Item 1.01. Entry Into a Material Definitive Agreement.
On December 20, 2021, CarParts.com, Inc. (“we” or the “Company”) entered into an Equity Offering Sales Agreement (the “Sales Agreement”)
with D.A. Davidson & Co., under which we may issue and sell from time to time shares of our common stock, $0.001 par value per share (the “Shares”), having an aggregate gross sales price of up to $50,000,000 through D.A. Davidson & Co. (the
“Agent”), as sales agent, through an “at the market” equity offering program. We have agreed to pay the sales agent a commission of 1.5% of the gross sales price of any Shares sold under the Sales Agreement. We have also agreed to reimburse the Agent
for certain of their expenses in an aggregate amount not to exceed $75,000 in connection with the execution of the Sales Agreement, and up to $20,000 in connection with quarterly bring-down procedures under the Sales Agreement.
The sales, if any, of the Shares made under the Sales Agreement will be made by means of ordinary brokers’ transactions on the Nasdaq
Global Market or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. Actual sales will depend on a variety of factors to be determined by us from time to time. Under the terms of the Sales Agreement, we may also sell Shares to the Agent as principal for its own account at a price agreed upon at the time of sale. If we sell Shares to
the Agent as principal, we will enter into a separate terms agreement with the Agent.
The Shares will be issued pursuant to our shelf registration statement on Form S-3 (File No. 333-240467). Concurrently herewith, we are
filing a prospectus supplement (the “Prospectus Supplement”), dated December 20, 2021, with the Securities and Exchange Commission in connection with the offer and sale of the Shares.
Because there is no minimum offering amount required pursuant to the Sales Agreement, the actual total public offering amount, commissions
and proceeds to us, if any, are not determinable at this time. We expect to use any net proceeds for general corporate purposes, which may include operating expenses, working capital, and to further or execute upon potential strategic transactions or
relationships.
The Sales Agreement also contains representations, warranties and certain covenants of the Company. The representations, warranties and
covenants contained in the Sales Agreement are made only for purposes of the Sales Agreement and as of specific dates; are solely for the benefit of the parties to the Sales Agreement; and may be subject to limitations agreed upon by the parties,
including being qualified by confidential disclosures made by each contracting party to the other for the purposes of allocating contractual risk between them that differ from those applicable to investors. Investors should not rely on the
representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of our business or D.A. Davidson & Co. or any of our or their subsidiaries, affiliates, businesses or
stockholders. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Sales Agreement, which subsequent information may or may not be fully reflected in our public
disclosures or statements by us or D.A. Davidson & Co. Accordingly, investors should read the representations and warranties in the Sales Agreement not in isolation but only in conjunction with the other information about us or D.A. Davidson
& Co. and our or their subsidiaries that the respective companies include in reports, statements and other filings made with the SEC.
This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the Shares, nor shall there by
any offer, solicitation or sale of the Shares in any state or country in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or country.
The foregoing description of the Sales Agreement is qualified in its entirety by reference to the Sales Agreement, a copy of which is filed
as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Dorsey & Whitney LLP, counsel to the Company, has issued a legal opinion relating to the Shares. A copy of this legal opinion,
including the consent included therein, is attached as Exhibit 5.1 hereto.
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