Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Item 8.01 Standard; Transfer of Listing.
Other Events.
As previously disclosed, on December 13, 2022, HyreCar, Inc. (the "Company")
received a letter (the "Notice") from the Listing Qualifications Department (the
"Staff") of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that,
based upon the Company's non-compliance with the $35 million market value of
listed securities ("MVLS") requirement set forth in Nasdaq Listing Rule
5550(b)(2), the Company's securities would be suspended from trading on and
delisted from The Nasdaq Capital Market unless the Company requested a hearing
before a Nasdaq Hearings Panel (the "Panel") to appeal Nasdaq's delisting
determination.
Following receipt of the Notice, the Company timely requested a hearing before
the Panel to appeal Nasdaq's delisting determination, which stayed the Company's
suspension from trading on and delisting from The Nasdaq Capital Market pending
the Company's hearing with the panel, which was originally scheduled for
February 2, 2023.
As previously disclosed, the Company holds a 1% membership interest in
HyreDrive, LLC ("HyreDrive"), which is a joint venture between the Company and
AmerDrive Holdings, Inc., the managing member and holder of the remaining 99%
membership interest in HyreDrive ("AmeriDrive"). Also as previously disclosed,
the Company entered into a Performance Guaranty in favor of the Trustee (as
defined below) under a Base Indenture, dated as of September 2, 2022 (the "Base
Indenture"), by and between AmeriDrive Funding LLC, a wholly-owned subsidiary of
HyreDrive, as issuer, (the "JV Sub") and Wilmington Trust, National Association,
not in its individual capacity, but solely as trustee (the "Trustee") and
securities intermediary (the "Securities Intermediary"), as supplemented by a
Series 2022-1 Supplement to Base Indenture, dated as of September 2, 2022 (the
"Series Supplement"), by and among the Issuer, AmeriDrive, HyreDrive, the
Company, Credit Suisse AG, New York Branch, certain noteholders, note
purchasers, conduit investors and funding agents, and the Trustee and Securities
Intermediary. As previously disclosed, proceeds from the financing obtained
pursuant to the Series Supplement and the Base Indenture were intended to be
used to purchase vehicles for the primary purpose of expanding the strategic
relationship between AmeriDrive and the Company, intended to create a larger
national network of vehicle supply for the Company's technology platform. As of
January 31, 2023, approximately $24 million of financing had been obtained
pursuant to the Series Supplement and the Base Indenture.
By letter dated January 5, 2023, Credit Suisse AG, New York Branch, and Credit
Suisse AG, Cayman Islands Branch (collectively, the "CS Entities"), delivered to
the JV Sub, HyreDrive, AmeriDrive, the Company and the Trustee reserving the
ability of the CS Entities to exercise (directly or through the Trustee) any and
all rights and remedies under the Series Supplement and related documents and/or
applicable law as a result of the determination by the CS Entities that a breach
of a financial covenant had occurred, which the CS Entities advised had resulted
in the occurrence of a default under the Series Supplement (the "Specified
Default"). The January 5, 2023 letter notified the recipients that the CS
Entities would be monitoring the situation and would decide in their sole
discretion whether or not to exercise rights and remedies they hold.
Subsequent to receipt of the January 5, 2023 letter, the Company was apprised by
AmeriDrive that it was in active discussions with the CS Entities to obtain
forbearance of the Specified Default, the amendment or waiver of the applicable
financial covenant and/or replacement financing.
On January 12, 2023, a further notice was delivered to the JV Sub and the
Trustee by Credit Suisse AG, Cayman Islands Branch, as Class A Noteholder
("CS"), declaring a liquidation event with respect to certain notes issued by
the JV Sub pursuant to the Series Supplement. Also on that date, CS instructed
the Trustee to commence to liquidate all vehicles previously purchased by the JV
Sub. Again, the Company was apprised by AmeriDrive that it continued in active
discussions with the CS Entities in an effort to find an alternative to
liquidation. A letter dated January 27, 2023, effective as of January 30, 2023,
to the JV Sub, HyreDrive, AmeriDrive and the Company was received from the
Trustee directing the JV Sub to take various actions to facilitate such
liquidation, and directing the Company to cause the JV Sub to take such actions.
On February 1, 2023, the Company received confirmation from the CS Entities that
no alternatives to liquidation had been identified and that the liquidation
would be proceeding.
The liquidation of the vehicles purchased by the JV Sub with proceeds from the
financing pursuant to the Series Supplement and the Base Indenture is expected
to have an adverse impact on the Company's ability to generate revenues and
improve its overall financial condition. After careful consideration, the
Company determined that, as a result of these additional challenges, it would
not be able to regain compliance with the MVLS requirement for continued
listing. Accordingly, the Company notified Nasdaq on February 1, 2023 of its
intention to withdraw from the Nasdaq hearing process.
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The Company's common stock has been suspended from trading on The Nasdaq Capital
Market and commenced trading on the OTC Pink Market as of February 3, 2023. The
Company anticipates that its common stock will be delisted from The Nasdaq
Capital Market on and effective 10 days after the filing of a Form 25 with the
Securities and Exchange Commission.
The Company has commenced active efforts to obtain additional financing and, on
a parallel path, to explore a full range of strategic alternatives. The
Company's review of strategic options and alternatives could result in, among
other things, a sale, merger, consolidation or business combination, asset
divestiture, partnering, licensing or other collaboration agreements, or
potential acquisitions, recapitalizations or restructurings, in one or more
transactions, or continuing to operate with our current business plan and
executing our strategic realignment plan discussed above. The Company may incur
substantial expenses associated with identifying, evaluating and pursuing
potential strategic alternatives. The Company's board of directors has not set a
timetable for the conclusion of its review of strategic alternatives, and there
can be no assurance that this process will result in any financing or strategic
transaction to maximize value for the Company's stockholders.
Statements in this Current Report concerning the Company's future expectations
and plans may constitute forward-looking statements for the purposes of the safe
harbor provisions under the Private Securities Litigation Reform Act of 1995 and
other federal securities laws and are subject to substantial risks,
uncertainties and assumptions. You should not place reliance on these
forward-looking statements, which include words such as "could," "believe,"
"anticipate," "intend," "estimate," "expect," "may," "continue," "predict,"
"potential," "project" or similar terms, variations of such terms or the
negative of those terms. Although the Company believes that the expectations
reflected in the forward-looking statements are reasonable, the Company cannot
guarantee such outcomes. The Company may not realize its expectations, and its
beliefs may not prove correct. Actual results may differ materially from those
indicated by these forward-looking statements as a result of various important
factors, including, without limitation, the factors described in the section
entitled "Risk Factors" in the Company's most recent Annual Report on Form 10-K
and the Company's other filings made with the U. S. Securities and Exchange
Commission. All such statements speak only as of the date made. Consequently,
forward-looking statements should be regarded solely as the Company's current
plans, estimates, and beliefs. Investors should not place undue reliance on
forward-looking statements. The Company cannot guarantee future results and/or
events. The Company does not undertake and specifically declines any obligation
to update, republish, or revise any forward-looking statements to reflect new
information, future events, or circumstances or to reflect the occurrences of
unanticipated events, except as may be required by applicable law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
104 Cover Page Interactive Data File (embedded within Inline XBRL document).
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