What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2017-03-24 compared with 2016-03-30 · 1634 added, 1110 removed, 227 unchanged (92% of the section changed)

2 unchanged sentences

of this Form 10-K.

Synergy Strips Corp.)

of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations

Statement of Changes in Stockholders’

FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statement of Changes in Stockholders’

Equity (Deficit)

Statements of Cash Flows

to the Consolidated Financial Statements

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Board of Directors and shareholders

Synergy Strips Corp.)

the Board of Directors and Shareholders of

have audited the accompanying consolidated balance sheets of Synergy CHC Corp.

(formerly Synergy Strips Corp.) (the “Company”)

as of December 31, 2015 and 2014, and the related consolidated statements of operations, stockholders’

equity (deficit)

and cash flows for each of the two years in the period ended December 31, 2015.

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial

statements based on our audits.

(the “Company”) as of December 31,

2016 and 2015, and the related consolidated statements of operations, comprehensive loss, stockholders’

equity and cash

flows for each of the two years in the period ended December 31, 2016.

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based

on our audits.

conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).

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free of material misstatement.

We were not engaged to perform an audit of the Company’s internal control over financial

Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

The company is not required to have, nor were we engaged to perform an audit of the Company’s

internal control over financial reporting.

Our audits included consideration of internal control over financial reporting as a

basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

An audit also includes examining, on a test

basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and

significant estimates made by management, and evaluating the overall financial statement presentation.

We believe that our audits

provide a reasonable basis for our opinion.

An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,

assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial

statement presentation.

We believe that our audits provide a reasonable basis for our opinion.

our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position

of Synergy CHC Corp.

(formerly Synergy Strips Corp.) at December 31, 2015 and 2014, and the results of its operations and its

cash flows for each of the two years in the period ended December 31, 2015, in conformity with accounting principles generally

accepted in the United States of America.

at December 31, 2016 and 2015, and the results of its operations and its cash flows for each of the two years

in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America.

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company suffered a net loss and has a net working capital

deficiency, which raises substantial doubt about its ability to continue as a going concern.

Management’s plans regarding

those matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

As discussed in Note 2 to the consolidated financial statements, the Company suffered a net loss, has accumulated deficit and

has a net working capital deficiency, which raises substantial doubt about its ability to continue as a going concern.

Management’s

plans regarding those matters are also described in Note 2.

The consolidated financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

March 24, 2017

York, New York

Synergy Strip Corp.)

Balance Sheets

December 31, 2016

December 31, 2015

Current Assets

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Restricted cash

Accounts Receivable

Note receivable from related party

Accounts receivable, net

Prepaid expenses

Inventory, net

Total Current Assets

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Intangible assets, net

Debt issuance cost, net

Liabilities and

Stockholders’

Equity (Deficit)

Liabilities and Stockholders’

Current Liabilities:

Accounts payable and accrued liabilities

Deferred revenue

Provision for income taxes payable

Earn out payment

Current portion of long-term debt, net

of debt discount, related party

Current portion of long-term debt

Current portion of long-term notes payable, net of debt discount and debt issuance cost, related party

Current portion of long-term notes payable

Warrant derivative liability

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Royalty payable

Notes payable, net of debt discount,

related parties

Notes payable, net of debt discount and debt issuance cost, related parties

Total long-term liabilities

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Stockholders’

Equity (Deficit):

Common stock, $0.00001 par value;

and 75,000,000 shares authorized, respectively;

300,000,000 shares authorized;

88,764,357 and 81,692,954, shares issued and outstanding, respectively

Common stock to be issued

Common stock to be issued (125,000 and 213,742 shares, respectively)

Additional paid in capital

Accumulated other comprehensive income

Accumulated deficit

Total stockholders’

equity (deficit)

Total Liabilities

and Stockholders’

Equity (Deficit)

Total Liabilities and Stockholders’

accompanying notes are an integral part of these consolidated financial statements

Synergy Strips Corp.)

Statements of Operations

Statements of Operations and Comprehensive Loss

December 31, 2016

December 31, 2015

Cost of Sales

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General and administrative

Impairment of goodwill and intangible assets

Depreciation and amortization

Total operating expenses

Income (loss) from

Income from operations

Other (income) expenses

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Interest expense

Remeasurement gain on translation of

foreign subsidiary

Loss on change in fair value of derivative

Remeasurement loss (gain) on translation of foreign subsidiary

(Gain) loss on change in fair value of derivative liability

Amortization of debt discount

Amortization of debt issuance cost

Imputed and other interest expense

Settlement expense

Loss on extinguishment of debt

Total other expenses

Net loss before income

Net income (loss) before income taxes

$ (7,146,603 )

Income tax expense

loss after tax

Net loss per share

Net loss after tax

$ (7,536,548 )

Net loss per share –

basic and diluted

Weighted average

common shares - basic and diluted

Weighted average common shares outstanding

Basic and diluted

Comprehensive loss

$ (7,536,548 )

Foreign currency translation adjustment

Comprehensive loss

$ (7,536,548 )

accompanying notes are an integral part of these consolidated financial statements

Synergy Strips Corp.)

Statement of Stockholders’

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Additional Paid in

Stockholders’

as of December 31, 2013

Cancellation of Oro Corporation shares

Accumulated Other Comprehensive

Total Stockholders’

Balance as of December 31, 2014

$ (1,033,291 )

Common stock issued to Synergy shareholders

Common stock issued for cash

Common stock issued as part of the Contribution Agreement with Hand MD

Common stock issued for acquisitions of Breakthrough Products, Inc.

Common stock issued for acquisitions of NomadChoice Pty Ltd.

Common stock issued to settle accounts payable

Common stock issued for conversion of notes payable

Common stock issued for exercise of warrants

Fair value of warrants issued along with notes payable

Fair value of vested stock options

Fair value of warrants issued to Breakthrough Products, Inc.

as part of acquisition

Common stock to be issued for services

Balance as of December 31, 2015

Common stock issued for cash

Common stock issued as part of the Contribution

Agreement with Hand MD

Common stock issued for acquisitions

of Breakthrough Products, Inc.

Common stock issued for acquisitions

of NomadChoice Pty Ltd.

Common stock issued to settle accounts

Common stock issued for conversion of

notes payable

Common stock issued for exercise of

Fair value of warrants issued along

with notes payable

$ (8,569,839 )

Adjusting the value of goodwill for the value of shares issued related to acquisition of Breakthrough Products, Inc.

Common stock cancelled

Common stock to be issued

Common stock issued for services

Common stock issued in conjunction with cancellation of warrants and options issued concurrent with debt

Fair value of vested stock options

Fair value of warrants issued to Breakthrough

Products, Inc.

as part of acquisition

Common stock to be issued for services

as of December 31, 2015

Foreign currency translation gain

Balance as of December 31, 2016

$ (9,366,000 )

accompanying notes are an integral part of these consolidated financial statements

Synergy Strips Corp.)

Statements of Cash Flows

Cash Flows from

Operating Activities

December 31, 2016

December 31, 2015

Cash Flows from Operating Activities

$ (7,536,548 )

Adjustments to reconcile net loss

to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Amortization of debt issuance cost

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Stock based compensation expense

Loss on acquisition

Stock issued for services

Settlement expense

Loss on extinguishment of debt

Amortization of debt discount

Foreign currency transaction loss

Fair value of derivative loss

Remeasurement gain on translation

of foreign subsidiary

Impairment of goodwill and intangible assets

Foreign currency transaction (gain) loss

Change in the fair value of derivative liability

Remeasurement loss (gain) on translation of foreign subsidiary

Non cash implied interest

Write-off of inventory

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expense

Prepaid expense and other current assets

Deferred revenue

Accounts payable and accrued liabilities

Net cash used in operating activities

Cash Flows from

Investing Activities

Payments for acquisition of fixed

Net cash provided by (used in) operating activities

Cash Flows from Investing Activities

Payments for acquisition of fixed assets

Restricted cash

Payments for acquisition of Focus

Payments for acquisition transaction

with Knight Therapeutics Inc.

Payments for acquisition of NomadChoice

Payments for acquisition of Focus Factor

Payments for acquisition transaction with Knight Therapeutics Inc.

Payment of earn out liability

Payments for acquisition of NomadChoice Pty Ltd

Cash acquired in acquisitions

Net cash used in investing activities

Cash Flows from

Financing Activities

(Repayments to) advances from related

Cash Flows from Financing Activities

Advances from related party notes

Proceeds from notes payable

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Proceeds from exercise of warrants

Proceeds from issuance of common

Net cash provided by financing activities

Net increase (decrease) in cash and

cash equivalents

Cash and Cash Equivalents, beginning

Proceeds from issuance of common stock

Net cash (used in) provided by financing activities

Effect of exchange rate on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and Cash Equivalents, beginning of period

accompanying notes are an integral part of these consolidated financial statements

and Cash Equivalents, end of period

Supplemental Disclosure of Cash Flow

Cash and Cash Equivalents, end of period

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for:

Supplemental Disclosure of Non-cash

Investing and Financing Activities:

issued for conversion of notes payable

Beneficial conversion

feature on warrants issued concurrent with debt

Derivative liability

Assumption of

liabilities as part of asset purchase agreement with Factor Nutrition Labs, LLC

Assumption of

liabilities as part of acquisition transaction with Knight Therapeutics Inc.

Note issued as

part of asset purchase agreement with Factor Nutrition Labs, LLC

issued as part of contribution agreement with Hand MD

issued for the acquisition of Breakthrough Products, Inc.

issued for the acquisition of NomadChoice Pty Ltd.

Fair value of

warrants issued as part of acquisition of Breakthrough Products, Inc.

Net liabilities

taken over as part of acquisition of Breakthrough Products, Inc.

Net assets taken

over as part of acquisition of NomadChoice Pty Ltd.

issued to settle payables

of common stock as part of purchase transaction

Financing for

prepaid insurance

Assumption of

liabilities as part of acquisition transaction

Issuance of shares as part of acquisition

Supplemental Disclosure of Non-cash Investing and Financing Activities:

Common stock issued for conversion of notes payable

Beneficial conversion feature on warrants issued concurrent with debt

Derivative liability at inception

Assumption of liabilities as part of asset purchase agreement with Factor Nutrition Labs, LLC

Assumption of liabilities as part of acquisition transaction with Knight Therapeutics Inc.

Note issued as part of asset purchase agreement with Factor Nutrition Labs, LLC

Common stock issued as part of contribution agreement with Hand MD

Common stock issued for the acquisition of Breakthrough Products, Inc.

Common stock issued for the acquisition of NomadChoice Pty Ltd.

Fair value of warrants issued as part of acquisition of Breakthrough Products, Inc.

Net liabilities taken over as part of acquisition of Breakthrough Products, Inc.

Net assets taken over as part of acquisition of NomadChoice Pty Ltd.

Common stock issued to settle payables

Reallocation of goodwill related to acquisition of Factor Nutrition to intellectual property

Reallocation of goodwill related to acquisition of Breakthrough Products, Inc.

to intellectual property

Reallocation of non-compete agreement related to acquisition of Breakthrough Products, Inc.

Adjusting the value of goodwill for the value of shares issued related to acquisition of Breakthrough Products, Inc.

Reallocation of blogger database and intellectual property related to acquisition of Nomadchoice Pty Ltd.

to customer database

Common stock to be issued now issued

Cancellation of common stock

Common stock issued in conjunction with cancellation of warrants and options issued concurrent with debt

Adjustment of accounts receivable and payables created during acquisition of Neuragen

Inventory written-off and adjusted against accounts receivable and payables created during acquisition of Neuragen

accompanying notes are an integral part of these consolidated financial statements

SYNERGY STRIPS CORP.)

TO CONSOLIDATED FINANCIAL STATEMENTS

SYNERGY CHC CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 –

Nature of the Business

(“Synergy”, “we”, “us”, “our”

or the “Company”) (formerly

Synergy Strips Corp.) was incorporated on December 29, 2010 in Nevada under the name “Oro Capital Corporation.”

April 21, 2014, the Company changed its fiscal year end from July 31 to December 31.

On April 28, 2014, the Company changed its

name to “Synergy Strips Corp.”.

On August 5, 2015, the Company changed its name to “Synergy CHC Corp.”

Company is a consumer health care company that is in the process of building a portfolio of best-in-class consumer product brands.

Synergy’s strategy is to grow its portfolio both organically and by further acquisition.

is the sole owner of three subsidiaries:

Neuragen Corp., Breakthrough Products, Inc.

and NomadChoice Pty Ltd.

and the results

have been consolidated in these statements.

Summary of Significant Accounting Policies

of Presentation

consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

All significant intercompany

balances and transactions have been eliminated in consolidation.

preparation of the consolidated financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial

statements and the reported amounts of expenses during the reporting period.

Synergy CHC Corp.

(“Synergy”, “we”,

“us”, “our”

or the “Company”) (formerly Synergy Strips Corp.) was incorporated on December

29, 2010 in Nevada under the name “Oro Capital Corporation.”

On April 21, 2014, the Company changed its fiscal year

end from July 31 to December 31.

On April 28, 2014, the Company changed its name to “Synergy Strips Corp.”.

5, 2015, the Company changed its name to “Synergy CHC Corp.”

The Company is a consumer health care company

that is in the process of building a portfolio of best-in-class consumer product brands.

Synergy’s strategy is to grow its

portfolio both organically and by further acquisition.

Synergy is the sole owner of five subsidiaries:

Neuragen Corp., Breakthrough Products, Inc., NomadChoice Pty Ltd., Synergy CHC Inc., and Sneaky Vaunt Corp., and the results have

been consolidated in these statements.

Note 2 –

Summary of Significant Accounting

Basis of Presentation

The accompanying consolidated financial statements

have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

All amounts referred to in the notes to the

consolidated financial statements are in United States Dollars ($) unless stated otherwise.

The consolidated financial statements include

the accounts of the Company and its wholly-owned subsidiaries.

All significant intercompany balances and transactions have been

eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial

statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts

of expenses during the reporting period.

Actual results could differ from those estimates.

At December 31, 2015 and 2014 significant estimates included in these estimates are assumptions about collection of accounts receivable,

useful life of fixed and intangible assets, goodwill and assumptions used in Black-Scholes-Merton, or BSM, valuation methods,

such as expected volatility, stock based compensation, risk-free interest rate, and expected dividend rate.

and Cash Equivalents

Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other

highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

As of December

31, 2015 the Company had no cash equivalents.

The Company maintains its cash and cash equivalents in banks insured by the Federal

Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $250,000 per

The Company minimizes this risk by placing its cash deposits with major financial institutions.

At December 31, 2015, the

uninsured balance amounted to $3,453,290.

Capitalization

of Fixed Assets

Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater

than one year for:

At December 31, 2016 and 2015 significant

estimates included are assumptions about collection of accounts receivable, useful life of fixed and intangible assets, impairment

analysis of goodwill and intangible assets, estimates used in the fair value calculation of stock based compensation, beneficial

conversion feature and derivative liability on warrants using Black-Scholes Model.

Cash and Cash Equivalents

The Company considers all cash on hand and

in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities

of three months or less, when purchased, to be cash and cash equivalents.

As of December 31, 2016 and 2015 the Company had no cash

The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation

(FDIC) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank.

The Company minimizes this

risk by placing its cash deposits with major financial institutions.

At December 31, 2016 and 2015, the uninsured balances amounted

to$2,038,985 and $3,453,290, respectively.

Capitalization of Fixed Assets

The Company capitalizes expenditures related

to property and equipment, subject to a minimum rule, that have a useful life greater than one year for:

(1) assets purchased;

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or (3) all land, regardless of cost.

Acquisitions of new assets, additions, replacements and improvements (other than land) costing

less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are

expensed as incurred.

Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting

Standards Codification (“ASC”) 605, Revenue Recognition (“ASC 605”).

ASC 605 requires that four basic

criteria must be met before revenue can be recognized:

of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance

and repair costs, including any planned major maintenance activities, are expensed as incurred.

Revenue Recognition

The Company recognizes revenue in accordance

with the Financial Accounting Standards Board’s (“FASB”), Accounting Standards Codification (“ASC”)

605, Revenue Recognition (“ASC 605”).

ASC 605 requires that four basic criteria must be met before revenue can be recognized:

(1) persuasive evidence of an arrangement exists;

(2) delivery has occurred

and/or service has been performed;

(3) the selling price is fixed and determinable;

(2) delivery has occurred and/or service has been performed;

(3) the selling

price is fixed and determinable;

and (4) collectability is reasonably assured.

The Company believes that these criteria are satisfied upon shipment from its fulfillment centers.

Certain of our distributors

may also perform a separate function as a co-packer on our behalf.

In such cases, ownership of and title to our products that

are co-packed on our behalf by those co-packers who are also distributors, passes to such distributors when we are notified by

them that they have taken transfer or possession of the relevant portion of our finished goods.

Freight billed to customers is

presented as revenues, and the related freight costs are presented as cost of goods sold.

Cancelled orders are refunded if not

already dispatched, refunds are only paid if stock is damaged in transit, discounts are only offered with specific promotions

and orders will be refilled if lost in transit.

receivable are generally unsecured.

The Company establishes an allowance for doubtful accounts receivable based on the age of

outstanding invoices and management’s evaluation of collectability.

Accounts are written off after all reasonable collection

efforts have been exhausted and management concludes that likelihood of collection is remote.

Any future recoveries are applied

against the allowance for doubtful accounts.

Company expenses marketing, promotions and advertising costs as incurred.

Such costs are included in general and administrative

expense in the accompanying consolidated statements of operations.

and Development

incurred in connection with the development of new products and processing methods are charged to general and administrative expenses

Company utilizes FASBASC 740, “Income Taxes,”

which requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences of events that have been included in the financial statements or tax returns.

method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities

and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the

differences are expected to affect taxable income.

The Company believes that these criteria are satisfied

upon shipment from its fulfillment centers.

Certain of our distributors may also perform a separate function as a co-packer on

In such cases, ownership of and title to our products that are co-packed on our behalf by those co-packers who are

also distributors, passes to such distributors when we are notified by them that they have taken transfer or possession of the

relevant portion of our finished goods.

Freight billed to customers is presented as revenues, and the related freight costs are

presented as cost of goods sold.

Cancelled orders are refunded if not already dispatched, refunds are only paid if stock is damaged

in transit, discounts are only offered with specific promotions and orders will be refilled if lost in transit.

Accounts receivable

Accounts receivable are generally unsecured.

The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s

evaluation of collectability.

Accounts are written off after all reasonable collection efforts have been exhausted and management

concludes that likelihood of collection is remote.

Any future recoveries are applied against the allowance for doubtful accounts.

As of December 31, 2016 and 2015, allowance for doubtful accounts was $0 and $121,291, respectively.

Advertising Expense

The Company expenses marketing, promotions

and advertising costs as incurred.

Such costs are included in selling and marketing expense in the accompanying consolidated statements

of operations.

Research and Development

Costs incurred in connection with the development

of new products and processing methods are charged to general and administrative expenses as incurred.

The Company utilizes FASBASC 740, “Income

Taxes,”

which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of

events that have been included in the financial statements or tax returns.

Under this method, deferred tax assets and liabilities

are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based

on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

A valuation allowance is recorded when it is “more likely-than-not”

that a deferred tax asset will not be realized.

Company generated a deferred tax asset through net operating loss carry-forward.

However, a valuation allowance of 100% has been

established due to the uncertainty of the Company’s realization of the net operating loss carry forward prior to its expiration.

Pty Ltd, the Company’s wholly-owned subsidiary is subject to income taxes in the jurisdictions in which it operates.

judgment is required in determining the provision for income tax.

There are many transactions and calculations undertaken during

the ordinary course of business for which the ultimate tax determination is uncertain.

The company recognizes liabilities for

anticipated tax audit issues based on the Company’s current understanding of the tax law.

Where the final tax outcome of

these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in

the period in which such determination is made.

Earnings (Loss) Per Common Share

Company computes earnings per share under ASC subtopic 260-10, Earnings Per Share.

Basic earnings (loss) per share is computed

by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares

of common stock outstanding (the denominator) during the reporting periods.

Diluted loss per share is computed by increasing the

denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into

common stock (using the “treasury stock”

The Company generated a deferred tax asset

through net operating loss carry-forward.

However, a valuation allowance of 100% has been established due to the uncertainty of

the Company’s realization of the net operating loss carry forward prior to its expiration.

NomadChoice Pty Ltd, the Company’s wholly-owned

subsidiary is subject to income taxes in the jurisdictions in which it operates.

Significant judgment is required in determining

the provision for income tax.

There are many transactions and calculations undertaken during the ordinary course of business for

which the ultimate tax determination is uncertain.

The company recognizes liabilities for anticipated tax audit issues based on

the Company’s current understanding of the tax law.

Where the final tax outcome of these matters is different from the carrying

amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Net Earnings (Loss) Per Common Share

The Company computes earnings per share under

ASC subtopic 260-10, Earnings Per Share.

Basic earnings (loss) per share is computed by dividing the net income (loss) attributable

to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator)

during the reporting periods.

Diluted loss per share is computed by increasing the denominator by the weighted average number of

additional shares that could have been outstanding from securities convertible into common stock (using the “treasury stock”

method), unless their effect on net loss per share is anti-dilutive.

December 31, 2015, options to purchase 5,000,000 shares of common stock and warrants to purchase 9,132,002 shares of common stock

were outstanding these potential shares were excluded from the shares used to calculate diluted earnings per share as their inclusion

would reduce net loss per share.

Company’s consolidated financial statements are prepared using U.S.

GAAP applicable to a going concern, which contemplates

the realization of assets and liquidation of liabilities in the normal course of business.

The Company had an accumulated deficit

at December 31, 2015 of $8,569,841.

As of December 31, 2016 and 2015, options to purchase 6,300,000

and 5,000,000 shares of common stock, respectively, were outstanding.

As of December 31, 2016 and 2015, warrants to purchase 1,000,000

and 9,132,002 shares of common stock, respectively, were outstanding.

These potential shares were excluded from the shares used

to calculate diluted loss per share as their inclusion would reduce net loss per share.

Going Concern

The Company’s consolidated financial

statements are prepared using U.S.

GAAP applicable to a going concern, which contemplates the realization of assets and liquidation

of liabilities in the normal course of business.

The Company had an accumulated deficit at December 31, 2016 of $9,366,000.

The Company had a working capital deficit of $4,944,587 as of December 31, 2016.

Due to acquisitions

during 2015 of revenue-producing products, the Company believes it has established an ongoing source of revenue that is sufficient

to cover its operating costs.

The ability of the Company to continue as a going concern is dependent on the Company obtaining

adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable.

If the Company is unable

to obtain adequate capital it could be forced to cease development of operations.

order to continue as a going concern and to develop a reliable source of revenues, and achieve a profitable level of operations

the Company will need, among other things, additional capital resources.

Management’s plans to continue as a going concern

include raising additional capital through borrowing and/or sales of equity and debt securities.

However, management cannot provide

any assurances that the Company will be successful in accomplishing any of its plans.

ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described

in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.

The accompanying

consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue

as a going concern.

Value Measurements

Company measures and discloses the fair value of assets and liabilities required to be carried at fair value in accordance with

ASC 820, Fair Value Measurements and Disclosures.

ASC 820 defines fair value, establishes a framework for measuring fair value,

and enhances fair value measurement disclosure.

825 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date.

When determining the fair value measurements for assets and liabilities

required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it

would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent

risk, transfer restrictions, and risk of nonperformance.

ASC 825 establishes a fair value hierarchy that requires an entity to

maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

ASC 825 establishes

three levels of inputs that may be used to measure fair value:

1 - Quoted prices for identical assets or liabilities in active markets to which we have access at the measurement date.

2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly.

3 - Unobservable inputs for the asset or liability.

determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant

to the fair value measurement.

of December 31, 2015, the Company has determined that there were no assets or liabilities measured at fair value except for the

warrant derivative liability which is valued using Level 3 estimates.

consists of raw materials, components and finished goods.

The Company’s inventory is stated at the lower of cost (FIFO cost

basis) or market.

Finished goods include the cost of labor to assemble the items.

Company adopted the provisions of ASC 718.

We estimate the fair value of stock options using a binomial model, consistent with

the provisions of ASC 718 and SEC Staff Accounting Bulletin No.

107, Share-Based Payment.

Option-pricing models require the input

of highly subjective assumptions, including the price volatility of the underlying stock.

We determined that the use of implied

volatility is expected to be more reflective of market conditions and, therefore, could reasonably be expected to be a better

indicator of our expected volatility than historical volatility.

The expected term assumption used in calculating the estimated

fair value of our stock-based compensation awards using the Black-Scholes-Merton (BSM) model is based on detailed historical data

about employees’

exercise behavior, vesting schedules, and death and disability probabilities.

In addition, we are required

to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest.

We estimate the forfeiture

rate based on historical experience of our stock-based awards that are granted, exercised and cancelled.

We believe the resulting

BSM calculation provides a more refined estimate of the fair value of our employee stock options.

assets include equipment and intangible assets other than those with indefinite lives.

We assess the carrying value of our long-lived

asset groups when indicators of impairment exist and recognize an impairment loss when the carrying amount of a long-lived asset

is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset.

of impairment include significant underperformance relative to historical or projected future operating results, significant changes

in our use of the assets or in our business strategy, loss of or changes in customer relationships and significant negative industry

or economic trends.

When indications of impairment arise for a particular asset or group of assets, we assess the future recoverability

of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis.

If carrying value exceeds projected,

net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically

a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value.

December 31, 2015, our qualitative analysis of long-lived assets did not indicate any impairment.

asset purchase is accounted for under the purchase method of accounting.

Under that method, assets and liabilities of the business

acquired are recorded at their estimated fair values as of the date of the acquisition, with any excess of the cost of the acquisition

over the estimated fair value of the net tangible and intangible assets acquired recorded as goodwill.

During the year ended December 31, 2016,

the Company incurred net loss of $796,161.

Due to acquisitions during 2015 of revenue-producing products, the Company believes

it has established an ongoing source of revenue that is sufficient to cover its operating costs and has income from operations

of $2,933,585.

The ability of the Company to continue as a going concern is dependent on the Company continuing to execute

the sales of their products.

Due to acquisitions during 2015 of revenue-producing

products, the Company believes it has established an ongoing source of revenue that is sufficient to cover its operating costs.

Management’s plans to continue as a going concern include raising additional capital through borrowing and/or sales of equity

and debt securities.

However, management cannot provide any assurances that the Company will be successful in accomplishing any

of its plans.

The ability of the Company to continue as a

going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually

secure other sources of financing and attain profitable operations.

The accompanying consolidated financial statements do not include

any adjustments that might be necessary if the Company is unable to continue as a going concern.

Fair Value Measurements

The Company measures and discloses the fair

value of assets and liabilities required to be carried at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures.

ASC 820 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure.

ASC 825 defines fair value as the price that

would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at

the measurement date.

When determining the fair value measurements for assets and liabilities required or permitted to be recorded

at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions

that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk

of nonperformance.

ASC 825 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs

and minimize the use of unobservable inputs when measuring fair value.

ASC 825 establishes three levels of inputs that may be used

to measure fair value:

Level 1 - Quoted prices for identical assets

or liabilities in active markets to which we have access at the measurement date.

Level 2 - Inputs other than quoted prices within

Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the asset

or liability.

The determination of where assets and liabilities

fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

As of December 31, 2016, the Company has determined

that there were no assets or liabilities measured at fair value.

Inventory consists of raw materials, components

and finished goods.

The Company’s inventory is stated at the lower of cost (FIFO cost basis) or market.

Finished goods include

the cost of labor to assemble the items.

Stock-Based Compensation

ASC 718, “Compensation –

Compensation,”

prescribes accounting and reporting standards for all share-based payment transactions in which employee services

are acquired.

Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments

such as employee stock ownership plans and stock appreciation rights.

Share-based payments to employees, including grants of employee

stock options, are recognized as compensation expense in the financial statements based on their fair values.

That expense is recognized

over the period during which an employee is required to provide services in exchange for the award, known as the requisite service

period (usually the vesting period).

The Company accounts for stock-based compensation

issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity –

Based Payments to

Non-Employees.”

Measurement of share-based payment transactions with non-employees is based on the fair value of whichever

is more reliably measurable:

(a) the goods or services received;

or (b) the equity instruments issued.

The fair value of the share-based

payment transaction is determined at the earlier of performance commitment date or performance completion date.

Intangible Assets with Indefinite Lives

We evaluate the recoverability of intangible

assets periodically and take into account events or circumstances that warrant revised estimates of useful lives or that indicate

that impairment exists.

All of our intangible assets are subject to amortization except intellectual property of $1,450,000 acquired

as part of Asset Purchase Agreement entered into with Factor Nutrition LLC on January 22, 2015.

As of December 31, 2016 and 2015,

our qualitative analysis of intangible assets with indefinite lives did not indicate any impairment.

Long-lived Assets

Long-lived assets include equipment and intangible

assets other than those with indefinite lives.

We assess the carrying value of our long-lived asset groups when indicators of impairment

exist and recognize an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted

cash flows expected to result from the use and eventual disposition of the asset.

Indicators of impairment include significant

underperformance relative to historical or projected future operating results, significant changes in our use of the assets or

in our business strategy, loss of or changes in customer relationships and significant negative industry or economic trends.

indications of impairment arise for a particular asset or group of assets, we assess the future recoverability of the carrying

value of the asset (or asset group) based on an undiscounted cash flow analysis.

If carrying value exceeds projected, net, undiscounted

cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted

cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value.

As of December 31, 2015,

our qualitative analysis of goodwill did not indicate any impairment.

our qualitative analysis of long-lived assets did not indicate any impairment.

However, as of December 31, 2016 our review of intangible

assets related to one of our subsidiaries did indicate that the carrying amount of the asset may not be recoverable.

year ended December 31, 2016, the Company fully impaired related intangible assets and charged to operations impairment loss of

An asset purchase is accounted for under the

purchase method of accounting.

Under that method, assets and liabilities of the business acquired are recorded at their estimated

fair values as of the date of the acquisition, with any excess of the cost of the acquisition over the estimated fair value of

the net tangible and intangible assets acquired recorded as goodwill.

As of December 31, 2015 our qualitative analysis of goodwill

did not indicate any impairment.

However, as of December 31, 2016, our review of Goodwill related to one of our subsidiaries did

indicate that the carrying amount of the asset may not be recoverable.

During the year ended December 31, 2016, the Company fully

impaired related goodwill and charged to operations impairment loss of $1,983,160.

Currency Translation

functional currency of each of the Company’s foreign subsidiaries is the U.S.

The Company’s subsidiary maintains

its record using local currency (Australian Dollar).

All monetary assets and liabilities of foreign subsidiaries were translated

Dollars at fiscal year-end exchange rates, non-monetary assets and liabilities of foreign subsidiaries were translated

The functional

currency of one of the Company’s foreign subsidiaries (Nomadchoice Pty Ltd.) is the U.S.

The Company’s subsidiary

maintains its record using local currency (Australian Dollar).

All monetary assets and liabilities of foreign subsidiaries were

translated into U.S.

Dollars at fiscal year-end exchange rates, non-monetary assets and liabilities of foreign subsidiaries were

translated into U.S.

Dollars at transaction day exchange rates.

Income and expense items related to non-monetary items were translated at

exchange rates prevailing during the transaction date and other incomes and expenses were translated using average exchange rate

for the period.

The resulting translation adjustments, net of income taxes, were recorded in statements of operations as Remeasurement

gain or loss on translation of foreign subsidiary.

and expense items related to non-monetary items were translated at exchange rates prevailing during the transaction date and other

incomes and expenses were translated using average exchange rate for the period.

The resulting translation adjustments, net of

income taxes, were recorded in statements of operations as remeasurement gain or loss on translation of foreign subsidiary.

The functional currency of the Company’s

other foreign subsidiary (Synergy CHC Inc.) is the Canadian Dollar (CAD).

The Company’s foreign subsidiary maintains its

records using local currency (CAD).

All assets and liabilities of the foreign subsidiary were translated into U.S.

Dollars at period

end exchange rates and stockholders’equity is translated at the historical rates.

Income and expense items were translated

using average exchange rate for the period.

The resulting translation adjustments, net of income taxes, are reported as other comprehensive

income and accumulated other comprehensive income in the stockholder’s equity in accordance with ASC 220 –

Comprehensive

Translation gains and losses that arise from

exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into either

Australian Dollars or Canadian Dollars, as the case may be, at the rate on the date of the transaction and included in the results

of operations as incurred.

Concentrations

of Credit Risk

the normal course of business, the Company provided credit terms to its customers;

normal course of business, the Company provides credit terms to its customers;

however, collateral was not required.

the Company performed credit evaluations of its customers and maintained allowances for possible losses which, when realized,

were within the range of management’s expectations.

From time to time, a higher concentration of credit risk existed on

outstanding accounts receivable for a select number of customers due to individual buying patterns.

costs include all third party warehouse rent fees and any additional costs relating to assembly or special pack-outs of the Company

products are charged to general and administrative expenses as incurred.

display costs

displays manufactured and purchased by the Company are for placement of product in retail stores.

This also includes all costs

for display execution and setup and retail services are charged to general and administrative expenses as incurred.

Derivative Liabilities

815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments

and account for them as free standing derivative financial instruments.

These three criteria include circumstances in which (a)

the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic

characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument

and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with

changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative

instrument would be considered a derivative instrument subject to the requirements of ASC 815.

ASC 815 also provides an exception

to this rule when the host instrument is deemed to be conventional, as described.

Black-Scholes-Merton option-pricing model, with dilution effects, was utilized to estimate the fair value of the Warrant Derivative

Liabilities as of November 12, 2015 and December 31, 2015.

This model is subject to the significant assumptions discussed below

and requires the following key inputs with respect to the Company and/or instrument:

the Company performed credit evaluations of its customers and maintained allowances for possible losses which, when realized, were

within the range of management’s expectations.

From time to time, a higher concentration of credit risk existed on outstanding

accounts receivable for a select number of customers due to individual buying patterns.

Warehousing costs

Warehouse costs include all third party warehouse

rent fees and are charged to selling and marketing expenses as incurred.

Any additional costs relating to assembly or special pack-outs

of the Company’s products are charged to cost of sales.

Product display costs

All displays manufactured and purchased by

the Company are for placement of product in retail stores.

This also includes all costs for display execution and setup and retail

services are charged to cost of sales and expensed as incurred.

Warrant Derivative Liabilities

ASC 815 generally provides three criteria that,

if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative

financial instruments.

These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded

derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the

hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value

under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur

and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument

subject to the requirements of ASC 815.

ASC 815 also provides an exception to this rule when the host instrument is deemed to be

conventional, as described.

A Black-Scholes-Merton option-pricing model,

with dilution effects, was utilized to estimate the fair value of the Warrant Derivative Liabilities as of November 12, 2015 and

December 31, 2015.

As of December 23, 2016 the Warrant Derivative Liability was extinguished in conjunction with the issuance of

This model is subject to the significant assumptions discussed below and requires the following key inputs with respect

to the Company and/or instrument:

November 12, 2015

December 31, 2015

December 23, 2016

Exercise Price

4 unchanged sentences

Outstanding Shares of Common Stock

of sales includes the purchase cost of products sold and all costs associated with getting the products into the retail stores

including buying and transportation costs.

Issuance Costs

issuance costs consist primarily of arrangement fees, professional fees and legal fees.

These costs are capitalized and are being

amortized to interest expense over the term of the related debt facilities.

of Long-Lived Assets

facts and circumstances indicate that the carrying values of long-lived assets, including fixed assets, may be impaired, an evaluation

of recoverability is performed by comparing the carrying value of the assets to projected future cash flows in addition to other

quantitative and qualitative analyses.

Upon indication that the carrying value of such assets may not be recoverable, the Company

recognizes an impairment loss as a charge against current operations.

Long-lived assets to be disposed of are reported at the

lower of the carrying amount or fair value, less estimated costs to sell.

The Company makes judgments related to the expected

useful lives of long-lived assets and its ability to realize undiscounted cash flows in excess of the carrying amounts of such

assets which are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions

and changes in operating performance.

As the Company assesses the ongoing expected cash flows and carrying amounts of its long-lived

assets, these factors could cause the Company to realize a material impairment charge.

and handling costs billed to customers are recorded in sales.

Shipping costs incurred by the company are recorded in selling and

marketing expenses.

are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control,

are controlled by, or are under common control with the Company.

Related parties also include principal owners of the Company,

its management, members of the immediate families of principal owners of the Company and its management and other parties with

which the Company may deal if one party controls or can significantly influence the management or operating policies of the other

to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

The All transactions

with related parties shall be recorded at fair value of the goods or services exchanged.

Property purchased from a related party

is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected

as a distribution to the related party.

identification and selection is consistent with the management structure used by the Company’s chief operating decision

maker to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results

consistent with that structure.

Based on the Company’s management structure and method of internal reporting, the Company

has one operating segment.

The Company’s chief operating decision maker does not review operating results on a disaggregated

rather, the chief operating decision maker reviews operating results on an aggregate basis.

Accounting Pronouncements

April 2015, the FASB issued Accounting Standards Update (“ASU”) No.

Cost of Sales

Cost of sales includes the purchase cost of

products sold and all costs associated with getting the products into the retail stores including buying and transportation costs.

Debt Issuance Costs

Debt issuance costs

consist primarily of arrangement fees, professional fees and legal fees.

These costs are netted off with the related loan and are

being amortized to interest expense over the term of the related debt facilities.

Shipping Costs

Shipping and handling

costs billed to customers are recorded in sales.

Shipping costs incurred by the company are recorded in selling and marketing expenses.

Related parties

Parties are considered

to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled

by, or are under common control with the Company.

Related parties also include principal owners of the Company, its management,

members of the immediate families of principal owners of the Company and its management and other parties with which the Company

may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that

one of the transacting parties might be prevented from fully pursuing its own separate interests.

All transactions with related

parties shall be recorded at fair value of the goods or services exchanged.

Segment Reporting

identification and selection is consistent with the management structure used by the Company’s chief operating decision maker

to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results consistent

with that structure.

Based on the Company’s management structure and method of internal reporting, the Company has one operating

The Company’s chief operating decision maker does not review operating results on a disaggregated basis;

the chief operating decision maker reviews operating results on an aggregate basis.

Reclassification

of Prior Period Presentation

Certain reclassifications

have been made to conform the prior period data to the current presentations.

These reclassifications had no effect on the reported

Recent Accounting Pronouncements

In November 2016,

the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), which requires that restricted cash and restricted cash equivalents

be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash amounts shown

on the statement of cash flows.

The effective date for ASU 2016-18 is for fiscal years beginning after December 15, 2018, and interim

periods within fiscal years beginning after December 15, 2019.

Early adoption is permitted.

We are currently evaluating the impact

of adopting ASU 2016-18 on our consolidated financial statements.

In August 2016, the

FASB issued AS 2016-15, Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain cash receipts and

cash payments are presented and classified in the statement of cash flows.

The effective date for ASU 2016-15 is for fiscal years

beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019.

Early adoption is

We are currently evaluating the impact of adopting ASU 2016-18 on our consolidated financial statements.

In April 2016, the

FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606):

Identifying Performance Obligations and Licensing,

which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing

implementation guidance.

The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU

2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years.

has not yet determined the impact of ASU 2016-10 on its consolidated financial statements.

In March 2016, the

FASB issued ASU No.

2016-09, Compensation –

Stock Compensation, or ASU No.

The areas for simplification in this

update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification

of awards as either equity or liabilities, and classification on the statement of cash flows.

For public entities, the amendments

in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods.

Early adoption is permitted in any interim or annual period.

If an entity early adopts the amendments in an interim period, any

adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

An entity that elects

early adoption must adopt all of the amendments in the same period.

Amendments related to the timing of when excess tax benefits

are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified

retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which

the guidance is adopted.

Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer

withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively.

Amendments requiring

recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected

term should be applied prospectively.

An entity may elect to apply the amendments related to the presentation of excess tax benefits

on the statement of cash flows using either a prospective transition method or a retrospective transition method.

We are currently

evaluating the impact of adopting ASU No.

2016-09 on our consolidated financial statements.

In March 2016, the

FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606):

Principal versus Agent Considerations (Reporting Revenue

Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent.

ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred

to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods

or services are combined with other goods or services.

The effective date for ASU 2016-08 is the same as the effective date of

ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods

within those years.

The Company has not yet determined the impact of ASU 2016-08 on its consolidated financial statements.

In January 2016, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, which amends the guidance in U.S.

on the classification and measurement of financial instruments.

Changes to the current guidance primarily affect the accounting

for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for

financial instruments.

In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred

tax assets resulting from unrealized losses on available-for-sale debt securities.

The new standard is effective for fiscal years

and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect

adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective.

Early adoption

is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting

from instrument-specific credit risk in other comprehensive income.

The Company is currently evaluating the impact of adopting

this guidance on its consolidated financial statements.

In November 2015,

the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes.

Currently deferred taxes for each tax jurisdiction

are presented as a net current asset or liability and net noncurrent asset or liability on the balance sheet.

To simplify the presentation,

the new guidance requires that deferred tax liabilities and assets for all jurisdictions along with any related valuation allowances

be classified as noncurrent in a classified statement of financial position.

This guidance is effective for interim and annual

reporting periods beginning after December 15, 2016, and early adoption is permitted.

The Company adopted this guidance in the

fourth quarter of the year ended December 31, 2015 on a retrospective basis.

The adoption of this guidance did not have a material

impact on the Company’s consolidated financial statements., and did not have any effect on prior periods due to the full

valuation allowance against the Company’s net deferred tax assets.

In September 2015, the FASB issued ASU 2015-16,

Simplifying the Accounting for Measurement –Period Adjustments.

Changes to the accounting for measurement-period adjustments

relate to business combinations.

Currently, an acquiring entity is required to retrospectively adjust the balance sheet amounts

of the acquiree recognized at the acquisition date with a corresponding adjustment to goodwill as a result of changes made to the

balance sheet amounts of the acquiree.

The measurement period is the period after the acquisition date during which the acquirer

may adjust the balance sheet amounts recognized for a business combination (generally up to one year from the date of acquisition).

The changes eliminate the requirement to make such retrospective adjustments, and, instead require the acquiring entity to record

these adjustments in the reporting period they are determined.

The new standard is effective for both public and private companies

for periods beginning after December 15, 2015.

Adoption of this new standard did not have any impact on the Company’s consolidated

financial statements.

In August 2015, the FASB issued ASU No.

Revenue From Contracts With Customers (Topic 606).

The amendments in this ASU defer the effective date of ASU 2014-09.

Public business

entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim

reporting periods within that reporting period.

Earlier application is permitted only as of annual reporting periods beginning

after December 15, 2016, including interim reporting periods within that reporting period.

We are still evaluating the effect of

the adoption of ASU 2014-09 on our consolidated financial statements.

In July 2015, the FASB issued ASU No.

Simplifying the Measurement of Inventory (Topic 330).

ASU 2015-11 simplifies the accounting for the valuation of all inventory

not accounted for using the last-in, first-out (“LIFO”) method by prescribing that inventory be valued at the lower

of cost and net realizable value.

ASU 2015-11 is effective for financial statements issued for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2016 on a prospective basis.

We do not expect the adoption of ASU 2015-11

to have a material effect on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-05,

Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40).

ASU 2015-05 provides guidance regarding the accounting

for a customer’s fees paid in a cloud computing arrangement;

specifically about whether a cloud computing arrangement includes

a software license, and if so, how to account for the software license.

ASU 2015-05 is effective for public companies’

periods, including interim periods within those fiscal years, beginning after December 15, 2015 on either a prospective or retrospective

Early adoption is permitted.

Adoption of this new standard did not have any impact on the Company’s consolidated financial

In May 2015, the FASB issued ASU No.

Fair Value Measurement (Topic 820):

Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or

Its Equivalent) This guidance eliminates the requirement to categorize investments within the fair value hierarchy if their fair

value is measured using the net asset value (“NAV”) per share practical expedient in the FASB’s fair value measurement

The new standard is effective for fiscal years and interim periods within those fiscal years, beginning after December

Adoption of this new standard did not have any impact on the Company’s consolidated financial statements

In April 2015, the FASB issued Accounting Standards

Update (“ASU”) No.

2015-03, Interest - Imputation of Interest (Subtopic 835-30):

Simplifying the Presentation of Debt Issuance Costs.

The amendments in this ASU require that debt issuance costs related

to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability,

consistent with debt discounts.

The recognition and measurement guidance for debt issuance costs are not affected by the amendments

The amendments are effective for financial statements issued for fiscal years, and interim periods within those fiscal

years, beginning after December 15, 2015.

The amendments are to be applied on a retrospective basis, wherein the balance sheet

of each individual period presented is adjusted to reflect the period-specific effects of applying the new guidance.

is evaluating the possible effect of this guidance on its financial statements.

February 2015, the FASB issued ASU No.

Simplifying the Presentation of Debt

Issuance Costs.

The amendments in this ASU require that debt issuance costs related to a recognized debt liability be presented

in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.

recognition and measurement guidance for debt issuance costs are not affected by the amendments in this ASU.

The amendments are

effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December

The amendments are to be applied on a retrospective basis, wherein the balance sheet of each individual period presented

is adjusted to reflect the period-specific effects of applying the new guidance.

The Company reclassified debt issuance cost of

$160,950 and $378,852 from other assets to liabilities and netted off with the related loans in the liabilities as of December

31, 2016 and 2015, respectively.

In February 2015, the FASB issued ASU No.

Consolidation (Topic 810):

Amendments to the Consolidation Analysis, which is

intended to improve targeted areas of consolidation guidance for legal entities such as limited partnerships, limited liability

corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed

security transactions).

The ASU focuses on the consolidation evaluation for reporting organizations that are required to evaluate

whether they should consolidate certain legal entities.

In addition to reducing the number of consolidation models from four to

two, the new standard simplifies the FASB Accounting Standards Codification and improves current U.S.

GAAP by placing more emphasis

on risk of loss when determining a controlling financial interest, reducing the frequency of the application of related-party

guidance when determining a controlling financial interest in a variable interest entity (“VIE”), and changing consolidation

conclusions for companies in several industries that typically make use of limited partnerships or VIEs.

The ASU will be effective

for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.

Early adoption is permitted,

including adoption in an interim period.

We do not expect the adoption of ASU 2015-02 to have a material effect on our financial

position, results of operations or cash flows.

January 2015, the FASB issued ASU No.

Amendments to the Consolidation Analysis, which is intended to improve targeted areas of consolidation

guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized

debt obligations, collateralized loan obligations, and mortgage-backed security transactions).

The ASU focuses on the consolidation

evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities.

addition to reducing the number of consolidation models from four to two, the new standard simplifies the FASB Accounting Standards

Codification and improves current U.S.

GAAP by placing more emphasis on risk of loss when determining a controlling financial interest,

reducing the frequency of the application of related-party guidance when determining a controlling financial interest in a variable

interest entity (“VIE”), and changing consolidation conclusions for companies in several industries that typically

make use of limited partnerships or VIEs.

The ASU will be effective for fiscal years, and interim periods within those fiscal years,

beginning after December 15, 2015.

Early adoption is permitted, including adoption in an interim period.

Adoption of this new standard

did not have any impact on the Company’s consolidated financial statements.

In January 2015, the FASB issued ASU No.

“Income Statement - Extraordinary and Unusual Items (Subtopic 225-20):

Income Statement Presentation by Eliminating the Concept of Extraordinary Items.”

Simplifying Income Statement Presentation by Eliminating

the Concept of Extraordinary Items.”

This ASU eliminates from U.S.

concept of extraordinary items.

ASU 2015-01 is effective for fiscal years, and interim periods within those fiscal years, beginning

after December 15, 2015.

A reporting entity may apply the amendments prospectively.

We do not expect the adoption of ASU 2015-01

to have a material effect on our financial position, results of operations or cash flows.

November 2014, the FASB issued ASU No.

GAAP the concept of extraordinary items.

ASU 2015-01 is

effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.

A reporting entity

may apply the amendments prospectively.

Adoption of this new standard did not have any impact on the Company’s consolidated

financial statements.

In November 2014, the FASB issued ASU No.

“Business Combinations (Topic 805):

Pushdown Accounting.”

provides an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of

an event in which an acquirer obtains control of the acquired entity.

An acquired entity may elect the option to apply pushdown

accounting in the reporting period in which the change-in-control event occurs.

If pushdown accounting is applied to an individual

change-in-control event, that election is irrevocable.

ASU 2014-17 was effective on November 18, 2014.

The adoption of ASU 2014-17

did not have any effect on our financial position, results of operations or cash flows.

November 2014, the FASB issued ASU 2014-16, “Derivatives and Hedging (Topic 815).”

ASU 2014-16 addresses whether the

host contract in a hybrid financial instrument issued in the form of a share should be accounted for as debt or equity.

is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.

We do not currently

have issued, nor are we investors in, hybrid financial instruments.

Accordingly, we do not expect the adoption of ASU 2014-16

to have any effect on our financial position, results of operations or cash flows.

August 2014, the FASB issued ASU No.

2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40)”.

ASU 2014-15 provides guidance related to management’s responsibility to evaluate whether there is substantial doubt about

an entity’s ability to continue as a going concern and to provide related footnote disclosure.

ASU 2014-15 is effective

for annual periods ending after December 15, 2016, and for interim and annual periods thereafter.

Early application is permitted.

We do not expect the adoption of ASU 2014-15 to have a material effect on our financial position, results of operations or cash

June 2014, the FASB issued ASU No.

This ASU provides an acquired entity with an option to apply

pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the

acquired entity.

An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control

event occurs.

If pushdown accounting is applied to an individual change-in-control event, that election is irrevocable.

was effective on November 18, 2014.

The adoption of ASU 2014-17 did not have any effect on our financial position, results of operations

or cash flows.

In November 2014, the FASB issued ASU 2014-16,

“Derivatives and Hedging (Topic 815).”

ASU 2014-16 addresses whether the host contract in a hybrid financial instrument

issued in the form of a share should be accounted for as debt or equity.

ASU 2014-16 is effective for fiscal years, and interim

periods within those fiscal years, beginning after December 15, 2015.

We do not currently have issued, nor are we investors in,

hybrid financial instruments.

Adoption of this new standard did not have any impact on the Company’s financial position,

results of operations or cash flows.

In August 2014, the FASB issued ASU No.

Presentation of Financial Statements-Going Concern.

The amendments in this update apply to all reporting entities and require an

entity’s management, in connection with preparing financial statements for each annual and interim reporting period, to evaluate

whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability

to continue as a going concern within one year after the date that the financial statements are issued (or within one year after

the date that the financial statements are available to be issued when applicable).

This ASU is effective for annual periods ending

after December 15, 2016.

We adopted this standard for the year ended December 31, 2016.

Based on the results of our analysis, no

additional disclosures were required.

In June 2014, the FASB issued ASU No.

“Compensation –

Stock Compensation (Topic 718):

Accounting for Share-Based

Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.”

This ASU requires that a performance target that affects vesting and that could be achieved after the requisite service period

be treated as a performance condition.

ASU 2014-12 is effective for fiscal years, and interim periods within those fiscal years,

beginning after December 15, 2015.

We do not expect the adoption of ASU 2014-12 to have a material effect on our financial position,

results of operations or cash flows.

May 2014, the FASB issued ASU No.

Accounting for Share-Based Payments When the Terms of an Award Provide

That a Performance Target Could Be Achieved after the Requisite Service Period.”

This ASU requires that a performance target

that affects vesting and that could be achieved after the requisite service period be treated as a performance condition.

is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015.

Adoption of this

new standard did not have any impact on the Company’s financial position, results of operations or cash flows.

In May 2014, the FASB issued ASU No.

“Revenue from Contracts with Customers (Topic 606).”

ASU 2014-09 affects

any entity using U.S.

GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts

for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts

or lease contracts).

ASU 2014-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2016.

We are still evaluating the effect of the adoption of ASU 2014-09.

In August 2015, the FASB issued ASU 2015-14,

which defers the effective date of ASU 2014-09 by one year for all entities and permits early adoption on a limited basis.

2014-09 will be effective for the Company in the first quarter of 2018, and early adoption permitted in the first quarter of 2017.

The Company does not believe the adoption of this ASU will have a material impact on its consolidated financial statements.

April 2014, the FASB issued ASU No.

2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and

Equipment (Topic 360) and Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.”

2014-08 amends the definition for what types of asset disposals are to be considered discontinued operations, as well as amending

the required disclosures for discontinued operations and assets held for sale.

ASU 2014-08 is effective for fiscal years, and

interim periods within those fiscal years, beginning on or after December 15, 2014.

The adoption of ASU 2014-08 did not have any

effect on our financial position, results of operations or cash flows.

were various updates recently issued, most of which represented technical corrections to the accounting literature or application

to specific industries and are not expected to a have a material impact on the Company’s condensed financial position, results

of operations or cash flows.

in Fiscal Year End

April 21, 2014, the Company’s board of directors approved a change to the Company’s fiscal year end from July 31 to

December 31 of each year.

Purchase Agreement with Factor Nutrition Labs, LLC:

January 22, 2015 (the “Closing Date”), the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”)

with Factor Nutrition Labs, LLC, a Delaware limited liability company (the “Seller”), Vita Partners, LLC, RPR Partners,

LLC, and Thor Associates, Inc.

ASU 2014-09 affects any entity using U.S.

GAAP that either enters

into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless

those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts).

ASU 2014-09 is effective

for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016.

We are still evaluating the

effect of the adoption of ASU 2014-09.

In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09

by one year for all entities and permits early adoption on a limited basis.

ASU 2014-09 will be effective for the Company in the

first quarter of 2018, and early adoption permitted in the first quarter of 2017.

We are still evaluating the effect of the adoption

of ASU 2014-09 on our consolidated financial statements.

In April 2014, the FASB issued ASU No.

“Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) and Reporting Discontinued

Operations and Disclosures of Disposals of Components of an Entity.”

ASU 2014-08 amends the definition for what types of

asset disposals are to be considered discontinued operations, as well as amending the required disclosures for discontinued operations

and assets held for sale.

ASU 2014-08 is effective for fiscal years, and interim periods within those fiscal years, beginning on

or after December 15, 2014.

The adoption of ASU 2014-08 did not have any effect on our financial position, results of operations

or cash flows.

There were various updates recently issued,

most of which represented technical corrections to the accounting literature or application to specific industries and are not

expected to a have a material impact on the Company’s condensed financial position, results of operations or cash flows.

Change in Fiscal Year End

On April 21, 2014, the Company’s board

of directors approved a change to the Company’s fiscal year end from July 31 to December 31 of each year.

Note 3 –

Asset Purchase Agreement with Factor Nutrition

On January 22, 2015 (the “Closing Date”),

the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Factor Nutrition Labs, LLC, a

Delaware limited liability company (the “Seller”), Vita Partners, LLC, RPR Partners, LLC, and Thor Associates, Inc.

(each a “Principal Owner”).

Pursuant to the Purchase Agreement, the Company purchased

all of the assets of the Seller’s line of business and products called FOCUS Factor (the product plus the business related

to the product is collectively referred to as the “Focus Factor Business”) and assumed the accounts payable and contractual

obligations of the Focus Factor Business for an aggregate purchase price of $6.0 million, with $4.5 million paid on the Closing

Date, and $750,000 to be paid on or before January 20, 2016 and an additional $750,000 to be paid on or before January 20, 2017.

January 22, 2015, the Company and Knight entered into a Distribution, License and Supply Agreement (the “Distribution Agreement”),

pursuant to which the Company granted to Knight an exclusive license to commercialize FOCUSFactor, FOCUSFactor Kids and Synergy

Strip and all improvements thereto (together the “Licensed Products”) and appointed Knight as the exclusive distributor

to offer to sell and sell the Licensed Products in Canada, and, at Knight’s election, one or more of Israel, Russia, and

Sub-Saharan Africa.

The Distribution Agreement provides that Knight may sublicense its rights or use sub-distributors under the

Distribution Agreement on terms consistent with the terms of the Distribution Agreement.

During the term of the Distribution Agreement,

Knight agrees to obtain from the Company all its requirements for the Licensed Products and the Company agrees to supply the Licensed

Products at its adjusted production cost plus a designated percentage and any applicable taxes.

the event of a long term inability by the Company to supply Knight with the Licensed Products, Knight is entitled to require,

among other remedies, the Company to grant a Knight-designated third party a non-exclusive license to use all relevant intellectual

property to manufacture and supply Knight with the Licensed Products for commercialization in the Territory.

The term of the Distribution

Agreement runs until 15 years from the date of the first commercial sale of a Licensed Product in Canada, and the Distribution

Agreement will automatically renew for successive 15-year periods unless either party provides the other with written notice of

its intention not to renew (a “Non-Renewal Notice”).

The Company agrees that in the event it issues a Non-Renewal

Notice, the Company will pay to Knight a non-renewal fee equal to the net sales of the Licensed Products achieved by Knight in

the Territory during the eight calendar quarters preceding the date of such notice, plus all applicable taxes.

Option Agreement

connection with the Loan Agreement, the Company entered into a Product Distribution Option Agreement, dated January 22, 2015 (the

“Option Agreement”), pursuant to which the Company granted Knight the exclusive right to negotiate the exclusive distribution

rights of any one or more of the Company’s products, including products from the Focus Factor Business, for the territories

of Canada, Russia, Sub-Saharan Africa and Israel (the “Option”), pursuant to designated parameters.

The Option Agreement

is effective upon the date of the Option Agreement, will run until January 31, 2045, and will automatically renew thereafter for

successive five-year periods unless either party provides a notice of termination prior to the Option Agreement’s expiration.

If Knight does not exercise the option then the Company is free to contract for distribution with other parties, but only on terms

no less favorable than those offered by Knight pursuant to the Option Agreement.

December 3, 2015, we entered into an Amendment to First Amendment Agreement (the “Second Amendment Agreement”) with

Knight pursuant to which we agreed to grant distribution rights to Knight for Breakthrough’s products.

To satisfy this obligation,

on December 3, 2015, we also entered into an Amendment and Confirmation Agreement (the “Confirmation Agreement”) with

Knight, Nomad and Breakthrough to amend the Distribution, License and Supply Agreement dated January 22, 2015 (the “Distribution

Agreement”) between us and Knight to grant to Knight an exclusive license to commercialize any and all Nomad and Breakthrough

products and appoint Knight as the exclusive distributor to offer and sell those products in Canada, Israel, Romania, Russia and

each of the countries within Sub-Saharan Africa, which is the new “Territory”

under the Distribution Agreement, as

Pursuant to the Second Amendment Agreement, Nomad will buy all Flat Tummy Tea products within the Territory for direct

to consumer sales exclusively from Knight and/or its affiliates at cost of goods plus 60% of gross sales.

Company has accounted for this transaction under the acquisition method of accounting.

Pursuant to the Purchase Agreement, the Company purchased all of the assets of the Seller’s

line of business and products called FOCUS Factor (the product plus the business related to the product is collectively referred

to as the “Focus Factor Business”) and assumed the accounts payable and contractual obligations of the Focus Factor

Business for an aggregate purchase price of $6.0 million, with $4.5 million paid on the Closing Date, and $750,000 to be paid on

or before January 20, 2016 and an additional $750,000 to be paid on or before January 20, 2017.

Distribution Agreement

On January 22, 2015, the Company and Knight

entered into a Distribution, License and Supply Agreement (the “Distribution Agreement”), pursuant to which the Company

granted to Knight an exclusive license to commercialize FOCUSFactor, FOCUSFactor Kids and Synergy Strip and all improvements thereto

(together the “Licensed Products”) and appointed Knight as the exclusive distributor to offer to sell and sell the

Licensed Products in Canada, and, at Knight’s election, one or more of Israel, Russia, and Sub-Saharan Africa.

The Distribution

Agreement provides that Knight may sublicense its rights or use sub-distributors under the Distribution Agreement on terms consistent

with the terms of the Distribution Agreement.

During the term of the Distribution Agreement, Knight agrees to obtain from the Company

all its requirements for the Licensed Products and the Company agrees to supply the Licensed Products at its adjusted production

cost plus a designated percentage and any applicable taxes.

In the event of a long term inability by the

Company to supply Knight with the Licensed Products, Knight is entitled to require, among other remedies, the Company to grant

a Knight-designated third party a non-exclusive license to use all relevant intellectual property to manufacture and supply Knight

with the Licensed Products for commercialization in the Territory.

The term of the Distribution Agreement runs until 15 years from

the date of the first commercial sale of a Licensed Product in Canada, and the Distribution Agreement will automatically renew

for successive 15-year periods unless either party provides the other with written notice of its intention not to renew (a “Non-Renewal

Notice”).

The Company agrees that in the event it issues a Non-Renewal Notice, the Company will pay to Knight a non-renewal

fee equal to the net sales of the Licensed Products achieved by Knight in the Territory during the eight calendar quarters preceding

the date of such notice, plus all applicable taxes.

Distribution Option Agreement

In connection with the Loan Agreement, the

Company entered into a Product Distribution Option Agreement, dated January 22, 2015 (the “Option Agreement”), pursuant

to which the Company granted Knight the exclusive right to negotiate the exclusive distribution rights of any one or more of the

Company’s products, including products from the Focus Factor Business, for the territories of Canada, Russia, Sub-Saharan

Africa and Israel (the “Option”), pursuant to designated parameters.

The Option Agreement is effective upon the date

of the Option Agreement, will run until January 31, 2045, and will automatically renew thereafter for successive five-year periods

unless either party provides a notice of termination prior to the Option Agreement’s expiration.

If Knight does not exercise

the option then the Company is free to contract for distribution with other parties, but only on terms no less favorable than those

offered by Knight pursuant to the Option Agreement.

On December 3, 2015, we entered into an Amendment

to First Amendment Agreement (the “Second Amendment Agreement”) with Knight pursuant to which we agreed to grant distribution

rights to Knight for Breakthrough’s products.

To satisfy this obligation, on December 3, 2015, we also entered into an Amendment

and Confirmation Agreement (the “Confirmation Agreement”) with Knight, Nomad and Breakthrough to amend the Distribution,

License and Supply Agreement dated January 22, 2015 (the “Distribution Agreement”) between us and Knight to grant to

Knight an exclusive license to commercialize any and all Nomad and Breakthrough products and appoint Knight as the exclusive distributor

to offer and sell those products in Canada, Israel, Romania, Russia and each of the countries within Sub-Saharan Africa, which

is the new “Territory”

under the Distribution Agreement, as amended.

Pursuant to the Second Amendment Agreement, Nomad

will buy all Flat Tummy Tea products within the Territory for direct to consumer sales exclusively from Knight and/or its affiliates

at cost of goods plus 60% of gross sales.

The Company has accounted for this transaction

under the acquisition method of accounting.

the total acquisition consideration price is allocated to the assets acquired and liabilities assumed based on their preliminary

estimated fair values based on the management’s estimates as of the date of the acquisition.

The Company expects to retain

the services of independent valuation firm to determine the fair value of these identifiable intangible assets.

Once determined,

the Company will reallocate the purchase price of the acquisition based on the results of the independent evaluation if they are

materially different from the allocations as recorded on January 22, 2015.

The Company expects the purchase price allocations

for the acquisition of Focus Factor Business to be completed by the filing of first quarter 2016 statements.

The preliminary allocation

of the purchase price to the assets acquired and liabilities assumed based on the estimated fair values is as follows:

Under the acquisition method of accounting, the total acquisition consideration price

is allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values based on the management’s

estimates as of the date of the acquisition.

The Company expects to retain the services of independent valuation firm to determine

the fair value of these identifiable intangible assets.

Once determined, the Company will reallocate the purchase price of the

acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded

on January 22, 2015.

The preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on the

estimated fair values is as follows:

Accounts receivable

Intellectual property

Non-compete provision

Non-solicitation

Intangible assets-Customer

relationships

Non-solicitation provision

Intangible assets-Customer relationships

Accounts payable

Customer relationships, the non-compete and the non-solicitation provisions will be amortized over their estimated useful lives

During the year ended December 31, 2015, the Company charged to operations amortization expense of $384,720.

purchase price allocated to the acquisition of the assets of Factor Nutrition Labs, LLC is made up as follows:

Accrued expenses

During first quarter 2016 filing, the Company

has consulted with a valuation professional to assist in determining the fair value of the identifiable FOCUSfactor intangible

As a result of this work, the Company has increased the amount allocated to the FOCUSfactor indefinite-lived brand and

patent by $450,000 and reduced the amount recorded to goodwill by an identical amount.

This adjustment had no effect on the income

The Company believes that the restated amount of $1,450,000 properly states the fair value of the FOCUSfactor brand

The final allocation of the purchase price

to the assets acquired and liabilities assumed based on the independent valuation is as follows:

Accounts receivable

Intellectual property

Non-compete provision

Non-solicitation provision

Intangible assets-Customer relationships

Accounts payable

Accrued expenses

The Customer relationships, the non-compete

and the non-solicitation provisions will be amortized over their estimated useful lives of 5 years.

Intellectual property is not

amortized and will be tested for impairment.

During the years ended December 31, 2016 and 2015, the Company charged to operations

amortization expense of $408,206 and $384,720, respectively.

The purchase price allocated to the acquisition

of the assets of Factor Nutrition Labs, LLC is made up as follows:

Cash payment made on January 22, 2015

Cash payment made on January 20, 2016

Cash payment to be made on January 20, 2017

to be made on January 20, 2017

forma Results of Operations.

The historical operating results of the Focus Factor Business prior to its acquisition date have

not been included in the Company’s historical consolidated operating results.

Pro forma results of operations data (unaudited)

for the years ended December 31, 2014 and 2013, as if the acquisition had occurred on January 1, 2013, are as follows:

Net (loss) income

forma revenue amount above does not include adjustment/reductions relating to certain discounts, coupons and placement fees and

is presented gross.

amounts of revenue and net income of the FOCUS Factor Business since the acquisition date included in the consolidated statement

of operations for the year ended December 31, 2015 are approximately $10,482,367 and $1,216,928, respectively.

Purchase Agreement with Knight Therapeutics Inc.:

June 26, 2015 (the “Closing Date”), Neuragen Corp., a Delaware corporation (“Neuragen”) and our wholly

owned subsidiary, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Knight Therapeutics Inc.,

a Canadian corporation (“Knight Canada”).

Asset Purchase Agreement with Knight Therapeutics

On June 26, 2015 (the “Closing Date”),

Neuragen Corp., a Delaware corporation (“Neuragen”) and our wholly owned subsidiary, entered into an Asset Purchase

Agreement (the “Purchase Agreement”) with Knight Therapeutics Inc., a Canadian corporation (“Knight Canada”).

Pursuant to the Purchase Agreement, Neuragen purchased the U.S.

rights related

to an innovative OTC product that helps relieve pain caused by diabetic nerve damage (the “Purchased Assets”) for

an aggregate purchase price of $1.2 million, with (i) $250,000 paid on the Closing Date, (ii) $250,000 to be paid on or before

June 30, 2016, (iii) $700,000 to be paid in quarterly installments (beginning with the quarter ending September 30, 2015) equal

to the greater of $12,500 or 5% of U.S.

net sales, and (iv) 2% of U.S.

rights related to an innovative OTC product that helps relieve

pain caused by diabetic nerve damage (the “Purchased Assets”) for an aggregate purchase price of $1.2 million, with

(i) $250,000 paid on the Closing Date, (ii) $250,000 to be paid on or before June 30, 2016, (iii) $700,000 to be paid in quarterly

installments (beginning with the quarter ending September 30, 2015) equal to the greater of $12,500 or 5% of U.S.

net sales, and

(iv) 2% of U.S.

net sales of Neuragen for 60 months thereafter.

of such amounts is secured by a security interest in certain assets, undertakings and property (“Collateral”) pursuant

to the Security Agreement, which will be released upon receipt of total payments of $1.2 million (collectively, “Total Consideration”).

The Company has recorded present value of future payments of $515,854 as of December 31, 2015.

The payment of such amounts is secured by a security interest in

certain assets, undertakings and property (“Collateral”) pursuant to the Security Agreement, which will be released

upon receipt of total payments of $1.2 million (collectively, “Total Consideration”).

The Company has recorded present

value of future payments of $290,947 and $531,589 as of December 31, 2016 and 2015, respectively.

The Company has recorded interest

expense of $37,372 for the year ended December 31, 2015.

the Closing Date, Neuragen entered into a Security Agreement with Knight Canada, pursuant to which Neuragen granted a lien and

security interest to Knight Canada in Collateral in connection with the Purchase Agreement.

Security Agreement was made to secure the payment of all indebtedness, obligations and liabilities of Neuragen of the Purchase

Agreement, including all expenses and charges, legal or otherwise, suffered or incurred by Knight Canada in collecting or enforcing

such indebtedness of the Purchase Agreement.

Security Agreement includes customary events of default, including but not limited to:

expense of $59,358 and $37,372 for the years ended December 31, 2016 and 2015, respectively.

Security Agreement

On the Closing Date, Neuragen entered into

a Security Agreement with Knight Canada, pursuant to which Neuragen granted a lien and security interest to Knight Canada in Collateral

in connection with the Purchase Agreement.

The Security Agreement was made to secure the

payment of all indebtedness, obligations and liabilities of Neuragen of the Purchase Agreement, including all expenses and charges,

legal or otherwise, suffered or incurred by Knight Canada in collecting or enforcing such indebtedness of the Purchase Agreement.

The Security Agreement includes customary events

of default, including but not limited to:

payment defaults;

Neuragen becoming insolvent

or entering into bankruptcy;

or if any contemplated security ceases to be a valid and perfected first-priority security interest

that is not remedied within fifteen business days by Neuragen.

Upon the occurrence of an event of default and during the continuation

thereof, the principal amount of the outstanding Total Consideration will bear a default interest rate of an additional 10% per

acquisition was treated as an acquisition of assets as the transaction involved the acquisition of a brand and a license agreement.

The Company expects to retain the services of independent valuation firm to determine the fair value of these identifiable intangible

Once determined, the Company will reallocate the purchase price of the acquisition based on the results of the independent

evaluation if they are materially different from the allocations as recorded on June 26, 2015.

The Company expects the purchase

price allocations for the asset acquisition to be completed by the filing of second quarter 2016 statements.

The preliminary allocation

of the purchase price to the assets acquired and liabilities assumed based on the estimated fair values is as follows:

Neuragen becoming insolvent or entering into bankruptcy;

contemplated security ceases to be a valid and perfected first-priority security interest that is not remedied within fifteen business

days by Neuragen.

Upon the occurrence of an event of default and during the continuation thereof, the principal amount of the outstanding

Total Consideration will bear a default interest rate of an additional 10% per annum.

The acquisition was treated as an acquisition

of assets as the transaction involved the acquisition of a brand and a license agreement.

The allocation of the purchase price

to the assets acquired and liabilities assumed based on the estimated fair values is as follows:

Accounts receivable

Intangible property

1 unchanged sentence

Accounts payable

intangible property and license agreement will be amortized over their estimated useful lives of 5 years.

During the year ended

December 31, 2015, the Company charged to operations amortization expense of $70,655.

Agreement with Hand MD Corp.:

August 18, 2015 (the “Closing Date”), we entered into a Contribution Agreement with Hand MD Corp., a Delaware corporation,

whereby we contributed to Hand MD Corp.

2,142,857 shares of our common stock in exchange for 50% of Hand MD Corp.’s outstanding

capital securities valued at $0.70 per share.

Simultaneously, Hand MD, LLC, a California limited liability company, entered into

a Contribution Agreement with Hand MD Corp., the principal owners of Hand MD, LLC, and us whereby Hand MD LLC contributed to Hand

all of its right, title and interest in its intellectual property associated with skincare, nail care and nail polish

products (the “Hand MD Business”) in exchange for the other 50% of Hand MD Corp.’s outstanding capital securities.

In the Contribution Agreement among Hand MD Corp., Hand MD, LLC, the principal owners of Hand MD, LLC and us, Hand MD, LLC and

its principal owners agreed to not compete or solicit customers or employees for five years.

As part of the transaction, we also

purchased from Hand MD Corp.

all inventory related to the Hand MD Business for approximately $106,000.

The Company has recorded

50% of the present value of future royalty payments of $258,897 as of December 31, 2015.

also entered into a license agreement with Hand MD Corp.

on August 18, 2015, whereby we acquired the exclusive worldwide license

to commercialize Hand MD Corp.

skincare products and all improvements thereto.

Accrued expenses

The intangible property and license agreement

will be amortized over their estimated useful lives of 5 years.

During the year ended December 31, 2016 and 2015, the Company charged

to operations amortization expense of $141,311 and $70,655, respectively.

Contribution Agreement with Hand MD Corp.:

On August 18, 2015 (the “Closing Date”),

we entered into a Contribution Agreement with Hand MD Corp., a Delaware corporation, whereby we contributed to Hand MD Corp.

shares of our common stock in exchange for 50% of Hand MD Corp.’s outstanding capital securities valued at $0.70 per share.

Simultaneously, Hand MD, LLC, a California limited liability company, entered into a Contribution Agreement with Hand MD Corp.,

the principal owners of Hand MD, LLC, and us whereby Hand MD LLC contributed to Hand MD Corp.

all of its right, title and interest

in its intellectual property associated with skincare, nail care and nail polish products (the “Hand MD Business”)

in exchange for the other 50% of Hand MD Corp.’s outstanding capital securities.

In the Contribution Agreement among Hand

MD Corp., Hand MD, LLC, the principal owners of Hand MD, LLC and us, Hand MD, LLC and its principal owners agreed to not compete

or solicit customers or employees for five years.

As part of the transaction, we also purchased from Hand MD Corp.

all inventory

related to the Hand MD Business for approximately $106,000.

The Company has recorded 50% of the present value of future royalty

payments of $313,752 and $258,897 as of December 31, 2016 and 2015, respectively.

We also entered into a license agreement with

Hand MD Corp.

on August 18, 2015, whereby we acquired the exclusive worldwide license to commercialize Hand MD Corp.

skincare products

and all improvements thereto.

The license runs in perpetuity unless earlier terminated.

We will pay Hand MD Corp.

a royalty of 5% of the net sales price of product sold, transferred or otherwise disposed of by us,

as well as 5% of any amount we receive from sublicensees, subject to a minimum royalty of $250,000 in the second year of the license

and $500,000 in the third year of the license, after which the minimum royalty terminates.

We are solely responsible for any regulatory

and intellectual property filings, including those necessary to maintain regulatory approvals for the licensed products.

we or Hand MD Corp.

can terminate the agreement in the event of bankruptcy or insolvency of the other party, or the uncured material

breach of the agreement by the other party.

Upon termination we would be entitled to sell any inventory of licensed product in

the normal course of business and consistent with sales of licensed product during the term of the agreement.

Contribution Agreements and the License Agreement contain customary representations and warranties and covenants by the respective

also entered into a Consulting Agreement on August 18, 2015, with Kara Harshbarger, the co-founder of Hand MD, LLC, pursuant to

which she will provide marketing and sales related services.

5% of the net sales price of product sold, transferred or otherwise disposed of by us, as well as 5% of any amount we receive from

sublicensees, subject to a minimum royalty of $250,000 in the second year of the license and $500,000 in the third year of the

license, after which the minimum royalty terminates.

We are solely responsible for any regulatory and intellectual property filings,

including those necessary to maintain regulatory approvals for the licensed products.

Either we or Hand MD Corp.

can terminate

the agreement in the event of bankruptcy or insolvency of the other party, or the uncured material breach of the agreement by the

Upon termination we would be entitled to sell any inventory of licensed product in the normal course of business and

consistent with sales of licensed product during the term of the agreement.

The Contribution Agreements and the License

Agreement contain customary representations and warranties and covenants by the respective parties.

We also entered into a Consulting Agreement

on August 18, 2015, with Kara Harshbarger, the co-founder of Hand MD, LLC, pursuant to which she will provide marketing and sales

related services.

We will pay Ms.

Harshbarger $10,000 a month for one year unless the

Consulting Agreement is terminated earlier by either party.

If we terminate the Consulting Agreement without cause, we will be

obligated to pay the remaining term of the Agreement.

Harshbarger agreed not to compete with us in the United States in any

marketing or sales of skincare, nail polish and nail care products during the term of the Consulting Agreement and for 12 months

after its termination.

Harshbarger also agreed not to solicit customers or employees for the same period.

acquisition was treated as an acquisition of assets as the transaction involved the acquisition of a brand and a license agreement.

The Company expects to retain the services of independent valuation firm to determine the fair value of these identifiable intangible

Once determined, the Company will reallocate the purchase price of the acquisition based on the results of the independent

evaluation if they are materially different from the allocations as recorded on August 18, 2015.

The Company expects the purchase

price allocations for the asset acquisition to be completed during 2016.

The preliminary allocation of the purchase price to the

assets acquired and liabilities assumed based on the estimated fair values is as follows:

Harshbarger $10,000 a month for one year unless the Consulting Agreement is terminated earlier

by either party.

If we terminate the Consulting Agreement without cause, we will be obligated to pay the remaining term of the

Harshbarger agreed not to compete with us in the United States in any marketing or sales of skincare, nail polish

and nail care products during the term of the Consulting Agreement and for 12 months after its termination.

Harshbarger also

agreed not to solicit customers or employees for the same period.

The acquisition was treated as an acquisition

of assets as the transaction involved the acquisition of a brand and a license agreement.

The allocation of the purchase price

to the assets acquired and liabilities assumed based on the estimated fair values is as follows:

Intangible property

License agreement

Royalty payable

intangible property and license agreement will be amortized over their estimated useful lives of 5 years.

During the year ended

December 31, 2015, the Company charged to operations amortization expense of $118,045.

Purchase Agreement with Breakthrough Products, Inc.:

November 12, 2015 (the “UrgentRx Closing Date”), we entered into a Stock Purchase Agreement (the “UrgentRx SPA”)

with Breakthrough Products, Inc., a Delaware corporation (the “Company”), URX ACQUISITION TRUST, a Delaware statutory

trust, (the “Trust”), Jordan Eisenberg, the chief executive officer and a shareholder of the Company (“Eisenberg”),

and the other shareholders of the Company (Eisenberg and such other shareholders collectively referred to as the “UrgentRx

Sellers”) for the purchase of all the issued and outstanding capital stock of the Company for 6,000,000 shares of our common

stock (“UrgentRx Equity Consideration”).

addition to the UrgentRx Equity Consideration, we have agreed to pay a royalty to the Trust, for the benefit of the UrgentRx Sellers,

equal to 5% of gross sales of the UrgentRx (as defined below) following the first $5,000,000 in gross sales by the UrgentRx Products,

on a quarterly basis for a period of seven years from the UrgentRx Closing Date.

Company is engaged in the business of developing and selling medications for headache, heart burn, allergy attack, ache and pain,

and upset stomach in the form of powders (“UrgentRx”).

the UrgentRx Closing Date, we discovered certain liabilities and obligations of Breakthrough that required an adjustment to the

UrgentRx Equity Consideration and the royalty payments.

December 17, 2015, we entered into a Settlement and Release Agreement (the “Settlement Agreement”) with the UrgentRx

Sellers, the Trust, on its own behalf and as the representative of the UrgentRx Sellers, David T.

Leyrer, Michael Valentino, Ron

Fugate, and Randall Kaplan (collectively with Leyrer, Valentino, Fugate, the “Former Directors”) to resolve the post-closing

Pursuant to the terms of the Settlement Agreement, 3,000,000 shares of the Equity Consideration were returned by

the Trust to us and our obligation to pay royalties to the Trust was reduced from seven years to five years.

The Settlement Agreement

further contained mutual releases among us, the UrgentRx Sellers, and the Former Directors, with limited exceptions.

Additionally,

we issued a three-year warrant to the Trust with a $5.00 per share exercise price.

We may redeem the warrant at a price of $0.001

per share if our common stock is traded on the OTCBB or on a national securities exchange, and the per share closing sale price

of our common stock equals or exceeds the exercise price for a period of 90 consecutive calendar days.

In the event of a reorganization

or reclassification of our capital stock, the merger or consolidation of our company into another entity or the sale or transfer

of all or substantially all of our assets, the warrant will terminate if not exercised prior to the date of such event.

Company has accounted for this transaction under the acquisition method of accounting.

The intangible property and license agreement

will be amortized over their estimated useful lives of 5 years.

During the years ended December 31, 2016 and 2015, the Company

charged to operations amortization expense of $354,135 and $118,045, respectively.

Stock Purchase Agreement with Breakthrough

Products, Inc.:

On November 12, 2015 (the “UrgentRx Closing

Date”), we entered into a Stock Purchase Agreement (the “UrgentRx SPA”) with Breakthrough Products, Inc., a Delaware

corporation (the “Company”), URX ACQUISITION TRUST, a Delaware statutory trust, (the “Trust”), Jordan Eisenberg,

the chief executive officer and a shareholder of the Company (“Eisenberg”), and the other shareholders of the Company

(Eisenberg and such other shareholders collectively referred to as the “UrgentRx Sellers”) for the purchase of all

the issued and outstanding capital stock of the Company for 6,000,000 shares of our common stock (“UrgentRx Equity Consideration”).

In addition to the UrgentRx Equity Consideration,

we have agreed to pay a royalty to the Trust, for the benefit of the UrgentRx Sellers, equal to 5% of gross sales of the UrgentRx

(as defined below) following the first $5,000,000 in gross sales by the UrgentRx Products, on a quarterly basis for a period of

seven years from the UrgentRx Closing Date.

The Company is engaged in the business of developing

and selling medications for headache, heart burn, allergy attack, ache and pain, and upset stomach in the form of powders (“UrgentRx”).

Following the UrgentRx Closing Date, we discovered

certain liabilities and obligations of Breakthrough that required an adjustment to the UrgentRx Equity Consideration and the royalty

On December 17, 2015, we entered into a Settlement

and Release Agreement (the “Settlement Agreement”) with the UrgentRx Sellers, the Trust, on its own behalf and as the

representative of the UrgentRx Sellers, David T.

Leyrer, Michael Valentino, Ron Fugate, and Randall Kaplan (collectively with Leyrer,

Valentino, Fugate, the “Former Directors”) to resolve the post-closing liabilities.

Pursuant to the terms of the Settlement

Agreement, 3,000,000 shares of the Equity Consideration were returned by the Trust to us and our obligation to pay royalties to

the Trust was reduced from seven years to five years.

The Settlement Agreement further contained mutual releases among us, the

UrgentRx Sellers, and the Former Directors, with limited exceptions.

Additionally, we issued a three-year warrant to the Trust

with a $5.00 per share exercise price.

We may redeem the warrant at a price of $0.001 per share if our common stock is traded on

the OTCBB or on a national securities exchange, and the per share closing sale price of our common stock equals or exceeds the

exercise price for a period of 90 consecutive calendar days.

In the event of a reorganization or reclassification of our capital

stock, the merger or consolidation of our company into another entity or the sale or transfer of all or substantially all of our

assets, the warrant will terminate if not exercised prior to the date of such event.

The Company has accounted for this transaction

under the acquisition method of accounting.

the total acquisition consideration price is allocated to the assets acquired and liabilities assumed based on their preliminary

estimated fair values based on the management’s estimates as of the date of the acquisition.

The Company expects to retain

the services of independent valuation firm to determine the fair value of these identifiable intangible assets.

Once determined,

the Company will reallocate the purchase price of the acquisition based on the results of the independent evaluation if they are

materially different from the allocations as recorded on November 12, 2015.

The Company expects the purchase price allocations

for the acquisition of UrgentRx to be completed during 2016.

The preliminary allocation of the purchase price to the assets acquired

and liabilities assumed based on the estimated fair values is as follows:

Under the acquisition method of accounting, the total acquisition consideration price

is allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values based on the management’s

estimates as of the date of the acquisition.

The Company expects to retain the services of independent valuation firm to determine

the fair value of these identifiable intangible assets.

Once determined, the Company will reallocate the purchase price of the

acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded

on November 12, 2015.

The preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on

the estimated fair values is as follows:

Accounts receivable

4 unchanged sentences

Accrued expenses

Intellectual property will be amortized over its estimated useful live of 5 years and the non-compete provision will be amortized

over its term of 3 years.

During the year ended December 31, 2015, the Company charged to operations amortization expense of $4,583.

purchase price allocated to the acquisition of the assets of UrgentRx is made up as follows:

The preliminary purchase price allocated to

the acquisition of the assets of UrgentRx is made up as follows:

Stock payment

Stock warrants issued

forma Results of Operations.

The historical operating results of the UrgentRx Business prior to its acquisition date have not

been included in the Company’s historical consolidated operating results.

Pro forma results of operations data (unaudited)

for the year ended December 31, 2014 as if the acquisition had occurred on January 1, 2014, are as follows:

Net (loss) income

(10,621,330 )

amounts of revenue and net loss of the UrgentRx Business since the acquisition date included in the consolidated statement of

operations for the year ended December 31, 2015 are approximately $90,590 and $80,249, respectively.

Purchase Agreement with TPR Investments Pty Ltd:

November 15, 2015 (the “Flat Tummy Tea Closing Date”), we entered into a Stock Purchase Agreement (the “Flat

Tummy Tea SPA”) with TPR Investments Pty Ltd ACN 128 396 654 as trustee for Polmear Family Trust (the “Flat Tummy

Tea Seller”), Timothy Polmear and Rebecca Polmear and NomadChoice Pty Limited ACN 160 729 939 trading as Flat Tummy Tea,

an Australian proprietary limited company (“NomadChoice”) for the purchase of all the issued and outstanding capital

stock of NomadChoice for $4,000,000 (AUD) in cash consideration (the “Cash Consideration”) and 3,571,428 shares of

our common stock (“Flat Tummy Tea Equity Consideration”).

addition to the Cash Consideration and the Flat Tummy Tea Equity Consideration, we have also agreed to pay the Flat Tummy Tea

Seller certain earn-out payments of up to $3,500,000 (AUD) in aggregate upon certain EBITDA thresholds are met as of June 30,

2016, as described in the Flat Tummy Tea SPA.

This earn-out payment was distributed on March 4, 2016.

Tummy Tea is engaged in the business of developing, manufacturing, and selling herbal detox tea (“Flat Tummy Tea”).

Company has accounted for this transaction under the acquisition method of accounting.

During second quarter 2016 filing, the Company

has consulted with a valuation professional to assist in determining the fair value of the identifiable Breakthrough Products,

Inc.’s intangible assets.

As a result of this work, the Company has increased the amount allocated to the UrgentRx patent

by $150,000, decreased the amount allocated to a Non-Compete agreement by $50,000 and reduced the amount recorded to goodwill by

the identical amounts.

In addition, it was determined that an incorrect stock price was used to calculate the purchase price of

the transaction.

As a result of this determination, the Company decreased Additional Paid In Capital and Goodwill by $1,170,000.

These adjustments had no effect on the income statement.

The Company believes that these restated amounts properly state the fair

value of the Breakthrough Products, Inc.

The final allocation of the purchase price

to the assets acquired and liabilities assumed based on the independent valuation is as follows:

Accounts receivable

Prepaid expenses

Intellectual property

Non-compete provision

Accounts Payable

Accrued Expenses

The Intellectual property will be amortized

over its estimated useful live of 5 years and the non-compete provision will be amortized over its term of 3 years.

years ended December 31, 2016 and 2015, the Company charged to operations amortization expense of $51,667 and $4,583, respectively.

As of December 31, 2016 our review of intangible

assets and Goodwill related to UrgentRx did indicate that the carrying amount of these assets may not be recoverable.

It was determined

that the net balance of $193,750 of intangible assets and $1,983,160 of Goodwill would be fully impaired and accordingly the Company

recorded impairment loss of $2,176,910 during the year ended December 31, 2016.

The adjusted purchase price allocated to the

acquisition of the assets of UrgentRx is made up as follows:

Stock payment

Stock warrants issued

Stock Purchase Agreement with TPR Investments

On November 15, 2015 (the “Flat Tummy

Tea Closing Date”), we entered into a Stock Purchase Agreement (the “Flat Tummy Tea SPA”) with TPR Investments

Pty Ltd ACN 128 396 654 as trustee for Polmear Family Trust (the “Flat Tummy Tea Seller”), Timothy Polmear and Rebecca

Polmear and NomadChoice Pty Limited ACN 160 729 939 trading as Flat Tummy Tea, an Australian proprietary limited company (“NomadChoice”)

for the purchase of all the issued and outstanding capital stock of NomadChoice for $4,000,000 (AUD) in cash consideration (the

“Cash Consideration”) and 3,571,428 shares of our common stock (“Flat Tummy Tea Equity Consideration”).

In addition to the Cash Consideration and the

Flat Tummy Tea Equity Consideration, we have also agreed to pay the Flat Tummy Tea Seller certain earn-out payments of up to $3,500,000

(AUD) in aggregate upon certain EBITDA thresholds are met as of June 30, 2016, as described in the Flat Tummy Tea SPA.

This earn-out

payment was distributed on March 4, 2016.

Flat Tummy Tea is engaged in the business of

developing, manufacturing, and selling herbal detox tea (“Flat Tummy Tea”).

The Company has accounted for this transaction

under the acquisition method of accounting.

the total acquisition consideration price is allocated to the assets acquired and liabilities assumed based on their preliminary

estimated fair values based on the management’s estimates as of the date of the acquisition.

The Company expects to retain

the services of independent valuation firm to determine the fair value of these identifiable intangible assets.

Once determined,

the Company will reallocate the purchase price of the acquisition based on the results of the independent evaluation if they are

materially different from the allocations as recorded on November 1, 2015.

The Company expects the purchase price allocations

for the acquisition of NomadChoice to be completed during 2016.

The preliminary allocation of the purchase price to the assets

acquired and liabilities assumed based on the estimated fair values is as follows:

Under the acquisition method of accounting, the total acquisition consideration price

is allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values based on the management’s

estimates as of the date of the acquisition.

The Company expects to retain the services of independent valuation firm to determine

the fair value of these identifiable intangible assets.

Once determined, the Company will reallocate the purchase price of the

acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded

on November 1, 2015.

The preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on the

estimated fair values is as follows:

Other receivable

1 unchanged sentence

Fixed assets, net

Intangible assets,

Intangible assets, Net

Blogger database

5 unchanged sentences

Dividends payable

Provision for Income

Blogger Database, Customer Database, Intellectual property and non-compete provision will be amortized over its estimated useful

lives of 5 years.

During the year ended December 31, 2015, the Company charged to operations amortization expense of $28,333.

purchase price allocated to the acquisition of the assets of NomadChoice is made up as follows:

Provision for income tax

During second quarter 2016 filing, the Company

has consulted with a valuation professional to assist in determining the fair value of the identifiable NomadChoice’s intangible

As a result of this work, the Company has increased the amount allocated to the Customer Database by $215,000, decreased

the amount allocated to Intellectual Property by $100,000 and decreased the amount allocated to the Blogger Database by $115,000.

These adjustments had no effect on the income statement.

The Company believes that these restated amounts properly state the fair

value of the TPR Investments Pty Ltd.

The final allocation of the purchase price

to the assets acquired and liabilities assumed based on the independent valuation is as follows:

Other receivable

Prepaid expenses

Fixed assets, net

Intangible assets, Net

Blogger database

Customer database

Intellectual property

Non-compete provision

Accounts payable

Accrued expenses

Dividends payable

Provision for income tax

The Blogger Database, Customer Database, Intellectual

property and non-compete provision will be amortized over its estimated useful lives of 5 years.

During the years ended December

31, 2016 and 2015, the Company charged to operations amortization expense of $170,000 and $28,333, respectively.

The purchase price allocated to the acquisition

of the assets of NomadChoice is made up as follows:

Stock issued at closing

Earn-out payment

forma Results of Operations.

The historical operating results of the Flat Tummy Tea Business prior to its acquisition date have

not been included in the Company’s historical consolidated operating results.

Pro forma results of operations data (unaudited)

for the year ended December 31, 2014 as if the acquisition had occurred on January 1, 2014, are as follows:

Net (loss) income

Company’s subsidiary Nomad has a fiscal year ended June 30 and the Company’s fiscal year end is December 31.

proforma information includes revenue and net income of Nomad for the year ended June 30, 2015.

amounts of revenue and net income of the Flat Tummy Tea Business since the acquisition date included in the consolidated statement

of operations for the year ended December 31, 2015 are approximately $2,513,990 and $966,671 respectively.

Company utilizes FASBASC740, “Income Taxes,”

which requires the recognition of deferred tax assets and liabilities

for the expected future tax consequences of events that have been included in the financial statements or tax returns.

method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities

and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the

differences are expected to affect taxable income.

Note 4 –

The Company utilizes FASBASC740, “Income

Taxes,”

which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of

events that have been included in the financial statements or tax returns.

Under this method, deferred tax assets and liabilities

are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based

on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

A valuation allowance is recorded when it is “more likely-than-not”

that a deferred tax asset will not be realized.

Company generated a deferred tax asset through net operating loss carry-forwards.

Based upon Management’s evaluation, a valuation allowance of 100% has been established due to the uncertainty of the Company’s

realization of the benefit derived from net operating loss carry-forwards.

income taxes arise from temporary differences resulting from income and expense items reported for financial accounting and tax

purposes in different periods.

Deferred taxes are classified as current or non-current, depending on the classification of assets

and liabilities to which they relate.

Deferred taxes arising from temporary differences that are not related to an asset or liability

are classified as current or noncurrent depending on the periods in which the temporary differences are expected to reverse.

Company does not have any uncertain tax positions.

tax expense for the year ended December 31, 2015 was $389,945, due to Foreign Income Tax relating to NomadChoice in Australia.

table below summarizes the differences between the U.S.

statutory federal rate and the Company’s effective tax rate for

the years ended December 31, 2015 and 2014:

The Company generated a deferred tax asset

through net operating loss carry-forwards.

Based upon Management’s evaluation, a valuation allowance of 100% has been established

due to the uncertainty of the Company’s realization of the benefit derived from net operating loss carry-forwards.

Deferred income taxes arise from temporary

differences resulting from income and expense items reported for financial accounting and tax purposes in different periods.

taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate.

Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or noncurrent

depending on the periods in which the temporary differences are expected to reverse.

The Company does not have any uncertain tax

Income tax expense for the years ended December

31, 2016 and 2015 was $944,358 and $389,945, respectively, due to Foreign Income Tax relating to NomadChoice in Australia.

The table below summarizes the differences

between the U.S.

statutory federal rate and the Company’s effective tax rate for the years ended December 31, 2016 and 2015:

December 31, 2016

December 31, 2015

Statutory Rate

effective rate in excess of AU rate

effective rate in excess of AU/CA rate

valuation allowance

Tax - Australia

provision for income taxes

Company has deferred tax assets, which have been fully reserved, as follows as of December 31, 2015 and 2014:

allowance for deferred tax assets

(11,460,536 )

Foreign Tax - Australia

Total provision for income taxes

The Company has deferred tax assets, which

have been fully reserved, as follows as of December 31, 2016 and 2015:

December 31, 2016

December 31, 2015

Deferred tax assets

Company also has net operating loss carryforwards of approximately $25,137,583 included in the deferred tax asset table above

attributable to the acquisition of Breakthrough Products, Inc.

However, due to limitations of carryover attributes and separate

return limitation year rules, it is unlikely the company will benefit from these NOL and thus Management has determined a 100%

valuation reserved is required.

Further, the Company has not completed an evaluation of the NOL’s attributable to

Breakthrough Products, Inc.

Valuation allowance for deferred tax assets

Net deferred tax assets

Taxes accrued and paid for the tax year December

31, 2016 are attributable to NomadChoice Pty, Ltd., the Company’s wholly-owned subsidiary and is subject to income taxes

in the jurisdiction in which it operates, Australia.

Tax expense was $944,358 and $389,945 for 2016 and 2015, respectively.

effective tax rate is attributable to the Company’s world wide income/(loss) as it relates to the income tax expense due

in Australia.

Earnings in foreign subsidiaries are permanently reinvested and the Company does not have plans to pay a dividend

from such subsidiaries for the foreseeable future.

The Company also has net operating loss carryforwards

of approximately $32,720,733 and $25,137,583 included in the deferred tax asset table above for 2016 and 2015, respectively,

the majority attributable to the acquisition of Breakthrough Products, Inc.

However, due to limitations of carryover attributes

and separate return limitation year rules, it is unlikely the company will benefit from the NOL’s and thus Management has

determined a 100% valuation reserved is required.

Further, the Company has not completed an evaluation of the NOL’s attributable

to Breakthrough Products, Inc.

at the date of this report.

total deferred tax asset is calculated by multiplying a domestic (US) 34 percent marginal tax rate by the cumulative Net Operating

Loss Carryforwards (“NOL”).The Company currently has net operating loss carryforwards approximately aggregating $33,707,458,

which expire through 2035.

The deferred tax asset related to the NOL carryforwards Management has determined based on all the

available information that a 100% Valuation reserve is required.

Company has not completed its evaluation of NOL Utilization Limitations under IRC Section 382, change of ownership rules.

Company has had a change in ownership the NOL’s would be limited as to the amount that could be utilized each year, based

on the Internal Revenue Code, as amended.”

Company has not filed its Federal and State income tax returns.

Such income tax returns remain subject to examination by federal

and most state tax authorities.

The total deferred tax asset is calculated

by multiplying a domestic (US) 34 percent marginal tax rate for 2016 and 34 percent marginal tax rate for 2015 by the cumulative

Net Operating Loss Carryforwards (“NOL”).The Company currently has net operating loss carryforwards approximately

aggregating $32,720,733 and $33,707,458 for 2016 and 2015, respectively, which expire through 2035.

The deferred tax asset

related to the NOL carryforwards Management has determined based on all the available information that a 100% Valuation reserve

purposes, the Company has not completed

its evaluation of NOL utilization limitations under Internal Revenue Code, as amended (the “Code”) Section 382, change

of ownership rules.

If the Company has had a change in ownership, the NOL’s would be limited as to the amount that could

be utilized each year, based on the Code.

Note 5 –

Accounts Receivable

receivable, net of allowances for sales returns and doubtful accounts, consisted of the following:

Accounts receivable, net of allowances for

sales returns and doubtful accounts, consisted of the following:

December 31, 2016

December 31, 2015

Trade accounts receivable

Less allowances

accounts receivable, net

the year ended December 31, 2015, the Company charged $50,000 to bad debt expense in setting up an allowance.

Total accounts receivable, net

During the year ended December 31, 2016 and

2015, the Company charged $0 and $50,000, respectively to bad debt expense in setting up an allowance.

Note 6 –

Prepaid Expenses

December 31, 2015 and 2014, prepaid expenses consisted of the following:

At December 31, 2016 and 2015, prepaid expenses

consisted of the following:

December 31, 2016

December 31, 2015

Advances for inventory

Media production

Promotion - Bloggers

License agreement

Software subscriptions

Miscellaneous

Note 7 –

Concentration of Credit Risk

and cash equivalents

Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts

that at times may be in excess of the federally insured limit of $250,000 per bank.

The Company minimizes this risk by placing

its cash deposits with major financial institutions.

At December 31, 2015, the uninsured balance amounted to $3,453,290.

of December 31, 2015, one customer accounted for 78% of the Company’s accounts receivable.

the year ended December 31, 2015, two customers accounted for approximately 71% of the Company’s gross revenues.

Substantially

all of the Company’s business is with companies in the United States.

the year ended December 31, 2015, our products were made by the following suppliers:

is the opinion of management that the products can be produced by other manufacturers and the choice to utilize these suppliers

is not a significant concentration.

consists of finished goods, components and raw materials.

The Company’s inventory is stated at the lower of cost (FIFO cost

basis) or market.

carrying value of inventory consisted of the following:

Cash and cash equivalents

The Company maintains its cash and cash equivalents

in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally

insured limit of $250,000 per bank.

The Company minimizes this risk by placing its cash deposits with major financial institutions.

At December 31, 2016 and 2015, the uninsured balance amounted to $2,038,985 and $3,453,290, respectively.

Accounts receivable

As of December 31, 2016 and 2015, three customers

accounted for 91% and 93%, respectively of the Company’s accounts receivable.

Major customers

For the year ended December 31, 2016, three

customers accounted for approximately 34% of the Company’s net revenue.

For the year ended December 31, 2015, three customers

accounted for approximately 73% of the Company’s net revenue.

Substantially all of the Company’s business is with companies

in the United States.

Major suppliers

For the year ended December 31, 2016 and 2015,

our products were made by the following suppliers:

Atrium Innovations - Pittsburgh, PA

Vit-Best Nutrition, Inc.

Flat Tummy Tea

Caraway Tea Company, LLC - Highland, NY

C-Care, LLC - Linthicum Heights, MD

Capstone Nutrition - Ogden, UT

HealthSpecialty - Santa Fe Springs, CA

It is the opinion of management that the products

can be produced by other manufacturers and the choice to utilize these suppliers is not a significant concentration.

Note 8 –

Inventory consists of finished goods, components

and raw materials.

The Company’s inventory is stated at the lower of cost (FIFO cost basis) or market.

The carrying value of inventory consisted of

the following:

December 31, 2016

December 31, 2015

Finished goods

Inventory in transit

Raw Materials

Energy product

of January 22, 2015, inventory was pledged to Knight under the Loan Agreement (see note 12).

Fixed Assets and Intangible Assets

of December 31, 2015 and 2014, fixed assets and intangible assets consisted of the following:

Total inventory

As of January 22, 2015, inventory was pledged

to Knight under the Loan Agreement (see note 12).

As of December 31, 2016, $104,500 of the Company’s inventory was in transit.

Note 9 –

Fixed Assets and Intangible

As of December 31, 2016 and 2015, fixed assets

and intangible assets consisted of the following:

December 31, 2016

December 31, 2015

Property and equipment

Less accumulated

expense for the years ended December 31, 2015 and 2014 was $1,513 and $0, respectively.

FOCUSfactor intellectual

Less accumulated depreciation

Fixed assets, net

Depreciation expense for the years ended December

31, 2016 and 2015 was $44,480 and $1,513, respectively.

December 31, 2016

December 31, 2015

FOCUSfactor intellectual property

Intangible assets subject to amortization

Less accumulated

expense for the years ended December 31, 2015 and 2014 was $606,489 and $0, respectively.

These intangible assets were acquired

through Asset Purchase Agreement and Stock Purchase Agreements disclosed in Note 3.

estimated aggregate amortization expense over each of the next five years is as follows:

Less accumulated amortization and impairment

Intangible assets, net

Amortization expense for the years ended December

31, 2016 and 2015 was $1,126,298 and $606,489, respectively.

Impairment of intangible assets for the years ended December 31, 2016

and 2015 was $193,750 and $0, respectively.

These intangible assets were acquired through Asset Purchase Agreement and Stock Purchase

Agreements disclosed in Note 3.

The estimated aggregate amortization expense

over each of the next five years is as follows:

Note 10 –

Related Party Transactions

April 2, 2014, the Company granted 1,000,000 options valued at approximately $282,000 to a company owned by Mr.

Jack Ross, Chief

Executive Officer of the Company (see note 15).

October 31, 2014, the Company borrowed $100,000 through a promissory note bearing interest at 10% with a maturity date of October

31, 2015 from a company owned by Mr.

Ross, the Company’s Chief Executive Officer.

During the year ended December 31, 2015,

the note was converted into 400,000 shares of the Company’s common stock.

Company accrued and paid consulting fees of $15,000 per month to a company owned by Mr.

Jack Ross, Chief Executive Officer of

The Company expensed $180,000 as consulting fees and made payments totaling $486,958 towards services to an entity

owned and controlled by an officer and shareholder of the Company for the year ended December 31, 2015.

As of December 31, 2015,

the total outstanding balance was $0.

December 31, 2014, $16,077, was due from a company owned by Mr.

Jack Ross, Chief Executive Officer of the Company in a form of

an advance in the normal course of business.

January 22, 2015, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for the

purchase of the Focus Factor assets.

At December 31, 2015, the Company owed Knight $4,267,268 on this loan, net of discount (see

June 26, 2015, the Company entered into a Security Agreement with Knight Therapeutics, Inc., through its wholly owned subsidiary

Neuragen Corp., for the purchase of Knight Therapeutics, Inc.’s assets.

At December 31, 2015, the Company owed Knight $925,000

in relation to this agreement (see Note 12).

August 18, 2015, the Company entered into a Consulting Agreement with Kara Harshbarger, the co-founder of Hand MD, LLC, pursuant

to which she will provide marketing and sales related service.

On April 2, 2014, the Company granted 1,000,000

options valued at approximately $282,000 to a company owned by Mr.

Jack Ross, Chief Executive Officer of the Company (see note

On October 31, 2014, the Company borrowed $100,000

through a promissory note bearing interest at 10% with a maturity date of October 31, 2015 from a company owned by Mr.

Company’s Chief Executive Officer.

During the year ended December 31, 2015, the note was converted into 400,000 shares of

the Company’s common stock.

The Company accrued and paid consulting fees

of $25,000 and $15,000 per month in 2016 and 2015, respectively, to a company owned by Mr.

Jack Ross, Chief Executive Officer

of the Company.

The Company expensed $481,215 and $180,000, respectively during 2016 and 2015 as consulting fees and bonuses,

and made payments totaling $481,215 and $486,958 towards services to an entity owned and controlled by an officer and shareholder

of the Company for the year ended December 31, 2016 and 2015.

As of December 31, 2016 and 2015, the total outstanding balance

On January 22, 2015, the Company entered into

a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for the purchase of the Focus Factor assets.

31, 2016 and 2015, the Company owed Knight $2,752,639 and $4,267,268, respectively, on this loan, net of discount (see Note 12).

On June 26, 2015, the Company entered into

a Security Agreement with Knight Therapeutics, Inc., through its wholly owned subsidiary Neuragen Corp., for the purchase of Knight

Therapeutics, Inc.’s assets.

At December 31, 2016 and 2015, the Company owed Knight $625,000 and $925,000 in relation to

this agreement (see Note 12).

On August 18, 2015, the Company entered into

a Consulting Agreement with Kara Harshbarger, the co-founder of Hand MD, LLC, pursuant to which she will provide marketing and

sales related service.

The Company will pay Ms.

Harshbarger $10,000 a month for one year

unless the Consulting Agreement is terminated earlier by either party.

Harshbarger $10,000 a month for one year unless the Consulting Agreement is terminated

earlier by either party.

Hand MD, LLC is a 50% owner in Hand MD Corp.

expensed $40,000 through payroll for the year ended December 31, 2015.

As of December 31, 2015, the total outstanding balance

November 12, 2015, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for the

purchase of NomadChoice Pty Limited and Breakthrough Products, Inc.

At December 31, 2015, the Company owed Knight $3,571,314 on

this loan, net of discount (see Note 12).

December 31, 2015, NomadChoice Pty Ltd.

(subsidiary) of the Company owed Knight Therapeutics $71,573 in connection with a royalty

distribution agreement (see Note 3).

The Company expensed $120,000 and $40,000 through payroll

for the years ended December 31, 2016 and 2015, respectively.

As of December 31, 2016 and 2015, the total outstanding balance was

On November 12, 2015, the Company entered into

a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for the purchase of NomadChoice Pty Limited and Breakthrough

Products, Inc.

At December 31, 2016 and 2015, the Company owed Knight $3,680,162 and $3,571,314, respectively, on this loan, net

of discount (see Note 12).

On December 22, 2016, we issued to Knight Therapeutics

(Barbados) Inc., or Knight, 7,500,000 shares of our common stock in exchange for the cancellation of warrants to purchase an aggregate

of 8,132,002 shares of our common stock held by Knight, with per share purchase prices of $0.34 and $0.49, and the cancellation

of an option to purchase 1,000,000 shares of our common stock held by Knight, with an exercise price of $0.25 per share.

As additional

consideration, Knight has agreed to purchase up to $2.0 million worth of our common stock if and when we undertake a common stock

equity financing, subject to certain terms and conditions.

At December 31, 2016 and 2015, NomadChoice

(subsidiary) of the Company owed Knight Therapeutics $87,678 and $71,573, respectively, in connection with a royalty distribution

agreement (see Note 3).

Note 11 –

Accounts Payable and Accrued Liabilities

of December 31, 2015 and 2014, accounts payable and accrued liabilities consisted of the following:

As of December 31, 2016 and 2015, accounts

payable and accrued liabilities consisted of the following:

December 31, 2016

December 31, 2015

Manufacturers

Returns allowance

Note 12 –

Notes Payable

Company’s loans payable at December 31, 2015 and 2014 are as follows:

The Company’s

loans payable at December 31, 2016 and 2015 are as follows:

December 31, 2016

December 31, 2015

Loans payable

Unamortized debt

Unamortized debt discount

Unamortized debt issuance cost

Current portion

Long-term portion

$6,000,000 January 22, 2015 Loan:

January 22, 2015, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with Knight Therapeutics

(Barbados) Inc.

(“Knight”), pursuant to which Knight agreed to loan the Company $6.0 million (the “Loan”),

and which amount was borrowed at closing (the “Financing”) for the purpose of acquiring the Focus Factor Business

(defined below).

At closing, the Company paid Knight an origination fee of $120,000 and a work fee of $60,000 and also paid $40,000

of Knight’s expenses associated with the Loan.

On January 22, 2015, the Company entered into

a Loan and Security Agreement (“Loan Agreement”) with Knight Therapeutics (Barbados) Inc.

(“Knight”), pursuant

to which Knight agreed to loan the Company $6.0 million (the “Loan”), and which amount was borrowed at closing (the

“Financing”) for the purpose of acquiring the Focus Factor Business (defined below).

At closing, the Company paid Knight

an origination fee of $120,000 and a work fee of $60,000 and also paid $40,000 of Knight’s expenses associated with the Loan.

The Loan bears interest at a rate of 15% per year;

provided, however, that

upon the occurrence of an equity or convertible equity offering by the Company of at least $1.0 million, the interest rate will

drop to 13% per year.

Interest accrues quarterly and is payable in arrears on March 31, June 30, September 30 and December 31

in each year, beginning on March 31, 2015.

outstanding principal and accrued and unpaid interest is due on the earliest to occur of either January 20, 2017 (the “Maturity

Date”), or the date that Knight, in its discretion, accelerates the Company’s obligations due to an event of default.

The Company may extend the Maturity Date for two successive additional 12-month periods if at March 31, 2016 and March 31, 2017,

respectively, the Company’s revenues exceed $13.0 million and its EBITDA exceeds $2.0 million for the respective 12-month

period then ending.

Principal payments under the Loan Agreement commenced on June 30, 2015 and continue quarterly as set forth

on the Repayment Schedule to the Loan Agreement.

to certain restrictions, the Company may prepay the outstanding principal of the Loan (in whole but not in part) at any time if

the Company pays a concurrent prepayment fee equal to the greater of (i) the total unpaid annual interest that would have been

payable during the year in which the prepayment is made if the prepayment is made prior to the first anniversary of the closing,

and (ii) $300,000.

The Company’s obligations under the Loan Agreement are secured by a first priority security interest

in all present and future assets of the Company.

The Company also agreed to not pledge or otherwise encumber its intellectual

property assets, subject to certain customary exceptions.

Loan Agreement includes customary representations, warranties, and affirmative and restrictive covenants, including covenants

to attain and maintain certain financial metrics, and to not merge or dispose of assets, acquire other businesses (except for

businesses substantially similar or complementary to the Company’s business and the aggregate consideration to be paid does

not exceed $100,000) or make capital expenditures in excess of $100,000 over the Company’s annual business plan in any year.

The Loan Agreement also includes customary events of default, including payment defaults, breaches of covenants, change of control

and material adverse effect default.

Upon the occurrence of an event of default and during the continuation thereof, the principal

amount of the Loan will bear a default interest rate of an additional 5%.

connection with the Loan Agreement, the Company issued to Knight a warrant that entitled Knight to purchase 4,595,187 shares of

common stock of the Company (“Common Stock”) on or prior to close of business on January 30, 2015 (the “ST Warrant”).

The aggregate exercise price of the Common Stock under the ST Warrant is $1.00.

provided, however, that upon the occurrence of an equity or convertible equity

offering by the Company of at least $1.0 million, the interest rate will drop to 13% per year.

Interest accrues quarterly and is

payable in arrears on March 31, June 30, September 30 and December 31 in each year, beginning on March 31, 2015.

All outstanding principal and accrued and unpaid

interest is due on the earliest to occur of either January 20, 2017 (the “Maturity Date”), or the date that Knight,

in its discretion, accelerates the Company’s obligations due to an event of default.

The Company may extend the Maturity

Date for two successive additional 12-month periods if at March 31, 2016 and March 31, 2017, respectively, the Company’s

revenues exceed $13.0 million and its EBITDA exceeds $2.0 million for the respective 12-month period then ending.

These covenants

were achieved, therefore the Company chose to extend the loan for the first 12-month period.

Principal payments under the Loan

Agreement commenced on June 30, 2015 and continue quarterly as set forth on the Repayment Schedule to the Loan Agreement.

Subject to certain restrictions, the Company

may prepay the outstanding principal of the Loan (in whole but not in part) at any time if the Company pays a concurrent prepayment

fee equal to the greater of (i) the total unpaid annual interest that would have been payable during the year in which the prepayment

is made if the prepayment is made prior to the first anniversary of the closing, and (ii) $300,000.

The Company’s obligations

under the Loan Agreement are secured by a first priority security interest in all present and future assets of the Company.

Company also agreed to not pledge or otherwise encumber its intellectual property assets, subject to certain customary exceptions.

The Loan Agreement includes customary representations,

warranties, and affirmative and restrictive covenants, including covenants to attain and maintain certain financial metrics, and

to not merge or dispose of assets, acquire other businesses (except for businesses substantially similar or complementary to the

Company’s business and the aggregate consideration to be paid does not exceed $100,000) or make capital expenditures in excess

of $100,000 over the Company’s annual business plan in any year.

The Loan Agreement also includes customary events of default,

including payment defaults, breaches of covenants, change of control and material adverse effect default.

Upon the occurrence of

an event of default and during the continuation thereof, the principal amount of the Loan will bear a default interest rate of

an additional 5%.

In connection with the Loan Agreement, the

Company issued to Knight a warrant that entitled Knight to purchase 4,595,187 shares of common stock of the Company (“Common

Stock”) on or prior to close of business on January 30, 2015 (the “ST Warrant”).

The aggregate exercise price

of the Common Stock under the ST Warrant is $1.00.

Knight exercised the ST Warrant on January 22, 2015.

Also in connection with the Loan Agreement, the Company issued to Knight a warrant to purchase 3,584,759 shares of Common

Stock on or prior to the close of business of January 22, 2025 (the “LT Warrant”).

The exercise price per share of

the Common Stock under the LT Warrant is $0.34.

Also in connection with

the Loan Agreement, the Company issued to Knight a warrant to purchase 3,584,759 shares of Common Stock on or prior to the close

of business of January 22, 2025 (the “LT Warrant”).

The exercise price per share of the Common Stock under the LT Warrant

The LT Warrant provides for cashless exercise.

The LT Warrant also provides that

in the event the closing price of the Common Stock remains above $1.00 for six consecutive months, Knight will forfeit the difference

between the number of shares acquired under the LT Warrant prior to 90 days after such six-month period, and 25% of the shares

purchasable under the LT Warrant.

beneficial conversion feature of the warrants issued to the noteholders amounted to $1,952,953 (ST warrants) and $1,462,560 (LT

warrants), respectively, and was recorded as debt discount of the corresponding debt.

Company recognized amortization of debt discount of $1,952,953 (ST warrants) and $854,828 (LT warrants) during the year ended

December 31, 2015.

Unamortized debt discount as of December 31, 2015 amounted to $607,732.

Company also recorded deferred financing costs of $289,045 with respect to the above loan.

The Company recognized amortization

of deferred financing costs of $136,207 during the year ended December 31, 2015.

Company recognized and paid interest expense of $805,686 during the year ended December 31, 2015.

Accrued interest expense was

$0 as of December 31, 2015.

Loan payable balance was $4,875,000 as of December 31, 2015.

The LT Warrant also provides that in the event the closing price of the

Common Stock remains above $1.00 for six consecutive months, Knight will forfeit the difference between the number of shares acquired

under the LT Warrant prior to 90 days after such six-month period, and 25% of the shares purchasable under the LT Warrant.

The beneficial conversion feature of the warrants

issued to the noteholders amounted to $1,952,953 (ST warrants) and $1,462,560 (LT warrants), respectively, and was recorded as

debt discount of the corresponding debt.

The Company recognized amortization of debt

discount of $1,952,953 (ST warrants) and $854,828 (LT warrants) during the year ended December 31, 2015.

The Company recognized

amortization of debt discount of $607,732 (LT warrants) during the year ended December 31, 2016.

Unamortized debt discount as of

December 31, 2015 amounted to $607,732.

During 2016, this debt discount was fully expensed in conjunction with the cancellation

of all warrants and options held by Knight.

The Company also recorded deferred financing

costs of $289,045 with respect to the above loan.

The Company recognized amortization of deferred financing costs of $92,976 and

$136,207 during the years ended December 31, 2016 and 2015, respectively.

Unamortized debt issuance cost as of December 31, 2016

amounted to $59,861.

The Company recognized and paid interest expense

of $625,359 and $805,686 during the years ended December 31, 2016 and 2015, respectively.

Accrued interest expense was $0 as of

both December 31, 2016 and 2015.

Loan payable balance was $2,812,500 and $4,875,000 as of December 31, 2016 and 2015, respectively.

On December 22, 2016, we entered into Subscription

Agreement with Knight Therapeutics (Barbados) Inc., or Knight, and issued 7,500,000 shares of our common stock in exchange for

the cancellation of warrants to purchase an aggregate of 8,132,002 shares of our common stock held by Knight, with per share purchase

prices of $0.34 and $0.49, and the cancellation of an option to purchase 1,000,000 shares of our common stock held by Knight, with

an exercise price of $0.25 per share.

As additional consideration, Knight has agreed to purchase up to $2.0 million worth of our

common stock if and when we undertake a common stock equity financing, subject to certain terms and conditions.

$1,500,000 January 22, 2015 Loan:

January 22, 2015, the Company issued a 0% promissory note in a principal amount of $1,500,000 in connection with an Asset Purchase

Agreement (see note 1).

The note has a maturity date of January 20, 2017, with $750,000 to be paid on or before January 20, 2016

and an additional $750,000 to be paid on or before January 20, 2017.

Loan payable balance was $1,500,000 as of December 31, 2015.

On January 22, 2015, the Company issued a 0%

promissory note in a principal amount of $1,500,000 in connection with an Asset Purchase Agreement (see note 1).

The note has a

maturity date of January 20, 2017, with $750,000 to be paid on or before January 20, 2016 and an additional $750,000 to be paid

on or before January 20, 2017.

Loan payable balance was $750,000 and $1,500,000 as of December 31, 2016 and 2015, respectively.

The loan was paid in full in January 2017.

$950,000 June 26, 2015 Security Agreement:

June 26, 2015, the Company, through its wholly owned subsidiary, Neuragen Corp.

(“Neuragen”), issued a 0% promissory

note in a principal amount of $950,000 in connection with an Asset Purchase Agreement (see note 1).

The note requires $250,000

to be paid on or before June 30, 2016, and $700,000 to be paid in quarterly installments (beginning with the quarter ending September

30, 2015) equal to the greater of $12,500 or 5% of U.S.

On June 26, 2015, the Company, through its

wholly owned subsidiary, Neuragen Corp.

(“Neuragen”), issued a 0% promissory note in a principal amount of $950,000

in connection with an Asset Purchase Agreement (see note 1).

The note requires $250,000 to be paid on or before June 30, 2016,

and $700,000 to be paid in quarterly installments (beginning with the quarter ending September 30, 2015) equal to the greater of

$12,500 or 5% of U.S.

net sales, and 2% of U.S.

net sales of Neuragen for 60 months thereafter.

The payment of such amounts is secured by a security interest in certain assets, undertakings and property (“Collateral”)

pursuant to the Security Agreement, which will be released upon receipt of total payments of $1.2 million.

Company also recorded deferred financing costs of $10,486 with respect to the above agreement.

The Company recognized amortization

of deferred financing costs of $2,643 during the year ended December 31, 2015.

The balance at December 31, 2015 was $925,000.

The payment of such amounts is

secured by a security interest in certain assets, undertakings and property (“Collateral”) pursuant to the Security

Agreement, which will be released upon receipt of total payments of $1.2 million.

The Company also recorded deferred financing

costs of $10,486 with respect to the above agreement.

The Company recognized amortization of deferred financing costs of $5,243

and $2,643 during the years ended December 31, 2016 and 2015, respectively.

Unamortized debt issuance cost as of December 31, 2016

amounted to $2,600.

The Company recorded present value of future payments of $290,947 and $531,589 as of December 31, 2016 and

2015, respectively.

The Company recorded interest expense of $59,358 and $37,372 for the year ended December 31, 2016 and 2015,

respectively.

$5,500,000 November 12, 2015 Loan:

November 12, 2015, we entered into a First Amendment to Loan Agreement (“First Amendment”) with Knight, pursuant to

which Knight agreed to loan us an additional $5.5 million, and which amount was borrowed at closing (the “Financing”)

for the purpose of acquiring Breakthrough Products, Inc.

On November 12, 2015, we entered into a First

Amendment to Loan Agreement (“First Amendment”) with Knight, pursuant to which Knight agreed to loan us an additional

$5.5 million, and which amount was borrowed at closing (the “Financing”) for the purpose of acquiring Breakthrough

Products, Inc.

and NomadChoice Pty Limited through Stock Purchase Agreements.

we paid Knight an origination fee of $110,000 and a work fee of $55,000 and also paid $24,000 of Knight’s expenses associated

with the Loan.

The Loan bears interest at a rate of 15% per year.

The interest rate will decrease to 13% if we meet certain equity-fundraising

The New Loan Agreement matures on November 11, 2017.

connection with the New Loan Agreement, we issued Knight a warrant that entitles Knight to purchase 5,550,625 shares of our common

stock (“Knight Warrant Shares”) representing approximately 6.5% of our fully diluted capital, which Knight exercised

in full on November 12, 2015.

Knight also received a 10-year warrant entitling Knight to purchase up to 4,547,243 shares of our

common stock at $0.49 per share (“Knight Warrants”).

beneficial conversion feature of the warrants issued to the noteholders amounted to $2,553,287 (5,550,625 warrants) and $2,067,258

(4,547,243 warrants), respectively, and was recorded as debt discount of the corresponding debt.

For derivative liability calculation

on 4,547,243 warrants, refer to Note 17.

Company recognized amortization of debt discount of $2,553,287 (5,550,625 warrants) and $138,571 (4,547,243 warrants) during the

year ended December 31, 2015.

Unamortized debt discount as of December 31, 2015 amounted to $1,928,686.

Company also recorded deferred financing costs of $233,847 with respect to the above loan.

The Company recognized amortization

of deferred financing costs of $15,675 during the year ended December 31, 2015.

Company recognized interest expense of $110,753 during the year ended December 31, 2015.

Accrued interest expense was $110,753

as of December 31, 2015.

The balance at December 31, 2015 was $5,500,000.

At closing, we paid Knight an origination fee of

$110,000 and a work fee of $55,000 and also paid $24,000 of Knight’s expenses associated with the Loan.

The Loan bears interest

at a rate of 15% per year.

The interest rate will decrease to 13% if we meet certain equity-fundraising targets.

The New Loan Agreement

matures on November 11, 2017.

In connection with the New Loan Agreement,

we issued Knight a warrant that entitles Knight to purchase 5,550,625 shares of our common stock (“Knight Warrant Shares”)

representing approximately 6.5% of our fully diluted capital, which Knight exercised in full on November 12, 2015.

received a 10-year warrant entitling Knight to purchase up to 4,547,243 shares of our common stock at $0.49 per share (“Knight

Warrants”).

The beneficial conversion feature of the warrants

issued to the noteholders amounted to $2,553,287 (5,550,625 warrants) and $2,067,258 (4,547,243 warrants), respectively, and was

recorded as debt discount of the corresponding debt.

For derivative liability calculation on 4,547,243 warrants, refer to Note

The Company recognized amortization of debt

discount of $2,553,287 (5,550,625 warrants) and $138,571 (4,547,243 warrants) during the year ended December 31, 2015.

recognized amortization of debt discount of $1,012,419 (4,547,243 warrants) during the year ended December 31, 2016 and remaining

balance of $916,267 was extinguished as part of the Subscription Agreement disclosed below.

Unamortized debt discount as of December

31, 2015 amounted to $1,928,686.

During 2016, this debt discount of $1,012,419 was expensed and $912,267 was extinguished in conjunction

with the cancellation of all warrants and options held by Knight.

The Company also recorded deferred financing

costs of $233,847 with respect to the above loan.

The Company recognized amortization of deferred financing costs of $117,083 and

$15,675 during the years ended December 31, 2016 and 2015, respectively.

Unamortized debt issuance cost as of December 31, 2016

amounted to $101,088.

The Company recognized interest expense of

$767,904 and $110,753 during the years ended December 31, 2016 and 2015, respectively.

Accrued interest expense was $31,079 and

$110,753 as of December 31, 2016 and 2015, respectively.

The principal balance outstanding at December 31, 2016 and 2015 was $3,781,250

and $5,500,000, respectively.

On December 22, 2016, we entered into Subscription

Agreement with Knight Therapeutics (Barbados) Inc., or Knight, and issued 7,500,000 shares of our common stock in exchange for

the cancellation of warrants to purchase an aggregate of 8,132,002 shares of our common stock held by Knight, with per share purchase

prices of $0.34 and $0.49, and the cancellation of an option to purchase 1,000,000 shares of our common stock held by Knight, with

an exercise price of $0.25 per share.

As additional consideration, Knight has agreed to purchase up to $2.0 million worth of our

common stock if and when we undertake a common stock equity financing, subject to certain terms and conditions.

Note 13 –

Stockholders’

total number of shares of all classes of capital stock which the Company is authorized to issue is 75,000,000 shares of common

stock with $0.00001 par value.

On July 30, 2014, the Company’s board of directors approved an increase of the Company’s

authorized common stock from 75,000,000 to 300,000,000 shares, which increase was approved by the Company’s shareholders

and became effective on August 5, 2015.

April 17, 2014, upon approval from FINRA, the Company effected a 30 for 1 forward stock split by way of a stock dividend, of all

of its issued and outstanding shares of common stock (the “Stock Split”).

The Stock Split did not affect the number

of the Company’s authorized common stock or its par value.

All references in the accompanying consolidated financial statements

and notes thereto have been retroactively restated to reflect the stock split.

the year ended December 31, 2015, the Company issued 4,595,187 shares of its common stock upon exercise of the ST Warrant at an

aggregate exercise price of $1.00 in connection with the Loan Agreement (see note1).

the year ended December 31, 2015, the Company issued 5,550,625 shares of its common stock upon exercise of a Warrant at an aggregate

exercise price of $1.00 in connection with the Loan Agreement (see note1).

the year ended December 31, 2015, the Company issued 400,000 shares of its common stock to a note holder in a note conversion

at $0.25 per share.

At the time of conversion, the note was valued at $100,000 for outstanding principal.

the year ended December 31, 2015, the Company issued 2,142,857 shares of its common stock valued at $0.70 per share in accordance

with Contribution Agreement entered into with Hand MD Corp.

The total number of shares of all classes of

capital stock which the Company is authorized to issue is 75,000,000 shares of common stock with $0.00001 par value.

2014, the Company’s board of directors approved an increase of the Company’s authorized common stock from 75,000,000

to 300,000,000 shares, which increase was approved by the Company’s shareholders and became effective on August 5, 2015.

On April 17, 2014, upon approval from FINRA,

the Company effected a 30 for 1 forward stock split by way of a stock dividend, of all of its issued and outstanding shares of

common stock (the “Stock Split”).

The Stock Split did not affect the number of the Company’s authorized common

stock or its par value.

All references in the accompanying consolidated financial statements and notes thereto have been retroactively

restated to reflect the stock split.

During the year ended December 31, 2015, the

Company issued 4,595,187 shares of its common stock upon exercise of the ST Warrant at an aggregate exercise price of $1.00 in

connection with the Loan Agreement (see note1).

During the year ended December 31, 2015, the

Company issued 5,550,625 shares of its common stock upon exercise of a Warrant at an aggregate exercise price of $1.00 in connection

with the Loan Agreement (see note1).

During the year ended December 31, 2015, the

Company issued 400,000 shares of its common stock to a note holder in a note conversion at $0.25 per share.

At the time of conversion,

the note was valued at $100,000 for outstanding principal.

During the year ended December 31, 2015, the

Company issued 2,142,857 shares of its common stock valued at $0.70 per share in accordance with Contribution Agreement entered

into with Hand MD Corp.

in exchange for 50% of Hand MD Corp.’s outstanding capital securities.

the year ended December 31, 2015, the Company issued 3,571,428 shares of its common stock valued at $0.35 per share in accordance

with a stock purchase agreement entered into with NomadChoice Pty Limited in exchange for 100% of NomadChoice Pty Limited’s

outstanding capital securities.

the year ended December 31, 2015, the Company issued 3,000,000 shares of its common stock valued at $0.85 per share in accordance

with a stock purchase agreement entered into with Breakthrough Products, Inc.

in exchange for 100% of Breakthrough Product Inc.’s

outstanding capital securities.

the year ended December 31, 2015, the Company issued 40,000 shares of its common stock valued at $0.65 per share for cash.

the year ended December 31, 2015, the Company issued 292,857 shares of its common stock valued at $0.70 per share to settle accounts

April 21, 2014, the Company entered into an agreement with accredited investors for the issuance and sale of 2,000,000 shares

of its common stock at a purchase price of $0.25 per share, for an aggregate consideration of $500,000.

the year ended December 31, 2014, the Company cancelled 135,900,000 shares of its common stock (4,530,000 pre-Stock Split) as

part of the Merger transaction.

the year ended December 31, 2014, the Company issued 16,000,000 shares of its common stock valued at $25,000 as part of the Merger

the year ended December 31, 2015 and 2014, the Company committed to issue common stock valued at $28,000 and $40,000, respectively

for services rendered.

of December 31, 2015 and 2014, there were 81,692,954 and 62,100,000 shares of the Company’s common stock issued and outstanding,

respectively.

During the year ended December 31, 2015, the

Company issued 3,571,428 shares of its common stock valued at $0.35 per share in accordance with a stock purchase agreement entered

into with NomadChoice Pty Limited in exchange for 100% of NomadChoice Pty Limited’s outstanding capital securities.

During the year ended December 31, 2015, the

Company issued 3,000,000 shares of its common stock valued at $0.85 per share in accordance with a stock purchase agreement entered

into with Breakthrough Products, Inc.

in exchange for 100% of Breakthrough Product Inc.’s outstanding capital securities.

During the year ended December 31, 2015, the

Company issued 40,000 shares of its common stock valued at $0.65 per share for cash.

During the year ended December 31, 2015, the

Company issued 292,857 shares of its common stock valued at $0.70 per share to settle accounts payable.

As of December 31, 2015, the Company committed

to issue common stock valued at $68,000 for services rendered.

During 2016, 213,742 shares of the Company’s common stock

were issued valued at $0.32 per share.

During the year ended December 31, 2016, the

Company issued 71,248 shares of its common stock valued at $0.70 per share for services rendered.

During the year ended December 31, 2016, the

Company cancelled 713,767 shares of its common stock valued at $125,000 in conjunction with an agreement with a former shareholder.

The Company committed to issue 125,000 shares to former shareholders valued at $56,250 recorded as settlement expense during the

These shares were not issued as of the date of this Annual Report.

During the year ended December 31, 2016, the

Company issued 7,500,000 shares of its common stock valued at $1,456,492 in conjunction with an agreement to cancel all outstanding

stock warrants and options issued along with the loans payable.

As of December 31, 2016 and 2015, there were

88,764,357 and 81,692,954 shares of the Company’s common stock issued and outstanding, respectively.

Note 14 –

Commitments and Contingencies

time to time the Company may become a party to litigation in the normal course of business.

Management believes that there are

no current legal matters that would have a material effect on the Company’s financial position or results of operations.

April 2014, a subsidiary entered into an extension of a non-cancellable operating lease for office space that expires on March

Rent expense under this lease for the period from acquisition until December 31, 2015 was $8,923 per month less a $3,010

per month sublease through March 2017.

December 2015, a subsidiary entered into a non-cancellable operating lease for office space through November 2016.

From time to time the Company may become a

party to litigation in the normal course of business.

Management believes that there are no current legal matters that would have

a material effect on the Company’s financial position or results of operations.

Operating leases

In April 2014, a subsidiary entered into an

extension of a non-cancellable operating lease for office space that expires on March 31, 2017.

Rent expense under this lease for

the period from acquisition until December 31, 2015 was $8,923 per month less a $3,010 per month sublease through March 2017.

In December 2015, a subsidiary entered into

a non-cancellable operating lease for office space through November 2016.

This lease was extended until April 2017.

Rental payments

under this lease are $5,900 Australian dollars per month, which is approximately $4,480.

December 2015, the Company entered into a non-cancellable operating lease for office space through December 2016.

Rental payments

under this lease are $5,500 per month.

following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining

non-cancelable lease terms in excess of one year as of December 31, 2015:

ending December 31:

December 8, 2014, a subsidiary entered into a non-cancellable 36 month phone lease with an estimated cost of $894 a month.

following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining

non-cancelable lease terms in excess of one year as of December 31, 2015:

ending December 31:

In December 2015, the Company entered into

a non-cancellable operating lease for office space through December 2016.

Rental payments under this lease were $5,500 per month.

The following is a schedule by years of future

minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of

one year as of December 31, 2016:

Year ending December 31:

On December 8, 2014, a subsidiary entered into

a non-cancellable 36 month phone lease with an estimated cost of $894 a month.

The following is a schedule by years of future

minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of

one year as of December 31, 2016:

Year ending December 31:

Note 15 –

Stock Options

July 30, 2014, the Company’s board of directors approved the Company’s 2014 Equity Incentive Plan and the reservation

of 15,525,000 shares of common stock for issuance under such plan.

Such plan was approved by the Company’s shareholders

and became effective on August 5, 2015.

April 2, 2014, the Company granted 1,000,000 options with an exercise price of $0.25 per share to the Company owned by Mr.

Ross, Chief Executive Officer of the Company.

December 14, 2015, the Company granted 1,000,000 options each with an exercise price of $0.25 per share to two Board Members of

December 14, 2015, the Company granted 1,000,000 options each with an exercise price of $0.65 per share to two employees of the

following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common

stock issued to employees and consultants under a stock option plan at December 31, 2015:

On July 30, 2014, the Company’s board

of directors approved the Company’s 2014 Equity Incentive Plan and the reservation of 15,525,000 shares of common stock for

issuance under such plan.

Such plan was approved by the Company’s shareholders and became effective on August 5, 2015.

On April 2, 2014, the Company granted 1,000,000

options with an exercise price of $0.25 per share to the Company owned by Mr.

Jack Ross, Chief Executive Officer of the Company.

On December 14, 2015, the Company granted 1,000,000

options each with an exercise price of $0.25 per share to two Board Members of the Company.

On December 14, 2015, the Company granted 1,000,000

options each with an exercise price of $0.65 per share to two employees of the Company.

On December 14, 2015, the Company granted 1,000,000

options with an exercise price of $0.25 per share to a Board Observer of the Company.

During 2016, these options were cancelled

in conjunction with the issuance of 7,500,000 shares and the cancellation of all outstanding options and warrants.

On February 18, 2016, the Company granted 300,000

options with an exercise price of $0.70 per share to an employee of the Company.

On April 18, 2016, the Company granted 500,000

options with an exercise price of $0.70 per share to an employee of the Company.

On July 4, 2016, the Company granted 500,000

options with an exercise price of $0.70 per share to an employee of the Company.

The following table summarizes the changes

in options outstanding and the related prices for the shares of the Company’s common stock issued to employees and consultants

under a stock option plan at December 31, 2016:

Options Outstanding

Options Exercisable

Exercise Prices ($)

Contractual Life

stock option activity for the year ended December 31, 2015 is as follows:

The stock option activity for the year ended

December 31, 2016 is as follows:

Options Outstanding

Weighted Average

Exercise Price

2 unchanged sentences

Outstanding at December 31, 2015

compensation expense related to vested options was $523,714 and $282,247 during the years ended December 31, 2015 and 2014, respectively.

The Company determined the value of share-based compensation for options vesting during the year ended December 31, 2015 using

the Black-Scholes fair value option-pricing model with the following weighted average assumptions:

estimated fair value of Company’s

common stock of $0.74, risk-free interest rate of 2.23%, volatility of 154%, expected lives of 10 years, and dividend yield of

The Company determined the value of share-based compensation for options vesting during the year ended December 31, 2014 using

the Black-Scholes fair value option-pricing model with the following weighted average assumptions:

estimated fair value of Company’s

common stock of $0.33, risk-free interest rate of 1.8%, volatility of 125%, expected lives of 4.5 years, and dividend yield of

Expired or canceled

Outstanding at December 31, 2016

Stock-based compensation expense related to

vested options was $2,200,160 and $523,714 during the years ended December 31, 2016 and 2015, respectively.

The Company determined

the value of share-based compensation for options vesting during the year ended December 31, 2015 using the Black-Scholes fair

value option-pricing model with the following weighted average assumptions:

estimated fair value of Company’s common stock

of $0.74, risk-free interest rate of 2.23%, volatility of 154%, expected lives of 10 years, and dividend yield of 0%.

determined the value of share-based compensation for options vesting during the year ended December 31, 2016 using the Black-Scholes

fair value option-pricing model with the following weighted average assumptions:

estimated fair value of Company’s common

stock of $0.40-0.61, risk-free interest rate of 0.90-1.24%, volatility of 135-160%, expected lives of 3-6 years, and dividend yield

Stock options outstanding as of December 31, 2016, as disclosed in the above table, have an intrinsic value of $780,000.

Note 16 –

Stock Warrants

following table summarizes the warrants outstanding and the related prices for the shares of the Company’s common stock

at December 31, 2015:

Contractual Life

warrant activity for the year ended December 31, 2015 is as follows:

Exercise Price

The following table summarizes the warrants

outstanding and the related prices for the shares of the Company’s common stock at December 31, 2016:

Warrants Outstanding

Warrants Exercisable

Exercise Prices ($)

Number Outstanding

Weighted Average Remaining Contractual Life (Years)

Weighted Average Exercise Price ($)

Number Exercisable

Weighted Average Exercise Price ($)

The warrant activity for the year ended December

31, 2016 is as follows:

Warrants Outstanding

Weighted Average Exercise Price

Outstanding at December 31, 2014

(10,145,812 )

Expired or canceled

Outstanding at December 31, 2015

Company has incurred a liability for the estimated fair value of a derivative warrant instrument.

The estimated fair value of

the derivative warrant instruments has been calculated using the Black-Scholes fair value option-pricing model with key input

variables provided by management, as of the issue date, with the valuation offset against additional paid in capital, and at each

reporting date, with changes in fair value recorded as gains or losses on revaluation in non-operating income (expense).

Company identified embedded derivatives related to the warrants issued along with loan payable entered into in November 2015.

These embedded derivatives included certain conversion features.

The accounting treatment of derivative financial instruments

requires that the Company record the fair value of the derivatives as of the inception date of the warrants and to adjust the

fair value as of each subsequent balance sheet date.

At the inception of the warrants, the Company determined a fair value of

$2,067,258 of the embedded derivative.

The fair value of the embedded derivative was determined using the Black-Scholes Model

based on the following assumptions:

Expired or canceled

Outstanding at December 31, 2016

Note 17 –

The Company has incurred a liability for the

estimated fair value of a derivative warrant instrument.

The estimated fair value of the derivative warrant instruments has been

calculated using the Black-Scholes fair value option-pricing model with key input variables provided by management, as of the issue

date, with the valuation offset against additional paid in capital, and at each reporting date, with changes in fair value recorded

as gains or losses on revaluation in non-operating income (expense).

The Company identified embedded derivatives

related to the warrants issued along with loan payable entered into in November 2015.

These embedded derivatives included certain

conversion features.

The accounting treatment of derivative financial instruments requires that the Company record the fair value

of the derivatives as of the inception date of the warrants and to adjust the fair value as of each subsequent balance sheet date.

At the inception of the warrants, the Company determined a fair value of $2,067,258 of the embedded derivative.

The fair value

of the embedded derivative was determined using the Black-Scholes Model based on the following assumptions:

November 12, 2015

Risk-free interest rate

2 unchanged sentences

Dividend yield

initial fair values of the embedded derivative of $2,067,258 was allocated as a debt discount $2,067,258.

value at December 31, 2015 was estimated to be $3,096,179 and based on the following assumptions:

The initial fair values of the embedded derivative

of $2,067,258 was allocated as a debt discount $2,067,258.

Fair value at December 31, 2015 was estimated

to be $3,096,179 and based on the following assumptions:

December 31, 2015

Risk-free interest rate

2 unchanged sentences

Dividend yield

the year ended December 31, 2015, the increase in the fair value of the warrant derivative liability of $1,028,921 was recorded

as a loss on change in fair value of derivative liability.

identification and selection is consistent with the management structure used by the Company’s chief operating decision

maker to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results

consistent with that structure.

Based on the Company’s management structure and method of internal reporting, the Company

has one operating segment.

The Company’s chief operating decision maker does not review operating results on a disaggregated

rather, the chief operating decision maker reviews operating results on an aggregate basis.

sales attributed to customers in the United States and foreign countries for the years ended December 31, 2015 and 2014 were as

During the year ended December 31, 2015, the

increase in the fair value of the warrant derivative liability of $1,028,921 was recorded as a loss on change in fair value of

derivative liability.

During the year ended December 31, 2016, the

decrease in the fair value of the warrant derivative liability of $1,380,600 was recorded as a gain on change in fair value of

derivative liability.

During December 2016, the Company cancelled

these warrants and issued 7,500,000 shares of common stock and accordingly warrant derivative liability was extinguished.

Fair value at December 23, 2016 when the warrants

were cancelled was estimated to be $1,715,579, based on the following assumptions:

December 23, 2016

Risk-free interest rate

Expected remaining term

Expected volatility

Dividend yield

The following table summarizes the derivative

liabilities included in the balance sheet at December 31, 2016:

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Balance - December 31, 2015

Extinguishment of derivatives liabilities from cancellation of warrants

Gain on change in fair value of the derivative liabilities

Balance –

December 31, 2016

Note 18 –

Segment identification and selection is consistent

with the management structure used by the Company’s chief operating decision maker to evaluate performance and make decisions

regarding resource allocation, as well as the materiality of financial results consistent with that structure.

Based on the Company’s

management structure and method of internal reporting, the Company has one operating segment.

The Company’s chief operating

decision maker does not review operating results on a disaggregated basis;

rather, the chief operating decision maker reviews operating

results on an aggregate basis.

Net sales attributed to customers in the United

States and foreign countries for the years ended December 31, 2016 and 2015 were as follows:

December 31, 2016

December 31, 2015

United States

Foreign countries

Company’s net sales by product group for the years ended December 31, 2015 and 2014 were as follows:

Flat Tummy Tea

Net sales for any other product group of similar products are less than 10% of consolidated net sales.

assets (net) attributable to operations in the United States and foreign countries as of December 31, 2015 and 2014 were as follows:

The Company’s net sales by product group

for the years ended December 31, 2016 and 2015 were as follows:

Nutraceuticals

Over the Counter

Cosmeceuticals

(1) Net sales for any other product group of

similar products are less than 10% of consolidated net sales.

Long-lived assets (net) attributable to operations

in the United States and foreign countries as of December 31, 2016 and 2015 were as follows:

December 31, 2016

December 31, 2015

United States

Foreign countries

Note 19 –

Subsequent Events

evaluated all activities of the Company through the issuance date of the Company’s consolidated financial statements and

concluded that no subsequent events have occurred that would require adjustments or disclosure into the consolidated financial

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Other than disclosed below, management evaluated

all activities of the Company through the issuance date of the Company’s consolidated financial statements and concluded

that no subsequent events have occurred that would require adjustments or disclosure into the consolidated financial statements.

During 2017, the Company paid the remaining

$750,000 on the loan to Factor Nutrition Labs, bringing the balance to $0.

The Company also paid an additional $1,031,250 in principal

on the second loan to Knight Therapeutics.

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data