7.             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, collectively known as the “Funds”; and is a director of the Company.  John 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 14,180,543 shares of common stock and hold warrants to purchase 701,859 common shares in the aggregate.

The Company had secured notes payable with the Funds in the aggregate amount of $1,289,361; on September 29, 2017, the Company converted the principal and interest of $412,716 into 8,510,386 shares of common stock.  The Funds also had an aggregate principal balance of $138,000 and accrued interest of $50,887 on the revolving line of credit converted to 944,436 shares of common stock on September 29, 2017.  As of December 31, 2016, the Funds held an aggregate amount of $962,361 in secured notes payable and an aggregate outstanding balance of $138,000 on the revolving line of credit.  The Funds earned interest from loans payable for the three and nine months ended September 30, 2017 of $36,149 and $131,038, respectively; and for the three and nine months ended September 30, 2016 of $47,836 and $144,891, respectively. Total accrued interest as of September 30, 2017 and December 31, 2016 was zero and $332,566, respectively.