Inventories

Inventories consisted of the following (in thousands):



	September 30, 2017			December 31, 2016
Raw materials	$	21,125		$	24,805
Work-in-process	—			12
Finished goods	4,589			5,005
	25,714			29,822
Less: inventory valuation allowance	(14,659		)	(9,801		)
Inventories, net	$	11,055		$	20,021

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 gross inventory, consisting of raw materials and finished goods was $11.3 million and $11.8 million at September 30, 2017 and December 31, 2016.

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 was contractually obligated to purchase inventory transferred from the Company's prior contract manufacturer after it aged for 365 days. All transferred inventory not consumed was repurchased by the Company in 2016. The Company is also contractually obligated to purchase inventory that has been purchased by its contract manufacturer as a result of the Company's forecasted demand when the inventory ages beyond 180 days and has no forecasted demand. All of the Company's consigned inventory was held by its contract manufacturing partner as of September 30, 2017 and December 31, 2016. The Company records a liability for adverse purchase commitments of inventory owned by its contract manufacturing partner. See Note 7 - 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 liabilities (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Inventory, net	$	5,763	$	1,570	$	6,249	$	4,073
Adverse purchase commitments^(A)	1,278		(289)		1,651		(1,403)
Net charges ^(B)	$	7,041	$	1,281	$	7,900	$	2,670