6. Balance Sheet Components

Property and Equipment, net

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


		June 30,		December 31,
	Useful Life	2018		2017
		(in thousands)
Machinery and equipment	3-5 years	$	32,920	$	31,825
Furniture and fixtures	3 years		1,319		1,216
Computer equipment	3 years		2,117		1,958
Capitalized software held for internal use	3 years		4,641		4,465
Leasehold improvements	Lesser of useful life or lease term		10,916		10,691
Construction-in-process			3,874		6,497
			55,787		56,652
Less: Accumulated depreciation and amortization			(30,474)		(26,985)
Total Property and Equipment, net		$	25,313	$	29,667

During the six months ended June 30, 2018, an asset impairment charge of $1.5 million was recorded in research and development expenses in the statements of operations and comprehensive loss. This charge was recorded to write off the project development costs that were previously capitalized.

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 June 30, 2018 and December 31, 2017, $1.4 million and $1.8 million of deferred costs related to the total consideration paid 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 and six months ended June 30, 2018, the Company amortized $0.2 million and $0.4 million of such costs, respectively, which was recorded as a reduction of product revenues in the statements of operations and comprehensive loss.

In August 2017, the Company entered into the 2017 Term Loan with OrbiMed and issued 300,000 shares of its common stock in exchange for OrbiMed’s initial and remaining funding commitments (as described in Note 9). The Company also paid legal fees totaling $0.3 million in connection with this term loan. Total debt issuance costs of $2.7 million is accounted for as a debt discount. For financial statement presentation purposes, the Company has classified $2.0 million of the debt discount as a direct reduction from the outstanding debt balance, while $0.7 million of such remains in noncurrent assets for the unused borrowing capacity of $25.0 million. The debt discount is being amortized on a straight-line basis over the term of the loan. For the three and six months ended June 30, 2018, debt discount amortized from noncurrent assets was insignificant. As of June 30, 2018, total unamortized debt discount remaining in noncurrent assets was $0.6 million.

Accrued Compensation

The Company’s accrued compensation consisted of the following:


	June 30,		December 31,
	2018		2017
	(in thousands)
Accrued paid time off	$	1,752	$	1,806
Accrued commissions		3,050		3,558
Accrued bonuses		1,767		2,063
Other accrued compensation		2,046		2,172
Total accrued compensation	$	8,615	$	9,599

Other Accrued Liabilities

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


	June 30,		December 31,
	2018		2017
(Amounts in thousands)			(As Revised)
Settlement accrued for reimbursement related claims	$	3,921	$	10,062
Reserves for refunds to insurance carriers		8,310		6,794
Accrued charges for outsourced testing		5,725		6,566
Testing and laboratory materials from suppliers		2,346		1,367
Marketing and corporate affairs		1,190		1,456
Legal, audit and consulting fees		755		206
Accrued shipping charges		851		198
Sales tax payable		694		504
Accrued specimen service fees		1,083		683
Accrued rent		880		856
Clinical trials and studies		551		483
Other accrued expenses		4,214		4,082
Total other accrued liabilities	$	30,520	$	33,257

As of December 31, 2017, the Company accrued a total of $11.4 million for amounts due under a settlement agreement related to reimbursement related claims, of which $10.1 million was the current portion and $1.3 million was recorded in other long-term liabilities. At the end of the first quarter of 2018, the noncurrent portion of the $1.3 million was reclassified to other current liabilities, and settlement prepayment of approximately $5.3 million had been made by the Company. The Company was allowed to make subsequent quarterly installments as described in Note 7 under Legal Proceedings. As of June 30, 2018, the first quarterly installment of approximately $1.3 million, along with a separate payment of approximately $0.8 million, had been paid to the federal government and the participating State Medicaids, respectively. The remaining amount accrued in other current liabilities under the settlement agreement was $3.9 million.

Reserves for refunds to insurance carriers include actual overpayments from and amounts to be refunded to insurance carriers, and additional amounts that the Company estimates as reserves for potential refund requests during the period. When the Company releases these previously reserved amounts, they are recognized as product revenues in the statements of operations and comprehensive loss. During the three months ended June 30, 2018, $0.9 million previously held in reserves from payers were released, and the Company reserved an additional $3.3 million, of which approximately $1.4 million pertained to the assessment of overpayments and $1.9 million was determined based on claims submitted to the Company. During the six months ended June 30, 2018, $1.8 million previously held in reserves from payers were released, and amounts totaling $5.1 million were reserved, of which approximately $2.7 million pertained to the assessment of overpayments and $2.4 million was determined based on claims submitted to the Company. Amounts remaining in reserves totaled $8.3 million and $6.8 million as of June 30, 2018 and December 31, 2017, respectively.