Quarterly report pursuant to Section 13 or 15(d)

Contingencies

v3.7.0.1
Contingencies
3 Months Ended
Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]  
Contingencies

Note 9 - Contingencies

 

From time to time, the Company is a party to, or otherwise involved in, legal proceedings arising in the normal course of business. As of the date of this report, except as described below, the Company is not aware of any proceedings, threatened or pending, against it which, if determined adversely, would have a material effect on its business, results of operations, cash flows or financial position.

 

In October 2013, Plaintiff Shefa LMV, LLC (“Plaintiff”) filed a First Amended Complaint (“Complaint”) in Los Angeles Superior Court for civil penalties and injunctive relief against numerous retailers and manufacturers of products, and alleged violations of California Health & Safety Code Sec. 25249.6 (part of the “Safe Drinking Water and Toxic Enforcement Act”) and California Business & Professional Code Sec. 17200, et seq. (California’s “Unfair Competition Law”). On October 17, 2014, Plaintiff filed an amendment to the Complaint, adding the Company’s subsidiary Biozone Laboratories, Inc. a California corporation, as Doe Defendant No. 9. An oral agreement between counsel for the Company and for Plaintiff has resulted in preparation of a Proposed Consent Judgment as to Biozone Laboratories, Inc. If fully executed and approved by the court, the Company will pay $7,500 in exchange for the release and discharge by the settling plaintiff only, with the Company presently expecting no further proceedings.

 

In October 2015, Cocrystal Pharma, Inc. received a subpoena from the staff of the Securities and Exchange Commission seeking the production of documents. The Company is fully cooperating with the inquiry. The Company cannot predict or determine whether any proceeding may be instituted in connection with the subpoena or the outcome of any proceeding that may be instituted.

 

In June 2014, the Company acquired a mortgage note from a bank which is collateralized by, among other things, the underlying real estate and related improvements. At March 31, 2017, the carrying amount of the mortgage note receivable was $1,294,000, consisting entirely of principal. The Company is currently in legal proceedings regarding the mortgage note receivable and collateralized real estate (see Note 7).