Note 8 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

8. COMMITMENTS AND CONTINGENCIES

Litigation

–

Periodically the Company is a party to various legal actions, both threatened and filed, arising in the normal course of business. While the Company does

not

expect that the ultimate resolution of any pending actions will have a material effect on its results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties. As such, there can be

no

assurance that any pending or threatened legal action, which the Company currently believes to be immaterial, does

not

become material in the future.

Purchase Commitments

– Contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. The Company’s purchase orders are normally based on its current manufacturing or other operational needs.

As of

June 30, 2017,

the total contractual obligation related to inventory purchase orders was approximately

$9.3

million. As of

June 30, 2017,

the Company had

no

material commitments to purchase capital assets; however, planned capital expenditures for the remainder of

2017

are estimated at approximately

$1.6

million and will primarily be financed by existing cash and cash equivalents, cash generated from sales, or the Credit Facility. The Company also enters into contracts for outsourced services; however, the contracts generally contain clauses allowing for cancellation without significant penalty.

The Company’s significant long-term obligations are operating leases on its facilities.