PROPERTY AND EQUIPMENT - Note 7

12 Months Ended

Dec. 31, 2017

Contract with Customer, Liability, Current, Change

Property and equipment - Note 7

7. PROPERTY AND EQUIPMENT

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

		December 31,
		2018		2017
Production equipment	$	7,124	$	6,573
Leasehold improvements		909		601
Computer hardware and software/lab equipment		6,082		5,515
Office furniture and equipment		1,342		1,304
		15,457		13,993
Less: Accumulated depreciation		(12,464)		(10,742)
	$	2,993	$	3,251

Depreciation expense was $1.7 million in 2018 and $1.1 million in 2017.

Capital leases are collateralized by the related assets financed and by security deposits held by the lessors under the lease agreements. The cost and accumulated depreciation of equipment under capital leases was $770,000 and $713,000 in the year ended December 31, 2018 and $704,000 and $704,000 in the year ended December 31, 2017.