Company: TRUE
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001327318-25-000036
Chunk: 159

Company: TrueCar, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 159
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 space (the “Lease”) located at 1401 Ocean Avenue, Santa Monica, California (the “Premises”) effective immediately, following the Landlord's breach of the Lease and related conduct by the Landlord. Also on April 10, 2024, the Company filed a lawsuit in Los Angeles Superior Court, seeking a declaratory judgment that its termination of the Lease was justified under applicable California law, along with certain other relief. A letter of credit with a principal amount of $1,750,000 (the “Letter of Credit”) secured the Company’s obligations under the Lease. The full principal amount of the Letter of Credit was collateralized by restricted cash. On April 18, 2024, the Landlord notified both the Company and the bank that issued the Letter of Credit that the Landlord was drawing down the full amount available under the Letter of Credit. The drawdown on the Letter of Credit was completed on April 25, 2024 and 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 June 30, 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 June 30, 2025, the lease liability of $7.4 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.

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The Company intends to vigorously defend its position that the Lease was appropriately terminated.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