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Commitments and Contingencies
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

11. Commitments and Contingencies

 

Operating Leases

 

On October 27, 2020, the Company amended its existing lease (the “Lease Amendment”) for its corporate headquarters located at 60 Cutter Mill Road, Great Neck, New York, to expand the office premises and to extend the term of the lease through November 30, 2027. Among other things, the Lease Amendment provides for gradual rent increases from approximately $4,500 per month during the first three years to $5,100 per month during the last year of the extension term.

 

As a result of the adoption of ASU 2016-02 effective January 1, 2019, the Company recorded a right-of-use asset and corresponding operating lease liability in an aggregate amount of $135,270, not including its share of its variable real estate taxes. The Company used a discount rate of 6.5% which it believes to be its incremental borrowing rate at the time. In November 2020, the Company recorded an additional right-of-use asset and corresponding operating lease liability of $329,421, not including its share of its variable real estate taxes, with a discount rate of 4.14% for the Lease Amendment.

 

 

At December 31, 2021, approximate future minimum lease payments, including mandatory fixed electricity charges, are as follows:

 

      
2022 $63,326 
2023   63,326 
2024   61,526 
2025   60,926 
2026   60,926 
Thereafter   55,848 
Total minimum lease payments   365,878 
Less: amount representing interest   (41,630)
Present Value of Net Minimum Lease Payments  $324,248 

 

Rent expense, including fixed electricity charges and variable real estate taxes, in the years 2021 and 2020 was approximately $63,000 and $56,000, respectively.

 

Employment Agreements

 

In March 1999, the Company entered into an employment agreement with Mr. Ran, pursuant to which: (i) Mr. Ran’s employment term renews automatically on June 30th of each year for successive one-year periods unless either party gives to the other written notice at least 180 days prior to June 30th of its intention to terminate the agreement; (ii) Mr. Ran receives a current annual base salary of $305,000 and annual bonuses as determined by the Compensation Committee of the board of directors, in its sole and absolute discretion, and is eligible to participate in all executive benefit plans established and maintained by us; and (iii) Mr. Ran agreed to a one-year non-competition period following the termination of his employment.

 

On September 28, 2021, Mr. Ran voluntarily agreed to forgo his base salary in an aggregate amount of $76,250 for the months of October, November and December 2021, and therefore Mr. Ran’s annual base compensation for the years 2021 and 2020 was $228,750 and $305,000, respectively. In addition, the Compensation Committee approved an annual bonus of $80,000 to Mr. Ran in 2020.