11. Commitments and Contingencies	9 Months Ended
Sep. 30, 2016
Less: Current portion of finance receivables not billed, net
11. Commitments and Contingencies	Operating Leases We lease certain of our equipment and corporate offices under non-cancelable operating lease agreements expiring at various dates through 2018. The operating leases for our Reno, NV and Draper, UT offices contain customary escalation clauses. Rental expense for the three months ended September 30, 2016 and 2015 was approximately $87,000 and $87,000, respectively. Rental expense for the nine months September 30, 2016 and 2015 was approximately $261,000 and $261,000, respectively. Sale-Leaseback On February 28, 2014, the Company sold and leased back the land, building and furniture associated with the corporate headquarters in Tempe, Arizona to a Company that is owned by the major shareholder and CEO of the Company for $2.0 million in cash. The Company recognized a deferred gain of $281,000 on sale-leaseback, which will be amortized over the initial lease term of 36 months to offset rent expense. The net deferred gain is included in other long-term liabilities in the condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015. Deferred gain amortization for the three months ended September 30, 2016 and 2015 was $23,000 and $23,000, respectively. Deferred gain amortization for the nine months ended September 30, 2016 and 2015 was $70,000 and $70,000, respectively. The lease agreement called for rent payments for the initial three year term to be made in advance in the form of 300,000 shares of common stock of Crexendo, Inc. The fair value price per share at the time of the lease was $3.22 per share, resulting in rent expense of $322,000 per year for three years. Rent expense incurred on the sale-leaseback during the three months ended September 30, 2016 and 2015 was $57,000 and $57,000, respectively. Rent expense incurred on the sale-leaseback during the nine months ended September 30, 2016 and 2015 was $171,000 and $171,000, respectively.

11. Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Less: Current portion of finance receivables not billed, net

Operating Leases

We lease certain of our equipment and corporate offices under non-cancelable operating lease agreements expiring at various dates through 2018. The operating leases for our Reno, NV and Draper, UT offices contain customary escalation clauses.

Rental expense for the three months ended September 30, 2016 and 2015 was approximately $87,000 and $87,000, respectively. Rental expense for the nine months September 30, 2016 and 2015 was approximately $261,000 and $261,000, respectively.

Sale-Leaseback

On February 28, 2014, the Company sold and leased back the land, building and furniture associated with the corporate headquarters in Tempe, Arizona to a Company that is owned by the major shareholder and CEO of the Company for $2.0 million in cash. The Company recognized a deferred gain of $281,000 on sale-leaseback, which will be amortized over the initial lease term of 36 months to offset rent expense. The net deferred gain is included in other long-term liabilities in the condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015. Deferred gain amortization for the three months ended September 30, 2016 and 2015 was $23,000 and $23,000, respectively. Deferred gain amortization for the nine months ended September 30, 2016 and 2015 was $70,000 and $70,000, respectively.

The lease agreement called for rent payments for the initial three year term to be made in advance in the form of 300,000 shares of common stock of Crexendo, Inc. The fair value price per share at the time of the lease was $3.22 per share, resulting in rent expense of $322,000 per year for three years. Rent expense incurred on the sale-leaseback during the three months ended September 30, 2016 and 2015 was $57,000 and $57,000, respectively. Rent expense incurred on the sale-leaseback during the nine months ended September 30, 2016 and 2015 was $171,000 and $171,000, respectively.