Note 13. Commitments and Contingencies

Lease Agreements

The Company, as lessee, has entered into various operating lease agreements for office and warehouse space. Future minimum gross rental payments relating to these lease agreements are as follows:


Year 1	$	174,000
Year 2		140,000
Year 3		88,000
Year 4		71,000
Year 5		6,000
Thereafter		-
	$	479,000

Rent expense for the three and six month periods ended June 30, 2014 was approximately $166,000 and $265,000, respectively. Rent expense for the three and six month periods ended June 30, 2013 was approximately $27,000 and $50,000, respectively.

Registration Rights

Under the terms of a 2010 private placement, ASTV provided that it would use its best reasonable efforts to cause the related registration statement to become effective within 180 days of the termination date, July 26, 2010, of the offering. ASTV failed to comply with this registration rights provision and is obligated to make pro rata payments to the subscribers under the 2010 private placement in an amount equal to 1% per month of the aggregate amount invested by the subscribers up to a maximum of 6% of the aggregate amount invested by the subscribers. The maximum amount of penalty to which ASTV may be subject is $156,000. The Company has a related accrued liability of $156,000 at June 30, 2014.

Litigation

From time to time, we are periodically a party to or otherwise involved in legal proceedings arising in the normal and ordinary course of business. As of the date of this report, except as otherwise disclosed, we are not aware of any proceeding, threatened or pending, against us which, if determined adversely, would have a material effect on our business, results of operations, cash flows or financial position.

At June 30, 2014, there was a lawsuit pending against Ronco relating to a claim for breach of contract arising from the failure of Ronco to pay for goods tendered. The amount sought in the lawsuit was approximately $258,000. However, Ronco has asserted a counterclaim for fraud and a claim under the Texas Deceptive Trade Practices Act, alleging, in part, that the goods provided were not in good or sellable condition and, as such, no money is owed to plaintiff for the alleged damages sought for breach of contract. Ronco settled the lawsuit for $70,000 on July 17, 2014.

Sales Tax

Included in Ronco's accrued sales taxes are sales taxes collected from customers that have not yet been remitted to taxing authorities. This accrual as of June 30, 2014 includes estimates for interest and penalties for non-payments. Accrued sales taxes at June 30, 2014 and December 31, 2013 are approximately $383,000 and are included in "Accrued Expenses and Other Current Liabilities" in our Condensed Consolidated Balance Sheets.