6. Balance Sheet Components

Property and Equipment, net

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


		September 30,		December 31,
	Useful Life	2019		2018
		(in thousands)
Machinery and equipment	3-5 years	$	36,317	$	35,400
Furniture and fixtures	3 years		1,376		1,319
Computer equipment	3 years		2,031		2,117
Capitalized software held for internal use	3 years		5,296		4,868
Leasehold improvements	Lesser of useful life or lease term		11,268		10,916
Construction-in-process			2,487		4,013
			58,775		58,633
Less: Accumulated depreciation and amortization			(39,748)		(34,297)
Total Property and Equipment, net		$	19,027	$	24,336

During the three months ended September 30, 2019, an impairment charge of $1.7 million was recorded in selling, general, and administrative expenses in the condensed consolidated statement of operations and comprehensive loss. This charge is comprised of $1.2 million from the impairment of leasehold improvements, $0.1 million from the impairment of capitalized software held for internal use, and $0.4 million from the right-of-use asset (Note 7) related to the disposal of business.

During the three months ended March 31, 2018, an asset impairment charge of $1.6 million was recorded in research and development expenses in the condensed consolidated 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 a total consideration payment of $3.2 million. As of September 30, 2019 and December 31, 2018, $0.4 million and $1.0 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. During the three months ended September 30, 2019 and 2018, amortization of such costs totaling $0.2 million was recorded for each of the two periods; and for the nine months ended September 30, 2019 and 2018, $0.6 million of such costs was recorded for each of the two periods 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 (as described in Note 10) and issued 300,000 shares of its common stock in exchange for OrbiMed’s initial and remaining funding commitments. In April 2019, the Company issued an additional 25,000 shares of its common stock to OrbiMed for extending the expiration date to draw the unused borrowing capacity until December 31, 2019. The Company has classified $1.2 million out of the total debt issuance costs in noncurrent assets for the unused borrowing capacity of $50.0 million. The debt discount is being amortized on a straight-line basis over the remaining term of the loan. For the three and nine months ended September 30, 2019 and 2018, debt discount amortized from noncurrent assets was insignificant. As of September 30, 2019, total unamortized remaining in noncurrent assets was $0.9 million.

As of September 30, 2019, other assets also included long-term advances to BGI of $10.0 million for future sequencing equipment and services.

Accrued Compensation

The Company’s accrued compensation consisted of the following:


	September 30,		December 31,
	2019		2018
	(in thousands)
Accrued paid time off	$	1,781	$	1,825
Accrued commissions		3,830		4,492
Accrued bonuses		3,552		3,757
Other accrued compensation		5,075		2,594
Total accrued compensation	$	14,238	$	12,668

Other Accrued Liabilities

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


	September 30,		December 31,
	2019		2018
(Amounts in thousands)
Settlement accrued for reimbursement related claims	$	—	$	1,378
Reserves for refunds to third-party payers		8,700		10,012
Accrued charges for outsourced testing		6,199		5,001
Testing and laboratory materials from suppliers		1,170		2,742
Marketing and corporate affairs		2,430		1,306
Legal, audit and consulting fees		1,516		1,058
Accrued shipping charges		—		852
Sales tax payable		1,021		1,255
Accrued specimen service fees		1,386		1,378
Accrued rent		—		903
Clinical trials and studies		1,229		1,694
Operating lease liabilities, current portion		5,536		—
Other accrued expenses		9,515		4,863
Total other accrued liabilities	$	38,702	$	32,442

In December 2017, the Company accrued a total of $11.4 million for amounts due under a settlement agreement related to reimbursement related claims and was required to make periodic payments as described in Note 8 under Legal Proceedings. In 2018, payments totaling $10.3 million including interest were made by the Company, with the final quarterly installment of $1.4 million remaining in other accrued liabilities as of December 31, 2018. The Company paid the final quarterly installment in March 2019.

Reserves for refunds to third-party payers include 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. As of December 31, 2018, reserves relating to payers were $10.0 million. During the nine months ended September 30, 2019, the Company reserved an additional $7.2 million, while a reduction of $8.5 million occurred within the same period resulting from the release of previously reserved amounts from payers and refunds of overpayments. Remaining reserves relating to payers in other accrued liabilities were $8.7 million as of September 30, 2019.