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Restructuring
3 Months Ended
Mar. 31, 2016
Restructuring And Related Activities [Abstract]  
Restructuring

12. Restructuring

As of December 31, 2015, we completed the commercial production and shipment of all ADASUVE orders received from Teva and Ferrer. With commercial production completed, we suspended our ADASUVE commercial manufacturing operations.

During the fiscal year ended December 31, 2015, we concluded that due to (i) the suspension of the ADASUVE commercial production operations during the third quarter of 2015, (ii) our continued operating losses and poor cash flows, (iii) the uncertainty of when we will resume commercial production, (iv) the limited ability to sell the capitalized equipment, and (v) our basic ability to continue as a going concern,  the carrying amounts of our long-lived assets including the first and second manufacturing cells from Autoliv ASP, Inc., or Autoliv, exceeded their fair values based on a Level 3 fair value measurement. We recognized non-cash impairment charges of approximately $1,381,000 on our long-lived assets, $1,229,000 of related inventory with fixed expiration dates, and $1,024,000 on prepayments made to the supplier of our lower housing assembly for fiscal year 2015. During the fourth quarter of 2015, we had recognized an additional $7,210,000 of impairment charges on our long-lived assets.

We did not record any long-lived asset impairment during the three months ended March 31, 2016.

Due to our reacquisition of the ADASUVE commercial U.S. rights under the Teva Amendment, all remaining ADASUVE inventory held by Teva was transferred to us along with a right to resell such inventory for up to one year. The Teva Amendment is intended to allow us to continue to provide ADASUVE product to patients and health care providers either on our own or through another unaffiliated partner, at which time all Teva license rights to ADASUVE would terminate. We accounted for the sub-license rights and the receipt of inventory under ASC 845, Nonmonetary Transaction. We concluded that the cost of the inventory transferred to us shall be based on the fair value of the inventory received as its fair value is more clearly evident than the fair value of the future milestone and royalty obligations relinquished. The fair value of the inventory was determined to be $945,000 recorded as a gain on exchange that is reflected as a non-operating line item within our consolidated statements of loss and comprehensive loss. However, given our continued operating losses, the uncertainty of when we will resume commercial production, the limited ability to sell the inventory, the twelve-month expiration of this inventory and our ability to continue as a going concern, we subsequently fully impaired the inventory we received by recording a $945,000, or $0.05 per share, impairment charge that was included in our cost of goods sold within our consolidated statements of loss and comprehensive loss. Our inventory was fully reserved as of December 31, 2015 and March 31, 2016.

As part of our restructuring plan, we eliminated 33 employees during 2015. Each affected employee received (i) severance payments equal to three months of salary plus an additional amount equal to one week of salary for each year of Alexza service in excess of five years; and (ii) three months of paid medical insurance premiums and outplacement services, or in total, the Severance Package. In addition, our remaining employees have received notification that their positions may be eliminated. If we are unable to obtain additional financing and further restructure our operations, the remaining employees will receive benefits substantially equivalent to the Severance Package. The aggregate cost of the Severance Package for these employees is being amortized over the period in which the employees are expected to provide service. During the three months ended March 31, 2016, we recognized $235,000 of severance related expenses and none in first quarter of 2015. We have accrued $1,707,000 in severance related expenses as of March 31, 2016.