12. Commitments and Contingencies

Operating Leases

On March 31, 2016, the Company entered into a lease agreement for its office space in New York, New York whose term ends on July 31, 2021. In connection with the lease agreement, the Company established an irrevocable standby letter of credit (“LOC”) with a bank. The LOC serves as the Company’s security deposit on the lease, in which the landlord is the beneficiary. The LOC expires and is automatically renewed April 8 of each succeeding calendar year up to October 29, 2020, unless written notice is provided no later than 90 days before the then existing expiration date. The Company has a certificate of deposit with a bank as collateral for the stand by letter of credit which is classified as restricted cash in the consolidated balance sheets. The restricted cash balance at March 31, 2018 is $208. Rent expense was $140 and $139 for the three months ended March 31, 2018 and 2017, respectively.

In January 2018, in connection with the Reverse Merger, the Company assumed an operating lease of Inotek for its former headquarters in Lexington, Massachusetts, whose term ends in February 2023. Rent expense was $83 during the three months ended March 31, 2018 in connection with the assumed lease.

As of March 31, 2018, the remaining aggregate annual commitments pursuant to the leases, as amended, are as follows:

2018 (remaining nine months)	$	641
2019		874
2020		897
2021		718
2022		445
Thereafter		74
Total	$	3,649

Securities Litigation

On January 6, 2017, a purported stockholder of Inotek filed a putative class action in the U.S. District Court for the District of Massachusetts, captioned Whitehead v. Inotek Pharmaceuticals Corporation, et al., No. 1:17-cv-10025. An amended complaint was filed on July 10, 2017, and a second amended complaint was filed on September 5, 2017. The second amended complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 against the Company, David Southwell, and Rudolf Baumgartner based on allegedly false and misleading statements and omissions regarding Inotek’s phase 2 and phase 3 clinical trials of trabodenoson. The lawsuit seeks, among other things, unspecified compensatory damages for purchasers of Inotek’s common stock between July 23, 2015 and July 10, 2017, as well as interest and attorneys’ fees and costs. The defendants filed a motion to dismiss the second amended complaint on October 6, 2017, the plaintiffs opposed the motion on December 5, 2017, and the defendants filed a reply on January 16, 2018. The Company continues to vigorously defend itself against this claim.

From time to time, the Company may be subject to other various legal proceedings and claims that arise in the ordinary course of its business activities. Although the results of litigation and claims cannot be predicted with certainty, the Company does not believe it is party to any other claim or litigation the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on its business. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

Indemnification Arrangements

Pursuant to its bylaws and as permitted under Delaware law, the Company has indemnification obligations to directors, officers, employees or agents of the Company or anyone serving in these capacities. The maximum potential amount of future payments the Company could be required to pay is unlimited. The Company has insurance that reduces its monetary exposure and would enable it to recover a portion of any future amounts paid. As a result, the Company believes that the estimated fair value of these indemnification commitments is minimal.

Throughout the normal course of business, the Company has agreements with vendors that provide goods and services required by the Company to run its business. In some instances, vendor agreements include language that requires the Company to indemnify the vendor from certain damages caused by the Company’s use of the vendor’s goods and/or services. The Company has insurance that would allow it to recover a portion of any future amounts that could arise from these indemnifications. As a result, the Company believes that the estimated fair value of these indemnification commitments is minimal.