NOTE 14. COMMITMENTS AND CONTINGENCIES

Operating Leases

On February 26, 2021 the Company executed an office lease, effective for a 12-month term beginning March 1, 2021.  The lease required monthly base rent payments of $6,000 and the issuance of 5,333 shares of the Company’s common stock.  The value of the common stock of $49,600 was amortized to rent expense on a monthly basis over the lease term. This lease was not renewed.  The Company leased shared office space on a monthly basis with monthly rents approximating $4,500 through June 30, 2022. The Company entered into a lease agreement to rent office space for a 12-month period beginning July 1, 2022 with a monthly base rent of $15,736. Rent expense under office leases, including CAM charges, was $48,893 and $48,819 for the three-month periods ended March 31, 2023 and 2022, respectively.

Legal Proceedings

On December 6, 2006, Orange County Valet and Security Patrol, Inc. filed a lawsuit against the Company in Orange County California State Superior Court for Breach of Contract in the amount of $11,164. A default judgment was taken against the Company in this matter. In mid-2013 we learned the Plaintiff’s perfected the judgment against the Company, but we have not heard from the Plaintiffs.  As of March 31, 2023 and December 31, 2022, the Company has accrued $11,164 plus accrued interest of approximately $18,000.  In the event the Company pays any money related to this lawsuit, IDTEC agreed, in connection with the closing of our 2020 asset purchase transaction with IDTEC, to pay the amount for the Company in exchange for shares of our common stock.