BALANCE SHEET COMPONENTS

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BALANCE SHEET COMPONENTS

(7) BALANCE SHEET COMPONENTS

Inventories

Inventories, net consists of the following:

	December 31,
	2021 (As Restated)		2020
Materials	$	1,047,156	$	1,238,332
Work in process		7,540		84,203
Finished goods		32,836,591		15,182,305
	$	33,891,287	$	16,504,840

Finished goods includes consigned inventory held by our customers of $4.5 million and $2.3 million at December 31, 2021 and 2020, respectively and includes in-transit inventory of $6.3 million and $6.2 million at December 31, 2021 and 2020, respectively. The Company reviews inventory for obsolete and slow-moving products each quarter and makes provisions based on its estimate of the probability that the material will not be consumed or that it will be sold below cost. The inventory reserves were $800 thousand and $480 thousand for the years ended December 31, 2021 and 2020, respectively.

Equipment

Equipment, net consists of the following:

	December 31,						Estimated Useful
	2021			2020			lives in years
Computer hardware and software	$	447,092		$	398,520			3
Machinery and equipment		682,980			426,885			5
Molds, tools and dies		997,313			760,563			5
Office furniture and fixtures		85,699			64,128			5
		2,213,084			1,650,096
Accumulated depreciation		(1,450,266	)		(1,195,030	)
	$	762,818		$	455,066

Depreciation expense was $255 thousand and $157 thousand for the years ended December 31, 2021 and 2020, respectively.

Goodwill

In December 2018, Zoom Connectivity acquired the net assets of MCP Networks Inc., a provider of a cloud-based home network management platform. The acquisition expanded Zoom Connectivity’s subscriber base and thereby offered sales opportunities of Zoom Connectivity’s SaaS to these subscribers. Zoom Connectivity recorded $58 thousand of goodwill related to this acquisition in its historical accounts of December 2018. In accordance with the accounting of a common control transaction (Note 4), the Company recorded $58 thousand of goodwill at Zoom Connectivity’s historical carrying amount as of October 9, 2020.

Intangible Assets

In December 2018, Zoom Connectivity acquired the net assets of MCP Networks Inc., a provider of a cloud-based home network management platform. The acquisition expanded Zoom Connectivity’s subscriber base and thereby offered sales opportunities of Zoom Connectivity’s SaaS to these subscribers. Zoom Connectivity recorded $122 thousand of customer relationships related to this acquisition in its historical accounts of December 2018. In accordance with the accounting of a common control transaction (Note 4), the Company recorded Zoom Connectivity’s historical carrying amounts as of October 9, 2020.

Intangible assets consisted of the following at December 31, 2021 and 2020:

	Estimated		As of December 31, 2021							As of December 31, 2020
	Useful		Gross							Gross
	Life		Carrying		Accumulated					Carrying		Accumulated
	(in years)		Amount		Amortization			Net		Amount		Amortization			Net
Customized internal use software		2.5	$	230,106	$	(115,306	)	$	114,800	$	230,106	$	(20,431	)	$	209,675
Customer relationships		9.0		122,435		(42,477	)		79,958		122,435		(28,768	)		93,667
Acquired web domain		5.0		86,732		(18,792	)		67,940		86,732		(1,445	)		85,287
			$	439,273	$	(176,575	)	$	262,698	$	439,273	$	(50,644	)	$	388,629

Amortization expense was $125 thousand and $25 thousand in the years ended December 31, 2021 and 2020, respectively.

The estimated annual amortization expense for each of the five succeeding years and thereafter is as follows:

Years ended December 31,
2022	$	123,097
2023		54,065
2024		31,092
2025		29,609
2026		13,708
Thereafter		11,127
	$	262,698

Accrued expenses

Accrued expenses consists of the following:

	December 31,
	2021		2020
Inventory purchases	$	287,571	$	1,458,850
Payroll and related benefits		210,495		853,402
Professional fees		229,597		618,308
Royalty costs		1,588,025		1,906,439
Sales allowances		1,958,050		1,559,847
Sales and use tax		50,916		183,264
Other		955,263		884,953
	$	5,279,917	$	7,465,063