13. Commitments and Contingencies

Litigation

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 York 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 August 14, 2019 we entered into a settlement agreement with mGage pursuant to which we and mGage released each other of all claims and we agreed to pay mGage $300,000 over a period of time. As of December 31, 2019, the settlement has been paid in full.

Operating Lease

As described in Note 6, 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 $19,707, to $20,140. As of December 31, 2019, we have an operating lease asset balance for this lease of $194,869 and an operating lease liability balance for this lease of $228,062 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 $2,665 to $2,979 per month, excluding common area maintenance charges. As of December 31, 2019, we have an operating lease asset balance for this lease of $65,776 and an operating lease liability balance for this lease of $75,741 recorded in accordance with ASC 840.