Commitments And Contingencies

6 Months Ended

Jun. 30, 2017

Commitments And Contingencies [Abstract]

Commitments And Contingencies

9.   Commitments and Contingencies

Operating Leases

The Company leased approximately 4,300 square feet of corporate offices and research facilities in Burlingame, California,  at a monthly cost of approximately $21,000. This lease expiredon  June 30, 2017.  

During January 2017, the Company entered into a new lease agreement (the “Lease”) for premises consisting of approximately 15,700 rentable square feet located in Hayward, California (the “Premises”).

The Company moved into the Premises in July 2017. The Premises is being used for the Company’s corporate headquarters and principal operating facility. The term of the Lease is sixty-two (62) months, which commenced on July 1, 2017.  Base rent was abated for the first two (2) months of the Lease term and thereafter is $42,400 per month during the first year of the Lease term, with specified annual increases thereafter until reaching approximately $50,300 per month during the last two (2) months of the Lease term. The Company paid a refundable security deposit of approximately $101,000 and is required to reimburse the landlord for certain expenses during the Lease term.  

The landlord provided the Company with improvement allowances in the amount of approximately $135.00 per rentable square foot of the Premises that were applied towards the costs of construction of the initial improvements in the Premises. The Company remains responsible for any improvement costs in excess of the foregoing allowances. During the three-month and six-month period ended June 30, 2017, the landlord incurred approximately $2.1 million related to the initial tenant leasehold improvements and the Company capitalized these leasehold improvements to property and equipment and a corresponding deferred rent liability on its balance sheet. 

The Company has the right to extend the Lease term by five (5) years upon written notice not more than twelve (12) months nor less than nine (9) months prior to the expiration of the original Lease term, with monthly payments equal to the “Fair Rental Value” as defined in the Lease. As of December 31, 2016, the lease obligations for less than one year, one to three years, three to five years and more than five years is approximately $0.3 million, $1.1 million, $1.1 million and $0.3 million, respectively.

During the three-month periods ended June 30, 2017 and 2016, rent expense, including common area maintenance charges, was approximately $74,000 and $49,000, respectively. During the six-month periods ended June 30, 2017 and 2016, rent expense, including common area maintenance charges, was approximately $137,000 and $99,000, respectively.