Commitments and Contingencies

12 Months Ended

May 31, 2014

Commitments And Contingencies

Commitments and Contingencies

Note P – Commitments and Contingencies

Lease Commitments

The Company leases certain office equipment with combined monthly payments of approximately $465 that have varying remaining terms of less than five years. The Company leases office, parking and storage space under month-to-month lease arrangements that approximate $3,844 each month.

The Company’ inactive subsidiary, Crystal Mountain Spring Water, holds an undeveloped leasehold interest in a mineral water spring located near Hot Springs, Arkansas. Under the leasehold arrangement, the Company makes minimum lease payments of $180 per month. The Company has options to extend the leasehold arrangement through October 2026 and also has a right to cancel the lease at any time upon sixty (60) days written notice.

Rental expense for these lease commitments totaled approximately $55,070 and $54,880 during fiscal years 2014 and 2013.

Minimum future lease payments under non-cancelable operating leases having remaining terms in excess of one year as of May 31, 2014 are:

Fiscal year 2014-2015	$	5,580
Fiscal year 2015-2016		5,580
Fiscal year 2016-2017		5,580
Total	$	16,740

During 2013, the Company and one of its surety principals entered into a contractual arrangement whereby the Company would hold collateral for use in paying future claims and expenses and upon the Company’s determination that its liability had been fully extinguished, the company would return the amount of the deposits less any paid claims or expenses. While the Company holds the collateral, the Company will pay 1.35% annual simple interest to the principal. The Company receives any appreciation and earnings in excess of the contractual deposit, less payments, and interest paid to the principal. This deposit and the earning or expenses associated with the deposit are included in the calculation of the Company’s investment income.