Good point, but at what point of the process was the settlement offer made? Likely after a good portion of the legal costs had already occurred.
Consider, going forward, a $344,908 decrease in costs, further improving the balance sheet for next year's 10K.
Selling and administrative costs for the year ended March 31, 2009, were $2,325,359 compared to $1,980,451 for the prior year. The $344,908 increase included increases in legal and litigation expenses of $485,000 due primarily to the digEcor litigation and an increase of $75,000 in shareholder related costs primarily as a result of the annual meeting material and mailing costs for the meeting held in September 2008 with no comparable costs in the prior year.These increases were offset by decreases in sales commissions of $103,000 due to decreased product sales and a $110,000 reduction in staffing costs due to reduced personnel and reduced stock-based compensation costs.
We accrued an additional $100,000 of litigation settlement costs in the fourth quarter ended March 31, 2009 as a result of settlement discussions prior to trial for the digEcor litigation (see “Legal Proceedings”). We expect significant legal costs in our first quarter of fiscal 2010 ending June 30, 2009 due to trial related costs. While we believe our total litigation and deposit accrual of $180,000 at March 31, 2009 related to this matter is adequate, we are unable to determine at this time the impact this litigation may have on our financial position or results of operations.
