NOTE 14 – COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company has month-to-month leases for its headquarters and its sales and marketing office. The total rent is approximately $1,955 per month.

The Company’s customer service and distribution facility is located at 1933 S. Broadway. Los Angeles, California. This facility is subleased on a month-to-month basis for $4,000 per month from a third party.

Rent expense was approximately $11,232 and $22,564, and $6,137 and $21,043 for the three and six months ended June 30, 2019 and 2018, respectively.

Legal

From time to time, various lawsuits and legal proceedings may arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any legal proceedings or claims that it believes will have a material adverse effect on its business, financial condition or operating results.

Guarantees

The Company’s Convertible Notes Payable are collateralized by substantially all of the Company’s assets and are personally guaranteed by the Company’s CEO and Australian Sapphire Corporation, a shareholder of the Company which is wholly-owned by the Company’s CEO.