NOTE 10 – COMMITMENTS

Operating leases 

As of December 31, 2016, future minimum lease payments for office space are as follows (in thousands):

Rent expense charged to operations, which differs from rent paid due to rent credits and to increasing amounts of base rent, is calculated by allocating total rental payments on a straight-line basis over the term of the lease. During the years ended December 31, 2016 and 2015, rent expense was $0.7 million and $0.6 million, respectively, and as of December 31, 2016 and 2015, deferred rent payable was $44,000 and $112,000, respectively, including the current portion, which at December 31, 2016 and 2015, was $11,000 and $6,000, respectively, which is included in accrued expenses in 2016 and 2015. In December 2016, the Company terminated the lease of the San Jose office. The costs related to the termination of the lease totaled $72,000 and are included in general and administrative expenses in the accompanied consolidated statement of operations for the year ended December 31, 2016.

Research and development agreements

The Company has contracts with various contract research organizations for which there are outstanding commitments aggregating approximately $7.1 million at December 31, 2016 for future work to be performed.

Defined contribution plan

Effective April 1, 2014, the Company established a qualified defined contribution plan (the “401(k) Plan”) pursuant to Section 401(k) of the Code, whereby all eligible employees may participate. Participants may elect to defer a percentage of their annual pretax compensation to the 401(k) plan, subject to defined limitations. The Company is required to make contributions to the 401(k) Plan equal to 100 percent of each participant’s pretax contributions of up to 19 percent of his or her eligible compensation, and the Company is also required to make a contribution equal to six percent of each participant’s salary, on an annual basis, subject to limitations under the Code. In 2017, the Company reduced the annual contribution to 3%. For the years ended December 31, 2016 and 2015, the Company charged operations $0.3 million and $0.4 million, respectively, for contributions under the 401(k) Plan.