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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 14COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

On December 19, 2014 at the closing of the sale of the Company’s office building (Note 4), the Company entered into a 12 month lease for office facilities at a monthly rate of $3,000, with an option to extend the lease term an additional 12 months for $3,300 per month. The monthly payments include all taxes and building maintenance charges. The Company extended its lease in 2015 and must notify the landlord of its intention to extend the lease for an additional 12 months by no later than October 31, 2016.

 

In addition, the Company has three operating leases for its office locations in Colombia. The leases are for terms of 12 months expiring on dates ranging from March 31, 2016 to October 31, 2016. The monthly payments for the three leases are approximately $5,700.

 

Rent expense for the years ended December 31, 2015 and 2014 was approximately $73,000 and $15,000, respectively, and is included in general and administrative expenses on the consolidated statements of operations.

 

The approximate minimum lease payments due under noncancelable operating leases through December 31, 2016 is approximately $74,000. The Company has no leases in effect that are for a term greater than one year.

 

Executive Compensation

 

In February 2014 the Company executed a new Employment Agreement with David Jones, President and CEO of the Company, at an annual salary of $60,000 per year and to include all benefits as offered to any other employee at the time. Effective August 25, 2014, David Jones resigned as the President and CEO.

 

In February 2014 the Company hired Thomas Szoke and Douglas Solomon to join the company as acting Chief Technology Officer and Chief Operating Officer respectively, at an annual rate of $60,000 per year to include all benefits as offered to any other employee at the time. Votes will be taken at the next full Board of Directors meeting for the appointment of each to the post permanently.

 

On July 1, 2014, the Company officers agreed to adjust their total compensation to $1 per year and will not receive any other benefits or other forms of compensation.

 

Effective December 19, 2014, the Company entered into a three year employment agreement with Thomas Szoke to be the Company’s President and CEO. The agreement provides for an annual base salary of $275,000, along with a signing bonus equivalent to 3 months base salary. The agreement also provides for future bonuses, stock options and other benefits to be granted at the discretion of the Board of Directors.

 

Effective December 19, 2014, the Company entered into a three year employment agreement with Douglas Solomon to be the Company’s Chairman and COO. The agreement provides for an annual base salary of $250,000, along with a signing bonus equivalent to 3 months base salary. The agreement also provides for future bonuses, stock options and other benefits to be granted at the discretion of the Board of Directors.

 

Legal Matters

 

From time to time, claims are made against the Company in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting the Company from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Company’s results of operations for that period or future periods. The Company is not presently a party to any pending or threatened legal proceedings.