NOTE 13 – FACTORING AND SECURITY AGREEMENT

On February 20, 2015, the Company executed a Factoring and Security Agreement with LSQ Funding Group L.C. (“LSQ”) Pursuant to the terms of the agreement LSQ will purchase, as absolute owner, certain accounts receivable as agreed upon by both parties. LSQ will credit the Company’s account the purchase price less applicable fees. During the nine months ended September 30, 2015 LSQ has purchased $1,261,644 of the Company’s receivables. Pursuant to the terms of contract LSQ holds back a 19% reserve on purchased receivables. Once the receivable is collected these funds are released to the Company. As of September 30, 2015 LSQ had disbursed all available funds, except $190, less applicable fees.