0000351998
2018-01-01
2018-03-31
0000351998
2017-01-01
2017-03-31
0000351998
2017-12-31
0000351998
2018-03-31
0000351998
us-gaap:CostOfSalesMember
2018-01-01
2018-03-31
0000351998
us-gaap:ResearchAndDevelopmentExpenseMember
2018-01-01
2018-03-31
0000351998
us-gaap:SellingGeneralAndAdministrativeExpensesMember
2018-01-01
2018-03-31
0000351998
2017-03-31
0000351998
us-gaap:CostOfSalesMember
2017-01-01
2017-03-31
0000351998
us-gaap:ResearchAndDevelopmentExpenseMember
2017-01-01
2017-03-31
0000351998
us-gaap:SellingGeneralAndAdministrativeExpensesMember
2017-01-01
2017-03-31
0000351998
2016-12-31
0000351998
2018-05-01
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
xbrli:pure
DATA I/O CORP
0000351998
10-Q
2018-03-31
false
--12-31
No
No
Yes
Smaller Reporting Company
2018
5000000
5000000
30000000
30000000
Q1
8295026
18541000
16816000
10513000
11571000
3769000
4423000
27186000
25633000
708000
435000
4168000
3959000
30287000
28870000
45000
220000
2458000
2419000
598000
598000
7700000
5735000
218000
174000
858000
934000
1787000
1718000
3536000
1540000
1301000
1369000
527000
472000
0
0
0
0
18989000
19161000
30287000
28870000
22060000
22663000
982000
1283000
2089000
2219000
73000
83000
0
0
0
0
8276813
8295026
8276813
8295026
4416000
4167000
3213000
3057000
7629000
7224000
344000
804000
4072000
3363000
2193000
1818000
1879000
1545000
-169000
187000
-176000
-32000
0
211000
7000
8000
130000
979000
45000
12000
175000
991000
8542
8327
8287
8031
0.02
0.12
0.02
0.12
301000
82000
431000
1061000
177000
97000
4000
42000
131000
2000
25000
70000
146000
116000
230000
164000
-1631000
-830000
0
0
-12000
-17000
-139000
-522000
-1925000
-503000
-110000
55000
-272000
331000
620000
547000
-338000
-192000
0
211000
338000
403000
-5000
-95000
0
0
-5000
-95000
-1974000
-1117000
249000
59000
90000
30000
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Data I/O Corporation (“Data I/O”,
“We”, “Our”, “Us”) prepared the financial statements as of March 31, 2018 and December 31,
2017 and for each of the three month periods ended March 31, 2018 and March 31, 2017 according to the rules and regulations of
the Securities and Exchange Commission ("SEC"). These statements are unaudited but, in the opinion of management, include
all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the results for the periods
presented. The balance sheet at December 31, 2017 has been derived from the audited financial statements at that date. We have
condensed or omitted certain information and footnote disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America according to such SEC rules and regulations. Operating
results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year
ending December 31, 2018. These financial statements should be read in conjunction with the annual audited financial statements
and the accompanying notes included in our Form 10-K for the year ended December 31, 2017.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Revenue Recognition </u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective January 1, 2018, the Company
adopted ASU 2014-09, Revenue (“Topic 606”): Revenue from Contracts with Customers, using the using the modified retrospective
method. Topic 606 provides a single, principles-based five-step model to be applied to all contracts with customers. It generally
provides for the recognition of revenue in an amount that reflects the consideration to which the Company expects to be entitled,
net of allowances for estimated returns, discounts or sales incentives, as well as taxes collected from customers when control
over the promised goods or services are transferred to the customer. For incremental contract acquisition costs, the Company has
elected the practical expedient to capitalize and amortize incremental costs for obtaining contracts, primarily sales commissions,
with terms that exceed one year.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Our basic revenue recognition remains
essentially the same as it was in 2017, but we have modified our policies and processes to be able to identify and properly defer
contract acquisition costs. The adoption of Topic 606 did not have a material impact on our financial results for the three month
period ending March 31, 2018</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We generally recognize revenue at the
time the product is shipped or when the service is delivered. The revenue related to products requiring installation that is perfunctory
is generally recognized at the time of shipment. Installation that is considered perfunctory includes any installation that can
be performed by other parties, such as distributors, other vendors, or the customers themselves. This takes into account the complexity,
skill and training needed as well as customer expectations regarding installation. Contracts requiring acceptance are recognized
when acceptance is received.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We have determined that our programming
equipment has reached a point of maturity and stability such that product acceptance can be assured by testing at the factory prior
to shipment and that the installation meets the criteria to be considered a separate element.  These systems are standard
products with published product specifications and are configurable with standard options.  The evidence that these systems
could be deemed as accepted was based upon having standardized factory production of the units, results from batteries of tests
of product performance to our published specifications, quality inspections and installation standardization, as well as past product
operation validation with the customer and the history provided by our installed base of products upon which the current versions
were based.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We enter into multiple deliverable arrangements
that arise during the sale of a system that includes an installation component, a service and support component and a software
maintenance component. We allocate the value of each element based on relative selling prices. Relative selling price is based
on the selling price of the standalone system. For the installation and service and support components, we use the standard compensation
provided as a discount to distributors or as additional commission to our representative partners who perform these components.
For software maintenance components, we use what we charge for annual software maintenance renewals after the initial year the
system is sold. Revenue is generally recognized on the system sale based on shipping terms, installation revenue is recognized
after the installation is performed, and hardware service and support and software maintenance revenue is recognized ratably over
the term of the agreement, typically one year.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">When we sell software separately, we recognize
software revenue upon shipment, provided that only inconsequential obligations remain on our part and substantive acceptance conditions,
if any, have been met.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We establish a reserve for sales returns
based on historical trends in product returns and estimates for new items.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We transfer certain products out of service
from their internal use and make them available for sale. The products transferred are our standard products and typically are:
service loaners, rental or test systems; engineering test systems; or sales demonstration systems. Once transferred, the systems
get sold by our regular sales channels as used inventory. These systems often involve refurbishing and an equipment warranty, and
are conducted as sales in our normal and ordinary course of business. The transfer amount is the system’s net book value
and the sale transaction is accounted for as revenue and cost of goods sold.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Stock-Based Compensation Expense</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">All stock-based compensation awards are
measured based on estimated fair values on the date of grant and recognized as compensation expense on the straight-line single-option
method. Our share-based compensation is reduced for estimated forfeitures at the time of grant and revised as necessary in subsequent
periods if actual forfeitures differ from those estimates.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Income Tax</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Penalties associated with tax matters
are classified as general and administrative expense when incurred and amounts related to interest associated with tax matters
are classified as interest income or interest expense.  We did not incur any interest or penalties associated with tax matters
during the three months ended March 31, 2018.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We have incurred net operating losses
in certain past years.  Given the uncertainty created by our loss history, as well as the volatile and uncertain economic
outlook for our industry and cyclical capital spending, we have limited the recognition of net deferred tax assets associated with
our net operating losses and credit carryforwards and continue to maintain a valuation allowance for the full amount of the net
deferred tax asset balance. We will continue to analyze the level of valuation allowance in future periods. There were $278,000
and $272,000 of unrecognized tax benefits related to uncertain tax positions and a corresponding valuation allowance as of March
31, 2018 and December 31, 2017, respectively.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Tax years that remain open for examination
include 2014 through 2018 in the United States of America. In addition, tax years from 2000 to 2013 may be subject to examination
in the event that we utilize the net operating losses and credit carryforwards from those years in our current or future year tax
returns.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Recent Accounting Pronouncements</u></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU
2016-02, “<i>Leases</i>” (ASU 2016-02).  ASU 2016-02 requires lessees to recognize almost all leases on the
balance sheet as a right-of-use asset and a lease liability and requires leases to be classified as either an operating or a finance
type lease. The standard excludes leases of intangible assets or inventory. Early adoption of the standard is allowed. The standard
becomes effective beginning January 1, 2019. We are in the process of evaluating the impact of adoption on our consolidated financial
statements. Our leases include facilities in Redmond, Washington, Shanghai and Munich areas as well as a small amount of office
equipment and automobiles.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued ASU 2014-09, “Revenue
from Contracts with Customers” (ASU 2014-09). ASU 2014-09 provides companies with a single model for accounting for
revenue arising from contracts with customers and supersedes previous revenue recognition guidance, including industry-specific
revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the
customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance.
In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers” (ASU 2015-14), deferring
the effective date of the new revenue recognition standard by one year and now takes effect for public entities in fiscal years
beginning after December 15, 2017. We have adopted the revenue standard as of January 1, 2018, which did not have a material
impact on our consolidated financial statements. We have implemented changes to our accounting policies, internal controls, and
disclosures to support the new standard, however, these changes were not material.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Inventories consisted of the following components:</p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 56%; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 8pt/115% Times New Roman, Times, Serif"></font></td>
<td nowrap="nowrap" style="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">March 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">December 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Raw material</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,356 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,392 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Work-in-process</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,159 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,091 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Finished goods</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">444 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">685 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Inventories</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$3,959 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$4,168 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><b> </b></p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Property and equipment consisted
of the following components:</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: top; width: 56%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">March 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">December 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Leasehold improvements </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$427 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$416 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Equipment </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5,354 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5,279 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Sales demonstration equipment </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,434 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,315 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">7,215 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">7,010 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Less accumulated depreciation </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4,796 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4,552 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Property and equipment, net </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,419 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,458 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Other accrued liabilities consisted
of the following components:</p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: top; width: 56%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">March 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">December 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Product warranty </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$535 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$530 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Sales return reserve </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">99 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">80 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Other taxes </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">130 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">109 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Other </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">170 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">139 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Other accrued liabilities </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$934 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$858 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The changes in our product warranty
liability for the three months ending March 31, 2018 were as follows:</p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: top; width: 70%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 23%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">March 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Liability, beginning balance </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$530 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Net expenses </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">252 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Warranty claims </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(252)</font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Accrual revisions </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Liability, ending balance </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$535 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">We have commitments under non-cancelable
operating leases and other agreements, primarily for factory and office space, with initial or remaining terms of one year or more
as follows:</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 71%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 22%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Operating</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">Leases</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2018 (remaining)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$701 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2019</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">959 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2020</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">946 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2021</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">770 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2022</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">233 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Thereafter</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">- </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Total</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$3,609 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the third quarter of 2017, we amended
our lease agreement for the Redmond, Washington headquarters facility effective September 12, 2017, which extended the lease to
July 31, 2022, waived a potential space give back provision and provided for lease inducement incentives. Previously on June 8,
2015 the lease was amended to relocate our headquarters to a nearby building and lower the square footage to approximately 20,460.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We signed a lease agreement effective November
1, 2015 that extends through October 31, 2021 for a new facility located in Shanghai, China which we moved into during the first
quarter of 2016. The new lease approximately doubled our space to 19,400 square feet at approximately 54% of the prior lease rental
rate.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the fourth quarter of 2016, we signed
a lease agreement for a new facility located near Munich, Germany which was effective March 1, 2017 and extends through February
28, 2022. The new lease slightly increased our space to 4,895 square feet at approximately the same cost per square foot as the
prior lease.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have purchase obligations for inventory
and production costs as well as other obligations such as capital expenditures, service contracts, marketing, and development agreements.
Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities
to be purchased, a pricing structure and approximate timing of the transaction. Most arrangements are cancelable without a significant
penalty, and with short notice, typically less than 90 days. At March 31, 2018, the purchase commitments and other obligations
totaled $984,000 of which all but $29,000 are expected to be paid over the next twelve months.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of March 31, 2018, we were not a party
to any legal proceedings or aware of any indemnification agreement claims, the adverse outcome of which in management’s opinion,
individually or in the aggregate, would have a material adverse effect on our results of operations or financial position.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Basic earnings (loss) per share is calculated
based on the weighted average number of common shares outstanding during each period and is used for all loss per share amounts.
Diluted earnings (loss) per share is calculated based on these same weighted average shares outstanding plus the effect of potential
shares issuable upon assumed exercise of stock options based on the treasury stock method. Potential shares issuable upon the exercise
of stock options are excluded from the calculation of diluted earnings (loss) per share to the extent their effect would be anti-dilutive.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth the computation
of basic and diluted earnings (loss) per share:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="3" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> Three Months Ended </font></td></tr>
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; width: 57%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 4%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">(in thousands except per share data)</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Numerator for basic and diluted</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">earnings per share:</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Net income</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$130 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$979 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Denominator for basic</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">earnings per share:</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Weighted-average shares</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">8,287 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">8,031 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Employee stock options and awards</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">255 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">296 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Denominator for diluted</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">earnings per share:</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Adjusted weighted-average shares &</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       assumed conversions of stock options</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">8,542 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">8,327 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Basic and diluted</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">earnings per share:</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Total basic earnings per share</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.02 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.12 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Total diluted earnings per share </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.02 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.12 </font></td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Options to purchase 25,000 and 90,000
shares were outstanding as of March 31, 2018 and 2017, respectively, but were excluded from the computation of diluted earnings
(loss) per share for the periods then ended because the options were anti-dilutive.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">For share-based awards granted, we have
recognized compensation expense based on the estimated grant date fair value method. For these awards we have recognized compensation
expense, reduced by estimated forfeitures, using a straight-line amortization method.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The impact on our results of operations
of recording share-based compensation for the three months ended March 31, 2018 and 2017, respectively, was as follows:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="3" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> Three Months Ended </font></td></tr>
<tr>
<td style="vertical-align: bottom; width: 54%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Cost of goods sold</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$4 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Research and development</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">42 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">25 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Selling, general and administrative</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">131 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">70 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Total share-based compensation</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$177 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$97 </font></td></tr>
<tr>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Equity awards granted during the three
months ended March 31, 2018 and 2017 respectively were as follows:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="3" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> Three Months Ended </font></td></tr>
<tr>
<td style="vertical-align: bottom; width: 54%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Restricted Stock</font></td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,000 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">12,000 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Stock Options</font></td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">- </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">- </font></td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">There were no stock option awards granted
during both the three months ended March 31, 2018 and 2017.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Non-employee directors Restricted Stock
Units (“RSU’s”) vest over one year, employee RSU’s vest annually over four years with the expense being
recognized over the vesting period.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The remaining unamortized expected future
equity compensation expense and remaining amortization period associated with unvested option grants, restricted stock awards and
restricted stock unit awards at March 31, 2018 are:</p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 80%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 19%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Unamortized future equity compensation expense (in thousands)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,395 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Remaining weighted average amortization period (in years)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2.79 </font></td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><b> </b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Effective January 1, 2018, the Company
adopted ASU 2014-09, Revenue (“Topic 606”): Revenue from Contracts with Customers, using the using the modified retrospective
method. Topic 606 provides a single, principles-based five-step model to be applied to all contracts with customers. It generally
provides for the recognition of revenue in an amount that reflects the consideration to which the Company expects to be entitled,
net of allowances for estimated returns, discounts or sales incentives, as well as taxes collected from customers when control
over the promised goods or services are transferred to the customer. For incremental contract acquisition costs, the Company has
elected the practical expedient to capitalize and amortize incremental costs for obtaining contracts, primarily sales commissions,
with terms that exceed one year.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Our basic revenue recognition remains
essentially the same as it was in 2017, but we have modified our policies and processes to be able to identify and properly defer
contract acquisition costs. The adoption of Topic 606 did not have a material impact on our financial results for the three month
period ending March 31, 2018</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We generally recognize revenue at the
time the product is shipped or when the service is delivered. The revenue related to products requiring installation that is perfunctory
is generally recognized at the time of shipment. Installation that is considered perfunctory includes any installation that can
be performed by other parties, such as distributors, other vendors, or the customers themselves. This takes into account the complexity,
skill and training needed as well as customer expectations regarding installation. Contracts requiring acceptance are recognized
when acceptance is received.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We have determined that our programming
equipment has reached a point of maturity and stability such that product acceptance can be assured by testing at the factory prior
to shipment and that the installation meets the criteria to be considered a separate element.  These systems are standard
products with published product specifications and are configurable with standard options.  The evidence that these systems
could be deemed as accepted was based upon having standardized factory production of the units, results from batteries of tests
of product performance to our published specifications, quality inspections and installation standardization, as well as past product
operation validation with the customer and the history provided by our installed base of products upon which the current versions
were based.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We enter into multiple deliverable arrangements
that arise during the sale of a system that includes an installation component, a service and support component and a software
maintenance component. We allocate the value of each element based on relative selling prices. Relative selling price is based
on the selling price of the standalone system. For the installation and service and support components, we use the standard compensation
provided as a discount to distributors or as additional commission to our representative partners who perform these components.
For software maintenance components, we use what we charge for annual software maintenance renewals after the initial year the
system is sold. Revenue is generally recognized on the system sale based on shipping terms, installation revenue is recognized
after the installation is performed, and hardware service and support and software maintenance revenue is recognized ratably over
the term of the agreement, typically one year.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">When we sell software separately, we recognize
software revenue upon shipment, provided that only inconsequential obligations remain on our part and substantive acceptance conditions,
if any, have been met.</p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We establish a reserve for sales returns
based on historical trends in product returns and estimates for new items.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We transfer certain products out of service
from their internal use and make them available for sale. The products transferred are our standard products and typically are:
service loaners, rental or test systems; engineering test systems; or sales demonstration systems. Once transferred, the systems
get sold by our regular sales channels as used inventory. These systems often involve refurbishing and an equipment warranty, and
are conducted as sales in our normal and ordinary course of business. The transfer amount is the system’s net book value
and the sale transaction is accounted for as revenue and cost of goods sold.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">All stock-based compensation awards are
measured based on estimated fair values on the date of grant and recognized as compensation expense on the straight-line single-option
method. Our share-based compensation is reduced for estimated forfeitures at the time of grant and revised as necessary in subsequent
periods if actual forfeitures differ from those estimates.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Penalties associated with tax matters
are classified as general and administrative expense when incurred and amounts related to interest associated with tax matters
are classified as interest income or interest expense.  We did not incur any interest or penalties associated with tax matters
during the three months ended March 31, 2018.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">We have incurred net operating losses
in certain past years.  Given the uncertainty created by our loss history, as well as the volatile and uncertain economic
outlook for our industry and cyclical capital spending, we have limited the recognition of net deferred tax assets associated with
our net operating losses and credit carryforwards and continue to maintain a valuation allowance for the full amount of the net
deferred tax asset balance. We will continue to analyze the level of valuation allowance in future periods. There were $278,000
and $272,000 of unrecognized tax benefits related to uncertain tax positions and a corresponding valuation allowance as of March
31, 2018 and December 31, 2017, respectively.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Tax years that remain open for examination
include 2014 through 2018 in the United States of America. In addition, tax years from 2000 to 2013 may be subject to examination
in the event that we utilize the net operating losses and credit carryforwards from those years in our current or future year tax
returns.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2016, the FASB issued ASU
2016-02, “<i>Leases</i>” (ASU 2016-02).  ASU 2016-02 requires lessees to recognize almost all leases on the
balance sheet as a right-of-use asset and a lease liability and requires leases to be classified as either an operating or a finance
type lease. The standard excludes leases of intangible assets or inventory. Early adoption of the standard is allowed. The standard
becomes effective beginning January 1, 2019. We are in the process of evaluating the impact of adoption on our consolidated financial
statements. Our leases include facilities in Redmond, Washington, Shanghai and Munich areas as well as a small amount of office
equipment and automobiles.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued ASU 2014-09, “Revenue
from Contracts with Customers” (ASU 2014-09). ASU 2014-09 provides companies with a single model for accounting for
revenue arising from contracts with customers and supersedes previous revenue recognition guidance, including industry-specific
revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the
customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance.
In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers” (ASU 2015-14), deferring
the effective date of the new revenue recognition standard by one year and now takes effect for public entities in fiscal years
beginning after December 15, 2017. We have adopted the revenue standard as of January 1, 2018, which did not have a material
impact on our consolidated financial statements. We have implemented changes to our accounting policies, internal controls, and
disclosures to support the new standard, however, these changes were not material.</p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 56%; padding-right: 5.4pt; padding-bottom: 10pt; padding-left: 5.4pt; font: 11pt/115% Calibri, Helvetica, Sans-Serif"><font style="font: 8pt/115% Times New Roman, Times, Serif"></font></td>
<td nowrap="nowrap" style="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">March 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">December 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Raw material</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,356 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,392 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Work-in-process</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,159 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,091 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Finished goods</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">444 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">685 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Inventories</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$3,959 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$4,168 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: top; width: 56%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">March 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">December 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Leasehold improvements </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$427 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$416 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Equipment </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5,354 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5,279 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Sales demonstration equipment </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,434 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,315 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">7,215 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">7,010 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Less accumulated depreciation </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4,796 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4,552 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> Property and equipment, net </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,419 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,458 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: top; width: 56%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">March 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">December 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Product warranty </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$535 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$530 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Sales return reserve </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">99 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">80 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Other taxes </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">130 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">109 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Other </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">170 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">139 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Other accrued liabilities </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$934 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$858 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr>
<td style="vertical-align: top; width: 70%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 23%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">March 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Liability, beginning balance </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$530 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Net expenses </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">252 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Warranty claims </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(252)</font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Accrual revisions </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> Liability, ending balance </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$535 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 71%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 22%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Operating</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">Leases</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2018 (remaining)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$701 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2019</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">959 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2020</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">946 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2021</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">770 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">2022</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">233 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Thereafter</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">- </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Total</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$3,609 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="3" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> Three Months Ended </font></td></tr>
<tr>
<td nowrap="nowrap" style="vertical-align: bottom; width: 57%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 4%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 16%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">(in thousands except per share data)</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Numerator for basic and diluted</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">earnings per share:</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Net income</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$130 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$979 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Denominator for basic</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">earnings per share:</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Weighted-average shares</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">8,287 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">8,031 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Employee stock options and awards</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">255 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">296 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Denominator for diluted</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">earnings per share:</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Adjusted weighted-average shares &</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       assumed conversions of stock options</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">8,542 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">8,327 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Basic and diluted</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">earnings per share:</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Total basic earnings per share</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.02 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.12 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">       Total diluted earnings per share </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.02 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$0.12 </font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="3" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> Three Months Ended </font></td></tr>
<tr>
<td style="vertical-align: bottom; width: 54%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif"> (in thousands) </font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Cost of goods sold</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$4 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Research and development</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">42 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">25 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Selling, general and administrative</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">131 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">70 </font></td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Total share-based compensation</font></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$177 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: Black 1pt solid; border-bottom: Black 2.25pt double; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$97 </font></td></tr>
<tr>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td colspan="3" style="border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> Three Months Ended </font></td></tr>
<tr>
<td style="vertical-align: bottom; width: 54%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 7%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td>
<td style="vertical-align: top; width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="vertical-align: bottom; width: 17%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2017</font></td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Restricted Stock</font></td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,000 </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">12,000 </font></td></tr>
<tr>
<td style="vertical-align: top; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Stock Options</font></td>
<td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">- </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">- </font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="width: 80%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="width: 19%; border-bottom: Black 1pt solid; font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Mar. 31,</font><br />
<font style="font: 8pt Times New Roman, Times, Serif">2018</font></td></tr>
<tr>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Unamortized future equity compensation expense (in thousands)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">$2,395 </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font: 8pt Times New Roman, Times, Serif">Remaining weighted average amortization period (in years)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="font: 11pt/115% Calibri, Helvetica, Sans-Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2.79 </font></td></tr>
</table>
272000
278000
2392000
2356000
1091000
1159000
685000
444000
7010000
7215000
1315000
1434000
5279000
5354000
416000
427000
4552000
4796000
858000
934000
139000
170000
109000
130000
80000
99000
530000
535000
5000
-252000
252000
3609000
0
233000
770000
946000
959000
701000
984000
29000
8287
8031
255
296
25000
90000
1000
12000
0
0
2395000
P2Y9M15D