2. Selected Consolidated Financial Statement Information

Accounts Receivable, Net

Accounts receivable consists of the following:



	June 30,
	2017			2016
Accounts receivable	$	29,336		$	23,840
Less: Allowance for doubtful accounts	(864		)	(712		)
Accounts receivable, net	$	28,472		$	23,128

Inventories

Inventories consist of the following:



	June 30,
	2017		2016
Raw materials	$	7,898	$	7,439
Work in process	1,221		1,142
Finished goods	7,778		8,859
Inventories, net	$	16,897	$	17,440

Property and Equipment

Property and equipment consists of the following:



	June 30,
	2017			2016
Land	$	500		$	500
Building	22,420			22,575
Equipment	16,502			14,141
Furniture	2,709			2,709
Leasehold improvements	86			86
Construction in progress	421			1,533
	42,638			41,544
Less: Accumulated depreciation	(12,942		)	(9,073		)
Total Property and equipment, net	$	29,696		$	32,471

On December 29, 2016, the Company entered into a Purchase and Sale Agreement, as subsequently amended (collectively, the “Sale Agreement”), with Krishna Holdings, LLC (the “Buyer”), providing for the sale to Buyer of the Company’s headquarters facility in St. Paul, Minnesota (the “Facility”), for a cash purchase price of $21,500. On March 30, 2017, the sale of the Facility under the Sale Agreement closed. The Company received proceeds of approximately $20,944 ($21,500, less $556 of transaction expenses). The net proceeds are to be used for working capital and general corporate purposes. In connection with the sale, the Company recorded an impairment charge of $158.

Under the Sale Agreement, the Company entered into a Lease Agreement (the “Lease Agreement”) with Krishna Holdings, LLC, Apex Holdings, LLC, Kashi Associates, LLC, Keva Holdings, LLC, S&V Ventures, LLC, Polo Group LLC, SPAV Holdings LLC, Star Associates LLC, and The Global Villa, LLC. As the lease terms resulted in a capital lease classification, the Company accounted for the sale and leaseback of the Facility as a financing transaction where the assets remain on the Company’s balance sheet. See Note 3 for further discussion on future payment obligations under the Lease Agreement.

Patents, net

Patents, net consist of the following:



	June 30,
	2017			2016
Patents	$	6,056		$	6,049
Less: Accumulated amortization	(1,000		)	(1,036		)
Total Patents, net	$	5,056		$	5,013

As of June 30, 2017, future estimated amortization of patents is as follows:



2018	$	198
2019	190
2020	180
2021	180
2022	180
Thereafter	4,128
	$	5,056

This future amortization expense is an estimate. Actual amounts may vary from these estimated amounts due to additional intangible asset acquisitions, approval of patents-in-process, potential impairment, change in useful life or other events.

Accrued Expenses

Accrued expenses consist of the following:



	June 30,
	2017		2016
Salaries and bonus	$	8,247	$	4,305
Commissions	8,217		7,788
Accrued vacation	3,436		3,498
Accrued excise, sales and other taxes	3,497		3,372
Accrued litigation	2,600		—
Legal settlement	1,814		3,872
Clinical studies	657		1,757
Restructuring	169		1,337
Other accrued expenses	1,599		1,064
Total Accrued expenses	$	30,236	$	26,993

Legal Settlement

On June 28, 2016, the Company entered into a Settlement Agreement (the “Settlement Agreement”) with the United States of America, acting through the Department of Justice (the “DOJ”) and on behalf of the Office of Inspector General of the Department of Health and Human Services, and Travis Thams, to resolve the investigation by the DOJ and the Civil Action underlying such investigation. Under the Settlement Agreement, the Company agreed to pay $8,000 (the “Settlement Amount”), as follows: an initial payment of $3,000, paid on July 1, 2016, with the remaining $5,000, which bears interest at 1.8% per annum, payable in 11 equal quarterly installments, beginning January 1, 2017. The amount payable within the next twelve months is included in accrued expenses (as noted in the table above) with the long-term portion included in other liabilities (as noted in the table below). Under the Settlement Agreement, if the Company makes a single payment in excess of $2,000, which payment is not covered by an insurance policy, in settlement of any claims before paying the full Settlement Amount, the remaining unpaid balance of the Settlement Amount will become immediately due and payable, with interest accruing on the unpaid principal portion at an interest rate of 1.8% per annum.

Restructuring

On March 31, 2016, the Company announced a restructuring to reduce costs as part of its plan to progress towards profitability and positive cash flow. As a result, the Company recorded a restructuring expense of $2,364 during the year ended June 30, 2016, which was comprised of severance and other employee related costs.

The following table provides information regarding the restructuring accrual:



	Severance
Restructuring accrual at June 30, 2015	$	—
Restructuring charge⁽¹⁾	2,311
Cash payments	(790		)
Restructuring accrual at June 30, 2016	1,521
Cash payments	(1,330		)
Restructuring accrual at June 30, 2017	$	191

⁽¹⁾ Excludes $55 of restructuring expense related to other employee related costs, and $(2) related to stock-based compensation modification expense.

The Company anticipates that $169 of the restructuring accrual at June 30, 2017, will be paid within the next twelve months and is therefore recorded in accrued expenses on the consolidated balance sheet. Estimated payments of $22, representing the long-term portion of benefits, are recorded in other liabilities on the consolidated balance sheet at June 30, 2017. The Company does not anticipate additional restructuring costs.

CEO Departure

On February 26, 2016, the Company’s former Chief Executive Officer (“CEO”) resigned from his positions as President and CEO of the Company and as a director of the Company. The Company and the former CEO entered into a Separation Agreement with benefits consistent with the Company’s Amended and Restated Executive Officer Severance Plan. The total expense related to the former CEO’s departure was $1,507 and was recorded in selling, general and administrative expenses for the year ended June 30, 2016. At June 30, 2017 approximately $413 of the package benefits is recorded in accrued expenses and $14 is recorded in other liabilities on the consolidated balance sheet, representing the long-term portion of the former CEO’s benefits.

Other Liabilities

The Company’s non-current other liabilities consist of the following:



	June 30,
	2017		2016
Legal settlement	$	2,314	$	4,128
Deferred compensation	519		684
Deferred grant incentive	473		486
Accrued severance	99		610
Other liabilities	74		102
Total Other liabilities	$	3,479	$	6,010

Deferred Revenue

In November 2016, the Company signed an exclusive distribution agreement with Medikit to sell its Diamondback 360^® Coronary and Peripheral OAS in Japan. To secure exclusive distribution rights, Medikit made an upfront payment of $10,000 to the Company, which is refundable based on the occurrence of certain events during the term of the agreement. The Company has classified the upfront payment as long-term based on its expectation of when revenue will be recognized. The classification will be re-evaluated on a quarterly basis.