OTHER LONG TERM ASSETS

12 Months Ended

Dec. 31, 2021

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

The following table reflects other long-term assets as of December 31, 2021 and 2020 (in thousands):


	December 31, 2021		December 31, 2020
Investment, net	$	1,579	$	1,579
Operating lease right-of-use assets	735		1,955
Prepaid asset and deposits	2,456		1,936
Other	698		1,031
Total other long-term assets	$	5,468	$	6,501

Investment, net as of December 31, 2021 and 2020 consists of the Company’s investment in NES Therapeutic, Inc. (NES). In August 2018, the Company entered into a Convertible Secured Note Purchase Agreement (Note Agreement) with NES. Pursuant the terms of the Note Agreement, the Company purchased a $3.0 million Convertible Secured Promissory Note (NES Note) for $3.0 million which accrues interest annually at a rate of 10% on $3.0 million principal, with both the principal and accrued interest due at maturity on August 2, 2024. Pursuant to the Note Agreement, the NES Note is convertible into equity based on (i) FDA acceptance of the NDA, (ii) initiation of any required clinical trials by NES, or (iii) a qualified financing event by NES.

As a result of the Company’s adoption of ASU 2016-13 Financial Instruments-Credit Losses (ASU 2016-13 or Topic 326): Measurement of Credit Losses on Financial Instruments on January 1, 2020, the Company estimated an expected credit loss of approximately $1.9 million on the NES Note including accrued interest, which was recognized in Other (expense) income in the Company’s Consolidated Statement of Comprehensive Income in the first quarter of 2020. To calculate the expected credit loss allowance, the Company utilized a probability-of-default method (PDM). This process estimates the probability of the loan being successfully paid back or converted into equity based on certain qualified events. The Company’s expected credit losses can vary from period to period based on several factors, such as progress of the medical research and FDA submission, and overall economic environment and the ability of the investee to fund its operations. As of December 31, 2021, the Company continues to assess an estimated $1.9 million expected credit loss on the NES Note based on evaluation of probability of default that exist.