Balance Sheet Details

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Inventories

Inventories consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Raw materials	$	40,804	$	36,970
Work in process	4,816		889
Finished goods	11,288		24,741
Total	$	56,908	$	62,600

The Company regularly reviews its inventories to identify items that may no longer be sellable due to age, damage, or shifts in customer demand. Inventory excess and obsolescence expense and inventory write off expense are included in cost of goods in the Company's condensed consolidated statements of operations. The Company will continue to evaluate its inventories and make adjustments as necessary to reflect market conditions.

Valuation adjustments for excess and obsolete short-term inventory, reflected as a reduction of inventories at September 30, 2024 and December 31, 2023, were $0.9 million and $13.0 million, respectively.

Other current assets and prepaid expenses

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


	September 30, 2024		December 31, 2023
Deposits with vendors	$	4,778	$	9,501

Prepayments	4,894		3,819
Sale tax and VAT receivable	2,870		6,307
Other	300		225
Total	$	12,842	$	19,852

Long-term inventories

The Company’s long-term inventories relate parts for device manufacturing, not expected to be sold in the twelve months ended September 30, 2025. Long-term inventories consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Raw materials	$	16,610	$	8,672
Work in process	271		2,049
Finished goods	11,783		5,562
Total	$	28,664	$	16,283

Valuation adjustments for excess and obsolete long-term inventory, reflected as a reduction of long-term inventories at September 30, 2024 and December 31, 2023, were $40.3 million and $12.8 million, respectively.

Property and Equipment, net

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


	September 30, 2024		December 31, 2023
AviClear devices	$	25,999	$	38,490

Machinery and equipment	5,546		4,944
Office equipment and furniture	1,815		1,884
Leasehold improvements	1,438		1,010
Assets under construction	653		1,274
	35,451		47,602
Less: Accumulated depreciation	(11,930)		(10,327)
Property and equipment, net	$	23,521	$	37,275

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. 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 nine months ended September 30, 2024, 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.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):


	September 30, 2024		December 31, 2023
Bonus and payroll-related accruals	$	12,598	$	13,949
Accrued interest	3,736		1,304
Product warranty	3,549		2,593
Sales and marketing accruals	3,291		4,929
Accrued sales tax	2,810		6,325
Liability for inventory in transit	1,456		5,461
Jabil settlement obligation, net	—		8,908
Other accrued liabilities	8,532		11,586
Total	$	35,972	$	55,055