| Prospectus Supplement |
|
Filed pursuant to Rule 424(b)(5) |
| |
|
Registration No. 333-263613 |
|
Up to $150,000,000
Class A common stock |
We have entered into a Controlled Equity Offering℠
Sales Agreement, or the “sales agreement,” with Cantor Fitzgerald & Co., or “Cantor Fitzgerald,”
relating to shares of our Class A common stock, par value $0.0001 (the “Class A common stock”), offered by this prospectus
supplement and the accompanying base prospectus. In accordance with the terms of the sales agreement, from time to time we may offer and
sell shares of our Class A common stock having an aggregate gross sales price of up to $150.0 million through or to Cantor Fitzgerald,
acting as sales agent or principal, pursuant to this prospectus supplement and the accompanying prospectus.
Our Class A common stock is listed for trading
on The Nasdaq Capital Market or “Nasdaq,” under the symbol “SFT.” On May 3, 2022, the last reported sales
price of our Class A common stock was $1.34 per share.
Sales of our Class A common stock, if any, under
this prospectus supplement may be made in sales deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated
under the Securities Act of 1933, as amended, or the “Securities Act.” Subject to terms of the sales agreement, Cantor
Fitzgerald is not required to sell any specific number or dollar amounts of securities but will act as our sales agent using commercially
reasonable efforts consistent with its normal trading and sales practices, on mutually agreed terms between Cantor Fitzgerald and us.
There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
Cantor Fitzgerald will be entitled to compensation
under the terms of the sales agreement at a fixed commission rate of 3.0% of the gross sales price per share sold. In connection with
the sale of our Class A common stock on our behalf, Cantor Fitzgerald will be deemed to be an “underwriter” within the meaning
of the Securities Act and the compensation of Cantor Fitzgerald will be deemed to be underwriting commissions or discounts. We have also
agreed to provide indemnification and contributions to Cantor Fitzgerald against certain civil liabilities, including liabilities under
the Securities Act.
Investing in our securities involves a high
degree of risk. See the section entitled “Risk Factors” beginning on page S-4 of this prospectus supplement and in
the documents incorporated by reference herein for a discussion of information that should be considered in connection with an investment
in our securities.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus
supplement. Any representation to the contrary is a criminal offense.
Cantor
The date of this prospectus supplement is May 6,
2022
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
ABOUT THIS PROSPECTUS SUPPLEMENT
You should rely only on the information contained
or incorporated by reference in this prospectus supplement and the accompanying base prospectus. We have not authorized anyone to provide
you with different information. We are not making an offer of these securities in any state or jurisdiction where the offer is not permitted.
This prospectus supplement and the accompanying
base prospectus are part of a registration statement on Form S-3 (Registration No. 333-263613) we filed with the Securities and Exchange
Commission, or the “SEC,” using a “shelf” registration process. Under this shelf process, we may, from
time to time, sell or issue any of the combination of securities described in the base prospectus in one or more offerings with a maximum
aggregate offering price of up to $300,000,000. The base prospectus provides you with a general description of us and the securities we
may offer, some of which may not apply to this offering. Each time we sell securities using the base prospectus, we provide a prospectus
supplement that contains specific information about the terms of that offering. A prospectus supplement may also add, update or change
information contained in the base prospectus and the documents incorporated by reference into the prospectus supplement or the base prospectus.
This prospectus supplement provides specific details
regarding this offering of $150,000,000 shares of our Class A common stock. To the extent there is a conflict between the information
contained in this prospectus supplement and the base prospectus, you should rely on the information in this prospectus supplement. This
prospectus supplement, the base prospectus and the documents we incorporate by reference herein and therein include important information
about us and our Class A common stock, and other information you should know before investing. You should read both this prospectus supplement
and the base prospectus, together with the additional information in “Where You Can Find More Information” and “Information
Incorporated by Reference.”
You should not assume the information appearing
in this prospectus supplement or the base prospectus is accurate as of any date other than the date on the front cover of the respective
documents. You should not assume the information contained in the documents incorporated by reference in this prospectus supplement or
the base prospectus is accurate as of any date other than the respective dates of those documents. Our business, financial condition,
results of operations, and prospects may have changed since such date.
PROSPECTUS SUPPLEMENT SUMMARY
This summary contains basic information
about us and our business but does not contain all of the information that is important to your investment decision. You should read this
summary together with the more detailed information contained elsewhere in this prospectus supplement and the accompanying base prospectus
and the documents incorporated herein and therein by reference before making an investment decision. Investors should carefully consider
the information set forth under the caption “Risk Factors” appearing elsewhere in this prospectus supplement, including those
described in documents incorporated by reference herein.
Unless otherwise indicated or unless
the context otherwise requires, all references in this prospectus supplement to “Shift,” the “Company” and “we,”
“us” and “our” are to Shift Technologies, Inc., a Delaware corporation, excluding its subsidiaries, unless expressly
stated or the context otherwise requires.
Overview
The Company is a leading end-to-end
ecommerce platform transforming the used car industry with a technology-driven, hassle-free customer experience. The Company’s mission
is to make car purchase and ownership simple — to make buying or selling a used car fun, fair, and accessible to everyone. The Company
provides comprehensive, technology-driven solutions throughout the car ownership lifecycle: finding the right car, having a test drive
brought to you before buying the car, a seamless digitally-driven purchase transaction including financing and vehicle protection products,
an efficient, digital trade-in/sale transaction, and a vision to provide high-value support services during car ownership. Each of these
steps is powered by the Company’s software solutions, mobile transactions platform, and scalable logistics, combined with our centralized
inspection, reconditioning & storage centers, called hubs.
Background
Insurance Acquisition Corp. (“IAC”)
was formed in March 2018 as a special purpose acquisition company for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or other similar business combination, with one or more businesses or assets (the “initial
business combination”). Shift was launched in 2014 and is an auto ecommerce platform that enables customers to buy, sell and test
drive cars and purchase ancillary products and services. On October 13, 2020, IAC acquired Shift (which we refer to as “the Merger”)
and changed its name to Shift Technologies, Inc. in connection with the Merger. Prior to the Merger, IAC’s common stock, units and
warrants traded on The Nasdaq Capital Market under the symbols “INSU,” “INSUU” and “INSUW,” respectively.
Pursuant to the Merger, the Company continued the listing of its common stock and warrants on The Nasdaq Capital Market under the symbols
“SFT” and “SFTTW,” respectively, effective October 15, 2020. Since January 2021, the Company does not have any
publicly registered warrants issued and outstanding.
Presentation of Financial Operating
Data
The Merger was accounted for as a reverse
recapitalization in accordance with U.S. generally accepted accounting principles (“GAAP”). Under this method of accounting,
IAC, who was the legal acquirer in the Merger, was treated as the “acquired” company for financial reporting purposes and
Shift was treated as the accounting acquirer. This determination was primarily based on Shift having a majority of the voting power of
the Company, Shift’s senior management comprising substantially all of the senior management of the Company, the relative size of
Shift compared to IAC, and Shift’s operations comprising the ongoing operations of the Company. Accordingly, for accounting purposes,
the Merger was treated as the equivalent of a capital transaction in which Shift was issuing stock for the net assets of IAC. The net
assets of IAC are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger are
those of Shift.
Emerging Growth Company
We are an “emerging growth company”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and
proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS
Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies
(that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities
registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides
that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which
means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging
growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison
of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which
has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards
used.
We will remain an emerging growth company
until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of our initial public offering,
(b) in which we have total annual revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which
means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s
second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the
prior three-year period.
Recent Developments
Liquidity and Management’s Plan
Since inception, the Company has generated recurring
losses which has resulted in an accumulated deficit and negative operating cash flows. The December 31, 2021 consolidated financial statements
were prepared under the assumption that we will continue as a going concern for the next twelve months. However, subsequent to the issuance
of the December 31, 2021 consolidated financial statements and based on our current assessment, management concluded that there is substantial
doubt about the Company’s ability to continue as a going concern. The Company's plan is to raise additional capital through this
offering and other capital-raising efforts to provide net proceeds which the Company believes will be sufficient to provide the liquidity
necessary to satisfy its obligations over the next twelve months.
Our ability to continue as a going concern is
dependent upon our ability to obtain additional equity or debt financing or generate profitable operations. Historically, we have funded
operations through issuances of common and preferred stock and through a reverse recapitalization via the Merger with IAC in October 2020.
We have also historically funded vehicle inventory purchases through our vehicle floorplan facilities. There can be no assurance that
additional financing will be available or will be available on commercially reasonable terms. The inclusion of disclosures expressing
substantial doubt about our ability to continue as a going concern could materially adversely affect our stock price and our ability to
raise new capital or enter into strategic alliances.
Corporate Information
The mailing address of
the Company’s principal executive office is 290 Division Street, Suite 400, San Francisco, CA 94103 and the telephone number
is (855) 575-6739. Our website address is www.shift.com. The information found on or that can be assessed through the website
is not part of, and is not incorporated into, this prospectus supplement and you should not consider information on our corporate website
to be part of this prospectus supplement in deciding whether to purchase our securities.
THE OFFERING
The following
summary contains basic terms about this offering and the Class A common stock and is not intended to be complete. It may not contain
all of the information that is important to you. You should read the more detailed information contained in this prospectus
supplement, including but not limited to, the risk factors beginning on page S-4 and the other risks described in our base
prospectus and the annual and quarterly reports incorporated by reference therein.
| Issuer |
|
Shift Technologies, Inc. |
| |
|
|
| Securities offered |
|
Shares of our Class A common stock having an aggregate offering price of up to $150,000,000. |
| |
|
|
Class A common stock to be outstanding
after this offering |
|
Up to 194,619,430 shares of our Class A common stock, assuming sales
of 111,940,299 shares of our Class A common stock in this offering at an offering price of $1.34 per share, which was the last reported
sale price of our Class A common stock on The Nasdaq Capital Market on May 3, 2022. The actual number of shares issued will vary depending
on the sales price under this offering.(1) |
| |
|
|
| Manner of offering |
|
Sales deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act to or through Cantor Fitzgerald as sales agent or principal. See “Plan of Distribution” on page S-12. |
| |
|
|
| Use of proceeds |
|
We intend to use the net proceeds from the sale of our Class A common stock in this offering for working capital and general corporate purposes. See “Use of Proceeds” on page S-9. |
| |
|
|
| Risk Factors |
|
See the section entitled “Risk Factors” on page S-4 and in the documents incorporated by reference herein for a discussion of factors you should consider carefully before deciding to invest in our Class A common stock. |
| |
|
|
| Nasdaq Symbol |
|
SFT |
| (1) | Based on 82,679,131 shares of our Class A common stock outstanding
as of March 31, 2022. This amount does not include, as of March 31, 2022: |
| - | Up to 22,692,885 shares of Class A common stock issuable
upon conversion of our 4.75% Convertible Senior Notes due 2026; |
| - | Shares of Class A common stock underlying currently issued
stock options and restricted stock units in the amount of 9,044,654; and |
| - | Shares of Class A common stock reserved for future issuance
under our 2020 Omnibus Equity Compensation Plan in the amount of 3,238,769. The number of shares reserved for future issuance under our
2020 Omnibus Equity Compensation Plan automatically increases each January 1 in an amount equal to 2% of the Company’s outstanding
Class A common stock as of the previous December 31. |
RISK FACTORS
An investment in our securities involves a
high degree of risk. Before you make a decision to invest in our Class A common stock, you should consider carefully the risk factors
described below and in the accompanying base prospectus, together with other information in this prospectus supplement, the accompanying
base prospectus, and the information incorporated by reference herein and therein as set forth in our filings with the SEC, including
our annual report on Form 10-K for the year ended December 31, 2021, as updated by our subsequent filings, including amendments, under
the Securities Exchange Act of 1934, as amended, or “Exchange Act.” Additional risks and uncertainties not presently known
to us or that we currently deem immaterial may also affect our business and results of operations. If any of these risks actually occur,
our business, financial condition or results of operations could be seriously harmed. In that event, the market price for our Class A
common stock could decline and you may lose all or part of your investment.
Risks Related to this Offering
Our management will have broad discretion
in the use of the net proceeds from this offering and may not use them effectively.
Our management will have broad discretion in the
application of the net proceeds from this offering, and our stockholders will not have the opportunity as part of their investment decision
to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine
our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The failure
by our management to apply these funds effectively could harm our business. See “Use of Proceeds” on page S-9
for a description of our proposed use of proceeds from this offering.
You may experience immediate and substantial
dilution in the net tangible book value per share of the Class A common stock you purchase.
The offering price per share in this offering
may exceed the net tangible book value per share of our Class A common stock outstanding prior to this offering. Assuming that an aggregate
111,940,299 shares of our Class A common stock are sold in this offering at an assumed offering price of $1.34 per share, which was the
last reported sale price of our Class A common stock on The Nasdaq Capital Market on May 3, 2022 for aggregate gross proceeds of $150.0
million, and after deducting commissions and estimated aggregate offering expenses payable by us, you would experience immediate dilution
of $0.26 per share, representing the difference between our net tangible book value per share as of December 31, 2021, on an unaudited
pro forma as adjusted basis after giving effect to this offering, and the assumed offering price.
A substantial number of shares of our Class
A common stock may be sold in this offering, which could cause the price of our Class A common stock to decline.
The sale of shares to be issued in this offering
in the public market, or any future sales of a substantial number of shares of our Class A common stock in the public market, or the perception
that such sales may occur, could adversely affect the price of our Class A common stock on The Nasdaq Capital Market. We cannot predict
the effect, if any, that market sales of those shares of Class A common stock or the availability of those shares of Class A common stock
for sale will have on the market price of our Class A common stock.
Investors who buy shares of our Class A
common stock in this offering at different times will likely pay different prices.
Investors who purchase shares of our Class A common
stock in this offering at different times will likely pay different prices and may experience different outcomes in their investment results.
We will have discretion, subject to the effect of market conditions, to vary the timing, prices, and numbers of shares sold in this offering.
Investors who buy at one time may experience a decline in the value of their shares of our Class A common stock, while investors who buy
at another time do not. Many factors could have an impact on the market price of our Class A common stock over time, including the factors
described or incorporated by reference in this “Risk Factors” section of the prospectus supplement.
You may experience future dilution as a result of future equity
offerings.
In order to raise
additional capital, we may in the future offer additional shares of our Class A common stock or other securities convertible into or
exchangeable for our Class A common stock at prices that may not be the same as the price per share in this offering. We may sell
shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in
this offering, and investors purchasing shares or other securities in the future could have rights superior to existing
stockholders. The price per share at which we sell additional shares of our Class A common stock, or securities convertible or
exchangeable into Class A common stock, in future transactions may be higher or lower than the price per share paid by investors in
this offering. In addition, the sale of shares in this offering and any future sales of a substantial number of shares of our Class
A common stock in the public market, or the perception that such sales may occur, could adversely affect the price of our Class A
common stock. We cannot predict the effect, if any, that market sales of those shares of Class A common stock, or the perception
that those shares may be sold, will have on the market price of our Class A common stock.
Our outstanding options
and other convertible securities may have an adverse effect on the market price of our Class A common stock.
As of March 31, 2022, we had issued and outstanding
securities that are exercisable for, or convertible into, a substantial number of shares of our Class A common stock, including:
| - | Up to 22,692,885 shares of Class A common stock issuable upon conversion of our 4.75% Convertible Senior
Notes due 2026; |
| - | Shares of Class A common stock underlying currently issued stock options and restricted stock units in
the amount of 9,044,654; and |
| - | Shares of Class A common stock reserved for future issuance under our 2020 Omnibus Equity Compensation
Plan in the amount of 3,238,769. The number of shares reserved for future issuance under our 2020 Omnibus Equity Compensation Plan automatically
increases each January 1 in an amount equal to 2% of the Company’s outstanding Class A common stock as of the previous December
31. |
The issuance of these shares
will dilute our other equity holders, which could cause the price of our Class A common stock to decline. In addition, the sale of these
shares in the public market, or the perception that such sales may occur, could adversely affect the price of our Class A common stock.
We do not expect to pay any dividends in
the foreseeable future.
We have not paid any cash dividends on our shares
of Class A common stock to date. The payment of cash dividends on our Class A common stock in the future will be dependent upon our revenues
and earnings, if any, capital requirements and general financial condition and will be within the discretion of our board of directors.
It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly,
our board of directors does not anticipate declaring any dividends on our Class A common stock in the foreseeable future. As a result,
any gain you will realize on our Class A common stock will result solely from the appreciation of such shares.
If we are not able
to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our Common Stock.
Our
Class A common stock is currently listed on The Nasdaq Capital Market. In order to maintain such listing, we must satisfy minimum financial
and other continued listing requirements and standards, including those regarding director independence and independent committee requirements,
minimum stockholders’ equity, minimum share price, and certain corporate governance requirements. There can be no assurance that
we will be able to comply with the applicable listing standards.
If
we are unable to satisfy these requirements or standards, or cure any deficiencies in accordance with the Nasdaq Listing Rules, we could
be subject to delisting, which would have a negative effect on the price of our Class A common stock and would impair your ability to
sell or purchase our Class A common stock when you wish to do so. In the event of a delisting, we would expect to take actions to restore
our compliance with the Nasdaq Listing Rules, but we can provide no assurance that any such action taken by us would allow our Class A
common stock to become listed again, stabilize the market price or improve the liquidity of our Class A common stock, prevent our Class
A common stock from dropping below the minimum bid price requirement, or prevent future non-compliance with the listing requirements.
Our Class A common stock price may be
volatile or may decline regardless of our operating performance and you may not be able to resell your shares at or above your purchase
price.
Volatility in the
market price of our Class A common stock may prevent you from being able to sell your shares at or above the price you paid for
them. Many factors, which are outside our control, may cause the market price of our Class A common stock to fluctuate
significantly, including those described elsewhere in this “Risk Factors’’ section and the documents incorporated
by reference in this prospectus supplement, as well as the following:
| ● | our operating and financial performance and prospects; |
| ● | our quarterly or annual earnings or those of other companies
in our industry compared to market expectations; |
| ● | future announcements concerning our business or our competitors’
businesses; |
| ● | the public’s reaction to our press releases, other public
announcements and filings with the SEC; |
| ● | the size of our public float; |
| ● | coverage by or changes in financial estimates by securities
analysts or failure to meet their expectations; |
| ● | market and industry perception of our success, or lack thereof,
in pursuing our growth strategy; |
| ● | strategic actions by us or our competitors, such as acquisitions
or restructurings; |
| ● | changes in laws or regulations which adversely affect our
industry or us; |
| ● | changes in accounting standards, policies, guidance, interpretations
or principles; |
| ● | changes in senior management or key personnel; |
| ● | issuances, exchanges or sales, or expected issuances, exchanges
or sales of our capital stock or other securities such as this offering; |
| ● | adverse resolution of new or pending litigation against us;
and |
| ● | changes in general market, economic and political conditions
in the United States and global economies or financial markets, including those resulting from natural disasters, terrorist attacks,
acts of war, the current COVID-19 pandemic and responses to such events. |
These broad market and industry factors may seriously
harm the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the
market, securities class action litigation has often been instituted against companies. Such litigation, if instituted against us, could
result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our
business, financial condition, results of operations and growth prospects.
Risks Related to Our Business
There is substantial doubt about our ability
to continue as a going concern.
Since inception, the Company has generated recurring
losses which has resulted in an accumulated deficit and negative operating cash flows. The December 31, 2021 consolidated financial statements
were prepared under the assumption that we will continue as a going concern for the next twelve months. However, subsequent to the issuance
of the December 31, 2021 consolidated financial statements and based on our current assessment, management concluded that there is substantial
doubt about the Company’s ability to continue as a going concern. The Company's plan is to raise additional capital through this
offering and other capital-raising efforts to provide net proceeds which the Company believes will be sufficient to provide the liquidity
necessary to satisfy its obligations over the next twelve months.
Our ability to continue as a going concern is
dependent upon our ability to obtain additional equity or debt financing or generate profitable operations. Historically, we have funded
operations through issuances of common and preferred stock and through a reverse recapitalization via the Merger with IAC in October 2020.
We have also historically funded vehicle inventory purchases through our vehicle floorplan facilities. There can be no assurance that
additional financing will be available or will be available on commercially reasonable terms. The inclusion of disclosures expressing
substantial doubt about our ability to continue as a going concern could materially adversely affect our stock price and our ability to
raise new capital or enter into strategic alliances.
NOTE ON FORWARD-LOOKING STATEMENTS AND RISK
FACTOR SUMMARY
All statements, other than statements of historical
facts, contained in this prospectus supplement, and in the documents incorporated by reference in this prospectus supplement, including
statements regarding our future results of operations and financial position, business strategy and plans and objectives of management
for future operations, are forward-looking statements. The words “may,” “will,” “should,” “expects,”
“plans,” “anticipates,” “could,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue”
or the negative of these terms or other similar expressions are intended to identify forward-looking statements, although not all forward-looking
statements contain these identifying words. Forward-looking statements are not guarantees of future performance and our actual results
and developments may differ significantly from the results and developments discussed in the forward-looking statements. Factors that
might cause such differences include, but are not limited to, those discussed or incorporated by reference in “Risk Factors.”
Important factors that that may affect our actual
results and developments include, but are not limited to the following:
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general business and economic conditions and risks related to the larger automotive ecosystem; |
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competition, and the ability of the Company to grow and manage growth profitably; |
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our history of losses and ability to achieve or maintain profitability in the future; |
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our ability to sustain our current rate of growth; |
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our ability to establish our software as a platform to be used by automotive dealers; |
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risks relating to our inspection, reconditioning and storage hubs; |
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impacts of COVID-19 and other pandemics; |
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our reliance on third-party carriers for transportation: |
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our current geographic concentration where we provide reconditioning services and store inventory; |
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cyber-attacks or other privacy or data security incidents; |
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the impact of copycat websites; |
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failure to adequately protect our intellectual property, technology and confidential information; |
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our reliance on third-party service providers to provide financing; |
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the impact of federal and state laws related to financial services on our third-party service providers; |
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the impact of federal, state and local laws on our ability to obtain and maintain necessary dealer and financing licenses in the states in which we do business; |
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our ability to timely secure and maintain cost effective real estate locations in connection with the expansion of our business; |
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risks that impact the quality of our customer experience, our reputation, or our brand; |
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changes and ambiguity in the prices of new and used vehicles; |
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our ability to correctly appraise and price vehicles; |
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access to desirable vehicle inventory; |
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our ability to expeditiously sell inventory; |
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our ability to expand product offerings; |
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changes in applicable laws and regulations and our ability to comply with applicable laws and regulations; |
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access to additional debt and equity capital; |
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changes in technology and consumer acceptance of such changes; |
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our reliance on internet search engines, vehicle listing sites and social networking sites to help drive traffic to our website; |
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any restrictions on the sending of emails or messages or an inability to timely deliver such communications; |
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seasonal and other fluctuations in our quarterly results of operations; |
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competition in the markets in which we operate; |
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changes in the auto industry and conditions affecting automotive manufacturers; |
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natural disasters, adverse weather events and other catastrophic events; |
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our dependence on key personnel; |
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our ability to rapidly hire and retain qualified personnel necessary to grow our business as anticipated; |
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increases in labor costs; |
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our reliance on third-party technology and information systems; |
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our use of open-source software; |
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claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers; |
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significant disruptions in service on our platform; |
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changes in interest rates; |
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volatility in the price of our common stock; |
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issuances of our common stock and future sales of our common stock; |
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our ability to establish and maintain effective internal control over financial reporting; |
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our ability to continue as a going concern; and |
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other economic, business and/or competitive factors, risks and uncertainties, including those described in the section entitled “Risk Factors” beginning on page S-4 and the documents incorporated by reference in this prospectus supplement. |
In addition, our forward-looking statements do
not reflect the potential impact of any future financings, acquisitions, mergers, dispositions, joint ventures, or investments we may
make.
We may not actually achieve the plans, intentions,
and/or expectations disclosed in our forward-looking statements, and you should not rely unduly on our forward-looking statements. You
should read this prospectus supplement, and the documents incorporated by reference herein, completely and with the understanding our
actual future results and developments may be materially different from what we expect. We do not assume any obligation to update any
forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
USE OF PROCEEDS
We may issue and sell shares of our Class A common
stock having aggregate sales proceeds of up to $150 million from time to time. Because there is no minimum offering amount required as
a condition to any sales in this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable
at this time. There can be no assurance that we will sell any shares under or fully utilize the sales agreement with Cantor Fitzgerald
as a source of financing.
We intend to use the net proceeds, if any, from
the sale of our Class A common stock in this offering for working capital and general corporate purposes. We have not identified the amounts
we will spend on any specific purpose. The amounts actually expended for any purpose may vary significantly depending upon numerous factors,
including assessments of potential market opportunities. In the event any net proceeds are not immediately applied, we may temporarily
deposit them in our bank accounts as cash and cash equivalents or purchase short-term investments.
DILUTION
If you invest in our shares,
your ownership interest will be diluted to the extent of the difference between the price you paid per share of Class A common stock
in this offering and the net tangible book value per share of our Class A common stock after this offering. Net tangible book value per
share represents total tangible assets less total liabilities, divided by the number of shares of our Class A common stock outstanding.
Our net tangible book value as of December 31,
2021 was approximately $65.4 million, or approximately $0.80 per share of our Class A common stock issued and outstanding, on an unaudited
historical actual basis as of such date.
Our net tangible book value as of December 31, 2021 would have been approximately
$210.9 million, or approximately $1.08 per share of our Class A common stock issued and outstanding, on an unaudited pro forma as adjusted
basis as of such date, after giving further effect to the sale by us of 111,940,299 shares of our Class A common stock in this offering
at an assumed offering price of $1.34 per share, which was the last reported sale price of our Class A common stock on The Nasdaq Capital
Market on May 3, 2022, for aggregate gross proceeds of $150.0 million, and after deducting commissions and estimated aggregate offering
expenses payable by us. This represents an immediate increase in net tangible book value of $0.28 per share of our Class A common stock
to existing stockholders and an immediate dilution of $0.26 per share of our Class A common stock to new investors purchasing shares of
our Class A common stock in this offering at the assumed offering price.
The following table illustrates the dilution on
a per share of Class A common stock basis for investors purchasing shares of our Class A common stock in this offering:
| Assumed public offering price per share in this offering |
|
|
|
|
|
$ |
1.34 |
|
| Pro forma net tangible book value per share as of December 31, 2021 |
|
$ |
0.80 |
|
|
|
|
|
| Increase in net tangible book value attributable to this offering |
|
$ |
0.28 |
|
|
|
|
|
| Pro forma as adjusted net tangible book value per share as of December 31, 2021 |
|
|
|
|
|
$ |
1.08 |
|
| Dilution per share to new investors in this offering |
|
|
|
|
|
$ |
0.26 |
|
The per share calculations above are based on
the number of shares of our Class A common stock issued and outstanding as of December 31, 2021, as follows: 81,369,311 shares on an unaudited
historical actual basis, and 187,752,290 shares on an unaudited pro forma as adjusted basis.
The table above assumes, for illustrative purposes,
that an aggregate of 111,940,299 shares of our Class A common stock are sold at an offering price of $1.34 per share, the last reported
sale price of our Class A common stock on The Nasdaq Capital Market on May 3, 2022, for aggregate gross proceeds of $150.0 million. However,
the shares sold in this offering, if any, will be sold from time to time at various prices. Presented below, solely for illustrative purposes
only, is the effect of each of an increase and a decrease of the assumed offering price by $0.25 per share.
Assuming that an aggregate of 94,339,623 shares
of our Class A common stock are sold at an offering price of $1.59 per share, representing an increase of $0.25 per share from the assumed
offering price above, for aggregate gross proceeds of $150.0 million, after deducting commissions and estimated aggregate offering expenses
payable by us, our net tangible book value per share on a pro forma as adjusted basis would be $1.20 per share and the dilution in net
tangible book value per share to new investors would be $0.39 per share.
Assuming that an aggregate of 137,614,679 shares
of our Class A common stock are sold at an offering price of $1.09 per share, representing a decrease of $0.25 per share from the assumed
offering price above, for aggregate gross proceeds of $150.0 million, after deducting commissions and estimated aggregate offering expenses
payable by us, our net tangible book value per share on a pro forma as adjusted basis would be $0.96 per share and the dilution in net
tangible book value per share to new investors would be $0.13 per share.
The foregoing information does not take into account
the exercise or conversion of our outstanding 4.75% Convertible Senior Notes due 2026, shares of Class A common stock underlying currently
issued stock options and restricted stock units and shares of Class A common stock reserved for future issuance under our 2020 Omnibus
Equity Compensation Plan, as set forth in footnote 1 in “Prospectus Summary – The Offering.” To the extent that
other shares are issued, investors purchasing shares in this offering could experience further dilution. In addition, we may choose to
raise additional capital due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current
or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities,
the issuance of those securities could result in further dilution to investors in this offering.
DESCRIPTION OF CAPITAL STOCK
Upon consummation of the offering, 194,619,430
shares of our Class A common stock will be outstanding, assuming the sale of an aggregate of 111,940,299 shares of our Class A common
stock at an offering price of $1.34 per share, the last reported sale price of our Class A common stock on The Nasdaq Capital Market on
May 3, 2022, for aggregate gross proceeds of $150.0 million. This amount does not include the shares of our Class A common stock issuable
upon the exercise or conversion of our outstanding 4.75% Convertible Senior Notes due 2026, shares of Class A common stock underlying
currently issued stock options and restricted stock units and shares of Class A common stock reserved for future issuance under our 2020
Omnibus Equity Compensation Plan, as set forth in footnote 1 in “Prospectus Summary – The Offering.” We presently
are authorized to issue 500,000,000 shares of our Class A common stock. For a more complete description of our Class A common stock, please
see “Description of Capital Stock” in the accompanying base prospectus.
PLAN OF DISTRIBUTION
We have entered into a sales agreement with Cantor
Fitzgerald, under which we may issue and sell shares of our Class A common stock having an aggregate gross sales price of up to $150,000,000
from time to time through or to Cantor Fitzgerald acting as sales agent or principal. The sales agreement will be filed as an exhibit
to a Current Report on Form 8-K.
Following delivery of a placement notice and subject
to the terms and conditions of the sales agreement, Cantor Fitzgerald may offer and sell our Class A common stock by any method permitted
by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act. We may
instruct Cantor Fitzgerald not to sell Class A common stock if the sales cannot be effected at or above the price designated by us from
time to time. We or Cantor Fitzgerald may suspend the offering of Class A common stock upon notice and subject to other conditions.
We will pay Cantor Fitzgerald commissions, in
cash, for its services in acting as agent in the sale of our Class A common stock. Cantor Fitzgerald will be entitled to compensation
at a commission rate of 3.0% of the gross sales price per share sold. Because there is no minimum offering amount required as a condition
to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this
time. We have also agreed to reimburse Cantor Fitzgerald for certain specified fees and documented expenses, including the fees and documented
expenses of its legal counsel in an amount not to exceed $75,000. We estimate that the total expenses for the offering, excluding commissions
and reimbursements payable to Cantor Fitzgerald under the terms of the sales agreement, will be approximately $150,000.
Settlement for sales of Class A common stock will
occur on the second trading day following the date on which any sales are made, or on some other date that is agreed upon by us and Cantor
Fitzgerald in connection with a particular transaction, in return for payment of the net proceeds to us. Sales of our Class A common stock
as contemplated in this prospectus supplement will be settled through the facilities of The Depository Trust Company or by such other
means as we and Cantor Fitzgerald may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
Cantor Fitzgerald will use its commercially reasonable efforts consistent with its normal trading and sales practices, to solicit offers
to purchase the shares of Class A common stock under the terms and subject to the conditions set forth in the sales agreement. In connection
with the sale of the Class A common stock on our behalf, Cantor Fitzgerald will be deemed to be an “underwriter” within the
meaning of the Securities Act and the compensation of Cantor Fitzgerald will be deemed to be underwriting commissions or discounts. We
have agreed to provide indemnification and contribution to Cantor Fitzgerald against certain civil liabilities, including liabilities
under the Securities Act.
The offering of our Class A common stock pursuant
to the sales agreement will terminate as permitted therein. We and Cantor Fitzgerald may each terminate the sales agreement at any time
upon ten days’ prior notice.
Cantor Fitzgerald and its affiliates may in the
future provide various investment banking, commercial banking and other financial services for us and our affiliates, for which services
they may in the future receive customary fees. To the extent required by Regulation M, Cantor Fitzgerald will not engage in any market
making activities involving our Class A common stock while the offering is ongoing under this prospectus supplement.
This prospectus supplement in electronic format
may be made available on a website maintained by Cantor Fitzgerald, and Cantor Fitzgerald may distribute this prospectus supplement electronically.
Our Class A common stock is listed on The Nasdaq
Capital Market under the trading symbol “SFT.”
The transfer agent for our Class A common stock
to be issued in this offering is Continental Stock Transfer & Trust Company, located at 1 State Street, 30th Floor, New
York, NY 10004.
LEGAL MATTERS
The validity of the securities offered will be
passed upon for us by Jenner & Block LLP, New York, NY. Duane Morris LLP, New York, New York, is acting as counsel for Cantor
Fitzgerald in connection with this offering.
EXPERTS
The consolidated financial statements incorporated
in this prospectus supplement by reference from the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, have
been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, which is incorporated
herein by reference. Such consolidated financial statements have been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the Securities and Exchange Commission. Our SEC filings are available to the public over the
Internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at the SEC’s
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information
about the public reference room.
We have filed with the SEC a registration statement
under the Securities Act relating to the offering of these securities. The registration statement, including the attached exhibits, contains
additional relevant information about us and the securities. This prospectus does not contain all of the information set forth in the
registration statement. You can obtain a copy of the registration statement, at prescribed rates, from the SEC at the address listed above.
The registration statement and our SEC filings,
including the documents referred to below under “Information Incorporated by Reference,” are also available on our
website on the “Investor Relations” page at www.shift.com. We have not incorporated by reference into this prospectus
the information on our website, and you should not consider it to be a part of this prospectus.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate
by reference the information we file with it, which means that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. This prospectus incorporates by reference the documents listed below,
all filings we make under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the initial filing date of the registration statement
of which this prospectus forms a part and prior to effectiveness of such registration statement, and all filings we make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after effectiveness of such registration statement and prior to the sale
of all of the securities offered hereby:
| |
● |
Our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 16, 2022. |
| |
● |
Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2021, filed with the SEC on April 25, 2022. |
| |
● |
The description of our Common Stock contained in our Registration Statement on Form 8-A, dated March 18, 2019, and any amendment or report filed with the SEC for the purpose of updating the description. |
Any statement contained in a document filed before
the date of this prospectus and incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus
to the extent that a statement contained herein modifies or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this prospectus. Any information that we file after the date of
this prospectus with the SEC and incorporated by reference herein will automatically update and supersede the information contained in
this prospectus and in any document previously incorporated by reference in this prospectus. Notwithstanding the foregoing, we are not
incorporating any document or portion thereof or information deemed to have been furnished and not filed in accordance with SEC rule.
We will provide you with a copy of the documents
incorporated by reference in this prospectus, without charge, upon written or oral request directed to:
Shift Technologies, Inc.
290 Division Street, Suite 400
San Francisco, California 94103-4234
(855) 575-6739
Attn: Secretary
You may also access the documents incorporated
by reference as described under “Where You Can Find More Information.”
PROSPECTUS
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Units
Rights
This
prospectus relates to the offer and sale from time to time, in one or more offerings, together or separately, by Shift Technologies,
Inc. (the “Company”) of shares of its Class A common stock, par value $0.0001 (the “Class A common stock”), preferred
stock, debt securities, warrants or any combination of the foregoing, either individually or as units composed of one or more of the
other securities. We may also issue rights to purchase the securities offered in this prospectus. This prospectus provides you with a
general description of the securities. The aggregate public offering price of all securities issued by us under this prospectus may not
exceed $300,000,000.
Each
time we sell a particular class or series of securities, we will provide specific terms of the securities offered in a supplement to
this prospectus. The prospectus supplement and any related free writing prospectus may also add, update or change information contained
in this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings.
You should read carefully this prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as any
documents incorporated by reference herein or therein before you invest in any of our securities.
The
specific terms of any securities to be offered, and the specific manner in which they may be offered, will be described in one or more
supplements to this prospectus. This prospectus may not be used to consummate sales of any of these securities unless it is accompanied
by a prospectus supplement. Before investing, you should carefully read this prospectus and any related prospectus supplement.
Our Class A common stock
is traded on The Nasdaq Capital Market under the symbol “SFT.” On March 15, 2022, the last reported sale price of our Class A
common stock was $1.93 per share. The applicable prospectus supplement will contain information, where applicable, as to any other listing
on The Nasdaq Capital Market or any securities market or other exchange of the securities, if any, covered by the prospectus supplement.
Prospective purchasers of our securities are urged to obtain current information as to the market prices of our securities, where applicable.
These
securities may be sold directly by us, through dealers or agents designated from time to time, to or through underwriters, dealers, or
through a combination of these methods on a continuous or delayed basis. See “Plan of Distribution” in this
prospectus. We may also describe the plan of distribution for any particular offering of our securities in a prospectus supplement. If
any agents, underwriters or dealers are involved in the sale of any securities in respect of which this prospectus is being delivered,
we will disclose their names and the nature of our arrangements with them in a prospectus supplement. The price to the public of such
securities and the net proceeds we expect to receive from any such sale will also be included in a prospectus supplement.
We
are an “emerging growth company” as defined in Section 2(a) of the Securities Act and are subject to reduced public
company reporting requirements.
You
should read this prospectus and any amendment carefully before you invest in our securities.
Investing
in our securities involves risks. You should review carefully the risks and uncertainties described under the heading “Risk Factors”
beginning on page 2 of this prospectus as well as those contained in the supplemental risk factors contained in any applicable prospectus
supplement and our most recent Annual Report on Form 10-K and our most recently filed Quarterly Reports on Form 10-Q incorporated by
reference into this prospectus, and under similar headings in the other documents that are incorporated by reference into this prospectus.
Neither
the U.S. Securities and Exchange Commission (the “SEC”), nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus
is April 26, 2022.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is a part of a registration statement that we filed with the U.S. Securities and Exchange Commission (the “SEC”),
under the Securities Act of 1933, as amended (the “Securities Act”) using a “shelf” registration process. Under
this shelf registration statement, we may sell from time to time in one or more offerings of Class A common stock and preferred stock,
various series of debt securities and/or warrants to purchase any of such securities, either individually or as units comprised of a
combination of one or more of the other securities in one or more offerings up to a total dollar amount of $300,000,000. This prospectus
provides you with a general description of the securities we may offer. Each time we sell any type or series of securities under this
prospectus, we will provide a prospectus supplement that will contain more specific information about the terms of that offering.
This
prospectus does not contain all of the information included in the registration statement. For a more complete understanding of the offering
of the securities, you should refer to the registration statement, including its exhibits. We may add, update or change in a prospectus
supplement or free writing prospectus any of the information contained in this prospectus or in the documents we have incorporated by
reference into this prospectus. We may also authorize one or more free writing prospectuses to be provided to you that may contain material
information relating to these offerings. This prospectus, together with the applicable prospectus supplement, any related free writing
prospectus and the documents incorporated by reference into this prospectus and the applicable prospectus supplement, will include all
material information relating to the applicable offering. You should carefully read both this prospectus and the applicable prospectus
supplement and any related free writing prospectus, together with the additional information described under “Where You Can Find
Additional Information; Incorporation by Reference” in making your investment decision.
We
have not authorized any dealer, agent or other person to give any information or to make any representation other than those contained
or incorporated by reference in this prospectus, any accompanying prospectus supplement or any related free writing prospectus that we
may authorize to be provided to you. You must not rely upon any information or representation not contained or incorporated by reference
in this prospectus or an accompanying prospectus supplement, or any related free writing prospectus that we may authorize to be provided
to you. This prospectus, the accompanying prospectus supplement and any related free writing prospectus, if any, do not constitute an
offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which they relate, nor do
this prospectus, the accompanying prospectus supplement or any related free writing prospectus, if any, constitute an offer to sell or
the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation
in such jurisdiction. You should not assume that the information contained in this prospectus, any applicable prospectus supplement or
any related free writing prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any
information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference
(as our business, financial condition, results of operations and prospects may have changed since that date), even though this prospectus,
any applicable prospectus supplement or any related free writing prospectus is delivered or securities are sold on a later date.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference in this prospectus were made solely for the benefit of the parties to such agreement, including, in
some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly,
such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
This
prospectus may not be used to consummate sales of our securities, unless it is accompanied by a prospectus supplement. To the extent
there are inconsistencies between any prospectus supplement, this prospectus and any documents incorporated by reference, the document
with the most recent date will control.
As
permitted by the rules and regulations of the SEC, the registration statement, of which this prospectus forms a part, includes additional
information not contained in this prospectus. You may read the registration statement and the other reports we file with the SEC at the
SEC’s web site or at the SEC’s offices described below under the heading “Where You Can Find More Information; Incorporation
by Reference.”
Unless
otherwise indicated, any reference to Shift, or as “we”, “us”, or “our” refers to Shift Technologies,
Inc. and its consolidated subsidiaries (“Shift” or the “Company”).
PROSPECTUS
SUMMARY
This
summary highlights certain information about us, this prospectus, the documents incorporated by reference and the information appearing
elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before
making an investment decision. You should read this entire prospectus carefully, including the information referred to under the heading
“Risk Factors” of this prospectus and any prospectus supplement relating to a specific security, along with the financial
statements and other documents incorporated by reference before making an investment decision. See also the section entitled “Where
You Can Find More Information; Incorporation by Reference.” Some of the statements in this prospectus constitute forward-looking
statements. See “Cautionary Note Regarding Forward-Looking Statements.” These risks could materially affect our business,
results of operations or financial condition and affect the value of our securities. You could lose all or part of your investment.
Overview
The
Company is a leading end-to-end ecommerce platform transforming the used car industry with a technology-driven, hassle-free customer
experience. The Company’s mission is to make car purchase and ownership simple — to make buying or selling a used car fun,
fair, and accessible to everyone. The Company provides comprehensive, technology-driven solutions throughout the car ownership lifecycle:
finding the right car, having a test drive brought to you before buying the car, a seamless digitally-driven purchase transaction including
financing and vehicle protection products, an efficient, digital trade-in/sale transaction, and a vision to provide high-value support
services during car ownership. Each of these steps is powered by the Company’s software solutions, mobile transactions platform,
and scalable logistics, combined with our centralized inspection, reconditioning & storage centers, called hubs.
Risk
Factors
There
are a number of risks related to our business and our securities that you should consider before making an investment decision. You should
carefully consider all the information presented in the section entitled “Risk Factors” beginning on page 2 of
this prospectus and the other information contained in this prospectus. Before making any investment decision, you should carefully consider
these risks as well as other information we include or incorporate by reference in this prospectus or in any applicable prospectus supplement.
Background
Insurance
Acquisition Corp. (“IAC”) was formed in March 2018 as a special purpose acquisition company for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination, with one or
more businesses or assets (the “initial business combination”). Shift was launched in 2014 and is an auto ecommerce platform
that enables customers to buy, sell and test drive cars and purchase ancillary products and services. On October 13, 2020, IAC acquired
Shift (which we refer to as “the Merger”) and changed its name to Shift Technologies, Inc. in connection with the Merger.
Prior to the Merger, IAC’s common stock, units and warrants traded on The Nasdaq Capital Market under the symbols “INSU,”
“INSUU” and “INSUW,” respectively. Pursuant to the Merger, the Company continued the listing of its common stock
and warrants on The Nasdaq Capital Market under the symbols “SFT” and “SFTTW,” respectively, effective October
15, 2020. Since January 2021, the Company does not have any publicly registered warrants issued and outstanding.
Presentation
of Financial Operating Data
The
Merger was accounted for as a reverse recapitalization in accordance with U.S. generally accepted accounting principles (“GAAP”).
Under this method of accounting, IAC, who was the legal acquirer in the Merger, was treated as the “acquired” company for
financial reporting purposes and Shift was treated as the accounting acquirer. This determination was primarily based on Shift having
a majority of the voting power of the Company, Shift’s senior management comprising substantially all of the senior management
of the Company, the relative size of Shift compared to IAC, and Shift’s operations comprising the ongoing operations of the Company.
Accordingly, for accounting purposes, the Merger was treated as the equivalent of a capital transaction in which Shift was issuing stock
for the net assets of IAC. The net assets of IAC are stated at historical cost, with no goodwill or other intangible assets recorded.
Operations prior to the Merger are those of Shift.
Emerging
Growth Company
We
are an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective
or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such
extended transition period which means that when a standard is issued or revised and it has different application dates for public or
private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt
the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because
of the potential differences in accounting standards used.
We
will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary
of the closing of our initial public offering, (b) in which we have total annual revenue of at least $1.07 billion, or (c) in which we
are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds
$700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than
$1.00 billion in non-convertible debt securities during the prior three-year period.
Corporate
Information
The
mailing address of the Company’s principal executive office is 290 Division Street, Suite 400, San Francisco, CA 94103 and
the telephone number is (855) 575-6739. Our website address is www.shift.com. The information found on the website is not
part of, and is not incorporated into, this prospectus.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. Before making an investment decision, you should consider carefully the risks and uncertainties
described under the heading “Risk Factors” in any applicable prospectus supplement and the risks described in the sections
entitled “Risk Factors” in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on form 10-Q, as filed
with the SEC, which are incorporated herein by reference in their entirety, as well any amendment or updates to our risk factors reflected
in subsequent filings with the SEC. Our business, financial condition, results of operations or prospects could be materially adversely
affected by any of these risks. The trading price of our securities could decline due to any of these risks, and you may lose all or
part of your investment. This prospectus and the documents incorporated herein by reference also contain forward-looking statements that
involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements
as a result of certain factors, including the risks mentioned elsewhere in this prospectus. For more information, see the section entitled
“Where You Can Find More Information; Incorporation by Reference.” Please also read carefully the section entitled “Cautionary
Note Regarding Forward-Looking Statements.”
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus, any prospectus supplement and the documents incorporated by reference herein and the exhibits attached hereto contain “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future events
or our future results of operations, financial condition, business, strategies, financial needs, and the plans and objectives of management,
are forward-looking statements. In some cases forward-looking statements can be identified because they contain words such as “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intend,”
“may,” “might,” “likely,” “plan,” “possible,” “potential,” “predict,”
“project,” “seek,” “should,” “target,” “will,” “would,” or similar
expressions and the negatives of those terms. Forward-looking statements are based on information available to our management as of the
date of this prospectus or any prospectus supplement and our management’s good faith belief as of such date with respect to future
events and are subject to a number of risks, uncertainties, and assumptions that could cause actual performance or results to differ
materially from those expressed in or suggested by the forward-looking statements, in particular the substantial risks and uncertainties
related to the ongoing COVID-19 pandemic. Important factors that could cause such differences include, but are not limited to:
| ● | general
business and economic conditions and risks related to the larger automotive ecosystem; |
| ● | competition,
and the ability of the Company to grow and manage growth profitably; |
| ● | our
history of losses and ability to achieve or maintain profitability in the future; |
| ● | our
ability to sustain our current rate of growth; |
| ● | our
ability to establish our software as a platform to be used by automotive dealers; |
| |
● |
risks relating to our inspection, reconditioning
and storage hubs; |
| ● | impacts
of COVID-19 and other pandemics; |
| ● | our
reliance on third-party carriers for transportation: |
| ● | our
current geographic concentration where we provide reconditioning services and store inventory; |
| ● | cyber-attacks
or other privacy or data security incidents; |
| ● | the
impact of copycat websites; |
| ● | failure
to adequately protect our intellectual property, technology and confidential information; |
| ● | our
reliance on third-party service providers to provide financing; |
| ● | the
impact of federal and state laws related to financial services on our third-party service
providers; |
| ● | the
impact of federal, state and local laws on our ability to obtain and maintain necessary dealer
and financing licenses in the states in which we do business; |
| ● | our
ability to timely secure and maintain cost effective real estate locations in connection
with the expansion of our business; |
| ● | risks
that impact the quality of our customer experience, our reputation, or our brand; |
| ● | changes
and ambiguity in the prices of new and used vehicles; |
| ● | our
ability to correctly appraise and price vehicles; |
| ● | access
to desirable vehicle inventory; |
| ● | our
ability to expeditiously sell inventory; |
| ● | our
ability to expand product offerings; |
| ● | changes
in applicable laws and regulations and our ability to comply with applicable laws and regulations; |
| ● | access
to additional debt and equity capital; |
| ● | changes
in technology and consumer acceptance of such changes; |
| ● | our
reliance on internet search engines, vehicle listing sites and social networking sites to
help drive traffic to our website; |
| ● | any
restrictions on the sending of emails or messages or an inability to timely deliver such
communications; |
| ● | seasonal
and other fluctuations in our quarterly results of operations; |
| ● | competition
in the markets in which we operate; |
| ● | changes
in the auto industry and conditions affecting automotive manufacturers; |
| ● | natural
disasters, adverse weather events and other catastrophic events; |
| ● | our
dependence on key personnel; |
| ● | our
ability to rapidly hire and retain qualified personnel necessary to grow our business as
anticipated; |
| ● | increases
in labor costs; |
| ● | our
reliance on third-party technology and information systems; |
| ● | our
use of open-source software; |
| ● | claims
asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged
trade secrets of their current or former employers; |
| ● | significant
disruptions in service on our platform; |
| ● | changes
in interest rates; |
| ● | volatility
in the price of our common stock; |
| ● | issuances
of our common stock and future sales of our common stock; |
| ● | our
ability to establish and maintain effective internal control over financial reporting; and |
| ● | other
economic, business and/or competitive factors, risks and uncertainties, including those described
in the section entitled “Risk Factors” beginning on page 2. |
Should
one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially
from those anticipated, believed, estimated or expected. We caution readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events
or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, except as may
be required under applicable securities law.
We
qualify all of the forward-looking statements contained in this prospectus or any prospectus supplement by the foregoing cautionary statements.
USE
OF PROCEEDS
Unless
stated otherwise in a prospectus supplement, the net proceeds from the sale of securities described in this prospectus will be used for
general corporate purposes.
PLAN
OF DISTRIBUTION
We
may sell the securities being offered hereby in one or more of the following ways from time to time:
| ● | through
agents to the public or to investors; |
| ● | to
underwriters for resale to the public or to investors; |
| ● | negotiated
transactions; |
| ● | directly
to investors; or |
| ● | through
a combination of any of these methods of sale. |
As
set forth in more detail below, the securities may be distributed from time to time in one or more transactions:
| ● | at
a fixed price or prices, which may be changed; |
| ● | at
market prices prevailing at the time of sale; |
| ● | at
prices related to such prevailing market prices; or |
We
will set forth in a prospectus supplement the terms of that particular offering of securities, including:
| ● | the
name or names of any agents or underwriters; |
| ● | the
purchase price of the securities being offered and the proceeds we will receive from the
sale; |
| ● | any
over-allotment options under which underwriters may purchase additional securities from us; |
| ● | any
agency fees or underwriting discounts and other items constituting agents’ or underwriters’
compensation; |
| ● | any
initial public offering price; |
| ● | any
discounts or concessions allowed or re-allowed or paid to dealers; and |
| ● | any
securities exchanges or markets on which such securities may be listed. |
Only
underwriters named in an applicable prospectus supplement are underwriters of the securities offered by that prospectus supplement.
If
underwriters are used in an offering, we will execute an underwriting agreement with such underwriters and will specify the name of each
underwriter and the terms of the transaction (including any underwriting discounts and other terms constituting compensation of the underwriters
and any dealers) in a prospectus supplement. The securities may be offered to the public either through underwriting syndicates represented
by managing underwriters or directly by one or more investment banking firms or others, as designated. If an underwriting syndicate is
used, the managing underwriter(s) will be specified on the cover of the prospectus supplement. If underwriters are used in the sale,
the offered securities will be acquired by the underwriters for their own accounts and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale.
Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.
Unless otherwise set forth in the prospectus supplement, the obligations of the underwriters to purchase the offered securities will
be subject to conditions precedent and the underwriters will be obligated to purchase all of the offered securities if any are purchased.
We
may grant to the underwriters options to purchase additional securities to cover over-allotments, if any, at the public offering price,
with additional underwriting commissions or discounts, as may be set forth in a related prospectus supplement. The terms of any over-allotment
option will be set forth in the prospectus supplement for those securities.
If
we use a dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, we will sell the
securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by
the dealer at the time of resale. The names of the dealers and the terms of the transaction will be specified in a prospectus supplement.
We
may sell the securities directly or through agents we designate from time to time. We will name any agent involved in the offering and
sale of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement
states otherwise, any agent will act on a best-efforts basis for the period of its appointment.
If
we use a dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, we will sell the
securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by
the dealer at the time of resale. The names of the dealers and the terms of the transaction will be specified in a prospectus supplement.
We
may sell the securities directly or through agents we designate from time to time. We will name any agent involved in the offering and
sale of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement
states otherwise, any agent will act on a best-efforts basis for the period of its appointment.
We
may authorize agents or underwriters to solicit offers by institutional investors to purchase securities from us at the public offering
price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified
date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts
in the prospectus supplement.
In
connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers of the
common stock for whom they act as agents in the form of discounts, concessions or commissions. Underwriters may sell the securities to
or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters
or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution
of the securities, and any institutional investors or others that purchase common stock directly and then resell the securities, may
be deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of the common stock
by them may be deemed to be underwriting discounts and commissions under the Securities Act.
We
may provide agents and underwriters with indemnification against particular civil liabilities, including liabilities under the Securities
Act, or contribution with respect to payments that the agents or underwriters may make with respect to such liabilities. Agents and underwriters
may engage in transactions with, or perform services for, us in the ordinary course of business.
We
may engage in at the market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act. In
addition, we may enter into derivative transactions with third parties (including the writing of options), or sell securities not covered
by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection
with such a transaction, the third parties may, pursuant to this prospectus and the applicable prospectus supplement, sell securities
covered by this prospectus and the applicable prospectus supplement. If so, the third party may use securities borrowed from us or others
to settle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge securities
covered by this prospectus and the applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event
of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement.
The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement or in
a post-effective amendment.
To
facilitate an offering of a series of securities, persons participating in the offering may engage in transactions that stabilize, maintain,
or otherwise affect the market price of the securities. This may include over-allotments or short sales of the securities, which involves
the sale by persons participating in the offering of more securities than have been sold to them by us. In those circumstances, such
persons would cover such over-allotments or short positions by purchasing in the open market or by exercising the over-allotment option
granted to those persons. In addition, those persons may stabilize or maintain the price of the securities by bidding for or purchasing
securities in the open market or by imposing penalty bids, whereby selling concessions allowed to underwriters or dealers participating
in any such offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect
of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise
prevail in the open market. Such transactions, if commenced, may be discontinued at any time. We make no representation or prediction
as to the direction or magnitude of any effect that the transactions described above, if implemented, may have on the price of our securities.
Unless
otherwise specified in the applicable prospectus supplement, each class or series of securities will be a new issue with no established
trading market, other than our common stock, which is listed on The Nasdaq Capital Market. We may elect to list any other class or series
of securities on any exchange or market, but we are not obligated to do so. It is possible that one or more underwriters may make a market
in a class or series of securities, but the underwriters will not be obligated to do so and may discontinue any market making at any
time without notice. We cannot give any assurance as to the liquidity of the trading market for any of the securities.
In
order to comply with the securities laws of some U.S. states or territories, if applicable, the securities offered pursuant to this prospectus
will be sold in those states only through registered or licensed brokers or dealers. In addition, in some states securities may not be
sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification
requirement is available and complied with.
Any
underwriter may engage in overallotment, stabilizing transactions, short covering transactions and penalty bids in accordance with Regulation
M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Overallotment involves sales in excess of the
offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Short covering transactions involve purchases of the securities in the open market
after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from
a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities
may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of
these activities at any time.
Any
underwriters who are qualified market makers on The Nasdaq Capital Market may engage in passive market making transactions in the securities
on The Nasdaq Capital Market in accordance with Rule 103 of Regulation M, during the business day prior to the pricing of the offering,
before the commencement of offers or sales of the securities. Passive market makers must comply with applicable volume and price limitations
and must be identified as passive market makers. In general, a passive market maker must display its bid at a price not in excess of
the highest independent bid for such security. If all independent bids are lowered below the passive market maker’s bid, however,
the passive market maker’s bid must then be lowered when certain purchase limits are exceeded.
DESCRIPTION
OF SECURITIES
We
may offer, from time to time, in one or more offerings, up to $300,000,000 of the following securities:
| ● | any
combination of the foregoing securities. |
The aggregate initial offering price of the offered securities that
we may issue will not exceed $300,000,000.
This
prospectus contains a summary of the general terms of the various securities that we may offer. The prospectus supplement relating to
any particular securities offered will describe the specific terms of the securities, which may be in addition to or different from the
general terms summarized in this prospectus. Because the summary in this prospectus and in any prospectus supplement does not contain
all of the information that you may find useful, you should read the documents relating to the securities that are described in this
prospectus or in any applicable prospectus supplement. Please read “Where You Can Find More Information; Incorporation by Reference”
to find out how you can obtain a copy of those documents.
The
applicable prospectus supplement will also contain the terms of a given offering, the initial offering price and our net proceeds. Where
applicable, a prospectus supplement will also describe any material United States federal income tax consequences relating to the securities
offered and indicate whether the securities offered are or will be quoted or listed on any quotation system or securities exchange.
DESCRIPTION
OF CAPITAL STOCK
We
have one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our Class A common stock,
par value $0.0001 per share.
The
general terms and provisions of our Class A common stock are summarized below. This summary does not purport to be complete and is subject
to, and qualified in its entirety by express reference to, the provisions of our Second Amended and Restated Certificate of Incorporation
(our “Charter”) and our Second Amended and Restated Bylaws (our “Bylaws”). Our Charter and our Bylaws have been
filed as exhibits to our periodic reports filed with the SEC, which are incorporated by reference in this prospectus. You should read
our Charter and our Bylaws for additional information before you invest in any of our securities. See “Where You Can Find More
Information; Incorporation by Reference.”
Authorized
Capital Stock
Our authorized capital stock consists
of 500,000,000 shares of Class A common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001
per share. As of March 11, 2022, there were 82,945,120 shares of our Class A common stock outstanding.
Our
board of directors (the “Board of Directors”) has authority at any time and from time to time to issue preferred stock of
one or more series and, in connection with the creation of each such series, to fix the voting rights (if any), designations, powers,
preferences, the relative, participating, optional or other special rights and any qualifications, limitations or restrictions thereof,
of such series to the full extent permitted by our Charter and the laws of the State of Delaware.
Dividends
Subject
to applicable law and any preferential rights of the holders of any then-outstanding shares of any series of preferred stock, holders
of our Class A common stock are entitled to receive such dividends, if any, as from time to time may be declared by our Board of Directors.
The declaration of dividends on our Class A common stock is a business decision to be made by our Board of Directors in its discretion
from time to time based upon our revenues and earnings, if any, capital requirements and general financial condition, as well as the
provisions of the Delaware General Corporation Law (“DGCL”) affecting the payment of dividends and distributions to stockholders
and any other factors as our Board of Directors may consider relevant.
Voting
Rights
Subject
to applicable law or the resolution or resolutions of our Board of Directors providing for the issue of any series of preferred stock,
the holders of outstanding shares of our Class A common stock shall exclusively possess voting power for the election of directors and
for all other matters to be voted on by stockholders. Each holder of our Class A common stock is entitled to one vote for each share
of Class A common stock standing in its name. Unless otherwise required by applicable law, any action at a meeting at which a quorum
is present will be decided by a majority of the votes properly cast, except the election of directors will be decided by a plurality
of votes cast. Our Charter does not provide for cumulative voting for the election of directors, with the result that the holders of
more than 50% of the shares voted for the election of directors can elect all of the directors.
Liquidation
In
the event of any liquidation, dissolution or winding up of the Company, after payment in full of the preferential amounts, if any, to
be distributed to the holders of any then-outstanding shares of preferred stock having a preference over our common stock, the holders
of our Class A common stock shall be entitled to share, ratably according to the number of shares of Class A common stock held by them,
in all remaining assets of the Company available for distribution to our stockholders.
Preemptive
or Other Rights
Holders
of our Class A common stock have no preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable
to our Class A common stock.
Fully
Paid and Nonassessable
All
outstanding shares of our Class A common stock are fully paid and not liable to any further call or assessments by us.
Certain
Anti-Takeover Provisions
Our
Charter, our Bylaws and the DGCL contain certain provisions that could delay or make more difficult an acquisition of control of us that
is not approved by our Board of Directors, whether by means of a tender offer, open-market purchases, a proxy contest or otherwise. These
provisions could have the effect of discouraging third parties from making proposals involving an acquisition or change of control of
us, even though such a proposal, if made, might be considered desirable by a majority of our stockholders. These provisions also may
have the effect of making it more difficult for third parties to cause the replacement of our current management without the concurrence
of our Board of Directors. Set forth below is a description of various provisions contained in our Charter, our Bylaws and the DGCL that
could impede or delay an acquisition of control of us that our Board of Directors has not approved. This description is intended as a
summary only and is subject to, and qualified in its entirety by reference to, our Charter and our Bylaws, as well as the DGCL.
Delaware
Anti-Takeover Statute
We
are subject to Section 203 of the DGCL. In general, Section 203 provides that a Delaware corporation with a class of voting stock listed
on a national securities exchange or held of record by more than 2,000 stockholders may not engage in various business combination transactions
with any interested stockholder for a period of three years following the time that such stockholder became an interested stockholder
unless:
| a. | our
Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested
stockholder prior to the time that stockholder became an interested stockholder; |
| b. | upon
consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding, for purposes of determining
the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, shares owned (i) by persons who
are directors and also officers and (ii) by certain employee stock plans); or |
| c. | at
or subsequent to such time the business combination is approved by our Board of Directors and authorized at an annual or special meeting
of stockholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder. |
In
general, a “business combination” is broadly defined to include (i) any merger or consolidation of the corporation or any
of its direct or indirect majority-owned subsidiaries with the interested stockholder; (ii) any sale, lease or other disposition (except
proportionally as a stockholder of the corporation) to or with the interested stockholder of assets of the corporation or of any direct
or indirect majority-owned subsidiary of the corporation, which assets have a market value equal to 10% or more of either the aggregate
market of all of the assets of the corporation determined on a consolidated basis or the aggregate market value of all the outstanding
stock of the corporation; (iii) subject to certain exceptions, any transaction which results in the issuance or transfer by the corporation
or by any of its direct or indirect majority-owned subsidiaries of any stock of the corporation or of such subsidiary to the interested
stockholder; (iv) subject to certain exceptions, any transaction involving the corporation or any of its direct or indirect majority-owned
subsidiaries which has the effect of increasing the proportionate share of the stock of any class or series of the corporation or of
any such subsidiary which is owned by the interested stockholder; and (v) subject to certain exceptions, any receipt by the interested
stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of such corporation), of any loans, advances
or other financial benefits provided by or through the corporation or any direct or indirect majority-owned subsidiary. In general, an
“interested stockholder” is any person (other than the corporation and any direct or indirect majority-owned subsidiary of
the corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the corporation or (ii) is an affiliate or associate
of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within the three-year
period immediately prior to the date of determination, and the affiliates and associates of such person.
The
DGCL permits a corporation to “opt out” of, or choose not to be governed by, the restrictions in Section 203 of the
DGCL by expressly stating so in its original certificate of incorporation (or in a subsequent amendment to its certificate of incorporation
or bylaws approved by its stockholders). However, neither our Charter nor our Bylaws contains a provision electing to opt out of Section
203.
Advance
Notice Requirements
Stockholders
wishing to nominate persons for election to our Board of Directors at an annual meeting or to propose any business to be considered by
our stockholders at an annual meeting must comply with certain advance notice and other procedures and requirements set forth in our
Bylaws. Likewise, if our Board of Directors has (or if stockholders, in compliance with certain provisions of our Bylaws, have) determined
that one or more directors shall be elected at a special meeting of stockholders, stockholders wishing to nominate persons for election
to our Board of Directors at such special meeting must comply with certain advance notice and other procedures and requirements set forth
in our Bylaws.
Special
Meetings
Our
Bylaws provide that, subject to the rights of the holders of any then-outstanding shares of any series of preferred stock, a special
meeting of stockholders may be called only by the Chairman of the Board, the Chief Executive Officer, or the Board of Directors
pursuant to a resolution adopted by a majority of the Board of Directors. Such meetings may not be called by any other person.
Number
of Directors; Board Vacancies
Our
Charter provides that the number of directors shall be fixed from time to time exclusively by our Board of Directors pursuant to a resolution
adopted by a majority of our Board of Directors; however, the number of directors is eight (8). Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled by a majority vote of the remaining directors then in
office, although less than a quorum, or by a sole remaining director. Each director so appointed shall hold office for the remainder
of the full term of the class of directors to which the new directorship was added or in which the vacancy occurred and until his or
her successor has been elected and qualified, or until such director’s earlier death, removal or resignation.
Classified
Board
Our
Charter provides that our Board of Directors is divided into three classes of directors, with the classes as nearly equal in number as
possible, and with the directors serving three-year terms. As a result, approximately one-third of our Board is elected each year. The
classification of directors has the effect of making it more difficult for stockholders to change the composition of our Board.
Additional
Authorized Shares of Capital Stock
The
additional shares of authorized common stock and preferred stock available for issuance under our Charter could be issued at such times,
under such circumstances and with such terms and conditions as to impede a change in control.
Amendments
to Bylaws
Our
Board of Directors may adopt, amend, alter or repeal our Bylaws, except with respect to the indemnifications provisions under Article
VIII. Stockholders may adopt, amend, alter or repeal our Bylaws upon obtaining (i) the affirmative vote of the holders of at least a
majority of all outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting
together as a single class, and (ii) any other vote of the holders of any class or series of capital stock of the Corporation required
by applicable law, our Charter or our Bylaws; provided, however, that an amendment with respect to the indemnifications
provisions under Article VIII shall require the affirmative vote of the stockholders holding at least 66.7% of the voting power of all
outstanding shares of capital stock of the Company.
No
Written Consent of Stockholders
Our
Charter and our Bylaws provide that any action required or permitted to be taken by stockholders must be effected at a duly called
annual or special meeting of stockholders and may not be effected by any consent in writing by such stockholders.
Limitations
on Liability and Indemnification of Officers and Directors
Our
Charter limits the liability of its officers and directors and provides that the Company will indemnify its officers and directors, in
each case, to the fullest extent permitted by the DGCL.
Stock
Exchange Listing
Our
shares of Class A common stock are listed on The Nasdaq Capital Market under the symbol “SFT.”
Transfer
Agent
The
transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company.
DESCRIPTION
OF DEBT SECURITIES
The
following description, together with the additional information we include in any applicable prospectus supplement, summarizes certain
general terms and provisions of the debt securities that we may offer under this prospectus. When we offer to sell a particular series
of debt securities, we will describe the specific terms of the series in a supplement to this prospectus. We will also indicate in the
prospectus supplement the extent to which the general terms and provisions described in this prospectus apply to a particular series
of debt securities.
We
may issue debt securities either separately, or together with, or upon the conversion or exercise of or in exchange for, other securities
described in this prospectus. Debt securities may be our senior, senior subordinated or subordinated obligations and, unless otherwise
specified in a supplement to this prospectus, the debt securities will be our direct, unsecured obligations and may be issued in one
or more series.
The
debt securities will be issued under an indenture between us and a trustee to be identified in the applicable prospectus supplement.
We have summarized select portions of the indenture below. The summary is not complete. The form of the indenture has been filed as an
exhibit to the registration statement of which this prospectus forms a part and you should read the indenture for provisions that may
be important to you. In the summary below, we have included references to the section numbers of the indenture so that you can easily
locate these provisions. Capitalized terms used in the summary and not defined herein have the meanings specified in the indenture.
As
used in this section only, “Shift,” “we,” “our” or “us” refer to Shift Technologies,
Inc., excluding its subsidiaries, unless expressly stated or the context otherwise requires.
General
The
terms of each series of debt securities will be established by or pursuant to a resolution of our board of directors and set forth or
determined in the manner provided in a resolution of our board of directors, in an officer’s certificate or by a supplemental indenture.
The particular terms of each series of debt securities will be described in a prospectus supplement relating to such series (including
any pricing supplement or term sheet).
We
can issue an unlimited amount of debt securities under the indenture that may be in one or more series with the same or various maturities,
at par, at a premium, or at a discount. We will set forth in a prospectus supplement (including any pricing supplement or term sheet)
relating to any series of debt securities being offered, the aggregate principal amount and the following terms of the debt securities,
if applicable:
| ● | the
title and ranking of the debt securities (including the terms of any subordination provisions); |
| ● | the
price or prices (expressed as a percentage of the principal amount) at which we will sell the debt securities; |
| ● | any
limit on the aggregate principal amount of the debt securities; |
| ● | the
date or dates on which the principal of and premium, if any, on the debt securities is payable and/or the method of determination thereof; |
| ● | the
place or places where payments will be made; |
| ● | the
rate or rates (which may be fixed or variable) per annum or the method used to determine the rate or rates (including any commodity,
commodity index, stock exchange index or financial index) at which the debt securities will bear interest, the date or dates from which
interest will accrue, the date or dates on which interest will commence and be payable and any regular record date for the interest payable
on any interest payment date; |
| ● | place
or places where principal of, and interest, if any, on the debt securities will be payable (and the method of such payment), where the
securities of such series may be surrendered for registration of transfer or exchange, and where notices and demands to us in respect
of the debt securities may be delivered; |
| ● | the
right, if any, to extend the interest payment periods and the duration of such extension; |
| ● | the
period or periods within which, the price or prices at which and the terms and conditions upon which we may redeem the debt securities; |
| ● | the
obligation, if any, of Shift to redeem or purchase debt securities of the series pursuant to any sinking fund or analogous provisions
(including payments made in cash in participation of future sinking fund obligations) or at the option of a holder thereof and the period
or periods within which (or manner of determining the same), the price or prices at which (or manner of determining the same), and the
terms and |
| ● | conditions
upon which, debt securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; |
| ● | the
dates on which and the price or prices at which we will repurchase debt securities at the option of the holders of debt securities and
other detailed terms and provisions of these repurchase obligations; |
| ● | the
form of the debt securities of the series, including the form of the trustee’s certificate of authentication for such series and
any legends or endorsements to be placed thereon; |
| ● | the
denominations in which the debt securities will be issued, if other than denominations of $1,000 and any integral multiple thereof; |
| ● | whether
the debt securities will be issued in the form of certificated debt securities or global debt securities; |
| ● | the
portion of principal amount of the debt securities payable upon declaration of acceleration of the maturity date, if other than the principal
amount; |
| ● | the
currency of denomination of the debt securities, which may be U.S. Dollars or any foreign currency, and if such currency of denomination
is a composite currency, the agency or organization, if any, responsible for overseeing such composite currency; |
| ● | the
designation of the currency, currencies or currency units in which payment of principal of, premium and interest on the debt securities
will be made; |
| ● | if
payments of principal of, premium or interest on the debt securities will be made in one or more currencies or currency units other than
that or those in which the debt securities are denominated, the manner in which the exchange rate with respect to these payments will
be determined; |
| ● | the
manner in which the amounts of payment of principal of, premium, if any, or interest on the debt securities will be determined, if these
amounts may be determined by reference to an index based on a currency or currencies other than that in which the debt securities are
denominated or designated to be payable or by reference to a commodity, commodity index, stock exchange index or financial index; |
| ● | any
provisions relating to any security provided for the debt securities; |
| ● | any
addition to, deletion of or change in the Events of Default described in this prospectus or in the indenture with respect to the debt
securities and any change in the acceleration provisions described in this prospectus or in the indenture with respect to the debt securities; |
| ● | any
addition to, deletion of or change in the covenants described in this prospectus or in the indenture with respect to the debt securities; |
| ● | the
provisions, if any, relating to conversion or exchange of any securities of such series, including if applicable, the conversion or exchange
price and period, provisions as to whether conversion or exchange will be mandatory, the events requiring an adjustment of the conversion
or exchange price and provisions affecting conversion or exchange; |
| ● | if
other than the trustee, the identity of the trustee, the registrar, paying agent and custodian for the depositary; |
| ● | if
other than The Depository Trust Company, the identity of the depositary; and |
| ● | any
other terms of the debt securities, which may supplement, modify or delete any provision of the indenture as it applies to that series,
including any terms that may be required under applicable law or regulations or advisable in connection with the marketing of the securities. |
We
may issue debt securities that provide for an amount less than their stated principal amount to be due and payable upon declaration of
acceleration of their maturity pursuant to the terms of the indenture. We will provide you with information on the federal income tax
considerations and other special considerations applicable to any of these debt securities in the applicable prospectus supplement.
If
we denominate the purchase price of any of the debt securities in a foreign currency or currencies or a foreign currency unit or units,
or if the principal of and any premium and interest on any series of debt securities is payable in a foreign currency or currencies or
a foreign currency unit or units, we will provide you with information on the restrictions, elections, general tax considerations, specific
terms and other information with respect to that issue of debt securities and such foreign currency or currencies or foreign currency
unit or units in the applicable prospectus supplement.
Transfer
and Exchange
Each
debt security will be represented by either one or more global securities registered in the name of The Depository Trust Company, or
the Depositary, or a nominee of the Depositary (we will refer to any debt security represented by a global debt security as a “book-entry
debt security”), or a certificate issued in definitive registered form (we will refer to any debt security represented by a certificated
security as a “certificated debt security”) as set forth in the applicable prospectus supplement. Except as set forth under
the heading “Global Debt Securities and Book-Entry System” below, book-entry debt securities will not be issuable in certificated
form.
Certificated
Debt Securities. You may transfer or exchange certificated debt securities at any office we maintain for this purpose in
accordance with the terms of the indenture. No service charge will be made for any transfer or exchange of certificated debt
securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with
a transfer or exchange.
You
may effect the transfer of certificated debt securities and the right to receive the principal of, premium and interest on certificated
debt securities only by surrendering the certificate representing those certificated debt securities and either reissuance by us or the
trustee of the certificate to the new holder or the issuance by us or the trustee of a new certificate to the new holder.
Global
Debt Securities and Book-Entry System. Each global debt security representing book-entry debt securities will be deposited with,
or on behalf of, the Depositary, and registered in the name of the Depositary or a nominee of the Depositary.
Covenants
We
will set forth in the applicable prospectus supplement any restrictive covenants applicable to any issue of debt securities.
No
Protection In the Event of a Change of Control
Unless
we state otherwise in the applicable prospectus supplement, the debt securities will not contain any provisions which may afford holders
of the debt securities protection in the event we have a change in control or in the event of a highly leveraged transaction (whether
or not such transaction results in a change in control) which could adversely affect holders of debt securities.
Consolidation,
Merger and Sale of Assets
We
may not consolidate with or merge with or into, or convey, transfer or lease all or substantially all of our properties and assets to
any person (a “successor person”) unless:
| ● | we
are the surviving corporation or the successor person (if other than us) is a corporation organized and validly existing under the laws
of any U.S. domestic jurisdiction and expressly assumes our obligations on the debt securities and under the indenture; and |
| ● | immediately
after giving effect to the transaction, no Default or Event of Default, shall have occurred and be continuing. |
Notwithstanding
the above, any of our subsidiaries may consolidate with, merge into or transfer all or part of its properties to us.
Events
of Default
“Event
of Default” means with respect to any series of debt securities, any of the following:
| ● | default
in the payment of any interest upon any debt security of that series when it becomes due and payable, and continuance of that default
for a period of 30 days (unless the entire amount of the payment is deposited by us with the trustee or with a paying agent prior to
the expiration of the 30-day period); |
| ● | default
in the payment of principal of any debt security of that series at its maturity; |
| ● | default
in the performance or breach of any other covenant or warranty by us in the indenture (other than a covenant or warranty that has been
included in the indenture solely for the benefit of a series of debt securities other than that series), which default continues uncured
for a period of 60 days after we receive written notice from the trustee or Shift and the trustee receive written notice from the holders
of not less than 25% in principal amount of the outstanding debt securities of that series as provided in the indenture; |
| ● | certain
voluntary or involuntary events of bankruptcy, insolvency or reorganization of Shift; or |
| ● | any
other Event of Default provided with respect to debt securities of that series that is described in the applicable prospectus supplement. |
No
Event of Default with respect to a particular series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization)
necessarily constitutes an Event of Default with respect to any other series of debt securities. The occurrence of certain Events of
Default or an acceleration under the indenture may constitute an event of default under certain of our indebtedness or that of our subsidiaries
outstanding from time to time.
If
an Event of Default with respect to debt securities of any series at the time outstanding occurs and is continuing, then the trustee
or the holders of not less than 25% in principal amount of the outstanding debt securities of that series may, by a notice in writing
to us (and to the trustee if given by the holders), declare to be due and payable immediately the principal of (or, if the debt securities
of that series are discount securities, that portion of the principal amount as may be specified in the terms of that series) and accrued
and unpaid interest, if any, on all debt securities of that series. Such acceleration will not be effective until the earlier of (1)
the acceleration of indebtedness under our senior secured credit facilities or (2) five business Days after receipt by us of written
notice of such acceleration, at which time the principal, premium, if any, interest and any other monetary obligations on all the then
outstanding series of debt securities will become due and payable immediately. In the case of an Event of Default resulting from certain
events of bankruptcy, insolvency or reorganization, the principal (or such specified amount) of and accrued and unpaid interest, if any,
on all outstanding debt securities will become and be immediately due and payable without any declaration or other act on the part of
the trustee or any holder of outstanding debt securities. At any time after a declaration of acceleration with respect to debt securities
of any series has been made, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders
of a majority in principal amount of the outstanding debt securities of that series may rescind and annul the acceleration if all Events
of Default, other than the non-payment of accelerated principal and interest, if any, with respect to debt securities of that series,
have been cured or waived as provided in the indenture. We refer you to the prospectus supplement relating to any series of debt securities
that are discount securities for the particular provisions relating to acceleration of a portion of the principal amount of such discount
securities upon the occurrence of an Event of Default.
The
indenture provides that the trustee will be under no obligation to exercise any of its rights or powers under the indenture unless the
trustee receives indemnity satisfactory to it against any cost, liability or expense which might be incurred by it in exercising such
right of power. Subject to certain rights of the trustee, the holders of a majority in principal amount of the outstanding debt securities
of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee
or exercising any trust or power conferred on the trustee with respect to the debt securities of that series.
No
holder of any debt security of any series will have any right to institute any proceeding, judicial or otherwise, with respect to the
indenture or for the appointment of a receiver or trustee, or for any remedy under the indenture, unless:
| ● | that
holder has previously given to the trustee written notice of a continuing Event of Default with respect to debt securities of that series;
and |
| ● | the
holders of not less than 25% in principal amount of the outstanding debt securities of that series have made written request, and offered
reasonable indemnity or security, to the trustee to institute the proceeding as trustee, and the trustee has not received from the holders
of not less than a majority in principal amount of the outstanding debt securities of that series a direction inconsistent with that
request and has failed to institute the proceeding within 60 days. |
Notwithstanding
any other provision in the indenture, the holder of any debt security will have an absolute and unconditional right to receive payment
of the principal of, premium and any interest on that debt security on or after the due dates expressed in that debt security and to
institute suit for the enforcement of payment.
The
indenture requires us, within 120 days after the end of our fiscal year, to furnish to the trustee a statement as to compliance with
the indenture. If a Default or Event of Default occurs and is continuing with respect to the debt securities of any series and if it
is known to a responsible officer of the trustee, the trustee shall mail to each holder of the debt securities of that series notice
of a Default or Event of Default within 90 days after it occurs. The indenture provides that the trustee may withhold notice to the holders
of debt securities of any series of any Default or Event of Default (except in payment on any debt securities of that series) with respect
to debt securities of that series if the trustee determines in good faith that withholding notice is in the interest of the holders of
those debt securities.
Modification
and Waiver
We
and the trustee may modify and amend the indenture or the debt securities of any series without the consent of any holder of any debt
security:
| ● | to
cure any ambiguity, defect or inconsistency; |
| ● | to
comply with covenants in the indenture described above under the heading “Consolidation, Merger and Sale of Assets;” |
| ● | to
provide for uncertificated securities in addition to or in place of certificated securities; |
| ● | to
make any change that does not adversely affect the rights of any holder of debt securities; |
| ● | to
provide for the issuance of and establish the form and terms and conditions of debt securities of any series as permitted by the indenture; |
| ● | to
add covenants for the benefit of the holders or to surrender any right or power conferred upon Shift; |
| ● | to
effect the appointment of a successor trustee with respect to the debt securities of any series and to add to or change any of the provisions
of the indenture to provide for or facilitate administration by more than one trustee; or |
| ● | to
comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act of
1939, as amended. |
We
may also modify and amend the indenture with the consent of the holders of at least a majority in principal amount of the outstanding
debt securities of each series affected by the modifications or amendments.
We
may not make any modification or amendment without the consent of the holders of each affected debt security then outstanding if that
amendment will:
| ● | reduce
the amount of debt securities whose holders must consent to an amendment, supplement or waiver; |
| ● | reduce
the rate of or extend the time for payment of interest (including default interest) on any debt security; |
| ● | reduce
the principal of or premium on or change the fixed maturity of any debt security or reduce the amount of, or postpone the date fixed
for, the payment of any sinking fund or analogous obligation with respect to any series of debt securities; |
| ● | reduce
the principal amount of discount securities payable upon acceleration of maturity; |
| ● | waive
a default in the payment of the principal of, premium or interest on any debt security (except a rescission of acceleration of the debt
securities of any series by the holders of at least a majority in aggregate principal amount of the then outstanding debt securities
of that series and a waiver of the payment default that resulted from such acceleration); |
| ● | make
the principal of or premium or interest on any debt security payable in currency other than that stated in the debt security; |
| ● | make
any change to certain provisions of the indenture relating to, among other things, the right of holders of debt securities to receive
payment of the principal of, premium and interest on those debt securities and to institute suit for the enforcement of any such payment
and to waivers or amendments; and |
| ● | waive
a redemption payment with respect to any debt security. |
Except
for certain specified provisions, the holders of at least a majority in principal amount of the outstanding debt securities of any series
may on behalf of the holders of all debt securities of that series waive our compliance with provisions of the indenture. The holders
of a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all the debt securities
of such series waive any past default under the indenture with respect to that series and its consequences, except a default in the payment
of the principal of, premium or any interest on any debt security of that series; provided, however, that the holders of a majority in
principal amount of the outstanding debt securities of any series may rescind an acceleration and its consequences, including any related
payment default that resulted from the acceleration.
Defeasance
of Debt Securities and Certain Covenants in Certain Circumstances
Legal
Defeasance. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities, we may
be discharged from any and all obligations in respect of the debt securities of any series (subject to certain exceptions). We will be
so discharged upon the deposit with the trustee, in trust, of money and/or U.S. government obligations or, in the case of debt securities
denominated in a single currency other than U.S. Dollars, government obligations of the government that issued or caused to be issued
such currency, that, through the payment of interest and principal in accordance with their terms, will provide money in an amount sufficient
in the opinion of a nationally recognized firm of independent public accountants or investment bank to pay and discharge each installment
of principal, premium and interest on and any mandatory sinking fund payments in respect of the debt securities of that series on the
stated maturity of those payments in accordance with the terms of the indenture and those debt securities.
This
discharge may occur only if, among other things, we have delivered to the trustee an opinion of counsel stating that we have received
from, or there has been published by, the United States Internal Revenue Service a ruling or, since the date of execution of the indenture,
there has been a change in the applicable United States federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the holders of the debt securities of that series will not recognize income, gain or loss for United
States federal income tax purposes as a result of the deposit, defeasance and discharge and will be subject to United States federal
income tax on the same amounts and in the same manner and at the same times as would have been the case if the deposit, defeasance and
discharge had not occurred.
Defeasance
of Certain Covenants. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities,
upon compliance with certain conditions:
| ● | we
may omit to comply with the covenant described under the heading “Consolidation, Merger and Sale of Assets” and certain other
covenants set forth in the indenture, as well as any additional covenants which may be set forth in the applicable prospectus supplement;
and |
| ● | any
omission to comply with those covenants will not constitute a Default or an Event of Default with respect to the debt securities of that
series (“covenant defeasance”). |
The
conditions include:
| ● | depositing
with the trustee money and/or U.S. government obligations or, in the case of debt securities denominated in a single currency other than
U.S. Dollars, government obligations of the government that issued or caused to be issued such currency, that, through the payment of
interest and principal in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized
firm of independent public accountants or investment bank to pay and discharge each installment of principal of, premium and interest
on and any mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of those payments
in accordance with the terms of the indenture and those debt securities; and |
| ● | delivering
to the trustee an opinion of counsel to the effect that the holders of the debt securities of that series will not recognize income,
gain or loss for United States federal income tax purposes as a result of the deposit and related covenant defeasance and will be subject
to United States federal income tax on the same amounts and in the same manner and at the same times as would have been the case if the
deposit and related covenant defeasance had not occurred. |
Covenant
Defeasance and Events of Default. In the event we exercise our option to effect covenant defeasance with respect to any series of
debt securities and the debt securities of that series are declared due and payable because of the occurrence of any Event of Default,
the amount of money and/or U.S. government obligations or foreign government obligations on deposit with the trustee will be sufficient
to pay amounts due on the debt securities of that series at the time of their stated maturity but may not be sufficient to pay amounts
due on the debt securities of that series at the time of the acceleration resulting from the Event of Default. However, we shall remain
liable for those payments.
Governing
Law
The
indenture and the debt securities will be governed by, and construed in accordance with, the laws of the State of New York without regard
to conflict of law principles that would result in the application of any law other than the law of the State of New York.
DESCRIPTION
OF WARRANTS
We
may issue warrants, including warrants to purchase common stock, preferred stock or debt securities or any combination of the foregoing.
Warrants may be issued independently or as part of a unit with any other securities and may be attached to or separate from the underlying
securities. We may issue warrants directly or under a warrant agreement to be entered into between us and a warrant agent, as detailed
in the prospectus supplement relating to warrants being offered. Any warrant agent will act solely as our agent in connection with the
warrants of a particular series and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial
owners of warrants.
A
prospectus supplement relating to any warrants being offered will include specific terms relating to the offering, including a description
of any other securities sold together with the warrants. These items will include:
| ● | the
title of the warrants; |
| ● | the
aggregate number of the warrants; |
| ● | the
price or prices at which the warrants will be issued; |
| ● | the
designation, amount and terms of the common stock, preferred stock or debt securities purchasable upon exercise of the warrants and procedures
by which those numbers may be adjusted; |
| ● | the
designation and terms of the other offered securities, if any, with which the warrants are issued and the number of the warrants issued
with each security; |
| ● | if
applicable, the date on and after which the warrants and the offered securities purchasable upon exercise of the warrants will be separately
transferable; |
| ● | the
price or prices at which the offered securities purchasable upon exercise of the warrants may be purchased; |
| ● | the
date on which the right to exercise the warrants shall commence and the date on which the right shall expire; |
| ● | the
minimum or maximum amount of the warrants that may be exercised at any one time; |
| ● | the
effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; |
| ● | any
terms relating to the modification of the warrants; |
| ● | the
terms of any rights to redeem or call the warrants; |
| ● | information
with respect to book-entry procedures, if any; |
| ● | discussion
of any material federal income tax considerations; and |
| ● | any
other material terms of the warrants, including terms, procedures and limitations relating to the transferability, exchange, exercise
or redemption of the warrants. |
The
descriptions of the warrants in this prospectus and in any prospectus supplement are summaries of the applicable provisions of the applicable
agreements. These descriptions do not restate those agreements in their entirety and do not contain all of the information that you may
find useful. We urge you to read the applicable agreements because they, and not the summaries, define your rights as holders of the
warrants or any warrant units. For more information, please review the form of the relevant agreements, which will be filed with the
SEC promptly after the offering of the warrants or warrant units and will be available as described under the heading “Where You
Can Find More Information; Incorporation by Reference.”
DESCRIPTION
OF UNITS
We
may issue units consisting of one or more debt securities, shares of preferred stock, or shares of common stock, or any combination of
such of our securities, as specified in a related prospectus supplement.
DESCRIPTION
OF RIGHTS
As
specified in the applicable prospectus supplement, we may issue rights to purchase the securities offered in this prospectus to our existing
stockholders, and such rights may or may not be issued for consideration. The applicable prospectus supplement will describe the terms
of any such rights. The description in the prospectus supplement will not purport to be complete and will be qualified in its entirety
by reference to the documents pursuant to which such rights will be issued.
FORMS
OF SECURITIES
Each
debt security, warrant, unit and right will be represented either by a certificate issued in definitive form to a particular investor
or by one or more global securities representing the entire issuance of securities. Certificated securities will be issued in definitive
form and global securities will be issued in registered form. Definitive securities name you or your nominee as the owner of the security,
and in order to transfer or exchange these securities or to receive payments other than interest or other interim payments, you or your
nominee must physically deliver the securities to the trustee, registrar, paying agent or other agent, as applicable. Global securities
name a depositary or its nominee as the owner of the debt securities, warrants, units or rights represented by these global securities.
The depositary maintains a computerized system that will reflect each investor’s beneficial ownership of the securities through
an account maintained by the investor with its broker/dealer, bank, trust company or other representative, as we explain more fully below.
Registered
Global Securities
We
may issue the registered debt securities, warrants, units and rights in the form of one or more fully registered global securities that
will be deposited with a depositary or its nominee identified in the applicable prospectus supplement and registered in the name of that
depositary or nominee. In those cases, one or more registered global securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal or face amount of the securities to be represented by registered global securities. Unless
and until it is exchanged in whole for securities in definitive registered form, a registered global security may not be transferred
except as a whole by and among the depositary for the registered global security, the nominees of the depositary or any successors of
the depositary or those nominees.
If
not described below, any specific terms of the depositary arrangement with respect to any securities to be represented by a registered
global security will be described in the prospectus supplement relating to those securities. We anticipate that the following provisions
will apply to all depositary arrangements.
Ownership
of beneficial interests in a registered global security will be limited to persons, called participants, that have accounts with the
depositary or persons that may hold interests through participants. Upon the issuance of a registered global security, the depositary
will credit, on its book-entry registration and transfer system, the participants’ accounts with the respective principal or face
amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution
of the securities will designate the accounts to be credited. Ownership of beneficial interests in a registered global security will
be shown on, and the transfer of ownership interests will be effected only through, records maintained by the depositary, with respect
to interests of participants, and on the records of participants, with respect to interests of persons holding through participants.
The laws of some states may require that some purchasers of securities take physical delivery of these securities in definitive form.
These laws may impair your ability to own, transfer or pledge beneficial interests in registered global securities.
So
long as the depositary, or its nominee, is the registered owner of a registered global security, that depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the securities represented by the registered global security for all purposes
under the applicable indenture, warrant agreement, unit agreement or rights agreement. Except as described below, owners of beneficial
interests in a registered global security will not be entitled to have the securities represented by the registered global security registered
in their names, will not receive or be entitled to receive physical delivery of the securities in definitive form and will not be considered
the owners or holders of the securities under the applicable indenture, warrant agreement, unit agreement or rights agreement. Accordingly,
each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for that registered
global security and, if that person is not a participant, on the procedures of the participant through which the person owns its interest,
to exercise any rights of a holder under the applicable indenture, warrant agreement, unit agreement or rights agreement. We understand
that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered global
security desires to give or take any action that a holder is entitled to give or take under the applicable indenture, warrant agreement,
unit agreement or rights agreement, the depositary for the registered global security would authorize the participants holding the relevant
beneficial interests to give or take that action, and the participants would authorize beneficial owners owning through them to give
or take that action or would otherwise act upon the instructions of beneficial owners holding through them.
Principal,
premium, if any, and interest payments on debt securities, and any payments to holders with respect to warrants, units or rights, represented
by a registered global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee,
as the case may be, as the registered owner of the registered global security. None of us, the trustees, the warrant agents, the unit
agents, the rights agents or any other agent of ours, agent of the trustees or agent of the warrant agents, unit agents or rights agents
will have any responsibility or liability for any aspect of the records relating to payments made on account of beneficial ownership
interests in the registered global security or for maintaining, supervising or reviewing any records relating to those beneficial ownership
interests.
We
expect that the depositary for any of the securities represented by a registered global security, upon receipt of any payment of principal,
premium, interest or other distribution of underlying securities or other property to holders on that registered global security, will
immediately credit participants’ accounts in amounts proportionate to their respective beneficial interests in that registered
global security as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests
in a registered global security held through participants will be governed by standing customer instructions and customary practices,
as is now the case with the securities held for the accounts of customers in bearer form or registered in “street name,”
and will be the responsibility of those participants.
If
the depositary for any of these securities represented by a registered global security is at any time unwilling or unable to continue
as depositary or ceases to be a clearing agency registered under the Exchange Act, and a successor depositary registered as a clearing
agency under the Exchange Act is not appointed by us within 90 days, we will issue securities in definitive form in exchange for the
registered global security that had been held by the depositary. Any securities issued in definitive form in exchange for a registered
global security will be registered in the name or names that the depositary gives to the relevant trustee, warrant agent, unit agent,
rights agent or other relevant agent of ours or theirs. It is expected that the depositary’s instructions will be based upon directions
received by the depositary from participants with respect to ownership of beneficial interests in the registered global security that
had been held by the depositary.
LEGAL
MATTERS
The
validity of the issuance of the securities offered pursuant to this prospectus will be passed upon by Jenner & Block LLP, New
York, NY. Additional legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in
the applicable prospectus supplement.
EXPERTS
The
consolidated financial statements of Shift Technologies, Inc. appearing in Shift Technologies, Inc.’s Annual Report (Form 10-K)
for the year ended December 31, 2021 have been audited by Deloitte & Touche LLP, an independent registered public accounting firm,
as stated in their report (which report expresses an unqualified opinion on the consolidated financial statements) which is incorporated
by reference herein and elsewhere in the registration statement. Such financial statements have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus and any prospectus supplement, which constitutes a part of the registration statement, does not contain all of the information
set forth in the registration statement or the exhibits which are part of the registration statement. For further information with respect
to us and the securities offered by this prospectus and any prospectus supplement, we refer you to the registration statement and the
exhibits filed as part of the registration statement. Statements contained in this prospectus and any prospectus supplement, concerning
any of our contracts, agreements or other documents are not necessarily complete. If a contract or document has been filed as an exhibit
to the registration statement, we refer you to the copy of the contract or document that has been filed. Each statement in this prospectus,
relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit.
We
are subject to the informational requirements of the Exchange Act and file annual, quarterly and current reports, proxy statements and
other information with the SEC. Our filings with the SEC are available to the public on the SEC’s website at http://www.sec.gov.
Those filings are also available to the public on, or accessible through, our website on the “Investor Relations” page
at www.shift.com. The information we file with the SEC or contained on or accessible through our corporate website or any other
website that we may maintain is not part of this prospectus and any prospectus supplement, or the registration statement of which this
prospectus is a part. You may inspect a copy of the registration statement through the SEC’s website, as provided herein.
Incorporation
by Reference
The
SEC’s rules allow us to “incorporate by reference” information into this prospectus and any prospectus supplement,
which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will
automatically update and supersede that information. Any statement contained in this prospectus, any prospectus supplement, or a previously
filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus and any prospectus
supplement, to the extent that a statement contained in this prospectus, any prospectus supplement, or a subsequently filed document
incorporated by reference modifies or replaces that statement (other than those documents or the portions of those documents not deemed
to be filed).
This
prospectus incorporates by reference the documents set forth below that have previously been filed with the SEC:
| ● | Our
Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 16, 2022. |
| ● | The
description of our Common Stock contained in our Registration Statement on Form 8-A, dated March 18, 2019, and any amendment or report
filed with the SEC for the purpose of updating the description. |
All
reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, which we refer to as the “Exchange Act” in this prospectus, prior to the termination of this offering, including
all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the
registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference
into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.
You
may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they are specifically
incorporated by reference in the documents) by writing or telephoning us at the following address:
Shift
Technologies, Inc.
290
Division Street, Suite 400
San
Francisco, California 94103-4234
(855)
575-6739
Attn:
Secretary
Exhibits
to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus.
$150,000,000
Shift Technologies, Inc.
Class A common stock
PROSPECTUS SUPPLEMENT
Cantor
May 6, 2022
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