Inventories

Inventories consisted of the following (in thousands):



	June 30, 2013			December 31, 2012
Raw materials	$	9,954		$	10,420
Work-in-process	1,132			605
Finished goods	8,505			11,245
	19,591			22,270
Less: inventory valuation allowance	(2,253		)	(2,199		)
Inventories, net	$	17,338		$	20,071



	June 30, 2013			December 31, 2012
Inventory deposit ^(A)	$	10,896		$	11,637
Less: inventory deposit valuation allowance	(3,174		)	(2,801		)
Inventory deposit, net	$	7,722		$	8,836

(A)

The Company is contractually obligated to reimburse its contract manufacturer for the cost of excess inventory that has been purchased as a result of the Company's forecasted demand when there is no alternative use. The Company's inventory deposit represents a cash deposit paid to its contract manufacturer for inventory in excess of near term demand. The deposit is recorded net of adverse purchase commitment liabilities, and therefore the net balance of the deposit represents inventory the Company believes will be utilized. The deposit will be applied against future adverse purchase commitments owed to the Company's contract manufacturers or reduced based on the usage of inventory. See Note 8 - Commitments and Contingencies for additional information regarding the Company's adverse purchase commitment liability.

Consigned inventory is held at third-party locations, including the Company's contract manufacturing partner and customers. The Company retains title to the inventory until purchased by the third-party. Consigned inventory, consisting of raw materials and finished goods, was $0.6 million and $0.7 million at June 30, 2013 and December 31, 2012.

The Company recorded the following charges associated with the valuation of inventory, inventory deposit and the adverse purchase commitment liability (in thousands):



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
Inventory, net	$	260	$	578	$	657	$	1,031
Inventory deposit, net	169		64		810		363
Adverse purchase commitments	164		(102)		132		(28)