LOTZ CLASS ACTION NOTICE: Glancy Prongay & Murray LLP Files Securities Fraud Lawsuit Against CarLotz, Inc.

By On Jul 9, 2021

THE ANGEL–(BUSINESS WIRE) – Glancy Prongay & Murray LLP (“GPM”) announces a class action lawsuit named Erdman v. CarLotz, Inc., et al., (Case No. 21-cv-5906) on behalf of individuals and legal entities, the securities of CarLotz, Inc. (“CarLotz” or “the Company”) (NASDAQ: LOTZ) between purchased or otherwise obtained on December 30, 2020 and May 25, 2021, inclusive (the “Class Period”). Plaintiff is pursuing claims under Sections 10 (b) and 20 (a) of the Securities Exchange Act of 1934 (the “Exchange Act”).

Investors are hereby notified that they have 60 days from this notification to move the court as the lead plaintiff in this lawsuit.

If you have suffered a loss on your CarLotz investment or would like to inquire whether federal securities laws allow you to recover your loss, your contact information can be found at https://www.glancylaw.com/cases/carlotz-inc . to transfer /. You can also contact Charles H. Linehan of GPM at 310-201-9150, toll free at 888-773-9224, email [email protected], or visit our website at www.glancylaw.com to learn more about your rights.

On March 15, 2021, CarLotz announced its fourth quarter and full year 2020 financial results. During a related conference call, the company stated that gross profit and gross profit per unit (“GPU”) were “softer than. . . expected ”due to“ the increase in inventory during the quarter and the resulting lower profitability of the retail units ”. CarLotz also reported that the extra inventory “created a jam that resulted in slower processing and higher sales days”.

Due to this news, the company’s share price fell $ 0.79, or 8.5%, on an unusually high trading volume, to close at $ 8.45 per share on March 16, 2021. The stock price fell a further $ 0.62, or 7.3%, for the next two consecutive trading sessions, closing at $ 7.83 per share on March 18, 2021 with unusually high trading volume.

Then, on May 10, 2021, after the market closed, CarLotz announced its financial results for the first quarter of 2021, which showed that gross profit per unit was below expectations. Specifically, the company had expected retail GPUs between $ 1,300 and $ 1,500 but reported $ 1,182.

Based on this news, the company’s share price fell $ 0.94, or 14%, on an unusually high trading volume, and closed at $ 5.57 per share on May 11, 2021. The stock price continued to fall $ 0.45, or 8%, to close at $ 4.12 per share on May 12, 2021 due to unusually high trading volume.

Then, on May 26, 2021, before the market opened, CarLotz announced an update to its with-profits agreement. Specifically, CarLotz stated that its “with-profits partner for the procurement of company vehicles has informed the company that it has suspended deliveries to the company in light of the current wholesale market conditions”. In addition, this partner accounted for “more than 60% of the cars sold and procured” in the first quarter of 2021 and “less than 50% of the cars sold and approximately 25% of the cars procured” in the second quarter of 2021 to date.

As a result of this news, the company’s share price fell $ 0.70, or 13.4%, due to an unusually high trading volume, and closed at $ 4.51 per share on May 26, 2021.

The complaint filed in this class action lawsuit alleges that during the collection period the defendants made materially false and / or misleading statements and disclosed material adverse facts about the company’s business, operations and prospects. In particular, Defendants made material misrepresentations regarding the following: (1) that CarLotz had a “backlog” due to an increase in inventory in the second half of fiscal 2020, resulting in slower processing and higher sales days; (2) that it would adversely affect the gross profit per unit of the company; (3) that the company offered aggressive pricing to minimize returns to the company’s vehicle sourcing partner who is responsible for more than 60% of CarLotz’s inventory; (4) that as a result, CarLotz’s gross profit per unit forecast was likely to have been inflated; (5) that company’s corporate vehicle sourcing partner would likely suspend supplies to the company due to market conditions, including rising wholesale prices; and (6) as a result, Defendants’ statements about their business, operations and prospects were materially false and misleading and / or were inadequate at all relevant times.

If you have purchased or otherwise acquired CarLotz securities during the Class Action Period, you may request the court no later than 60 days after such notice to request the court to appoint you as the lead plaintiff. You don’t need to do anything at this point to be a member of the class; You can hire a lawyer of your choice or do nothing and remain an absent member of the group. If you would like to learn more about this promotion, or have any questions about this announcement or your rights or interests in relation to these matters, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles California 90067 at 310-201-9150, toll free at 888-773-9224, email [email protected], or visit our website at www.glancylaw.com. For inquiries by email, please include your postal address, telephone number and the number of shares purchased.

This press release may be viewed as a solicitation in some jurisdictions subject to applicable laws and ethical rules.