SFT Shift Technologies Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) July 11, 2023 (July 11, 2023)

 

SHIFT TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-38839		82-5325852
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

290 Division Street, Suite 400, San Francisco, CA		94103
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (855) 575-6739

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, par value $0.0001 per share		SFT		Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) if the Exchange Act.  ☐

 

 

 

Item 2.05. Costs Associated with Exit or Disposal Activities.

 

On July 11, 2023, Shift Technologies, Inc. (the “Company,” “Shift,” “we” or “us”) announced a plan to restructure and reduce the Company’s workforce (the “Restructuring Plan”), pursuant to which the Company will focus all resources on its omnichannel used auto operations and cease investment into the Company’s dealer marketplace business. The Restructuring Plan is part of the Company’s broader efforts to improve cost efficiency and better align its operating structure with its omnichannel sales operations as the Company continues to evaluate strategic alternatives to maximize stockholder value. The Restructuring Plan will result in an estimated workforce reduction of approximately 34%. The Company expects the Restructuring Plan and associated workforce reduction will be substantially completed by July 11, 2023.

 

The Company expects to incur charges related to the Restructuring Plan and associated workforce reduction. As a result of the Restructuring Plan and associated workforce reduction, we expect to incur approximately $900,000 in non-recurring restructuring charges, consisting primarily of one-time cash severance payments and related costs. The Company has not yet completed its analysis of additional charges associated with implementation of the Restructuring Plan and associated workforce reduction, and therefore is not able to make a good faith determination of an estimate of the amount, or range of amounts, of any additional charges such as contract termination costs. The Company will provide additional disclosure through an amendment to this Current Report on Form 8-K once it makes a determination of an estimate or range of estimates of such charges, if any.

 

The charges that the Company expects to incur are subject to a number of assumptions, and actual expenses may differ materially from the estimates disclosed above.

 

The Company’s previously announced review of strategic alternatives by its Board of Directors, management team, and advisors remains ongoing.

 

Item 2.06 Material Impairments.

 

To the extent required, the information contained in Item 2.05 of this Current Report on Form 8-K is incorporated by reference herein.

 

Item 7.01 Regulation FD Disclosure.

 

On July 11, 2023, the Company issued a press release in connection with the Restructuring Plan. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

The information set forth in Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Forward-Looking Statements

 

Certain statements in this Current Report on Form 8-K constitute “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words contained in this Current Report on Form 8-K such as “believe,” “anticipate,” “expect,” “estimate,” “plan,” “intend,” “should,” “would,” “could,” “may,” “might,” “will” and variations of such words and similar future or conditional expressions, are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements related to the Company’s expectations related to the Restructuring Plan and the associated workforce reduction. These forward-looking statements are not guarantees of future results and are subject to a number of risks and uncertainties, many of which are difficult to predict and beyond our control. Important assumptions and other important factors that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, a material delay in consummating the Restructuring Plan, the Company may incur additional costs not currently contemplated or that the savings may be less than anticipated, the risk that the Company’s Restructuring Plan and associated workforce reduction may negatively impact the Company’s business operations and reputation, the Company’s ability to recruit and retain key management and employees, and those additional risks, uncertainties and factors described in more detail in the Company’s filings with the Securities and Exchange Commission (“SEC”) from time to time, including under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (including any amendments thereto), and in the Company’s other filings with the SEC (including any amendments thereto). The Company disclaims any obligation or undertaking to update, supplement or revise any forward-looking statements contained in this Current Report on Form 8-K except as required by applicable law or regulation. Given these risks and uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date hereof.

 

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

The following exhibit relating to Item 7.01 shall be deemed to be furnished, and not filed:

 

99.1	Press Release dated July 11, 2023.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	SHIFT TECHNOLOGIES, INC.
Dated: July 11, 2023	/s/ Oded Shein
	Name:	Oded Shein
	Title:	Chief Financial Officer

 

 

 

Exhibit 99.1

 

Shift Announces Restructuring to Streamline Operations and Reduce Cost Structure

 

SAN FRANCISCO, July 11, 2023 (GLOBE NEWSWIRE) -- Shift Technologies, Inc. (Nasdaq: SFT), a consumer-centric omnichannel used auto retailer, today announced a plan to restructure and reduce the Company’s workforce to better align people and responsibilities with the Company’s omnichannel sales strategy. The restructuring plan is the result of a review by the Company’s recently appointed CEO Ayman Moussa as well as evaluations conducted as part of the Company’s review of strategic alternatives. The new structure is designed to improve the customer experience, increase efficiencies throughout the sales process, and better leverage our fixed costs. The Company has also decided to eliminate investment into the Company’s dealer marketplace business in order to focus on core operations. 

 

“I joined Shift because I believe there is a meaningful opportunity to increase unit sales and unit economics through operational process improvements. We are announcing these changes today as a result of observations during my first month as CEO, leveraging best practices from over 20 years of auto industry experience and leadership. These changes include eliminating centralized operations roles, putting more ownership to team members on the ground in our hubs, as well as eliminating investment into the dealer marketplace. We are moving with a great sense of urgency to improve performance and maximize our cash runway,” said Mr. Moussa. 

 

As a result of the restructuring, the Company expects to reduce its headcount by approximately 34%. Approximately 60% of the headcount reductions are in operational roles, primarily as a result of eliminating centralized support. The remaining headcount reductions are concentrated among technology roles as a result of eliminating investment into the dealer marketplace, as well as general corporate roles.

 

“I have been impressed by the dedication and engagement of the entire Shift team to deliver on our mission to make car purchase and ownership simple. The quality of the team makes this necessary decision to reduce our workforce especially difficult,” Mr. Moussa continued. 

 

The Company expects the reduction in force to result in annualized SG&A savings of approximately $14 million. The Company expects to incur non-recurring charges of approximately $900,000, consisting primarily of employee severance costs. 

 

Update on the Strategic Alternatives Review Process

 

The strategic alternatives review process established to maximize value for all stakeholders is ongoing.  

 

About Shift

 

Shift Technologies, Inc. is a consumer-centric omnichannel retailer transforming the used car industry by leveraging its end-to-end ecommerce platform and retail locations to provide a technology-driven, hassle-free customer experience. Shift’s mission is to make car purchase and ownership simple — to make buying or selling a used car fun, fair, and accessible to everyone. Shift provides comprehensive, digital solutions throughout the car ownership lifecycle, enabling customers to purchase a vehicle online with financing and vehicle protection products, and a vision to provide high-value support services during car ownership. For more information please visit www.shift.com.

 

 

Forward Looking Statements; Use of Projections

 

This communication includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” “project,” should,” “would,” “could,” “may,” “might,” “will”, and variations of such words other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements related to the Company’s expectations related to the Restructuring Plan and the associated workforce reduction. Such forward looking statements include estimated financial information. Such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of Shift’s business are based on current expectations that are subject to risks and uncertainties. These forward-looking statements are not guarantees of future results, and a number of risks, factors and uncertainties could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. Important assumptions and other important factors that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, a material delay in consummating the Restructuring Plan, the risk that the Restructuring Plan costs may be greater than anticipated or that the savings may be less than anticipated, the risk that the Restructuring Plan and associated workforce reduction may negatively impact the Company’s business operations and reputation, and the Company’s ability to recruit and retain its management and key employees, and those additional risks, uncertainties and factors described in more detail in the Company’s filings with the Securities and Exchange Commission (“SEC”) from time to time, including under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (including any amendments thereto), and in the Company’s other filings with the SEC (including any amendments thereto). You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Shift disclaims any obligations or undertaking to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. Shift gives no assurance that it will achieve its expectations.

 

Investor Relations:

 

Susan Lewis

 

IR@shift.com 

 

Media Contact:

 

press@shift.com 

 

Source: Shift Technologies, Inc.

 

 

 

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---