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What changed in FITLIFE BRANDS, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FITLIFE BRANDS, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+303 added−183 removedSource: 10-K (2025-03-27) vs 10-K (2024-03-29)

Top changes in FITLIFE BRANDS, INC.'s 2024 10-K

303 paragraphs added · 183 removed · 133 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

74 edited+120 added−35 removed61 unchanged
Biggest changeRisk Factors Relating to our Common Stock If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our Common Stock may be delisted and the price of our Common Stock and our ability to access the capital markets could be negatively impacted.
Biggest changePotential difficulties we may encounter as part of the integration process include, but are not limited to, the following: employees may voluntarily or involuntarily separate from employment with us or the acquired businesses because of the acquisitions; our management may have its attention diverted while trying to integrate the acquired businesses; we may encounter obstacles when incorporating the acquired businesses into our operations and management; we may be required to recognize impairment charges; and integration may be more costly or more time consuming and complex or less effective than anticipated. - 17 - Risk Factors Relating to our Common Stock If we fail to comply with the continued listing requirements of the Nasdaq Capital Market, our Common Stock may be delisted and the price of our Common Stock and our ability to access the capital markets could be negatively impacted.
To further protect its product formulations and flavors, the Company may enter into agreements with manufacturers that provide exclusivity to certain products formulations and delivery technologies. When appropriate, the Company will seek to protect its research and development efforts by filing patent applications for proprietary product technologies or ingredient combinations.
To further protect its product formulations and flavors, the Company may enter into agreements with manufacturers that provide exclusivity to certain products formulations and/or delivery technologies. When appropriate, the Company will seek to protect its research and development efforts by filing patent applications for proprietary product technologies or ingredient combinations.
NDS Products The Company’s NDS Products consist of the following brands: ● NDS – Premium weight loss, sports nutrition, and general health products; ● PMD – Premium sports nutrition products; ● SirenLabs – Premium weight loss and sports nutrition products; ● Nutrology – Sports nutrition and general wellness products with an emphasis on natural, vegan, and organic ingredients; ● Metis Nutrition – Premium male health and weight loss products; and ● Core Active Nutrition – Value-oriented sports nutrition and weight loss products. -2- iSatori Products The Company’s iSatori Products consist of the following brands: ● Energize – Energy products designed to boost energy through a combination of time-released caffeine, vitamins, and herbal formulations; ● iSatori – High-quality weight loss and sports nutrition products; and ● BioGenetic Laboratories – Value-oriented weight loss and general health products.
NDS Products The Company’s NDS Products consist of the following brands: ● NDS – Premium weight loss, sports nutrition, and general health products; ● PMD – Premium sports nutrition products; ● SirenLabs – Premium weight loss and sports nutrition products; ● Nutrology – Sports nutrition and general wellness products with an emphasis on natural, vegan, and organic ingredients; ● Metis Nutrition – Premium male health and weight loss products; and ● Core Active Nutrition – Value-oriented sports nutrition and weight loss products. iSatori Products The Company’s iSatori Products consist of the following brands: ● Energize – Energy products designed to boost energy through a combination of time-released caffeine, vitamins, and herbal formulations; ● iSatori – High-quality weight loss and sports nutrition products; and ● BioGenetic Laboratories – Value-oriented weight loss and general health products.
A failure by us or our wholesale partners to comply with these laws and regulations could lead to governmental investigations, civil and criminal prosecutions, administrative hearings and court proceedings, civil and criminal penalties, injunctions against product sales or advertising, civil and criminal liability for the Company and/or its principals, bad publicity, and tort claims arising out of governmental or judicial findings of fact or conclusions of law adverse to the Company or its principals.
A failure by us or our distributors or wholesale partners to comply with these laws and regulations could lead to governmental investigations, civil and criminal prosecutions, administrative hearings and court proceedings, civil and criminal penalties, injunctions against product sales or advertising, civil and criminal liability for the Company and/or its principals, bad publicity, and tort claims arising out of governmental or judicial findings of fact or conclusions of law adverse to the Company or its principals.
In the event any of our third-party manufacturers were to become unable or unwilling to continue to provide us with products in required volumes and at suitable quality levels, we would be required to identify and obtain acceptable replacement manufacturing sources. There is no assurance that we would be able to obtain alternative manufacturing sources on a timely basis.
In the event any of our third-party manufacturers were to become unable or unwilling to continue to provide us with products in required volumes and at suitable quality levels, we would be required to identify and obtain acceptable replacement manufacturing sources. There is no assurance that we would be able to develop alternative manufacturing sources on a timely basis.
Although we believe that all of our products fall within the generally known safe limits for daily doses of each ingredient contained within them, nutrition science is imperfect. Moreover, some people have peculiar sensitivities or reactions to nutrients commonly found in certain foods and may have similar sensitivities or reactions to nutrients contained in our products.
Although we believe that all of our products fall within the generally known safe limits for daily doses of each ingredient contained within them, nutrition science is imperfect. Moreover, some people have peculiar sensitivities or reactions to nutrients commonly found in certain foods and may have similar sensitivities or reactions to ingredients contained in our products.
Each contract manufacturer is required by the Company to abide by current Good Manufacturing Practices (“ cGMPs ”) to ensure quality and consistency, and to manufacture its products according to the Company’s strict specifications. Nearly all our contract manufacturers are certified through a governing body such as the Natural Products Association or NSF International.
Each contract manufacturer is required by the Company to abide by current Good Manufacturing Practices (“ cGMPs ”) to ensure quality and consistency, and to manufacture its products according to the Company’s strict specifications. All our contract manufacturers are certified through a governing body such as the Natural Products Association or NSF International.
(the “ Company ”) is a national provider of innovative and proprietary nutritional supplements and wellness products for health-conscious consumers marketed under the following brand names: (i) NDS Nutrition, PMD Sports, SirenLabs, Core Active, Nutrology, and Metis Nutrition (together, “ NDS Products ”); (ii) iSatori, BioGenetic Laboratories, and Energize (together, the " iSatori Products "); (iii) Dr.
(the “ Company ”) is a provider of innovative and proprietary nutritional supplements and wellness products for health-conscious consumers marketed under the following brand names: (i) NDS Nutrition, PMD Sports, SirenLabs, Core Active, Nutrology, and Metis Nutrition (together, “ NDS Products ”); (ii) iSatori, BioGenetic Laboratories, and Energize (together, the " iSatori Products "); (iii) Dr.
We believe MusclePharm’s brand recognition attracts a large and engaged customer base consisting of athletes and other active individuals. Manufacturing, Sourcing and Availability of Raw Materials All of the Company’s products are manufactured by FDA-regulated contract manufacturers within the United States.
We believe MusclePharm’s brand recognition attracts a large and engaged customer base consisting of athletes and other active individuals. - 4 - Manufacturing, Sourcing and Availability of Raw Materials All of the Company’s products are manufactured by FDA-regulated contract manufacturers within the United States.
Currently, we have the following classes of Preferred Stock authorized, which could be issued without shareholder approval: (i) 1,000 shares of Series A Preferred Stock, par value $0.01 per share, are authorized (the “ Series A Preferred ”); and (ii) 2,000 shares of Series B Junior Participating Preferred Stock, par value $0.01.
Currently, we have the following classes of Preferred Stock authorized, which could be issued without shareholder approval: (i) 1,000 shares of Series A Preferred Stock, par value $0.01 per share (the “ Series A Preferred ”); and (ii) 2,000 shares of Series B Junior Participating Preferred Stock, par value $0.01.
Prior to the transition, we collected receivables from numerous franchisees. We anticipate that GNC will continue to represent a substantial portion of all accounts receivable for the foreseeable future. In the event that our sales to GNC decrease, our results from operations will be negatively affected, and such effect may be material.
Prior to the transition, we collected receivables from individual franchisees. We anticipate that GNC will continue to represent a substantial portion of all accounts receivable for the foreseeable future. In the event that our sales to GNC decrease, our results from operations will be negatively affected, and such effect may be material.
There can be no assurance that we or our wholesale partners will be in compliance with all of these regulations.
There can be no assurance that we or our distributors or wholesale partners will be in compliance with all of these regulations.
New product ideas are derived from a number of sources including trade publications, scientific and health journals, consultants, distributors, and other third parties. Prior to reformulating existing products or introducing new products, we investigate product formulations as they relate to regulatory compliance and other issues.
New product ideas are derived from a number of sources including trade publications, scientific and health journals, consultants, distributors, and other third parties. Prior to reformulating existing products or introducing new products, we evaluate product formulations as they relate to regulatory compliance and other issues.
In August 2007, a new rule issued by the FDA went into effect requiring companies that manufacture, package, label, distribute or hold nutritional supplements to meet cGMPs to ensure such products are of the quality specified and are properly packaged and labeled.
In June 2007, a new rule issued by the FDA went into effect requiring companies that manufacture, package, label, distribute or hold nutritional supplements to meet cGMPs to ensure such products are of the quality specified and are properly packaged and labeled.
In addition to the Company’s online distribution channels for direct-to-consumer sales, major iSatori customers include CVS, Rite Aid, Vitamin Shoppe and Walgreens. iSatori’s core strategy is to build and strengthen brands among consumers seeking nutritional supplement products with a reputation for quality and innovation. iSatori utilizes social media campaigns, coupons, and online advertising, plus cooperative and other incentive programs, to build consumer awareness and generate trial and repeat purchases.
In addition to the Company’s online distribution channels for direct-to-consumer sales, major iSatori customers include Vitamin Shoppe and Walgreens. iSatori’s core strategy is to build and strengthen brands among consumers seeking nutritional supplement products with a reputation for quality and innovation. iSatori utilizes social media campaigns, coupons, and online advertising, plus cooperative and other incentive programs, to build consumer awareness and generate trial and repeat purchases.
Although COVID-19 has largely abated, as well as the concomitant supply change challenges resulting from the pandemic, in the event of future outbreaks of COVID-19 or other illnesses, our operations and those of our third-party suppliers or our wholesale partners could be adversely affected.
Although COVID-19 has largely abated, as well as the concomitant supply chain challenges resulting from the pandemic, in the event of future outbreaks of COVID-19 or other illnesses, our operations and those of our third-party suppliers or our wholesale partners could be adversely affected.
Product sold to GNC may be returned from corporate store shelves or the distribution center in the event the product is damaged, short dated, expired or recalled. GNC maintains a customer satisfaction program that allows customers to return product to the store for credit or refund.
Product sold to GNC may be returned from corporate store shelves or the distribution centers in the event the product is damaged, short dated, expired or recalled. GNC maintains a customer satisfaction program that allows customers to return product to the store for credit or refund.
The market price of our securities may be subject to wide changes in response to quarterly variations in operating results, announcements of new products by us or our competitors, reports by securities analysts, volume trading, or other events or factors.
The market price of our securities may be subject to wide changes in response to quarterly variations in operating results, announcements of new products by us or our competitors, reports by securities analysts, volume traded, or other events or factors.
MusclePharm Products The MusclePharm assets were acquired by the Company on October 10, 2023. MusclePharm is a scientifically driven, performance lifestyle brand that develops, markets and distributes 33 branded sports nutrition and general health products. MusclePharm products are sold to wholesale customers as well as online directly to the end consumer.
MusclePharm Products The MusclePharm assets were acquired by the Company on October 10, 2023. MusclePharm is a scientifically driven, performance lifestyle brand that develops, markets and distributes a variety of branded sports nutrition and general health products. MusclePharm products are sold to wholesale customers as well as online directly to the end consumer.
We sell MusclePharm products online directly to the end consumer as well as to wholesale partners. A complete product list is available on our website at fitlifebrands.com .
We sell MusclePharm products online directly to the end consumer as well as to wholesale partners. - 3 - A complete product list is available on our website at www.fitlifebrands.com .
The inability to sell our products through e-commerce platforms, including Amazon, would materially impact our sales and operating results. -7- In addition, although we continued efforts to expand international distribution for our products in the years ended December 31, 2023 and 2022, we cannot assure that any further efforts to sell our products outside the United States will result in material increased revenue.
Further, the inability to sell our products through e-commerce platforms, including Amazon, would materially impact our sales and operating results. - 9 - In addition, although we continued efforts to expand international distribution for our products in the years ended December 31, 2024 and 2023, we cannot assure that any further efforts to sell our products outside the United States will result in material increased revenue.
We consider our employee relations to be good. -6- Cost of Compliance with Environmental Laws We have not incurred any costs associated with compliance with environmental regulations, nor do we anticipate any future costs associated with environmental compliance; however, no assurances can be given that we will not incur such costs in the future.
We consider our employee relations to be good. Cost of Compliance with Environmental Laws We have not incurred any costs associated with compliance with environmental regulations, nor do we anticipate any future costs associated with environmental compliance; however, no assurance can be given that we will not incur such costs in the future.
All trademark registrations are protected for a period of ten years and then are renewable thereafter if still in use. Employees We had 37 and 27 full-time employees as of December 31, 2023 and 2022, respectively. In addition, the Company utilizes consultants and temporary or part-time employees for certain services on an as-needed basis.
All trademark registrations are protected for a period of ten years and then are renewable thereafter if still in use. Employees We had 39 and 37 full-time employees as of December 31, 2024 and 2023, respectively. In addition, the Company utilizes consultants and temporary or part-time employees for certain services on an as-needed basis.
The Company currently markets more than 100 different NDS Products to more than 700 GNC franchise locations located in the United States, as well as to additional franchise locations in other countries, all of which are distributed through GNC’s distribution system.
The Company currently markets more than 100 different NDS Products to approximately 700 GNC franchise locations located in the United States, as well as to additional franchise locations in other countries, most of which are distributed through GNC’s distribution system.
Further, uncertain or unfavorable economic conditions have and could continue to negatively impact the financial stability of our customers or suppliers, which could lead to increased uncollectible receivables or non-performance. Current global geopolitical tensions, including related to Ukraine and Israel, may exacerbate any economic downturn and inflation.
And uncertain or unfavorable economic conditions have and could continue to negatively impact the financial stability of our customers or suppliers, which could lead to increased uncollectible receivables or non-performance. Current global geopolitical tensions, including related to Ukraine and the Middle East, may exacerbate any economic downturn and inflation.
In addition, the financial markets have experienced significant price and volume fluctuations for a number of reasons, including the failure of certain companies to meet market expectations. These broad market price swings, or any industry-specific market fluctuations, may adversely affect the market price of our securities.
In addition, the financial markets have experienced significant price and volume fluctuations for a number of reasons, including exogenous factors as well as the failure of certain companies to meet market expectations. These broad market price swings, or any industry-specific market fluctuations, may adversely affect the market price of our securities.
We are affected by extensive laws, governmental regulations, administrative determinations, court decisions and similar constraints, which can make compliance costly and subject us to enforcement actions by governmental agencies.
Legal and Regulatory Risks We are affected by extensive laws, governmental regulations, administrative determinations, court decisions and similar constraints, which can make compliance costly and subject us to enforcement actions by governmental agencies.
In addition, following the launch of Metis Nutrition, we distribute products through more than 1,500 corporate GNC stores in the United States. We sell iSatori Products through more than 17,000 specialty, mass, and online retail locations. We sell the MRC Products primarily on Amazon.com (“ Amazon ”).
In addition, following the launch of Metis Nutrition, we distribute products through more than 1,400 corporate GNC stores in the United States. We sell iSatori Products through specialty, mass, and online retail locations. We sell the MRC Products primarily on Amazon.com (“ Amazon ”).
Department of Agriculture, and the Environmental Protection Agency. Various agencies of the states and localities in which we operate and in which our products are sold also regulate our business, such as the California Department of Health Services, Food and Drug Branch.
Various agencies of the states and localities in which we operate and in which our products are sold also regulate our business, such as the California Department of Health Services, Food and Drug Branch.
Management is committed to continue to work collaboratively with GNC and its franchisees to build on our established track record of innovation and operational performance. iSatori Products iSatori Products are distributed directly to consumers through the Company's own websites and through other e-commerce platforms such as Amazon , as well as through the specialty, drug and mass-market distribution channels. iSatori products are currently sold in over 17,000 retail locations.
Management is committed to continue to work collaboratively with GNC and its franchisees to build on our established track record of innovation and operational performance. iSatori Products iSatori Products are distributed directly to consumers through the Company's own websites and through other e-commerce platforms such as Amazon , as well as through the specialty, drug and mass-market distribution channels.
Moreover, unilateral decisions could be taken by our distributors, customers, or third-party e-commerce platforms such as Amazon, to discontinue all or any of our products that they are carrying or selling at any time, which would cause our business to suffer.
Moreover, unilateral decisions could be taken by our distributors or customers to discontinue all or any of our products that they are carrying or selling at any time, which would cause our business to suffer.
If the products we sell do not have the healthful effects intended, our business may suffer. In general, our products sold consist of nutritional supplements that are classified in the United States as “dietary supplements”, which do not currently require approval from the FDA or other regulatory agencies prior to sale.
In general, our products sold consist of nutritional supplements that are classified in the United States as “dietary supplements”, which do not currently require approval from the FDA or other regulatory agencies prior to sale.
Our Articles of Incorporation authorize the issuance of up to 10 million shares of preferred stock, par value $0.01 per share (" Preferred Stock "), in the aggregate.
We may issue Preferred Stock with rights senior to the Common Stock. Our Articles of Incorporation authorize the issuance of up to 10 million shares of preferred stock, par value $0.01 per share (" Preferred Stock "), in the aggregate.
We introduced a total of 18 new products during the year ended December 31, 2023, which included 6 completely new products and 12 product reformulations and flavor extensions, and we introduced a total of 10 new products during the year ended December 31, 2022, which included 3 completely new products and 7 product reformulations and flavor extensions.
We introduced a total of 23 new products during the year ended December 31, 2024, which included 19 completely new products and 4 product reformulations and flavor extensions, and we introduced a total of 18 new products during the year ended December 31, 2023, which included 6 completely new products and 12 product reformulations and flavor extensions.
In other markets outside the U.S., we may be required to obtain approvals, licenses or certifications from a country’s ministry of health or comparable agency before we begin operations or the marketing of products in that country.
In other markets outside the U.S., we may be required to obtain approvals or certifications from a country’s ministry of health or comparable agency before we begin operations or the marketing of products in that country. These approvals may be secured through the Company directly or through the respective distributors depending on the country.
The Company pursues registration of the registrable trademarks, service marks and patents, associated with its key products in the United States, Canada, Europe and other places it distributes its products. The Company formulates its products using proprietary ingredient formulations, flavorings and delivery systems.
The Company believes that protecting such intellectual property is crucial to its business strategy. The Company pursues registration of the registrable trademarks, service marks and patents, associated with its key products in the United States, Canada, Europe and other places it distributes its products. The Company formulates its products using proprietary ingredient formulations, flavorings and delivery systems.
The coronavirus (COVID-19) pandemic had a material impact on global supply chains, including for certain raw materials imported from China, among other countries, and this impacted our third-party suppliers and our wholesale partners.
Future outbreaks of COVID-19 or other illnesses could have a material adverse impact on us in the future. The coronavirus (“ COVID-19 ”) pandemic had a material impact on global supply chains, including for certain raw materials imported from China, among other countries, and this impacted our third-party suppliers and our wholesale partners.
The FDA also regulates the labeling and marketing of dietary supplements and nutritional products, including the following: ● the identification of dietary supplements or nutritional products and their nutrition and ingredient labeling; ● requirements related to the wording used for claims about nutrients, health claims, and statements of nutritional support; ● labeling requirements for dietary supplements or nutritional products for which “high potency” and “antioxidant” claims are made; ● notification procedures for statements on dietary supplements or nutritional products; and ● premarket notification procedures for new dietary ingredients in nutritional supplements.
We are committed to meeting or exceeding the standards set by the FDA and we currently operate in compliance with all GMPS. - 6 - The FDA regulates the labeling and marketing of dietary supplements and nutritional products, including the following: ● the identification of dietary supplements or nutritional products and their nutrition and ingredient labeling; ● requirements related to the wording used for claims about nutrients, health claims, and statements of nutritional support; ● labeling requirements for dietary supplements or nutritional products for which “high potency” and “antioxidant” claims are made; ● notification procedures for statements on dietary supplements or nutritional products; and ● premarket notification procedures for new dietary ingredients in nutritional supplements.
We may need to overcome significant regulatory and legal barriers in order to continue to sell our products internationally, and we cannot give assurances as to whether we will be able to comply with such regulatory or legal requirements.
We may need to overcome significant regulatory and legal barriers in order to continue to sell our products internationally, and we cannot give assurances as to whether we will be able to comply with such regulatory or legal requirements. We must identify changing consumer and customer preferences and behaviors and develop and offer products to meet these preferences.
Sales to GNC’s centralized distribution platform, including indirect distribution of product to domestic and international franchisees, accounted for approximately 33% and 67% of our total sales for the years ended December 31, 2023 and 2022, respectively. GNC’s franchisees are not required to carry our products.
We are currently dependent on sales to GNC for a significant portion of our sales. Sales to GNC’s centralized distribution platform, including indirect distribution of product to domestic and international franchisees, accounted for approximately 23% and 33% of our total sales for the years ended December 31, 2024 and 2023, respectively. GNC’s franchisees are not required to carry our products.
Management continually assesses and analyzes developing market trends to detect and proactively address what they believe are areas of unmet or growing demand that represent an opportunity for the Company and, where deemed appropriate, attempts to introduce new products and/or packaging solutions in direct response to meet that demand. -3- Sales, Marketing and Distribution NDS Products NDS Products are sold through more than 700 GNC franchise locations located throughout the United States.
Management continually assesses and analyzes developing market trends to detect and proactively address what they believe are areas of unmet or growing demand that represent an opportunity for the Company and, where deemed appropriate, attempts to introduce new products and/or packaging solutions in direct response to meet that demand.
DSHEA generally provides a regulatory framework to help ensure safe, quality dietary supplements and the dissemination of accurate information about such products. The FDA is generally prohibited from regulating active ingredients in dietary supplements as drugs unless product claims, such as claims that a product may heal, mitigate, cure or prevent an illness, disease or malady, trigger drug status.
The FDA is generally prohibited from regulating active ingredients in dietary supplements as drugs unless the product makes claims in violation of DSHEA, such as claims that a product may heal, mitigate, cure or prevent an illness, disease or malady, trigger drug status.
Approvals or licenses may be conditioned on the reformulation of our products for a particular market or may be unavailable for certain products or product ingredients. These regulations may limit our ability to enter certain markets outside the U.S.
Approvals or licenses may be conditioned on the reformulation of our products for a particular market or may be unavailable for certain products or product ingredients.
Judd’s position as Chair of the Board and Chief Executive Officer, he and/or Sudbury may have the ability to exert influence over both the actions of the Board of Directors, as well as the execution of management’s plans.
Judd’s position as Chair of the Board and Chief Executive Officer, he and/or Sudbury may have the ability to exert influence over both the actions of the Board of Directors, as well as the execution of management’s plans. - 18 - Compliance with changing corporate governance regulations and public disclosures may result in additional risks and exposures.
The iSatori Products are sold through more than 17,000 retail locations, which include specialty, mass, and online. The Company distributes the MRC Products primarily online. MusclePharm’s products are sold to wholesale customers as well as online directly to the end consumer. FitLife Brands is headquartered in Omaha, Nebraska. For more information on the Company, please go to www.fitlifebrands.com.
The Company distributes the MRC Products primarily online through e-commerce platforms, such as Amazon, directly to the end consumer. MusclePharm’s products are sold to both wholesale customers as well as online through various e-commerce platforms directly to the end consumer. FitLife Brands is headquartered in Omaha, Nebraska. For more information on the Company, please go to www.fitlifebrands.com.
The nutrition industry is generally categorized into the following segments: ● Natural & Organic Foods (products such as cereals, milk, non-dairy beverages and frozen meals); ● Functional Foods (products with added ingredients or fortification specifically for health or performance purposes); ● Natural & Organic Personal Care and Household Products; and ● Supplements. -1- Management believes that the following factors drive growth in the nutrition industry: ● The general public’s awareness and understanding of the connection between diet and health; ● The aging population in the Company’s markets who tend to use more nutritional supplements as they age; ● Increasing healthcare costs and the consequential trend toward preventative medicine and non-traditional medicines; and ● Product introductions in response to new scientific studies.
Management believes that the following factors drive growth in the nutrition industry: ● The general public’s awareness and understanding of the connection between diet and health; ● The aging population in the Company’s markets who tend to use more nutritional supplements as they age; ● Increasing healthcare costs and the consequential trend toward preventative medicine and non-traditional medicines; and ● Product introductions in response to new scientific studies.
We could be adversely affected by studies that may assert that our products are ineffective or harmful to consumers, or if adverse effects are associated with a competitor’s similar products. -9- Our products may not meet health and safety standards or could become contaminated.
We could be adversely affected by studies that may assert that our products are ineffective or harmful to consumers, or if adverse effects are associated with a competitor’s similar products. If the products we sell do not have the healthful effects intended, our business may suffer.
If we were to become the subject of securities class action litigation, it could result in substantial costs and a significant diversion of our management’s attention and resources. -11- We may issue Preferred Stock with rights senior to the Common Stock.
Companies that have experienced volatility in the market price of their stock have been the subject of securities class action litigation. If we were to become the subject of securities class action litigation, it could result in substantial costs and a significant diversion of our management’s attention and resources.
As a result, our efforts to comply with evolving laws, regulations, and standards have resulted in, and are likely to continue to result in, increased expense and significant management time and attention. Loss of key personnel could impair our ability to operate. Our success depends on hiring, retaining and integrating senior management and skilled employees.
As a result, our efforts to comply with evolving laws, regulations, and standards have resulted in, and are likely to continue to result in increased expense and significant management time and attention.
Our marketing team regularly reviews the media mix for its effectiveness in creating consumer demand and the highest return on investment dollars. MRC Products and MusclePharm MRC Products are distributed primarily on Amazon. MusclePharm’s products are distributed via wholesale customers as well as directly to end consumers through the Company’s own websites and through other e-commerce platforms, including Amazon.
Our marketing team regularly reviews the media mix for its effectiveness in creating consumer demand and the highest return on investment dollars. - 5 - MRC Products and MusclePharm MRC Products are distributed primarily on Amazon.
Any errors in our product manufacturing could result in product recalls, significant legal exposure, and reduced revenue. Although we require that our manufacturers verify the accuracy of the contents of our products, we do not have the expertise or personnel to monitor the production of products by these third parties.
Although we require that our manufacturers verify the accuracy of the contents of our products for each production lot, we do not have the internal expertise or personnel to monitor the production of products by these third parties.
Claims that any products are ineffective, inappropriately labeled or have inaccurate instructions as to their use, could have a material adverse effect on the market demand for our products, including reducing our revenue.
Claims that any products are ineffective, inappropriately labeled or have inaccurate instructions as to their use, could have a material adverse effect on the market demand for our products, including reducing our revenue. - 11 - The efficacy of nutritional supplement products is supported by limited conclusive clinical studies, which could result in reduced market acceptance of these products and lower revenue or lower revenue growth rates.
We anticipate that these competitors may use their resources to engage in various business activities that could result in reduced sales of our products. Companies with greater capital and research capabilities could re-formulate existing products or formulate new products that could gain wide marketplace acceptance, which could have a negative effect on our future sales.
Companies with greater capital and research capabilities could re-formulate existing products or formulate new products that could gain wide market acceptance, which could have a negative effect on our future sales and profitability.
Our sales and marketing efforts are designed to expand sales of NDS Products to additional GNC franchise locations both domestically and internationally. In addition, we relaunched our Core Active brand as an online-exclusive brand. The GNC domestic franchise market remains a strong business and a critical component of our operations.
For the years ended December 31, 2024 and 2023, the majority of NDS Product sales were through GNC’s centralized distribution platform. Our sales and marketing efforts are designed to expand sales of NDS Products to additional GNC franchise locations both domestically and internationally. In addition, we relaunched our Core Active brand as an online-exclusive brand.
We do not have control over the third parties involved in the manufacturing of our products and their compliance with government health and safety standards. Even if our products meet these standards, they could otherwise become contaminated. A failure to meet these standards or contamination could occur in our operations or those of our distributors or suppliers.
Any of these consequences could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our products may not meet health and safety standards or could become contaminated. We do not have control over the third parties involved in the manufacturing of our products and their compliance with government health and safety standards.
We face intense competition from numerous resellers, manufacturers and wholesalers of nutritional supplements similar to ours, including retail, online and mail-order providers. Many of our competitors have longer operating histories, more-established brands in the marketplace, greater financial resources and better access to capital than we have.
We face intense competition in the markets in which we compete, including from numerous resellers, manufacturers and wholesalers of nutritional supplements and brands similar to ours, including retail, online and mail-order providers.
Patents, Trademarks and Proprietary Rights The Company regards intellectual property, including its trademarks, service marks, website URLs (domains) and other proprietary rights, as valuable assets and part of its brand equity. The Company believes that protecting such intellectual property is crucial to its business strategy.
These regulations may limit our ability to enter certain markets outside the U.S. - 7 - Patents, Trademarks and Proprietary Rights The Company regards intellectual property, including its trademarks, service marks, website URLs (domains) and other proprietary rights, as valuable assets and part of its brand equity.
The market price of the securities of a company such as ours with little name recognition in the financial community and without significant revenue can be subject to wide price swings. For example, the closing price of our Common Stock has ranged from a high of $22.45 to a low of $15.28 during the year ending December 31, 2023.
The market price of the securities of a company can be subject to wide price swings. For example, the closing price of our Common Stock has ranged from a high of $17.50 to a low of $9.60 during the year ending December 31, 2024.
The Company also distributes NDS Products to additional franchise locations in other countries. In 2014, the Company transitioned distribution of NDS Products to GNC’s centralized distribution platform. For the years ended December 31, 2023 and 2022, the majority of NDS Product sales were through GNC’s centralized distribution platform.
Sales, Marketing and Distribution NDS Products NDS Products are sold through approximately 700 GNC franchise locations located throughout the United States. The Company also distributes NDS Products to additional franchise locations in other countries. In 2014, the Company transitioned distribution of NDS Products to GNC’s centralized distribution platform.
Any of these events could have an adverse effect on our business, financial condition, results of operations and cash flows. We are dependent on our third-party manufacturers to supply our products in the compositions we require, and we do not independently analyze each production lot of our products.
We are dependent on our third-party manufacturers to supply our products in the compositions we require, and we do not independently analyze each production lot of our products. Any errors in our product manufacturing could result in product recalls, significant legal exposure, and reduced revenue.
If the FDA determines that a particular statement of nutritional support is an unacceptable drug claim or an unauthorized version of a disease claim for a food product, or if the FDA determines that a particular claim is not adequately supported by existing scientific data or is false or misleading, we will be prevented from using the claim. -5- In addition, DSHEA provides that so-called “third-party literature”, for example a reprint of a peer-reviewed scientific publication linking a particular nutritional ingredient with health benefits, may be used in connection with the sale of a nutritional supplement to consumers without the literature being subject to regulation as labeling.
If the FDA determines that a particular statement of nutritional support is an unacceptable drug claim or an unauthorized version of a disease claim for a food product, or if the FDA determines that a particular claim is not adequately supported by existing scientific data or is false or misleading, we will be prevented from using the claim.
While we cannot assure that such measures will block competitive products, we believe our continued emphasis on innovation and new product development targeted at the needs of the consumer will enable the Company to effectively compete in the marketplace. -4- Regulatory Matters Our business is subject to varying degrees of regulation by a number of government authorities in the U.S., including the Federal Drug Administration (“ FDA ”), the Federal Trade Commission (“ FTC ”), the Consumer Product Safety Commission, the U.S.
While we cannot assure that such measures will mitigate the potential impact of competitive products, we believe our continued emphasis on innovation and new product development targeted at the needs of the consumer will enable the Company to effectively compete in the marketplace.
In addition, our customers may seek to reduce their inventories in response to those economic conditions. In those circumstances, we could experience a reduction in sales.
In addition, our wholesale customers may seek to reduce their inventories in response to those economic conditions. In those circumstances, we could experience a reduction in sales. Further, during economic downturns, it may be more difficult to convince consumers to switch to, or continue to use, our brands without extensive promotions or price reductions.
An extended interruption in the supply of our products would likely result in decreased product sales and a corresponding decline in revenue. We believe that we can meet our current supply and manufacturing requirements with our current suppliers and manufacturers or with available substitute suppliers and manufacturers.
An extended interruption in the supply of our products would likely result in decreased product sales and a corresponding decline in revenue. Adverse publicity associated with our products, ingredients, or those of similar companies, could adversely affect our sales and revenue.
This could result in expensive production interruptions, recalls and liability claims. Moreover, negative publicity could be generated from false, unfounded or nominal liability claims or limited recalls. Any of these failures or occurrences could negatively affect our business and financial performance.
Even if our products meet these standards, they could otherwise become contaminated. A failure to meet these standards or contamination could occur in our operations or those of our distributors or suppliers. This could result in expensive production interruptions, recalls and liability claims. Moreover, negative publicity could be generated from false, unfounded or nominal liability claims or limited recalls.
However, any reported medical concerns with respect to ingredients commonly used in nutritional supplements could negatively impact the demand for our products. Additionally, low-carbohydrate products, liquid meal replacements and similar competing products addressing changing consumer tastes and preferences could affect the market for certain categories of supplements.
However, a number of factors with respect to the nutritional supplement industry could negatively impact the demand for our products. Additionally, low-carbohydrate products, liquid meal replacements, GLP-1 and other pharmaceutical products, or similar competing products could affect the market for certain categories of supplements. All these factors could have a negative impact on our sales growth.
For instance, in 2022, the U.S. experienced significantly heightened inflationary pressures which continued into 2023. In periods of adverse or uncertain economic conditions, including during periods of high inflation or recession concerns, or as a result of the COVID-19 pandemic, consumers may purchase less of our products, purchase more value or private label products or may forgo certain purchases altogether.
The willingness of consumers to purchase our products depends in part on general or local economic conditions and consumers’ discretionary spending habits. In periods of adverse or uncertain economic conditions, including during periods of high inflation or recession concerns, consumers may purchase less of our products, purchase more value or private label products or may forgo certain purchases altogether.
Risk Factors Relating to our Business and Industry The Company was profitable during the years ended December 31, 2023 and 2022. However, we may not be able to achieve sustained profitability. Our failure to sustain profitability or effectively manage growth could result in net losses, and therefore negatively affect our financial condition.
Our failure to sustain profitability or effectively manage growth could result in net losses, and therefore negatively affect our financial condition.
In the event we incur net losses, our financial condition could be negatively affected, and such effect could be material. We are currently dependent on sales to GNC for a substantial portion of our total sales.
In the event we incur net losses, our financial condition could be negatively affected, and such effect could be material. We may not be able to effectively manage our growth, which could materially harm our business, financial condition, results of operations and cash flows.
Any inability of management to integrate the operations of the Company, MRC and/or MusclePharm successfully could have a material adverse effect on the business and financial condition of the combined company.
Any or all of these consequences could have a material adverse effect on our financial condition, results of operations and cash flows.
In addition, aggressive advertising and promotion by our competitors may require us to compete by lowering prices or by increasing our marketing expenditures, and the economic viability of our operations likely would be diminished. Adverse publicity associated with our products, ingredients, or those of similar companies, could adversely affect our sales and revenue.
In addition, aggressive advertising and promotion by our competitors including through social and digital media, may require us to compete by lowering prices or by increasing our marketing expenditures.
The Company’s common stock, par value $0.01 per share (“ Common Stock ”), trades under the symbol “FTLF” on the Nasdaq Capital Market. Recent Developments Acquisition of Mimi ’ s Rock Corp On December 4, 2022, the Company entered into an Arrangement Agreement with Mimi’s Rock Corp. (“ MRC ”), pursuant to which the Company agreed to acquire MRC.
The Company’s common stock, par value $0.01 per share (“ Common Stock ”), trades under the symbol “FTLF” on the Nasdaq Capital Market. Recent Developments Stock Split On February 7, 2025, the Company effected a 2-for-1 stock split of its Common Stock and proportionately increased the number of authorized shares of Common Stock.
Errors in the manufacture of our products could result in product recalls, significant legal exposure, adverse publicity, and decreased revenue. We face significant competition from existing suppliers of products similar to ours. If we are not able to compete with these companies effectively, we may not be able to maintain profitability.
Risks Relating to our Business and Industry We face significant competition in the markets in which we compete. If we are not able to compete effectively, we may not be able to increase sales or maintain profitability.
Tobias, All Natural Advice, and Maritime Naturals (together, the “ MRC Products "); and (iv) MusclePharm. The Company distributes the NDS Products principally through franchised General Nutrition Centers, Inc. (“ GNC ”) stores located both domestically and internationally, and, with the launch of Metis Nutrition, through corporate GNC stores in the United States.
( “ MRC ”) on February 28, 2023 (together, the “ MRC Products "); and (iv) MusclePharm, which was acquired on October 10, 2023 as a result of the acquisition of substantially all of the assets of MusclePharm Corporation (“ MusclePharm ”). - 2 - The Company distributes the NDS Products principally through franchised General Nutrition Centers, Inc.
Removed
Tobias, All Natural Advice, and Maritime Naturals (together, the “ MRC Products "); and (iv) MusclePharm. Overview FitLife Brands, Inc.
Added
Tobias, All Natural Advice, and Maritime Naturals, each acquired as a result of the acquisition of Mimi’s Rock Corp.
Removed
(the “ Company ”) is a national provider of innovative and proprietary nutritional supplements and wellness products for health-conscious consumers marketed under the following brand names: (i) NDS Nutrition, PMD Sports, SirenLabs, CoreActive, Nutrology, and Metis Nutrition (together, “ NDS Products ”); (ii) iSatori, BioGenetic Laboratories, and Energize (together, the " iSatori Products "); (iii) Dr.
Added
(“ GNC ”) stores located both domestically and internationally and, with the launch of Metis Nutrition, through corporate GNC stores in the U.S. The iSatori Products are sold through retail locations, which include specialty and mass, as well as online directly to the end consumer.
Removed
On February 28, 2023, the Company completed the acquisition of MRC. Total consideration for the acquisition of MRC was $17,099, of which $12,500 was funded using proceeds from a new term loan, and $4,599 from the Company’s available cash. See Note 8 to the financial statements for additional disclosure regarding the acquisition of MRC.
Added
All share and per share information throughout this Annual Report on Form 10-K have been retroactively adjusted to reflect the stock split. The shares of Common Stock retain a par value of $0.01 per share.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES The Company, including its subsidiaries, leases its headquarters in Omaha, Nebraska, as well as office space in Oakville, Ontario, Canada. Management believes that the Company's site is adequate to support the business and suitable for present purposes, and the property and equipment have been well maintained.
Biggest changeITEM 2. PROPERTIES The Company, including its subsidiaries, leases its headquarters in Omaha, Nebraska, as well as office space in Oakville, Ontario, Canada. Management believes that the Company's locations are adequate to support the business and suitable for present purposes, and the property and equipment have been well maintained.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES None. -13- PART II
Biggest changeITEM 4. MINE SAFETY DISCLOSURES None. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. Mine Safety Disclosures 13 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 14 ITEM 6. Selected Financial Data 15 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 24 ITEM 8.
Biggest changeITEM 4. Mine Safety Disclosures 20 PART II 20 ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 ITEM 6. Selected Financial Data 22 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 32 ITEM 8.
Removed
Consolidated Financial Statements and Supplementary Data 24 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 24 ITEM 9A. Controls and Procedures 24

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2023, there were 4,598,241 shares of Common Stock outstanding and 22 shareholders of record of the Company’s Common Stock, in addition to an undetermined number of holders whose shares are held in “street name.” The following table sets forth the high and low closing prices for our Common Stock for the periods indicated: High Low Fiscal Year 2023 First Quarter (January - March 2023) $ 19.19 $ 15.50 Second Quarter (April - June 2023) $ 17.25 $ 15.50 Third Quarter (July - September 2023) $ 19.32 $ 15.28 Fourth Quarter (October - December 2023) $ 22.45 $ 18.62 Fiscal Year 2022 First Quarter (January - March 2022) $ 16.70 $ 11.80 Second Quarter (April - June 2022) $ 11.10 $ 9.50 Third Quarter (July - September 2022) $ 16.80 $ 10.25 Fourth Quarter (October - December 2022) $ 17.00 $ 14.05 On March 28, 2024, the closing price of our Common Stock was $23.81 per share.
Biggest changeAs of December 31, 2024, there were 9,210,216 shares of Common Stock outstanding and 20 shareholders of record of the Company’s Common Stock, in addition to an undetermined number of holders whose shares are held in “street name.” - 20 - The following table sets forth the high and low closing prices for our Common Stock for the periods indicated: High Low Fiscal Year 2024 First Quarter (January - March 2024) $ 12.00 $ 9.60 Second Quarter (April - June 2024) $ 17.50 $ 12.25 Third Quarter (July - September 2024) $ 16.89 $ 14.59 Fourth Quarter (October - December 2024) $ 17.44 $ 15.13 Fiscal Year 2023 First Quarter (January - March 2023) $ 9.60 $ 7.75 Second Quarter (April - June 2023) $ 8.63 $ 7.75 Third Quarter (July - September 2023) $ 9.66 $ 7.64 Fourth Quarter (October - December 2023) $ 11.22 $ 9.31 Share Repurchase Program On August 16, 2019, the Company approved a share repurchase program, pursuant to which the Board authorized management to repurchase up to $500,000 of the Company's Common Stock over the subsequent 24 months (the " Share Repurchase Program ").
Share Repurchase Program On August 16, 2019, the Company approved a share repurchase program, pursuant to which the Board authorized management to repurchase up to $500,000 of the Company's Common Stock over the subsequent 24 months (the " Share Repurchase Program "), as amended September 23, 2019 to increase the repurchase amount to $1,000,000, and include shares of the Company's Common Stock, its Series A Convertible Preferred Stock, par value $0.01 per share (" Series A Preferred "), and warrants to purchase shares of the Company's Common Stock (" Warrants ") in the Share Repurchase Program, to be repurchased over the next 24 months, at a purchase price, in the case of Common Stock, equal to the fair market value of the Company's Common Stock on the date of purchase, and in the case of Series A Preferred and Warrants, at a purchase price determined by management, with the exact date and amount of such purchases to be determined by management; further amended on November 6, 2019 to increase the repurchase amount to $2,500,000 over the subsequent 24 months, and further amended on February 1, 2021 to increase the repurchase amount to up to $5,000,000 over the subsequent 24 months.
The Share Repurchase Program was amended September 23, 2019 to increase the repurchase amount to $1,000,000, and include shares of the Company's Common Stock, its Series A Convertible Preferred Stock, par value $0.01 per share (" Series A Preferred "), and warrants to purchase shares of the Company's Common Stock (" Warrants ") in the Share Repurchase Program, to be repurchased over the next 24 months, at a purchase price, in the case of Common Stock, equal to the fair market value of the Company's Common Stock on the date of purchase, and in the case of Series A Preferred and Warrants, at a purchase price determined by management, with the exact date and amount of such purchases to be determined by management; further amended on November 6, 2019 to increase the repurchase amount to $2,500,000 over the subsequent 24 months; and further amended on February 1, 2021 to increase the repurchase amount to up to $5,000,000 over the subsequent 24 months.
All other terms of the Share Repurchase Program remain unchanged. During the year ended December 31, 2023, the Company did not repurchase any shares of the Company’s Common Stock under the Share Repurchase Program.
All other terms of the Share Repurchase Program remain unchanged. During the year ended December 31, 2024, the Company did not repurchase any shares of the Company’s Common Stock under the Share Repurchase Program. As of December 31, 2024, the Company may purchase up to $5,000,000 of additional shares of Common Stock under the Share Repurchase Program.
Securities Authorized for Issuance under Equity Compensation Plans For a discussion of our equity compensation plans, please see Item 11 of this Annual Report.
Recent Sales of Unregistered Securities No unregistered securities were issued during the fiscal year. Transfer Agent Our transfer agent and registrar for the Common Stock is Colonial Stock Transfer located in Sandy, Utah. Securities Authorized for Issuance under Equity Compensation Plans For a discussion of our equity compensation plans, please see Item 11 of this Annual Report. - 21 -
Removed
Recent Sales of Unregistered Securities No unregistered securities were issued during the fiscal year.
Removed
As of December 31, 2023, the Company may purchase up to $5,000,000 of additional shares of Common Stock under the Share Repurchase Program. -14- Common Stock repurchase activity under our publicly announced Share Repurchase Program during each quarter of 2023 and 2022 was as follows: Trade date Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced programs Dollar value of shares that may yet be purchased First quarter ended March 31, 2022 - - - $ 3,169,917 Second quarter ended June 30, 2022 - - - $ 3,169,917 Third quarter ended September 30, 2022 - - - $ 3,169,917 Fourth quarter ended December 31, 2022 48,596 $ 15.86 48,596 $ 2,398,979 Subtotal 48,596 48,596 $ 2,398,979 First quarter ended March 31, 2023 - - - $ 5,000,000 Second quarter ended June 30, 2023 - - - $ 5,000,000 Third quarter ended September 30, 2023 - - - $ 5,000,000 Fourth quarter ended December 31, 2023 - - - $ 5,000,000 Subtotal - - - $ 5,000,000 Transfer Agent Our transfer agent and registrar for the Common Stock is Colonial Stock Transfer located in Sandy, Utah.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Year ended December 31, 2023 Year ended December 31, 2022 $ Change % Change Revenue $ 52,700 $ 28,803 $ 23,897 83 % Cost of goods sold 31,268 16,769 14,499 86 % Gross profit 21,432 12,034 9,398 78 % Gross margin percentage 40.7 % 41.8 % Operating expense: Selling, general and administrative expense 12,161 6,010 6,151 102 % Merger and acquisition related expense 1,627 257 1,370 533 % Depreciation and amortization 94 66 28 42 % Total operating expense 13,882 6,333 7,549 119 % Income from operations 7,550 5,701 1,849 32 % Other expense (income) 547 (121 ) 668 n/m % Provision for income tax 1,707 1,393 314 23 % Net income $ 5,296 $ 4,429 $ 867 20 % Fiscal Year Ended December 31, 2023 Compared to Fiscal Year Ended December 31, 2022 Revenue.
Biggest changeResults of Operations Year ended December 31, 2024 Year ended December 31, 2023 $ Change % Change Revenue $ 64,469 $ 52,700 $ 11,769 22 % Cost of goods sold 36,389 31,268 5,121 16 % Gross profit 28,080 21,432 6,648 31 % Gross margin percentage 43.6 % 40.7 % n/m 2.9 % Operating expense: Advertising and marketing 4,626 4,276 350 8 % Selling, general and administrative (“ SG&A ”) 9,972 7,885 2,087 26 % Merger and acquisition related expense 255 1,627 (1,372 ) (84 )% Depreciation and amortization 108 94 14 15 % Total operating expense 14,961 13,882 1,079 8 % Income from operations 13,119 7,550 5,569 74 % Other expense (income) 1,248 547 701 128 % Provision for income tax 2,887 1,707 1,180 69 % Net income $ 8,984 $ 5,296 $ 3,688 70 % Fiscal Year Ended December 31, 2024 Compared to Fiscal Year Ended December 31, 2023 Revenue.
As presented below, EBITDA excludes interest, foreign exchange gains and losses, income taxes, and depreciation and amortization. Adjusted EBITDA excludes—in addition to interest, taxes, depreciation and amortization—stock-based compensation, merger and acquisition related expense and other non-recurring costs.
As presented below, EBITDA excludes interest, foreign exchange gains and losses, income taxes, and depreciation and amortization. Adjusted EBITDA excludes—in addition to interest, foreign exchange gains and losses, taxes, depreciation and amortization—stock-based compensation, merger and acquisition related expense and other non-recurring costs.
Off-Balance Sheet Arrangements Other than contractual obligations incurred in the normal course of business, we do not have any off-balance sheet financing arrangements or liabilities, retained or contingent interests in transferred assets or any obligation arising out of a material variable interest in an unconsolidated entity. -23-
Off-Balance Sheet Arrangements Other than contractual obligations incurred in the normal course of business, we do not have any off-balance sheet financing arrangements or liabilities, retained or contingent interests in transferred assets or any obligation arising out of a material variable interest in an unconsolidated entity.
The Amended Credit Agreement further contains customary representations and warranties of the Company; customary indemnification provisions whereby the Company will indemnify Bank for certain losses arising out of inaccuracies in, or breaches of, the representations, warranties and covenants of the Company, and certain other matters; and customary affirmative and negative covenants, including covenants to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.25 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending December 31, 2023, a Funded Debt to EBITDA Ratio (as defined in the Credit Agreement) of not more than 2.50 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending March 31, 2024, and to the extent the Term Loans still have a balance as of June 30, 2025 and a Cash Flow Leverage threshold (as defined in the Credit Agreement) of at least 1.15 is not met, the Company will be required to make a prepayment on the Term Loan equal to 50% of the Excess Cash Flow (as defined in the Credit Agreement).
The Amended Credit Agreement further contains customary representations and warranties of the Company; customary indemnification provisions whereby the Company will indemnify Lender for certain losses arising out of inaccuracies in, or breaches of, the representations, warranties and covenants of the Company, and certain other matters; and customary affirmative and negative covenants, including covenants to maintain a Fixed Charge Coverage Ratio (as defined in the Amended Credit Agreement) of not less than 1.25 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending December 31, 2023, a Funded Debt to EBITDA Ratio (as defined in the Amended Credit Agreement) of not more than 2.50 to 1.00 as tested quarterly on a trailing twelve-month basis, starting with the fiscal quarter ending March 31, 2024, and to the extent the Term Loans still have a balance as of June 30, 2025 and a Cash Flow Leverage threshold (as defined in the Amended Credit Agreement) of at least 1.15 is not met, the Company will be required to make a prepayment on the Term Loans equal to 50% of the Excess Cash Flow (as defined in the Amended Credit Agreement).
Distribution and platform fees are not recorded as a reduction of revenue because the Company: 1) owns the goods before they are transferred to the customer, 2) can direct Amazon, similar to other third-party logistics providers (“Logistic Providers”), to return the Company’s inventory to any location specified by the Company, 3) has the responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk, 4) is subject to credit risk (i.e., credit card chargebacks), 5) establishes prices of its products, 6) can determine who fulfills the goods to the customer (Amazon or the Company) and 7) can limit quantities or stop selling the goods at any time.
Distribution and platform fees are not recorded as a reduction of revenue because the Company: (1) owns the goods before they are transferred to the customer, (2) can direct Amazon, similar to other third-party logistics providers (“ Logistic Providers ”), to return the Company’s inventory to any location specified by the Company, (3) has the responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk, (4) is subject to credit risk (i.e., credit card chargebacks), (5) establishes prices of its products, (6) can determine who fulfills the goods to the customer (Amazon or the Company) and (7) can limit quantities or stop selling the goods at any time.
If the Company’s stock price experiences significant price and volume fluctuations, this will impact the fair value of the reporting unit, which can lead to potential impairment in future periods. There were no impairment charges incurred during the year ended December 31, 2023. Revenue Recognition The Company’s revenue is comprised of sales of nutritional supplements and wellness products to consumers.
If the Company’s stock price experiences significant price and volume fluctuations, this will impact the fair value of the reporting unit, which can lead to potential impairment in future periods. There were no impairment charges incurred during the year ended December 31, 2024. Revenue Recognition The Company’s revenue is comprised of sales of nutritional supplements and wellness products to consumers.
The Amended Credit Agreement contains customary events of default (each an “ Event of Default ”), which upon the occurrence of an Event of Default, as defined in the Amended Credit Agreement, among other things, interest will accrue at the Applicable Rate plus 2% per annum, and the Bank may declare all Obligations, with interest thereon, immediately due and payable.
The Amended Credit Agreement contains customary events of default (each an “ Event of Default ”), which upon the occurrence of an Event of Default, as defined in the Amended Credit Agreement, among other things, interest will accrue at the applicable rate plus 2% per annum, and the Lender may declare all obligations, with interest thereon, immediately due and payable.
The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying consolidated statements of income and comprehensive income. As of December 31, 2023, and 2022, the Company has not established a liability for uncertain tax positions.
The Company accrues interest and penalties, if incurred, on unrecognized tax benefits as components of the income tax provision in the accompanying consolidated statements of income and comprehensive income. As of December 31, 2024 and 2023, the Company has not established a liability for uncertain tax positions.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products to a customer. -18- All products sold by the Company are distinct individual products and consist of nutritional supplements and wellness products.
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products to a customer. - 24 - All products sold by the Company are distinct individual products and consist of nutritional supplements and wellness products.
The Company currently anticipates that cash derived from operations and existing cash resources, along with available borrowings under the Line of Credit, will be sufficient to provide for the Company’s liquidity for the next twelve months. -22- The Company is dependent on cash flow from operations and amounts available under the Line of Credit to satisfy its working capital requirements.
The Company currently anticipates that cash derived from operations and existing cash reserves, along with available borrowings under the Line of Credit, will be sufficient to provide for the Company’s liquidity for the next twelve months. The Company is dependent on cash flow from operations and amounts available under the Line of Credit to satisfy its working capital requirements.
If we determine there are any risks or issues with any specific products, we accrue sales return allowances based on management’s assessment of the overall risk and likelihood of returns in light of all information available. Total allowance for product returns, sales returns and incentive programs as of December 31, 2023 and 2022 amounted to $571 and $590, respectively.
If we determine there are any risks or issues with any specific products, we accrue sales return allowances based on management’s assessment of the overall risk and likelihood of returns in light of all information available. Total allowance for product returns, sales returns and incentive programs as of December 31, 2024 and 2023 amounted to $564 and $571, respectively.
Sales to customers in the U.S. were approximately 93% and 99% for the year ended December 31, 2023 and 2022, respectively, with the balance of sales to customers primarily in Canada. Control of products we sell transfers to customers upon shipment from our facilities or delivery to our customers, and the Company’s performance obligations are satisfied at that time.
Sales to customers in the U.S. were approximately 95% and 93% for the year ended December 31, 2024 and 2023, respectively, with the balance of sales to customers primarily in Canada. Control of products we sell transfers to customers upon shipment from our facilities or delivery to our customers, and the Company’s performance obligations are satisfied at that time.
Online revenue, which consists of revenue generated from sales on the Company’s own websites as well as third-party e-commerce platforms such as Amazon, for the year ended December 31, 2023 was approximately 63% of total revenue, compared to roughly 28% of total revenue during the same twelve-month period in 2022.
Online revenue, which consists of revenue generated from sales on the Company’s own websites as well as third-party e-commerce platforms such as Amazon, for the year ended December 31, 2024 was approximately 67% of total revenue, compared to roughly 63% of total revenue during the same twelve-month period in 2023.
Additionally, our management’s estimates of future product demand may be inaccurate, which could result in an understated or overstated provision required for excess and obsolete inventory. Total allowance for expiring, excess and slow-moving inventory items as of December 31, 2023 and 2022 amounted to $162 and $107, respectively.
Additionally, our management’s estimates of future product demand may be inaccurate, which could result in an understated or overstated provision required for excess and obsolete inventory. Total allowance for expiring, excess and slow-moving inventory items as of December 31, 2024 and 2023 amounted to $100 and $162, respectively.
Management also believes that its focus on developing its e-commerce capabilities will drive additional incremental sales in the short-term, while yielding substantial benefits in the longer-term. Cost of Goods Sold. Cost of goods sold for the year ended December 31, 2023 increased 86% to $31,268 as compared to $16,769 for the year ended December 31, 2022.
Management also believes that its focus on developing its e-commerce capabilities will drive additional incremental sales in the short-term, while yielding substantial benefits in the longer-term. Cost of Goods Sold. Cost of goods sold for the year ended December 31, 2024 increased 16% to $36,389 as compared to $31,268 for the year ended December 31, 2023.
Subject to certain terms and restrictions, GNC may require reimbursement from vendors for unsaleable returned product through either direct payment or credit against a future invoice. We also support a product return policy for iSatori Products, whereby customers can return product for credit or refund.
Subject to certain terms and restrictions, GNC may require reimbursement from vendors for unsaleable returned product through either direct payment or credit against a future invoice. We also support a product return policy for iSatori Products, whereby customers can return product for credit or refund. Product returns can and do occur from time to time and can be material.
Sales to customers in the U.S. were approximately 93% and 99% for the year ended December 31, 2023 and 2022, respectively, with the balance of sales primarily to customers in Canada.
Sales to customers in the U.S. were approximately 95% and 93% for the year ended December 31, 2024 and 2023, respectively, with the balance of sales primarily to customers in Canada.
Product returns can and do occur from time to time and can be material. -17- For the sale of goods with a right of return, the Company estimates variable consideration using the most likely amount method and recognizes revenue for the consideration it expects to be entitled to when control of the related product is transferred to the customers and records a product returns liability for the amount it expects to credit back its customers.
For the sale of goods with a right of return, the Company estimates variable consideration using the most likely amount method and recognizes revenue for the consideration it expects to be entitled to when control of the related product is transferred to the customers and records a product returns liability for the amount it expects to credit back its customers.
Information for product returns is received on a regular basis and adjusted for accordingly. Adjustments for returns are based on factual information and historical trends for all Company Products and are specific to each distribution channel. We monitor, among other things, remaining shelf life and sell-through data on a weekly basis.
Adjustments for returns are based on factual information and historical trends for all Company Products and are specific to each distribution channel. We monitor, among other things, remaining shelf life and sell-through data on a weekly basis.
Cash Provided by (Used in) Financing Activities Cash provided by financing activities for the year ended December 31, 2023 was $20,296 as compared to cash used of $750 during the year ended December 31, 2022.
Cash Provided by (Used in) Financing Activities Cash used in financing activities for the year ended December 31, 2024 was $6,983 as compared to cash provided by financing activities of $20,296 during the year ended December 31, 2023.
The fair value of stock-based payments is estimated using the Black-Scholes option-pricing model or other applicable valuation model such as the Monte Carlo valuation pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life, and future dividends.
The fair value of stock-based payments is estimated using the Black-Scholes option-pricing model or other applicable valuation model such as the Monte Carlo valuation pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life, and future dividends. The assumptions used could materially affect compensation expense recorded in future periods.
Cash Provided by Operating Activities Net cash provided by operating activities was $4,220 during the year ended December 31, 2023, compared to net cash provided by operating activities of $4,130 for the year ended December 31, 2022.
Cash Provided by Operating Activities Net cash provided by operating activities was $9,610 during the year ended December 31, 2024, compared to net cash provided by operating activities of $4,220 for the year ended December 31, 2023.
Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carryforwards for federal income tax purposes.
Based on these considerations, the Company is the principal in this arrangement. Advertising fees paid to Amazon are recorded in selling, general and administrative expense in the consolidated statements of income and comprehensive income. The Company disaggregates revenue into geographical regions and distribution channels.
Based on these considerations, the Company is the principal in this arrangement. Advertising fees paid to Amazon are recorded in advertising and marketing expense in the consolidated statements of income and comprehensive income. The Company disaggregates revenue into distribution channels, geographical regions, and collections of brands (Legacy FitLife and recently acquired brands).
The assumptions used could materially affect compensation expense recorded in future periods. -19- Recent Accounting Pronouncements See Note 2 of the Notes to the Consolidated Financial Statements included in this Annual Report for a description of recent accounting pronouncements believed by management to have a material impact on our present or future financial statements.
Recent Accounting Pronouncements See Note 2 of the Notes to the Consolidated Financial Statements included in this Annual Report for a description of recent accounting pronouncements believed by management to have a material impact on our present or future financial statements.
Stock-based payments to officers, directors, employees and consultants for acquiring goods and services from nonemployees, which include grants of employee stock options, are recognized in the financial statements based on their grant date fair values in accordance with ASC 718, Compensation-Stock Compensation .
Such issuances vest and expire according to the terms established at the issuance date. - 25 - Stock-based payments to officers, directors, employees and consultants for acquiring goods and services from non-employees, which include grants of employee stock options, are recognized in the financial statements based on their grant date fair values in accordance with ASC 718, Compensation-Stock Compensation .
Merger and acquisition related expense increased to $1,627 for the year ended December 31, 2023 compared to $257 for the same period of 2022, driven primarily by acquisition costs related to MRC. Net Income.
Merger and acquisition related expense decreased to $255 for the year ended December 31, 2024 compared to $1,627 for the same period of 2023, driven primarily by transaction costs related to the acquisition of MRC and the MusclePharm assets in 2023. Net Income.
Legacy FitLife revenue for the year ended December 31, 2023 was $28,100, a 3% decrease compared to the previous year, driven by a 9% decline in wholesale revenue, partially offset by a 14% increase in online revenue.
Legacy FitLife revenue for the year ended December 31, 2024 was $25,387, a 10% decrease compared to the previous year, driven by a 16% decline in wholesale revenue, partially offset by a 3% increase in online revenue.
The Company was in compliance with all covenants as of December 31, 2023. As of December 31, 2023 and 2022, no borrowings were outstanding on the Company’s $3,500 Line of Credit. The Company has historically financed its operations primarily through cash flow from operations and equity and debt financings.
The Company was in compliance with all covenants as of December 31, 2024. - 31 - As of December 31, 2024, the borrowings outstanding on the Term Loans and the Line of Credit were $13,125 and $0, respectively. The Company has historically financed its operations primarily through cash flow from operations and equity and debt financings.
We generated a net income of $5,296 for the year ended December 31, 2023, an increase of 20% compared to net income of $4,429 for the year ended December 31, 2022.
We generated a net income of $8,984 for the year ended December 31, 2024, an increase of 70% compared to net income of $5,296 for the year ended December 31, 2023.
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for doubtful accounts, estimating losses resulting from the inability of its customers to make required payments for products.
The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for doubtful accounts, estimating losses resulting from the inability of its customers to make required payments for products. Accounts with known financial issues are first reviewed and specific estimates are recorded.
Year ended December 31, 2023 2022 (Unaudited) (Unaudited) Net income $ 5,296 $ 4,429 Interest expense 1,025 - Interest income (289 ) (121 ) Foreign exchange (gain) loss (189 ) - Provision for income taxes 1,707 1,393 Depreciation and amortization 94 66 EBITDA 7,644 5,767 Non-cash and non-recurring adjustments Stock compensation expense 473 363 Merger and acquisition related expense 1,627 257 Amortization of inventory step-up 323 - Non-recurring loss on foreign currency forward contract 112 - Restatement-related costs - 318 Adjusted EBITDA $ 10,179 $ 6,705 -21- Liquidity and Capital Resources As of December 31, 2023, the Company had positive working capital of $4,356, compared to $18,933 at December 31, 2022.
Year ended December 31, 2024 2023 (Unaudited) (Unaudited) Net income $ 8,984 $ 5,296 Interest expense 1,367 1,025 Interest income (69 ) (289 ) Foreign exchange (gain) loss (50 ) (189 ) Provision for income taxes 2,887 1,707 Depreciation and amortization 108 94 EBITDA 13,227 7,644 Non-cash and non-recurring adjustments Stock-based compensation 459 473 Merger and acquisition related 255 1,627 Restructuring costs 184 Amortization of inventory step-up - 323 Non-recurring loss on foreign currency forward contract - 112 Adjusted EBITDA $ 14,125 $ 10,179 - 30 - Liquidity and Capital Resources As of December 31, 2024, the Company had positive working capital of $6,832 compared to $4,356 at December 31, 2023.
Stock Compensation.Expense The Company periodically issues restricted share units (“ RSUs ”), stock options and warrants to employees and non-employees in non-capital raising transactions for services rendered. Such issuances vest and expire according to the terms established at the issuance date.
Stock-Based Compensation The Company periodically issues restricted share units (“ RSUs ”), stock options and warrants to employees and non-employees in non-capital raising transactions for services rendered.
The Company continually reformulates and introduces new products, as well as seeks to increase both the number of stores and number of approved products that can be sold within the GNC franchise system that comprise its domestic and international distribution footprint.
The Company continually reformulates and introduces new products across its various brands, while also seeking to increase both the number of stores and number of approved products that can be sold within the GNC franchise system that comprises a significant portion its domestic and international distribution footprint.
The decrease in gross margin is primarily attributable to the amortization of the fair value step-up to MRC inventory acquired as well as higher product costs due to inflationary pressure. Excluding the $323 impact of the step-up amortization, gross margin would have been 41.3% during the year ended December 31, 2023. Selling, General and Administrative Expense.
The increase in gross margin is primarily attributable to higher margins from MRC and Legacy FitLife as well as the amortization of the fair value step-up to MRC inventory acquired in the first quarter of 2023. Excluding the $323 impact of the step-up amortization, gross margin would have been 41.3% during the year ended December 31, 2023. Advertising and Marketing.
In addition, as necessary, product returns liability may be established for significant future known or anticipated events. The types of known or anticipated events that are considered, and will continue to be considered, include, but are not limited to, changes in the retail environment and the Company's decision to continue to support new and existing products.
The types of known or anticipated events that are considered, and will continue to be considered, include, but are not limited to, changes in the retail environment and the Company's decision to continue to support new and existing products. - 23 - Information for product returns is received on a regular basis and adjusted for accordingly.
Our principal sources of liquidity at December 31, 2023 consisted of $1,139 of cash and $2,046 of accounts receivable.
Our principal sources of liquidity at December 31, 2024 consisted of $4,468 of cash and $1,626 of accounts receivable.
The increase in cash provided by operating activities was driven primarily by the acquisition of MRC, which was largely offset by transaction-related costs as well as payment of a number of payables and other expenses that were accrued at MRC at the time of the acquisition.
The increase in cash provided by operating activities was primarily due to the higher net income driven by the acquisitions of MRC and the MusclePharm assets, as well as the payment of the transaction-related costs and other payables and expenses that were accrued at MRC at the time the Company acquired MRC in 2023.
Online revenue during the year ended December 31, 2023 was approximately 63% of total revenue, compared to roughly 28% of total revenue during the same twelve-month period in 2022.
During the year ended December 31, 2024, MusclePharm generated revenue of $10,046, of which approximately half was generated from wholesale customers and half from online sales. Online revenue during the year ended December 31, 2024 was approximately 67% of total revenue, compared to roughly 63% of total revenue during the same twelve-month period in 2023.
Cash Used in Investing Activities Cash used in investing activities for the fiscal year ended December 31, 2023 was $35,993 and $0 during the years ended December 31, 2023 and 2022, respectively. The Company used $17,099 for the acquisition of MRC and $18,788 for the acquisition of MusclePharm assets during the year ended December 31, 2023.
During the year ended December 31, 2023, the Company paid $17,099 for the acquisition of MRC and $18,788 for the acquisition of MusclePharm assets.
Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped into categories by the number of days the balance is past due, and the estimated loss is recorded based upon management’s assessment of collectability.
The remaining accounts receivable balances are then grouped into categories by the number of days the balance is past due, and the estimated loss is recorded based upon management’s assessment of collectability. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered.
This 78% increase in gross profit is attributable to higher revenue driven primarily by the acquisition of MRC. Gross Margin . Gross margin for the year ended December 31, 2023 decreased to 40.7% from 41.8% for the year ended December 31, 2022.
This 31% increase in gross profit is principally attributable to higher MRC gross profit as well as incremental gross profit from MusclePharm. Gross Margin . Gross margin for the year ended December 31, 2024 increased to 43.6% from 40.7% for the year ended December 31, 2023.
Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. As of December 31, 2023 and 2022, the Company had provided a reserve for doubtful accounts of $17 and $50, respectively. Income Taxes The Company accounts for income taxes under FASB ASC Topic 740, Income Taxes (“ ASC 740 ”).
As of December 31, 2024 and 2023, the Company had provided a reserve for doubtful accounts of $41 and $17, respectively. Income Taxes The Company accounts for income taxes under FASB Accounting Standards Codification (“ ASC ”) Topic 740, Income Taxes (“ ASC 740 ”).
The increase of $14,499 is primarily due to an increase in revenue attributable to the acquisition of MRC as well as higher distribution costs resulting from increased sales through online channels. -20- Gross Profit. Gross profit for the year ended December 31, 2023 increased to $21,432 as compared to $12,034 for the year ended December 31, 2022.
The increase of $5,121 is primarily due to an increase in revenue attributable to the acquisitions of MRC and the MusclePharm assets. Gross Profit. Gross profit for the year ended December 31, 2024 increased to $28,080 as compared to $21,432 for the year ended December 31, 2023.
Revenue for the year ended December 31, 2023 increased 83% to $52,700 as compared to $28,803 for the year ended December 31, 2022. The increased revenue for the year ended December 31, 2023 compared to the prior year is primarily due to revenue generated from MRC, which was acquired in the first quarter of 2023.
Revenue for the year ended December 31, 2024 increased 22% to $64,469 as compared to $52,700 for the year ended December 31, 2023. The increased revenue for the year ended December 31, 2024 compared to the prior year is primarily due to the acquisition of MRC and the MusclePharm assets, partially offset by a decline in Legacy FitLife revenue.
The increase in net income for the year ended December 31, 2023 compared to the same period in 2022 was primarily attributable to the acquisition of MRC, partially offset by approximately $2.1 million of non-recurring items associated with the transaction.
The increase in net income for the year ended December 31, 2024 compared to the same period in 2023 was primarily attributable to higher revenue and gross profit from MRC, incremental revenue and gross profit from MusclePharm, as well as a reduction in acquisition-related expense due to the acquisitions of MRC and the MusclePharm assets that closed during 2023, partially offset by incremental SG&A expense and higher interest expense due to the debt borrowed in conjunction with the acquisition of the MusclePharm assets.
Selling, general and administrative (“ SG&A ”) expense for the year ended December 31, 2023 increased by $6,151 to $12,161 as compared to $6,010 for the year ended December 31, 2022. The increase was primarily due to the inclusion of SG&A expense in the Company’s consolidated financial statements attributable to MRC. Merger and Acquisition Related Expense.
SG&A expense for the year ended December 31, 2024 increased by $2,087 to $9,972 as compared to $7,885 for the year ended December 31, 2023. The increase was primarily due to the full-period impact of MRC SG&A as well as higher personnel costs (including salaries and benefits) and higher professional fees.
Acquisition of MusclePharm Assets On October 10, 2023, the Company acquired substantially all of the assets of MusclePharm Corporation (“ MusclePharm ”) through an asset purchase transaction under Section 363 of the U.S. Bankruptcy Code.
( “ MRC ”) on February 28, 2023 (together, the “ MRC Products "); and (iv) MusclePharm, which was acquired on October 10, 2023 as a result of the acquisition of substantially all of the assets of MusclePharm Corporation (“ MusclePharm ”).
Removed
Unless otherwise stated, all dollar amounts are in thousands, except per share data. Recent Developments Acquisition of Mimi ’ s Rock Corp On December 4, 2022, the Company entered into an Arrangement Agreement with Mimi’s Rock Corp. (“ MRC ”), pursuant to which the Company agreed to acquire MRC.
Added
Unless otherwise stated, all dollar amounts are in thousands, except per share data. Products and Recent Acquisitions FitLife Brands, Inc.
Removed
On February 28, 2023, the Company completed the acquisition of MRC for $17,099. Of this amount, $12,500 was funded using proceeds from a term loan provided by First Citizens Bank, with the remainder funded from the Company’s available cash balances. See Note 8 to the financial statements for additional disclosure regarding the acquisition.
Added
(the “ Company ”) is a provider of innovative and proprietary nutritional supplements and wellness products for health-conscious consumers marketed under the following brand names: (i) NDS Nutrition, PMD Sports, SirenLabs, Core Active, Nutrology, and Metis Nutrition (together, “ NDS Products ”); (ii) iSatori, BioGenetic Laboratories, and Energize (together, the " iSatori Products "); (iii) Dr.
Removed
The Company acquired substantially all of the assets and assumed none of the liabilities of MusclePharm other than de minimus cure costs relating to certain assumed contracts. Total consideration for the acquisition was approximately $18,500.
Added
Tobias, All Natural Advice, and Maritime Naturals, each acquired as a result of the acquisition of Mimi’s Rock Corp.
Removed
Of this amount, $10,000 was funded using proceeds from a new term loan provided by First Citizens Bank, with the remainder funded from the Company’s available cash balances. See Note 9 to the financial statements for additional disclosure regarding the acquisition.
Added
Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. - 22 - Accounts Receivable and Allowance for Doubtful Accounts All of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest.
Removed
Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates. Foreign Currency Translation The functional currency of the Company is the U.S. dollar. The functional currency of the Company’s Canadian subsidiaries is the Canadian dollar. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars using end-of-period exchange rates.
Added
In addition, as necessary, product returns liability may be established for significant future known or anticipated events.
Removed
Changes in reported amounts of assets and liabilities of foreign subsidiaries that occur as a result of changes in exchange rates between foreign subsidiaries’ functional currencies and the U.S. dollar are included in foreign currency translation adjustment. Foreign currency translation adjustment is included as a component of stockholders’ equity in the accompanying consolidated balance sheets.
Added
MRC was acquired February 28, 2023, and as such, only ten months of MRC revenue were included in the Company’s financial statements for the year ended December 31, 2023. The MusclePharm assets were acquired on October 10, 2023.
Removed
Revenue and expense transactions use an average rate prevailing during the period of the related transaction.
Added
The Company’s wholesale revenue continues to be challenged by declining customer counts in the brick-and-mortar stores of our wholesale partners. - 26 - MRC revenue for the year ended December 31, 2024 was $29,036. MRC revenue for the period from February 28, 2023 to December 31, 2023 was $24,370.
Removed
Transaction gains and losses that arise from exchange rate fluctuations denominated in a currency other than the functional currency of each subsidiary are included in the results of operations as incurred. -16- Accounts Receivable and Allowance for Doubtful Accounts All of the Company’s accounts receivable balance is related to trade receivables.
Added
Advertising and marketing expense for the year ended December 31, 2024 increased to $4,626 as compared to $4,276 for the same period of the prior year. The 8% increase is primarily due to the full-period impact of MRC advertising and marketing as well as incremental advertising and marketing expense following the acquisition of the MusclePharm assets. SG&A.
Removed
The acquisition of MusclePharm had minimal impact on revenue due to (1) the transaction closing during the fourth quarter, (2) the need to procure inventory since only $195 of inventory was acquired in the asset purchase, and (3) the need to negotiate new commercial agreements with MusclePharm’s existing customers.
Added
In addition, the Company incurred non-recurring severance costs of $184 during the year ended December 31, 2024. Merger and Acquisition Related Expense.
Removed
Although no assurances can be given, management believes that online revenue will continue to increase in subsequent periods relative to prior comparable periods given management’s focus on higher margin online sales and the acquisition of both MRC and MusclePharm, which were consummated in the first and fourth quarters of fiscal 2023, respectively.
Added
Supplemental Discussion of Performance of Acquired Brands Management frequently receives questions from investors regarding the performance of brands subsequent to their acquisition by the Company. In an effort to be responsive to these questions, the Company is providing additional disclosure herein.
Removed
The decrease in working capital is principally attributable to (i) the acquisition of MusclePharm for $18,788, of which $10,000 was funded from proceeds of the Amended Credit Agreement, defined below, and $8,788 from the Company’s available cash, and (ii) the acquisition of MRC for $17,099, of which $12,500 was funded from proceeds of the Credit Agreement, defined below, and $4,599 from the Company’s available cash, partially offset by cash flows from operating activities during fiscal 2023.
Added
Management intends to provide this level of disclosure for no more than two years following a transaction, after which the performance of acquired brands will be reported as part of Legacy FitLife results. - 27 - One of the primary metrics used by management to evaluate the performance of the Company’s brands is contribution, a non-GAAP financial measure which management defines as gross profit less advertising and marketing expenditures.
Removed
The increase in cash provided by financing activities is primarily attributable to the funding of the Term Loans during the first and fourth quarters of fiscal 2023.
Added
Other companies may also report contribution as a performance metric, but their definition or calculation of contribution may differ from the Company’s.
Added
Management believes that contribution, as defined by the Company, is a particularly relevant performance metric since it incorporates the gross profit associated with a specific brand or collection of brands as well as the advertising and marketing expenditures associated with the same brand or brands.
Added
With limited exceptions, other operating expenses incurred by the Company are generally not allocable to a specific brand or collection of brands. Other than for MusclePharm, the numbers in the contribution tables presented below represent the performance of a collection of brands. Legacy FitLife consists of nine brands and MRC consists of three brands.
Added
These collections of brands do not meet the definition of operating segments and are not managed as such.
Added
Legacy FitLife (Unaudited) 2023 2024 Q4 Q1 Q2 Q3 Q4 Wholesale revenue $ 4,011 $ 4,506 $ 4,224 $ 3,859 $ 3,210 Online revenue 2,134 2,455 2,578 2,443 2,112 Total revenue 6,145 6,961 6,802 6,302 5,322 Gross profit 2,480 2,928 3,006 2,684 2,115 Gross margin 40.4 % 42.1 % 44.2 % 42.6 % 39.7 % Advertising and marketing 71 80 94 70 59 Contribution $ 2,409 $ 2,848 $ 2,912 $ 2,614 $ 2,056 Contribution as a % of revenue 39.2 % 40.9 % 42.8 % 41.5 % 38.6 % For the fourth quarter of 2024, Legacy FitLife revenue declined 13% compared to the same period last year, primarily driven by a 20% decline in wholesale revenue.
Added
During the fourth quarter, a commercial dispute with GNC, the Company’s largest customer, resulted in the Company rejecting all purchase orders from GNC beginning on December 1, 2024. However, any product that was ordered by GNC prior to December 1, 2024 continued to be shipped and was all received by GNC prior to the end of December 2024.
Added
Subsequent to the end of the fourth quarter, in early January 2025, the Company began selling and shipping product directly to its GNC franchisee customers. On January 23, 2025, the Company and GNC settled their commercial dispute and the Company immediately began accepting purchase orders from GNC, with shipments to the GNC distribution centers beginning approximately two weeks later.
Added
The Company continued shipping directly to GNC franchisees until the GNC distribution centers were restocked.
Added
Subsequent to the distribution centers being restocked during February 2024, in the event GNC distribution centers do not have adequate inventory to fulfill franchisee orders of the Company’s products, the Company may make shipments directly to GNC franchisees in order to ensure continued availability of the Company’s products on store shelves.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rates Our exposure to risk for changes in interest rates relates primarily to borrowings under the Amended Credit Agreement (which includes Term Loans A and B as well as our existing Line of Credit), and our investments in short-term financial instruments.
Biggest changeThe Company has not entered into any foreign currency hedging transactions during the year ended December 31, 2024. Interest Rates Our exposure to risk for changes in interest rates relates primarily to borrowings under the Amended Credit Agreement (which includes the Term Loans as well as our Line of Credit), and our investments in short-term financial instruments.
As a result, our financial results may be materially affected by factors such as changes in foreign currency exchange rates or economic conditions in foreign markets. Foreign Currency In January 2023, the Company entered into a foreign currency hedging transaction to mitigate the risk of adverse changes in the USD/CAD exchange rate with respect to the pending acquisition of MRC.
As a result, our financial results may be materially affected by factors such as changes in foreign currency exchange rates or economic conditions in foreign markets. - 32 - Foreign Currency In January 2023, the Company entered into a foreign currency hedging transaction to mitigate the risk of adverse changes in the USD/CAD exchange rate with respect to the pending acquisition of MRC.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our business is conducted principally in the United States. However, due to the MRC acquisition in 2023, the Company now has more exposure to fluctuations in foreign currencies.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our business is conducted principally in the U.S. However, due to the MRC acquisition in 2023, the Company now has more exposure to fluctuations in foreign currencies.
As of December 31, 2023, the Company had $20,125 outstanding on the Term Loans and $0 under its existing Line of Credit. Investments of our existing cash balances in both fixed-rate and floating-rate interest-earning instruments carry some interest rate risk.
As of December 31, 2024, the Company had $13,125 outstanding on the Term Loans and $0 under its Line of Credit. Investments of our cash balances in both fixed-rate and floating-rate interest-earning instruments carry some interest rate risk.

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