Item 2.05 Costs Associated with Exit or Disposal Activities.

As discussed in the March 15, 2023 earnings call, AEye, Inc. (the "Company") expects to announce its revised strategic plan during its second quarter earnings call in May 2023. The revised strategic plan will outline the steps the Company is taking to focus on key products and critical customer engagements it believes will generate the best long-term results for all stakeholders. In advance of the second quarter earnings call, the Company announced today, March 28, 2023, that it will restructure and reduce its workforce by approximately one-third, effective April 3, 2023. The revised strategic plan to be announced in May is also expected to include other significant operating expense reductions.

The reduction-in-force impacts approximately 46 full-time and part-time employees and is expected to be completed early in the second quarter of 2023. The Company expects to incur a one-time restructuring charge in the first quarter of 2023, to be paid in cash in the second quarter, in the range of $0.6 to $1.0 million, primarily consisting of personnel expenses, such as one-time separation payments and other benefits.

Important Notice Regarding Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: "outlook," "target," "reflect," "on track," "foresees," "future," "may," "deliver," "will," "shall," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing" or the negative of these terms, other comparable terminology (although not all forward-looking statements contain these words), or by discussions of strategy, plans, or intentions. Forward looking statements included in this Current Report include statements about the Company's revised strategic plan, the implementation of any operating expense reductions in connection with the Company's revised strategic plan, and the size, impact and timing of the reduction-in-force, among others. These statements involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Current Report on Form 8-K, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain.

With respect to the matters addressed in this Current Report, the estimated costs the Company expects to incur in connection with the reduction-in-force are subject to certain assumptions, and actual results may differ significantly from these estimates. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the restructuring. The reduction-in-force may take longer than anticipated and it may have an adverse impact on the Company's performance. Except as required by law, the Company undertakes no duty or obligation to update any forward-looking statements contained in this Form 8-K, whether as a result of new information, future events, or otherwise.

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