7.	Commitments and Contingencies

The Company has contracted with drug manufacturers and other vendors, including the clinical research organization (CRO) overseeing the clinical trial of one of the Company’s drug candidates, to assist in the execution of the Company’s pre-clinical and clinical trials, analysis, and the preparation of material necessary for the future filings of new drug applications (NDA’s) with the U.S. Food and Drug Administration (FDA). The contracts are cancelable at any time, but obligate the Company to reimburse the providers for any time or costs incurred through the date of termination.

The Company has executed a noncancellable operating lease agreement for its corporate office. The lease has free and escalating rent payment provisions. The Company recognizes rent expense under such lease on a straight-line basis over the term of the lease. As of December 31, 2013, future minimum lease payments under the operating lease agreement are as follows:


2014	$	68,534
2015		70,576
2016		72,678
2017		67,828

	$	279,616

During June 2011, in connection with the renewal of the corporate office lease, the Company entered into the first amendment to the lease. The amendment extends the original lease term for five years and relocates the Company into another space within the same building. The corporate office lease is cancellable upon the payment of an early termination penalty during 2015. The relocation occurred in November 2011. The lease provides for fixed increases in minimum annual rent payments, as well as rent free periods. The total amount of rental payments due over the lease term is being charged to rent expense on the straight-line method over the term of the lease. The differences between rent expense recorded and the amount paid is credited or charged to accrued expenses and other liabilities in the accompanying balance sheets. Rent expense was $69,930, $65,310 and $61,653, respectively, for the years ended December 31, 2013, 2012 and 2011. The Company’s leases expire on various dates through November 2017. Subsequent to year end, during February 2014, the Company entered into the second amendment of the lease for an additional contiguous space under substantially the same terms.

Securities Class Action Lawsuit

In October 2013 and November 2013, three securities class action lawsuits were filed against the Company and certain of its executive officers and directors seeking unspecified damages in the U.S. District Court for the Southern District of Florida (the Court). The complaints, which were substantially identical, purported to state a claim for violation of federal securities laws on behalf of a class of those who purchased the Company’s common stock between October 31, 2012 and October 18, 2013. Two of the cases were voluntarily dismissed by the plaintiffs and the Court granted the Company’s motion to dismiss the third case on January 3, 2014. However, the Court granted leave to the plaintiffs to file an amended complaint within 20 days.

On January 23, 2014, the plaintiffs filed an amended complaint against the Company and one of its executive officers seeking unspecified damages. The amended complaint purports to state a claim for alleged misrepresentations regarding the development of Firdapse™ on behalf of a class of those who purchased the Company’s common stock between August 27, 2013 and October 18, 2013. The Company has filed a motion to dismiss the amended complaint, which has not yet been ruled upon by the Court. The Company believes that the amended lawsuit, which is at a very early stage, is without merit, and the Company intends to vigorously defend this lawsuit. While there can be no assurance, the Company does not expect this lawsuit to have a material adverse effect on the Company, and no amounts have been accrued with respect to this potential contingent liability in the accompanying December 31, 2013 balance sheet.

Obligations under capital leases are not significant.

For commitments related to the Company’s license agreements with BioMarin (defined below), Brookhaven (defined below), and Northwestern (defined below), see Note 8.