Inventories

12 Months Ended

Dec. 31, 2022

INVENTORIES

Inventories are stated at the lower of standard cost (which approximates actual cost determined using the first-in, first-out cost method) or net realizable value and consists of the following (in thousands):


	At December 31,
	2022		2021
Raw materials	$	3,347	$	3,882
Finished goods	4,656		7,034
Reserve for excess, obsolete, and slow-moving inventories	(2,527)		(3,050)
Inventories, net	$	5,476	$	7,866

The following is a roll-forward of the reserves for excess, obsolete, and slow-moving inventories (in thousands):


	At December 31,
	2022		2021
Beginning balance	$	(3,050)	$	(2,894)
Accrual	(312)		(281)
Reduction due to sold inventory	323		125
Write-off for disposed inventory	512		—
Reserves for excess, obsolete, and slow-moving inventories	$	(2,527)	$	(3,050)

As part of our expense reduction initiatives, we significantly decreased our warehouse space beginning in the third quarter of 2022. In connection with the space reduction, in the second quarter of 2022, we began disposing of a substantial portion of our excess and obsolete commercial finished goods inventory that was highly reserved, which effort continued into the fourth quarter of 2022. The scraping of inventory primarily drove the decrease in excess inventory reserves of $0.5 million as compared to 2021. We also focused on selling down inventory on hand and limited inventory and component purchases to top selling products with expected higher turnover. This resulted in a net decrease of our gross inventory levels of $2.9 million.

We experienced significant global supply chain and logistics constraints during 2021, which impacted our inventory purchasing strategy, leading to a buildup of inventory and inventory components in an effort to manage both shortages of available components and longer lead times in obtaining components. This resulted in a net increase of our gross inventory levels of $2.4 million and excess inventory reserves of $0.2 million as compared to 2020.