12. Commitments and Contingencies

 

Offer Letters

 

The Company has entered into offer letters with certain of its executives. The letters provide for, among other items, salary, bonus and severance payments.

 

Resignation of Former Chief Executive Officer

 

On December 17, 2015, the Company’s President and former Chief Executive Officer (“CEO”) resigned, which included his resignation as a member of the board of directors of the Company, in each case effective December 31, 2015. The Company entered into a separation agreement pursuant to which the Company agreed to pay the former CEO severance payments in accordance with his existing employment agreement totaling $527,500 and the maintenance of health benefits for a period of up to one year from the separation date. The separation agreement also provided for the modification of existing stock option grants such that all unvested portions of existing stock option grants were immediately vested and all existing stock option grants became exercisable for up to 90 days from the date of separation as in accordance with the terms of the original grants. The former CEO is subject to restrictive covenants, including non-competition and non-solicitation provisions. The severance payments and stock-based compensation related to the modification of existing grants was included as part of general and administrative expenses for the year ended December 31, 2015 in the accompanying statement of operations.

 

Office Lease

 

In August 2013, the Company entered into a lease for new corporate office space location in Baltimore, Maryland. The lease provides for three months of rent abatement and includes escalating rent payments. Rent expense is recognized on a straight‑line basis over the term of the lease. Rent expense amounted to approximately $190,000 and $192,000 for the years ended December 31, 2015 and 2014, respectively. Pursuant to the terms of such lease, the Company’s future lease obligation is as follows:

 

 

Obligations to Contract Research Organizations and External Service Providers

 

The Company has entered into agreements with contract research organizations and other external service providers for services, primarily in connection with the clinical trials and development of the Company’s product candidates. The Company was contractually obligated for up to approximately $3.6 million of future services under these agreements as of December 31, 2015. The Company’s actual contractual obligations will vary depending upon several factors, including the progress and results of the underlying services.