Note 6 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Legal Matters and Contingencies [Text Block]

6. Commitments and Contingencies – Please refer to Note 8 to our Consolidated Financial Statements included in our 2012 Form 10-K for a description of our commitments and contingencies in addition to those disclosed here.

Legal Matters – 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 infringed a newly issued patent held by ChemFree.  The matter was amicably mediated and settled between the parties in January 2013 with each party paying their own legal expenses.

On April 2, 2013, ChemFree received a letter from Clearwater Environmental Services (“CES”) regarding a claim for additional sales commission that CES alleges is owed to it pursuant to a sales agreement between CES and ChemFree that expired October 31, 2012.  On April 8, 2013, ChemFree sent a letter in reply to CES disputing its claim.  The company believes that all amounts due to CES have been paid in full in accordance with the terms of the sales agreement.  The dispute may result in arbitration and, while management believes it will prevail in the matter, there can be no assurance of the outcome of the dispute.

In the ordinary course of business, from time to time we may become a party to various legal matters 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.  Except as noted above, other commitments and contingencies described in Note 8 to the Consolidated Financial Statements included in our 2012 Form 10-K are unchanged.