Supplemental Balance Sheet Disclosures

6 Months Ended

Jun. 30, 2022

Supplemental Balance Sheet Disclosures

Supplemental Balance Sheet Disclosures

5.    SUPPLEMENTAL BALANCE SHEET DISCLOSURES

Components of selected captions in the condensed consolidated balance sheets consisted of the following (amounts in thousands):

Accounts receivable, net

Accounts receivable from product sales are net of allowance for doubtful accounts of $351 and $355 as of June 30, 2022 and December 31, 2021, respectively.

Inventory, net

	As of		As of
	June 30, 2022		December 31, 2021
Raw materials	$	225	$	171
Work-in-process		349		528
Finished goods		60		32
Inventory, gross	$	634	$	731
Inventory reserve		(57)		(255)
Inventory, net	$	577	$	476

During the six months ended June 30, 2022 existing reserves of $161 were charged against work-in-process inventory and inventory reserves were decreased by $37.

Accrued expenses

	As of
	June 30, 2022		December 31, 2021
Employees benefits	$	462	$	712
Professional services		24		174
Legal fees		44		23
Royalty fees		5		10
Franchise fees		20		193
Severance		37		258
Other		62		63
Total	$	654	$	1,433

Deferred revenue

License Revenue

The Company recorded deferred license fee revenue in connection with a Clinical Research and Co-Promotion Agreement with Health Tech Connex Inc. (“HTC”) (the “Co-Promotion Agreement”), as more fully described in the 2021 10-K. Deferred revenue as of both June 30, 2022 and December 31, 2021 included approximately $200 of license fees not yet recognized under the Co-Promotion Agreement. License fee revenue recognized is included in Other Revenue in the Condensed Consolidated Statements of Operations and Comprehensive Loss. On January 31, 2022, the Company notified HTC of its material breaches under the Co-Promotion Agreement which HTC failed to cure under the terms of the Co-Promotion Agreement and as such it is the Company’s position that this exclusivity right is no longer in effect. The Company and HTC are currently discussing opportunities to work together moving forward.

Product Sales

Deferred revenue as of December 31, 2021 included approximately $100 for the fair value of the remaining 16 PoNS devices to be transferred that had been included as consideration in the Company’s acquisition of Heuro Canada, Inc. (“Heuro”).  During the six months ended June 30, 2022, the remaining 16 PoNS devices were transferred and the remaining $100 of deferred revenue was recognized in Product Sales in the Condensed Consolidated Statements of Operations and Comprehensive Loss. There were no PoNS devices, included as consideration in the Heuro acquisition, transferred during the six-month period ended June 30, 2021.