(4) Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

(4) COMMITMENTS AND CONTINGENCIES

a) Real Property Lease

The Company leases office and warehouse space with unrelated parties. During 2014, the Company executed a 1-year lease, with base rent of $2,200 per month, which was renewed on July 1, 2015. The new lease required a monthly base rent payment of $2,310. This lease expired July 1, 2016, and was extended for one month. The Company relocated under a new two year lease effective July 1, 2016. The Company received a three month abatement in rent payments in exchange for completing certain leasehold improvements. These improvements were completed and the Company relocated on August 1, 2016. This lease requires a base rent of $3,063 per month and increases by 4% on the anniversary.

Rent expense of $23,697 and $23,257 was incurred during the nine months ended September 30, 2016 and 2015, respectively. Rent expense of $8,040 and $8,029 was incurred during the three months ended September 30, 2016 and 2015, respectively.

Future minimum lease payments under the office lease agreement are as follows:

For the Years Ending December 31,
2016 (3 months remaining)	$ 9,188
2017	$ 37,121
2018	$ 28,668
Total minimum lease payments	$ 74,977

b) Vehicle Lease

The Company leases a certain vehicle under an agreement which is accounted for on the balance sheet as a capital lease and expires in May 2021. The lease calls for monthly payments of $366, which commenced in July 2015.

Future minimum lease payments under the capital lease agreement are as follows:

For the Years Ending December 31,
2016 (3 months remaining)	$ 1,799
2017	$ 4,392
2018	$ 4,392
2019	$ 4,392
2020	$ 4,392
Thereafter	$ 934

Total minimum lease payments	$ 20,301
Less: amount representing interest	$ 2,245
Present value of net minimum lease payments	$ 18,056

c) 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.

HD View 360 Inc. 10-Q