Inventories consist primarily of raw materials related to component parts and finished goods. The following is a summary of the Company’s inventories by category:


	December 31,
	2022		2021
	(in thousands)
Raw materials	$	410	$	1,905
Finished goods		4,626		3,807
Total inventories	$	5,036	$	5,712

Prepaid expenses and other current assets consist of the following:


	December 31,
	2022		2021
	(in thousands)
Advances to suppliers	$	2,000	$	95
Marketing costs		1,709		1,948
Payroll advances		1,686		3,889
Software subscriptions		1,553		1,468
Product launch fee		252		—
Insurance costs		78		2,945
Other		568		528
Total prepaid expenses and other current assets	$	7,846	$	10,873

Property and equipment, net, consists of the following:


	December 31,
	2022			2021
	(in thousands)
Capitalized software	$	11,579		$	11,569
Tools and lab equipment		5,087			4,712
Furniture and fixtures		2,440			906
Leasehold improvements		993			861
Computer and equipment		482			401
		20,581			18,449
Less accumulated depreciation and amortization		(13,140	)		(8,898	)
Total property and equipment, net	$	7,441		$	9,551

Depreciation and amortization expense for the years ended December 31, 2022, 2021 and 2020 is $4.8 million, $4.2 million and $2.5 million, respectively, which includes amortization of capitalized software costs of $3.5 million, $2.1 million and $0.8 million, respectively.

Accrued expenses consist of the following:


	December 31,
	2022		2021
	(in thousands)
Accrued compensation	$	8,070	$	4,845
Accrued warranty reserve		3,765		4,014
Refunds due to customers		580		376
Other accrued expenses		300		—
Total accrued expenses	$	12,715	$	9,235

The sales returns reserve consists of the following activity:


	Year ended December 31,
	2022			2021			2020
	(in thousands)
Sales returns reserve, beginning balance	$	13,827		$	4,326		$	3,759
Reduction of revenue		18,240			37,674			22,676
Decrease related to Pricing Concession		(11,263	)		—			—
Utilization of sales returns reserve		(16,862	)		(28,173	)		(22,109	)
Sales returns reserve, ending balance	$	3,942		$	13,827		$	4,326

During the year ended December 31, 2022, as part of the Pricing Concession, the Company recorded a decrease in its insurance-related sales return reserve liability of $11.3 million related to unsubmitted and unpaid claims, which was recorded against revenue in the consolidated statement of operations. Please see caption “DOJ investigation and settlement and claims audits” in Note 1.

The allowance for credit losses consists of the following activity:


	Year ended December 31,
	2022			2021			2020
	(in thousands)
Allowance for credit losses, beginning balance	$	4,838		$	1,868		$	225
Charged to expense		713			9,615			2,352
Accounts written off, net of recoveries		(5,393	)		(6,645	)		(709	)
Allowance for credit losses, ending balance	$	158		$	4,838		$	1,868

The accrued warranty reserve consists of the following activity:


	Year ended December 31,
	2022			2021			2020
	(in thousands)
Accrued warranty reserve, beginning balance	$	4,014		$	2,390		$	450
Charged to cost of revenue		2,607			3,229			3,178
Utilization of accrued warranty reserve		(2,856	)		(1,605	)		(1,238	)
Accrued warranty reserve, ending balance	$	3,765		$	4,014		$	2,390