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Balance Sheet Components | 9 Months Ended
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Sep. 30, 2024
Balance Sheet Related Disclosures [Abstract] |
Balance Sheet Components | 5. Balance sheet components Accounts receivable and allowance for bad debts, returns, and adjustments Net accounts receivable (gross accounts receivable, net of allowances) balance concentrations by major category as of September 30, 2024 and December 31, 2023 were as follows:
|  | September 30, |  |  | December 31, |
Net accounts receivable |  | 2024 |  |  | 2023 |
Rental (1) |  | $ | 5,460 |  |  | $ | 6,401 |
Business-to-business and other receivables (2) |  |  | 28,773 |  |  |  | 35,840 |
Total net accounts receivable |  | $ | 34,233 |  |  | $ | 42,241 |
(1) Rental includes Medicare, Medicaid/other government, private insurance, and patient pay. (2) Business-to-business receivables included extended terms for two customers: 1) one customer had a net accounts receivable balance of $5,055 and $8,639 as of September 30, 2024 and December 31, 2023, respectively; and 2) one customer had a net accounts receivable balance of $4,994 as of December 31, 2023. Each customer received extended payment terms through a direct financing plan offered. The following table sets forth the accounts receivable allowances as of September 30, 2024 and December 31, 2023:
|  | September 30, |  |  | December 31, |
Allowances - accounts receivable |  | 2024 |  |  | 2023 |
Doubtful accounts |  | $ | 5,026 |  |  | $ | 2,341 |
Sales returns |  |  | 506 |  |  |  | 479 |
Total allowances - accounts receivable |  | $ | 5,532 |  |  | $ | 2,820 |
Concentration of customers and vendors The Company primarily sells its products to traditional home medical equipment providers, distributors, and resellers in the United States and in foreign countries on a credit basis. The Company also sells its products direct-to-consumers primarily on a prepayment basis. Medicare's service reimbursement programs represented more than 10% of the Company's total revenue for the three and nine months ended September 30, 2023. Two customers represented more than 10% of the Company’s net accounts receivable balance with net accounts receivable balances of $5,055 and $3,730, respectively, as of September 30, 2024 and $8,639 and $4,994, respectively, as of December 31, 2023. The Company also rents products directly to consumers for insurance reimbursement, which resulted in a customer concentration relating to Medicare’s service reimbursement programs. Medicare’s service reimbursement programs accounted for 57.0% and 69.7% of rental revenue in the nine months ended September 30, 2024 and 2023, respectively, and based on total revenue were 9.6% and 13.7% for the nine months ended September 30, 2024 and 2023, respectively. Accounts receivable balances relating to Medicare’s service reimbursement programs (including held and unbilled, net of allowances) amounted to $1,375 or 4.0% of total net accounts receivable as of September 30, 2024 compared to $2,059 or 4.9% of total net accounts receivable as of December 31, 2023. The Company currently purchases raw materials from a limited number of vendors, which resulted in a concentration of three major vendors. The three major vendors supply the Company with raw materials used to manufacture the Company’s products. For the nine months ended September 30, 2024, the Company’s three major vendors accounted for 20.9%, 19.2%, and 10.6%, respectively, of total raw material purchases. For the nine months ended September 30, 2023, the Company’s three major vendors accounted for 29.3%, 16.3%, and 9.1%, respectively, of total raw material purchases. A portion of revenue is earned from sales outside the United States. Approximately 76.3% and 76.9% of the non-U.S. revenue for the three months ended September 30, 2024 and 2023, respectively, were invoiced in Euros. Approximately 78.4% and 78.0% of the non-U.S. revenue for the nine months ended September 30, 2024 and 2023, respectively, were invoiced in Euros. A breakdown of the Company’s revenue from U.S. and non-U.S. sources for the three and nine months ended September 30, 2024 and 2023, respectively, is as follows:
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
U.S. revenue |  | $ | 56,506 |  |  | $ | 58,354 |  |  | $ | 166,730 |  |  | $ | 171,887 |
Non-U.S. revenue |  |  | 32,328 |  |  |  | 25,613 |  |  |  | 88,894 |  |  |  | 67,877 |
Total revenue |  | $ | 88,834 |  |  | $ | 83,967 |  |  | $ | 255,624 |  |  | $ | 239,764 |
Inventories Inventories are stated at the lower of cost and net realizable value, using the first-in, first-out (FIFO) method. The Company records adjustments to inventory for potentially excess, obsolete, slow-moving, or impaired items, and losses on firm purchase commitments as a component of cost of sales in the consolidated statements of comprehensive loss. The Company recorded noncurrent inventory related to inventories that are expected to be realized or consumed after one year of $1,821 and $1,225 as of September 30, 2024 and December 31, 2023, respectively. Noncurrent inventories are primarily related to raw materials purchased in bulk to support long-term expected repairs to reduce costs and are classified in other assets. During the nine months ended September 30, 2024 and 2023, $509 and $1,997, respectively, of inventory was transferred to rental equipment and was considered a noncash transaction in the production and purchase of rental equipment on the consolidated statements of cash flows. Inventories that are considered current consist of the following:
|  | September 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Raw materials and work-in-progress |  | $ | 17,870 |  |  | $ | 18,036 |
Finished goods |  |  | 8,451 |  |  |  | 6,871 |
Less: reserves |  |  | (3,001 | ) |  |  | (3,067 | )
Inventories, net |  | $ | 23,320 |  |  | $ | 21,840 |
Property and equipment Repair and maintenance expense, which includes labor, parts, and freight, for rental equipment was $1,689 and $1,320 for the three months ended September 30, 2024 and 2023, respectively, and $4,890 and $3,873 for the nine months ended September 30, 2024 and 2023, respectively. Depreciation and amortization expense related to rental equipment and other property and equipment are summarized below for the three and nine months ended September 30, 2024 and 2023, respectively.
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Rental equipment |  | $ | 3,247 |  |  | $ | 3,364 |  |  | $ | 9,554 |  |  | $ | 9,680 |
Other property and equipment |  |  | 960 |  |  |  | 1,045 |  |  |  | 3,143 |  |  |  | 3,044 |
Total depreciation and amortization |  | $ | 4,207 |  |  | $ | 4,409 |  |  | $ | 12,697 |  |  | $ | 12,724 |
Property and equipment and rental equipment with associated accumulated depreciation is summarized below as of September 30, 2024 and December 31, 2023, respectively.
|  | September 30, |  |  | December 31, |
Property and equipment |  | 2024 |  |  | 2023 |
Rental equipment, net of allowances of $3,181 and $2,606, respectively |  | $ | 65,453 |  |  | $ | 67,804 |
Other property and equipment |  |  | 25,760 |  |  |  | 30,357 |
Property and equipment |  |  | 91,213 |  |  |  | 98,161 |
Accumulated depreciation |  |  |  |  |  |
Rental equipment |  |  | 32,054 |  |  |  | 31,023 |
Other property and equipment |  |  | 12,561 |  |  |  | 16,822 |
Accumulated depreciation |  |  | 44,615 |  |  |  | 47,845 |
Property and equipment, net |  |  |  |  |  |
Rental equipment, net of allowances of $3,181 and $2,606, respectively |  |  | 33,399 |  |  |  | 36,781 |
Other property and equipment |  |  | 13,199 |  |  |  | 13,535 |
Property and equipment, net |  | $ | 46,598 |  |  | $ | 50,316 |
Long-lived assets The Company accounts for the impairment and disposition of long-lived assets in accordance with Accounting Standards Codification (ASC) 360 — Property, Plant, and Equipment. In accordance with ASC 360, long-lived assets to be held are reviewed for events or changes in circumstances that indicate that their carrying value may not be recoverable. No impairments were recorded for the nine months ended September 30, 2024 and 2023. Goodwill and other identifiable intangible assets Goodwill The changes in the carrying amount of goodwill for the nine months ended September 30, 2024 were as follows:
Balance as of December 31, 2023 (1) |  | $ | 10,057 |
Translation adjustment |  |  | 113 |
Balance as of September 30, 2024 (1) |  | $ | 10,170 |
(1) Includes $32,894 of accumulated impairment losses as of September 30, 2024 and December 31, 2023. Intangible assets The following tables represent the changes in net carrying values of intangible assets as of the respective dates:
|  | Average |  |  |  |  |  |  |  |  |
|  | estimated |  | Gross |  |  |  |  |  |  |
|  | useful lives |  | carrying |  |  | Accumulated |  |  |  |
September 30, 2024 |  | (in years) |  | amount |  |  | amortization |  |  | Net amount |
Developed technology |  | 10 |  | $ | 33,677 |  |  | $ | 3,508 |  |  | $ | 30,169 |
Licenses |  | 10 |  |  | 159 |  |  |  | 159 |  |  |  | — |
Patents and websites |  | 5 |  |  | 4,518 |  |  |  | 4,482 |  |  |  | 36 |
Customer relationships |  | 4 |  |  | 3,007 |  |  |  | 1,513 |  |  |  | 1,494 |
Trade name |  | 4 |  |  | 209 |  |  |  | 54 |  |  |  | 155 |
Commercials |  | 3 |  |  | 494 |  |  |  | 241 |  |  |  | 253 |
Internally developed software |  | 3 |  |  | 2,090 |  |  |  | 435 |  |  |  | 1,655 |
Total |  |  |  | $ | 44,154 |  |  | $ | 10,392 |  |  | $ | 33,762 |
|  | Average |  |  |  |  |  |  |  |  |
|  | estimated |  | Gross |  |  |  |  |  |  |
|  | useful lives |  | carrying |  |  | Accumulated |  |  |  |
December 31, 2023 |  | (in years) |  | amount |  |  | amortization |  |  | Net amount |
Developed technology |  | 10 |  | $ | 33,303 |  |  | $ | 971 |  |  | $ | 32,332 |
Licenses |  | 10 |  |  | 185 |  |  |  | 185 |  |  |  | — |
Patents and websites |  | 5 |  |  | 4,518 |  |  |  | 4,429 |  |  |  | 89 |
Customer relationships |  | 4 |  |  | 2,974 |  |  |  | 1,372 |  |  |  | 1,602 |
Trade name |  | 4 |  |  | 206 |  |  |  | 15 |  |  |  | 191 |
Commercials |  | 3 |  |  | 494 |  |  |  | 117 |  |  |  | 377 |
Total |  |  |  | $ | 41,680 |  |  | $ | 7,089 |  |  | $ | 34,591 |
Annual estimated amortization expense for each of the succeeding fiscal years is as follows:
|  | September 30, |
|  | 2024 |
Remaining 3 months of 2024 |  | $ | 1,188 |
2025 |  |  | 4,717 |
2026 |  |  | 4,585 |
2027 |  |  | 4,048 |
2028 |  |  | 3,368 |
2029 |  |  | 3,368 |
Thereafter |  |  | 12,488 |
|  | $ | 33,762 |
Current liabilities Accounts payable and accrued expenses as of September 30, 2024 and December 31, 2023 consisted of the following:
|  | September 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Accounts payable |  | $ | 15,459 |  |  | $ | 13,454 |
Accrued inventory (in-transit and unvouchered receipts) and trade payables |  |  | 7,263 |  |  |  | 10,054 |
Accrued purchasing card liability |  |  | — |  |  |  | 2,197 |
Accrued loss on purchase commitments |  |  | 1,723 |  |  |  | 2,057 |
Accrued franchise, sales and use taxes |  |  | 457 |  |  |  | 472 |
Other accrued expenses |  |  | 2,126 |  |  |  | 1,908 |
Total accounts payable and accrued expenses |  | $ | 27,028 |  |  | $ | 30,142 |
Accrued payroll as of September 30, 2024 and December 31, 2023 consisted of the following:
|  | September 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Accrued bonuses |  | $ | 5,201 |  |  | $ | 1,110 |
Accrued wages and other payroll related items |  |  | 3,736 |  |  |  | 4,170 |
Accrued vacation |  |  | 3,590 |  |  |  | 3,194 |
Accrued severance |  |  | 1,667 |  |  |  | 2,284 |
Accrued employee stock purchase plan deductions |  |  | 91 |  |  |  | 308 |
Total accrued payroll |  | $ | 14,285 |  |  | $ | 11,066 |

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