Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Balance Sheet Components

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Note 5 - Balance Sheet Components
3 Months Ended
Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Balance Sheet Components

Note 5. Balance Sheet Components

 

Inventory

 

Inventory consisted of the following as of March 31, 2017 and December 31, 2016 (in thousands):

 

   

As of

March 31, 2017

  As of December 31, 2016
Raw materials   $ —       $ —    
Work-in-process     —         —    
Finished goods     6,114       8,568  
Inventory   $ 6,114     $ 8,568  

 

The Company records charges for obsolete and slow moving inventory based on the age of the product as determined by the expiration date. Products within one year of their expiration dates are considered for write-off purposes. Historically, the Company has had minimal returns with established customers. Other than write-off of inventory during restructuring activities, the Company incurred insignificant inventory write-offs during the three months ended March 31, 2017 and 2016. Inventory write-downs, once established, are not reversed as they establish a new cost basis for the inventory.

 

As disclosed further in Note 4, the Company executed a restructuring plan in August 2015 and wrote off inventory related to discontinued products. For the three months ended March 31, 2016, discontinued inventory of $1.7 million was written off and included as a component of “Cost of revenue” in the accompanying Condensed Consolidated Statements of Operations.

 

 

Property and Equipment

 

Property and equipment consisted of the following as of March 31, 2017 and December 31, 2016 (in thousands):

 

   

As of

March 31, 2017

  As of December 31, 2016
Furniture, fixtures and equipment   $ 3,561     $ 3,521  
Leasehold improvements     2,504       2,504  
Manufacturing and lab equipment     3       3  
Vehicles     209       334  
Displays     483       483  
Website     462       462  
Construction in process     36       55  
Property and equipment, gross     7,258       7,362  
Less: accumulated depreciation and amortization     (4,405 )     (4,119 )
Property and equipment, net   $ 2,853     $ 3,243  

 

Depreciation and amortization expense related to property and equipment was $0.3 million and $0.4 million for the three months ended March 31, 2017 and 2016, respectively, which is included in “Selling, general, and administrative” expense in the accompanying Condensed Consolidated Statements of Operations.

 

Intangible Assets

 

Intangible assets consisted of the following (in thousands):

   

As of March 31, 2017

 

   

Gross Value

 

 

Accumulated
Amortization

 

 

Net
Carrying
Value

 

 

Remaining Weighted-
Average
Useful Lives
(years)

 

Amortized Intangible Assets                                
Brand   $ 2,244     $ (686 )   $ 1,558       4.9  
Total intangible assets   $ 2,244     $ (686 )   $ 1,558          

 

   

As of December 31, 2016

 

   

Gross Value

 

 

Accumulated
Amortization

 

 

Net
Carrying
Value

 

 

Remaining Weighted-
Average
Useful Lives
(years)

 

Amortized Intangible Assets                                
Brand   $ 2,244     $ (606 )   $ 1,638       5.1  
Total intangible assets   $ 2,244     $ (606 )   $ 1,638          

 

 

Intangible assets amortization expense was $0.1 million and $0.2 million for the three months ended March 31, 2017 and 2016, respectively, which is included in the “Selling, general, and administrative” expense in the accompanying Condensed Consolidated Statements of Operations.

 

As of March 31, 2017, the estimated future amortization expense of intangible assets is as follows (in thousands):

 

For the Year Ending December 31,      
Remainder of 2017   $ 241  
2018     321  
2019     321  
2020     321  
2021     321  
Thereafter     33  
Total amortization expense   $ 1,558