8.             RELATED PARTY TRANSACTIONS:

Dividend and Interest activity

Justin Yorke is the manager of the JMW Fund, LLC, the San Gabriel Fund, LLC, and the Richland Fund, LLC; and is a director of the Company.  Mr. McGrain, our Interim Chief executive officer and Interim Chief financial officer is also a member of the JMW Fund, LLC, the San Gabriel Fund, LLC, and the Richland Fund, LLC.  These funds own 4,725,721 shares of common stock and holds warrants to purchase 1,278,186 common shares in the aggregate.

The Company had secured notes payable with the JMW Fund, LLC, the San Gabriel Fund, LLC and the Richland Fund, LLC in the aggregate amount of $1,037,361 as of June 30, 2017 and $962,361 as of December 31, 2016.  The funds had an aggregate outstanding balance of $138,000 on the revolving line of credit as of June 30, 2017 and December 31, 2016.  Mr. Yorke, as the manager of these funds, earned interest from loans payable for the three and six months ended June 30, 2017 of $48,093 and $94,889, respectively; and for the three and six months ended June 30, 2016 of $47,316 and $97,055, respectively. Total accrued interest as of June 30, 2017 and 2016 was $427,455 and $332,566, respectively.