The Company's corporate headquarters, research and development facilities, and manufacturing and distribution centers occupying an approximately 33,000 square foot facility located in Santa Clara, CA and are subject to a non-cancellable operating lease that terminates on May 31, 2023. The Company adopted ASC 842 and the related amendments on January 1, 2022.

On July 29, 2022, the Company entered into a new non-cancellable operating lease arrangement for its current facility commencing on June 1, 2023 and will expire on May 31, 2028 and contains monthly base rent payments of $88,341 that increase annually by 3% over the term of the lease. In addition to the base rent, the Company will reimburse the landlord for certain operating expenses under the terms of the new lease. The Company established a letter of credit for $0.3 million as collateral for its new lease in favor of the new lessor which was recorded as restricted cash on the balance sheet as of December 31, 2022.

The following table contains future minimum rental obligation required under the existing non-cancellable lease on December 31, 2021 under ASC 840 (in thousands):


2022	$	846
2023		358
Total minimum lease payments	$	1,204

The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the year ended December 31, 2022:


		For Year Ended December 31, 2022
Lease Cost		(in thousands)
Operating lease cost	$	653
Variable lease cost		225
Total lease cost	$	878
Other Information
Operating cash flows used for lease liabilities	$	846
Right of use asset acquired under operating lease on the adoption of ASC 842	$	270
Weighted average remaining lease term (in years)		0.4
Weighted average incremental borrowing rate		4.0%

As of December 31, 2022, operating lease right of use assets were $0.3 million and operating lease liabilities were $0.4 million. The Company has no finance leases.

The maturities of the operating lease liabilities were as follows (in thousands):


		December 31, 2022
2023	$	358
Total undiscounted lease payments		358
Less: imputed interest		3
Total operating lease liability		355
Less: current portion		355
Operating lease liability, net of current maturities	$	-

The future minimum rental obligation required under the existing non-cancellable lease on December 31, 2022 amounts to $0.4 million during 2023. Total rent expense was $0.7 million for the years ended December 31, 2022 and 2021.

The future minimum rental obligation required under the new non-cancellable lease on December 31, 2022 is as follows (in thousands):


2023	$	618
2024		1,079
2025		1,111
2026		1,144
2027		1,179
thereafter		497
Total minimum lease payments	$	5,628

The Company enters into indemnification provisions under its agreements with other companies in the ordinary course of business, including business partners and contractors. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party as a result of the Company’s activities. The terms of these indemnification agreements are generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. The Company maintains commercial general liability insurance and products liability insurance to offset certain of its potential liabilities under these indemnification provisions.

The Company regularly evaluates its exposure to threatened or pending litigation and other business contingencies. Because of the uncertainties related to the amount of loss from litigation and other business contingencies, the recording of losses relating to such exposures requires significant judgment about the potential range of outcomes. As additional information about current or future litigation or other contingencies becomes available, the Company will assess whether such information warrants the recording of additional expense.

In November 2015, Hologic, Inc. and Cytyc Surgical Products, LLC (collectively, Hologic) sued the Company in U.S. District Court for the District of Delaware alleging infringement of four patents. On July 27, 2018 there was a jury verdict of no willfulness and awarding Hologic approximately one quarter of the damages it sought. Following an appeal, on December 30, 2022, the Company paid Hologic $7.4 million in damages and interest, thereby satisfying the judgment. This matter is now concluded.

On July 8, 2020, Hologic again sued the Company alleging willful infringement of one of the same patents as in the First Action, the ’348 patent, in the U.S. District Court for the District of Delaware. Hologic accused the Company’s newer EAS Handpiece of infringing the patent for the approximately five-month period before that patent expired on November 19, 2018. The Company has answered, denying infringement and willfulness. Due to COVID-19 and the on-going appeal of the First Hologic Action at the time, the case was stayed twice. In late 2022, the court lifted the stay and has scheduled trial for August 21, 2023. As of December 31, 2022, the Company recognized a legal accrual which represents management’s best estimate of the potential loss from this litigation.

In April 2017, the Company sued Hologic for willful infringement of a Company patent (U.S. Patent No. 9,186,208 (“the ’208 patent”)) in the U.S. District Court for the Northern District of California. Hologic has answered, denying infringement and willfulness and alleging invalidity of the patent. The Company sought a preliminary injunction and that motion was denied. This matter was thereafter transferred to the U.S. District Court for the District of Delaware, where it has been assigned to the same judge presiding over the Hologic complaints. Due to COVID-19, the July 2020 trial date was delayed.

On July 20, 2021, the District Court granted Hologic’s motion excluding certain expert opinions regarding infringement. On July 23, 2021, the District Court found on summary judgment that the Company’s ’208 patent is invalid, dismissed the case and entered judgment. On August 24, 2021, the Company appealed to the Court of Appeals for the Federal Circuit. Briefing was completed and oral argument in the matter was held on October 3, 2022. On February 14, 2023 a three judge panel upheld the lower court’s ruling and denied the Company’s request for a hearing. The Company has decided not to pursue this claim further.