Inventories

12 Months Ended

Jul. 31, 2016

Inventory Disclosure [Abstract]

Inventories

3. INVENTORIES

The Company’s inventory consists of the following (in thousands):

	July 31, 2016		July 31, 2015
Work-in-progress, including accessories and spare parts	$	–	$	11
Finished goods		99		424
Total inventories	$	99	$	435

The Company recorded inventory valuation adjustments of $327,000 and $20,000 for the years ended July 31, 2016 and 2015. The $327,000 inventory valuation adjustment for the year ended July 31, 2016 resulted from management’s year-end business review and related assessment of the net realizable value of the Exer-Rest units. Factors in this determination included the age of inventory, recent historical sales, and the uncertainty of when the Company would have a sales team, either internal or through an alliance or collaboration, for the Exer-Rest. Previous to year end, factors similar to those above led management to conclude that inventory was recorded at the lower of cost and net realizable value (or lower-of-cost or market for previous years). In light of the change in circumstances in connection with management's year-end business review which included a decision to not pursue re-hiring a sales force or such other alternatives in the foreseeable future, management reassessed its inventory valuation and recorded a provision on inventory. Additionally the inventory adjustment includes spare parts and a single used Exer-Rest.

A summary of the inventory valuation adjustment consists of the following (in thousands):

	Inventory Valuation Adjustment
Finished goods including landing costs	$	313
Spare parts		11
Used inventory		3
Total inventory valuation adjustment	$	327

The $20,000 inventory valuation adjustments for the year ended July 31, 2015 was related to damage sustained to certain units in the warehouse.

Although it does not plan to do so, if the Company were to dispose of the inventory outside the course of normal business, the amount recovered by the Company may likely be substantially less than the carrying value.