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Craig A. Smith & Associate, Inc. and MPS31), LLC <br />Notes to Financial Statements <br />NOTE 7 — COMMITMENTS AND CONTINGENCIES (CONTINUED) <br />Office Lease (continued) <br />and a 6.0% sales tax rate. The Companies also incurs 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 />2016 $ 260,209 <br />2017 256,803 <br />2018 216,073 <br />$ 733,085 <br />Lease Obligation Payable <br />The Companies also lease an office located at 815 NW 57th Avenue, Miami, Florida. The annual <br />rent is $9,000 plus 6% sales tax. The lease terminates on February 29, 2016. <br />Deferred Rent <br />In accordance with the Second Amendment of the Office Lease Agreement that was signed on <br />March 29, 2013 the Companies received an abatement of the basic annual rent for the months of <br />May, June and July 2013 and May, June and July 2014. The abatements resulted in deferred rent <br />commencing on May 1, 2013 which is being amortized over the term of the lease as an <br />adjustment to rent expense. <br />NOTE 8 — POST RETIREMENT BENEFITS <br />The Companies offer a Simple IRA Plan which is administered by Fidelity Management Trust <br />Company, an affiliate of Fidelity Investments. The Companies elected to match employee <br />contributions up to a maximum of 3.0% of payroll earnings for the years ended December 31, <br />2015 and 2014. The Companies paid and expensed a required matching contribution for the <br />years ended December 31, 2015 and 2014 of $53,011 and $46,097. The IRA expense is included <br />in Fringe Benefits of $527,149 and $430,858 for the years ended December 31, 2015 and 2014, <br />respectively on the accompanying financial statements. Also included in Fringe Benefits are <br />payroll taxes, employee health insurance, employee life insurance and workers compensation <br />insurance. <br />NOTE 9 - OTHER INCOME <br />For the year ended December 31, 2015, Other Income includes interest income of $4,694 and <br />miscellaneous income of $12,288. <br />For the year ended December 31, 2014 Other Income includes interest income of $4,481. <br />-12- <br />62 <br />