(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (i804)
i510-0744
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
i☐
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
i☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
i☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
i☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title
of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
iClass A common stock, par value $0.0001 per share
iLOTZ
iThe
Nasdaq Global Market
iRedeemable warrants, exercisable for Class A common stock at an exercise price of $11.50 per share
iLOTZW
iThe
Nasdaq Global Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company i☒
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. i☐
Item
8.01 Other Events.
On September 28, 2022, CarLotz, Inc. (the “Company”) received notice (the “Notice”) from the Lender (as defined below) pursuant to the Inventory Financing and Security Agreement, dated March 10, 2021 (as amended and supplemented from time to time, the “Ally Facility”) by and among the Company, Ally Bank, a Utah chartered state bank (“Ally Bank”), and Ally Financial Inc., a Delaware corporation (“Ally” and, together with Ally Bank, the “Lender”) that, effective October 1, 2022, the maximum available credit line under the Ally Facility would be reduced from $40 million to $25 million.
The Lender
also provided notice that the current financial covenant under the Ally Facility that requires the Company to maintain at least 10% of the maximum available credit line in cash and cash equivalents and at least 10% of the maximum available credit line on deposit with Ally Bank would be revised to replace 10% of the maximum available credit line with $4 million, so long as the amount borrowed under the Ally Facility remains under $20 million, with such minimum amount to be increased to $5 million if the amount borrowed under the Ally Facility at any time exceeds $20 million. The Notice stated that a revised agreement with respect to the revisions discussed in this paragraph would be forthcoming from the Lender in the coming days for the Company to execute. As of September
28, 2022, we had total outstanding debt of $5.2 million under the Ally Facility.
The Notice further stated the Lender’s understanding that the Company’s previously announced business combination with Shift Technologies, Inc. is expected to close in late 2022 and that, should the business combination not occur by December 31, 2022, the Lender asks that the Company provide a business plan to Lender, no later than January 10, 2023, or within 10 days of the announced dissolution of business combination discussions, at which time the Lender will revisit the facility arrangement and communicate additional go forward plans at that time.
Notwithstanding
the foregoing, the Ally Facility is expressly subject to the terms of the agreements under which they were extended and may be modified, suspended or terminated at the Lender’s election, as set forth in the agreements, which are filed as Exhibits 10.22, 10.22.1 and 10.23 to the Company’s Annual Report on Form
10-K for the fiscal year ended December 31, 2021.
2
SIGNATURE
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 hereunto duly authorized.
