Filed Pursuant to Rule 424(b)(3)
File No. 333-273529
PROSPECTUS
37,889,029
Shares of Class A Common Stock
This
prospectus relates to the offer and sale by the selling stockholders identified in this prospectus of up to 37,889,029 shares of our
Class A common stock, $0.0001 par value per share (the “common stock”). The shares of common stock included in this prospectus
consist of (i) 13,418,750 shares of common stock that may be issued upon the conversion of certain convertible promissory notes in the
aggregate principal amount of up to $5,367,500 (the “notes”), representing a good faith estimate of the maximum number of
shares issuable thereunder and (ii) 24,470,279 shares of common stock that may be issued upon the conversion of certain warrants (the
“warrants”) issued to the selling stockholders. For more information, see “Description of the Notes and Warrants”
below.
We
will not receive any proceeds from the sale of the shares by the selling stockholders. Our registration of the shares of common stock
covered by this prospectus does not mean that the selling stockholders will offer or sell any of the shares of common stock.
The
selling stockholders may sell the shares of common stock described in this prospectus in a number of different ways and at varying prices.
See “Plan of Distribution” for more information about how the selling stockholders may sell the shares of common stock being
offered pursuant to this prospectus.
We
will pay the expenses incurred in registering the shares, including legal and accounting fees. See “Plan of Distribution”.
Our common stock is listed
on the NYSE American under the symbol “ID”. On August 7, 2023, the last reported sale price of our common stock was $0.49
per share.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 7 of this
prospectus.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is August 8, 2023.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of the registration statement that we filed with the Securities and Exchange Commission, or the SEC. As permitted
by the rules and regulations of the SEC, the registration statement filed by us includes additional information not contained in this
prospectus.
If
information in this prospectus is inconsistent with any document incorporated by reference that was filed with the SEC before the date
of this prospectus, you should rely on this prospectus. This prospectus and the documents incorporated by reference into this prospectus
include important information about us, the securities being offered and other information you should know before investing in our securities.
You should also read and consider information in the documents to which we have referred you in the section of this prospectus entitled
“Where You Can Find More Information.”
You
should rely only on this prospectus and the information incorporated or deemed to be incorporated by reference in this prospectus. We
have not authorized anyone to provide you with information that is in addition to or different from that contained or incorporated by
reference in this prospectus. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus
does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. You should not assume that the information contained or incorporated
by reference in this prospectus is accurate as of any date other than as of the date of this prospectus, or in the case of the documents
incorporated by reference, the date of such documents regardless of the time of delivery of this prospectus or any sale of our shares
of common stock. Our business, financial condition, liquidity, results of operations and prospects may have changed since those dates.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference in this prospectus were made solely for the benefit of the parties to such agreement, including, in
some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
Unless
otherwise indicated, information contained or incorporated by reference in this prospectus concerning our industry, including our
general expectations and market opportunity, is based on information from our own management estimates and research, as well as from
industry and general publications and research, surveys and studies conducted by third parties. Management estimates are derived
from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge, which we
believe to be reasonable. In addition, assumptions and estimates of our and our industry’s future performance are necessarily
uncertain due to a variety of factors, including those described in “Risk Factors” beginning on page 7 of this
prospectus. These and other factors could cause our future performance to differ materially from our assumptions and
estimates.
Unless
the context indicates otherwise, references in this prospectus to the “Company,” “PARTS iD,” “we,”
“us,” “our” and similar terms refer to PARTS iD, Inc. (f/k/a Legacy Acquisition Corp.) and its consolidated subsidiaries
(including PARTS iD, LLC). References to “Legacy” refer to our predecessor company prior to the consummation of the business
combination with Legacy consummated in November 2020 (the “Business Combination”)pursuant to that certain Business Combination
Agreement, dated September 18, 2020 (the “Business Combination Agreement”), by and among Legacy, Excel Merger Sub I, Inc.,
a Delaware corporation, Excel Merger Sub II, LLC, a Delaware limited liability company a, Onyx Enterprises Int’l, Corp., a New
Jersey corporation (“Onyx”), and Shareholder Representative Services LLC, a Colorado limited liability company, solely in
its capacity as the stockholder representative pursuant to the terms of the Business Combination Agreement.
PROSPECTUS
SUMMARY
This
summary highlights certain information about us and selected information contained elsewhere in or incorporated by reference into this
prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding to invest
in our common stock. For a more complete understanding of our company, we encourage you to read and consider carefully the more detailed
information in this prospectus, including the information incorporated by reference in this prospectus, and the information under the
heading “Risk Factors”, beginning on page 7 of this prospectus.
Our
Company
Business
Overview
PARTS
iD, Inc. is a technology-driven, digital commerce company on a mission to transform the U.S. automotive aftermarket and the adjacent
complex parts markets we serve by providing customers a differentiated customer experience with advanced product search capabilities,
proprietary product options, exclusive shop by service type functionality, visually inspired browsing, easy product discovery, rich custom
content, an exhaustive product catalog and competitive prices.
We
deliver this customer experience vision using our purpose-built technology platform and user interface (UI), proprietary parts and accessories
fitment data with more than fourteen billion product and fitment data points powered with machine learning, and a comprehensive product
catalog spanning approximately eighteen million parts and accessories, when fully available, from over one thousand suppliers we partner
with across eight verticals.
Our
technology platform integrates software engineering with catalog management, data intelligence, mining, and analytics, along with user
interface development which utilizes distinctive rules-based parts fitment software capabilities. To manage the ever-growing need for
accurate product and parts data, we use cutting-edge computational and software engineering techniques, including Bayesian classification,
to enhance and improve data records and product information, and ultimately to contribute to the overall development of a rich and engaging
user experience. Furthermore, our technology platform is designed to support much more than just car parts and accessories. We believe
that we have demonstrated the flexibility and scalability of our technology by launching seven adjacent verticals, including BOATiD.com,
MOTORCYCLEiD.com, CAMPERiD.com, and others in August 2018, all of which leverage the same proprietary technology platform and data architecture.
There
are several key competitive strengths that we believe highlight the attractiveness of our platform business model and underscore how
we are differentiated from our competition, including:
| 1. | The
Company’s distinctive technology, customer-first UI, and proprietary fitment data enables
a differentiated shopping experience for the automotive parts consumer. Unlike any other
consumer product category, we believe that the success or failure of selling automotive parts,
and especially aftermarket accessories at scale, comes down to rich and comprehensive fitment
data. We believe that the Company has been successful at developing its own proprietary fitment
database which is not licensed for use to any other person or entity. |
| 2. | We
believe that the Company’s product catalog of approximately eighteen million products,
when fully available, and approximately forty-five hundred brands is unrivaled. Our comprehensive
catalog is enriched with approximately fourteen billion data points, advanced 3D imagery,
in-depth product descriptions, customer reviews, installation and fitment guides, as well
as other rich custom content specifically catering to the needs of the automotive aftermarket
industry and is further complemented by our highly trained and specialized customer service. |
| 3. | The
Company’s proprietary and asset-light fulfillment model is enabled by a network of
hundreds of suppliers with whom we have cultivated relationships with and integrated over
the last fifteen years. This has enabled us to further scale our catalog size and to add
adjacent verticals which allows us to offer a broader array of product lines over our competitors.
Furthermore, our geo-sourcing fulfillment algorithm factors in real-time inventory when available,
customer proximity, shipping cost, and profitability to optimize product sourcing. This algorithmic
approach allows us to increase fill rate and delivery speed. |
| 4. | The
Company’s differentiated customer experience is a result of rich content, wide product
range with ease of selection, proprietary fitment data, and highly trained customer service
representatives, providing a data-driven engagement platform for discovery and inspiration.
This is demonstrated by: |
| a. | the
Company’s Net Promoter Score continues to be between 60-70 despite the global supply
chain disruptions (primarily due to the COVID-19 pandemic); |
| b. | the
Company’s overall product return rate across all eight verticals is consistently within
the range of 5-6%; and |
| c. | repeat
customer revenue was 34% of total revenue for the fourth quarter of 2022. |
The
Company has invested sixteen years in building its proprietary platform and we believe that our investment in technology and data has
allowed us to expand into adjacent verticals, leveraging a capital-efficient just-in-time inventory model to offer our consumers an extensive
selection and customer experience.
Implications
of Being a Smaller Reporting Company and No Longer Being an Emerging Growth Company
We
are a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act of 1934, as amended (the “Exchange Act’)
and have elected to take advantage of certain of the scaled disclosure requirements available to smaller reporting companies.
As
of December 31, 2022, the last day of the fiscal year following the fifth anniversary of the completion of Legacy’s initial public
offering on November 8, 2017, we are no longer an “emerging growth company,” as defined in Section 2(a) of the Securities
Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS
Act”).
Since
we are no longer an “emerging growth company,” we cannot take advantage of certain exemptions from various reporting requirements
that are applicable to emerging growth companies, including, but not limited to, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved. Additionally, since we are no longer
an “emerging growth company,” we can no longer elect to delay the adoption of new or revised accounting standards that have
different effective dates for public and private companies (as defined under Section 2(a) of the Sarbanes-Oxley Act of 2022, the
“Sarbanes-Oxley Act”). However, as a “smaller reporting company,” we are not required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act.
Securities
Offered by Selling Stockholders
This
prospectus relates to the offer and sale by the selling stockholders identified in this prospectus of up to 37,889,029 shares of common
stock consisting of:
| 1. | up
to 13,418,750 shares of common stock that may be issued upon conversion of $5,367,500 aggregate
principal amount, plus the amount of accrued and unpaid interest, if any, that may be payable
in shares of common stock, of outstanding senior secured convertible promissory notes issued
on July 14, 2023 pursuant to the Lind Purchase Agreement (as defined below), representing
a good faith estimate of the maximum number of shares issuable thereunder; |
| 2. | up
to 12,837,838 shares of common stock that may be issued upon exercise of outstanding warrants
to purchase common stock issued on July 14, 2023 pursuant to the Lind Purchase Agreement; |
| 3. | up
to 536,570 shares of common stock that may be issued upon exercise of outstanding warrants
to purchase common stock issued on July 14, 2023 to the Placement Agent (as defined below); |
| 4. | up
to 7,738,094 shares of common stock that may be issued upon exercise of outstanding warrants
to purchase common stock issued on July 13, 2023 pursuant to the July Purchase Agreement
(as defined below); |
| 5. | up
to 694,444 shares of common stock that may be issued upon exercise of outstanding warrants
to purchase common stock issued on June 14, 2023 pursuant to the June Purchase Agreement
(as defined below); |
| 6. | up
to 2,083,333 shares of common stock that may be issued upon exercise of outstanding warrants
to purchase common stock issued on May 19, 2023 pursuant to the May Purchase Agreement (as
defined below); |
| 7. | up
to 580,000 shares of common stock that may be issued upon exercise of outstanding warrants
to purchase common stock issued on March 6, 2023 pursuant to the March Purchase Agreement
(as defined below). |
For
more information, see “Description of the Notes and Warrants” below.
Corporate
Information
Our
corporate mailing address is 1 Corporate Drive, Suite C, Cranbury, New Jersey 08512. Our telephone number is (609) 642-4700, and our
website is www.partsidinc.com. The information on our website is not part of this prospectus. The information contained in or connected
to our website is not incorporated by reference into, and should not be considered part of, this prospectus. Any information about us
on LinkedIn, Twitter or other social media platforms should not be considered part of this prospectus, nor should any information about
us posted by others on blogs, bulletin boards, in chat rooms or in similar media.
THE
OFFERING
Common stock
to be offered by the selling stockholders |
|
37,889,029
shares of our common stock issuable upon exercise of the notes and warrants. The number of shares of common stock issuable upon the
exercise of the notes and warrants and the exercise prices thereof are subject to adjustment in certain circumstances. |
|
|
Common stock outstanding
after this offering |
|
72,715,000
shares of our common stock assuming the notes and warrants are exercised in full and without giving effect to any other issuances
of common stock subsequent to the date hereof. |
|
|
Use of proceeds |
|
We
will receive none of the proceeds from the sale of shares by the selling stockholders in this offering. However, we intend to use
the net proceeds of any exercises of the notes and warrants by the holder thereof to augment our working capital and for general
corporate purposes. See “Use of Proceeds.” |
|
|
Trading |
|
Our
common stock is traded on the NYSE American under the symbol “ID.” |
|
|
Risk factors |
|
Investing
in our common stock involves significant risks. See “Risk Factors” beginning on page 7 of this prospectus and the
documents incorporated by reference in this prospectus. |
The
number of shares of common stock shown above to be outstanding after this offering is based on 34,825,971 shares outstanding as of March
31, 2023, and excludes as of such date:
| ● | 3,212,078
additional shares of common stock reserved and available for future issuances under the PARTS
iD, Inc. 2020 Equity Incentive Plan, of which 2,580,445 shares were subject to outstanding
awards; |
| ● | 2,043,582
additional shares of common stock reserved and available for future issuances under the PARTS
iD, Inc. 2020 Employee Stock Purchase Plan; and |
| ● | 750,000
additional shares of common stock reserved for issuance pursuant to indemnification escrow
obligations under the Business Combination Agreement (any unused portion of which reserved
shares will be issued to Onyx Enterprises Canada Inc., Roman Gerashenko and Stanislav Royzenshteyn,
according to their pro rata share of common stock of Onyx prior to the Closing, pursuant
to the Business Combination Agreement). |
| ● | 1,580,000
additional shares of common stock that may be issuable upon the exercise of outstanding warrants. |
Unless
otherwise indicated, this prospectus assumes no exercise of outstanding stock options or warrants, and no settlement of outstanding restricted
stock units.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
All
statements in this prospectus that address events, developments or results that we expect or anticipate may occur in the future are “forward-looking
statements” within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities
Litigation Reform Act of 1995. The words “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intends,” “project,” “forecast,” “may,”
“might,” “plan,” “possible,” “potential,” “predict,” “project,”
“should,” “seeks,” “scheduled,” or “will,” and similar expressions are intended to identify
forward-looking statements. These statements relate to future periods, future events or our future operating or financial plans or performance,
are made on the basis of management’s current views and assumptions with respect to future events, including management’s
current views regarding the likely impacts of the COVID-19 pandemic, supply chain constraints from current economic conditions, record
inflation and the conflict in Ukraine. Any forward-looking statement is not a guarantee of future performance and actual results could
differ materially from those contained in the forward-looking statement. We operate in a changing environment where new risks emerge
from time to time and it is not possible for us to predict all risks that may affect us, particularly those associated with the COVID-19
pandemic and the conflict in Ukraine, which have had wide-ranging and continually evolving effects. The forward-looking statements, as
well as our prospects as a whole, are subject to risks and uncertainties that could cause actual results to differ materially from those
set forth in the forward-looking statements. These risks and uncertainties include, without limitation:
| ● | our
future capital requirements; |
| ● | our
ability to raise capital and utilize sources of cash; |
| ● | our
ability to generate sufficient revenue to cover our operating expenses and to continue to
operate with a working capital deficiency; |
| ● | our
ability to service our obligations and to obtain funding for our operations; |
| ● | the
ongoing conflict between Ukraine and Russia has affected and may continue to affect our business; |
| ● | competition
and our ability to counter competition, including changes to the algorithms of Google and
other search engines and related impacts on our revenue and advertisement expenses; |
| ● | the
impact on our business of macro-economic factors including discretionary spending pressure
due to inflation and low savings rates that impact consumer sentiment; |
| ● | the
impact of health epidemics, including the COVID-19 pandemic, on our business and the actions
we may take in response thereto; |
| ● | disruptions
in the supply chain and associated impacts on demand, product availability, order cancellations
and cost of goods sold including the economic impacts of record inflation; |
| ● | difficulties
in managing our international business operations, particularly in Ukraine, including with
respect to enforcing the terms of our agreements with our contractors and managing increasing
costs of operations; |
| ● | changes
in our strategy, future operations, financial position, estimated revenue and losses, product
pricing, projected costs, prospects and plans; |
| ● | the
outcome of actual or potential litigation, complaints, product liability claims, or regulatory
proceedings, and the potential adverse publicity related thereto; |
| ● | the
implementation, market acceptance and success of our business model, expansion plans, opportunities
and initiatives, including the market acceptance of our planned products and services; |
| ● | developments
and projections relating to our competitors and industry; |
| ● | our
expectations regarding our ability to obtain and maintain intellectual property protection
and not infringe on the rights of others; |
| ● | our
ability to maintain and enforce intellectual property rights and our ability to maintain
our technology position; |
| ● | changes
in applicable laws or regulations; |
| ● | the
effects of current and future U.S. and foreign trade policy and tariff actions; |
| ● | disruptions
in the marketplace for online purchases of aftermarket auto parts; |
| ● | costs
related to operating as a public company; and |
| ● | the
possibility that we may be adversely affected by other economic, business, and/or competitive
factors. |
See
also the section titled “Risk Factors” in this prospectus and subsequent reports and registration statements filed from time
to time with the SEC, for further discussion of certain risks and uncertainties that could cause actual results and events to differ
materially from our forward-looking statements. Readers of this prospectus are cautioned not to rely on these forward-looking statements,
since there can be no assurance that these forward-looking statements will prove to be accurate. Forward-looking statements speak only
as of the date they are made, and we expressly disclaim any intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make
on related subjects in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. This cautionary
note is applicable to all forward-looking statements contained in this prospectus.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. You should carefully consider the risk factors included in, or incorporated by reference
into, this prospectus, as updated by our subsequent filings under the Exchange Act before acquiring any of such securities. Before making
any investment decision, you should carefully consider these risks as well as other information we include or incorporate by reference
in this prospectus. For more information, see the section entitled “Where You Can Find More Information” and “Incorporation
of Documents by Reference” elsewhere in this prospectus. These risks could materially affect our business, results of operations
or financial condition and affect the value of our securities. You could lose all or part of your investment. Additionally, the risks
and uncertainties discussed in this prospectus or in any document incorporated by reference into this prospectus are not the only risks
and uncertainties that we face, and additional risks and uncertainties not presently known to us or that we currently deem immaterial
may also affect our business, results of operations or financial condition.
Risks
Related to the Company’s Finances
The
Company has a history of losses.
The
Company has a history of low operating margins and losses. The Company continues to focus on growing its business in the near term, with
increasing investments in its business, which may result in the incurrence of additional losses. During (i) the three months ended March
31, 2023, the Company had a net loss of $6.5 million, compared to $3.95 million during the three months ended March 31, 2022 and (ii)
the year ended December 31, 2022, the Company had a net loss of $17.9 million, compared to net a net loss of $8.0 million in 2021. In
2022, a slight decrease in gross margin and a decrease in advertising spend due to liquidity issues led to a decrease in net revenue,
which substantially reduced the profitability of the Company. With continuing supply chain constraints and liquidity concerns, the Company’s
financial condition for 2023 could also be adversely impacted by lower gross margins and lower advertising spend thus reducing revenues.
If the Company incurs substantial net losses in the future, it could impact the Company’s liquidity, as it may not be able to provide
positive cash flows from operations in order to meet its working capital requirements. The Company may need to sell additional assets
or seek additional equity and or debt financing in the future. However, there can be no assurance that the Company would be able to raise
such additional financing or engage in such asset sales on acceptable terms, or at all. If the Company’s net losses were to continue,
and if the Company is not able to raise adequate additional financing or proceeds from asset sales to continue to fund its ongoing operations,
it will need to defer, reduce or eliminate significant planned expenditures, restructure or significantly curtail its operations, file
for bankruptcy or cease operations.
The
Company has experienced significant declines in revenue and is not generating sufficient cash flows to cover its operating expenses,
and any failure to obtain additional capital will jeopardize its operations.
As
of March 31, 2023, the Company had negative working capital of approximately $45.9 million and have continued to experience declining
revenues. While we have operated with a working capital deficiency since our inception, this combined with declined profitability had
caused us to consume approximately $18.5 million in cash from operating activities during the year ended December 31, 2022. Since then,
we have been unable to generate sufficient cash from our operating activities or obtain sufficient financing to cover our operating expenses
to date. If our revenues do not increase and continue to decline, we may be forced to discontinue our operations. In addition, we have
experienced recent unfavorable changes in our credit terms from our vendors due to our inability to generate sufficient cash flows to
cover our operating expenses. We have very limited liquidity and may need to raise additional capital in the near future, which may not
be available on reasonable terms or at all, to continue funding the operations and development of our business. Even if we are able to
raise additional capital, we may raise capital by selling equity securities, which will be dilutive to our existing stockholders. If
we incur indebtedness, costs of financing may be extremely high, and we will be subject to default risks associated with such indebtedness,
which may harm our ability to continue the Company’s operations as a going concern. We cannot provide any assurance that we will
be able to generate sufficient revenue and positive cash flow to successfully continue our business operations.
Changes
in customer, product, vendor or sourcing sales mix could cause the Company’s gross margin and ultimately operating margins to decline;
failure to mitigate these pressures could adversely affect its results of operations and financial condition.
The
Company’s gross margins are dependent on the mix of products it sells, decisions to drop-ship rather than stock products in its
distribution centers, decisions to offer private label alternatives or branded offerings, price changes by its vendors, pricing actions
by competitors, and the mix of paid and organic traffic to its e-commerce platform and economic conditions. In addition, the Company’s
margin could be adversely affected by any consumer shift away from its private label products. Declines in the Company’s margins
could adversely affect its results of operations and financial condition.
We
may be unable to accurately forecast net sales and appropriately plan our expenses in the future.
Net
sales and results of operations are difficult to forecast because they generally depend on the volume, timing and type of orders we receive,
all of which are uncertain. We base our expense levels and investment plans on our estimates of net sales and gross margins. We cannot
be sure the same growth rates, trends, and other key performance metrics are meaningful predictors of future growth. If our assumptions
prove to be wrong, we may spend more than we anticipate acquiring and retaining customers or may generate lower net sales per active
customer than anticipated, either of which could have a negative impact on our business, financial condition, and results of operations.
Risks
Related to Our Common Stock
Concentration
of ownership among certain stockholders may prevent other stockholders from influencing significant corporate decisions.
As
of March 31, 2023, each of Prashant Pathak, Chairman of the Board of Directors (the “Board’) of the Company and a director
and President of Onyx Enterprises Canada Inc. (“OEC”), Roman Gerashenko and Stanislav Royzenshteyn, beneficially owned, directly
or indirectly, approximately 40.9%, 17.4%, and 17.4%, respectively, of our outstanding common stock, and our directors and executive
officers as a group beneficially owned approximately 48% of our outstanding common stock. As a result of their current holdings, these
stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election
of directors, any amendment of the Certificate of Incorporation and approval of significant corporate transactions. This control could
have the effect of delaying or preventing a change of control or changes in management and will make the approval of certain transactions
difficult or impossible without the support of these stockholders.
Sales
of a substantial number of shares of our common stock in the public market could cause the price of our common stock to fall.
Sales
of a substantial number of shares of our common stock in the public market or the perception that these sales might occur could depress
the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
We are unable to predict the effect that sales may have on the prevailing market price of our common stock. In addition, the sale of
substantial amounts of our common stock could adversely impact its price.
The
shares of common stock covered by effective registration statements, pursuant to which certain stockholders may sell their shares, represent
approximately 90% of our outstanding common stock. Sales, or the potential sales, of substantial numbers of shares in the public market
by those selling stockholders could increase the volatility of the market price of our common stock or adversely affect the market price
of our common stock.
We
have never paid dividends on our common stock, and we do not anticipate paying dividends in the foreseeable future.
We
have never paid dividends on any of our capital stock and currently intend to retain any future earnings to fund the growth of our business.
Any determination to pay dividends in the future will be at the discretion of the Board and will depend on our financial condition, operating
results, capital requirements, general business conditions and other factors that the Board may deem relevant. As a result, capital appreciation,
if any, of our common stock will be the sole source of gain for the foreseeable future.
Our
stock price is volatile, and you may not be able to sell shares of our common stock at or above the price you paid.
The
trading price of our common stock is volatile and could be subject to wide fluctuations in response to various factors, some of which
are beyond our control. These factors include:
| ● | actual
or anticipated fluctuations in operating results; |
| ● | failure
to meet or exceed financial estimates and projections of the investment community or that
we provide to the public; |
| ● | issuance
of new or updated research or reports by securities analysts or changed recommendations for
our stock or the transportation industry in general; |
| ● | announcements
by us or our competitors of significant acquisitions, strategic partnerships, joint ventures,
collaborations or capital commitments; |
| ● | operating
and share price performance of other companies that investors deem comparable to us; |
| ● | our
focus on long-term goals over short-term results; |
| ● | the
timing and magnitude of our investments in the growth of our business; |
| ● | actual
or anticipated changes in laws and regulations affecting our business; |
| ● | additions
or departures of key management or other personnel; |
| ● | disputes
or other developments related to our intellectual property or other proprietary rights, including
litigation; |
| ● | our
ability to market new and enhanced products and technologies on a timely basis; |
| ● | sales
of substantial amounts of the common stock by the Board, executive officers or significant
stockholders or the perception that such sales could occur; |
| ● | changes
in our capital structure, including future issuances of securities or the incurrence of debt;
and |
| ● | general
economic, political and market conditions. |
In
addition, the stock market in general, and the NYSE American in particular, has experienced extreme price and volume fluctuations that
have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may
seriously affect the market price of our common stock, regardless of our actual operating performance. In addition, in the past, following
periods of volatility in the overall market and the market price of a particular company’s securities, securities class action
litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial
costs and a diversion of our management’s attention and resources.
Risks
Related to Our Being a Public Company
We
incur significant costs and devote substantial management time as a result of operating as a public company.
As
a public company, we incur significant legal, accounting and other expenses. For example, we are required to comply with the requirements
of the Sarbanes-Oxley Act and the Dodd Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations subsequently
implemented by the SEC and the New York Stock Exchange, including the establishment and maintenance of effective disclosure and financial
controls and changes in corporate governance practices. Compliance with these rules and regulations increases our legal and financial
compliance costs, makes some activities more difficult, time consuming or costly and increases demand on our systems and resources, particularly
since we are no longer an “emerging growth company.” In order to maintain and, if required, improve our disclosure controls
and procedures and internal control over financial reporting, significant resources and management oversight may be required. As a result,
management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results.
USE
OF PROCEEDS
This
prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders. We will
receive no proceeds from the sale of shares of common stock by the selling stockholders in this offering.
We
currently intend to use the net proceeds from any exercise of the warrants for general corporate purposes, which may include working
capital, capital expenditures, the repayment or refinancing of existing indebtedness mergers and acquisitions and other investments.
We have not determined the amounts we plan to spend on any of the areas listed above or the timing of these expenditures. As a result,
our management will have broad discretion to allocate the net proceeds from the exercise of the notes and warrants.
SELLING
STOCKHOLDERS
The
selling stockholders are offering under this prospectus up to 37,889,029 shares of our common stock issuable by us to the below selling
stockholders upon the exercise of the notes and warrants, the terms of which are described in this prospectus under the caption “Description
of the Notes and Warrants.” The selling stockholders may, from time to time, offer and sell pursuant to this prospectus any or
all of the shares offered hereby. The selling stockholders may sell some, all or none of their shares. We do not know how long the selling
stockholders will hold the shares before selling them, and we currently have no agreements, arrangements or understandings with the selling
stockholders regarding the sale of any of the shares or the exercise of the notes and warrants.
The
following table presents information regarding the selling stockholders and the shares that such selling stockholder may offer and sell
from time to time under this prospectus. The table is prepared based on information supplied to us by such selling stockholder. Other
than as disclosed herein, none of the selling stockholders, nor any affiliate of a selling stockholder, has held a position or office,
or had any other material relationship, with us or any of our predecessors or affiliates. Beneficial ownership is determined in accordance
with Rule 13d-3(d) promulgated by the SEC under the Exchange Act. The percentage of shares beneficially owned prior to the offering is
based on 34,825,971 shares of our common stock actually outstanding as of March 31, 2023.
Selling Stockholders | |
Shares Beneficially Owned Before this Offering | | |
Percentage of Outstanding Shares Beneficially Owned Before this Offering | | |
No. of Shares Offered by Selling Stockholder Upon Exercise of Notes and/or Warrants | | |
Percentage of Outstanding Shares Beneficially Owned After this Offering | |
Lind Global Fund II LP (1) | |
| 26,256,588 | | |
| 42.99 | % | |
| 26,256,588 | (2) | |
| * | |
Titan Partners Group LLC (3) | |
| 536,750 | | |
| 1.52 | % | |
| 536,750 | | |
| * | |
2642186 Ontario Inc. (4) | |
| 4,001,637 | | |
| 10.31 | % | |
| 3,996,229 | | |
| * | |
Limestone Development Corporation (5) | |
| 50,000 | | |
| * | | |
| 50,000 | | |
| * | |
Lev Peker (6) | |
| 6,400,986 | | |
| 15.54 | % | |
| 6,374,404 | | |
| * | |
Edwin J. Rigaud (7) | |
| 1,866,986 | | |
| 5.26 | % | |
| 675,238 | | |
| 3.42 | % |
TOTALS | |
| | | |
| | | |
| 37,889,029 | | |
| | |
(1) | Shares
beneficially owned before this offering reflect all shares issuable upon exercise of notes and/or warrants beneficially owned by Lind
Global Fund II LP LP (“Lind”). Jeff Easton is the Managing Member of The Lind Partners, LLC, which is the Investment Manager
of Lind, and in such capacity has the right to vote and dispose of the securities held by such entities. Mr. Easton disclaims beneficial
ownership over the securities listed except to the extent of his pecuniary interest therein. The address of Lind is c/o The Lind Partners
LLC, 444 Madison Avenue, Floor 41, New York, NY 10022. |
(2) | Assumes
the Lind Note (as defined below) converts at a conversion price of $0.40. |
(3) | Shares
beneficially owned before this offering reflect all shares issuable upon exercise of warrants beneficially owned by Titan
Partners Group LLC, a division of American Capital Partners, LLC (“Titan”). The address of Titan is 7 World Trade Center, 46th Floor, New York, NY 10007. |
(4) | Shares beneficially owned before this offering reflect all shares issuable
upon exercise of warrants beneficially owned by 2642186 Ontario Inc. (“Ontario”). The address of Ontario is 2 Bloor St.
W, Toronto, Ontario, Canada. |
(5) | Shares beneficially owned before this offering reflect all shares issuable
upon exercise of warrants beneficially owned by Limestone Development Corporation (“Limestone”). The address of Limestone
is c/o Sierra Corporation, 1090 Don Mills Road, Suite 300, Toronto, Ontario M3C 3R6. |
(6) | Shares
beneficially owned before this offering reflect all shares issuable upon exercise of warrants beneficially owned by Lev
Peker. Includes 26,582 shares of common stock held directly. Mr. Peker serves as a director on the Board and is the Company’s Chief
Executive Officer. The address of Mr. Peker is c/o PARTS iD, Inc., 1 Corporate Drive, Suite C, Cranbury, New Jersey 08512. |
(7) | Shares
beneficially owned before this offering reflect all shares issuable upon exercise of warrants beneficially owned by Edwin
J. Rigaud. Includes: (a) 277,605 shares of common stock held directly; (b) 914,143 shares of common stock held by Legacy Acquisition
Sponsor I LLC over which Mr. Rigaud may share voting and investment power with Legacy Acquisition Sponsor I LLC. Mr. Rigaud is the managing
member of Legacy Acquisition Sponsor I LLC and disclaims beneficial ownership of such shares held by Legacy Acquisition Sponsor I LLC,
except to the extent of his pecuniary interest therein. Mr. Rigaud serves as a director on the Board. The address of Mr. Rigaud is c/o
PARTS iD, Inc., 1 Corporate Drive, Suite C, Cranbury, New Jersey 08512. |
PLAN
OF DISTRIBUTION
The
selling stockholders of the shares offered hereby and any of their pledgees, assignees and successors-in-interest may, from time to time,
sell any or all of their securities covered hereby on the NYSE American or any other stock exchange, market or trading facility on which
the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A selling stockholder may use
any one or more of the following methods when selling securities:
| ● | ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● | block
trades in which the broker-dealer will attempt to sell the securities as agent but may position
and resell a portion of the block as principal to facilitate the transaction; |
| ● | purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; |
| ● | an
exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately
negotiated transactions; |
| ● | settlement
of short sales; |
| ● | in
transactions through broker-dealers that agree with the selling stockholders to sell a specified
number of such securities at a stipulated price per security; |
| ● | through
the writing or settlement of options or other hedging transactions, whether through an options
exchange or otherwise; |
| ● | a
combination of any such methods of sale; or |
| ● | any
other method permitted pursuant to applicable law. |
The
selling stockholders may also sell securities under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in
excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or
markdown in compliance with FINRA IM-2440.
In
connection with the sale of the securities or interests therein, the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they
assume. The selling stockholders may also sell securities short and deliver these securities to close out their short positions, or loan
or pledge the securities to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option
or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer
or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
Any
broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning
of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act. Each selling stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly
or indirectly, with any person to distribute the securities.
The
Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company
has agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under
the Securities Act.
Any
securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144
rather than under this prospectus. The selling stockholders have advised us that there is no underwriter or coordinating broker acting
in connection with the proposed sale of the resale securities by the selling stockholders.
We
agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the selling stockholders
without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar
effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule
of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is
complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the selling stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the
common stock by the selling stockholders or any other person. We will make copies of this prospectus available to the selling stockholders
and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).
DESCRIPTION
OF CAPITAL STOCK
The
following summary of the material terms of our capital stock is not intended to be a complete summary of the rights and preferences of
such securities, and is qualified by reference to our Second Amended and Restated Certificate of Incorporation (our “Certificate
of Incorporation”) and our Amended and Restated Bylaws (our “Bylaws”), which are exhibits to the registration statement
of which this prospectus is a part. We urge to you read each of our Certificate of Incorporation and our Bylaws in their entirety for
a complete description of the rights and preferences of our common stock and preferred stock.
Authorized
and Outstanding Stock
Our
Certificate of Incorporation authorizes the issuance of 111,000,000 shares of capital stock, $0.0001 par value per share, consisting
of (a) 110,000,000 shares of common stock, including 100,000,000 shares of Class A common stock and 10,000,000 shares of Class F common
stock, and (b) 1,000,000 shares of preferred stock (the “Preferred Stock”).
As
of March 31, 2023, we had 34,825,971 shares of Class A common stock outstanding. As of March 31, 2023, the Company had reserved 6,005,660 shares
of Class A common stock for issuance as follows:
Nature of Reserve | |
As of March 31, 2023 | |
a. | |
Indemnification reserve: Upon the expiration of the indemnification period of two years as described in the Business Combination Agreement, subject the payments of indemnity claims, if any, the Company will issue up to 750,000 Common shares to former Onyx shareholders | |
| 750,000 | |
b. | |
EIP reserve: Shares reserved for future issuance under the stockholder approved Parts iD, Inc. 2020 Equity Incentive Plan | |
| 3,212,078 | |
c. | |
ESPP reserve: Shares reserved for future issuance under the stockholder approved Parts iD, Inc. 2020 Employee Stock Purchase Plan | |
| 2,043,582 | |
| |
Total shares reserved for future issuance | |
| 6,005,660 | |
As
of March 31, 2023, there were no shares of Class F common stock outstanding, and no shares of Preferred Stock outstanding.
The outstanding shares of common stock are duly authorized, validly issued, fully paid and non-assessable.
Class
A Common Stock
Voting
Power
Except
as otherwise required by law or as otherwise provided in any certificate of designation for any series of Preferred Stock, the holders
of Class A common stock possess all voting power for the election of our directors and all other matters requiring stockholder action.
Holders of Class A common stock and Class F common stock are entitled to one vote per share, voting together as a single class, on matters
to be voted on by stockholders.
Dividends
Subject
to the rights of holders of Preferred Stock, holders of Class A common stock will be entitled to receive such dividends, if any, as may
be declared from time to time by the Board in its discretion out of funds legally available therefor. We have not paid any cash dividends
on the Class A common stock to date. We may retain future earnings, if any, for future operations, expansion and debt repayment and have
no current plans to pay cash dividends for the foreseeable future. Any decision to declare and pay dividends in the future will
be made at the discretion of the Board and will depend on, among other things, our results of operations, financial condition, cash requirements,
contractual restrictions and other factors that the Board may deem relevant. In addition, our ability to pay dividends may be limited
by covenants of any existing and future outstanding indebtedness incurred.
Liquidation,
Dissolution and Winding Up
In
the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of the Class A
common stock, together with holders of Class F common stock, will be entitled to receive an amount of all of our assets of whatever kind
available for distribution to stockholders, after the rights of the holders of the preferred stock have been satisfied, ratably in proportion
to the number of shares of Class A common stock (on an as-converted basis with respect to the Class F common stock) held.
Preemptive
or Other Rights
Our
stockholders have no preemptive or other subscription rights and there are no sinking fund, redemption provisions or conversion
provisions applicable to Class A common stock.
Class
A Common Stock as Potentially Limited by Issuance of Preferred Stock
The
Certificate of Incorporation provides that shares of Preferred Stock may be issued from time to time in one or more series. The Board
is authorized to fix the voting rights, if any, designations, powers and preferences, the relative, participating, optional or other
special rights, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series of Preferred Stock.
The Board is able to, without stockholder approval, issue Preferred Stock with voting and other rights that could adversely affect the
voting power and other rights of the holders of the Class A common stock and could have anti-takeover effects. The ability of our Board
to issue Preferred Stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control
of the Company or the removal of existing management.
Certain
Anti-Takeover Provisions of Delaware Law and our Certificate of Incorporation and Bylaws
We
are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations,
under certain circumstances, from engaging in a “business combination” with:
| ● | a
stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested
stockholder”); |
| ● | an
affiliate of an interested stockholder; or |
| ● | an
associate of an interested stockholder, for three years following the date that the stockholder
became an interested stockholder. |
A
“business combination” includes a merger or sale of more than 15% of our assets. However, the above provisions of Section
203 do not apply if:
| ● | our
Board approves the transaction that made the stockholder an “interested stockholder,”
prior to the date of the transaction; |
| ● | after
the completion of the transaction that resulted in the stockholder becoming an interested
stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time
the transaction commenced, other than statutorily excluded shares of common stock; or |
| ● | on
or subsequent to the date of the transaction, the business combination is approved by our
Board and authorized at a meeting of our stockholders, and not by written consent, by an
affirmative vote of at least two-thirds of the outstanding voting stock not owned by the
interested stockholder. |
Our
authorized but unissued capital stock and Preferred Stock are available for future issuances without stockholder approval and could be
utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit
plans. The existence of authorized but unissued and unreserved capital stock could render more difficult or discourage an attempt to
obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Exclusive
forum for certain lawsuits
Our
Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against
directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery
in the State of Delaware and, if brought outside of Delaware, the stockholder bringing such suit will be deemed to have consented to
service of process on such stockholder’s counsel. In addition, our Bylaws require that the federal district courts of the United
States shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities
Act. Notwithstanding the foregoing, unless and until our Bylaws are amended in this respect, the exclusive forum provision shall not
apply to claims seeking to enforce any liability or duty created by the Exchange Act. Any person or entity purchasing or otherwise acquiring
any interest in our shares of common stock shall be deemed to have notice of and to have consented to these provisions of our Certificate
of Incorporation and Bylaws. In addition, Section 22 of the Securities Act provides that federal and state courts have concurrent jurisdiction
over lawsuits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. To the
extent the exclusive forum provision restricts the courts in which claims arising under the Securities Act may be brought, there is uncertainty
as to whether a court would enforce such a provision. We note that investors cannot waive compliance with the federal securities laws
and the rules and regulations thereunder. Although we believe this provision benefits us by providing increased consistency in the application
of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our
directors and officers.
Special
meetings of stockholders
Our
Bylaws provide that special meetings of our stockholders may be called only by a majority vote of our Board, by our Chief Executive Officer
or by our Chairman of the Board.
Advance
notice requirements for stockholder proposals and director nominations
Our
Bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election
as directors at our annual meeting of stockholders must provide timely notice of their intent in writing. To be timely, a stockholder’s
notice will need to be received by the Company secretary at our principal executive offices not later than the close of business on the
90th day nor earlier than the opening of business on the 120th day prior to the anniversary of the immediately
preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Securities Act, proposals seeking inclusion in our annual
proxy statement must comply with the notice periods contained therein. Our Bylaws also specify certain requirements as to the form and
content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting
of stockholders or from making nominations for directors at our annual meeting of stockholders.
No
action by written consent
Our
Certificate of Incorporation provides that any action required or permitted to be taken by our stockholders must be effected by a duly
called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders.
Classified
Board of Directors
Our
Certificate of Incorporation provides that our Board is divided into two classes, Class I and Class II, with members of each class serving
staggered two-year terms and that the authorized number of directors may be changed only by resolution of the Board. As a result,
in most circumstances, a person can gain control of our Board only by successfully engaging in a proxy contest at two or more annual
meetings.
There
is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted
for the election of directors can elect all of the directors within the class of directors up for election.
Subject
to the terms of any Preferred Stock, any or all of the directors may be removed from office at any time, but only for cause and only
by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of our capital stock entitled to
vote generally in the election of directors, voting together as a single class. Any vacancy on our Board, including a vacancy resulting
from an enlargement of our Board, may be filled only by vote of a majority of our directors then in office.
Our
Transfer Agent
The
transfer agent for our common stock is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock
Transfer & Trust Company in its role as transfer agent, its agents and each of its stockholders, directors, officers and employees
against all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its
activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified
person or entity.
Rule
144
Pursuant
to Rule 144, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell
their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during
the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months
before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such
shorter period as we were required to file reports) preceding the sale.
Persons
who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of,
or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be
entitled to sell within any three-month period only a number of securities that does not exceed the greater of:
| ● | 1%
of the total number of shares of common stock then outstanding; or |
| ● | the
average weekly reported trading volume of the common stock during the four calendar weeks
preceding the filing of a notice on Form 144 with respect to the sale. |
Sales
by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current
public information about us.
DESCRIPTION
OF THE NOTES AND WARRANTS
Lind
Financing
On
July 14, 2023, we entered into a Securities Purchase Agreement with Lind Global Fund II LP (“Lind”) (the “Lind Purchase
Agreement”).
The
Lind Purchase Agreement provides for loans in an aggregate principal amount of up to $10 million under various tranches (the “Lind
Financing”). As of July 14, 2023, Lind funded $3.75 million (less commitment fees) to the Company out of the $4.75 million “First
Funding Amount” (as defined in the Lind Purchase Agreement) and Lind will fund the remaining $1.0 million (less commitment fees)
within 5 business days of the Company (i) having a registration statement (the “Registration Statement”) declared effective
by the SEC for the registration of the shares of the common stock issuable upon conversion of the Lind Note (as defined below) and the
Lind Warrant (as defined below) and (ii) the receipt of Stockholder Approval (as defined in the Lind Purchase Agreement), if required.
In consideration for the First Funding Amount, the Company issued and sold to Lind, in a private placement, (A) a senior secured convertible
promissory note in the aggregate principal amount of $5,367,500 (the “Lind Note”) and (B) 12,837,838 warrants to purchase
the common stock at an exercise price of $0.50 per share (subject to certain adjustments) (the “Lind Warrant”).
At
any time while the Lind Note is outstanding and subject to certain conditions being satisfied as set forth in the Lind Purchase Agreement,
the Company may deliver a written notice to Lind (an “Additional Funding Request”) requesting an increase in the amount of
funding provided by Lind to the Company under the Lind Note, and such Additional Funding Request shall be equal to no less than $1.0
million and shall not exceed $5.25 million (the “Additional Funding Limit”). Within 7 business days of receiving the Additional
Funding Request, Lind shall give a written response to the Company (an “Investor Response”) that provides that Lind has elected
(in its sole and absolute discretion) to (i) advance the full requested amount, (ii) advance an amount less than the full requested amount
or (iii) not advance any of the requested amount. In addition, Lind may, in its sole discretion and without any action by the Company,
deliver written notice to the Company (an “Investor Funding Notice”) of its election to advance up to an aggregate of $2.0
million of increased funding to the Company. Any such increased funding amounts directed by Lind shall count toward the Additional Funding
Limit.
The
Lind Note does not bear any interest and matures on July 14, 2024. Following the date that is sixty (60) days after the earlier to occur
of (A) the date the Registration Statement is declared effective by the SEC or (B) the date that any shares issued pursuant to the Lind
Note may be immediately resold under Rule 144 of the Securities Act, the Company may repay all, but not less than all,
of the then outstanding principal amount of the Lind Note, subject to a 5% premium. If the Company elects to prepay the Lind Note, Lind
has the right to convert up to 33 1/3% of the principal amount of the Lind Note at the Conversion Price (as defined below) into shares
of the common stock. The Lind Note is convertible, at the option of Lind, into shares of the common stock at a price per share equal
to the lower of $0.50 or 90% of the average of the 3 lowest daily VWAPs (as defined in the Lind Note) during the 20 Trading Days (as
defined in the Lind Note) prior to conversion.
As
collateral for the obligations under the Lind Purchase Agreement, the Company has granted to Lind a senior security interest in all of
Company’s right, title, and interest in, to and under all of Company’s property (inclusive of intellectual property), subject
to certain exceptions, as set forth in the LLC Guarantor Security Agreement (as defined in the Lind Purchase Agreement) and the Security
Agreement (as defined in the Lind Purchase Agreement).
The
Lind Warrant will expire after 5 years from the date of issuance and may be exercised on a cashless basis. The Lind Warrant provides
that Lind will not have the right to exercise any portion of the Lind Warrant, if, together with its affiliates, and any other party
whose holdings would be aggregated with those of the holder for purposes of Section 13(d) or Section 16 of the Securities Exchange Act
of 1934, as amended, would beneficially own in excess of 4.99%, of the number of shares of the common stock outstanding immediately after
giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that the Beneficial Ownership
Limitation by shall automatically increase to 9.99% if Lind, together with its affiliates, owns in excess of 4.99% of the Company’s
outstanding common stock.
Titan
Partners Group, a division of American Capital Partners, LLC, acted as sole placement agent for the offering.
The
foregoing descriptions of the Lind Purchase Agreement, the Lind Note, the Lind Warrant, Security Agreement, LLC Guarantor Security Agreement,
Pledge Agreement, Guaranty and Trademark Security Agreement are not complete and are subject to, and qualified in their entirety by reference
to, the full text of the Lind Purchase Agreement, the forms of Lind Note and Lind Warrant, and the full text of the Security Agreement,
LLC Guarantor Security Agreement, Pledge Agreement, Guaranty and Trademark Security Agreement, which are included as Exhibits 10.1, 4.1,
4.2, 10.2, 10.3, 10.4, 10.5 and 10.6 to this registration statement, respectively, and are incorporated herein by this reference.
Placement
Agent Warrant
On
July 14, 2023, in consideration for its services in respect of the Lind Financing described above, the Company also issued to Titan Partners
Group LLC, a division of American Partners, LLC (the “Placement Agent”) warrants to purchase 536,570 shares of the common
stock at an exercise price per share of $0.625 (the “Placement Agent Warrant”). The Placement Agent Warrant has a 5-year
term. In addition, the Company paid the Placement Agent a commission of $285,000.
The
foregoing description of the Placement Agent thereby is not complete and is subject to, and qualified in its entirety by reference to,
the form of the Placement Agent Warrant, of which is included as Exhibit 10.7 to this registration statement and is incorporated herein
by this reference.
July
2023 Warrants
On
July 13, 2023, the Company entered into a Note and Warrant Purchase Agreement (the “July Purchase Agreement”) whereby the
Company agreed to issue and sell to certain investors affiliated with certain directors, officers and beneficial owners of the Company
(collectively, the “July Purchasers”), in a private placement, (i) an aggregate principal amount of up to $3.25 million in
junior secured convertible promissory notes and (ii) an aggregate of up to 7,738,094 warrants to purchase the common stock at an exercise
price of $0.42 per share (subject to certain adjustments) (the “July Warrants”).
The
July Warrants will expire after 5 years from the date of issuance and the July Warrant issued to the non-insider Purchaser may be exercised
on a cashless basis. The July Warrants provide that a holder of July Warrants will not have the right to exercise any portion of its
July Warrants, if such holder, together with its affiliates, and any other party whose holdings would be aggregated with those of the
holder for purposes of Section 13(d) or Section 16 of the Exchange Act would beneficially own in excess the Beneficial Ownership Limitation;
provided, however, that each holder may increase or decrease the Beneficial Ownership Limitation by giving notice to the Company, with
any such increase not taking effect until the sixty-first day after such notice is delivered to the Company but not to any percentage
in excess of 9.99%; provided that any holder of the July Warrants that beneficially owns in excess of 19.99% of the number of shares
of the common stock outstanding on the issuance date of the July Warrants shall not be subject to the Beneficial Ownership Limitation.
The
foregoing descriptions of the July Purchase Agreement and the July Warrants are not complete and are subject to, and qualified in their
entirety by reference to, the full text of the July Purchase Agreement and the form of July Warrant, which are included as Exhibits 10.8,
4.3, 4.4, 4.5 and 4.6 to this registration statement, respectively, and are incorporated herein by this reference.
June
2023 Warrants
On
June 14, 2023, we entered into a Note and Warrant Purchase Agreement (the “June Purchase Agreement”) whereby the Company
agreed to issue and sell to an investor (the “Purchaser”), in a private placement, (i) an unsecured convertible promissory
note in the aggregate principal amount of $250,000 and (ii) a warrant to purchase an aggregate of 694,444 shares of the common stock,
at an exercise price of $0.36 per share (the “June Warrant”).
The
June Warrant will expire after 5 years from the date of issuance and may not be exercised on a cashless basis. The June Warrant provides
that the holder will not have the right to exercise any portion of the June Warrant, if the holder, together with its affiliates, and
any other party whose holdings would be aggregated with those of the holder for purposes of Section 13(d) or Section 16 of the Exchange
Act would beneficially own in excess of the Beneficial Ownership Limitation; provided, however, that the holder may increase or decrease
the Beneficial Ownership Limitation by giving notice to the Company, with any such increase not taking effect until the sixty-first day
after such notice is delivered to the Company but not to any percentage in excess of 9.99%; provided that the holder of the June Warrant
that beneficially owns in excess of 19.99% of the number of shares of the common stock outstanding on the issuance date of the June Warrant
shall not be subject to the Beneficial Ownership Limitation.
The
foregoing description is only a summary of the terms of the June Purchase Agreement and June Warrant and it is qualified in its entirety
by reference to the full text of the June Purchase Agreement and June Warrant, copies of which are included as Exhibits 10.9 and 10.10
to this registration statement, respectively, and are incorporated herein by this reference.
May
2023 Warrants
On
May 19, 2023, we entered into a Note and Warrant Purchase Agreement (the “May Purchase Agreement”) whereby the Company agreed
to issue and sell to certain investors, in a private placement, (i) unsecured convertible promissory notes (the “May Convertible
Notes”) in the aggregate principal amount of $1,000,000 and (ii) an aggregate of 2,083,333 warrants to purchase shares of the common
stock, at an exercise price of $0.48 per share (the “May Warrants”). Lev Peker, the Chief Executive Officer and a director
of the Company, purchased an aggregate principal amount of $750,000 of May Convertible Notes and received an aggregate of 1,562,500 May
Warrants in this offering. All of the disinterested directors of the Board, as well as the disinterested directors of the Audit Committee
of the Company, reviewed and approved the terms of the May Purchase Agreement, May Convertible Notes and May Warrants.
The
May Warrants will expire after 5 years from the date of issuance and may not be exercised on a cashless basis. The May Warrants provide
that a holder of May Warrants will not have the right to exercise any portion of its May Warrants, if such holder, together with its
affiliates, and any other party whose holdings would be aggregated with those of the holder for purposes of Section 13(d) or Section
16 of the Exchange Act would beneficially own in excess of the Beneficial Ownership Limitation; provided, however, that each holder may
increase or decrease the Beneficial Ownership Limitation by giving notice to the Company, with any such increase not taking effect until
the sixty-first day after such notice is delivered to the Company but not to any percentage in excess of 9.99%; provided that any holder
of the May Warrants that beneficially owns in excess of 19.99% of the number of shares of the common stock outstanding on the issuance
date of the May Warrants shall not be subject to the Beneficial Ownership Limitation.
The
foregoing description is only a summary of the terms of the May Purchase Agreement and May Warrants and it is qualified in its entirety
by reference to the full text of the May Purchase Agreement and May Warrants, copies of which are included as Exhibits 10.11 and 4.7
to this registration statement, respectively, and are incorporated herein by this reference.
March
2023 Warrants
On
March 6, 2023, we entered into a Note and Warrant Purchase Agreement (the “March Purchase Agreement”) whereby the Company
agreed to issue and sell to certain investors in a private placement, (i) an aggregate principal amount of up to $10 million in junior
secured convertible promissory notes (the “March Convertible Notes”) and (ii) an aggregate of up to two million warrants
to purchase the common stock at an exercise price of $0.50 per share (the “March Warrants”), in one or more closings pursuant
to the terms of the March Purchase Agreement. All of the disinterested directors of the Board, as well as the disinterested directors
of the Audit Committee of the Company, reviewed and approved the terms of the March Purchase Agreement, March Convertible Notes and March
Warrants. As of March 6, 2023, the Company issued and sold (i) an aggregate principal amount of $2,900,000 of March Convertible Notes
and (ii) an aggregate of 580,000 March Warrants, of which $2,650,000 of March Convertible Notes and 530,000 March Warrants were purchased
by entities affiliated with certain directors, officers and beneficial owners of the Company.
The
March Warrants will expire after 5 years from the date of issuance and may not be exercised on a cashless basis. The March Warrants provide
that a holder of March Warrants will not have the right to exercise any portion of its March Warrants, if such holder, together with
its affiliates, and any other party whose holdings would be aggregated with those of the holder for purposes of Section 13(d) or Section
16 of the Exchange Act would beneficially own in excess of the Beneficial Ownership Limitation; provided, however, that each holder may
increase or decrease the Beneficial Ownership Limitation by giving notice to the Company, with any such increase not taking effect until
the sixty-first day after such notice is delivered to the Company but not to any percentage in excess of 9.99%; provided that any holder
of the March Warrants that beneficially owns in excess of 19.99% of the number of shares of the common stock outstanding on the issuance
date of the March Warrants shall not be subject to the Beneficial Ownership Limitation.
The
foregoing descriptions of the March Purchase Agreement and the March Warrants are not complete and are subject to, and qualified in their
entirety by reference to, the full text of the March Purchase Agreement and the form of March Warrant, copies of which are included as
Exhibits 10.12 and 4.8 to this registration statement, respectively, and are incorporated herein by this reference.
LEGAL
MATTERS
The
validity of the securities being offered hereby will be passed upon for us by DLA Piper LLP (US), Short Hills, New Jersey.
EXPERTS
WithumSmith+Brown
PC, independent registered public accounting firm, has audited our consolidated financial statements included in our Annual Report on
Form 10-K for the year ended December 31, 2022, as set forth in their report, dated April 17, 2023, which is incorporated by reference
in the prospectus and elsewhere in this registration statement. Our consolidated financial statements are incorporated by reference in
reliance on WithumSmith+Brown PC’s report, given their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that
contains our reports, proxy statements and other information regarding us and other issuers that file electronically with the SEC, at
http://www.sec.gov. Our SEC filings are also available at our website (www.partsidinc.com). However, except for our filings with the
SEC that are incorporated by reference into this prospectus, the information on our website is not, and should not be deemed to be, a
part of, or incorporated by reference into this prospectus.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
SEC allows “incorporation by reference” into this prospectus of information that we file with the SEC. This permits us to
disclose important information to you by referencing these filed documents. Any information referenced this way is considered to be a
part of this prospectus and any information filed by us with the SEC subsequent to the date of this prospectus automatically will be
deemed to update and supersede this information. We incorporate by reference the following documents which we have filed with the SEC
(excluding any documents or portions of such documents that have been “furnished” but not “filed” for purposes
of the Exchange Act):
|
(1) |
Our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which incorporates by reference certain portions of our definitive proxy statement for our 2023 Annual Meeting of Stockholders filed on April 17, 2023, and as amended on Form 10-K/A filed on May 1, 2023; |
|
(2) |
Our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, filed on May 22, 2023; |
|
(3) |
Our
Current Reports on Form 8-K filed on January
6, 2023, January
17, 2023, February
7, 2023, February
8, 2023, February
21, 2023, February
23, 2023, March 6,
2023, April 27,
2023, May 22,
2023, May 26,
2023, June 20,
2023, July 12,
2023, July 17,
2023 and August 3, 2023; and |
|
(4) |
The description of our Class A common stock contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed on April 17, 2023, and as amended on Form 10-K/A filed on May 1, 2023. |
We
incorporate by reference any filings made by us with the SEC in accordance with Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
on or after the date of this prospectus and the date all of the securities offered hereby are sold or the offering is otherwise terminated,
with the exception of any information furnished under Item 2.02 and Item 7.01 (including any financial statements or exhibits relating
thereto furnished pursuant to Item 9.01) of Form 8-K, which is not deemed filed and which is not incorporated by reference herein. Any
such filings shall be deemed to be incorporated by reference and to be a part of this prospectus from the respective dates of filing
of those documents.
This
prospectus is part of a registration statement that we filed with the SEC and do not contain all of the information in the registration
statement. The full registration statement may be obtained from the SEC or us, as provided below. Statements in this prospectus about
these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should
refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement
at the SEC’s website, as provided above.
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed to be modified
or superseded to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference in this prospectus modifies or supersedes that statement. Any statement so modified or superseded will
not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We
will provide to each person, including any beneficial owner, to whom a prospectus is delivered, without charge, upon written or oral
request, a copy of any or all of the documents that are incorporated by reference into this prospectus but not delivered with this prospectus,
excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference as an exhibit in this prospectus.
You should direct requests for documents to:
PARTS
iD, Inc.
1
Corporate Drive, Suite C
Cranbury,
New Jersey 08512
+1
(609) 642-4700
You
should rely only on the information incorporated by reference or presented in this prospectus. Neither we, nor any underwriters or agents,
have authorized anyone else to provide you with different information. We are not making an offer of these securities in any jurisdiction
where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than
the dates on the front of those documents.
37,889,029
Shares of Class A Common Stock
PROSPECTUS
August 8, 2023
PARTS iD (AMEX:ID)
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