Commitments And Contingencies
|12 Months Ended|
Dec. 31, 2015
|Commitments and Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||
NOTE 6 COMMITMENTS AND CONTINGENCIES
The Company leases approximately 5,169 square feet at 4643 South Ulster Street, Denver, Colorado pursuant to an amended lease dated May 21, 2015 and expiring on December 31, 2020. Under the lease, the Company pays annual base rent on an escalating scale ranging from $142,148 to $152,485.
The Companys wholly-owned subsidiary E.A.J.: PHL, Airport Inc. leases approximately 845 square feet in the Philadelphia Airport, Philadelphia, Pennsylvania, pursuant to a lease dated July 6, 2010. E.A.J.: PHL, Airport Inc. pays $14,000 per month basic rent, plus percentage rent equal to 20% of gross revenues above $1,200,000, under the lease, which expires April 30, 2017.
The minimum future lease payments under these leases for the next five years are:
Rent expense for the years ended 2015 and 2014 was $358,051 and $253,819, respectively. In addition to the minimum basic rent, rent expense also includes approximately $3,400 per month for other items charged by the landlord in connection with rent.
We are involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Except for income tax contingencies, we record accruals for contingencies to the extent that our management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. Material legal proceeding that is currently pending is as follow:
On October 14, 2015, the Company was named as a defendant in a case filed in the United States District Court for the District of Delaware case: Zakeni Limited v. SPYR, Inc., f/k/a Eat at Joes., Ltd. The suit relates to the Companys issuance of its convertible debentures in the aggregate principal amount of $1,500,000 in 1998. The plaintiff is seeking payment or conversion of said convertible debentures together with accrued interest and unspecified damages. The Company believes the claim is not a valid debt and will vigorously defend this lawsuit. Based upon available information at this very early stage of litigation it is the opinion of management and belief of in-house counsel that the Company will obtain a favorable ruling and no amount will be awarded to the plaintiff in this action. Accordingly, Management believes the likelihood of material loss resulting from this lawsuit to be remote.
Pursuant to employment agreements entered in December 2014 and October 2015, the Company agreed to compensate three officers with a base salary in the aggregate of $450,000 per year through 2020. In addition, these officers were also granted a total of 5.8 million shares of common stock as a form of signing bonus and an aggregate of 1.6 million shares of common stock to be granted at the beginning of each employment year.
During the year ended December 31, 2015, the Company issued a total of 7.4 million shares of the Companys common stock to these officers with a fair value of $1,768,250, of which, $987,500 was recorded in 2014 and the remaining $780,750 was recorded in 2015. See Note 7 for further discussion.
The entire disclosure for commitments and contingencies.
Reference 1: http://www.xbrl.org/2003/role/presentationRef