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Commitments and Contingencies
6 Months Ended
Jun. 30, 2019
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
Note 12 – Commitments and Contingencies

Class Action Civil Litigation

From time to time in the ordinary course of the Company’s business, the Company is subject to claims, legal proceedings and disputes.

Edge and the Edge Board were named as defendants in two individual lawsuits and two putative class action lawsuits regarding the Merger, each of which alleged that the registration statement on Form S-4 (Registration No. 333-228937) filed by Edge on December 21, 2018 omitted material information with respect to the proposed transaction, which rendered the registration statement on Form S-4 false or misleading. The case captioned Michael Condon v. Edge Therapeutics et al., case no. 2:19-cv-00152 (the “Condon Action”), was filed on January 4, 2019 in the United States District Court for the District of New Jersey. The case captioned Adam Franchi et al. v. Edge Therapeutics et al., case no. 1:19-cv-00058-UNA (the “Franchi Action”), was filed on January 9, 2019 in the United States District Court for the District of Delaware. The case captioned Jeffrey L. Prince v. Edge Therapeutics et al., case no. 1:19-cv-00280 (the “Prince Action”), was filed on January 10, 2019 in the United States District Court for the Southern District of New York. The case captioned Brian Foldenauer et al. v. Edge Therapeutics et al., case no. 1:19-cv-00280 (the “Foldenauer Action”), was filed on January 22, 2019 in the United States District Court for the District of Delaware.

The causes of action set forth in each of the Condon Action, the Franchi Action, the Prince Action and the Foldenauer Action were (i) a claim against Edge and Edge’s board of directors for violations of Section 14(a) of the Exchange Act, as well as (ii) a claim against Edge’s board of directors for violations of Section 20(a) of the Exchange Act. In the Franchi Action, Private PDS was also named as a defendant in respect of the claim regarding violations of Section 20(a) of the Exchange Act. In each case, the plaintiffs sought, among other things, injunctive relief, rescissory damages, and an award of attorneys’ fees and expenses.

On January 18, 2019, the plaintiffs in the Prince Action filed a motion for a preliminary injunction barring any stockholder vote on the Merger until revised disclosures was made to Edge’s stockholders, and withdrew the motion for a preliminary injunction on February 1, 2019.

In March 2019, Edge (and Private PDS, with respect to the Franchi Action) settled each of the aforementioned actions in their entirety, and each case was voluntarily dismissed with prejudice, as follows: (i) the Franchi Action was dismissed on March 12, 2019; (ii) the Condon Action was dismissed on April 22, 2019; and (iii) the Prince Action and the Foldenauer Action were dismissed on March 14, 2019.

Retainer/Advisory and Finders’ Fee Agreements

The Company entered into several consultant agreements beginning in May 2016 for retainer fees, advisory fees and finders’ fees. The fees were settled either with cash or issuance of common stock. Expenses recorded for the three and six months period ended June 30, 2018 were $181,500 and $299,000 respectively. There were no fees paid in the three and six months period ended June 30, 2019.

Employment Matters

The Company has entered into employment agreements or offer letters with each of its executive officers. The employment agreements generally provide for, among other things, salary, bonus and severance payments. The employment agreements generally provide for between 12 months and 24 months of severance benefits to be paid to an executive (as well as certain potential bonus, COBRA and equity award benefits), subject to the effectiveness of a general release of claims, if the executive terminates his or her employment for good reason or if the Company terminates the executive’s employment without cause.  Such severance payments may be provided for as long as 24 months in connection with a termination following a change of control.   The continued provision of severance benefits is conditioned on each executive’s compliance with the terms of the Company’s confidentiality and invention and assignment agreement as well as his or her release of claims.

Rent

For the three and six months ended June 30, 2019 and 2018, rent was $11,400 and $15,644 and $20,300 and $31,287, respectively, for arrangements not impacted by the adoption of ASC 842.