Item 2.05 Costs Associated with Exit or Disposal Activities.
On July 21, 2022, Owlet, Inc. (the “Company”) implemented a restructuring program to streamline the Company’s organizational structure in response to current business conditions, reduce the Company’s operating expenses and manage and conserve the Company’s cash resources. The Company is undertaking the restructuring program primarily to increase cost-efficiencies across the organization and strive for profitability.
As part of the restructuring program implementation, the Company commenced a workforce reduction of approximately 74 employees that is expected to be substantially completed in the third quarter of 2022. In connection with the restructuring program, the Company expects to incur an estimated total amount of approximately $1.1 million in the third quarter of 2022, consisting primarily of severance, one-time termination and other related costs, all of which will result in future cash expenditures.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K and oral statements made from time to time by representatives of the Company may contain or incorporate by reference certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Generally, forward-looking statements include the words “may,” “believes,” “plans,” “expects,” “anticipates,” “intends,” “estimate,” “goal,” “potential,” “upcoming,” “outlook,” “guidance,” or the negation thereof, or similar expressions. Forward-looking statements are based on the Company’s expectations at the time such statements are made, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors. For all such forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. The Company’s actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by our forward-looking statements. Many important factors could affect the Company’s future results and cause those results to differ materially from those expressed in or implied by the Company’s forward-looking statements. Such factors include, but are not limited to, the following: (i) Owlet’s competition and ability to profitably grow and manage growth; (ii) the regulatory pathway for Owlet products and responses from regulators, including the U.S. Food and Drug Administration and similar regulators outside of the United States, as well as legal proceedings and regulatory requirements; (iii) the ability of Owlet to maintain relationships with customers, manufacturers and suppliers and retain Owlet’s management and key employees; (iv) changes in applicable laws or regulations; (v) the possibility that Owlet may be adversely affected by other economic, business, regulatory and/or competitive factors; (vi) the ability of Owlet to implement its strategic initiatives and continue to innovate its existing products; (vii) the ability of Owlet to acquire, defend and protect its intellectual property and satisfy regulatory requirements, including but not limited to those concerning privacy and data protection; (viii) the impact of the COVID-19 pandemic on Owlet’s business, financial condition, operations and supply chain; and (ix) other risks and uncertainties set forth in the Company’s releases, public statements and/or filings with the Securities and Exchange Commission, including those identified in the “Risk Factors” section in the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. All future written and oral forward-looking statements attributable to the Company or any person acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Moreover, the Company operates in an evolving environment. In addition to the factors described above, new risk factors and uncertainties may emerge from time to time, and it is impossible for the Company to predict such events or how they may affect us. Except as required by federal securities laws, the Company assumes no obligation to update any forward-looking statements after the date of this Current Report on Form 8-K as a result of new information, future events or otherwise, although we may do so from time to time. The Company does not endorse any projections regarding future performance that may be made by third parties.