NOTE 24: RESTRUCTURING AND OTHER EXIT ACTIVITIES

In October of 2023, the Company made an announcement regarding its restructuring plans to adjust its manufacturing capacity and increase operating efficiency, including terminating the manufacturing process in Mexico, reducing manufacturing capacity in China, and discontinuing the Company’s LCV activity. The program is expected to be completed by the end of the first half of 2024. These decisions were made in order to better align the Company with current market conditions.

The Company determined that the discontinuation of the LCV activity does not represent a strategic shift that will have a major effect on the Company's operations and financial results and therefore it did not meet the criteria for discontinued operations classification.

Restructuring and other exit charges for the year ended December 31, 2023 by segments and type of cost were as follows:

	Solar				e-Mobility
	Employee termination costs		Contract termination and other		Employee termination costs		Inventory write-down		Contract termination and other		Total
Cost of revenues	$	2,561	$	20,593	$	-	$	27,158	$	9,489	$	59,801
Sales and marketing		-		-		4		-		-		4
General and administrative		-		-		297		-		87		384
Total	$	2,561	$	20,593	$	301	$	27,158	$	9,576	$	60,189

For the year ended December 31, 2022, the Company recorded $4,314 of inventory write-downs in cost of revenues as a result of Critical Power's discontinuation.

The Company did not record any restructuring and other exit activities costs for the year ended December 31, 2021

The Company’s liability balance for the restructuring and other exit charges is as follows:

	Employee termination costs			Inventory write-down ¹		Contract termination and other
Balance as of January 1, 2023	$	-		$	-	$	-
Charges		2,862			27,158		30,169
Cash payments		(548	)		-		-
Foreign currency adjustments		59			616		224
Balance as of December 31, 2023	$	2,373		$	27,774	$	30,393

¹Inventory write-down is included under Inventories, net on the balance sheet.

The total amount expected to be incurred for restructuring and other exit charges, which primarily consists of contract terminations related to the solar segment, is $10,558.