RESTRUCTURING

During the first quarter of 2017, we announced a restructuring initiative with a goal of reducing annual operating costs by an estimated $10 million from the 2016 levels. This initiative included an organizational consolidation of management and oversight functions in order to streamline and better align the organization into more focused, efficient, and cost effective reporting relationships, and involved headcount reductions and office closures. This initiative was designed to return the Company to profitability and mitigate the substantial doubt that existed at December 31, 2016 about our ability to continue as a going concern, and considered both quantitative and qualitative information, including our financial position, liquid resources, and obligations due or anticipated within the next year.

The actions included closing our offices in Rochester, Minnesota, New York, New York, and Arlington, Virginia and impacted 20 employees, primarily located in these offices. As a result, included in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2017 are restructuring expenses totaling approximately $0.7 million, consisting of approximately $0.6 million in severance and related benefits, $19 thousand in facilities costs related to the termination of the Rochester, Minnesota lease obligation, and $11 thousand in other costs. We expect to incur an additional $0.4 million in additional restructuring charges in the second quarter of 2017 related to lease termination costs and ongoing facility obligations, as we cease use of additional facilities. The following is a reconciliation of the beginning and ending balances of our restructuring liability:



	Severance and Related Benefits			Facilities			Other			Total
Balance at January 1, 2017	$	—		$	—		$	—		$	—
Additions	643			19			11			674
Payments	(30		)	(19		)	(2		)	(52		)
Balance at March 31, 2017	$	613		$	—		$	9		$	622

While the substantial doubt about our ability to continue as a going concern continued to exist at March 31, 2017, we had $15.0 million in cash and no debt obligations at the end of the quarter. In addition, the actions taken in the first quarter of 2017 resulted in a decrease in operating expenses, excluding restructuring and asset impairment charges, of approximately $0.7 million and $1.5 million over the first quarter of 2017 and the fourth quarter of 2016, respectively. Consequently, we continue to believe that the combination of our current financial position, liquid resources, executive reorganization, and restructuring actions will return us to profitability by the end of 2017 and effectively mitigate the substantial doubt about our ability to continue as a going concern.