CarParts.com, Inc. 8-K

What Happened
CarParts.com, Inc. announced it entered into a Loan and Security Agreement with First Business Specialty Finance, LLC on June 15, 2026, providing an asset-based revolving credit facility with a maximum principal amount of up to $25,000,000, secured by substantially all of the Company’s assets. Certain subsidiaries are guarantors under a related Security Agreement. Availability under the facility is limited by a borrowing base based mainly on cash, accounts receivable and inventory. The facility matures on March 31, 2028 and automatically renews for one-year periods unless timely terminated.

Key Details

• Facility size: up to $25,000,000, limited to the lesser of $25M or the borrowing base.
• Interest: 1‑Month Term SOFR + 3.25% per year; rate can be reduced by 0.25% or 0.50% depending on the Company’s prior-year Fixed Charge Coverage Ratio (FCCR) if audited financials are delivered and no Event of Default exists.
• Covenants/maintenance: customary negative covenants; if cash + availability < $15M or availability < $7.5M, Company must maintain an FCCR of at least 1.10x (tested quarterly on a trailing four-quarter basis).
• Maturity/termination fees: matures March 31, 2028; automatic one-year renewals unless 30 days’ notice is given. If terminated early, prepayment premium is $750,000 if before June 15, 2027, or $500,000 if on/after June 15, 2027.
• Other: mandatory prepayments from proceeds of certain asset sales; the Company terminated its prior JPMorgan Chase revolving credit facility with no outstanding balance at termination.

Why It Matters
This facility provides CarParts.com with a committed source of liquidity tied to its working capital (cash, receivables, inventory), which can support operations and growth. Because availability is governed by a borrowing base and the interest rate is variable (SOFR‑based), the actual usable capacity and borrowing cost will fluctuate with the Company’s balance sheet and market rates. The financial covenants and customary defaults mean the facility imposes operating restrictions and could be accelerated if breaches occur — investors should watch the Company’s cash balance, availability under the facility, and Fixed Charge Coverage Ratio in future filings to assess liquidity and covenant compliance.