NOTE 10   COMMITMENTS AND CONTINGENCIES Legal Proceedings There are no legal proceedings, which the Company believes will have a material adverse effect on its financial position. Operating Leases The Company leases office and warehouse space in Columbus, Ohio under an operating lease. The lease provides for a lease payment of $4,200 per month from December 1, 2012 through November 30, 2013, and a lease payment of $4,400 per month from December 1, 2013 through November 30, 2014, and lease payments thereafter on a month-to-month basis at a rate of $4,568 per month. Future minimum lease payments under the terms of the operating leases are as follows: 2012 $ 50,400 2013 50,600 2014 48,400 Thereafter - Total $ 149,400 Contingent Consideration In connection with the acquisition of E-Waste Systems of Ohio, Inc. (formerly Tech Disposal, Inc.) on October 14, 2011, the Company agreed to pay contingent consideration to selling shareholder equal to 4.5 times the adjusted earnings before interest tax depreciation and amortization (EBITDA) for the twelve month period immediately following closing, plus the cash balance at the date of closing, less the initial consideration paid. The purchase consideration is deferred for 12 months in accordance with the contractual terms of the earn-out arrangement and is to be paid through the issuance of common stock. The contingent liability was valued on the date of acquisition based probability-weighted expected outcomes of operations over the earnout period. The contingent liability was $291,999 as of December 31, 2011.