13. Preferred Stock and Stockholders’ Equity

Preferred Stock

On January 14, 2025, the Company amended its certificate of incorporation to authorize the issuance of up to 5,000,000 shares of Preferred Stock, $0.001 par value per share.

As of March 31, 2026, and December 31, 2025, there was no preferred stock issued or outstanding. The Vroom Automotive Preferred Units described below are preferred equity interests of a subsidiary classified as mezzanine equity and are not preferred stock of Vroom, Inc.

Common Stock

Effective as of January 14, 2025, the Company amended its certificate of incorporation to authorize the issuance of up to 250,000,000 shares of Common Stock, $0.001 par value per share as well as effect an automatic conversion of the Common Stock at a ratio of 1-for-5.

Vroom Automotive Redeemable Preferred Stock

On January 16, 2026, Vroom Automotive, LLC, a Delaware limited liability company and an indirect subsidiary of Vroom, Inc., holding intellectual property licenses and other financial assets, authorized and issued to SPE Holdings 2026-1, a Delaware statutory trust (“SPE Holdings”), 15,000 newly issued Series A preferred units and 7,500 newly issued Series B preferred units (collectively, the "Vroom Automotive Preferred Units") for aggregate gross proceeds of $22.5 million, pursuant to a Preferred Unit Purchase Agreement by and among the Company, Vroom Automotive, LLC and SPE Holdings. Vroom Automotive's Second Amended and Restated Limited Liability Company Agreement, dated as of January 16, 2026, amends and restates the existing LLC agreement and establishes the terms of the Vroom Automotive Preferred Units.

As a result of the transaction, Vroom Inc. holds 63% ownership interest in Vroom Automotive and SPE Holdings holds 37% ownership interest in Vroom Automotive as of March 31, 2026.
 

The Vroom Automotive Preferred Units will be entitled to receive a quarterly preferential distribution, equal to the liquidation preference of such Vroom Automotive Preferred Units multiplied by a variable distribution rate, which will reset on each quarterly distribution date in an amount equal to the ninety (90) day average of the Secured Overnight Financing Rate (SOFR) plus a spread of 8.25% for Series A Preferred Units and 9% for Series B Preferred Units. Dividends paid on the Vroom Automotive Preferred Units are deducted from net income attributable to controlling interests to derive net income attributable to common shareholders. For the three months ended March 31, 2026 dividends of $0.6 million were declared, authorized and paid on April 16, 2026.
 

The Series B Preferred Units are convertible into common units of Vroom Automotive at the option of the Counterparty at any time. The Series A Preferred Units are not convertible. The Vroom Automotive Preferred Units are redeemable at the holder’s option by providing written notice at least ninety days prior to the applicable redemption dates. The Series A Redemption Date is March 16, 2027, and each anniversary thereafter. The Series B Mandatory Redemption Date is January 16, 2031, and each anniversary thereafter. As of March 31, 2026, the carrying value for both Series A and B preferred units was $21.2 million, which is equal to the redemption value of $22.5 million less stock issuance costs of $1.3 million.

The holders of each unit of the Series B Preferred Units are entitled to one vote for each unit of common units into which such preferred stock is convertible at the time of the vote. The Series A preferred units have no voting rights.

In the event of a liquidation, dissolution or winding up of Vroom Automotive LLC, either voluntary or involuntary, or in the event of a deemed liquidation event, Series A Preferred Units are paid their respective full liquidation amount in preference to the holders of Series B Preferred Units or common units. After payment in full of the Liquidation Amount to the holders of Series A Preferred Units, holders of Series B Preferred Units are entitled to receive, in preference to all holders of common units, their respective full liquidation amount. After payment in full of the liquidation preferences of the Vroom Automotive Preferred Units, any remaining assets shall be distributed ratably to the holders of common units.

The Company classifies the Vroom Automotive Preferred Units as mezzanine equity within the Company’s consolidated balance sheets because the instruments contain redemption rights and liquidation features, including a liquidation preference in the event of a deemed liquidation event, that are not solely within the Company’s control.