Annual report pursuant to Section 13 and 15(d)

12. Commitments and Contingencies

12. Commitments and Contingencies
12 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
12. Commitments and Contingencies

12. Commitments and Contingencies




As of the date of this report, there are no pending legal proceedings to which we or our properties are subject, except as described below and for routine litigation incurred in the normal course of business.


In February 2019, a complaint was filed against us and five of our employees in the U.S. Federal District Court for the Southern District of New Yotk by mGage, LLC (mGage, LLC v. Glenn Stansbury, et al., No. 19-cv-1165-CM (S.D.N.Y. Filed 2/7/19).  In the complaint, the plaintiff alleged that we and five of our employees, who previously worked at mGage, misappropriated confidential information belonging to mGage in violation of the federal Defend Trade Secrets Act, that those same individuals violated non-compete agreements through their employment at Mobivity and that we tortiously interfered with mGage’s business opportunities.  On February 7, 2019 the court granted a preliminary injunction enjoining Mobivity and the individual employees from working together at Mobivity or using any of the alleged confidential information.  The court also directed expedited discovery.  The court has set a conference date in the case for June 21, 2019.   We deny all liability on the part of Mobivity and we intend to vigorously defend against this lawsuit.

Operating Lease


The Company has a lease agreement for 10,395 square feet, for its office facilities in Chandler, AZ through December 2020. Monthly rental payments, including common area maintenance charges, are $20,416. As of December 31, 2018, we have a deferred rent balance for this lease of $25,830 recorded in accordance with ASC 840.


The Company also has a lease through April 2022 for 3,248 square feet of office space located in Halifax, Nova Scotia, at a monthly rental expense of $3,458 per month, excluding common area maintenance charges. As of December 31, 2018, we have a deferred rent balance for this lease of $7,450 recorded in accordance with ASC 840.


The minimum lease payments that are required over the next five years are shown below.



Minimum Lease Payments      
2019   $ 264,147
2020     271,848
2021     35,748
2022     11,916
2023     -
Thereafter     -
    $ 857,740


Rent expense was $416,080 and $335,750 for the years ended December 31, 2018 and 2017.