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REVENUE
 9 Months Ended
Sep. 30, 2023
Revenue from Contract with Customer [Abstract]  
REVENUE

NOTE 10—REVENUE

 

The following table disaggregates the Company’s revenue for the nine-month and three-month periods ended September 30, 2023 and 2022 (in thousands):

 

   Hardware   Monitoring   Total 
Nine months ended September 30, 2023:               
PG Segment  $2,017   $2,977   $4,994 
CP Segment   620    195    815 
Total Revenue  $2,637   $3,172   $5,809 

 

   Hardware   Monitoring   Total 
Nine months ended September 30, 2022:               
PG Segment  $1,610   $2,725   $4,335 
CP Segment   631    189    820 
Total Revenue  $2,241   $2,914   $5,155 

 

   Hardware   Monitoring   Total 
Three months ended September 30, 2023:               
PG Segment  $780   $1,018   $1,798 
CP Segment   224    65    289 
Total Revenue  $1,004   $1,083   $2,087 

 

   Hardware   Monitoring   Total 
Three months ended September 30, 2022:               
PG Segment  $608   $902   $1,510 
CP Segment   217    56    273 
Total Revenue  $825   $958   $1,783 

 

Deferred revenue activity for the nine months ended September 30, 2023 can be seen in the table below (in thousands):

 

    Hardware     Monitoring     Total  
Balance at December 31, 2022   $ 3,751     $ 2,420     $ 6,171  
Additions during the period     1,597       3,436       5,033  
Recognized as revenue     (1,821 )     (3,172 )     (4,993 )
Balance at September 30, 2023   $ 3,527     $ 2,684     $ 6,211  
                         
Amounts to be recognized as revenue in the twelve-month-period ending:                        
September 30, 2024   $ 2,023      $ 2,247     $ 4,270  
September 30, 2025     1,179       433       1,612  
September 30, 2026 and thereafter     325       4       329  
    $ 3,527      $ 2,684      $ 6,211  

 

 

The amount of hardware revenue recognized during the nine months ended September 30, 2023 that was included in deferred revenue at the beginning of the fiscal year was $1,469,000. The amount of monitoring revenue during the nine months ended September 30, 2023 that was included in deferred revenue at the beginning of the fiscal year was $1,890,000.

 

Reconciliation of Hardware Revenue  2023   2022   2023   2022 
  

Nine months ended

September 30,

  

Three months ended

September 30,

 
Reconciliation of Hardware Revenue  2023   2022   2023   2022 
Amortization of deferred revenue  $1,821   $1,658   $629   $631 
Sales of custom designed units and related accessories   135    —    43    — 
Hardware sales (new product versions)   150    —    150    — 
Other accessories, services, shipping and miscellaneous charges   531    583    182    194 
Total hardware revenue  $2,637   $2,241   $1,004   $825 

 

Deferred charges relate only to the sale of equipment. Deferred charges activity for the nine months ended September 30, 2023 can be seen in the table below (in thousands):

 

      
Balance at December 31, 2022  $1,694 
Additions, net of adjustments, during the period   655 
Recognized as COGS   (817)
Balance at September 30, 2023  $1,532 
      
Amounts to be recognized as COGS in the twelve-month-period ending:     
September 30, 2024  $890 
September 30, 2025   507 
September 30, 2026 and thereafter   135 
   $1,532 

 

 

Reconciliation of COGS Expense  2023   2022   2023   2022 
  

Nine months ended

September 30,

  

Three months ended

September 30,

 
Reconciliation of COGS Expense  2023   2022   2023   2022 
Amortization of deferred COGS  $817   $793   $277   $309 
COGS of custom designed units and related accessories   34    —    11    — 
COGS of hardware sales (new product versions)   66    —    66    — 
Data costs for monitoring   224    250    76    93 
Other COGS of accessories, services, shipping and miscellaneous charges   312    393    107    166 
Total COGS expense  $1,453   $1,436   $537   $568 

 

The following table provides a reconciliation of the Company’s sales commissions contract assets for the nine-month period ended September 30, 2023 (in thousands):

 

   Hardware   Monitoring   Total 
Balance at December 31, 2022  $319   $80   $399 
Additions during the period   148    43    191 
Amortization of sales commissions   (149)   (27)   (176)
Balance at September 30, 2023  $318    96    414 

 

The capitalized sales commissions are included in other current assets ($218,000) and other assets ($196,000) in the Company’s unaudited condensed consolidated balance sheets as of September 30, 2023. The capitalized sales commissions are included in other current assets ($196,000) and other assets ($203,000) in the Company’s condensed consolidated balance sheet at December 31, 2022.

 

Amounts to be recognized as sales commission expense in the twelve-month-period ending:

 

         
September 30, 2024   $ 218  
September 30, 2025     138  
September 30, 2026 and thereafter     58  
Total   $ 414  

 

 

The contract assets of deferred COGS and deferred sales commissions are subject to review under ASU 2016-13, see Notes 2 and 4; however, no credit losses on contract assets are expected based on the Company’s implementation of ASU 2016-13.

 

Commissions earned from the sales of the new hardware products will be recognized when the product is shipped.