Revenue Composition - FOCUSfactor represents 64% of the company's revenue, while the Flat Tummy brand accounts for 32%[15][16]. - The company relies heavily on Costco and Walmart, which together comprise 78% of net revenue from retail sales[23]. Sales Strategy - The company plans to diversify its sales network and expand online sales channels to enhance market penetration[19][27]. Research and Development - The company outsources research and development to manufacturers experienced in product development[20]. - FOCUSfactor is the only product in its category with both a patent and clinical study supporting its claims[29]. - The company has a patent (U.S. Patent 8,329,227) for FOCUSfactor's formulation, which enhances mental function[25]. Workforce and Growth - The company had 36 full-time employees as of April 2020 and plans to grow its workforce in response to business demands[34]. - The company intends to continue developing product extensions and expanding into new markets[14]. Risk Factors - The COVID-19 pandemic poses risks that could disrupt business operations and impact financial conditions[35]. - The company is focused on compliance with applicable laws and regulations, which may impact future operations[30][33].

Financial Performance - For the three months ended September 30, 2019, the company reported revenue of $7,364,546, a decrease of 20% from $9,190,377 in the same period of 2018[140]. - The gross profit for the three months ended September 30, 2019, was $4,874,102, representing a gross margin of 66%, down from 68% in the same period of 2018[142]. - Adjusted EBITDA for the three months ended September 30, 2019, was $787,275, compared to $1,000,000 in the same period of 2018, indicating a decrease in operational performance[138]. - For the nine months ended September 30, 2019, the company reported revenue of $23,170,222, down 19% from $28,619,950 in the same period of 2018[149]. - The net income for the nine months ended September 30, 2019, was $1,893,613, a significant improvement compared to a net loss of $(493,296) for the same period in 2018[157]. Expenses and Costs - Selling and marketing expenses for the three months ended September 30, 2019, were $2,771,884, a decrease of 30% from $3,960,131 in the same period of 2018[143]. - The company's cost of revenue for the three months ended September 30, 2019, was $2,490,444, down from $2,945,389 in the same period of 2018, reflecting a decrease in product sales[141]. - The company experienced a decrease in depreciation and amortization expenses for the three months ended September 30, 2019, totaling $301,388, down from $455,579 in the same period of 2018[145]. Cash Flow and Working Capital - As of September 30, 2019, the company had cash on hand of $1,389,311 and a working capital deficit of $3,980,990, including a balloon payment on a loan of $4,500,000[158]. - Net cash provided by operating activities for the nine months ended September 30, 2019 was $2,529,885, an increase of 23.7% compared to $2,043,765 for the same period in 2018[160]. - The net income contributing to the cash flow was $1,893,613, with significant adjustments including a decrease in accounts receivable by $2,556,095 and a decrease in inventory by $437,155[161]. - Net cash used in investing activities was $0 for the nine months ended September 30, 2019, a decrease from $194,300 used in the same period in 2018[162]. - Net cash used in financing activities was $1,537,500, down 32.8% from $2,287,500 in the same period in 2018, primarily due to the payoff of a loan[163]. Strategic Plans - The company plans to grow both organically and through future acquisitions as part of its overall strategy[134]. - The company plans for organic growth by developing and launching new products and expanding its online presence[164]. - The company intends to grow further through additional acquisitions while also focusing on developing existing products[164]. Operational Updates - The technology center in Halifax, Nova Scotia is fully operational, providing marketing services to all brands[164]. - There were no significant contractual obligations or off-balance sheet arrangements reported[165][166]. - The effect of inflation on the company's operating results was not significant[167]. - Recent accounting pronouncements are detailed in the unaudited condensed consolidated financial statements[169].

Financial Performance - For the three months ended June 30, 2019, the company reported revenue of $6,336,721, a decrease of 35.5% from $9,728,712 in the same period in 2018[148]. - For the six months ended June 30, 2019, the company reported revenue of $15,805,676, down 18.5% from $19,429,573 in the same period in 2018[157]. - The company's net income for the three months ended June 30, 2019, was $318,462, a turnaround from a net loss of $783,393 in the same period in 2018[155]. - The net income for the company was $1,785,748, resulting in an adjusted total of $1,776,352 after accounting for various adjustments[169]. Profitability Metrics - The company's gross profit for the three months ended June 30, 2019, was $4,729,434, representing a gross profit margin of 75%, compared to 72% in the same period in 2018[150]. - Adjusted EBITDA for the three months ended June 30, 2019, was $1,185,681, reflecting a significant increase in operational performance[146]. Expenses Management - Selling and marketing expenses for the three months ended June 30, 2019, were $2,647,379, down 48.6% from $5,148,656 in the same period in 2018[151]. - The company's cost of revenue for the three months ended June 30, 2019, was $1,607,587, a decrease of 41.4% from $2,744,760 in the same period in 2018[149]. - The company experienced a decrease in general and administrative expenses to $1,072,705 for the three months ended June 30, 2019, from $1,475,289 in the same period in 2018, due to better management of operating costs[152]. Cash Flow - Net cash provided by operating activities for the six months ended June 30, 2019, was $1,776,352, compared to $712,546 for the same period in 2018, indicating improved cash flow[168]. - Net cash used in investing activities for the six months ended June 30, 2019, was $0, a decrease from $194,300 in the same period of 2018[170]. - Net cash used in financing activities for the six months ended June 30, 2019, was $1,025,000, down from $1,712,500 in the same period of 2018[171]. Company Operations - As of June 30, 2019, the company had cash on hand of $1,064,301 and a working capital deficit of $46,078[167]. - The company plans for organic growth by developing and launching new products and expanding its online presence[172]. - The technology center in Halifax, Nova Scotia, is fully operational, providing marketing services to all brands[172]. Accounting and Compliance - The company employs critical accounting estimates related to revenue recognition and accounts receivable allowances[177]. - Recent accounting pronouncements are detailed in the unaudited condensed consolidated financial statements[178]. - As a smaller reporting company, the company is not required to provide detailed market risk disclosures[179]. - There were no contractual obligations or off-balance sheet arrangements reported[174][175]. - The effect of inflation on the company's operating results was not significant[176].

Financial Performance - For the three months ended March 31, 2019, the company reported revenue of $9,468,955, a decrease of 2.4% from $9,700,861 in the same period of 2018[151]. - Gross profit for the same period was $6,928,505, representing a gross margin of 73%, up from 71% in 2018, indicating a slight improvement in product mix[154]. - Adjusted EBITDA for the three months ended March 31, 2019, was $2,273,420, reflecting the company's focus on core operating results[150]. - Net income for the three months ended March 31, 2019, was $1,467,287, a significant recovery from a net loss of $(55,493) in the same period of 2018[159]. Expenses Management - Selling and marketing expenses decreased to $3,311,867 in Q1 2019 from $4,252,703 in Q1 2018, primarily due to reduced personnel in advertising and marketing[155]. - General and administrative expenses were reduced to $1,487,107 in Q1 2019 from $1,760,856 in Q1 2018, attributed to better management of operating costs[156]. Strategic Focus - The company plans to focus on organic growth by developing and launching new products and expanding its online presence in 2019[166]. Cash Flow and Working Capital - As of March 31, 2019, the company had cash on hand of $688,836 and a working capital deficit of $155,476[161]. - Net cash provided by operating activities for Q1 2019 was $813,711, down from $944,647 in Q1 2018, mainly due to a decrease in accounts payable and accrued expenses[162]. - The company had no net cash used in investing activities for Q1 2019, compared to $136,725 in Q1 2018, indicating a shift in investment strategy[164].

Revenue Sources - FOCUSfactor represents 55% of the company's revenue, while Flat Tummy Tea accounts for 37%[16][17] - The company relies on Costco and Sam's Club for 65% of its retail sales revenue[24] Sales Strategy - The company plans to expand its online sales model and diversify its sales network to enhance market penetration[21][24] - The company aims to expedite market acceptance by selling to active retailers and distributors in the consumer product space[27] Research and Development - The company outsources research and development to manufacturers experienced in product development[22] - The company intends to conduct research with focus groups to optimize marketing strategies[27] Product Claims and Compliance - FOCUSfactor is the only product in its category with both a patent and clinical study supporting its claims[29] - The company has a patent (U.S. Patent 8,329,227) for FOCUSfactor's formulation, which enhances mental function[26] - The company is focused on compliance with FDA regulations for its nutraceuticals and cosmeceuticals[30][33] Workforce - The company had 42 full-time employees and 1 part-time employee as of March 27, 2019, with plans for growth[34]