10.

Commitments and contingencies

Operating lease commitments

The Company has several operating leases, primarily for offices. Payments under operating leases are expensed on a straight-line basis over the periods of their respective leases, and the terms of the leases do not contain rent escalation, contingent rent, renewal, or purchase options.

Rental expenses incurred under the operating leases for the years ended

December

31,

2014,

2015

and

2016

amounted to

$12,

$33

and

$136,

respectively.

The following table summarizes the future minimum lease payments under the operating lease as of

December

31,

2016:

			$
Year ending December 31, 2017			155
Year ending December 31, 2018			57
Total			212

Royalty payment

As part of the consideration to the seller for acquiring the worldwide patent of Plinabulin excluding the PRC and Hong Kong, Wanchun Biotech was required to pay royalties on a quarterly basis equal to

20%

of gross proceeds from the sales of the product, commencing on the

first

commercial sale of such product for

ten

years.

February

2015,

the Company, Wanchun Biotech and Fortis Advisors LLC, in its capacity as an agent of the former stakeholders of the seller of the patent of Plinabulin transferred to Wanchun Biotech, entered into an agreement to terminate such royalty payment arrangements. The termination agreement will be effective upon the consummation of the Company’s IPO in the United States. If the IPO is consummated within

three

years following the agreement date, the Company is required to issue and allot such number of ordinary shares representing

10%

of the Company’s fully-diluted equity capitalization immediately prior to the IPO to a single corporate entity designated by the seller in lieu of the royalty payment. In connection with the Company IPO on the NASDAQ Capital Market completed on

March

14,

2017

(Note

11),

the Company issued

2,112,963

ordinary shares to Nereus Trust, an entity designated by the seller, and the royalty payment arrangements were terminated.