COMMITMENTS & CONTINGENCIES

Lease Commitments

Operating Leases

The corporate headquarters are located at 480 N. Orlando Avenue, Suite 200 in Winter Park, Florida. The company occupies this office pursuant to a five-year, five-month sublease agreement that expires in April 2019 and is renewable for one additional year until April 30, 2020. The Company leases approximately 15,500 square feet based on an annually increasing rate of $17.50 to $22.50 per square foot over the lease term. The Company leases approximately 4,125 square feet of office space at an annually increasing rate of $36.00 to$37.26 per square foot in Sherman Oaks, California under a two-year contract that expires on December 31, 2016. The Company also leases flexible office space under a one-year contract in Chicago and a quarter-to-quarter contract in Toronto.

Capital Leases

During 2013 and 2014, the Company entered into capital leases for equipment which expire on various dates between December 2015 and January 2016. Total obligations outstanding under capital leases were $7,291 at December 31, 2015. See Note 2 for more information on the Company's equipment under capital leases.

A summary of future minimum lease payments under the Company's non-cancelable leases as of December 31, 2015 is as follows:



Year ending December 31:	Capital Leases			Operating Leases
2016	$	7,504		$	546,372
2017	—			330,908
2018	—			333,417
2019	—			113,516
Total minimum lease payments	7,504			$	1,324,213
Less amount representing interest	(213		)
Total principal lease payments	7,291
Less current maturities	(7,291		)
Total long term obligations	$	—

Total rent expense recorded in general and administrative expense in the accompanying consolidated statements of operations was approximately $492,000 and $263,000 for the twelve months ended December 31, 2015 and 2014, respectively.

Retirement Plans

In December 2007, the Company introduced a 401(k) plan that covered all eligible employees. The Company matches participant contributions in an amount equal to 50% of each participant's contribution up to 8% of the participant's salary. The participants become vested in 20% annual increments after two years of service. During the twelve months ended December 31, 2015 and 2014, the Company incurred $125,262 and $47,682, respectively, in expense for matching employer contributions.

Litigation

From time to time, the Company may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. Litigation is, however, subject to inherent uncertainties, and an adverse result in these or other matters may harm the Company's business. Other than as described below, the Company is currently not aware of any legal proceedings or claims that it believes would or could have, individually or in the aggregate, a material adverse effect on its operations or financial position.

On October 17, 2012, Blue Calypso, Inc. filed a complaint against the Company alleging that the Company infringed their patents related to peer-to-peer advertising between mobile communication devices. On July 19, 2013, Blue Calypso’s case against the Company was consolidated, along with other patent infringement cases against Groupon, Inc., Yelp, Inc. and Foursquare Labs, Inc., into Blue Calypso, Inc. v. Groupon et al for all pretrial purposes, including discovery and claim construction.

On August 17, 2015, the Company entered into a settlement agreement with Blue Calypso ending all outstanding litigation between the two companies. Under the agreement, the Company agreed to pay Blue Calypso a settlement amount of $390,506, representing a royalty fee of 4.125% of revenue from the Company's legacy platforms: SocialSpark, Sponsored Tweets, and WeReward. This royalty fee was assessed on those legacy platforms from their inception until the time they were all discontinued by the end of 2014. Blue Calypso has dismissed with prejudice all pending litigation against the Company and has granted the Company a worldwide covenant not to sue covering the IZEAx and Ebyline platforms or any reasonable iteration thereof. The Company developed the IZEAx and Ebyline platforms in a manner such that it believes they do not infringe Blue Calypso's current patents.

The Company paid $200,000 upon execution of the agreement and is paying the balance in equal quarterly installments of $23,813.25 over 24 months beginning in November 2015. The Company recorded the entire amount of the settlement in general and administrative expense during the twelve months ended December 31, 2015. The remaining balance owed of $166,693 is recorded in accrued expenses as of December 31, 2015.