Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Note 9: Commitments and Contingencies

Leases and Purchase Commitments

The Company leases its facility under a non-cancelable operating lease that expires in 2020.

On October 3, 2017, the Company entered into a sublease agreement under which the Company subleased a new headquarters facility located in San Jose, California for a term of 36 months commencing November 1, 2017. The monthly rent and common-area costs under the new facility lease are approximately $22,000, and compare with monthly rent and common-area costs for the previous facility of approximately $89,000.

On October 3, 2017, the Company entered into a lease termination agreement with M West Propco XII LLC (“MWest”) under which the Company and MWest agreed to terminate the Company’s lease for previous its headquarters facility effective October 31, 2017. In connection with the lease termination, the Company incurred fees of approximately $250,000, which have been recorded as restructuring charges in the statements of operations and comprehensive loss in these consolidated financial statements.

Rent expense was approximately $470,000, $783,000 and $798,000 for the years ended December 31, 2017, 2016 and 2015, respectively. The leases provide for monthly payments and are being charged to operations ratably over the lease terms. In addition to the minimum lease payments, the Company is responsible for property taxes, insurance and certain other operating costs.

Future minimum lease payments under non-cancelable operating leases and purchase commitments are (in thousands):


	Operating
Year ended December 31,	leases
2018	$	213
2019		219
2020		187
Total minimum payments	$	619

Indemnification

In the ordinary course of business, the Company enters into contractual arrangements under which it may agree to indemnify the counterparties from any losses incurred relating to breach of representations and warranties, failure to perform certain covenants, or claims and losses arising from certain events as outlined within the particular contract, which may include, for example, losses arising from litigation or claims relating to past performance. Such indemnification clauses may not be subject to maximum loss clauses. The Company has entered into indemnification agreements with its officers and directors. No material amounts were reflected in the Company’s consolidated financial statements for the years ended December 31, 2017, 2016 or 2015 related to these indemnifications.

The Company has not estimated the maximum potential amount of indemnification liability under these agreements due to the limited history of prior claims and the unique facts and circumstances applicable to each particular agreement. To date, the Company has not made any payments related to these indemnification agreements.

Legal Matters

In October 2017, Trinity Technologies, Inc., our former sales representative in the San Francisco bay area, filed a lawsuit against us in the Superior Court of California alleging non-payment of commissions. The lawsuit is still in its early stages, and the Company intends to vigorously defend itself.