Annual report pursuant to section 13 and 15(d)

18. Commitments and Contingencies

18. Commitments and Contingencies
12 Months Ended
Dec. 31, 2012
Commitments and Contingencies Disclosure [Abstract]  
18. Commitments and Contingencies


The Company has various non-cancelable operating lease agreements for office facilities. A summary of the lease commitments under non-cancelable leases for years ending subsequent to December 31, 2012 are approximately as follows:


Year Ending December 31:    
2013   1,249,429
2014   1,230,846
2015   1,032,748
2016   151,792
2017   133,536
Thereafter   -
  $ 3,798,351


Rent expense for all operating leases was $1.0 million for the years ended December 31, 2012 and 2011, respectively. Certain of the Company’s leases include fixed rent escalation schedules or rent escalations based upon a fixed percentage. The Company recognizes rent expense (including escalations) on a straight-line basis over the lease term.


As of December 31, 2012, the Company has no material outstanding purchase commitments with any equipment vendors.


Legal Matters

On February 16, 2012, a landlord over premises leased by the Company commenced a proceeding in the New York City Civil Court, County of New York (Index No. 56186/12), in which the landlord sought to recover against the Company certain unpaid rent and related charges due under a lease agreement between the landlord and the Company, and to evict the Company from the premises. By Stipulation dated April 19, 2012, the landlord and the Company agreed that the landlord would be entitled to a judgment in the amount of $222,510 and a warrant of eviction, but that the landlord would not enforce the judgment or execute the warrant as long as the Company complied with the Stipulation. As of December 31, 2012, the Company had satisfied all of its obligations under the stipulation(see note 24).


The Company is from time to time involved in claims and legal actions arising in the ordinary course of business. Management does not expect that the outcome of any such claims or actions will have a material effect on the Company’s operations or financial condition. In addition, due to the regulatory nature of the telecommunications industry, the Company periodically receives and responds to various inquiries from state and federal regulatory agencies. Management does not expect the outcome of any such regulatory inquiries to have a material impact on the Company’s operations or financial condition.