Laserfiche WebLink
Craig A. Smith & Associate, Inc. and MPS31), LLC <br />Notes to Financial Statements <br />NOTE 6 — NOTE PAYABLE — OFFICERS & RELATED PARTIES <br />In 2013 the Company borrowed funds and executed Demand Promissory Notes Payable (Notes) <br />with a related party totaling $185,000. Interest on the Notes is calculated at 5% per annum based <br />on a year of 365 days. In 2014 the Company borrowed an additional $15,000. The Company <br />incurred interest expense related to the above note of $0 and $1,864 in 2016 and 2015, <br />respectively. The balances of these notes were fully repaid in 2015, and no new related party <br />borrowings were taken in 2015 or 2016. <br />NOTE 7 — COMMITMENTS AND CONTINGENCIES <br />Lease Obligation Payable <br />The Companies have fourteen active leases with Bank of the West (now Trinity Leasing) and <br />Advance Acceptance. As of December 31, 2016 and 2015 the Companies had short term lease <br />obligations of $71,384 and $41,887, respectively. As of December 31, 2016 and 2015 the <br />Companies also had long term lease obligations of $96,458 and $56,319, respectively. <br />The equipment leases are non -cancellable and exceed one year. The future minimum annual <br />lease payments are as follows: <br />Year ended December 31, <br />2017 $ <br />71,384 <br />2018 <br />56,408 <br />2019 <br />34,804 <br />2020 <br />5,246 <br />Total $ <br />167,842 <br />Interest expense relating to the lease obligation payable was $4,392 and $6,299 for the years <br />ended December 31, 2016 and 2015 respectively. <br />Office Lease <br />The Companies current offices are located at 7777 Glades Road, Boca Raton, Florida. On March <br />29, 2013 the Companies signed a second amendment to its lease which extended the lease for <br />five years with a commencement date of November 1, 2013 and a term date of October 31, 2018. <br />The Companies base rent was reduced to $11,952 per month with an annual 3% escalation rate <br />and a 6.0% sales tax rate. The Companies also incur monthly operating expenses which are <br />approximately $8,300 and are also subject to annual adjustment and the 6.0% sales tax rate. <br />Future minimum annual payments under these lease agreements are as follows <br />Year ended December 31, <br />2017 $ 256,803 <br />2018 216,073 <br />$ 472,876 <br />The Companies also lease an office located at 815 NW 57th Avenue, Miami, Florida. The annual <br />rent is $9,450 plus 7% sales tax. The lease terminates on February 28, 2017. <br />- 11- <br />47 <br />