11. Commitments and Contingencies Operating Lease In June 2016, the Company entered into a lease for its corporate headquarters and research facility in Austin, Texas (the Headquarters) under an operating lease agreement (the Lease). The lease will commence on the earlier of (i) the date on which the Company first conducts any business in the new Headquarters, (ii) substantial completion of the improvements made to the new Headquarters as defined in the Lease, or (iii) January 1, 2017 (collectively, the Commencement Date). The initial term of the lease is for a 123 month period, with the option to extend the lease for up to two consecutive 60 month terms. The Company anticipates taking occupancy of the facilities in the latter half of 2016. The lease provides annual base rent of approximately $600,000 in the first year after a three - month rent free period following the Commencement Date, with subsequent annual increases of approximately 3% in the annual base rent. In connection with the lease, the landlord has provided a tenant improvement allowance of approximately $1.9 million to be used by the Company to build-out certain improvements to the Headquarters. The Lease also provides for an additional improvement allowance of up to $1.3 million. The additional allowance, if exercised, will amortize over 120 months on a straight line basis. There have been no draws on the additional improvement allowance as of June 30, 2016. Mirna has obtained a standby letter of credit for the initial amount of approximately $2.4 million, which may be drawn down by the landlord in the event of default. If Mirna meets certain requirements, the amount due under the Letter of Credit may be reduced to approximately $800,000 . Under the Lease agreement, future minimum payments payable are approximately as follows: Operating Period ending December 31, Lease 2016 (six months) - 2017 $ 450,930 2018 614,856 2019 633,364 2020 and thereafter 5,306,111 Total $ 7,005,261 Shared Services Agreement Pursuant to a shared services agreement