Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 11, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-38839 | |
Entity Registrant Name | Shift Technologies, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-5325852 | |
Entity Address, Address Line One | 290 Division Street | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94103-4893 | |
City Area Code | 855 | |
Local Phone Number | 575-6739 | |
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | |
Trading Symbol | SFT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 81,291,036 | |
Entity Central Index Key | 0001762322 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 247,532 | $ 233,936 |
Accounts receivable, net of allowance for doubtful accounts of $298 and $46 | 12,789 | 8,426 |
Inventory | 88,885 | 49,086 |
Prepaid expenses and other current assets | 5,258 | 5,478 |
Total current assets | 354,464 | 296,926 |
Property and equipment, net | 5,972 | 2,123 |
Capitalized website and internal use software costs, net | 8,495 | 6,542 |
Restricted cash, non-current | 1,625 | 1,605 |
Deferred borrowing costs | 0 | 2,149 |
Other non-current assets | 2,307 | 2,748 |
Total assets | 372,863 | 312,093 |
Current liabilities: | ||
Accounts payable | 11,696 | 10,675 |
Accrued expenses and other current liabilities | 39,250 | 22,286 |
Flooring line of credit | 50,250 | 13,870 |
Total current liabilities | 101,196 | 46,831 |
Convertible notes | 144,048 | 0 |
Financial instruments liability | 7,639 | 25,230 |
Other non-current liabilities | 3,150 | 2,850 |
Total liabilities | 256,033 | 74,911 |
Commitment and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock – par value $0.0001 per share; 1,000,000 shares authorized at September 30, 2021 and December 31, 2020, respectively | 0 | 0 |
Common stock – par value $0.0001 per share; 500,000,000 shares authorized at September 30, 2021 and December 31, 2020, respectively; 84,281,072 and 83,904,182 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 8 | 8 |
Additional paid-in capital | 503,070 | 511,617 |
Accumulated deficit | (386,248) | (274,443) |
Total stockholders’ equity | 116,830 | 237,182 |
Total liabilities and stockholders’ equity | $ 372,863 | $ 312,093 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 298 | $ 46 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 84,281,072 | 83,904,182 |
Common stock, outstanding (in shares) | 84,281,072 | 83,904,182 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | ||||
Revenue | $ 179,800 | $ 59,914 | $ 440,653 | $ 122,307 |
Cost of sales | 166,848 | 56,188 | 404,006 | 111,666 |
Gross profit | 12,952 | 3,726 | 36,647 | 10,641 |
Operating expenses: | ||||
Selling, general and administrative expenses | 57,886 | 24,030 | 156,264 | 52,109 |
Depreciation and amortization | 1,375 | 1,181 | 4,037 | 3,258 |
Total operating expenses | 59,261 | 25,211 | 160,301 | 55,367 |
Loss from operations | (46,309) | (21,485) | (123,654) | (44,726) |
Change in fair value of financial instruments | 11,967 | (579) | 17,591 | (6,211) |
Interest and other expense, net | (3,047) | (1,256) | (5,742) | (3,707) |
Net loss and comprehensive loss attributable to common stockholders | (37,389) | (23,320) | (111,805) | (54,644) |
Net loss and comprehensive loss attributable to common stockholders | $ (37,389) | $ (23,320) | $ (111,805) | $ (54,644) |
Net loss and comprehensive loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.48) | $ (6.96) | $ (1.43) | $ (17.05) |
Net loss and comprehensive loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.48) | $ (6.96) | $ (1.43) | $ (17.05) |
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic (in shares) | 78,096,901 | 3,352,870 | 78,052,624 | 3,205,180 |
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, diluted (in shares) | 78,096,901 | 3,352,870 | 78,052,624 | 3,205,180 |
Ecommerce revenue, net | ||||
Revenue | ||||
Revenue | $ 156,248 | $ 48,486 | $ 374,889 | $ 97,870 |
Other revenue, net | ||||
Revenue | ||||
Revenue | 6,215 | 2,036 | 15,309 | 3,933 |
Wholesale vehicle revenue | ||||
Revenue | ||||
Revenue | $ 17,337 | $ 9,392 | $ 50,455 | $ 20,504 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Public Warrants | Previously Reported | Revision of Prior Period, Adjustment | Common Stock | Common StockPublic Warrants | Common StockPreviously Reported | Common StockRevision of Prior Period, Adjustment | Additional Paid-in Capital | Additional Paid-in CapitalPublic Warrants | Additional Paid-in CapitalPreviously Reported | Additional Paid-in CapitalRevision of Prior Period, Adjustment | Accumulated Deficit | Accumulated DeficitPreviously Reported |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 255,237,101 | (255,237,101) | |||||||||||
Beginning balance at Dec. 31, 2019 | $ 0 | $ 223,631 | $ (223,631) | |||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 0 | |||||||||||||
Ending balance at Mar. 31, 2020 | $ 0 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 31,394,963 | 37,432,555 | (6,037,592) | |||||||||||
Beginning balance at Dec. 31, 2019 | 43,334 | $ (180,297) | $ 223,631 | $ 3 | $ 3 | $ 258,628 | $ 34,997 | $ 223,631 | $ (215,297) | $ (215,297) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Issuance of common stock upon exercise of vested options (in shares) | 38,860 | |||||||||||||
Issuance of common stock upon exercise of vested options | 59 | 59 | ||||||||||||
Vesting of early exercised options | 41 | 41 | ||||||||||||
Stock-based compensation | 327 | 327 | ||||||||||||
Net loss and comprehensive loss | (12,331) | (12,331) | ||||||||||||
Net loss and comprehensive loss | (12,331) | (12,331) | ||||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 31,433,823 | |||||||||||||
Ending balance at Mar. 31, 2020 | $ 31,430 | $ 3 | 259,055 | (227,628) | ||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 255,237,101 | (255,237,101) | |||||||||||
Beginning balance at Dec. 31, 2019 | $ 0 | $ 223,631 | $ (223,631) | |||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 0 | |||||||||||||
Ending balance at Sep. 30, 2020 | $ 0 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 31,394,963 | 37,432,555 | (6,037,592) | |||||||||||
Beginning balance at Dec. 31, 2019 | 43,334 | $ (180,297) | $ 223,631 | $ 3 | $ 3 | 258,628 | 34,997 | 223,631 | (215,297) | (215,297) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net loss and comprehensive loss | (54,644) | |||||||||||||
Net loss and comprehensive loss | (54,644) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 32,141,202 | |||||||||||||
Ending balance at Sep. 30, 2020 | $ (8,284) | $ 3 | 261,654 | (269,941) | ||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 255,237,101 | (255,237,101) | |||||||||||
Beginning balance at Dec. 31, 2019 | $ 0 | $ 223,631 | $ (223,631) | |||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 0 | |||||||||||||
Ending balance at Dec. 31, 2020 | $ 0 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 31,394,963 | 37,432,555 | (6,037,592) | |||||||||||
Beginning balance at Dec. 31, 2019 | 43,334 | $ (180,297) | $ 223,631 | $ 3 | $ 3 | 258,628 | $ 34,997 | $ 223,631 | (215,297) | $ (215,297) | ||||
Ending balance (in shares) at Dec. 31, 2020 | 83,904,182 | |||||||||||||
Ending balance at Dec. 31, 2020 | $ 237,182 | $ 8 | 511,617 | (274,443) | ||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 0 | |||||||||||||
Beginning balance at Mar. 31, 2020 | $ 0 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 0 | |||||||||||||
Ending balance at Jun. 30, 2020 | $ 0 | |||||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 31,433,823 | |||||||||||||
Beginning balance at Mar. 31, 2020 | 31,430 | $ 3 | 259,055 | (227,628) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Issuance of common stock upon exercise of vested options (in shares) | 24,189 | |||||||||||||
Issuance of common stock upon exercise of vested options | 28 | 28 | ||||||||||||
Vesting of early exercised options | 89 | 89 | ||||||||||||
Stock-based compensation | 492 | 492 | ||||||||||||
Net loss and comprehensive loss | (18,993) | (18,993) | ||||||||||||
Net loss and comprehensive loss | (18,993) | (18,993) | ||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 31,458,012 | |||||||||||||
Ending balance at Jun. 30, 2020 | $ 13,046 | $ 3 | 259,664 | (246,621) | ||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 0 | |||||||||||||
Ending balance at Sep. 30, 2020 | $ 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Issuance of common stock upon exercise of vested options (in shares) | 686,398 | |||||||||||||
Issuance of common stock upon exercise of vested options | 697 | 697 | ||||||||||||
Repurchase of shares related to early exercised options (in shares) | (3,208) | |||||||||||||
Vesting of early exercised options | 476 | 476 | ||||||||||||
Stock-based compensation | 817 | 817 | ||||||||||||
Net loss and comprehensive loss | (23,320) | (23,320) | ||||||||||||
Net loss and comprehensive loss | (23,320) | (23,320) | ||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 32,141,202 | |||||||||||||
Ending balance at Sep. 30, 2020 | $ (8,284) | $ 3 | 261,654 | (269,941) | ||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ 0 | |||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 0 | |||||||||||||
Ending balance at Mar. 31, 2021 | $ 0 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 83,904,182 | |||||||||||||
Beginning balance at Dec. 31, 2020 | 237,182 | $ 8 | 511,617 | (274,443) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Warrant exchange (in shares) | 125,160 | |||||||||||||
Warrant exchange | $ (497) | $ (497) | ||||||||||||
Issuance of common stock upon exercise of vested options (in shares) | 107,645 | |||||||||||||
Issuance of common stock upon exercise of vested options | 200 | 200 | ||||||||||||
Repurchase of shares related to early exercised options | 1 | 1 | ||||||||||||
Vesting of early exercised options | 132 | 132 | ||||||||||||
Stock-based compensation | 8,375 | 8,375 | ||||||||||||
Net loss and comprehensive loss | (42,755) | (42,755) | ||||||||||||
Net loss and comprehensive loss | (42,755) | (42,755) | ||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 84,136,987 | |||||||||||||
Ending balance at Mar. 31, 2021 | $ 202,638 | $ 8 | 519,828 | (317,198) | ||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ 0 | |||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | |||||||||||||
Ending balance at Sep. 30, 2021 | $ 0 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 83,904,182 | |||||||||||||
Beginning balance at Dec. 31, 2020 | $ 237,182 | $ 8 | 511,617 | (274,443) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Issuance of common stock upon exercise of vested options (in shares) | 273,739 | |||||||||||||
Net loss and comprehensive loss | $ (111,805) | |||||||||||||
Net loss and comprehensive loss | (111,805) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 84,281,072 | |||||||||||||
Ending balance at Sep. 30, 2021 | $ 116,830 | $ 8 | 503,070 | (386,248) | ||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 0 | |||||||||||||
Beginning balance at Mar. 31, 2021 | $ 0 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | |||||||||||||
Ending balance at Jun. 30, 2021 | $ 0 | |||||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 84,136,987 | |||||||||||||
Beginning balance at Mar. 31, 2021 | 202,638 | $ 8 | 519,828 | (317,198) | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Purchase of Capped Calls (Note 7) | (28,391) | (28,391) | ||||||||||||
Issuance of common stock upon exercise of vested options (in shares) | 31,679 | |||||||||||||
Issuance of common stock upon exercise of vested options | 101 | 101 | ||||||||||||
Repurchase of shares related to early exercised options (in shares) | (5,849) | |||||||||||||
Vesting of early exercised options | 114 | 114 | ||||||||||||
Stock-based compensation | 5,651 | 5,651 | ||||||||||||
Net loss and comprehensive loss | (31,661) | (31,661) | ||||||||||||
Net loss and comprehensive loss | (31,661) | (31,661) | ||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 84,162,817 | |||||||||||||
Ending balance at Jun. 30, 2021 | $ 148,452 | $ 8 | 497,303 | (348,859) | ||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | |||||||||||||
Ending balance at Sep. 30, 2021 | $ 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Issuance of common stock upon exercise of vested options (in shares) | 134,415 | |||||||||||||
Issuance of common stock upon exercise of vested options | 99 | 99 | ||||||||||||
Repurchase of shares related to early exercised options (in shares) | (16,160) | |||||||||||||
Vesting of early exercised options | 142 | 142 | ||||||||||||
Stock-based compensation | 5,526 | 5,526 | ||||||||||||
Net loss and comprehensive loss | (37,389) | (37,389) | ||||||||||||
Net loss and comprehensive loss | (37,389) | (37,389) | ||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 84,281,072 | |||||||||||||
Ending balance at Sep. 30, 2021 | $ 116,830 | $ 8 | $ 503,070 | $ (386,248) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (111,805) | $ (54,644) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,489 | 3,258 |
Stock-based compensation expense | 18,944 | 1,455 |
Change in fair value of financial instruments | (17,591) | 6,211 |
Contra-revenue associated with milestones | 478 | 478 |
Amortization of debt discounts | 2,429 | 3,275 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,363) | (6,085) |
Inventory | (39,799) | (15,287) |
Prepaid expenses and other current assets | 255 | 7 |
Other non-current assets | 44 | (54) |
Accounts payable | 867 | 7,515 |
Accrued expenses and other current liabilities | 17,497 | 7,983 |
Other non-current liabilities | 391 | (52) |
Net cash, cash equivalents, and restricted cash used in operating activities | (128,164) | (45,940) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (5,094) | (407) |
Capitalized website internal-use software costs | (4,604) | (2,857) |
Net cash, cash equivalents, and restricted cash used in investing activities | (9,698) | (3,264) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from flooring line of credit facility | 227,662 | 67,413 |
Repayment of flooring line of credit facility | (191,363) | (63,102) |
Proceeds from Delayed Draw Term Loan | 0 | 12,500 |
Proceeds from SBA PPP Loans | 0 | 6,055 |
Proceeds from Convertible Notes (Note 6) | 143,768 | 0 |
Premiums paid for Capped Call Transactions (Note 7) | (28,391) | 0 |
Exchange of warrants for cash | (497) | 0 |
Proceeds from stock option exercises, including from early exercised options | 366 | 1,740 |
Repurchase of shares related to early exercised options | (67) | (7) |
Net cash, cash equivalents, and restricted cash provided by financing activities | 151,478 | 24,599 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 13,616 | (24,605) |
Cash, cash equivalents and restricted cash, beginning of period | 235,541 | 44,576 |
Cash, cash equivalents and restricted cash, end of period | 249,157 | 19,971 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 760 | 650 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Capital expenditures in accounts payable | 154 | 0 |
Vesting of exercised options | 388 | 605 |
Other receivables resulting from stock option exercises | 35 | 269 |
Stock-based compensation capitalized to internal-use software | $ 608 | $ 182 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS AND ACCOUNTING POLICIES | 1. DESCRIPTION OF THE BUSINESS AND ACCOUNTING POLICIES Shift Technologies, Inc., which, together with its subsidiaries we refer to as Shift, we, us, our, SFT, or the Company, conducts its business through its wholly owned subsidiaries Shift Platform, Inc., Shift Operations, LLC, Shift Transportation LLC, and Shift Finance, LLC. Shift Platform, Inc., formerly known as Shift Technologies, Inc. (“Legacy Shift”) was incorporated in the State of Delaware on December 9, 2013. The Company is headquartered in San Francisco, California and operates hubs to purchase, recondition and/or sell vehicles in major cities in California, Oregon, Washington, Texas, and Nevada. Shift operates an innovative platform to make car purchases, car sales and ownership simple. Shift’s innovative platform, which includes proprietary pricing technology, provides consumers with a digital purchase and selling experience, and includes offerings throughout the sales cycle, including vehicle pickup and delivery at a customer’s location. The Company currently is organized into two reportable segments: Retail and Wholesale. The Retail segment represents retail sales of used vehicles through the Company’s ecommerce platform and fees earned on sales of value-added products associated with those vehicles sales such as vehicle service contracts, guaranteed asset protection waiver coverage, prepaid maintenance plans, and appearance protection plans. The Wholesale segment represents sales of used vehicles through wholesale auctions or directly to a wholesaler (“DTW”). Insurance Acquisition Corp. Merger On October 13, 2020, Insurance Acquisition Corp. (“IAC”), an entity listed on the Nasdaq Capital Market under the trade symbol “INSU”, acquired Legacy Shift by the merger of IAC Merger Sub, Inc., a direct wholly owned subsidiary of IAC, with and into Legacy Shift, with Legacy Shift continuing as the surviving entity and a wholly owned subsidiary of IAC (the “Merger”). The public company resulting from the merger was renamed Shift Technologies, Inc. Upon the consummation of the Merger, Shif t received approximately $300.9 million, net of fees and expenses. See Note 2 - Merger for additional details regarding this transaction. COVID-19 In March 2020, the World Health Organization declared the outbreak of the novel coronavirus disease (“COVID-19”) as a pandemic, and the Company expects its operations in all locations to be affected as the pandemic progresses. The Company saw a slowing of vehicle sales immediately following the shelter in place ordinances in March; however, within five weeks, weekly sales volume rebounded nearly to pre-COVID-19 volumes. The Company has adjusted certain aspects of its operations to protect its employees and customers while still meeting customers’ needs for vital technology, including implementing contactless purchase and delivery processes and applying long-term antimicrobial surface and air protection systems for its entire inventory. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), was signed into law in response to the COVID-19 pandemic. The CARES Act includes several significant income tax relief provisions as well as the deferral of the employer portion of the social security payroll tax. The income tax benefits include a favorable increase in the interest expense limitation under section 163(j), allowing a five-year net operating loss (“NOL”) carryback provision for certain NOLs, and increasing the amount of NOLs corporations may use to offset income for taxable years beginning before 2021. The Company has evaluated the income tax impacts of the CARES Act and does not expect that the income tax relief provisions of the CARES Act will significantly impact the Company, since it has had taxable losses since inception. In addition, the Company has adopted the deferral of the employer portion of the social security payroll tax. The deferral was effective from the enactment date through December 31, 2020. As of September 30, 2021, the Company had deferred $1.3 million. The deferred amount will be paid in two installments and the amount will be considered timely paid if 50% of the deferred amount is paid by December 31, 2021 and the remainder by December 31, 2022. Basis of Presentation Our unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The interim condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, the interim condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020, condensed consolidated statements of stockholders' equity for the three and nine months ended September 30, 2021 and 2020, and condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020, and amounts relating to the interim periods included in the accompanying notes to the interim condensed consolidated financial statements are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements contained in the Company's most recent Annual Report on Form 10-K , and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s condensed consolidated balance sheet as of September 30, 2021, and its results of operations for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results expected for the fiscal year or any other periods. These interim financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes for the fiscal year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission ("SEC") on March 19, 2021. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to the valuation of vehicle inventory, capitalized website and internal-use software development costs, fair value of common stock, financial instruments, convertible debt, stock-based compensation and income taxes. The COVID-19 pandemic has adversely impacted the global economy, as well as the Company’s operations, and the extent and duration of the impacts remain unclear. The Company’s future estimates, including, but not limited to, the inventory valuations, and fair value measurements, may be impacted and continue to evolve as conditions change as a result of the COVID-19 pandemic. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. As of September 30, 2021 and December 31, 2020, all liability-classified financial instruments that are remeasured on a recurring basis have been valued using Level 3 inputs. The determination of the fair value of the Lithia warrants subject to remeasurement was based on the Black-Scholes valuation model, which requires significant estimates including the expected volatility of our common stock, expected dividend yield, option term and risk-free rate. The fair value of the Escrow Shares was determined using a Monte Carlo valuation model, which requires significant estimates including the expected volatility of our common stock. The liability arising from the Escrow Shares is included in financial instruments liability in the condensed consolidated balance sheets. The expected annual volatility of our common stock was estimated to be 65.53% and 63.93% as of September 30, 2021 and December 31, 2020, respectively, based on the historical volatility of comparable publicly traded companies. The table below illustrates the changes in the fair value of the Company’s Level 3 financial instruments liability: (in thousands) 2021 2020 Balance as of January 1, $ 25,230 $ 4,810 Remeasurement of Lithia warrants — 6,211 Remeasurement of Escrow Shares liability (17,591) — Balance as of September 30, $ 7,639 $ 11,021 All Legacy Shift warrants outstanding prior to the merger were exercised and settled via net share settlement. The number of shares issued upon the exercise of the warrants was reduced in lieu of cash payment for the exercise price of the warrants. There were no warrants outstanding at September 30, 2021. Correction of Immaterial Errors During the quarter ended September 30, 2021, the company recorded a charge of $3.1 million related to certain sales tax amounts (including penalties and interest) which should have been recorded in prior periods from 2018 through the periods ended June 30, 2021. This out of period charge represents the Company’s best estimate of the probable amount due to the applicable taxing authorities and includes sales tax amounts collected from customers that were remitted to the incorrect jurisdiction as well as additional sales tax amounts in certain jurisdictions that were not correctly determined at the time of the customer transaction. The Company is currently working with the applicable jurisdictions to resolve the outstanding balances. We have determined that the impact of this out of period charge is quantitatively and qualitatively immaterial to all prior periods. The amounts are also immaterial to the expected results for the full year 2021 and to trends in the Company’s financial results. The correction of the $3.1 million was recorded as an increase to selling, general, and administrative expenses on the condensed consolidated statement of comprehensive loss in the three months ended September 30, 2021. As a result of the errors described above, selling, general and administrative expenses and net loss are understated by $0.7 million and $0.6 million for the years ended December 31, 2020 and 2019, respectively. Accumulated deficit is understated and stockholder's equity is overstated by $1.8 million as of December 31, 2020. Selling, general and administrative expenses and net loss are understated by $0.2 million and $0.5 million for the three and nine months ended September 30, 2020. Selling, general and administrative expenses and net loss are understated by $0.5 million and $0.8 million for the three months ended March 31, 2021 and June 30, 2021, respectively, resulting in an understatement of $1.3 million for the six months ended June 30, 2021. Selling, general and administrative expenses and net loss are understated by $0.1 million and $0.2 million for the three months ended March 31, 2020 and June 30, 2020, respectively, resulting in an understatement of $0.3 million for the six months ended June 30, 2020. Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. This ASU is effective for public and private companies’ fiscal years beginning after December 15, 2018, and December 15, 2021, respectively, with early adoption permitted. The Company expects to adopt ASU 2016-02 under the private company transition guidance beginning January 1, 2022, using the optional transition method provided by ASU 2018-11. Based upon that analysis and our current evaluation of the standard, we estimate the adoption will result in the addition of $25 million to $31 million o f assets and liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. The actual amount of additional assets and liabilities that will be recorded upon adoption will depend on the discount rates that are in effect as of the adoption date, as well as assets and liabilities associated with leases that will be executed before the adoption date. In June 2016, the FASB issued ASU 2016-13, Financial instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , and subsequent related ASUs, which amends the guidance on the impairment of financial instruments by requiring measurement and recognition of expected credit losses for financial assets held. This ASU is effective for public and private companies’ fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, and December 15, 2022, respectively. The Company expects to adopt ASU 2016-13 under the private company transition guidance beginning January 1, 2023, and is currently evaluating the impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for public entities for interim and annual periods beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 will be effective for the Company for annual periods beginning after December 15, 2021, and interim periods beginning after December 15, 2022, with early adoption permitted. The Company is currently assessing the impact, if any, the guidance will have on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The guidance is effective for all entities during the period March 12, 2020, through December 31, 2022. The Company is currently assessing the impact, if any, the guidance will have on the Company’s consolidated financial statements. Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) , which simplifies the accounting for convertible debt by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU also simplify the guidance in ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity |
MERGER
MERGER | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
MERGER | 2. MERGER On October 13, 2020, Legacy Shift and IAC consummated the Merger, with Legacy Shift surviving the Merger as a wholly-owned subsidiary of IAC, which was renamed “Shift Technologies, Inc.” Immediately prior to the closing of the Merger, all shares of outstanding redeemable convertible preferred stock of Legacy Shift were automatically converted into shares of Legacy Shift common stock, and all outstanding warrants for Legacy Shift shares were exercised. Upon the consummation of the Merger, each share of Legacy Shift common stock issued and outstanding was canceled and converted into the right to receive 0.1073 shares (the “Exchange Ratio”) of Class A common stock of IAC, including the contingently cancellable Escrow Shares described below. In connection with the execution of the merger agreement, IAC entered into separate subscription agreements (each, a “Subscription Agreement”) with a number of investors (each a “Subscriber”), pursuant to which the Subscribers agreed to purchase, and IAC agreed to sell to the Subscribers, an aggregate of 18,900,000 shares of common stock (the “PIPE Shares”), for a purchase price of $10 per share and an aggregate purchase price of $189.0 million, in a private placement pursuant to the subscription agreements (the “PIPE”). The PIPE investment closed simultaneously with the consummation of the Merger. The Merger is accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, IAC was treated as the “acquired” company for financial reporting purposes (See Note 1 - Description of the Business and Accounting Policies). Accordingly, for accounting purposes, the Merger was treated as the equivalent of Shift issuing stock for the net assets of IAC, accompanied by a recapitalization. The net assets of IAC of $0.1 million are stated at historical cost, with no goodwill or other intangible assets recorded. Escrow Shares In connection with the closing of the Merger, 6,000,218 shares of the Company’s common stock (the “Escrow Shares”) were deposited into an escrow account, with each former Legacy Shift stockholder listed as beneficiary in proportion to their percentage ownership of Legacy Shift common shares immediately prior to the Merger. The Escrow Shares will be released to the beneficiaries if the following conditions are achieved following October 13, 2020, the date of the closing of the Merger: i. if at any time during the 12 months following the closing, the closing share price of the Company’s common stock is greater than $12.00 over any 20 trading days within any 30 trading day period, 50% of the Escrow Shares will be released; and ii. if at any time during the 30 months following the closing, the closing share price of the Company’s common stock is greater than $15.00 over any 20 trading days within any 30 trading day period, 50% of the Escrow Shares will be released. iii. If, during the 30 months following the closing, there is a change of control (as defined in the Merger Agreement) that will result in the holders of the Company’s common stock receiving a per share price equal to or in excess of $10 per share (as equitably adjusted for stock splits, stock dividends, special cash dividends, reorganizations, combinations, recapitalizations and similar transactions affecting the common stock after the date of the Merger), then all remaining Escrow Shares shall be released to the Legacy Shift stockholders effective as of immediately prior to the consummation of such change of control. The Escrow Shares are legally outstanding and the beneficiaries retain all voting, dividend and distribution rights applicable to the Company’s common stock while the shares are in escrow. If the conditions for the release of the Escrow Shares are not met, the shares and any dividends or distributions arising therefrom shall be returned to the Company. The Escrow Shares are not considered outstanding for accounting purposes, and as such are excluded from the calculation of basic net loss per share (see Note 12). The Escrow Shares meet the accounting definition of a derivative financial instrument. As the number of Escrow Shares that will ultimately be released is partially dependent on variables (namely, the occurrence of a change in control) that are not valuation inputs to a “fixed for fixed” option or forward contract, the Escrow Shares are not considered to be indexed to the Company’s common stock and are therefore classified as a liability. The Company’s obligation to release the Escrow Shares upon achievement of the milestones was recorded to financial instruments liability on the condensed consolidated balance sheets at fair value as of the date of the Merger. Subsequent changes in the fair value of the liability are recorded to change in fair value of financial instruments on the condensed consolidated statements of operations and comprehensive loss. No Escrow Shares had been released as of September 30, 2021. During the three and nine months ended September 30, 2021, the Company recognized gains related to the change in fair value of the Escrow Shares of $12.0 and $17.6 million, respectively, which are included in change in fair value of financial instruments on the condensed consolidated statements of operations and comprehensive loss. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 3. PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following (in thousands): As of September 30, 2021 As of December 31, 2020 Equipment $ 6,516 $ 2,132 Furniture and fixtures 225 158 Leasehold improvements 1,056 1,408 Total property and equipment 7,797 3,698 Less: accumulated depreciation (1,825) (1,575) Property and equipment, net $ 5,972 $ 2,123 Depreciation expense related to property and equipment was $0.4 million and $0.2 million for the three months ended September 30, 2021 and 2020, respectively. Depreciation expense related to property and equipment was $1.4 million and $0.7 million for the nine months ended September 30, 2021 and 2020, respectively. Depreciation expense is included in depreciation and amortization in the condensed consolidated statements of operations and comprehensive loss. |
CAPITALIZED WEBSITE AND INTERNA
CAPITALIZED WEBSITE AND INTERNAL-USE SOFTWARE COSTS, NET | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
CAPITALIZED WEBSITE AND INTERNAL-USE SOFTWARE COSTS, NET | 4. CAPITALIZED WEBSITE AND INTERNAL-USE SOFTWARE COSTS, NET Capitalized website and internal use software costs, net consists of the following (in thousands): As of September 30, 2021 As of December 31, 2020 Capitalized website domain costs – nonamortizable $ 385 $ 385 Capitalized website and internal-use software development costs – amortizable 22,351 17,308 Less: accumulated amortization (14,241) (11,151) Capitalized website and internal-use software development costs, net $ 8,495 $ 6,542 Amortization of capitalized software development costs is included in depreciation and amortization in the condensed consolidated statements of operations and comprehensive loss. Amortization of capitalized software development costs amounted to $1.2 million and $0.9 million for the three months ended September 30, 2021 and 2020, respectively, and $3.1 million and $2.5 million for the nine months ended September 30, 2021 and 2020, respectively. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following (in thousands): As of September 30, 2021 As of December 31, 2020 Liability for vehicles acquired under OEM program $ 3,670 $ 11,461 Accrued payroll related costs 11,479 4,155 Provision for DMV refunds 1,173 1,093 Accrued sales taxes 11,587 1,503 Common stock subject to repurchase liability, current 160 524 Interest payable 2,475 18 Other accrued expenses 8,706 3,532 Total accrued expenses and other current liabilities $ 39,250 $ 22,286 In November 2019, the Company entered into an arrangement with an original equipment manufacturer (“OEM”) to sell vehicles sourced locally through the trade-in program of the OEM on the Company’s platform. Under the terms of the arrangement, the Company has the option to provisionally accept any trade-ins based on information provided by the OEM. The Company transports any accepted vehicles to one of its inspection and reconditioning centers where Shift inspects the vehicle and makes a final purchasing decision regarding the vehicle. Any rejected vehicles are sent to wholesale auction facilities at Shift’s expense, at which point Shift has no further obligations to the automaker for the rejected vehicle. The Company records inventory received under the arrangement with the OEM equal to the amount of the liability due to the OEM to acquire such vehicles. The liability due to the OEM provider for such acquired vehicles is equal to the OEM’s original acquisition price. The final price paid to the OEM upon sale of the vehicle includes an additional amount equal to 50% of the excess of the sales price over the original acquisition price. Interest payable in the table above as of December 31, 2020 has been reclassified to be shown separately from other accrued expenses to conform to the presentation as of September 30, 2021 . |
BORROWINGS
BORROWINGS | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
BORROWINGS | 6. BORROWINGS Convertible Notes On May 27, 2021, the Company completed a private offering of its 4.75% Convertible Senior Notes due 2026 (the “Notes”). The aggregate principal amount of the Notes sold in the offering was $150.0 million. The Notes are the Company’s senior unsecured obligations and will rank equally in right of payment with the Company’s future senior unsecured indebtedness, senior in right of payment to the Company’s future indebtedness that is expressly subordinated to the Notes and effectively subordinated to the Company’s future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The Notes will accrue interest payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2021, at a rate of 4.75% per year. The Notes will mature on May 15, 2026, unless earlier converted, redeemed or repurchased by the Company. The Notes are convertible into shares of the Company’s Class A common stock at an initial conversion rate of 118.6556 shares of the Company’s Class A common stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $8.43 per share of the Company’s Class A common stock). The initial conversion price represents a premium of approximately 27.50% over the last reported sale price of the Company’s Class A common stock on May 24, 2021, which was $6.61 per share. The conversion rate will be subject to adjustment upon the occurrence of certain events prior to the maturity date. The Company will increase the conversion rate on a sliding scale to up to a maximum of 151.2859 per $1,000 principal amount for a holder who elects to convert its notes in connection with certain corporate events or the Company’s delivery of a notice of redemption, as the case may be, in certain circumstances. Noteholders may convert their notes at their option only in the following circumstances: 1. during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of our Class A common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; 2. during the 5 consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our Class A common stock on such trading day and the conversion rate on such trading day; 3. upon the occurrence of certain corporate events or distributions on our Class A common stock; 4. if we call such notes for redemption; and 5. at any time from, and including, November 15, 2025 until the close of business on the second scheduled trading day immediately before the maturity date. Conversions of the Notes will be settled in cash, shares of the Company's Class A common stock or a combination thereof, at the Company's election. The Notes will be redeemable, in whole or in part (subject to a partial redemption limitation), at the Company’s option at any time, and from time to time, on or after May 20, 2024 and on or before the 40th scheduled trading day immediately before the Maturity Date, at a cash redemption price equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if (i) the last reported sale price per share of the Company’s Class A common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (2) the trading day immediately before the date the Company sends such notice; and (ii) a registration statement covering the resale of the shares of the Company’s Class A common stock, if any, issuable upon conversion of the Notes in connection with such optional redemption is effective and available for use and is expected, as of the date the redemption notice is sent, to remain effective and available during the period from, and including the date the redemption notice is sent to, and including, the business day immediately before the related redemption date, unless the Company elects cash settlement in respect of the conversions in connection with such optional redemption. In addition, calling any Note for redemption will constitute a make-whole fundamental change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption and on or prior to the business day immediately before the related redemption date. If the Company elects to redeem less than all of the outstanding Notes, at least $50.0 million aggregate principal amount of Notes must be outstanding and not subject to redemption as of the date the Company sends the related redemption notice. Unamortized deferred borrowing costs at September 30, 2021 were $6.0 million, and are included as a reduction to convertible notes on the condensed consolidated balance sheets. For the three and nine months ended September 30, 2021, the Company recorded $1.8 million and $2.5 million of contractual interest expense, respectively, and $0.3 million and $0.4 million of deferred borrowing cost amortization, respectively to interest and other expense, net on the condensed consolidated statements of operations and comprehensive loss. The effective interest rate of the Notes is 5.73% for all periods presented. The fair value of the Notes (Level 1) at September 30, 2021 was $179.6 million. The Company used a portion of the net proceeds from the sale of the notes to pay the cost of the capped call transactions (see Note 7 - Stockholders' Equity), and intends to use the remaining proceeds for working capital and general corporate purposes. Flooring Line of Credit On October 11, 2018, the Company entered into a flooring line of credit facility (“FLOC”) with U.S. Bank National Association (“US Bank”), with the proceeds from such arrangement available to finance the purchase of vehicles. The FLOC initially allowed for a $30.0 million commitment of advances, whereby the Company may borrow, prepay, repay and reborrow the advances. Advances may be prepaid in part or in full at any time without charge, penalty or premium. The terms of the facility allowed the Company to request a one-time increase in the commitment by an amount equal to $20.0 million, provided that certain conditions in the facility agreement are met. The expiration date of the facility was initially September 30, 2019. Advances under the facility accrue interest at LIBOR plus 2.00% and as of September 30, 2021, LIBOR was 0.08%. The obligations under the facility are secured by substantially all of the Company’s inventory, both currently owned or acquired thereafter. Repayment of obligations under the facility are guaranteed by Lithia. Upon expiration of the facility, Lithia guaranteed the provision of the flooring line of credit through October 11, 2021 if the Company is unable to secure an extension of the flooring line of credit facility with US Bank. With the signing of the flooring line of credit with US Bank, the Company entered into the commercial agreement for Milestone 1 and the related warrants were issued. Refer to Note 9 - Related Party Transactions for further details regarding the guarantee of the flooring line of credit, the commercial agreement and the warrants. The loan and security agreement contained a financial covenant that required the Company to maintain a total balance of unrestricted cash and the amount of principal available to be drawn (together, the “Borrower’s Liquidity”) equal to or exceeding four times the decrease, if any, of the cash and cash equivalents balance on the determination date compared with the balance three months prior (together calculated with the Borrower’s Liquidity, the “Liquidity Covenant”). The loan and security agreement set forth negative covenants that restrict indebtedness, liens, investments, sales of assets, fundamental changes, distributions and other matters. Subsequent amendments extended the expiration date to October 11, 2021 and increased the amount available under the FLOC to $50.0 million. The amendments also required the Company to pay a fee of 0.40% per annum on unused availability under the FLOC, and reduced the Liquidity Covenant to one times the three-month cash burn amount. The FLOC was subject to customary subjective acceleration clauses, effective upon a material adverse change in the Company’s business or financial condition, or a material impairment in the Company’s ability to repay the borrowing. As of September 30, 2021, the Company was not in breach of any debt covenants or subjective acceleration clauses. The FLOC expired on October 11, 2021 and was repaid in full. Delayed Draw Term Loan Agreement Concurrent with the initial closing of the Series D Convertible Preferred Stock, the Company also entered into the Delayed Draw Term Loan Agreement (“DDTL”) with Lithia, whereby Lithia agreed to make up to two term loans (“Term Loan A” and “Term Loan B”) from November 29, 2019, to June 12, 2020 (extended by amendment to July 31, 2020), with a maximum principal amount of $12.5 million per term loan. Interest accrued on the outstanding principal amount of each Term Loan at a rate equal to LIBOR plus 0.50% The terms of the DDTL include various restrictive covenants, events of default, and security interests in the Company's assets. In December 2019, the Company drew down on Term Loan A in the amount of $12.5 million. In July 2020, the Company drew down $12.5 million to fund Term Loan B. The DDTL, including both Term Loans A and B, was repaid in full in November 2020. SBA PPP Loan On April 22, 2020, the Company, through Shift Platform Inc. (then named Shift Technologies, Inc.), and its wholly owned subsidiary, Shift Operations LLC, obtained loans under the Paycheck Protection Program (the “PPP Loans”) with an outstanding principal amount of $6.1 million. The PPP Loans were made through Newtek Small Business Finance (the “Lender”), and the Company entered into two U.S. Small Business Administration Paycheck Protection Program Notes (the “Agreements”) with the Lender evidencing the PPP Loans. Interest accrued on the outstanding principal balances of the PPP Loans at a fixed rate of 1.0%, which is deferred for the first nine months of the term of the PPP Loans. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 7. STOCKHOLDERS' EQUITY Capped Call Transactions On May 27, 2021, in connection with the issuance of the Notes (see Note 6 - Borrowings), the Company consummated privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the initial purchasers, their respective affiliates and other counterparties (the "Capped Call Counterparties"). The Capped Call Transactions initially cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of the Company’s Class A common shares underlying the Notes. The Capped Call Transactions are expected generally to reduce the potential dilution to holders of the Company’s Class A common stock upon conversion of the Notes and/or offset the potential cash payments that the Company could be required to make in excess of the principal amount of any converted Notes upon conversion thereof, with such reduction and/or offset subject to a cap. The Capped Call Transactions are settled from time to time upon the conversion of the Notes, with a final expiration date of May 15, 2026. The Capped Call Transactions are settled in the same proportion of cash and stock as the converted Notes. The proportion of cash and stock used to settle the Notes is at the discretion of the Company. The cap price of the Capped Call Transactions was initially approximately $14.8725 per share, which represents a premium of approximately 125% above the last reported sale price per share of Class A common stock on NASDAQ on May 24, 2021, and is subject to certain adjustments under the terms of the Capped Call Transactions. The Capped Call Transactions are separate transactions entered into by the Company with the Capped Call Counterparties, are not part of the terms of the Notes and will not change any holder’s rights under the Notes. Holders of the Notes will not have any rights with respect to the Capped Call Transactions. The Company used approximately $28.4 million of the net proceeds from the offering of the Notes to pay the cost of the Capped Call Transactions. The Capped Call Transactions do not meet the criteria for separate accounting as a derivative as they are indexed to the Company's stock. The premiums paid for the Capped Call Transactions have been included as a net reduction to additional paid-in capital on the condensed consolidated balance sheets. The following table presents the hypothetical settlement amount of the Capped Call Transactions at September 30, 2021, assuming the conversion of all outstanding Notes. The table also presents the hypothetical impact of a $1 increase or decrease in our share price on the settlement amounts. As the Company can receive settlement of the Capped Called Transactions in any combination of cash or common stock (depending on how the Company elects to settle the Notes), the table presents both the cash settlement amount assuming 100% cash settlement and the share settlement amount in common shares assuming 100% share settlement. As of September 30, 2021 Cash Settlement Amount Share Settlement Amount Fair Value of Share Settlement (thousands) (# of shares) (thousands) Hypothetical Capped Call Settlement Value $ 926 99,545 $ 691 Capped Call Settlement Value - Share Price + $1 6,977 831,679 5,772 Capped Call Settlement Value - Share Price - $1 112 13,008 90 Warrant Exchange On December 24, 2020, the Company announced the preliminary results of its offer to exchange (“Offer”) 0.25 shares of Class A common stock and $1.00 in cash, without interest, for each of the 7,532,500 outstanding publicly traded warrants to purchase the Class A common stock of the Company, formerly known as Insurance Acquisition Corp. (“IAC”), in connection with the initial public offering of IAC’s securities on March 22, 2019, which entitle such warrant holders to purchase one share of Class A common stock at an exercise price of $11.50, subject to adjustments (the “Public Warrants”), upon the terms and subject to the conditions set forth in the Company’s Tender Offer Statement on Schedule TO originally filed by the Company with the Securities and Exchange Commission (the “SEC”) on November 5, 2020, as amended. The Offer to exchange expired on December 23, 2020. On December 28, 2020, the Company issued an aggregate of 1,744,088 shares of Class A common stock and $7.0 million in cash in exchange for the Public Warrants validly tendered and accepted for exchange in accordance with the Offer. Pursuant to the terms of the Offer, on December 28, 2020, the Company issued an aggregate of 53,125 shares of Class A common stock and $0.2 million in cash to the holders of 212,500 privately placed warrants, at the same exchange ratio offered to the Public Warrant holders in the Offer (the "Private Exchange"). In connection with the Offer and the Private Exchange, the Company issued an aggregate of 1,798,203 shares of Class A common stock, representing approximately 2.1% of the shares of Class A Common Stock outstanding after such issuances. The Company subsequently issued 125,160 additional shares of Class A common stock and distributed $0.5 million in cash on January 14, 2021 in exchange for all remaining Public Warrants that were outstanding at December 31, 2020. There were no warrants outstanding at September 30, 2021. |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION PLANS | 8. STOCK-BASED COMPENSATION PLANS The Company’s 2014 Stock Option Plan (the “2014 Plan”) provides for the grant of restricted stock awards and incentive and non-qualified options and to purchase common stock to officers, employees, directors, and consultants. Options granted to employees and non-employees generally vest ratably over four Each Legacy Shift option from the 2014 Plan that was outstanding immediately prior to the Merger, whether vested or unvested, was converted into an option to purchase a number of shares of post-Merger common stock (each such option, a "Converted Option") equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Legacy Shift common stock subject to such Legacy Shift option immediately prior to the Merger and (ii) the equity award exchange ratio. The per share exercise price for each share of post-Merger common stock issuable upon exercise of the Converted Option is equal to the exercise price per Legacy Shift share of each Legacy Shift option immediately before the Merger, with certain adjustments necessary to preserve ISO classification of awards for income tax purposes. The mechanism of conversion resulted in the fair value of each Converted Option award equaling the fair value of the corresponding Legacy Shift option award immediately prior to the consummation of the Merger. Except as specifically provided in the Merger Agreement, following the Merger, each Converted Option continues to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Legacy Shift option immediately prior to the consummation of the Merger. All stock option activity was retroactively restated to reflect the Converted Options. At the Company's special meeting of stockholders held on October 13, 2020, the stockholders approved the 2020 Omnibus Equity Compensation Plan (the "2020 Plan"). The 2020 Plan provides for the grant of incentive and non-qualified stock option, restricted stock units ("RSUs"), restricted share awards, stock appreciation awards, and cash-based awards to employees, directors, and consultants of the Company. Awards under the 2020 Plan expire no more than ten years from the date of grant. The 2020 Plan became effective immediately upon the closing of the Merger. Activity related to employee and non-employee stock options issued under the 2014 Plan is set forth below: Number of Weighted Weighted Average Aggregate Intrinsic Value (000’s) As of December 31, 2020 2,354,836 $ 1.80 8.40 $ 15,230 Granted — — Exercised (273,739) 1.42 Forfeited (310,796) 2.88 Cancelled (expired) (65,323) 3.89 As of September 30, 2021 1,704,978 $ 1.61 7.40 $ 9,250 Exercisable as of September 30, 2021 1,704,978 $ 1.61 7.40 $ 9,250 Activity related to employee and non-employee RSU awards issued under the 2020 Plan is set forth below: Number of Weighted Weighted Average Aggregate Intrinsic Value (000’s) As of December 31, 2020 — $ — — $ — Granted 9,603,494 7.23 Vested — — Forfeited (560,721) 7.70 As of September 30, 2021 9,042,773 $ 7.20 1.58 $ 62,757 The RSUs granted during the nine months ended September 30, 2021 include 1,771,220 RSUs that vest if the closing price of the Company's common stock exceeds thresholds ranging from $23 to $28 during the two year period following the second anniversary of the earlier of the closing of the Merger or the grantee's date of hire. The grant date fair values of awards with market-based vesting conditions were determined using a Monte Carlo valuation model, which requires significant estimates including the expected volatility of our common stock. Stock-Based Compensation Expense For the three months ended September 30, 2021 and 2020, the Company recorded stock-based compensation expense to selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss of $5.3 million and $0.8 million, respectively. For the nine months ended September 30, 2021 and 2020, the Company recorded stock-based compensation expense of $18.9 million and $1.5 million, respectively In addition, the Company capitalized stock-based compensation costs for the three months ended September 30, 2021 and 2020 of $0.2 million and $0.1 million, respectively, to capitalized website and internal use software costs, net. For the nine months ended September 30, 2021, the Company capitalized $0.6 million and $0.2 million. As of September 30, 2021, there was $48.0 million of unrecognized stock-based compensation expense that is expected to be recognized over a weighted-average period of 2.42 years. Common Stock Subject to Repurchase Related to Early Exercised Options The Company typically allows employees to exercise options prior to vesting. Upon termination of service of an employee, the Company has the right to repurchase at the original purchase price any non-vested but issued common shares. Such an exercise is not substantive for accounting purposes. The consideration received for an exercise of an option is considered to be a deposit of the exercise price, and the related dollar amount is recorded as a liability. The liability is reclassified to additional paid in capital as the award vests. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 9. RELATED PARTY TRANSACTIONS Sales with Related Party The Company operates a one-sided marketplace (“OSM”) program whereby the Company acquires cars from various sources in Oxnard, California and sells them directly and solely to Lithia. The Company invoices Lithia based on the purchase price of the car plus an agreed upon margin. During the three months ended September 30, 2021 and 2020, the Company recognized approximately $4.8 million and $2.2 million, respectively, of sales from the OSM agreement with Lithia. During the nine months ended September 30, 2021 and 2020, the Company recognized approximately $11.7 million and $3.7 million, respectively, of sales from the OSM agreement with Lithia. Accounts Receivable from Related Party As of September 30, 2021 and December 31, 2020, the Company has $2.5 million and $0.2 million in outstanding accounts receivable from Lithia, which is comprised of $2.3 million and $0.1 million, respectively, in vehicle sales and $0.1 million and $43 thousand, respectively, in commissions based on the number of loan contracts booked with US bank. The Company operates under Lithia’s master agreement with US Bank where the collections pass through Lithia. Warrant and Commercial Agreements In September 2018, the Company entered into a warrant agreement (the “Warrant Agreement”) and a commercial agreement for Milestone 1 with Lithia and granted Lithia a warrant to purchase 86,661,588 shares of Legacy Shift common stock at an exercise price of $0.01 per share (the “Warrant Shares”). The Warrant Shares were scheduled to vest and become exercisable in six separate tranches of 14,443,598 shares each. Vesting and exercisability was dependent upon the achievement of the Milestones, as defined below. While the Warrant Agreement establishes general vesting terms for each of the six Milestones, each of the six Milestones contains substantive service or performance requirements, and were non-binding as neither the Company nor Lithia were obligated to perform until the commercial agreement associated with each Milestone was executed. Two tranches of 14,443,598 Warrant Shares were scheduled to vest and become immediately exercisable upon the achievement of each of Milestone 1 and Milestone 2. The remaining four tranches of 14,443,598 Warrant Shares were scheduled to vest and become exercisable on January 12, 2020 (the “Vesting Cliff Date”), provided that Milestone 3, Milestone 4, Milestone 5 and Milestone 6 were achieved prior to such date. If such Milestone had not been achieved by the Vesting Cliff Date, such 14,443,598 Warrant Shares would vest and become immediately exercisable upon the achievement of such Milestone. With respect to any unvested Warrant Shares that had not vested by June 12, 2020 (the “Vesting Termination Date”), the Warrant would automatically terminate. All Warrant Shares became vested prior to the Vesting Termination Date and were exercised prior to the Merger. • Milestone 1 — the Company, with Lithia’s assistance, enters into acceptable credit facilities with access to asset-based used vehicle floorplan financing. • Milestone 2 — the Company and Lithia enter into a data sharing commercial agreement whereby Lithia agrees to transfer certain historical transaction and inventory data to the Company. • Milestone 3 — the Company and Lithia enter into a lease and services agreement whereby Lithia will make available at least one of its locations for the Company’s use as a storage/reconditioning/retail delivery center. • Milestone 4 — the Company and Lithia enter into a lease and services agreement whereby Lithia will make available at least three of its locations for the Company’s use as a storage/reconditioning/retail delivery center. • Milestone 5 — the Company and Lithia enter a commercial agreement whereby Lithia agrees to use commercially reasonable best efforts to help the Company secure and maintain access to finance and insurance products on par with a typical Lithia store. • Milestone 6 — the Company and Lithia entering into a commercial agreement where Lithia will purchase mutually-agreed upon vehicles from the Company in a minimum of three existing Lithia markets. 2018 Milestones The commercial agreement agreed to with Lithia in September 2018 was entered into concurrently with arrangements that provide for Lithia’s guarantee of the flooring line of credit for a three-year period and the provision by Lithia for the delayed draw facility, see Note 6 - Borrowings. The Company determined that there was significant value in the terms received related to both the guarantee and delayed draw facility, for which the Company transferred the warrants identified in Milestone 1 as compensation. Accordingly, upon entering into the arrangements, the Company measured the fair value of the guarantee received at $9.1 million and the fair value of the delayed draw facility at $5.7 million. The fair value of the guarantee is treated as a deferred borrowing cost associated with the flooring line of credit and is included within deferred borrowing costs on the condensed consolidated balance sheets and is being amortized over the three-year guarantee period, which resulted in $0.6 million and $1.1 million of interest expense during the three months ended September 30, 2021 and 2020, respectively, and $2.1 million and $3.5 million for the nine months ended September 30, 2021 and 2020, respectively. The deferred loan commitment cost was amortized over the four-year loan commitment period and the remaining balance was written off when the DDTL was repaid on November 10, 2020. Amortization of the deferred loan commitment cost associated with the delayed draw facility resulted in total interest expense during the three and nine months ended September 30, 2020 of $0.3 million and $1.0 million, respectively. The warrants issued with Milestone 1 were determined to be liability classified, subject to remeasurement, and were recorded as a non-current liability on the condensed consolidated balance sheets as of March 31, 2020. The warrants were exercised in connection with the Merger closing on October 13, 2020. The Company recognized remeasurement losses of $6.2 million for the three and nine months ended September 30, 2020. 2019 Milestones In connection with the negotiations related to Milestone 5, Lithia facilitated an agreement with Automotive Warranty Services (“AWS”) to sell and market AWS’s service plans, whereby the Company receives commission rates from AWS of comparable terms to those received by Lithia. In substance the Company paid Lithia, in the form of Warrant Shares, to make an upfront payment to Company’s customers on behalf of the Company as the Company achieved favorable pricing from AWS. The benefits of this agreement were guaranteed by Lithia for an initial term of five years commencing on the signing date of the agreement. Such arrangement was the first of a number of agreements to be entered into under the terms of Milestone 5, see further discussion below. The estimated fair value of the in substance upfront payment to AWS was $2.8 million with an offsetting entry recorded to additional paid-in capital, representing a capital transaction with a related party. Milestone 5 was met in October 2019 and the Company recorded the warrants to additional paid-in capital based on a fair value of $4.3 million. Milestone 5 was achieved after a mutual signed agreement was entered into evidencing that Lithia provided commercially best efforts to help the Company secure and maintain access to four finance and insurance products on par with a typical Lithia store. The fair value of the in substance upfront payment, other than the $2.8 million for AWS discussed above, was $0.4 million and was recorded to other non-current assets on the condensed consolidated balance sheets. The combined asset recorded of $3.2 million is subject to amortization over a five-year period expected period of benefit. During the three months ended September 30, 2021 and 2020, the Company amortized $0.2 million and $0.2 million, respectively of the asset as a reduction to finance and insurance sales, which is recorded within other revenue, net on the condensed consolidated statements of operations and comprehensive loss. During the nine months ended September 30, 2021 and 2020, the Company amortized $0.5 million and $0.5 million, respectively. As of September 30, 2021 and December 31, 2020, the remaining asset, net of amortization, was $1.4 million and $1.9 million, respectively. Lease Agreements On November 1, 2018 and July 10, 2019, pursuant to Milestone 3 and 4, the Company and Lithia, entered into license and services agreements that govern the Company’s access to and utilization of reconditioning, offices and parking spaces at the Concord and Portland facilities of Lithia, respectively. Both agreements expire on October 12, 2021, with automatic 12 month renewal subject to terms and conditions of the agreements. During the three months ended September 30, 2021 and 2020, total costs related to these agreements were approximately $18 thousand and $32 thousand, respectively. During the nine months ended September 30, 2021 and 2020, total costs related to these agreements were approximately $0.1 million and $0.1 million, respectively. The lease costs were expensed to selling, general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. Flooring Line of Credit Guarantee In February 2019, the Company entered into a guarantee agreement with Lithia. The interest rate is 1.50% per annum based on a daily outstanding flooring line of credit and is payable monthly to Lithia. For the three months ended September 30, 2021 and 2020, the Company recorded $29 thousand and $37 thousand, respectively of interest and $0.6 million and $1.1 million, respectively of deferred borrowing cost amortization to interest and other expense, net on the condensed consolidated statements of operations and comprehensive loss. For the nine months ended September 30, 2021 and 2020, the Company recorded $65 thousand and $0.1 million, respectively of interest and $2.1 million and $3.5 million, respectively of deferred borrowing cost amortization. The guarantee expired conterminously with the FLOC on October 11, 2021. Delayed Draw Term Loan Agreement The Company drew down $12.5 million on December 27, 2019, in accordance with the DDTL agreement. On July 2, 2020, an additional $12.5 million was drawn down. On November 10, 2020 the outstanding amount of $25.0 million was repaid. For the three and nine months ended September 30, 2020, the Company recorded $0.1 million and $0.3 million, respectively of interest and $0.3 million and $1.0 million, respectively of deferred borrowing cost amortization to interest and other expense, net on the condensed consolidated statements of operations and comprehensive loss. See Note 6 - Borrowings for further discussion regarding the DDTL. Accounts Payable Due to Related Party As of September 30, 2021 and December 31, 2020 payables and accruals to Lithia consisted of other miscellaneous expenses of $0.6 million and $0.5 million, respectively. Loan to Employees On July 30, 2018 and April 4, 2019, the Company received partial recourse promissory notes for $0.2 million and $0.1 million, respectively, as loans to an employee. The notes bear interest of 2.87% and 2.59%, respectively, per year, compounded annually. The principal balance together with all accrued but unpaid interest shall be due and payable in full upon the earliest of the day before the ninth anniversary of the promissory note or earlier if the employee ceases to provide services to the Company subject to the terms of the promissory note. Concurrently, the Company entered into a stock pledge agreement whereby the employee granted security interest to the Company for all existing and new shares earned by the employee from the Company. The proceeds from loan the of $0.2 million were used to exercise the employee’s options and no cash was paid to the employee. The Company treated the loan as an off-balance sheet transaction. The proceeds from the loan of $0.1 million was partially paid to the employee and partially used to pay off taxes resulting from exercise of options in 2018. On January 14, 2019, the Company received a promissory note in exchange for a $0.1 million loan to another employee. The note bears an interest of 2.72% per year, compounded annually. Each of these promissory notes was satisfied prior to the closing of the Merger via the issuance of bonuses to the employees. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 10. COMMITMENTS AND CONTINGENCIES Lease Agreements The Company is a tenant under various operating leases with third parties, including leases of office facilities and parking/vehicle storage locations. These lease agreements are under non-cancelable leases and expire at various dates, ranging from 2021 to 2029. The Company records rent expense on a straight-line basis over the term of the lease. Rent expense was $2.4 million and $1.4 million for the three months ended September 30, 2021 and 2020, respectively, and $6.5 million and $4.1 million for the nine months ended September 30, 2021 and 2020, respectively. Future minimum lease payments under non-cancellable operating leases in effect as of September 30, 2021, were as follows (in thousands): Year ended December 31, Minimum Lease Commitments 2021 $ 2,556 2022 9,263 2023 8,982 2024 6,948 2025 6,302 2026 6,192 Thereafter 13,098 Total minimum lease payments $ 53,341 Litigation The Company may be subject to legal proceedings and claims that arise in the ordinary course of business. Other than the matter discussed below, Management is not currently aware of any matters that will have a material effect on the financial position, results of operations, or cash flows of the Company. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 11. SEGMENT INFORMATION The Company currently is organized into two reportable segments: Retail and Wholesale. The Retail segment represents retail sales of used vehicles through the Company’s ecommerce platform and fees earned on sales of value-added products associated with those vehicles sales such as vehicle service contracts, guaranteed asset protection waiver coverage, prepaid maintenance plans, and appearance protection plans. The Wholesale segment represents sales of used vehicles through wholesale auctions or directly to a wholesaler (“DTW”). No operating segments have been aggregated to form the reportable segments. The Company determined its operating segments based on how the chief operating decision maker (“CODM”) or decision-making group, reviews the Company’s operating results in assessing performance and allocating resources. The CODM is the Co-Chief Executive Officers. The CODM reviews revenue and gross profit for each of the reportable segments. Gross profit is defined as revenue less cost of sales incurred by the segment. The CODM does not evaluate operating segments using asset information as these are managed on an enterprise wide group basis. Accordingly, the Company does not report segment asset information. During the three and nine months ended September 30, 2021 and 2020, the Company did not have sales to customers outside the United States. As of September 30, 2021 and December 31, 2020, the Company did not have any assets located outside of the United States. Information about the Company’s reportable segments are as follows (in thousands): Three Months Ended September 30, 2021 Retail Wholesale Consolidated Revenue from external customers $ 162,463 $ 17,337 $ 179,800 Segment gross profit (loss) 13,673 (721) 12,952 Three Months Ended September 30, 2020 Retail Wholesale Consolidated Revenue from external customers $ 50,522 $ 9,392 $ 59,914 Segment gross profit 3,642 84 3,726 Nine Months Ended September 30, 2021 Retail Wholesale Consolidated Revenue from external customers $ 390,198 $ 50,455 $ 440,653 Segment gross profit (loss) 36,888 (241) 36,647 Nine Months Ended September 30, 2020 Retail Wholesale Consolidated Revenue from external customers $ 101,803 $ 20,504 $ 122,307 Segment gross profit 8,451 2,190 10,641 The reconciliation between reportable segment gross profit to net loss and comprehensive loss attributable to common stockholders is as follows (in thousands): Three Months Ended Nine Months Ended September 30, 2021 2020 2021 2020 Segment gross profit $ 12,952 $ 3,726 $ 36,647 $ 10,641 Selling, general and administrative expenses (57,886) (24,030) (156,264) (52,109) Depreciation and amortization (1,375) (1,181) (4,037) (3,258) Change in fair value of financial instruments 11,967 (579) 17,591 (6,211) Interest and other expense, net (3,047) (1,256) (5,742) (3,707) Net loss and comprehensive loss attributable to common stockholders $ (37,389) $ (23,320) $ (111,805) $ (54,644) |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | 12. NET LOSS PER SHARE The following table sets forth the computation of net loss and comprehensive loss per share attributable to common stockholders, basic and diluted: Three Months Ended Nine Months Ended September 30, (in thousands, except share and per share amounts) 2021 2020 2021 2020 Net loss and comprehensive loss attributable to common stockholders $ (37,389) $ (23,320) $ (111,805) $ (54,644) Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted 78,096,901 3,352,870 78,052,624 3,205,180 Net loss and comprehensive loss per share attributable to common stockholders, basic and diluted $ (0.48) $ (6.96) $ (1.43) $ (17.05) The following potentially dilutive shares were not included in the calculation of diluted shares outstanding for the periods presented as the effect would have been anti-dilutive: As of September 30, 2021 2020 Escrow Shares 6,000,218 — Convertible Notes 17,798,340 — Stock options 1,704,978 2,727,989 Restricted stock units 9,042,773 — Restricted stock awards — 83,437 Contingently repurchasable early exercise shares 71,644 332,530 Total 34,617,953 3,143,956 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 13. INCOME TAXESThe Company did not record a provision or benefit for income taxes during the three and nine months ended September 30, 2021 and 2020. The Company continues to maintain a full valuation allowance for its net U.S. federal and state deferred tax assets. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS On November 4, 2021, Shift Technologies, Inc. (the “Company”) announced the voluntary transition of Toby Russell from the Company as its Co-Chief Executive Officer, effective February 1, 2022. Mr. Russell will continue to serve after his transition as a non-employee director of the Company until the completion of his current term in 2023, and will also serve in an advisory capacity to the senior management of the Company for a three-month period following his transition to assist with the orderly transition of his duties and responsibilities. In connection with his forthcoming transition from serving as an officer of the Company, the Company and Mr. Russell entered into a Transition and Separation Agreement on November 4, 2021 (the “Agreement”) that specifies the terms of his transition and the benefits he is eligible to receive. Pursuant to the Agreement, Mr. Russell will be entitled to receive the following benefits: (i) a cash payment equal to his 2022 base salary, payable in equal installments on the Company’s regular payroll cycles, (ii) payment of his 2022 annual bonus, prorated for the number of days employed by the Company in 2022 and determined based on actual performance and payable at such time that annual bonuses are otherwise generally paid to employees of the Company, (iii) COBRA compliant health insurance coverage, and (iv) continued vesting of all outstanding and unvested equity awards as of February 1, 2022 for three months following such date, if any such awards would be eligible to vest by May 1, 2022. |
DESCRIPTION OF THE BUSINESS A_2
DESCRIPTION OF THE BUSINESS AND ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The interim condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020, the interim condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020, condensed consolidated statements of stockholders' equity for the three and nine months ended September 30, 2021 and 2020, and condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020, and amounts relating to the interim periods included in the accompanying notes to the interim condensed consolidated financial statements are unaudited. The unaudited interim financial statements have been prepared on the same basis as the audited consolidated financial statements contained in the Company's most recent Annual Report on Form 10-K , and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s condensed consolidated balance sheet as of September 30, 2021, and its results of operations for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results expected for the fiscal year or any other periods. These interim financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes for the fiscal year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission ("SEC") on March 19, 2021. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and assumptions, including those related to the valuation of vehicle inventory, capitalized website and internal-use software development costs, fair value of common stock, financial instruments, convertible debt, stock-based compensation and income taxes. The COVID-19 pandemic has adversely impacted the global economy, as well as the Company’s operations, and the extent and duration of the impacts remain unclear. The Company’s future estimates, including, but not limited to, the inventory valuations, and fair value measurements, may be impacted and continue to evolve as conditions change as a result of the COVID-19 pandemic. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. This ASU is effective for public and private companies’ fiscal years beginning after December 15, 2018, and December 15, 2021, respectively, with early adoption permitted. The Company expects to adopt ASU 2016-02 under the private company transition guidance beginning January 1, 2022, using the optional transition method provided by ASU 2018-11. Based upon that analysis and our current evaluation of the standard, we estimate the adoption will result in the addition of $25 million to $31 million o f assets and liabilities to our consolidated balance sheet, with no significant change to our consolidated statements of operations or cash flows. The actual amount of additional assets and liabilities that will be recorded upon adoption will depend on the discount rates that are in effect as of the adoption date, as well as assets and liabilities associated with leases that will be executed before the adoption date. In June 2016, the FASB issued ASU 2016-13, Financial instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , and subsequent related ASUs, which amends the guidance on the impairment of financial instruments by requiring measurement and recognition of expected credit losses for financial assets held. This ASU is effective for public and private companies’ fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, and December 15, 2022, respectively. The Company expects to adopt ASU 2016-13 under the private company transition guidance beginning January 1, 2023, and is currently evaluating the impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for public entities for interim and annual periods beginning after December 15, 2020, with early adoption permitted. ASU 2019-12 will be effective for the Company for annual periods beginning after December 15, 2021, and interim periods beginning after December 15, 2022, with early adoption permitted. The Company is currently assessing the impact, if any, the guidance will have on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The guidance is effective for all entities during the period March 12, 2020, through December 31, 2022. The Company is currently assessing the impact, if any, the guidance will have on the Company’s consolidated financial statements. Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) , which simplifies the accounting for convertible debt by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU also simplify the guidance in ASC 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity |
DESCRIPTION OF THE BUSINESS A_3
DESCRIPTION OF THE BUSINESS AND ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Changes in the Fair Value of Level 3 Financial Instruments | The table below illustrates the changes in the fair value of the Company’s Level 3 financial instruments liability: (in thousands) 2021 2020 Balance as of January 1, $ 25,230 $ 4,810 Remeasurement of Lithia warrants — 6,211 Remeasurement of Escrow Shares liability (17,591) — Balance as of September 30, $ 7,639 $ 11,021 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net consists of the following (in thousands): As of September 30, 2021 As of December 31, 2020 Equipment $ 6,516 $ 2,132 Furniture and fixtures 225 158 Leasehold improvements 1,056 1,408 Total property and equipment 7,797 3,698 Less: accumulated depreciation (1,825) (1,575) Property and equipment, net $ 5,972 $ 2,123 |
CAPITALIZED WEBSITE AND INTER_2
CAPITALIZED WEBSITE AND INTERNAL-USE SOFTWARE COSTS, NET (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Capitalized Website and Internal-Use Software Development Costs | Capitalized website and internal use software costs, net consists of the following (in thousands): As of September 30, 2021 As of December 31, 2020 Capitalized website domain costs – nonamortizable $ 385 $ 385 Capitalized website and internal-use software development costs – amortizable 22,351 17,308 Less: accumulated amortization (14,241) (11,151) Capitalized website and internal-use software development costs, net $ 8,495 $ 6,542 |
Capitalized Website and Internal-Use Software Development Costs | Capitalized website and internal use software costs, net consists of the following (in thousands): As of September 30, 2021 As of December 31, 2020 Capitalized website domain costs – nonamortizable $ 385 $ 385 Capitalized website and internal-use software development costs – amortizable 22,351 17,308 Less: accumulated amortization (14,241) (11,151) Capitalized website and internal-use software development costs, net $ 8,495 $ 6,542 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): As of September 30, 2021 As of December 31, 2020 Liability for vehicles acquired under OEM program $ 3,670 $ 11,461 Accrued payroll related costs 11,479 4,155 Provision for DMV refunds 1,173 1,093 Accrued sales taxes 11,587 1,503 Common stock subject to repurchase liability, current 160 524 Interest payable 2,475 18 Other accrued expenses 8,706 3,532 Total accrued expenses and other current liabilities $ 39,250 $ 22,286 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Capped Called Transaction Settlements | The table also presents the hypothetical impact of a $1 increase or decrease in our share price on the settlement amounts. As the Company can receive settlement of the Capped Called Transactions in any combination of cash or common stock (depending on how the Company elects to settle the Notes), the table presents both the cash settlement amount assuming 100% cash settlement and the share settlement amount in common shares assuming 100% share settlement. As of September 30, 2021 Cash Settlement Amount Share Settlement Amount Fair Value of Share Settlement (thousands) (# of shares) (thousands) Hypothetical Capped Call Settlement Value $ 926 99,545 $ 691 Capped Call Settlement Value - Share Price + $1 6,977 831,679 5,772 Capped Call Settlement Value - Share Price - $1 112 13,008 90 |
STOCK-BASED COMPENSATION PLANS
STOCK-BASED COMPENSATION PLANS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Employee and Non-Employee Stock Option Activity | Activity related to employee and non-employee stock options issued under the 2014 Plan is set forth below: Number of Weighted Weighted Average Aggregate Intrinsic Value (000’s) As of December 31, 2020 2,354,836 $ 1.80 8.40 $ 15,230 Granted — — Exercised (273,739) 1.42 Forfeited (310,796) 2.88 Cancelled (expired) (65,323) 3.89 As of September 30, 2021 1,704,978 $ 1.61 7.40 $ 9,250 Exercisable as of September 30, 2021 1,704,978 $ 1.61 7.40 $ 9,250 |
Employee and Non-Employee Restricted Stock Unit Activity | Activity related to employee and non-employee RSU awards issued under the 2020 Plan is set forth below: Number of Weighted Weighted Average Aggregate Intrinsic Value (000’s) As of December 31, 2020 — $ — — $ — Granted 9,603,494 7.23 Vested — — Forfeited (560,721) 7.70 As of September 30, 2021 9,042,773 $ 7.20 1.58 $ 62,757 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Commitments under Facility Operating Leases | Future minimum lease payments under non-cancellable operating leases in effect as of September 30, 2021, were as follows (in thousands): Year ended December 31, Minimum Lease Commitments 2021 $ 2,556 2022 9,263 2023 8,982 2024 6,948 2025 6,302 2026 6,192 Thereafter 13,098 Total minimum lease payments $ 53,341 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Reportable Segments Information | Information about the Company’s reportable segments are as follows (in thousands): Three Months Ended September 30, 2021 Retail Wholesale Consolidated Revenue from external customers $ 162,463 $ 17,337 $ 179,800 Segment gross profit (loss) 13,673 (721) 12,952 Three Months Ended September 30, 2020 Retail Wholesale Consolidated Revenue from external customers $ 50,522 $ 9,392 $ 59,914 Segment gross profit 3,642 84 3,726 Nine Months Ended September 30, 2021 Retail Wholesale Consolidated Revenue from external customers $ 390,198 $ 50,455 $ 440,653 Segment gross profit (loss) 36,888 (241) 36,647 Nine Months Ended September 30, 2020 Retail Wholesale Consolidated Revenue from external customers $ 101,803 $ 20,504 $ 122,307 Segment gross profit 8,451 2,190 10,641 |
Reconciliation of Reportable Segment Gross Profit to Consolidated Loss before Provision for Income Taxes | The reconciliation between reportable segment gross profit to net loss and comprehensive loss attributable to common stockholders is as follows (in thousands): Three Months Ended Nine Months Ended September 30, 2021 2020 2021 2020 Segment gross profit $ 12,952 $ 3,726 $ 36,647 $ 10,641 Selling, general and administrative expenses (57,886) (24,030) (156,264) (52,109) Depreciation and amortization (1,375) (1,181) (4,037) (3,258) Change in fair value of financial instruments 11,967 (579) 17,591 (6,211) Interest and other expense, net (3,047) (1,256) (5,742) (3,707) Net loss and comprehensive loss attributable to common stockholders $ (37,389) $ (23,320) $ (111,805) $ (54,644) |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss per Share Attributable to Common Stockholders | The following table sets forth the computation of net loss and comprehensive loss per share attributable to common stockholders, basic and diluted: Three Months Ended Nine Months Ended September 30, (in thousands, except share and per share amounts) 2021 2020 2021 2020 Net loss and comprehensive loss attributable to common stockholders $ (37,389) $ (23,320) $ (111,805) $ (54,644) Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted 78,096,901 3,352,870 78,052,624 3,205,180 Net loss and comprehensive loss per share attributable to common stockholders, basic and diluted $ (0.48) $ (6.96) $ (1.43) $ (17.05) |
Potentially Dilutive Shares not included in the Calculation of Diluted Shares Outstanding | The following potentially dilutive shares were not included in the calculation of diluted shares outstanding for the periods presented as the effect would have been anti-dilutive: As of September 30, 2021 2020 Escrow Shares 6,000,218 — Convertible Notes 17,798,340 — Stock options 1,704,978 2,727,989 Restricted stock units 9,042,773 — Restricted stock awards — 83,437 Contingently repurchasable early exercise shares 71,644 332,530 Total 34,617,953 3,143,956 |
DESCRIPTION OF THE BUSINESS A_4
DESCRIPTION OF THE BUSINESS AND ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | Oct. 13, 2020USD ($) | Sep. 30, 2021USD ($)shares | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($)segmentshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2022USD ($) |
Concentration Risk [Line Items] | ||||||||||||||
Number of reportable segments | segment | 2 | |||||||||||||
Net contributions from merger and PIPE financing | $ 300,900 | |||||||||||||
Social security tax deferral, CARES Act | $ 1,300 | |||||||||||||
Selling, general and administrative expenses | $ 57,886 | $ 24,030 | 156,264 | $ 52,109 | ||||||||||
Selling, general and administrative expenses, understated | $ 800 | $ 500 | 200 | $ 200 | $ 100 | $ 1,300 | $ 300 | 500 | $ 700 | $ 600 | ||||
Net Ioss, understated | $ 800 | $ 500 | $ 200 | $ 200 | $ 100 | $ 1,300 | $ 300 | $ 500 | 700 | $ 600 | ||||
Accumulated deficit, understated | (1,800) | |||||||||||||
Stockholders' equity, overstated | 1,800 | |||||||||||||
Assets | 372,863 | 372,863 | 312,093 | |||||||||||
Liabilities | 256,033 | $ 256,033 | $ 74,911 | |||||||||||
Revision of Prior Period, Error Correction, Adjustment | ||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||
Selling, general and administrative expenses | $ 3,100 | |||||||||||||
Forecast | Accounting Standards Update 2016-02 | Minimum | ||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||
Assets | $ 25,000 | |||||||||||||
Liabilities | 25,000 | |||||||||||||
Forecast | Accounting Standards Update 2016-02 | Maximum | ||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||
Assets | 31,000 | |||||||||||||
Liabilities | $ 31,000 | |||||||||||||
Public And Placement Warrants | ||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||
Warrants outstanding (in shares) | shares | 0 | 0 | ||||||||||||
Measurement Input, Option Volatility | ||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||
Expected volatility rate | 0.6393 | |||||||||||||
Fair Value, Inputs, Level 3 | Measurement Input, Option Volatility | Valuation Technique, Option Pricing Model | ||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||
Expected volatility rate | 0.6553 | 0.6553 |
DESCRIPTION OF THE BUSINESS A_5
DESCRIPTION OF THE BUSINESS AND ACCOUNTING POLICIES - Changes in the Fair Value of Level 3 Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance as of January 1, | $ 25,230 | $ 4,810 | ||
Balance as of September 30, | $ 7,639 | $ 11,021 | 7,639 | 11,021 |
Lithia Warrants | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Remeasurement during period | $ 6,200 | 0 | 6,211 | |
Escrow Shares | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Remeasurement during period | $ (12,000) | $ (17,591) | $ 0 |
MERGER (Details)
MERGER (Details) | Oct. 13, 2020USD ($)trading_day$ / sharesshares | Sep. 30, 2021USD ($)shares | Sep. 30, 2021USD ($)shares | Sep. 30, 2020USD ($) | Oct. 13, 2021shares |
Business Acquisition [Line Items] | |||||
Conversion of stock, conversion rate | 0.1073 | ||||
Escrow Shares | |||||
Business Acquisition [Line Items] | |||||
Remeasurement gain (loss) from change in fair value of financial instruments | $ 12,000,000 | $ 17,591,000 | $ 0 | ||
Insurance Acquisition Corp. | |||||
Business Acquisition [Line Items] | |||||
Net assets acquired in business combination | $ 100,000 | ||||
Intangibles acquired in business combination | 0 | ||||
Goodwill | $ 0 | ||||
Additional number of shares legacy stockholders are entitled given certain conditions | shares | 6,000,218 | ||||
Number of shares released to legacy stockholders | shares | 0 | 0 | |||
Insurance Acquisition Corp. | Subsequent Event | |||||
Business Acquisition [Line Items] | |||||
Number of shares returned | shares | 3,000,109 | ||||
Insurance Acquisition Corp. | Derivative Instrument, Period, One | |||||
Business Acquisition [Line Items] | |||||
Contingent liability of shares entitled to legacy stockholders, earnout period | 12 months | ||||
Contingent liability of shares entitled to legacy stockholders, earnout period, trigger stock price (in dollars per share) | $ / shares | $ 12 | ||||
Contingent liability of shares entitled to legacy stockholders, earnout period, number of trading days | trading_day | 20 | ||||
Contingent liability of shares entitled to legacy stockholders, earnout period, number of trading days in period | trading_day | 30 | ||||
Contingent liability of shares entitled to legacy stockholders, earnout period, release of shares | 50.00% | ||||
Insurance Acquisition Corp. | Derivative Instrument, Period, Two | |||||
Business Acquisition [Line Items] | |||||
Contingent liability of shares entitled to legacy stockholders, earnout period | 30 months | ||||
Contingent liability of shares entitled to legacy stockholders, earnout period, trigger stock price (in dollars per share) | $ / shares | $ 15 | ||||
Contingent liability of shares entitled to legacy stockholders, earnout period, number of trading days | trading_day | 20 | ||||
Contingent liability of shares entitled to legacy stockholders, earnout period, number of trading days in period | trading_day | 30 | ||||
Contingent liability of shares entitled to legacy stockholders, earnout period, release of shares | 50.00% | ||||
Insurance Acquisition Corp. | Derivative Instrument, Period, Three | |||||
Business Acquisition [Line Items] | |||||
Contingent liability of shares entitled to legacy stockholders, earnout period | 30 months | ||||
Contingent liability of shares entitled to legacy stockholders, earnout period, trigger stock price (in dollars per share) | $ / shares | $ 10 | ||||
Private Placement | |||||
Business Acquisition [Line Items] | |||||
Sale of stock in transaction (in shares) | shares | 18,900,000 | ||||
Sale of stock, price per share in transaction (in dollars per share) | $ / shares | $ 10 | ||||
Sale of stock, consideration received on transaction | $ 189,000,000 |
PROPERTY AND EQUIPMENT, NET - S
PROPERTY AND EQUIPMENT, NET - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 7,797 | $ 3,698 |
Less: accumulated depreciation | (1,825) | (1,575) |
Property and equipment, net | 5,972 | 2,123 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 6,516 | 2,132 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 225 | 158 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,056 | $ 1,408 |
PROPERTY AND EQUIPMENT, NET - N
PROPERTY AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense related to property and equipment | $ 0.4 | $ 0.2 | $ 1.4 | $ 0.7 |
CAPITALIZED WEBSITE AND INTER_3
CAPITALIZED WEBSITE AND INTERNAL-USE SOFTWARE COSTS, NET - Schedule of Capitalized Website and Internal-Use Software Development Costs, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Capitalized website domain costs – nonamortizable | $ 385 | $ 385 |
Capitalized website and internal-use software development costs – amortizable | 22,351 | 17,308 |
Less: accumulated amortization | (14,241) | (11,151) |
Capitalized website and internal-use software development costs, net | $ 8,495 | $ 6,542 |
CAPITALIZED WEBSITE AND INTER_4
CAPITALIZED WEBSITE AND INTERNAL-USE SOFTWARE COSTS, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of capitalized software development costs | $ 1.2 | $ 0.9 | $ 3.1 | $ 2.5 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Liability for vehicles acquired under OEM program | $ 3,670 | $ 11,461 |
Accrued payroll related costs | 11,479 | 4,155 |
Provision for DMV refunds | 1,173 | 1,093 |
Accrued sales taxes | 11,587 | 1,503 |
Common stock subject to repurchase liability, current | 160 | 524 |
Interest payable | 2,475 | 18 |
Other accrued expenses | 8,706 | 3,532 |
Total accrued expenses and other current liabilities | $ 39,250 | $ 22,286 |
Amount paid over original acquisition price of acquired inventory | 50.00% |
BORROWINGS (Details)
BORROWINGS (Details) $ / shares in Units, $ in Thousands | May 27, 2021USD ($)trading_daybusiness_day$ / shares | Jun. 12, 2020 | Apr. 22, 2020USD ($)debt_intrument | Dec. 27, 2019USD ($) | Nov. 29, 2019 | Oct. 11, 2018USD ($) | Jul. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Jul. 31, 2020debt_intrument | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | May 24, 2021$ / shares | Sep. 30, 2019USD ($) |
Line of Credit Facility [Line Items] | |||||||||||||
Share price | $ / shares | $ 6.61 | ||||||||||||
Proceeds from delayed draw term loans | $ 0 | $ 12,500 | |||||||||||
London Interbank Offered Rate (LIBOR) | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Variable rate | 0.08% | 0.08% | |||||||||||
Convertible Notes | Convertible Senior Notes Due 2026 | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Stated interest rate | 4.75% | ||||||||||||
Outstanding principal amount | $ 150,000 | ||||||||||||
Redemption, threshold trading days | trading_day | 40 | ||||||||||||
Redemption, principal amount to remain outstanding | $ 50,000 | ||||||||||||
Unamortized deferred borrowing costs | $ 6,000 | $ 6,000 | |||||||||||
Contractual interest expense | 1,800 | 2,500 | |||||||||||
Deferred borrowing cost amortization expense | $ 300 | $ 400 | |||||||||||
Effective rate | 5.73% | 5.73% | |||||||||||
Convertible Notes | Convertible Senior Notes Due 2026 | Estimate of Fair Value Measurement | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Convertible debt, fair value | $ 179,600 | $ 179,600 | |||||||||||
Convertible Notes | Convertible Senior Notes Due 2026 | Debt Instrument, Convertible, Trigger Option, One | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Convertible, threshold percentage of stock price trigger | 130.00% | ||||||||||||
Number of threshold trading days | trading_day | 20 | ||||||||||||
Number of threshold consecutive trading days | trading_day | 30 | ||||||||||||
Convertible Notes | Convertible Senior Notes Due 2026 | Debt Instrument, Convertible, Trigger Option, Two | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Convertible, threshold percentage of stock price trigger | 98.00% | ||||||||||||
Number of threshold consecutive trading days | trading_day | 10 | ||||||||||||
Number of threshold business days | business_day | 5 | ||||||||||||
Convertible Notes | Convertible Senior Notes Due 2026 | Debt Instrument, Convertible, Period One | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Conversion ratio | 0.1186556 | ||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 8.43 | ||||||||||||
Conversion premium | 27.50% | ||||||||||||
Convertible Notes | Convertible Senior Notes Due 2026 | Debt Instrument, Convertible, Period Two | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Conversion ratio | 0.1512859 | ||||||||||||
Secured Debt | Delayed Draw Term Loan (DDTL) Agreement | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Number of debt instruments | debt_intrument | 2 | ||||||||||||
Secured Debt | Term Loan A | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Outstanding principal amount | $ 12,500 | ||||||||||||
Proceeds from delayed draw term loans | $ 12,500 | ||||||||||||
Secured Debt | Term Loan A | London Interbank Offered Rate (LIBOR) | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Basis spread on variable rate | 0.50% | ||||||||||||
Secured Debt | Term Loan B | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Outstanding principal amount | $ 12,500 | ||||||||||||
Basis spread on variable rate | 0.50% | ||||||||||||
Proceeds from delayed draw term loans | $ 12,500 | ||||||||||||
Loans Payable | Paycheck Protection Program, CARES Act | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Outstanding principal amount | $ 6,100 | ||||||||||||
Number of debt instruments | debt_intrument | 2 | ||||||||||||
Fixed interest rate | 1.00% | ||||||||||||
Line of Credit | Revolving Credit Facility | Flooring Line of Credit Facility | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 30,000 | $ 50,000 | $ 50,000 | ||||||||||
Borrowing capacity, increase limit | $ 20,000 | ||||||||||||
Covenant, liquidity required, three-month cash burn multiplier, minimum | 4 | 1 | 1 | ||||||||||
Commitment fee for unused availability under borrowing capacity | 0.40% | ||||||||||||
Line of Credit | Revolving Credit Facility | Flooring Line of Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||
Basis spread on variable rate | 2.00% |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | May 27, 2021 | Jan. 14, 2021 | Dec. 28, 2020 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 27, 2020 | Dec. 24, 2020 | Mar. 22, 2019 |
Class of Warrant or Right [Line Items] | ||||||||||
Cost for capped call transactions | $ 28,391 | $ 0 | ||||||||
Exchange of warrants for cash | $ 497 | $ 0 | ||||||||
Call Option | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Cap price for capped call transactions (in dollars per share) | $ 14.8725 | |||||||||
Cap price for capped call transactions premium | 125.00% | |||||||||
Cost for capped call transactions | $ 28,400 | |||||||||
Public Warrants | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Number of shares called by each warrant (in shares) | 0.25 | |||||||||
Repurchase price of warrants (in dollars per share) | $ 1 | |||||||||
Warrants outstanding (in shares) | 7,532,500 | |||||||||
Number of shares issued (in shares) | 125,160 | 1,744,088 | ||||||||
Exchange of warrants for cash | $ 500 | $ 7,000 | ||||||||
Public Warrants | Common Stock | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Number of shares issued (in shares) | 125,160 | |||||||||
Public Warrants Assumed In Acquisition | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Number of shares called by each warrant (in shares) | 1 | |||||||||
Warrant exercise price (in dollars per share) | $ 11.50 | |||||||||
Placement Warrants | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Warrants outstanding (in shares) | 212,500 | |||||||||
Number of shares issued (in shares) | 53,125 | |||||||||
Exchange of warrants for cash | $ 200 | |||||||||
Public And Placement Warrants | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Warrants outstanding (in shares) | 0 | |||||||||
Percentage of shares outstanding called by warrants | 2.10% | |||||||||
Public And Placement Warrants | Common Stock | ||||||||||
Class of Warrant or Right [Line Items] | ||||||||||
Number of shares issued (in shares) | 1,798,203 |
STOCKHOLDERS' EQUITY - Capped C
STOCKHOLDERS' EQUITY - Capped Called Transaction Settlements (Details) - Call Option $ in Thousands | Sep. 30, 2021USD ($)shares |
Option Indexed to Issuer's Equity [Line Items] | |
Hypothetical capped call settlement value, cash settlement amount | $ 926 |
Hypothetical capped call settlement value, share settlement amount (in shares) | shares | 99,545 |
Hypothetical capped call settlement value, fair value of share settlement | $ 691 |
Capped call settlement value - share price + $1, cash settlement amount | $ 6,977 |
Capped call settlement value - share price + $1, share settlement amount (in shares) | shares | 831,679 |
Capped call settlement value - share price + $1, fair value of share settlement | $ 5,772 |
Capped call settlement value - share price - $1, cash settlement amount | $ 112 |
Capped call settlement value - share price - $1, share settlement amount (in shares) | shares | 13,008 |
Capped call settlement value - share price - $1, fair value of share settlement | $ 90 |
STOCK-BASED COMPENSATION PLAN_2
STOCK-BASED COMPENSATION PLANS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 9,603,494 | ||||
Stock-based compensation expense | $ 5,300 | $ 800 | $ 18,900 | $ 1,500 | |
Capitalized stock-based compensation costs | 200 | $ 100 | 608 | $ 182 | |
Unrecognized stock-based compensation expense | 48,000 | $ 48,000 | |||
Unrecognized stock-based compensation expense, weighted average period of recognition | 2 years 5 months 1 day | ||||
Share-based Payment Arrangement, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 1,771,220 | ||||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Liability related to stock options exercised but not vested | $ 300 | $ 300 | $ 700 | ||
Stock options exercised but not vested (in shares) | 71,644 | 294,761 | |||
Stock options | 2014 Stock Option Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award contractual term | 10 years | ||||
Stock options | 2020 Omnibus Equity Compensation Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award contractual term | 10 years | ||||
Restricted stock units | Share-based Payment Arrangement, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 2 years | ||||
Minimum | Share-based Payment Arrangement, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Closing price which will trigger vesting of shares (in dollars per share) | $ 23 | ||||
Minimum | Stock options | 2014 Stock Option Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years | ||||
Maximum | Share-based Payment Arrangement, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Closing price which will trigger vesting of shares (in dollars per share) | $ 28 | ||||
Maximum | Stock options | 2014 Stock Option Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 5 years |
STOCK-BASED COMPENSATION PLAN_3
STOCK-BASED COMPENSATION PLANS - Employee and Non-Employee Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | |
Number of Shares | ||
Beginning balance (in shares) | shares | 2,354,836 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | (273,739) | |
Forfeited (in shares) | shares | (310,796) | |
Cancelled (expired) (in shares) | shares | (65,323) | |
Ending balance (in shares) | shares | 1,704,978 | 2,354,836 |
Exercisable at period end (in shares) | shares | 1,704,978 | |
Weighted Average Exercise Price | ||
Beginning balance (in dollars per share) | $ / shares | $ 1.80 | |
Granted (in dollars per share) | $ / shares | 0 | |
Exercised (in dollars per share) | $ / shares | 1.42 | |
Forfeited (in dollars per share) | $ / shares | 2.88 | |
Cancelled (expired) (in dollars per share) | $ / shares | 3.89 | |
Ending balance (in dollars per share) | $ / shares | 1.61 | $ 1.80 |
Weighted average exercise price, exercisable at period end (in dollars per share) | $ / shares | $ 1.61 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted average remaining contractual life, outstanding | 7 years 4 months 24 days | 8 years 4 months 24 days |
Weighted average remaining contractual life, exercisable at period end | 7 years 4 months 24 days | |
Aggregate intrinsic value, outstanding | $ | $ 9,250 | $ 15,230 |
Aggregate intrinsic value, exercisable at period end | $ | $ 9,250 |
STOCK-BASED COMPENSATION PLAN_4
STOCK-BASED COMPENSATION PLANS - Employee and Non-Employee Restricted Stock Unit Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Number of Shares | ||
Beginning balance (in shares) | 0 | |
Granted (in shares) | 9,603,494 | |
Vested (in shares) | 0 | |
Forfeited (in shares) | (560,721) | |
Ending balance (in shares) | 9,042,773 | 0 |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 0 | |
Granted (in dollars per share) | 7.23 | |
Vested (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 7.70 | |
Ending balance (in dollars per share) | $ 7.20 | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Weighted average remaining contractual life, outstanding | 1 year 6 months 29 days | 0 years |
Aggregate intrinsic value, outstanding | $ 62,757 | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ / shares in Units, $ in Thousands | Nov. 10, 2020USD ($) | Jul. 02, 2020USD ($) | Dec. 27, 2019USD ($) | Apr. 04, 2019USD ($) | Jan. 14, 2019USD ($) | Sep. 30, 2018USD ($)tranche$ / sharesshares | Jul. 30, 2018USD ($) | Oct. 31, 2019USD ($) | Feb. 28, 2019 | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Related Party Transaction [Line Items] | ||||||||||||||
Deferred borrowing costs | $ 0 | $ 0 | $ 2,149 | |||||||||||
Lithia Warrants | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Remeasurement gain (loss) from change in fair value of financial instruments | $ (6,200) | 0 | $ (6,211) | |||||||||||
Warrant Shares, Tranche Five | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Issuance of warrants upon achievement of milestones | $ 4,300 | |||||||||||||
Affiliated Entity | Lithia Motors, Inc. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Accounts receivable | 2,500 | 2,500 | 200 | |||||||||||
Agreement term | 5 years | |||||||||||||
Deferred asset, gross | $ 3,200 | |||||||||||||
Amortization period | 5 years | |||||||||||||
Deferred asset, amortization expense | 200 | 200 | 500 | 500 | ||||||||||
Deferred asset, net | 1,400 | 1,400 | 1,900 | |||||||||||
Accounts payable | 600 | 600 | 500 | |||||||||||
Affiliated Entity | Lithia Motors, Inc. | Warrant Shares, Classified As Derivatives | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Number of shares, exercisable, tranche one, upon achievement of milestones | shares | 14,443,598 | |||||||||||||
Number of shares, exercisable, tranche three, upon achievement of milestones | shares | 14,443,598 | |||||||||||||
Affiliated Entity | Lithia Motors, Inc. | Warrant Shares | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Number of shares called by warrants | shares | 86,661,588 | |||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||
Total number of tranches warrants become exercisable | tranche | 6 | |||||||||||||
Number of potential shares exercisable per tranche | shares | 14,443,598 | |||||||||||||
Number of shares, exercisable, tranche two, upon achievement of milestones | shares | 14,443,598 | |||||||||||||
Number of shares, exercisable, tranche four, on vesting cliff date, upon achievement of milestones | shares | 14,443,598 | |||||||||||||
Number of shares, exercisable, tranche five, on vesting cliff date, upon achievement of milestones | shares | 14,443,598 | |||||||||||||
Number of shares, exercisable, tranche six, on vesting cliff date, upon achievement of milestones | shares | 14,443,598 | |||||||||||||
Number of shares, exercisable, per tranche, between vesting cliff date and vesting termination date, upon achievement of milestones | shares | 14,443,598 | |||||||||||||
Affiliated Entity | One-Sided Marketplace (OSM) Agreement | Lithia Motors, Inc. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Revenue from related party | 4,800 | 2,200 | 11,700 | 3,700 | ||||||||||
Affiliated Entity | Vehicle Sales | Lithia Motors, Inc. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Accounts receivable | 2,300 | 2,300 | 100 | |||||||||||
Affiliated Entity | Lithia Motors, Inc. Master Agreement With US Bank, Commissions | Lithia Motors, Inc. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Accounts receivable | 100 | $ 100 | $ 43 | |||||||||||
Affiliated Entity | Substance Upfront Payment | Lithia Motors, Inc. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Deferred asset, gross | $ 2,800 | |||||||||||||
Affiliated Entity | Substance Upfront Payment, Recorded In Other Non-Current Assets | Lithia Motors, Inc. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Deferred asset, gross | $ 400 | |||||||||||||
Affiliated Entity | License And Services Agreement | Lithia Motors, Inc. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Renewal term | 12 months | |||||||||||||
Selling, general and administrative expenses from transactions with related party | 18 | 32 | $ 100 | 100 | ||||||||||
Affiliated Entity | Flooring Line of Credit Facility | Lithia Motors, Inc. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Debt instrument, term | 3 years | |||||||||||||
Deferred borrowing costs | $ 9,100 | |||||||||||||
Deferred costs, amortization period | 3 years | |||||||||||||
Deferred borrowing cost amortization expense | 600 | 1,100 | 2,100 | 3,500 | ||||||||||
Interest rate | 1.50% | |||||||||||||
Interest expense | $ 29 | 37 | $ 65 | 100 | ||||||||||
Affiliated Entity | Delayed Draw Term Loan (DDTL) Agreement | Lithia Motors, Inc. | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Debt, fair value | $ 5,700 | |||||||||||||
Deferred costs, amortization period | 4 years | |||||||||||||
Deferred borrowing cost amortization expense | 300 | 1,000 | ||||||||||||
Interest expense | $ 100 | $ 300 | ||||||||||||
Proceeds debt | $ 12,500 | $ 12,500 | ||||||||||||
Repayments of debt | $ 25,000 | |||||||||||||
Affiliated Entity | Employee Loans | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Interest rate | 2.59% | 2.72% | 2.87% | |||||||||||
Related party transaction | $ 100 | $ 100 | $ 200 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 2.4 | $ 1.4 | $ 6.5 | $ 4.1 |
Possible loss related to claim (up to) | $ 4 | $ 4 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Future Minimum Commitments under Facility Operating Leases (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 2,556 |
2022 | 9,263 |
2023 | 8,982 |
2024 | 6,948 |
2025 | 6,302 |
2026 | 6,192 |
Thereafter | 13,098 |
Total minimum lease payments | $ 53,341 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 9 Months Ended |
Sep. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Reportabl
SEGMENT INFORMATION - Reportable Segments Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Revenue from external customers | $ 179,800 | $ 59,914 | $ 440,653 | $ 122,307 |
Segment gross profit (loss) | 12,952 | 3,726 | 36,647 | 10,641 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Segment gross profit (loss) | 12,952 | 3,726 | 36,647 | 10,641 |
Operating Segments | Retail | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from external customers | 162,463 | 50,522 | 390,198 | 101,803 |
Segment gross profit (loss) | 13,673 | 3,642 | 36,888 | 8,451 |
Operating Segments | Wholesale | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from external customers | 17,337 | 9,392 | 50,455 | 20,504 |
Segment gross profit (loss) | $ (721) | $ 84 | $ (241) | $ 2,190 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Reportable Segment Gross Profit to Consolidated Loss before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||
Segment gross profit (loss) | $ 12,952 | $ 3,726 | $ 36,647 | $ 10,641 | ||||
Selling, general and administrative expenses | (57,886) | (24,030) | (156,264) | (52,109) | ||||
Depreciation and amortization | (1,375) | (1,181) | (4,037) | (3,258) | ||||
Change in fair value of financial instruments | 11,967 | (579) | 17,591 | (6,211) | ||||
Interest and other expense, net | (3,047) | (1,256) | (5,742) | (3,707) | ||||
Net loss and comprehensive loss attributable to common stockholders | (37,389) | $ (31,661) | $ (42,755) | (23,320) | $ (18,993) | $ (12,331) | (111,805) | (54,644) |
Net loss and comprehensive loss attributable to common stockholders | (37,389) | $ (31,661) | $ (42,755) | (23,320) | $ (18,993) | $ (12,331) | (111,805) | (54,644) |
Operating Segments | ||||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||
Segment gross profit (loss) | $ 12,952 | $ 3,726 | $ 36,647 | $ 10,641 |
NET LOSS PER SHARE - Computatio
NET LOSS PER SHARE - Computation of Basic and Diluted Net Loss per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||||||
Net loss attributable to common stockholders, basic | $ (37,389) | $ (23,320) | $ (111,805) | $ (54,644) | ||||
Net loss attributable to common stockholders, diluted | (37,389) | (23,320) | (111,805) | (54,644) | ||||
Net loss and comprehensive loss attributable to common stockholders | $ (37,389) | $ (31,661) | $ (42,755) | $ (23,320) | $ (18,993) | $ (12,331) | $ (111,805) | $ (54,644) |
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic (in shares) | 78,096,901 | 3,352,870 | 78,052,624 | 3,205,180 | ||||
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, diluted (in shares) | 78,096,901 | 3,352,870 | 78,052,624 | 3,205,180 | ||||
Net loss and comprehensive loss per share attributable to common stockholders, basic (in dollars per share) | $ (0.48) | $ (6.96) | $ (1.43) | $ (17.05) | ||||
Net loss and comprehensive loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.48) | $ (6.96) | $ (1.43) | $ (17.05) |
NET LOSS PER SHARE - Potentiall
NET LOSS PER SHARE - Potentially Dilutive Shares not included in the Calculation of Diluted Shares Outstanding (Details) - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 34,617,953 | 3,143,956 |
Escrow Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 6,000,218 | 0 |
Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 17,798,340 | 0 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,704,978 | 2,727,989 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 9,042,773 | 0 |
Restricted stock awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 0 | 83,437 |
Contingently repurchasable early exercise shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 71,644 | 332,530 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 0 | $ 0 | $ 0 | $ 0 |