Plant and Equipment

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Plant and Equipment

9. Plant and Equipment

The composition of plant and equipment, net is as follows (in thousands):

		As of
	Useful Lives	September 30, 2024			December 31, 2023
Computer equipment	3 - 5 years	$	1,632		$	984
Computer software	3 years		836			840
Construction in progress (“CIP”)			90			87
Furniture and fixtures	7 years		1,112			824
Laboratory and other equipment	3 - 5 years		954			769
Leasehold improvements	Lesser of life or lease term		4,196			367
RECELL moulds	5 years		462			438
RECELL GO RPD CIP			1,531			-
RECELL GO RPD			318			-
Operating lease assets - RPD	200 uses		1,071			-
Less: accumulated amortization and depreciation			(3,051	)		(2,432	)
Total plant and equipment, net		$	9,151		$	1,877

Construction in progress consists primarily of leasehold improvements for the renovations to the Ventura production facility, and RECELL GO RPD CIP consists of materials for the manufacture of the RPDs. RPDs have a useful life of 200 uses and are being amortized based on customer usage as determined by orders placed for the sales of RPK units. RECELL GO RPD represents assets available to be leased by customers and are not depreciated until leased.

Depreciation expense related to plant and equipment was $288,000 and $156,000 for the three-months ended September 30, 2024 and 2023, respectively, and $661,000 and $419,000 for the nine-months ended September 30, 2024 and 2023, respectively. No impairment was recorded for the three-months ended September 30, 2024. During the nine-months ended September 30, 2024, the Company recorded a loss on disposal of fixed assets for approximately $5,000. During the three-months and nine-months ended September 30, 2023, the Company recorded a loss on disposal of fixed assets for approximately of $80,000 and $83,000, respectively. Amounts are recorded in General and administrative expenses in the Consolidated Statement of Operations.

Lessor Arrangements

As discussed in Note 5 of our Consolidated Financial Statements, the contracts for the RECELL GO device include an operating lease for the customer’s right to use the RPD. The lease arrangement does not contain fixed consideration. Variable lease payments are not included in consideration at lease inception. The variable consideration related to the lease is allocated based on the SSP and is recognized when control of the RPK is transferred to the customer.

The table below summarizes the Company's Lease revenue as presented in the Consolidated Statement of Operations for the three and nine-months ended September 30, 2024 and 2023.

	Three-Months Ended		Nine-Months Ended
(in thousands)	September 30, 2024		September 30, 2024
Variable lease revenue	$	152		164

Assets held for lease and included in Plant and equipment consisted of the following (in thousands):

	As of
	September 30, 2024
Rental RPD assets	$	1,071
Accumulated depreciation		(24	)
Net rental RPD assets	$	1,047