Inventory consisted of the following as of:


	September 30, 2021		December 31, 2020
Finished goods	$	9,219	$	7,331
Raw materials		1,006		581
Total inventory	$	10,225	$	7,912

Prior to the reverse recapitalization, the Company capitalized transaction costs for accounting and legal services related to the Merger. As part of the reverse recapitalization those costs, including deferred underwriting fees, were reclassified to additional paid-in capital in equity upon closing the Merger. Total costs capitalized by Old Owlet and the surviving Owlet totaled $11,836.

Prepaid expenses and other current assets consisted of the following as of:


	September 30, 2021		December 31, 2020
Prepaid insurance	$	4,531	$	499
Prepaid expenses		872		163
Prepaid hosting		527		369
Point of purchase ("POP") displays		488		376
Prepaid inventory		387		-
Right of return asset		282		146
Other current assets		1		93
Total prepaid expenses and other current assets	$	7,088	$	1,646

Property and equipment consisted of the following as of:


	September 30, 2021			December 31, 2020
Tooling and manufacturing equipment	$	2,220		$	1,731
Furniture and fixtures		569			569
Computer equipment		471			214
Software		213			213
Leasehold improvements		26			9
Total property and equipment		3,499			2,736
Less accumulated depreciation and amortization		(1,610	)		(1,018	)
Property and equipment, net	$	1,889		$	1,718

Depreciation and amortization expense on property and equipment was $253 and $230 for the three months ended September 30, 2021 and 2020, respectively. For the three months ended September 30, 2021 and 2020, the Company allocated $160 and $152, respectively, of depreciation and amortization expense related to tooling and manufacturing equipment and software to cost of revenues.

Depreciation and amortization expense on property and equipment was $691 and $547 for the nine months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, the Company allocated $457 and $308, respectively, of depreciation and amortization expense related to tooling and manufacturing equipment and software to cost of revenues.

Intangible assets consisted of the following as of:


	September 30, 2021
	Gross		Accumulated Amortization			Net
Patents and trademarks	$	602	$	(151	)	$	451
Film production costs		277		(140	)		137
Total intangible assets	$	879	$	(291	)	$	588

	December 31, 2020
	Gross		Accumulated Amortization			Net
Patents and trademarks	$	511	$	(119	)	$	392
Film production costs		278		(65	)		213
Total intangible assets	$	789	$	(184	)	$	605

Amortization expense resulting from intangible assets was $37 and $29 for the three months ended September 30, 2021 and 2020, respectively. For the three months ended September 30, 2021 and 2020, the Company allocated $26 and $18, respectively, of amortization expense related to film production costs to cost of revenues.

Amortization expense resulting from intangible assets was $108 and $74 for the nine months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, the Company allocated $76 and $41, respectively, of amortization expense related to film production costs to cost of revenues.

The future aggregate amounts of amortization expense to be recognized related to finite-lived intangible assets as of September 30, 2021 is as follows for the:


Years Ending December 31:	Amount
Remainder of 2021	$	38
2022		152
2023		46
2024		44
2025		44
Thereafter		103
	$	427

As of September 30, 2021, the Company has capitalized $161 of legal costs associated with pending patents and trademarks which are not currently being amortized.

As of September 30, 2021, the Company's internally developed software is still in development and not ready for general release. As such, the Company has not recognized any amortization for the three and nine months ended September 30, 2021.

Accrued and other expenses consisted of the following as of:


	September 30, 2021		December 31, 2020
Accrued and other expenses:
Accrued sales returns	$	4,022	$	2,844
Discounts and allowances		4,009		1,747
Payroll liabilities		2,689		1,768
Sales tax payable		1,625		1,886
Accrued warranty		1,190		924
Other accrued expenses		3,896		1,423
Total accrued expenses	$	17,431	$	10,592

Changes in accrued warranty were as follows:


	For the Three Months Ended September 30,
	2021			2020
Accrued warranty, beginning of period	$	992		$	892
Provision for warranties issued during the period		485			334
Settlements of warranty claims during the period		(287	)		(300	)
Accrued warranty, end of period	$	1,190		$	926

	For the Nine Months Ended September 30,
	2021			2020
Accrued warranty, beginning of period	$	924		$	378
Provision for warranties issued during the period		708			1,427
Settlements of warranty claims during the period		(442	)		(879	)
Accrued warranty, end of period	$	1,190		$	926