Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation

On October 3, 2007, a purported Geeknet (formerly known as VA Linux Systems, Inc.) shareholder filed a complaint for violation of Section 16(b) of the Securities Exchange Act of 1934 (“Exchange Act”), which prohibits short-swing trading, against the Company's IPO underwriters. On June 11, 2012, the Plaintiff voluntarily dismissed the action in part with prejudice. On August 29, 2012, the same Plaintiff sent a demand to the Company requesting the Company commence an action under Section 16(b) of the Exchange Act against Credit Suisse Securities (USA) LLC, one of the Company's IPO underwriters based on similar allegations as in Plaintiff's prior lawsuit. The Company believes that pursuing the claim would not be in the best interests of the Company and therefore did not take the action requested in the letter. On November 2, 2012, the Plaintiff filed a complaint in the United States District Court for the Western District of Washington under Section 16(b) of the Exchange Act against Credit Suisse Securities (USA) LLC seeking disgorgement of short-swing trading profits (Simmonds v. Credit Suisse Securities (USA) LLC, No. 12-cv-01937). The Company was named as a nominal plaintiff in the suit, and no recovery is sought against the Company.

    During July 2012, the Consumer Product Safety Commission ("CPSC") filed an administrative complaint against the maker of a product that was sold on the Company's ThinkGeek website. The CPSC complaint does not name ThinkGeek or Geeknet as a party; however, the Company voluntarily ceased selling this product due to the safety concerns raised by the CPSC. The Company is offering its customers who have purchased this product the opportunity to return the product in exchange for a ThinkGeek credit. This exchange is being offered through August 31, 2013. As of December 31, 2012, the Company issued an insignificant amount of credits.

During September 2012, the Company sold its Media business for $20.0 million of which $3.0 million was deposited by the Buyers into an escrow account for a period of twelve months after the Closing Date in order to secure the Company’s indemnification obligations to the Buyers for breaches of the Company’s representations, warranties, covenants and other obligations under the Purchase Agreement. The Purchase Agreement generally limits the Company's liability for breaches of representations and warranties made in the Purchase Agreement to an aggregate of $10.0 million.

The Company is subject to various claims and legal actions arising in the ordinary course of business.  The Company reviews all claims and accrues a liability for those matters where it believes that the likelihood that a loss will occur is probable and the amount of loss is reasonably estimable.  At December 31, 2012 and December 31, 2011, no liability was recorded for outstanding matters.

Purchase Obligations

The following table summarizes the Company's contractual obligations and commitments as of December 31, 2012 (in thousands):

		Years Ending December 31,
	Total	2013	2014	2015	Thereafter
Operating Lease Obligations (1)	622	367	255	—	—
Purchase Obligations (2)	917	774	40	103	—
Total Obligations	1,539	1,141	295	103	—

⁽¹⁾ Includes future payments for the Company's facilities under non-cancelable operating leases that expire at various dates through 2014. 

⁽²⁾ Includes a one-time termination fee of approximately $0.4 million that the Company would be required to pay to our third-party fulfillment and warehouse provider if the Company were to cancel the contract with them and also includes committed licensing payments.

Rent Expense

Rent expense from continuing operations for the years ended December 31, 2012, December 31, 2011 and December 31, 2010 was approximately $0.4 million, $0.5 million and $0.8 million, respectively.