NOTE 12 – Restructuring Costs

In February 2017, the Company announced its plan to transfer its wafer fabrication operation located in Lee’s Summit, MO. (“KFAB”) to other Company-owned wafer fabrication plants and external foundries. The Company ceased production operations at KFAB late in third quarter 2017 and vacated the premises in November 2017. Employees were provided retention and standard severance packages. During the six months ended June 2017, the Company received $6.0 million of insurance proceeds as a result of the fires sustained at the KFAB facility during 2016 of which $4.2 million is recorded in Cost of Goods Sold and $1.8 million is recorded in Other Income. During the six months ended June 30, 2018, the Company received $2.9 million of insurance proceeds as a result of the aforementioned fire. This $2.9 million is recorded in other income.

The table below sets forth the restructuring costs, recorded in restructuring expense in the condensed consolidated statements of operations, incurred during the three and six months ended June 30, 2018 and 2017:

	Three Months Ended					Six Months Ended
	June 30, 2018		June 30, 2017			June 30, 2018			June 30, 2017
Early supply contract termination	$	-	$	(246	)	$	-		$	1,985
Cost of equipment relocation		526		72			220			72
Asset retirement obligation		-		234			-			234
Retention costs		-		1,778			(14	)		1,778
	$	526	$	1,838		$	206		$	4,069

In connection with the KFAB closure, during the six months ended June 30, 2017, the Company also recorded separation costs of $0.5 million in cost of goods sold, $0.09 million in selling, general and administrative expense and $0.02 million in research and development expense.

The table below sets forth the costs accrued and paid related to the KFAB restructuring:

	Retention Costs			Equipment Relocation			Total
Beginning balance, January 1, 2018	$	659		$	645		$	1,304
Costs accrued		(14	)		526			512
Restructuring costs paid		(645	)		(1,171	)		(1,816	)
Balance at June 30, 2018	$	-		$	-		$	-

This asset retirement obligation is for the estimated amounts to be paid to contractors to remediate the KFAB facility upon vacating the property. The table below sets forth the asset retirement obligation related to the KFAB restructuring:

Asset retirement obligation, January 1, 2018	$	389
Reversal of accrual		(389	)
Asset retirement obligation, June 30, 2018	$	-

In connection with the asset retirement obligation as of June 30, 2018, the offsetting asset has been fully amortized.