| | | | | | | | | | | | | | | | | | | | | |
<?xml version="1.0" encoding="windows-1252"?> |
<InstanceReport xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"> |
| <Version> 2.4.0.8 </Version> |
| <ReportLongName> 100130 - Disclosure - Commitments and Contingencies </ReportLongName> |
| <DisplayLabelColumn> true </DisplayLabelColumn> |
| <ShowElementNames> false </ShowElementNames> |
| <RoundingOption/> |
| <HasEmbeddedReports> false </HasEmbeddedReports> |
| <Columns> |
| | <Column FlagID="0"> |
| | | <Id> 1 </Id> |
| | | <IsAbstractGroupTitle> false </IsAbstractGroupTitle> |
| | | <LabelSeparator> </LabelSeparator> |
| | | <CurrencyCode/> |
| | | <FootnoteIndexer/> |
| | | <hasSegments> false </hasSegments> |
| | | <hasScenarios> false </hasScenarios> |
| | | <MCU> |
| <KeyName/> |
| <CurrencySymbol/> |
| <contextRef> |
| <ContextID> C_0000811240_20130101_20130630 </ContextID> |
| <EntitySchema> http://www.sec.gov/CIK </EntitySchema> |
| <EntityValue> 0000811240 </EntityValue> |
| <PeriodDisplayName/> |
| <PeriodType> duration </PeriodType> |
| <PeriodStartDate> 2013-01-01T00:00:00 </PeriodStartDate> |
| <PeriodEndDate> 2013-06-30T00:00:00 </PeriodEndDate> |
| <Segments/> |
| <Scenarios/> |
| </contextRef> |
| <UPS/> |
| <CurrencyCode/> |
| <OriginalCurrencyCode/> |
| </MCU> |
| | | <CurrencySymbol/> |
| | | <Labels> |
| <Label Key="CalendarSupplement" Id="0" Label="6 Months Ended"/> |
| <Label Key="Calendar" Id="1" Label="Jun. 30, 2013"/> |
| </Labels> |
| | | </Column> |
| | </Columns> |
| <Rows> |
| | <Row FlagID="0"> |
| | | <Id> 1 </Id> |
| | | <IsAbstractGroupTitle> false </IsAbstractGroupTitle> |
| | | <LabelSeparator> </LabelSeparator> |
| | | <Level> 4 </Level> |
| | | <ElementName> us-gaap_CommitmentsAndContingenciesDisclosureTextBlock </ElementName> |
| | | <ElementPrefix> us-gaap_ </ElementPrefix> |
| | | <IsBaseElement> true </IsBaseElement> |
| | | <BalanceType> na </BalanceType> |
| | | <PeriodType> duration </PeriodType> |
| | | <IsReportTitle> false </IsReportTitle> |
| | | <IsSegmentTitle> false </IsSegmentTitle> |
| | | <IsCalendarTitle> false </IsCalendarTitle> |
| | | <IsEquityPrevioslyReportedAsRow> false </IsEquityPrevioslyReportedAsRow> |
| | | <IsEquityAdjustmentRow> false </IsEquityAdjustmentRow> |
| | | <IsBeginningBalance> false </IsBeginningBalance> |
| | | <IsEndingBalance> false </IsEndingBalance> |
| | | <IsReverseSign> false </IsReverseSign> |
| | | <PreferredLabelRole> terseLabel </PreferredLabelRole> |
| | | <FootnoteIndexer/> |
| | | <Cells> |
| <Cell FlagID="0" ContextID="C_0000811240_20130101_20130630" UnitID=""> |
| <Id> 1 </Id> |
| <IsNumeric> false </IsNumeric> |
| <IsRatio> false </IsRatio> |
| <DisplayZeroAsNone> false </DisplayZeroAsNone> |
| <NumericAmount> 0 </NumericAmount> |
| <RoundedNumericAmount> 0 </RoundedNumericAmount> |
| <NonNumbericText> <div> <p style="margin:0pt; page-break-after:avoid"><font style="font-family:'Times New Roman'; font-size:10pt; font-weight:bold">NOTE 9—COMMITMENTS AND CONTINGENCIES </font></p> <p style="margin:6pt 0pt 0pt; page-break-after:avoid"><font style="font-family:'Times New Roman'; font-size:10pt; font-weight:bold">Leases </font></p> <p style="margin:6pt 0pt 0pt; text-indent:24.5pt"><font style="font-family:'Times New Roman'; font-size:10pt">The Company leases its corporate headquarters and manufacturing facility in Irvine, California and also leases certain other facilities, office equipment, and automobiles under various operating lease arrangements.</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">Future minimum rental commitments under operating lease agreements with non-cancelable terms greater than one year for the years ending December</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">31, 2013, 2014, 2015, and 2016 and thereafter, is $</font><font style="font-family:'Times New Roman'; font-size:10pt; ">400,000</font><font style="font-family:'Times New Roman'; font-size:10pt">,</font><font style="font-family:'Times New Roman'; font-size:10pt"> $</font><font style="font-family:'Times New Roman'; font-size:10pt; ">659,000</font><font style="font-family:'Times New Roman'; font-size:10pt">, $</font><font style="font-family:'Times New Roman'; font-size:10pt; ">192,000</font><font style="font-family:'Times New Roman'; font-size:10pt">, and $</font><font style="font-family:'Times New Roman'; font-size:10pt; ">0</font><font style="font-family:'Times New Roman'; font-size:10pt">, respectively.</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font></p> <p style="margin:6pt 0pt 0pt; page-break-after:avoid"><font style="font-family:'Times New Roman'; font-size:10pt; font-weight:bold">Employee arrangements and other compensation </font></p> <p style="margin:6pt 0pt 0pt; text-indent:24.5pt"><font style="font-family:'Times New Roman'; font-size:10pt">Certain members of management are entitled to severance benefits payable upon termination following a change in control, which would approximate $</font><font style="font-family:'Times New Roman'; font-size:10pt; ">958,000</font><font style="font-family:'Times New Roman'; font-size:10pt"> at June</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">30, 2013. The Company also has agreements with certain employees to pay bonuses based on targeted performance criteria. No amount was required to be accrued at June</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">30, 2013.</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font></p> <p style="margin:6pt 0pt 0pt; page-break-after:avoid"><font style="font-family:'Times New Roman'; font-size:10pt; font-weight:bold">Purchase Commitments </font></p> <p style="margin:6pt 0pt 0pt; text-indent:24.5pt"><font style="font-family:'Times New Roman'; font-size:10pt">The Company generally purchases components and subassemblies for its products from a limited group of third party suppliers through purchase orders. The Company had $</font><font style="font-family:'Times New Roman'; font-size:10pt; ">13.0</font><font style="font-family:'Times New Roman'; font-size:10pt"> million of purchase commitments as of June</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">30, 2013, for which the Company has not received the goods or services and which is expected to be purchased within one year. These purchase commitments were made to secure better pricing and to ensure the Company will have the necessary parts to meet anticipated near term demand. </font></p> <p style="margin:6pt 0pt 0pt; page-break-after:avoid"><font style="font-family:'Times New Roman'; font-size:10pt; font-weight:bold">Litigation </font></p> <p style="margin:6pt 0pt 0pt; text-indent:24.5pt"><font style="font-family:'Times New Roman'; font-size:10pt">The Company discloses material loss contingencies deemed to be reasonably possible and accrues for loss contingencies when, in consultation with its legal advisors, management concludes that a loss is probable and reasonably estimable. The ability to predict the ultimate outcome of such matters involves judgments, estimates, and inherent uncertainties. The actual outcome of such matters could differ materially from management’s estimates. </font></p> <p style="margin:6pt 0pt 0pt 24.5pt; page-break-after:avoid"><font style="font-family:'Times New Roman'; font-size:10pt; font-style:italic">Intellectual Property Litigation </font></p> <p style="margin:6pt 0pt 0pt; text-indent:24.5pt"><font style="font-family:'Times New Roman'; font-size:10pt">On April</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">24, 2012, CAO Group, Inc. (“CAO”) filed a lawsuit against the Company in the United States District Court for the District of Utah, Central Division, alleging patent infringement of U.S. Patent No.</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">7,485,116 involving the Company’s </font><font style="font-family:'Times New Roman'; font-size:10pt">ezLase</font><font style="font-family:'Times New Roman'; font-size:10pt"> diode laser. On September</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">12, 2012, CAO filed a First Amended Complaint, which added claims for (1)</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">business disparagement/injurious falsehood and (2)</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">unfair competition. The new claims are based on a press release that the Company issued on or about April</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">30, 2012, which CAO alleges contain statements that are factually inaccurate and falsities that are disparaging to CAO and its diode product. The First Amended Complaint seeks unspecified damages, punitive damages, injunctive relief, treble damages, costs, interest, and attorneys’ fees. On September</font><font style="font-family:'Times New Roman'; font-size:10pt"> </font><font style="font-family:'Times New Roman'; font-size:10pt">14, 2012, the Company filed an inter </font><font style="font-family:'Times New Roman'; font-size:10pt">partes</font><font style="font-family:'Times New Roman'; font-size:10pt"> reexamination request with respect to the asserted patent with the United States Patent and Trademark Office (“USPTO”). The Court then entered a stay of the lawsuit pending the request for reexamination, which reexamination request was subsequently granted. The USPTO issued an office action in a reexamination proceeding rejecting all of the claims of CAO that were subject to reexamination. Because all of the pertinent patent claims being asserted by CAO against the Company in the lawsuit have been reexamined by the USPTO, the District Court has stayed CAO’s lawsuit pending the final outcome of the reexamination. Management plans to vigorously defend against the allegations. </font></p> <p style="margin:6pt 0pt 0pt 24.5pt; page-break-after:avoid"><font style="font-family:'Times New Roman'; font-size:10pt; font-style:italic">Other Matters </font></p> <p style="margin:6pt 0pt 0pt; text-indent:24.5pt"><font style="font-family:'Times New Roman'; font-size:10pt">In the normal course of business, the Company is subject to other legal proceedings, lawsuits</font><font style="font-family:'Times New Roman'; font-size:10pt">,</font><font style="font-family:'Times New Roman'; font-size:10pt"> and other claims. Although the ultimate aggregate amount of probable monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance, the Company’s management believes that any monetary liability or financial impact to the Company from these other matters, individually and in the aggregate, would not be material to the Company’s financial condition, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability or financial impact to the Company from these other matters could differ materially from those projected. </font></p> </div> </NonNumbericText> |
| <FootnoteIndexer/> |
| <CurrencyCode/> |
| <CurrencySymbol/> |
| <IsIndependantCurrency> false </IsIndependantCurrency> |
| <ShowCurrencySymbol> false </ShowCurrencySymbol> |
| <DisplayDateInUSFormat> false </DisplayDateInUSFormat> |
| </Cell> |
| </Cells> |
| | | <ElementDataType> nonnum:textBlockItemType </ElementDataType> |
| | | <SimpleDataType> na </SimpleDataType> |
| | | <ElementDefenition> The entire disclosure for commitments and contingencies. </ElementDefenition> |
| | | <ElementReferences> Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 14 -Paragraph 3 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.25) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 460 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -SubTopic 20 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 5 -Paragraph 9, 10, 11, 12 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. </ElementReferences> |
| | | <IsTotalLabel> false </IsTotalLabel> |
| | | <UnitID> 0 </UnitID> |
| | | <Label> Commitments and Contingencies </Label> |
| | | </Row> |
| | </Rows> |
| <Footnotes/> |
| <IsEquityReport> false </IsEquityReport> |
| <ReportName> Commitments and Contingencies </ReportName> |
| <MonetaryRoundingLevel> UnKnown </MonetaryRoundingLevel> |
| <SharesRoundingLevel> UnKnown </SharesRoundingLevel> |
| <PerShareRoundingLevel> UnKnown </PerShareRoundingLevel> |
| <ExchangeRateRoundingLevel> UnKnown </ExchangeRateRoundingLevel> |
| <HasCustomUnits> true </HasCustomUnits> |
| <IsEmbedReport> false </IsEmbedReport> |
| <IsMultiCurrency> false </IsMultiCurrency> |
| <ReportType> Sheet </ReportType> |
| <RoleURI> http://www.biolase.com/20130630/taxonomy/role/DisclosureCommitmentsAndContingencies </RoleURI> |
| <NumberOfCols> 1 </NumberOfCols> |
| <NumberOfRows> 1 </NumberOfRows> |
| </InstanceReport> |