Commitments and Contingencies
|12 Months Ended|
Dec. 31, 2018
|Commitments And Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||
7. Commitments and Contingencies
Operating Lease Commitments
Rent expense was $0.3 million for each of the years ended December 31, 2018, 2017 and 2016.
From January 2014 to November 2018, the Company leased 8,894 square feet of office space in Newark, California pursuant to a lease which commenced January 16, 2014 and was set to expire on January 15, 2019.
On April 16, 2018, the Company entered into an amended lease to extend the term of its original lease by five years to January 15, 2024 and relocate and expand its office space within the same office park in Newark, California to approximately 17,698 square feet. The lease agreement includes an escalation clause for increased rent and a renewal provision allowing the Company to extend this lease for an additional five years by giving the landlord written notice of the election to exercise the option prior to the amended expiration date of January 15, 2024. The lease agreement also requires the lessor to fund and complete the construction of certain tenant improvements. These improvements were placed into service on December 1, 2018 and are classified as property and equipment, net on the consolidated balance sheet. The Company estimated the value of these tenant improvements at $2.3 million and also recorded them as a lease incentive within deferred rent on the Company’s consolidated balance sheet.
Future minimum rent payments under noncancelable operating lease commitments are as follows (in thousands):
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification, including indemnification associated with product liability or infringement of intellectual property rights. The Company’s exposure under these agreements is unknown because it involves future claims that may be made against the Company that may be, but have not yet been, made. To date, the Company has not paid any claims or been required to defend any action related to these indemnification obligations, and no amounts have been accrued in the accompanying consolidated balance sheets related to these indemnification obligations.
The Company has agreed to indemnify its officers and directors for losses and costs incurred in connection with certain events or occurrences, including advancing money to cover certain costs, subject to certain limitations. The maximum potential amount of future payments the Company could be required to make under this indemnification is unlimited; however, the Company maintains insurance policies that may limit its exposure and may enable it to recover a portion of any future amounts paid. Assuming the applicability of coverage, the willingness of the insurer to assume coverage, and subject to certain retention, loss limits, and other policy provisions, the Company believes the fair value of these indemnification obligations is not material. Accordingly, the Company has not recognized any liabilities relating to these obligations as of December 31, 2018 and 2017. No assurances can be given that the covering insurers will not attempt to dispute the validity, applicability, or amount of coverage without expensive litigation against these insurers, in which case the Company may incur substantial liabilities as a result of these indemnification obligations.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef