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Craig A. Smith & Associate, Inc. and MPS31), LLC Notes to Financial Statements NOTE 7 — COMMITMENTS AND CONTINGENCIES (CONTINUED) Deferred Rent In accordance with the Second Amendment of the Office Lease Agreement that was signed on March 29, 2013 the Companies received an abatement of the basic annual rent for the months of May, June and July 2013 and May, June and July 2014. The abatements resulted in deferred rent commencing on May 1, 2013 which is being amortized over the term of the lease as an adjustment to rent expense. NOTE 8 - POST RETIREMENT BENEFITS The Companies offer a Simple IRA Plan which is administered by Fidelity Management Trust Company, an affiliate of Fidelity Investments, The Companies elected to match employee contributions up to a maximum of 3.0% of payroll earnings for the years ended December 31, 2016 and 2015. The Companies paid and expensed a required matching contribution for the years ended December 31, 2016 and 2015 of $57,071 and $53,011. The IRA expense is included in Fringe Benefits of $480,728 and $527,149 for the years ended December 31, 2016 and 2015, respectively on the accompanying financial statements. Also included in Fringe Benefits are payroll taxes, employee health insurance, employee life insurance and workers compensation insurance. NOTE 9 — OTHER INCOME For the year ended December 31, 2016, Other Income includes interest income of $3,848 and miscellaneous income of $50. For the year ended December 31, 2015, Other Income includes interest income of $4,694 and miscellaneous income of $12,288. NOTE 10 - COST AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS As of December 31, 2016 and 2015, costs and estimated earnings in excess of billings on uncompleted contracts are as follows: Contract costs incurred plus recognized profits to date Less: Progress billings to date Costs and estimated earnings in excess of billings on uncompleted contracts NOTE 11 — DATE OF MANAGEMENT REVIEW December 31, 2016 2015 $ 454,712 $ 324,508 (429,189) (262,227) $ 25,523 $ 62,281 In preparing the financial statements, management has evaluated events and transactions for potential recognition or disclosure through April 4, 2017, the date that the financial statements were available to be issued. -12- M.