Note 9 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Legal Matters and Contingencies [Text Block]

9. Commitments and Contingencies –

Leases – We renewed a noncancellable operating lease on May 25, 2012 for a three year term ending May 31, 2015. As of June 30, 2012, our future minimum lease payments are as follows:

Year ended December 31,
(in thousands)
2012 (July 1 through December 31, 2012)	$	232
2013		465
2014		465
2015		194
Total minimum lease payments	$	1,356

The above future minimum lease payments are payable to a related party, as explained in Note 11 to the Consolidated Financial Statements contained in our 2011 Form 10-K.

Legal Matters – ChemFree Patent Matter – As reported in our 2011 Form 10-K, on March 12, 2012, the United States Court of Appeals issued its final ruling in the long-standing case brought by ChemFree on a patent infringement matter, affirming the invalidity findings of the lower court with respect to certain claims in four of ChemFree’s patents. As a result of the ruling, ChemFree incurred a liability for certain allowable taxable costs. Accordingly, the company accrued for the estimated amount of such costs and recorded an expense of $75,000 reflected in the category Other Income and a corresponding liability reflected in Other Current Liabilities in its 2011 Consolidated Financial Statements.  The total final amount of the liability for taxable costs was $76,000, which ChemFree paid in April 2012.

On September 29, 2011, ChemFree filed a second patent infringement action against J. Walter in the United States District Court for the Northern District of Georgia, alleging that certain of J. Walter’s products infringe a newly issued patent held by ChemFree. The complaint seeks a ruling to compel the defendant to cease its infringing activities. The discovery phase of the litigation is on hold while the parties attempt to settle the matter.  No resolution has been reached as of the date of this filing.

In the ordinary course of business, from time to time we may be involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations.