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COMMITMENTS AND CONTINGENCIES | 3 Months Ended
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Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Purchase Commitments As of March 31, 2025, we had approximately $982 thousand in outstanding purchase commitments for inventory and fixed assets. Of this amount, approximately $915 thousand is expected to ship in the second quarter of 2025, and $67 thousand is expected to ship after the third quarter of 2025. We have 49% of the outstanding purchase commitments with a related party. Settlement of Return of Slow-Moving Inventory On December 30, 2024, in connection with its strategy to reduce a certain quantity of low-turnover inventory, the Company entered into an agreement with the vendor, an unrelated party, to return the inventory purchased between 2021 and 2022 and transfer EnFocus™ registered trademarks (carry amount of $0). As a result, the Company will recognize a non-cash gain of approximately $5 thousand on the settlement of returning inventory, cancelling prepayments made with the vendor, and settlement of outstanding accounts payable with the vendor. Please see below for the related accounts as of March 31, 2025. Net gain will be recognized on the return date which is expected to be in the early second quarter of year 2025.
| At March 31,
| 2025
Inventories, net | $ | 338 |
Prepayments to vendors | 307 |
Accounts payable | (650) |
EnFocus™ trademark | — |
Net gain to be recognized | $ | (5) |
The unforeseen results of potential trade disputes and reciprocal tariffs around the world, including the United States, the European Union and/or China may cause an impact on our business. Our operations expose us to the risk that increased trade protectionism from the United States, China or other nations adversely affect our business. Governments may turn to trade barriers to protect or revive their domestic industries in the face of foreign imports. Restrictions on imports, including in the form of tariffs, could have a major impact on global trade and, indirectly, demand for our products. Trade protectionism in the markets we serve may cause an increase in the cost of exported goods, the length of time required to deliver goods and the risks associated with exporting goods and, as a result, a decline in the volume of exported goods and demand for our products. Due to the interconnected nature of the global supply chain for many products, these policies could impact imports and exports from countries not directly imposing or subject to tariffs. Tensions over trade and other matters remain high between the U.S. and other countries, including the members of the E.U. and China. The new U.S. administration, led by President Trump, instituted widespread tariffs on a wide variety of goods, including from the European Union and China, which led, and could continue to lead, to retaliatory tariffs from other countries including China and the E.U. The new administration’s use of tariffs extensively as a policy tool has created significant uncertainty about the future relationship between the United States and China, the European Union, Canada, Mexico and other exporting countries, including with respect to trade policies, treaties, government regulations and tariffs, and has led to concerns regarding the potential for an extended trade war. Protectionist developments, or the perception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade and, in particular, trade between the United States and other countries, including China and countries in the European Union, which could adversely affect our business, results of operations, and financial condition. Any new or increased trade barriers or restrictions on trade, including as a result of tariffs imposed by the United States or other countries, could have an adverse impact on our business, operating results and financial condition.

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