Product Warranty Obligations

3 Months Ended

Mar. 31, 2024

Product Warranty Obligations

Product Warranty Obligations

11. Product Warranty Obligations

The Company provides a warranty of one year on its smart transmitters. Additionally, the Company may also replace Eversense system components that do not function in accordance with the product specifications. Estimated replacement costs are recorded at the time of shipment as a charge to cost of sales in the consolidated statement of

operations and are developed by analyzing product performance data and historical replacement experience, including comparing actual replacements to revenue.

The warranty reserve was $0.5 million at each March 31, 2024 and December 31, 2023. The following table provides a reconciliation of the change in estimated warranty liabilities for the three months ended March 31, 2024, and for the twelve months ended December 31, 2023 (in thousands):

	March 31,		December 31,
	2024		2023
Balance at beginning of the period	$	514	$	781
Provision for warranties during the period		66		242
Settlements made during the period		(95)		(509)
Balance at end of the period	$	485	$	514