COMMITMENTS AND CONTINGENCIES - Note 7	9 Months Ended
Sep. 30, 2017
Commitments And Contingencies Disclosure Footnote
Commitments and Contingencies - Note 7	7. COMMITMENTS AND CONTINGENCIES Lease commitments We lease our office space and certain equipment under noncancelable capital and operating leases with initial or remaining terms in excess of one year. In July 2017, we entered into a 65 month facility lease amendment on 31,142 square feet of combined use office, laboratory and manufacturing space at our headquarters facility in Redmond, Washington. The lease commences in October 2017 and includes 7,225 square feet expansion space on our existing premise of 23,917 square feet. The lease agreement includes extension and rent escalation provisions over the term of the lease. Our 65 month lease expires in March 2023. Litigation On March 31, 2014, Asia Optical Co., Inc., a supplier pursuant to an agreement entered into in 2008, filed a complaint for arbitration with the American Arbitration Association claiming that we ordered products from them and failed to take delivery of and pay for such products. The relief sought in the complaint is $3.6 million plus attorneys' fees, interest and arbitration costs. We contest the claim and are defending against it. An adverse outcome of these proceedings could materially and adversely affect our financial condition. At this stage, we cannot predict the likelihood of an unfavorable outcome or the range of potential loss. We are also subject to various claims and pending or threatened lawsuits in the normal course of business. We are not currently party to any other legal proceedings that we believe are reasonably possible to have a material adverse effect on our financial position, results of operations or cash flows. Purchase commitments At September 30, 2017, we had $7.4 million in open purchase obligations that represent commitments to purchase inventory, materials, capital equipment, and other goods used in the normal operation of our business. Adverse purchase commitments As of September 30, 2017 and December 31, 2016, we had $500,000 accrued for commitments to purchase materials for the discontinued SHOWWX^TM pico projector that were in excess of estimated future proceeds from sales of that product.

COMMITMENTS AND CONTINGENCIES - Note 7

9 Months Ended

Sep. 30, 2017

Commitments And Contingencies Disclosure Footnote

7. COMMITMENTS AND CONTINGENCIES

Lease commitments

We lease our office space and certain equipment under noncancelable capital and operating leases with initial or remaining terms in excess of one year.

In July 2017, we entered into a 65 month facility lease amendment on 31,142 square feet of combined use office, laboratory and manufacturing space at our headquarters facility in Redmond, Washington. The lease commences in October 2017 and includes 7,225 square feet expansion space on our existing premise of 23,917 square feet. The lease agreement includes extension and rent escalation provisions over the term of the lease. Our 65 month lease expires in March 2023.

Litigation

On March 31, 2014, Asia Optical Co., Inc., a supplier pursuant to an agreement entered into in 2008, filed a complaint for arbitration with the American Arbitration Association claiming that we ordered products from them and failed to take delivery of and pay for such products. The relief sought in the complaint is $3.6 million plus attorneys' fees, interest and arbitration costs. We contest the claim and are defending against it. An adverse outcome of these proceedings could materially and adversely affect our financial condition. At this stage, we cannot predict the likelihood of an unfavorable outcome or the range of potential loss.

We are also subject to various claims and pending or threatened lawsuits in the normal course of business. We are not currently party to any other legal proceedings that we believe are reasonably possible to have a material adverse effect on our financial position, results of operations or cash flows.

Purchase commitments

At September 30, 2017, we had $7.4 million in open purchase obligations that represent commitments to purchase inventory, materials, capital equipment, and other goods used in the normal operation of our business.

Adverse purchase commitments

As of September 30, 2017 and December 31, 2016, we had $500,000 accrued for commitments to purchase materials for the discontinued SHOWWX^TM pico projector that were in excess of estimated future proceeds from sales of that product.