Item 2.05 Costs Associated with Exit or Disposal Activities
Between January 31, 2022 and February 3, 2022, BIGtoken, Inc. (the "Company"),
notified thirty-five (35) employees that they would be terminated on February
15, 2022, in connection with a reduction in force. As a result, the Company
anticipates terminating twelve (12) employees in the United States and
twenty-three (23) in its Mexico offices (the "Terminations"). As a result of the
Terminations, the Company will (i) reduce its workforce by approximately seventy
percent 70% in total and (ii) reduce its annual payroll by $2.09 million or
approximately fifty seven percent (57%). The Terminations, which will be
effective February 15, 2022, were part of a broad set of cost-saving measures
implemented by new management subsequent to the completion of its merger with
BritePool, Inc. that closed on November 30, 2021. The Company estimates that the
pre-tax costs for the Terminations will be in the range of $80,000 to $150,000,
substantially all of which are related to employee severance (the "Severances"),
which the Company expects to record in the quarter ending March 31, 2022. The
Company does not anticipate any future cash expenditures beyond the payment of
the Severances.
Forward Looking Statements
This Item 2.05 contains forward-looking statements, including, but not limited
to, statements related to the expected costs associated with termination
benefits and the financial impact of the reduction in force. These
forward-looking statements are based on the Company's current expectations and
inherently involve significant risks and uncertainties. The Company's actual
results and the timing of events could differ materially from those anticipated
in such forward-looking statements as a result of these risks and uncertainties,
which include, without limitation, risks related to cost reduction efforts. In
addition, the Company's workforce reduction costs may be greater than
anticipated and the workforce reduction may have an adverse impact on the
Company's development activities. A further description of the risks and
uncertainties relating to the business of the Company is contained in the
Company's Quarterly Report on Form 10-Q for the quarterly period ended September
30, 2021, filed with the Securities and Exchange Commission (the "SEC") on
November 15, 2021, and the Company's subsequent current reports filed with the
SEC. The Company undertakes no duty or obligation to update any forward-looking
statements contained in this Item 2.05 as a result of new information, future
events or changes in its expectations.
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