Item 2.05 | Costs Associated with Exit or Disposal Activities |
On October 12, 2023, MariaDB plc (the “Company”) began implementing its board-approved restructuring plan (the “Plan”) to better align its workforce with the needs of its business and to reduce the Company’s operating costs. The Plan includes a reduction of the Company's workforce by 84 people, or approximately 28%. The Company expects the Plan will result in (i) restructuring charges consisting of approximately $3.1 million in employee severance and notice period payments, benefits, and related costs and $0.1 million in non-cash stock-based compensation expense related to vesting of share-based awards, and (ii) cash expenditures of approximately $0.8 million to satisfy amounts owed due to earned vacation time.
As part of the Plan, the Company will focus its attention on its core MariaDB Enterprise Server database product. Products not related to the core MariaDB Enterprise Server business, including SkySQL and Xpand, will no longer be sold and the Company has implemented a plan to help existing customers migrate off these products.
The Company expects the majority of the restructuring charges and expenses related to the Plan to be incurred in the Company’s first half of fiscal year 2024. In addition to the Plan, an estimated 13 employees are expected to be provided transition packages that will provide for continued services through various dates of the Company’s fiscal year 2024.
The above estimates of the cash expenditures and restructuring charges that the Company expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions and actual amounts may differ materially from estimates. For example, potential employee reductions are subject to legal requirements that vary by jurisdiction, which may extend the reduction process beyond that expected in certain cases. In addition, the Company may incur other cash expenditures or charges not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Plan or otherwise.
Item 2.06Material Impairments
The information contained in Item 2.05 above is incorporated herein by reference. Due to the approval and implementation of the Plan and the deterioration of the price of the Company’s ordinary shares and the resulting reduced market capitalization of the Company, the Company determined that as of fiscal year end September 30, 2023, it would incur an impairment charge associated with its acquisitions of Clustrix/Xpand in September 2018 and CubeWerx Inc. in August 2022. Approximately $7.9 million of the impairment charge relates to goodwill with the remaining $0.9 million portion of the impairment charge relating to intangible assets. This determination was reached based on the results of an updated financial plan for the Company’s business and economic outlook, which the Company conducts as part of its annual strategic planning cycle.
This impairment charge will be reflected in the Company’s financial statements as of and for the fiscal quarter and year ended September 30, 2023. The Company will not be required to make any current or future cash expenditures as a result of this impairment charge.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On October 12, 2023, Franz Aman, Chief Marketing Officer of the Company was terminated in connection with the reduction of the Company’s workforce, effective October 12, 2023.
Forward-Looking Statements
Certain statements in this Current Report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words indicating future events and actions, such as “expect,” “anticipate,” “contemplate,” “will,” “intend,” “plan,” and “may,” and variations of such words, and similar expressions and future-looking language identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in this Current Report include statements regarding the occurrence and timing of the Plan and its implementation (including discontinuance of certain product offerings) and its effects