3. Debt, Commitments and Contingencies

Commercial Bank Debt

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

	June 30, 2016			December 31, 2015
Commercial bank debt	$	3,515		$	5,202
Less debt discount, net of current portion		—			(6	)
Commercial bank debt, net of debt discount		3,515			5,196
Less current portion of commercial bank debt		(3,515	)		(3,420	)
Commercial bank debt, net of current portion	$	—		$	1,776
Current portion of commercial bank debt	$	3,515		$	3,420
Current portion of debt discount		(26	)		(54	)
Current portion of commercial bank debt, net of debt discount	$	3,489		$	3,366

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

	June 30, 2016
2016	$	1,811
2017		2,310
		4,121
Less interest and final payment		(606	)
Commercial bank debt	$	3,515

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 three months ended June 30, 2016 and 2015 was $0.1 million. Rent expense for the six months ended June 30, 2016 and 2015 was $0.2 million.

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% and matured at the earlier of (i) May 2015, (ii) a liquidation event, or (iii) the closing of an initial firm commitment underwritten public offering of our common stock pursuant to a registration statement under the Act, at which time all outstanding principal and accrued interest amounts would be due, unless previously converted. 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.

In June 2016, we entered into a sublease agreement with a tenant of our landlord for additional facility space in our existing building that commences in August 2016 and will expire in June 2017.

Future minimum payments under the non-cancelable operating lease as of June 30, 2016 were as follows (in thousands):

	Operating Lease
2016	$	438
2017		386
Total	$	824

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 six months ended June 30, 2016, we provided $0.4 million of additional funding to TSRI for research conducted between January 2016 through May 2016.

During the three months ended June 30, 2016 and 2015, excluding the fair value of the common stock issued to TSRI described above, we recognized expense under the agreement in the amount of $0.3 million and $0.2 million, respectively. During the six months ended June 30, 2016 and 2015, 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 and $0.3 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 three months ended June 30, 2016 and 2015, we provided charitable donations to the National Foundation for Cancer Research of $0.1 million. During the six months ended June 30, 2016 and 2015, we provided charitable donations to the National Foundation for Cancer Research of $0.2 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

In June 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 total payment in the mid seven figures. In addition, we are billed for consumables on a pass-through basis. In the next 12 months, we are committed to pay Fujifilm approximately $1.6 million based on development and production milestones. During the three months ended June 30, 2016 and 2015, expenses associated with this agreement, excluding pass through consumables, were $1.3 million and $0.3 million, respectively. During the six months ended June 30, 2016 and 2015, expenses associated with this agreement, excluding pass through consumables, were $2.9 million and $0.7 million, respectively.