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Supplementary Balance Sheet Information
 3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Supplementary Balance Sheet Information Supplementary Balance Sheet Information
Inventories
The components of inventories are as follows (in thousands):
March 31, 2024December 31, 2023
Raw materials$1,456 $1,394 
Work-in-process414 410 
Finished goods2,850 1,616 
Total inventories4,720 3,420 
Less reserve for excess and obsolete inventories— — 
Total inventories, net$4,720 $3,420 
Property and Equipment
Property and equipment consist of the following (in thousands):
March 31, 2024December 31, 2023
Land$548 $548 
Buildings and leasehold improvements1,063 1,063 
Machinery and equipment3,709 3,474 
Gross property and equipment5,320 5,085 
Accumulated depreciation(1,783)(1,603)
Total property and equipment, net$3,537 $3,482 
As of March 31, 2024, the non-operating land and buildings, held for investments, had a carry value of $1.0 million and was included within property and equipment on the condensed Consolidated Balance Sheet.
Warranty Reserves
Within our Building Solutions division, KBS Builders, Inc. (“KBS”) provides a limited assurance warranty on its residential homes that covers substantial defects in materials or workmanship for a period of 12 months after delivery to the owner. EdgeBuilder, Inc. (“EdgeBuilder”) provides a limited warranty on the sale of its wood foundation products that covers leaks resulting from defects in workmanship for a period of twenty-five years. Estimated warranty costs are accrued in the period that the related revenue is recognized.
Notes Receivable
Notes receivable consists of the following principal and interest balances as of March 31, 2024 and December 31, 2023 (in thousands):
March 31, 2024December 31,
2023
Principal and interestPrincipal and interest
TTG Note$7,634 $7,459 
MDOS Note1,117 1,192 
KBS Customer Note176 176 
$8,927 $8,827 
As a part of the TTG Transaction described further in Note 2. “Discontinued Operations,” a $7 million promissory note was entered into which represents an unsecured note receivable on our balance sheet. The note has a maturity date of May 3, 2029 with payment-in-kind (non-cash) interest on the outstanding principal balance hereof to accrue at the Interest Rate. The full balance is scheduled to be paid at the maturity date. The Interest Rate is defined as (i) during the period from the date of issuance of the note through the third anniversary of the date of issuance of the note, a per annum rate equal to the sum of (x) 5.0% per annum plus (y) the greater of 5.0% per annum and the weighted average term SOFR-based interest rate of outstanding loans under the Senior Loan Agreement (as defined in the Purchase Agreement) during such period, and (ii) during the period following the third anniversary of the date of issuance of the note, a per annum rate equal to the sum of (x) 5.0% per annum plus (y) the greater of 7.0% per annum and the weighted average term SOFR-based interest rate of outstanding loans under the Senior Loan Agreement during such period.
In 2021 we completed the sale of MD Office Solutions in exchange for a secured promissory note (the “MDOS Note”). This note, the principal of which is approximately $1.1 million at March 31, 2024, is included in “Notes receivable, current portion” and “Notes receivable” in our Consolidated Balance Sheet at March 31, 2024 for $0.2 million and $0.9 million, respectively. The MDOS Note requires quarterly installments of $74 thousand and incurs interest at a fixed rate of 5.0% through maturity in 2028.
In 2023, KBS issued a promissory note to a customer, incurring 12% interest per annum (the “KBS Customer Note”). The KBS Customer Note, which has a maturity date with full payment due of September 19, 2024, is included in “Notes receivable, current portion” in the Consolidated Balance Sheets at March 31, 2024.
Cost Method Investment
As a part of the sale of Digirad Health, we received $6.0 million in the common equity of TTG Parent LLC. We have elected the measurement alternative under ASC 321. The measurement alternative election allows for equity securities that do not have readily determinable fair values to be recorded at cost, with adjustments for impairment and certain observable price changes reflected in earnings. Such securities are adjusted to fair value when an observable price change occurs or impairment is identified. No such impairments were noted as of March 31, 2024.