Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

8. Commitments and Contingencies

Leases

In October 2014, we entered into a five-year operating lease agreement for office space in Radnor, Pennsylvania. Rent payments under this lease commence May 1, 2015, with payment amounts escalating each May 1 thereafter through the end of the lease term. In December 2015, we entered into a First Amendment to this lease agreement (Amended Lease) to lease approximately 8,500 rentable square feet of office space in Radnor, Pennsylvania. This Lease amends our existing lease agreement to replace our existing premises of approximately 4,000 rentable square feet of office space, and we are expected to commence leasing the larger office space in April 2016. Rent payments under the Amended Lease are expected to commence June 1, 2016, with payment amounts escalating each June 1 thereafter through the end of the 62-month lease term.

In November 2015, we entered into a one-year operating lease agreement for office space in Madison, Connecticut, with two annual renewal options of one year each. Rent payments under this lease commenced on November 1, 2015, and increase with each renewal period. Prior to that and through October 2015, we leased a facility in New Haven, Connecticut. Rent expense under these operating leases, in thousands, was $143 and $50 for the years ended 2015 and 2014, respectively. All leases are non-cancelable.

Our annual future minimum lease payments under these leases are as follows (in thousands):


	Operating Lease Payments
2016	$	232
2017		311
2018		318
2019		324
2020		330
Thereafter		139
Total minimum lease payments	$	1,654

Contractual Obligations

In June 2015, we entered into a contract with a third party for up to $3.8 million in clinical manufacturing supplies to support our ongoing clinical trials for ganaxolone. Delivery is expected to begin in the first quarter of 2016 and complete by the end of the year. In July 2015, we paid $1.0 million of this commitment, which is recorded in prepaid expenses and other current assets as of December 31, 2015. The balance of $2.8 million is due in 2016.

Employee Benefit Plan

We maintain a Section 401(k) retirement plan for all employees. Employees can contribute up to 50% of their eligible pay, subject to maximum amounts allowed under law. We may make discretionary profit sharing contributions, which vest over a period of four years from each employee’s commencement of employment with us. We have not made any discretionary contributions.

License Agreement

We are obligated to pay royalties pursuant to a license agreement with Purdue as a percentage of net product sales for direct licensed products, such as ganaxolone. The obligation to pay royalties expires, on a country‑by‑country basis, 10 years from the first commercial sale of a licensed product in each country. The agreement also requires that we pay Purdue a percentage of the non‑royalty consideration that we receive from a sublicensee and a percentage of milestone payments for indications other than seizure disorders and vascular migraine headaches not associated with mood disorders. Under the license agreement, we are committed to use commercially reasonable efforts to develop and commercialize at least one licensed product.