SHIFT TECHNOLOGIES, INC. Costs Associated with Exit or Disposal Activities (form 8-K/A)

Item 2.05. Costs Associated with Exit or Disposal Activities.

This Current Report on Form 8-K/A amends and supplements the Current Report on Form 8-K filed on August 9, 2022 (the "Original Form 8-K") by Shift Technologies, Inc. (the "Company") announcing the closure of 7 inventory inspection, reconditioning, and storage facilities, or "hubs," as part of a strategic review of the business. The hub closures resulted in an estimated workforce reduction of approximately 60%. This Current Report on Form 8-K/A amends and supplements the Original Form 8-K to disclose the estimates required by paragraphs (b), (c) and (d) of Item 2.05 of Form 8-K with respect to the hub closures and workforce reduction.

As disclosed in the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2022, filed on November 9, 2022, the restructuring was
substantially completed as of September 30, 2022. The Company recorded the
following restructuring charges for the three and nine months ended September
30, 2022 (in thousands):



                                                                         Three and Nine
                                                                          Months Ended
                                                                         September 30,
                                                                              2022
Losses on sales of inventory associated with restructuring              $        8,545
Restructuring costs related to operating leases                                  3,216
Losses on sale or disposal of property and equipment                             2,367
Losses on early decommissioning of capitalized internal-use software             6,498
Severance, retention, and CEO transition                                         3,667
Labor and other costs incurred to close hubs                                     4,901
Total                                                                   $       29,194

Of the charges detailed in the table above, $0.9 million is expected to result in future cash expenditures as of the date of this filing.

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