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Certain Balance Sheet Accounts
 9 Months Ended
Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Certain Balance Sheet Accounts Certain Balance Sheet Accounts
Restricted Cash

The Company’s restricted cash consists of cash collateral that is held by the Company’s financial institutions to secure its financing arrangements. Specifically, restricted cash that is classified within current assets in the condensed consolidated balance sheet consists of cash collateral to secure its current credit card borrowings. Restricted cash included in Other assets in the condensed consolidated balance sheets consists of cash collateral to secure the Company's long-term term-loan facility. Cash as reported on the condensed consolidated statements of cash flows includes the aggregate amounts of cash, cash equivalents, and restricted cash as shown on the condensed consolidated balance sheets and consists of the following (in thousands):
September 30,
20242023
Reconciliation of cash, cash equivalents, and restricted cash reported in the condensed consolidated balance sheet:
Cash and cash equivalents$21,502 $15,165 
Restricted cash300 — 
Restricted cash included in Other assets80 — 
Total cash, cash equivalents, and restricted cash$21,882 $15,165 

Allowance for Credit and Other Losses

The Company records its accounts receivable at sales value and maintains an allowance for its current estimate of expected credit losses from customers. Provisions for expected credit losses are estimated based on historical experience, assessment of specific risk, review of outstanding invoices, and forecasts about the future. The Company establishes specific reserves for customers in an adverse financial condition and adjusts for its expectations of changes in conditions that may impact the collectability of outstanding receivables.

Changes in the Company's allowance for credit and other losses were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Beginning balance$542 $2,898 $3,322 $3,013 
Charges to expense37 (221)(347)(165)
Charges to revenue37 (98)131 (50)
Write-offs(24)(464)(2,514)(683)
Ending balance$592 $2,115 $592 $2,115 

Write-offs for the nine months ended September 30, 2024 related to a settlement agreement with a former retailer for past due receivables which had previously been charged to the provision for credit losses in a prior period. A benefit was recognized to charges to expense during the nine months ended September 30, 2024, which represented a partial recovery of the past due receivables in connection with the settlement.

Inventory

Details of inventory were as follows (in thousands):
September 30, 2024December 31, 2023
Raw materials$199 $688 
Finished goods10,398 5,805 
Total Inventory$10,597 $6,493 
Property and Equipment, net

Property and equipment consisted of the following (in thousands):
September 30, 2024December 31, 2023
Tooling and manufacturing equipment$2,618 $2,632 
Computer equipment322 348 
Furniture and fixtures289 639 
Software106 106 
Leasehold improvements35 35 
Total property and equipment3,370 3,760 
Less: accumulated depreciation and amortization
(3,218)(3,383)
Property and equipment, net$152 $377 

Depreciation and amortization expense on property and equipment was $72 and $146 for the three months ended September 30, 2024 and September 30, 2023, respectively. For the three months ended September 30, 2024 and September 30, 2023, the Company allocated $67 and $58, respectively, of depreciation and amortization expense related to tooling and manufacturing equipment within cost of revenues on the condensed consolidated statements of operations. The remaining depreciation and amortization expense related to property and equipment was recorded within general and administrative expenses.

Depreciation and amortization expense on property and equipment was $256 and $645 for the nine months ended September 30, 2024 and September 30, 2023, respectively. For the nine months ended September 30, 2024 and September 30, 2023, the Company allocated $235 and $388, respectively, of depreciation and amortization expense related to tooling and manufacturing equipment within cost of revenues on the condensed consolidated statements of operations. The remaining depreciation and amortization expense related to property and equipment was recorded within general and administrative expenses.

Intangible Assets Subject to Amortization

Intangible assets were $870, net of accumulated amortization of $355 as of September 30, 2024, and $2,210, net of accumulated amortization of $280, as of December 31, 2023. Intangible assets as of September 30, 2024 consist of trademarks, patents, and internally developed software.

The Company capitalizes certain costs incurred in developing internal-use software when capitalization requirements have been met. Capitalization of such costs begins when the preliminary project stage is completed and it is probable that the project will be completed and the software will be used to perform the function intended. Any subsequent addition, modification, or upgrade to internal-use software is capitalized to the extent that it enhances the software’s functionality or extends its useful life. Costs related to design or maintenance are expensed as incurred. Capitalized costs are included in intangible assets, net, and amortized on a straight-line basis over the estimated useful life of three years.

The Company recorded $30 of amortization expense related to internal-use software in both the three and nine months ended September 30, 2024, which was recorded within cost of revenues on the condensed consolidated statements of operations. No amortization expense related to internal-use software was recorded in the three and nine months ended September 30, 2023.

In 2021, the Company began work on a software development project and during 2021 and 2022 total costs of $1,873 were capitalized within intangible assets on the balance sheet. Due to financial constraints the Company was experiencing in 2022, work on the project was paused and each subsequent period the Company reconsidered the probability that the project would be resumed when the Company’s financial condition allowed and whether any technological developments had changed the prospects for the project's eventual success and recovery of the carrying amount of the asset. Because the software was still in development and not ready for general release the Company did not recognize any amortization for the three or nine months ended September 30, 2024 or 2023 and did not recognize any impairment charges related to intangible assets during the three and nine months ended September 30, 2023. However, in September of 2024, the Company made the decision to extend the pause of this particular software development project indefinitely, indicating that the carrying amount of the asset was unlikely to be recoverable. The Company recognized $1,873 of impairment charges during the three and nine months ended September 30, 2024, to fully impair that particular internally developed software project, which was recorded within general and administrative expenses on the condensed consolidated statements of operations.
Accrued and Other Expenses

Accrued and other expenses consisted of the following (in thousands):

September 30, 2024December 31, 2023
Accrued payroll$2,419 $1,056 
Accrued sales discounts2,581 2,528 
Accrued sales returns8752,919
Other6,5558,548
Total accrued and other expenses$12,430 $15,051 

Changes in accrued warranty were as follows (in thousands):

Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Accrued warranty, beginning of period$843 $591 $782 $712 
Settlements of warranty claims during the period(189)(135)(660)(372)
Provision for warranties issued during the period455 186 865 481 
Changes in provision for pre-existing warranties(179)(139)(57)(318)
Accrued warranty, end of period$930 $503 $930 $503