Vroom, Inc. 10-K

Item 9A. Controls and Procedures Limitations on effectiveness of controls and procedures In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2024. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that, as of December 31, 2024, our disclosure controls and procedures were effective at the reasonable assurance level. Management's Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, using the criteria described in Internal Control—Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024. This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting because we are a non-accelerated filer. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarterly period ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B . Other Information a) Disclosure in lieu of reporting on a Current Report on Form 8-K. On March 11, 2025, the Company’s Board of Directors approved the grant of 287,949 restricted stock unit awards (the “RSUs”) and 259,400 stock options to Thomas Shortt, the Company’s Chief Executive Officer subject to the effectiveness of the Company’s registration statement on Form S-8. The RSUs vest on or around the fourth annual anniversary of the date the Company emerged from the Prepackaged Chapter 11 Case (the “vesting commencement date”) and the options vest as to 25% on the first anniversary of the grant date and as to 75% in three ratable installments on each of the second, third and fourth anniversaries of the vesting commencement date, in each case subject to Mr. Shortt’s continued service through the applicable vesting dates. The options have a per share exercise price as follows: (a) 50% with a per share exercise price equal to the $45.70, and (b) 50% with a per share exercise price equal to $60.95. In the event of a change in control, where the per share price received by the stockholders in connection with such change in control equals or exceeds $45.70, the awards will fully accelerate. In addition, in the event Mr. Shortt’s employment is terminated by the Company without “cause” or by him for “good reason” on or prior to the first anniversary of the vesting commencement date with respect to the RSUs or the first anniversary of the grant date with respect to the options, 25% of the RSUs and options, and following such date, a pro-rated number of RSUs and options based on the 127 Table of Contents Mr. Shortt’s period of employment during the vesting period, will accelerate. In addition, in the event of such a qualifying termination, the options will remain outstanding through their original expiration date. 1.01 Entry into a Material Definitive Agreement. On March 8, 2025, Vroom, Inc., UACC and its indirect subsidiary Darkwater Funding LLC, as co-borrowers, entered into a credit agreement with Mudrick Capital Management, L.P. (“Lender”), who as of January 14, 2025 was a 76.5% shareholder of the Company, for a $25.0 million delayed draw term loan facility (“Delayed Draw Facility”). The Delayed Draw Facility allows for multiple drawdowns by each co-borrower, subject to satisfaction of usual and customary conditions precedent. The Delayed Draw Facility bears interest at a rate of Term SOFR +850 bps, payable quarterly in arrears, with a full payment-in-kind option. Interest is also payable upon any payment of principal. The co-borrowers’ obligations under the Delayed Draw Facility will be collateralized by asset backed residual certificates in certain UACC securitization trusts. The Delayed Draw Facility matures on December 31, 2026; however, borrowings can be prepaid at any time, in whole or in part, without penalty or premium. Once amounts are repaid they may not be reborrowed. The Delayed Draw Facility includes certain usual and customary covenants with respect to the co-borrowers’ activities and the collateral. The foregoing description of the Delayed Draw Facility does not purport to be complete and is subject to, and qualified in its entirety by, the full text of such agreement, which is attached hereto as Exhibit 10.40 and incorporated herein by reference. In addition, on March 8, 2025, we renewed one of our Warehouse Credit Facilities, now expiring June 2026. The aggregate borrowing limit and significant terms of the agreement remained unchanged except for an increase in the minimum liquidity covenant. The foregoing description of the Warehouse Credit Facility does not purport to be complete and is subject to, and qualified in its entirety by, the full text of such agreement, which is attached hereto as Exhibit 10.36 and incorporated herein by reference. Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth above in Item 1.01 above regarding the Company’s direct financial obligation under the Delayed Draw Facility is incorporated into this Item 2.03 by reference. Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. On March 11, 2025, and effective as of that date, the Company filed a Change of Registered Agent and/or Registered Office (the “Certificate of Change”) with the Secretary of State of the State of Delaware to change the Company’s registered agent to CT Corporation System, and its registered office to 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware 19801. The Certificate of Change was approved by the Company's board of directors (the “Board”) in accordance with Section 133 of the General Corporation Law of the State of Delaware and had the effect of amending Article SECOND of the Amended and Restated Certificate of Incorporation of the Company. A copy of the Certificate of Change is filed as Exhibit 3.1 hereto. In addition, on March 11, 2025, and effective as of that date, the Company filed a restated certificate of incorporation (the “Restated Certificate”) with the Secretary of State of the State of Delaware, which restated the Company’s prior amended and restated certificate of incorporation to integrate the provisions of the Certificate of Change. The Restated Certificate was approved by the Board in accordance with Section 245 of the General Corporation Law of the State of Delaware and only restated and integrated, but did not further amend, the Company’s prior amended and restated certificate of incorporation. The foregoing description of the Company’s Restated Certificate is qualified in all respects by reference to the text of the Restated Certificate, which is filed as Exhibit 3.2 hereto. b) Insider Trading Arrangements and Policies. 128 Table of Contents During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. Item 9C . Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 129 Table of Contents PART III Item 10. Directors, Executive Off icers, and Corporate Governance We have adopted a written code of ethics, entitled “Code of Business Conduct and Ethics,” that applies to all of our directors, executive officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. We make available our code of ethics free of charge through our investor relations website which is located at ir.vroom.com . We intend to post on our website all disclosures that are required by law or Nasdaq listing standards concerning any amendments to, or waivers from, any provision of our code of ethics. The information concerning our executive offers and directors required by this Item 10 is contained under the caption “Information about our Executive Officers and Directors” at the end of Part I of this Annual Report on Form 10-K. The remaining information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024, under the headings "Our Board of Directors," "Our Executive Officers," "Corporate Governance," and, if applicable, "Delinquent Section 16(a) Reports." Item 11. Executi ve Compensation The information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024, under the headings "Executive Compensation" and "Compensation Committee Interlocks and Insider Participation." Item 12. Security Ownership of Certain Beneficial Own ers and Management and Related Stockholder Matters The information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024, under the headings "Security Ownership of Certain Beneficial Owners and Management" and "Securities Authorized for Issuance under Equity Compensation Plans." Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024, under the headings "Certain Relationships and Related Person Transactions" and "Corporate Governance." Item 14. Principal Accou nting Fees and Services The information required by this item is incorporated by reference to Vroom’s Proxy Statement for its 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024, under the subheading "Principal Accountant Fees and Services." 130 Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules 1. Financial Statements: The Consolidated Financial Statements of Vroom are set forth in Part II, Item 8 of this Annual Report on Form 10-K. 2. Financial Statement Schedules: All financial statement schedules have been omitted because they are not applicable, not material or the required information is shown in Part II, Item 8 of this Annual Report on Form 10-K. 3. Exhibits: The exhibits listed in the accompanying Exhibit Index are filed, furnished or incorporated by reference as part of this Annual Report on Form 10-K. INDEX TO EXHIBITS Exhibit Number Exhibit Description Form File No. Exhibit Filing Date Filed Herewith Furnished Herewith 2.1 Agreement and Plan of Merger, dated as of October 11, 2021, by and among Vroom, Inc., Vroom Finance Corporation, Unitas Holdings Corp. and Fortis Advisors LLC, solely in its capacity as the equityholders' representative 8-K 001-39315 2.1 October 12, 2021 2.2 Prepackaged Plan of Reorganization for Vroom, Inc. Under Chapter 11 of the Bankruptcy Code 8-K 001-39315 2.1 January 15, 2025 3.1 Certificate of Change of Registered Agent and/or Registered Office X 3.2 Restated Certificate of Incorporation of Vroom, Inc. X 3.3 Amended and Restated Bylaws of Vroom, Inc. 8-K 001-39315 3.2 January 15, 2025 4.1 Eighth Amended and Restated Investors’ Rights Agreement, dated as of November 21, 2019, by and among Vroom, Inc. and certain holders of its capital stock S-1/A 333-238482 4.2 May 18, 2020 4.2 Description of Registrant's Securities X 10.1† Second Amended & Restated 2014 Equity Incentive Plan, as amended S-1/A 333-238482 10.1 May 18, 2020 10.2† First Amendment to the Second Amended and Restated Vroom, Inc. 2014 Equity Incentive Award Plan 10-Q 001-39315 10.3 August 13, 2020 131 Table of Contents 10.3† Second Amendment to the Second Amended and Restated Vroom, Inc. 2014 Equity Incentive Award Plan 10-Q 001-39315 10.4 August 13, 2020 10.4† Form of Stock Option Agreement pursuant to the Second Amended and Restated 2014 Equity Incentive Award Plan 10-K 001-39315 10.4 March 3, 2021 10.5† Form of Restricted Stock Unit Agreement pursuant to the Second Amended and Restated 2014 Equity Incentive Award Plan 10-K 001-39315 10.5 March 3, 2021 10.6† 2019 Short Term Incentive Plan S-1/A 333-238482 10.2 May 18, 2020 10.7† Amended and Restated 2020 Incentive Award Plan X 10.8† Form of Restricted Stock Unit Agreement pursuant to the 2020 Incentive Award Plan 10-Q 001-39315 10.2 August 13, 2020 10.9† Form of Stock Option Grant Notice and Stock Option Agreement pursuant to the 2020 Incentive Award Plan 10-Q 001-39315 10.4 August 8, 2022 10.10† 2022 Inducement Award Plan S-8 333-265233 99.1 May 26, 2022 10.11† Form of Restricted Stock Unit Agreement pursuant to the 2022 Inducement Award Plan S-8 333-265233 99.2 May 26, 2022 10.12† Form of Stock Option Agreement pursuant to the 2022 Inducement Award Plan S-8 333-265233 99.3 May 26, 2022 10.13† Amended and Restated Non-Employee Director Compensation Policy 10-Q 001-39315 10.9 August 8, 2022 10.14† Form of Indemnification Agreement S-1/A 333-238482 10.5 June 1, 2020 10.15† Amended and Restated Executive Severance Plan, as amended and restated X 10.16† Agreement of Termination of Amended and Restated Inventory Financing and Security Agreement and Credit Balance Agreement, dated March 12, 2024 by and among Ally Bank, Ally Financial Inc., Vroom Automotive, LLC and Vroom, Inc. 10-K 001-39315 10.19 March 13, 2024 132 Table of Contents 10.17 † Employment Offer Letter, dated December 29, 2018, by and between Vroom, Inc. and Patricia Moran S-1/A 333-248655 10.18 September 8, 2020 10.18 † Employment Offer Letter, dated November 3, 2016, by and between Vroom, Inc. and Carol Denise Stott S-1/A 333-248655 10.19 September 8, 2020 10.19 † Letter Agreement, dated as of September 13, 2021, by and between Robert Krakowiak and Vroom, Inc. 8-K 001-39315 10.1 September 13, 2021 10.20 † Amended Offer Letter, dated as of May 20, 2022, by and between Robert R. Krakowiak and Vroom, Inc. 8-K 001-39315 10.2 May 26, 2022 10.21† Letter Agreement, dated as of December 15, 2021, by and between Thomas Shortt and Vroom, Inc. 8-K 001-39315 10.1 December 17, 2021 10.22 † Letter Agreement dated as of March 11, 2024, by and between Thomas Shortt and Vroom, Inc. 10-K 001-39315 10.25 March 13, 2024 10.23 † Letter Agreement dated as of March 11, 2024, by and between Robert Ronald Krakowiak and Vroom, Inc. 10-K 001-39315 10.26 March 13, 2024 10.24 † Letter Agreement dated as of March 11, 2024, by and between Patricia Moran and Vroom, Inc. 10-K 001-39315 10.27 March 13, 2024 10.25 † Employment Letter, dated as of May 9, 2022, by and between Thomas Shortt and Vroom, Inc. 8-K 001-39315 10.1 May 9, 2022 10.26 Separation Agreement, dated as of May 7, 2024, by and between Robert R. Krakowiak and Vroom, Inc. 10-Q 001-39315 10.1 August 8, 2024 10.27 Employment Letter, dated as of May 7, 2024, by and between Agnieszka Zakowicz and Vroom, Inc. 10-Q 001-39315 10.3 August 8, 2024 10.28 Separation Agreement, dated as of May 7, 2024, by and between C. Denise Stott and Vroom, Inc. 10-Q 001-39315 10.2 August 8, 2024 10.29 Separation and Consulting Agreement, dated as of July 23, 2024, between Patricia Moran and Vroom, Inc. 10-Q 001-39315 10.4 August 8, 2024 133 Table of Contents 10.30 Employment Letter, dated as of July 23, 2024, between Anna-Lisa Corrales and Vroom, Inc. 10-Q 001-39315 10.5 August 8, 2024 10.31 † Nominee and Indemnity Agreement, dated September 1, 2020, by and among Catterton Management Company, L.L.C. as investment manager of CGP2 Lone Star, L.P., Michael Farello and Vroom, Inc. S-1/A 333-248655 10.21 September 8, 2020 10.32 † Assignment of Contracts, dated July 29, 2021, by and between CGP2 Lone Star, LP as assignor and Catterton Growth Partners II, L.P., Catterton Growth Partners II Offshore, L.P., L Catterton Growth Partners III, L.P. and L Catterton Growth Partners Offshore III, L.P. as assignees, of the Nominee and Indemnity Agreements, dated September 1, 2020, of Scott Dahnke and Michael Farello 10-Q 001-39315 10.1 August 11, 2021 10.33 Restructuring Support Agreement, dated November 12, 2024 10-Q 001-39315 10.1 November 12, 2024 10.34 Warrant Agreement, dated as of January 14, 2025, between Vroom, Inc. and Equinity Trust Company, LLC 8-K 001-39315 10.1 January 15, 2025 10.35 Board Observer Agreement by and between Vroom, Inc. and Jason Mudrick, dated February 18, 2025 X 10.36# Warehouse Agreement, dated as of November 19, 2013, by and among UACC Auto Financing Trust IV, as borrower, United Auto Credit Corporation, as servicer and custodian, a backup servicer and account bank, the lender parties thereto, the agent parties thereto, and JPMorgan Chase Bank, N.A. as administrative agent, as amended through March 8, 2025 X 134 Table of Contents 10.37 Amended and Restated Warehouse Agreement, dated as of July 16, 2013, by and among UACC Auto Financing Trust III, as borrower, United Auto Credit Corporation, as servicer and custodian, a backup servicer and account bank, the lender parties thereto, the agent parties thereto, and Wells Fargo Bank, National Association as administrative agent, as amended through November 30, 2023 10-Q 001-39315 10.2# May 10, 2024 10.38 Amended and Restated Warehouse Agreement, dated as of March 29, 2021, by and among UACC Auto Financing Trust V, as borrower, United Auto Credit Corporation, as servicer and custodian, a backup servicer and account bank, the lender parties thereto, and Capital One, N.A. as administrative agent, as amended through August 31, 2023 10-Q 001-39315 10.3# May 10, 2024 10.39 Warehouse Agreement, dated as of November 18, 2022, by and among VFS Near Prime Trust I, as borrower, United Auto Credit Corporation, as servicer and custodian, a paying agent, the lender parties thereto, and Fifth Third Bank, National Association, as administrative agent, as amended through October 20, 2023 10-Q 001-39315 10.4# May 10, 2024 10.40 Loan and Security Agreement, dated as of March 7, 2025, by and among Vroom, Inc., as borrower, Darkwater Funding, LLC, as borrower, United Auto Credit Corporation, as borrower, Mudrick Capital Management, L.P., as administrative agent, and the lender parties hereto, entered into on March 8, 2025 X 19.1 Vroom Inc. Insider Trading Compliance Policy X 21.1 Subsidiaries of the Registrant X 23.1 Consent of RSM US LLP X 23.2 Consent of PricewaterhouseCoopers LLP X 135 Table of Contents 31.1 Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 31.2 Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 97.1 † Policy for Recovery of Erroneously Awarded Compensation 10-K 001-39315 97.1 March 13, 2024 101.INS Inline XBRL Instance Document X 101.SCH Inline XBRL Taxonomy Extension Schema Document X 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document X 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document X 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) X † Indicates a management contract or compensatory plan or arrangement. # Certain portions of this exhibit (indicated by "[***]") have been omitted pursuant to Regulation S-K, Item (601)(b)(10). Item 16. Form 10-K Summary None. 136 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Vroom, Inc. Date: March 11, 2025 By: /s/ Thomas H. Shortt Thomas H. Shortt Chief Executive Officer (principal executive officer) Date: March 11, 2025 By: /s/ Agnieszka Zakowicz Agnieszka Zakowicz Chief Financial Officer (principal financial officer and principal accounting officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Thomas H. Shortt Chief Executive Officer (Principal Executive Officer) and Director March 11, 2025 Thomas H. Shortt /s/ Agnieszka Zakowicz Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) March 11, 2025 Agnieszka Zakowicz /s/ Robert J. Mylod, Jr. Chairperson of the Board March 11, 2025 Robert J. Mylod, Jr. /s/ Robert R. Krakowiak Vice Chair of the Board March 11, 2025 Robert R. Krakowiak /s/ Timothy M. Crow Director March 11, 2025 Timothy M. Crow /s/ Michael J. Farello Director March 11, 2025 Michael J. Farello /s/ Laura W. Lang Director March 11, 2025 Laura W. Lang /s/ Laura G. O’Shaughnessy Director March 11, 2025 Laura G. O’Shaughnessy /s/ Matthew J. Pietroforte Director March 11, 2025 Matthew J. Pietroforte /s/ Paula B. Pretlow Director March 11, 2025 Paula B. Pretlow 137