Annual report pursuant to Section 13 and 15(d)

COMMITMENTS AND CONTINGENCIES

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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2015
Notes to Financial Statements  
Note 17 - COMMITMENTS AND CONTINGENCIES

Operating lease

 

The Company's lease commenced effective July 1, 2013 expiring July 1, 2016. The base rent is $1,484 per month. The lease agreement contains escalation clauses. The Company determined that any related straight line rent is not material.

 

Aggregate maturities of long-term debt as of December 31, 2015 are as follows:

 

For the twelve months ended December 31,   Amount  
2016   $ 1,819,001  
2017     38,500  
2018     -  
Total   $ 1,857,501  

 

Employment and consulting agreements

 

On September 1, 2015, the Company entered into an employment agreement with Kent Emry for the full time position of Chief Executive Officer of the Company for 12 months with automatic renewals. Compensation at $75,000 per annum (See Note 16).

 

Lourdes Felix, Chief Financial Officer and Brady Granier, Chief Operating Officer of the Company, entered into Executive Service Agreements with the Company on February 28, 2013 and October 16, 2013, respectively (the "Executive Agreements").

 

Neil Muller, Ex-President of the Company, entered into an Executive Service Agreement with the Company on February 28, 2013 for 12 months with automatic renewals. Effective September 1, 2015, Mr. Muller resigned from his post as President.

  

The Executive Agreements provided, among other things, (i) the remuneration to be received in exchange for services provided to the Company; (ii) a general description of the services to be provided to the Company; and (iii) other obligations, terms, and conditions relating to the professional relationship between Felix and Granier, as applicable, and the Company.

 

On June 30, 2014, each of Felix and Granier entered into an amendment to the Executive Agreements (the "Amendments"), which provide that each of Felix and Granier shall receive three percent (3%) of the Company's gross margin of sales of then-current healthcare products, devices and/or modifications thereto thereafter for a period of fifteen years following the Termination Date, as defined in the Executive Agreements. The Amendments were approved by the unanimous consent of the disinterested directors of the Company in accordance with the requirements of the Nevada Revised Statutes. As of December 31, 2015 and 2014, $81,189 and $174,582 was paid in connection with this agreement.

 

On July 1, 2014, the Company entered into an agreement with Maximum Harvest LLC whereby Maximum Harvest LLC will advise on marketing and sales development. The remuneration for the services shall be $3,000 per month and 330,000 shares of the Company's common stock (as extended). The initial term of the agreement is for three months, subsequently extended. The Company charged the fair value of the stock obligation of $34,155 to operations in 2014.

 

On September 11, 2014, the Company entered into an agreement with Smallcapvoice.com whereby Smallcapvoice will provide general corporate consulting services. The remuneration for the services shall be $2,500 per month and 75,000 shares of the Company's common stock. The agreement expires December 31, 2014. The Company charged the fair value of the stock obligation of $7,733 to operations in 2014.

 

On October 1, 2014, the Company entered into an agreement with Troy Emry whereby Emry will create written policy and procedure manuals for use by the company and any current or future subsidiaries. The remuneration for the services shall be 400,000 shares of the Company's common stock. The agreement is expired September 30, 2015. The Company charged the fair value of the stock obligation of $50,000 to operations in 2014.

 

On November 20, 2014, the Company entered into an agreement with Joel B. Singer MD whereby Dr. Singer will create documented protocol specific to surgical techniques. The remuneration for the services shall be 50,000 shares of the Company's common stock. The agreement is for twelve months, unless terminated earlier. The Company charged the fair value of the stock obligation of $5,325 to operations in 2014.

 

On December 3, 2014, the Company entered into an agreement with EROI, LLC whereby EROI will provide strategic assistance for the acquisition of a management company and develop plans thereafter. The remuneration for the services shall be an aggregate of 9,000,000 shares of the Company's common stock, of which, 6,000,000 shares will be issued upon milestone completion, plus $30,000 per month, paid by the management company upon acquisition, and with ownership percentage of acquired management company. The agreement has open to service terms. The Company charged the fair value of the stock obligation of $300,000 to operations in 2014.

 

On February 27, 2015, the Company entered into an agreement with Terry LaDow whereby LaDow will provide general corporate consulting services with a term of 12 months. The remuneration for the services shall be 25,000 shares of the Company's common stock upon execution of the agreement and 25,000 shares upon milestone achievements. The Company charged the fair value of the stock issued of $3,088 to operations in 2015.

 

On July 1, 2015, the Company entered into an agreement with Smallcapvoice.com whereby Smallcapvoice will provide general corporate consulting services with a term of 90 days. The remuneration for the services shall be $2,500 per month and 200,000 shares of the Company's common stock. The Company charged the fair value of the stock issued of $27,800 to operations in 2015.

 

On September 1, 2015, the Company entered into an agreement with Dawn Maxwell whereby Maxwell will consult in identifying, securing and training counselors for the BioCorRxÒ Recovery Program with a term of for 12 months. The remuneration for the services shall be $5,500 per month, 500,000 shares of the Company's common stock issued at execution of the agreement and up to 1,500,000 shares of the Company's common stock and bonuses upon milestone achievements, of which 500,000 shares of the Company's common stock were earned and issued in 2015. milestone completion. The Company charged the fair value of the stock issued of $34,500 to operations in 2015.

 

On November 1, 2015, the Company entered into an agreement with George Fallieras whereby Fallieras will consult with Wellness Centers and other locations and will create a scientific presentation for the medical community with a term of for 12 months. The remuneration for the services shall be 2,000,000 shares of the Company's common stock, 400,000 shares of which upon execution of the agreement, 400,000 shares upon completion and delivery of the scientific-based presentation and 200,000 per month for first six months until consultant receives 2,000,000 shares of the Company's common stock. The Company charged the fair value of the stock issued of $60,000 to operations in 2015.

 

On November 6, 2015, the Company entered into an agreement with Tactical Growth Partners, LLC whereby Tactical will provide general advisory services, strategic planning and introductions to the Company with a term of 6 months. The remuneration for the services shall be $5,000 per month and 1,500,000 shares of the Company's common stock, of which 750,000 shares were issued upon execution of the agreement. The Company charged the earned portion of the fair value of the stock issued of $5,666 to operations in 2015.

 

On November 16, 2015, the Company entered into an agreement with Jeremy Miller whereby Miller will make personal appearances and devote time, energy and services to the affairs of the Company with a term of 12 months. The remuneration for the services shall be 150,000 shares of the Company's common stock upon execution of the agreement. The Company charged the earned portion of the fair value of the stock issued of $476 to operations in 2015.

 

On November 20, 2015, the Company entered into an amended agreement with Joel Singer where by Singer will create a surgical procedure training manual along with other related materials with a remaining term of 12 months. The remuneration for the services shall be 50,000 shares of the Company's common stock upon execution of the agreement and 100,000 upon milestone achievements. The Company charged the earned portion of the fair value of the stock issued of $597 to operations in 2015.

 

On November 30, 2015, the Company entered into an agreement with Rialto Partners LLC whereby Rialto will spearhead the setup of a scientific advisory board for the Company along other duties with a term of 12 months. The remuneration for the services shall be shares of the Company's common stock based on a defined schedule. The Company charged the earned portion of the fair value of the stock issued of $353 to operations in 2015.

 

On December 1, 2015, the Company entered into an agreement with Kristine Waterlander whereby Waterlander will assist the Company with education of care givers along other duties with a term of 12 months. The remuneration for the services shall be 100,000 shares of the Company's common stock upon execution of the agreement. The Company charged the earned portion of the fair value of the stock issued of $287 to operations in 2015.

 

On October 6, 2015, the Company entered into an agreement with Bonnie Barnett whereby Barnett will assist the Company with national implementation of the program in Wellness Center client environments with a term of six months. The remuneration for the services shall be up to a total aggregate of 500,000 shares of the Company's common stock. The Company charged the earned portion of the fair value of the stock issued of $8,929 to operations in 2015.

 

On March 20, 2015, the Company entered into an agreement with Myriad Medical Marketing (MMM) whereby MMM was appointed as the Company's exclusive sales representative for the BioCorRx Recovery Program in certain territories. The sole compensation under the terms of the agreement shall be a commission collected on the gross sales sold in the territory. As of December 31, 2015 $4,750 was paid in connection with this agreement.

 

Litigation

 

On June 13, 2013, Fresh Start Private Florida, LLC ("FSPF") filed a complaint against the Company alleging breach of a License Agreement whereby FSPF was to receive, implant, use, sell and otherwise commercialize the Naltrexone implant product and the Fresh Start Alcohol Rehabilitation Program throughout the state of Florida. The complaint alleged that the Company made certain misrepresentations and failed to provide certain operational documentation pursuant to the License Agreement. (Fresh Start Private Florida, LLC v. Fresh Start Private Management, Inc., Case No. 13-CA 1850, Circuit Court of the Twentieth Judicial Circuit in and for Collier County, Florida).

 

On June 3, 2014, the Company entered into a settlement agreement to pay the plaintiff in increments through October 31, 2015 in exchange for dismissal of all pending litigation and termination of all prior and current agreements. Under the confidentiality clause of the settlement agreement the parties are prohibited from disclosing settlement amounts.

 

As of December 31, 2015 and 2014, the outstanding liabilities related the settlement agreement was $-0- and $220,000, respectively.

 

The Company is subject at times to other legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity. There was no outstanding litigation as of December 31, 2015.

 

Uncertain Tax Positons

 

The Company uses a number of independent contractors in our operations in which it does not pay or withhold any federal, state or provincial employment tax. There are a number of different tests used in determining whether an individual is an employee or an independent contractor and such tests generally take into account multiple factors. There can be no assurance that legislative, judicial or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change, or at least challenge, the classification of our independent contractors. As of December 31, 2015 and 2014, the Company has reviewed the various independent contractor relationships and has determined to not accrue any additional liabilities related to the above contingency.