In March 2014, the Company entered into an operating facility lease agreement to lease approximately 12,900 square feet in Menlo Park, California for its headquarters building for a period of thirty-nine months. The term of this lease ended in August 2017.

In December 2015, the Company entered into an operating sublease agreement to lease approximately 10,900 square feet of additional office space in Menlo Park for a period of twenty-four months. The term of this lease ended in December 2017.

In March 2017, the Company entered into an operating facility lease agreement for approximately 34,500 rentable square feet located at 1020 Marsh Road, Menlo Park, California. The lease commenced in August 2017 for a period of 86 months with one renewal option for a five-year term. The total obligation under this lease is approximately $17.0 million as of December 31, 2018. The Company is considered the "accounting owner" of the 1020 Space as a build-to-suit lease asset and has recorded a build-to-suit lease obligation on its consolidated balance sheets. Additional information regarding the build-to-suit lease is included in Note 7.

In October 2018, the Company executed a sublease agreement in Palo Alto, California for approximately 4,240 square feet for office space. The rental term of the sublease commenced on October 30, 2018 and expires August 31, 2020. The total obligation for the Company under this lease is approximately $0.3 million.

Rent expense was $0.3 million and $1.5 million, for the years ended December 31, 2018 and 2017, respectively.

Future minimum payments under the Company’s lease obligations as of December 31, 2018, are as follows (in thousands):

Year Ending December 31,
2019	$	3,048
2020		2,980
2021		2,930
2022		3,009
2023		3,089
Thereafter		2,364
	$	17,420

In December 2016, through the Company’s subsidiary, Versartis GmbH, entered into a Commercial Supply Agreement with Boehringer Ingelheim Biopharmaceuticals GmbH (“BI”), pursuant to which the Company engaged BI as a contract manufacturer to manufacture the bulk drug substance for our proprietary long-acting human growth hormone, somavaratan, fill it into the final container and closure and supply such drug product to us for commercial use.

Under the agreement, each calendar year the Company was required to reserve minimum drug substance manufacturing capacity, order from BI a minimum number of batches of drug substance, and purchase and take possession of a minimum number of batches of drug product. If the Company did not order and purchase these minimum quantities, it would have needed to pay fees to BI based on the shortfalls in its product orders or purchases, unless there was a supply failure or supply interruption by BI. The agreement included customary terms and conditions relating to, among other things, forecast, ordering, delivery, inspection, acceptance and product warranties. In September 2017, the Phase 3 VELOCITY trial of somavaratan failed to reach its primary endpoint. As a result, the Company notified BI of its termination of their commercial supply agreement in September 2017 which termination became effective in December 2017.

In May 2016, the Company entered into a Manufacture and Supply Agreement with Owen Mumford Limited, a leading medical device manufacturer, pursuant to which the Company engaged Owen Mumford to: (1) manufacture a proprietary disposable autoinjector device and (2) assemble and supply a final combination product including the device and somavaratan, its proprietary long-acting form of human growth hormone. The Company agreed to supply somavaratan in prefilled syringes to Owen Mumford for incorporation into the final combination product. In September 2017, the Phase 3 VELOCITY trial of somavaratan failed to reach its primary endpoint. As a result, the Company terminated its manufacture and supply agreement with Owen Mumford in October 2017.

The Company conducts research and development programs through a combination of internal and collaborative programs that include, among others, arrangements with contract manufacturing organizations and contract research organizations. The Company had contractual arrangements with these organizations including license agreements with milestone obligations and service agreements with obligations largely based on services performed.

In the normal course of business, the Company enters into various firm purchase commitments related to certain preclinical and clinical studies.

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

As of December 31, 2018 and 2017 the Company is contingently committed to make development and sales-related milestone payments of up to $30.0 million under certain circumstances, and other payments of $10.0 million, as well as royalties relating to potential future product sales under the License Agreement with Amunix. The amount, timing and likelihood of these payments are unknown as they are dependent on the occurrence of future events that may or may not occur, including approval by the FDA of potential drug candidates.

In accordance with the Company’s amended and restated Certificate of Incorporation and amended and restated bylaws, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date and the Company has a director and officer insurance policy that may enable it to recover a portion of any amounts paid for future claims.

The Company may from time to time be involved in legal proceedings arising from the normal course of business. There are no pending or threatened legal proceedings as of December 31, 2018.

As part of the Merger, the Company acquired a settlement with former creditors in 2014, Private Aravive had agreed to make an initial 7.5% cash payment to the creditors with the remainder contingent on future milestone payments, or Contingent Payments, until full repayment of the payables is made. The contingent Payments are to be made from the proceeds received by Private Aravive from any future licensing transactions. The Contingent Payments will be distributed on a pro rata basis with other secured creditors and will be made from at least 10% of any proceeds from any future licensing transactions. The proceeds from any future licensing transactions will be held in an escrow account which will be administered by an independent third party. The creditors agree that the Initial payment and any Contingent Payments represents settlement in full of all outstanding obligations owed to the creditors by Private Aravive and released Private Aravive from all claims. As a result of and in connection with the Merger, the Company determined the fair value of the contingent payable to be approximately $264,000, based upon an appraisal (or valuation) of the assets and liabilities assumed to determine fair values.