PRSS 2017 Annual Report

59 Accrued liabilities The following table shows the components of accrued liabilities (in thousands): December 31, 2017 2016 Production costs $ 4,037 $ 5,323 Payroll and employee related expense 1,382 1,337 Accrued advertising 1,323 1,616 Accrued sales and business taxes 919 1,072 Professional services 226 564 Unclaimed royalty payments 207 433 Other accrued liabilities 204 332 Royalties-minimum guarantee 194 299 Allowance for sales returns and chargebacks 181 219 Restructuring 20 570 Accrued liabilities $ 8,693 $ 11,765 Allowance for sales returns and chargebacks The following table presents the changes in the allowance for sales returns and chargebacks (in thousands): December 31, 2017 2016 Allowance for sales returns and chargebacks: Balance, beginning of period $ 219 $ 232 Add: provision 2,469 2,662 Less: deductions and other adjustments (2,507) (2,675) Balance, end of period $ 181 $ 219 4. Related Party Transactions On September 1, 2015, we sold our EZ Prints business, which provided a suite of enterprise class deployable software products and services focused on private label e-commerce customization services, pursuant to an asset purchase agreement with EZP Holdings. Vincent Sarrecchia, the chief executive officer of EZP Holdings, was previously serving as the interim chief executive officer of the EZ Prints business pursuant to a consulting agreement with us. Total consideration for the sale was $0.6 million, of which $0.1 million has been received by us and $0.5 million is in the form of a non-interest bearing note receivable due on or before December 31, 2018. The $0.5 million note receivable is still outstanding at December 31, 2017. 5. Escrow Agreement On September 15, 2017, the Letter of Credit provided to the landlord under our production and fulfillment center lease was replaced by an escrow agreement. Pursuant to the terms of the escrow agreement, we deposited $1.5 million in a non-interest bearing account, representing the maximum amount owed to the landlord, only to be drawn on by the landlord should we exercise our right to terminate the production facility and fulfillment center lease prior to the expiration of the term.