Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

M. Commitments and Contingencies

Operating Leases

On September 20, 2010, we entered into an office lease agreement for approximately 23,834 square feet of office space located in Burlington, Massachusetts. We moved our corporate headquarters to the premises in January 2011. The lease for our facility in Burlington expires in 2017.

On March 25, 2011, we entered into an office lease agreement through 2014 for approximately 2,267 square feet of office space located in California. On November 7, 2012, we amended this lease to add additional space totaling 2,319 square feet to the existing premises, and extend the term of the lease. The amended lease for the entire space is for a 64-month term, commencing in February 2013 upon the completion of improvements the landlord made to the expanded premises.

In connection with these two lease agreements we received landlord incentives for build out expenses incurred. The incentive or allowance is recorded as deferred rent and amortized as a reduction to lease expense over the initial lease terms.

At December 31, 2012, future minimum lease payments under non-cancelable operating leases are:

For the years ended December 31,
2013	$	745
2014		712
2015		728
2016		744
2017		759
Thereafter		421
Total	$	4,109

Rental expense under operating leases for our office facilities totaled $617,000, $610,000 and $318,000 for the years ended December 31, 2012, 2011 and 2010, respectively.

Legal Matters

We are involved from time to time in litigation incidental to the conduct of our business. Although we do not expect that the outcome of any of these matters, individually or collectively, will have a material adverse effect on our financial condition or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered, that could adversely affect our operating results or cash flows in a particular period. We routinely assess all of our litigation and threatened litigation as to the probability of ultimately incurring a liability, and record our best estimate of the ultimate loss in situations where we assess the likelihood of loss as probable.

Lease Commitments

We accept lease applications on a daily basis and, as a result, we have a pipeline of applications that have been approved, where a lease has not been originated. Our commitment to lend does not become binding until all of the steps in the origination process have been completed, including the receipt of the lease, supporting documentation and verification with the lessee. Since we fund on the same day a lease is verified, we have no outstanding commitments to lend.