10. Restructuring Costs

In June 2017, the Company refocused its clinical development efforts and aligned its resources to focus on the Company’s highest value opportunities while maintaining key capabilities. The Company’s restructuring activities included a reduction of its workforce by approximately 40%, as well stopping enrollment in its EC1456 phase 1b trial as the assessment of trial data did not yield the level of clinical activity necessary to support continued advancement of EC1456. Pursuant to ASC Topic 420, Exit or Disposal Cost Obligations, the Company recorded $2.3 million of restructuring expenses in the nine months ended September 30, 2017 as follows:

included in research and development expenses were expenses for employee termination benefits of $0.9 million, $0.9 million for the remaining EC1456 phase 1b trial expenses, including site close-out expenses, $0.3 million related to other restructuring expenses, and $0.1 million related to fixed asset impairment charges; and

included in general and administrative expenses were expenses for employee termination benefits of $0.1 million.

As of September 30, 2017, the Company had paid all severance related to the restructuring activities, had a clinical trial accrual balance related to the EC1456 phase 1b trial termination of $0.4 million, and an accrual balance related to other restructuring expenses of $37,600, both of which accrual balances are expected to be fully paid by the end of the first quarter of 2018.

The following tables summarize the restructuring accruals for the three and nine months ended September 30, 2017.


			EC1456
	Employee		Phase 1b Trial		Other
	Termination		Termination		Restructuring
	Accrual		Accrual		Costs Accrual		Total
Balance, June 30, 2017	$	181,500	$	778,100	$	45,100	$	1,004,700
Charges for the three months ended September 30, 2017		—		—		—		—
Amounts paid in the three months ended September 30, 2017		(181,500)		(409,764)		(7,500)		(598,764)
Balance, September 30, 2017	$	—	$	368,336	$	37,600	$	405,936


			EC1456
	Employee		Phase 1b Trial		Other
	Termination		Termination		Restructuring
	Accrual		Accrual		Costs Accrual		Total
Balance, January 1, 2017	$	—	$	—	$	—	$	—
Charges for the nine months ended September 30, 2017		1,029,400		947,100		126,500		2,103,000
Amounts paid in the nine months ended September 30, 2017		(1,029,400)		(578,764)		(88,900)		(1,697,064)
Balance, September 30, 2017	$	—	$	368,336	$	37,600	$	405,936