Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 5 - Commitments and contingencies

We entered a lease from March 2017 through February 2022 related to the office space in Wayne, Pennsylvania. In August 2017, we entered an amendment to expand our space, which increased the monthly base payments. Effective August 1, 2018, we terminated after one year the amendment for the additional space and reduced our payments to approximately $9,000 per month. Beginning January 1, 2018, we signed a new lease for our UK office effective through February 2022. The total monthly cost for our UK office is approximately $2,900. In March 2017, our Hong Kong office entered into a lease expiring in March 2018, which was then renewed until February 2022 for our current office space, costing approximately $1,900 a month. Our Israel office lease is for a one-year term ending in April 2018, which was then renewed until April, 2019 for approximately $1,900 a month. Rent expense incurred during the three and nine months ended September 30, 2018 and 2017 totaled approximately $51,000 and $179,000 and $83,000 and $224,000 respectively.

The schedule below details the future financial obligations under the active leases:

	Remaining
	Three
	Months										Total
	2018		2019		2020		2021		2022		Obligation
Wayne - Corporate HQ	$	29,470	$	119,015	$	120,309	$	121,633	$	20,309	$	410,736
Israel Office		5,700		7,600		-		-		-		13,300
UK Office		8,666		34,663		34,663		34,663		5,777		118,432
Hong Kong Office		5,569		22,275		22,275		22,275		3,713		76,107
Total Lease Obligations	$	49,405	$	183,553	$	177,247	$	178,571	$	29,799	$	618,575

Legal Matters

By letter dated March 23, 2018, the Company’s Board of Directors notified Richard Ransom, President of the Company, that his employment would be terminated for cause in 30 days unless Mr. Ransom cured the causes for termination, as presented in the letter, within such 30-day period.

On April 12, 2018, Mr. Ransom filed a Complaint in the Court of Common Pleas of Philadelphia County, Pennsylvania (the “Court”), naming as defendants the Company and our CEO, Kelvin Claney.  On May 3, 2018, the Company filed its Preliminary Objections to the Complaint with the Court. On May 22, 2018, Mr. Ransom withdrew the Complaint and filed an Amended Complaint. On or about June 11, 2018, the Company filed its Preliminary Objections to the Amended Complaint. Thereafter, the Court denied the Company’s Preliminary Objections.    The Amended Complaint alleges that on March 20, 2018, Mr. Ransom was terminated without cause, pursuant to the terms of Mr. Ransom’s employment agreement, as a result of certain changes to the Company’s organizational chart and management duties instituted by the Company’s Chief Executive Officer, Kelvin Claney.  The Amended Complaint seeks to recover Mr. Ransom’s severance compensation for a termination without cause, consisting of approximately $626,000 of base salary thorough the remaining term of his employment agreement; benefits and any performance bonus prorated through the date of termination; immediate vesting of 150,000 stock options; and 1,000,000 shares of the Company’s common stock.  The Amended Complaint also alleges that the Company and Mr. Claney defamed Mr. Ransom and seeks damages in an unspecified amount in excess of $50,000.  On October 29, 2018, the Company filed its Answer to the Amended Complaint denying the allegations therein and made certain Counterclaims against Mr. Ransom.  The Counterclaims allege that Mr. Ransom was terminated for Cause and seeks a Declaratory Judgment requesting same.  The Counterclaims also allege that Mr. Ransom breached his fiduciary duty to the Company and misappropriated and/or converted assets of the Company for his own personal benefit.  As a result, the Company seeks damages from Mr. Ransom in an unspecified amount in excess of $50,000. 

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Other than the legal proceeding described above, we are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition, operating results or cash flows.

Other matters

Product Liability Insurance

For certain products, we were (and are) listed as an additional insured party under the product manufacturer’s insurance policy. We purchase our own liability insurance which will expire May 20, 2019. At present, management is not aware of any claims against us for any products sold.