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<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note 1 - Summary of Significant Accounting Policies</u></b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Organization and Nature of Business, and Basis
of Presentation</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">iSatori,
Inc (the “Company”) was incorporated under the laws of the state of Delaware on June 29, 2012. The trading symbol
of the Company on OTCBB is “IFIT”.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The
Company is engaged in researching, designing, developing, contracting for the manufacture, marketing, selling and distributing
of various branded nutritional and dietary supplement products for the general nutrition market. The “general nutrition
market” may include such activities as body-building, weight-training, physique enhancement (increase of lean body mass
and decrease in fat mass) and enhanced athletic performance through increased strength and/or endurance and proper nutrition.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The
Company does engage from time to time in funding of clinical studies with the objective of discovering and/or validating claims
of new, efficacious products for the Company’s relevant market as well as providing necessary and appropriate substantiation
for any claims which the Company may use in its marketing and advertising. The Company markets products which are under its control
and which are in some way proprietary to the Company. Some of the Company’s products are the subject of patents, service
marks and or trademarks owned by the Company.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unaudited Interim Financial
Information</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying interim condensed financial statements have been prepared in accordance with our accounting practices described in
our audited financial statements for the year ended December 31, 2013, and are unaudited. These unaudited interim condensed financial
statements should be read in conjunction with the audited financial statements and accompanying notes for the year ended December
31, 2013. The accompanying interim condensed financial statements are presented in accordance with the rules and regulations of
the Securities and Exchange Commission and, accordingly, do not include all the disclosures required by generally accepted accounting
principles in the United States (“U.S. GAAP”) with respect to annual financial statements. In the opinion of management,
all adjustments, consisting of normal recurring accruals that are considered necessary for a fair presentation of the interim
condensed financial information, have been included. However, operating results for the periods presented are not necessarily
indicative of the results that may be expected for a full year.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Financial Instruments</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The
Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
Accordingly, cash and cash equivalents consist of petty cash, checking accounts and money market funds.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value Measurements</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">ASC 820-10 establishes a framework
for measuring the fair value of assets and liabilities and requires additional disclosure about fair value measurements. ASC 820-10
defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal (or most
advantageous market) for the asset or liability in an orderly transaction between market participants at the measurement date.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company has a number of financial
instruments, including cash, cash equivalents. receivables, inventory, payables and debt obligations. The carrying amount of cash
and cash equivalents, receivables, accounts payable, accrued expenses and notes payable approximates their fair value because
of the short maturity of these instruments. As further described in Note 7, the Company has issued warrants which are measured
at fair value on a recurring basis and result in a long-term derivative liability on the balance sheet. The actual and estimated
fair values, respectively, of the Company’s financial instruments are as follows:</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<table cellspacing="0" cellpadding="0" style="margin-top: 0px; font-size: 9pt; width: 100%">
<tr style="font-size: 1pt">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 57px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 57px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 57px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 8px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 57px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="5" style="border-bottom: #000000 1px solid; vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>June
30, 2014</b></font></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="5" style="border-bottom: #000000 1px solid; vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>December
31, 2013</b></font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>Carrying</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>Amount</b></font></p></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Fair
Value</b></font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>Carrying</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>Amount</b></font></p></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Fair
Value</b></font></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"><b>Cash and cash equivalents</b></font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,717,916</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,717,916</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">822,876</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">822,876</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Receivables</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,148,148</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,148,148</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,398,178</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,398,178</font></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Accounts Payable</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,354,883</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,354,883</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,248,490</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,248,490</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Derivative Liability</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">279,013</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">279,013</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td></tr>
</table>
<p style="margin: 0"></p>
<p style="text-align: left; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Trade Receivables and Credit
Policy</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Trade receivables are uncollateralized
customer obligations due under normal trade terms requiring payment generally within 10-60 days from the invoice date. Accounts
are considered delinquent when outstanding for more than 7 days past due date. The Company does not have a policy of accruing
interest on past due accounts. Payments on trade receivables are applied as instructed per the customer, or to the earliest unpaid
invoices. The allowance for doubtful accounts represents an estimate of amounts considered uncollectible and is determined based
on management’s historical collection experience, adverse situations that may affect the customer’s ability to repay,
and prevailing economic conditions. Specific accounts deemed uncollectible are written off periodically with subsequent receipts
on previously written off accounts credited to bad debt expense. The allowance for doubtful accounts is $0 for each of the periods
ended June 30, 2014 and December 31, 2013. Receivables at each of the below respective periods consisted of the following:</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; margin-top: 0px; font-size: 9pt">
<tr style="font-size: 1pt">
<td style="width: 68%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 15%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 14%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; vertical-align: bottom"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>June
30,</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>2014</b></font></p></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; vertical-align: bottom"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>December
31,</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>2013</b></font></p></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Trade Receivables</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,085,330</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,323,522</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Other</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">62,817</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">74,656</font></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Allowance for doubtful accounts</b></font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(0)</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(0)</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Totals</b></font></td>
<td style="border-bottom: #000000 3px double; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,148,147</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,398,178</font></td></tr>
</table>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">In addition, the Company has
recorded an allowance for customer returns in the amount of approximately $85,000 and $70,000 at June 30, 2014 and December 31,
2013, respectively, in accrued expenses.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Inventory Valuation</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Inventories
of nutritional and dietary supplements are stated at lower of cost or market on a first-in, first-out (FIFO) basis as noted below:</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; margin-top: 0px; font-size: 9pt">
<tr style="font-size: 1pt">
<td style="width: 68%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 15%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 14%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; vertical-align: bottom"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>June
30,</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>2014</b></font></p></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; vertical-align: bottom"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>December
31,</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>2013</b></font></p></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Labels and packaging</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">182,397</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">120,057</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Raw materials</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">79,836</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">207,320</font></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Finished goods</b></font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,984,571</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,658,387</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Totals</b></font></td>
<td style="border-bottom: #000000 3px double; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,246,804</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,985,764</font></td></tr>
</table>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note Receivable</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The predecessor company disposed
of a dormant product line of vitamins in December 2010. As part of the consideration in this divestiture, the Company received
from the purchaser of this product line an unsecured note in the amount of $170,000. The original note was due to be repaid on
or before March 2014, where interest accrued principally at an annual rate of 5%, based upon the initial $170,000 principal and
was payable monthly. As of March 31, 2013, the note was novated and a new promissory note was issued to reflect a modification
in the payment terms, which includes no interest. The total note receivable balance at June 30, 2014 was $89,071, and is due to
be repaid in monthly increments through May 1, 2017.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Revenue Recognition</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company operates predominantly
as a distributor of its dietary supplement products through traditional large retailers and electronic intermediaries. Revenue
from product sales is recognized upon transfer of title to the Company’s product to its customers. Net sales represent product
sales less actual returns, allowances, discounts, and promotions. Sales to direct customers have an unconditional money back guarantee
for thirty to sixty days after the date of purchase. Sales to several of the retail customers carry a “Sale or Return”
Purchase agreement per contract, where if minimum sales thresholds are not met within required timeframe, the inventory will be
returned to the Company for full credit. Other retail customers receive a percentage discount from invoice to cover any customer
returns or damages they may incur. Returns, allowances and discounts, and promotions were $849,356 and $293,498 for the three
month period ended June 30, 2014 and 2013, respectively. Returns, allowances and discounts, and promotions were $1,360,091 and
$1,008,528 for the six month period ended June 30, 2014 and 2013, respectively.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">In addition, the Company provides
allowances for sales returns based upon estimated and known returns. Product returns are recorded as a reduction of net revenues
and as a reduction of the accounts receivable balance.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company receives other revenues
which include but are not limited to shipping and handling charges billed to customers.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company has recorded $214,977
as of June 30, 2014 in deferred revenue as a liability pertaining to inventory sold under consignment terms, even though it has
already been paid for by the customer.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Cost of Sales</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company purchases its products
directly from third party manufacturers. The Company’s cost of sales include product costs, including any associated materials
used in production, cost of warehousing and distribution. Included in the cost of sales are transit freight and shipping and handling
costs that are incurred by the Company.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Income Taxes</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company utilizes the asset
and liability method of accounting for income taxes. Under this asset and liability method, deferred tax assets and liabilities
are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities, and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. See Note
4, “Income Taxes”.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Since 2012 was the Company’s
initial tax year, there are no prior federal or state tax returns subject to examination. Accordingly, the only taxable periods
subject to examination by federal and state taxing authorities are the periods ended December 31, 2013 and 2012. Federal and state
tax returns for the Company prior to the short form merger are open for the period ended December 31, 2011.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Leases</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company leases its headquarters
facility, comprising approximately 10,044 square feet, in Golden (metropolitan Denver), Colorado. The total rent expense for each
of the three month periods ended June 30, 2014 and 2013, was $20,716. The total rent expense for each of the six month periods
ended June 30, 2014 and 2013, was $41,432. The lease term expires January 31, 2017 and requires equal monthly payments over the
remaining term. Future payments under the lease total $214,063. The Company also leases miscellaneous office and warehouse equipment.
In most cases, management expects that in the normal course of business these leases will be renewed or replaced by other leases
as applicable.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Marketing</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company expenses all production
costs related to advertising costs as they are incurred, including print, digital, and television when the advertisement has been
broadcast or otherwise finished and or distributed. The Company records website costs related to its direct-to-consumer advertisements
in accordance with FASB ASC 340-20 “Capitalized Advertising Costs”. In accordance with FASB ASC 340-20, direct response
advertising costs incurred should be reported as assets and should be amortized over the estimated period of the benefits, based
on the proportion of current period revenue from the advertisements to probable future revenue. As of June 30, 2014 and December
31, 2013, the Company had deferred $0 and $7,651 respectively, related to such advertising costs. This amount was included in
Deposits and other assets and amortized over a one year period, the estimated time frame to which the existing commercial was
used. For the three month period ended June 30, 2014 and 2013, marketing expenses totaled $314,696 and $178,720, respectively.
For the six month period ended June 30, 2014 and 2013, marketing expenses totaled $942,119 and $324,930, respectively.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Research and Development Costs</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Research and development costs,
which includes the funding of clinical research studies, are expensed when incurred. Research and development costs of $4,481
and $28,701 for the three month period ended June 30, 2014 and 2013, respectively, are included in selling and marketing expense.
Research and development costs of $10,905 and $88,514 for the six month period ended June 30, 2014 and 2013, respectively, are
included in selling and marketing expense.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Distribution, Shipping and Handling Costs</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Shipping costs on purchases and
shipping and handling fees related to sales charged to customers are both included in cost of sales. As mentioned in Revenue Recognition,
shipping and handling revenue billed customers are reflected in other revenues.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Concentration of Credit Risk</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Financial instruments that potentially
subject the Company to concentration of credit risk consist principally of trade accounts receivables. Concentrations of credit
with respect to trade receivables are limited due to the large number of customers comprising the Company’s customer bases
and their dispersion across different geographic locations.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company maintains cash balances
at one financial institution located in Colorado and one in California. Accounts at these institutions are insured by the Federal
Deposit Insurance Corporation (FDIC) up to $250,000 per account. At times during the year, the Company’s bank balances have
exceeded the FDIC limit. Management believes the risk of loss at such institutions to be minimal.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">During the six month period ended
June 30, 2014, sales to three customers made up 66% of total product revenue, with each customer representing greater than 10%
of product revenue on an individual basis. These customers’ combined accounts receivable balances were 80% of total accounts
receivable at June 30, 2014. During the six month period ended June 30, 2013, sales to three customers made up 57% of total product
revenue, with each customer representing greater than 10% of product revenue on an individual basis. These customers’ combined
accounts receivable balances were 56% of total accounts receivable as of June 30, 2013. During the six month period ended June
30, 2014, purchases from three vendors made up 63% of total inventory purchases. These vendors’ combined accounts payable
balances were 48% of total accounts payable as of June 30, 2014. During the six month period ended June 30, 2013, purchases from
two vendors made up 78% of total inventory purchases. These vendors’ combined accounts payable balances were 68% of total
accounts payable as of June 30, 2013.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Use of Estimates</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The preparation of the financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant estimates include but are not limited to the fair value determination of derivative instruments, the valuation allowance
with respect to estimated utilization of net operating losses, estimated allowances for sales returns and collectability of trade
receivables.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Earnings (Loss) Per Share</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Net earnings (loss) per share
is computed by dividing net income (loss) less preferred dividends for the period by the weighted average number of shares of
common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) less
preferred dividends for the period by the weighted average number of shares of common stock, common stock equivalents and potentially
dilutive securities outstanding during each period.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Since the Company reflected a
net loss for the six month period ended June 30 2013, the effect of considering any common stock equivalents, if exercisable,
would have been anti-dilutive.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company has the following
common stock equivalents as of June 30, 2014 and 2013:</font></p>
<p style="margin: 0"></p>
<table cellspacing="0" cellpadding="0" style="margin-top: 0px; font-size: 9pt; width: 100%">
<tr style="font-size: 1pt">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 15px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 63px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 6px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 63px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 63px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 6px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 63px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three
Months Ended</b></font></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Six
Months Ended</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">Basic weighted average common shares outstanding</font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,866,401</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,686,928</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,883,026</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,645,842</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">Stock options (exercise price – $0.573-$2.50/share)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">382,258</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">614,488</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">413,280</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">581,145</font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">Warrants (exercise price – $0.001-$2.25/share)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">418,095</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">437,450</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">418,491</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">431,648</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">Total common stock equivalents</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,686,754</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,738,866</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,714,797</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,658,635</font></td></tr>
</table>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note 2 - Contingencies</u></b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">In accordance with the standards
on contingencies, the Company accrues a loss contingency if it is probable and can reasonably be estimated or a liability has
been incurred at the date of the financial statements. If both of these conditions are not met, or if an exposure to loss exists
in excess of the amount accrued, disclosure of the contingency shall be made when there is at least a reasonable possibility that
a loss or an additional loss may have been incurred. The Company is exposed to legal claims encountered in the normal course of
business. See Note 3, “Litigation”. Management believes that the ultimate resolution of these matters will not have
a material adverse effect on the operating results or the financial position of the Company.</font></p>
<p style="margin: 0pt"></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
3 - Litigation</u></b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company is engaged in various
legal actions, claims and proceedings arising in the normal course of business, including claims related to breach of contracts,
product liabilities and intellectual property matters resulting from the Company’s business activities. As with most actions
such as these, an estimation of any possible and/or ultimate liability cannot always be determined. The following summaries highlight
the current status of certain material commercial litigation in which the Company is involved.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">On May 17, 2013 and on January
31, 2014, the Company received demand letters from the Environmental Research Corporation, “ERC” requesting substantiation
of compliance with the State of California’s Proposition 65 regulations for ten of its products. The Company is in communication
with ERC and has begun discussions regarding claims as outlined in the demand letters. The Company believes that there is a reasonable
possibility, as defined by FASB ASC 450-20, of an unfavorable outcome. However, the range of any possible loss cannot be reasonably
estimated as of the date of the financial statements.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">On March 24, 2014, the Company
received a summons in a civil action filed by Wise Sports Nutrition, LLC claiming alleged trademark infringement for iSatori’s
Garcinia Trim product. Company counsel has made contact with the plaintiff’s attorney and filed a response to the alleged
trademark infringement with the Company’s counterclaims. The Company believes the counterclaims have strong merit and are
pursuing their defense. Both parties are now preparing responses to be presented to the court. The Company believes that it is
too early in the proceedings to make a determination of either a favorable or unfavorable outcome. Therefore, no range of any
possible gain or loss can be reasonably estimated as of the date of the financial statements.</font></p>
<p style="margin: 0pt"></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note 4 - Income Taxes</u></b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">For the three months ended June
30, 2014, the Company recognized income tax expense of $63,382, and for the three months ended June 30, 2013, the Company recognized
an income tax benefit of $194,348.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">For the six months ended June
30, 2014, the Company recognized income tax expense of $79,205, and for the six months ended June 30, 2013, the Company recognized
an income tax benefit of $184,214.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The difference between the six
months ended June 30, 2014 effective rate of 8.96% and the Federal statutory rate of 35.0% is primarily due to state income taxes
(net of federal benefit), change in the valuation allowance, and an adjustment to the income tax receivable.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">At June 30, 2014 management believes
there are no uncertain tax positions.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
5- Stockholders’ Equity</u></b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">At June 30, 2014, there were
12,887,151 shares of common stock, par value $.01 per share, outstanding for the Company.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company issued warrants,
now totaling 420,549 shares, to purchase 3% of fully diluted shares of the common stock of the Company to Breakwater Structured
Growth Opportunity Fund, L.P., with an imputed exercise price equal to approximately one-hundredth of a dollar in connection with
a $1.025 million subordinated mezzanine loan arrangement. These warrants are fully vested and expire on June 15, 2016. The Company
used a lattice model in developing a fair value for the Breakwater warrant obligation at June 30, 2014, using a quoted stock value
of $0.68 per share, which represents a discount of 50% from the closing stock price. This reduction was based on the application
of a discount for lack of liquidity. Other assumptions used in the above valuations include (a) risk-free interest rate of .47%
based on duration, (b) weighted average expected term years of 2.04 (c) weighted average expected stock volatility of 38.18% (e)
expected dividends of 0%, (f) stock price movements ranging from 1.05437284 to 0.94843111 and (g) risk neutral probabilities ranging
from 0.4876197 to 0.5123803.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">This valuation resulted in income
of $191,279 in the Statement of Operations for the three month period ended June 30, 2014, and income of $192,002 in the Statement
of Operations for the six month period ended June 30, 2014. For the three month period ended June 30, 2013, the valuation resulted
in income of $58,837, and expense of $100,968 in the Statement of Operations for the six month period ended June 30, 2014.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">On April 1, 2014, the Company
issued 7,500 shares of its $.01 par value common stock to a business development consultant. The Company considered the fair value
of the shares issued to be the most reliable measure of compensation to the consultant. At the time of the issuance, the Company’s
stock price was $2.17 per share, and therefore the issuance resulted in $16,275 of share based compensation expense for the three
and six months ended June 30, 2014.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; text-indent: 0px; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><i>2012 Performance
Incentive Plan</i></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">On September 27, 2012, the Company’s
Board of Directors approved the 2012 Performance Incentive Plan (the Plan”). The Plan allows the Company to promote the
success of the Corporation and to increase stockholder value by providing an additional means through the grant of awards to attract,
motivate, retain and reward selected employees and other eligible persons. Any stock option granted in the form of an incentive
stock option will be intended to comply with the<font style="color: #00007f"> </font>requirements of Section 422 of the Code.
Only stock options granted to employees qualify for incentive stock option treatment. A stock option may be exercised in whole
or in installments, which may be cumulative. Shares of common stock purchased upon the exercise of a stock option must be paid
for in full at the time of the exercise in cash or such other consideration determined by the compensation committee. Payment
may include tendering shares of common stock or surrendering of a stock award, or a combination of methods.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Plan is administered by the
Plan Administrator, being the Board or one or more committees appointed by the Board or another committee (within its delegated
authority) to administer all or certain aspects of this Plan. The Administrator has full and exclusive power within the limitations
set forth in the Plan to make all decisions and determinations regarding the selection of participants and the granting of awards;
establishing the terms and conditions relating to each award; adopting rules, regulations and guidelines; and interpreting the
Plan.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">On January 2, 2014, the Company
issued options to purchase 10,000 shares of the Company’s common stock to an employee with an exercise price of $2.50 per
share and which contain three year vesting schedules of 1/3 each year through October 2016. These options are due to expire on
October 15, 2023.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">On February 10, 2014, the Company
issued options to purchase 6,000 shares of the Company’s common stock to an employee with an exercise price of $2.22 per
share and which contain three year vesting schedules of 1/3 each year through February 2017. These options are due to expire on
February 10, 2024.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company, in developing a
fair value for the employee options used a current stock price of $1.11-1.25, which represents a discount of 50% from the quoted
stock price for lack of marketability. Other assumptions used in the above valuations include (a) risk-free interest rate of 2.13-2.41%
based on duration, (b) weighted average expected terms ranging from 6.08 to 6.33 years; (c) weighted average expected stock volatility
of 35.22 % and (e) expected dividends of 0%.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company has recorded share
based compensation expense due to issuances under the Plan totaling $6,017 for the three months ended June 30, 2014, and has recorded
share based compensation expense due to issuances under the Plan totaling $12,122 for the six months ended June 30, 2014.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note
6- Revolving Line of Credit and Related Interest</u></b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company entered into a Credit
Agreement with Colorado Business Bank West of Denver, Colorado on July 16, 2012, which was renewed effective October 16, 2013.
Borrowings under this agreement are used to provide ongoing working capital and for other general corporate purposes of the Company.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The agreement provides a revolving
commitment to the Company of $1,500,000. Amounts outstanding under the agreement are reflected in a promissory note with a principal
balance of $1,500,000 and maturity date of November 16, 2014 (the “Promissory Note”). The principal balance on the
Promissory Note will bear interest at the one month USD LIBOR rate measured not more often than once per month (the “Index”).
Interest on any unpaid balance under the promissory note will bear interest at the Index plus 3.75% with a minimum interest rate
of 4.00% per annum.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The outstanding balance on the
revolving line of credit as of June 30, 2014 and December 31, 2013 was $1,220,519 and $1,220,655, respectively.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b><u>Note 7 - Fair Value Measurements
and Disclosures</u></b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company follows ASC 820,
Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for using fair value to measure assets
and liabilities, and expands disclosures about fair value measurements. The statement establishes a hierarchy for inputs used
in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring
that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing
the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are
inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability developed
based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability
of the inputs as follows:</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Level 1: Quoted prices are available
in active markets for identical assets or liabilities.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Level 2: Quoted prices in active
markets for similar assets and liabilities that are observable for the asset or liability; or</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Level 3: Unobservable pricing
inputs that are generally less observable from objective sources, such as discounted cash flow models or valuations.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">ASC 820 requires financial assets
and liabilities to be classified based on the lowest level of input that is significant to the fair value measurement. The Company’s
assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation
of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">For the purposes of marketable
securities where there is an active market, the Company uses the quoted prices available for the identical asset or liability.
As of June 30, 2014, the Company had $35,185 assets held for sale valued using the Level 1 mark-to-market approach. As of December
31, 2013, the Company had $108,228 assets held for sale valued using the Level 1 mark-to-market approach.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The inputs used in the fair value
measurements categorized within Level 3 include the stock price at the valuation date, the exercise price of the warrant, the
expected period of time the warrant will be outstanding, the annual volatility of the underlying stock price, the annual yield
rate of quarterly dividends, and the risk free rate of interest relevant to the expected time period the warrant will be outstanding.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The following table represents
the Company’s warrant derivative liabilities that were accounted for at fair value on a recurring basis by level within
the fair value hierarchy:</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"></font></p>
<table cellspacing="0" cellpadding="0" style="margin-top: 0px; font-size: 9pt; width: 100%">
<tr style="font-size: 1pt">
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 49px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 52px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 56px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 49px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 51px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 55px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="8" style="border-bottom: #000000 1px solid; vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>June
30, 2014</b></font></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="8" style="border-bottom: #000000 1px solid; vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>December
31, 2013</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
1</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
2</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
3</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
1</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
2</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
3</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">Balance</font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">35,185</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">279,013</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">108,228</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">Beginning of Period</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">108,228</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">29,338</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">701,852</font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">Deletions</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(87,843)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(36,103)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(87,755)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">Revisions</font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">14,800</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(192,002)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">114,993</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(143,082)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">End of Period</font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">35,185</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">279,013</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">108,228</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td></tr>
</table>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Organization and Nature of Business, and Basis
of Presentation</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">iSatori,
Inc (the “Company”) was incorporated under the laws of the state of Delaware on June 29, 2012. The trading symbol
of the Company on OTCBB is “IFIT”.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The
Company is engaged in researching, designing, developing, contracting for the manufacture, marketing, selling and distributing
of various branded nutritional and dietary supplement products for the general nutrition market. The “general nutrition
market” may include such activities as body-building, weight-training, physique enhancement (increase of lean body mass
and decrease in fat mass) and enhanced athletic performance through increased strength and/or endurance and proper nutrition.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The
Company does engage from time to time in funding of clinical studies with the objective of discovering and/or validating claims
of new, efficacious products for the Company’s relevant market as well as providing necessary and appropriate substantiation
for any claims which the Company may use in its marketing and advertising. The Company markets products which are under its control
and which are in some way proprietary to the Company. Some of the Company’s products are the subject of patents, service
marks and or trademarks owned by the Company.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Unaudited Interim Financial
Information</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The
accompanying interim condensed financial statements have been prepared in accordance with our accounting practices described in
our audited financial statements for the year ended December 31, 2013, and are unaudited. These unaudited interim condensed financial
statements should be read in conjunction with the audited financial statements and accompanying notes for the year ended December
31, 2013. The accompanying interim condensed financial statements are presented in accordance with the rules and regulations of
the Securities and Exchange Commission and, accordingly, do not include all the disclosures required by generally accepted accounting
principles in the United States (“U.S. GAAP”) with respect to annual financial statements. In the opinion of management,
all adjustments, consisting of normal recurring accruals that are considered necessary for a fair presentation of the interim
condensed financial information, have been included. However, operating results for the periods presented are not necessarily
indicative of the results that may be expected for a full year.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Financial Instruments</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The
Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.
Accordingly, cash and cash equivalents consist of petty cash, checking accounts and money market funds.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Fair Value Measurements</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">ASC 820-10 establishes a framework
for measuring the fair value of assets and liabilities and requires additional disclosure about fair value measurements. ASC 820-10
defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal (or most
advantageous market) for the asset or liability in an orderly transaction between market participants at the measurement date.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company has a number of financial
instruments, including cash, cash equivalents. receivables, inventory, payables and debt obligations. The carrying amount of cash
and cash equivalents, receivables, accounts payable, accrued expenses and notes payable approximates their fair value because
of the short maturity of these instruments. The Company has issued warrants which are measured
at fair value on a recurring basis and result in a long-term derivative liability on the balance sheet</font>.</p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Trade Receivables and Credit
Policy</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Trade receivables are uncollateralized
customer obligations due under normal trade terms requiring payment generally within 10-60 days from the invoice date. Accounts
are considered delinquent when outstanding for more than 7 days past due date. The Company does not have a policy of accruing
interest on past due accounts. Payments on trade receivables are applied as instructed per the customer, or to the earliest unpaid
invoices. The allowance for doubtful accounts represents an estimate of amounts considered uncollectible and is determined based
on management’s historical collection experience, adverse situations that may affect the customer’s ability to repay,
and prevailing economic conditions. Specific accounts deemed uncollectible are written off periodically with subsequent receipts
on previously written off accounts credited to bad debt expense.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Inventory Valuation</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font-family: Times New Roman, Times, Serif; text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Inventories
of nutritional and dietary supplements are stated at lower of cost or market on a first-in, first-out (FIFO) basis</font>.</p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Revenue Recognition</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company operates predominantly
as a distributor of its dietary supplement products through traditional large retailers and electronic intermediaries. Revenue
from product sales is recognized upon transfer of title to the Company’s product to its customers. Net sales represent product
sales less actual returns, allowances, discounts, and promotions. Sales to direct customers have an unconditional money back guarantee
for thirty to sixty days after the date of purchase. Sales to several of the retail customers carry a “Sale or Return”
Purchase agreement per contract, where if minimum sales thresholds are not met within required timeframe, the inventory will be
returned to the Company for full credit. Other retail customers receive a percentage discount from invoice to cover any customer
returns or damages they may incur.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">In addition, the Company provides
allowances for sales returns based upon estimated and known returns. Product returns are recorded as a reduction of net revenues
and as a reduction of the accounts receivable balance.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company receives other revenues
which include but are not limited to shipping and handling charges billed to customers.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Cost of Sales</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company purchases its products
directly from third party manufacturers. The Company’s cost of sales include product costs, including any associated materials
used in production, cost of warehousing and distribution. Included in the cost of sales are transit freight and shipping and handling
costs that are incurred by the Company.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Income Taxes</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company utilizes the asset
and liability method of accounting for income taxes. Under this asset and liability method, deferred tax assets and liabilities
are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities, and their respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Marketing</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company expenses all production
costs related to advertising costs as they are incurred, including print, digital, and television when the advertisement has been
broadcast or otherwise finished and or distributed. The Company records website costs related to its direct-to-consumer advertisements
in accordance with FASB ASC 340-20 “Capitalized Advertising Costs”. In accordance with FASB ASC 340-20, direct response
advertising costs incurred should be reported as assets and should be amortized over the estimated period of the benefits, based
on the proportion of current period revenue from the advertisements to probable future revenue.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Research and Development Costs</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Research and
development costs, which includes the funding of clinical research studies, are expensed when incurred and are included
in selling and marketing expense.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Distribution, Shipping and Handling Costs</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Shipping costs on purchases and
shipping and handling fees related to sales charged to customers are both included in cost of sales. As mentioned in Revenue Recognition,
shipping and handling revenue billed customers are reflected in other revenues.</font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Concentration of Credit Risk</b></font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Financial instruments that potentially
subject the Company to concentration of credit risk consist principally of trade accounts receivables. Concentrations of credit
with respect to trade receivables are limited due to the large number of customers comprising the Company’s customer bases
and their dispersion across different geographic locations.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The Company maintains cash balances
at one financial institution located in Colorado and one in California. Accounts at these institutions are insured by the Federal
Deposit Insurance Corporation (FDIC) up to $250,000 per account. At times during the year, the Company’s bank balances have
exceeded the FDIC limit. Management believes the risk of loss at such institutions to be minimal.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Use of Estimates</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">The preparation of the financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Significant estimates include but are not limited to the fair value determination of derivative instruments, the valuation allowance
with respect to estimated utilization of net operating losses, estimated allowances for sales returns and collectability of trade
receivables.</font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Earnings (Loss) Per Share</b></font></p>
<p style="margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="text-align: justify; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Net earnings (loss) per share
is computed by dividing net income (loss) less preferred dividends for the period by the weighted average number of shares of
common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) less
preferred dividends for the period by the weighted average number of shares of common stock, common stock equivalents and potentially
dilutive securities outstanding during each period.</font></p>
<table cellspacing="0" cellpadding="0" style="margin-top: 0px; font-size: 9pt; width: 100%">
<tr>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="5" style="border-bottom: #000000 1px solid; vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>June
30, 2014</b></font></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="5" style="border-bottom: #000000 1px solid; vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>December
31, 2013</b></font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>Carrying</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>Amount</b></font></p></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Fair
Value</b></font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>Carrying</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>Amount</b></font></p></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Fair
Value</b></font></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"><b>Cash and cash equivalents</b></font></td>
<td style="vertical-align: bottom; width: 8px"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; width: 57px"><font style="font: 8pt Times New Roman, Times, Serif">1,717,916</font></td>
<td style="vertical-align: bottom; width: 8px"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 8px"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; width: 57px"><font style="font: 8pt Times New Roman, Times, Serif">1,717,916</font></td>
<td style="vertical-align: bottom; width: 8px"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 8px"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; width: 57px"><font style="font: 8pt Times New Roman, Times, Serif">822,876</font></td>
<td style="vertical-align: bottom; width: 8px"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 8px"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; width: 57px"><font style="font: 8pt Times New Roman, Times, Serif">822,876</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Receivables</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,148,148</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,148,148</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,398,178</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,398,178</font></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Accounts Payable</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,354,883</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,354,883</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,248,490</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,248,490</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Derivative Liability</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">279,013</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">279,013</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; margin-top: 0px; font-size: 9pt">
<tr>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; vertical-align: bottom"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>June
30,</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>2014</b></font></p></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; vertical-align: bottom"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>December
31,</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>2013</b></font></p></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom; width: 68%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Trade Receivables</b></font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; width: 15%"><font style="font: 10pt Times New Roman, Times, Serif">2,085,330</font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; width: 14%"><font style="font: 10pt Times New Roman, Times, Serif">2,323,522</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Other</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">62,817</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">74,656</font></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Allowance for doubtful accounts</b></font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(0)</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(0)</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Totals</b></font></td>
<td style="border-bottom: #000000 3px double; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,148,147</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,398,178</font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="width: 100%; margin-top: 0px; font-size: 9pt">
<tr>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; vertical-align: bottom"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>June
30,</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>2014</b></font></p></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: #000000 1px solid; vertical-align: bottom"><p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>December
31,</b></font></p>
<p style="font-size: 8.5pt; text-align: center; margin: 0"><font style="font: 8pt Times New Roman, Times, Serif"><b>2013</b></font></p></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom; width: 68%"><font style="font: 10pt Times New Roman, Times, Serif"><b>Labels and packaging</b></font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; width: 15%"><font style="font: 10pt Times New Roman, Times, Serif">182,397</font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right; width: 14%"><font style="font: 10pt Times New Roman, Times, Serif">120,057</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Raw materials</b></font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">79,836</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">207,320</font></td></tr>
<tr style="background-color: #f5f5ff">
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Finished goods</b></font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,984,571</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 1px solid; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,658,387</font></td></tr>
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"><b>Totals</b></font></td>
<td style="border-bottom: #000000 3px double; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,246,804</font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double; vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; vertical-align: top; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,985,764</font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="margin-top: 0px; font-size: 9pt; width: 100%">
<tr>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three
Months Ended</b></font></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="3" style="vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Six
Months Ended</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt; width: 15px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center; width: 63px"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="font-size: 8.5pt; width: 6px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center; width: 63px"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td>
<td style="font-size: 8.5pt; width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center; width: 63px"><font style="font: 10pt Times New Roman, Times, Serif"><b>2014</b></font></td>
<td style="font-size: 8.5pt; width: 6px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; font-size: 8.5pt; text-align: center; width: 63px"><font style="font: 10pt Times New Roman, Times, Serif"><b>2013</b></font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">Basic weighted average common shares outstanding</font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,866,401</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,686,928</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,883,026</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">12,645,842</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">Stock options (exercise price – $0.573-$2.50/share)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">382,258</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">614,488</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">413,280</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">581,145</font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">Warrants (exercise price – $0.001-$2.25/share)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">418,095</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">437,450</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">418,491</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">431,648</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">Total common stock equivalents</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,686,754</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,738,866</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,714,797</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">13,658,635</font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="margin-top: 0px; font-size: 9pt; width: 100%">
<tr>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="8" style="border-bottom: #000000 1px solid; vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>June
30, 2014</b></font></td>
<td style="vertical-align: bottom; font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="8" style="border-bottom: #000000 1px solid; vertical-align: bottom; font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>December
31, 2013</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
1</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
2</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
3</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
1</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
2</b></font></td>
<td style="font-size: 8.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="font-size: 8.5pt; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"><b>Level
3</b></font></td></tr>
<tr style="vertical-align: bottom">
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-top: #000000 1px solid; font-size: 8.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">Balance</font></td>
<td style="border-bottom: #000000 3px double; width: 5px"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right; width: 49px"><font style="font: 10pt Times New Roman, Times, Serif">35,185</font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double; width: 5px"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right; width: 52px"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double; width: 5px"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right; width: 56px"><font style="font: 10pt Times New Roman, Times, Serif">279,013</font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double; width: 5px"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right; width: 49px"><font style="font: 10pt Times New Roman, Times, Serif">108,228</font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double; width: 5px"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right; width: 51px"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td style="width: 5px"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double; width: 5px"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right; width: 55px"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">Beginning of Period</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">108,228</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">29,338</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">701,852</font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">Deletions</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(87,843)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(36,103)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(87,755)</font></td></tr>
<tr style="vertical-align: bottom">
<td><font style="font: 10pt Times New Roman, Times, Serif">Revisions</font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">14,800</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(192,002)</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">114,993</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">-</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 1px solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(143,082)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #f5f5ff">
<td><font style="font: 10pt Times New Roman, Times, Serif">End of Period</font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">35,185</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">279,013</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">108,228</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">0</font></td>
<td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: #000000 3px double"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td>
<td style="border-bottom: #000000 3px double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">471,015</font></td></tr>
</table>
2148148
2398178
1354883
1248490
1717916
822876
2148148
2398178
1354883
1248490
279013
471015
2085330
2323522
62817
74656
0
0
182397
120057
79836
207320
1984571
1658387
382258
614488
413280
581145
418095
437450
418491
431648
85000
70000
89071
2017-05-01
1360091
849356
293498
1008528
41432
20716
20716
41432
The Company leases its headquarters facility, comprising approximately 10,044 square feet, in Golden, Colorado. The lease term expires January 31, 2017 and requires equal monthly payments over the remaining term.
214063
0
7651
942119
314696
178720
324930
10905
4481
28701
88514
The predecessor company disposed of a dormant product line of vitamins in December 2010. As part of the consideration in this divestiture, the Company received from the purchaser of this product line an unsecured note in the amount of $170,000. The original note was due to be repaid on or before March 2014, where interest accrued principally at an annual rate of 5%, based upon the initial $170,000 principal and was payable monthly. As of March 31, 2013, the note was novated and a new promissory note was issued to reflect a modification in the payment terms, which includes no interest.
0.66
0.57
0.80
0.56
0.63
0.78
0.48
0.68
10000
6000
2.50
2.22
420549
2016-06-15
2023-10-15
2024-02-10
Fully vested
Three year vesting schedules of 1/3 each year through October 2016.
Three year vesting schedules of 1/3 each year through February 2017.
0.50
.50
0.50
0.0213
0.0213
0.0241
0.0241
0.68
2.17
1.05437284 to 0.94843111
0.4876197 to 0.5123803
12122
6017
16275
16275
The company issued warrants to purchase 3% of fully diluted shares of the common stock of the Company to Breakwater Structured Growth Opportunity Fund, L.P., with an imputed exercise price equal to approximately one-hundredth of a dollar in connection with a $1.025 million subordinated mezzanine loan arrangements.
The Company used a lattice model in developing a fair value for the Breakwater warrant obligation at June 30, 2014, using a quoted stock value of $0.68 per share, which represents a discount of 50% from the closing stock price. This reduction was based on the application of a discount for lack of liquidity.
0.0047
P2Y1M
0.3818
0.3522
0.3522
192002
191279
58837
100968
7500
1.11
1.11
1.25
1.25
P6Y1M
P6Y1M
P6Y4M
P6Y4M
1500000
2014-11-16
The principal balance will note bear interest at the one month USD LIBOR rate measured not more often than once per month (the "Index"). Interest on any unpaid balance will bear interest at the Index plus 3.750% with a minimum interest rate of 4.00% per annum..
471015
701852
279013
35185
108228
29338
-87755
0
-87843
-36103
-143082
-192002
14800
114993
35185
108228
13714797
13686754
13738866
13658635
12892754