Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies

Commitments and Contingencies

14. Commitments and Contingencies

Leases

The Company has various leases for office space specific to each of its subsidiaries. The latest to expire is Timios’ Plano, TX lease, which expires on December 31, 2015. The Company’s minimum lease payments for 2013, 2014 and 2015 are approximately $504,497, $263,497 and $158,697, respectively.

Rent expense related to our overall office space for our operations during the year ended December 31, 2012, the Transition Period ended December 31, 2011(6 months) and June 30, 2011 was $524,825, $244,701 and $137,390, respectively.

Commitments

The Company, in the normal course of business, routinely enters into consulting agreements for services to be provided to the Company. These agreements are generally short term and are terminable by either party on sixty (60) days notice. As a result, the Company does not believe it has any material commitments to consultants. At December 31, 2012 and 2011 and June 30, 2011, the Company has not recognized any material liabilities for loss contingencies.

Claims

During the ordinary course of business, the Company is subject to various disputes and claims and there are uncertainties surrounding the ultimate resolutions of these matters. Because of the uncertainties, it is at least reasonably possible that any amount recorded may change within the near term.

Contingency

The Company has received notification alleging the Company breached certain representations and warranties with regard to the sale of one of its former subsidiaries. The claim alleges that the Company misrepresented the estimate of costs to complete a certain contract that was included in the sale. The Company is currently in discussions with the claimant regarding its allegation. As of December 31, 2012 no resolution has been reached concerning this allegation. (see Note 16 - Subsequent Events)

Customer Concentration

DSUSA derived all of it revenue and earnings from a contract with a major U.S. Bank from the date of acquisition through December 31, 2011. This contract terminated on September 30, 2011, with DSUSA having the right to residual revenue from buyer contracts on properties entered into prior to September 30, 2011 but not closed as of that date. Management has not been successful in renewing this contract or obtaining any other material contracts as of the date of this filing. Accordingly, DSUSA’s revenue has been negligible through December 31, 2012.

Timios relies on business in the states of Texas, Florida, New Jersey and Pennsylvania for a substantial portion of the revenue it recorded during the year ended December 31, 2012 and the Transition Period ended December 31, 2011. Adverse regulatory developments in these states, which could include reductions in the maximum rates permitted to be charged, inadequate rate increases or more fundamental changes in the design or implementation of the title insurance regulatory framework, could have a material adverse effect on our results of operations and financial condition.

Working Capital and Dividend Restrictions

We are a holding company whose primary assets are the securities of our operating subsidiaries. Our ability to pay our outstanding debts and our other obligations is dependent on the ability of our subsidiaries to pay dividends or make other distributions or payments to us. If our operating subsidiaries are not able to pay dividends to us, we may not be able to meet our financial obligations.

In addition, our title insurance subsidiary, Timios, must comply with state laws which require it to maintain minimum amounts of working capital, surplus and reserves, and place restrictions on the amount of dividends that it can distribute to us. Compliance with these laws will limit the amounts that subsidiaries can dividend to us.