COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2016

COMMITMENTS AND CONTINGENCIES [Abstract]

NOTE 13 — COMMITMENTS AND CONTINGENCIES:

Employment Contracts:

The Company has contracts with three key employees. The contracts call for salaries presently aggregating $975,000 per year. One contract expires in May 2017, one expires in March 2019 and one contract expires in March 2017. The following table is a schedule of future minimum salary commitments:

2017	$	516,200
2018		335,000
2019		55,800

Pension Plan:

The Company has a 401(k) plan established for its employees. Effective January 1, 2011 the Company elected to match 40% of the first 5% (or 2% of salary) that an employee contributes to their 401(k) plan. Expenses related to this matching contribution aggregated $96,051, $90,915 and $82,750 for the years ended December 31, 2016, 2015, and 2014 respectively.

Obligations Under Operating Leases:

The Company leases industrial space used for office, R&D and manufacturing facilities, currently with a monthly rent of $28,688. The current lease expires on April 30, 2017. The lease provides for annual increases of 2.50% percent each year starting May 1, 2016. In February of 2014, the Company entered into a lease, effective March 1, 2014, for another facility located a short distance from its current facility currently with a monthly rent of $15,550. The space is used primarily for warehousing and provides for additional office space. The lease expires on April 30, 2018. The lease provides for annual increases of 3.00% percent each year starting March 1, 2016.

The following is a schedule of future minimum rental commitments (assuming no increases):

Years ending December 31,

2017	$	306,018
2018		64,067
2019		-
	$	370,085

Rent expense was $516,708, $511,900 and $476,000 for the years ended December 31, 2016, 2015, and 2014 respectively.

Economic Dependency:

The following table delineates sales the Company had to customers in excess of 10% of total sales for the periods indicated:

	For the years ended														Accounts Receivable
	December 31, 2016					December 31, 2015					December 31, 2014				December 31, 2016			December 31, 2015
	Sales			% of Sales		Sales			% of Sales			Sales	% of Sales
Customer 1		$	4,801,577	35	%		$	10,132,512	46	%	$	12,253,526	47	%		$	828,848		$	775,209
Customer 2			1,796,477	13	%			4,526,908	21	%		6,618,251	26	%			-			700,656

The following table delineates purchases the Company had with vendors in excess of 10% of total purchases for the periods indicated:

	For the years ended														Accounts Payable
	December 31, 2016					December 31, 2015					December 31, 2014				December 31, 2016			December 31, 2015
	Purchases			% of Purc.		Purchases			% of Purc.			Purchases	% of Purc.
Vendor 1		$	652,273	11	%		$	*	*		$	*	*			$	26,984		$	*
Vendor 2			*	*				794,536	11	%		1,331,647	14	%			*			90,075

In the table above the asterisk (*) indicates that purchases from the vendor did not exceed 10% for the period indicated.

The Company currently buys materials which are purchased under intellectual property rights agreements and are important components in its products. Management believes that other suppliers could provide similar materials on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would affect operating results adversely.