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Litigation
6 Months Ended
Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]  
Litigation

Note 3 - 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 agreed to a settlement, which was approved by the iSatori Board of Directors. The documents were generated for presentation to the California Court. These documents were accepted by the court in early June 2015, and iSatori has initiated the payments of the settlement amounts of $60,000.00. Settlement amounts have been accrued into FY 2014 and are reflected in this 10Q 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 ruled in favor of iSatori and its filing of a motion for summary judgment. As a result of this ruling the trademark has been ruled as “descriptive” and therefore not eligible for trademark assignment. Settlement discussions are underway and have been substantively agreed to by both parties. The settlement includes a settlement and release agreement and allows for the assignment of the mark to iSatori and the license of the mark to Wise Sports.