Note 7 - Commitments and Contingencies

3 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Text Block]

7.	Commitments and Contingencies

October 17, 2017,

Salon signed a

two

-year office lease agreement for its San Francisco headquarters at

870

Market Street, San Francisco, California. The

two

-year lease, for approximately

1,072

square feet, commenced on

December 1, 2017

and will terminate on

November 30, 2019.

April 9, 2019

the Company terminated the lease effective

June 30, 2019.

The outstanding lease obligation is

$59

for the remaining

months of the lease.

August 2016,

we informed our landlord at our office space at

132

West

Street, New York, New York, of our intention to move out of the premises, and we engaged a property agent to find a sub-tenant for the space. The lease for New York space commenced on

July 1, 2014

and will expire on

September 30, 2019.

January 2017,

we were asked to vacate the office space at

132

West

Street due to nonpayment of our monthly rent, and on

January 30, 2017,

we released the letter of credit of

$204

to the landlord in payment of the past due rent. On

August 3, 2017,

we received a notice of legal action (the “Complaint”) from the landlord. This civil summons and complaint in New York State Court seeks to recover all unpaid rents for the remainder of our

five

-year lease, equal to approximately

$918

at the time of filing the initial lawsuit (and currently approximately

$630

as of the date of this report) plus damages and attorneys fees. Counsel for Salon is currently evaluating potential defenses and counterclaims, based on the laws and facts.

The potential amount of this contingent liability is indeterminate, since it is unknown whether the Landlord will lease the premises to a new tenant, in which case the rents from the new tenant are an off-set to this liability. While counsel for Salon is evaluating potential defenses and counterclaims to the Complaint, we are unable to determine the foregoing liability, if any, with any degree of certainty, due to the uncertain nature of litigation matters.

The parties are currently engaged in discovery proceedings and

trial date has been set. The landlord has moved for partial summary judgement as to liability, which motion has

not

yet been opposed, argued or decided by the Court.

November 18, 2018,

Jordana Brondo, a former employee of Salon Media Group, brought a formal claim against the Company for Judicial Arbitration and Mediation Services under JAMS in San Francisco, CA. Under her claim, Ms. Brondo alleges wrongful termination under the basis of gender discrimination pregnancy discrimination, wrongful termination in violation of public policy, and retaliation. Ms. Brondo seeks general damages, special damages, punitive damages, cost of fees and attorney fees in the amount of

$1,600.

The Company has denied the allegations and is actively defending the matter. In addition, the Company has insurance to cover any unexpected liability. The matter is currently pending.

Our current office space in New York, located at

253

Street, New York, New York is rented on a month-to-month basis and does

not

carry a lease agreement.

October 2018,

the Company entered into an agreement with the WGAE for a

three

-year period. As a result of the ongoing negotiations and accompanying legal fees as well as the higher cost structure per the negotiated agreement, the effect was detrimental to the company’s financial standing as we had to endure layoffs of management in order to accommodate the editorial staff. In addition, the agreement with the union had a seemingly negative impact on the Company’s ability to obtain additional financing.

SALON MEDIA GROUP INC 10-Q