Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

Commitments and Contingencies
12 Months Ended
Dec. 31, 2015
Loss Contingency [Abstract]  
Commitments and Contingencies
Commitments and Contingencies
Operating Leases
Our headquarters are located in Redwood City, California where we occupy approximately 107,200 square feet of office and laboratory space in four buildings within the same business park from Metropolitan Life Insurance Company (“MetLife”). We entered into the initial lease with Met Life for a portion of this space in 2004 and the lease has been amended numerous times since then to adjust space and amend the terms of the lease, with the latest amendment being in 2012. The various terms for the spaces under the lease have expiration dates that range from January 2017 through January 2020. In October 2015, we entered into an agreement to sublet a portion of our headquarter space to a subtenant effective January 2016. This sublease expires in November 2019.
We received certain lease incentives from MetLife in 2011 & 2012, which have been amortized on a straight line basis over the term of the lease as a reduction in rent expense. As of December 31, 2015 and 2014, we have unamortized lease incentive obligation of $1.7 million and $2.2 million, respectively, of which the non-current portion of $1.3 million and $1.7 million, respectively, is included in lease incentive obligation on the consolidated balance sheets. Rent expense for the Redwood City properties is recognized on a straight-line basis over the term of the lease. Rent expense was $3.4 million in 2015, $3.4 million in 2014 and $3.6 million in 2013, partially offset by sublease income of $0.6 million in 2015, $0.4 million in 2014 and nil in 2013.
We are required to restore certain of the Redwood City facilities that we are renting to their original form. We are expensing the asset retirement obligation over the terms of the respective leases. We review the estimated obligation each reporting period and makes adjustments if our estimates change. As of December 31, 2015 and 2014, we have assets retirement obligations of $0.4 million, which is included in other liabilities on the consolidated balance sheets
Pursuant to the terms of the amended lease agreement, we exercised our right to deliver a letter of credit in lieu of a security deposit. The letters of credit are collateralized by deposit balances held by the bank in the amount of $0.7 million as of December 31, 2015 and 2014. These deposits are recorded as restricted cash on the consolidated balance sheets.
Prior to March 2014, we also rented facilities in Hungary. The facility lease was transferred to Intrexon Corporation to in connection with the sale of Codexis Laboratories Hungary Kft. See Note 8 - Assets Held for Sale and Sale of Former Hungarian Subsidiary.
Future minimum payments under noncancellable operating leases are as follows at December 31, 2015 (in thousands): 
Lease Payments
Years ending December 31,






Total minimum payments (1)

Minimum payments have not been reduced by future minimum sublease rentals of $2.7 million to be received under noncancellable subleases.
Legal Proceedings
On February 19, 2016, we filed a complaint against EnzymeWorks, Inc., a California corporation, EnzymeWorks, Inc., a Chinese corporation, and Junhua “Alex” Tao (collectively, the “Defendants”) in the United States District Court for the Northern District of California. The complaint alleges that the Defendants have engaged in willful patent infringement, trade secret misappropriation, breach of confidence, intentional interference with contractual relations, intentional interference with prospective economic relations and statutory and common law unfair competition. We have sought injunctive relief, monetary damages, treble damages, restitution, punitive damages and attorneys’ fees. We are unable to determine when this litigation will be resolved or its ultimate outcome.
Other than our litigation against the Defendants, we are not currently a party to any material litigation or other material legal proceedings
We are required to recognize a liability for the fair value of any obligations we assume upon the issuance of a guarantee. We have certain agreements with licensors, licensees and collaborators that contain indemnification provisions. In such provisions, we typically agree to indemnify the licensor, licensee and collaborator against certain types of third party claims. The maximum amount of the indemnifications is not limited. We accrue for known indemnification issues when a loss is probable and can be reasonably estimated. There were no accruals for expenses related to indemnification issues for any periods presented.