Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed on a Current Report on Form 8-K filed with the
Securities and Exchange Commission (the "SEC") on October 26, 2022, on October
21, 2022 (the "Issue Date"), PARTS iD, Inc. (the "Company") entered into a Loan
and Security Agreement (the "Loan Agreement") with JGB Collateral, LLC, a
Delaware limited liability company, in its capacity as collateral agent (the
"Agent") and the several financial institutions or entities that from time to
time become parties to the Loan Agreement as lenders (collectively, the
"Lender").
As previously disclosed on a Current Report on Form 8-K filed with the SEC on
January 6, 2023, PARTS iD, Inc. (the "Company") notified the Agent and the
Lender that it will not be in compliance with the Consolidated Quarterly Net
Revenue Covenant (as defined in the Loan Agreement) for the calendar quarter
ended December 31, 2022 (the "Subject Default"). As a result of the Subject
Default, an Event of Default (as defined in the Loan Agreement) was triggered
under the Loan Agreement and the Company had $5,507,333.33 immediately due and
payable under the Loan Agreement, unless a forbearance agreement was reached
with the Agent and the Lender.
On January 17, 2023, the Company entered into a Forbearance Agreement and
Reservation of Rights (the "Forbearance Agreement") with the Agent and the
Lender with respect to the Subject Default. The Forbearance Agreement provides
that both the Agent and the Lender will not exercise or pursue any rights or
remedies under the Loan Agreement or any other Loan Document (as defined in the
Loan Agreement) until the earlier of (i) April 30, 2023 or (ii) that certain
date when the Lender or Agent become aware that any Event of Default (other than
the Subject Default) has occurred and is continuing, in exchange for certain
forbearance payments in the aggregate amount of $50,000 to be paid by the
Company to the Lender pursuant to Section 3.3 of the Forbearance Agreement.
The foregoing description of the Forbearance Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Forbearance Agreement, a copy of which is filed herewith as Exhibit 10.1 and is
incorporated herein by reference.
Item 8.01 Other Events.
On January 17, 2023, the Company issued a press release announcing the
engagement of Canaccord Genuity, Inc., as its advisor, in connection with the
exploration and evaluation of strategic alternatives. The full text of the press
release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
On January 17, 2023, the Company and the Lender agreed to extend the period in
which the Company has to register for resale the shares of common stock
underlying the warrant issued to the Lender in connection with the Loan
Agreement from 90 days following the Issue Date to February 3, 2023.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed as part of this report:
Exhibit No. Description
10.1 Forbearance Agreement and Reservation of Rights, dated as of January
17, 2023, by and among PARTS iD, Inc., PARTS iD, LLC, the Lenders party
thereto and JGB Collateral LLC, as agent.
99.1 PARTS iD, Inc. News Release dated January 17, 2023.
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