UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Item 2.05. Costs Associated with Exit or Disposal Activities.
On September 5, 2023, Shift Technologies, Inc. (the “Company,” “Shift,” “we” or “us”) announced the closing of its Portland-based vehicle storage and sales facility and additional streamlining of its corporate organization (collectively, the “Restructuring”). The Restructuring will result in an estimated workforce reduction of approximately 25%. The Company expects that the Restructuring and associated workforce reduction will result in total annualized cost savings of up to $23 million, which includes up to $13 million in expected net cost savings related to the Restructuring and up to $10 million in expected net costs savings related to the workforce reduction. The Company expects the Restructuring and associated workforce reduction will be substantially completed by September 5, 2023.
The Company expects to incur charges related to the Restructuring and associated workforce reduction. As a result of the Restructuring and associated workforce reduction, we expect to incur approximately $0.5 million in one-time cash severance payments, and approximately $8.5 million in one-time non-cash charges associated primarily with the decommissioning of certain technology assets. The Company has not yet completed its analysis of additional charges associated with implementation of the Restructuring 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.
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 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, the Company may incur additional costs not currently contemplated or that the savings may be less than anticipated, the risk that the Restructuring 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 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.
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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: September 5, 2023 | /s/ Oded Shein | |
Name: | Oded Shein | |
Title: | Chief Financial Officer |
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