Note 10

Commitments and Contingencies:

Leases

The Company has entered into various non-cancelable operating lease agreements for real property and one minor operating lease for personal property. These arrangements expire at various dates through 2016. Rent expense was $1,002, $908 and $458 for the years ended December 31, 2013, 2012 and 2011, respectively. The future annual minimum payments under these leases are as follows:

Year Ending December 31,
2014	$	535
2015		336
2016		56
Thereafter		-
Total	$	927

Litigation

During the year ended December 31, 2013, Radiancy, Inc., a wholly-owned subsidiary of PhotoMedex, commenced legal action against Viatek Consumer Products Group, Inc., over Viatek’s Pearl and Samba hair removal products which Radiancy believes infringe the intellectual property covering its no!no! hair removal devices. The first suit, which was filed in the United States Federal Court, Southern District of New York, includes claims against Viatek for patent infringement, trademark and trade dress infringement, and false and misleading advertising. A second suit against Viatek was filed in Canada, where the Pearl is offered on that country’s The Shopping Channel, alleging trademark and trade dress infringement, and false and misleading advertising. Viatek’s response contains a variety of counterclaims and affirmative defenses against both Radiancy and its parent company PhotoMedex, including, among other counts, claims regarding the invalidity of Radiancy’s patents and antitrust allegations regarding Radiancy’s conduct.

As of March 17, 2014, the case has proceeded into the discovery phase of the litigation. Radiancy, and PhotoMedex, have moved to dismiss PhotoMedex from the case, and to dismiss the counterclaims and affirmative defenses asserted by Viatek. Radiancy has also moved for sanctions against Viatek for failure to provide meaningful and timely responses to Radiancy’s discovery requests. No decision has yet been rendered on these motions. At this time, the amount of any loss, or range of loss, cannot be reasonably estimated as the case is still in the early stages of discovery to determine the validity of any claim or claims made by Viatek. Therefore, the Company has not recorded any reserve or contingent liability related to this particular legal matter. However, in the future, as the case progresses, the Company may be required to record a contingent liability or reserve for this matter.

On December 20, 2013, PhotoMedex, Inc. was served with a putative class action lawsuit filed in the United States District Court for the Eastern District of Pennsylvania against the Company and its two top executives, Dolev Rafaeli, Chief Executive Officer, and Dennis M. McGrath, President and Chief Financial Officer. The suit, filed by Mr. Guy Ratz, a former employee of Radiancy (Israel) Ltd., a wholly-owned subsidiary of the Company, alleges various violations of the Federal securities laws between November 7, 2012 and November 14, 2013, including that the Company and its officers made false and misleading statements or failed to disclose material facts concerning the Company’s business. Two other shareholders filed suit through other firms; the Asbestos Workers Local 14 Pension Fund was appointed the lead plaintiff in this case. The complaint seeks certification of the putative class as well as an unspecified amount of monetary damages, pre-and post-judgment interest and attorneys’ fees, expert witness fees and other costs. The Company and its officers intend to vigorously defend themselves against this lawsuit. At this time, the amount of any loss, or range of loss, cannot be reasonably estimated as the cases have only been initiated and no discovery has been conducted to determine the validity of any claim or claims made by plaintiffs. Therefore, the Company has not recorded any reserve or contingent liability related to these particular legal matters. However, in the future, as the cases progress, the Company may be required to record a contingent liability or reserve for these matters.

Four putative class-action lawsuits have been filed in connection with PhotoMedex’s proposed acquisition of LCA-Vision, Inc. Two of those suits have been filed in the Court of Chancery of the State of Delaware and two have been filed in the Court of Common Pleas of Hamilton County, Ohio. All cases assert claims against LCA-Vision, Inc., its chief executive officer and directors, PhotoMedex, and Gatorade Acquisition Corp., a wholly owned subsidiary of PhotoMedex. The complaints allege that the proposed acquisition undervalues LCA and deprives LCA’s shareholders of the opportunity to participate in LCA’s long-term financial prospects, that the “go shop” provisions of the Merger Agreement are intended to prevent LCA from soliciting or receiving competing offers, that LCA’s Board has breached its fiduciary duties and failed to maximize that company’s stockholder value, and that LCA, PhotoMedex, and Gatorade have aided and abetted the LCA defendants’ alleged breaches of duty. The complaints seek injunctive relief, unspecified damages, and other relief. As of March 17, 2014, defendants have not responded to the complaints in any of the actions. Defendants intend to vigorously defend themselves in the lawsuits. At this time, the amount of any loss, or range of loss, cannot be reasonably estimated as the cases have only been initiated and no discovery has been conducted to determine the validity of any claim or claims made by plaintiffs. Therefore, the Company has not recorded any reserve or contingent liability related to these particular legal matters. However, in the future, as the cases progress, the Company may be required to record a contingent liability or reserve for these matters.

The Company and certain of the Company’s subsidiaries are involved in certain other legal actions and claims, including product liability, consumer, commercial, tax and governmental matters, which arise from time to time in the ordinary course of its business. Management believes, based on discussions with legal counsel, that these other litigation matters and claims will likely be resolved without a material effect on the Company’s consolidated financial position, results of operations or liquidity. However, litigation is inherently unpredictable, and excessive verdicts can result from litigation. Although the Company believes that it has substantial defenses in these matters, the Company may, in the future, incur judgments or enter into settlements of claims that could have a material adverse effect on our results of operations in a particular period. As of December 31, 2013, management believes that there are not any contingencies that might cause a significant loss or that the occurrence is considered to be probable.

Employment Agreements

The Company has severance agreements with certain key executives and employees that create certain liabilities in the event of their termination of employment by the company without cause, or following a change in control of the Company. The aggregate commitment under these executive severance agreements, should all covered executives and employees be terminated other than for cause, was approximately $1,427 as of December 31, 2013, based on 2013 salary levels. Should all covered executives and certain key employees be terminated following a change in control of the Company, the aggregate commitment under these executive severance agreements at December 31, 2013 was approximately $1,174, based on 2013 salary levels.