Supplemental Balance Sheet Information

Inventories

Inventories are stated at the lower of cost or net realizable value on a first-in, first-out basis and are comprised of the following (in thousands):



	March 31, 2017		December 31, 2016
Raw materials	$	215	$	389
Work-in-process	262		351
Finished goods	12		63
Total inventories, net	$	489	$	803

Property and Equipment

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



	March 31, 2017			December 31, 2016
Office and computer equipment	$	409		$	409
Software	743			708
Laboratory equipment	4,562			4,516
Furniture	200			200
Manufacturing equipment	910			897
Manufacturing tooling and molds	154			154
T2-owned instruments and components	10,522			9,119
Leasehold improvements	3,353			3,353
Construction in progress	1,343			1,299
	22,196			20,655
Less accumulated depreciation and amortization	(7,728		)	(7,066		)
Property and equipment, net	$	14,468		$	13,589

Construction in progress is primarily comprised of equipment and leasehold improvement construction projects that have not been placed in service. T2-owned instruments and components is comprised of raw materials and work-in-process inventory that are expected to be used or used to produce Company-owned instruments, based on our business model and forecast, and completed instruments that will be used for internal research and development, clinical studies or reagent rental agreements with customers. Completed T2-owned instruments are placed in service once installation procedures are completed and are depreciated over five years. The Company has approximately $6.7 million and $5.7 million of net value related to the T2-owned instruments installed and depreciating as of March 31, 2017 and December 31, 2016, respectively. Depreciation expense for T2-owned instruments placed at customer sites pursuant to reagent rental agreements is recorded as a component of cost of product revenue and totaled approximately $0.2 million and $0.1 million for the three months ended March 31, 2017 and March 31, 2016, respectively. Depreciation expense for T2-owned instruments used for internal research and development and clinical studies is recorded as a component of research and development expense.

Accrued Expenses

Accrued expenses consist of the following (in thousands):



	March 31, 2017		December 31, 2016
Accrued payroll and compensation	$	1,848	$	2,479
Accrued research and development expenses	724		846
Accrued professional services	915		884
Other accrued expenses	573		699
Total accrued expenses	$	4,060	$	4,908