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Commitments and Contingencies
6 Months Ended
Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

7. COMMITMENTS AND CONTINGENCIES

 

Litigation

 

From time to time, the Company experiences routine litigation in the normal course of its business.

 

In the third quarter of 2018, the Company received a summons from Bartmann, Perales & Dolter, LLC, the former lessor of the Franklin Park, Illinois, property the Company leased previously, alleging that the Company owes $175,000 in overdue rent payments, property taxes and restoration costs. The Company intends to vigorously defend the allegation and has asserted a counterclaim pursuant to the terms of the lease agreement for reimbursement of costs and expenses to maintain the condition and repair for said property. The management of the Company does not believe this pending litigation will have a material adverse effect on the financial condition or results of operations or cash flows of the Company.

 

Contingent Payments Related to Direct Dose

 

In May 2019, the Company formed Rubicon DTP LLC ("Rubicon DTP") in order to launch a Direct to Patient (DTP) pharmacy solution under the brand names - Direct Dose Rx and Rubicon Rx. On May 17, 2019, the Company acquired certain equipment and other assets from an Indiana based pharmacy operation ("Seller"), including its licenses to operate in 11 states. Direct Dose Rx is focused on the delivery of prescription medication, over-the-counter drugs and vitamins ("Meds") to skilled nursing facilities and hospitals for patients that are being discharged. Rubicon Rx will deliver Meds to patients at their homes. The Company has concluded that as of June 30, 2019 this transaction was not material to its financial statements.

 

The Company has a contingent liability to Seller in the amount of $500,000 in the event that, for the time period between May 17, 2019 and December 31, 2019, Rubicon DTP's revenue is equal to or greater than $4,185,000.

 

The Company has an additional contingent liability to Seller in the amount of $500,000 in the event that, for the time period between January 1, 2020 and December 31, 2020, Rubicon DTP's revenue is equal to or greater than $7,500,000.

 

The Company has an additional contingent liability to Seller if Rubicon DTP is sold for greater than $12 million on or before May 17, 2022, in an amount equal to one of the following: (a) if the aggregate consideration paid for Rubicon DTP is greater than $12 million, but equal to or less than $30 million, then $1.5 million; (b) if the aggregate consideration paid for Rubicon DTP is greater than $30 million, but equal to or less than $60 million, then $2.0 million; (c) if the aggregate consideration paid for Rubicon DTP is greater than $60 million, but less than $100 million, then $3.0 million; or (d) if the total consideration paid for Rubicon DTP is greater than or equal to $100 million, then $4.5 million.

 

Although it is possible that the Company meets one or more of the various targets and is required to make some or all of the above described payments, the Company believes the likelihood is remote.