5. Debt, Commitments and Contingencies

Commercial Bank Debt

Commercial bank debt and unamortized discount balances are as follows (in thousands):

	December 31,
	2015			2014
Commercial bank debt	$	5,202		$	8,439
Less debt discount, net of current portion		(6	)		(60	)
Commercial bank debt, net of debt discount		5,196			8,379
Less current portion of commercial bank debt		(3,420	)		(3,237	)
Commercial bank debt, net of current portion	$	1,776		$	5,142
Current portion of commercial bank debt	$	3,420		$	3,237
Current portion of debt discount		(54	)		(103	)
Current portion of commercial bank debt	$	3,366		$	3,134

In each of April 2012 and August 2012, we borrowed $1.25 million under a loan and security agreement with Silicon Valley Bank (SVB Loan), at fixed interest rates of 4.89% and 4.85%, respectively. We were obligated to make interest-only payments through December 2012 and, beginning in December 2013, monthly payments of principal and interest through the maturity date in December 2015. The SVB Loan was amended in July 2013 to increase the available credit under the agreement to $10.0 million. In July 2013, we borrowed $5.0 million under the SVB Loan at a fixed interest rate of 5.0% and received $2.9 million of cash proceeds after repayment of the existing principal balance and related accrued interest and fees. In June 2014, we borrowed the remaining $5.0 million of available credit at a fixed interest rate of 5.88% and, subsequent to June 2014, had no available credit under the SVB Loan. We were obligated to make interest-only payments on each $5.0 million borrowing through June 2014 and, beginning in July 2014, monthly payments of principal and interest through the maturity date in June 2017. The final payment due in June 2017 includes an additional fee of $0.5 million, which is being accreted over the term of the debt using the effective interest method and is included in interest expense. The loan is collateralized by all of our assets, other than intellectual property, and contains customary affirmative and negative covenants, reporting requirements and events of default.

In July 2013, in connection with the SVB Loan, we issued a warrant to purchase 59,312 shares of Series D redeemable convertible preferred stock at an exercise price of $2.529 per share. In June 2014, the warrant became exercisable for a total of 118,624 shares of Series D redeemable convertible preferred stock when we borrowed the remaining $5.0 million of available credit under the SVB Loan. In May 2015, upon the effectiveness of our IPO, the Series D redeemable convertible preferred stock warrants with Silicon Valley Bank (SVB) were converted to purchase 14,913 shares common stock.

Future minimum principal and interest payments under our loan and security agreement with SVB, including the final payment, are as follows (in thousands):

	As of December 31, 2015
2016	$	3,622
2017		2,311
	$	5,933
Less interest and final payment		(731	)
Commercial bank debt	$	5,202

Facility Lease

In December 2011, we entered into a noncancelable operating lease that included certain tenant improvement allowances and is subject to base lease payments, which escalate over the term of the lease, additional charges for common area maintenance and other costs. The lease expires in May 2017 and we have an option to extend the lease for a period of five years. Rent expense for the years ended December 31, 2015, 2014 and 2013 was $0.4 million, $0.2 million and $0.2 million, respectively.

In conjunction with this lease, we borrowed $2.0 million under a subordinated unsecured convertible promissory note issued to the venture arm of our landlord. The convertible promissory note carried an annual interest rate of 8.0%. In May 2015, the $2.0 million outstanding principal balance of the convertible promissory note and the $0.5 million accrued interest on the convertible promissory note was repaid in full in connection with our IPO.

Future minimum payments under the non-cancelable operating lease as of December 31, 2015 are as follows (in thousands):

	Operating Lease
2016	$	610
2017	231
	$	841

Research Agreements and Funding Obligations

In October 2007, we entered into a research funding and option agreement for certain technologies from The Scripps Research Institute (TSRI). Under the agreement, we provide funding to TSRI to conduct certain research activities. The agreement renews automatically for successive 12 month periods starting on May 31st of each year unless we provide 30 days’ prior written notice to terminate the agreement. TSRI has the right to terminate the agreement if we fail to make any payment under the agreement or for breach or insolvency. Under the research funding and option agreement, TSRI has granted us options to enter into license agreements to acquire rights and exclusive licenses to develop, make, have made, use, have used, import, have imported, offer to sell, sell, and have sold certain licensed products, processes and services based on certain technology arising from the sponsored research activities. Pursuant to the terms of these license agreements, TSRI is entitled to receive tiered royalties as a percentage of net sales and a percentage of nonroyalty revenue we may receive from our sublicensees or partners, with the amount owed decreasing if we enter into the applicable sublicense or partnering agreement after meeting a specified clinical milestone. In addition, we are obligated to pay TSRI up to an aggregate of $2.75 million under each license agreement upon the achievement of specific clinical and regulatory milestone events. In January 2015, we and TSRI entered into an amended and restated research funding and option agreement pursuant to which we agreed to issue 119,840 shares of our common stock to TSRI in consideration for the adjustment of sublicense payments and the assignment of certain intellectual property rights by TSRI to us. The $1.4 million fair value of the common stock issued to TSRI was recorded to research and development expense. We issued the shares of common stock to TSRI on March 31, 2015.

During the years ended December 31, 2015, 2014 and 2013, excluding the fair value of the common stock issued to TSRI described above, we recognized expense under the agreement in the amount of $0.7 million, $0.7 million and $0.6 million, respectively. A member of our board of directors is a faculty member at TSRI and such payments fund a portion of his research activities conducted at TSRI.

During the years ended December 31, 2015, 2014 and 2013, we provided charitable donations to the National Foundation for Cancer Research of $0.4 million. We have requested that the donations be restricted to certain basic research in cancer biology and therapeutics, a portion of which funds research activities conducted at TSRI in the laboratory of a member of our board of directors.

FUJIFILM Diosynth Biotechnologies U.S.A., Inc. Agreement

On June 16, 2015, we entered into a Master Services Agreement (the MSA) with FUJIFILM Diosynth Biotechnologies U.S.A., Inc. (Fujifilm) to complete the development of the manufacturing process and for the production of the drug substance for Resolaris, our drug in clinical development. Pursuant to the MSA, Fujifilm will provide the drug substance for Resolaris to support future clinical trials, including potential pivotal trials. Under the initial scope of work executed pursuant to the MSA, Fujifilm will conduct process optimization, scale-up and demonstration, and cGMP manufacturing of the drug substance of Resolaris, and we are required to pay Fujifilm based on development and production milestones up to the mid seven figures. In addition, we are billed for consumables on a pass-through basis. During the year ended December 31, 2015, expenses associated with this agreement were $5.1 million.