Note 9. Reorganization

In July 2022, the Company's Board of Directors approved a reorganization plan (the "Reorganization") designed to consolidate the Company’s national footprint, streamline legacy leadership, and centralize core business functions following the completion of 13 acquisitions by Fathom since 2019. Pursuant to the Reorganization, the Company intends to:

• Consolidate its existing facility in Oakland, CA into Fathom headquarters in Hartland, WI, improving utilization and reducing costs;

• Establish a Fathom technology center in Fremont, CA that will focus on new and emerging technologies, specifically in the additive market; and

• Consolidate leadership and other roles through a net workforce reduction of approximately 6%, create an accounting shared service organization to streamline company-wide processes and create economies of scale while pursuing additional shared-service systems in other administrative functions.

The Company has commenced workforce reductions and expects to complete these actions by the end of the second quarter of 2023. The Company has also commenced the relocation of its Oakland, CA facility to Hartland, WI and expects to complete these activities by the end of the first quarter 2023. Reorganizing charges are presented on the face of our unaudited consolidated statement of comprehensive loss as an operating expense. For the three months and nine months ended September 30, 2022 and September 30, 2021, the Company has incurred costs of $996 and $0, respectively. Total reorganizing costs are expected to be approximately $1,600 and incurred through June 2023.

The reorganization liability resides in other current liabilities within our unaudited consolidated balance sheet and as of September 30, 2022 consists of the lease termination of our Oakland, CA facility for $149 and employee termination costs of $332. Cash payments are expected to be disbursed by the end of the second quarter of 2023.