Note 4 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(4) COMMITMENTS AND CONTINGENCIES:

Legal Proceedings

From time to time, in the ordinary course of business, we are a party to various claims and legal proceedings. Currently, there are no such claims or proceedings which, in the opinion of management, could have a material adverse effect on our results of operations, financial condition and cash flows, except as follows:

On April 7, 2014, a former student at our Schools Division’s Denver School of Massage Therapy brought a putative class action against our Schools Division,

Nesbitt v. FCNH, Inc. et al.

, in the U.S. District Court for the District of Colorado, alleging violations of the Fair Labor Standards Act (“FLSA”) and various state wage and hour laws. The plaintiff alleges that, in performing certain therapies on individuals from the public as part of the requirements that students perform clinical services (required for a massage therapy license), she was acting as an employee for purposes of the FLSA and applicable state law and was entitled to wages for those services. The complaint seeks unspecified damages. The plaintiff brought the action on behalf of herself and all others similarly situated at the schools operated by our Schools Division. At this time, we are unable to provide an evaluation of the likelihood of an unfavorable outcome, or provide an estimate of the amount or range of potential loss in this matter. Should we be found liable in this matter, the amount that we may be required to pay in connection with such liability could have a material adverse effect on our financial condition and results of operations.

On November 17, 2014, a former sales consultant brought a putative collective action against Ideal Image Development Corporation,

Marlow v. Ideal Image Development Corp.

, in the U.S. District Court for the Eastern District of Tennessee, alleging violations of the FLSA. The plaintiff alleges that she and others working as sales consultants were not paid the applicable minimum wage for certain training and travel work and were not paid overtime for hours worked over 40 in a workweek. The complaint seeks unspecified damages. The plaintiff brought the action on behalf of herself and others similarly situated across the country. Twenty individuals have joined the lawsuit to date. At this time, we are unable to provide an evaluation of the likelihood of an unfavorable outcome, or provide an estimate of the amount or range of potential loss in this matter. Should we be found liable in this matter, the amount that we may be required to pay in connection with such liability could have a material adverse effect on our financial condition and results of operations.