Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

7. Commitments and Contingencies

Lease Arrangements

The Company leases its facility under a noncancelable operating lease that expires in April 2018. The Company has provided a security deposit of $30,000 as collateral for the lease, which is included in other assets on the consolidated balance sheets.

The following table summarizes the Company’s future minimum lease payments as of December 31, 2016 (in thousands):


Year Ending December 31:	Amount
2017	$	368
2018		87

Total	$	455

The Company’s rent expense was $408,000, $280,000 and $184,000 for the years ended December 31, 2016, 2015 and 2014, respectively. Rent expense is recognized on a straight-line basis over the term of the leases and accordingly, the Company records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability.

Indemnifications

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by California corporate law. The Company currently has directors’ and officers’ insurance. To date, the Company has not incurred material costs to defend lawsuits or settle claims related to the indemnification agreements. The Company believes that the fair value of these indemnification agreements is minimal and has not accrued any amounts for the obligations.