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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 operations located in Mt. Laurel, New Jersey. The consolidation was substantially completed during the

fourth

quarter of

2020

and resulted in the termination of certain employees at the Fremont location. Prior to the consolidation, our interface products were manufactured in the Fremont facility, and our manipulator and docking hardware products were manufactured in the Mt. Laurel facility. The consolidation was undertaken to better serve customers through streamlined operations and reduce the fixed annual operating costs for the EMS segment. A small engineering and sales office will be maintained in northern California.

As a result of this action, we incurred charges for severance and other

one

-time termination benefits, other associated costs, including moving and production start-up costs, and charges related to exiting the facility, including an impairment charge related to the ROU asset for the lease of the Fremont facility. The total costs incurred in

2020

related to this action were

$903.

We expect to incur additional charges in the

first

half of

2021

as we finalize the integration of the manufacturing operations. These additional costs are expected to range from

$100

$150.

We intend to try to sublease our facility located in Fremont, California. When manufacturing operations ceased in the Fremont facility on

December 28, 2020,

we recorded a non-cash impairment charge of

$522

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. As of

December 31, 2020,

after recording the impairment charge, the ROU asset related to this facility totaled

$597.

Details of the cash and non-cash charges recorded during the year ended

December 31, 2020

related to the EMS segment restructuring and facility consolidation are below. These costs are included in restructuring and other charges on our consolidated statement of operations for the year ended

December 31. 2020.

	Cash Charges		Non-Cash Charges		Total Charges
Severance and other one-time termination benefits	$	69	$	-	$	69
Other associated costs		159		-		159
Impairment of ROU asset		-		522		522
Costs related to subletting the Fremont, CA facility		153		-		153
Total	$	381	$	522	$	903

Executive Management Changes

August 6, 2020,

James Pelrin resigned 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 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 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 letter agreement is included as Exhibit

10.2

to our

-K filed on

August 11, 2020

with the SEC.

Total costs incurred during the year ended

December 31, 2020

related to these executive management changes were

$514,

which consisted of fees for the executive management search firm, legal fees related to the transition, and 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.

In addition, in connection with these actions, we have reduced 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 recorded a non-cash impairment charge of

$90

during the

fourth

quarter of

2020

related to the ROU asset associated with the lease of the corporate space in Mansfield and a cash charge of

$99

for other costs related to reducing the size of this facility. We intend to try to sublease this space, but we do

not

currently expect to sublet it for the full remaining term of the lease. As of

December 31, 2020,

after recording the impairment charge, the ROU asset related to this space totaled

$139.

We do

not

expect to incur any additional costs related to these actions after

December 31, 2020.

Details of the cash and non-cash charges recorded during the year ended

December 31, 2020

related to these actions are below. These severance and

one

-time termination benefits, the impairment charge and the costs associated with subletting the facility in Mansfield are included in restructuring and other charges on our consolidated statement of operations for the year ended

December 31. 2020.

The other associated costs in the table below are included in general and administrative expense on our consolidated statement of operations for the year ended

December 31, 2020.

	Cash Charges		Non-Cash Charges		Total Charges
Severance and other one-time termination benefits	$	133	$	-	$	133
Other associated costs		381		-		381
Impairment of ROU asset		-		90		90
Costs related to subletting the Mansfield, MA facility		99		-		99
Total	$	613	$	90	$	703

Other Charges

In addition to the charges discussed above, during

2020,

we recorded cash charges for severance and other

one

-time termination benefits of

$46

and other costs of

$14

related to headcount reductions and employee relocation. The headcount reductions were primarily in our Thermal segment as a result of a slow-down in business activity early in the year. These costs are included in restructuring and other charges on our consolidated statement of operations for the year ended

December 31. 2020.

Consolidation of Ambrell

s European Operations

During the year ended

December 31, 2019,

we recorded

$240

of restructuring and other charges which were primarily related to the consolidation of Ambrell's European operations. These costs included severance and other

one

-time termination benefits of

$137

and other costs related to the consolidation of

$103.

Accrued Restructuring

The liability for accrued restructuring charges is included in other current liabilities on our consolidated balance sheet. Changes in the amount of the liability for accrued restructuring for the years ended

December 31, 2020

and

2019

are as follows:

Balance - January 1, 2019	$	-
Accruals for severance and other one-time termination benefits		137
Accruals for costs related to the consolidation of Ambrell's European operations		103
Cash payments		(240	)
Balance - December 31, 2019		-
Accruals for severance and other one-time termination benefits		248
Accruals for costs related to subletting the Fremont, CA facility		153
Accruals for costs related to subletting the Mansfield, MA facility		98
Cash payments		(159	)
Balance - December 31, 2020	$	340