COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 10 - COMMITMENTS AND CONTINGENCIES:

Warranties:

The Company typically provides one-year warranties on all of its products covering both parts and labor. The Company, at its option, repairs or replaces products that are defective during the warranty period if the proper preventive maintenance procedures have been followed by its customers.

Operating Leases:

The Company leases a 45,700 square foot facility located in Hanover Township, Parsippany, New Jersey, which has a term ending March 31, 2023 and is currently being used as the Company’s principal corporate headquarters and manufacturing plant. The Company is also responsible for its proportionate share of the cost of utilities, repairs, taxes, and insurance.

Monthly lease payments range from approximately $33,000 in year one to approximately $41,000 in year eight. Additionally, the Company had available an allowance of approximately $300,000 towards alterations and improvements to the premises, which expired on January 31, 2017. The Company used substantially all of the improvement allowance prior to its expiration. The lease can be renewed at the Company’s option for one five-year period at fair market value to be determined at term expiration.

The future minimum lease payments are shown below:

2017	$	421,138
2018		433,772
2019		446,786
2020		460,189
2021		473,995
Thereafter		611,164
	$	2,847,044

Rent expense, inclusive of common area maintenance charges, for the years ended December 31, 2016 and 2015 was $584,605 and $542,218, respectively.

The Company leases certain equipment under operating lease arrangements. These operating leases expire in various years through 2023. All leases may be renewed at the end of their respective leasing periods. Future payments relative to continuing operations consist of the following at December 31, 2016:

2017	$	52,764
2018		52,764
2019		52,764
2020		52,764
2021		52,764
Thereafter		8,794
	$	272,614

Purchase obligations consist of inventory that arises in the normal course of business operations. Future obligations and commitments as of December 31, 2016 consisted of the following:

Table of Contractual Obligations
			Payments by Period
			Less than						More than
	Total		1 Year		1-3 Years		4-5 Years		5 Years
Facility Leases	$	2,847,044	$	421,138	$	1,340,747	$	962,210	$	122,949
Purchase Obligations		744,531		744,531		—		—		—
Operating and Equipment Leases		272,614		52,764		158,292		61,558		—
	$	3,864,189	$	1,218,433	$	1,499,039	$	1,023,768	$	122,949

Environmental Contingencies:

In 1982, Boonton and the New Jersey Department of Environmental Protection (the “NJDEP”) agreed upon a plan to correct ground water contamination at the site, located in the township of Parsippany-Troy Hills, pursuant to which wells have been installed by Boonton. The plan contemplates that the wells will be operated and that soil and water samples will be taken and analyzed until such time that contamination levels are satisfactory to the NJDEP. In 2014, the Company received approval for a groundwater permit from the NJDEP to carry out the final remedial action work plan and report. Under the final phase of the plan, there will be limited and reduced monitoring and testing as long as concentrations at the site continue on a decreasing trend.

Expenditures incurred by the Company during the year ended December 31, 2016 and 2015 in connection with the site amounted to approximately $18,000 and $22,000, respectively. While management anticipates that the expenditures in connection with this site will not be substantial in future years, the Company could be subject to significant future liabilities and may incur significant future expenditures if further contaminants from Boonton’s testing are identified and the NJDEP requires additional remediation activities. Management is unable to estimate future remediation costs, if any, at this time. The Company will continue to be liable under the plan, in all future years, until such time as the NJDEP releases the Company from all obligations.

In December 2016, the Company entered into an agreement with an insurance company to settle prior disputes between the parties related to whether insurance policies were issued by a former insurer and whether they provided coverage for expenses arising from the NJDEP environmental matter. Under the terms of the settlement agreement, the Company received a payment in the amount of approximately $485,000 for full and final settlement of any and all claims which is reflected in other income (net) in the accompanying 2016 consolidated statement of operations.

At this time, the Company believes that it is in material compliance with all environmental laws, does not anticipate any material expenditure to meet current or pending environmental requirements, and generally believes that its processes and products do not present any unusual environmental concerns. Besides the matter referred to above with the NJDEP, the Company is unaware of any existing, pending or threatened contingent liability that may have a material adverse effect on its ongoing business operations.

Line of Credit:

The Company maintains a line of credit with an investment bank. The credit facility provides borrowing availability of up to 100% of the Company’s money market account balance and 99% of the Company’s short-term investment securities and, under the terms and conditions of the loan agreement, is fully secured by said money fund account and any short-term investment holdings. Advances under the facility will bear interest at a variable rate equal to the London InterBank Offered Rate (“LIBOR”) in effect at time of borrowing. Additionally, under the terms and conditions of the loan agreement, there is no annual fee and any amount outstanding under the loan facility may be paid at any time in whole or in part without penalty.

As of December 31, 2016, the Company had no borrowings outstanding under the facility and approximately $4,500,000 of borrowing availability. The Company believes cash generated from operations will adequately meet near-term working capital requirements. On February 17, 2017, the Company partially funded the acquisition of CommAgility Limited with the cash from this money market account. Thus the line of credit is no longer available to the Company.

Risks and Uncertainties:

Proprietary information and know-how are important to the Company’s commercial success. There can be no assurance that others will not either develop independently the same or similar information or obtain and use proprietary information of the Company. Certain key employees have signed confidentiality and non-compete agreements regarding the Company’s proprietary information.

The Company believes that its products do not infringe the proprietary rights of third parties. There can be no assurance, however, that third parties will not assert infringement claims in the future.