Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies

Note 6 - Commitments and Contingencies

Leases

The Company is obligated under non-cancelable operating leases for premises expiring through August 2016. Future minimum lease payments are $173,000, $175,000, $178,000, $95,000 and $71,000 for the years ending December 31, 2012, 2013, 2014, 2015 and 2016, respectively. Rent expense for the years ended December 31, 2011 and 2010 was $273,000 and $232,000, respectively.

Other Agreements

The Company has employment agreements with Messrs. Wachtel, Wunderlich and Williams, its chief executive officer, chief financial officer, and it president and chief operating officer, respectively, who are also stockholders. The agreements with Messrs. Wachtel and Wunderlich, which were to expire on December 31, 2011, provided for minimum annual compensation of $250,000 and $175,000, and bonuses equal to 10% of the Company’s consolidated pre-tax profit (as defined) up to $1,250,000 and 5% of consolidated pre-tax profit in excess of $1,250,000, respectively. Under the terms of the agreements, annual salaries and bonuses shall not exceed $750,000 and $675,000 for Messrs. Wachtel and Wunderlich, respectively. Bonus payments to each of Messrs. Wachtel and Wunderlich were $360,000 for the year ended December 31, 2010. The agreement with Mr. Williams, which was to expire on December 31, 2011, provided for a base salary starting at $175,000 per year which will increase to $205,000 per year by the fourth year of the contract term and, commencing with the year ended December 31, 2010, a bonus equal to 2% of consolidated pre-tax profit and for the year ended December 31, 2009, 1% of consolidated pre-tax profit. Accordingly, a bonus of $119,000 was paid for the year ended December 31, 2010.

In February 2011, Messrs. Wachtel, Wunderlich and Williams entered into new employment agreements. The agreements with Messrs. Wachtel and Wunderlich, which expire on December 31, 2015, provide for no change in the minimum annual compensation, bonus and maximum compensation. Bonus payments to each of Messrs. Wachtel and Wunderlich were $418,000 for the year ended December 31, 2011. The agreement with Mr. Williams, which expires on December 31, 2015, provides for a minimum annual salary of $205,000 and an annual bonus equal to 2% of our first $3,000,000 of the Company’s consolidated pre-tax profit (as defined) plus an additional: (i) three percent (3%) of any of the Company’s consolidated pre-tax profit in excess of $3,000,000 but less than or equal to $4,000,000; (ii) four percent (4%) of any of the Company’s consolidated pre-tax profit in excess of $4,000,000 but less than or equal to $5,000,000; and (iii) five percent (5%) of any of the Company’s consolidated pre-tax profit in excess of $5,000,000; provided, however, the total annual aggregate salary and bonus payable to Mr. Williams is limited to a maximum of $485,000. Bonus payments to Mr. Williams was $236,000 for the year ended December 31, 2011. The agreements also provide that in the event of a change in control (as defined therein), Messrs. Wachtel, Wunderlich and Williams shall each receive a lump-sum cash payment equal to one and one-half times the respective executive officer’s minimum annual compensation (as defined therein), plus one and one-half times of his average annual bonus for the prior two years. Further, upon a change in control, we may, within a specified period, terminate the executive officer’s employment with us without further liability to the executive officer other than with respect to the provision of continued medical coverage through December 31, 2015.

Litigation

The Company is involved in certain litigation arising in the ordinary course of its business.  In the opinion of management, these matters will not have a material adverse effect on the Company's financial position or liquidity.