Third-Party Outsourcing

The Company derives substantially all of its revenue from the sale of products using a third-party fulfillment center to provide order processing and sales fulfillment, customer invoicing and collections, and product warehousing. Substantially all of the Company’s products are shipped through the third-party fulfillment center to the customer. Shipping charges to customers are included in revenues. In addition, the Company uses the third-party fulfillment center to provide sales and inventory management, and marketing and promotional services.

The Company outsources the production of substantially all of its products with a third partythird-party that manufactures and packages the finished products under a product supply agreement.

For the three months and six months ended June 30, 2022 and 2021, costsCosts incurred related to third-party outsourcing, which includes manufacturing, order processing and fulfillment, customer invoicing, collections and warehousing, were approximately $1,847,0001,876,259 and $3,075,0004,951,259 for the three months ended September 30, 2022 and 2021, respectively, and $1,932,967 and $719,0002,560,487 for the nine months ended September 30, 2022 and $719,000,2021, respectively.

Cost of Goods Sold

Cost of goods sold is comprised of the costs for third-party contract manufacturing, packaging, manufacturing fees, and in-bound freight charges.

Shipping Costs

Shipping costs associated with product distribution after manufacture are included as part of cost of goods sold. Shipping and handling expense totaled $252,883209,804 and $77,942182,580 for the three months ended JuneSeptember 30, 2022 and 2021, respectively, and $412,374622,178 and $95,416277,997 for the sixnine months ended JuneSeptember 30, 2022 and 2021, respectively.

Advertising Costs

Advertising costs are expensed as incurred and are included in sales and marketing expense. Advertising costs were $292,368385,010 and $253,428513,701 for the three months ended JuneSeptember 30, 2022 and 2021, respectively, and $879,7301,264,740 and $611,4911,203,421 for the sixnine months ended JuneSeptember 30, 2022 and 2021, respectively.

Concentrations

Revenue. During the three months ended JuneSeptember 30, 2022, the Company had one customer that accounted for 5657% of total revenue. During the three months ended JuneSeptember 30, 2021, the Company had two customers that accounted for 3949% and 1310% of the Company’s total revenue. No other customer accounted for more than 10% of revenue, during the three months ended JuneSeptember 30, 2022 and 2021. The Company sells the majority of its products to one of the largest retailers in the United States. Activ has been selling to this retailer for several years.

During the sixnine months ended JuneSeptember 30, 2022, the Company had one customer that accounted for 5756% of total revenue. During the sixnine months ended JuneSeptember 30, 2021, the Company had two customers that accounted for 3342% and 1110% of the Company’s total revenue. No other customer accounted for more than 10% of revenue, during the sixnine months ended JuneSeptember 30, 2022 and 2021.

Accounts receivable. As of JuneSeptember 30, 2022, the Company had accounts receivable from one customer which comprised approximately 6163% of its accounts receivable. As of December 31, 2021, the Company had accounts receivable from two customers which comprised approximately 50% and 48% of its accounts receivable. No other customer accounted for more than 10% of accounts receivable as of JuneSeptember 30, 2022 and December 31, 2021. Historically we havethe Company has not experienced any collectability issues with this customer.

Purchases from vendors. During the three months and sixnine months ended JuneSeptember 30, 2022, the Company utilized one manufacturer for most of its production and packaging of its clinical nutrition products. Total purchases from this manufacturer accounted for approximately 4349% of all purchases during the three months ended JuneSeptember 30, 2022. There was one other vendor during the three months ended JuneSeptember 30, 2022 that accounted for 1312% of total purchases. During the three months ended JuneSeptember 30, 2021, the Company’s largest vendor accounted for approximately 38% of all purchases. During the sixnine months ended JuneSeptember 30, 2021, the Company’s largest vendors accounted for approximately 16% and 15% of all purchases. No other vendor accounted for more than 10% of purchases during the three months and sixnine months ended JuneSeptember 30, 2022 and 2021.

Accounts payable. As of JuneSeptember 30, 2022, one vendor accounted for 8788% of total accounts payable. As of December 31, 2021, the Company’s largest two vendors accounted for 18% and 13% of the total accounts payable. No other vendor accounted for more than 10% of accounts payable as of JuneSeptember 30, 2022 and December 31, 2021.

Cash and cash equivalents

Cash and cash equivalents consist of funds deposited with a major, established, high quality financial institution and short-term (original maturity of generally 60 days or less) liquid investments in money market deposit accounts. Cash equivalents are classified as Level 1 in the GAAP valuation hierarchy and are valued using the net asset value (“NAV”) per share of the money market fund. As of September 30, 2022, included in cash and cash equivalents was $12,917,044 held in the Goldman Sachs Financial Square Government Institutional Fund.

The Company’s policy is to maintain its cash balances with financial institutions with high credit ratings and in accounts insured by the Federal Deposit Insurance Corporation (the “FDIC”) and/or by the Securities Investor Protection Corporation (the “SIPC”). The Company may periodically have cash balances in financial institutions in excess of the FDIC and SIPC insurance limits of $250,000 and $500,000, respectively. The Company has not experienced any losses to date resulting from this policy, and management believes that the risk of loss associated with any uninsured balances is remote.

Investments

Short-term investments held by the Company as of December 31, 2021 consist of a U.S. Treasury Bill, which is classified as held-to-maturity. The Company’s U.S. Treasury Bill was scheduled to mature approximately 30 days from the date of purchase. Unrealized gains and losses were not material. As of December 31, 2021, the carrying value of the Company’s U.S. Treasury Bill approximates its fair value due to its short-term maturity. As of September 30, 2022, the Company held no short-term investments.

Intangible Assets

Amortizable finite-lived identifiable intangible assets consist of a trade name and customer relationships acquired in the acquisition of Activ, effective June 1, 2021 (See Note 3), and are stated at cost less accumulated amortization. The trade name and customer relationships are being amortized over a period of 10 years. The Company follows ASC 360 in accounting for finite-lived intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts.

At September 30, 2022, management concluded that there were no impairment triggering events. If economic uncertainty increases and/or the global economy worsens, the Company’s business, financial condition and results of operations may be sufficiently impacted to result in future impairment charges in the short-term. Management will continue to monitor the effects that macroeconomic conditions have on its business and operations, and will review impairment indicators to the extent necessary in the upcoming months.

Stock-Based Compensation

The Company periodically issuesStock-based awards for stock options and restricted stock awards to employees and non-employees are accounted using the fair value method in non-capital raising transactionsaccordance with ASC 718, Share-Compensation – Stock Compensation. The estimated fair value of stock options granted to employees in exchange for services and for financing costs. Stock option grants, which are generally time and/or performance vested, areis measured at the grant date, using a fair valuevalue-based method, such as a Black-Scholes option valuation model, and depending on the conditions associated with the vesting of the award, compensation cost is recognized as an expense on a straight-line or graded basis over the vesting period.requisite service periods. The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods. The fair value of restricted stock units is measured at the grant date based on the closing market price of the Company’s common stock on the date of grant, and is recognized as an expense on a straight-line basis over the requisite service periods. Recognition of compensation expense for non-employees is accounted for in the same period and manner as if the Company had paid cash for the services.

The fair value of stock options granted is estimated using the Black-Scholes option-pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life, and future dividends. The assumptions used in the Black-Scholes option pricing model could materially affect compensation expense recorded in future periods.

Loss per Common Share

Basic loss per share is computed by dividing net loss by the weighted-average common shares outstanding during the period, excluding shares of unvested restricted common stock outstanding. Diluted earnings per share is computed based on the weighted-average common shares outstanding plus the effect of dilutive potential common shares outstanding during the period calculated using the treasury stock method. Shares of vested restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are vested. Dilutive potential common shares include shares from unexercised warrants and options. Potential common share equivalents have been excluded where their inclusion would be anti-dilutive. The Company’s basic and diluted net loss per share is the same for all periods presented as the Company had a net loss for all periods presented and all shares issuable upon exercise of warrants and options would therefore be anti-dilutive.

The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share:

 Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

Fair Value of Financial Instruments

Accounting standards require certain assets and liabilities be reported at fair value in the financial statements and provide a framework for establishing that fair value. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques used to measure fair value:

Level 1 – Quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date.

Level 2 – Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

Level 3 – Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions.

The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end.

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets at fair value as of JuneSeptember 30, 2022 and December 31, 2021:

 Schedule of Financial Assets at Fair Value

The Company believes the carrying amount of its financial instruments (consisting of cash, short-term investments, accounts receivable, accounts payable and accrued liabilities) approximates fair value due to the short-term nature of such instruments.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion models. As a result, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost as long as no other features require bifurcation and recognition as derivatives. For contracts in an entity’s own equity, the type of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective January 1, 2024 for the Company and the provisions of this update can be adopted using either the modified retrospective method or a fully retrospective method. Early adoption is permitted and effective January 1, 2021, the Company early adopted ASU 2020-06 using the modified retrospective approach.

At December 31, 2020, the Company recorded a derivative liability of $26,265 related to 10,417 warrants issued in 2019 because the settlement provisions of the warrants contained language that the shares underlying the warrants are required to be registered. ASU 2020-06 removed the requirement to consider if the warrants would be settled in registered shares, and accordingly, the adoption of ASU 2020-06 resulted in a decrease to accumulated deficit of $26,265 and a decrease in derivative warrant liability of $26,265 on January 1, 2021.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company adopted ASU 2021-04 effective January 1, 2022. The adoption of ASU 2021-04 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In JuneSeptember 2016, the FASB issued ASU No. 2016-13, Credit Losses – Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows.

Other recent accounting pronouncements issued by FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

3. Acquisition of Activ Nutritional, LLC

On June 1, 2021, the Company acquired Activ, the owner and distributor of the Viactiv® line of supplements for bone health and other applications, for total purchase consideration of $25,949,654.

The following table summarizes the allocation of the fair value of the purchase consideration to the fair value of tangible assets, identifiable intangible assets, and assumed liabilities of Activ on the date of acquisition:

 Schedule of Fair Value of Assets Acquired and Liabilities Assumed

The Company consolidated Activ’s operations with the Company’s operations commencing on June 1, 2021. GoodwillSubsequently, goodwill of $11,893,134 was written off as impaired at December 31, 2021.

During the three months ended June 30, 2022, Activ generated

Activ’s revenue and operating income (loss) included in the Company’saccompanying condensed consolidated statements of operations of $3,183,200 and $404,402, respectively. During the six months ended June 30, 2022, Activ generated revenue and operating income included in the Company’s condensed consolidated statements of operations of $5,442,831 and $194,572, respectively. During the three months and six months ended June 30, 2021, Activ generated revenue and operating income included in the Company’s condensed consolidated statements of operations of $1,049,803 and $231,288, respectively.are as follows:

 Schedule of Activ’s Revenue and Operating Income (Loss)

Pro Forma Information

The following unaudited pro forma condensed consolidated statement of operations for the three months and sixnine months ended JuneSeptember 30, 2021 is presented as if the acquisition of Activ had occurred on January 1, 2021, and after giving effect to certain pro forma adjustments. The pro forma condensed consolidated statement of operations is presented for informational purposes only and is not indicative of the results of operations that would have necessarily been achieved if the acquisition had actually been consummated on January 1, 2021. These results are prepared in accordance with ASC 606 - Revenue from Contracts with Customers.

 Schedule of Pro Forma Financial Information

Acquisition-related transaction costs of $2,103,680 (consisting of legal, due diligence, valuation, investment banking fees and costs and other professional fees) are not included as a component of consideration transferred but were expensed as incurred. During the three months and sixnine months ended JuneSeptember 30, 2022, the Company incurred no acquisition-related costs.

4. Inventories

Inventories consisted of the following on the dates noted below:

 Schedule of Inventories

The Company’s inventories are stated at the lower of cost or net realizable value calculated on a first in first outfirst-in, first-out basis.

5. Property and Equipment, Net

Property and equipment, net consisted of the following on the dates noted below:

 Schedule of Property and Equipment

Depreciation expense for the three months ended JuneSeptember 30, 2022 and 2021 was $19,63014,717 and $19,69820,008, respectively. Depreciation expense for the sixnine months ended JuneSeptember 30, 2022 and 2021 was $39,18053,897 and $41,10761,115, respectively. During the sixnine months ended JuneSeptember 30, 2022, fully depreciated assets with a cost of $26,06050,923, and accumulated depreciation of $26,06041,636, were removed from property and equipment.equipment and resulted in a loss on disposal of $9,287.

6. Intangible Assets, Net

Intangible assets, net consisted of the following on the dates noted below:

 Schedule of Intangible Assets