Business Context and Reporting Period
Company: Bond Laboratories, Inc. (Note: Metadata referenced "FITLIFE BRANDS, INC." but the filing text identifies the registrant as Bond Laboratories, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: September 30, 2009
Event: Entry into a Material Definitive Agreement modifying an existing Asset Purchase Agreement with NDS Nutritional Products, Inc. and affiliated parties.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, or operating margins. It details a specific debt restructuring and inventory purchase transaction.
- New Debt Instrument: Secured Promissory Note dated September 30, 2009.
- Total Principal Amount: $621,775.01.
- Interest Rate: 8% per annum (simple interest).
- Maturity Date: December 31, 2010.
- Debt Composition:
- $240,851.38: Replacement of pre-existing notes (Component Inventory, Fixed Assets, Installment).
- $105,923.63: Consideration for purchase of finished goods inventory at cost.
- $275,000.00: Residual unpaid Earn-Out Amount.
- Earn-Out Total: Fixed at $330,420.21 (includes $55,420.21 previously paid).
Material Changes and Payment Terms
The company replaced three prior secured promissory notes with a single new note and finalized the earn-out obligation. The payment schedule for the new note is as follows:
- Grace Period: No payments due for the first five months following issuance.
- Standard Payment: $25,000 per month.
- Accelerated Payments: The second and third monthly payments (after the grace period) are $50,000 each.
- Prepayment: Allowed at any time in whole or in part without penalty or premium.
Guidance, Risks, and Contingencies
Forward-Looking Statements: The filing includes a cautionary note stating that projections regarding operations, cash flows, and financial condition are subject to risks and uncertainties. Actual results may differ materially from expectations.
Contingencies: The agreement includes mutual releases between the parties regarding the referenced agreements. The company retains the right to reduce the principal balance through prepayments.
Management Commentary: No specific outlook or guidance on future financial performance was provided in this text beyond the terms of the debt agreement.
Investor Verification Checklist
- Verify the impact of the $621,775.01 principal obligation on the company's liquidity and cash flow for the 2010 fiscal year.
- Confirm the valuation of the finished goods inventory purchased for $105,923.63 and its expected contribution to future revenue.
- Review the "Second Amendment to Asset Purchase Agreement" (Exhibit 10.3) for any additional covenants or conditions not summarized in the 8-K.
- Monitor the company's ability to meet the accelerated $50,000 monthly payments scheduled after the initial five-month grace period.