Note 8 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Legal Matters and Contingencies [Text Block]

8.    COMMITMENTS AND CONTINGENCIES

Leases – We have a noncancellable operating lease expiring in May 2015.  Future minimum lease payments are as follows:

Year ended December 31,
(in thousands)
2013	$	467
2014		467
2015		195
Total minimum lease payments	$	1,129

The above future minimum lease payments are payable to a related party.  See Note 11 for further discussion.

Rental expense for leased facilities and equipment related to continuing operations amounted to $467,000 in each of the years ended December 31, 2012 and 2011.  Non-affiliated companies sublease space from the company. In each of the years ended December 31, 2012 and 2011, we received $33,000 in sublease rental income which reduced our rental expense during these years.

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 sought a ruling to compel the defendant to cease its infringing activities. The matter was mediated and settled amicably between the parties in January 2013 with each party paying their own legal expenses.

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.