8. Commitments

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

8. Commitments

8. Commitments

The Company has annual compensation arrangements with the following individuals:

Sidney Chan	$	180,000
William Smith	$	180,000

The contracts are automatically renewed annually and may be terminated by the Company at any time, effective thirty or sixty days after delivery of notice, without any further compensation.

The terms of Mr. Chan’s contract provides for monthly services fees of $15,000 per month and vehicle allowance of $800 per month as Chief Executive Officer of the Company. The contract also provides for a commission of 1% of net sales of all the Company’s products. The term of the contract is for one year and automatically renews for continuous one year terms.

In addition, if more than 50% of the Company’s stock or assets are sold, Messrs. Chan will be compensated for entering into non-compete agreements based on the selling price of the Company or its assets as follows:

• 2% of sales price up to $24,999,999 plus

• 3% of sales price between $25,000,000 and $49,999,999 plus

• 4% of sales price between $50,000,000 and $199,999,999 plus

• 5% of sales price in excess of $200,000,000

Any other amounts distributed to each key employee are to be determined by the Board of Directors.

On May 25, 2015 the Company modified the terms of the agreement with Messrs. Chan. All terms have remained the same, with the exception of the following:

• the 1% commission on the net sales of the Company has been extended to a lifetime commission on all sales of the Company, whether Messrs. Chan continues to hold that office, or any position with the Company

• in the event Messrs. Chan is terminated by the Company, Messrs. Chan would receive 24 months compensation at his current rate and all amounts owed to him, his spouse and their family members would be due within five days, including principal and accrued interest and all options would remain in good standing until their expiration

• the health care provision will now include international health care coverage for Messrs. Chan and his dependents

The terms of Mr. Smith’s contract provides for monthly services fees of $15,000 per month and home office allowance of $500 per month as President of the Company. The term of the contract is for one year and automatically renews for continuous one year terms.