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RESTRUCTURING AND OTHER CHARGES

EMS Segment Restructuring and Facility Consolidation

September 21, 2020,

we notified employees in our Fremont, California facility of a plan to consolidate all manufacturing for our EMS segment into our manufacturing operation located in Mt. Laurel, New Jersey. Currently, our interface products are manufactured in the Fremont facility, and our manipulator and docking hardware products are manufactured in the Mt. Laurel facility. The consolidation of manufacturing operations will result in the closure of the Fremont facility and the termination of certain employees at that location. The consolidation is being undertaken to better serve customers through streamlined operations and reduce the fixed annual operating costs for the EMS segment. The consolidation is expected to be substantially completed during the

fourth

quarter of

2020.

A small engineering and sales office will be maintained in northern California after the consolidation of manufacturing operations has been completed.

As a result of this action, we expect to incur cash charges for severance and other

one

-time termination benefits ranging from

$50

$100.

In addition, we expect to incur cash charges for other costs related to the facility consolidation, including moving costs and production start-up costs, ranging from

$300

$400.

Most of these costs are expected to be incurred during the

fourth

quarter of

2020.

Costs incurred through

September 30, 2020

related to these actions were

$14.

The costs are included in general and administrative expense on our statement of operations. The cash payments are expected to be made during the

fourth

quarter of

2020

and the

first

quarter of

2021.

In addition, we intend to try to sublease our facility located in Fremont, California. When manufacturing operations cease in the Fremont facility we expect to record an impairment charge related to the ROU asset for the lease of the Fremont facility as we do

not

currently expect to sublet the facility for the full remaining term of the lease. We currently estimate the amount of this charge will range from

$700

$800.

This impairment charge is expected to be recorded in the

fourth

quarter of

2020

and will be a non-cash charge As of

September 30, 2020,

the ROU asset related to this facility totaled

$1,174.

Changes in the amount of the liability for accrued restructuring for the

nine

months ended

September 30, 2020

are as follows:

Balance - January 1, 2020	$	-
Accruals for other associated costs		14
Cash payments		(14	)
Balance September 30, 2020	$	-

Executive Management Changes

August 6, 2020,

our Board of Directors accepted the resignation of James Pelrin as President and Chief Executive Officer (“CEO”) and as a director. In connection with his resignation, we entered into a Separation and Consulting Agreement (the “Separation Agreement”) with Mr. Pelrin dated

August 6, 2020

pursuant to which Mr. Pelrin has agreed to provide consulting services for

three

months, subject to an extension of up to an additional

three

months at our option. The Separation Agreement also provides that Mr. Pelrin is entitled to severance and other benefits. The full text of the Separation Agreement is included as Exhibit

10.1

to our Current Report on Form

-K (

“8

-K”) filed on

August 11, 2020

with the SEC.

August 6, 2020,

our Board of Directors approved, effective as of

August 24, 2020 (

the “Start Date”), the appointment of Richard N. Grant, Jr. to the position of President and CEO and to fill the vacancy on our Board of Directors left by Mr. Pelrin's resignation. We entered into a letter agreement with Mr. Grant, subject to his appointment as our President, CEO and a director, which appointments occurred on

August 6, 2020

and became effective as of the Start Date. The full text of the letter agreement is included as Exhibit

10.2

to our

-K filed on

August 11, 2020

with the SEC.

Total costs incurred during the

nine

months ended

September 30, 2020

related to these executive management changes were

$495,

which consisted of

$224

for the executive management search firm,

$128

for legal fees related to the transition, and

$143

for severance and consulting fees paid to our former CEO. These costs were partially offset by the reversal of

$117

of expense related to stock-based compensation awards forfeited at his termination date by our former CEO. All of these costs were included in general and administrative expense in our consolidated statement of operations and were accrued and paid during the

nine

months ended

September 30, 2020.

We expect to incur an additional

$20

in consulting fees during the

fourth

quarter of

2020

related to these actions. In addition, in connection with these actions, we are reducing the administrative footprint in our Mansfield, Massachusetts corporate office associated with the reestablishment of the Mt. Laurel, New Jersey office as our corporate headquarters. We expect to record a non-cash impairment charge in the range of

$100

$200

during the

fourth

quarter of

2020

related to the ROU asset associated with the lease of the corporate space in Mansfield. As of

September 30, 2020,

the ROU asset related to this space totaled

$242.

We do

not

expect to incur any additional costs related to these actions after

December 31, 2020.