Balance Sheet Account Detail

(a) Property and Equipment

Property and equipment consisted of the following:



	March 31, 2015			December 31, 2014
Production equipment, molds, and office furniture	$	13,560		$	12,943
Computer hardware and software	6,504			6,457
Leasehold improvements	16,251			15,729
Construction in progress (software and related implementation, production equipment, and leasehold improvements)	1,188			2,564
Property and equipment, at cost	$	37,503		$	37,693
Accumulated depreciation	(12,174		)	(11,997		)
Property and equipment, net	$	25,329		$	25,696

Depreciation expense for property and equipment for the three months ended March 31, 2015 and 2014 was $1.1 million, and $0.5 million, respectively.

(b) Inventories

Inventories consisted of the following:



	March 31, 2015		December 31, 2014
Raw materials	$	8,161	$	6,728
Work-in-process	7,372		5,946
Finished goods	19,610		18,651
Total Inventories	$	35,143	$	31,325

The following table presents goodwill, indefinite lived intangible assets, finite lived intangible assets, and related accumulated amortization:



	March 31, 2015			December 31, 2014
Goodwill (1)	$	28,673		$	28,866

Intangible assets:
Indefinite lived intangibles
Trademarks and trade names	$	2,708		$	2,708

Finite lived intangibles
Developed technology (2)	$	40,100		$	40,100
Accumulated amortization	(382		)	(285		)
Developed technology, net	$	39,718		$	39,815

License	$	100		$	100
Accumulated amortization	(78		)	(71		)
License, net	$	22		$	29

Customer relationships (1)	$	429		$	480
Accumulated amortization (1)	(393		)	(400		)
Customer relationships, net	$	36		$	80

Acquired Shonin approval (3)	$	1,000		$	1,000
Accumulated amortization	(417		)	(167		)
Acquired Shonin approval, net	$	583		$	833

Intangible assets (excluding goodwill), net	$	43,067		$	43,465

(1) Difference in the value between these dates is solely due to a foreign currency translation adjustment.

(2) Was reclassified in the first quarter of 2013 from in-process research and development to finite lived intangibles, which coincided with the European commercial launch of the product (Nellix EVAS System) associated with this intangible asset. A significant portion of this intangible asset will not begin amortization until the U.S. launch of this product, currently scheduled for 2016.

(3) Regulatory approval for Intuitrak in Japan acquired through an amendment with a distributor in the fourth quarter of 2014.

Amortization expense for intangible assets for the three months ended March 31, 2015, and 2014 was $0.4 million, and $0.1 million respectively.

Estimated amortization expense for the five succeeding years and thereafter (which includes amortization of intangible assets which commenced in February 2013 with the commercial launch of the Nellix System in Europe) is as follows:



Remainder of 2015	$	931
2016	948
2017	2,210
2018	3,689
2019	4,744
2020	5,409
2021 & Thereafter	22,428
Total	$	40,359

(d) Marketable securities

Investments in held-to-maturity marketable securities consist of the following at March 31, 2015 and December 31, 2014:



	March 31, 2015
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
Asset backed securities	$	1,473	$	—	$	—		$	1,473
Agency bonds	3,000		—		(1		)	2,999
Corporate bonds	5,669		—		(2		)	5,667
Commercial paper	40,281		7		—			40,288
Government securities	3,044		—		—			3,044
Total	$	53,467	$	7	$	(3	)	$	53,471

	December 31, 2014
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Fair Value
Asset backed securities	$	3,633	$	—	$	—		$	3,633
Corporate bonds	15,707		—		(8		)	15,699
Commercial paper	40,531		5		—			40,536
Total	$	59,871	$	5	$	(8	)	$	59,868

At March 31, 2015, the Company’s investments included 8 held-to-maturity debt securities in unrealized loss positions with a total unrealized loss of approximately $3,000 and a total fair market value of approximately $11.2 million. All investments with gross unrealized losses have been in unrealized loss positions for less than 12 months. The unrealized losses were caused by interest rate fluctuations. There was no change in the credit risk of the securities. The Company does not intend to sell the securities and it is not likely that the Company will be required to sell the securities before the expected recovery of their amortized cost bases. There were no realized gains or losses on the investments for the three months ended March 31, 2015. Investments of held-to-maturity all mature within less than 12 months with an average maturity of 4 months.

(e) Fair Value Measurements

The following fair value hierarchy table presents information about each major category of the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2015 and December 31, 2014:



	Fair value measurement at reporting date using:
	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
At March 31, 2015
Cash and cash equivalents	$	20,183	$	—	$	—	$	20,183
Contingently issuable common stock	$	—	$	—	$	14,700	$	14,700
At December 31, 2014
Cash and cash equivalents	$	26,798	$	—	$	—	$	26,798
Contingently issuable common stock	$	—	$	—	$	14,600	$	14,600

There were no re-measurements to fair value during the three months ended March 31, 2015 of financial assets and liabilities that are not measured at fair value on a recurring basis. There were no transfers between Level 1, Level 2, or Level 3 securities during the three months ended March 31, 2015.

(f) Financial Instruments Not Recorded at Fair Value on a Recurring Basis

We measure the fair value of our Senior Notes carried at amortized cost quarterly for disclosure purposes. The estimated fair value of the Senior Notes is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues. Based on the market prices, the fair value of our long-term debt was $87.8 million as of March 31, 2015 and $84.5 million as of December 31, 2014.

We measure the fair value of our held-to-maturity marketable securities carried at amortized cost quarterly for disclosure purposes. The fair value of marketable securities is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar instruments.