13.

COMMITMENTS AND CONTINGENCIES

Lease Obligations

As of

December 31, 2018,

future minimum rental payments under the non-cancelable operating leases are as follows (in thousands):

2019	$	1,511
2020		872
2021		273
2022		195
2023		26
Total	$	2,877

The Company leases manufacturing and inventory warehouse facilities, sales and marketing, and research and development offices in Asia, Europe and the United States. Certain of the Company’s facility leases provide for periodic rent increases. Rent expense for the years ended

December 31, 2018,

2017

and

2016

was

$1.8

million,

$1.5

million and

$1.7

million, respectively.

Warranty and Indemnification Provisions

The changes in warranty reserves are as follows (in thousands):

	Year Ended December 31,
	2018			2017			2016
Balance at beginning of period	$	2,416		$	1,030		$	289
Warranty provision for product sales		6,586			1,912			1,102
Settlements made		(1,402	)		(40	)		(68	)
Unused warranty provision		(3,036	)		(486	)		(293	)
Balance at end of period	$	4,564		$	2,416		$	1,030

The Company provides indemnification agreements to certain direct or indirect customers. The Company agrees to reimburse these parties for any damages, costs and expenses incurred by them as a result of legal actions taken against them by

third

parties for infringing upon their intellectual property rights as a result of using the Company’s products and technologies. These indemnification provisions are varied in their scope and are subject to certain terms, conditions, limitations and exclusions. In addition, the Company has entered into indemnification agreements with its directors and officers.

It is

not

possible to predict the maximum potential amount of future payments under these agreements due to the limited history of indemnification claims and the unique facts and circumstances involved in each particular agreement. There were

indemnification liabilities incurred in any of the periods presented. However, there can be

assurances that the Company will

not

incur any financial liabilities in the future as a result of these obligations.