COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

NOTE 15 – COMMITMENTS AND CONTINGENCIES

The Company is not aware of any pending or threatened legal proceedings, nor is the Company aware of any pending or threatened legal proceedings, affecting any current officer, director or control stockholder, or their affiliates.

As part of its regular operations, the Company may become party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning its commercial operations, products, employees and other matters. Although the Company can give no assurance about the outcome of these or any other pending legal and administrative proceedings and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on the Company’s financial condition or results of operations.

The Company leases office space on a month-to-month basis, with monthly rental payments due of approximately $10,900, which includes the New Mexico operations facility of $5,500, and accounting, dispatch and executive office rents in Colorado and Georgia.

On May 18, 2015, the Company entered into a trailer lease agreement with Polar Service Centers. The Company leased 7 trailers at a monthly rent of $17,500 for 28 months commencing on June 1, 2015 and continuing until September 30, 2017.

On February 15, 2016, the Company entered into a trailer lease agreement with Wallwork Truck Center. The Company leased 10 trailers at a monthly rent of $17,335 for 48 months commencing on February 12, 2016 and continuing until February 12, 2020.

On July 26, 2016, the Company entered into a trailer lease agreement with Wholesale Truck and Finance. The Company leased 3 trailers at a monthly rent of $5,717 for 60 months commencing on August 1, 2016 and continuing until August 1, 2021.

The Company leases office space, a diesel repair shop, and employee housing under non-cancelable lease agreements. The leases provide that we pay taxes, insurance, utilities, and maintenance expenses related to the leased assets. During March 2016, we entered into a restructured lease agreement with the property owner/landlord, where the facility lease has been restructured to a 60 month lease commencing April 1, 2016. The restructured lease indicates that we will not pay any cash lease payments while we deplete our $120,000 security deposit held by the landlord, which is included in other assets on the accompanying balance sheets. The revised lease and its payment structure will be such that we will use the funds contained in the security deposit in the amount of $6,000 per month as rent expense (in lieu of cash payments) while West Texas Intermediate (“WTI”) oil prices remain below $60.00 per barrel, for any 30 day period. When the price of WTI oil goes above $60.00 per barrel but less than $80.00 per barrel for any 30 day period, we will use the revised amount against our deposit of $7,500 per month. Upon the price of WTI oil being above the $80.00 per barrel level for a 30 day period, the Company’s rent payment will be $10,000 per month, the maximum rental payment under the restructured lease agreement.

The Company entered into 3 separate apartment leases in 2016, to provide employee housing in various operating locations. Each are 12 month agreements with a total monthly rent of $3,602.

Future minimum lease payments for these non-cancelable operating leases for the years ending December 31, are as follows:

2017		536,744
2018		348,624
2019		348,624
2020		175,274
2021		63,736
Total net minimum payments	$	1,473,002

Legend Oil & Gas, Ltd. 10-K