☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2018
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT
For the transition period from N/A to N/A
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Nevada
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20-3464383
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(State or other jurisdiction of incorporation)
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(IRS Employer Identification No.)
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non–Accelerated filer
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☐
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Small reporting company
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☒
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Emerging growth company
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☐
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Class
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Outstanding at May 14, 2018
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Common stock, $0.01 par value
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10,955,099
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PAGE
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PART I - FINANCIAL INFORMATION
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Item 1.
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Condensed
Consolidated Financial Statements (unaudited)
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Condensed
Consolidated Balance Sheets as of March 31, 2018 (unaudited) and
December 31, 2017
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2
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Condensed
Consolidated Statement of Operations for the three months ended
March 31, 2018 and 2017 (unaudited)
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3
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Condensed
Consolidated Statement of Stockholders’ Equity as of and for
the three months ended March 31, 2018 (unaudited)
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4
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Condensed
Consolidated Statement of Cash Flows for the three months ended
March 31, 2018 and 2017 (unaudited)
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5
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Notes to
Condensed Consolidated Financial Statements
(unaudited)
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6
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Item 2.
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Management
Discussion & Analysis of Financial Condition and Results of
Operations
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13
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Item 3.
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Quantitative and
Qualitative Disclosures About Market Risk
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18
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Item 4.
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Controls and
Procedures
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19
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PART II - OTHER INFORMATION
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Item 1.
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Legal
Proceedings
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20
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Item 1A.
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Risk
Factors
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20
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Item 2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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20
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Item 3.
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Defaults Upon
Senior Securities
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20
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Item 5.
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Other
Information
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20
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Item 6.
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Exhibits
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21
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31.1
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Certification
of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act.
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31.2
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Certification
of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act.
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32.1
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Certification
of Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act.
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32.2
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Certification
of Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act.
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FITLIFE BRANDS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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FOR THE THREE MONTHS ENDED MARCH 31, 2018 AND 2017
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(Unaudited)
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2018
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2017
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Revenue
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$
4,614,286
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$
5,589,354
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Cost
of Goods Sold
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2,698,618
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3,668,790
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Gross
Profit
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1,915,668
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1,920,564
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OPERATING
EXPENSES:
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General
and administrative
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870,382
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1,160,069
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Selling
and marketing
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806,109
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947,386
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Depreciation
and amortization
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18,840
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119,338
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Total
operating expenses
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1,695,331
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2,226,793
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OPERATING
INCOME (LOSS)
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220,337
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(306,229
)
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OTHER
(INCOME) AND EXPENSES
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Interest
expense
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3,473
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26,661
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Gain
on sale of assets
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(526
)
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-
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Total
other expenses
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2,947
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26,661
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NET
INCOME (LOSS)
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$
217,390
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$
(332,890
)
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NET
INCOME (LOSS) PER SHARE:
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Net
income (loss) per common share - basic and diluted
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$
0.02
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$
(0.03
)
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Weighted
average common shares outstanding - basic and diluted
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10,726,710
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10,385,890
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Common Stock
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Additional
Paid-in
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Accumulated
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Capital
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Deficit
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Total
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DECEMBER
31, 2017
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10,681,710
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$
106,819
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$
31,013,043
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$
(30,208,265
)
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$
911,597
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Common
stock issued for services
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273,389
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2,734
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79,767
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82,501
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Fair value of
options issued for services
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-
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-
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10,460
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-
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10,460
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Net
loss
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-
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-
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-
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217,390
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217,390
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10,955,099
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$
109,551
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$
31,103,272
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$
(29,990,875
)
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$
1,221,948
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(Unaudited)
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2018
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2017
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Net
income (loss)
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$
217,390
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$
(332,890
)
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Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
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Depreciation
and amortization
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18,840
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119,338
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Allowance
for sales returns and doubtful accounts
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(86,517
)
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717,706
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Allowance
for inventory obsolescence
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32,794
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-
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Common
stock issued for services
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82,501
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17,500
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Fair
value of options issued for services
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10,460
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11,584
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Gain
on sale of assets
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(526
)
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-
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Changes
in operating assets and liabilities:
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Accounts
receivable
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(427,052
)
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(2,477,923
)
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Inventories
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456,095
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861,046
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Prepaid
expenses and other current assets
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139,199
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87,465
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Customer
note receivable
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5,000
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2,251
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Accounts
payable
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(265,944
)
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849,445
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Accrued
expenses and other liabilities
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(231,983
)
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121,905
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Net
cash used in operating activities
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(49,743
)
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(22,573
)
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CASH
FLOWS FROM INVESTING ACTIVITIES:
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Proceeds
from sale of assets
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2,025
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-
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Net
cash provided by investing activities
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2,025
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-
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CASH
FLOWS FROM FINANCING ACTIVITIES:
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Repayment
of line of credit
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(1,950,000
)
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-
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Repayment
of term loan
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(414,877
)
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(137,320
)
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Secured
payable to factor
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1,715,434
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-
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Net
cash used in financing activities
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(649,443
)
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(137,320
)
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DECREASE
IN CASH
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(697,162
)
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(159,893
)
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CASH,
BEGINNING OF PERIOD
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1,261,933
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1,293,041
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CASH,
END OF PERIOD
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$
564,772
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$
1,133,148
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Supplemental disclosure operating activities
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Cash
paid for interest
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$
3,473
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$
26,661
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March
31, 2018
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March
31, 2017
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Options
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810,284
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969,924
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Warrants
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43,300
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60,620
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Total
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853,584
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1,030,544
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March
31,
2018
(unaudited)
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December
31,
2017
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Finished
goods
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$
1,959,811
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$
2,511,260
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Components
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506,655
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411,301
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Allowance for
obsolescence
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(81,524
)
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(48,730
)
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Total
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$
2,384,942
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$
2,873,831
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March
31,
2018
(unaudited)
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December
31,
2017
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Equipment
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$
967,321,
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$
971,820
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Accumulated
depreciation
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(692,473
)
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(676,633
)
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Total
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$
274,848
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$
295,187
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Outstanding
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Exercise
Price
|
Issuance
Date
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Expiration
Date
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212,074
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$
1.39
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05/09/16
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05/09/21
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4,330
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$
1.44
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09/29/15
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09/29/25
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40,000
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$
2.20
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04/11/14
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04/11/19
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370,000
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$
2.30
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02/23/15
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02/23/20
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93,503
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$
3.31
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02/16/12
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02/16/22
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18,966
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$
4.62
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05/13/15
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05/13/25
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4,330
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$
5.49
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04/08/15
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04/08/25
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1,732
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$
5.81
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03/05/15
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03/05/25
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32,331
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$
5.89
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03/23/15
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03/23/25
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8,660
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$
12.13
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09/17/13
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09/17/23
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7,038
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$
12.99
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11/14/12
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09/27/22
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17,320
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$
14.43
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01/16/13
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11/30/22
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810,284
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Outstanding
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Exercise
Price
|
Issuance
Date
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Expiration
Date
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43,300
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$
12.99
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07/16/13
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07/16/18
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43,300
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Registrant
Date: May 15, 2018
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FitLife Brands, Inc.
By:
/s/
Dayton Judd
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Dayton Judd
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Interim Chief Executive Officer and Director
(Principal Executive Officer)
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Registrant
Date: May 15, 2018
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FitLife Brands, Inc.
By:
/s/ Michael
Abrams
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Michael Abrams
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Chief Financial Officer and Director
(Principal Financial Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of FitLife
Brands, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
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a.
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Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluations: and
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d.
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Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting;
and
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5.
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The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons
performing the equivalent functions):
|
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a.
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All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information;
and
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|
b.
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Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
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Registrant
Date: May 15, 2018
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FitLife Brands, Inc.
By: /s/
Dayton Judd
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Dayton
Judd
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|
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Interim Chief Executive Officer and Director
(Principal Executive Officer)
|
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1.
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I have reviewed this Quarterly Report on Form 10-Q of FitLife
Brands, Inc.;
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2.
|
Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
|
3.
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Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this report;
|
4.
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The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
|
|
b.
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Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluations: and
|
|
d.
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Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting;
and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons
performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information;
and
|
|
b.
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Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
|
Registrant
Date: May 15, 2018
|
|
FitLife Brands, Inc.
By: /s/ Michael Abr
ams
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|
|
|
Michael Abrams
|
|
|
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Chief Financial Officer and Director
(Principal Financial Officer)
|
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(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.
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Registrant
Date: May 15, 2018
|
|
FitLife Brands, Inc.
By: /s/ Dayton Judd
|
|
|
|
Dayton Judd
|
|
|
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Interim Chief Executive Officer and Director
(Principal Executive Officer)
|
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(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.
|
Registrant
Date: May 15, 2018
|
|
FitLife Brands, Inc.
By: /s/ Michael Abrams
|
|
|
|
Michael Abrams
|
|
|
|
Chief Financial Officer and Director
(Principal Financial Officer)
|
|