Filed Pursuant to Rule 424(b)(3)
Registration No. 333-261284
PROSPECTUS SUPPLEMENT NO. 3
(to Prospectus dated April 11, 2023)
Up to 1,582,025 Shares of Class A Common Stock
This prospectus supplement updates and supplements the prospectus dated April 11, 2023 (the “Prospectus”), which forms a part of our Registration Statement on Form S-3 (No. 333-261284), as amended by Post-Effective Amendment No. 1 to Form S-3 on Form S-1 filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 3, 2023 (the “Registration Statement”), relating to the offer and sale from time to time by the selling stockholders identified in the Prospectus, and any of their respective permitted assignees, (each, a “Selling Stockholder” and collectively, the “Selling Stockholders”) of up to 1,582,025 shares of Class A common stock, par value $0.0001 (the “common stock”), of Shift Technologies, Inc. (the “Company”). These shares are issuable upon conversion or redemption of the Company’s 4.75% Convertible Senior Notes due 2026. We are not selling any shares covered by the Prospectus and will not receive any proceeds from the sale of shares of common stock by the Selling Stockholders pursuant to the Prospectus.
This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our (i) Current Report on Form 8-K, filed with the SEC on April 24, 2023 (the “Current Report No. 1”), (ii) Current Report on Form 8-K, filed with the SEC on June 28, 2023 (the “Current Report No. 2” and, together with the Current Report No. 1, the “Current Reports”), (iii) Amendment No.1 to the Annual Report on Form 10-K/A for the fiscal year ended December 31, 2022, filed with the SEC on June 29, 2023 (the “Annual Report”) and (iv) Amendment No. 1 to the Quarterly Report on Form 10-Q/A for the quarterly period ended March 31, 2023, filed with the SEC on June 29, 2023 (the “Quarterly Report”). Accordingly, we have attached the Current Reports, Annual Report and Quarterly Report to this prospectus supplement.
This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus, and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.
We are an “emerging growth company” as defined under U.S. federal securities laws and, as such, are subject to reduced public company reporting requirements.
Investing in our securities involves risks that are described in the “Risk Factors” section beginning on page 7 of the Prospectus and under similar headings in any amendments or supplements to the Prospectus.
Neither the SEC, nor any state securities commission has approved or disapproved of these securities or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is June 29, 2023
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 24, 2023 (April 19, 2023)
SHIFT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-38839 | 82-5325852 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
290 Division Street, Suite 400, San Francisco, CA | 94103 | |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (855) 575-6739
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A common stock, par value $0.0001 per share | SFT | Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) if the Exchange Act. ☐
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On April 19, 2023, Shift Technologies, Inc. (the “Company”) received a written notice (the “Notice”) from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the Company’s Market Value of Listed Securities ("MVLS") was below the minimum of $35 million required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(2) (the “Market Value Standard”). The Staff also noted that the Company does not meet the requirements under Nasdaq Listing Rules 5550(b)(1) (Equity Standard) and 5550(b)(3) (Net Income Standard). The Notice does not impact the listing of the Company’s Class A common stock, par value $0.0001 per share (“Class A common stock”), on the Nasdaq Capital Market at this time.
The Notice provided that, in accordance with Nasdaq Listing Rule 5810(c)(3)(C) (the “Compliance Period Rule”), the Company has a period of 180 calendar days from the date of the Notice, or until October 16, 2023 (the “Compliance Date”), to regain compliance with the Market Value Standard. During this period, Class A common stock will continue to trade on the Nasdaq Capital Market. If at any time before the Compliance Date the Company’s MVLS closes at or above $35 million for a minimum of 10 consecutive business days as required under the Compliance Period Rule, the Staff will provide written notification to the Company that it has regained compliance with the Market Value Standard and will close the matter (unless the Staff exercises its discretion to extend this 10 business day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H)).
If the Company does not regain compliance with the Market Value Standard by the Compliance Date, the Staff will provide a written notification to the Company that Class A common stock will be subject to delisting. At that time, the Company may appeal the Staff’s delisting determination to a Hearings Panel (the “Panel”). However, there can be no assurance that, if the Company receives a delisting notice and appeals the delisting determination by the Staff to the Panel, such appeal would be successful.
The Company intends to monitor its MLVS between now and the Compliance Date, and may, if appropriate, evaluate available options to resolve the deficiency under the Market Value Standard and regain compliance with the Market Value Standard. The Company may also try to comply with another Nasdaq listing criteria, such as the one under Nasdaq Listing Rule 5550(b)(1) (Equity Standard). However, there can be no assurance that the Company will be able to regain or maintain compliance with Nasdaq listing criteria.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SHIFT TECHNOLOGIES, INC. | ||
Dated: April 24, 2023 | /s/ Jeff Clementz | |
Name: | Jeff Clementz | |
Title: | Chief Executive Officer |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 28, 2023 (June 23, 2023)
SHIFT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-38839 | 82-5325852 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
290 Division Street, Suite 400, San Francisco, CA | 94103 | |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (855) 575-6739
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A common stock, par value $0.0001 per share | SFT | Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) if the Exchange Act. ☐
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.
Shift Technologies, Inc. (the “Company”) is announcing that Sean Foy is no longer the Chief Operating Officer of the Company, effective June 23, 2023 (the “Effective Date”).
The Company presently does not have any plans to fill the position of Chief Operating Officer, and Ayman Moussa, Chief Executive Officer of the Company, assumed oversight of the majority of Mr. Foy’s operational duties as of the Effective Date.
The Company expects to enter into a separation agreement with Mr. Foy, the material terms of which will be disclosed in a subsequent Current Report on Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SHIFT TECHNOLOGIES, INC. | ||
Dated: June 28, 2023 | /s/ Oded Shein | |
Name: | Oded Shein | |
Title: | Chief Financial Officer |
(Mark One) | |||||
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the fiscal year ended December 31, 2022 | |||||
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from _______ to _______ |
Delaware | 82-5325852 | ||||
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | ||||
290 Division Street, Suite 400, San Francisco, California 94103-4893 (Address of principal executive offices) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Class A common stock, par value $0.0001 per share | SFT | Nasdaq Capital Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||||||
Emerging growth company | ☒ | |||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Page | ||||||||
Year Ended December 31, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | Change | |||||||||||||||||||||||||||||||||
($ in thousands, except per unit metrics) | |||||||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||
Retail vehicle revenue, net | $ | 555,523 | $ | 538,387 | 3.2 | % | |||||||||||||||||||||||||||||
Other revenue, net | 27,007 | 22,633 | 19.3 | % | |||||||||||||||||||||||||||||||
Wholesale vehicle revenue | 88,223 | 75,849 | 16.3 | % | |||||||||||||||||||||||||||||||
Total revenue | $ | 670,753 | $ | 636,869 | 5.3 | % | |||||||||||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||||||||||||||
Retail vehicle cost of sales | $ | 546,940 | $ | 513,124 | 6.6 | % | |||||||||||||||||||||||||||||
Wholesale vehicle cost of sales | 98,480 | 74,957 | 31.4 | % | |||||||||||||||||||||||||||||||
Total cost of sales | $ | 645,420 | $ | 588,081 | 9.8 | % | |||||||||||||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||||||||||
Retail vehicle gross profit | $ | 8,583 | $ | 25,263 | (66.0) | % | |||||||||||||||||||||||||||||
Other gross profit | 27,007 | 22,633 | 19.3 | % | |||||||||||||||||||||||||||||||
Wholesale vehicle gross profit (loss) | (10,257) | 892 | (1,249.9) | % | |||||||||||||||||||||||||||||||
Total gross profit | $ | 25,333 | $ | 48,788 | (48.1) | % | |||||||||||||||||||||||||||||
Unit sales information: | |||||||||||||||||||||||||||||||||||
Retail vehicle unit sales | 20,961 | 23,251 | (9.8) | % | |||||||||||||||||||||||||||||||
Wholesale vehicle unit sales | 5,344 | 7,067 | (24.4) | % | |||||||||||||||||||||||||||||||
Average selling prices per unit (“ASP”): | |||||||||||||||||||||||||||||||||||
Retail vehicles | $ | 26,503 | $ | 23,155 | 14.5 | % | |||||||||||||||||||||||||||||
Wholesale vehicles | $ | 16,509 | $ | 10,733 | 53.8 | % | |||||||||||||||||||||||||||||
Gross profit per unit: | |||||||||||||||||||||||||||||||||||
Retail gross profit per unit | $ | 409 | $ | 1,087 | (62.4) | % | |||||||||||||||||||||||||||||
Other gross profit per unit | 1,288 | 973 | 32.4 | % | |||||||||||||||||||||||||||||||
Wholesale gross profit (loss) per unit | (489) | 38 | (1,386.8) | % | |||||||||||||||||||||||||||||||
Total gross profit per unit | $ | 1,208 | $ | 2,098 | (42.4) | % | |||||||||||||||||||||||||||||
Non-financial metrics | |||||||||||||||||||||||||||||||||||
Average monthly unique visitors | 735,824 | 659,358 | 11.6 | % | |||||||||||||||||||||||||||||||
Average days to sale | 69 | 54 | 27.8 | % | |||||||||||||||||||||||||||||||
Retail vehicles available for sale | 1,476 | 4,337 | (66.0) | % |
Year Ended December 31, | |||||||||||||||||
2022 | 2021 | Change | |||||||||||||||
($ in thousands) | |||||||||||||||||
Compensation and benefits | $ | 94,273 | $ | 103,871 | (9.2) | % | |||||||||||
as a % of revenue | 14.1 | % | 16.3 | % | |||||||||||||
Marketing expenses | 32,547 | 49,807 | (34.7) | % | |||||||||||||
as a % of revenue | 4.9 | % | 7.8 | % | |||||||||||||
Other costs(1) | 87,188 | 66,377 | 31.4 | % | |||||||||||||
as a % of revenue | 13.0 | % | 10.4 | % | |||||||||||||
Total selling, general and administrative expenses | $ | 214,008 | $ | 220,055 | (2.7) | % | |||||||||||
as a % of revenue | 31.9 | % | 34.6 | % |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
($ in thousands) | |||||||||||
Cash Flow Data: | |||||||||||
Net cash, cash equivalents, and restricted cash used in operating activities | $ | (110,416) | $ | (211,046) | |||||||
Net cash, cash equivalents, and restricted cash provided by (used in) investing activities | 65,995 | (14,143) | |||||||||
Net cash, cash equivalents, and restricted cash provided by (used in) financing activities | (42,074) | 183,989 |
Index to Consolidated Financial Statements | |||||
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34) | |||||
As of December 31, 2022 | As of December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 96,159 | $ | 182,616 | |||||||
Restricted cash, current | 10,632 | — | |||||||||
Marketable securities at fair value | 1,264 | — | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $93 and $304 | 4,558 | 20,084 | |||||||||
Inventory | 40,925 | 122,743 | |||||||||
Prepaid expenses and other current assets | 7,657 | 7,392 | |||||||||
Operating and finance lease assets, property and equipment, accounts receivable, and other assets held for sale | 17,226 | — | |||||||||
Total current assets | 178,421 | 332,835 | |||||||||
Restricted cash, non-current | 1,055 | 11,725 | |||||||||
Marketable securities at fair value, non-current | 707 | — | |||||||||
Property and equipment, net | 6,797 | 7,940 | |||||||||
Operating lease assets | 44,568 | — | |||||||||
Finance lease assets, net | 152 | — | |||||||||
Capitalized website and internal use software costs, net | 10,657 | 9,262 | |||||||||
Goodwill | 2,070 | — | |||||||||
Deferred borrowing costs | 268 | 564 | |||||||||
Other non-current assets | 3,323 | 3,414 | |||||||||
Total assets | $ | 248,018 | $ | 365,740 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 12,085 | $ | 15,175 | |||||||
Accrued expenses and other current liabilities | 33,872 | 43,944 | |||||||||
Operating lease liabilities, current | 8,865 | — | |||||||||
Finance lease liabilities, current | 271 | — | |||||||||
Operating and finance lease liabilities and other liabilities associated with assets held for sale | 15,432 | — | |||||||||
Flooring line of credit | 24,831 | 83,252 | |||||||||
Total current liabilities | 95,356 | 142,371 | |||||||||
Long-term debt, net | 163,363 | 144,335 | |||||||||
Operating lease liabilities, non-current | 44,985 | — | |||||||||
Finance lease liabilities, non-current | 3,989 | — | |||||||||
Other non-current liabilities | 111 | 3,762 | |||||||||
Total liabilities | 307,804 | 290,468 | |||||||||
Commitments and contingencies (Note 11) | |||||||||||
Stockholders’ equity (deficit): | |||||||||||
Preferred stock – par value $0.0001 per share; 1,000,000 shares authorized at December 31, 2022 and December 31, 2021, respectively | — | — | |||||||||
Common stock – par value $0.0001 per share; 500,000,000 shares authorized at December 31, 2022 and December 31, 2021, respectively; 17,212,130 and 8,136,931 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 2 | 1 | |||||||||
Additional paid-in capital | 552,968 | 515,982 | |||||||||
Accumulated other comprehensive loss | (3) | — | |||||||||
Accumulated deficit | (612,753) | (440,711) | |||||||||
Total stockholders’ equity (deficit) | (59,786) | 75,272 | |||||||||
Total liabilities and stockholders’ equity (deficit) | $ | 248,018 | $ | 365,740 |
Year Ended December 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Retail revenue, net | $ | 555,523 | $ | 538,387 | |||||||||||||||||||
Other revenue, net | 27,007 | 22,633 | |||||||||||||||||||||
Wholesale vehicle revenue | 88,223 | 75,849 | |||||||||||||||||||||
Total revenue | 670,753 | 636,869 | |||||||||||||||||||||
Cost of sales | 645,420 | 588,081 | |||||||||||||||||||||
Gross profit | 25,333 | 48,788 | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general and administrative expenses | 214,008 | 220,055 | |||||||||||||||||||||
Depreciation and amortization | 10,456 | 5,586 | |||||||||||||||||||||
Restructuring expenses | 21,001 | — | |||||||||||||||||||||
Loss on impairment | 17,319 | — | |||||||||||||||||||||
Total operating expenses | 262,784 | 225,641 | |||||||||||||||||||||
Loss from operations | (237,451) | (176,853) | |||||||||||||||||||||
Change in fair value of financial instruments | — | 18,893 | |||||||||||||||||||||
Gain on bargain purchase | 76,685 | — | |||||||||||||||||||||
Interest and other expense, net | (10,950) | (8,082) | |||||||||||||||||||||
Loss before income taxes | (171,716) | (166,042) | |||||||||||||||||||||
Provision for income taxes | 326 | 226 | |||||||||||||||||||||
Net loss | $ | (172,042) | $ | (166,268) | |||||||||||||||||||
Net loss per share, basic and diluted | $ | (19.92) | $ | (21.29) | |||||||||||||||||||
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | 8,638,073 | 7,811,414 |
Year Ended December 31, | ||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
Net loss | $ | (172,042) | $ | (166,268) | ||||||||||||||||||||||
Other comprehensive loss, net of tax: | ||||||||||||||||||||||||||
Unrealized loss on marketable securities | (3) | — | ||||||||||||||||||||||||
Other comprehensive loss, net of tax | (3) | — | ||||||||||||||||||||||||
Total comprehensive loss | $ | (172,045) | $ | (166,268) |
Common Stock | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity (Deficit) | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 8,390,418 | 1 | 511,624 | (274,443) | — | 237,182 | ||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of vested options | 36,299 | — | 506 | — | — | 506 | ||||||||||||||||||||||||||||||||
Repurchase of shares related to early exercised options | (2,292) | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of early exercised options | — | — | 436 | — | — | 436 | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 25,967 | — | — | 25,967 | ||||||||||||||||||||||||||||||||
Warrant exchange | 12,516 | — | (497) | — | — | (497) | ||||||||||||||||||||||||||||||||
Purchase of capped calls | — | — | (28,391) | — | — | (28,391) | ||||||||||||||||||||||||||||||||
Cancellation and reclassification of Escrow Shares | (300,010) | — | 6,337 | — | — | 6,337 | ||||||||||||||||||||||||||||||||
Net loss and comprehensive loss | — | — | — | (166,268) | — | (166,268) | ||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 8,136,931 | 1 | 515,982 | (440,711) | — | 75,272 | ||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of vested options | 1,293 | — | 3 | — | — | 3 | ||||||||||||||||||||||||||||||||
Repurchase of shares related to early exercised options | (2,285) | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of early exercised options | — | — | 92 | — | — | 92 | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 14,299 | — | — | 14,299 | ||||||||||||||||||||||||||||||||
Issuance of common stock under stock-based compensation plans, net of shares exchanged for withholding tax | 313,162 | — | (2,861) | — | — | (2,861) | ||||||||||||||||||||||||||||||||
Issuance of common stock as consideration in business combinations | 8,763,029 | 1 | 25,453 | — | — | 25,454 | ||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | (3) | (3) | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | (172,042) | — | (172,042) | ||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 17,212,130 | 2 | 552,968 | (612,753) | (3) | (59,786) |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net loss | $ | (172,042) | $ | (166,268) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 11,787 | 6,253 | |||||||||
Stock-based compensation expense | 13,029 | 25,130 | |||||||||
Unrealized losses on equity securities | 24 | — | |||||||||
Gain on bargain purchase | (76,685) | — | |||||||||
Change in fair value of financial instruments | — | (18,893) | |||||||||
Amortization of operating lease right-of-use assets | 10,496 | — | |||||||||
Contra-revenue associated with milestones | 637 | 637 | |||||||||
Amortization of debt discounts | 2,011 | 2,741 | |||||||||
Loss on impairment and non-cash restructuring expenses | 30,692 | — | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 18,158 | (11,658) | |||||||||
Inventory | 88,409 | (73,657) | |||||||||
Prepaid expenses and other current assets | (203) | (1,914) | |||||||||
Other non-current assets | 767 | (1,186) | |||||||||
Accounts payable | (4,352) | 4,359 | |||||||||
Accrued expenses and other current liabilities | (19,020) | 22,375 | |||||||||
Operating lease liabilities | (10,770) | — | |||||||||
Other non-current liabilities | (3,354) | 1,035 | |||||||||
Net cash, cash equivalents, and restricted cash used in operating activities | (110,416) | (211,046) | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Purchases of property and equipment | (4,665) | (7,524) | |||||||||
Proceeds from sale of property and equipment | 317 | — | |||||||||
Purchases of marketable securities | (67) | — | |||||||||
Proceeds from sales of marketable securities | 115 | — | |||||||||
Capitalized website internal-use software costs | (10,368) | (6,619) | |||||||||
Cash received from acquisition of CarLotz, Inc. | 95,663 | — | |||||||||
Cash paid for acquisition of Fair Dealer Services, LLC | (15,000) | — | |||||||||
Net cash, cash equivalents, and restricted cash provided by (used in) investing activities | 65,995 | (14,143) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Proceeds from flooring line of credit facility | 382,090 | 329,981 | |||||||||
Repayment of flooring line of credit facility | (440,511) | (261,217) | |||||||||
Exchange of warrants for cash | — | (497) | |||||||||
Proceeds from Senior Unsecured Notes, net of discounts | 19,591 | — | |||||||||
Payment of debt issuance costs | (175) | (88) | |||||||||
Proceeds from issuance of convertible notes | — | 143,768 | |||||||||
Premiums paid for Capped Call Transactions | — | (28,391) | |||||||||
Principal payments on finance leases | (127) | — | |||||||||
Proceeds from stock option exercises, including from early exercised options | — | 506 | |||||||||
Payment of tax withheld for common stock issued under stock-based compensation plans | (2,861) | — | |||||||||
Repurchase of shares related to early exercised options | (81) | (73) | |||||||||
Net cash, cash equivalents, and restricted cash provided by (used in) financing activities | (42,074) | 183,989 | |||||||||
Net decrease in cash, cash equivalents and restricted cash | (86,495) | (41,200) | |||||||||
Cash, cash equivalents and restricted cash, beginning of period | 194,341 | 235,541 | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 107,846 | $ | 194,341 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||
Cash paid for interest | $ | 10,338 | $ | 4,230 | |||||||
Cash paid for income taxes | 214 | 102 | |||||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||||||||
Capital expenditures in accounts payable | $ | 126 | $ | 141 | |||||||
Vesting of exercised options | 92 | 436 | |||||||||
Other receivables resulting from stock option exercises | — | 35 | |||||||||
Stock-based compensation capitalized to internal-use software | 1,270 | 841 | |||||||||
Issuance of shares as consideration in business acquisitions | 2,481 | — | |||||||||
Imputation of debt discounts reducing consideration transferred in business acquisitions | 2,103 | — | |||||||||
Establishment of operating lease right of use assets and lease liabilities | |||||||||||
Operating lease right of use assets | 67,603 | — | |||||||||
Operating lease liabilities | 72,202 | — | |||||||||
Finance lease right of use assets | 4,488 | — | |||||||||
Finance lease liabilities | 9,423 | — | |||||||||
Other Assets | 1,716 | — | |||||||||
Other Liabilities | 2,492 | — |
Equipment | 3 to 5 years | ||||
Furniture and fixtures | 3 years | ||||
Leasehold improvements | Lesser of useful life or lease term |
(in thousands) | 2021 | |||||||
Balance as of January 1, | $ | 25,230 | ||||||
Remeasurement of Escrow Shares liability | (18,893) | |||||||
Reclassification of Escrow Shares liability to additional paid-in capital | (6,337) | |||||||
Balance as of December 31, | $ | — |
(In thousands) | ||||||||
Cash consideration | $ | 15,000 | ||||||
Fair value of shares of Shift Common Stock issued | 2,481 | |||||||
Allocation of proceeds from Senior Unsecured Notes | (2,103) | |||||||
Merger Consideration | $ | 15,378 |
Estimated Fair Value | |||||
Capitalized website and internal use software costs | $ | 12,500 | |||
Other intangible assets - Trade name | 100 | ||||
Other intangible assets - Dealer network | 100 | ||||
Prepaid expenses and other current assets | 154 | ||||
Goodwill | 2,524 | ||||
Total fair value of purchase price | $ | 15,378 |
Year Ended December 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Revenue | $ | 670,753 | $ | 636,869 | |||||||||||||||||||
Loss from operations | (244,602) | (196,774) | |||||||||||||||||||||
Net loss | $ | (179,644) | $ | (187,906) | |||||||||||||||||||
Net loss per share, basic and diluted | $ | (20.62) | $ | (23.44) | |||||||||||||||||||
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | 8,712,246 | 8,018,112 |
(In thousands) | ||||||||
Fair value of shares of Shift Common Stock issued to CarLotz stockholders | $ | 22,411 | ||||||
Replacement of CarLotz equity awards | 562 | |||||||
Merger Consideration | $ | 22,973 |
Estimated Fair Value | |||||
Cash, cash equivalents, and marketable securities | $ | 97,710 | |||
Accounts receivable | 3,321 | ||||
Inventory | 7,062 | ||||
Other current assets | 1,756 | ||||
Property and equipment | 7,009 | ||||
Operating lease right of use assets | 25,119 | ||||
Finance lease right of use assets | 4,176 | ||||
Developed technology | 3,190 | ||||
Trademarks | 970 | ||||
Other non-current assets | 364 | ||||
Total assets | 150,677 | ||||
Accounts payable and accrued liabilities | (11,899) | ||||
Operating lease liabilities, current | (4,127) | ||||
Finance lease liabilities, current | (273) | ||||
Other current liabilities | (694) | ||||
Operating lease liabilities | (24,713) | ||||
Finance lease liabilities | (8,940) | ||||
Other non-current liabilities | (373) | ||||
Total liabilities | (51,019) | ||||
Net assets acquired | 99,658 | ||||
Gain on Bargain purchase | $ | (76,685) | |||
Consideration transferred | $ | 22,973 |
Year Ended December 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Revenue | $ | 814,184 | $ | 895,403 | |||||||||||||||||||
Loss from operations | (288,489) | (281,428) | |||||||||||||||||||||
Net loss | $ | (284,003) | $ | (80,479) | |||||||||||||||||||
Net loss per share, basic and diluted | $ | (16.56) | $ | (4.77) | |||||||||||||||||||
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | 17,147,688 | 16,879,267 |
December 31, 2022 | |||||||||||||||||||||||
Amortized Cost/ Cost Basis | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||||||||||
Corporate bonds | $ | 527 | $ | — | $ | (3) | $ | 524 | |||||||||||||||
Municipal bonds | 674 | — | — | 674 | |||||||||||||||||||
Foreign governments | 314 | — | — | 314 | |||||||||||||||||||
Total Fixed Maturity Debt Securities | $ | 1,515 | $ | — | $ | (3) | $ | 1,512 |
Amortized Cost | Fair Value | ||||||||||
Due in one year or less | $ | 822 | $ | 805 | |||||||
Due after one year through five years | 648 | 662 | |||||||||
Due after five years through ten years | 45 | 45 | |||||||||
Total | $ | 1,515 | $ | 1,512 |
December 31, 2022 | |||||||||||
Cost | Estimated Fair Value | ||||||||||
Equity securities | $ | 483 | $ | 459 |
As of December 31, 2022 | As of December 31, 2021 | ||||||||||
Equipment | $ | 4,545 | $ | 8,753 | |||||||
Furniture and fixtures | 1,278 | 252 | |||||||||
Leasehold improvements | 4,334 | 1,258 | |||||||||
Total property and equipment | 10,157 | 10,263 | |||||||||
Less: accumulated depreciation | (3,360) | (2,323) | |||||||||
Property and equipment, net | $ | 6,797 | $ | 7,940 |
Balance Sheet Classification | December 31, 2022 | |||||||||||||
Assets | ||||||||||||||
Operating leases | Operating lease assets | $ | 44,568 | |||||||||||
Operating and finance lease assets, property and equipment, accounts receivable, and other assets held for sale | 9,572 | |||||||||||||
Finance leases | Finance lease assets, net | 152 | ||||||||||||
Operating and finance lease assets, property and equipment, accounts receivable, and other assets held for sale | 4,155 | |||||||||||||
Total lease assets | $ | 58,447 | ||||||||||||
Liabilities | ||||||||||||||
Operating leases | Operating lease liabilities, current | $ | 8,865 | |||||||||||
Operating and finance lease liabilities and other liabilities associated with assets held for sale | 10,138 | |||||||||||||
Operating lease liabilities, non-current | 44,985 | |||||||||||||
Total operating lease liabilities | $ | 63,988 | ||||||||||||
Finance leases | Finance lease liabilities, current | $ | 271 | |||||||||||
Operating and finance lease liabilities and other liabilities associated with assets held for sale | 5,036 | |||||||||||||
Finance lease liabilities, non-current | 3,989 | |||||||||||||
Total finance lease liabilities | $ | 9,296 | ||||||||||||
Total lease liabilities | $ | 73,284 |
Year Ended December 31, 2022 | |||||||||||
Lease cost | |||||||||||
Operating lease cost | $ | 14,811 | |||||||||
Finance lease amortization | 181 | ||||||||||
Finance lease interest | 72 | ||||||||||
Short-term lease cost | 1,485 | ||||||||||
Variable lease cost | 2,387 | ||||||||||
Sublease income | (215) | ||||||||||
Total lease cost | $ | 18,721 | |||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | |||||||||||
Operating cash flows from operating leases | $ | 9,594 | |||||||||
Finance leases - Operating cash flows | $ | 72 | |||||||||
Finance leases - Financing cash flows | $ | 127 | |||||||||
Lease assets obtained in exchange for lease liabilities | |||||||||||
Operating leases | $ | 67,603 | |||||||||
Finance leases | $ | 4,488 | |||||||||
Weighted average remaining lease term - operating leases (in years) | 5.48 | ||||||||||
Weighted average discount rate - operating leases | 8.97 | % | |||||||||
Weighted average remaining lease term - finance leases (in years) | 12.28 | ||||||||||
Weighted average discount rate - finance leases | 11.13 | % |
Year ended December 31, | Operating Leases | Finance Leases | ||||||||||||
2023 | $ | 13,434 | $ | 1,374 | ||||||||||
2024 | 12,649 | 1,297 | ||||||||||||
2025 | 13,726 | 1,318 | ||||||||||||
2026 | 11,092 | 1,346 | ||||||||||||
2027 | 10,315 | 1,422 | ||||||||||||
Thereafter | 16,862 | 10,928 | ||||||||||||
Total minimum lease payments | $ | 78,078 | $ | 17,687 | ||||||||||
Less: Imputed interest | 14,090 | 8,391 | ||||||||||||
Total lease liabilities | $ | 63,988 | $ | 9,296 |
As of December 31, 2022 | As of December 31, 2021 | ||||||||||
Capitalized website domain costs – nonamortizable | $ | 385 | $ | 385 | |||||||
Capitalized website and internal-use software development costs – amortizable | 12,294 | 24,433 | |||||||||
Less: accumulated amortization | (2,022) | (15,556) | |||||||||
Capitalized website and internal-use software development costs, net | $ | 10,657 | $ | 9,262 |
As of December 31, 2022 | |||||
2023 | $ | 4,393 | |||
2024 | 1,985 | ||||
2025 | 921 | ||||
Development in progress | 2,974 | ||||
Total amortizable costs | 10,272 | ||||
Nonamortizable costs | 385 | ||||
Total capitalized website and internal-use software development costs | $ | 10,657 |
Gross Amount | Accumulated Impairment | ||||||||||
Balance at December 31, 2021 | $ | — | $ | — | |||||||
Acquisition of Fair Dealer Services, LLC (see Note 3) | 2,524 | ||||||||||
Impairment losses | — | (454) | |||||||||
Balance at December 31, 2022 | $ | 2,524 | $ | (454) | |||||||
Total goodwill | $ | 2,070 |
As of December 31, 2022 | As of December 31, 2021 | ||||||||||
Liability for vehicles acquired under OEM program | $ | — | $ | 3,550 | |||||||
Accrued payroll related costs | 14,048 | 15,890 | |||||||||
Provision for DMV refunds | 1,080 | 1,170 | |||||||||
Accrued sales taxes | 3,957 | 13,787 | |||||||||
Common stock subject to repurchase liability, current | 44 | 142 | |||||||||
Interest payable | 960 | 910 | |||||||||
Provision for sales returns and cancellations | 4,304 | 3,302 | |||||||||
Other accrued expenses | 9,479 | 5,193 | |||||||||
Total accrued expenses and other current liabilities | $ | 33,872 | $ | 43,944 |
Year Ended December 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Revenue from external customers | |||||||||||||||||||||||
Retail | $ | 582,530 | $ | 561,020 | |||||||||||||||||||
Wholesale | 88,223 | 75,849 | |||||||||||||||||||||
Consolidated | $ | 670,753 | $ | 636,869 | |||||||||||||||||||
Segment gross profit (loss) | |||||||||||||||||||||||
Retail | $ | 35,590 | $ | 47,896 | |||||||||||||||||||
Wholesale | (10,257) | 892 | |||||||||||||||||||||
Consolidated | $ | 25,333 | $ | 48,788 |
Year Ended December 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Segment gross profit | $ | 25,333 | $ | 48,788 | |||||||||||||||||||
Selling, general and administrative expenses | (214,008) | (220,055) | |||||||||||||||||||||
Depreciation and amortization | (10,456) | (5,586) | |||||||||||||||||||||
Loss on impairment | (17,319) | — | |||||||||||||||||||||
Restructuring expenses | (21,001) | — | |||||||||||||||||||||
Change in fair value of financial instruments | — | 18,893 | |||||||||||||||||||||
Gain on bargain purchase | 76,685 | — | |||||||||||||||||||||
Interest and other expense, net | (10,950) | (8,082) | |||||||||||||||||||||
Loss before income taxes | $ | (171,716) | $ | (166,042) |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (000’s) | ||||||||||||||||||||
As of December 31, 2021 | 159,779 | $ | 15.90 | 7.47 | $ | 3,574 | |||||||||||||||||
Granted | 379,616 | 30.90 | |||||||||||||||||||||
Exercised | (1,297) | 2.47 | |||||||||||||||||||||
Forfeited | (10,072) | 28.93 | |||||||||||||||||||||
Cancelled (expired) | (8,703) | 50.79 | |||||||||||||||||||||
As of December 31, 2022 | 519,323 | $ | 26.02 | 4.95 | $ | 1 | |||||||||||||||||
Exercisable as of December 31, 2022 | 510,452 | $ | 26.00 | 4.88 | $ | 1 |
Number of Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (000’s) | ||||||||||||||||||||
Unvested as of December 31, 2021 | 973,397 | $ | 61.40 | 2.21 | $ | 33,193 | |||||||||||||||||
Granted | 745,867 | 12.19 | |||||||||||||||||||||
Vested | (482,845) | 42.80 | |||||||||||||||||||||
Forfeited | (750,365) | 53.80 | |||||||||||||||||||||
Unvested as of December 31, 2022 | 486,054 | $ | 29.30�� | 1.01 | $ | 724 | |||||||||||||||||
Vested and unreleased | 3,287 | ||||||||||||||||||||||
Outstanding as of December 31, 2022 | 489,341 |
Year Ended December 31, 2022 | |||||
Losses on sales of inventory associated with restructuring(1) | $ | 8,598 | |||
Restructuring costs related to operating leases(2) | 3,277 | ||||
Losses on sale or disposal of property and equipment(2) | 2,325 | ||||
Losses on early decommissioning of capitalized internal-use software(2) | 6,524 | ||||
Severance, retention, and CEO transition(2) | 3,671 | ||||
Labor and other costs incurred to close facilities(2) | 5,204 | ||||
Total | $ | 29,599 |
Balance at December 31, 2021 | $ | — | |||
Accruals and accrual adjustments | 3,339 | ||||
Cash payments | (2,545) | ||||
Balance at December 31, 2022 | $ | 794 |
Year Ended December 31, 2022 | ||||||||
Assets | ||||||||
Accounts receivable, net | $ | 689 | ||||||
Prepaid expenses and other current assets | 226 | |||||||
Property and equipment, net | 2,584 | |||||||
Operating lease assets | 9,572 | |||||||
Finance lease assets | 4,155 | |||||||
Total assets | $ | 17,226 | ||||||
Liabilities | ||||||||
Accounts payable | $ | 70 | ||||||
Accrued expenses and other liabilities | 101 | |||||||
Operating lease liabilities | 10,138 | |||||||
Finance lease liabilities | 5,036 | |||||||
Other non-current liabilities | 87 | |||||||
Total liabilities | $ | 15,432 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Provision for income taxes at federal statutory rates | $ | (36,060) | $ | (34,869) | |||||||
State taxes, net of federal benefit | (12,983) | (9,618) | |||||||||
Permanent differences | (8,399) | 1,406 | |||||||||
Change in valuation allowance | 59,628 | 42,278 | |||||||||
Other | (1,860) | 1,029 | |||||||||
Total | $ | 326 | $ | 226 |
Year Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Deferred tax assets: | |||||||||||
Accruals, reserves, and other | $ | 17,255 | $ | 16,777 | |||||||
Lease liabilities | 17,436 | — | |||||||||
Depreciation | 13,908 | 804 | |||||||||
Federal net operating loss carryover | 175,365 | 91,632 | |||||||||
State net operating loss carryover | 49,553 | 29,420 | |||||||||
Total gross deferred tax assets | 273,517 | 138,633 | |||||||||
Less: valuation allowance | (258,765) | (138,633) | |||||||||
Net deferred tax assets | 14,752 | — | |||||||||
Deferred tax liabilities: | |||||||||||
Right of use assets | (14,752) | — | |||||||||
Total gross deferred tax liabilities | (14,752) | — | |||||||||
Net deferred taxes | $ | — | $ | — |
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Federal | $ | 835,071 | $ | 436,344 | |||||||
California | 554,100 | 397,270 | |||||||||
Oregon | 97,091 | 32,733 | |||||||||
Virginia | 79,371 | 3,301 | |||||||||
Other | 103,038 | 2,876 |
Year Ended December 31, | ||||||||||||||
(in thousands, except share and per share amounts) | 2022 | 2021 | ||||||||||||
Net loss | $ | (172,042) | $ | (166,268) | ||||||||||
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | 8,638,073 | 7,811,414 | ||||||||||||
Net loss per share, basic and diluted | $ | (19.92) | $ | (21.29) |
As of December 31, | |||||||||||
2022 | 2021 | ||||||||||
Escrow Shares | 300,010 | 300,010 | |||||||||
Public and private warrants | 1,146,727 | — | |||||||||
Earnout Shares | 489,841 | — | |||||||||
Convertible Notes | 1,779,834 | 1,779,834 | |||||||||
Stock options | 519,323 | 159,779 | |||||||||
Restricted stock units | 489,341 | 1,151,357 | |||||||||
Contingently repurchasable early exercise shares | 1,177 | 5,963 | |||||||||
Total | 4,726,253 | 3,396,943 |
Name | Class | Age | Principal Occupation and Other Information | |||||||||||||||||
Victoria McInnis | I | 61 | Victoria McInnis has served as a director of the Company since October 2020 and Lead Director since December 2022. Prior to joining the Board of Directors, Ms. McInnis served as an independent board member and audit committee chair for VectoIQ Acquisition Company, a special purpose acquisition company, from May 2018 to June 2020. Prior to that, Ms. McInnis held various positions with General Motors Corporation from 1995 until her retirement in 2017, including Vice President, Tax and Audit March 2015 to August 2017, Chief Tax Officer from 2009 to March 2015 and, prior to that, Executive Director, Tax Counsel, General Tax Director, Europe, Director of Federal Tax Audits, and Senior Tax Counsel, GM Canada. The board has determined that Ms. McInnis is well qualified to serve as a director based on her extensive experience in the automotive industry and her financial expertise. | |||||||||||||||||
Kellyn Smith Kenny | I | 45 | Ms. Smith Kenny has served as a director of the Company since October 2020. She has been recognized by Fortune, Adweek, Brand Innovators, and HotTopics for marketing innovation, effectiveness, and leadership, where she is featured as a Top 100 Most Innovative CMO in the World, Top 50 CMO, Top 20 Most Tech Savvy CMO, Top 100 Women in Brand Marketing, and Working Mother of the Year. She is the Chief Marketing & Growth Officer at AT&T Communications, where she is responsible for accelerating customer acquisition, increasing customer lifetime value, and delivering a customer value proposition that strengthens AT&T’s premium position. Prior to AT&T, Kellyn served as the global Chief Marketing Officer at Hilton Worldwide, and held senior positions at Uber, Capital One and Microsoft. She holds a Bachelor of Arts in Economics from Colgate University and a Master of Business Administration from Northwestern University. The board has determined that Ms. Smith Kenny is well qualified to serve as a director based on her intimate knowledge of how to build and maintain a strong brand and her extensive experience in senior management positions at public companies. |
Name | Class | Age | Principal Occupation and Other Information | |||||||||||||||||
Kimberly H. Sheehy | I | 58 | Kimberly H. Sheehy has served as a director of the Company and Chair of the Audit Committee since December 2022. Prior to that, Ms. Sheehy was a member of the board of directors, Chair of the audit committee and member of the compensation committee for CarLotz, Inc. from January 2021 to December 2022. In addition, she served as a member of the board of directors and Chair of the audit committee for a Switch Inc., a public high growth technology infrastructure company, from December of 2017 until December 6, 2022. Ms. Sheehy has served as a member of the board of directors for Evolv Technologies since July of 2021, and CVB Financial Corp. since June of 2022. Until May of 2020, Ms. Sheehy served as Chief Financial Officer of ResMan LLC, a privately owned software company providing software solutions to multi-family residential property managers. Prior to ResMan LLC, Ms. Sheehy served as Chief Financial Officer of Lori’s Gifts Inc., a privately owned retail company serving hospitals through-out the United States, from March 2018 through April 2019. Ms. Sheehy served as Chief Financial Officer of Stackpath LLC, a privately held entity offering a secure edge platform from December 2015 through October 2017. Prior to joining StackPath, Ms. Sheehy served as Chief Financial & Administrative Officer of CyrusOne Inc., a public high-growth real estate investment trust specializing in engineering, building and managing data center properties from November 2012 through September 2015. Prior to CyrusOne Inc., she held various roles between 1996 and 2012 at Cincinnati Bell Inc., including Treasurer and Vice President of Investor Relations, Vice President of Finance and Treasurer, Vice President of Financial Planning and Analysis, and Managing Director of Corporate Tax. Prior to joining Cincinnati Bell Inc., Ms. Sheehy held accounting and tax positions at Ernst & Young from 1989 to 1996. Ms. Sheehy received her Bachelor’s of Arts Degree in Accounting from the University of Cincinnati and holds her Certified Public Accounting license in the State of Ohio. The board has determined that Ms. Sheehy is well qualified to serve as a director based on her extensive accounting and audit experience with over 30 years of tax, accounting, financial and executive experience, experience in public accounting and public companies, and service on public company boards, including service as a chair of an audit committee. |
Name | Class | Age | Principal Occupation and Other Information | |||||||||||||||||
Luis I. Solorzano | II | 50 | Luis Ignacio Solorzano has served as a director of the Company since December 2022. Prior to that, Mr. Solorzano served as the Chairman of the board of directors and member of the compensation and nominating and corporate governance committees for CarLotz, Inc. from November 2018 to December 2022. Mr. Solorzano is a Partner and Chief Executive Officer of Acamar Partners, an investment management firm. In addition, Mr. Solorzano is Co-founder of Brabex Capital, an investment management firm. Mr. Solorzano is also a member of the board of directors of Grupo Aeroportuario Centro Norte, S.A.B. de C.V. since April 2018. Mr. Solorzano is a former director of Acamar Partners Acquisition Corp., a special purpose acquisition company, from 2019 to 2021 when Acamar Partners Acquisition Corp. merged with CarLotz, Inc. Prior to joining Acamar Partners Acquisition Corp, Solorzano served on the boards of various public and private companies, including Dufry, Grupo Aeroportuario del Centro Norte, Aerodom, InverCap Holdings and Viakem. Mr. Solorzano previously served as Partner, Managing Director and Chairman of the Latin America’s Investment Committee of Advent International from 2001 to 2017, becoming Partner and Managing Director in 2008. He served as Chairman of the Latin America’s Investment Committee and during his tenure at Advent, Mr. Solorzano participated in various investments and management activities encompassing various of Advent’s private equity funds, including Advent’s acquisition of a majority stake in Dufry in which Mr. Solorzano co-led this transaction and played a significant role in the execution of Dufry’s operating plan, Dufry’s IPO process, and the negotiation, execution and integration of several add-on acquisitions made by Dufry in various geographies. He was also a key executive involved in the raising of three funds and he played a leading role in fifteen investment transactions in various sectors, including retail and consumer, financial services, industrials, information technology and infrastructure. Mr Solorzano also played a significant role in supporting portfolio companies in the design and implementation of various strategic, operating and financial value creation initiatives. Mr. Solorzano began his career with BankBoston Capital, where he spent four years making private equity investments and corporate loans across Latin America from 1985 to 1999. Mr. Solorzano graduated with a degree in Economics (cum laude) from the Instituto Tecnologico Autonomo de Mexico (ITAM) and a Masters of Business Arts from Harvard Business School. The board has determined that Mr. Solorzano is well qualified to serve as a director based on his experience serving on the boards of various public and private companies, in addition to his extensive experience supporting companies in the design and implementation of various strategic, operating and financial value creation initiatives, with over 20 years of investment experience across various sectors and geographies covering both the Americas and Europe, including serving in leading roles in investment transactions in various sectors, including retail and consumer, financial services, industrials, information technology and infrastructure. |
Name | Class | Age | Principal Occupation and Other Information | |||||||||||||||||
Adam Nash | II | 48 | Adam Nash has served as director of the Company since October 2020 and as a director of Shift Platform, Inc. from May 2020 to September 2022. Mr. Nash is the President & CEO of Aside, Inc. and has served on the board of directors of Acorns, a financial technology & services company that specializes in micro-investing, since February 2017 and is an adjunct lecturer in Computer Science at Stanford University, a position he has held since September 2017. Previously, he served as the Vice President of Product & Growth at Dropbox, a leading provider of cloud-based storage and collaboration applications, from 2018 to 2020. Prior to joining Dropbox, Mr. Nash was the President and Chief Executive Officer of Wealthfront, Inc. (“Wealthfront”) from 2014 to 2016. Before Wealthfront, he held roles as an Executive in Residence at Greylock Partners and Vice President of Product at LinkedIn. In addition, Mr. Nash has held strategic and technical roles at eBay, Atlas Venture, Preview Systems, and Apple. Mr. Nash holds both Bachelor of Science and Master of Science degrees in Computer Science from Stanford University, and a Master of Business Administration from Harvard University. The board has determined that Mr. Nash is qualified to serve as a director based upon his prior service as a director of Shift Platform, Inc., his extensive experience with early-stage companies as an angel investor and advisor, his knowledge of ecommerce and the innovation economy in California, and his knowledge of the business communities in Shift’s principal markets. | |||||||||||||||||
Jeff Clementz | II | 48 | Jeff Clementz has served as the Chief Executive Officer of Shift since September 2022 and director since November 2022, and a director of Shift Platform, Inc. since September 2022. He previously served as President of Shift from October 2021 to September 2022. Prior to joining Shift, Mr. Clementz served in various management positions at Walmart from October 2015 to September 2021, most recently serving as its Senior Vice President and General Manager of Marketplace and Partner Operations. Prior to that, he served in various management positions at PayPal from May 2003 to October 2015, including as its Vice President and Managing Director of Australia and New Zealand. Mr. Clementz also previously served in various positions with Vendio Services and Intel. Mr. Clementz holds a Master of Business Administration from the University of California, Berkeley and a Bachelor of Arts in Business Administration from the University of Washington. The board has determined that Mr. Clementz is qualified to serve as a director of the Company due to his extensive experience and knowledge of technical issues in the industry. |
Name | Class | Age | Principal Occupation and Other Information | |||||||||||||||||
George Arison | III | 45 | George Arison, has served as a director of the Company since October 2020. Mr. Arison incorporated Shift Platform, Inc. in December 2013, and served as a director and Chief Executive Officer of Shift Technologies, Inc. until August 2022. He currently serves as the Chief Executive Officer of Grindr, Inc. (NYSE: GRND), the world’s largest social network and dating application for the LGBTQ+ community and he joined the Board of Directors of Grindr, Inc. in June 2022. Prior to co-founding Shift Platform, Inc., he served in various positions at Google from 2010 to 2013, most recently as a product manager. From 2007 to 2010, he co-founded Taxi Magic (now known as Curb) with Mr. Russell. From 2005 to 2007 he worked for Boston Consulting Group. Mr. Arison has been an investor in numerous startups, including Shipper, Carrot, Eden, Fathom, AutoLeap, Pulsar AI (acquired by Impel), Zero (acquired by Avant), TravelBank (acquired by US Bank), Fyusion (acquired by Cox Automotive) and Omni (acquired by Coinbase). He was a co-founder and member of the board of directors of Belong Acquisition Corp., a blank check company. Prior to his business career, Mr. Arison was a policy analyst and ran a political campaign in Georgia, the country of his birth, about which he wrote Democracy and Autocracy in Eurasia: Georgia in Transition. Mr. Arison holds a bachelor’s degree from Middlebury College. The board has determined that Mr. Arison is qualified to serve as a director due to his previous position as Chief Executive Officer of the Company and due to his extensive experience in numerous startups. | |||||||||||||||||
Toby Russell | III | 45 | Toby Russell, has served as a director of the Company since October 2020 and served as Co-Chief Executive Officer from October 2020 through January 2022 and President from October 2020 through September 2021. Mr. Russell is a co-founder and director of Shift Platform, Inc. and was employed by the Shift Platform, Inc. from November 2015 through January 2022, most recently serving as its Co-Chief Executive Officer. Prior to joining Shift Platform, Inc., he was Managing Vice President at Capital One from 2011 to 2015 where he led the digital transformation of the bank, including creating a completely new mobile and desktop customer experience for customers. In 2007, he co-founded Taxi Magic (now known as Curb) with Mr. Arison, which invented the use of native mobile applications for on-demand services, in its case transportation. In addition to his work in the private sector, Mr. Russell has spent time in public service, leading a $12 billion renewable energy and efficiency investment program for the U.S. Department of Energy. After finishing his Doctorate at Oxford University, he worked as a project leader at the Boston Consulting Group. Mr. Russell holds a bachelor’s degree from Middlebury College. The board has determined that Mr. Russell is qualified to serve as a director due to his previous position as Chief Executive Officer of the Company and due to his extensive technical experience in the industry. |
Name | Class | Age | Principal Occupation and Other Information | |||||||||||||||||
James E. Skinner | II | III | 69 | James E. Skinner has served as a director of the Company and member of the Audit Committee and Leadership Development, Compensation and Governance Committee since December 2022. Prior to that, Mr. Skinner served as a member of the board of directors, Chair of the nominating and corporate governance committee and member of the audit committee for CarLotz, Inc. from February 2020 to December 2022. Mr. Skinner also serves on the board of directors of Ares Commercial Real Estate (NYSE: ACRE) since 2016. He has previously served on the board of directors of Hudson Ltd. (NYSE: HUD), Acamar Partners (NASDAQ: ACAM), and Fossil Group, Inc. [Nasdaq: FOSL] Mr. Skinner is also on the Advisory Board of RevTech, an incubator/accelerator focused on the retail technology. Mr. Skinner held various senior management positions with Neiman Marcus Group, Inc. and its related and predecessor companies from June 2001 until his retirement in February 2016, including serving as Vice Chairman, Executive Vice President, Chief Operating Officer and Chief Financial Officer During his 15 years with NMG, Mr. Skinner was responsible for numerous areas including: finance, accounting, strategy, business development, distribution and logistics, real estate and construction, investor relations, legal, and information technology. Prior to NMG, Mr. Skinner was with CompUSA, a pioneer in computer retailing, which he joined shortly before the initial public offering and left after the sale of the company in 2000 and held various positions, including Executive Vice President and Chief Financial Officer. Prior to that, Mr. Skinner began his career with Ernst & Young, an international professional services firm, where he served for sixteen years until 1991, including the last four years as a partner. Mr. Skinner received his Bachelor’s of Business Administration Degree in Accounting from Texas Tech University and holds his Certified Public Accounting license in the State of Texas. The board has determined that Mr. Skinner is well qualified to serve as a director based on his extensive accounting and audit experience with over 30 years of tax, accounting, financial and executive experience in numerous areas including: finance, accounting, strategy, business development, distribution and logistics, real estate and construction, investor relations, legal, and information technology, experience in public accounting and public companies, and service on public company boards, including chairing audit and compensation committees. |
Name | Age | Position | ||||||||||||
Jeff Clementz | 48 | Chief Executive Officer and Director | ||||||||||||
Oded Shein | 61 | Chief Financial Officer | ||||||||||||
Sean Foy | 55 | Chief Operating Officer |
Director | Audit Committee | Leadership Development, Compensation and Governance Committee | Finance Committee | |||||||||||||||||
Adam Nash | X | X | X | |||||||||||||||||
George Arison | - | - | X | |||||||||||||||||
James Skinner | X | - | - | |||||||||||||||||
Jeff Clementz | - | - | X | |||||||||||||||||
Kellyn Smith Kenny | - | X | - | |||||||||||||||||
Kimberly Sheehy | Chair | - | - | |||||||||||||||||
Luis Solorzano | - | - | X | |||||||||||||||||
Toby Russell | - | - | Chair | |||||||||||||||||
Victoria McInnis | X | Chair | - |
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($) | Nonequity Incentive Plan Compensation ($)(3) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||||||
George Arison | 2022 | 467,083 | - | - | - | 354,000 | 122,917 | (4) | 944,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Former Co-CEO | 2021 | 490,000 | - | 21,146,274 | - | 1,470,000 | - | 23,106,274 | ||||||||||||||||||||||||||||||||||||||||||||||||
Toby Russell | 2022 | 49,165 | - | - | - | - | 540,835 | (4) | 590,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Former Co-CEO | 2021 | 490,000 | - | 21,146,274 | - | 1,470,000 | - | 23,106,274 | ||||||||||||||||||||||||||||||||||||||||||||||||
Jeff Clementz | 2022 | 510,000 | 1,650,000 | - | - | 306,000 | - | 2,466,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Oded Shein | 2022 | 420,000 | 400,000 | 127,950 | - | 168,000 | - | 1,115,950 | ||||||||||||||||||||||||||||||||||||||||||||||||
Chief Financial Officer | 2021 | 308,750 | - | 2,517,973 | - | 624,000 | - | 3,450,723 | ||||||||||||||||||||||||||||||||||||||||||||||||
Sean Foy | 2022 | 405,000 | 440,166 | 126,341 | - | 162,000 | 8,925 | (5) | 1,142,432 | |||||||||||||||||||||||||||||||||||||||||||||||
Chief Operating Officer | 2021 | 357,504 | - | 2,288,431 | - | 715,542 | 30,955 | 3,392,432 |
Name | 2022 Target Bonus | 2022 Earned Bonus | ||||||||||||||||||
George Arison | $ | 1,180,000 | $ | 354,000 | ||||||||||||||||
Toby Russell | $ | 1,180,000 | $ | — | ||||||||||||||||
Jeff Clementz | $ | 765,000 | $ | 306,000 | ||||||||||||||||
Oded Shein | $ | 420,000 | $ | 168,000 | ||||||||||||||||
Sean Foy | $ | 405,000 | $ | 162,000 |
Name | Payout Upon Achievement of Target Goals | |||||||
George Arison | 200% Base Salary | |||||||
Toby Russell | 200% Base Salary | |||||||
Jeff Clementz | 150% Base Salary | |||||||
Oded Shein | 100% Base Salary | |||||||
Sean Foy | 100% Base Salary |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
George Arison | 7/31/2019(2) | 33,604 | - | - | 3.00 | 7/31/2029 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Toby Russell | 9/13/2017(3) | 49 | - | - | 0.80 | 9/13/2027 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
7/31/2019(3) | 52,546 | - | - | 3.00 | 7/31/2029 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeff Clementz | 12/2/2021(4) | - | - | - | - | - | 29,316 | 43,681 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Oded Shein | 5/5/2021(5) | - | - | - | - | - | 11,529 | 17,178 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
12/2/2021(6) | - | - | - | - | - | 9,375 | 13,969 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
6/3/2022(7) | - | - | - | - | - | 3,500 | 5,215 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
8/23/2022(8) | - | - | - | - | - | 9,957 | 14,836 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Sean Foy | 1/28/2019(9) | 2,786 | - | - | 3.00 | 1/28/2029 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
7/31/2019(10) | 7,895 | 1,814 | - | 3.00 | 7/31/2029 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2/2/2021(11) | - | - | - | - | - | 6,659 | 9,922 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
12/2/2021(12) | - | - | - | - | - | 7,031 | 10,476 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
6/3/2022(13) | - | - | - | - | - | 3,500 | 5,215 | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
8/23/2022(14) | - | - | - | - | - | 9,784 | 14,578 | - | - |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||||
Kellyn Smith Kenny(2) | 45,000 | 97,818 | - | - | 142,818 | |||||||||||||||||||||||||||
Jason Krikorian(3) | 81,667 | 101,062 | - | - | 182,729 | |||||||||||||||||||||||||||
Victoria McInnis(4) | 60,000 | 97,818 | - | - | 157,818 | |||||||||||||||||||||||||||
Emily Melton(5) | 47,083 | 97,818 | - | - | 144,901 | |||||||||||||||||||||||||||
Adam Nash(6) | 50,000 | 97,818 | - | - | 147,818 | |||||||||||||||||||||||||||
Manish Patel(7) | 55,000 | 97,818 | - | - | 152,818 | |||||||||||||||||||||||||||
George Arison(8) | 8,391 | - | - | - | 8,391 | |||||||||||||||||||||||||||
Toby Russell(9) | 33,333 | 99,303 | - | - | 132,636 | |||||||||||||||||||||||||||
Kimberly Sheehy(10) | 3,710 | - | - | - | 3,710 | |||||||||||||||||||||||||||
Luis Solorzano(11) | 2,473 | - | - | - | 2,473 | |||||||||||||||||||||||||||
James Skinner(12) | 3,401 | - | - | - | 3,401 |
Name | Number of Time RSUs | |||||||
Kellyn Smith Kenny | 9,316 | |||||||
Jason Krikorian | - | |||||||
Victoria McInnis | 9,316 | |||||||
Emily Melton | - | |||||||
Adam Nash | 9,316 | |||||||
Manish Patel | - | |||||||
George Arison | - | |||||||
Toby Russell | 9,872 | |||||||
Kimberly Sheehy | - | |||||||
Luis Solorzano | - | |||||||
James Skinner | - |
Year Ended December 31, | |||||||||||||||||||||||
Adjusted EBITDA Reconciliation | 2022 | 2021 | |||||||||||||||||||||
Net Loss | $ | (172,042) | $ | (166,268) | |||||||||||||||||||
(+) Interest and other expense, net | 10,950 | 8,082 | |||||||||||||||||||||
(+) Stock-based compensation | 13,029 | 25,130 | |||||||||||||||||||||
(+) Change in fair value of financial instruments | — | (18,893) | |||||||||||||||||||||
(+) Depreciation & amortization | 11,662 | 6,253 | |||||||||||||||||||||
(+) Warrant impact adjustment - contra-revenue (1) | 637 | 637 | |||||||||||||||||||||
(+) Merger and acquisition transaction costs (2) | 19,972 | 141 | |||||||||||||||||||||
(+) Costs related to closed locations excluding severance (3) | 11,857 | — | |||||||||||||||||||||
(+) Sales tax penalty accrual (recovery) | (2,149) | 5,951 | |||||||||||||||||||||
(+) At-the-market sales agreement costs | 266 | — | |||||||||||||||||||||
(+) Provision for income taxes | 326 | 226 | |||||||||||||||||||||
(+) Severance, retention, and CEO costs (4) | 8,455 | 1,166 | |||||||||||||||||||||
(+) Restructuring costs from inventory, property and equipment, and capitalized internal-use software (5) | 17,447 | — | |||||||||||||||||||||
(+) Impairment expense | 17,319 | — | |||||||||||||||||||||
(+) Bargain purchase gain | (76,685) | — | |||||||||||||||||||||
Adjusted EBITDA | $ | (138,956) | $ | (137,575) |
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted- average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||||||||||
Equity compensation plans approved by security holders | 955,835 | $ | 27.47 | 354,649 | ||||||||||||||||
Equity compensation plans not approved by security holders | 52,829 | $ | 8.70 | 53,345 | ||||||||||||||||
Total | 1,008,664 | $ | 26.02 | 407,994 |
Class A Common Stock | ||||||||||||||
Name and Address of Beneficial Owners | Number | % of class | ||||||||||||
Directors and Executive Officers:(1) | ||||||||||||||
Jeff Clementz | 27,592 | * | ||||||||||||
George Arison(2) | 218,384 | 1.3 | % | |||||||||||
Toby Russell(3) | 188,601 | 1.1 | % | |||||||||||
Oded Shein(4) | 10,692 | * | ||||||||||||
Sean Foy(5) | 34,211 | * | ||||||||||||
Victoria McInnis(6) | 3,470 | * | ||||||||||||
Kellyn Smith Kenny | 1,970 | * | ||||||||||||
Adam Nash(7) | 3,696 | * | ||||||||||||
James Skinner | 18,175 | * | ||||||||||||
Kimberly Sheehy | 17,469 | * | ||||||||||||
Luis Solorzano(8) | 454,278 | 2.6 | % | |||||||||||
All directors and executive officers as a group (eleven individuals) | 978,538 | 5.7 | % | |||||||||||
5% or Greater Beneficial Owners: | ||||||||||||||
TRP Capital Partners, LP (9) | 1,563,872 | 9.1 | % | |||||||||||
Lithia Motors Inc.(10) | 1,282,782 | 7.4 | % |
2022 | 2021 | |||||||||||||
Audit Fees(1) | $ | 2,887,000 | $ | 1,165,000 | ||||||||||
Audit-Related Fees(2) | 586,000 | — | ||||||||||||
Tax Fees | — | — | ||||||||||||
All Other Fees(3) | 3,790 | 3,790 | ||||||||||||
Total | $ | 3,476,790 | $ | 1,168,790 |
Index to Consolidated Financial Statements | |||||
Exhibit No. | Description | |||||||
2.1 | ||||||||
2.2 | ||||||||
2.3 | ||||||||
2.4 | ||||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
4.1 | ||||||||
4.2 | ||||||||
10.1 | ||||||||
10.2 | ||||||||
10.3 | ||||||||
10.4 | ||||||||
10.5 | ||||||||
10.6 | ||||||||
10.7 | ||||||||
10.8 | ||||||||
10.9 | ||||||||
10.10 | ||||||||
10.11 | ||||||||
10.12 | ||||||||
10.13 | ||||||||
10.14 | ||||||||
10.15 | ||||||||
10.16 | ||||||||
10.17 | ||||||||
10.18 | ||||||||
10.19 | ||||||||
10.20 | ||||||||
10.21 | ||||||||
10.22 | ||||||||
10.23 | ||||||||
10.24 | ||||||||
10.25 | ||||||||
10.26 | ||||||||
10.27 | ||||||||
10.28 | ||||||||
10.29 | ||||||||
10.30 | ||||||||
10.31 | ||||||||
10.32 | ||||||||
10.33 | ||||||||
14.1 | ||||||||
21.1 | ||||||||
23.1 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
† | Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Shift agrees to furnish a supplemental copy of any omitted schedule or attachment to the SEC upon request. | ||||
* | Indicates management contract or compensatory plan or arrangement. |
SHIFT TECHNOLOGIES, INC. | |||||
/s/ Oded Shein | |||||
Oded Shein | |||||
Chief Financial Officer | |||||
June 29, 2023 |
(Mark One) | |||||
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarterly period ended March 31, 2023 | |||||
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from _______ to _______ |
Delaware | 82-5325852 | ||||
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | ||||
290 Division Street, Suite 400, San Francisco, California 94103-4893 (Address of principal executive offices) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Class A common stock, par value $0.0001 per share | SFT | Nasdaq Capital Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||||||
Emerging growth company | ☒ | |||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Page | ||||||||
As of March 31, 2023 | As of December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 58,784 | $ | 96,159 | |||||||
Restricted cash, current | 7,907 | 10,632 | |||||||||
Marketable securities at fair value | — | 1,264 | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $603 and $93 | 4,393 | 4,558 | |||||||||
Inventory | 34,019 | 40,925 | |||||||||
Prepaid expenses and other current assets | 6,257 | 7,657 | |||||||||
Operating and finance lease assets, property and equipment, accounts receivable, and other assets held for sale or classified as discontinued operations | 12,749 | 17,226 | |||||||||
Total current assets | 124,109 | 178,421 | |||||||||
Restricted cash, non-current | 1,030 | 1,055 | |||||||||
Marketable securities at fair value, non-current | — | 707 | |||||||||
Property and equipment, net | 2,012 | 6,797 | |||||||||
Operating lease assets | 28,366 | 44,568 | |||||||||
Finance lease assets, net | 112 | 152 | |||||||||
Capitalized website and internal use software costs, net | 9,633 | 10,657 | |||||||||
Goodwill | 2,070 | 2,070 | |||||||||
Deferred borrowing costs | 193 | 268 | |||||||||
Other non-current assets | 1,971 | 3,323 | |||||||||
Total assets | $ | 169,496 | $ | 248,018 | |||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 14,280 | $ | 12,085 | |||||||
Accrued expenses and other current liabilities | 23,136 | 33,872 | |||||||||
Operating lease liabilities, current | 5,490 | 8,865 | |||||||||
Finance lease liabilities, current | 50 | 271 | |||||||||
Flooring line of credit | 22,165 | 24,831 | |||||||||
Operating and finance lease liabilities and other liabilities associated with assets held for sale or classified as discontinued operations | 18,159 | 15,432 | |||||||||
Total current liabilities | 83,280 | 95,356 | |||||||||
Long-term debt, net | 163,879 | 163,363 | |||||||||
Operating lease liabilities, non-current | 27,245 | 44,985 | |||||||||
Finance lease liabilities, non-current | 1,496 | 3,989 | |||||||||
Other non-current liabilities | 65 | 111 | |||||||||
Total liabilities | 275,965 | 307,804 | |||||||||
Commitments and contingencies (Note 10) | |||||||||||
Stockholders’ deficit: | |||||||||||
Preferred stock – par value $0.0001 per share; 1,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively | — | — | |||||||||
Common stock – par value $0.0001 per share; 500,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively; 17,227,910 and 17,212,130 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 2 | 2 | |||||||||
Additional paid-in capital | 554,379 | 552,968 | |||||||||
Accumulated other comprehensive loss | — | (3) | |||||||||
Accumulated deficit | (660,850) | (612,753) | |||||||||
Total stockholders’ deficit | (106,469) | (59,786) | |||||||||
Total liabilities and stockholders’ deficit | $ | 169,496 | $ | 248,018 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Revenue | |||||||||||
Retail revenue, net | $ | 48,907 | $ | 183,081 | |||||||
Other revenue, net | 1,652 | 8,712 | |||||||||
Wholesale vehicle revenue | 3,549 | 27,787 | |||||||||
Total revenue | 54,108 | 219,580 | |||||||||
Cost of sales | 50,944 | 208,792 | |||||||||
Gross profit | 3,164 | 10,788 | |||||||||
Operating expenses: | |||||||||||
Selling, general and administrative expenses | 42,591 | 63,537 | |||||||||
Depreciation and amortization | 4,399 | 1,680 | |||||||||
Loss on impairment | 931 | — | |||||||||
Total operating expenses | 47,921 | 65,217 | |||||||||
Loss from operations | (44,757) | (54,429) | |||||||||
Interest and other expense, net | (2,791) | (2,578) | |||||||||
Loss before income taxes | (47,548) | (57,007) | |||||||||
Provision for income taxes | 55 | 41 | |||||||||
Net loss from continuing operations | (47,603) | (57,048) | |||||||||
Loss from discontinued operations | 494 | — | |||||||||
Net loss and comprehensive loss | $ | (48,097) | $ | (57,048) | |||||||
Net loss and comprehensive loss per share, basic and diluted | $ | (2.84) | $ | (6.97) | |||||||
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | 16,920,600 | 8,182,525 |
Common Stock | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Deficit | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 17,212,130 | $ | 2 | $ | 552,968 | $ | (612,753) | $ | (3) | $ | (59,786) | |||||||||||||||||||||||||||
Vesting of early exercised options | — | — | 14 | — | — | 14 | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 1,416 | — | — | 1,416 | ||||||||||||||||||||||||||||||||
Issuance of common stock under stock-based compensation plans, net of shares exchanged for withholding tax | 15,780 | — | (19) | — | — | (19) | ||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | 3 | 3 | ||||||||||||||||||||||||||||||||
Net loss and comprehensive loss | — | — | — | (48,097) | — | (48,097) | ||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | 17,227,910 | $ | 2 | $ | 554,379 | $ | (660,850) | $ | — | $ | (106,469) |
Common Stock | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 8,136,931 | $ | 1 | $ | 515,982 | $ | (440,711) | $ | — | $ | 75,272 | |||||||||||||||||||||||||||
Issuance of common stock upon exercise of vested options | 1,231 | — | 3 | — | — | 3 | ||||||||||||||||||||||||||||||||
Repurchase of shares related to early exercised options | (278) | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of early exercised options | — | — | 35 | — | — | 35 | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | 4,517 | — | — | 4,517 | ||||||||||||||||||||||||||||||||
Issuance of common stock under stock-based compensation plans, net of shares exchanged for withholding tax | 130,029 | — | (2,162) | — | — | (2,162) | ||||||||||||||||||||||||||||||||
Net loss and comprehensive loss | — | — | — | (57,048) | — | (57,048) | ||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | 8,267,913 | $ | 1 | $ | 518,375 | $ | (497,759) | $ | — | $ | 20,617 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net loss | $ | (48,097) | $ | (57,048) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | 4,447 | 2,019 | |||||||||
Stock-based compensation expense | 1,233 | 4,192 | |||||||||
Amortization of operating lease right-of-use assets | 3,388 | 2,162 | |||||||||
Contra-revenue associated with milestones | 601 | 159 | |||||||||
Amortization of debt discounts | 591 | 365 | |||||||||
Loss on impairment | 931 | — | |||||||||
Loss on disposal of long-lived assets | 3,460 | — | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 845 | 130 | |||||||||
Inventory | 6,379 | (37,762) | |||||||||
Prepaid expenses and other current assets | 1,437 | (2,179) | |||||||||
Other non-current assets | 101 | (27) | |||||||||
Accounts payable | 1,934 | (543) | |||||||||
Accrued expenses and other current liabilities | (9,780) | (6,243) | |||||||||
Operating lease liabilities | (3,746) | (1,925) | |||||||||
Other non-current liabilities | (38) | (1,670) | |||||||||
Net cash, cash equivalents, and restricted cash used in operating activities | (36,314) | (98,370) | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Purchases of property and equipment | (390) | (1,444) | |||||||||
Proceeds from sale of property and equipment | 9 | — | |||||||||
Proceeds from sales of marketable securities | 806 | — | |||||||||
Proceeds from commutation of reinsurance contracts | 187 | — | |||||||||
Proceeds from sale of discontinued operations | 434 | — | |||||||||
Capitalized website internal-use software costs | (1,991) | (2,328) | |||||||||
Net cash, cash equivalents, and restricted cash used in investing activities | (945) | (3,772) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Proceeds from flooring line of credit facility | 33,229 | 126,903 | |||||||||
Repayment of flooring line of credit facility | (35,895) | (110,150) | |||||||||
Principal payments on finance leases | (180) | — | |||||||||
Proceeds from stock option exercises, including from early exercised options | — | 3 | |||||||||
Payment of tax withheld for common stock issued under stock-based compensation plans | (19) | (2,162) | |||||||||
Repurchase of shares related to early exercised options | (1) | (10) | |||||||||
Net cash, cash equivalents, and restricted cash provided by (used in) financing activities | (2,866) | 14,584 | |||||||||
Net decrease in cash, cash equivalents and restricted cash | (40,125) | (87,558) | |||||||||
Cash, cash equivalents and restricted cash, beginning of period | 107,846 | 194,341 | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 67,721 | $ | 106,783 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||
Cash paid for interest | $ | 1,114 | $ | 496 | |||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||||||||
Capital expenditures in accounts payable | $ | — | $ | 534 | |||||||
Vesting of exercised options | 14 | 35 | |||||||||
Stock-based compensation capitalized to internal-use software | 183 | 325 | |||||||||
Imputation of debt discounts reducing consideration transferred in business acquisitions | 2,103 | — | |||||||||
Establishment of lease right of use assets and lease liabilities | |||||||||||
Operating lease right of use assets | $ | — | $ | 27,855 | |||||||
Operating lease liabilities | — | 28,631 | |||||||||
Other assets | — | 1,716 | |||||||||
Other liabilities | — | 2,492 | |||||||||
Termination of lease right of use assets and lease liabilities | |||||||||||
Operating lease right of use assets | $ | 11,884 | $ | — | |||||||
Operating lease liabilities | 11,744 | — | |||||||||
Finance lease right of use assets | 4,660 | — | |||||||||
Finance lease liabilities | 4,746 | — |
(In thousands) | ||||||||
Cash consideration | $ | 15,000 | ||||||
Fair value of shares of Shift Class A common stock issued | 2,481 | |||||||
Allocation of proceeds from Senior Unsecured Notes | (2,103) | |||||||
Acquisition Consideration | $ | 15,378 |
Estimated Fair Value | |||||
Capitalized website and internal use software costs | $ | 12,500 | |||
Other intangible assets - Trade name | 100 | ||||
Other intangible assets - Dealer network | 100 | ||||
Prepaid expenses and other current assets | 154 | ||||
Goodwill | 2,524 | ||||
Total fair value of purchase price | $ | 15,378 |
Three Months Ended March 31, 2022 | |||||
Revenue | $ | 219,580 | |||
Loss from operations | (59,240) | ||||
Net loss | $ | (62,196) | |||
Net loss per share, basic and diluted | $ | (7.69) | |||
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | 8,089,211 |
(In thousands) | ||||||||
Fair value of shares of Shift Class A common stock issued to CarLotz stockholders | $ | 22,411 | ||||||
Replacement of CarLotz equity awards | 562 | |||||||
Merger Consideration | $ | 22,973 |
Estimated Fair Value | |||||
Cash, cash equivalents, and marketable securities | $ | 97,710 | |||
Accounts receivable | 3,321 | ||||
Inventory | 7,062 | ||||
Other current assets | 1,756 | ||||
Property and equipment | 7,009 | ||||
Operating lease right of use assets | 25,119 | ||||
Finance lease right of use assets | 4,176 | ||||
Developed technology | 3,190 | ||||
Trademarks | 970 | ||||
Other non-current assets | 364 | ||||
Total assets | 150,677 | ||||
Accounts payable and accrued liabilities | (11,899) | ||||
Operating lease liabilities, current | (4,127) | ||||
Finance lease liabilities, current | (273) | ||||
Other current liabilities | (694) | ||||
Operating lease liabilities | (24,713) | ||||
Finance lease liabilities | (8,940) | ||||
Other non-current liabilities | (373) | ||||
Total liabilities | (51,019) | ||||
Net assets acquired | 99,658 | ||||
Gain on Bargain purchase | $ | (76,685) | |||
Consideration transferred | $ | 22,973 |
Three Months Ended March 31, 2022 | |||||
Revenue | $ | 282,594 | |||
Loss from operations | (81,919) | ||||
Net loss | $ | (80,305) | |||
Net loss per share, basic and diluted | $ | (4.88) | |||
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | 16,472,676 |
As of March 31, 2023 | As of December 31, 2022 | ||||||||||
Equipment | $ | 3,841 | $ | 4,545 | |||||||
Furniture and fixtures | 332 | 1,278 | |||||||||
Leasehold improvements | 929 | 4,334 | |||||||||
Total property and equipment | 5,102 | 10,157 | |||||||||
Less: accumulated depreciation | (3,090) | (3,360) | |||||||||
Property and equipment, net | $ | 2,012 | $ | 6,797 |
Balance Sheet Classification | March 31, 2023 | December 31, 2022 | ||||||||||||||||||
Assets | ||||||||||||||||||||
Operating leases | Operating lease assets | $ | 28,366 | $ | 44,568 | |||||||||||||||
Operating and finance lease assets, property and equipment, accounts receivable, and other assets held for sale or classified as discontinued operations | 9,706 | 9,572 | ||||||||||||||||||
Finance leases | Finance lease assets, net | 112 | 152 | |||||||||||||||||
Operating and finance lease assets, property and equipment, accounts receivable, and other assets held for sale or classified as discontinued operations | 180 | 4,155 | ||||||||||||||||||
Total lease assets | $ | 38,364 | $ | 58,447 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Operating leases | Operating lease liabilities, current | $ | 5,490 | $ | 8,865 | |||||||||||||||
Operating and finance lease liabilities and other liabilities associated with assets held for sale or classified as discontinued operations | 14,918 | 10,138 | ||||||||||||||||||
Operating lease liabilities, non-current | 27,245 | 44,985 | ||||||||||||||||||
Total operating lease liabilities | $ | 47,653 | $ | 63,988 | ||||||||||||||||
Finance leases | Finance lease liabilities, current | $ | 50 | $ | 271 | |||||||||||||||
Operating and finance lease liabilities and other liabilities associated with assets held for sale or classified as discontinued operations | 2,824 | 5,036 | ||||||||||||||||||
Finance lease liabilities, non-current | 1,496 | 3,989 | ||||||||||||||||||
Total finance lease liabilities | $ | 4,370 | $ | 9,296 | ||||||||||||||||
Total lease liabilities | $ | 52,023 | $ | 73,284 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Lease cost | |||||||||||
Operating lease cost | $ | 9,241 | $ | 2,162 | |||||||
Finance lease amortization | 86 | — | |||||||||
Finance lease interest | 109 | — | |||||||||
Short-term lease cost | 168 | 832 | |||||||||
Variable lease cost | 455 | 185 | |||||||||
Sublease income | (241) | — | |||||||||
Total lease cost | $ | 9,818 | $ | 3,179 | |||||||
Cash paid for amounts included in the measurement of operating lease liabilities | |||||||||||
Operating leases - Operating cash flows | $ | 3,746 | $ | 1,925 | |||||||
Finance leases - Operating cash flows | $ | 731 | $ | — | |||||||
Finance leases - Financing cash flows | $ | 180 | $ | — | |||||||
Lease assets derecognized with the sale of lease liabilities | |||||||||||
Operating leases | $ | 11,884 | $ | — | |||||||
Finance leases | $ | 4,660 | $ | — | |||||||
Weighted average remaining lease term - operating leases (in years) | 5.65 | 5.14 | |||||||||
Weighted average discount rate - operating leases | 8.53 | % | 7.30 | % | |||||||
Weighted average remaining lease term - finance leases (in years) | 6.03 | — | |||||||||
Weighted average discount rate - finance leases | 11.10 | % | — | % |
Year ended December 31, | Operating Leases | Finance Leases | ||||||||||||
2023 | $ | 9,198 | $ | 592 | ||||||||||
2024 | 10,860 | 693 | ||||||||||||
2025 | 9,456 | 708 | ||||||||||||
2026 | 9,339 | 724 | ||||||||||||
2027 | 9,353 | 680 | ||||||||||||
Thereafter | 13,935 | 4,091 | ||||||||||||
Total minimum lease payments | $ | 62,141 | $ | 7,488 | ||||||||||
Less: Imputed interest | 14,488 | 3,118 | ||||||||||||
Total lease liabilities | $ | 47,653 | $ | 4,370 |
As of March 31, 2023 | As of December 31, 2022 | ||||||||||
Capitalized website domain costs – nonamortizable | $ | 385 | $ | 385 | |||||||
Capitalized website and internal-use software development costs – amortizable | 14,280 | 12,294 | |||||||||
Less: accumulated amortization | (5,032) | (2,022) | |||||||||
Capitalized website and internal-use software development costs, net | $ | 9,633 | $ | 10,657 |
As of March 31, 2023 | |||||
2023 | $ | 1,871 | |||
2024 | 2,488 | ||||
2025 | 1,382 | ||||
2026 | 58 | ||||
Development in progress | 3,449 | ||||
Total amortizable costs | 9,248 | ||||
Nonamortizable costs | 385 | ||||
Total capitalized website and internal-use software development costs | $ | 9,633 |
As of March 31, 2023 | As of December 31, 2022 | ||||||||||
Accrued payroll related costs | $ | 10,196 | $ | 14,048 | |||||||
Provision for DMV refunds | 1,089 | 1,080 | |||||||||
Accrued sales taxes | 212 | 3,957 | |||||||||
Class A common stock subject to repurchase liability, current | 34 | 44 | |||||||||
Interest payable | 2,742 | 960 | |||||||||
Provision for sales returns and cancellations | 3,146 | 4,304 | |||||||||
Other accrued expenses | 5,717 | 9,479 | |||||||||
Total accrued expenses and other current liabilities | $ | 23,136 | $ | 33,872 |
Three Months Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Revenue from external customers | |||||||||||||||||||||||
Retail | $ | 50,559 | $ | 191,793 | |||||||||||||||||||
Wholesale | 3,549 | 27,787 | |||||||||||||||||||||
Consolidated | $ | 54,108 | $ | 219,580 | |||||||||||||||||||
Segment gross profit (loss) | |||||||||||||||||||||||
Retail | $ | 3,929 | $ | 10,926 | |||||||||||||||||||
Wholesale | (765) | (138) | |||||||||||||||||||||
Consolidated | $ | 3,164 | $ | 10,788 |
Three Months Ended March 31, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Segment gross profit | $ | 3,164 | $ | 10,788 | |||||||||||||||||||
Selling, general and administrative expenses | (42,591) | (63,537) | |||||||||||||||||||||
Depreciation and amortization | (4,399) | (1,680) | |||||||||||||||||||||
Loss on impairment | (931) | — | |||||||||||||||||||||
Interest and other expense, net | (2,791) | (2,578) | |||||||||||||||||||||
Loss before income taxes | $ | (47,548) | $ | (57,007) |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (000’s) | ||||||||||||||||||||
As of December 31, 2022 | 519,323 | $ | 26.02 | 4.95 | $ | 1 | |||||||||||||||||
Granted | — | — | |||||||||||||||||||||
Exercised | — | — | |||||||||||||||||||||
Forfeited | (4,927) | 31.99 | |||||||||||||||||||||
Cancelled (expired) | (117,025) | 70.05 | |||||||||||||||||||||
As of March 31, 2023 | 397,371 | $ | 12.98 | 5.95 | $ | — | |||||||||||||||||
Exercisable as of March 31, 2023 | 393,867 | $ | 12.84 | 5.94 | $ | — |
Number of Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value (000’s) | ||||||||||||||||||||
Unvested as of December 31, 2022 | 486,054 | $ | 29.30 | 1.01 | $ | 724 | |||||||||||||||||
Granted | 123,688 | 2.16 | |||||||||||||||||||||
Vested | (35,796) | 37.70 | |||||||||||||||||||||
Forfeited | (89,298) | 20.69 | |||||||||||||||||||||
Unvested as of March 31, 2023 | 484,648 | $ | 23.27 | 0.81 | $ | 543 | |||||||||||||||||
Vested and unreleased | 22,673 | ||||||||||||||||||||||
Outstanding as of March 31, 2023 | 507,321 |
Balance at December 31, 2022 | $ | 794 | |||
Accruals and accrual adjustments | — | ||||
Cash payments | (161) | ||||
Balance at March 31, 2023 | $ | 633 |
Gross purchase price | $ | 434 | ||||||
Net assets sold | (820) | |||||||
Loss on disposal | $ | (386) |
Assets | ||||||||
Inventory | $ | 606 | ||||||
Security deposits | 57 | |||||||
Property, plant, and equipment | 306 | |||||||
Operating lease assets | 1,577 | |||||||
Total assets | $ | 2,546 | ||||||
Liabilities | ||||||||
Operating lease liabilities | $ | 1,726 | ||||||
Total liabilities | $ | 1,726 | ||||||
Net assets sold | $ | 820 |
March 31, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Held for sale: | |||||||||||
Operating lease assets | $ | 7,813 | $ | 5,634 | |||||||
Finance lease assets, net | — | 3,960 | |||||||||
Total held for sale assets | 7,813 | 9,594 | |||||||||
Discontinued Operations: | |||||||||||
Accounts receivable, net | 460 | 689 | |||||||||
Prepaid expenses and other current assets | 217 | 226 | |||||||||
Property and equipment, net | 2,186 | 2,584 | |||||||||
Operating lease assets | 1,893 | 3,938 | |||||||||
Finance lease assets, net | 180 | 195 | |||||||||
Total discontinued operations assets | 4,936 | 7,632 | |||||||||
Total held for sale and discontinued operations assets | $ | 12,749 | $ | 17,226 | |||||||
Liabilities | |||||||||||
Held for sale: | |||||||||||
Operating lease liabilities | $ | 13,018 | $ | 6,016 | |||||||
Finance lease liabilities | 2,641 | 4,843 | |||||||||
Total held for sale liabilities | 15,659 | 10,859 | |||||||||
Discontinued Operations: | |||||||||||
Accounts payable | 65 | 70 | |||||||||
Accrued expenses and other current liabilities | 272 | 131 | |||||||||
Operating lease liabilities | 1,900 | 4,122 | |||||||||
Finance lease liabilities | 183 | 193 | |||||||||
Other non-current liabilities | 80 | 87 | |||||||||
Total discontinued operations liabilities | 2,500 | 4,603 | |||||||||
Total held for sale and discontinued operations liabilities | $ | 18,159 | $ | 15,462 |
Three Months Ended March 31, 2023 | ||||||||
Retail revenue, net | $ | 2,123 | ||||||
Other revenue, net | 270 | |||||||
Wholesale vehicle revenue | 1,190 | |||||||
Total revenue | 3,584 | |||||||
Cost of sales | 3,210 | |||||||
Gross profit | 374 | |||||||
Selling, general and administrative expenses | 459 | |||||||
Loss on disposal | 386 | |||||||
Depreciation and amortization | 20 | |||||||
Total Operating Expenses | 865 | |||||||
Loss from operations | (491) | |||||||
Interest and other expense, net | (3) | |||||||
Loss from discontinued operations | $ | (494) |
Three Months Ended March 31, 2023 | ||||||||
Depreciation and amortization | $ | 20 |
Three Months Ended March 31, | ||||||||||||||
(in thousands, except share and per share amounts) | 2023 | 2022 | ||||||||||||
Net loss | $ | (48,097) | $ | (57,048) | ||||||||||
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted | 16,920,600 | 8,182,525 | ||||||||||||
Net loss per share, basic and diluted | $ | (2.84) | $ | (6.97) |
As of March 31, | |||||||||||
2023 | 2022 | ||||||||||
Escrow Shares | 300,010 | 300,010 | |||||||||
Public and private warrants | 1,146,727 | — | |||||||||
Earnout Shares | 489,841 | — | |||||||||
Convertible Notes | 1,779,834 | 1,779,834 | |||||||||
Stock options | 397,371 | 156,302 | |||||||||
Restricted stock units | 507,321 | 748,162 | |||||||||
Contingently repurchasable early exercise shares | 813 | 4,800 | |||||||||
Total | 4,621,917 | 2,989,108 |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2023 | 2022 | Change | |||||||||||||||||||||||||||||||||
($ in thousands, except per unit metrics) | |||||||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||
Retail vehicle revenue, net | $ | 48,907 | $ | 183,081 | (73.3) | % | |||||||||||||||||||||||||||||
Other revenue, net | 1,652 | 8,712 | (81.0) | % | |||||||||||||||||||||||||||||||
Wholesale vehicle revenue | 3,549 | 27,787 | (87.2) | % | |||||||||||||||||||||||||||||||
Total revenue | $ | 54,108 | $ | 219,580 | (75.4) | % | |||||||||||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||||||||||||||
Retail vehicle cost of sales | $ | 46,630 | $ | 180,867 | (74.2) | % | |||||||||||||||||||||||||||||
Wholesale vehicle cost of sales | 4,314 | 27,925 | (84.6) | % | |||||||||||||||||||||||||||||||
Total cost of sales | $ | 50,944 | $ | 208,792 | (75.6) | % | |||||||||||||||||||||||||||||
Gross profit: | |||||||||||||||||||||||||||||||||||
Retail vehicle gross profit | $ | 2,277 | $ | 2,214 | 2.8 | % | |||||||||||||||||||||||||||||
Other gross profit | 1,652 | 8,712 | (81.0) | % | |||||||||||||||||||||||||||||||
Wholesale vehicle gross loss | (765) | (138) | 454.3 | % | |||||||||||||||||||||||||||||||
Total gross profit | $ | 3,164 | $ | 10,788 | (70.7) | % | |||||||||||||||||||||||||||||
Unit sales information: | |||||||||||||||||||||||||||||||||||
Retail vehicle unit sales | 2,292 | 6,714 | (65.9) | % | |||||||||||||||||||||||||||||||
Wholesale vehicle unit sales | 252 | 1,975 | (87.2) | % | |||||||||||||||||||||||||||||||
Average selling prices per unit (“ASP”): | |||||||||||||||||||||||||||||||||||
Retail vehicles | $ | 21,338 | $ | 27,269 | (21.7) | % | |||||||||||||||||||||||||||||
Wholesale vehicles | $ | 14,083 | $ | 14,069 | 0.1 | % | |||||||||||||||||||||||||||||
Gross profit per unit: | |||||||||||||||||||||||||||||||||||
Retail gross profit per unit | $ | 993 | $ | 330 | 200.9 | % | |||||||||||||||||||||||||||||
Other gross profit per unit | 721 | 1,298 | (44.5) | % | |||||||||||||||||||||||||||||||
Wholesale gross loss per unit | (334) | (21) | 1,490.5 | % | |||||||||||||||||||||||||||||||
Total gross profit per unit | $ | 1,380 | $ | 1,607 | (14.1) | % | |||||||||||||||||||||||||||||
Non-financial metrics | |||||||||||||||||||||||||||||||||||
Average monthly unique visitors | 543,911 | 822,856 | (33.9) | % | |||||||||||||||||||||||||||||||
Average days to sale | 78 | 56 | 39.3 | % | |||||||||||||||||||||||||||||||
Retail vehicles available for sale | 1,650 | 5,464 | (69.8) | % |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Change | |||||||||||||||
($ in thousands) | |||||||||||||||||
Compensation and benefits | $ | 14,634 | $ | 30,514 | (52.0) | % | |||||||||||
as a % of revenue | 27.0 | % | 13.9 | % | |||||||||||||
Marketing expenses | 4,530 | 11,909 | (62.0) | % | |||||||||||||
as a % of revenue | 8.4 | % | 5.4 | % | |||||||||||||
Other costs(1) | 23,427 | 21,114 | 11.0 | % | |||||||||||||
as a % of revenue | 43.3 | % | 9.6 | % | |||||||||||||
Total selling, general and administrative expenses | $ | 42,591 | $ | 63,537 | (33.0) | % | |||||||||||
as a % of revenue | 78.7 | % | 28.9 | % |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
($ in thousands) | |||||||||||
Cash Flow Data: | |||||||||||
Net cash, cash equivalents, and restricted cash used in operating activities | $ | (36,314) | $ | (98,370) | |||||||
Net cash, cash equivalents, and restricted cash used in investing activities | (945) | (3,772) | |||||||||
Net cash, cash equivalents, and restricted cash provided by (used in) financing activities | (2,866) | 14,584 |
Exhibit No. | Description | |||||||
3.1 | ||||||||
10.1 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
99.1 | ||||||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
† | Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Shift agrees to furnish a supplemental copy of any omitted schedule or attachment to the SEC upon request. | ||||
* | Indicates management contract or compensatory plan or arrangement. |
SHIFT TECHNOLOGIES, INC. | |||||
/s/ Oded Shein | |||||
Oded Shein | |||||
Chief Financial Officer | |||||
June 29, 2023 |
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