NOTE 6 – COMMITMENTS & CONTIGENCIES

The Company currently occupies office space in Burbank, California. The Company signed a three-year lease starting January 1, 2016. Current monthly lease payments are $3,527 with yearly increases. The lease required a deposit of $3,500 which was paid on December 10, 2015. As of September 30, 2017, the Company has accrued rent due of $10,006. Minimum lease payments over the next two years are as follows: 

Investment Agreement

On July 9, 2014, the Board of Directors approved an investment arrangement with an individual. Per the terms of the agreement, the investor transferred $150,000 to the Company for which he was entitled to the following: $1 per unit sold of a fitness product through all retail outlets including online and retail shopping shows until the investment was paid back in full. Once the original investment was recouped the investor shall then receive a 2% royalty in perpetuity on all future retail sales of the fitness product. The investment remains with the Company and is disclosed as an accrued liability on the balance sheet. Since the product for which the investment was intended was never produced this agreement is being renegotiated.

Stock Warrants

On August 4, 2017, the Company executed a settlement and general release agreement with Carwash, LLC. Per the terms of that agreement the Company will issue warrants to purchase up to 2,000,000 shares of common stock. The number of warrants to be issued is contingent on the final restructuring of the Company. The warrants have an exercise price of $0.35 and a term of five years.  The aggregate fair value of the warrants totaled $5,468 based on the Black Scholes Merton pricing model using the following estimates: exercise price of $0.35, 1.82% risk free rate, 27.47% volatility and expected life of the options of five years.