Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Operating Leases

We lease several facilities under operating leases expiring through 2018. Certain leases require us to pay increases in real estate taxes, operating costs and repairs over certain base year amounts. Lease payments for the nine and three months ended September 30, 2013 were $575,000 and $191,000, respectively. Lease payments for the nine and three months ended September 30, 2012 were $395,000 and $131,000, respectively.

Future minimum rental commitments under all non-cancelable operating leases as of September 30, 2013, are as follows (in thousands):

Year Ending December 31,
Three months of 2013	$	150
2014	370
2015	349
2016	359
2017	305
2018	223
	$	1,756

Capital Lease Obligations

During the nine months ended September 30, 2013, the Company entered into a non-cancelable lease agreement for $38,000 with an interest rate of 8.8%. In 2012, the Company entered into three non-cancelable lease agreements for $90,000, $30,000 and $48,000 with interest rates of 9%, 3% and 0%, respectively. In 2011, the Company entered into two non-cancelable lease agreements for $512,000 and $40,000 with interest rates of 6% and 0%, respectively. These leases are accounted for as capital leases. Depreciation expense on the equipment under the capital leases for the nine and three months ended September 30, 2013 was $120,000 and $40,000, respectively. Depreciation expense on the equipment under the capital leases for the nine and three months ended September 30, 2012 was $94,000 and $36,000, respectively. Future minimum commitments under all non-cancelable capital leases as of September 30, 2013, are as follows (in thousands):

Year Ended December 31,	Total		Interest		Principal
Three months of 2013	68		4		64
2014	225		8		217
2015	43		1		42
2016	1		—		1
	$	337	$	13	$	324

The current portion of the Company's capital lease obligation is $263,000 and the long-term portion is $62,000 at September 30, 2013.

Commercial Commitments

We have entered into a number of agreements with telecommunications companies to purchase communications services. Some of the agreements require a minimum amount of services to be purchased over the life of the agreement, or during a specified period of time.

Glowpoint believes that it will meet its commercial commitments. In certain instances where Glowpoint did not meet the minimum commitments, no penalties for minimum commitments have been assessed and the Company has entered into new agreements. It has been our experience that the prices and terms of successor agreements are similar to those offered by other carriers.

Glowpoint does not believe that any loss contingency related to a potential shortfall should be recorded in the condensed consolidated financial statements because it is not probable, from the information available and from prior experience, that Glowpoint has incurred a liability.

Letters of Credit

The Company has outstanding irrevocable standby letter of credits with Comerica Bank for $57,000 and $185,000 to serve as our security deposits for our leases of office space in New Jersey and Colorado, respectively.