NOTE 12: COMMITMENTS AND CONTINGENCIES (1) Lease commitments Capital Lease From April, 2015, NOWnews Network entered into various capital lease agreements with Nextlink Technology Co., Ltd. (Nextlink), pursuant to which NOWNews Network agreed to lease multiple servers from Nextlink for the period ranges from sixteen months to two years. At the end of each contract and upon fulfillment of the lease obligations, the title of these servers and ownership shall be transferred to NOWnews Network. Because NOWnews Network takes ownership of the equipment at the completion of the lease contract, NOWnews Network determined that the arrangement represents a capital lease for the equipment. The Company recorded $ 155,631 as a capital lease for the equipment and began depreciating the equipment on a straight line basis over five years. Depreciation expense of those equipment under capital lease for the year ended December 31, 2015 was $ 27,887 . Interest expense resulted from capital leases for the year ended December 31, 2015 amounted to $ 2,895 . Operating Lease Operating lease commitments consist of leases for office space and copy machines under various operating lease agreements which expire in June, 2018. Operating lease agreements generally contain renewal options that may be exercised at the Companys discretion after the completion of the terms. The Company's obligations under capital and operating leases are as follows: Capital Leases Operating Leases As of December 31, Amount Amount 2016 $ 79,751 $ 87,225 2017 15,712 23,564 2018 - 714 Total minimum payments $ 95,463 $ 111,503 The Company incurred rent expenses of $ 123,345 and $ 240,914 for the years ended December 31, 2015 and 2014, respectively. (2) Litigation Defamation and General Matters From time to time, the Company is subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of copyrights and other intellectual property rights and other claims alleging defamation, invasion of privacy, or similar c