8.	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 year ended December 31, 2015 the Company’s sales reached the maximum amount under which the Company is required to pay a royalty under this agreement. Royalty expense amounted to $20,157 and $45,000 for the years ended December 31, 2015 and 2014, respectively. During 2015, the Company’s President who has a 60% interest in the royalties, converted royalties payable under the agreement in the amount of $84,868 to 499,225 shares of company stock at 0.17 cents per share.

Included in accounts payable and accrued expenses at December 31, 2015 and 2014 was $56,579 and $132,986, respectively, in regards to this agreement.