Page 315 - Onboarding May 2017

CENTRALIZED SUPPLY CHAIN SERVICES, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2015 and 2014

NOTE 3 - COMMITMENTS AND CONTINGENCIES (Continued)

Rental expense for office space under operating leases amounted to approximately $220,000 and
212,000 for the years ended December 31, 2015 and 2014, respectively. The Company has
commitments related primarily to minimum lease payments.

The approximate future minimum payments under the leases are as follows:

2016 $ 232,594
2017 213,944
2018 210,193
2019 210,193
2020 210,193
Thereafter 175,159

$ 1,252,276

NOTE 4 - 401(k) PLAN

The Company maintains a defined contribution retirement plan under Section 401(k) of the Internal
Revenue Code. Employees with one year of service and who are at least 21 years of age are eligible to
participate in the plan. Once an employee becomes eligible, the plan entry date is the first day of month
after their one year anniversary date. Eligible employees may contribute up to 100% of pretax annual
compensation, not to exceed maximum dollar limits established by law. The Company matches dollar for
dollar up to the first 3% of employee contributions and 50% of the employee elective contributions
between 3% and 5%. Employees are fully vested in the Company match. A five-year vesting schedule
will be applied to any additional discretionary match that is made. Company contributions to the plan
were $176,738 and $166,343 for the years ended December 31, 2015 and 2014, respectively.

NOTE 5 – LINE OF CREDIT

At December 31, 2015 and 2014, the Company had a $1,000,000 revolving line of credit with its primary
bank. The line of credit bears interest at the Prime rate and matures on July 25, 2016. The Company
had no borrowings and incurred no related interest expense for the years ended December 31, 2015 and
2014. The line of credit contains restrictive financial covenants related to tangible net worth. At
December 31, 2015, the Company was in compliance with all financial loan covenants.

The line of credit is secured by substantially all assets of the Company and guaranteed by its Members.
The Company is required to maintain a minimum compensating balance of $400,000 with its primary
bank in support of the line of credit.

9.