Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
9 Months Ended
Sep. 30, 2018
Leases [Abstract]  
Leases Leases
We lease certain office space and equipment. As leases expire, it can be expected that they will be renewed or replaced in the normal course of business. Rent expense from continuing operations was $101,767 and $309,596 for the three and nine months ended September 30, 2018, respectively, and $109,701 and $346,717 for the three and nine months ended September 30, 2017, respectively.

Minimum future lease payments under non-cancelable operating leases as of September 30, 2018 are:
2018 $ 118,870 
2019 477,319 
2020 405,606 
2021 242,558 
2022 163,284 
Total  $ 1,407,637 

In April 2015, we entered into a five-year agreement to lease office space in Little Rock, Arkansas commencing October 1, 2015, to serve as our headquarters. The lease is for 12,245 square feet and cost approximately $171,000 during its first year. Thereafter, the lease payment increases by 2%. 

As part of the 2017 asset acquisition, Inuvo assumed the office space lease and a lease obligation in Sunnyvale, CA. The lease was for 15,717 square feet and cost approximately $95,000 for the remaining term of the lease which expired in July 2017.

In June 2017, we entered into an agreement to lease 4,801 square feet of office space in San Jose, CA commencing on July 17, 2017. The lease has a term of five years and cost approximately $216,000 during its first year.  After the first year, the lease payments increase by 3% per annum.

In June 2017, we entered into an agreement with Dell Financial Services to lease computer equipment for our data centers. The lease has a term of three years and will cost approximately $173,000 over the life of the lease.











Capital lease obligations and future minimum lease payments under non-cancelable capital leases as of September 30, 2018 are:
Lease Payments 
2018 $ 59,527 
2019 $ 213,685 
2020 $ 82,404 
Total payments under capital lease obligations  $ 355,616 
Less amount representing interest  (22,857)
Present value of capital lease obligations  332,759 
Current portion of capital lease obligations  (204,430)
Capital lease obligations, net of current portion  $ 128,329 

Assets acquired under capital lease obligations are included in property and equipment in the accompanying consolidated balance sheets. Cost and related accumulated depreciation as of:

September 30, 2018 December 31, 2017
Equipment  $ 707,264  $ 707,264 
Less accumulated depreciation  (393,806) (242,169)
Equipment, net  $ 313,458  $ 465,095 

Depreciation expense on assets under capital lease obligations was $47,277 and $151,637 for the three and nine months ended September 30, 2018, respectively, and $107,531 and $66,245 for the three and nine months ended September 30, 2017, respectively, and is included in the consolidated statements of operations.

In February 2017, we acquired assets and certain liabilities including the capital lease for computer equipment with a remaining value at that time of $88,575.
In June 2017, we entered into an agreement with Dell Financial Services to lease computer equipment for our data centers. The lease has a term of three years and will cost approximately $516,000 over the life of the lease.