Company’s cost structure. As a result of the above, and cash on hand as of December 31, 2022, the Company believes it has sufficient cash to fund operations for the twelve months subsequent to the issuance of the consolidated financial statements. Subsequent to December 31, 2022, the Company amended its debt agreement (see Note 17- Subsequent Event) to allow for additional borrowing. As such, the debt agreement, as amended, is expected to provide additional liquidity. Segment Reporting and Geographical Information For the periods ended December 31, 2022 and 2021, the Company was managed as a single operating segment. The Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and assessing financial performance, as well as for making strategic operational decisions and managing the organization. As such, the Company has one reportable segment. Additionally, all of the Company’s assets are maintained in the United States. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity period of three months or less, when acquired, to be cash equivalents. The majority of the Company’s cash and cash equivalents are held at one financial institution, which at December 31, 2022, exceeds insured amounts. The Company believes it mitigates such risk by having this cash held by a major financial institution. There were no cash equivalents as of December 31, 2022 and 2021. Restricted Cash The Company considers cash which is not freely available for immediate use, and that is held for a specific purpose, to be restricted cash. If the terms dictating the restriction require the restricted cash to be considered as such beyond twelve months, the Company classifies that restricted cash as a noncurrent asset due to its inability to provide liquidity within one year. As of December 31, 2022, the Company had approximately $2.3 million of restricted cash, all of which was classified as noncurrent. The entirety of the $2.3 million of restricted cash relates to a letter of credit opened in connection with the Company’s new manufacturing facility in Bolingbrook, IL. Amounts will be released for the Company’s use proportionately over a two-year period beginning in 2024. The below table reconciles cash and restricted cash to amounts shown in the Consolidated Statements of Cash Flows: (In thousands) December 31, 2022 Cash ....................................... $5,279 Restrictedcash ............................... 2,318 Total cash reported in statements of cash flows . . . . . $7,597 Accounts Receivable Accounts receivable are recorded at the invoiced amount, net of allowances for estimated variable consideration and amounts payable to customers for slotting, which are fees assessed by customers for the cost of accepting new products into their store. Estimated product returns are immaterial. Management assesses the collectability of outstanding customer invoices, and if it deems necessary, maintains an allowance for credit losses resulting from the non-collection of customer receivables. In estimating this reserve, management considers factors such as historical collection experience, customer creditworthiness, specific customer risk, trends specific to the customer, and current and expected general economic conditions that may affect a customer’s ability to pay. Customer balances are written off after all collection efforts are exhausted. The amounts recorded for reserves for credit losses for the years ended December 31, 2022 and 2021 were de minimis. 57
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