RELATED PARTY TRANSACTIONS

The Company may from time to time enter into agreements with shareholders, affiliates and other companies engaged in certain aspects of the display, electronics, optical and software industries as part of our business strategy. In addition, the wearable computing product market is relatively new and there may be other technologies the Company needs to purchase from affiliates in order to enhance its product offering. The Company and Goertek Inc. ("Goertek") have entered into agreements to jointly develop and commercialize a range of technologies and wearable products. These include: a mutually exclusive supply and manufacturing arrangement for a certain display product for 24 months after mass production begins; an agreement that provides the Company with the right of first refusal to invest in certain manufacturing capacity for certain products with Goertek; an agreement whereby Goertek will provide system level original equipment manufacturing services for the Company's wearable products; an arrangement whereby the Company will supply display modules for Goertek's virtual reality and augmented reality products; and other agreements related to promotion around certain products as well as providing designs relating to head mounted displays.

During the three and six month periods ended June 30, 2018 and July 1, 2017, the Company had the following transactions with related parties:



	Three Months Ended
	June 30, 2018				July 1, 2017
	Sales		Purchases		Sales		Purchases
Goertek	$	—	$	78,905	$	—	$	173,925
RealWear, Inc.	261,605		—		—		—
	$	261,605	$	78,905	$	—	$	173,925

	Six Months Ended
	June 30, 2018				July 1, 2017
	Sales		Purchases		Sales		Purchases
Goertek	$	—	$	298,909	$	—	$	182,925
RealWear, Inc.	512,956		—		—		—
	$	512,956	$	298,909	$	—	$	182,925

The Company had the following receivables, contract assets and payables with related parties:



	June 30, 2018						December 30, 2017
	Receivables		Contract assets		Payables		Receivables		Payables
Goertek	$	—	$	—	$	122,974	$	—	$	326,877
RealWear, Inc.	246,005		900,000		—		414,635		—
	$	246,005	$	900,000	$	122,974	$	414,635	$	326,877