Cost Reduction Plans

Over the past several quarters, the Company announced plans to reduce the overall costs of its global operations, collectively referred to as the Cost Reduction Plans, The Cost Reduction Plans were primarily a response to the anticipated impact on the Company’s financial results and operations caused by changes in the 3D box office performance of certain motion pictures due to perceived changes in consumer preference and the fact that the Company’s 3D cinema business is maturing in many markets like the United States in which the Company expected equipment installations to continue to slow. As part of the Cost Reduction Plans, the Company reduced its staff, rescoped and made changes to certain R&D projects, reduced certain non-personnel related general and administrative expenses and streamlined certain manufacturing operations. The Company further focused the expansion of its global cinema platform on emerging growth markets and higher performing motion picture exhibitors.

The Company accounts for the Cost Reduction Plans in accordance with the Accounting Standards Codification (ASC), including ASC 420, "Exit or Disposal Cost Obligations", ASC 712, "Compensation-Nonretirement Postemployment Benefits", ASC 840, "Leases" and ASC 360, Property, Plant and Equipment (Impairment or Disposal of Long-Lived Assets)". As a result of the Cost Reduction Plans, including workforce reduction and the commencement of the relocation of manufacturing, the Company incurred termination and other charges totaling approximately $6.1 million through March 31, 2015. Charges of $0.8 million have been incurred in the nine months ended December 31, 2015. Both the charges incurred during the three and nine months ended December 31, 2015 included a lease termination charge of $1.2 million and partially offset by decreases in overall rent expenses of $0.6 million both relating to us terminating a portion of the operation facility in Boulder, Colorado. Therefore, the total charges resulting from the Cost Reduction Plans were $6.9 million through December 31, 2015. The following table summarizes the charges resulting from the implementation of the Cost Reduction Plans during the three and nine months ended December 31, 2015 and December 31, 2014:



	Three months ended December 31
	2015						2014
(in thousands)	Personnel		Leasehold		Total		Personnel		Leasehold		Total
Cost of revenue	$	—	$	—	$	—	$	1	$	132	$	133
Research and development	20		—		20		115		—		115
Selling and marketing	2		—		2		59		—		59
General and administrative	—		595		595		2		—		2
Total	$	22	$	595	$	617	$	177	$	132	$	309



	Nine months ended December 31
	2015						2014
(in thousands)	Personnel		Leasehold		Total		Personnel		Leasehold		Total
Cost of revenue	$	3	$	7	$	10	$	25	$	505	$	530
Research and development	39		—		39		115		—		115
Selling and marketing	137		22		159		75		—		75
General and administrative	—		595		595		192		—		192
Total	$	179	$	624	$	803	$	407	$	505	$	912

The following table summarizes the activity resulting from the implementation of the Cost Reduction Plans within accrued expenses and other liabilities:



	Payments excluding non-cash impairment
(in thousands)	Personnel			Leasehold			Total
Cost reduction plan liabilities as of March 31, 2015	$	1,249		$	265		$	1,514
Charges	179			624			803
(Payments)	(735		)	(775		)	(1,510		)
Cost reduction plan liabilities as of December 31, 2015	$	693		$	114		$	807

There is no guarantee that any net cost reduction will actually be achieved as a result of the Cost Reduction Plans.

Additionally, the Company leases facility space for its headquarters in Beverly Hills, California and its operation and R&D facility in Boulder, Colorado that includes approximately $4.8 million and $4.7 million, respectively, in leasehold improvements and other items classified as fixed assets (see Note 3 "Cinema Systems and Property & Equipment"). If the Company were to vacate any of this facility space, these fixed assets could become subject to an impairment assessment and contract termination costs or sublease loss could be incurred. During the fiscal quarter ended December 31, 2015, the Company terminated a portion of its operation space in Boulder, Colorado, which resulted in impairment charges for all associated leasehold improvements. Charges to cost of revenue totaled $1.1 million for both the three and nine months ended December 31, 2015.