8. Commitments and Contingencies

12 Months Ended

Jun. 30, 2012

Commitments And Contingencies

8. Commitments and Contingencies

Total rent expense for the Company under operating leases recorded for the years ended June 30, 2012 and 2011 was $814 and $65, respectively. The Company’s future minimum rental commitments under noncancelable operating leases are as follows:

	(in thousands)
Years Ending June 30,
2013	$	2,216
2014	839
2015	844
2016	737
2017	666
Thereafter	3,517
Total	$	8,819

As of June 30, 2012, the Company has entered into employment contracts with certain key executives and employees, which include provisions for severance payments in the event of specified terminations of employment. Expected payments under existing employment contracts are as follows:

	(in thousands)
Year Ending June 30,
2013	$	2,754
2014	2,588
2015	1,569
2016	939
Thereafter	—
Total	$	7,850

In connection with the purchase from Trusted Opinion Inc. of the Loyalize assets, the Company is also obligated to fund as a purchase price adjustment the difference, if any, by which $1,839 exceeds the calculated value (computed based on the average closing price of its common shares during the 20 days prior to December 31, 2012) of the 137,519 shares on December 31, 2012, either in cash or in common shares of the Company, at Buyer's election, provided that such additional consideration shall not be payable until claims which remain subject to determination and secured by all the Escrowed Shares are no longer outstanding and the additional consideration shall be eliminated to the extent final claims exceed the value of the shares then remaining in escrow. The guarantee was recorded at $120 at the time of the acquisition and subsequently has been marked to market to a fair value of $963 at June 30, 2012. The Company has recorded a charge of $843 which is reflected in other expense in the Consolidated Statement of Operations for the year ended June 30, 2012. The Company has recorded a $963 liability for the guarantee in the Consolidated Balance Sheet as of June 30, 2012.

On August 17, 2012, the Company was served with a patent infringement lawsuit filed on August 13, 2012 by Blue Spike, LLC ("Blue Spike") in the United States District Court for the Eastern District of Texas, Tyler Division (Civil Action No. 6:12-CV-526). The lawsuit claims patent infringement under U.S. Patent numbers 7,346,472, 7,660,700, 7,949,494, and 8,214,715 in connection with the Company's audio recognition technology. Blue Spike has commenced suits against numerous other companies involving the same patent family.

The Company denies that it is infringing any valid, enforceable claims of the asserted patents and intends to vigorously defend itself against the lawsuit. The Company filed its answer on October 3, 2012.

We are subject to litigation and other claims that arise in the ordinary course of business. While the ultimate result of our outstanding legal matters cannot presently be determined, the Company does not expect that the ultimate disposition will have a material adverse effect on our results of operations or financial condition. However, legal matters are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. As such, there can be no assurance that the final outcome will not have a material adverse effect upon our financial condition and results of operations.