12. Commitments and Contingencies

Office Lease Obligations –

The Company currently leases office space and manufacturing facilities in Dallas, Texas. The office space lease that expires on March 1, 2025 and the manufacturing facilities lease expires on April 30, 2015. The Company received a tenant improvement allowance of $1,250,200, which was recorded as an increase in leasehold improvements and deferred rent to be amortized over the life of the lease.  The Company also received a one-year rent abatement, but the rent expense is being recorded on a straight-line basis.

The Company also leases office space in San Francisco and Los Angeles, California, New York, New York and Pittsford, New York, under leases that expire at various dates through 2020.

In addition, the Company leases office space in London, England under a lease agreement that expires in August 2016; in Dubai, UAE under a lease agreement that expires in August 2015; and in Singapore under a lease that expires in September 2015.

Future minimum rental payments under these leases are as follows:

Total rent expense under all operating leases for the year ended December 31, 2014 was $2,207,846.  For the period April 20, 2013 to December 31, 2013, it was $1,889,098 and for the period February 1, 2013 to April 19, 2013, it was $102,704.

The Company is currently subleasing two facilities and receiving monthly payments which are less than the Company’s monthly lease obligations. Based upon the then current real estate market conditions, the Company believed that these leases had been impaired and accrued lease impairment charges. The impairment charges were calculated based on future lease commitments less estimated future sublease income. The leases expire in February 28, 2021 and August 31, 2017, respectively.

 Capital Lease Commitments -

The Company has entered into capital lease agreements with leasing companies for the financing of equipment and furniture purchases. The capital lease payments expire at various dates through June 2017. Future minimum lease payments under non-cancelable capital lease agreements consist of the following amounts for the year ending December 31:

Revenue Share Commitments

The Company has entered into revenue sharing agreements with a business partner, requiring the Company to make minimum yearly revenue sharing payments.

Future minimum payments under this agreement consists of the following amounts for the years ending December 31:

During the three-month period ended September 30, 2014, the Company renegotiated a revenue sharing agreement with a business partner. The parties agreed, among other things, to eliminate the Company’s remaining minimum revenue sharing commitment of $11,500,000 if certain terms and conditions are met in the future. As a result, the remaining minimum commitment of $1,888,008 is not included in the table above. This amount is accrued on the balance sheet.

Legal proceedings -

The Company is subject to legal proceedings and claims that arise in the ordinary course of business. Management is not aware of any claims that would have a material effect on the Company’s financial position, results of operations or cash flows.

On March 5, 2015, T-Rex Property AB (“T-Rex”), filed a complaint against us in the United States District Court for the North District of Texas, Civil Action Number 3:15-cv-00738-P.  T-Rex alleges that we are infringing on three United States patents.  T-Rex is seeking unspecified monetary relief, injunctive relief for the payment of royalties and reimbursement for attorneys’ fees.  We deny the allegations set forth in the complaint and intend to vigorously defend ourself in the proceedings.