15. COMMITMENTS AND CONTINGENCIES Leases On November 30, 2011, the Company entered into a commercial lease for 26,342 square feet of office, laboratory and manufacturing space in Cambridge, Massachusetts (as amended on September 17, 2012 and October 31, 2017, the Cambridge Lease). The term of the Cambridge Lease is 6 years and 3 months, with one 5-year extension option. On August 21, 2017, the Company exercised its option for the 5-year extension on the Cambridge Lease. The 5- year renewal lease term commences on November 1, 2018 and ends on October 31, 2023. The terms of the Cambridge Lease require a standby letter of credit in the amount of $311 thousand. On March 31, 2016, the Company entered into a short-term lease, to sub-lease 5,233 square feet of its facility (the 2016 Sublease). The 2016 Sublease term was from April 1, 2016 through January 31, 2017. In connection with the 2016 Sublease, the Company received sublease income for the year ended December 31, 2017 of $26 thousand, which was recorded as an offset to rent expense. On June 13, 2017, the Company entered into a new short-term lease, to sub-lease 5,233 square feet of its facility (the Moderna Sublease). The lease term was from July 1, 2017 through October 26, 2018. On June 19, 2017, the Company received a $55 thousand security deposit under the terms of the Moderna Sublease. In conjunction with the assignment of the Cambridge Lease on May 3, 2018 further described below, this security deposit was transferred to the third party that assumed the lease. In connection with the Moderna Sublease, the Company received sublease income of $112 thousand for the year ended December 31, 2018, which was recorded as an offset to rent expense. On May 3, 2018, the Company assigned the Cambridge Lease to a third party who assumed all of the Companys remaining rights and obligations under the Cambridge Lease including the Moderna Sublease. On the same date as the lease assignment, the Company entered into a sublease for 5,104 square feet of space, originally part of the Cambridge Lease, from the third party to which the Company assigned the Cambridge Lease (the Current Cambridge Lease). The Current Cambridge Lease commenced on May 3, 2018 and expires October 31, 2023 and contains rent holiday and rent escalation clauses. In connection with the Cambridge Lease Assignment and the Current Cambridge Lease, the $311 thousand standby letter of credit was terminated, and a new standby letter of credit was established for $40 thousand. On November 1, 2018, the standby letter of credit was increased to $60 thousand. The $55 thousand security deposit under the Moderna Sublease was transferred to the third party and $603 thousand of deferred rent was removed from the consolidated balance sheets as of June 30, 2018. The resulting gain was recorded within the consolidated statement of operations and comprehensive loss during the second quarter of 2018. The Company also wrote off certain furniture, fixtures and equipment (including laboratory equipment) and recorded an impairment charge of $48 thousand for the year ended December 31, 2018. The Company recognizes rent expense on a straight-line basis over the term of the lease and records the difference between the amount charged to expense and the rent paid as prepaid rent or deferred rent liability. As of December 31, 2018, and December 31, 2017, the amount of prepaid rent was $17 thousand and $0, respectively. As of December 31, 2018, and December 31, 2017, the amount of deferred rent liability was $0 and $397 thousand, respectively Pursuant to the terms of the non-cancelable lease agreements in effect at December 31, 2018, the future minimum rent commitments are as follows: (In thousands) Year Ended December 31, 2019 $ 243 2020 375 2021 386 2022 398 2023 339 Total $ 1,741 Total rent expense for the years ended December 31, 2018 and 2017, including month-to-month leases, was $837 thousand, and $1.2 million, respectively. Compensation Commitment The Company entered into a compensation arrangement with an executive during September 2016 which provided for a future cash payment by the Company to the executive based on the February 13, 2017 stock price of the executives former employer. The award was earned over a period of 1 year. The expense related to the compensation arrangement was $174 thousand for the year ended December 31, 2017. As of December 31, 2018, there were no outstanding payments to the executive. Lawsuits with Former Employee In November 2013, the Company filed a lawsuit against Francis Reynolds, its former Chairman, Chief Executive Officer and Chief Financial Officer, in Middlesex Superior Court, Middlesex County, Massachusetts (InVivo Therapeutics Holdings Corp. v. Reynolds, Civil Action No. 13-5004). The complaint alleged breaches of fiduciary duties, breach of contract, conversion, misappropriation of corporate assets, unjust enrichment, and corporate waste, and seeks monetary damages and an accounting. The lawsuit involved approximately $500 thousand worth of personal and/or exorbitant expenses that the Company alleged Mr. Reynolds inappropriately caused it to pay while he was serving as the Companys Chief Executive Officer, Chief Financial Officer, President, and Chairman of the Companys Board of Directors. On December 6, 2013, Mr. Reynolds answered the complaint, and filed counterclaims against the Company and the Companys Board of Directors. The counterclaims alleged two counts of breach of contract, two counts of breach of the covenant of good faith and fair-dealing, and tortious interference with a contract, and sought monetary damages and a declaratory judgment. The counterclaims related to Mr. Reynoldss allegations that the Company and the Companys Board of Directors interfered with the performance of his duties under the terms of his employment agreement, and that Mr. Reynolds was entitled to additional shares upon the exercise of certain stock options that he did not receive. On January 9, 2014, the Company, along with the directors named in the counterclaims, filed the Companys answer denying that Mr. Reynolds was entitled to any relief. On March 3, 2017, the counterclaim defendants filed a motion for summary judgement on all counterclaims asserted by Mr. Reynolds. On October 18, 2017, the Court allowed the motion for summary judgment in substantial part, and denied it in part. The Court, citing disputed issues of fact, declined to dismiss the counterclaims for breach of contract, breach of implied covenant of good faith and fair dealing, and declaratory judgment concerning Mr. Reynolds attempted exercise of certain stock options, which Mr. Reynolds claims is the equivalent of 47,864 shares of common stock, but dismissed all other claims asserted by Mr. Reynolds. In July 2018, the parties reported the case as settled to the Court. Vendor Dispute In July 2018, the Company entered into a settlement agreement with a former vendor under which the vendor agreed to pay the Company $1.2 million, of which the full amount has been paid and is included in other income on the statement of operations and other comprehensive loss.