22. LEASES

12 Months Ended

Dec. 31, 2014

Leases [Abstract]

22. LEASES

Our corporate headquarters is located at 14200 Ironwood Drive, Grand Rapids, Michigan 49534, which the Company purchased in September 2014 for a purchase price of $530,000. At closing the Company paid the seller $105,000 and financed $430,572 of the purchase price through an 8.5% Mortgage Note (“Original Mortgage Note”), which was due at December 31, 2014 with accrued interest. The Original Mortgage Note was retired and replaced with a new $250,000 Mortgage Note as of December 31, 2014 with a maturity of December 31, 2019. The new $250,000 Mortgage Note has a variable interest rate of the prime rate plus 2.5% with the initial rate being 5.75%. The Company believes our new corporate offices are suitable and adequate to operate its business at this time and for the foreseeable future.

The Company’s subsidiary, Vapestick leases an area of approximately 3,100 square feet, in Borehamwood, Hertfordshire, England, for £5,727 per month ($9,210 as of December 31, 2014), with an option to terminate the lease after three years. The Company’s subsidiary, VIP, leases its corporate offices as well as a storage and distribution center, in Radcliffe, Manchester, England, at an annual rental rate of £13,420 ($20,935 as of December 31, 2014). This lease expires in November 2015. In October 2014, VIP entered into a new lease for its corporate offices as well as a storage and distribution center, in Radcliffe, Manchester, England, effective February 5, 2015, at an annual rental rate of £118,000 ($182,900 for 2015). This lease expires in February 2025 but has the option to break in February 2020.

VIP has 5 year leases on its retail outlets at Gateshead, Doncaster and Middleton. The former lease expires in August 2018 whilst the latter two leases expire in August 2019. All three of these leases contain tenant break option clauses. The rental levels of these leases are £26,000, $40,300, £38,500 $59,675 and £20,000 $31,000 respectively.

Period Ending December 31,	Amount
2015	$	1,842,925
2016		521,378
2017		376,449
2018		355,667
2019		331,104
2020 and thereafter		937,258
Total	$	4,364,781