Restructuring

12 Months Ended

Dec. 31, 2022

Restructuring and Related Activities [Abstract]

In the first quarter of 2022, the Company conducted a strategic review of its operations. The results of this review resulted in the following actions being taken: (i) the closure of the Company’s production center and warehouse in Quincy, IL; (ii) the termination of engineering activities in the Company’s Boston office; (iii) elimination of all of the Company’s plug-in hybrid products and a substantial majority of the Company’s hybrid drivetrain products; (iv) a reduction of the Company’s workforce of approximately 50 employees; and (v) the termination of the Company’s partnership with eNow. The Company recognized a total charge of $2.4 million related to these activities.

In connection with the Company’s reduction in its workforce, the Company incurred severance charges included in Selling, General and Administrative expenses of approximately $840,000 of which $725,000 was paid in the first quarter of 2022, $67,000 was paid in the second quarter of 2022, and the remainder paid in the third quarter of 2022.

In connection with the Company’s decision to exit certain product lines, the Company incurred an inventory obsolescence charge, included in Net Loss from Discontinued Operations, of $1.5 million in the first quarter of 2022. In the second quarter of 2022, the Company recognized an additional $0.2 million of non-cash charge related to inventory obsolescence.

In the third quarter of 2022, with the acquisition of Legacy Spruce Power, the Company initiated an evaluation of strategic alternatives for the Company’s Drivetrain business. In the fourth quarter of 2022, with the announcement that the Company was exiting the Drivetrain business and corporate restructuring actions, the Company recognized $19.1 million of restructuring and restructuring related charges. These charges included $3.6 million of severance charges, $5.0 million of non-cash charges for accelerated vesting of certain equity awards, and $10.6 million of non-cash charges related to inventory obsolescence.

Included in Selling, General and Administrative Expenses were $8.6 million of charges for severance and accelerated vesting of certain equity awards. Included in Net Loss from Discontinued Operations were $10.6 million of charges for severance and accelerated vesting of certain equity awards and the inventory obsolescence charges.

Restructuring Liability

The following table summarizes the activity for the year ended December 31, 2022 in the restructuring liability:


(Amounts in thousands)	Balance at December 31, 2021		Additions		Payments		Balance at December 31, 2022

Employee termination charges	$	—	$	4,435	$	(1,007)	$	3,428