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Restructuring and Related Activities
6 Months Ended
Jun. 30, 2013
Restructuring and Related Activities:  
Restructuring and Related Activities Disclosure

6.        RESTRUCTURING

 

In order to reduce operating costs and improve efficiencies, the Company adopted a restructuring plan in June 2013 to reduce certain redundant positions within the Company, eliminating the lease in Irvine, California in order to find office space more appropriate for its needs, and reduce its product development cost to be more in line proportionately to its competitors. The plan is expected to be completed by the end of the third quarter. On June 28, 2013, the Company internally announced that in connection with its restructuring plan, it would terminate the lease obligation in Irvine, California by paying a one-time lease termination payment of $125,000 to terminate its lease 32 months prior to its scheduled expiration. In conjunction with the lease termination, the Company will accelerate the amortization of leasehold improvements and its deferred rent liability associated with the lease.  As of June 30, 2013, this resulted in a reduction of the deferred rent liability by $5,000.   In addition, the Company announced that it eliminated certain redundant positions in connection with its restructuring plan. The employees are eligible for separation benefits upon their termination. On June 30, 2013, the Company recorded $182,000 of one-time restructuring charges associated with restructuring as this was the communication date to certain employees and the lessor of the Irvine lease. During the third quarter of 2013, $62,000 of termination benefits included in the restructuring charge will be paid. At June 30, 2013, liabilities of $62,000 remain in accrued expenses for the unpaid portion of the separation benefits. No other costs were incurred pursuant to the restructuring plan as of June 30, 2013. However, the Company expects to have additional restructuring charges in 2013 of approximately $150,000 as part of its restructuring plan and will record the charges once those changes are announced to the employees.