As filed with the Securities and Exchange Commission on August 4, 2020
Registration No. 333-
PER SHARE | TOTAL | |||||||
Public offering price | $ | $ | ||||||
Underwriting discounts and commissions (1) | $ | $ | ||||||
Proceeds to us, before expenses | $ | $ | ||||||
Proceeds to the selling stockholder, before expenses | $ | $ |
1. | See “Underwriting” beginning on page S-29 for a description of the compensation payable to the underwriters. |
D.A. Davidson & Co. | Roth Capital Partners |
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Issuer | CarParts.com, Inc. |
Common stock offered by us | shares of common stock (or shares of common stock if the underwriters exercise their option to purchase additional shares in full). |
Common stock offered by the selling stockholder | shares of common stock. |
Offering price | $ per share. |
Common stock outstanding immediately after this offering | shares of common stock (or shares of common stock if the underwriters exercise their option to purchase additional shares in full). |
Underwriters’ option | The underwriters have been granted an option, exercisable for 30 days after the date of this prospectus supplement, to purchase up to an additional shares from us at the public offering price, less the underwriting discount. |
Use of proceeds | The net proceeds from the sale of shares of our common stock that we are offering will be approximately $ million (or approximately $ million from the sale of shares of common stock if the underwriters exercise their option to purchase additional shares in full), after deducting the underwriting discount and estimated offering expenses payable by us. We currently expect to use the net proceeds from this offering for working capital and general corporate purposes. See “Use of Proceeds” on page S-7 for additional information. |
We will not receive any proceeds from the sale of any shares of our common stock by the selling stockholder. | |
Risk factors | See “Risk Factors” for a discussion of risks you should carefully consider before deciding to invest in our common stock. |
Listing | Our common stock is listed on The Nasdaq Global Market, or Nasdaq, under the symbol “PRTS”. |
∎ | 7,782,359 shares of common stock issuable upon the exercise of outstanding stock options; |
∎ | 3,051,989 additional shares of common stock reserved for issuance pursuant to outstanding equity awards issued under our equity compensation plans; and |
∎ | 1,371,285 shares of common stock reserved for future awards pursuant to our equity compensation plans. |
• | We have returned to positive e-commerce growth by continuing to focus on making the auto parts purchasing process as easy and seamless as possible. We plan to continue to provide unique catalog content and provide better content on our websites with the goal of improving our ranking on the search results. |
• | We continue to work to improve the website purchase experience for our customers by (1) helping our customers find the parts they want to buy by reducing failed searches and increasing user purchase confidence; (2) implementing guided navigation and custom buying experiences specific to strategic part names; (3) increasing order size across our sites through improved recommendation engines; (4) improving our site speed; and (5) creating a frictionless checkout experience for our customers. In addition, we intend to continue to improve our mobile enabled websites to take advantage of shifting consumer behaviors. These efforts are intended to increase the number of repeat purchases, as well as contribute to our sales growth. |
• | We continue to work towards becoming one of the preferred low price options in the market for aftermarket auto parts and accessories. We also continue to offer lower prices by increasing foreign sourced private label products as they are generally less expensive and we believe provide better value for the consumer. We believe our product offering will grow our sales and improve our margins. |
• | We continue to increase product selection by being the first to market with many new SKUs. We currently have over 60,000 private label SKUs and over 770,000 branded SKUs in our product selection. We will continue to seek to add new categories and expand our existing specialty categories. We believe continued product expansion will increase the total number of orders and contribute to our sales growth. Additionally, we plan to continue to maintain certain in-stock inventory throughout the year to provide consistent service levels and improve customer experience. |
• | We continue to implement cost saving measures. |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
Net income (loss) | $ | 1,568 | $ | (1,457 | ) | $ | 590 | $ | (5,038 | ) | ||||||
Depreciation & amortization | 1,634 | 1,511 | 3,532 | 3,040 | ||||||||||||
Amortization of intangible assets | 25 | 25 | 50 | 50 | ||||||||||||
Interest expense, net | 490 | 487 | 1,149 | 894 | ||||||||||||
Taxes | 118 | (186 | ) | 154 | (465 | ) | ||||||||||
EBITDA | $ | 3,835 | $ | 380 | $ | 5,475 | $ | (1,519 | ) | |||||||
Stock compensation expense | $ | 1,722 | $ | 613 | $ | 4,385 | $ | 1,163 | ||||||||
Employee transition costs(1) | — | 283 | — | 1,269 | ||||||||||||
Customs costs(2) | — | 149 | — | 415 | ||||||||||||
Adjusted EBITDA | $ | 5,557 | $ | 1,425 | $ | 9,860 | $ | 1,328 |
(1) | We incurred employee transition costs related to the transition of our executive management team including severance, recruiting, hiring bonus and relocation costs. |
(2) | We incurred port and carrier fees and legal costs associated with our customs related issues. |
Fifty-two weeks ended | ||||||||
December 28, 2019 | December 29, 2018 | |||||||
Net loss from continuing operations | (31,548 | ) | (4,889 | ) | ||||
Depreciation & amortization | 6,252 | 5,802 | ||||||
Amortization of intangible assets | 100 | 185 | ||||||
Interest expense, net | 1,897 | 1,595 | ||||||
Taxes | 21,437 | (329 | ) | |||||
EBITDA | $ | (1,862 | ) | $ | 2,364 | |||
Stock compensation expense | $ | 3,656 | $ | 3,595 | ||||
Employee transition costs(1) | 2,274 | 774 | ||||||
Customs Costs(2) | 464 | 5,046 | ||||||
Proceeds from AutoMD sale | — | (1,400 | ) | |||||
Adjusted EBITDA | $ | 4,532 | $ | 10,379 |
(1) | We incurred employee transition costs related to the transition of our executive management team including severance, recruiting, hiring bonus and relocation costs. |
(2) | We incurred port and carrier fees and legal costs associated with our customs related issues. |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost of sales | 65.7 | 70.5 | 65.8 | 71.8 | ||||||||||||
Gross profit | 34.3 | 29.5 | 34.2 | 28.2 | ||||||||||||
Operating expense | 32.5 | 31.2 | 33.3 | 31.4 | ||||||||||||
Income (loss) from operations | 1.8 | (1.6 | ) | 0.9 | (3.1 | ) | ||||||||||
Other income (expense): | ||||||||||||||||
Other income, net | 0.0 | 0.1 | 0.0 | 0.0 | ||||||||||||
Interest expense | (0.4 | ) | (0.7 | ) | (0.6 | ) | (0.6 | ) | ||||||||
Total other expense, net | (0.4 | ) | (0.6 | ) | (0.6 | ) | (0.6 | ) | ||||||||
Income (loss) before income taxes | 1.4 | (2.2 | ) | 0.4 | (3.7 | ) | ||||||||||
Income tax provision (benefit) | 0.1 | (0.3 | ) | 0.1 | (0.3 | ) | ||||||||||
Net income (loss) | 1.3 | % | (2.0 | )% | 0.3 | % | (3.4 | )% |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Net sales | $ | 118,930 | $ | 73,687 | $ | 206,748 | $ | 148,425 | ||||||||
Cost of sales | 78,101 | 51,924 | 136,140 | 106,533 | ||||||||||||
Gross profit | $ | 40,829 | $ | 21,763 | $ | 70,608 | $ | 41,892 | ||||||||
Gross margin | 34.3 | % | 29.5 | % | 34.2 | % | 28.2 | % |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Operating expense | $ | 38,653 | $ | 22,968 | $ | 68,785 | $ | 46,543 | ||||||||
Percent of net sales | 32.5 | % | 31.2 | % | 33.3 | % | 31.4 | % |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Other expense, net | $ | (490 | ) | $ | (438 | ) | $ | (1,079 | ) | $ | (852 | ) | ||||
Percent of net sales | (0.4 | )% | (0.6 | )% | (0.5 | )% | (0.6 | )% |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
June 27, 2020 | June 29, 2019 | June 27, 2020 | June 29, 2019 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Income tax provision (benefit) | $ | 118 | $ | (186 | ) | $ | 154 | $ | (465 | ) | ||||||
Percent of net sales | 0.1 | % | (0.3 | )% | 0.1 | % | (0.3 | )% |
Fiscal Year Ended | ||||||||
December 28, 2019 | December 29, 2018 | |||||||
Net sales | 100.0 | % | 100.0 | % | ||||
Cost of sales | 70.0 | 72.8 | ||||||
Gross profit | 30.0 | 27.2 | ||||||
Operating expense | 32.9 | 28.9 | ||||||
Loss from operations | (2.9 | ) | (1.7 | ) | ||||
Other income (expense): | ||||||||
Other income, net | 0.0 | 0.5 | ||||||
Interest expense | (0.7 | ) | (0.6 | ) | ||||
Total other expense, net | (0.7 | ) | (0.1 | ) | ||||
Loss before income taxes | (3.6 | ) | (1.8 | ) | ||||
Income tax provision (benefit) | 7.6 | (0.1 | ) | |||||
Net loss | (11.2 | )% | (1.7 | )% |
Fiscal Year Ended | ||||||||||||||||
December 28, 2019 | December 29, 2018 | $ Change | % Change | |||||||||||||
(in thousands) | ||||||||||||||||
Net sales | $ | 280,657 | $ | 289,467 | $ | (8,810 | ) | (3.0 | )% | |||||||
Cost of sales | 196,434 | 210,746 | (14,312 | ) | (6.8 | )% | ||||||||||
Gross profit | $ | 84,223 | $ | 78,721 | $ | 5,502 | 7.0 | % | ||||||||
Gross margin | 30.0 | % | 27.2 | % | 2.8 | % |
Fiscal Year Ended | ||||||||||||||||
December 28, 2019 | December 29, 2018 | $ Change | % Change | |||||||||||||
(in thousands) | ||||||||||||||||
Operating expense | $ | 92,473 | $ | 83,728 | $ | 8,745 | 10.4 | % | ||||||||
Percent of net sales | 32.9 | % | 28.9 | % | 4.0 | % |
Fiscal Year Ended | ||||||||||||||||
December 28, 2019 | December 29, 2018 | $ Change | % Change | |||||||||||||
(in thousands) | ||||||||||||||||
Other expense, net | $ | (1,861 | ) | $ | (211 | ) | $ | (1,650 | ) | 782.0 | % | |||||
Percent of net sales | (0.7 | )% | (0.1 | )% | (0.6 | ) |
Fiscal Year Ended | ||||||||||||||||
December 28, 2019 | December 29, 2018 | $ Change | % Change | |||||||||||||
(in thousands) | ||||||||||||||||
Income tax (benefit) provision | $ | 21,437 | $ | (329 | ) | $ | 21,766 | (6,615.8 | )% | |||||||
Percent of net sales | 7.6 | % | (0.1 | )% | 7.8 | % |
Twenty-Six Weeks Ended | ||||||||
June 27, 2020 | June 29, 2019 | |||||||
Net cash provided by operating activities | $ | 25,168 | $ | 2,950 | ||||
Net cash used in investing activities | (3,840 | ) | (3,431 | ) | ||||
Net cash provided by (used in) financing activities | 1,267 | (668 | ) | |||||
Effect of exchange rate changes on cash | (8 | ) | 1 | |||||
Net change in cash and cash equivalents | $ | 22,587 | $ | (1,148 | ) |
• | Revenue Recognition; |
• | Inventory; |
• | Website and Software Development Costs; |
• | Income Taxes; and |
• | Share-Based Compensation. |
Public offering price per share | $ | ||||||
Net tangible book value per share at June 27, 2020 | $ | 0.48 | |||||
Increase in net tangible book value per share attributable to this offering | |||||||
As adjusted net tangible book value per share after this offering | |||||||
Dilution in net tangible book value per share to investors in this offering | $ |
∎ | 7,731,573 shares of common stock issuable upon the exercise of outstanding stock options; |
∎ | 3,053,475 additional shares of common stock reserved for issuance pursuant to outstanding equity awards issued under our equity compensation plans; |
∎ | 1,437,945 shares of common stock reserved for future awards pursuant to our equity compensation plans; and |
∎ | shares of common stock sold by the selling stockholder in this offering. |
∎ | an actual basis; and |
∎ | an as adjusted basis, after giving effect to this offering and the payment of underwriting discounts and commissions and estimated offering expenses payable by us (but not the application of the net proceeds therefrom). |
As of June 27, 2020 | |||||||
Actual | As Adjusted | ||||||
(dollars in thousands) | |||||||
Cash and cash equivalents | 24,860 | ||||||
Long-term debt (including current maturities) | |||||||
Long-term debt, less current portion, net of debt issuance costs | 8,667 | ||||||
Long-term operating lease liabilities | 11,725 | ||||||
Deferred tax liabilities, net | |||||||
Other long-term liabilities | 2,688 | ||||||
Total debt | |||||||
Stockholders’ equity | |||||||
Series A convertible preferred stock, $0.001 par value; $1.45 per share liquidation value or aggregate of $6,017; 4,150 shares authorized; 0 shares issued and outstanding at June 27, 2020 | 0 | ||||||
Common stock, $0.001 par value; 100,000 shares authorized; 42,411 shares issued and outstanding at June 27, 2020 (of which 2,525 are treasury stock) | 45 | ||||||
Additional paid-in capital | 194,693 | ||||||
Retained earnings | (167,358 | ) | |||||
Total stockholders’ equity | 20,376 | ||||||
Total capitalization | 20,376 |
Shares Beneficially Owned Prior to Offering | Number of Shares to be Sold in the offering | Shares Beneficially Owned After Offering | Number of Shares to be Sold in the offering | Shares Beneficially Owned After Offering | |||||||||||||
Name of Selling Stockholder | Shares | Percentage | Shares | Percentage | Shares | Percentage | |||||||||||
Mehran Nia | 5,013,542 | (1) | 11.8% | % | % |
(1) | Consists of (i) 4,763,341 shares of common stock owned directly by the Nia Living Trust Established September 2, 2004 (the “Living Trust”), of which Mehran Nia and his spouse, Fariba Nia, are co-trustees, (ii) 38,764 shares of common stock owned directly by Mr. Nia, and (iii) 211,436 shares of common stock held by Mr. Nia’s domestic partner. Mehran Nia disclaims beneficial interest in the Living Trust except to the extent of his pecuniary interest therein. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
• | a trust (1) whose administration is subject to the primary supervision of a U.S. court and which has one or more United States persons (within the meaning of Section 7701(a)(30) of the Code who have the authority to control all substantial decisions of the trust, or (2) that has a valid election in effect under applicable Treasury Regulations to be treated as a United States person for U.S. federal income tax purposes. |
• | the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, and if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States; |
• | the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition, and certain other requirements are met; or |
• | our common stock constitutes a “United States real property interest” by reason of our status as a United States real property holding corporation, or USRPHC, for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or the non-U.S. holder’s holding period for our common stock, and our common stock is not regularly traded on an established securities market during the calendar year in which the sale or other disposition occurs. |
Underwriters | Number of Shares | |
RBC Capital Markets, LLC | ||
Craig-Hallum Capital Group LLC | ||
D.A. Davidson & Co. | ||
Roth Capital Markets, LLC | ||
Total |
• | the obligation to purchase all of the shares of common stock offered hereby (other than those shares of common stock covered by their option to purchase additional shares as described below), if any of the shares are purchased; |
• | the representations and warranties made by us and the selling stockholder to the underwriters are true; |
• | there is no material change in our business or the financial markets; and |
• | we and the selling stockholder deliver customary closing documents to the underwriters. |
Us | Selling stockholder | ||||||||||||||
No Exercise | Full Exercise | ||||||||||||||
Per Share | $ | $ | $ | ||||||||||||
Total | $ | $ | $ |
• | Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. |
• | A short position involves a sale by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase in the offering, which creates the syndicate short position. This short position may be either a covered short position or a naked short position. In a covered short position, the number of shares involved in the sales made by the underwriters in excess of the number of shares they are obligated to purchase is not greater than the number of shares that they may purchase by exercising their option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in their option to purchase additional shares. The underwriters may close out any short position by either exercising their option to purchase additional shares and/or purchasing shares in the open market. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through their option to purchase additional shares. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering. |
• | Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. |
• | Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. |
• | to any legal entity which is a qualified investor as defined under the Prospectus Regulation; |
• | to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation); or |
• | in any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
• | it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) received by it in connection with the issue or sale of the shares of our common stock in circumstances in which Section 21(1) of the FSMA does not apply to us; and |
• | it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares of our common stock in, from or otherwise involving the United Kingdom. |
● | our Annual Report on Form 10-K for the fiscal year ended December 28, 2019, filed with the SEC on March 10, 2020; |
● | our Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2020, filed with the SEC on May 6, 2020; |
● | our Quarterly Report on Form 10-Q for the fiscal quarter ended June 27, 2020, filed with the SEC on August 11, 2020; |
● | our Current Reports on Form 8-K filed with the SEC on April 16, 2020, May 4, 2020, June 3, 2020, June 16, 2020, June 22, 2020, July 17, 2020 (other than with respect to Item 7.01), and July 27, 2020 (other than with respect to Item 7.01); and |
● | the description of our common stock contained in our Registration Statement on Form 8-A as filed with the SEC on January 27, 2015 pursuant to Section 12(b) of the Exchange Act, as updated by the description of our common stock contained in Exhibit 4.2 to our Annual Report on Form 10-K for the fiscal year ended December 28, 2019, filed with the SEC on March 10, 2020. |
D.A. Davidson & Co. | Roth Capital Partners |
Delaware | | | 68-0623433 |
(State or Other Jurisdiction of Incorporation or Organization) | | | (I.R.S. Employer Identification No.) |
Large accelerated filer | | | ☐ | | | Smaller reporting company | | | ☒ |
Accelerated Filer | | | ☐ | | | Emerging growth company | | | ☐ |
Non-accelerated filer | | | ☒ | | | | |
Title of Each Class of Securities to be Registered | | | Amount To Be Registered | | | Proposed Maximum Offering Price per Unit or Share(2) | | | Proposed Maximum Aggregate Offering Price(2) | | | Amount of Registration Fee |
Primary Offering: | | | | | | | | | ||||
Common Stock, $0.001 par value per share | | | — | | | — | | | — | | | — |
Preferred Stock, $0.001 par value per share | | | — | | | — | | | — | | | — |
Warrants | | | — | | | — | | | — | | | — |
Debt Securities | | | — | | | — | | | — | | | — |
Subscription Rights | | | — | | | — | | | — | | | — |
Units(3) | | | — | | | — | | | — | | | — |
Total Primary Offering | | | $200,000,000.00(1) | | | — | | | $200,000,000.00 | | | $25,960.00 |
Secondary Offering by Selling Stockholders: | | | | | | | | | ||||
Common Stock, par value $0.001 per share | | | 2,000,000(4) | | | $12.94 | | | $25,880,000.00 | | | $3,359.22 |
Total | | | | | | | $225,880,000.00 | | | $29,319.22 |
(1) | The securities registered for the primary offering hereunder include such indeterminate number of (a) shares of common stock, (b) shares of preferred stock, (c) warrants to purchase common stock, preferred stock or debt securities of the Registrant, (d) debt securities, (e) subscription rights to purchase common stock, preferred stock or debt securities of the Registrant, and (f) units, consisting of some or all of these securities, as may be sold from time to time by the Registrant. Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. There are also being registered hereunder an indeterminate number of shares of common stock, preferred stock and debt securities as shall be issuable upon conversion, exchange or exercise of any securities that provide for such issuance. In no event will the aggregate offering price of all types of securities issued by the Registrant pursuant to this registration statement exceed $200,000,000. |
(2) | With respect to securities to be offered for sale by the Registrant in the primary offering, the proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). With respect to shares of the Registrant’s common stock to be offered for resale by the selling stockholders in the secondary offering, the proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) based on the average of the high and low prices reported for the Registrant’s common stock traded on the Nasdaq Capital Market on July 29, 2020. |
(3) | Consisting of some or all of the securities listed above, in any combination. |
(4) | Represents shares offered by the selling stockholder. Pursuant to Rule 416 under the Securities Act, the shares being registered for the secondary offering hereunder include such unspecified number of each identified security as may be issuable with respect to the securities being registered hereunder as a result of stock splits, stock dividends or similar transactions and other adjustments. |
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• | designation or classification; |
• | aggregate principal amount or aggregate offering price; |
• | maturity; |
• | original issue discount; |
• | rates and times of payment of interest or dividends; |
• | redemption, conversion, exchange or sinking fund terms; |
• | ranking; |
• | restrictive covenants; |
• | voting or other rights; |
• | conversion or exchange prices or rates and any provisions for changes to or adjustments in the conversion or exchange prices or rates and in the securities or other property receivable upon conversion or exchange; and |
• | important U.S. federal income tax considerations. |
• | the names of those underwriters or agents; |
• | applicable fees, discounts and commissions to be paid to them; |
• | details regarding over-allotment options, if any; and |
• | the estimated net proceeds to us. |
• | the distinctive serial designation of such series and the number of shares constituting such series; |
• | the annual dividend rate on shares of such series, if any, whether dividends shall be cumulative and, if so, from which date or dates; |
• | whether the shares of such series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon and after which such shares shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; |
• | the obligation, if any, to retire shares of such series pursuant to a sinking fund; |
• | whether shares of such series shall be convertible into, or exchangeable for, shares of stock of any other class or classes and, if so, the terms and conditions of such conversion or exchange, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment, if any; |
• | whether the shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights; |
• | the rights of the shares of such series in the event of voluntary or involuntary liquidation, dissolution or winding-up of the Company; and |
• | any other relative rights, powers, preferences, qualifications, limitations or restrictions thereof relating to such series. |
• | before the date that the person became an “interested stockholder,” our board of directors approved either the “business combination” or the transaction which makes the person an “interested stockholder”; |
• | the “interested stockholder” owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (i) shares owned by persons who are directors and also officers and (ii) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
• | on or after the date that the person became an “interested stockholder,” the business combination is approved by (i) our board of directors and (ii) authorized at an annual or special meeting of our stockholders by the affirmative vote of at least 66 2/3% of our outstanding voting stock that is not owned by the “interested stockholder.” |
• | the title of the debt warrants; |
• | the offering price for the debt warrants, if any; |
• | the aggregate number of the debt warrants; |
• | the designation and terms of the debt securities, including any conversion rights, purchasable upon exercise of the debt warrants; |
• | if applicable, the date from and after which the debt warrants and any debt securities issued with them will be separately transferable; |
• | the principal amount of debt securities that may be purchased upon exercise of a debt warrant and the exercise price for the warrants, which may be payable in cash, securities or other property; |
• | the dates on which the right to exercise the debt warrants will commence and expire; |
• | if applicable, the minimum or maximum amount of the debt warrants that may be exercised at any one time; |
• | whether the debt warrants represented by the debt warrant certificates or debt securities that may be issued upon exercise of the debt warrants will be issued in registered or bearer form; |
• | information with respect to book-entry procedures, if any; |
• | the currency or currency units in which the offering price, if any, and the exercise price are payable; |
• | if applicable, a discussion of material U.S. federal income tax considerations; |
• | the anti-dilution provisions of the debt warrants, if any; |
• | the redemption or call provisions, if any, applicable to the debt warrants; |
• | any provisions with respect to the holder’s right to require us to repurchase the warrants upon a change in control or similar event; and |
• | any additional terms of the debt warrants, including procedures, and limitations relating to the exchange, exercise and settlement of the debt warrants. |
• | the title of the warrants; |
• | the offering price for the warrants, if any; |
• | the aggregate number of warrants; |
• | the designation and terms of the common stock or preferred stock that may be purchased upon exercise of the warrants; |
• | if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each security; |
• | if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable; |
• | the number of shares of common stock or preferred stock that may be purchased upon exercise of a warrant and the exercise price for the warrants; |
• | the dates on which the right to exercise the warrants shall commence and expire; |
• | if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time; |
• | the currency or currency units in which the offering price, if any, and the exercise price are payable; |
• | if applicable, a discussion of material U.S. federal income tax considerations; |
• | the anti-dilution provisions of the warrants, if any; |
• | the redemption or call provisions, if any, applicable to the warrants; |
• | any provisions with respect to the holder’s right to require us to repurchase the warrants upon a change in control or similar event; and |
• | any additional terms of the warrants, including procedures, and limitations relating to the exchange, exercise and settlement of the warrants. |
• | to vote, consent or receive dividends; |
• | to receive notice as stockholders with respect to any meeting of stockholders for the election of our directors or any other matter; or |
• | to exercise any rights as stockholders of the Company. |
• | the title of the series of debt securities; |
• | any limit upon the aggregate principal amount that may be issued; |
• | the maturity date or dates; |
• | the form of the debt securities of the series; |
• | the applicability of any guarantees; |
• | whether or not the debt securities will be secured or unsecured, and the terms of any secured debt; |
• | whether the debt securities rank as senior debt, senior subordinated debt, or subordinated debt; |
• | if the price (expressed as a percentage of the aggregate principal amount thereof) at which such debt securities will be issued is a price other than the principal amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity thereof, or if applicable, the portion of the principal amount of such debt securities that is convertible into another security or the method by which any such portion shall be determined; |
• | the interest rate or rates, which may be fixed or variable, or the method for determining the rate and the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates; |
• | our right, if any, to defer payment of interest and the maximum length of any such deferral period; |
• | if applicable, the date or dates after which, or the period or periods during which, and the price or prices at which, we may, at our option, redeem the series of debt securities pursuant to any optional or provisional redemption provisions and the terms of those redemption provisions; |
• | the date or dates, if any, on which, and the price or prices at which we are obligated, pursuant to any mandatory sinking fund, mandatory redemption or analogous provisions or otherwise, to repurchase, at the holder’s option, the series of debt securities; |
• | the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof; |
• | any and all terms, if applicable, relating to any auction or remarketing of the debt securities of that series and any security for our obligations with respect to such debt securities and any other terms which may be advisable in connection with the marketing of debt securities of that series; |
• | whether the debt securities of the series shall be issued in whole or in part in the form of a global security or securities; the terms and conditions, if any, upon which such global security or securities may be exchanged in whole or in part for other individual securities; and the depositary for such global security or securities; |
• | if applicable, the provisions relating to conversion or exchange of any debt securities of the series and the terms and conditions upon which such debt securities will be so convertible or exchangeable, including the conversion or exchange price, as applicable, or how it will be calculated and may be adjusted, any mandatory or optional (at our option or the holders’ option) conversion or exchange features, the applicable conversion or exchange period and the manner of settlement for any conversion or exchange; |
• | if other than the full principal amount thereof, the portion of the principal amount of debt securities of the series which shall be payable upon declaration of acceleration of the maturity thereof; |
• | additions to or changes in the covenants applicable to the particular debt securities being issued, including, among others, the consolidation, merger or sale covenant; |
• | additions to or changes in the events of default with respect to the securities and any change in the right of the trustee or the holders to declare the principal, premium, if any, and interest, if any, with respect to such securities to be due and payable; |
• | additions to or changes in or deletions of the provisions relating to covenant defeasance and legal defeasance; |
• | additions to or changes in the provisions relating to satisfaction and discharge of the applicable indenture; |
• | additions to or changes in the provisions relating to the modification of the applicable indenture both with and without the consent of holders of debt securities issued under the applicable indenture; |
• | the currency or currencies, including composite currencies, in which payment of debt securities if other than U.S. dollars and the manner of determining the equivalent amount in U.S. dollars; |
• | whether interest will be payable in cash or additional debt securities at our or the holders’ option and the terms and conditions upon which the election may be made; |
• | the terms and conditions, if any, upon which we will pay amounts in addition to the stated interest, premium, if any, and principal amounts of the debt securities of the series to any holder that is not a “United States person” for federal tax purposes; |
• | any restrictions on transfer, sale or assignment of the debt securities of the series; |
• | any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, any other additions or changes in the provisions of the applicable indenture, and any terms that may be required by us or advisable under applicable laws or regulations; and |
• | the subordination terms of the debt securities of the series, if any. |
• | if we fail to pay any installment of interest on any series of debt securities, as and when the same shall become due and payable, and such default continues for a period of 90 days; provided, however, that a valid extension of an interest payment period by us in accordance with the terms of any indenture supplemental thereto shall not constitute a default in the payment of interest for this purpose; |
• | if we fail to pay the principal of, or premium, if any, on any series of debt securities as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to such series; provided, however, that a valid extension of the maturity of such debt securities in accordance with the terms of any indenture supplemental thereto shall not constitute a default in the payment of principal or premium, if any; |
• | if we fail to observe or perform any other covenant or agreement contained in the debt securities or the indenture, other than a covenant specifically relating to another series of debt securities, and our failure continues for 90 days after we receive written notice of such failure, requiring the same to be remedied and stating that such is a notice of default thereunder, from the trustee or holders of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and |
• | if specified events of bankruptcy, insolvency or reorganization occur. |
• | the direction so given by the holder is not in conflict with any law or the applicable indenture; and |
• | subject to its duties under the Trust Indenture Act, the trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding. |
• | a holder of the debt securities of any series will have the right to institute a proceeding under the indenture or to appoint a receiver or trustee, or to seek other remedies only if: |
• | the holder has given written notice to the trustee of a continuing event of default with respect to that series; |
• | the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request; |
• | such holders have offered to the trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred by the trustee in compliance with the request; and |
• | the trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other conflicting directions within 90 days after the notice, request and offer. |
• | to cure any ambiguity, defect or inconsistency in the indenture or in the debt securities of any series; |
• | to comply with the provisions described above under “Description of Debt Securities—Consolidation, Merger or Sale; |
• | to provide for uncertificated debt securities in addition to or in place of certificated debt securities; |
• | to add to our covenants, restrictions, conditions or provisions such new covenants, restrictions, conditions or provisions for the benefit of the holders of all or any series of debt securities, to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default or to surrender any right or power conferred upon us in the indenture; |
• | to add to, delete from or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication and delivery of debt securities, as set forth in the indenture; |
• | to make any change that does not adversely affect the interests of any holder of debt securities of any series in any material respect; |
• | to provide for the issuance of and establish the form and terms and conditions of the debt securities of any series as provided above under “Description of Debt Securities—General” to establish the form of any certifications required to be furnished pursuant to the terms of the indenture or any series of debt securities, or to add to the rights of the holders of any series of debt securities; |
• | to evidence and provide for the acceptance of appointment under any indenture by a successor trustee; or |
• | to comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture Act. |
• | extending the fixed maturity of any debt securities of any series; |
• | reducing the principal amount, reducing the rate of or extending the time of payment of interest, or reducing any premium payable upon the redemption of any series of any debt securities; or |
• | reducing the percentage of debt securities, the holders of which are required to consent to any amendment, supplement, modification or waiver. |
• | register the transfer or exchange of debt securities of the series; |
• | replace stolen, lost or mutilated debt securities of the series; |
• | maintain paying agencies; |
• | hold monies for payment in trust; |
• | recover excess money held by the trustee; |
• | compensate and indemnify the trustee; and |
• | appoint any successor trustee. |
• | issue, register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing; or |
• | register the transfer of or exchange of any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in part. |
• | the price, if any, for the subscription rights; |
• | the exercise price payable for our common stock, preferred stock or debt securities upon the exercise of the subscription rights; |
• | the number of subscription rights to be issued to each stockholder; |
• | the number and terms of our common stock, preferred stock or debt securities which may be purchased per each subscription right; |
• | the extent to which the subscription rights are transferable; |
• | any other terms of the subscription rights, including the terms, procedures and limitations relating to the exchange and exercise of the subscription rights; |
• | the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire; |
• | the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities or an over-allotment privilege to the extent the securities are fully subscribed; and |
• | if applicable, the material terms of any standby underwriting or purchase arrangement which may be entered into by CarParts.com in connection with the offering of subscription rights. |
• | the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances the securities comprising the units may be held or transferred separately; |
• | a description of the terms of any unit agreement governing the units; |
• | a description of the provisions for the payment, settlement, transfer or exchange of the units; |
• | a discussion of material federal income tax considerations, if applicable; and |
• | whether the units if issued as a separate security will be issued in fully registered or global form. |
| | Common Stock Beneficially Owned | |||||||||||||
| | Shares Beneficially Owned before Offering | | | Maximum Number of Shares that may be Offered Pursuant to this Prospectus | | | Shares Beneficially Owned After Offering(1) | |||||||
Name of Selling Stockholder | | | Number | | | Percentage | | | Number | | | Percentage (%) | |||
Mehran Nia | | | 5,013,542(2) | | | 11.8% | | | 2,000,000 | | | 3,013,542 | | | 7.1% |
(1) | We do not know when or in what amounts the selling stockholders may offer shares for sale. The selling stockholders may not sell any or all of the shares offered by this prospectus. Because the selling stockholders may offer all or some of the shares pursuant to this offering we cannot estimate the number of shares that will be held by the selling stockholders after completion of this offering. However, for purposes of this table, we have assumed that, after completion of this offering, none of the shares covered by this prospectus will be held by the selling stockholders. |
(2) | Consists of (i) 4,763,341 shares of common stock owned directly by the Nia Living Trust Established September 2, 2004 (the “Living Trust”), of which Mehran Nia and his spouse, Fariba Nia, are co-trustees, (ii) 38,764 shares of common stock owned directly by Mr. Nia, and (iii) 211,436 shares of common stock held by Mr. Nia’s domestic partner. Mehran Nia disclaims beneficial interest in the Living Trust except to the extent of his pecuniary interest therein. |
• | the terms of the offering; |
• | the names of any underwriters or agents; |
• | the name or names of any managing underwriter or underwriters; |
• | the purchase price of the securities; |
• | the net proceeds from the sale of the securities; |
• | any delayed delivery arrangements; |
• | any underwriting discounts, commissions and other items constituting underwriters’ compensation; |
• | any initial public offering price; |
• | any discounts or concessions allowed or reallowed or paid to dealers; and |
• | any commissions paid to agents. |
• | our Annual Report on Form 10-K for the fiscal year ended December 28, 2019, filed with the SEC on March 10, 2020; |
• | our Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2020, filed with the SEC on May 6, 2020; |
• | our Current Reports on Form 8-K filed with the SEC on April 16, 2020, May 4, 2020, June 3, 2020, June 16, 2020, June 22, 2020, July 17, 2020 (other than with respect to Item 7.01), and July 27, 2020 (other than with respect to Item 7.01); and |
• | the description of our common stock contained in our Registration Statement on Form 8-A as filed with the SEC on January 27, 2015 pursuant to Section 12(b) of the Exchange Act, as updated by the description of our common stock contained in Exhibit 4.2 to our Annual Report on Form 10-K for the fiscal year ended December 28, 2019, filed with the SEC on March 10, 2020. |
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