v3.7.0.1

CONSOLIDATED BALANCE SHEET COMPONENTS | 6 Months Ended
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Jun. 30, 2017
Balance Sheet Related Disclosures [Abstract] |
CONSOLIDATED BALANCE SHEET COMPONENTS | CONSOLIDATED BALANCE SHEET COMPONENTS Prepaid expenses and other current assets Prepaid expenses and other current assets consist of the following:
|  |  | June 30, |  | December 31,
|  |  | 2017 |  | 2016
|  |  | (in thousands)
Deferred sales commissions, current portion |  |  | $ | 3,281 |  |  | 2,932 |
Prepaid expenses |  |  | 2,731 |  |  | 2,032 |
Other |  |  | 1,116 |  |  | 1,325 |
Total prepaid expenses and other current assets |  |  | $ | 7,128 |  |  | $ | 6,289 |
Property and Equipment, net Property and equipment, net consists of the following:
|  |  |  | June 30, |  | December 31,
|  | Estimated Useful Lives |  | 2017 |  | 2016
|  |  |  | (in thousands)
Computer and other equipment |  | 3 years |  | $ | 1,902 |  |  | $ | 1,920 |
Manufacturing, research and development laboratory equipment |  | 3 years |  | 4,540 |  |  | 4,314 |
Software |  | 2 to 5 years |  | 8,217 |  |  | 8,217 |
Office furniture and equipment |  | 3 to 7 years |  | 2,053 |  |  | 2,070 |
Leasehold improvements |  | shorter of useful life or lease term |  | 1,008 |  |  | 1,008 |
Property and equipment, gross |  |  |  | 17,720 |  |  | 17,529 |
Less: Accumulated depreciation and amortization |  |  |  | (10,082 | ) |  | (8,521 | )
Property and equipment, net |  |  |  | $ | 7,638 |  |  | $ | 9,008 |
The software category includes the capitalized internal-use software for the Company's cloud service platform. In April 2015, the Company completed and launched the next generation of its cloud services platform, and began to amortize these capitalized costs to cost of subscription and support revenue on a straight-line basis over an estimated useful life of the software of five years. Depreciation and amortization expense was $0.8 million and $0.9 million for the three months ended June 30, 2017 and 2016, respectively, and $1.6 million and $1.8 million for the six months ended June 30, 2017 and 2016, respectively. Office furniture and equipment classified under capital lease was $1.2 million at June 30, 2017 and December 31, 2016 respectively, and the related accumulated depreciation was $0.3 million and $0.2 million at June 30, 2017 and December 31, 2016 respectively. Other assets Other assets consist of the following:
|  |  | June 30, |  | December 31,
|  |  | 2017 |  | 2016
|  |  | (in thousands)
Deferred sales commissions, non-current portion |  |  | $ | 3,338 |  |  | $ | 3,115 |
Investment in privately held company |  |  | 1,500 |  |  | 1,500 |
Other |  |  | 537 |  |  | 485 |
Total other assets |  |  | $ | 5,375 |  |  | $ | 5,100 |
In January 2016, the Company paid $1.5 million in cash to purchase a convertible note issued by a privately held company, which provides Wi-Fi application and analytics. In June 2017, the convertible note and accrued interest on the note converted into shares of preferred stock of the privately held company and the note was cancelled. The accrued interest on the note was immaterial for any period. The Company currently has no significant voting rights, investor rights or influence over the privately held company. Since the investment has no readily determinable market value, the Company has categorized it as a Level 3 asset in the fair value hierarchy. As of June 30, 2017, the investment is carried at the value of original principal and the Company reviews such carried value quarterly for indicators of other-than-temporary impairment. The Company did not recognize an impairment for the three months ended June 30, 2017 and 2016, respectively, as there were no identified events or changes in circumstances that might have a significant adverse impact on the carrying values of the investment. Since the Company does not intend to liquidate this investment in the next 12 months, the Company has classified the investment as other assets on the condensed consolidated balance sheet. Accrued Liabilities Accrued liabilities consist of the following:
|  |  | June 30, |  | December 31,
|  |  | 2017 |  | 2016
|  |  | (in thousands)
Accrued compensation |  |  | $ | 7,417 |  |  | $ | 7,230 |
Accrued expenses and other liabilities |  |  | 1,022 |  |  | 1,445 |
Warranty liability, current portion |  |  | 575 |  |  | 625 |
Total accrued liabilities |  |  | $ | 9,014 |  |  | $ | 9,300 |
Deferred Revenue Deferred revenue consists of the following:
| June 30, |  | December 31,
| 2017 |  | 2016
| (in thousands)
Products | $ | 1,774 |  |  | $ | 1,220 |
Subscription and support | 66,137 |  |  | 64,684 |
Total deferred revenue | 67,911 |  |  | 65,904 |
Less: current portion of deferred revenue | 32,954 |  |  | 31,727 |
Non-current portion of deferred revenue | $ | 34,957 |  |  | $ | 34,177 |
Warranty Liability The following table summarizes the activity related to the Company’s accrued liability for estimated future warranty:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
| (in thousands)
Beginning balance | $ | 857 |  |  | $ | 997 |  |  | $ | 975 |  |  | $ | 978 |
Charges to operations | 230 |  |  | 199 |  |  | 351 |  |  | 373 |
Obligations fulfilled | (142 | ) |  | (103 | ) |  | (339 | ) |  | (207 | )
Changes in existing warranty | (15 | ) |  | (59 | ) |  | (57 | ) |  | (110 | )
Total product warranties | $ | 930 |  |  | $ | 1,034 |  |  | $ | 930 |  |  | $ | 1,034 |
Current portion | $ | 575 |  |  | $ | 670 |  |  | $ | 575 |  |  | $ | 670 |
Non-current portion | $ | 355 |  |  | $ | 364 |  |  | $ | 355 |  |  | $ | 364 |
Changes in existing warranty reflect a combination of changes in expected warranty claims and changes in the related costs to service such claims.

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