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COMMITMENTS AND CONTINGENCIES
6 Months Ended
Jun. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 6. COMMITMENTS AND CONTINGENCIES

 

Litigation

 

From time to time, claims are made against the Company in the ordinary course of its business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties, or injunctions prohibiting the Company from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Company’s results of operations for that period or future periods.

 

In 2019, a judgement was received against the Company awarding EMA Financial, a former note holder of the Company, settlement of default notes payable, accrued interest and fees in the amount of $195,250. The amount is recorded on the balance sheet as of December 31, 2021, and December 31, 2020. The Company paid the full amount due under the judgement during fiscal year 2022.

 

During the period, a shareholder of the Company paid $200,000 in attempted settlement of the judgement noted above. The shareholder agreed to contribute the funds and that no payable from the Company was necessary. As such, the Company recorded the payment as a contribution in kind in APIC in relief of the amounts owed under the initial settlement.

 

During the three-month period ended June 30, 2022, the Company received an additional judgement on the above matter in the amount $20,333 for attorney’s fees related to the matter. The attorney additionally sought interest on the amounts owed in the amount of $57,246. In August of 2022, the Company agreed to a settlement with the attorney granting them 60 days to pay the full remaining amount of $57,246 in installment payments through October. The Company recorded the additional loss on settlements during the period in the amount of $61,996.