Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies

Commitments and Contingencies

12.         Commitments and Contingencies

Leases

The Company leases office spaces in King of Prussia, Pennsylvania, San Diego, California, Dublin, Ireland and laboratory and office space in Vienna, Austria under agreements previously classified as operating leases.

The lease agreement in King of Prussia, Pennsylvania expires on December 15, 2023 and does not include any renewal options. The agreement provides for an initial monthly base amount plus annual escalations through the term of the lease.

The lease agreement in San Diego, California expired on June 30, 2019 and was not renewed by the Company. In the third quarter of 2020, the Company entered into a month-to-month sublease agreement for office space for one employee in San Diego, California through March 31, 2021.

For the lease agreement in Vienna Austria, the Company can terminate the lease without the landlord’s consent and without paying a termination penalty by giving six months’ notice to the landlord. The agreement provides for a monthly base fixed amount. The Company is in the process of determining the appropriate space needed in the building based on its needs. As a result, the Company may negotiate a new lease or evaluate additional or alternate spaces. As such, the Company has classified the agreement as a short-term lease. Starting in the third quarter of 2019, the Company subleased certain space at its leased cost.

In March 2019, the Company entered into a lease agreement for office space in Dublin, Ireland which expires on April 30, 2021. The agreement can be automatically renewed by both parties equal to the current lease term but for no less than three months. The agreement provides for a monthly based fixed amount of 7,000 euros beginning on the commencement date which was in May 2019.

In addition to the monthly base amounts under the lease agreements, the Company is required to pay its proportionate share of real estate taxes and operating expenses during the lease term for the King of Prussia lease.

For the nine months ended September 30, 2020, the Company’s operating lease expense was $1.0 million.

As of September 30, 2020, the lease term of the King of Prussia operating leases was 3.1 years and the discount rate was 9.8%.

As of September 30, 2020, other information related to the operating leases were as follows:

Operating Cash Flow Supplemental Information:

(in thousands)	September 30, 2020
Cash paid for amounts included in the measurement of the operating lease liabilities	$	379
Right-of-use assets obtained in exchange for operating lease obligations	$	1,387

The following table sets forth by year the required future payments of operating lease liabilities:

(in thousands)	September 30, 2020
2020	$	128
2021		515
2022		522
2023		507
Total lease payments		1,672
Less imputed interest and amortization differences		(225)
Present value of operating lease liabilities	$	1,447

Legal Proceedings

On May 8, 2019, a putative class action lawsuit was filed against the Company and its Chief Executive Officer in the United States District Court for the Southern District of New York, captioned Larry Enriquez v. Nabriva Therapeutics PLC, and Ted Schroeder, No. 19-cv-04183. The complaint purported to be brought on behalf of shareholders who purchased the Company's securities between November 1, 2018 and April 30, 2019. The complaint generally alleged that the Company and its Chief Executive Officer violated Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making allegedly false and/or misleading statements and omitting to disclose material facts concerning the Company's submission of an NDA to the FDA for marketing approval of CONTEPO for the treatment of cUTI in the United States and the likelihood of such approval. The complaint sought unspecified damages, attorneys' fees, and other costs.

On May 22, 2019, a second putative class action lawsuit was filed against the Company and its Chief Executive Officer in the United States District Court for the Southern District of New York, captioned Anthony Manna v. Nabriva Therapeutics PLC, and Ted Schroeder, No. 19-cv-04713. The complaint purported to be brought on behalf of shareholders who purchased the Company's securities between November 1, 2018 and April 30, 2019. The allegations made in the Manna complaint were similar to those made in the Enriquez complaint, and the Manna complaint sought similar relief. On May 24, 2019, these two lawsuits were consolidated by the court. The court appointed a lead plaintiff and approved plaintiff's selection of lead counsel on July 22, 2019.

On September 23, 2019, plaintiff filed an amended complaint, adding the Company's Chief Financial Officer and Chief Medical Officer as defendants; the amended complaint purports to be brought on behalf of shareholders who purchased the Company's securities between January 4, 2019 through April 30, 2019, and otherwise includes allegations similar to those made in the original complaints and seeks similar relief. The Company's pre-motion letter to dismiss the amended complaint was due to plaintiff on October 21, 2019, and plaintiff responded to the Company via a letter on November 4, 2019. On November 18, 2019, the Company filed a pre-motion letter to dismiss with the Court, seeking leave to move to dismiss and setting forth why a motion to dismiss is warranted. On April 28, 2020, the Court dismissed the amended complaint without prejudice and granted plaintiff twenty days to show cause why the lawsuit should not be dismissed with prejudice. On May 8, 2020, the Court granted plaintiff a 21-day extension to show cause. On June 8, 2020, plaintiff filed a letter application to the court seeking leave to file a proposed second amended complaint, and on

June 23, 2020, the court directed plaintiff to file the proposed second amended complaint. Plaintiff did so on June 24, 2020. The Company filed an answer to the second amended complaint on July 8, 2020.

On October 21, 2020, the parties mediated this case and reached a settlement, subject to court approval. The settlement will be covered in full by the Company´s directors’ and officers’ insurance.

Other Commitments and Contingencies

The Company has other contractual commitments related primarily to contracts entered into with contract research organizations and contract manufacturing organizations in connection with the conduct of clinical trials and other research and development activities. During the nine months ended September 30, 2020, there were no material changes outside the ordinary course of the Company’s business to its contractual obligations relating to contract research organizations and contract manufacturing organizations.

The Company has no contingent liabilities in respect of legal claims arising in the ordinary course of business.