Annual report pursuant to section 13 and 15(d)

17. Commitments and Contingencies

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17. Commitments and Contingencies
12 Months Ended
Dec. 31, 2013
Notes to Financial Statements  
17. Commitments and Contingencies

Leases

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, 2013 are approximately as follows:

 

Year Ending December 31:      
2014     2,022,000  
2015     1,640,000  
2016     777,000  
2017     545,000  
2018 and thereafter     -  
    $ 4,984,000  

 

Rent expense for all operating leases was $1.0 million for each of the years ended December 31, 2013 and 2012.  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.

 

Legal matters

 

On March 12, 2013, a landlord over premises leased by the Company commenced a lawsuit in the New York City Civil Court, County of New York (Index No. 58738/13), in which the landlord is seeking to recover specified rent and related charges of approximately $97,000 due under a lease agreement between the landlord and the Company, and, as a result thereof, to evict the Company from the premises.  The Company has since made all of the payments demanded by the landlord in the lawsuit, and the lawsuit has been dismissed.   

 

On or about September 4, 2013, a landlord over premises leased by the Company commenced a lawsuit in the New York City Civil Court, County of New York (Index No. 79154/13), in which the landlord is seeking to recover specified rent and related charges of approximately $88,000 due under a lease agreement between the landlord and the Company, plus interest and attorneys’ fees, and to evict the Company from the premises.  The Company has since made all of the payments demanded by the landlord in the lawsuit, and the lawsuit has been dismissed.   

 

Other matters

 

The Company’s operations were impacted by Hurricane Sandy in October of 2012, and the Company filed a business interruption insurance claim with its insurance carrier for the Company’s estimate of losses it incurred as a result of the storm.  The Company’s consolidated statement of operations for the year ended December 31, 2013 reflects insurance proceeds of approximately $248,000, of which approximately $109,000 is reflected as Revenues, $85,000 is reflected as a reduction in Cost of sales and the remainder as a reduction to Selling, general and administrative expenses.

 

As of December 31, 2013, the Company has no material outstanding purchase commitments with any equipment vendors.