Select Condensed Consolidated Balance Sheet Details

6 Months Ended

Jun. 30, 2019

Balance Sheet Related Disclosures [Abstract]

Select Condensed Consolidated Balance Sheet Details

3. Select Condensed Consolidated Balance Sheet Details

Accounts Receivable, net

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

	June 30, 2019			December 31, 2018
Accounts receivable	$	13,938		$	15,291
Allowance for doubtful accounts		(296	)		(196	)
Accounts receivable, net	$	13,642		$	15,095

Inventories, net

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

	June 30, 2019			December 31, 2018
Raw materials	$	6,071		$	5,813
Work-in-process		814			952
Finished goods		46,615			39,758
		53,500			46,523
Less reserve for excess and obsolete finished goods		(20,895	)		(17,758	)
Inventories, net	$	32,605		$	28,765

Property and Equipment, net

Property and equipment, net consist of the following (in thousands except as indicated):

	Useful lives (in years)		June 30, 2019			December 31, 2018
Surgical instruments		4	$	54,584		$	54,848
Machinery and equipment		7		6,003			5,971
Computer equipment		3		3,391			3,104
Office furniture and equipment		5		1,244			1,155
Leasehold improvements	various			1,761			1,765
Construction in progress	n/a			145			92
				67,128			66,935
Less accumulated depreciation and amortization				(52,038	)		(53,700	)
Property and equipment, net			$	15,090		$	13,235

Total depreciation expense was $1.5 million for both the three months ended June 30, 2019 and 2018 and $3.1 million and $3.0 million for the six months ended June 30, 2019 and 2018, respectively. At both June 30, 2019 and December 31, 2018, assets recorded under capital leases of $0.1 million were included in the machinery and equipment balance. Amortization of assets under capital leases is included in depreciation expense.

Intangible Assets, net

Intangible assets, net consist of the following (in thousands, except as indicated):

	Remaining Avg. Useful lives (in years)		June 30, 2019			December 31, 2018
Developed technology		10	$	26,976		$	26,976
Intellectual property		—		1,004			1,004
License agreements		1		5,536			5,536
Trademarks and trade names		—		792			792
Customer-related		4		7,458			7,458
Distribution network		3		4,027			4,027
In process research and development		19		8,800			8,800
				54,593			54,593
Less accumulated amortization				(28,539	)		(28,185	)
Intangible assets, net			$	26,054		$	26,408

Total amortization expense was $0.2 million and $0.1 million for the three months ended June 30, 2019 and 2018, respectively and $0.4 million for both the six months ended June 30, 2019 and 2018.

Developed technology and in process research and development intangibles are expected to begin amortizing when the relevant products reach full commercial launch. Future amortization expense related to intangible assets as of June 30, 2019 is as follows (in thousands):

Year Ending December 31,
Remainder of 2019	$	899
2020		1,870
2021		1,890
2022		1,890
2023		1,890
Thereafter		17,615
	$	26,054

Accrued Expenses

Accrued expenses consist of the following (in thousands):

	June 30, 2019		December 31, 2018
Commissions and sales milestones	$	4,337	$	3,594
Payroll and payroll related		4,904		3,222
Litigation settlement obligation		4,400		4,400
Professional fees		2,626		2,637
Royalties		1,609		1,354
Restructuring and severance accruals		140		710
Taxes		3		(3	)
Interest		136		261
Acquisition related - contingent consideration		-		2,600
Other		2,676		3,541
Total accrued expenses	$	20,831	$	22,316