Note 13 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note M – Commitments and contingencies

1.         Leases

The Company leases facilities and certain equipment under agreements accounted for as operating leases. The leases generally contain renewal options and require the Company to pay all executory costs such as maintenance and insurance. The Company leases approximately 4,000 square feet located in Tarrytown, NY that expires on March 31, 2014. The Company also leases approximately 2,900 square feet located at 15 Aba Even Avenue, Herzliya, Israel that expires on December 31, 2013. Rent expense approximated $0.1 million for each of the nine months ended September 30, 2013 and 2012. Future minimum rental payments under non-cancelable operating leases is approximately $0.1 million through March 31, 2014.

2.         Employment agreements

The Company is committed under various employment agreements with senior management. The agreements provide for, among other things, salary, bonus, severance payment, and certain other payments, each as defined in the respective agreements.

3.         Consulting Contracts

The Company is a party to a number of research, consulting, and license agreements, which require the Company to make payments to the other party upon the other party attaining certain milestones as defined in the agreements. The Company may be required to make future milestone payments as of September 30, 2013, totaling approximately $1.9 million under these agreements, of which approximately $0.8 million is payable during 2013 and approximately $1.2 million is payable from 2014 through 2016. The Company is obligated to make future royalty payments to iCo, Mablife, Yissum, Dalhousie and Shire.

4.         Litigation

In connection with the merger, the Company became the defendant in litigation involving a dispute between the plaintiffs Kenton L. Cowley and John A. Flores, and Epicept Corporation. The complaint alleges breach of contract, breach of covenant of good faith and fair dealing, fraud and rescission of contract with respect to the development of a topical cream containing ketamine and butamben, known as EpiCept NP-2. A summary judgment in the Company’s favor was granted in January 2012 and the plaintiffs filed an appeal in the United States Court of Appeals for the Ninth Circuit in September 2012. A hearing on the motion occurred in November 2013 and a decision is anticipated in early 2014. The Company believes this complaint is entirely without merit and that incurrence of a liability is not probable.