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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

14.

COMMITMENTS AND CONTINGENCIES

The Company has entered into distribution agreements with liquidated damages in case the Company cancels the distribution agreements without cause. Cause has been defined in various ways. It is management’s belief that no such agreement has created any liability as of September 30, 2018.

On February 22, 2017, we were served with a summons and complaint with respect to a breach of contract action filed in Superior Court of the State of California, Los Angeles County, by Statewide Beverage Company, Inc. (“Statewide”), a former distributor of the Company’s products, whose distribution agreement, with the Company had terminated effective November 2016 for “cause” (non-payment of invoices within the applicable grace period provided in the distribution agreement). The complaint alleged that the distribution agreement was terminated without “cause” and sought unspecified damages consisting of termination payments and fees which would be due upon a termination without “cause,” but not on a termination for “cause” as well as certain invasion fees allegedly due under the terms of the distribution agreement. The Company settled this case as of July 31, 2018 for three cash payments over a five (5) month period through January 1, 2019 totaling $750,000 and the issuance of 60,000 restricted shares of our common stock, valued at $4.66 per share. Accordingly, the total impact of this settlement amounted to $1,029,600.

In July 2018, we were served with a complaint filed in Palm Beach County, Florida Circuit Court by Johnny Nunez (“Plaintiff”), seeking damages for alleged breach of contract and unjust enrichment by D3M Licensing Group, LLC (“D3M”), who was also named as a defendant as well as Celsius. Celsius believes that Plaintiff’s claims are without merit, as Plaintiff was not a party to the Photography Agreement or any other agreement with Celsius and accordingly, cannot claim breach of contract or unjust enrichment as a matter of law. Accordingly, Celsius has filed a motion to dismiss Plaintiff’s amended complaint for failure to state a claim. Plaintiff’s counsel has filed a motion in opposition and the parties are currently awaiting a ruling from the Court. Please refer to Item 1 below, regarding Legal Proceedings, for additional details.

The Company entered into an office lease with a related party (see note 11) effective October 2015. The current monthly base rent amounts to $12,090 per month and the lease terminates in October 2020. Future minimum payments required under operating lease obligations at September 30, 2018 are as follows:

Future Minimum Lease Payments

Year ending December 31,
2018	$	36,994
2019		150,175
2020		128,259
Total	$	315,428