Deferred Rent

12 Months Ended

Dec. 31, 2017

Deferred Revenue Disclosure [Abstract]

Deferred Rent

7. Deferred Rent

The leases for both of the Company’s subleased former offices in Campbell, California contain free rent and predetermined fixed escalations in our minimum rent payments. Rent expense related to these leases is recognized on a straight-line basis over the terms of the leases. Any difference between the straight-line rent amounts and amounts payable under the leases is recorded as part of deferred rent in current or long-term liabilities, as appropriate. The monthly rent payments due to the Company for the sublease of the office at 1919 S. Bascom Avenue fully offset the rent payments due under the Company’s lease for that space. The monthly rent payments due to the Company for the sublease of the office at 51 East Campbell Avenue will offset approximately 62% of the monthly rent payments due to the landlord under the Company’s lease for that space. During the three-month period ended September 30, 2017, the Company recorded a loss of $62,900 representing the total of the shortfall of monthly rent payments over the life of this sublease. As of December 31, 2017, $13,800 remains on the balance sheet as a lease liability to be amortized over the remaining 12 months of the sublease.

Incentives that we received upon entering into the S. Bascom Avenue lease agreement are recognized on a straight-line basis as a reduction to rent over the term of the lease. We record the unamortized portion of these incentives as a part of deferred rent in current or long-term liabilities, as appropriate.

As of December 31, 2017 deferred rent was:

Component	Current Liabilities		Long-Term Liabilities		Total
Lease liability - ST	$	13,800	$	—	$	13,800
Deferred rent expense		27,200		—		27,200
Deferred rent benefit		33,100		—		33,100
	$	74,100	$	—	$	74,100

As of December 31, 2016 deferred rent was:

Component	Current Liabilities			Long-Term Liabilities			Total
Deferred rent expense	$	(15,600	)	$	(30,500	)	$	(46,100	)
Deferred rent benefit		39,700			33,100			72,800
	$	24,100		$	2,600		$	26,700

Deferred rent expense represents the remaining balance of the aggregate free rent we received from our landlord and escalations that are being recognized over the life of the lease as a component of rent expense. Deferred rent benefit relates to the unamortized portion of the leasehold improvements provided to us by our landlord (i.e., incentives) that we are recognizing on a straight-line basis as a reduction to rent expense over the term of the lease.