Balance Sheet Detail

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Detail

BALANCE SHEET DETAIL

Inventories

Valuation adjustments for excess and obsolete inventory, reflected as a reduction of inventory at December 31, 2023 and 2022, were $13.0 million and $3.6 million, respectively.

Inventories of these adjustments, consist of the following (in thousands):

	December 31,
	2023		2022
Raw materials	$	36,970	$	36,323
Work in process	889		2,117
Finished goods	24,741		25,188
Total	$	62,600	$	63,628

Long-term inventories

Valuation adjustments for excess and obsolete inventory, reflected as a reduction of long-term inventory at December 31, 2023, was $12.8 million. The Company’s long-term inventories relate to AviClear devices, and parts for device manufacturing, not expected to be sold in the twelve months ended December 31, 2024.

Long-term inventories of these adjustments, consist of the following (in thousands):

	December 31,
	2023		2022
Raw materials	$	8,672	$	—
Work in process	2,049		—
Finished goods	5,562		—
Total	$	16,283	$	—

Other current assets and prepaid expenses

Other current assets and a prepaid expenses, consists of the following (in thousands):

	December 31,
	2023		2022
Deposits with vendors	$	9,501	$	13,917
Foreign tax receivable	6,307		7,147
Prepayments	3,819		2,972
Other	225		—
Total	$	19,852	$	24,036

Property and Equipment, net

Property and equipment, net, consists of the following (in thousands):

	December 31,
	2023		2022
Leasehold improvements	$	1,010	$	793
AviClear devices	38,490		19,904
Office equipment and furniture	1,884		1,936
Machinery and equipment	4,944		5,106
Assets under construction	1,274		17,876
	47,602		45,615
Less: Accumulated depreciation	(10,327)		(5,247)
Property and equipment, net	$	37,275	$	40,368

In November 2023, the Company introduced a new business model for AviClear, providing for the purchase of the device upfront. From the FDA approval in April 2022 through October 2023, AviClear devices were leased to customers, and parts and devices not yet placed in service were recorded as property and equipment on the consolidated balance sheet, and further categorized as assets under construction. As a result of the new business model, the Company has determined to classify AviClear parts and devices not currently leased as inventories at December 31, 2023. AviClear devices currently leased continue to be classified as property and equipment on the consolidated balance sheet.

The Company identified indicators of impairment during the twelve months ended December 31, 2023, including a decline in financial results and market capitalization. The Company evaluated its long-lived assets, including property and equipment, for potential impairment and concluded that an impairment was not required. An impairment may potentially result in partial or full write-down of these balances. The Company will continue to monitor financial results and market capitalization. Should the financial results continue to deteriorate, an impairment of long-lived assets, including property and equipment, may become reasonably possible.

Goodwill

Goodwill is related to the acquisition of Iridex’s aesthetic business unit, and customer relationships in the Benelux countries acquired from a former distributor in 2013. Goodwill was $1.3 million as of December 31, 2023 and 2022.

The Company assesses goodwill for impairment at the reporting unit level at least annually and may test more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable.

In the fourth quarter of 2023, the Company identified indicators of impairment, including a decline in the market capitalization. The Company performed an impairment test by comparing the fair value with its carrying value, including goodwill, and concluded it is unlikely to have a fair value below the carrying value. The Company concluded that no impairment charges were required during the year ended December 31, 2023.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	December 31,
	2023		2022
Bonus and payroll-related accruals	$	13,949	$	18,951
Accrued sales tax	6,325		9,066
Liability for inventory in transit	5,461		7,028
Sales and marketing accruals	4,929		5,347
Product warranty	2,593		3,254
Jabil settlement obligation, net (Note 16)	8,908		—
Other accrued liabilities	12,890		13,806
Total	$	55,055	$	57,452