Inventories

Inventories consisted of the following (in thousands):



	March 31, 2018			December 31, 2017
Raw materials	$	24,037		$	23,269
Finished goods	3,766			4,012
	27,803			27,281
Less: inventory valuation allowance	(23,204		)	(23,016		)
Inventories, net	$	4,599		$	4,265

Consigned inventory is held at third-party locations, which include the Company's contract manufacturing partners and customers. The Company retains title to the inventory until purchased by the third-party.

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 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 March 31, 2018 and December 31, 2017. 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
	March 31,
	2018			2017
Inventory, net	$	661		$	501
Adverse purchase commitments^(A)	(993)			201
Net charges	$	(332	)	$	702