NOTE 11 - COMMITMENTS AND CONTINGENCIES

Lease Commitments

Rental expense of the Company was $33,031 and $33,009 for the three months ended March 31, 2021 and 2020, respectively.

On October 1, 2019, the Company entered into a lease with a company (“Lessor”) beneficially owned by Ms. Tang Oi Ming Denise (holding 7.5% of the Company’s shares of common stock as of March 31, 2020 and 7.5% as of March 31, 2021) and Ms. Tang Oi Ming Denise was also a director of Lessor who later resigned on March 15, 2021, for office space in Hong Kong for the period of one year, at HKD55,000 (approximately $7,051) per month. On October 1, 2020, the lease was renewed for the period of one year, at HKD55,000 (approximately $7,051) per month. For the three months ended March 31, 2021 and 2020, the Company incurred paid rental amounts of $21,154 and $21,500, respectively, to Ms. Tang Oi Ming Denise that are included in General and administrative expenses.

The Company has entered into a lease for office space located in Din Daeng Sub-district, Din Daeng District, Bangkok, Thailand for the period from February 21, 2017 to February 20, 2020, at THB127,120 ($4,068) per month. The Company early terminated the lease effective in July 2019.

On August 1, 2019, OBON Thailand entered into a rental agreement with Mr. Thanawat Wongnapachant, brother of the Company’s CEO, to lease an office space from Mr. Thanawat Wongnapachant for a period of twelve months at THB50,000 ($1,600) per month. On August 1, 2020, the rental agreement was renewed for a period of twelve months at THB50,000 ($1,600) per month.

On November 1, 2019, OBON Thailand entered into an additional rental agreement with Mr. Thanawat Wongnapachant, brother of the Company’s CEO, to lease an office space property from Mr. Thanawat Wongnapachant for a period of twelve months at THB70,000 ($2,240) per month. On November 1, 2020, the rental agreement was renewed for a period of twelve months at THB70,000 ($2,240) per month.

For the three months ended March 31, 2021 and 2020, the Company incurred rental amounts of $11,878 and $11,509, respectively, to Mr. Thanawat Wongnapachant that are included in General and administrative expenses.

As of March 31, 2021, all the outstanding leases are short-term leases. The total minimum future lease payments are $64,388 payable in the twelve months ending March 31, 2022.

Capital Commitments

As of March 31, 2021, the Company had the following contracted capital commitments:


	March 31, 2021
For purchases of equipment, payable in the twelve months ending March 31, 2022	$	1,052,994

Employment Agreement

On October 1, 2019, Enigma BVI entered into a three-year employment agreement with Hok Fung Wai, the president of the Company, to serve as Enigma BVI’s general manager from October 1, 2019 to October 1, 2022. Enigma BVI may, in its absolute discretion, terminate the employment agreement, with one month notice or for cause. The agreement provides Mr. Wai a monthly salary of HK$45,000 (approximately $5,769). During the three months ended March 31, 2021 and 2020, salaries paid to Mr. Wai totaled $22,885 and $23,654, respectively.