NOTE 14 - COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

(14) - COMMITMENTS AND CONTINGENCIES

(14) COMMITMENTS AND CONTINGENCIES

a) Real Property Leases

The Company leases seven (7) restaurant spaces and its corporate office from unrelated parties. Rent expense paid was $323,541 and $271,902 for the six months ended June 30, 2020 and 2019. Future minimum lease payments under these real property lease agreements are as follows:

For the Year Ending December 31,	KMKE	IBE	IBA	IBWS	IBCH	IBCS	IPL
2020 (six months)	$ -	$ -	$ 38,897	$ 51,322	$ 35,091	$ 33,000	$ 32,524
2021	$ -	$ -	$ 25,931	$ 102,643	$ 23,394	$ 67,200	$ 66,151
2022	$ -	$ -	$ -	$ 104,354	$ -	$ 69,000	$ 67,648
2023	$ -	$ -	$ -	$ 112,908	$ -	$ 70,800	$ 69,183
2024	$ -	$ -	$ -	$ 112,908	$ -	$ 72,600	$ 70,756
Thereafter	$ -	$ -	$ -	$ 94,090	$ -	$ 281,400	$ 165,001
Total minimum lease payments	$ -	$ -	$ 64,828	$ 578,225	$ 58,485	$ 594,000	$ 471,263
	WCVC	Total
2020 (six months)	$ 26,520	$ 217,354
2021	$ 22,100	$ 307,419
2022	$ -	$ 241,002
2023	$ -	$ 252,891
2024	$ -	$ 256,264
Thereafter	$ -	$ 540,491
Total minimum lease payments	$ 48,620	$ 1,815,421

KMKE: Kalaka Mexican Kitchen - Evergreen; IBE: Illegal Burger - Evergreen; IBA: Illegal Burger - Arvada; IBWS - Illegal Burger - Writer Square; IBCH - Illegal Burger - Capital Hill; IBCS - Illegal Burger - CitiSet; IPL - Illegal Pizza - Lauderhill; WCVC - corporate office. The Company’s leases for the Evergreen locations expired on August 31, 2019, and are currently operating on a month to month basis.

b) Other

The Company is subject to asserted claims and liabilities that arise in the ordinary course of business. The Company maintains insurance policies to mitigate potential losses from these actions. In the opinion of management, the amount of the ultimate liability with respect to those actions will not materially affect the Company’s financial position or results of operations.

c) Litigation

On October 8, 2018, the creditor holding the First Amended Senior Secured Note from Illegal Burger, LLC filed suit in Broward County, Florida. The creditor is demanding $565,267, including interest plus attorney’s fees and costs. The Company expects to either negotiate a settlement agreement or to vigorously defend this action. In May 2020 the U.S. Securities and Exchange Commission, (SEC), filed a civil action alleging fraud against the creditor in Note 13c above. The SEC also appointed a court supervised receiver of this creditor, who has stayed all current litigation involving this creditor. The Company expects to reach a settlement with this receiver when they lift the stay.

The two related party holders of four fixed rate convertible notes and two of the SPAs for the purchase of common shares has threatened litigation relating to these securities, based on a claim that the Company does not have sufficient shares reserved for issuance under these notes and SPAs as required. The Company claims that these holders have defaulted under the SPA that required a $347,500 tranche to be invested in September 2019, and that the failure to provide these funds directly caused the circumstances causing the claimed shortfall in reserved shares.