Discontinued Operations

9 Months Ended

Sep. 30, 2011

Discontinued Operations

Note 3—Discontinued Operations

In August 2006, the Company acquired the assets and business of the Alan James Group, LLC (the Alan James Group). The Alan James Group was a provider of products and services in the consumer healthcare marketplace and the acquired business primarily developed, marketed and sold nutritional products and engaged in related activities. Prior to the opening of business on July 1, 2009, the Company and its wholly-owned subsidiary, AJG Brands, Inc. entered into an asset purchase agreement with Nutraceutical Corporation and Pep Products, Inc., a wholly-owned subsidiary of Nutraceutical Corporation, pursuant to which substantially all of the Alan James Group business and assets of AJG Brands, Inc. were sold to Pep Products, Inc.

Prior to June 30, 2011, the Company reserved for estimated sales returns, discontinued items and trade promotions applicable to the non-acquired accounts resulting from our sale of substantially all of the assets of the Alan James Group business. On June 30, 2011, the Company completed an analysis of all return activity since the time of sale and determined that the remaining reserve was no longer required. The adjustment was reflected in income from discontinued operations in the June 30, 2011 statement of operations. Since June 30, 2011, payments related to returns were insignificant and any future payments are expected to be minimal.

The balance of other current assets of $200,000 at December 31, 2010 represents a receivable from Nutraceutical Corporation in connection with the transaction in June 2009 which was received on July 1, 2011.