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<br />. <br />. <br />. <br />.. <br />.. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />.. <br />.. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />'. <br />,. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br />. <br /> <br />BERMELLO, AJAMIL & PARTNERS, INC. <br />AND SUBSIDIARY <br /> <br />NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br />DECEMBER 31, 2006 AND 2005 <br /> <br />NOTE 9. STOCKHOLDERS' EQUITY <br /> <br />At various times, the Company has executed agreements to employees for the issuance of <br />shares of common stock upon full payment of an agreed-upon purchase price. The agreed- <br />upon purchase price balance is due in three equal annual installments bearing interest at 6% <br />per annum. Amounts not collected in full are shown as a stock subscription receivable and <br />a reduction of stockholders' equity. The Company issued 14,000 and 805 shares of <br />common stock at $0.01 par value during 2006 and 2005, respectively. The issue price for <br />these shares amounted to $274,120 and $8 for 2006 and 2005, respectively. During 2006, <br />the Company repurchased 10,010 shares of its common stock, par value $0.01, for <br />$195,800. <br /> <br />NOTE JO. COMMITMENTS AND CONTINGENCIES <br /> <br />Operating Leases <br /> <br />The Company leases two floors of office space under the tenns of a renegotiated non- <br />cancelable lease agreement which expires on February 28, 2009. The Company is required <br />to make monthly rental payments of approximately $89,000, which are subject to increases <br />based on the Consumer Price Index. <br /> <br />Additionally, the Company has three office space leases in Dubai that expire on various <br />dates during 2007. The Company is required to make monthly rental payments of <br />approximately $19,000 for all three leases. The Company also has an office space lease in <br />Orlando and Broward that expire on April 16, 2011 and May 31, 2011, respectively. The <br />Company is required to make monthly rental payments of approximately $4,000 for the <br />Orlando lease and approximately $16,000 for the Broward lease. <br /> <br />On November I, 2004, BAP AE entered into a lease agreement for office premises. The <br />lease term is for five years and three months. Rental payments amount to $135,000 per <br />annum. BAP is a guarantor of such payments. <br /> <br />-]8- <br />