| Balance Sheet Items |
Balance Sheet Items Inventory, net are comprised of the following (in thousands): | | | | | | | | | | December 31, | | 2016 | | 2015 | Raw materials | $ | 3,422 |
| | $ | 4,118 |
| Finished goods | — |
| | 38 |
| Inventory in-transit | — |
| | 29 |
| Less: reserve for obsolescence | (303 | ) | | (335 | ) | Inventory, net | $ | 3,119 |
| | $ | 3,850 |
|
Property and equipment, net are comprised of the following (in thousands): | | | | | | | | | | December 31, | | 2016 | | 2015 | Land and building | $ | 3,675 |
| | $ | 1,816 |
| Computer equipment and office furniture | 7,678 |
| | 13,401 |
| Computer software | 1,795 |
| | 2,405 |
| Internal use software and website | 11,207 |
| | 9,636 |
| Internal use software and website development in progress | 849 |
| | 2 |
| Production equipment | 13,685 |
| | 18,595 |
| Leasehold improvements | 3,003 |
| | 2,851 |
| Total property and equipment | 41,892 |
| | 48,706 |
| Less: accumulated depreciation and amortization | (30,956 | ) | | (40,082 | ) | Property and equipment, net | $ | 10,936 |
| | $ | 8,624 |
|
Property and equipment acquired under capital leases are as follows (in thousands): | | | | | | | | | | December 31, | | 2016 | | 2015 | Building | $ | 35 |
| | $ | 35 |
| Less accumulated depreciation | (35 | ) | | — |
| Building, net | $ | — |
| | $ | 35 |
| | | | | Production equipment | $ | 127 |
| | $ | 389 |
| Less: accumulated depreciation | (127 | ) | | (389 | ) | Production equipment, net | $ | — |
| | $ | — |
|
Effective as of December 31, 2015, we completed the purchase of approximately 1.6 acres of land and an on-site building with approximately 25,000 square feet located in Louisville, Kentucky, to be used for our corporate offices. The total cash purchase price at the closing on December 31, 2015 was $1.8 million. We moved our corporate functions into the newly purchased building in May 2016. Depreciation and amortization expense was $4.3 million and $6.3 million for the years ended December 31, 2016 and 2015, respectively. Accrued liabilities The following table shows the components of accrued liabilities (in thousands): | | | | | | | | | | December 31, | | 2016 | | 2015 | Production costs | $ | 5,323 |
| | $ | 3,245 |
| Accrued advertising | 1,616 |
| | 1,427 |
| Payroll and employee related accruals | 1,337 |
| | 2,374 |
| Accrued sales and business taxes | 1,072 |
| | 1,180 |
| Restructuring | 570 |
| | — |
| Professional services | 564 |
| | 548 |
| Unclaimed royalty payments | 433 |
| | 830 |
| Other accrued liabilities | 332 |
| | 747 |
| Royalties-minimum guarantee | 299 |
| | 118 |
| Allowance for sales returns and chargebacks | 219 |
| | 232 |
| Accrued liabilities | $ | 11,765 |
| | $ | 10,701 |
|
Allowance for sales returns and chargebacks The following table presents the changes in the allowance for sales returns and chargebacks (in thousands):
| | | | | | | | | | | December 31, | | 2016 | | 2015 | | Allowance for sales returns and chargebacks: | | | | | Balance, beginning of period | $ | 232 |
| | $ | 294 |
| | Add: provision | 2,662 |
| | 2,905 |
| | Less: deductions and other adjustments | (2,675 | ) | | (2,967 | ) | | Balance, end of period | $ | 219 |
| | $ | 232 |
| |
|