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<br />I- <br />I <br /> <br />I <br />.e <br /> <br />I <br />I <br /> <br />I <br /> <br />I <br />I <br /> <br />I <br /> <br />Ie <br />I <br />I <br /> <br />I <br />I <br />I <br /> <br />I <br /> <br />I <br />.. <br />I <br /> <br />CUBELLlS BUSINESS TRUST <br /> <br />~OTES TO CONSOLlDA TF:D FINANCIAL STATEMENTS <br /> <br />Note 12 - Profit Sharing Plan <br /> <br />The Company sponsors a Profit Sharing 401(k) Retirement Plan (the "Plan"), which covers <br />digiblc cmployecs aller three months of service. Employees may contribute up to 15% of their <br />salary to the Plan. The Company makes a matching contribution equal to 35% of employee <br />contributions; hO\vever, the Company's match is only applicable to the first 5'Yo of each <br />participant's salary that is contributed to the Plan. Profit sharing expense \vas approximately <br />594,000 and S 76,000 lor thc years endcd December 31, 2005 and 2004, respectively. <br /> <br />Note 13 - Concentration of Credit Risk <br /> <br />The Company maintains its cash in bank deposit accounts which, at times, may exceed federally <br />insured limits. The Company has not experienced any losses in such accounts and docs not <br />helieve It is exposed to any significant credit risk related to cash. <br /> <br />:"-Iote 1-4 - Contingencies <br /> <br />At Dccembe:r 31. 2005, various claims and suits are pending against the Company in the ordinary' <br />course 0 I' busi ness. In the opinion 0 f management, the Company's liabi Ii ty insurance is su fficient <br />to cover any liability resulting from such claims. <br /> <br />~ote 15 - Supplementary Cash Flow Disclosures <br /> <br />Interest and Income Taxes <br />Cash p:.lId for the following items is as follows: <br /> <br />2005 <br /> <br />2004 <br /> <br />Income; taxe;s <br />Interest <br /> <br />S 62.-400 <br />179.138 <br /> <br />S 28,000 <br />74,7-+6 <br /> <br />Non-cash Investing and Financing Activities <br />[n 2005. equipment and software purchases totaling S 1,193.357 were financed through capital <br />kascs. [n 2004, equipment and software purchases totaling 5489,049 and S 167.051 were <br />financed through capital leases and notes payable. respectively. <br /> <br />i\lerger with 'Iarco Design Group <br />Assets and liahilities assumed in connection with the mcrge;r with ~.Jarco Design Group on <br />February 1, 2004 consiste;d of the following: <br /> <br />Cash <br />Accounts receivable;, net <br />Equipment and impro\'e;ll1e:nts. net <br />Outstanding line of credit halance <br />Accounts pay'able and accrued cxpe:nses <br /> <br />S 107.502 <br />151.227 <br />114,210 <br />(137,244) <br />(41.767) <br /> <br />The: line of credit was repaid and closed in 2004. <br /> <br />1" <br />.1 <br />