10. Commitments and Contingencies

Operating Leases

During 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.

The Company adopted Topic 842 on January 1, 2019, using the transition method per ASU No. 2018-11 issued on July 2018 wherein entities were allowed to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Accordingly, all periods prior to January 1, 2019 were presented in accordance with the previous ASC 840, Leases, and no retrospective adjustments were made to the comparative periods presented. The adoption of ASC 842 resulted in an increase to total assets and liabilities due to the recording of operating lease right-of-use assets (“ROU”) presented within other assets and operating lease liabilities of approximately $0.1 million as of January 1, 2019. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments.

Information related to the Company's right-of-use assets and related lease liabilities were as follows:


Cash paid for operating lease liabilities	$	132
Right-of-use assets recognized in exchange for new lease obligations		107

Current operating lease liabilities		396
Non-current operating lease liabilities		1,223
Total lease liabilities	$	1,619

Weighted average remaining lease term		3.42 years
Weighted average discount rate		10%

Maturities of lease liabilities as of March 31, 2019 were as follows (in thousands):


Year Ending December 31:
2019 (remaining 9 months)	$	404
2020		554
2021		574
2022		392
Total lease payments		1,924
Less imputed interest		(305)
Total operating lease liabilities	$	1,619

During the three-month periods ended March 31, 2019 and 2018, rent expense, including common area maintenance charges, was approximately $59,000 and $57,000, respectively.

Legal Proceedings

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.

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.