Note 7 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies Disclosure [Text Block]

 (7)  Commitments and Contingencies

We are obligated under certain noncancellable operating leases for assembly, warehouse and office space.  A summary of the minimum rental commitments under noncancellable leases is as follows:

Years ending December 31,
2012	$	628
2013		413
	$	1,041

Rent expense was approximately $675,000 and $647,000 for the years ended December 31, 2011 and 2010, respectively.   

On June 17, 2010, the Court approved the final class action settlement regarding the consolidated securities class action filed in June 1999 in the United States District court of the District of Delaware.  The court entered an order dismissing with prejudice all claims against all defendants in the litigation.  The settlement provided for a total payment to the class of $16.5 million in cash and a payment of the first $1.25 million, after attorneys fees and costs, actually received (if any) by us in connection with our litigation against our former insurance broker Thilman & Filipini, LLC (“T&F”) and our former insurance carrier, Zurich American Insurance Company ("ZAIC").  Of the $16.5 million cash settlement amount, $5 million was paid by us, which we accrued as a liability during the quarter ended September 30, 2009 and was paid to the settlement fund in March 2010.  As part of the settlement, the underwriters for the initial public offering released us from any indemnification obligation.  On July 19, 2010, the appeals period for the final order of dismissal expired and the litigation was fully and finally resolved.

We maintain directors' and officers' and corporate liability insurance to cover certain risks associated with, among other things, securities law-based claims filed against us or our directors and officers.  During the period covering our initial public offering, we maintained insurance from multiple carriers, each insuring a different layer of exposure, up to a total of $50 million.  In June 1999, a class action lawsuit, which we settled in June 2010, was filed against us concerning our initial public offering. We have met the financial deductible of our directors' and officers' insurance policy for the period covered by the lawsuit.  On March 30, 2006, ZAIC, which provided insurance coverage totaling $5 million for the layer of exposure between $15 million and $20 million, notified us that it was denying coverage of claims in the class action lawsuit because it was allegedly not timely notified of the class action lawsuit.  On October 11, 2007, we filed a suit against our former insurance broker, T&F, asserting various causes of action arising out of T&F's alleged failure to notify ZAIC of the class action lawsuit.  T&F moved to dismiss our lawsuit on the basis that our suit was premature in that we had not been damaged because we had not paid any sums in satisfaction of a judgment or settlement of the class action securities litigation.  That motion was denied pursuant to a Memorandum Opinion and Order dated September 26, 2008.  On November 16, 2009, we filed a Second Amended Complaint reasserting our causes of action against T&F and adding ZAIC as a defendant to the lawsuit, asserting various causes of action against it arising out of its denial of coverage for the class action lawsuit. 

On December 15, 2011, we entered into a Compromise Settlement Agreement and Mutual Release with ZAIC to settle the Company’s insurance coverage lawsuit against ZAIC.  Pursuant to the Settlement Agreement, ZAIC agreed to pay the Company $7.65 million in cash.  In addition, we and ZAIC agreed to release, the other party and the other party’s affiliates, directors, officers and attorneys from any claims related to the lawsuit or the facts and circumstances at issue in the litigation.  We also agreed to certain indemnification obligations.  Pursuant to the terms of the settlement reached by the Company in the underlying class action lawsuit, the Company was required to pay the class action plaintiffs the first $1.25 million from the Company’s recovery against ZAIC in the coverage lawsuit.  Prior to December 31, 2011, we received the full settlement amount of $7.65 million and remitted the portion due to the class action plaintiffs of $1.25 million.  The recovery of settlement expense, net of $1.3 million in legal fees incurred during 2011 was recorded during the year ended December 31, 2011 and is included in the accompanying statement of operations.

From time to time, we are engaged in various other legal proceedings in the normal course of business. The ultimate liability, if any, for the aggregate amounts claimed cannot be determined at this time.