Annual report pursuant to Section 13 and 15(d)

12. Commitments

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12. Commitments
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Commitments

In August 2013, the Company entered into an agreement to lease office and laboratory space in Lexington, Massachusetts under an operating lease with a commencement date of January 1, 2014 and a termination date of January 31, 2019. With the execution of this lease, the Company is required to maintain a $66,000 letter of credit as a security deposit. In connection with the Lexington lease, the Company recorded $120,299 as prepaid rent as of December 31, 2014, with $90,838 recorded as a non-current asset. The Company also incurred a liability of $89,074 with respect to the Company’s contribution to the landlord’s leasehold improvements, of which $73,117 is outstanding as of December 31, 2014, with $56,383 recorded as a non-current liability. This liability is repayable as additional rent expense over the term of the lease and bears interest at 6%. In addition, the Company leases office space in London, UK, which is due to expire in March 2017. In September 2014, the Company served notice to the landlord of the office space in London in accordance with the terms of the break clause in the lease, with an expected termination date in March 2015. The Company also leased laboratory space in London, UK during 2013, however this lease was terminated in December 2013.

 

The Company’s contractual commitments under all non-cancelable operating leases as of December 31, 2014 are as follows:

 

As of December 31,   Total Operating Leases  
2015   $ 94,686  
2016     98,645  
2017     102,604  
2018     106,563  
2019     8,908  
Total minimum lease payments   $ 411,406  

 

Rent expense is calculated on a straight-line basis over the term of the lease. Rent expense under the Company’s operating leases was $172,821 and $280,606 for the years ended December 31, 2014 and 2013, respectively.