COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 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 June 30, 2023. The Company’s principal executive office were located at 431 Fairway Drive, Suite 200, Deerfield Beach, Florida 33441. The Company did not renew the expiring operating lease and entered into a new lease on July 1, 2023 at #144-V, 10 Fairway Drive, Suite 100, Deerfield Beach, Florida, 33441. See Note 6.

On April 26, 2023, the landlord amended the terms for the operating lease and related common area management expenses (“CAM”) owed by the Company for its principal executive office to extend the payment terms for the remaining three months of the lease term over the following nine months through December 31, 2023. In addition to the monthly rent expense, the landlord included an estimate for additional CAM charges for the 2023 operating lease year of $5,435 and $17,124 for additional CAM charges for the 2022 operating lease year. The Company will pay a total of $58,500 with monthly payments of $6,500 per month for nine months commencing April 1, 2023 and ending December 31, 2023, to satisfy the aforementioned operating lease liabilities for the executive office lease. As of June 30, 2023, accrued expenses include additional CAM charges of $17,124 that will be paid during the next six months 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 June 30, 2023 and 2022 amounted to $38,059 and $35,783, respectively and $92,925 and $74,683 for the six months ended June 30, 2023 and 2022, respectively, including the monthly CAM charges and additional CAM charges included in accrued expenses.

Supplemental balance sheet information related to leases as of June 30, 2023 is as follows:
Assets
Operating lease - right-of-use asset	$	231,077
Accumulated amortization		(231,077	)
Operating lease - right - of -use asset , net	$	—
Liabilities
Current
Current portion of operating lease	$	—
Noncurrent
Operating lease liability, net of current portion	$	—
Lease term and Discount Rate		—
Weighted average remaining lease term (months)
Weighted average Discount Rate		7	%

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 $498,709 and $252,000, as of June 30, 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 Mr. Wallach was earning as of the date of termination and the sum of “merit” based bonuses earned by Mr. Wallach 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 Mr. Wallach, 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 Mr. Wallach’s health and dental insurance benefits for 6 months starting at the Executives date of termination. If Mr. Wallach had family health coverage at the time of termination, the additional family premium obligation would remain theirs and will be reduced against Mr. Wallach’s severance package. The employment agreements have an anti-competition provision for 18 months after the end of employment. The Company did not accrue for the benefits owed at the time of death or disability as it is not probable as of the period ended June 30, 2023.

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 June 30, 2023.