Balance Sheet Components

3 Months Ended

Mar. 31, 2024

Balance Sheet Components

Balance Sheet Components

6. Balance Sheet Components

Allowance for doubtful accounts

The following is a roll-forward of the allowances for doubtful accounts related to trade accounts receivable for the three months ended March 31, 2024 and 2023:

	Three Months Ended
	March 31,
	2024		2023
		(in thousands)
Beginning balance	$	6,481	$	3,830
Provision for doubtful accounts		929		1,304
Write-offs		(158)		—
Total	$	7,252	$	5,134

Property and Equipment, net

The Company’s property and equipment consisted of the following:

		March 31,		December 31,
	Useful Life	2024		2023
		(in thousands)
Machinery and equipment	3-5 years	$	90,737	$	85,626
Computer equipment	3 years		2,000		1,850
Purchased and capitalized software held for internal use	3 years		11,116		11,636
Leasehold improvements	Lesser of useful life or lease term		47,478		38,999
Construction-in-process			33,192		29,392
			184,523		167,503
Less: Accumulated depreciation and amortization			(58,732)		(56,293)
Total Property and Equipment, net		$	125,791	$	111,210

The Company’s long-lived assets are located in the United States.

During the three months ended March 31, 2024, the increase in net property and equipment was due to expansion projects and purchases of new equipment for the Company’s laboratories located in Texas and California to expand testing capabilities, offset by depreciation expense of $6.3 million recorded in the three months ended March 31, 2024. Depreciation expense of $5.1 million was recorded in the three months ended March 31, 2023. The Company did not incur any impairment charges during either the three months ended March 31, 2024 or 2023.

Other Accrued Liabilities

The Company’s other accrued liabilities consisted of the following:

	March 31,		December 31,
	2024		2023
	(in thousands)
Reserves for refunds to insurance carriers	$	18,023	$	23,245
Accrued charges for third-party testing		13,167		14,823
Testing and laboratory materials from suppliers		17,880		11,229
Marketing and corporate affairs		9,688		10,085
Short term advances		7,050		—
Legal, audit and consulting fees		34,141		43,897
Accrued shipping charges		1,652		3,646
Sales and income tax payable		4,329		3,731
Accrued third-party service fees		7,764		7,111
Clinical trials and studies		6,961		12,126
Operating lease liabilities, current portion		11,957		11,621
Property and equipment purchases		4,429		4,316
Other accrued interest		2,695		1,078
Other accrued expenses		2,492		2,497
Total other accrued liabilities	$	142,228	$	149,405

Reserves for refunds to insurance carriers include overpayments from and amounts to be refunded to insurance carriers, and additional amounts that the Company estimates for potential refund requests during the period. When the

Company releases these previously accrued amounts, they are recognized as product revenues in the condensed statements of operations and comprehensive loss.

The following table summarizes the reserve balance and activities for refunds to insurance carriers for the three months ending March 31, 2024 and 2023:

	March 31,
	2024		2023
	(in thousands)
Beginning balance	$	23,245	$	18,948
Additional reserves		227		2,384
Refunds to carriers		(3,095)		(502)
Reserves released to revenue		(2,354)		(6,559)
Ending balance	$	18,023	$	14,271

As of March 31, 2024, the Company had $7.1 million in short term advances obtained as a result of the disruption to Change Healthcare’s network in February 2024 which are due and payable within ten days of demand.