FINANCIAL STATEMENT COMPONENTS

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

FINANCIAL STATEMENT COMPONENTS

7. FINANCIAL STATEMENT COMPONENTS

The following financial statement components have significant balances as of September 30, 2024.

Restricted Cash

During the nine months ended September 30, 2024, Restricted cash, current decreased largely due to a $3.3 million release of escrow in connection with the Asset Purchase Agreement with Ibeo. In addition, Restricted cash, net of current portion increased by approximately $1.0 million related to cash that is held as collateral for a Hamburg, Germany lease.

Inventory

Inventory consists of the following:

	September 30,		December 31,
(in thousands)	2024		2023
Raw materials	$	2,457	$	1,574
Work in process		-		305
Finished goods		2,029		1,995
	$	4,486	$	3,874

Inventory is computed using the first-in, first-out (FIFO) method and is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required.

Property and Equipment

Property and equipment consists of the following:

	September 30,			December 31,
(in thousands)	2024			2023
Production equipment	$	6,140		$	6,140
Leasehold improvements		3,965			3,843
Computer hardware and software/lab equipment		12,275			12,149
Office furniture and equipment		5,440			5,367
		27,820			27,499
Less: Accumulated depreciation		(20,152	)		(18,467	)
	$	7,668		$	9,032

Depreciation expense was $0.6 million and $1.1 million for the three months ended September 30, 2024 and 2023, respectively, and $1.7 million and $2.8 million for the nine months ended September 30, 2024 and 2023, respectively.

Intangible Assets

The components of intangible assets were as follows:

As of September 30, 2024									Weighted
	Gross						Net		Average Remaining
(in thousands)	Carrying Amount		Accumulated Amortization		Impairment Expense		Carrying Amount		Period (Years)
Acquired technology	$	20,172		4,582		3,027		12,563		12
Backlog		26		26		-		-		-
	$	20,198	$	4,608	$	3,027	$	12,563

As of December 31, 2023									Weighted
	Gross						Net		Average Remaining
(in thousands)	Carrying Amount		Accumulated Amortization		Impairment Expense		Carrying Amount		Period (Years)
Acquired technology	$	20,172		2,940		-		17,232		12
Backlog		26		23		-		3		-
	$	20,198	$	2,963	$	-	$	17,235

Amortization expense was $0.5 million and $0.6 million for the three months ended September 30, 2024 and 2023, respectively, and $1.6 million for the nine months ended September 30, 2024 and 2023.

During the quarter ended June 30, 2024, management identified various factors related to the 2024 restructuring events (see Note 13. Restructuring Charges) that collectively indicated that it is more-likely-than-not that the fair value of the Company’s Reference software intangible asset was less than its carrying amount as of June 30, 2024. As of June 30, 2024, prior to impairment, the fair value was $4.5 million. As a result, the Company performed an impairment assessment for intangibles in accordance with ASC 360, Property, Plant and Equipment. The June 30, 2024 impairment test indicated a decline in the carrying amount of the Reference software intangible asset and a reduction in the asset’s useful life, resulting in a non-cash impairment charge of $3.0 million, which is included in impairment loss on intangible assets on the condensed consolidated statement of operations. The fair value of the Reference software subsequent to impairment was $1.4 million and is included within intangible assets, net on the condensed consolidated balance sheets. No further indicators of impairment related to intangible assets were identified during the three months ended September 30, 2024.

The following table outlines estimated future amortization expense related to intangible assets held as of September 30, 2024 (in thousands):

			Research and
	Cost of		Development
Years Ended December 31,	Revenue		Expense		Total
2024 (remainder of the year)	$	362		72	$	434
2025		1,446		57		1,503
2026		1,446		28		1,474
2027		829		-		829
2028		825		-		825
Thereafter		7,498		-		7,498
	$	12,406	$	157	$	12,563