RESTRUCTURING COSTS

In the fourth quarter of 2017, the Company executed a series of restructuring actions designed to sharpen the Company’s strategic focus and establish a more cost-efficient operating structure. The restructuring activities primarily focused on a reduction of the Company’s global workforce in conjunction with steps taken to:

•Significantly reduce the Company’s presence in China and focus its efforts on Mobile OEM licensing in that region;

•Cease its Mobile Advertising activities; and

•Narrow its focus in the Gaming and VR/AR markets on development efforts to bolster its IP licensing model in these markets

The restructuring plan is expected to increase internal efficiencies through the consolidation of certain sites of operation and has resulted in the elimination of approximately 56 positions, or 41%, of the worldwide employee base.

For the year ended December 31, 2017, the Company recorded restructuring expenses of $1.6 million. There were no additional restructuring activities during the three and six months June 30, 2018. There were $44,000 adjustments to the 2017 restructuring costs that were reflected in the condensed consolidated statements of operations for the three and six months ended June 30, 2018. There were no restructuring costs for the three and six months ended June 30, 2018.

Employee separation costs are associated with worldwide headcount reductions. Asset-related charges consist primarily of accelerated depreciation costs related to the closure of one of the Company’s offices in China. Accelerated depreciation costs represent the difference between the depreciation expense as determined using the useful life of the assets prior to the restructuring activities and the revised useful life resulting from the restructuring activities. Other expenses consist primarily of lease termination expenses related to the closure of one of the Company’s offices in China.

Substantially all accrued amounts related to the 2017 restructuring activities were paid during the first quarter of 2018. The following table presents a reconciliation of the restructuring reserve recorded within accrued liabilities on the Company’s condensed consolidated balance sheet as of June 30, 2018:



(in thousands)	Employee Separation Costs			Asset-Related Charges		Other			Total
Balance as of December 31, 2017	$	1,522		$	—	$	57		$	1,579
Charges	—			—		—			—
Adjustments	(44		)	—		—			(44		)
Non-cash activity	(10		)	—		(28		)	(38		)
Cash Payments	(1,468		)	—					(1,468		)
Balance as of June 30, 2018	—			—		29			29