Balance sheet components

Accounts receivable, net

Accounts receivable, net, consists of the following (in thousands):



	June 30, 2019			December 31, 2018
Accounts receivable	$	57,471		$	74,343
Trade notes receivable	2,409			672
Allowance for doubtful accounts	(257		)	(264		)
	$	59,623		$	74,751

Inventories, net

Inventories, net, consist of the following (in thousands):



	June 30, 2019		December 31, 2018
Raw materials	$	24,083	$	27,806
Work in process	14,892		13,044
Finished goods⁽¹⁾	9,820		11,309
	$	48,795	$	52,159

________________________________________________________


(1)	Finished goods inventory at customer vendor managed inventory locations was $2.8 million and $5.6 million as of June 30, 2019 and December 31, 2018, respectively.

Assets held for sale

In December 2018, the Company entered into an agreement with Joint Stock Company Rusnano, a related party, for Joint Stock Company Rusnano group to purchase the 100% interest in the operations of NeoPhotonics Corporation, LLC, the Company's manufacturing operations in Russia. In 2018, the Company recorded additional restructuring expense of $1.6 million related to these operations, bringing the total amount accrued for the Rusnano payment derivative to $2.0 million.

As of December 31, 2018, the Company has recorded assets with a carrying value of $3.0 million as held for sale, consisting primarily of $2.5 million of property, plant and equipment and $0.5 million of prepaid expenses and other current assets. The estimated fair value less direct costs of sale approximates the related carrying value. The balance for liabilities held for sale as of December 31, 2018 was immaterial and was primarily included in accrued and other current liabilities.

In April 2019, the Company completed the sale of 100% interest in the operations of NeoPhotonics Corporation, LLC, the Company's manufacturing operations in Russia to Joint Stock Company Rusnano, a related party. In connection with the sale, the Company received $2.0 million in cash, settled the $2.0 million exit fee and recognized a gain on asset sale of $0.8 million during the three and six months ended June 30, 2019, see Note 6.

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following (in thousands):



	June 30, 2019		December 31, 2018
Prepaid taxes and taxes receivable	$	4,130	$	5,461
Transition services agreement receivable (see Note 6)	12,016		11,999
Deposits and other prepaid expenses	2,424		3,020
Other receivable	4,827		6,125
	$	23,397	$	26,605

Property, plant and equipment, net

Purchases of property, plant and equipment unpaid as of June 30, 2019 and June 30, 2018 was $1.5 million and $3.1 million, respectively.

Purchased intangible assets

Purchased intangible assets consist of the following (in thousands):



	June 30, 2019							December 31, 2018
	Gross Assets		Accumulated Amortization			Net Assets		Gross Assets		Accumulated Amortization			Net Assets
Technology and patents	$	37,048	$	(35,368	)	$	1,680	$	37,029	$	(34,995	)	$	2,034
Customer relationships	15,172		(15,172		)	—		15,146		(15,026		)	120
Leasehold interest	1,240		(388		)	852		1,238		(374		)	864
	$	53,460	$	(50,928	)	$	2,532	$	53,413	$	(50,395	)	$	3,018

Amortization expense relating to technology and patents and the leasehold interest intangible assets is included within cost of goods sold and customer relationships within operating expenses. The following table presents details of the amortization expense of the Company’s purchased intangible assets as reported in the condensed consolidated statements of operations (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Cost of goods sold	$	184	$	184	$	368	$	387
Operating expenses	—		120		119		239
Total	$	184	$	304	$	487	$	626

The estimated future amortization expense of purchased intangible assets as of June 30, 2019, is as follows (in thousands):



2019 (remaining six months)	$	368
2020	737
2021	644
2022	28
2023	28
Thereafter	727
	$	2,532

Accrued and other current liabilities

Accrued and other current liabilities consist of the following (in thousands):



	June 30, 2019		December 31, 2018
Transition services agreement payables (see Note 6)	$	11,769	$	11,769
Employee-related	12,905		14,899
Asset sale related contingent liabilities (see Note 6)	6,762		6,751
Operating lease liabilities, current	2,223		—
Accrued warranty	751		672
Deferred revenue, current	291		1,114
Income and other taxes payable	1,107		1,580
Rusnano payment derivative	—		2,000
Accrued litigation settlement	—		2,645
Other accrued expenses	7,212		8,858
	$	43,020	$	50,288

Warranty Accrual

The table below summarizes the movement in the warranty accrual, which is included in accrued and other current liabilities (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Beginning balance	$	739		$	1,699		$	672		$	1,334
Warranty accruals	161			(17		)	476			529
Settlements	(149		)	(90		)	(397		)	(271		)
Ending balance	$	751		$	1,592		$	751		$	1,592

Other noncurrent liabilities

Other noncurrent liabilities consist of the following (in thousands):



	June 30, 2019		December 31, 2018
Pension and other employee-related	$	4,113	$	4,529
Deferred rent	—		3,058
Government grant	2,333		2,108
Capital lease obligation	—		282
Asset retirement obligations and other	3,503		3,522
	$	9,949	$	13,499