7.	Royalties

The Company is subject to a royalty agreement based upon sales of certain skin care products. The agreement requires the Company to pay a royalty based upon 8% of such sales, up to $227,175. During the three month period ended June 30, 2015 the Company’s sales reached the maximum amount under which the Company is required to pay a royalty under this agreement. Royalty expense for the three month periods ended September 30, 2015 and 2014 amounted to $-0- and $9,000, respectively. Royalty expense for the nine month periods ended September 30, 2015 and 2014 amounted to $20,157 and $36,000, respectively. The Company’s President has a 60% interest in the royalties.

At September 30, 2015 and December 31, 2014, included in accounts payable and accrued expenses was $141,448 and $132,986, respectively, in regards to this agreement.