Company: TRUE
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001327318-25-000065
Chunk: 389

Company: TrueCar, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 2
Chunk 389
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 a cost-effective manner, and our business, financial condition and results of operations could be materially and adversely affected.

We face litigation and are party to legal proceedings that could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We are subject to a variety of claims and lawsuits. These claims may arise from a wide variety of business practices and initiatives, including product innovations, the content and functionality of the websites and mobile applications that we operate, our advertising practices and content, our use and storage of data, our use of intellectual property, M&A transactions and business transactions or other business relationships, such as those with our users, participating dealers, affinity partners, OEM partners, licensors, licensees, landlords, tenants and employees. Additionally, as a public company, we face the risk of stockholder lawsuits, particularly if we experience declines in the price of our common stock. Adverse outcomes in any claim or lawsuit against us could result in significant monetary damages or injunctive relief that could adversely affect our ability to conduct our business. Examples of litigation to which we are, and have been, subject include:

Stockholder Litigation

In the past we have been subject to securities class action litigation and stockholder derivative actions, including actions stemming from allegations of breaches of fiduciary duties by our directors and officers, and we may be subject to similar actions in the future. For example, in 2018, a purported stockholder filed a putative securities class action against us and certain of our then-current and former officers and directors were named as defendants in a putative securities class action, which we refer to as the Federal Securities Litigation, based on allegations that the defendants made false or misleading statements in violation of applicable securities laws in connection with our secondary offering of common stock in 2017. The case was ultimately dismissed pursuant to a settlement which was covered by our directors’ and officers’ liability insurance. Following the resolution of the Federal Securities Litigation, we were subject to a number of derivative actions in Delaware based upon substantially the same factual allegations as the Federal Securities Litigation and received demands from the plaintiffs that we pursue related claims against certain of our former officers and directors. Each such derivative action was ultimately dismissed and is currently resolved and a special committee of our board of directors recommended that our board refuse the plaintiffs’ related demands in their entirety. However, if similar litigation is filed against us, we may incur significant legal fees, settlements or damages awards. If any such matter is not ultimately resolved in our favor, losses