MERGER PROPOSAL—YOUR VOTE IS VERY IMPORTANT
Dear Shift Stockholders and CarLotz Stockholders:
On August 9, 2022, Shift Technologies, Inc. (“Shift”), Shift Remarketing Operations, Inc., a wholly owned subsidiary of Shift (“Merger Sub”), and CarLotz, Inc. (“CarLotz”) entered into an Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), which provides that Merger Sub will, upon the terms and subject to the conditions set forth in the Merger Agreement, merge with and into CarLotz with CarLotz continuing as the surviving corporation and as a wholly owned subsidiary of Shift (the “Merger”) at the effective time of the Merger (the “Effective Time”).
Pursuant to the Merger Agreement, at the Effective Time, each issued and outstanding share of Class A common stock, par value $0.0001 per share, of CarLotz (“CarLotz Common Stock”) (subject to certain exceptions set forth in the Merger Agreement) will be converted into the right to receive 0.692158 (the “Exchange Ratio”) of a fully-paid and nonassessable share of Class A common stock, par value $0.0001 per share, of Shift (“Shift Common Stock”), subject to adjustment immediately prior to the Effective Time to equal a ratio calculated as (i) the product of (A) the number of issued and outstanding shares of Shift Common Stock immediately prior to the Effective Time and (B) 99.99%, divided by (ii) the number of shares of CarLotz Common Stock outstanding immediately prior to the Effective Time expressed on a fully-diluted and as-converted to CarLotz Common Stock basis (but excluding certain CarLotz securities, including earnout shares, earnout restricted stock units, warrants, options to purchase CarLotz Common Stock that have an exercise price equal to or higher than the implied price per share of CarLotz Common Stock, determined at the Effective Time based on the Exchange Ratio, and performance-based restricted stock units that are terminated as of the Effective Time). Shift Stockholders will continue to own their existing shares of Shift Common Stock following the Merger.
Shift Common Stock is traded on the Nasdaq Capital Market (“Nasdaq”) under the symbol “SFT.” CarLotz Common Stock is traded on the Nasdaq Global Market under the symbol “LOTZ.” CarLotz Warrants are traded on the Nasdaq Global Market under the symbol “LOTZW.”
On June 7, 2022, CarLotz received a deficiency letter from the Staff of the Nasdaq Stock Market notifying CarLotz that, for the last 30 consecutive business days, the bid price for CarLotz Common Stock had closed below the $1.00 per share minimum bid price requirement for continued inclusion on the Nasdaq Global Market. On October 4, 2022, Shift received a deficiency letter from the Staff of the Nasdaq Stock Market notifying Shift that, for the last 30 consecutive business days, the bid price for Shift Common Stock had closed below the $1.00 per share minimum bid price requirement for continued inclusion on the Nasdaq Capital Market. See the section entitled “Questions and Answers — What happens if the Merger is not completed?”
Based on the Exchange Ratio, the number of outstanding shares of CarLotz Common Stock and the number of outstanding shares of Shift Common Stock as of August 8, 2022, it is estimated that Shift Stockholders will own approximately 52.89% and CarLotz Stockholders will own approximately 47.11%, respectively, of the outstanding shares of Shift Common Stock on a fully diluted basis immediately following the Effective Time. Shift and CarLotz will each hold a special meeting of their respective stockholders to vote on the proposals necessary to complete the Merger and the other transactions contemplated by the Merger Agreement (collectively, the “Proposed Transactions”). Such special meetings are referred to as the “Shift Special Meeting” and the “CarLotz Special Meeting,” respectively. We encourage you to obtain current quotes for both Shift Common Stock and CarLotz Common Stock before voting at the Shift Special Meeting or the CarLotz Special Meeting.
At the Shift Special Meeting, Shift Stockholders will be asked to consider and vote on (i) a proposal to approve the issuance of shares of Shift Common Stock to CarLotz Stockholders in connection with the Merger for purposes of applicable Nasdaq rules (the “Shift Share Issuance Proposal”), (ii) a proposal to approve and adopt an amendment to Shift’s second amended and restated certificate of incorporation (the “Shift Charter”) to effect a reverse stock split of the Shift Common Stock at a ratio within a range of 1-for-5 and 1-for-10, as determined by the Shift Board, in the form attached as Annex B to this joint proxy statement/prospectus (the “Shift Reverse Stock Split Proposal”), and (iii) a proposal to approve the adjournment of the Shift Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Shift Special Meeting to approve the Shift Share Issuance Proposal (the “Shift Adjournment Proposal”). The Shift Board unanimously recommends that Shift Stockholders vote “FOR” each of the proposals to be considered at the Shift Special Meeting.
At the CarLotz Special Meeting, CarLotz Stockholders will be asked to consider and vote on (i) a proposal to adopt the Merger Agreement (the “CarLotz Merger Proposal”) and (ii) a proposal to approve the adjournment of the CarLotz Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the CarLotz Special Meeting to approve the CarLotz Merger Proposal (the “CarLotz Adjournment Proposal”). The CarLotz Board unanimously recommends that CarLotz Stockholders vote “FOR” each of the proposals to be considered at the CarLotz Special Meeting.
We cannot complete the Merger unless the Shift Share Issuance Proposal is approved by Shift Stockholders and the CarLotz Merger Proposal is approved by CarLotz Stockholders. Your vote on these matters is very important, regardless of the number of shares you own. Whether or not you plan to virtually attend your company’s respective special meeting, please vote by proxy over the internet or telephone using the instructions included with the accompanying proxy card, or promptly complete your proxy card and return it in the enclosed postage-paid envelope, in order to authorize the individuals named on your proxy card to vote your shares at the applicable special meeting.
The accompanying joint proxy statement/prospectus provides you with important information about Shift, CarLotz, the Merger Agreement, the Proposed Transactions (including the Merger) and the special meetings. We encourage you to read the entire joint proxy statement/prospectus carefully (including the annexes thereto and documents incorporated by reference therein), in particular the information under “Risk Factors
” beginning on page 34
for a discussion of material risks relevant to the Merger.
We look forward to the successful completion of the Merger.
Chief Executive Officer
Shift Technologies, Inc.
Chief Executive Officer
Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Shift Common Stock to be issued in connection with the Merger or passed upon the adequacy or accuracy of the accompanying joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.
The accompanying joint proxy statement/prospectus is dated November 8, 2022 and is first being mailed to Shift Stockholders and CarLotz Stockholders on or about November 8, 2022.