CONSOLIDATED BALANCE SHEET COMPONENTS

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:



	September 30,		December 31,
	2017		2016
	(in thousands)
Deferred sales commissions, current portion	$	3,489	2,932
Prepaid expenses	3,113		2,032
Other	1,262		1,325
Total prepaid expenses and other current assets	$	7,864	$	6,289

Property and Equipment, net

Property and equipment, net consists of the following:



		September 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	4,543			4,314
Software	2 to 5 years	8,217			8,217
Office furniture and equipment	3 to 7 years	2,065			2,070
Leasehold improvements	shorter of useful life or lease term	1,008			1,008
Construction in progress		78			—
Property and equipment, gross		17,813			17,529
Less: Accumulated depreciation and amortization		(10,808		)	(8,521		)
Property and equipment, net		$	7,005		$	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 $0.7 million and $0.9 million for the three months ended September 30, 2017 and 2016, respectively, and $2.4 million and $2.7 million for the nine months ended September 30, 2017 and 2016, respectively.

Office furniture and equipment classified under capital lease was $1.2 million at September 30, 2017 and December 31, 2016 respectively, and the related accumulated depreciation was $0.4 million and $0.2 million at September 30, 2017 and December 31, 2016 respectively.

Other assets

Other assets consist of the following:



	September 30,		December 31,
	2017		2016
	(in thousands)
Deferred sales commissions, non-current portion	$	3,332	$	3,115
Investment in privately held company	1,500		1,500
Other	530		485
Total other assets	$	5,362	$	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 September 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 September 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:



	September 30,		December 31,
	2017		2016
	(in thousands)
Accrued compensation	$	7,423	$	7,230
Accrued expenses and other liabilities	1,073		1,445
Warranty liability, current portion	480		625
Total accrued liabilities	$	8,976	$	9,300

Deferred Revenue

Deferred revenue consists of the following:



	September 30,		December 31,
	2017		2016
	(in thousands)
Products	$	4,207	$	1,220
Subscription and support	68,286		64,684
Total deferred revenue	72,493		65,904
Less: current portion of deferred revenue	36,761		31,727
Non-current portion of deferred revenue	$	35,732	$	34,177

Warranty Liability

The following table summarizes the activity related to the Company’s accrued liability for estimated future warranty:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(in thousands)
Beginning balance	$	930		$	1,034		$	975		$	978
Charges to operations	141			142			492			515
Obligations fulfilled	(247		)	(124		)	(586		)	(331		)
Changes in existing warranty	(11		)	(53		)	(68		)	(163		)
Total product warranties	$	813		$	999		$	813		$	999
Current portion	$	480		$	660		$	480		$	660
Non-current portion	$	333		$	339		$	333		$	339

Changes in existing warranty reflect a combination of changes in expected warranty claims and changes in the related costs to service such claims.