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Pursuant to our license agreement with Martha Stewart Living Omnimedia, Inc. (“MSLO”), we are required to make minimum royalty payments totaling $1,800,000, $2,100,000, $2,700,000, $3,200,000 and $3,800,000 for each of the years ended 2014, 2015, 2016, 2017 and 2018, respectively. We have made all requisite royalties payments through June 2014. We were not able to make the payment that was due July 1, 2014 and we are in discussions with MSLO to work out terms of payment. If we are unable to come to acceptable terms, we would be in default of the terms of the license agreement.
