Company: TRUE
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0001327318-25-000016
Chunk: 199

Company: TrueCar, Inc.
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 8
Chunk 199
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 the Company has applied the payment as a reduction to the lease liability. The Company vacated and returned possession of the Premises on April 30, 2024. On May 8, 2024, the Landlord filed a cross-complaint against the Company alleging breach of contract as a result of the Company’s termination of the Lease and seeking an unspecified amount of damages. This litigation is currently in the discovery phase and a trial has been scheduled for April 2027. As of March 31, 2025, the Company has fully impaired the right-of-use asset associated with the Lease of $6.8 million in accordance with FASB ASC 360 — Property, Plant, and Equipment. At March 31, 2025, the lease liability of $7.3 million remains on the condensed consolidated balance sheet and will remain until the matter is legally resolved in accordance with FASB ASC 405 — Liabilities. The Company will continue to recognize lease cost for the accretion of interest on the lease liability until the matter is resolved.The Company intends to vigorously defend its position that the Lease was appropriately terminated.

14

Other AgreementsIn October 2024, American Express, one of the Company’s longstanding affinity group marketing partners, provided the Company with a notice of termination pursuant to the commercial agreement between the Company and American Express (the “AmEx Agreement”), with such termination effective as of April 28, 2025. In accordance with its terms, any accrued marketing funds remaining as of the termination of the AmEx Agreement are required to be split equally between the Company and American Express upon termination. Prior to the termination of the AmEx Agreement, the Company and American Express entered into an agreement to discontinue marketing activities under the AmEx Agreement and liquidate the related marketing fund balance of $2.8 million on March 31, 2025. As a result, the Company made a payment of $1.4 million to American Express and was relieved of the remaining $1.4 million liability in accordance with FASB ASC 405 — Liabilities. The Company’s $1.4 million share of the marketing fund was recognized as a reduction to sales and marketing expenses.Employment ContractsThe Company has entered into employment contracts with certain executives of the Company. Employment under these contracts is at-will employment. However, under the provisions of the contracts, the Company would incur severance obligations of up to twelve months of the executive’s annual base salary for certain