Operating Leases

12 Months Ended

Dec. 31, 2016

7. Operating Leases

The Company leases office and research space in Rockville, Maryland under an operating lease with a term through October 31, 2023 (as amended to date, the Lease) that is subject to annual rent increases. The Company has the right to sublease or assign all or a portion of the premises, subject to the conditions set forth in the Lease. The Lease may be terminated early by either the landlord or the Company in certain circumstances. In connection with the Lease, the Company received rent abatement as a lease incentive. The annual rent increases and rent abatement have been recognized as deferred rent that is being adjusted on a straight-line basis over the term of the Lease.

In March 2016, the Company amended the Lease (the Lease Amendment) to lease additional space beginning on June 1, 2016. In addition to the other terms of the Lease, the Lease Amendment provided for a tenant improvement allowance reflected in the Company’s financial statements as an increase in capitalized leasehold improvements as incurred and an increase in deferred rent. In May 2016, the Company also paid a security deposit of $52,320 to be held until the expiration or termination of the Company’s obligations under the Lease. The term of the Lease Amendment for the additional space continues through October 31, 2023, the same date as for the premises originally leased under the Lease, subject to the Company’s renewal option set forth in the Lease. The Company also has a one-time option to terminate the Lease effective as of October 31, 2020.

Deferred rent related to the Lease was $822,130 and $243,647 at December 31, 2016 and December 31, 2015, respectively. Total rent expense under the Company’s leases was $784,739, $595,497 and $385,668 for the years ended December 31, 2016, 2015 and 2014, respectively.

The following table presents the future minimum lease payments as of December 31, 2016 under the Lease:


YEAR	AMOUNT
2017	$	941,822
2018		965,368
2019		989,502
2020		1,014,239
2021		1,039,595
After 2021		1,972,254
Total	$	6,922,780