Commitments and Contingencies

The Company has entered into various agreements with third parties and certain related parties in connection with the research and development activities of its existing product candidates as well as discovery efforts on potential new product candidates. These agreements include fixed obligations to sponsor research and development activities, make minimum royalty payments for licensed patents and pay additional amounts that may be required upon the achievement of scientific, regulatory and commercial milestones, including milestones such as the submission of an IND to the FDA and the first commercial sale of the Company’s products in various countries. As of December 31, 2018 the Company is uncertain as to whether any of these contingent events will become realized. There were no milestone payments or royalties on net sales accrued for any of these agreements as of December 31, 2018 and 2017.

From time-to-time, the Company may have certain contingent liabilities that arise in the ordinary course of business. The Company accrues for liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. For all periods presented, other than as set forth below, the Company was not a party to any pending material litigation or other material legal proceedings.

On October 22, 2018, the MPT filed a complaint against BioLab 612, one of our subsidiaries operating in the Russian Federation, in the Arbitration court of Moscow city. The complaint alleges that BioLab 612 breached its 2012 and 2013 contracts with the MPT by completing its third stage of the 502 clinical study and seventh stage of the 612 clinical study in an untimely manner. The MPT sought 19,819,281 rubles (or approximately $0.3 million) in damages and penalties for breach of the 502 contract and 49,519,600 rubles (or approximately $0.75 million) in damages and penalties for breach of the 612 contract. In November 2018, the court dismissed the claim for damages and penalties arising from the alleged breach of the 502 contract. In January 2019, the court ordered BioLab 612 to pay 2,823,377 rubles (or approximately $0.04 million) in damages and penalties for breach of the 612 contract. The MPT had until February 19, 2019 to appeal this decision and to our knowledge has not.

The Company has entered into agreements with substantially all of our employees who, if terminated by the Company without cause as described in these agreements, would be entitled to severance pay.

As of December 31, 2018, the Company had unconditional purchase obligations totaling $94,456 for goods and services, substantially all of which the Company anticipates to incur during 2019.

Operating Leases

The Company leases laboratory facilities and office facilities at various locations with expiration dates through 2019. The Company recognizes rent expense on a straight-line basis over the term of the related operating leases. For the years ended December 31, 2018 and 2017, total rent expense related to the Company’s operating leases was $398,346 and $401,455, respectively. In addition, the Company has subleased some of its facilities.

As of December 31, 2018, future minimum payments under operating leases are as follows:



2019	$	198,039
Total minimum lease payments	$	198,039