Acquisition, Restructuring and Other Expense

Acquisition, restructuring and other expense consists of the following:



	Three Months Ended March 31,
	2017		2016

Restructuring costs included in cost of sales	$	1,169	$	864

Restructuring costs	$	1,322	$	2,791
Business acquisition costs	1,488		9,045
SurgiQuest litigation verdict	12,200		—
Patent settlement costs and other	1,048		—
Acquisition, restructuring and other expense included in selling and administrative expense	$	16,058	$	11,836

Debt refinancing costs included in other expense	$	—	$	2,942

During the three months ended March 31, 2017 and 2016, we incurred $1.5 million and $9.0 million in costs associated with the January 4, 2016 acquisition of SurgiQuest, Inc. as further described in Note 3. The costs incurred in 2016 consist of investment banking fees, consulting fees, legal fees associated with the acquisition as well as legal fees associated with the Lexion case as further described in Note 13, costs associated with expensing of unvested options acquired and integration related costs. The costs incurred in 2017 consist of legal fees associated with the Lexion case, costs associated with expensing of unvested options acquired and integration related cost.

During the three months ended March 31, 2017, we incurred $12.2 million in costs associated with the SurgiQuest, Inc. vs. Lexion Medical litigation verdict whereby SurgiQuest was found liable for $2.2 million in compensatory damages with an additional $10.0 million in punitive damages as further described in Note 13. We have recorded an accrual in other current liabilities at March 31, 2017.

During the three months ended March 31, 2017, we incurred $1.0 million in costs associated with a patent settlement agreement as well as other legal costs.

During 2017 and 2016, we continued our operational restructuring plan. We incurred $1.2 million and $0.9 million in costs associated with the operational restructuring during the three months ended March 31, 2017 and 2016, respectively. These costs were charged to cost of sales and include severance and other charges.

During 2017 and 2016, we restructured certain selling and administrative functions and incurred severance and other related costs in the amount of $1.3 million and $2.8 million for the three months ended March 31, 2017 and 2016, respectively.

We have recorded an accrual in current and other long term liabilities of $1.8 million at March 31, 2017 mainly related to severance costs associated with the restructuring. Below is a roll forward of the costs incurred and cash expenditures associated with these activities during the three months ended March 31, 2017 and 2016:



	2017			2016
Balance as of January 1,	$	2,643		$	7,175

Expenses incurred	2,515			3,655

Payments made	(3,401		)	(6,955		)

Balance at March 31,	$	1,757		$	3,875