(11) COMMITMENTS AND CONTINGENCIES

(a) – Lease Commitments

We lease office and operating facilities and equipment under non-cancelable operating leases. Current facility leases include our new headquarters in Englewood, Colorado and a small warehouse/office in Denmark. Rent expense was $0.6 million and $0.5 million for the years ended December 31, 2017 and 2016, respectively.

We signed a new headquarters facility lease in October 2017 with a term from January 1, 2018 through June 30, 2023 and includes an option to extend the lease for an additional two years through 2025. The lease rate increases annually as of November 1. We account for the effect of such escalating lease payments as if the lease rate were consistent over the lease term.

Our prior headquarters lease in Lone Tree, Colorado contained a termination clause which allowed the Company to terminate the lease at any time with three months written notice. We provided notice to the landlord at the end of October 2017.

The Company also leases certain equipment under capital leases which expire on various dates through 2018. Imputed interest rates on the leases range from approximately 5% to 10%. At December 31, 2017 and 2016, the total recorded cost of assets under capital leases was $0.5 million and the accumulated depreciation related to these assets totaled approximately $0.4 million and $0.3 million, respectively.

Future minimum commitments under non-cancelable operating leases and capital leases as of December 31, 2017 are as follows (in thousands):

	Operating Leases		Capital Leases
2018	$	463	$	125
2019		830		-
2020		873		-
2021		914		-
2022		956
Thereafter		495		-
Total minimum lease payments	$	4,531		125
Less: Amount representing interest				(2)
Principal balance of capital lease obligation				123
Less: Current portion of capital lease obligation				(123)
Long-term portion of capital lease obligation			$	-

(b) - Litigation

From time to time, the Company may become party to litigation and other claims in the ordinary course of business. To the extent that such claims and litigation arise, management would provide for them if losses are determined to be both probable and estimable.

The Company is currently not a party to any material pending legal proceedings.