Commitments and Contingencies

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Note 9.

Commitments and Contingencies

The Company currently leases 19 vehicles for sales and service employees, delivery and other purposes with expirations ranging from July 2015 through June 2018. The current minimum monthly payment for these vehicle leases is approximately $6,214.

The Company has several operation leases for office, laboratory and manufacturing space. The Company’s operating lease for one of its German facilities can be cancelled by either party with a 3 months’ notice, its Poland facility can be terminated by either party with a six month notice. Monthly rent payments for the German and Poland facilities are Euro 4,000 ($4,465 as of June 30, 2015) and PLN 6,240 ($1,662 as of June 30, 2015) respectively. The Company’s laboratory facility in Chicago, IL terminates June 30, 2016 and requires monthly payments of $1,070. The Company also subleases its former Chicago laboratory facility for $3,948 per month. The lease for this facility terminates October 30, 2016 and requires monthly rent payments of $4,594. The Company’s Orlando facility has escalating rents ranging from $2,345 to $2,563 per month and terminates July 31, 2018. The total aggregate monthly lease payments (net of the sublease) required on these leases is approximately $9,400.

The Company also leases IT Hardware and Software for 3-D Design and incurs a monthly lease rate of $1,646.

In 2014, the Company became subject to a lawsuit brought by D&D Technologies, Inc. (“D&D”) in the state of New Jersey for breach of contract and breach of implied covenant of good faith that occurred in 2013 and prior by the former CytoCore for failure to pay for past contractual services. The original complaint was dismissed and then refiled by D&D. D&D is seeking damages over $86,000 plus equitable relief. In the second quarter of 2015, the Company and D&D reached a settlement agreement with D&D Technologies, Inc for $15,000. This settlement has been accrued as of June 30, 2015 and included in account payable and accrued expenses on the accompanying condensed consolidated balance sheet. The balance was paid to D&D Technologies by the date of the filling.

The Company’s former auditor L.J. Soldinger and Associates filed a claim against the Company in Illinois’ Lake County Superior Court. The Company believes the claims are without merit and is adequately reserved for costs associated with the claim.