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 March 31,					Nine Months Ended March 31,
	2019		2018			2019			2018
Severance and Related Costs	$	-	$	-		$	-		$	(13	)
Court Award		-		-			(609	)		675
Impairment		-		-			-			(42	)
Inventory Write-Off		-		(3	)		-			(17	)
Total	$	-	$	(3	)	$	(609	)	$	603

For the three months ended March 31, 2018, the decrease of the inventory write-off was due to finding other uses for some of the inventory originally designated as impaired.

Severance expense for the nine months ended March 31, 2018 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 for the nine months ended March 31, 2018 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):

	Nine Months Ended March 31,
	2019			2018
Beginning Balance at July 1,	$	675		$	1,113
Accruals - Severance Related		-			(13	)
Accruals / Adjustments - Court Award		(609	)		675
Payments		(66	)		(849	)
Ending Balance at March 31,	$	-		$	926