NOTE 5. BALANCE SHEET COMPONENTS

Inventory

As of December 31, 2016 and 2015, our inventory consisted of the following components:



	December 31,
(in thousands)	2016		2015
Purchased materials	$	4,817	$	4,041
Work in process		7,287		3,576
Finished goods		3,530		3,338
Inventory	$	15,634	$	10,955

Prepaid Expenses and Other Current Assets

As of December 31, 2016 and 2015, our prepaid expenses and other current assets consisted of the following components:


	December 31,
(in thousands)	2016		2015
Receivable from Existing Landlord	$	5,000	$	10,000
Rent deposits for O'Brien building		2,160		—
Prepaid expenses		2,342		1,330
Other current assets		476		741
Prepaid expenses and other current assets	$	9,978	$	12,071

Other Long-term Assets

As of December 31, 2016 and 2015, our other long-term assets consisted of the following components:


	December 31,
(in thousands)	2016		2015
Receivable from Existing Landlord	$	—	$	5,000
Rent deposits and tenant improvements for O'Brien building		9,641		2,160
Other		172		358
Other long-term assets	$	9,813	$	7,518

Receivable from existing landlord of $10.0 million as of December 31, 2015 was part of the $15.0 million of future payments receivable from our existing landlord for our Menlo Park facility real property leases, as described in further details in “Note 7. Commitments and Contingencies.” Of the amount receivable, $10.0 million was recorded as a short-term receivable in “Prepaid and Other Current Assets” and the final $5.0 million was recorded in “Other Long-term Assets” as of December 31, 2015, based on the expected timing of receipt of the payment. During the year ended December 31, 2016, two $5.0 million Landlord Payments were received in February 2016 and in August 2016 and at December 31, 2016, the final $5.0 million was recorded in “Prepaid Expenses and Other Current Assets” in the consolidated balance sheets.

In addition, rent deposits and tenant improvements for our 1305 O’Brien building of $9.6 million and $2.2 million were recorded, respectively, in “Other long-term assets” in the consolidated balance sheets at December 31, 2016 and 2015.

In January 2017, we entered into a Third Lease Amendment Agreement with the Existing Landlord that increased the amount of the payments receivable from the Existing Landlord by $65,000.

Property and Equipment, Net

As of December 31, 2016 and 2015, our property and equipment, net, consisted of the following components:



	December 31,
(in thousands)	2016		2015
Building	$	1,160	$	1,160
Laboratory equipment and machinery		23,337		20,358
Leasehold improvements		8,138		8,348
Computer equipment		7,170		6,781
Software		5,189		4,798
Furniture and fixtures		823		968
Construction in progress		5,772		—
		51,589		42,413
Less: Accumulated depreciation		(37,029)		(33,865)
Property and equipment, net	$	14,560	$	8,548

At December 31, 2016, out of the construction-in-progress balance of $5.8 million, approximately $5.2 million related to1305 O’Brien building purchases.

Depreciation expense during the years ended December 31, 2016, 2015 and 2014 was $3.9 million, $3.7 million and $4.2 million, respectively.

Accrued Expenses

As of December 31, 2016 and 2015, our accrued expenses consisted of the following components:



	December 31,
(in thousands)	2016		2015
Salaries and benefits	$	8,562	$	8,129
Accrued license and development services		5,411		5,459
Inventory accrual, professional services, accrued interest and other		2,631		1,963
Accrued expenses	$	16,604	$	15,551