8.Balance Sheet Components

a.Allowance for Sales Returns and Doubtful Accounts

The Company has established an allowance for sales returns of $2,205 and $660 as of March 31, 2016 and December 31, 2015, respectively, recorded net against accounts receivable in the balance sheet.

The Company has established an allowance for doubtful accounts of $508 and $456 as of March 31, 2016 and December 31, 2015, respectively, recorded net against accounts receivable in the balance sheet.

b.Property and Equipment

Property and equipment, net consist of the following:


	March 31,		December 31,
	2016		2015
Leasehold improvements	$	86	$	86
Laboratory equipment and toolings		953		366
Computer equipment		278		277
Software		528		655
Office equipment		137		137
Furniture and fixtures		725		724
		2,707		2,245
Less accumulated depreciation		(911)		(841)
	$	1,796	$	1,404

Depreciation expense for the three months ended March 31, 2016 and 2015 was $70 and $68, respectively.

c.Goodwill and Other Intangible Assets, net

Goodwill represents the excess of the purchase price over the fair value of net assets of purchased businesses. Goodwill is not amortized, but instead subject to impairment tests on at least an annual basis and whenever circumstances suggest that goodwill may be impaired. The Company’s annual test for impairment is performed as of October 1 of each fiscal year. The Company makes a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it is not required to perform the two-step impairment test for that reporting unit.

Under the first step of the test, the Company is required to compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired and the second step of the test is not performed. If the results of the first step of the impairment test indicate that the fair value of a reporting unit does not exceed its carrying amount, then the second step of the test is required. The second step of the test compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The impairment loss is measured by the excess of the carrying amount of the reporting unit goodwill over the implied fair value of that goodwill.

The changes in the carrying amount of goodwill during the three months ended March 31, 2016 were as follows:


Balances as of December 31, 2015	$	—
Goodwill		14,278
Accumulated impairment losses		(14,278)
		—

Goodwill acquired (Note 3)		3,273

Balances as of March 31, 2016
Goodwill		17,551
Accumulated impairment losses		(14,278)
	$	3,273

The components of the Company’s other intangible assets consist of the following:


	March 31,		December 31,
	2016		2015
Acquired FDA non-gel product approval	$	1,713	$	1,713
Customer relationships		3,200		—
Trade name		800		—
Non-compete agreement		30		—
Less accumulated amortization		(1,735)		(1,660)
	$	4,008	$	53

Amortization expense for the three months ended March 31, 2016 and 2015 was $74 and $15, respectively. The following table summarizes the estimated amortization expense relating to the Company's intangible assets as of March 31, 2016:


	Amortization
Period	Expense
Remainder of 2016	$	631
2017		813
2018		612
2019		464
2020		353
	$	2,873

d.Accrued and Other Current Liabilities

Accrued and other current liabilities consist of the following:


	March 31,		December 31,
	2016		2015
Accrued clinical trial and research and development expenses	$	121	$	215
Audit, consulting and legal fees		1,702		1,208
Payroll and related expenses		1,654		2,494
Accrued commission		1,549		1,960
Warrant liability		75		60
Other		647		1,022
	$	5,748	$	6,959