Commitments and Contingencies Legal Matters The Companys industry is characterized by frequent claims and litigation, including claims regarding intellectual property. As a result, the Company may be subject to various legal proceedings from time to time. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Management is not aware of any pending or threatened litigation. License Agreement In December 2012, the Company entered into an exclusive worldwide royalty free license agreement with Merck Sharp &amp; Dohme Corp., or Merck for exclusive worldwide rights for the development and commercialization of serlopitant and two other NK 1 -R antagonists in all human diseases, disorders or conditions, except for the treatment and prevention of nausea or vomiting. The Company paid Merck an upfront non-refundable, non-creditable licensing fee of $1.0 million dollars and issued to Merck shares of its common stock. In addition, the Company has agreed to make aggregate payments of up to $25.0 million dollars upon the achievement of specified development and regulatory milestones. Future milestone payments are considered to be contingent consideration and will be accrued when the applicable milestone is achieved. Through December 31, 2017, no milestones have been achieved under the license agreement. Leases The Company conducts its operations using leased office facilities. In September 2017, the Company entered into a lease agreement. The 30 month lease, beginning on October 1, 2017, provides approximately 14,000 square feet of office space in Redwood City, California. Base annual rent is approximately $55,000 per month, with annual increases. The Company recognizes rent expense on a straight-line basis over the respective lease period. Rent expense for the years ended December 31, 2017, 2016 and 2015 was $400,000 , $208,000 an