet

 

Reorganization adjustments

 

1.
Represents payment of professional fees incurred in connection with the Plan.
2.
Represents write-off of prepaid asset related to predecessor directors and officers insurance tail policy.
3.
Represents the settlement of our pre-petition Convertible Notes, which is calculated as follows (in thousands):

Convertible note

 

$

290,488

 

Accrued interest on convertible senior note

 

 

1,089

 

Liabilities subject to compromise

 

 

291,577

 

Issuance of 92.94% of Successor common shares to prepetition convertible note holders (1)

 

 

152,750

 

Gain on settlement of liabilities subject to compromise

 

$

138,827

 

 

(1) Note the total issuances of Successor equity in the amount of $167.2 million was issued to Predecessor note holders in the amount of $152.8 million and Predecessor equity holders in the amount of $14.4 million. The total issuance to the Predecessor equity holders of $14.4 million included warrants of $2.8 million and 7.06% of common shares totaling $11.6 million.

 

4.
Represents the cancellation of Predecessor common stock.
5.
Represents the issuance of Successor common stock.
6.
Represents the cancellation of Predecessor additional paid-in capital.
7.
Represents the fair value of 5,163,109 Successor common shares totaling $164.4 million and 364,516 Successor warrants totaling $2.8 million. This results in total Successor equity in the amount of $167.2 million.

 

 

Fresh Start Adjustments

8.
Represents reclassification of finance receivables held for sale to finance receivables at fair value due to a change in Accounting Policy in accordance with Fresh Start Accounting. Upon reclassification, the finance receivables were adjusted to fair value.
9.
Represents a fair value adjustment to property, plant and equipment, net.
10.
Represents a fair value adjustment to intangible assets, net.
11.
Represents a fair value adjustment to record the initial measurement of the operating lease right-of-use assets to the amount of the operating lease liabilities in accordance with Fresh Start Accounting. An impairment of $4.2 million related to the operating lease right-of-use asset is excluded from the pro forma consolidated statement of operations.
12.
Represents a fair value adjustment to other assets, which includes the write-off of debt issuance costs of warehouse credit facilities.
13.
Represents an adjustment to long-term debt related to the fair value option election for the 2024-1 securitization notes, which includes the write-off of debt issuance costs of $2.4 million and an adjustment to the fair value of the notes of $1.7 million.
14.
Represents the cumulative impact to accumulated deficit from the reorganization adjustments and the impact of the fresh start accounting adjustments. The cumulative impact to

5

 

accumulated deficit from the reorganization adjustments is calculated as follows (in thousands):

 

Adjustment to Predecessor common stock and additional paid-in-capital

$

2,094,891

 

Gain on settlement of liabilities subject to compromise

 

138,827

 

Warrants and common stock issued to Predecessor equity holders

 

(14,428

)

Reorganization adjustment to total assets

 

(3,411

)

Cumulative impact to accumulated deficit

$

2,215,879

 

 

Statement of Operations

 

Reorganization Adjustments

 

a)
Represents the reversal of interest expense on the Notes as these were converted into equity as part of the reorganization adjustments.
b)
Represents the elimination of nonrecurring reorganization items that were directly attributable to the 2024 Chapter 11 Case. Reorganization items were comprised of the following (in thousands):

 

Write-off of debt issuance costs on liabilities subject to compromise

 

$

2,438

 

Legal, professional and other, net

 

 

3,126

 

Total Reorganization items

 

$

5,564

 

 

Fresh Start Adjustments

c)
Represents the reclassification of discount income as a result of a new accounting policy election in accordance with Fresh Start Accounting.
d)
Represents the mark-to-market adjustment to realized and unrealized losses for the finance receivables held for sale that were reclassified to finance receivables at fair value in accordance with a new accounting policy election for Fresh Start Accounting.
e)
Represents the reversal of amortization expense for debt issuance costs related to warehouse credit facility as these were written off as part of the fair value adjustments required under Fresh Start Accounting.
f)
Represents the reversal of amortization expense for debt issuance costs related to securitization debt as these were written off as part of the fair value adjustments required under Fresh Start Accounting.
g)
Represents the adjustment of debt issuance costs incurred for the year ended December 31, 2024 from long term debt to professional fees expense in accordance with a new accounting policy election for Fresh Start Accounting.
h)
Represents the adjustment of amortization for intangible assets as part of the fair value adjustments required under Fresh Start Accounting.
i)
Represents the cost reduction related to insurance coverage for directors and officers insurance as a result of the Plan.
j)
Represents the pro forma net loss per share calculated using the weighted average Successor shares of common stock outstanding, assuming the impacts of the Plan were effective on January 1, 2024.

 

The following table reflects the impact of the Plan on historical weighted average shares outstanding:

 

6

 

Historical weighted average Predecessor common shares outstanding

 

1,813,168

 

Less: cancellation of Predecessor common shares

 

(1,813,168

)

Add: Issuance of Successor common stock

 

5,163,109

 

Weighted average Successor common stock outstanding

 

5,163,109

 

 

The following table represents the calculation of pro forma net loss per share (in thousands, except for per share data):

Net loss from continuing operations

$

(111,187

)

Weighted average Successor common stock outstanding

 

5,163,109

 

Net loss per share attributable to common stockholders, continuing operations, basic and diluted

$

(21.53

)

 

7