5. Balance Sheet Components

Property and Equipment, net

The Company’s property and equipment consisted of the following:


		March 31,		December 31,
	Useful Life	2017		2016
		(in thousands)
Machinery and equipment	3-5 years	$	30,141	$	27,303
Furniture and fixtures	3 years		1,143		1,087
Computer equipment	3 years		3,249		861
Capitalized software held for internal use	3 years		2,898		2,172
Leasehold improvements	Lesser of useful life or lease term		10,583		10,444
Construction-in-process			5,394		9,759
			53,408		51,626
Less: Accumulated depreciation and amortization			(21,656)		(19,337)
Total Property and Equipment, net		$	31,752	$	32,289

During the three months ended March 31, 2017, the Company recorded an asset impairment charge of $0.6 million in cost of product revenues in the statements of operations and comprehensive loss. This charge was recorded following an impairment analysis completed in the fourth quarter of 2016 on certain sequencing and automation equipment whose service lives were determined to be significantly shorter than initially expected. Those equipment were completely phased out in January 2017 as the Company began its transition to the next generation of sequencing and automation equipment to help streamline its production workflows.

Other Assets

In April 2016, the Company entered into a four-year agreement with a health insurance carrier whereby in return for partial exclusivity and the right to pricing benefits the Company agreed to pay total consideration of $3.2 million. The total consideration was paid in the third quarter of 2016. As of March 31, 2017 and December 31, 2016, $2.4 million and $2.6 million of deferred costs were included in other long-term assets, respectively. The deferred costs are being amortized ratably over the four-year term of the agreement and for the three months ended March 31, 2017, the Company amortized $0.2 million of such costs, which was recorded as a reduction of product revenue in the statements of operations and comprehensive loss.

Accrued Compensation

The Company’s accrued compensation consisted of the following:


	March 31,		December 31,
	2017		2016
	(in thousands)
Accrued paid time off	$	1,853	$	1,892
Accrued commissions		4,112		3,868
Accrued bonuses		903		2,387
Other accrued compensation		2,460		2,920
Total accrued compensation	$	9,328	$	11,067

Other Accrued Liabilities

The Company’s other accrued liabilities consisted of the following:


	March 31,		December 31,
	2017		2016
	(in thousands)
Reserves for refunds to insurance carriers	$	8,874	$	7,535
Testing and laboratory materials from suppliers		6,542		3,804
Other accrued expenses		3,325		4,521
Marketing and corporate affairs		1,381		202
Legal, audit and consulting fees		1,031		180
Accrued shipping charges		756		467
Sales tax payable		571		459
Accrued specimen service fees		565		469
Accrued rent		505		195
Clinical trials and studies		322		388
Leasehold improvement projects in progress		56		1,659
Total other accrued liabilities	$	23,928	$	19,879