NOTE 12 – COMMITMENTS AND CONTINGENCIES

On March 20, 2014, the Company entered into a consulting agreement with Wall Street Relations, Inc. (the “Consultant”). Under the agreement, the Consultant was to provide to the Company public relations, communications, advisory and consulting services. The term of the agreement was 12 months. For the services to be rendered under the agreement, the Company paid to the Consultant an aggregate amount of $500,000 in cash. On June 20, 2014, the Company terminated the agreement because of the Consultant’s failure to perform its obligations under the agreement. The defendant was served with the complaint in October 2014. The Company also sent a demand letter to the counsel of the Consultant’s President in September 2015 and counsels for both parties entered into discussions. The Company is currently considering all options to obtain reimbursement of the fee paid to the Consultant under the agreement. The Company recorded a write off of prepaid assets of approximately $320,000 for the year ended December 31, 2014.

The Company is subject to various legal proceedings from time to time as part of its business. As of December 31, 2015, the Company was not currently party to any legal proceedings or threatened legal proceedings, the adverse outcome of which, individually or in the aggregate, it believes would have a material adverse effect on its business, consolidated financial condition and consolidated results of operations.