Item 2.02 Results of Operations and Financial Condition
On February 11, 2020, Lyft, Inc. (the "Company" or "Lyft") issued a press
release announcing its financial results for the quarter and fiscal year ended
December 31, 2019. A copy of the press release is attached as Exhibit 99.1 to
this current report on Form 8-K and is incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
In connection with consummation of the acquisition (the "Acquisition") of all of
the outstanding membership interests of Flexdrive Services, LLC ("Flexdrive") by
Lyft, on February 7, 2020 for approximately $20 million, pursuant to which
Flexdrive became a wholly-owned subsidiary of Lyft, Flexdrive remained
responsible for obligations under Flexdrive's Loan and Security Agreement, as
amended, with Hyundai Capital America ("Lender") (the "HCA Agreement"). Further,
in connection with the Acquisition, Lyft agreed to guarantee the obligations of
Flexdrive under (i) the Vehicle Lease Agreement, dated as of October 31, 2017,
as amended, by and between Flexdrive and Automotive Rentals, Inc. ("ARI") (the
"ARI Lease Agreement"), (ii) the Master Vehicle Acquisition Financing and
Security Agreement, dated as of February 7, 2020, as amended, by and between
Flexdrive and ARI (the "ARI Loan Agreement"), and (iii) the Vehicle Procurement
Agreement, dated as of February 7, 2020, by and between Flexdrive and ARI (the
"Procurement Agreement").
HCA Agreement
Pursuant to the HCA Agreement, Lender has previously and will continue to
advance loans to Flexdrive in an amount up to the total line of credit to
purchase new Hyundai and Kia vehicles. At the time of the Acquisition, the HCA
Agreement consisted of a line of credit of $300 million, of which approximately
$104 million was outstanding, which amounts are secured by all equipment and
inventory financed under the HCA Agreement, as well as certain other rights and
agreements related to such equipment and inventory (the "HCA Loan"). Interest on
the HCA Loan is set with respect to each advance made under the HCA Agreement.
Interest and principal payments are due monthly for the term specified in the
advance, but must be paid in full no later than 48 months from the date of the
advance. In addition, principal amounts outstanding under the HCA Loan may be
fully or partially prepaid at the option of Flexdrive and must be prepaid under
certain circumstances.
The HCA Agreement also contains customary affirmative and negative covenants
that, among other things, limit Flexdrive's ability to enter into certain
acquisitions or consolidations or engage in certain asset dispositions. Upon the
occurrence of certain events of default, including bankruptcy and insolvency
events with respect to Flexdrive or Lyft, all amounts due under the HCA
Agreement may become immediately due and payable, among other remedies.
ARI Lease Agreement, ARI Loan Agreement and Procurement Agreement
Under the ARI Lease Agreement, ARI will continue to procure and lease to
Flexdrive such vehicles as Flexdrive may request. Each lease issued pursuant to
the ARI Lease Agreement is subject to a separate motor vehicle lease agreement,
without a pre-set aggregate lease value cap. At the time of the Acquisition, the
net book value of all vehicles leased pursuant to the ARI Lease Agreement was
approximately $106 million. In Lyft's Registration Statement on Form S-1
effective March 28, 2019 and Lyft's Quarterly Reports on Form 10-Q filed on
May 14, 2019, August 13, 2019 and November 4, 2019, Flexdrive is identified as
the Select Express Drive Partner. Flexdrive rentals are reflected in Lyft's
financial results as operating leases, and revenue and lease expenses have been
recognized on a gross basis in Lyft's income statement.
Each loan issued pursuant to the ARI Loan Agreement is subject to a separate
motor vehicle loan agreement, without a pre-set aggregate loan cap. At the time
of the Acquisition, approximately $76 million in vehicle loans was outstanding
pursuant to the ARI Loan Agreement.
Under the Procurement Agreement, ARI provides certain procurement services and
fleet management services to Flexdrive.
The obligations of Flexdrive under the ARI Lease Agreement, the ARI Loan
Agreement and the Procurement Agreement are guaranteed by Lyft.
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Item 7.01 Regulation FD Disclosure
On February 11, 2020, Lyft posted supplemental investor materials on its
investor.lyft.com website. Lyft announces material information to the public
about Lyft, its products and services and other matters through a variety of
means, including filings with the Securities and Exchange Commission, press
releases, public conference calls, webcasts, the investor relations section of
its website (investor.lyft.com), its blog (blog.lyft.com) and its Twitter
account (@lyft) in order to achieve broad, non-exclusionary distribution of
information to the public and for complying with its disclosure obligations
under Regulation FD.
The information in Item 2.02 and Item 7.01 of this current report on Form 8-K
and the exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") or otherwise subject to the liabilities of that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended (the "Securities Act"), or the Exchange Act, regardless of any
general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
Exhibit
No. Exhibit Description
99.1 Press Release, dated February 11, 2020
104 Cover Page Interactive Data File (formatted as Inline XBRL)
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