Restructuring Charges

6 Months Ended

Jun. 30, 2013

15. Restructuring Charges

In December 2012 the Company announced the closure of its tissue engineering facility in Abano Terme, Italy due to the inability to meet strict regulatory standards, effective January 1, 2013, established by the EMA for Advanced Therapy Medicinal Products. The restructuring plan involved a workforce reduction as well as associated asset abandonments. The Company recorded restructuring and impairment charges in the fourth quarter of 2012 of approximately $2.5 million. Of the total restructuring and impairment charges related to the tissue engineering operation, approximately $1.2 million related to the non-cash termination and related impairment of an IPR&D project, $0.3 million related to the disposal of property and equipment, and $0.1 million related to the disposal of inventory. The remaining $0.9 million relates to cash payments that are anticipated to occur in 2013, primarily for employee termination costs.

We made substantial progress in the six months ending June 30, 2013 in completing the planned restructuring. We sold certain previously impaired and written-off equipment, resulting in restructuring credit of $111,178 and $246,785 in the three and six months ended June 30, 2013, respectively. The carrying value of the restructuring accrual approximated fair value at June 30, 2013.

The following table summarizes restructuring accrual activity for the six months ended June 30, 2013:

	Restructuring Accrual
	Employee Severance and Related Benefits			Activity Termination and Facility Closure Costs			Total
December 31, 2012	$	801,453		$	132,279		$	933,732
Charges to Operations		-			-			-
Cash Proceeds, Disbursements		(613,870	)		(45,240	)		(659,110	)
Write Offs and Abandonments		-			-			-
Foreign Exchange Impact		8,422			19			8,441
June 30, 2013	$	196,005		$	87,058		$	283,063

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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