What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2019-03-29 compared with 2018-04-02 · 559 added, 933 removed, 697 unchanged (68% of the section changed)

7 unchanged sentences

Statement of Changes in Stockholders’

Equity (Deficit)

Statements of Cash Flows

7 unchanged sentences

2018 and 2017, and the related statements of operations, comprehensive income (loss), stockholders’

cash flows for each of the years in the two year period ended December 31, 2017, and the related notes (collectively

referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations

and its cash flows for each of the years in the two year period ended December 31, 2017, in conformity with accounting principles

generally accepted in the United States of America.

equity, and cash flows

for each of the years in the two year period ended December 31, 2018, and the related notes (collectively referred to as the consolidated

financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the

years in the two year period ended December 31, 2018, in conformity with accounting principles generally accepted in the United

States of America.

consolidated financial statements are the responsibility of the Company’s management.

7 unchanged sentences

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the

audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due

to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control

over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control

over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, 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.

1 unchanged sentence

error or fraud, and performing procedures that respond to those risks.

Such procedures included

examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also

included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the

overall presentation of the financial statements.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

have served as the Company’s auditor since 2014.

April 2, 2018

Balance Sheets

1 unchanged sentence

receivable, net

Income taxes receivable

Current Assets

3 unchanged sentences

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

portion of long-term notes payable

Current Liabilities

6 unchanged sentences

89,862,683 and 89,862,683, shares issued and outstanding, respectively

stock to be issued (0 and 125,000 shares, respectively)

paid in capital

other comprehensive (loss) income

other comprehensive income (loss)

(15,027,122 )

stockholders’

4 unchanged sentences

and administrative

of goodwill and intangible assets

of intangible assets

and amortization

operating expenses

from operations

income from operations

(income) expenses

Remeasurement

(gain) loss on translation of foreign subsidiary

on change in fair value of derivative liability

of debt discount

loss (gain) on translation of foreign subsidiary

of debt issuance cost

on extinguishment of debt

on the sale of assets

other expenses

income before income taxes

income (loss) after tax

income (loss) per share –

(loss) income before income taxes

tax benefit (expense)

(loss) income after tax

$ (6,160,690 )

(loss) income per share –

basic and diluted

average common shares outstanding

Weighted average

common shares outstanding

Comprehensive

income (loss):

income (loss)

(loss) income

$ (6,160,690 )

currency translation adjustment

Comprehensive

income (loss)

(loss) income

$ (5,903,584 )

accompanying notes are an integral part of these consolidated financial statements

4 unchanged sentences

$ (9,366,000 )

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

stock cancelled

stock to be issued

stock issued for services

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

value of vested stock options

currency translation gain

as of December 31, 2016

$ (9,366,000 )

stock issued for acquisition of Per-fekt Beauty

6 unchanged sentences

$ (8,866,432 )

value of vested stock options

currency translation gain

as of December 31, 2018

$ (15,027,122 )

accompanying notes are an integral part of these consolidated financial statements

1 unchanged sentence

Flows from Operating Activities

income (loss)

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

(loss) income

$ (6,160,690 )

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

of debt issuance cost

1 unchanged sentence

based compensation expense

issued for services

on extinguishment of debt

of debt discount

of goodwill and intangible assets

currency transaction loss (gain)

in the fair value of derivative liability

of intangible assets

currency transaction loss

Remeasurement

(gain) loss on translation of foreign subsidiary

loss (gain) on translation of foreign subsidiary

cash implied interest

3 unchanged sentences

payable and accrued liabilities

cash (used in) provided by operating activities

cash provided by (used in) operating activities

Flows from Investing Activities

2 unchanged sentences

for brand development fees

of earn out liability

for domain name

cash used in investing activities

4 unchanged sentences

from sale of common stock

cash provided by (used in) financing activities

of exchange rate on cash and cash equivalents

decrease in cash and cash equivalents

and Cash Equivalents, beginning of year

cash (used in) provided by financing activities

of exchange rate on cash, cash equivalents and restricted cash

decrease in cash, cash equivalents and restricted cash

Cash Equivalents and restricted cash, beginning of year

accompanying notes are an integral part of these consolidated financial statements

and Cash Equivalents, end of year

Cash Equivalents and restricted cash ,

Disclosure of Cash Flow Information:

1 unchanged sentence

Disclosure of Non-cash Investing and Financing Activities:

of goodwill related to acquisition of Factor Nutrition to intellectual property

of goodwill related to acquisition of Breakthrough Products, Inc.

to intellectual property

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

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

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

to customer database

stock to be issued now issued

of common stock

stock issued for the acquisition of assets of Per-fekt

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

of accounts receivable and payables created during acquisition of Neuragen

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

26 unchanged sentences

Actual results could differ from those estimates.

At December 31, 2017 and 2016 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.

At December 31, 2018 and 2017 significant estimates included are assumptions about collection of accounts receivable, current

income taxes, deferred income taxes valuation allowance, 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, assumptions used in

Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility, risk-free interest rate, and expected dividend rate.

and Cash Equivalents

8 unchanged sentences

31, 2018 and 2017, the uninsured balances amounted to $162,729 and $1,557,373, respectively.

following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial

position that sum to the total of the same such amounts shown in the statement of cash flows.

and cash equivalents

cash, cash equivalents, and restricted cash shown in the statement of cash flows

included in restricted cash represent amounts held for credit card collateral.

Capitalization

12 unchanged sentences

intellectual property of $1,450,000 acquired as part of an Asset Purchase Agreement entered into with Factor Nutrition Labs LLC

on January 22, 2015 and $10,000 acquired as part of an Asset Purchase Agreement entered into with Perfekt Beauty Holdings LLC

and CDG Holdings, LLC on June 21, 2017.

on January 22, 2015, $10,000 acquired as part of an Asset Purchase Agreement entered into with Perfekt Beauty Holdings LLC and

CDG Holdings, LLC (“Perfekt”) on June 21, 2017 and $50,000 acquired as an Asset Purchase entered into with Cocowhite

on May 22, 2018.

Intangible assets are amortized on a straight line basis over the useful lives.

December 31, 2017, our qualitative analysis of intangible assets with indefinite lives did not indicate any impairment.

As of December 31, 2017, our

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

During the year ended December

31, 2018, the Company fully impaired intangible assets related to Perfekt and Cocowhite and charged to operations impairment loss

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

11 unchanged sentences

December 31, 2017, our qualitative analysis of long-lived assets did not indicate any impairment.

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

However, as of December 31,

2018 our review of intangible assets related to two of our subsidiaries did indicate that the carrying amount of the asset may

not be recoverable.

During the year ended December 31, 2018, the Company fully impaired related intangible assets and charged

to operations impairment loss of $864,067.

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

3 unchanged sentences

As of December 31, 2018,

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 an impairment loss of $1,983,160.

and 2017, our qualitative analysis of goodwill did not indicate any impairment.

of ASU 2014-09, Revenue from Contracts with Customers

January 1, 2018, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 606,

Revenue from Contracts with Customers (ASC 606) using the modified retrospective (cumulative effect) transition method.

this transition method, results for reporting periods beginning January 1, 2018 or later are presented under ASC 606, while prior

period results continue to be reported in accordance with previous guidance.

The cumulative effect of the initial application

of ASC 606 was immaterial, no adjustment was recorded to the opening balance of retained earnings.

The timing of revenue recognition

for our various revenue streams was not materially impacted by the adoption of this standard.

The Company believes its business

processes, systems, and controls are appropriate to support recognition and disclosure under ASC 606.

In addition, the adoption

has led to increased footnote disclosures.

Overall, the adoption of ASC 606 did not have a material impact on the Company’s

consolidated balance sheet, statement of operations and comprehensive income and statement of cash flows for the year ended December

ASC 606 also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows

arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred

to fulfill a contract.

As described below, the analysis of contracts under ASC 606 supports the recognition of revenue at a point

in time, resulting in revenue recognition timing that is materially consistent with the Company’s historical practice of

recognizing product revenue when title and risk of loss pass to the customer.

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;

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.

revenue results from transactions in which the Company has been paid for products by customers, but for which all revenue recognition

criteria have not yet been met.

Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”).

recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled

to receive in exchange for those goods.

Revenue recognition is evaluated through the following five steps:

(i) identification

of the contract, or contracts, with a customer;

(ii) identification of the performance obligations in the contract;

(iii) determination

of the transaction price;

(iv) allocation of the transaction price to the performance obligations in the contract;

and (v) recognition

of revenue when or as a performance obligation is satisfied.

Company recognizes revenue 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.

Company does not have any contract assets such as work-in-process.

All trade receivables on the Company’s consolidated balance

sheet are from contracts with customers.

incurred to obtain a contract are capitalized unless short term in nature.

As a practical expedient, costs to obtain a contract

that are short term in nature are expensed as incurred.

The Company does not have any contract costs capitalized as of December

Liabilities - Deferred Revenue

Company’s contract liabilities consist of advance customer payments and deferred revenue.

Deferred revenue results from

transactions in which the Company has been paid for products by customers, but for which all revenue recognition criteria have

not yet been met.

Once all revenue recognition criteria have been met, the deferred revenues are recognized.

51 unchanged sentences

As of December 31, 2018, and 2017, options to purchase 7,166,667 and 8,666,667 shares of common stock, respectively, were outstanding.

As of both December 31, 2017 and 2016, warrants to purchase 1,000,000 shares of common stock were outstanding.

As of December 31, 2017, warrants to purchase 1,000,000 shares of common stock were outstanding.

following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings

per share for the years ending December 31, 2018, and 2017:

the year ending

(loss) income after tax

$ (6,160,690 )

Weighted average

common shares outstanding

shares from the assumed exercise of dilutive stock options

shares from the assumed exercise of dilutive stock warrants

potential common shares

earnings per share:

following securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive

due to the respective exercise prices being greater than the

market price of the Company’s common stock on the dates shown:

due to the respective exercise prices being greater than the market price of the Company’s common stock on the dates shown:

to purchase common stock

47 unchanged sentences

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.

foreign subsidiary maintains its records using local currency (Australian Dollar –

“AUD”).

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

Dollars at quarter end exchange rates, non-monetary

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

Dollars at transaction day exchange rates.

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

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.

12 unchanged sentences

Comprehensive Income.

exchange rates used to translate amounts in AUD and CAD into USD for the purposes of preparing the consolidated financial statements

were as follows:

USD exchange rate

gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional

16 unchanged sentences

for display execution and setup and retail services are charged to cost of sales and expensed 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.

As of December 23, 2016 the Warrant Derivative Liability was extinguished

in conjunction with the issuance of shares.

This model is subject to the significant assumptions discussed below and requires

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

Exercise Price

Expected Life (in years)

Stock Volatility

Risk-Free Rate

Dividend Rate

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

22 unchanged sentences

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

of Financial Statements –

Going Concern

Concern Evaluation

connection with preparing consolidated financial statements for the year ended December 31, 2018, management evaluated whether

there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability

to continue as a going concern within one year from the date that the financial statements are issued.

Company considered the following:

Net loss of $6,160,690 for the year ended December 31, 2018.

At December 31, 2018, the Company had an accumulated deficit of $15,027,122.

At December 31, 2018, the Company had working capital deficit of $1,470,837.

Revenue decline in 2018 of $1,771,540.

● The Company obtained waiver against

not meeting financial covenants related to loans payable (maintaining minimum cash balance, net debt to EBITDA ratio and minimum

● The Company is required to make repayment of loans payable of $500,000 and

accrued interest during the three months ended March 31, 2020.

conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern relate to the

entity’s ability to meet its obligations as they become due.

Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements

are issued by considering the following:

The Company raised $10.0 million via debt financing during the year ended December 31, 2017.

In 2018, the Company repaid $2.9 million of loans.

In 2018, the Company generated $1.3 million of cash from operating activities.

In 2019, the Company has repaid $500,000 of the loan payable.

● Working capital deficit of $1,470,837

at December 31, 2018, includes loans payables to related party of $1,963,887, royalty payable to related party of $304,434 and

deferred revenue of $49,709.

Revenue declines were largely the result of 2017 being launch year of two new brands and 2018 being normalized revenue of those

The Company has line of credit facility of $20 million available from its current lender for future mergers and

Management concluded that above factors

alleviates doubts about the Company’s ability to generate enough cash from operations and other available sources to satisfy

its obligations for the next twelve months from the issuance date.

Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections,

in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern:

Raise additional capital through line of credit and/or loans financing for future mergers and acquisition.

Implement additional restructuring and cost reductions.

Raise additional capital through a private placement.

At March 27, 2019 and December 31, 2018, the Company had $1,372,431 and $459,736, respectively in cash and

cash equivalents.

Accounting Pronouncements

August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework –

Changes in Disclosure

Requirements for Fair Value Measurement, which removes, modifies and adds certain disclosure requirements in Topic 820 “Fair

Value Measurement”.

ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods

within those fiscal years.

Early adoption is permitted.

The adoption of ASU 2018-13 is not expected to have any impact on the

Company’s consolidated financial statements.

June 2018, the FASB issued ASU 2018-07, Compensation –

Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based

Payment Accounting, which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting

for share-based payments to employees, with certain exceptions.

ASU 2018-07 is effective for fiscal years beginning after December

15, 2018, including interim periods within those fiscal years.

Early adoption is permitted.

The adoption of ASU 2018-07 is not

expected to have any impact on the Company’s consolidated financial statements.

Accounting Standards Update adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No.

118, which expresses the view

of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date

on which the Tax Cuts and Jobs Act (H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent

Resolution on the Budget for Fiscal Year 2018) was signed into law.

We are currently evaluating the impact of adopting ASU 2017-13

on our consolidated financial statements.

December 22, 2017, the U.S.

federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles

II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (Tax Cuts and Jobs Act of 2017).

Stakeholders raised

a narrow-scope financial reporting issue that arose as a consequence of the Tax Cuts and Jobs Act of 2017.

The amendments in this

Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting

from the Tax Cuts and Jobs Act of 2017.

The amendments in this Update affect any entity that is required to apply the provisions

of Topic 220, Income Statement-Reporting Comprehensive Income, and has items of other comprehensive income for which the related

tax effects are presented in other comprehensive income as required by GAAP.

The amendments in this update is effective for all

entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.

Early adoption of

the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting

periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which

financial statements have not yet been made available for issuance.

The amendments in this Update should be applied either in

the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S.

federal corporate

income tax rate in the Tax Cuts and Jobs Act is recognized.

Accounting Standards Update is the final version of Proposed Accounting Standards Update 2018-210—Income Statement—Reporting

Comprehensive Income (Topic 220), which has been deleted.

We are currently evaluating the impact of adopting ASU 2017-13 on our

consolidated financial statements.

amendments in this Update provide an optional transition practical expedient to not evaluate under Topic 842 existing or expired

land easements that were not previously accounted for as leases under Topic 840, Leases.

An entity that elects this practical

expedient should evaluate new or modified land easements under Topic 842 beginning at the date that the entity adopts Topic 842.

An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with

the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease.

We are currently

evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements.

September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606),

2 unchanged sentences

We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements.

Board is issuing this Update to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying

the guidance in Topic 718, Compensation—Stock Compensation, to a change to the terms or conditions of a share-based payment

amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require

an entity to apply modification accounting in Topic 718.

The amendment is Effective for all entities for annual periods, and interim

periods within those annual periods, beginning after December 15, 2017.

Early adoption is permitted, including adoption in any

interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued

and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance.

Update is the final version of Proposed Accounting Standards Update 2016-360—Compensation—Stock Compensation (Topic

718)—Scope of Modification Accounting, which has been deleted.

Adoption of this

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

January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), which simplifies the goodwill impairment

The effective date for ASU 2017-04 is for fiscal years beginning after December 15, 2019.

Early adoption is permitted for

interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

We are currently evaluating the

impact of adopting ASU 2017-04 on our consolidated financial statements.

amendments eliminate Step 2 from the goodwill impairment test.

The annual, or interim, goodwill impairment test is performed by

comparing the fair value of a reporting unit with its carrying amount.

An impairment charge should be recognized for the amount

by which the carrying amount exceeds the reporting unit’s fair value;

however, the loss recognized should not exceed the

total amount of goodwill allocated to that reporting unit.

In addition, income tax effects from any tax deductible goodwill on

the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable.

amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative

assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test.

An entity still has the

option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary.

Early adoption is permitted for interim or annual goodwill

impairment tests performed on testing dates after January 1, 2017.

We are currently evaluating the impact of adopting ASU 2017-04

on our consolidated financial statements.

January 2017, the FASB issued ASU No.

8 unchanged sentences

to any business development transaction.

We are currently evaluating the impact of adopting ASU 2017-04 on our consolidated financial

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

financial statements.

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

4 unchanged sentences

Early adoption is permitted.

We are currently

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

adopted ASU 2016-18 effective January 1, 2018.

The adoption of ASU 2016-18 had no impact on our retained earnings, and no impact

to our net income on an ongoing basis.

Adoption of the new standard requires that a statement of cash flows explain the change

during the period in the total of cash, cash equivalents and amounts generally described as restricted cash, or restricted cash

The amounts generally described as restricted cash and restricted cash equivalents should be included with cash and

cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows.

The amendments have been applied using a retrospective transition method to each period presented, as required.

The period ended

December 31, 2017 has been reclassified to reflect this change.

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

4 unchanged sentences

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

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.

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.

effective date for ASU 2016-10 is the same as the effective date of ASU 2016-08 and ASU 2014-09 as amended by ASU 2015-14,

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

Effective January

1, 2018, the Company will adopt the requirements of Topic 606 using the modified retrospective method.

Upon adoption, the

Company will recognize the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance

of retained earnings.

Using the modified retrospective method of adoption, the comparative information for periods prior

to 2018 will not be restated and instead will continue to be reported under the accounting standards in effect for those periods.

Company anticipates that the adoption of the new standard will not result in a material difference between the recognition of

revenue under Topic 606 and prior accounting standards.

For the majority of the Company’s net sales, revenue will continue

to be recognized when products are shipped from our distribution facilities, or when received by the customers, depending upon

the terms of the contract.

In addition, to meet the disaggregation disclosure requirements under Topic 606, the Company anticipates

its disclosure of revenue disaggregation will be by major product group, geographic area and major sales channels.

June 2016, the FASB issued ASU No.

2016-13, Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses

on Financial Instruments and subsequent amendment to the initial guidance:

ASU 2018-19 (collectively, Topic 326).

amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit

losses on certain types of financial instruments, including trade receivables.

ASU 2016-13 is effective for fiscal years beginning

after December 15, 2019, with early adoption permitted.

The Company is currently assessing the potential impact of ASU 2016-13

on its consolidated financial statements.

March 2016, the FASB issued ASU No.

22 unchanged sentences

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

January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016-01, which amends the guidance in U.S.

GAAP 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

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.

February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance:

ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively Topic 842) to increase transparency and comparability of lease

recognition and disclosure.

The update requires lessees to recognize lease contracts with a term greater than one year on the

balance sheet, while recognizing expenses on the income statement in a manner similar to current guidance.

For lessors, the update

makes targeted changes to the classification criteria and the lessor accounting model to align the guidance with the new lessee

model and revenue guidance.

ASU 2016-02, ASU 2017-13, ASU 2018-10, ASU 2018-11 and ASU 2018-20 are effective for annual reporting

periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted.

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

ASU 2019-01 is effective

for annual reporting periods beginning after December 15, 2019.

The Company is currently assessing the potential impact of ASU

2019-01 on its consolidated financial statements.

January 2016, the FASBASU 2016-01, which amends the guidance in U.S.

GAAP on the classification and measurement of financial

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.

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

33 unchanged sentences

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

April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40).

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.

is effective for public companies’

annual periods, including interim periods within those fiscal years, beginning after

December 15, 2015 on either a prospective or retrospective basis.

Early adoption is permitted.

Adoption of this new standard did

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

May 2015, the FASB issued ASU No.

2015-07, 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 guidance.

The new standard 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

consolidated financial statements

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

2015-03, Interest - Imputation of Interest (Subtopic

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.

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.

February 2015, the FASB issued ASU No.

2015-02, 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.

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

financial statements.

January 2015, the FASB issued ASU No.

2015-01, “Income Statement - Extraordinary and Unusual Items (Subtopic 225-20):

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.

Adoption of this new standard did not have

any impact on the Company’s consolidated financial statements.

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.

Adoption of this new standard did not have any impact on the

Company’s financial position, results of operations or cash flows.

June 2014, the FASB issued ASU No.

2014-12, “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.

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

results of operations or cash flows.

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.

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.

(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 ,

both of which payments were made on a timely basis.

January 22, 2015, the Company and Knight Therapeutics (Barbados) Inc.

(“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.

December 23, 2016, we entered into a FOCUSFactor Distribution Agreement (Canada) with Knight whereas the Company was appointed

the exclusive Third Party distributor or FOCUSFactor products in Canada.

In conjunction with this agreement, we are required to

pay Knight a distribution amount equal to 30% of gross sales on revenue generated from direct sales and 5% of gross sales on revenue

generated from retail sales.

This distribution agreement has a minimum amount due of $100,000 Canadian, annually.

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

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:

Non-compete provision

Non-solicitation

Intangible assets-Customer

relationships

Accounts payable

the first quarter of 2016, the Company consulted with a valuation professional to assist in determining the fair

value of the identifiable FOCUSfactor intangible assets.

As a result of this work, the Company 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 statement for the year ended December 31, 2015.

The Company believes that the

restated amount of $1,450,000 properly states the fair value of the FOCUSfactor brand and patent.

final allocation of the purchase price to the assets acquired and liabilities assumed based on the independent valuation is as

Intellectual property

Non-compete provision

Non-solicitation

Intangible assets-Customer

relationships

Accounts payable

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

Intellectual property is not amortized and will be tested for impairment.

During each of the years ended December

31, 2017 and 2016, the Company charged to operations amortization expense of $408,206.

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

Cash payment made on January

Cash payment made on January 20, 2016

made on January 20, 2017

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”).

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.

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 $282,240 and $290,947 as of December 31, 2017 and 2016, respectively.

The Company has recorded interest expense of $41,292 and $59,358 for the years ended December 31, 2017 and 2016, respectively.

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:

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 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

Accounts payable

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

During each of the years

ended December 31, 2017 and 2016, the Company charged to operations amortization expense of $141,311.

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 $221,222 and $313,752 as of December 31, 2017 and 2016, respectively.

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.

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

License agreement

Royalty payable

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

During each of the years

ended December 31, 2017 and 2016, the Company charged to operations amortization expense of $354,135.

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 (“Breakthrough”), URX ACQUISITION TRUST, a Delaware

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

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

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

our common stock (“UrgentRx Equity Consideration”).

Breakthrough is engaged in the business of developing and selling

treatments for headache, heart burn, allergy attack, ache and pain and upset stomach in the form of powders (“UrgentRx”).

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

equal to 5% of gross sales of the UrgentRx 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 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.

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

Prepaid expenses

Intellectual property

Non-compete provision

Accounts payable

Accrued expenses

preliminary purchase price allocated to the acquisition of the assets of UrgentRx is made up as follows:

warrants issued

the second quarter of 2016, the Company 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 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 for the year ended December

The Company believes that these restated amounts properly state the fair value of the Breakthrough Products, Inc.

final allocation of the purchase price to the assets acquired and liabilities assumed based on the independent valuation is as

Accounts receivable

Prepaid expenses

Intellectual property

Non-compete provision

Accounts Payable

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 years ended December 31, 2017 and 2016, the Company charged to operations amortization expense

of $0 and $51,667, respectively.

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

adjusted purchase price allocated to the acquisition of the assets of UrgentRx is made up as follows:

Stock payment

Stock warrants issued

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 full 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.

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

Prepaid expenses

Fixed assets, net

Intangible assets,

Blogger database

Customer database

Intellectual property

Non-compete provision

Accounts payable

Accrued expenses

Dividends payable

Provision for income

second quarter of 2016, the Company consulted with a valuation professional to assist in determining the fair value of

the identifiable NomadChoice’s intangible assets.

As a result of this work, the Company 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 for the year ended December

The Company believes that these restated amounts properly state the fair value of the TPR Investments Pty Ltd.

final allocation of the purchase price to the assets acquired and liabilities assumed based on the independent valuation is as

Other receivable

Prepaid expenses

Fixed assets, net

Intangible assets,

Blogger database

Customer database

Intellectual property

Non-compete provision

Accounts payable

Accrued expenses

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 each of the years ended December 31, 2017 and 2016, the Company charged to operations amortization expense

purchase price allocated to the acquisition of the assets of NomadChoice is made up as follows:

Stock issued at closing

Earn-out payment

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

operations or cash flows.

Purchase Agreement with Perfekt Beauty Holdings LLC and CDG Holdings, LLC:

3 unchanged sentences

engaged in the business of developing and selling skincare and cosmetics products under the brand Per-fekt.

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:

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:

Consideration

1 unchanged sentence

additional consideration, the Company will pay quarterly royalties equal to 5% of net sales for 10 years following the closing

The purchase price was subject to adjustment as provided in the Purchase Agreement, based on the final amounts of

accounts payable, accounts receivable and new and unsold inventory.

Company utilizes FASBASC740, “Income Taxes,”

The purchase price was subject to adjustment as provided in the Purchase Agreement, based on the final amounts of accounts

payable, accounts receivable and new and unsold inventory.

Subsequent to December 31, 2018, we have issued 26,931 shares as

full and final payment to Perfekt Beauty Holdings LLC and CDG Holdings, LLC.

2018 the Company wrote off $164,694 worth of inventory to cost of sales as it was determined to be nearing expiration and slow

The Company also determined the $10,000 intellectual property related to the brand may not be recoverable and thus recorded

full impairment of the asset.

Company utilizes FASB ASC 740, “Income Taxes,”

which requires the recognition of deferred tax assets and liabilities

20 unchanged sentences

tax law is uncertain, including to what extent various states will conform to the newly enacted federal tax law.

The Company has not recorded

the necessary provisional adjustments in the financial statements in accordance with its current

understanding of the TCJA and guidance currently available as of this filing.

But is reviewing

the TCJA ’

s potential ramifications.

Company has not recorded the necessary provisional adjustments in the financial statements in accordance with its current understanding

of the TCJA and guidance currently available as of this filing.

But is reviewing the TCJA’s potential ramifications.

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

9 unchanged sentences

Company does not have any uncertain tax positions.

tax expense for the years ended December 31, 2017 and 2016 was $289,811 and $944,358, respectively, due to Foreign Income

Tax relating to NomadChoice in Australia.

purposes, the Company has not completed its evaluation of NOL utilization limitations under Internal Revenue Code, as amended

(the “Code”) Section 382/383, change of ownership rules.

If the Company has had a change in ownership, the NOL’s

would be limited or eliminated, as to the amount that could be utilized each year, based on the Code.

NOL’s attributable

to Breakthrough Products, Inc., which are the majority of the Company’s domestic NOL’s are Separate Return Limitation

Year (SRLY) NOL’s.

Such losses may generally not be available for use (limited or eliminated).

Company has not filed its State & Local Income/Franchise tax returns in States it is required to file for the last few years,

so such returns and liability remain open.

The Company has estimated and accrued for its sales tax liability at $180,222 as

of December 31, 2018.

table below summarizes the differences between the U.S.

3 unchanged sentences

effective rate in excess of AU/CA rate

of Australian tax loss

valuation allowance

Foreign Tax -

Australia/Canada

Total provision

for income taxes

Tax - Australia/Canada

provision for income taxes

Company has deferred tax assets, which have been fully reserved, as follows as of December 31, 2018 and 2017:

1 unchanged sentence

deferred tax assets

accrued and paid for the tax year December 31, 2016 are attributable to NomadChoice Pty, Ltd., the Company’s wholly-owned

subsidiary which is subject to income taxes in Australia, the jurisdiction in which it operates.

Tax expense was

$289,811 and $944,358 for 2017 and 2016, respectively.

The effective tax rate is attributable to the Company’s world wide

income/(loss) as it relates to the income tax expense due in Australia.

expense (benefit) was $(247,694) and $316,012 for 2018 and 2017, respectively.

The effective tax rate is attributable to the Company’s

world wide income/(loss) as it relates to the income tax expense due in Australia.

“TCJA”

9 unchanged sentences

Company also has net operating loss carryforwards of approximately $40,000,000 and $33,634,744 (United States and Canada)

included in the deferred tax asset table above for 2017 and 2016, 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.

included in the deferred tax asset table above for 2018 and 2017, 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.

of this report.

total deferred tax asset is calculated by multiplying a domestic (US) 21 percent marginal tax rate for 2017 and 36 percent

marginal tax rate for 2016 by the cumulative Net Operating Loss Carryforwards (“NOL”).The Company currently has net

operating loss carryforwards approximately aggregating $33,634,744 and $32,720,733 for 2017 and 2016, 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 is required.

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.

total deferred tax asset is calculated by multiplying a domestic (US) 21 percent marginal tax rate for 2018 and 21

percent marginal tax rate for 2017 by the cumulative Net Operating Loss Carryforwards (“NOL”).

currently has net operating loss carryforwards approximately aggregating $40,000,000 and $33,634,744 for 2018 and

2017, 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 is required.

Accounts Receivable

2 unchanged sentences

accounts receivable, net

each of the years ended December 31, 2017 and 2016, the Company charged $0 to bad debt expense.

the years ended December 31, 2018 and 2017, the Company charged $69,070 and $0, respectively to bad debt expense.

Prepaid Expenses

11 unchanged sentences

and $1,557,373, respectively.

of December 31, 2017 and 2016, three customers accounted for 88% and 91%, respectively, of the Company’s accounts

of December 31, 2018 and 2017, three customers accounted for 83% and 88%, respectively, of the Company’s accounts receivable.

the year ended December 31, 2018, two customers accounted for approximately 41% of the Company’s net revenue.

ended December 31, 2016, three customers accounted for approximately 34% of the Company’s net revenue.

Substantially all

of the Company’s business is with companies in the United States.

each of the years ended December 31, 2017 and 2016, our products were made by the following suppliers:

Innovations - Pittsburgh, PA

Nutrition, Inc.

Tea Company, LLC - Highland, NY

LLC - Linthicum Heights, MD

Nutrition - Ogden, UT

HealthSpecialty

- Santa Fe Springs, CA

Jingrui - China

Queen Pegasus

Actives - Gilbert, AZ

Queen Pegasus

Beautiful Daily Cosmetics - Zhejiang, China

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.

For the year ended December 31, 2017, two customers accounted for approximately 42% of the Company’s net revenue.

Substantially

all of the Company’s business is with companies in the United States.

of December 31, 2018 and 2017, two vendors accounted for 77% and 81%, respectively, of the Company’s accounts payable.

the year ended December 31, 2018, two suppliers accounted for approximately 45% of the Company’s purchases.

ended December 31, 2017, three suppliers accounted for approximately 46% of the Company’s purchases.

Substantially all of

the Company’s business is with suppliers in the United States.

consists of finished goods, components and raw materials.

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

basis) or market.

basis) or net realizable value.

carrying value of inventory consisted of the following:

2 unchanged sentences

$256,051 and $45,188, respectively, of the Company’s inventory was in transit.

During the year ended December 31,

2018, $1,056,209 of expiring and slow moving inventory was written off to cost of sales.

Fixed Assets and Intangible Assets

5 unchanged sentences

intellectual property

assets subject to amortization

accumulated amortization and impairment

accumulated amortization

accumulated impairment

expense for the years ended December 31, 2018 and 2017 was $1,669,542 and $1,385,159, respectively.

Impairment of intangible assets

for the year ended December 31, 2016 was $193,750.

These intangible assets were acquired through the Asset Purchase Agreement

and the Stock Purchase Agreements disclosed in Note 3.

Impairment of intangible

assets for the year ended December 31, 2018 related to branding payments made during 2017.

estimated aggregate amortization expense over each of the next five years is as follows:

1 unchanged sentence

Company accrued and paid consulting fees of $41,250 per month through April 2017 and $57,917 per month through December 2018

accounting fees of $12,500 per month and rent of $1,500 per month to a company owned by Mr.

Jack Ross, Chief Executive Officer

of the Company.

The Company expensed $796,336 and $481,215, respectively during 2017 and 2016 as consulting fees, and made

payments totaling $796,336 and $481,215 towards services to an entity owned and controlled by an officer and shareholder

of the Company for the year ended December 31, 2017 and 2016.

The Company also paid out a bonus of $525,000 during 2017.

As of December 31, 2017 and 2016, the total outstanding balance was $0.

to a company owned by Mr.

Jack Ross, Chief Executive Officer of the Company.

The Company also paid three months of a vehicle

allowance of $1,500 per month.

The Company expensed $648,944 and $796,336, respectively during 2018 and 2017 as consulting

fees, and made payments totaling $648,944 and $796,336 towards services to an entity owned and controlled by an officer

and shareholder of the Company for the year ended December 31, 2018 and 2017, respectively.

The Company also paid out a bonus

of $525,000 during 2017.

As of December 31, 2018 and 2017, the total outstanding balance was $28,213 and $0, respectively.

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, 2017 and 2016, the Company owed Knight $559,243 and $2,752,639, respectively,

on this loan, net of discount (see Note 12).

At December 31, 2017, the Company owed Knight $559,243 on this loan, net of discount, which

was paid-off during 2018 (see Note 12).

June 26, 2015, the Company entered into a Security Agreement with Knight Therapeutics, Inc., through its wholly owned subsidiary

7 unchanged sentences

unless the Consulting Agreement is terminated earlier by either party.

The Company decided to extend the contract on a month

to month basis.

The Company decided to extend the contract on a month to

Hand MD, LLC is a 50% owner in Hand MD Corp.

The Company expensed $120,000 through payroll for each of the

years ended December 31, 2017 and 2016.

The Company expensed $120,000 through payroll for each of the years

ended December 31, 2018 and 2017.

As of December 31, 2018 and 2017, the total outstanding balance was $0.

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, 2017 and 2016, the Company owed Knight $0

and $3,680,162, respectively, on this loan, net of discount (see Note 12).

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.

August 9, 2017, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for a working

capital loan.

At December 31, 2018 and 2017, the Company owed Knight $7,320,739 and $9,110,030, respectively, on this loan, net

of debt issuance cost (see Note 10).

December 23, 2016, we entered into an agreement with Knight Therapeutics for the distribution rights of FOCUSFactor in Canada.

3 unchanged sentences

this agreement is $100,000 Canadian dollars.

As of December 31, 2017, the total outstanding balance was $100,000 Canadian dollars.

August 9, 2017, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for a working

capital loan.

At December 31, 2017, the Company owed Knight $9,110,030 on this loan, net of debt issuance cost (see Note 10).

Company expensed royalty of $117,722 for the year ended December 31, 2017.

At December 31, 2017 Sneaky Vaunt Corp., a subsidiary

of the Company, owed Knight Therapeutics $4,608 in connection with a royalty distribution agreement.

Company expensed commissions of $172,579 for the year ended December 31, 2017.

At December 31, 2017 Sneaky Vaunt Corp., a subsidiary

of the Company, owed Founded Ventures, owned by a shareholder in the Company, $2,581 in connection with a commission agreement.

The Company paid a development fee for the brand, Sneaky Vaunt, in the amount of $761,935 for the year ended December 31, 2017.

Company expensed commissions of $13,952 for the year ended December 31, 2017.

As of December 31, 2018 and 2017, the total outstanding balance was $200,000 and

$100,000 Canadian dollars, respectively.

In US Dollars, the total outstanding balance was $152,834 and $79,534 as of December

31, 2018 and 2017, respectively.

December 23, 2016, we entered into an agreement with Knight Therapeutics for the distribution rights of Hand MD into Canada.

conjunction with this agreement, we are required to pay Knight a distribution fee equal to 60% of gross sales for sales achieved

through a direct sales channel until the sales in the calendar year equal the threshold amount and then 40% of all such gross

sales in such calendar year in excess of the threshold amount and 5% of gross sales for sales achieved through retail sales.

minimum due to Knight under this agreement is $25,000 Canadian dollars.

As of December 31, 2018 the total outstanding balance

was $25,000 Canadian dollars.

In US Dollars, the total outstanding balance was $18,325.

Company expensed royalty of $16,066 and $117,722 for the years ended December 31, 2018 and 2017, respectively.

At December 31,

2018 and 2017, Sneaky Vaunt Corp., a subsidiary of the Company, owed Knight Therapeutics $5,906 and $4,608, respectively in connection

with a royalty distribution agreement.

Company expensed commissions of $43,374 and $172,579 for the years ended December 31, 2018 and 2017, respectively.

31, 2018 and 2017, Sneaky Vaunt Corp., a subsidiary of the Company, owed Founded Ventures, owned by a shareholder in the Company,

$10,579 and $2,581, respectively in connection with a commission agreement.

The Company paid a development fee for the brand,

The Queen Pegasus, in the amount of $1,000,000 for the year ended December 31, 2017.

At December 31, 2017, The Queen Pegasus,

a subsidiary of the Company, owed Founded Ventures $1,462 in connection with a commission agreement.

Company expensed royalty of $24,227 for the year ended December 31, 2017.

At December 31, 2017 The Queen Pegasus, a subsidiary

of the Company, owed Knight Therapeutics $10,274 in connection with a royalty distribution agreement.

Company paid $125,000 for the year ended December 31, 2017 to Hand MD, Corp, related to a royalty agreement.

Sneaky Vaunt, in the amount of $761,935 for the year ended December 31, 2017.

Company expensed commissions of $10,016 and $13,952 for the years ended December 31, 2018 and 2017, respectively.

paid a development fee for the brand, The Queen Pegasus, in the amount of $1,000,000 for the year ended December 31, 2017.

December 31, 2018 and 2017, The Queen Pegasus, a subsidiary of the Company, owed Founded Ventures $3,547 and $1,462, respectively

in connection with a commission agreement.

Company expensed royalty of $2,361 and $24,227 for the years ended December 31, 2018 and 2017, respectively.

At December 31, 2018

the Company owed Hand MD Corp.

$250,000 in minimum future royalties.

and 2017, The Queen Pegasus, a subsidiary of the Company, owed Knight Therapeutics $193 and $10,274, respectively in connection

with a royalty distribution agreement.

Company paid $250,000 and $125,000 for the years ended December 31, 2018 and 2017, respectively, to Hand MD, Corp, related to

a royalty agreement.

At December 31, 2018 and 2017, the Company owed Hand MD Corp.

$0 and $250,000, respectively in minimum future

Company expensed royalty of $392,589 and $380,166 for the years ended December 31, 2018 and 2017, respectively.

At December 31, 2017 and 2016, NomadChoice Pty Ltd., a subsidiary of the Company owed Knight Therapeutics $39,682 and $87,678,

respectively, in connection with a royalty distribution agreement (see Note 3).

At December 31,

2018 and 2017, NomadChoice Pty Ltd., a subsidiary of the Company owed Knight Therapeutics $109,329 and $39,682, respectively,

in connection with a royalty distribution agreement (see Note 3).

Accounts Payable and Accrued Liabilities

2 unchanged sentences

related party

Party Reimbursements

Company has accounted for a severance accrual in the amount of $506,250 as of December 31, 2018 relating to the termination of

This liability will be paid out in three remaining equal installments of $168,750 during 2019.

Notes Payable

Company’s loans payable at December 31, 2018 and 2017 are as follows:

debt discount

debt issuance cost

14 unchanged sentences

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

outstanding principal and accrued and unpaid interest was 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.

3 unchanged sentences

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.

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.

Knight exercised the ST Warrant on January 22,

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.

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.

2016, this debt discount was fully expensed in conjunction with the cancellation of all warrants and options held by Knight.

to January 20, 2018.

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.

This loan was repaid in full on January 20, 2018.

Company also recorded deferred financing costs of $289,045 with respect to the above loan.

4 unchanged sentences

Accrued interest expense was $0 as of both December 31, 2018 and 2017.

Loan payable balance was $562,500 and $2,812,500 as of

December 31, 2017 and 2016, respectively.

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.

Loan payable balance was $0 and $562,500 as of December

31, 2018 and 2017, respectively.

January 22, 2015 Loan:

3 unchanged sentences

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

Loan payable balance was $0 and $750,000 as of December 31,

2017 and 2016, respectively.

Loan payable balance was $0 as of December 31, 2018 and 2017.

The loan was paid in full in January 2017.

13 unchanged sentences

of deferred financing costs of $0 and $2,600 during the years ended December 31, 2018 and 2017, respectively.

debt issuance cost as of December 31, 2017 amounted to $0.

Unamortized debt

issuance cost as of December 31, 2017 amounted to $0.

The Company recorded present value of future payments of $272,151 and $282,240

as of December 31, 2018 and 2017, respectively.

The Company recorded interest expense of $41,292 and $59,358 for the

year ended December 31, 2017 and 2016, respectively.

The Company made payments of $50,000 during 2017 and $300,000 during 2016.

At December 31, 2018 and 2017, the Company owed Knight $525,000 and $575,000 in

relation to this agreement.

The Company recorded interest expense of $39,911 and $41,292 for the year ended December 31, 2018

and 2017, respectively.

The Company made payments of $50,000 during both 2018 and 2017.

November 12, 2015 Loan:

8 unchanged sentences

The New Loan Agreement matured on November 11, 2017 and was fully paid.

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.

2016, this debt discount was fully expensed in conjunction with the cancellation of all warrants and options held by Knight.

Company also recorded deferred financing costs of $233,847 with respect to the above loan.

The Company recognized amortization

of deferred financing costs of $101,088 and $117,083 during the years ended December 31, 2017 and 2016, respectively.

debt issuance cost as of December 31, 2017 amounted to $0.

Company recognized interest expense of $252,515 and $767,904 during the years ended December 31, 2017 and 2016, respectively.

Accrued interest expense was $0 and $31,079 as of December 31, 2017 and 2016, respectively.

The principal balance outstanding

at December 31, 2017 and 2016 was $0 and $3,781,250, respectively.

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.

of deferred financing costs of $101,088 during the year ended December 31, 2017.

Unamortized debt issuance cost as of December

31, 2017 amounted to $0.

Company recognized interest expense of $252,515 during the year ended December 31, 2017.

The principal balance outstanding at

both December 31, 2018 and 2017 was $0.

August 9, 2017 Loan:

4 unchanged sentences

fee of $200,000 and a work fee of $100,000 and also paid $100,000 of Knight’s expenses associated with the Loan.

bears interest at 10.5% per annum.

The new Loan Agreement matures on August 8, 2020.

Tranches under the Loan Agreement are available to the Company until August 9, 2022 provided that no event of default exists.

Each Additional Tranche must be for a minimum amount of $1.0 million, may only be used to finance qualified acquisitions (as defined

in the Loan Agreement), and can be denied in Knight’s absolute discretion.

If an Additional Tranche is denied, the Company

can effect a qualified acquisition through a special purpose entity with such special purpose entity being entitled to obtain

financing from third parties so long as such financing does not adversely affect Knight or Knight’s rights under the Loan

Upon the closing of any Additional Tranche, the Company will pay Knight an origination fee equal to 2% of the Additional

Tranche, a work fee equal to 1% of the amount of the Additional Tranche, and reimburse Knight for its expenses incurred in connection

with its consideration of any Additional Tranche (whether or not advanced).

Loan bears interest at 10.5% per annum.

The amended Loan Agreement matures on August 8, 2020 and (b) the date that Knight,

in its discretion, accelerates the Company’s obligations due to an event of default.

the Maturity Date of the Third Tranche and every Additional Tranche (or upon the acceleration of each such loan), the Company

must pay Knight a success fee (the “Success Fee”) of that number of Company common shares equal to 10% of the loan,

divided by the lesser of (a) $1.50, (b) the lowest price at which any common shares were issued by the Company in any offering

or equity financing or other transaction between the Closing Date and the date the Success Fee is due, and (c) the current market

price on the date the Success Fee is due.

The Company may also pay the Success Fee in cash pursuant to the terms of the Loan Agreement.

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 provided that the aggregate consideration

to be paid does not exceed $100,000 and the acquired business guarantees the Company’s obligations under the Loan Agreement)

or make capital expenditures in excess of $500,000.

The Loan Agreement also includes customary events of default, including payment

defaults, breaches of covenants, change of control and material adverse effect defaults.

Upon the occurrence of an event of default

and during the continuation thereof, the principal amount of all loans under the Loan Agreement will bear a default interest rate

of an additional 5%.

Company’s obligations and liabilities under the Loan Agreement are secured and unconditionally guaranteed by certain of

the Company’s wholly-owned subsidiaries as provided in the Loan Agreement.

We have met all the covenants except for

the TTM EBITDA of $5 million during the period ending March 31, 2018.

Default Interest rate of 5% (from 10.5% to 15.5%) applies

in accordance to our current agreement and will be in effect starting April 1, 2018 and will be in effect until the $5 million

TTM EDITDA covenant is achieved.

We entered into Loan Amendment Agreement on May 14, 2018, the interest rate was reduced to 13%

due to reducing payroll expenses.

Also, Synergy will maintain Focus Factor Net Sales as measured on a year-end basis of at least

USD $15 million for each fiscal year starting with December 31, 2017.

have amended our covenants under our loan agreement on March 27, 2019 and are currently in compliance with all

The new covenants are as follows:

we will maintain a minimum EBITDA of $1,900,000 for the twelve months

ending on December 31, 2018, $2,500,000 for the twelve months ending March 31, 2019, $3,500,000 for the twelve months ending

June 30, 2019 and $5,000,000 for the twelve months period ending on last day of each fiscal quarters thereafter.

We shall maintain a net debt to TTM EBITDA ratio of no more than 8:1 for the twelve month period ending on December 31,

2018 until March 31, 2019 and shall maintain a net debt to TTM EBITDA ratio of no more than 6:1 thereafter.

We shall maintain

at all times a positive cash balance of $575,000 for the three month period ending December 31, 2018, $750,000 for the

three month period ending March 31, 2019 and $1,000,000 thereafter.

The default interest rate of 2.5% applies (from 13% to

15.5%) in accordance to our current agreement and will be in effect as of October 1, 2018.

Company also recorded deferred financing costs of $452,869 with respect to the above loan.

The Company recognized amortization

of deferred financing costs of $62,898 during the year ended December 31, 2017.

Unamortized debt issuance cost as of December

31, 2017 amounted to $389,970.

Company recognized interest expense of $412,417 during the year ended December 31, 2017.

Accrued interest was $147,000 as of December

Loan balance at December 31, 2017 was $9,500,000.

of deferred financing costs of $210,710 and $62,898 during the years ended December 31, 2018 and 2017, respectively.

debt issuance cost as of December 31, 2018 amounted to $179,261.

Company recognized interest expense of $1,057,833 and $412,417 during the years ended December 31, 2018 and 2017, respectively.

Accrued interest was $0 and $147,000 as of December 31, 2018 and 2017, respectively.

The loan balance at December 31, 2018 and

2017 was $7,500,000 and $9,500,000, respectively.

Stockholders’

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.

the year ended December 31, 2016, the Company issued 71,248 shares of its common stock valued at $0.70 per share for services

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 year.

These shares were issued during 2017.

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 to the lender .

the year ended December 31, 2017, the Company issued 473,326 shares of its common stock valued at $0.51 per share in accordance

1 unchanged sentence

and liabilities related to the Per-fekt brand.

the year ended December 31, 2017, the Company sold 400,000 shares of its common stock valued at $220,000 to an

employee of the Company.

the year ended December 31, 2017, the Company issued 100,000 shares of its common stock valued at $55,000

to an employee of the Company.

of December 31, 2017 and 2016, there were 89,862,683 and 88,764,357 shares of the Company’s common stock issued and outstanding,

respectively.

the year ended December 31, 2017, the Company sold 400,000 shares of its common stock valued at $220,000 to an employee of the

the year ended December 31, 2017, the Company issued 100,000 shares of its common stock valued at $55,000 to an employee of the

of December 31, 2018 and 2017, there were 89,862,683 shares of the Company’s common stock issued and outstanding.

Commitments and Contingencies

3 unchanged sentences

Company and Mr.

Kadanoff entered into an employment agreement on October 10, 2017 with an initial term of 3 years.

for his service as Chief Financial Officer, Mr.

Kadanoff will receive an annual base salary of $450,000.

He will receive a signing

bonus consisting of:

(i) 100,000 shares of the Company’s common stock, and (ii) a cash payment equal to the value of 100,000

shares of the Company’s common stock based on a price of $0.55 per share.

He will receive an annual bonus for calendar year

2017 of $37,500.

Beginning with calendar year 2018, Mr.

Kadanoff will be eligible for an annual target bonus of up to half his

The target bonus will be determined at the discretion of our Board or compensation committee based upon the achievement

of financial and other performance-related goals and may be paid in cash or shares of the Company’s common stock.

connection with his employment, Mr.

Kadanoff has committed to purchasing 400,000 shares of our common stock from the Company for

a price of $0.55 per share.

The Company granted Mr.

Kadanoff an option to purchase 1,500,000 shares of the Company’s common

stock at an exercise price of $0.55 (the “Initial Option”).

The Initial Option will vest in three (3) equal annual

installments on the first three anniversaries of Mr.

Kadanoff’s Start Date with the Company, provided that Mr.

remains employed by the Company on each such date.

The Initial Option will expire on the tenth anniversary of the grant date.

Subject to the approval by the Board, during each calendar year of Mr.

Kadanoff’s employment with the Company beginning

with 2018, the Company will grant to him an option to purchase 500,000 shares of the Company’s common stock (such options

collectively the “Additional Options”).

The exercise price of each Additional Option will be the Fair Market Value

of the common stock on the date each such Additional Option is granted.

Each Additional Option will expire on the tenth anniversary

of the date of grant of such Additional Option.

The Additional Options will vest in three (3) equal annual installments on the

first three anniversaries of the date of grant of such Additional Option, provided that Mr.

Kadanoff remains employed by the Company

on each such date.

Upon the occurrence of a Change in Control , the vesting of stock options granted to Mr.

Kadanoff will be accelerated

subject to his continued service to the Company as of such date and provided further that Mr.

Kadanoff’s stock options will

be treated no less favorably than those of any other senior executive or Chairman of the Company.

Company and Mr.

McCullough entered into an employment agreement on October 17, 2017 (the “Employment Agreement”) with

2 unchanged sentences

McCullough will receive an annual base salary of $340,000.

He will receive a cash signing bonus of $37,500, to be paid on January 1, 2018, and an additional cash signing bonus of $37,500,

to be paid on July 1, 2018, provided that he is employed by the Company through such dates.

McCullough will be eligible for

an annual bonus of up to twenty-five percent (25%) of his base salary.

The annual bonus will be determined at the discretion of

our Board or compensation committee based upon the achievement of financial goals established by the Company’s Chief Executive

McCullough will also be eligible for additional bonus compensation based on the Company’s achievement of certain

annual earnings and retail sales goals established each year by the Company’s Chief Executive Officer.

Subject to the Company’s

achievement of an annual overall earnings goal and certain adjustments in the event of future acquisitions by the Company, Mr.

McCullough will be eligible to receive five percent (5%) of all retail sales by the Company in excess of the annual retail sales

goal set by the Chief Executive Officer.

He received a cash signing bonus of $37,500paid on January 1, 2018, and an additional cash signing bonus of $37,500, paid on July

McCullough will be eligible for an annual bonus of up to twenty-five percent (25%) of his base salary.

bonus will be determined at the discretion of our Board or compensation committee based upon the achievement of financial goals

established by the Company’s Chief Executive Officer.

McCullough will also be eligible for additional bonus compensation

based on the Company’s achievement of certain annual earnings and retail sales goals established each year by the Company’s

Chief Executive Officer.

Subject to the Company’s achievement of an annual overall earnings goal and certain adjustments

in the event of future acquisitions by the Company, Mr.

McCullough will be eligible to receive five percent (5%) of all retail

sales by the Company in excess of the annual retail sales goal set by the Chief Executive Officer.

Company granted Mr.

7 unchanged sentences

Plan pursuant to a stock grant agreement between the Company and Mr.

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.

This lease has expired.

December 8, 2014, a subsidiary entered into a non-cancellable 36 month phone lease with an estimated cost of $894 a month.

lease expired in December 2017.

December 2015, a subsidiary entered into a non-cancellable operating lease for office space through November 2016.

was extended until April 2017 and expired.

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.

This lease has expired.

August 16, 2017, the Company entered into a sublease for office space, effective October 1, 2017 through May 2021.

under this lease will be $19,500 per month, and increasing annually on June 1.

under this lease was $19,500 per month, and increasing annually on June 1.

Effective January 31, 2019 this sublease was cancelled.

following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining

2 unchanged sentences

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

February 18, 2016, the Company granted 300,000 options with an exercise price of $0.70 per share to an employee of the Company.

April 18, 2016, the Company granted 500,000 options with an exercise price of $0.70 per share to an employee of the Company.

July 4, 2016, the Company granted 500,000 options with an exercise price of $0.70 per share to an employee of the Company.

2 unchanged sentences

October 16, 2017, the Company granted 1,500,000 options with an exercise price of $0.55 per share to an employee of the Company.

During 2018, 1,500,000 unvested options were cancelled due to termination of employee.

October 18, 2017, the Company granted 200,000 options with an exercise price of $0.70 per share to an employee of the Company.

14 unchanged sentences

of 10 years, and dividend yield of 0%.

The Company determined the value of share-based compensation for options vesting during

the year ended December 31, 2017 using the Black-Scholes fair value option-pricing model with the following weighted average assumptions:

estimated fair value of Company’s common stock of $0.48-0.50, risk-free interest rate of 1.95-1.99%, volatility of 116-117%,

expected lives of 10 years, and dividend yield of 0%.

Stock options outstanding as of December 31, 2017, as disclosed in the above

table, have an intrinsic value of $711,900.

Stock options outstanding as of December 31, 2018, as disclosed in the above table, have

an intrinsic value of $0.

As of December 31, 2018, unamortized stock-based compensation costs related to options was $290,499,

and will be recognized over a period of 2 years.

Stock Warrants

5 unchanged sentences

warrant activity for the year ended December 31, 2018 is as follows:

Average Exercise Price

Exercise Price

at December 31, 2016

1 unchanged sentence

at December 31, 2018

warrants outstanding as of December 31, 2017, as disclosed in the above table, have an intrinsic value of $0.

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:

interest rate

remaining term

initial fair values of the embedded derivative of $2,067,258 was allocated as a debt discount $2,067,258.

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.

December 2016, the Company cancelled these warrants and issued 7,500,000 shares of common stock and accordingly warrant derivative

liability was extinguished.

value at December 23, 2016 when the warrants were cancelled was estimated to be $1,715,579, based on the following assumptions:

interest rate

remaining term

following table summarizes the derivative liabilities included in the balance sheet at December 31, 2016:

Value Measurements Using Significant Unobservable Inputs (Level 3)

- December 31, 2015

Extinguishment

of derivatives liabilities from cancellation of warrants

on change in fair value of the derivative liabilities

December 31, 2016

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

6 unchanged sentences

sales attributed to customers in the United States and foreign countries for the years ended December 31, 2018 and 2017 were as

countries primarily consist of Australia and Canada.

Company’s net sales by product group for the years ended December 31, 2018 and 2017 were as follows:

3 unchanged sentences

Net sales for any other product group of similar products are less than 10% of consolidated net sales.

Company’s net sales by major sales channel for the years ended December 31, 2018 and 2017 were as follows:

assets (net) attributable to operations in the United States and foreign countries as of December 31, 2018 and 2017 were as follows:

Subsequent Events

2018, the Company paid its final payment of $562,500 on the $6,000,000 loan relating to the purchase of the Focus Factor

The Company also made an additional $500,000 payment on Loan 3.

2019, the Company made an additional $500,000 payment on Loan 3.

January 1, 2019 the Company has merged its U.S.

subsidiaries into the parent company.

On January 28, 2019 the Company issued

26,391 shares of stock in full and final settlement of Per-fekt transaction.

January 31, 2019, the sublease for office space entered into on October 1, 2017 was cancelled.

March 2019 the Company received a 60 day Proposition 65 letter that one of its products did not have California’s Prop 65

The Company is taking action to correct the oversight.

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