INERGETICS INC

The Company entered into a securities purchase agreement (“SPA”), dated as of July 16, 2015, with two (2) accredited investors (“Buyers 1 & 2”). Pursuant to the terms of SPA, Buyers 1 & 2 each purchased from the Company, a 12% convertible promissory notes of the Company, in the aggregate principal amount of $145,500 per note or $291,000 in the aggregate (“Notes 1 and 2”) which were paid for by Buyer 1 &2 on July 14, 2015 and July 16, 2015, respectively.

Notes 1 and 2 mature on July 13, 2016 and are convertible in whole or in part into shares of the Company's common stock, at the option of Buyers 1 & 2, respectively, at any time prior to the maturity dates thereof at a conversion price (collectively, the “Conversion Price”) equal to the lower of (i) a 38% discount from the lowest Trading Price of the Company’s common stock for the 10 trading days prior to the date that the holder requests a conversion and (ii) $0.07. The Conversion Price is subject to anti-dilution protection as provided in the SPA.

Notes 1 and 2 are each subject to prepayment at any time by the Company, but if such prepayment occurs at any time beginning 75 days after the issue date of Notes 1 and 2 respectively, but prior to the maturity dates thereof, the Company may prepay Notes 1 and 2 by paying to Buyers 1 & 2 an amount equal to 130% of the outstanding principal amount of Notes 1 & 2, respectively. Upon a Qualified Offering (as defined in Notes 1 and 2), the Company is required to prepay Notes 1 and 2 on the terms provided in Notes 1 and 2.

The Company entered into a securities purchase agreement (“SPA 2”), dated as of July 31, 2015, with two (2) accredited investors (“Buyers 1 & 2”). Pursuant to the terms of SPA 2, Buyers 1 & 2 each purchased from the Company, a 12% convertible promissory notes of the Company, in the aggregate principal amount of $52,500 per note or $105,000 in the aggregate (“Notes 3 and 4”) which were paid for by Buyer 1 &2 on August 3, 2015 and August 4, 2015, respectively.

In order to provide financing to have the Company’s manufacturers produce certain of the Company’s products, the Company is currently negotiating the terms of a purchase order financing arrangement with Buyers 1 & 2 (the “Potential PO Lenders”), pursuant to which the Potential PO Lenders would make available up to $1,000,000 in purchase order financing to the Company against purchase orders for the Company’s products by the Company’s customers, which purchase orders would need to be approved by the Potential PO Lenders. No assurances can be given when, if ever, a purchase order arrangement will be entered into or the terms thereof. If, a purchase order arrangement is entered into, the PO Lenders have discussed with the Company converting and/or exchanging Notes 1 and 2 into notes and/or financial obligations of the Company having the same or similar terms as the terms for any purchase order financing the Potential PO Lenders would receive if they and the Company enter into a purchasing order financing arrangement. Such Potential PO Lenders have discussed preliminarily providing the Company with an account receivable financing facility to provide the Company with funding for working capital and general corporate purposes.

Research and development cost and selling, general and administrative expenses were $515,205 compared to $1,564,032 or a decrease of $1,048,827. The decrease was attributable to reduced promotional cost of $292,012, reduced commission expense of $10,121, reduced consultants of $11,363, reduced compensation, payroll taxes and benefits in the amount of $205,847 due to reduced number of employees and less common stock issued in the quarter ended June 30, 2015. Other professional fees were reduced by $111,448. There was a decrease in licensing fee in the amount of $271,642 due to MSLO due to the agreement being terminated in the second quarter but accrued for in the first quarter of 2015. Warehouse expense was reduced by $10,367, temporary help was reduced by $10,640, travel and entertainment was reduced by $44,958 and director fees were reduced by $34,375. Management reduced expenses due to lack of proper funding.