Inventories

3 Months Ended

Oct. 31, 2016

Inventory Disclosure [Abstract]

Inventories

3. INVENTORIES

The Company’s inventory consisted of the following at October 31, 2016 and July 31, 2016 (in thousands):

	October 31, 2016		July 31, 2016
Finished goods	$	99	$	99
Total inventories	$	99	$	99

The Company recorded inventory valuation impairment adjustments of $327,000 for the year ended July 31, 2016. The $327,000 inventory valuation adjustment for the year ended July 31, 2016 is related to 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). Given the change in circumstances around year end which included a lower likelihood of having a sales force, management reassessed its determination and recorded a provision on inventory. Additionally the inventory adjustment includes spare parts and a single used Exer-Rest unit that is no longer in the possession of the Company.

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

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