NOTE 8 - COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

NOTE 8 - COMMITMENTS AND CONTINGENCIES

NOTE 8 – COMMITMENTS AND CONTINGENCIES

We entered into a sub-lease of our corporate offices in Orange County, California, on December 1, 2014. The property consists of approximately 11,000 square feet of office, manufacturing and assembly space. After completing various leasehold improvements, we moved in to the property in early March 2015. We currently sublease the property from ASP, an affiliate of the Company, for $12,000 per month, consistent with the amount that is charged to ASP by the landlord. On February 5, 2015, ASP entered into a new five year lease for the property beginning July 1, 2015. The lease calls for a base rent of $9,968 per month plus payment of approximately $2,000 per month for common area maintenance. The lease includes annual increases in the monthly lease payments of approximately 3% each year. Additionally, in conjunction with the new lease agreement, NuGene paid a commission to the real estate agent of $19,152. The commission has been recorded in Other Long Term Assets in the accompanying consolidated balance sheet as of March 31, 2015 and will be amortized over the life of the lease.

As of March 31, 2015, the Company had entered into Advisory Board agreements (“Advisory Agreements”) with four medical professionals and on April 1, 2015 entered into an Advisory Agreement with a fifth physician. The Company believes our Advisory Board consists of leaders in their respective fields. The Advisory Agreements are for a period of three years and will begin expiring in December 2017. The terms of each Advisory Agreement vary but generally provide our advisory members with up to 50,000 initial sign on shares vesting over an 18 month period, base compensation of $3,000 per month and up to 50,000 shares of common stock per annum issued on the anniversary of the effective date of the agreement. Our Advisory Board members are required to attend two Advisory Board meetings per year for which they will be compensated $2,000 - $6,000 per meeting plus travel expenses.

From time to time, we may be involved in routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate amount of liability, if any, for any claims of any type (either alone or in the aggregate) may materially and adversely affect our financial condition, results of operations and liquidity. In addition, the ultimate outcome of any litigation is uncertain. Any outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses, diversion of management attention and other factors. We expense legal costs in the period incurred. We cannot assure you that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against us in the future, and these matters could relate to prior, current or future transactions or events.

We are not currently a party to any material legal proceedings. We are not aware of any pending or threatened litigation against us that in our view would have a material adverse effect on our business, financial condition, liquidity, or operating results. However, legal claims are inherently uncertain, and we cannot assure you that we will not be adversely affected in the future by legal proceedings.