NOTE 4—BALANCE SHEET DETAIL

Inventories

Inventories consist of the following (in thousands):

	December 31,
	2012		2011
Raw materials	$	7,221	$	6,587
Finished goods		3,893		4,142
Total	$	11,114	$	10,729

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):

	December 31,
	2012			2011
Leasehold improvements	$	620		$	590
Office equipment and furniture		2,888			2,761
Machinery and equipment		3,252			2,893
		6,760			6,244
Less: Accumulated depreciation		(5,827	)		(5,391	)
Property and equipment, net	$	933		$	853

Goodwill and Other Intangible Assets

Goodwill and other intangible assets comprise a patent sublicense acquired from Palomar in 2006; a technology sublicense acquired in 2002; and, intangible assets and goodwill related to the acquisition of Iridex's aesthetic business unit. The components of intangible assets at December 31, 2012 and 2011 were as follows (in thousands):

	Gross Carrying Amount		Accumulated Amortization Amount		Net Amount
December 31, 2012
Patent sublicense	$	1,218	$	931	$	287
Technology sublicense		538		538		—
Customer relationship intangible related to acquisition		2,510		460		2,050
Other identified intangible assets related to acquisition	$	780	$	551	$	229
Goodwill		1,339		—		1,339
Total	$	6,385	$	2,480	$	3,905
December 31, 2011
Patent sublicense	$	1,218	$	793	$	425
Technology sublicense		538		517		21
Total	$	1,756	$	1,310	$	446

Amortization expense for intangible assets was $1.2 million in 2012, $191,000 in 2011, and $192,000 in 2010.

Based on intangible assets recorded at December 31, 2012, and assuming no subsequent additions to, or impairment of the underlying assets, the remaining estimated annual amortization expense is expected to be as follows (in thousands):

Year ending December 31,	Amount
2013	$	696
2014		696
2015		569
2016		558
2017		47
Total	$	2,566

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	December 31,
	2012		2011
Payroll and related expenses	$	4,721	$	4,172
Warranty		1,212		1,121
Sales tax		1,085		839
Inventory		404		149
Professional fees		389		483
Royalty		359		434
Income tax		343		276
Customer deposits		249		1,054
Sales and marketing accruals		131		191
Other		600		543
Total	$	9,493	$	9,262