Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

7.Commitments and Contingencies.

Operating Leases. On September 14, 2015, the Company amended the lease for its headquarters to extend the term for five years, through March 31, 2021, and to reduce the square footage and rental rate per square foot effective January 1, 2016. Rent expense under the prior lease, excluding operating costs, was approximately $318,000 in the year ended December 31, 2015 and $445,000 in the year-ended December 31, 2014. During the year ended December 31, 2014, the Company abandoned a portion of its office space for the remaining lease term, which resulted in an expense of approximately $118,000.

In connection with the amended lease, the Company incurred costs related to the build-out of its facility and other relocation costs, as well as costs for new furniture and equipment, a portion of which will be funded by a tenant allowance of $275,000, which was recorded as deferred rent and other assets as of December 31, 2015.

Minimum future lease obligations under the amended lease, excluding operating costs, are approximately as follows for the years ending December 31:

2016	$	151,000
2017	206,000
2018	211,000
2019	217,000
2020	222,000
Thereafter	57,000

Retailer Agreements. The Company has contracts in the normal course of business with various retailers, some of which provide for fixed or store-based payments rather than sign placement-based payments resulting in minimum commitments each year in order to maintain the agreements. During the years ended December 31, 2015 and 2014, the Company incurred $3,661,000 and $2,585,000 of costs related to fixed and store-based payments, respectively. The amounts are recorded in cost of services in the Company’s statements of comprehensive income.

Aggregate commitment amounts under agreements with retailers are approximately as follows for the years ending December 31:

2016	$	3,101,000
2017	1,716,000
2018	246,000

On an ongoing basis the Company negotiates renewals of various retailer agreements. Upon the completion of future contract renewals, the annual commitment amounts for 2016 and thereafter are expected to be in excess of the amounts above.

Legal. The Company is subject to various legal matters in the normal course of business. The outcome of these matters is not expected to have a material effect on the Company’s financial position or results of operations.