7. COMMITMENTS AND CONTINGENCIES (a) On January 22, 2013, the Company entered into a license agreement with Advanced NeuroRehabilitation, LLC (ANR) for an exclusive right on ANRs patent pending technology, claims and knowhow. In addition to the issuance of 3,207,005 shares of common stock, the Company agreed to pay a 4% royalty on net revenue on the sales of devices covered by the patent-pending technology and services related to the therapy or use of devices covered by the patent-pending technology. For the years ended December 31, 2019 and 2018, the Company recorded approximately $59 thousand and $0, respectively, in royalty expenses in its consolidated statement of operations. (b) On October 30, 2017, HMI amended the Asset Purchase Agreement with A&amp;B which specified that if the Company fails to obtain FDA marketing authorization for commercialization of or otherwise fails to ensure that the PoNS device is available for purchase by the U.S. Government by December 31, 2021, the Company would be subject to a $2.0 million contract penalty payable to A&amp;B, unless the Company receives an exemption for the requirement of FDA marketing authorization from the U.S. Army Medical Material Agency. In December 2018, the U.S. Army notified the Company that they were amending the Agreement such that the satisfaction of the obligation of the contract was changed from FDA marketing authorization of the PoNS device to submitting of an application for marketing authorization of the PoNS device with the FDA. As the Company submitted its application for marketing authorization of the PoNS device to the FDA on August 31, 2018, and with copies of the submission documents provided to the U.S. Army, the Company has met its obligation under the amended agreement. Based on this amendment the Company has determined that the possibility of a payment under this contractual penalty is remote. (c) In November 2014, the Company signed a development and distribution agreement with Altair LLC to apply for registration and distribution of the PoNS device in the territories of the former Soviet Union. Through March 31, 2019, the Company was entitled to receive a 7% royalty on sales of the devices within the territories. Altair terminated the distribution agreement effective May, 20, 2019. The Company made no commercial sales in the territories pursuant to the distribution agreement. (d) In March 2017, the Company entered into a lease for office space in Newtown, Pennsylvania. The initial term of the lease is from July 1, 2017 through December 31, 2022, with an option to extend until 2027. In July 2017, the Company amended the contract to commence the lease on July 17, 2017 through January 16, 2023, with an option to extend until January 2028. It is not reasonably certain at this point in time that the Company will elect to utilize the option to extend. Monthly rent plus utilities will be approximately $20 thousand per month beginning in January 2018 with a 3% annual increase. The following table summarizes the Companys operating lease information including future minimum lease payments under a non-cancellable lease as of December 31, 2019 (amounts in thousands): For the Year Ending December 31, 2019 Operating lease cost $ 224 Operating lease  operating cash flows $ 246 Weighted average remaining lease term 3.05 years Weighted average discount rate 15.1 % Future minimum lease payments under non-cancellable lease as of December 31, 2019 were as follows: For the Period Ending December 31, 2020 $ 253 2021 260 2022 267 2023 10 Total future minimum lease payments 790 Less imputed interest (153 ) Total liability $ 637 Reported as of December 31, 2019 Current operating lease liability 172 Non-current operating lease liability 465 Total $ 637 (e) On December 29, 2017, HMI (formerly known as NeuroHabilitation Corporation) entered into a Manufacturing and Supply Agreement (MSA) with Key Tronic Corporation (Key Tronic), for the manufacture and supply of the Companys PoNS device based upon the Companys product specifications as set forth in the MSA. Per the agreement, the Company shall provide to Key Tronic a rolling forecast for the procurement of parts and material and within normal lead times based on estimated delivery dates for the manufacture of the PoNS device. The term of the agreement is for three years and the agreement will automatically renew for additional consecutive terms of one year, unless cancelled by either party upon 180-day written notice to the other party prior to the end of the then current term. As of December 31, 2019, the Company had a $0.1 million obligation to Key Tronic to complete the Companys forecast for the procurement of materials necessary for the delivery of PoNS devices. (f) In September 2018, the Company entered into an exclusive strategic alliance agreement with HTC and Heuro to establish up to three founding clinics to treat patients and create a replicable model for future clinic expansion. Under the terms of the agreement, the parties developed a clinic system to facilitate the commercialization of the PoNS Treatment in Canada. Under the terms of the agreement, the parties contracted with the clinics and developed a model for the clinics to deliver clinical services, featuring the PoNS Treatment to manage neurological conditions. During the second quarter of 2019, the Company entered into the clinic expansion phase of this alliance with the addition of three new PoNS authorized clinics, bringing the total number of clinics authorized to treat patients with the PoNS device to five in Canada. The agreement also provided for HTC to pay the Company CAD$750 thousand in three annual payments of CAD$250 thousand beginning December 31, 2019, in consideration for the exclusivity right the Company granted to Heuro. The Company and HTC governed the agreement through a joint steering committee, and each funded up to 50% of Heuros operating budget as agreed upon by a joint steering committee and shared in the net profits and losses of Heuro on a 50/50 basis. On October 30, 2019, the Company entered into a Share Purchase Agreement with HTC to purchase Heuro. The receivable was considered part of the consideration for acquisition and was imbedded in the purchase price allocation. See Note 2 for details of the transaction. For the years ended December 31, 2019 and 2018, the Company recorded $0.1 million and $0.2 million, respectively, in expenses for its share of the estimated costs incurred by Heuro. Additionally, for the year ended December 31, 2018, the Company recorded $0.2 million of expenses incurred by the Company in performing services on behalf of Heuro. The aforementioned expenses were recorded as general and administrative expenses in the Companys consolidated statement of operations and comprehensive loss. During the year ended December 31, 2019, the Company recorded $0.1 million in cost of sales for services rendered in the Companys consolidated statement of operations and comprehensive loss. Further for the year ended December 31, 2019, the Company recognized $37 thousand in fee revenue related to its arrangement with HTC and Heuro (see Note 2).