COMMITMENTS AND CONTINGENCIES	6 Months Ended
Jun. 30, 2017
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	4. COMMITMENTS AND CONTINGENCIES We and certain of our officers were 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, but subsequently transferred to the California District Court. These three cases, or the Class Action Lawsuits, which were based on the same factual background, were consolidated for all purposes. 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. On April 7, 2017, the California District Court issued an order preliminarily approving the settlement proposed in the Stipulation and directing 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, or the Class Period. The Notice included, among other things, the general terms of the settlement, the proposed plan of allocation of the settlement amount, the terms of the plaintiff’s counsel fee application and the process whereby purchasers of our common stock during the Class Period could opt out of the settlement class. The settlement does not constitute any admission of fault or wrongdoing by us or any of the individual defendants. 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 to be held in escrow until finalization of the settlement. Our portion of the settlement payment is included in prepaid assets on our condensed balance sheet as of June 30, 2017. On July 21, 2017, following the settlement fairness hearing regarding the proposed settlement, the California District Court entered an order and final judgment that: (i) dismissed with prejudice and released the claims asserted in the Class Action Lawsuits against all named defendants in connection with the Class Action Lawsuits, including us, and any claims that could have been asserted that arise or relate to the facts alleged in the Class Action Lawsuits, such that every member of the settlement class will be barred from asserting such claims in the future; and (ii) approved the payment of the escrow account, minus the payment of attorneys’ fees and costs to plaintiff’s counsel, to members of the settlement class. 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 June 30, 2017. We also recorded an undiscounted insurance recovery asset of $6,000,000, which is included in litigation settlement insurance recovery on our condensed balance sheet as of June 30, 2017, representing the amount we recovered from our insurance providers upon final approval of the settlement by the California District Court on July 21, 2017. We do not expect to make any additional payments for and do not expect, and are not aware of, any additional claims arising from or related to the facts alleged in the Class Action Lawsuits and asserted by stockholders who have opted out of the settlement class in the Class Action Lawsuits. However, it is possible that additional lawsuits may be filed, or allegations may 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 were 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, but subsequently transferred to the California District Court. These three cases, or the Class Action Lawsuits, which were based on the same factual background, were consolidated for all purposes.

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. On April 7, 2017, the California District Court issued an order preliminarily approving the settlement proposed in the Stipulation and directing 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, or the Class Period. The Notice included, among other things, the general terms of the settlement, the proposed plan of allocation of the settlement amount, the terms of the plaintiff’s counsel fee application and the process whereby purchasers of our common stock during the Class Period could opt out of the settlement class. The settlement does not constitute any admission of fault or wrongdoing by us or any of the individual defendants.

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 to be held in escrow until finalization of the settlement. Our portion of the settlement payment is included in prepaid assets on our condensed balance sheet as of June 30, 2017.

On July 21, 2017, following the settlement fairness hearing regarding the proposed settlement, the California District Court entered an order and final judgment that: (i) dismissed with prejudice and released the claims asserted in the Class Action Lawsuits against all named defendants in connection with the Class Action Lawsuits, including us, and any claims that could have been asserted that arise or relate to the facts alleged in the Class Action Lawsuits, such that every member of the settlement class will be barred from asserting such claims in the future; and (ii) approved the payment of the escrow account, minus the payment of attorneys’ fees and costs to plaintiff’s counsel, to members of the settlement class.

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 June 30, 2017. We also recorded an undiscounted insurance recovery asset of $6,000,000, which is included in litigation settlement insurance recovery on our condensed balance sheet as of June 30, 2017, representing the amount we recovered from our insurance providers upon final approval of the settlement by the California District Court on July 21, 2017.

We do not expect to make any additional payments for and do not expect, and are not aware of, any additional claims arising from or related to the facts alleged in the Class Action Lawsuits and asserted by stockholders who have opted out of the settlement class in the Class Action Lawsuits. However, it is possible that additional lawsuits may be filed, or allegations may 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.