This excerpt taken from the TUNE 8-K filed Oct 16, 2009.
The Company leases its facilities under noncancelable leases that expire between March 2009 and August 2012, which have been accounted for as operating leases. In connection with one of the leases and as described more fully in Note 1, the Company provided an irrevocable standby letter of credit to its landlord, as amended, in the amount of $30,000 as of December 31, 2008, to secure its rent obligation ($40,000 as of December 31, 2007). Certain of the facility leases also contain escalation clauses calling for increased rents. The related rent expenses are recognized in accordance with Financial Accounting Standards Board Technical Bulletin No. 85-3, Accounting for Operating Leases with Scheduled Rent Increases, using the straight-line method over the term of the leases.
Auvitek International Ltd.
Notes to Consolidated Financial Statements (continued)
7. Commitments and Contingencies (continued)
As of December 31, 2008, future minimum lease payments required under operating leases and related sublease income are presented below:
Rent expense was approximately $511,000 and $417,000 for the years ended December 31, 2008 and 2007, respectively.