12. COMMITMENTS AND CONTINGENCIES Contingent Consideration Liability for the Acquisition of Combat Training Solutions, Inc. On December 22, 2011, CTI entered into a Stock Purchase Agreement ( SPA ) with CTS and the sole stockholder of CTS. Pursuant to the SPA, CTI purchased all of the issued and outstanding capital stock of CTS using a combination of cash, shares of our common stock plus other consideration that is contingent on future financial performance of CTS. The contingent consideration ranges from $ 0 to $ 5.75 million and is based on the financial performance of the acquired business during the combined calendar years 2012 and 2013, to be paid after calendar year 2013 when CTS s financial performance is known. Up to $ 5.5 million of the contingent payment is based on CTS achieving certain cumulative gross margin thresholds during the calendar years ending December 31, 2012 and 2013. This payment will consist of a combination of cash and our common stock. An additional payment of $ 250,000 of our common stock is contingent upon CTS achieving cumulative gross margin of $ 6.0 million during calendar years ending December 31, 2012 and 2013. See Note 13 for an estimate of the fair value of this liability and a description of how we estimate its fair value. Legal Civil Action No. 06-706 in Superior Court of the Commonwealth of Massachusetts On January 23, 2006, before we owned CTI, the former owners of CTI (from whom we purchased CTI) (the  Former Owners ) acquired all of the outstanding capital stock of Omniglow Corporation (the  Transaction ) and changed the name of the company to Cyalume Technologies, Inc. Prior to, or substantially simultaneously with, the Transaction, CTI sold certain assets and liabilities related to Omniglow Corporation s novelty and retail business to certain former Omniglow Corporation stockholders and management (the  Omniglow Buyers ). This was done because CTI sought to retain only the Omniglow Corporation assets and current liabilities associated with its government, military and