3. Balance Sheet Details

Accounts Receivable, net

Accounts receivable consist of the following (in thousands):

	December 31,
	2016			2015
Accounts receivable	$	19,870		$	27,639
Less allowance for doubtful accounts		(1,358	)		(769	)
Accounts receivables, net	$	18,512		$	26,870

Inventories, net

Inventories consist of the following (in thousands):

	December 31,
	2016			2015
Raw materials	$	7,301		$	7,237
Work-in-process		823			1,908
Finished goods		38,469			39,388
		46,593			48,533
Less reserve for excess and obsolete finished goods		(16,500	)		(15,901	)
Inventories, net	$	30,093		$	32,632

Property and Equipment, net

Property and equipment consist of the following (in thousands except for useful lives):

	Useful lives		December 31,
	(in years)		2016			2015
Surgical instruments		4	$	53,095		$	52,404
Machinery and equipment		7		5,435			14,416
Computer equipment		3		3,511			3,816
Office furniture and equipment		5		2,695			3,426
Leasehold improvements	various			3,467			3,467
Construction in progress	n/a			445			139
				68,648			77,668
Less accumulated depreciation and amortization				(53,572	)		(61,587	)
Property and equipment, net			$	15,076		$	16,081

Total depreciation expense was $7.4 million, $10.8 million and $9.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. At December 31, 2016, assets recorded under capital leases of $2.1 million were included in the machinery and equipment balance. At December 31, 2015, assets recorded under capital leases of $2.6 million were included in the machinery and equipment balance and $0.1 million are included in the construction in progress balance. Amortization of assets under capital leases is included in depreciation expense.

Intangible Assets

Intangible assets consist of the following (in thousands except for useful lives):

	Remaining Avg. Useful lives		December 31,
	(in years)		2016			2015
Developed product technology		—	$	13,876		$	13,876
Intellectual property		—		1,004			1,004
License agreements		2		5,265			5,015
Trademarks and trade names		—		732			732
Customer-related		8		7,458			7,458
Distribution network		8		4,027			4,027
				32,362			32,112
Less accumulated amortization				(26,651	)		(23,306	)
Intangible assets, net			$	5,711		$	8,806

Total expense related to amortization of intangible assets was $1.6 million, $3.0 million and $2.2 million for the years ended December 31, 2016, 2015 and 2014, respectively.

In connection with the sale of the International Business (see Note 4), the Company determined that certain intangible assets related to the Company's previous acquisition of Scient'x, including customer relationships, distribution network and key product tradename intangible assets, no longer had a business purpose and no cash flows associated with these assets are expected in the future. As a result, the Company recorded $1.7 million as intangible impairment expense during the year ended December 31, 2016. Prior to the impairment, amortization of these intangible assets had been recorded in amortization of acquired intangible assets within operating expenses.

During 2016, due to revised marketing strategies for an interbody fusion device, the Company evaluated the related intangible asset for impairment. As a result of this impairment analysis, the Company expensed $0.5 million as an impairment charge in cost of goods sold in 2016 for the write-off of intangible asset related to this product.

During 2015, the Company entered into an exclusive distribution agreement with a third party to market a biologic product. The Company expensed $0.3 million as an impairment charge in cost of goods sold in 2016 for the write-off of an intangible asset related to this product. Additionally, due to a revised marketing strategy for the Company's Epicage interbody fusion device, the Company evaluated the related intangible asset for impairment. As a result of this impairment analysis, the Company expensed $0.9 million as an impairment charge in cost of goods sold in 2015 for the write-off of an intangible asset related to this product.

In connection with the step two goodwill impairment test performed in the third quarter of 2015, the Company determined that the physician education intangible acquired in the Scient’x acquisition was impaired. As a result, the Company expensed $0.9 million included in goodwill and intangible impairment of discontinued operations in the year ended December 31, 2015.

The future expected amortization expense related to intangible assets as of December 31, 2016 is as follows (in thousands):

Year Ending December 31,
2017	$	936
2018		750
2019		689
2020		688
2021		688
Thereafter		1,960
Total	$	5,711

Goodwill

The changes in the carrying amount of goodwill from December 31, 2015 through December 31, 2016 were as follows (in thousands):

	2016		2015
Balance at January 1	$	—	$	171,333
Impairment charge		—		(164,263	)
Effect of foreign exchange rate on goodwill		—		(7,070	)
Balance at December 31	$	—	$	—

In the third quarter of 2015, the market value of the Company’s common stock substantially declined. As a result of this decline, the Company determined that it had an indicator of impairment of its goodwill, and an interim test of goodwill impairment was required. As a result of this interim test, the Company recorded a charge of $164.3 million, representing the write-off of the remaining balance of goodwill in the third quarter of 2015.

Accrued Expenses

Accrued expenses consist of the following (in thousands):

	December 31,
	2016		2015
Commissions and sales milestones	$	4,202	$	3,963
Payroll and payroll related		2,384		3,947
Litigation settlements		4,400		4,400
Globus related accruals		3,830		—
Accrued professional fees		3,093		1,972
Royalties		1,347		1,199
Restructuring and severance accruals		1,328		505
Accrued taxes		404		765
Guaranteed collaboration compensation, current		2,228		—
Accrued interest		387		999
Other		3,986		3,425
Total accrued expenses	$	27,589	$	21,175