Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

We recognize and disclose commitments when we enter into executed contractual obligations with third parties. We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

On March 13, 2012 the Company received notice that Children’s Hospital Boston and Children’s Medical Center Corporation had filed a lawsuit in Middlesex Superior Court, Middlesex County, Massachusetts seeking to recover amounts alleged to be owed by the Company to the plaintiffs.

On February 1, 2013 the Company entered into a Settlement Agreement and Release with Boston Children’s Hospital (BCH) and Children’s Medical Center Corporation (CMCC) in full settlement of the lawsuit filed by BCH and CMCC seeking to recover amounts alleged to be owed by the Company to the plaintiffs totaling $642,906 plus costs. The amount of $642,906 was included in accrued expenses at December 31, 2012 but was incurred and expensed prior to January 1, 2011.

In settlement of all claims by BCH and CMCC, the Company agreed to pay a lump sum of $185,000 to the plaintiffs. In addition to the lump sum payment, the Company agreed to pay to the plaintiffs an additional sum equal to the then cash value of 20,000 shares of the common stock of Navidea upon the occurrence of the first milestone described in Section 4.2 of the sublicense agreement dated as of July 31, 2012 between Navidea and the Company. This second payment is only due upon the occurrence of the first milestone unless the Company declares bankruptcy or alters its agreement with Navidea in a manner that results in the delay or cancellation of said milestone payment in which case CMCC and BCH could bring additional claims against the Company for additional consideration. An adjustment reducing accrued expenses by $405,026 was made in March 2013 to reflect the final settlement with CMCC. This adjustment is reflected as a gain in the Consolidated Statement of Comprehensive Loss for the nine month period ended September 30, 2013.

On May 2, 2012 the Company received notice that Biostorage Technologies, Inc (Biostorage). had filed a lawsuit in Marion Superior/Circuit Court, Marion County, Indiana seeking to recover amounts alleged to be owed by the Company to the plaintiffs totaling $119,363. On July 27 , 2013, the Company entered into a settlement agreement with Biostorage pursuant to which the Company agreed to pay a total of $75,000 to Biostorage in three installments as follows: $10,000 on July 31, 2013, $40,000 December 31, 2013 and $25,000 February 28, 2014. The Company also agreed to stipulate a judgment in the amount of $95,000 to be adjusted down by each payment actually made by the Company and so long as each required payment is made by the Company on time, the judgment will be vacated on February 28, 2014. As of September 30, 2013 the Company maintained an accrual of $85,000 on its books which reflects the remaining balance of the stipulated judgment in the event that the Company is unable to pay the agreed to amounts of $40,000 and $25,000 due as described above.