Balance Sheet Components

12 Months Ended

Dec. 31, 2022

Note 5: Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	December 31,
	2022		2021
Prepaid expenses	$	223	$	333
Prepaid insurance		977		1,144
Prepaid research and development expenses		1,088		1,899
Australia research and development refundable tax credit		1,003		1,128
Other current assets		276		367
Total prepaid expenses and other current assets	$	3,567	$	4,871

Cortexyme Australia, Pty, Ltd, is eligible to obtain a cash refund from the Australian Taxation Office for eligible R&D

expenditures under the Australian R&D Tax Incentive Program (the “Australian Tax Incentive”). The Australian Tax Incentive is recognized as a reduction to R&D expense when there is reasonable assurance that the relevant expenditure has been incurred, the amount can be reliably measured and that the Australian Tax Incentive will be received. The Company recognized reductions to R&D expense of $0.6 million and $1.1 million for the years ended December 31, 2022 and 2021, respectively.

Novosteo Pty, Ltd is eligible to obtain a cash refund from the Australian Taxation Office for eligible R&D expenditures under the Australian Tax Incentive as well. The Company is eligible to receive a refundable tax credit of $0.5 million and $0 million for the years ended December 31, 2022 and 2021, respectively.

Property and equipment, net

Property and equipment, net consisted of the following (in thousands):


	December 31,
	2022			2021
Computer equipment	$	18		$	53
Lab equipment		415			528
Finance lease right of use assets		124			557
Leasehold improvement		21			58
Office furniture		—			26
Less: accumulated amortization and depreciation		(185	)		(959	)
Property and equipment, net	$	393		$	263

Depreciation expense for property and equipment was $204,000 and $344,000 for the years ended December 31, 2022 and 2021, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expense and other current liabilities consisted of the following (in thousands):


	December 31,
	2022		2021
Personnel expenses	$	1,130	$	820
Professional fees		234		462
Research and development expenses		497		7,108
Current portion of operating lease liabilities		377		741
Current portion of finance lease liability		76		—
Other		185		180
Total accrued expenses and other current liabilities	$	2,499	$	9,311

In response to the reprioritization of the Company's pipeline following the clinical hold on atuzaginstat (COR388) IND application, on February 2, 2022, the Board approved a cost reduction program to reorganize operations and allow continued support for the needs of the business. Under the cost reduction program, the Company lowered headcount through a reduction in workforce. The reduction in force was completed in July 2022. To be eligible for the severance payments, employees had to remain with the Company through their communicated severance date. The Company recognized the severance and related expenses over the requisite employment obligation period.


	For the year ended December 31,
	2022
Beginning accrued severance	$	—
Incurred during the period		3,942
Severance paid during the period		(3,942	)
Ending accrued severance	$	—