subsequently maintain the effectiveness of the registration statement, then in addition to any other rights the investor may have, we will be required to pay the investor liquidated damages, in cash, equal to one percent per month of the aggregate purchase price paid by such investor.

 

The SEC declared our Form S-3 effective on June 1, 2005, which was within 60 days of closing. We believe that the events that would lead to a suspension of effectiveness are unlikely to occur. However, if we fail to maintain the effectiveness of the registration statement in the future, liquidated damages could be substantial.

 

None

 

Our principal executive offices are located in an approximately 62,000 square foot facility in Germantown, Maryland. We moved into this facility in May 2003 and completed the transfer of our laboratory function to this facility in December 2003. The lease for this facility expires in June 2013.

 

In August 2004, we entered into a lease for approximately 53,000 square feet of additional research and development space, in a building adjacent to the Company’s existing headquarters in Germantown, Maryland. The lease for this facility expires in May 2013.

 

We previously had an approximately 8,432 square foot lab and office facility in Gaithersburg, Maryland, the lease for which expired in November 2005. Also, in September 2004 we rented an office of approximately 6,681 square feet for engineering space in Bridgewater, New Jersey under a short-term lease that expires in September 2006.

 

We believe that our facilities are suitable and adequate to meet our current needs.

Item 3.   Legal Proceedings

 

We are not a party to any material pending legal proceedings, other than ordinary routine litigation incidental to our business, except as discussed below.

 

In December 2003, Aventis and Aventis Pharmaceuticals Inc., now part of sanofi-aventis, brought an action against Advancis in the U.S. District Court for the District of Delaware. The Complaint contains six counts, based upon both federal and state law, alleging, in essence, that the we infringed on the plaintiffs’ trademark. The plaintiffs seek injunctive relief, as well as unspecified monetary damages. Discovery has been completed, the trial was held in May 2005, and we are currently waiting for the judgment of the court. We believe that the ultimate outcome of this matter will not have a material adverse effect upon the our financial position but could possibly have a material adverse effect on our results of operations for a particular period.

 

No matters were submitted to a vote of our security holders during the fourth quarter of the fiscal year ended December 31, 2005.