Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

(6)  Commitments and Contingencies

(a) Consulting Agreements:

On April 29, 2011, the Company and Dr. Michael Kaplitt (“Dr. Kaplitt”), one of the Company’s scientific co-founders and a member of its Scientific Advisory Board (the “SAB”), executed a letter agreement that extended the Company’s consulting agreement with Dr. Kaplitt from April 30, 2011 until April 30, 2012 at the annual rate of $175. Related to this agreement, the Company granted Dr. Kaplitt non-qualified stock options to purchase 150,000 shares of Common Stock at an exercise price of $0.80 per share on May 10, 2011. The fair value of the options will be recognized over the period during which the services are received. The amount charged to operations related to these options during the six months ended June 30, 2011 was $59.

Effective September 30, 2010, the Company extended, for a period of one year, the term of its consulting agreement with Dr. Matthew During, one of the Company’s scientific co-founders and a member of the SAB.  In connection with such extension, the Company granted Dr. Matthew During non-qualified stock options to purchase 150,000 shares of Common Stock at an exercise price of $0.80 per share on May 10, 2011. The fair value of the options will be recognized over the period during which the services are received. The amount charged to operations related to these options during the six months ended June 30, 2011 was $63.

(b)  Legal Proceedings:

On February 7, 2011, plaintiffs Robert Zeman (“RZ”) and his wife, Julia Zeman (“JZ”), filed a complaint (the “Complaint”) in the United States District Court for the District of Massachusetts against the Company and other named defendants involved in the Company's Phase 2 clinical trial for the treatment of advanced Parkinson's disease.  The Complaint is styled Robert Zeman et al v. Ziv Williams, M.D. et al.

The Complaint, among other things, alleges that RZ, a participant in the Phase 2 clinical trial, was injured during the trial's surgical procedure by receiving a double dose of the drug used in the trial on one side of his brain rather than a bilateral dose of such drug as called for by the trial's protocol, and that RZ was not adequately informed of the risks and potential consequences of his participation in the trial.  The Complaint further alleges that JZ suffered loss of consortium as a result of RZ's alleged injuries.

RZ seeks from the Company approximately $15,000 in damages, and JZ seeks from the Company approximately $3,000 in damages.

On July 13, 2011, the plaintiffs filed a motion for leave to amend the Complaint in order to, among other things, (i) add Dr. Kaplitt as an additional defendant, (ii) make allegations against Dr. Kaplitt based on negligence and loss of consortium, and (iii) make additional allegations against the Company regarding vicarious liability based on Dr. Kaplitt’s alleged negligence. RZ does not seek any further damages against the Company based on the additional allegations against the Company set forth in such proposed amendment to the Complaint.

The Company believes that the plaintiffs’ claims against the Company set forth in the Complaint and the proposed amendment to the Complaint described above are without merit, and the Company intends to vigorously defend against such claims.