During the third quarter of fiscal 2016, we announced a financial improvement plan that resulted in a reduction in global headcount of approximately 11%. This plan was implemented to re-align our fixed costs with our near-term to mid-term expectations for our business. In addition, during the first quarter of fiscal 2017, we decided to terminate production and marketing of a specific product line due to limitations in its design. Since this decision was made, we have written off $290,000, net related to inventory and impaired certain customer receivable balances in the amount of $127,000. By the second quarter of fiscal 2018, we had substantially completed the plan that was announced; we incurred total pre-tax cash and non-cash charges relating to the original restructuring plan, as well as the additional charges from the terminated product line, of $3,531,000.

In January 2018, a judge in a trade secrets case brought by Perceptron granted the defendants’ motions for recovery of their attorney fees (see Note 17, “Commitments and Contingencies” for further discussion relating to this matter). A charge in the amount of $675,000 was recorded as a liability in the second quarter of fiscal 2018. We appealed this court decision. In January 2019, we settled with the defendants and ended our appeal in return for a net payment due to them in the amount of $66,000. As a result, in the second quarter of fiscal 2019, we adjusted our accrual.

The charges recorded as Severance, Impairment and Other Charges are as follows (in thousands):

	Three Months Ended December 31,						Six Months Ended December 31,
	2018			2017			2018			2017
Severance and Related Costs	$	-		$	(17	)	$	-		$	(13	)
Court Award		(609	)		675			(609	)		675
Impairment		-			-			-			(42	)
Inventory Write-Off		-			-			-			(14	)
Total	$	(609	)	$	658		$	(609	)	$	606

Severance income for the three months ended December 31, 2017 was primarily associated with an adjustment at our Chinese location.

Severance expense for the six months ended December 31, 2017 was associated with adjustments at our China (income of $15,000) and U.S. (expense of $2,000) locations as we reached final settlements related to several individuals impacted by the reduction in force. The decrease in the impairment was due to a collection of an accounts receivable balance that was previously written off. The decrease of the inventory write-off was due to finding other uses for some of the inventory originally designated as impaired.

The following table reconciles the activity for the Reserves for Restructuring and Other Charges (in thousands):

	Six Months Ended December 31,
	2018			2017
Beginning Balance at July 1,	$	675		$	1,113
Accruals - Severance Related		-			(13	)
Accruals / Adjustments - Court Award		(609	)		675
Payments		-			(531	)
Ending Balance at December 31,	$	66		$	1,244

The remaining accrual balance at December 31, 2018 is the accrual for the settlement related to the trade secrets case. We expect to make this payment during the third quarter of fiscal 2019.