Business Context and Reporting Period
Company: U.S. Auto Parts Network, Inc. (d/b/a Carparts.Com, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: December 16, 2011
Event: Entry into a Material Definitive Agreement (Amendment No. 3 to Loan and Security Agreement with Silicon Valley Bank).
Key Financial Metrics
This filing does not contain financial statements, revenue, profit, cash flow, or margin data. The only specific financial figure disclosed relates to a credit facility amendment:
- Permitted Indebtedness Cap: Up to $2,500,000 outstanding at any one time for vendor purchasing card programs with Bank of America N.A. or J.P. Morgan Chase Bank, N.A.
Material Changes
The Company amended its existing Loan and Security Agreement with Silicon Valley Bank. The material changes include:
- Deletion of Permitted Liens: Subsection (t) of the definition of "Permitted Liens" in Section 13.1 was deleted in its entirety.
- Amendment of Permitted Indebtedness: Subsection (n) of the definition of "Permitted Indebtedness" was amended and restated to explicitly allow indebtedness owed to Bank of America N.A. or J.P. Morgan Chase Bank, N.A. (and affiliates) for vendor purchasing card programs, capped at $2,500,000.
Guidance, Outlook, and Risks
The filing contains no management commentary, forward-looking guidance, or specific risk factors beyond the standard implications of amending debt covenants. The amendment facilitates specific vendor purchasing arrangements while removing a specific category of permitted liens.
Investor Verification Checklist
- Verify the total outstanding balance of the vendor purchasing card programs to ensure compliance with the new $2,500,000 cap.
- Review the impact of deleting Subsection (t) of "Permitted Liens" on the Company's ability to secure other assets or enter new agreements.
- Confirm the status of the underlying Loan and Security Agreement dated August 13, 2010, and previous amendments (No. 1 and No. 2) to understand the full covenant landscape.
- Check subsequent filings for any financial statements that may detail the utilization of this new credit facility.