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Litigation
12 Months Ended
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Litigation

Note 5 - Litigation

 

The Company is engaged in various legal actions, claims and proceedings arising in the normal course of business, including claims related to breach of contracts, product liabilities and intellectual property matters resulting from the Company’s business activities. As with most actions such as these, an estimation of any possible and/or ultimate liability cannot always be determined. The following summaries highlight the current status of certain material commercial litigation in which the Company is involved.

 

On May 17, 2013 and on January 31, 2014 the Company received demand letters from the Environmental Research Corporation, “ERC” requesting substantiation of compliance with the State of California’s Proposition 65 regulations for ten of its products. In October, while the Company was awaiting the results of the compliance testing, ERC contacted the Company again requesting settlement to their initial demand letter. And in February 2014, before compliance testing or any other demand letter validation was completed, ERC contacted the Company again requesting settlement to their second demand letter. After many discussions with ERC, a lawsuit was filed by ERC for the non-compliance issues with the State of California’ Proposition 65 regulations. After many conversations and mediation attempts, both parties have agreed to a settlement, which has been approved by the iSatori Board of Directors. The documents are currently being generated for presentation to the California Court. Once accepted by the court, settlement amounts will be paid. This action is expected to happen in second quarter of 2015. The Company believes this settlement of the lawsuits is in the best interest of iSatori. Settlement amounts have been accrued into FY 2014 and are reflected in this 10K report.

 

On March 24, 2014 the Company received a summons in a civil action filed by Wise Sports Nutrition, LLC claiming alleged trademark infringement for iSatori’s, Garcinia Trim product. Company counsel has made contact with the plaintiff’s attorney and filed a response to the alleged trademark infringement with the Company’s counterclaims. The Company believes the counterclaims have strong merit and are pursuing their defense. Both parties have prepared responses and presented them to the court. The court has recently ruled in favor of iSatori and its filing of a summary judgment. As a result of this ruling the trademark has been ruled as “descriptive” and therefore not eligible for trademark assignment. iSatori has been contacted by the former plaintiff in this case to discuss a favorable settlement with iSatori. Settlement discussions will get underway promptly. The Company believes now that a favorable condition exists for settlement but it is too early in the settlement proceedings to make a determination of the outcome. Therefore, no range of any possible gain or loss can be reasonably estimated as of the date of the financial statements.