12. 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 expired on June 30, 2017.

In January 2017, the Company entered into a new lease agreement for premises consisting of approximately 15,700 rentable square feet located in Hayward, California. The lease commenced on July 1, 2017 and expires in August 2022, with an option to extend the lease term for an additional five years. Under the terms of the lease agreement, the landlord provided an allowance for tenant improvements in the amount of $2.1 million, which was recorded as deferred rent at the inception of the lease term. Rent expense associated with the future minimum lease payment is reduced by amortization of tenant improvement allowance over the life of the lease. An offsetting amount was recorded as leasehold improvement at the inception of the lease term. Leasehold improvements are depreciated over the lease term.

During the years ended December 31, 2018, 2017 and 2016, rent expense, including common area maintenance charges, was $0.2 million, $0.3 million and $0.2 million, respectively.

Future minimum lease payments under the non-cancelable operating leases as of December 31, 2018 are as follows (in thousands):


Year Ending December 31:
2019	$	536
2020		554
2021		574
2022		392
Thereafter		—
	$	2,056

Indemnification

The Company and certain directors have received subpoenas from the Securities and Exchange Commission requesting documents and other information in connection with an investigation into trading in the Company’s stock in advance of the Company’s September 2017 private placement equity financing. The Company and its directors have cooperated with the investigation.

The Company maintains indemnification agreements with its directors and officers that may require the Company to indemnify them against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by applicable law.

At this time, the Company is unable to estimate a possible loss, if any, associated with the matter described above.

From time to time, the Company may be involved in a variety of claims, lawsuits, investigations and proceedings relating to securities laws, product liability, patent infringement, contract disputes and other matters relating to various claims that arise in the normal course of our business in addition to governmental and other regulatory investigations and proceedings. In addition, third parties may, from time to time, assert claims against the Company in the form of letters and other communications. The Company currently believes that these ordinary course matters will not have a material adverse effect on our business; however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.