17. COMMITMENTS AND CONTINGENCIES

Leases

On November 30, 2011 and as amended on September 17, 2012, the Company entered into a commercial lease for 26,150 square feet of office, laboratory and manufacturing space in Cambridge, Massachusetts (as amended, the "Cambridge Lease"). The term of the Cambridge Lease is six years and three months, with one five-year extension option. The terms of the Cambridge Lease require a standby letter of credit in the amount of $311 (see Note 2).

The Cambridge Lease contains rent holidays and rent escalation clauses. The Company recognizes rent expense on a straight-line basis over the term of the Cambridge Lease and records the difference between the amount charged to expense and the rent paid as a deferred rent liability. As of December 31, 2014, the amount of deferred rent liability is $505 and is included in accrued expenses.

It is the Company's policy to assess whether improvements made to the space rented under operating leases should be accounted for as "lessor" or "lessee" assets. In connection with the Cambridge Lease, the Company paid for lessor assets and was not reimbursed through construction allowances. Such costs are recorded as leasehold improvements, which are amortized to rent expense over the term of the Cambridge Lease. As of December 31, 2014, such leasehold improvements totaled $390 and are $249, net of accumulated depreciation.

Pursuant to the terms of the non-cancelable lease agreements in effect at December 31, 2014, the future minimum rent commitments are as follows:

Year Ended December 31,
2015	$	1,243
2016		1,269
2017		1,295
2018		1,049

Total	$	4,856

Total rent expense for the years ended December 31, 2014, 2013, and 2012, including month-to-month leases, was $1,148, $1,125 and $758, respectively.

On September 4, 2013, the Company entered into a legal settlement agreement for $286, in connection with the Cambridge Lease. The settlement has been included in the deferred rent liability and the benefit will be amortized over the remainder of the term of the Cambridge Lease.

Litigation

Lawsuit with Former Employee

In November 2013, we filed a lawsuit against Francis Reynolds, our former Chairman, Chief Executive Officer and Chief Financial Officer, in Middlesex Superior Court, Middlesex County, Massachusetts (InVivo Therapeutics Holdings Corp. v. Reynolds, Civil Action No. 13-5004). The complaint alleges breaches of fiduciary duties, breach of contract, conversion, misappropriation of corporate assets, unjust enrichment, corporate waste, and seeks monetary damages and an accounting. The lawsuit involves approximately $500 worth of personal and/or exorbitant expenses that we allege Mr. Reynolds inappropriately caused us to pay while he was serving as our Chief Executive Officer, Chief Financial Officer, President and Chairman of our Board of Directors. On December 6, 2013, Mr. Reynolds answered the complaint, and filed counterclaims against us and our Board of Directors. The counterclaims allege two counts of breach of contract, two counts of breach of the covenant of good faith and fair-dealing, and tortious interference with a contract, and seek monetary damages and a declaratory judgment. The counterclaims involve Mr. Reynolds's allegations that we and the Board interfered with the performance of his duties under the terms of his employment agreement, and that Mr. Reynolds was entitled to additional shares upon the exercise of certain stock options. On January 9, 2014, we, along with the directors named in the counterclaims, filed our answer. The parties are currently conducting pre-trial discovery. No judgments or rulings are pending at this stage.

Shareholder Matters and Investigations

On July 31, 2014, a putative securities class action lawsuit was filed in the United States District Court for the District of Massachusetts, naming the Company and Mr. Reynolds, as defendants (the "Securities Class Action"). The lawsuit alleges violations of the Securities Exchange Act of 1934 in connection with allegedly false and misleading statements related to the timing and completion of the clinical study of the Company's Neuro-Spinal Scaffold. The plaintiff seeks class certification for purchasers of the Company's common stock during the period from April 5, 2013 through August 26, 2013 and unspecified damages. On December 12, 2014, the Company moved to dismiss this lawsuit, and a hearing on that motion is scheduled for March 11, 2015. The Company intends to vigorously defend the lawsuit.

On January 23, 2015, Shawn Luger, a purported shareholder of the Company, sent the Company a letter demanding that the Board of Directors take action to remedy purported breaches of fiduciary duties allegedly related to the claimed false and misleading statements that are the subject of the Securities Class Action (the "Shareholder Demand"). The Board of Directors is currently considering this demand.

In addition to the Securities Class Action and the Shareholder Demand, the Company has received investigation subpoenas from the Boston Regional Office of the Securities and Exchange Commission and the Massachusetts Securities Division of the Secretary of the Commonwealth of Massachusetts requesting corporate documents also concerning, among other topics, the allegations raised Securities Class Action and the Shareholder Demand. The Company is currently cooperating with these investigations.