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Commitments and Contingencies
9 Months Ended
Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 8 – COMMITMENTS AND CONTINGENCIES

 

Industrial Lease

 

Effective March 1, 2014, the Company signed a lease for four thousand square feet of industrial space in North Las Vegas. The term of the lease was for three years and cost $2,200 per month. The lease expired on April 30, 2017 and the Company was on a month to month lease thereafter. The lease was terminated as of June 30, 2018.

 

Rent expense amounted to $0 and $6,539 for the three-month periods ended September 30, 2018 and 2017, respectively. Rent expense amounted to $13,400 and $19,556 for the nine-month periods ended September 30, 2018 and 2017, respectively.

 

Aoxin License Agreement

 

Pursuant to a 2012 license agreement and 2017 amendment executed between the Company and Aoxin, in order to maintain exclusive rights for the United States (US), the Company was required to purchase and sell certain amount of e-Go model vehicles per year for a certain period of time starting from the completion of the requirements established by the United States Department of Transportation’s protocols for the e-Go model. As part of the license agreement, the Company was committed to pay expenses related to any required airbag testing procedures. The Company estimated the cost of these airbags could be as little as $500,000 or as much as $2 million.

 

Aoxin has been unable to procure a license to design, test and manufacture e-Go vehicles in China. Additionally, our representatives in China have been told by Aoxin that any such agreement and amendment has expired. Based on this information, we may prepare a business plan and re-approach Aoxin if and when Aoxin obtains the required licenses to provide a next-generation version of the e-Go vehicle. Given these circumstances, during the nine-month period ended September 30, 2018, we took a $50,000 charge and wrote down the value of the Aoxin license to $0 and associated vehicle deposits were also fully-impaired.

 

Legal Proceedings

 

The Company may from time to time, become a party to various legal proceedings, arising in the ordinary course of business. The Company investigates these claims as they arise. Management does not believe, based on current knowledge, that there were any such claims outstanding as of September 30, 2018.