E-101

Warehouse and Inventory Control

Section E — Materials Management Revision 13 7 pages

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1.0 Purpose

The purpose of this procedure is to define the process for the allocation, storage, and annual
inventory of all received raw materials, packaging components, and printed packaging.

2.0 Scope

This procedure applies to all raw materials, packaging components and printed packaging stored

at Ion Labs, Inc.

3.0 Responsibility
3.1. Purchasing, Warehouse and Inventory Control personnel are responsible for the overall

inventory management and compliance with this procedure.

3.2 It is the responsibility of Warehouse management or designee to request raw materials,
packaging components, and printed packaging for batches.

3.3 It is the responsibility of Warehouse personnel to pull and restock inventory.

3.4 It is the responsibility of Warehouse management to implement this procedure and to

ensure that the procedure is being followed.

4.0 Definitions

4.1 Allocation — The process of identifying materials in inventory and selectively placing

them for use in a batch

4.2 Packaging Components and Printed Packaging — Any component intended for

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packaging related activity in the manufacture of dietary supplements

4.3 RMID — Raw Material Identification Number; a unique identifier used to tack inventory
within a business

4.4 R# - Receiving Number; A unique identifying number assigned to each lot of material
upon receipt

4.5 DC — Document Control

4.6 BPR — Batch Production Record

4.7 FIFO — First In, First Out; an inventory plan that ensures that items purchased first will
be used first. Raw materials, components, drug related products, containers, and closures

approved for use shall be rotated so that the oldest approved stock is used first (deviation

from this requirement is permitted if such deviation is temporary and appropriate)

4.8 SAP — Enterprise Resource Planning; software which supports automation and processes

and manages day-to-day business activities such as accounting, procurement, project
management, risk management and compliance, and supply chain operations

WMS — Warehouse Management System; software which controls and administers
4.9 warehouse operations from the time goods or materials enter the warehouse until they

move out

5.0 References

5.1 F-505, SOP, Environmental Monitoring Program

5.2 D-303, SOP, Recertification of Expired Raw Materials

5.3 QS-106, SOP, Allergen Control

5.4 21 CFR§ 111.415(f)

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6.0 Procedure

Note: Only Warehouse personnel are to receive, pull, and restock inventory items.

6.1 Annual Inventory

6.1.1 The annual inventory stock count is represented as our annual fiscal year cycle

count program. The cycle count program methodology implemented captures all
warehouse locations with stock on hand to be counted twice per year. Inventory

will be documented systemically via inventory counting transactions in SAP and
reviewed by Finance.

6.1.2 If any discrepancies are discovered during the verification of cycle count program

inventory records, production management and inventory control must be
informed to investigate the variance(s).

6.1.3 Inventory of Allergens, Gluten, Non-GMO Project Verified, Certified Organic,

Kosher, and Halal- related materials will be done in their respective designated
areas of the warehouse. Care is used to not move materials out of the designated

areas to ensure there is no chance for cross-contamination.

6.2 Electronic Documentation

6.21 The electronic documentation system (SAP/WMS) is the system in which

employees can determine the current status of inventory items.

6.2.2 Only Warehouse employees, Production leadership, Purchasing staff, and

Accounting staff have authorization to make changes in the inventory system.

6.2.3 It is the responsibility of Inventory Control and Warehouse personnel to ensure

that the inventory system is current at all times of operation.

6.2.4 The inventory system is used to keep an inventory of the following items:

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6.2.4.1 Raw Materials (solids, semi-solids, liquids)

6.2.4.2 Capsules (empty)

6.2.4.3 Caps and Closure Systems

6.2.4.4 Bottles and Containers

6.2.4.5 Packaging Supplies

6.2.4.6 Printed Packaging Components (labels, shrink sleeves, cartons, display
trays, etc.)

6.2.4.7 Corrugated Boxes

6.2.4.8 Customer Supplies Raw Materials

6.2.4.9 Customer Supplied Packaging Supplies (when applicable)

All of the items are to be documented in the system and kept up to date as they are
6.2.5 added, removed, sampled, or destroyed.

6.2.6 The electronic documentation system is for reference only.

6.3 Storage

6.3.1 Storage of all raw materials and packaging components follow SOP F-505

Environmental Monitoring Program for the storage conditions of inventory.

6.3.2 Material and components will be stored in a FIFO manner.

Raw material liquids will only be stored in the same locator (ground level and
6.3.3 second locator only) with like-liquid raw materials.

All allergen-related material is received and immediately placed in a designated
6.3.4 allergen area. Allergen-related material will be stored with like-material in a

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designated area as required by SOP QS-106 Allergen Control.

6.350 All Gluten, Non-GMO Project Verified, Certified Organic, Kosher, and Halal-
related material is received and immediately placed in a designated area and

stored with like-material if applicable.

6.3.6 Raw materials that are stored in the limited access storage area will be stored in

segregated, designated areas and maintained by Warehouse/Production

Management. Each area will be identified by proper signage.

6.3.7 Non-human consumption raw materials will be stored in separate designated areas

and properly identified.

6.3.8 Expired raw material will be held in a designated quarantined area. Refer to SOP

D-303 Recertification of Expired Raw Materials.

6.4 Allocation — Raw Material Pulling

6.4.1 Using FIFO, warehouse personnel will be responsible for pulling all raw materials

used during the mixing process.

Allergen, Certified Organic, Halal, and Kosher raw materials will be identified by
6.4.2 the BPR and associated product labeling.

Warehouse personnel use the production schedule to pull batches based on
6.4.3 priorities set by Warehouse Management / Production Control Management.

Check for accuracy of materials by verifying the product name # as indicated in
6.4.4 the BPR.

6.4.5 In weighing and dispensing, personnel will start the steps to weigh the materials,

following the instructions in the BPR. The quantities used will be properly
recorded in the space provided in the BPR.

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6.4.6 At the end of the batch run, the operator will document the quantity of the

materials used in the batch record. Inventory Control team will receive inventory
from the electronic inventory system.

6.4.7 Weighing and Dispensing operators will return the raw materials to the staging
area and ensure that the partial material has been closed and resealed on each

container then placed into another plastic bag (secondary confinement) to protect

content integrity. Additionally partial containers will be identified by means of
sealing up with yellow tape and a yellow return label will be placed on the

material. All material must be properly identified with the original R#, RMID,
and weight. .

6.4.8 Warehouse personnel will restock the raw materials to the appropriate locations.

6.5 Allocation — Packaging Component and Printed Packaging Pulling

6.5.1 Using FIFO, warehouse personnel will be responsible for pulling the packaging

components for each job in packaging.

6.5.2 Warehouse personnel stages materials based on the priorities from the production

schedule, Warehouse Manager or Production Director.

6.5.3. Warehouse personnel will ensure that partial boxes of packaging components are

pulled to be used first.

6.5.4 In packaging, the material’s R# will be documented in the packaging section of

the BPR by Packaging personnel.

6.5.5 At the end of the batch run, the operator will document the quantity of the

materials used in the BPR.

6.5.6 Packaging operators will return the components to the warehouse. Warehouse will

restock the materials.

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7.0 Revision History

| Rev | Date | Description of Changes | CCR # | By |
|-----|----------|------------------------|-------|----|
| 0 | 07/23/10 | New - - | - | - |
| 1 | 05/17/13 | Changed SOP format and number. Updated SOP. - - | - | - |
| 2 | 09/27/13 | Added additional requirements to sections 5.4.1 and 5.5.1. | 13-832 | B. Mosall |
| 3 | 03/13/14 | Added section for proper confinement of partial or open material. | 14-0182 | L. Titolo |
| 4 | 04/21/14 | Added requirements for allergens | 14-0341 | S. Millar |
| 5 | 10/18/17 | Complete rewrite to update to current process. | 17-1296 | S. Millar |
| 6 | 04/30/18 | Added storage requirements for liquid raw materials. | 18-0149 | S. Millar |
| 7 | 10/01/20 | Procedure rewrite to incorporate label control warehousing CC- | 20-0697 | J. Murphy |
| 8 | 04/29/21 | ce aa to Non GMO Project Verified and Organic CC- Added certified to organic references. Added CFR 111.415(f) to | 21-0176 | C. Mitchell |
| 9 | 07/02/21 | section 5.0. Added Halal and Kosher references. Revised annual CC- inventory procedure. | 21-0256 | R. Pagano |
| 10 | 11/09/21 | Added Halal and Kosher to section 6.3.5 CC- Added note in section 6.4.7 to use yellow tape and a yellow return - OSilGiee label when returning partial cases back to the warehouse. eno i. Murphy Remove SOP B-901 reference. Add QS-106 reference. Update Me perils ballleenrdgienng a tnod w sepiegchiialn gm aatnedr idalle psetnosriangee, r veqeui raedmdeinttiso.n aClh daenfigneitions. Se 1 Minphy Update format, wording, and clarifications throughout. | 21-0423 | C. Mitchell |
| 13 | 08/15/23 | Add Gluten to 6.1.3 and 6.3.5 CC- | 23-0416 | C. Horelle |