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usell.com, Inc.
0001271075
10-Q
USEL
2017-09-30
false
--12-31
No
No
Yes
Smaller Reporting Company
Q3
2017
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
1 - Organization and Business</u></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">uSell.com,
Inc., through its wholly-owned subsidiaries (collectively, “uSell,” or the “Company”), is a large market
maker of used smartphones. uSell acquires products from both individual sellers, on its website, uSell.com, and from major carriers,
big box retailers, and manufacturers through its subsidiary, We Sell Cellular, LLC (“We Sell Cellular”). The Company
maximizes the value of these devices by reclassifying them, adding value to them, and moving them throughout the world to those
who want them most. In order to serve its global and highly diverse customer base, uSell leverages both a traditional sales force
and an online marketplace where professional buyers of used smartphones can buy inventory on-demand. Through participation on
uSell’s online platform and through interaction with uSell’s salesforce, buyers can acquire high volumes of inventory
in a cost effective manner, while minimizing risk.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
4 – Capitalized Technology, Net </u></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Capitalized
technology consists of the following:</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font: 10pt/normal Times New Roman, Times, Serif; width: 90%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>September
30, </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017 </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December
31, </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016 </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; width: 72%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Gross
value</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 11%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">3,578,117</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 11%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">3,171,414</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated
amortization</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(2,693,693</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(2,237,221</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Net
value</font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">884,424</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">934,193</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Capitalized
technology is amortized on a straight-line basis over estimated useful lives of three years. Amortization expense amounted to
$150,000 and $139,000 for the three months ended September 30, 2017 and 2016, respectively, and $456,000 and $402,000 for the
nine months ended September 30, 2017 and 2016, respectively, and is included in cost of revenue. </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Future
annual estimated amortization expense is summarized as follows: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: left; font-weight: bold; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Years
ending December 31,</b></font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 84%; text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">2017
(remaining three months)</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">142,035</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">438,186</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">2019</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">247,463</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">2020</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">56,740</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">884,424</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
6 – Special Purpose Entity</u></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">On
the January 13, 2017, the Company and the Lender (the “Manager”) formed a special purpose entity as a Delaware limited
liability company (the “SPE”), for the purpose of purchasing, refurbishing, repairing and reselling cell phones, smart
phones, tablets and related accessories. The Manager is the sole manager of the SPE. The Manager invested $5,200,000 in equity
in exchange for all of the membership interests. Of this sum, $5,000,000 will be used by the SPE for the purchase of approved
inventory. Profits from the SPE will be distributed to the Manager and to the Company based on certain return thresholds, as defined
in Limited Liability Company Agreement.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">As
further detailed in the Services Agreement entered into between the Company and the SPE on the Closing Date, the Company will
provide all administrative and inventory management services necessary to the SPE’s daily operations. The Company and its
personnel will not be compensated for providing services to the SPE, and the Company will generally be responsible for the costs
of providing services to the SPE. However, the SPE will be responsible for costs directly related to acquiring and refurbishing
the SPE’s inventory, shipping, certain tax accounting fees approved by the Manager, and other costs. The Services Agreement
allows the Company to purchase inventory for its account and not for the SPE’s account until the Company has no available
capital to purchase inventory.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company conducted an evaluation of its involvement with the SPE, which is considered to be a related party business entity, as
of September 30, 2017, in order to determine whether the SPE was a variable interest entity (“VIE”) requiring consolidation
or disclosure in the condensed consolidated financial statements of the Company. The SPE was determined to be a related party
business entity because the Manager of the SPE is also the Lender to the Company’s NPA, as described in Note 5. The Company
evaluated the purpose for which the SPE was created and the nature of the risks in the entity as required by the guidance under
ASC 810-10-25, “Consolidation.” Based upon the Company’s analysis, the Company concluded that the SPE is not
deemed to be a VIE and as such it should not be consolidated within the Company’s condensed consolidated financial statements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">As
of September 30, 2017, the net amount due to the SPE for accounts receivable collected on its behalf was $49,000 and is recorded
as due to related party in the accompanying condensed consolidated balance sheets.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Expense
reimbursements for the three months ended September 30, 2017 amounted to $139,000, of which $100,000 was recorded in cost of revenues
and $39,000 was recorded in sales and marketing. Expense reimbursements for the nine months ended September 30, 2017 amounted
to $402,000, of which $261,000 was recorded in cost of revenues and $141,000 was recorded in sales and marketing. There were no
profit distributions made to the Company from the SPE during the three and nine months ended September 30, 2017. The Company will
account for profit distributions generated from the SPE as a component of its principal device revenue.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
8 - Commitments and Contingencies</u></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Management
Incentive Compensation Plan</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">On
July 27, 2016, the Company adopted its Management Incentive Compensation Plan (the “Incentive Plan”). The Incentive
Plan provides that each quarter that the Company meets certain gross EBITDA thresholds, participants will be eligible to receive
quarterly bonuses. The Incentive Plan is effective through September 2018. The Incentive Plan provides for minimum bonus eligibility
thresholds set at quarterly gross EBITDA levels that ensure that the Company will remain cash-flow positive and in compliance
with all debt covenants over the term after payment of bonuses. If the Company does not meet the minimum EBITDA threshold in a
given quarter, no bonus is payable under the Incentive Plan for that quarter. Bonuses will be subject to adjustment in the event
the Company’s year-end audit results in restatement of a prior quarter’s EBITDA. For the three and nine months ended
September 30, 2017, a total of $180,000 was earned under the Incentive Plan. As of September 30, 2017 and December 31, 2016, $90,000
and $52,000 is included in accrued expenses.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Legal
Proceedings</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">From
time to time, the Company is a party to or otherwise involved in legal proceedings arising in the normal and ordinary course of
business. As of the date of this report, the Company is not aware of any proceeding, threatened or pending, against the Company
which, if determined adversely, would have a material effect on its business, results of operations, cash flows or financial position.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Operating
Leases</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company leases space for operations, sales, customer support and corporate purposes under a lease agreement that expires in August
2018. The Company also leases space for its warehouse and office under a lease that expires in September 2021. The leases contain
provisions requiring the Company to pay maintenance, property taxes and insurance and require scheduled rent increases. Rent expense
is recognized on a straight-line basis over the terms of the leases.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Rent
expense, amounting to $86,000 and $63,000 for the three months ended September 30, 2017 and 2016, respectively, and $260,000 and
$149,000 for the nine months ended September 30, 2017 and 2016, respectively, is included in general and administrative expense
in the accompanying condensed consolidated statements of operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
10 – Customer and Vendor Concentrations</u></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Customer
Concentration</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">During
the three months ended September 30, 2017 and 2016, no customers represented 10% or more of the Company’s revenues. During
the three months ended September 30, 2017 and 2016, 62% and 65% of the Company’s revenues, respectively, were originated
in the United States, 19% and 24%, respectively, were originated in Europe and 13% and 8%, respectively, were originated in Hong
Kong.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">During
the nine months ended September 30, 2017 and 2016, no customers represented 10% or more of the Company’s revenues. During
the nine months ended September 30, 2017 and 2016, 67% and 65% of the Company’s revenues, respectively, were originated
in the United States, 16% and 20% of the Company’s revenues, respectively, were originated in Europe and 12% and 13% of
the Company’s revenues were originated in Hong Kong.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">At
September 30, 2017, no customers represented 10% or more of the Company’s accounts receivable. At December 31, 2016, two
customers represented 10% or more of accounts receivable, accounting for 22% and 15% of the Company’s accounts receivable.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Vendor
Concentration</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">During
the three months ended September 30, 2017, three vendors represented 10% or more of purchases, accounting for 34%, 33% and 16%
of the Company’s purchases. During the three months ended September 30, 2016, two vendors represented 10% or more of purchases,
accounting for 62% and 15% of the Company’s purchases.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">During
the nine months ended September 30, 2017, two vendors represented 10% or more of purchases, accounting for 57% and 20% of the
Company’s purchases. During the nine months ended September 30, 2016, one vendor represented 10% or more of purchases, accounting
for 81% of the Company’s purchases.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">At
September 30, 2017 and December 31, 2016, one vendor represented 10% or more of accounts payable, accounting for 57% and 52% of
accounts payable, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Basis
of Presentation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the
instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”).
Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been
condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not
include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations,
or cash flows. It is management’s opinion, however, that the accompanying unaudited interim condensed consolidated financial
statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the
financial position, operating results and cash flows for the periods presented.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s
Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC, which contains the audited financial statements
and notes thereto, together with Management’s Discussion and Analysis, for the years ended December 31, 2016 and 2015. The
financial information as of December 31, 2016 is derived from the audited financial statements presented in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2016. The interim results for the nine months ended September 30, 2017
are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any future interim periods.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Principles
of Consolidation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying unaudited interim condensed consolidated financial statements include the accounts of uSell and its wholly-owned
subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Segment
Information</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Operating
segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation
by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance.
The Company’s chief operating decision maker is its Chief Executive Officer. The Company and its Chief Executive Officer
view the Company’s operations and manage its business as one operating segment.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Use
of Estimates</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
preparation of unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect
of a condition, situation or set of circumstances that existed at the date of the unaudited interim condensed consolidated financial
statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming
events. Accordingly, the actual results could differ significantly from our estimates.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Accounts
Receivable</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Accounts
receivable represent obligations from the Company’s customers and are recorded net of allowances for cash discounts, doubtful
accounts, and sales returns. The Company’s policy is to reserve for uncollectible accounts based on its best estimate of
the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable
to determine whether an allowance for doubtful accounts is necessary based on an analysis of past due accounts and other factors
that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged
to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance
for doubtful accounts was $1,600 at September 30, 2017 and December 31, 2016.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Inventory,
net</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Inventory,
comprised of all finished goods, is stated at the lower of cost (average cost method) or net realizable value. Inventory is recorded
net of allowances.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Allowances
for slow-moving or obsolete inventory are provided based on historical experience of a variety of factors, including sales volume,
product life and levels of inventory at the end of the period. The provision for slow-moving for inventory amounted to $0 and
$384,000 for the three months ended September 30, 2017 and 2016, respectively, and $0 and $563,000 for the nine months ended September
30, 2017 and 2016, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Substantially
all of the Company’s inventory purchases are paid for before inventory is received in the Company’s warehouse. Prepaid
inventory amounted to approximately $737,000 and $221,000 at September 30, 2017 and December 31, 2016, respectively, and is included
in inventory, net in the accompanying condensed consolidated balance sheets.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Revenue
Recognition</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Revenue
is recognized when all of the following conditions exist: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred,
(3) the sales price is fixed or determinable, and (4) collectability is reasonably assured.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><i>Principal
Device Revenue</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company, through We Sell Cellular, generates revenue from the sales of its cellular telephones and related equipment. The Company
recognizes revenue “FOB shipping point” on such sales. Delivery to the customer is deemed to have occurred when the
customer takes title to the product. Generally, title passes to the customer when the products leave the Company’s warehouse.
Payment terms generally require payment once an order is placed. The Company allows customers to return product within 30 days
of shipment if the product is defective. Allowances for product returns are recorded as a reduction of sales at the time revenue
is recognized based on historical data. The estimate of the allowance for product returns amounted to approximately $370,000 and
$130,000 at September 30, 2017 and December 31, 2016, respectively, and is recorded in accrued expenses in the accompanying condensed
consolidated balance sheets.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><i>Agent
Commission Revenue</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Sellers
on the Company’s uSell.com website are shown a list of offers from third party buyers interested in purchasing their devices.
If a seller chooses one of these offers, the seller will ship their device directly to the buyer. The buyer is then responsible
for testing the device, servicing the customer, and ultimately paying the seller for the device or returning it. The Company charges
a commission to the buyers only when the seller sends in a device and is successfully paid for it. As such, the Company recognizes
Agent Commission Revenue upon payment to the seller.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><i>Fulfillment
Revenue</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company offers fulfillment services on behalf of its buyers for the items sold using the Agent Commission Revenue approach outlined
above. The Company acts as the agent in these fulfillment services transactions, passing orders booked by its buyers to its third
party fulfillment vendor, who then assembles the kits and mails them directly to the sellers. The Company earns a standard fee
from its buyers and recognizes revenue upon shipment of the kits to the sellers. The Company evaluated the presentation of revenue
on a gross versus net basis and determined that since the Company performs as an agent without assuming the risks and rewards
of ownership of the goods, revenue should be reported on a net basis.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><i>Advertising
Revenue</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Advertising
revenues primarily come from payments for text-based sponsored links and display advertisements. Generally, the Company’s
advertisers pay the Company on a cost per click, or CPC basis, which means advertisers pay only when someone clicks on one of
their advertisements, or on a cost per thousand impression basis, or CPM. Paying on a CPM basis means that advertisers pay the
Company based on the number of times their advertisements appear on the Company’s websites or mobile applications. Advertising
revenue is recognized as income when the advertising services are rendered.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Deferred
revenue represents amounts billed to customers or payments received from customers prior to providing services and for which the
related revenue recognition criteria have not been met.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Advertising</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Advertising
costs are expensed as they are incurred and are included in sales and marketing expenses. Advertising expense amounted to approximately
$7,000 and $11,000 for the three months ended September 30, 2017 and 2016, respectively, and approximately $31,000 and $41,000
for the nine months ended September 30, 2017 and 2016, respectively</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Concentration
of Credit Risk</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Financial
instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company minimizes credit risk associated with cash by periodically evaluating the credit quality of its primary financial institutions.
At times, the Company’s cash may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation
(“FDIC”) insurance limit. At September 30, 2017 and December 31, 2016, the Company had not experienced losses on these
accounts and management believes the Company is not exposed to significant risks on such accounts.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Concentrations
of credit risk with respect to accounts receivables is minimal due to the large number of customers comprising the Company’s
customer base and generally short payment terms.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair
Value of Financial Instruments</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Financial
instruments, including cash and cash equivalents, accounts receivable and accounts payable are carried at cost,
which management believes approximates fair value due to the short-term nature of these instruments. The fair value of debt approximates
its carrying amounts as a market rate of interest is attached to the repayment.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
computation of diluted EPS excludes the common stock equivalents of the following potentially dilutive securities because their
inclusion would be anti-dilutive: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font: 10pt/normal Times New Roman, Times, Serif; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="6" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 10.6pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three
and Nine Months Ended </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 10.6pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>September
30, </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="font-weight: bold; line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="font-weight: bold; line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; width: 70%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Unvested
Restricted Stock</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 12%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">141,666</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 12%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">255,000</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Vested
and Unvested Restricted Stock Units</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">743,020</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">743,020</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Stock
Options</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">503,667</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">468,896</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Stock
Warrants</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">797,083</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">802,520</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,185,436</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,269,436</font></td>
</tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Capitalized
technology consists of the following:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>September
30,</b></font></p>
<p style="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b> </font></p></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>December
31,</b> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b> </font></p></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="width: 72%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Gross
value</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">3,578,117</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">3,171,414</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Accumulated
amortization</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">(2,693,693</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">(2,237,221</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Net
value</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">884,424</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">934,193</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Future
annual estimated amortization expense is summarized as follows: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: left; font-weight: bold; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Years
ending December 31,</b></font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 84%; text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">2017
(remaining three months)</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">142,035</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">438,186</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">2019</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">247,463</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">2020</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">56,740</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">884,424</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">At
September 30, 2017, the Company’s Note (as defined below) is comprised of the following:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="width: 87%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Principal
Balance</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 10%; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">8,660,000</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Less:
Unamortized discount and debt issue costs</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">(349,852</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Total
Notes, net of unamortized discount and debt issue costs</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">8,310,148</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Less:
Current portion of Notes</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Long-term
Notes</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">8,310,148</font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The future minimum lease payments
under the capital lease at September 30, 2017 is as follows: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: left; padding-bottom: 1pt; font-weight: bold; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Years
ending December 31,</b></font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 84%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2017 (remaining
three months)</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">4,653</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,611</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2019</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,611</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2020</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,611</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2021</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,506</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">2022</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">549</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">74,541</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Less:
Amounts representing interest</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">10,661</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Principal portion</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">63,880</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Less:
Current portion</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">14,029</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Capital
lease obligations, net of current portion</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">49,851</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
following table summarizes the Company’s stock option activity for the nine months ended September 30, 2017:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Number
of</b></font></p>
<p style="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Options</b> </font></p></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted</b></font></p>
<p style="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Average</b></font></p>
<p style="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercise</b> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Price</b> </font></p></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted</b></font></p>
<p style="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Average</b> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Remaining</b> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Contractual</b> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Life</b> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>(in
Years)</b> </font></p></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Aggregate</b></font></p>
<p style="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0.05in 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Intrinsic
Value</b> </font></p></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="width: 48%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding
- December 31, 2016</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 9%; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">434,998</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">2.59</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 6%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8%; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">1.7</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 9%; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">265,000</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">0.70</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Exercised</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited
or Canceled</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">(196,331</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">(2.93</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">) </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding
– September 30, 2017</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">503,667</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">1.46</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">3.3</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercisable
– September 30, 2017</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">236,166</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">2.27</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">1.9</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
following table summarizes the Company’s stock option activity for non-vested options for the nine months ended September
30, 2017:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Number
of</b>  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Options</b> </font></p></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted</b> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Average</b> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Grant
Date</b></font></p>
<p style="font: 10pt/0.05pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 1.8pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair
Value</b> </font></p></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="width: 71%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Balance
at December 31, 2016</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 11%; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">45,001</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 2%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 11%; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">0.86</font></td>
<td style="width: 1%; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">265,000</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">0.57</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">(35,833</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">(0.68</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt; line-height: 107%"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited
or Canceled</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">(6,667</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">(1.28</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">Balance
at September 30, 2017</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">267,501</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 6.75pt double; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 6.75pt double; text-align: right; line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif">0.60</font></td>
<td style="line-height: 107%; padding-right: 0.8pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
477610
1657422
1047786
1188318
3440837
982064
396186
430171
7658053
8874099
94834
130141
12067520
12073897
181921
191957
8448759
8448759
3142337
3724466
1904078
1238259
2185004
1539462
884424
934193
884424
934193
61750
124358
24786711
25497630
4208200
4328422
1366616
916961
48991
673332
229152
374098
14029
10664
5866988
6303477
8310148
6441000
8310148
8080000
49851
47986
14226987
12792463
2015
2013
71464215
71089882
-60906506
-58386728
10559724
12705167
24786711
25497630
0.0001
0.0001
0.0001
0.0001
0.0001
0.0001
0.0001
0.0001
325000
325000
4000000
4000000
146667
1466667
103232
103232
0.0001
0.0001
43333333
43333333
20154999
20134999
20154999
20134999
81141673
28872702
24817307
73098642
75863429
27314910
22750001
68319317
5278244
1557792
2067306
4779325
1617531
532757
468624
1259524
4207210
1312713
1605398
4594637
5824741
1845470
2074022
5854161
-546497
-287678
-6716
-1074836
429
429
1973281
337352
405192
1090325
-370000
-1973281
-337352
-404763
-1459896
-2519778
-625030
-411479
-2534732
-0.13
-0.03
-0.02
-0.13
20143783
20150640
20123042
19995689
1082093
1504049
374335
363604
346000
351000
115000
87000
1063545
348393
-112284
-1876
-33985
-237545
-1216046
-2003507
-35307
-142396
-12608
-11912
-120222
257615
449655
-54647
48991
5000
-144946
-524324
1531619
2230726
406703
435116
2458773
3528073
18770
69019
8435
-2884246
-4040643
8572400
2000000
-8080000
9456
310129
49551
360000
966000
172815
1950449
-1179812
140532
18193
42198
402500
14686
55129
1500000
2185436
2269436
141666
743020
503667
797083
255000
743020
468896
802520
1
468000
146000
108000
336000
31000
7000
11000
41000
1600
1600
0
0
384000
563000
737000
221000
370000
130000
<p><font style="font: 10pt Times New Roman, Times, Serif">The Company allows customers to return product within
30 days of shipment if the product is defective.</font></p>
5282000
5282000
2622000
2008000
369000
283000
2622000
2008000
369000
283000
3578117
3171414
2139663
1557534
717922
769741
369000
283000
436996
468538
369000
283000
-2693693
-2237221
P7Y
P5Y
P1Y
P1Y
P7Y
P5Y
P1Y
P1Y
P3Y
194043
142035
776171
438186
776171
247463
709230
56740
374571
312151
582000
194000
357000
1071000
456000
402000
150000
139000
8660000
349852
8310148
8572400
<p><font style="font: 10pt Times New Roman, Times, Serif">The Company paid the Lender a fee equal to 2% of
the aggregate original principal amount of the Note and will pay the Lender a monthly maintenance fee based on an annual rate
of 0.75% of the aggregate original principal amount of the Note.</font></p>
0.01
8140295
P3Y
0.1325
0.03
88000
7000
19000
299000
867000
30000
78000
5200000
5000000
139000
100000
39000
402000
261000
141000
49000
806059
744931
4653
18611
18611
18611
13506
549
74541
10661
63880
79000
0.086
80000
14000
86000
63000
260000
149000
2018-08-31
2021-09-30
180000
180000
90000
52000
0.0155
0.00
1.3948
P3Y6M
503667
434998
265000
2000
265000
196331
1.46
2.59
0.70
2.93
2.27
P1Y8M12D
P3Y3M18D
P1Y10M24D
P5Y
267501
45001
35833
6667
0.6
0.86
0.57
0.68
1.28
793333
552083
20000
18000
261250
28000
17000
5000
13000
12900
3700
154000
P2Y6M
P2Y6M
797083
797083
801250
801250
3.19
3.19
P1Y9M18D
P2Y9M18D
P10M24D
0.60
0.85
12900
367000
150000
1732023
700
151100
P3Y
17000
1500
13000
800
1
1
1
2
0
1
0
1
0
1
0
3
2
0.22
0.15
0.57
0.52
0.10
0.10
0.81
0.10
0.10
0.57
0.20
0.67
0.65
0.16
0.20
0.12
0.13
0.62
0.65
0.19
0.24
0.13
0.08
0.10
0.11
0.10
0.10
0.10
0.11
0.10
0.10
0.34
0.33
0.10
0.62
0.15
0.16
236166
0.70
0.80
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shipping
and Handling Costs</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 605-45 regarding shipping and handling
costs. Shipping and handling costs included in cost of revenue were approximately $146,000 and $108,000 for the three months ended
September 30, 2017 and 2016, respectively, and approximately $468,000 and $336,000 for the nine months ended September 30, 2017
and 2016, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net
Loss per Share</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Basic
loss per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number
of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives
effect to all dilutive potential of shares of common stock outstanding during the period, including stock options and warrants,
using the treasury stock method, and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS
excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
computation of diluted EPS excludes the common stock equivalents of the following potentially dilutive securities because their
inclusion would be anti-dilutive: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font: 10pt/normal Times New Roman, Times, Serif; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="6" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 10.6pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three
and Nine Months Ended </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 10.6pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>September
30, </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="font-weight: bold; line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="font-weight: bold; line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b>2016</b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; width: 70%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Unvested
Restricted Stock</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 12%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">141,666</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 12%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">255,000</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Vested
and Unvested Restricted Stock Units</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">743,020</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">743,020</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Stock
Options</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">503,667</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">468,896</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Stock
Warrants</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">797,083</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">802,520</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,185,436</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,269,436</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr></table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
3 - Intangible Assets </u></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Intangible
assets, net is as follows:</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt/normal Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="font-weight: bold; line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b>September
30, 2017</b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Useful
Lives </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>(Years) </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross
 </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Carrying
 </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Accumulated </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amortization </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net
Carrying </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; width: 49%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Trade
Name</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 10%; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">7</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,622,000</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(717,922</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1,904,078</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Customer
Relationships</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">5</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,008,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(769,741</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1,238,259</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">eBay
Reputation Relationship</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">369,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(369,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Non-Compete
Agreement</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">283,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(283,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Intangible
assets, net</font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">5,282,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(2,139,663</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">3,142,337</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt/normal Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="font-weight: bold; line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">December
31, 2016</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Useful
Lives </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>(Years) </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross
 </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Carrying
 </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Accumulated </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amortization </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net
Carrying </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; width: 49%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Trade
Name</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 10%; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">7</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,622,000</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(436,996</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,185,004</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Customer
Relationships</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">5</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,008,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(468,538</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1,539,462</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">eBay
Reputation Relationship</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">369,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(369,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Non-Compete
Agreement</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">283,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(283,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Intangible
assets, net</font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">5,282,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(1,557,534</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">3,724,466</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Intangible
assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense amounted to $194,000 and
$357,000 for the three months ended September 30, 2017 and 2016, respectively, and $582,000 and $1,071,000 for the nine months
ended September 30, 2017 and 2016, respectively.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Future
annual estimated amortization expense is summarized as follows: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font: 10pt/normal Times New Roman, Times, Serif; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="font-weight: bold; line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b>Years
ending December 31,</b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; width: 84%; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2017
(remaining three months)</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 12%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">194,043</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">776,171</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2019</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">776,171</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2020</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">709,230</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2021</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">374,571</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2022</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">312,151</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">3,142,337</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Intangible
assets, net is as follows:</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt/normal Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="font-weight: bold; line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b>September
30, 2017</b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Useful
Lives </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>(Years) </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross
 </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Carrying
 </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Accumulated </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amortization </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net
Carrying </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; width: 49%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Trade
Name</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 10%; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">7</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,622,000</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(717,922</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1,904,078</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Customer
Relationships</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">5</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,008,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(769,741</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1,238,259</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">eBay
Reputation Relationship</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">369,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(369,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Non-Compete
Agreement</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">283,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(283,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Intangible
assets, net</font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">5,282,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(2,139,663</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">3,142,337</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<table cellspacing="0" cellpadding="0" style="font: 10pt/normal Times New Roman, Times, Serif; width: 100%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="font-weight: bold; line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">December
31, 2016</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>Useful
Lives </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>(Years) </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross
 </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Carrying
 </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Accumulated </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amortization </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="line-height: normal; text-align: center; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net
Carrying </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amount </b></font></p></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; width: 49%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Trade
Name</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 10%; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">7</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,622,000</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(436,996</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 10%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,185,004</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Customer
Relationships</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">5</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2,008,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(468,538</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1,539,462</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">eBay
Reputation Relationship</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">369,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(369,000</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Non-Compete
Agreement</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">1</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">283,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(283,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">Intangible
assets, net</font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: center; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">5,282,000</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">(1,557,534</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">3,724,466</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr></table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Future
annual estimated amortization expense is summarized as follows: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font: 10pt/normal Times New Roman, Times, Serif; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal">
<td style="font-weight: bold; line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b>Years
ending December 31,</b></font></td>
<td style="font-weight: bold; line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; width: 84%; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2017
(remaining three months)</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; width: 12%; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">194,043</font></td>
<td style="line-height: normal; width: 1%; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">776,171</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2019</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">776,171</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2020</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">709,230</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2021</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">374,571</font></td>
<td style="line-height: normal; text-align: left; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: white">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">2022</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 1pt solid; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">312,151</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 1pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="line-height: normal; vertical-align: bottom; font-size-adjust: none; font-stretch: normal; background-color: rgb(204, 238, 255)">
<td style="line-height: normal; text-align: left; padding-left: 5.4pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="line-height: normal; text-align: left; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="line-height: normal; text-align: right; border-bottom: black 2.5pt double; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif">3,142,337</font></td>
<td style="line-height: normal; text-align: left; padding-bottom: 2.5pt; font-size-adjust: none; font-stretch: normal"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr></table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
7 – Capital Lease Obligations </u></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">We
are obligated under capital leases under which the aggregate present value of the minimum lease payments amounted to $75,000.
The present value of the minimum lease payments was calculated using a discount rate of 8.6%. The future minimum lease payments
under the capital lease at September 30, 2017 is as follows: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: left; padding-bottom: 1pt; font-weight: bold; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Years
ending December 31,</b></font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 84%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2017 (remaining
three months)</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">4,653</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,611</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2019</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,611</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2020</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">18,611</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">2021</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,506</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">2022</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">549</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">74,541</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Less:
Amounts representing interest</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">10,661</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Principal portion</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">63,880</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">Less:
Current portion</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">14,029</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Capital
lease obligations, net of current portion</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">49,851</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
capital lease obligations are collateralized by underlying property and equipment. As of September 30, 2017, the gross amount
of property and equipment under non-cancelable capital leases was $80,000 and the amount of accumulated amortization was $14,000.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
9 - Stock-Based Compensation </u></b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">On
April 12, 2017, the Company amended its 2008 Equity Incentive Plan (the “Plan”) to increase the number of authorized
shares of common stock under the Plan by 150,000 shares, increasing the available number of shares authorized under the Plan to
1,732,023 shares.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Stock
Option Grants </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">On
May 11, 2017, the Company granted an aggregate of 265,000 stock options to certain employees for future services. These options
had a fair value of $151,100, using the Black-Scholes option pricing model with the following assumptions: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 84%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free
interest rate</font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1.55</font></td>
<td style="width: 2%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Expected dividend yield</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">139.48</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Expected term</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3.5 years</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
options are exercisable over a five-year term and vest over three years. The Company recorded $13,000 and $17,000 during the three
and nine months ended September 30, 2017, respectively, as compensation expense pertaining to these grants. </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
following table summarizes the Company’s stock option activity for the nine months ended September 30, 2017: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 100%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Number
of</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Options</b>  </font></p></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Average</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Exercise</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Price</b>  </font></p></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Average</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Remaining</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Contractual</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Life</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>(in
Years)</b>  </font></p></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Aggregate</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0.05in 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Intrinsic
Value</b>  </font></p></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 48%"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding - December 31,
2016</font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">434,998</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2.59</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1.7</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">265,000</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.70</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="padding-left: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercised</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited
or Canceled</font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(196,331</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(2.93</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Outstanding –
September 30, 2017</font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">503,667</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">1.46</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">3.3</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Exercisable –
September 30, 2017</font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">236,166</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">2.27</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">1.9</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company recorded non-cash compensation expense of $17,000 and $5,000 for the three months ended September 30, 2017 and 2016, respectively,
and $28,000 and $13,000 for the nine months ended September 30, 2017 and 2016, respectively, pertaining to stock option grants. </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Total
unrecognized compensation expense related to unvested stock options at September 30, 2017 amounts to $154,000 and is expected
to be recognized over a weighted average period of 2.5 years. </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
following table summarizes the Company’s stock option activity for non-vested options for the nine months ended September
30, 2017:</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Number
of</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Options</b>  </font></p></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: black 1pt solid"><p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Weighted</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Average</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Grant
Date</b>  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 1.8pt 0pt 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair
Value</b>  </font></p></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 70%"><font style="font: 10pt Times New Roman, Times, Serif">Balance at December 31, 2016</font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">45,001</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.86</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">265,000</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0.57</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="padding-left: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(35,833</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(0.68</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited
or Canceled</font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(6,667</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(1.28</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Balance at September
30, 2017</font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">267,501</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">0.60</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Warrants </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">As
of September 30, 2017 and December 31, 2016, there were 797,083 and 801,250 warrants outstanding and exercisable, respectively,
with a weighted average exercise price of $3.19 per share. The weighted average remaining contractual life of the warrants outstanding
and exercisable at September 30, 2017 and December 31, 2016 was 1.8 and 2.8 years, respectively, and the aggregate intrinsic value
was $0. </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company did not grant any warrants to purchase shares of common stock during the nine months ended September 30, 2017 and 2016. </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">There
was no expense pertaining to warrants recorded during the nine months ended September 30, 2017 and 2016.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Restricted
Stock Awards </b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">During
the nine months ended September 30, 2017, the Company granted 18,000 fully vested shares of common stock to an advisor for services
provided. The fair value of the common stock on the dates of grant ranged from $0.60 to $0.85 per share. The aggregate grant date
fair value of the awards amounted to $12,900, of which $3,700 and $12,900 was recorded as compensation expense during the three
and nine months ended September 30, 2017, respectively. </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">During
the nine months ended September 30, 2017, the Company granted 2,000 fully vested shares of common stock to an advisor for services
provided. The fair value of the common stock on the date of grant ranged from $0.70 to $0.80 per share. The aggregate grant date
fair value of the awards amounted to $1,500, of which $800 and $1,500 was recorded as compensation expense during the three and
nine months ended September 30, 2017. </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">A
summary of the restricted stock award activity for the nine months ended September 30, 2017 is as follows:</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="text-align: center; font-weight: bold; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Number
of<br /> Shares</b></font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 84%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Unvested
Outstanding at December 31, 2016</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">793,333</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20,000</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(261,250</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Unvested
Outstanding at September 30, 2017</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">552,083</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company recorded non-cash compensation expense of $115,000 and $87,000 for the three months ended September 30, 2017 and 2016,
respectively, and $346,000 and $351,000 for the nine months ended September 30, 2017 and 2016, respectively. </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Total
unrecognized compensation expense related to unvested stock awards and unvested restricted stock units at September 30, 2017 amounts
to $367,000 and is expected to be recognized over a weighted average period of 0.9 years.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">These options
had a fair value of $151,100, using the Black-Scholes option pricing model with the following assumptions: </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 84%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Risk-free
interest rate</font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1.55</font></td>
<td style="width: 2%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Expected dividend yield</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Expected volatility</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">139.48</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Expected term</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3.5 years</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">A
summary of the restricted stock award activity for the nine months ended September 30, 2017 is as follows:</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table align="center" cellspacing="0" cellpadding="0" style="font-size: 10pt; line-height: normal; width: 80%; border-collapse: collapse; font-size-adjust: none; font-stretch: normal">
<tr style="vertical-align: bottom">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td>
<td colspan="2" style="text-align: center; font-weight: bold; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"><b>Number
of<br /> Shares</b></font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="width: 84%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Unvested
Outstanding at December 31, 2016</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">793,333</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">Granted</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">20,000</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">Forfeited</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left; padding-bottom: 1pt; padding-left: 0.12in"><font style="font: 10pt Times New Roman, Times, Serif">Vested</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 1pt solid"><font style="font: 10pt Times New Roman, Times, Serif">(261,250</font></td>
<td style="text-align: left; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204, 238, 255)">
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif">Unvested
Outstanding at September 30, 2017</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right; border-bottom: black 2.5pt double"><font style="font: 10pt Times New Roman, Times, Serif">552,083</font></td>
<td style="text-align: left; padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
2 - Significant Accounting Policies</u></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Basis
of Presentation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the
instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”).
Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been
condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not
include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations,
or cash flows. It is management’s opinion, however, that the accompanying unaudited interim condensed consolidated financial
statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the
financial position, operating results and cash flows for the periods presented.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s
Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC, which contains the audited financial statements
and notes thereto, together with Management’s Discussion and Analysis, for the years ended December 31, 2016 and 2015. The
financial information as of December 31, 2016 is derived from the audited financial statements presented in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2016. The interim results for the nine months ended September 30, 2017
are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any future interim periods.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Principles
of Consolidation</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying unaudited interim condensed consolidated financial statements include the accounts of uSell and its wholly-owned
subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Segment
Information</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Operating
segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation
by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance.
The Company’s chief operating decision maker is its Chief Executive Officer. The Company and its Chief Executive Officer
view the Company’s operations and manage its business as one operating segment.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Use
of Estimates</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
preparation of unaudited interim condensed consolidated financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect
of a condition, situation or set of circumstances that existed at the date of the unaudited interim condensed consolidated financial
statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming
events. Accordingly, the actual results could differ significantly from our estimates.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Accounts
Receivable</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Accounts
receivable represent obligations from the Company’s customers and are recorded net of allowances for cash discounts, doubtful
accounts, and sales returns. The Company’s policy is to reserve for uncollectible accounts based on its best estimate of
the amount of probable credit losses in its existing accounts receivable. The Company periodically reviews its accounts receivable
to determine whether an allowance for doubtful accounts is necessary based on an analysis of past due accounts and other factors
that may indicate that the realization of an account may be in doubt. Account balances deemed to be uncollectible are charged
to the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance
for doubtful accounts was $1,600 at September 30, 2017 and December 31, 2016.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Inventory,
net</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Inventory,
comprised of all finished goods, is stated at the lower of cost (average cost method) or net realizable value. Inventory is recorded
net of allowances.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Allowances
for slow-moving or obsolete inventory are provided based on historical experience of a variety of factors, including sales volume,
product life and levels of inventory at the end of the period. The provision for slow-moving for inventory amounted to $0 and
$384,000 for the three months ended September 30, 2017 and 2016, respectively, and $0 and $563,000 for the nine months ended September
30, 2017 and 2016, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Substantially
all of the Company’s inventory purchases are paid for before inventory is received in the Company’s warehouse. Prepaid
inventory amounted to approximately $737,000 and $221,000 at September 30, 2017 and December 31, 2016, respectively, and is included
in inventory, net in the accompanying condensed consolidated balance sheets.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Revenue
Recognition</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Revenue
is recognized when all of the following conditions exist: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred,
(3) the sales price is fixed or determinable, and (4) collectability is reasonably assured.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><i>Principal
Device Revenue</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company, through We Sell Cellular, generates revenue from the sales of its cellular telephones and related equipment. The Company
recognizes revenue “FOB shipping point” on such sales. Delivery to the customer is deemed to have occurred when the
customer takes title to the product. Generally, title passes to the customer when the products leave the Company’s warehouse.
Payment terms generally require payment once an order is placed. The Company allows customers to return product within 30 days
of shipment if the product is defective. Allowances for product returns are recorded as a reduction of sales at the time revenue
is recognized based on historical data. The estimate of the allowance for product returns amounted to approximately $370,000 and
$130,000 at September 30, 2017 and December 31, 2016, respectively, and is recorded in accrued expenses in the accompanying condensed
consolidated balance sheets.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><i>Agent
Commission Revenue</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Sellers
on the Company’s uSell.com website are shown a list of offers from third party buyers interested in purchasing their devices.
If a seller chooses one of these offers, the seller will ship their device directly to the buyer. The buyer is then responsible
for testing the device, servicing the customer, and ultimately paying the seller for the device or returning it. The Company charges
a commission to the buyers only when the seller sends in a device and is successfully paid for it. As such, the Company recognizes
Agent Commission Revenue upon payment to the seller.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><i>Fulfillment
Revenue</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company offers fulfillment services on behalf of its buyers for the items sold using the Agent Commission Revenue approach outlined
above. The Company acts as the agent in these fulfillment services transactions, passing orders booked by its buyers to its third
party fulfillment vendor, who then assembles the kits and mails them directly to the sellers. The Company earns a standard fee
from its buyers and recognizes revenue upon shipment of the kits to the sellers. The Company evaluated the presentation of revenue
on a gross versus net basis and determined that since the Company performs as an agent without assuming the risks and rewards
of ownership of the goods, revenue should be reported on a net basis.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> <b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><i>Advertising
Revenue</i></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Advertising
revenues primarily come from payments for text-based sponsored links and display advertisements. Generally, the Company’s
advertisers pay the Company on a cost per click, or CPC basis, which means advertisers pay only when someone clicks on one of
their advertisements, or on a cost per thousand impression basis, or CPM. Paying on a CPM basis means that advertisers pay the
Company based on the number of times their advertisements appear on the Company’s websites or mobile applications. Advertising
revenue is recognized as income when the advertising services are rendered.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Deferred
revenue represents amounts billed to customers or payments received from customers prior to providing services and for which the
related revenue recognition criteria have not been met.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Shipping
and Handling Costs</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 605-45 regarding shipping and handling
costs. Shipping and handling costs included in cost of revenue were approximately $146,000 and $108,000 for the three months ended
September 30, 2017 and 2016, respectively, and approximately $468,000 and $336,000 for the nine months ended September 30, 2017
and 2016, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Advertising</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Advertising
costs are expensed as they are incurred and are included in sales and marketing expenses. Advertising expense amounted to approximately
$7,000 and $11,000 for the three months ended September 30, 2017 and 2016, respectively, and approximately $31,000 and $41,000
for the nine months ended September 30, 2017 and 2016, respectively</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Concentration
of Credit Risk</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Financial
instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company minimizes credit risk associated with cash by periodically evaluating the credit quality of its primary financial institutions.
At times, the Company’s cash may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation
(“FDIC”) insurance limit. At September 30, 2017 and December 31, 2016, the Company had not experienced losses on these
accounts and management believes the Company is not exposed to significant risks on such accounts.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Concentrations
of credit risk with respect to accounts receivables is minimal due to the large number of customers comprising the Company’s
customer base and generally short payment terms.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair
Value of Financial Instruments</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Financial
instruments, including cash and cash equivalents, accounts receivable and accounts payable are carried at cost,
which management believes approximates fair value due to the short-term nature of these instruments. The fair value of debt approximates
its carrying amounts as a market rate of interest is attached to the repayment.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net
Loss per Share</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">Basic
loss per share (“EPS”) is computed by dividing net loss available to common stockholders by the weighted average number
of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives
effect to all dilutive potential of shares of common stock outstanding during the period, including stock options and warrants,
using the treasury stock method, and convertible debt or convertible preferred stock, using the if-converted method. Diluted EPS
excludes all dilutive potential of shares of common stock if their effect is anti-dilutive.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> <b> </b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
computation of diluted EPS excludes the common stock equivalents of the following potentially dilutive securities because their
inclusion would be anti-dilutive:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 80%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="6" style="border-bottom: black 1pt solid; text-align: center"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0 10.6pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three
and Nine Months Ended</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 10.6pt 0 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>September
30,</b></font></p></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1pt solid; text-align: center; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif">2016</font></td>
<td style="padding-bottom: 1pt; font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Unvested
Restricted Stock</font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">141,666</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">255,000</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Vested and Unvested
Restricted Stock Units</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">743,020</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">743,020</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Stock Options</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">503,667</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">468,896</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Stock
Warrants</font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">797,083</font></td>
<td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">802,520</font></td>
<td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,185,436</font></td>
<td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,269,436</font></td>
<td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Recent
Accounting Pronouncements</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
May 2014, the Financial Accounting Standard Board (the “FASB”) issued ASU No. 2014-09, “Revenue from Contracts
with Customers” (“ASU 2014-09”). ASU 2014-09 provides guidance for revenue recognition and affects any entity
that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial
assets and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific
guidance. The core principle of ASU 2014-09 is the recognition of revenue when a company transfers promised goods or services
to customers in an amount that reflects the consideration to which the company expects to be entitled to in exchange for those
goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, companies will need
to use more judgment and make more estimates than under the current guidance. These may include identifying performance obligations
in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction
price to each separate performance obligation. ASU 2014-09 was initially effective for fiscal years beginning after December 15,
2016 and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting
the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii)
a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which
includes additional footnote disclosures). Early adoption is not permitted. The Company will adopt the standard on January 1,
2018. The Company performed an initial review of the requirements of the standard and is monitoring the activity of the FASB and
the transition resource group as it relates to specific interpretive guidance that may impact the Company. The Company is currently
completing detailed review of its revenue recognition methods to determine necessary adjustments to existing accounting policies
and procedures and to support an evaluation of the standard’s impact on its consolidated financial statements and disclosures
included within the notes to the consolidated financial statements. Based on reviews performed, the Company does not expect its
revenues to be materially impacted by the implementation of this guidance. Additionally, the new guidance will require enhanced
disclosures, including additions to the Company’s revenue recognition policies to identify performance obligations to customers
and significant judgments in measurement and recognition. The Company may identify other impacts from the implementation of this
guidance as it continues its assessment. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory” simplifying the measurement
of inventory. The guidance requires an entity to measure inventory at the lower of cost or net realizable value, which consists
of estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal, and
transportation. The new guidance eliminates unnecessary complexity that exists under current “lower of cost or market”
guidance. For public entities, ASU No. 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim
periods within those fiscal years. The guidance is to be applied prospectively as of the beginning of an interim or annual reporting
period, with early adoption permitted. The Company adopted the methodologies prescribed by ASU 2015-11 as of January 1, 2017.
The adoption of ASU 2015-11 did not have a material effect on the Company’s financial position or results of operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting” (“ASU 2016-09”). ASU 2016-09 was issued as part of the FASB’s simplification initiative
and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas
as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of
cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still
qualify for equity classification and the classification of those taxes paid on the statement of cash flows. ASU 2016-09 is effective
for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively
or using a modified retrospective transition method, depending on the area covered in this update. The Company adopted the methodologies
prescribed by ASU 2016-09 as of January 1, 2017. The adoption of ASU 2016-09 did not have a material effect on the Company’s
financial position or results of operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting
“(“ASU 2017-09”). ASU 2017-09 provides clarity and reduces both (i) diversity in practice and (ii) cost and
complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of
a share-based payment award. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of
a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 is effective for all
annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted.
The Company is currently evaluating the impact of adopting this guidance.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"><b>Recent
Accounting Pronouncements</b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
May 2014, the Financial Accounting Standard Board (the “FASB”) issued ASU No. 2014-09, “Revenue from Contracts
with Customers” (“ASU 2014-09”). ASU 2014-09 provides guidance for revenue recognition and affects any entity
that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial
assets and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific
guidance. The core principle of ASU 2014-09 is the recognition of revenue when a company transfers promised goods or services
to customers in an amount that reflects the consideration to which the company expects to be entitled to in exchange for those
goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, companies will need
to use more judgment and make more estimates than under the current guidance. These may include identifying performance obligations
in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction
price to each separate performance obligation. ASU 2014-09 was initially effective for fiscal years beginning after December 15,
2016 and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting
the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii)
a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which
includes additional footnote disclosures). Early adoption is not permitted. The Company will adopt the standard on January 1,
2018. The Company performed an initial review of the requirements of the standard and is monitoring the activity of the FASB and
the transition resource group as it relates to specific interpretive guidance that may impact the Company. The Company is currently
completing detailed review of its revenue recognition methods to determine necessary adjustments to existing accounting policies
and procedures and to support an evaluation of the standard’s impact on its consolidated financial statements and disclosures
included within the notes to the consolidated financial statements. Based on reviews performed, the Company does not expect its
revenues to be materially impacted by the implementation of this guidance. Additionally, the new guidance will require enhanced
disclosures, including additions to the Company’s revenue recognition policies to identify performance obligations to customers
and significant judgments in measurement and recognition. The Company may identify other impacts from the implementation of this
guidance as it continues its assessment. </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory” simplifying the measurement
of inventory. The guidance requires an entity to measure inventory at the lower of cost or net realizable value, which consists
of estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal, and
transportation. The new guidance eliminates unnecessary complexity that exists under current “lower of cost or market”
guidance. For public entities, ASU No. 2015-11 is effective for fiscal years beginning after December 15, 2016, including interim
periods within those fiscal years. The guidance is to be applied prospectively as of the beginning of an interim or annual reporting
period, with early adoption permitted. The Company adopted the methodologies prescribed by ASU 2015-11 as of January 1, 2017.
The adoption of ASU 2015-11 did not have a material effect on the Company’s financial position or results of operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting” (“ASU 2016-09”). ASU 2016-09 was issued as part of the FASB’s simplification initiative
and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas
as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of
cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still
qualify for equity classification and the classification of those taxes paid on the statement of cash flows. ASU 2016-09 is effective
for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively
or using a modified retrospective transition method, depending on the area covered in this update. The Company adopted the methodologies
prescribed by ASU 2016-09 as of January 1, 2017. The adoption of ASU 2016-09 did not have a material effect on the Company’s
financial position or results of operations.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting
“(“ASU 2017-09”). ASU 2017-09 provides clarity and reduces both (i) diversity in practice and (ii) cost and
complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change to the terms or conditions of
a share-based payment award. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of
a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 is effective for all
annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted.
The Company is currently evaluating the impact of adopting this guidance.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
5 - Promissory Note</u></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">At
September 30, 2017, the Company’s Note (as defined below) is comprised of the following:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 95%; border-collapse: collapse; font-size: 10pt">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 87%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Principal
Balance</font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">8,660,000</font></td>
<td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Less:
Unamortized discount and debt issue costs</font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(349,852</font></td>
<td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Total Notes, net of
unamortized discount and debt issue costs</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">8,310,148</font></td>
<td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Less:
Current portion of Notes</font></td>
<td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td>
<td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">Long-term
Notes</font></td>
<td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">8,310,148</font></td>
<td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">On
January 13, 2017 (the “Closing Date”), the Company entered into a Note Purchase Agreement (the “NPA”)
with an institutional investor (the “Lender”) and in Lender’s capacity as a purchaser and as the agent (the
“Agent”) for all purchasers from time to time party to the NPA pursuant to which the Company issued the Lender a secured
term note in the principal amount of $8,660,000 at an original issue discount of 1%, for gross proceeds of $8,572,400 (the “Note”).
The Note matures three years from issuance and bears interest at an annual rate of 13.25%, which interest is due and payable monthly
in arrears. In addition, the Company paid the Lender a fee equal to 2% of the aggregate original principal amount of the Note
and will pay the Lender a monthly maintenance fee based on an annual rate of 0.75% of the aggregate original principal amount
of the Note. The Note is prepayable after 18 months with a 3% prepayment penalty. The Note contains customary financial covenants.
In connection with the issuance of the Note, the Company granted the Lender a right of first refusal to participate in future
financings (with certain exceptions) for as long as the principal balance of the Note remains outstanding.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">On
June 29, 2017, the Company entered into a First Amendment to Note Purchase Agreement, effective as of June 29, 2017, with the
Lender and the Agent pursuant to which the Company amended the terms of its financial covenant related to the interest coverage
ratio.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
connection with the execution of the NPA and issuance of the Note, the Company and certain of its wholly-owned subsidiaries, We
Sell Cellular (collectively, the “Debtors”) entered into a Security Agreement for the benefit of the Lender and Agent.
Pursuant to the Security Agreement, the Debtors granted the Agent (for the benefit of the Lender) a lien on all of each Debtor’s
respective assets, including, but not limited to, equipment, inventory, accounts, and intellectual property. The wholly-owned
subsidiaries which are parties to the Security Agreement also jointly and severally guaranteed payment and performance of all
obligations under the Note and related debt transaction documents. The Company also entered into a Trademark Security Agreement
with the Lender incorporating the terms of the Security Agreement with respect to the Company’s trademark-related collateral.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">As
additional collateral to guarantee the Note and related obligations, the Company and certain of its wholly-owned subsidiaries
also entered into a Pledge Agreement for the benefit of the Agent pursuant to which they pledged the equity interests of certain
of their wholly-owned subsidiaries, including BST and We Sell Cellular, and the Company pledged its equity interest in the Special
Purpose Entity (see Note 6).</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">In
connection with the above, the Management Agreement effective as of October 1, 2015 by and among the Company, Nik Raman, Brian
Tepfer, Scott Tepfer, and Daniel Brauser, the Company’s Executive Chairman, was amended to clarify that nothing in the Management
Agreement precludes the Agent’s ability to exercise its remedies as a secured creditor party under the Note and related
agreements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company maintains a dedicated bank account with a third party custodian pursuant to which all accounts receivable and Collateral
proceeds (as defined in the NPA) are deposited to this account. The Company can only access funds in this account in accordance
with the terms of the NPA. This account is controlled by the Lender and is presented as restricted cash in the accompanying condensed
consolidated balance sheet.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company recorded a discount on the Note of $88,000 which is being accreted to non-cash interest expense over the contractual term
of the Note. During the three and nine months ended September 30, 2017, accretion of the discount amounted to $7,000 and $19,000,
respectively. Contractual interest expense on the Note amounted to $299,000 and $867,000 for the three and nine months ended September
30, 2017, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company incurred fees associated with the closing of the Note of $360,000. These amounts have been treated as a debt issue cost
and, accordingly, have been recorded as a direct deduction from the carrying amount of Note and are being amortized to interest
expense over the contractual term of the Note. During the three and nine months ended September 30, 2017, accretion of the fees
amounted to $30,000 and $78,000, respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company applied the proceeds received upon issuance of the Note to repay all amounts outstanding under its prior credit facility
with certain institutional investors for which BAM Administrative Services, LLC acted as agent (the “BAM Facility”).
At the time of repayment, amounts of principal outstanding under the BAM Facility were $8,080,000, with accrued interest and fees
bringing the total payoff amount to $8,140,295. As a result of the termination of the BAM Facility, the Company amortized the
remaining balance of the debt issue costs, amounting to $966,000, to interest expense in the accompanying condensed consolidated
statement of operations.</font></p>
20156999
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
11 – Subsequent Events</u></b></font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">The
Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial
statements were issued for potential recognition or disclosure. Other than as described below, the Company did not identify any
subsequent events that would have required adjustment or disclosure in the financial statements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">On
November 13, 2017, the Company entered into a Second Amendment to Note Purchase Agreement (the “Second Amendment”),
effective November 2, 2017, with the Lender and the Agent pursuant to which the Company amended the terms of its financial covenant
related to the outstanding principal amount of loan to EBITDA ratio. The Second Amendment also includes a requirement for the
Company to complete an equity raise of at least $1 million on or prior to December 31, 2017.</font></p>
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