BIOLASE, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Accrued Liabilities

Accrued Liabilities

9 Months Ended

Sep. 30, 2021

Payables and Accruals [Abstract]

Accrued Liabilities

NOTE 8—ACCRUED LIABILITIES

Accrued liabilities are comprised of the following (in thousands):


	September 30,		December 31,
	2021		2020
Payroll and benefits	$	3,017	$	3,552
Settlement accrual		680		—
Warranty accrual, current portion		545		748
Lease liability		404		305
Taxes		357		165
Accrued professional services		283		281
Accrued insurance premium		—		885
Other		896		731
Accrued liabilities	$	6,182	$	6,667

The CARES Act allows employers to defer the deposit and payment of the employer's share of Social Security taxes through December 31, 2020. Under the CARES Act, the Company deferred $0.4 million as of September 30, 2021. The deferred liability is included in accrued payroll and benefits.

As of September 30, 2021, a settlement accrual liability of $0.7 million related to the CAO Settlement Agreement (as defined below) was included in current accrued liabilities. See Note 11 for additional information.

Changes in the initial product warranty accrual and the expenses incurred under the Company’s initial and extended warranties are included within accrued liabilities and were as follows (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
Balance, beginning of period	$	551		$	853		$	1,132		$	1,110
Provision for estimated warranty cost		832			345			1,129			575
Warranty expenditures		(366	)		(344	)		(1,244	)		(831	)
Balance, end of period		1,017			854			1,017			854
Less: long-term portion of warranty accrual		472			204			472			204
Current portion of warranty accrual	$	545		$	650		$	545		$	650

The Company's Waterlase laser systems sold domestically are covered by a warranty against defects in material and workmanship for a period of up to one year from the date of sale to the end-user by the Company or a distributor. The Company's diode systems sold domestically are covered by a warranty against defects in material and workmanship for a period of up to two years from the date of sale to the end-user by the Company or a distributor. Waterlase systems and diode systems sold internationally are covered by a warranty against defects in material and workmanship for a period of up to 28 months from date of sale to the international distributor. The Company's laser systems warranty covers parts and service for sales in its North American territories and parts only for international distributor sales.

In North America and select international locations, the Company sells extended warranty contracts to its laser systems end users that cover the period after the expiration of the Company's standard warranty coverage for its laser systems. Extended warranty coverage provided under the Company's service contracts varies by the type of system and the level of service desired by the customer. Products or accessories remanufactured, refurbished, or sold by unauthorized parties, voids all warranties in place for such products and exempts the Company from liability issues relating to the use of such products. The Company distributes extended warranties on certain imaging products, including its digital radiography products. However, all imaging products that the Company distributes are initially covered by manufacturer’s warranties.