Lease Commitment to Related Party

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Lease Commitment to Related Party

NOTE 9 – LEASE COMMITMENT TO RELATED PARTY

Prior to October 9, 2015, the Company occupied approximately 23,000 square feet of an office building located at 23251 Mulholland Drive, Woodland Hills, California. Erwin Cheldin, the Company's former president and a current director and principal stockholder, is the owner of the Woodland Hills building. The lease provided for an annual gross rent of $486,000 and was effective from April 1, 2012, through March 31, 2013. The lease provided for extension options at the same terms and conditions. The Company exercised its right to extend the lease through June 30, 2014, and the lease continued thereafter on a month-to-month basis. The Company believes that at the inception of the lease agreement, and at each subsequent extension, the terms of the lease were at least as favorable to the Company as could have been obtained from non-affiliated third parties. The Company utilized for its own operations 100% of the space it leased at the Woodland Hills building. The Company also leased storage space from Erwin Cheldin. Depending on usage, storage space rental was estimated to be approximately $15,000 annually. The total rent for the Woodland Hills building was $406,796, $501,258 and $500,770 for the years ended December 31, 2015, 2014 and 2013, respectively. The Company’s month-to-month lease of the home office in Woodland Hills, California, ended on October 15, 2015.