Inventories, net

9 Months Ended

Sep. 30, 2020

Inventories, net

4. Inventories, net

4. Inventories, Net

On July 1, 2021, the Company changed its accounting to burden the material at the time of purchase receipts. Prior to July 1, 2021, the Company applied the material burden at the time the inventory was issued to work in progress. The Company believes that this method improves financial reporting by better reflecting the current value of inventory on the consolidated balance sheets, by providing better matching of revenues and expenses.

The fiscal 2020 financial statements have been retrospectively adjusted to apply the new inventory change. The cumulative effect of this change on periods prior to those presented herein resulted in a net decrease in accumulated deficit of approximately $1,158 as of January 1, 2020.

Inventories, which are presented net of allowance for obsolete and slow-moving inventory, consisted of the following:

	September 30, 2021		December 31, 2020
			(as adjusted)
Finished goods	$	2,565	$	2,206
Work in process		4,342		3,672
Raw materials		9,074		4,667
	$	15,981	$	10,545

Allowances for slow-moving, excess, or obsolete inventory are used to state the Company’s inventories at the lower of cost or net realizable value. The allowances were approximately $1,160 at September 30, 2021, compared with approximately $588 (as adjusted) at December 31, 2020.

As a result of the retrospective application of this change in accounting method, the following financial statement line items within the accompanying fiscal 2020 Condensed Consolidated financial statements were adjusted as follows:

	As Originally Reported ($)			Effect of Change ($)			As Reported under Change in Accounting Principle ($)
Consolidated Balance Sheets
Assets
Inventories, net as of December 31, 2020		9,441			1,104			10,545
Liabilities & Shareholders’ Equity
Accumulated deficit as of December 31, 2020		(6,797	)		1,104			(5,693	)
Consolidated Income Statements
Cost of goods sold:
Three months ended September 30, 2020		7,560			(112	)		7,448
Nine months ended September 30, 2020		20,163			153			20,316
Income (loss) before income taxes:
Three months ended September 30, 2020		680			112			792
Nine months ended September 30, 2020		(787	)		(153	)		(940	)
Net income (loss):
Three months ended September 30, 2020		678			112			790
Nine months ended September 30, 2020		(817	)		(153	)		(970	)
Net (loss) income per share-basic and diluted:
Three months ended September 30, 2020		0.05			0.01			0.06
Nine months ended September 30, 2020		(0.07	)		(0.01	)		(0.08	)
Consolidated Statements of Cash Flows
Net loss as of September 30, 2020		(817	)		(153	)		(970	)
Inventories allowance		117			25			142
Inventories		4,970			128			5,098