Restructuring

In September 2013, the Company commenced certain restructuring initiatives (“2013 Initiatives”) including the closure of the Company’s development site in Calgary, Canada, and the consolidation of certain supply chain management activities. During February and March 2014, the Company commenced additional reduction in force initiatives resulting in headcount reductions of 41 employees and 21 employees, respectively, and during June 2014 a further headcount reduction of five employees at its Calgary, Canada site.

In connection with the 2013 Initiatives and for the twelve months ended December 31, 2014, the Company recorded restructuring charges of $2.9 million, which consisted of $1.7 million in employee severance costs and $1.2 million in facility exit related costs related to ongoing assessment of estimates of the timing and amounts of sublease income.

Total restructuring charges incurred to date relating to the 2013 Initiatives discussed above, are approximately $6.2 million, including restructuring charges recorded during the year ended December 31, 2013 of approximately $3.3 million.

The Company accounts for facility exit costs in accordance with FASB ASC Topic 420, Exit or Disposal Cost Obligations, which requires that a liability for such costs be recognized and measured initially at fair value on the cease-use date based on remaining lease rentals, adjusted for the effects of any prepaid or deferred items recognized, reduced by the estimated sublease rentals that could be reasonably obtained even if it is not the intent to sublease.

The Company is required to estimate future sublease income and future net operating expenses of the facilities, among other expenses. The most significant of these estimates relate to the timing and extent of future sublease income which reduce lease obligations, and the probability that such sublease income will be realized. The Company based estimates of sublease income, in part, on information from third party real estate experts, current market conditions and rental rates, an assessment of the time period over which reasonable estimates could be made, and the location of the respective facility, among other factors. Further adjustments to the facility exit liability accrual will be required in future periods if actual exit costs or sublease income differ from amounts currently expected. Exit costs the Company records under these provisions are neither associated with, nor do they benefit, continuing activities.

In June 2014, the Company commenced certain restructuring initiatives relating to the reorganization of executive level management (“2014 Initiatives”), which included among other actions the replacement of the former Chief Executive Officer with the current Chief Executive Officer. In connection with the 2014 Initiatives, and for the twelve months ended December 31, 2014, the Company recorded restructuring charges of approximately $4.9 million, including approximately $1.3 million related to the accelerated vesting of all of former Chief Executive Officer's restricted stock units and options which vested immediately upon his departure.

The following table sets forth activity in the restructuring liability for the twelve months ended December 31, 2014 (in thousands):



	2013 Initiatives						2014 Initiatives
	Employee Severance Costs			Facility Exit Related Costs			Employment Contract Costs			Share-based Compensation Costs			Total
Balance at December 31, 2013	$	—		$	881		$	—		$	—		$	881
Accruals	1,713			1,170			3,579			1,298			7,760
Payments	(1,713		)	(1,819		)	(1,828		)	—			(5,360		)
Share-based compensation	—			—			—			(1,298		)	(1,298		)
Balance at December 31, 2014	$	—		$	232		$	1,751		$	—		$	1,983

The balance of the restructuring liability at December 31, 2014 consists of approximately $1.9 million in current liabilities and $60,000 in non-current liabilities. The balance of the restructuring liability at December 31, 2014 is anticipated to be fully distributed by the end of 2016, at the expiration of the Company’s facility lease in San Diego.