Commitments and Contingencies

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

ommitments and Contingencies

Operating Leases

The Company leases its headquarters and laboratory facilities in South San Francisco, California under a non-cancelable lease agreement for approximately 59,000 square feet. The lease began in June 2015 and ends in March 2026 and contains extension of lease term and expansion options. Certain expansion options were waived by the Company on February 8, 2017 in exchange for consideration of $500,000. The Company had deposits of $603,000 included in long-term assets as of December 31, 2016 and 2015, restricted from withdrawal and held by a bank in the form of collateral for an irrevocable standby letter of credit held as security for the lease of the South San Francisco facility.

The Company also leases laboratory and office space in Austin, Texas under a lease that expires on July 31, 2018. The Company provided a cash security deposit of $75,000, which is included in other assets in the Company's balance sheets as of December 31, 2016 and 2015.

Future minimum lease payments under non-cancelable operating leases as of December 31, 2016 are as follows (in thousands of dollars):



Year Ending December 31,	Amounts
2017	$	2,143
2018	2,102
2019	2,026
2020	2,082
2021	2,144
Thereafter	9,812
Total minimum lease payments	$	20,309

The Company recognizes rent expense on a straight-line basis over the non-cancelable lease period. Rent expense was $2.0 million, $1.9 million and $852,000 for the years ended December 31, 2016, 2015 and 2014, respectively.

Capital Lease

The Company entered into a capital lease in December 2016 for $1.2 million of equipment and the associated equipment has not been placed into service as of December 31, 2016. Amortization of the equipment will commence when the equipment is placed into service and ready for its intended use. The Company paid an upfront amount of $330,000 and the present value of the total future minimum lease payments of $874,000, which is a non-cash investing transaction for 2016, comprises a short-term portion of $275,000, included in accrued liabilities, and a long-term portion of $599,000, included in capital lease liability, on the Company's balance sheet as of December 31, 2016. As of December 31, 2016, the annual future minimum lease payments will be $317,000 for each of 2017, 2018 and 2019.

Supplies Purchase Commitments

The Company had non-cancelable purchase commitments with suppliers to purchase a minimum quantity of supplies for approximately $1.7 million at December 31, 2016.

Contingencies

From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. The Company believes there is no litigation pending that could have, individually or in the aggregate, a material adverse effect on its financial position, results of operations or cash flows.