Hendrx Corporation manufactures water purification equipment. The Company produces water generation, filtration, ionization, and purification devices.
In Mar 2006, Hendrx was sued by Worldwide Water for contractual fraud and patent infringement. It was ordered to pay $1m for damages in Apr 2008. Hendrx received a finalized judgment on April 11, 2008 and recorded a $1,225,320 contingent liability as of September 30, 2008 to account for the $1,000,000 judgment plus prejudgment interest and other costs.
Problems with audits of Hendrx’s 2006 and 2007 Financial Statements: Hendrx’s 2006 financial statements disclose goodwill in the amount of $31,854,137, representing 74% of total assets. The auditor failed to tested for goodwill impairment at least annually and consider the potential for impairment of goodwill, including (i) technical issues associated with Hendrx’s primary product, (ii) impairment of the value of patents granted under the PRC laws.  Marketwired: Hendrx Made Party to Contract and Patent Infringement Suit, 6 Mar 2006 Hendrx: Press Release, 26 Jan 2009  P.7, PCAOB Auditor Report, 8 Apr 2011