Commitments and contingencies

12 Months Ended

Dec. 31, 2011

Commitments and contingencies

Note 12. Commitments and contingencies

Legal Proceedings

Settled in 2011

MedPlast Elkhorn, Inc. In May 2009, MedPlast Elkhorn, Inc. (“MedPlast”) filed suit against the Company in the Circuit Court, Walworth County, Wisconsin (Case No. 09 CV00721). MedPlast alleged that the Company has failed to pay for certain tools and materials used in the manufacturing of the Company’s products. MedPlast asked for payment of $377,000. In November, 2011, the Company entered into a settlement agreement with MedPlast. The terms of the agreement provide for the Company to transfer title for three presses to MedPlast and MedPlast transfed to the Company all molds tools and equipment in its procession. In addition, MedPlast paid the Company $51,000. As a result of this agreement, the Company recorded a charge of $141,000 as a charge to other expense. The Company believes that it has no further liability to MedPlast.

Pending as of December 31, 2011

None

Securities and Exchange Commission

SEC Civil Action.In January 2011, the Securities and Exchange Commission (“SEC”) filed a civil injunction action against the Company, Daniel J. Burns, the former Chairman of the Board of Directors of the Company, and Robert F. McCullough, Jr., Chairman of the Board, Chief Executive Officer and Chief Financial Officer of the Company, in the United States District Court sitting in the Northern District of Illinois. The SEC alleged that between 2003 and 2008, the Company paid compensation to unregistered broker/dealers and failed to accurately report the beneficial ownership of certain of our officers and directors in our SEC filings. In February, 2011, the Company consented to the entry of a final judgment which permanently restrains and enjoins the Company from violating Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Section 15(a) of the Exchange Act, and from aiding and abetting others in such violations. In connection with the foregoing settlement, the Company agreed that for a period of at least two years it will establish and comply with internal policies and procedures designed to prevent it from future violations of certain federal securities laws.

Other claims

Other Creditors. CCI was a party to a number of other proceedings, informal demands, or debt for services brought by former unsecured creditors to collect past due amounts for services. CCI is attempting to settle these demands and unfilled claims. CCI does not consider any of these claims to be material.

During the year ended December 31, 2011, the Company entered into a settlement with a vendor to pay $32,000. As a result, the vendor forgave $15,000 of debt. The settlement was recorded as a reduction in Research and Development expense.

During the year ended December 31, 2010, CCI entered into a settlement with a vendor to pay $69,000. As a result, the vendor forgave $71,000 of debt. The settlement was recorded as a reduction in Selling, General and administration expense. Also in 2010, a former employee entered into a settlement with CCI. The Company paid the former employee $15,000 and recorded a reduction of $64,000 in Research and Development.

Commitments

As a result of cash constraints experienced by the Company, the Illinois Franchise Taxes due for the year 2011, 2010 and 2009 have not been paid. CCI believes that it has made adequate provision for the liability including penalties and interest.