Commitments and Contingencies

Operating Leases

We lease two facilities in Denver, CO and Oxnard, CA that are under operating leases through December 2018 and March 2020, respectively. Both of these leases require us to pay increases in real estate taxes, operating costs and repairs over certain base year amounts. Lease payments for the three months ended March 31, 2015 and 2014 were $126,000 and $165,000, respectively.

Future minimum rental commitments under all non-cancelable operating leases as of March 31, 2015, are as follows (in thousands):



Year Ending December 31,
Remaining 2015	$	208
2016	294
2017	301
2018	308
2019	88
2020	23
	$	1,222

For the year ended December 31, 2014 and through February 2015, the Company leased office space in New Jersey on a month-to-month basis. In March 2015, the Company terminated this lease and no longer leases office space in New Jersey. The Company recorded impairment losses of $125,000 relating to property and equipment, primarily consisting of furniture and leasehold improvements.

During the first quarter of 2014, the Company vacated its Pennsylvania office space and recorded an impairment charge of $225,000 representing the estimated net present value of the Company’s contractual obligation over the remaining lease term, adjusted for estimated sublease payments and other associated costs. The Company recorded impairment losses of $101,000 relating to property and equipment, primarily consisting of furniture and leasehold improvements. These charges are recorded in Impairment Charges on the Company’s condensed consolidated statements of operations for the three months ended March 31, 2014. In August 2014, the Company entered into a termination agreement relating to this lease. In exchange for the Company's termination payment of $150,000, paid in 2014, the Company was released from all future obligations under the lease.

Commercial Commitments

We have entered into a number of agreements with our suppliers to purchase communications and consulting 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. Historically, 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 suppliers. Glowpoint does not believe that any loss contingency related to a potential shortfall should be recorded in the consolidated financial statements because it is not probable, from the information available and from prior experience, that Glowpoint has incurred a liability.

In June 2010, the Company entered into a Technology Development & Operations Outsourcing arrangement with UTC Associates, Inc. (“UTC”). In March 2015, the Company received a demand letter from UTC regarding the expiration of the UTC arrangement. The letter alleges default by the Company of certain minimum commitment amounts contained in the arrangement and notifies the Company of UTC’s intent to commence litigation in the event that the Company does not pay $957,000 allegedly due UTC under the arrangement. The Company believes the demand to be without merit and intends to vigorously defend itself in any litigation filed in connection with this dispute.

Letters of Credit

As of March 31, 2015, the Company had an outstanding irrevocable standby letter of credit with Comerica Bank for $148,000 to serve as our security deposit for our lease of office space in Colorado. See Note 4.