COMMITMENTS AND CONTINGENCIES	3 Months Ended
Mar. 31, 2017
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	4. COMMITMENTS AND CONTINGENCIES We and certain of our officers have been named as defendants in two purported class action securities lawsuits filed in the United States District Court for the Northern District of California, or the California District Court, as well as a third securities lawsuit, not styled as a class action, which was originally filed in the United States District Court for the Southern District of Mississippi, and subsequently transferred to the California District Court. These three cases, or the Class Action Lawsuits, which are based on the same factual background, have been consolidated for all purposes, and are currently stayed to enable the parties to seek to resolve them. On November 23, 2016, the parties signed a Memorandum of Understanding that set forth material deal points of resolving the Class Action Lawsuits. On December 13, 2016, the parties filed a notice of settlement, which the California District Court signed on December 16, 2016, staying the Class Action Lawsuits pending final approval of a settlement. On March 2, 2017, the parties to the Class Action Lawsuits, through their respective counsel, executed a Stipulation and Agreement of Settlement, or the Stipulation, and related documents formalizing an agreement to settle the Class Action Lawsuits. Under the Stipulation, in exchange for the dismissal with prejudice of all claims against all defendants in connection with the Class Action Lawsuits, we agreed to settle the Class Action Lawsuits for $6,250,000 in cash. We and our insurance providers agreed that $6,000,000 of the settlement amount will be paid by our insurance providers and the remaining $250,000 will be paid by us. The settlement does not constitute any admission of fault or wrongdoing by us or any of the individual defendants. On March 2, 2017, plaintiff’s counsel filed a motion for preliminary approval of the settlement, and on April 7, 2017, the California District Court issued an order preliminarily approving the settlement proposed in the Stipulation and directed that notice of the settlement, or the Notice, be given to certain purchasers of our common stock during the period from December 10, 2012 through and including March 11, 2014. The Notice includes, among other things, the general terms of the settlement, the proposed plan of allocation of the settlement amount, and the terms of the plaintiff’s counsel fee application. The California District Court scheduled a settlement fairness hearing on July 21, 2017 to, among other things, make a final determination whether the settlement is fair, reasonable and adequate and should be approved by the California District Court. The settlement and the Stipulation remain subject to final approval by the California District Court and certain other conditions. We accrue a liability for litigation matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As a result of the fully executed Stipulation by the parties and subsequent receipt of preliminary approval from the California District Court of the settlement proposed in the Stipulation, we accrued a loss contingency and recorded an undiscounted liability of $6,250,000, which is included in litigation settlement payable on our condensed balance sheet as of March 31, 2017. We also recorded an undiscounted receivable of $6,000,000, the amount we expect to recover from our insurance providers, which is included in litigation settlement insurance recovery on our condensed balance sheet as of March 31, 2017. In April 2017, following the preliminary approval by the California District Court of the settlement and in accordance with the Stipulation, we paid $250,000 and our insurance providers paid $6,000,000 to a settlement escrow account. These amounts will be held in escrow until finalization of the settlement. In accordance with the Stipulation, upon full payment of the settlement amount to the escrow account, we have no further liability or obligation to make any further payments related to the Stipulation or the Class Action Lawsuits. The Class Action Lawsuits, including the settlement proposed in the Stipulation, remain subject to inherent uncertainties, and the actual defense and disposition costs may depend upon many unknown factors. Therefore, there can be no assurance that the Class Action Lawsuits will not have a material adverse effect on our business, cash flow, results of operations or financial position. It is possible that additional lawsuits will be filed, or allegations will be made by stockholders, with respect to these same or other matters and also naming us and/or our officers and directors as defendants. Monitoring, initiating and defending against legal actions is time-consuming for our management, likely to be expensive and may detract from our ability to fully focus our internal resources on our business activities. In addition, despite the availability of insurance, we may incur substantial legal fees and costs in connection with litigation and such amounts could be material to our financial statements. We may expend significant resources in the settlement or defense of any additional lawsuits, and we may not prevail in such lawsuits. We have not established any reserve for any potential liability relating to any additional lawsuits. For a more complete discussion of the Class Action Lawsuits, see the section entitled “Legal Proceedings” under Part II, Item 1 of this Form 10-Q.

4. COMMITMENTS AND CONTINGENCIES

We and certain of our officers have been named as defendants in two purported class action securities lawsuits filed in the United States District Court for the Northern District of California, or the California District Court, as well as a third securities lawsuit, not styled as a class action, which was originally filed in the United States District Court for the Southern District of Mississippi, and subsequently transferred to the California District Court. These three cases, or the Class Action Lawsuits, which are based on the same factual background, have been consolidated for all purposes, and are currently stayed to enable the parties to seek to resolve them. On November 23, 2016, the parties signed a Memorandum of Understanding that set forth material deal points of resolving the Class Action Lawsuits. On December 13, 2016, the parties filed a notice of settlement, which the California District Court signed on December 16, 2016, staying the Class Action Lawsuits pending final approval of a settlement.

On March 2, 2017, the parties to the Class Action Lawsuits, through their respective counsel, executed a Stipulation and Agreement of Settlement, or the Stipulation, and related documents formalizing an agreement to settle the Class Action Lawsuits. Under the Stipulation, in exchange for the dismissal with prejudice of all claims against all defendants in connection with the Class Action Lawsuits, we agreed to settle the Class Action Lawsuits for $6,250,000 in cash. We and our insurance providers agreed that $6,000,000 of the settlement amount will be paid by our insurance providers and the remaining $250,000 will be paid by us. The settlement does not constitute any admission of fault or wrongdoing by us or any of the individual defendants.

On March 2, 2017, plaintiff’s counsel filed a motion for preliminary approval of the settlement, and on April 7, 2017, the California District Court issued an order preliminarily approving the settlement proposed in the Stipulation and directed that notice of the settlement, or the Notice, be given to certain purchasers of our common stock during the period from December 10, 2012 through and including March 11, 2014. The Notice includes, among other things, the general terms of the settlement, the proposed plan of allocation of the settlement amount, and the terms of the plaintiff’s counsel fee application.

The California District Court scheduled a settlement fairness hearing on July 21, 2017 to, among other things, make a final determination whether the settlement is fair, reasonable and adequate and should be approved by the California District Court. The settlement and the Stipulation remain subject to final approval by the California District Court and certain other conditions.

We accrue a liability for litigation matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As a result of the fully executed Stipulation by the parties and subsequent receipt of preliminary approval from the California District Court of the settlement proposed in the Stipulation, we accrued a loss contingency and recorded an undiscounted liability of $6,250,000, which is included in litigation settlement payable on our condensed balance sheet as of March 31, 2017. We also recorded an undiscounted receivable of $6,000,000, the amount we expect to recover from our insurance providers, which is included in litigation settlement insurance recovery on our condensed balance sheet as of March 31, 2017. In April 2017, following the preliminary approval by the California District Court of the settlement and in accordance with the Stipulation, we paid $250,000 and our insurance providers paid $6,000,000 to a settlement escrow account. These amounts will be held in escrow until finalization of the settlement. In accordance with the Stipulation, upon full payment of the settlement amount to the escrow account, we have no further liability or obligation to make any further payments related to the Stipulation or the Class Action Lawsuits.

The Class Action Lawsuits, including the settlement proposed in the Stipulation, remain subject to inherent uncertainties, and the actual defense and disposition costs may depend upon many unknown factors. Therefore, there can be no assurance that the Class Action Lawsuits will not have a material adverse effect on our business, cash flow, results of operations or financial position. It is possible that additional lawsuits will be filed, or allegations will be made by stockholders, with respect to these same or other matters and also naming us and/or our officers and directors as defendants. Monitoring, initiating and defending against legal actions is time-consuming for our management, likely to be expensive and may detract from our ability to fully focus our internal resources on our business activities. In addition, despite the availability of insurance, we may incur substantial legal fees and costs in connection with litigation and such amounts could be material to our financial statements. We may expend significant resources in the settlement or defense of any additional lawsuits, and we may not prevail in such lawsuits. We have not established any reserve for any potential liability relating to any additional lawsuits.

For a more complete discussion of the Class Action Lawsuits, see the section entitled “Legal Proceedings” under Part II, Item 1 of this Form 10-Q.