Balance Sheet Components

Inventories



(in thousands)	September 30, 2014		December 31, 2013
Raw materials	$	563	$	806
Finished goods	3,667		4,859
Total inventories	$	4,230	$	5,665

Property and equipment, net



(in thousands)	September 30, 2014			December 31, 2013
Computer equipment and software	$	8,092		$	7,345
Furniture, fixtures and equipment	958			924
Leasehold improvements	2,139			2,125
Manufacturing tools and equipment	3,136			3,081
Construction in process	1,173			555
Property and equipment, at cost	15,498			14,030
Less: Accumulated depreciation	(10,307		)	(8,665		)
Property and equipment, net	$	5,191		$	5,365

Depreciation and amortization expense was $0.5 million and $0.5 million for the three months ended September 30, 2014 and 2013, respectively. Depreciation and amortization expense was $1.6 million and $1.3 million for the nine months ended September 30, 2014 and 2013, respectively.

Net investment in sales-type leases

The Company has sales-type leases with terms of 1.25 to 4 years. Sales-type lease receivables are collateralized by the underlying equipment. The components of our net investment in sales-type leases are as follows:



(in thousands)	September 30, 2014			December 31, 2013
Minimum payments to be received on sales-type leases	$	1,971		$	2,597
Less: Unearned interest income and executory costs	(995		)	(1,167		)
Net investment in sales-type leases	976			1,430
Less: Current portion	(542		)	(620		)
Non-current net investment in sales-type leases	$	434		$	810

There were no allowances for doubtful accounts on these leases as of September 30, 2014 and December 31, 2013. There is no guaranteed or unguaranteed residual value on the leased equipment. The current and non-current net investments in sales-types leases are reported as components of the consolidated balance sheet captions "other receivables" and "other long-term assets," respectively.

The minimum payments expected to be received for future years under sales-type leases as of September 30, 2014 were as follows:



(in thousands)	Future lease payments
2014 (three months remaining)	$	238
2015	827
2016	655
2017	251
Total	$	1,971

Accrued payroll and other current liabilities



(in thousands)	September 30, 2014		December 31, 2013
Payroll and related expenses	$	5,806	$	5,065
Accrued payables	1,896		2,259
Deferred rent, current portion	349		490
Lease financing, current portion	612		528
Product warranty	846		840
Customer prepayments	625		281
Sales and use tax payable	93		259
Other	154		119
Total accrued payroll and other current liabilities	$	10,381	$	9,841

The changes in the Company's product warranty reserve are as follows:



	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2014			2013			2014			2013
Warranty balance at the beginning of the period	$	582		$	202		$	840		$	297
Warranty expense accrued for shipments during the period	132			175			619			349
Changes in estimate related to pre-existing warranties	250			203			275			430
Warranty settlements made	(118		)	(367		)	(888		)	(863		)
Warranty balance at the end of the period	$	846		$	213		$	846		$	213