INVESTOR ALERT: Howard G. Smith Law Firms Announce Securities Class Action Filing on Behalf of CarLotz, Inc. (LOTZ) Investors

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BENSALEM, PA – (COMMERCIAL THREAD) – The law firm of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who have purchased securities of CarLotz, Inc. (“CarLotz” or “the Company”) (NASDAQ: LOTZ ) Between December 30, 2020 and May 25, 2021, inclusive (the “Class Period”). CarLotz investors have up to September 7, 2021 file an application as the principal applicant.

Investors experiencing losses on their CarLotz investments are encouraged to contact the law firms of Howard G. Smith to discuss their legal rights in this class action lawsuit at 888-638-4847 or by email at [email protected]

On March 15, 2021, CarLotz announced its fourth quarter and full year 2020 financial results. During a related conference call, the company stated that the gross margin and gross margin per unit (“GPU”) “ were less than. . . expected “due to” the increase in inventory during the quarter and the resulting drop in profitability of retail units. “CarLotz also reported that the additional inventory” created a bottleneck which resulted in slower processing and longer selling days ”.

Following this news, the company’s stock price fell $ 0.79, or 8.5%, to close at $ 8.45 per share on March 16, 2021, on unusually high trading volume. The stock price continued to decline over the next two consecutive trading days by $ 0.62, or 7.3%, to close at $ 7.83 per share on March 18, 2021, on trading volume unusually high.

Then, on May 10, 2021, after the market closed, CarLotz announced its financial results for the first quarter of 2021 revealing that the gross margin per unit was below expectations. In particular, the company expected the retail GPU to be between $ 1,300 and $ 1,500, but said $ 1,182.

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

Then, on May 26, 2021, ahead of the market opening, CarLotz announced an update to its profit-sharing sourcing partnership agreement. Specifically, CarLotz stated that its “Profit Sharing Company Vehicle Supply Partner has advised the Company that, in light of the current wholesale market conditions, it has suspended shipments to the Company”. Additionally, this partner “accounted for over 60% of cars sold and sourced” in the first quarter of 2021 and “less than 50% of cars sold and around 25% of cars sourced” during the second quarter of 2021 to date.

Following this news, the Company’s share price fell $ 0.70, or 13.4%, to close at $ 4.51 per share on May 26, 2021, on unusually high trading volume.

The complaint filed in this class action alleges that throughout the Class Period, the Defendants made materially false and / or misleading statements, and failed to disclose material adverse facts regarding the business, operations and prospects of the society. Specifically, the Defendants made false statements regarding the following: (1) that due to an increase in inventory in the second half of fiscal 2020, CarLotz was experiencing a “traffic jam” resulting in slower processing and longer selling days; (2) that as a consequence, the gross profit per unit of the Company would be adversely affected; (3) that in order to minimize returns to the corporate vehicle supply partner responsible for more than 60% of CarLotz’s inventory, the Company was offering aggressive pricing; (4) that, as a result, CarLotz’s expected gross profit per unit was likely inflated; (5) that this company’s corporate vehicle supply partner would likely suspend shipments to the company due to market conditions, including increased wholesale prices; and (6) as a result, the Defendants’ statements regarding its business, operations and prospects were materially false and misleading and / or lacked reasonable basis at all relevant times.

If you have purchased CarLotz securities, have any information or would like to learn more about any such claims, or have any questions regarding this announcement or your rights or interests in any such matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pa. 19020, by phone at (215) 638-4847, toll free at (888) 638-4847, or by email at howardsmith @ howardsmithlaw. com, or visit our website at www.howardsmithlaw.com.

This press release may be considered an attorney’s advertisement in certain jurisdictions under applicable law and ethical rules.


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