Inventories

Inventories consisted of the following (in thousands):



	September 30, 2015			December 31, 2014
Raw materials	$	12,470		$	9,219
Work-in-process	552			1,195
Finished goods	7,367			10,762
	20,389			21,176
Less: inventory valuation allowance	(4,780		)	(2,701		)
Inventories, net	$	15,609		$	18,475

Consigned inventory is held at third-party locations, which include 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 $8.5 million and $2.6 million at September 30, 2015 and December 31, 2014.

The Company’s consignment inventory with its contract manufacturer consists of inventory transferred from the Company’s prior contract manufacturer as well as inventory that has been purchased by the contract manufacturer as a result of the Company's forecasted demand. The Company is contractually obligated to purchase inventory transferred from the Company's prior contract manufacturer after the inventory ages for 365 days. The Company is also contractually obligated to purchase inventory that has been purchased by the contract manufacturer as a result of the Company's forecasted demand when the inventory ages beyond 180 days and has no forecasted demand. The Company’s consignment inventory at its contract manufacturing partner was $6.4 million and $0.1 million as of September 30, 2015 and December 31, 2014. The Company records a liability for adverse purchase commitments of inventory owned by its contract manufacturing partner. See Note 8 - Commitments and Contingencies for additional information regarding the Company's adverse purchase commitment liability.

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



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
Inventory, net	$	806	$	875	$	1,078	$	2,219
Adverse purchase commitments	527		378		1,534		532