7.	Royalties

The Company was subject to a royalty agreement based upon sales of certain skin care products. The agreement required 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 was required to pay a royalty under this agreement. Royalty expense amounted to $-0- and $19,000 for the three month periods ended March 31, 2016 and 2015, respectively. During 2015, the Company’s President who had 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 March 31, 2016 and December 31, 2015 was $56,579 in regards to this agreement.