NOTE 14 - COMMITMENTS AND CONTINGENCIES

Operating lease

The Company's lease commenced effective September 1, 2012 for a term of three years, with an option to extend the lease for 36 months.  The base rent is $4,309 per month.

Guarantor-Factoring Agreement

August 1, 2011, Start Fresh Alcohol Recovery Clinic Inc. (the “Clinic”) entered into an agreement with a factoring company to provide a debt facility secured against the approved insurance clients of the Company.  The agreement is for one year, for a maximum facility of $500,000.  The facility bears a Funding fee equal to the greater of (i) the prime rate of interest plus 6.5% multiplied by the outstanding facility position, calculated monthly and (ii) $4,500 and a Collateral Management Fee equal to 1% of the factored accounts receivable.  If both fees are less than $6,000 per month, then the combined fee is $6,000.  Up to October 31, 2011, the aforementioned fees are capped at 50% of the greater amount. Additionally the Company is responsible for monthly maintenance fees of $350 per month and an origination fee of 3% of the facility cap or $15,000.   The Company is guarantor for this facility.  The security for the facility has been provided by way of a security interest against the receivables of the Clinic, a general security assignment over all of the assets of the Clinic and the Company and personal guarantees of two of the Company’s directors.  As of December 31, 2012, the Clinic had drawn $154,990 of the facility.

On February 26, 2013 Fresh Start Private Management, Inc. (The Company) entered into an agreement with the factoring company to repay the outstanding sum of $140,000 no later than July 31, 2013.

Consulting agreements

On April 17, 2012, the Company entered into an agreement with James Wagenbach whereby Mr. Wagenbach is to be appointed as the senior insurance specialist for the Company.  The remuneration for the services shall be (i) 750,000 shares of the Company’s common stock; (ii) a fee of $2,500 per month and (iii) the Company to pay 10% of the bonus pool (which percentage may fluctuate).  The term of the agreement is an at will, open agreement.  The Company charged the fair value of stock obligation of $22,500 to operations in 2012.

On May 24, 2012, the Company entered into an agreement with Tom Welch whereby Mr. Welch is to be appointed as the senior sales/marketing and placement specialist for the Company.  The remuneration for the services shall be (i) 450,000 shares of the Company’s common stock upon the successful placement of two positions; (ii) 300,000 shares of the Company’s common stock for assisting clinic operations; (iii) $1,000 per month and bonus compensation per insurance claim and cash paid and (iv) 10% of the bonus pool (which percentage may fluctuate).   The term of the agreement is an at will, open agreement.  The Company charged the fair value of stock obligation of $9,960 to operations in 2012.

On November 5, 2012, the Company entered into an agreement with Jeffery Goddard whereby Mr. Goddard will provide certain consulting services relating to marketing.  The remuneration for the services shall be 3,000,000 shares of the Company’s common stock.  The term of the agreement is for five years.  The Company charged the fair value of earned portion  of the stock obligation of $1,196 to operations in 2012.

On November 9, 2012, the Company entered into an agreement with Dr. Rudi Puana whereby Dr. Puana will provide certain consulting services relating to clinical analysis and studies, speak at conventions and other meetings on behalf of the Company.  The remuneration for the services shall be (i) 500,000 shares of the Company’s common stock; (ii) 250,000 shares of the Company’s common stock upon written acceptance of the paper for publication in a journal; (iii) 1,000,000 shares of the Company’s common stock upon publication of the paper in a journal; (iv) for subsequent papers, the Company shall compensate Dr. Puana in either cash or the Company’s common stock; (v) for appearances as a consultant with multiple peers, the Company shall pay $2,000; for appearances with individuals and radio or television interviews, the Company shall pay $700 and (vi) effective January 1, 2013, 250,000 shares of the Company’s common stock for general medical consulting services.  The term of the agreement is five years. The Company charged the fair value of earned portion  of the stock obligation of $214 to operations in 2012.

On December 13, 2012, the Company entered into an agreement with Sal Amodeo whereby Mr. Amodeo will provide general consulting services on any aspects of the Naltorxone implant.  The remuneration for the services shall be 1,000,000 shares of the Company’s common stock.  The term of the agreement is for one year.  The Company charged the fair value of earned portion  of the stock obligation of $542 to operations in 2012.

On December 14, 2012, the Company entered into an agreement with Alexander Wilson whereby Mr. Wilson will provide legal advice and services for the Company.  The remuneration for the services shall be 750,000 shares of the Company’s common stock.  The term of the agreement is for one year.  The Company charged the fair value of earned portion  of the stock obligation of $416 to operations in 2012.

On December 18, 2012, the Company entered into an agreement with Timothy Jackoboice whereby Mr. Jackoboice will be designated as Chief Licensing Officer of the Company.  The remuneration for the services shall be 4,000,000 shares of the Company’s common stock.  The term of the agreement is for one year.  The Company charged the fair value of earned portion  of the stock obligation of $1,710 to operations in 2012.

On December 25, 2012, the Company entered into an agreement with John Carley whereby Mr. Carley will be designated as the Product and License Sales Manager of the Company.  The remuneration for the services shall be 3,500,000 shares of the Company’s common stock.  The term of the agreement is for one year.  The Company charged the fair value of earned portion  of the stock obligation of $690 to operations in 2012.

Settlement agreement

In February 2013 a dispute arose between the Company and one of its providers, Dr. Alexandre of Start Fresh Clinic.  The dispute was related to matters of fees due Dr. Alexandre for implant procedures performed by Dr. Alexandre.  The Company investigated the matter and it was determined by both parties that errors were made by Dr. Alexandre.  On or about April 13, 2013, the parties entered into a settlement agreement.  Under the terms of the settlement agreement, Dr. Alexandre would (i) transfer his ownership interest in Start Fresh Clinic to Dr. George Fallieras for $10,000 (ii) Dr. Alexandre will provide tail coverage on the existing policy for two years and (iii) Dr. Alexandre agreed to waive any contractual claim to amounts due Dr. Alexandre from pending medical insurance payments and his role as Medical Director of Start Fresh Clinic.  The funds in dispute shall be retained by Start Fresh Clinic.  As a result of this settlement agreement, the Company recorded a charge of $81,646 at December 31, 2012.  This amount is included in the operating expenses in the accompanying statement of operations.