Commitments and Contingencies

6 Months Ended

Dec. 31, 2014

Commitments and Contingencies [Abstract]

Commitments and Contingencies

4. Commitments and Contingencies

Contingencies

On April 11, 2013, we filed an answer and counter-claims in response to the complaint Harvest Technologies Corp. (Harvest) filed on October 24, 2012, against the Company in the case captioned as Harvest Technologies Corp. v. Cesca Therapeutics, 12-cv-01354, U.S. District Court, District of Delaware (Wilmington), with the complaint being amended on February 15, 2013, to name the Company’s customer Celling as a co-defendant.  In the complaint, Harvest contends that our Res-Q 60 System infringes certain Harvest patents. The counter-claims are based on anti-trust and other alleged improper conduct by Harvest and further seek declarations that the Res-Q 60 System does not infringe the patents and that the patents are invalid.  Harvest filed an answer on May 20, 2013 in which they denied the assertions made by the Company in the counterclaim.  Management considers it probable that the case will settle and a payment will be made, however, the Company has not made an accrual as of December 31, 2014 due to the immateriality of the expected settlement payment.

We have terminated our contract with a product manufacturing supplier due to various performance issues.  The supplier has agreed to the contract cancellation in exchange for reimbursement of costs incurred and damages of $205, net of recoverable inventory.  During the quarter we issued the supplier a payment of $122 towards this matter.  We have also recorded a loss contingency of $29 during the quarter ended December 31, 2014 for a total accrual of $83 at December 31, 2014.

Warranty

We offer a warranty on all of our products of one to two years, except disposable products which we warrant through their expiration date.  We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary.

The warranty liability is included in other current liabilities in the unaudited balance sheet.  The change in the warranty liability for the six months ended December 31, 2014 is summarized in the following table:

Balance at July 1, 2014	$	498
Warranties issued during the period		93
Settlements made during the period		(84	)
Changes in liability for pre-existing warranties during the period		116
Balance at December 31, 2014	$	623