UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 16,
2020
AutoWeb, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-34761
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33-0711569
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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400 North Ashley Drive, Suite 300
Tampa, Florida 33602-4314
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(Address
of principal executive offices) (Zip Code)
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(949) 225-4500
Registrant’s
telephone number, including area code
(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:
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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AUTO
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The Nasdaq Capital Market
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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).
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Emerging growth company
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☐
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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.
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Item 2.04
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Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet
Arrangement.
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On
January 16, 2020, AutoWeb, Inc. (“Company” or “AutoWeb”) received a notice of
event of default and reservation of rights (“Notice”) from PNC Bank, National
Association, as Agent and Lender (“PNC”), under the Revolving Credit
and Security Agreement dated as of April 30, 2019 by and among
AutoWeb, PNC, and AutoWeb’s U.S. subsidiaries, Car.com, Inc.,
Autobytel, Inc., and AW GUA USA, Inc., as Guarantors, (as amended
by the First Amendment, “Credit Agreement”), advising that
an event of default has occurred and is continuing under Section
10.3 of the Credit Agreement by reason of AutoWeb’s failure
to deliver to PNC the financial statements and related compliance
certificate for the month ended November 30, 2019. Although not
covered by the Notice at this time, AutoWeb also is not in
compliance with the minimum EBITDA financial covenant under the
Credit Agreement.
As a
result of the Notice, PNC has increased the interest rate under the
Credit Agreement by 2.0% per annum and PNC may accelerate the
obligation to pay all outstanding balances under the Credit
Agreement. As of the filing of this Current Report on Form 8-K, (i)
PNC has not accelerated payment of the outstanding balances under
the Credit Agreement and has not informed AutoWeb that PNC intends
to accelerate payment of the outstanding balances under the Credit
Agreement; and (ii) operations have not been impacted by the Notice
because AutoWeb has been able to access available credit under the
Credit Agreement. However, there can be no assurance that PNC will
not exercise its rights to accelerate payment of outstanding
balances under the Credit Agreement or that the Company will
continue to be able to access available credit under the Credit
Agreement. As of the filing of this Current Report on Form 8-K, the
outstanding principal balance under the Credit Agreement was
approximately $5.3 million, and AutoWeb maintains $5.0 million in
restricted cash under the Credit Agreement and has an average
accounts receivables balance, net of allowances for bad debts and
customer credits, of approximately $24.4 million.
The
Notice advises AutoWeb that PNC (i) specifically reserves all
rights and remedies available to it under the Credit Agreement and
(ii) does not waive the event of default or any other event of
default that may exist on the date of the Notice or which may occur
thereafter. The Notice further advises that any loans, advances,
and extensions of credit made to AutoWeb from time to time, will be
at the sole discretion of PNC and will not constitute a waiver of
the event of default, or a waiver by PNC of any of its rights under
the Credit Agreement or any collateral agreement.
AutoWeb
has been exploring various alternative borrowing and financing
options to replace the credit facility with PNC and, based on its
discussions with potential lenders, AutoWeb believes that it has
options available to it to replace the PNC credit facility. The
Company is currently in negotiations with a potential lender
regarding a new credit facility. The potential lender has conducted
its initial diligence on the Company and is proceeding to complete
diligence and prepare loan documentation. The
Company’s objective is to enter into a new credit
facility promptly upon completion of the lender’s
process. There can be no assurance that AutoWeb will come to
any agreement regarding a new credit facility with this lender or
any other lender or, if a new credit facility is entered into with
this lender or another lender, when the new credit facility will
close.
The
Company filed a copy of the Credit Agreement as Exhibit 10.1 to its
Current Report on Form 8-K filed with the Securities and Exchange
Commission (“SEC”) on May 1, 2019 (SEC File No.
001-34761) and a copy of the first amendment to the Credit
Agreement as Exhibit 10.1 to its Current Report on Form 8-K filed
with the SEC on October 30, 2019 (SEC File No.
001-34761).
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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 hereunto duly authorized.
Date:
January 23, 2020
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AUTOWEB,
INC.
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By:
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/s/ Glenn E.
Fuller
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Glenn
E. Fuller, Executive Vice President, Chief Legal Officer and
Secretary
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