COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 4– COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company had operating lease agreements for its principal executive offices in Fort Lauderdale, Florida expiring at June 2023. The Company’s principal executive office is located at 431 Fairway Drive, Suite 200, Deerfield Beach, Florida 33441. The Company is currently reviewing executive office leasing opportunities as we do not plan to renew the expiring lease.

Effective November 1, 2019, the Company entered a prime operating lease with the landlord, 431 Fairway Associates, LLC, ending June 30, 2023, for the Company’s executive offices located at 431 Fairway Drive, Suite 200, Deerfield Beach, Florida 33441 with an annualized base rent of $70,104 and with a base rental adjustment of 3% commencing July 1, 2020 and on July 1^st of each subsequent year during the term. Under the lease agreement, CAPI is also responsible for approximately 4,694 square feet of common area maintenance charges (“CAM”), respectively in the leased premises which has been estimated at $12.00 per square foot or approximately $56,000 on an annualized basis. The CAM charges are expensed monthly as incurred and excluded from the recorded lease liability. On an annual basis, the leasing agent may request payment for additional CAM expenses incurred but not included in the estimated monthly CAM pro-rata square foot charges. The Company will record these additional expenses upon receiving the CAM adjustment from the landlord. As of March 31, 2023, accrued expenses include additional CAM charges of $17,124 that will be paid in a subsequent period related to the 2022 operating lease year.

The Company’s rent expense is recorded on a straight-line basis over the term of the lease. The rent expense for the three months ended March 31, 2023 and 2022, amounted to $54,866 and $38,898, respectively, including the monthly CAM charges and additional CAM charges included in accrued expenses.

Supplemental balance sheet information related to leases as of March 31, 2023 is as follows:
Assets
Operating lease - right-of-use asset	$	231,077
Accumulated amortization		(213,848	)
Operating lease - right - of -use asset , net	$	17,229
Liabilities
Current
Current portion of operating lease	$	18,932
Noncurrent
Operating lease liability, net of current portion	$	—
Lease term and Discount Rate
Weighted average remaining lease term (months)		3
Weighted average Discount Rate		7	%

Scheduled maturities of operating lease liabilities outstanding as of March 31, 2023 are as follows:

Year		Operating Lease
	2023	$	19,153
	Less: Imputed Interest		221
	Present Value of Lease Liabilities	$	18,932

Employment Agreements

On February 5, 2023, the Company entered into a new Employment Agreement with Stewart Wallach, whereby Mr. Wallach will be paid $301,521 per annum. The initial term of this new agreement began February 5, 2023 and ends February 5, 2025. The parties may extend the employment period of this agreement by mutual consent with approval of the Company’s Board of Directors, but the extension may not exceed two years in length.

On February 5, 2020, the Company entered into an Employment Agreement with James McClinton, whereby Mr. McClinton will be paid $191,442 per annum. The term of agreement began February 5, 2020 and ended February 5, 2022. On February 6, 2022, the Company entered into an Employment Agreement with James McClinton (Chief Financial Officer and Director), whereby Mr. McClinton was paid $736 per day. On November 30, 2022, Mr. McClinton retired from all positions with the Company.

Beginning in 2020 and through 2023, executive salaries and consulting fees have been deferred from time to time to conserve cash flow. Deferrals amounted to approximately $386,000 and $252,000, as of March 31, 2023 and December 31, 2022, respectively, and are included in accounts payable and accrued liabilities.

There is a provision in Mr. Wallach’s employment agreement, if the officer’s employment is terminated by death or disability or without cause, the Company is obligated to pay to the officer’s estate or the officer, an amount equal to accrued and unpaid base salary as well as all accrued but unused vacation days through the date of termination. The Company will also pay sum payments equal to: the sum of twelve (12) months base salary at the rate the Executive was earning as of the date of termination and (b) the sum of “merit” based bonuses earned by the Executive during the prior calendar year of his termination. Any payments owed by the Company shall be paid from a normal payroll account on a bi-weekly basis in accordance with the normal payroll policies of the Company. The amount owed by the Company to the Executive, from the effective Termination date, will be payout bi-weekly over the course of the year but at no time will be no more than twenty (26) installments. The Company will also continue to pay the Executive’s health and dental insurance benefits for 6 months starting at the Executives date of termination. If the Executive had family health coverage at the time of termination, the additional family premium obligation would remain theirs and will be reduced against the Executive’s severance package. The employment agreements have an anti-competition provision for 18 months after the end of employment.

The following table summarizes potential payments upon termination of employment :

	Salary Severance		Bonus  Severance		Gross up  Taxes		Benefit  Compensation		Grand Total
Stewart Wallach	$	301,521	$	—	$	12,600	$	6,600	$	320,721

Directors Compensation

On July 5, 2022, The Board of Directors voted to suspend granting compensation to the independent directors for the remainder of the fiscal year 2022. There have been no payments to the Board of Directors during the period ended March 31, 2023.