The statements contained in this Report that are not historical are forward-looking statements, including statements regarding the Company's expectations, intentions, beliefs or strategies regarding the future. Forward-looking statements include the Company's statements regarding liquidity, anticipated cash needs and availability and anticipated expense levels. All forward-looking statements included in this Report are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statement. It is important to note that the Company's actual results could differ materially from those in such forward-looking statements. Additionally, the following discussion and analysis should be read in conjunction with the Financial Statements and notes thereto appearing elsewhere in this Report. The discussion is based upon such financial statements which have been prepared in accordance with U.S. Generally Accepted Accounting Principles and the Standards of the Public Company Accounting Oversight Board (United States).

Management's Discussion and Analysis of Financial Condition and Results of Operations

We derive our revenues from developing, manufacturing and distributing a wide variety of nutraceuticals and cosmeticeuticals, sports nutrition products, pharmaceutical and generic drugs, and prescription and non-prescription products. We also derive revenues from the distribution of our branded product lines as well as from distributing others' product lines.

Cost of goods sold is comprised of direct manufacturing and manufacturing and distribution material product costs, direct personnel compensation and other statutory benefits and indirect costs relating to labor to support product manufacture, distribution and the warehousing of production and other manufacturing overhead. In addition, for the distribution segment, the cost of all free goods for the purpose of product introduction or other incentive-based product costs are also recorded.

Research and development expenses that benefit us and that benefit our customers are charged against either cost of goods sold or included within selling, general and administrative expenses as incurred dependent upon whether the R&D relates to direct product materials expended, direct laboratory and manufacturing production costs or whether it relates to indirect or more facility and administrative type costs representing indirect salaries.

Selling, general and administrative expenses include management and general office salaries, taxes and benefits, advertising and promotional expenses, depreciation and amortization, stock compensation, insurance expenses, rents, legal and accounting costs, sales and marketing and other indirect operating costs.

Effective May 15, 2007, we discontinued our pharmacy benefit management operations, due to our mutual termination of our PBM contract with Amerigroup, formerly known as CarePlus Health. Therefore, after the contract termination date, we have not received or recorded PBM segment revenues or incurred or recorded related PBM contract expenses. We did not incur contract termination or any related exit costs associated with this contract termination.

For the three and nine months ended December 31, 2007, the following amounts, which are included in our consolidated statement of operations for the three and nine months ended December 31, 2007, as discontinued operations, were attributable to our PBM segment:

• PBM segment revenue of approximately $2.9 million;

• PBM segment gross profit of approximately $20,900;

• PBM segment selling, general and administrative expenses of approximately $20,800; and

• PBM segment exit income of approximately $8,300.

Effective October 16, 2007, we acquired 100% of the common stock of BOSS, a Florida corporation. BOSS develops, markets and distributes a wide variety of sports nutrition products, performance drinks, non-prescription dietary supplements, health and beauty care products, health food and nutritional products, soft goods and other related products. The transaction was accounted for as a purchase. The results of operations of BOSS and its subsidiaries have been included in our results of operations in our statement of operations, since the effective date of acquisition, October 16, 2007, as part of our distribution segment.

The unaudited pro forma effect of the acquisition of BOSS on our revenues, net income (loss) and net income (loss) per share, had the acquisition occurred on April 1, 2007, is as follows:

                                         Three Months             Nine Months
                                             Ended                   Ended
                                       December 31, 2007       December 31, 2007
    Revenues                          $        20,926,244     $        62,955,040


    Net income (loss)                 $        (1,569,281 )   $        (5,367,176 )


    Basic income (loss) per share     $             (0.11 )   $             (0.39 )


    Diluted income (loss) per share   $             (0.11 )   $             (0.39 )

The following amounts, which are included in our consolidated statement of operations for the three months ended December 31, 2008, were attributable to BOSS:

• Distribution revenue of approximately $8 million;

• Distribution gross profit of approximately $1.3 million;

• Selling, general and administrative expenses of approximately $1.8 million;

• Depreciation and amortization expense of approximately $48,300;

• Interest income (expense), net of approximately $(36,100); and

• Other income (expense), net of approximately $(12,600).

The following amounts, which are included in our consolidated statement of operations for the nine months ended December 31, 2008, were attributable to BOSS:

• Distribution revenue of approximately $30.7 million;

• Distribution gross profit of approximately $5.3 million;

• Selling, general and administrative expenses of approximately $5.9 million;

• Depreciation and amortization expense of approximately $141,800;

• Interest income (expense), net of approximately $(99,600); and

• Other income (expense), net of approximately $(1,200).

The impact of the results of operations of BOSS on our consolidated net loss for the three and nine months ended December 31, 2008 was net income (loss) of approximately $(579,400) and $(868,000), respectively. See Strategic and Other Activities below.

The table and the comparative analysis below for results of operations of the three and nine months ended December 31, 2008, as compared to the three and nine months ended December 31, 2007, excludes (1) the results of operations of BOSS, acquired by us effective October 16, 2007 and (2) the results of operations of our discontinued operations, the PBM segment, effective May 15, 2007.

The following table sets forth selected unaudited consolidated statements of operations data as a percentage of revenues for the periods indicated.

                                                    Three Months Ended         Nine Months Ended
                                                       December 31,               December 31,
                                                   2008           2007         2008          2007
Revenues                                            100.0 %        100.0 %      100.0 %      100.0 %
Cost of goods sold (excluding depreciation and
amortization)                                        82.0 %         77.1 %       81.4 %       78.1 %


Gross profit                                         18.0 %         22.9 %       18.6 %       21.9 %
Depreciation and amortization                        13.4 %          5.6 %       10.7 %        6.1 %
Stock compensation expense                            7.2 %          3.3 %        5.6 %        3.3 %
Selling, general and administrative expenses         67.4 %         41.3 %       59.8 %       46.1 %
Other income (expense), net                          (9.5 )%        (2.3 )%      (7.5 )%      (1.2 )%
Income (loss) before minority interest, income
taxes and preferred dividends                       (79.5 )%       (29.7 )%     (65.1 )%     (34.8 )%
Minority interest benefit                             3.0 %          2.5 %        2.8 %        3.1 %
Income tax benefit (expense)                          3.1 %          9.2 %        9.6 %       11.6 %
Preferred stock dividends                             2.7 %          1.3 %        2.3 %        1.5 %


Net income (loss)                                   (76.1 )%       (19.3 )%     (55.0 )%     (21.6 )%

Three Months Ended December 31, 2008, Compared to Three Months Ended December 31, 2007

Our analysis of the three months ended December 31, 2008, as compared to the three months ended December 31, 2007, excludes the results of operations of BOSS, acquired October 16, 2007, and our PBM segment, discontinued on May 15, 2007.

Revenues

Our total revenues decreased approximately $2.9 million, or 36.2%, to approximately $5.1 million for the three months ended December 31, 2008, from approximately $8 million for the three months ended December 31, 2007.

Manufacturing revenues decreased approximately $2.9 million, or 41.8%, to approximately $4.1 million for the three months ended December 31, 2008, as compared to approximately $7 million for the three months ended December 31, 2007. During the three months ended December 31, 2008, we experienced a decrease in sales volume driven by the significant weakening of demand for the products that we manufacture for our customers, due to the global economic downturn, which has negatively impacted end user demand for the products we produce. Manufacturing capacities and capabilities continue to be increased as we continue to enhance our existing core manufacturing equipment and standard operating procedures. We believe the reduction in demand for the products we produce could continue for some time. Consequently, based on continued economic uncertainty, we believe it is likely that our manufacturing revenues may decline further in the near future.

Distribution revenues decreased approximately $447,400, or 47.3%, to approximately $498,900 for the three months ended December 31, 2008, as compared to approximately $946,300 for the three months ended December 31, 2007. For the three months ended December 31, 2008, 370 cases of Hoodia DEX-L10 were sold versus 1,747 cases sold for the three months ended December 31, 2007. In addition, during March 2007, we had introduced a new product line DEX-C20, of which 2,232 cases were sold during the three months ended December 31, 2008. Overall, sales prices vary for all product lines and are dependent upon a customer's individual as well as aggregate purchase volumes in addition to the number of distribution points of sale and advertising dollars projected to be spent. During the three months ended December 31, 2008, we experienced a decrease in sales volume for the products we distribute, driven by increased competition at the mass retail chain level where the majority of the products are sold, as well as a significant weakening of demand for our products, due to the global economic downturn, which has negatively impacted end user demand for the products we distribute. We believe the reduction in demand for the products we distribute could continue for some time. Consequently, based on continued economic uncertainty, we believe it is likely that our distribution revenues may decline further in the near future.

Pharmaceutical revenues were approximately $504,000 for the three months ended December 31, 2008. There were no sales for this business segment for the three months ended December 31, 2007. During the three months ended December 31, 2008, pharmaceutical revenues were comprised of sales of Vetprofen ™ , the Company's brand of Carprofen, which was approved by the FDA during November 2007. Our Carprofen is sold in three different strengths: 25 mg, 75 mg and 100 mg. Of the total pharmaceutical revenues for the three months ended December 31, 2008, sales were comprised of 713 cases of 75 mg and 837 cases of 100 mg of Carprofen.

Our total gross profit decreased approximately $904,900 or 49.7%, to approximately $915,300 for the three months ended December 31, 2008, as compared to approximately $1.8 million for the three months ended December 31, 2007. Total gross margins decreased to 18% for the three months ended December 31, 2008 from 22.9% for the three months ended December 31, 2007.

Manufacturing gross profit decreased approximately $1 million, or 45.4%, to approximately $1.2 million for the three months ended December 31, 2008, as compared to approximately $2.2 million for the three months ended December 31, 2007. For the three months ended December 31, 2008 manufacturing gross margin decreased to 29.8%, from 31.8% for the three months ended December 31, 2007. Gross profit and gross margin have declined based on lower utilization of our manufacturing capacity with the lower level of our sales volume, as well as higher costs with increases in freight charges due to increased fuel costs, increases in resin and plastic-based packaging component costs, as well as increased labor costs. Current increases in this type of labor-based direct overhead costs are in line with our planned improvements surrounding enhanced standard operating and manufacturing procedures in all of our manufacturing plants. We expect that these improvements will continue to increase our visibility in the marketplaces that we compete in for new and expanded business for the upcoming fiscal year.

Distribution gross profits decreased approximately $278,500, or 66.3%, to approximately $141,700 for the three months ended December 31, 2008, as compared to approximately $420,200 for the three months ended December 31, 2007. Distribution gross margins decreased to 28.4% for the three months ended December 31, 2008, as compared to 44.4% for the three months ended December 31, 2007. Gross profits and gross margins have declined based on the lower level of our sales volume and increased competition, which caused additional short-term price concessions and a change in the chain store sales mix. In addition, gross margins can vary in a given quarter based on sales promotions and advertising efforts.

Pharmaceutical gross profits increased approximately $385,900, or 46.6%, to a gross profit deficit of approximately $442,900 for the three months ended December 31, 2008, as compared to approximately $828,700 in gross profit deficit for this business segment for the three months ended December 31, 2007. This was based primarily on the Cephalasporin and Beta-Lactam facilities that have no revenue streams but have costs associated with overall research and product development, and production and laboratory direct labor costs. The Largo, Florida generic drug plant has commenced initial manufacturing and began shipping Vetprofen ™ , its branded generic Carprofen, during the fourth fiscal quarter ended March 31, 2008, which has assisted in offsetting some of the costs associated with other research and product development, production and laboratory direct costs related to the pharmaceutical segment. The Largo, Florida Cephalasporin and generic drug plants incurred approximately $841,000 of costs with the Baltimore, Maryland Beta-Lactam facility having incurred approximately $106,000 of costs with revenue offsets of approximately $504,000. The drug revenues derived were generated from our generic drug plant in Largo, Florida. We are awaiting FDA facility approval of both the Baltimore, Maryland Beta-Lactam and the Largo, Florida Cephalosporin drug facility plants and we estimate and anticipate that we will begin to derive revenues during the fourth quarter of the fiscal year ending March 31, 2009 or the first quarter of the fiscal year ending March 31, 2010.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses consist of advertising and promotional expenses; stock compensation costs, insurance costs, research and development costs associated with the generic drug segment, personnel costs related to general management functions, finance, accounting and information systems, payroll expenses and sales commissions; professional fees related to legal, audit and tax matters; and depreciation and amortization expenses. Selling, general and administrative expenses, inclusive of stock compensation and depreciation and amortization expenses, increased approximately $471,300, or 11.8%, to approximately $4.5 million for the three months ended December 31, 2008, as compared to approximately $4 million for the three months ended December 31, 2007. An increase of approximately $134,000 was due to the increase in amortizable intangible assets related to our distribution segment; approximately $98,000 was due to the increase in purchased depreciable assets related to generic drug, cosmeceutical and nutraceutical manufacturing; approximately $222,000 increase in legal; approximately $101,000 increase in the stock compensation expense directly related to the issuance of 3-year restricted stock awards; approximately $52,000 increase in consulting fees; and approximately $374,000 increase in bad debt expense; all of which were partially offset by a decrease of approximately $391,000 in advertising and promotional expenses associated with promoting our distribution segment and related branded product lines; a decrease of approximately $56,000 in filing fees; a decrease of approximately $52,000 in repair and maintenance; and a decrease of approximately $40,000 increase in travel related expenses. As a percentage of sales, selling, general and administrative expenses increased to 88% for the three months ended December 31, 2008, from 50.3% for the three months ended December 31, 2007. We have instituted material cost reduction initiatives commencing in December 2008 and expect to begin experiencing the benefits of such initiatives commencing in our fourth fiscal quarter ended March 31, 2009. See Strategic and Other Activities below.

Operating Income (Loss)

Operating loss was approximately $3.6 million, or 70% of revenues for the three months ended December 31, 2008, compared to an operating loss of approximately $2.2 million, or 27.4% of revenues for the three months ended December 31, 2007. Although we have instituted cost reduction initiatives, the continued economic uncertainty and potential further decline in our revenues could cause us to operate in an operating loss position in the near future.

Other income (expense), net was approximately $(482,200) for the three months ended December 31, 2008, compared to approximately $(184,900) for the three months ended December 31, 2007. Interest income (expense), net, was approximately $(501,100) for the three months ended December 31, 2008, compared to approximately $(184,900) for the three months ended December 31, 2007. The increase in interest expense was primarily attributable to interest expense associated with our convertible debt in addition to our short-term obligations issued during fiscal 2008, and was partially offset by interest capitalized on our generic pharmaceutical leasehold construction. For the three months ended December 31, 2008, other income (expense), net, of approximately $18,900, primarily consisted of allowances on prior year vendor balances. For the three months ended December 31, 2007, other income (expense), net, was zero.

Income Tax Benefit (Expense)

For the three months ended December 31, 2008, we had recorded approximately $158,300 of income tax benefit as compared to approximately $730,000 of income tax benefit for the three months ended December 31, 2007. The tax benefit was based on our tax calculation of temporary and permanent differences using the effective tax rates applied to our net loss for the period, changes in information gained related to underlying assumptions about our future operations, as well as the utilization of available operating loss carryforwards. In accordance with SFAS No. 109, "Accounting for Income Taxes," we have evaluated whether it is more likely than not that the deferred tax asset will be realized. Based on available evidence, we have concluded that it is more likely than not that the increase in the asset will be realized by carrying back approximately $3.5 million of the operating loss and by carrying forward the remainder of the loss to future periods through the expiration dates of the operating loss carryforwards beginning 2021 and ending 2028.

Nine Months Ended December 31, 2008, Compared to Nine Months Ended December 31, 2007

Our analysis of the nine months ended December 31, 2008, as compared to the nine months ended December 31, 2007, excludes the results of operations of BOSS, acquired October 16, 2007, and our PBM segment, discontinued on May 15, 2007.

Revenues

Our total revenues decreased approximately $2.3 million, or 11%, to approximately $18.5 million for the nine months ended December 31, 2008, from approximately $20.8 million for the nine months ended December 31, 2007.

Manufacturing revenues decreased approximately $1.7 million, or 10.3%, to approximately $14.9 million for the nine months ended December 31, 2008, as compared to approximately $16.6 million for the nine months ended December 31, 2007. During the nine months ended December 31, 2008, we experienced a decrease in sales volume driven by the significant weakening of demand for the products that we manufacture for our customers, due to the global economic downturn which has negatively impacted end user demand for the products we produce. Manufacturing capacities and capabilities continue to be increased as we continue to enhance our existing core manufacturing equipment and standard operating procedures. We believe the reduction in demand for the products we produce could continue for some time. Consequently, based on continued economic uncertainly, we believe it is likely that our manufacturing revenues may decline further in the near future.

Distribution revenues decreased approximately $1.7 million, or 41%, to approximately $2.5 million for the nine months ended December 31, 2008, as compared to approximately $4.2 million for the nine months ended December 31, 2007. For the nine months ended December 31, 2008, 4,891 cases of Hoodia DEX-L10 were sold versus 6,819 cases sold for the nine months ended December 31, 2007. In addition, during March 2007, we had introduced a new product line DEX-C20, of which 14,296 cases were sold during the nine months ended December 31, 2008. Overall, sales prices vary for all product lines and are dependent upon a customer's individual as well as aggregate purchase volumes in addition to the number of distribution points of sale and advertising dollars projected to be spent. During the nine months ended December 31, 2008, we experienced a decrease in overall distribution sales volume, driven by increased competition at the mass retail chain level where the majority of the products are sold, as well as a significant weakening of demand for our products, due to the global economic downturn, which has negatively impacted end user demand for the products we distribute. We believe the reduction in demand for the products we distribute could continue for some time. Consequently, based on continued economic uncertainty, we believe it is likely that our distribution revenues may decline further in the near future.

Pharmaceutical revenues increased approximately $1.1 million, or 2,722.2%, to approximately $1.2 million for the nine months ended December 31, 2008, as compared to approximately $41,200 in sales for this business segment for the nine months ended December 31, 2007. During the nine months ended December 31, 2008, pharmaceutical revenues were comprised of sales of Vetprofen ™ , the Company's brand of Carprofen, which was approved by the FDA during November 2007. Our Carprofen is sold in three different strengths: 25 mg, 75 mg and 100 mg. Of the total pharmaceutical revenues for the nine months ended December 31, 2008, sales were comprised of 415 cases of 25 mg, 1,538 cases of 75 mg and 1,660 cases of 100 mg of Carprofen.

Our total gross profit decreased approximately $1.1 million or 24.6%, to approximately $3.4 million for the nine months ended December 31, 2008, as compared to approximately $4.6 million for the nine months ended December 31, 2007. Total gross margins decreased to 18.6% for the nine months ended December 31, 2008 from 21.9% for the nine months ended December 31, 2007.

Manufacturing gross profit decreased approximately $659,900, or 13.1%, to approximately $4.4 million for the nine months ended December 31, 2008, as compared to approximately $5 million for the nine months ended December 31, 2007. For the nine months ended December 31, 2008 manufacturing gross margin decreased to 29.3%, from 30.3% for the nine months ended December 31, 2007. Gross profit and gross margin have declined based on lower utilization of our manufacturing capacity with the lower level of our sales volume, as well as higher costs with increases in freight charges due to increased fuel costs, increases in resin and plastic-based packaging component costs, as well as increased labor costs. Current increases in this type of labor-based direct overhead costs are in line with our planned improvements surrounding enhanced standard operating and manufacturing procedures in all of our manufacturing plants. We expect that these improvements will continue to increase our visibility in the marketplaces that we compete in for new and expanded business for the upcoming fiscal year.

Distribution gross profits decreased approximately $923,700, or 48.6%, to approximately $976,300 for the nine months ended December 31, 2008, as compared to approximately $1.9 million for the nine months ended December 31, 2007. Distribution gross margins decreased to 39.7% for the nine months ended December 31, 2008, as compared to 45.6% for the nine months ended December 31, 2007. Gross profits and gross margins have declined based on the lower level of our sales volume and increased competition, which caused additional short-term price concessions and a change in the chain store sales mix. In addition, gross margins can vary in a given quarter based on sales promotions and advertising efforts.

Pharmaceutical gross profits increased approximately $463,000, or 19.6%, to a gross profit deficit of approximately $1.9 million for the nine months ended December 31, 2008, as compared to approximately $2.4 million in gross profit deficit for this business segment for the nine months ended December 31, 2007. This was based primarily on the Cephalasporin and Beta-Lactam facilities that have no revenue streams but have costs associated with overall research and product development, and production and laboratory direct labor costs. The Largo, Florida generic drug plant has commenced initial manufacturing and began shipping Vetprofen ™ , its branded generic Carprofen, during the fourth fiscal quarter ended March 31, 2008, which has assisted in offsetting some of the costs associated with other research and product development, production and . . .